Arbitration Act 1996

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The decision clarifies the circumstances under which an arbitral award might be challenged.

By Philip Clifford QC

A recent decision by the English Commercial Court indicates that failure to comply with a precondition to arbitration (such as an obligation to negotiate) calls into question the admissibility of a claim, rather than calling into question the jurisdiction of the arbitrators to hear such a claim. As parties to arbitration can only challenge an award through the English courts under s. 67 of the Arbitration Act 1996 (the Act) for lack of jurisdiction, and not in relation to the admissibility of a claim, the decision suggests that s. 67 may not be available to bring challenges concerned with a failure to comply with such preconditions to arbitration.

In Republic of Sierra Leone v SL Mining Ltd [2021] EWHC 286 (Comm), the court dismissed the Republic of Sierra Leone’s challenge made under s. 67 of the Act, finding that the challenge related to questions of admissibility to be determined by the arbitrators, rather than relating to a question of jurisdiction falling under s. 67 of the Act.

A new decision signals the Court’s readiness to interpret section 44(2)(a) of the Arbitration Act 1996 broadly.

By Oliver E. Browne and Robert Price

In A and B v C, D and E (Taking evidence for a foreign seated arbitration),[1] the Court of Appeal unanimously allowed the taking of evidence from a witness by way of deposition in support of a foreign-seated arbitration, even though the witness was not a party to the arbitration agreement.

Background

The Appellants and the First and Second Respondents were co-venturers in an oil field in Central Asia, and were parties to a New York seated arbitration (the New York Arbitration).

An issue arose in the New York Arbitration as to the nature of certain payments made by the First and Second Appellants and whether those amounts were properly deductible when quantifying sums due in respect of certain interests in the oil field. Although the evidential hearing in the New York Arbitration had concluded, the Appellants obtained permission from the tribunal to bring an application in the High Court under section 44(2)(a) of the Arbitration Act 1996 for an order for the compulsory taking of evidence from an individual in England who worked for their counterparties as the lead commercial negotiator of the production-sharing agreement (the Third Respondent).

The decision confirms that UNCITRAL Rules do not impose a higher procedural fairness burden than the Arbitration Act and that the foreign act of state doctrine applies in arbitrations.

By Oliver E. Browne

The Commercial Court considered various challenges to an arbitral award under the Arbitration Act 1996 (the Act) in Reliance Industries Ltd and another v Union of India [2018] EWHC 822 (Comm). Practitioners will welcome the Court’s important decisions on a technical difference between the UNCITRAL Arbitration Rules 1976 (the Rules) and the Act, and on the applicability of the foreign act of state doctrine in arbitration proceedings in England.

Introduction

The claimants entered into two production sharing contracts with the Indian government for the exclusive right to exploit a number of petroleum resources. These contracts provided for disputes to be referred to arbitration under the Rules, with London as the seat of arbitration.

By Robert Price

Case: Expofrut SA & Others v Melville Services Inc and Lavinia Corporation [2015] EWHC 1950 (Comm)

The English High Court has ruled that an extension to a contractually agreed period in which arbitration proceedings must be brought will only be granted in exceptional circumstances. The case of Expofrut illustrates that it is crucial for a claimant to bring such proceedings within the agreed timeframe or risk losing the right to do so at all.

By Robert Price

Selecting the right seat for an arbitration is critical. The courts at the seat of the arbitration can affect the arbitral process in a number of ways, including the following

  • Support or intervention Jurisdictions which are pro-arbitration generally allow the parties a high degree of procedural autonomy. For example, if the courts intervene in England, a well- Flags_002_International_singleColColorknown and respected jurisdiction, , they will generally only do so in order to support the arbitral process. The English courts have useful powers (given by the Arbitration Act 1996), including the ability to compel witnesses to give oral testimony or produce documents, grant freezing injunctions to preserve assets whilst the arbitration takes place, and order a party to comply with the tribunal’s instructions (orders).
  • Challenge The arbitration award can only be “set aside” or “annulled” in the courts of the seat of arbitration. So, the arbitration laws at the seat of the arbitration will determine the ways in which a party can challenge the tribunal’s award. Pro-arbitration jurisdictions tend to limit the parties’ ability to challenge an award, ensuring that the arbitration process is as final as possible. This is a priority for commercial parties.
  • Recognition and Enforcement One of arbitration’s major advantages over domestic litigation is the regime for recognition and enforcement provided by the New York Convention. Parties should always try to select a seat in a country that is a signatory to the New York Convention to ensure recognition and enforceability of any award.