Infrastructure
1. Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?
United Kingdom
The United Kingdom (UK) (which incorporates Great Britain and Northern Ireland) signed and ratified the New York Convention in 1975, subject to the "reciprocity" reservation, viz: the UK courts will enforce awards made in a state that is also party to the Convention.
Answer contributed by
Oliver Marsden and
Rory McLeod
2. Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?
United Kingdom
The UK is party to the Geneva Convention on the Execution of Foreign Arbitral Awards 1927. However, very few states are signatories to the Geneva Convention and not to the New York Convention. With regard to other reciprocal arrangements, the Foreign Judgments (Reciprocal Enforcement) Act 1933 provides for the enforcement of arbitral awards from certain former Commonwealth countries. The Arbitration (International Investment Disputes) Act 1966 makes provision for the recognition and enforcement of ICSID awards.
Answer contributed by
Oliver Marsden and
Rory McLeod
3. Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?
United Kingdom
Arbitration proceedings in England and Wales and Northern Ireland are governed by the Arbitration Act 1996 (the Act). Arbitrations in Scotland are governed by the Arbitration (Scotland) Act 2010. Under section 99 of the Act, the Arbitration Act 1950 (Part II) remains in effect with regard to the enforcement of certain awards that do not fall under the New York Convention.
The Act brought English law significantly closer to the UNCITRAL Model Law, but it is not a wholesale adoption. Unlike the Model Law, the Act is not limited to international commercial arbitration. For a helpful summary of other key differences between the Act and the Model Law, see Merkin and Flannery, Arbitration Act 1996 (2019, 6th ed.) pp. 3–4.
Answer contributed by
Oliver Marsden and
Rory McLeod
4. What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?
United Kingdom
The LCIA (formerly known as the London Court of International Arbitration) is a renowned international arbitration institution with popular rules, which will also act as an appointing and administrative authority in respect of arbitrations under its own Rules or the UNCITRAL Rules. The LCIA issued revised Arbitration Rules in 2020. The Chartered Institute of Arbitrators administers arbitrations under its own Rules and acts as an appointing authority. The Centre for Effective Dispute Resolution acts as an appointing authority and administrator in arbitrations governed by the UNCITRAL Rules. The London Maritime Arbitrators Association promotes maritime arbitration in London and can act as an appointing body. There are also a number of other institutions catering for disputes arising in a particular trade area or industry, such as the Insurance and Reinsurance Arbitration Society (ARIAS (UK)) for insurance disputes. Commodity disputes are regularly conducted under the rules of, inter alia, the Grain and Feed Trade Association, the Federation of Oils, Seeds and Fats Associations and the London Metal Exchange (LME) (each of which acts as an appointing authority).
Answer contributed by
Oliver Marsden and
Rory McLeod
5. Can foreign arbitral providers operate in your jurisdiction?
United Kingdom
International arbitrations are routinely conducted in London under the rules of numerous arbitral institutions based outside the UK, including the ICC, the SCC, the AAA/IDRC and other bodies.
Answer contributed by
Oliver Marsden and
Rory McLeod
6. Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with, and supportive of, the law and practice of international arbitration?
United Kingdom
There is no specialist arbitration court. However, the judiciary in the Commercial Court is familiar with, and very supportive of, the law and practice of international arbitration.
Applications in respect of arbitrations will be heard at first instance by the Commercial Court, usually with a right of appeal to the higher courts. Some provisions of the Act preclude appeals unless permission to appeal to a higher court has been expressly given by the lower court (eg, sections 42(5), 44(7) and 67(4).
Answer contributed by
Oliver Marsden and
Rory McLeod
Agreement to arbitrate
7. What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?
United Kingdom
An arbitration agreement must be "in writing" or evidenced in writing to fall within the scope of the Act (sections 5(1)–(2)). What constitutes in writing or evidence in writing is broadly defined (see sections 5(2),(4)–(6)), and includes an oral agreement to arbitrate by reference to "terms which are in writing" (section 5(3)). Save for the exception in section 5(3), oral arbitration agreements are recognised only by the common law.
An arbitration agreement can cover future disputes (section 6(1)).
Answer contributed by
Oliver Marsden and
Rory McLeod
8. Are any types of dispute non-arbitrable? If so, which?
United Kingdom
The Act clarifies that both contractual and non-contractual disputes (section 6(1)) may be submitted to arbitration. Commercial disputes arising under a valid arbitration agreement (including competition disputes) are generally arbitrable. The Act does not list or delimit matters which are not capable of settlement by arbitration (section 81(1)(a)). Matters that are deemed non-arbitrable under English law include criminal and family law matters.
Answer contributed by
Oliver Marsden and
Rory McLeod
9. Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?
United Kingdom
Under English law, a third party cannot be bound by an arbitration clause without its consent. If a third party seeks to enforce substantive rights in a contract that provides for arbitration of disputes, any such rights of the third party are considered to be conditioned by the arbitration clause of the contract such that the third party must comply with the arbitration clause in seeking to enforce such rights (Qingdao Huiquan Shipping Co v Shanghai Dong He Xin Industry Group Co Ltd [2018] EWHC 3009 (Comm)).
The Court of Appeal has held that an anti-suit injunction should be granted to restrain court proceedings brought by a third party to enforce rights that are subject to an arbitration clause without any need to show that the court proceedings are "vexatious and oppressive" (Shipowners’ Mutual v Containership Denizcilik (Yusuf Cepnioglu) [2016] EWCA Civ 386. The question of whether it was appropriate to grant the final anti-suit injunction was initially appealed to the Supreme Court, but was settled before the Supreme Court reached a decision on the issue).
When challenging an award before the English courts under section 67 of the Act, a third party may also be joined to the challenge proceedings where it is “desirable to add the new party” either to resolve all the matters in dispute or to resolve an issue connected to the matters in dispute (CPR 19.2). The High Court has recently confirmed this approach, granting an application permitting the parent companies of one of the parties to be joined in proceedings challenging an award (Republic of Uganda v Rift Valley Rail (Uganda) Limited (In Liquidation) [2020] EWHC 3653 (Comm)).
Answer contributed by
Oliver Marsden and
Rory McLeod
10. Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?
United Kingdom
A tribunal cannot consolidate proceedings without the consent of all the parties concerned. Parties may provide for consolidation in the relevant contract(s) or agree to consolidation once a dispute arises. Recent amendments to the LCIA Rules (October 2020) and other sets of institutional arbitration rules (such as the amendments to articles 7 and 10 of the ICC Rules in January 2021) clarify and expand the power of the tribunal to order consolidation in certain circumstances (including after the formation of the tribunal), but consolidation beyond those circumstances still requires the consent of all parties.
Under the 2020 version of the LCIA Rules, a claimant can commence multiple arbitration proceedings through a single composite Request for Arbitration (article 1(2)), which may be accompanied by a request for consolidation under article 22A of the Rules. This should avoid the issue that arose in A v B [2017] EWHC 3417 (Comm), where disputes under separate contracts were referred to arbitration pursuant to a single LCIA Request for Arbitration. The tribunal upheld its jurisdiction to hear both disputes, and the tribunal’s award was successfully challenged under section 67 of the Act (see further question 42).
Answer contributed by
Oliver Marsden and
Rory McLeod
11. Is the "group of companies doctrine" recognised in your jurisdiction?
United Kingdom
English law does not recognise the ‘group of companies doctrine’. An award based on this doctrine may be challenged (see eg, Peterson Farms Inc v C&M Farming Ltd [2004] EWHC 121 (Comm)). Group companies will normally be recognised as parties to an arbitration agreement only where this is expressly agreed. However, the corporate veil may be ‘pierced’ to bind a third-party group company to an arbitration agreement where a court or tribunal is persuaded that the existence of a separate corporate entity is merely a façade (Trustor AB v Smallbone and Others [2001] EWHC 703 (Ch); Anglo German Breweries Ltd (In Liquidation) v Chelsea Corp Inc [2012] EWHC 1481 (Ch); Ashot Egiazaryan and Vitaly Gogokhiya v OJSC OEK Finance and The City of Moscow [2015] EWHC 3532 (Comm)).
Answer contributed by
Oliver Marsden and
Rory McLeod
12. Are arbitration clauses considered separable from the main contract?
United Kingdom
Unless otherwise agreed by the parties, an arbitration agreement is treated as a distinct agreement and is not regarded as invalid, non-existent or ineffective because the wider contract is invalid, non-existent or ineffective (section 7 of the Act). The Supreme Court has recently confirmed that the separability of an arbitration agreement providing for arbitration in England is governed by English law even where the law governing the underlying contract is foreign law. However, it has also recently confirmed that the separability principle may be excluded in the unusual event that the parties specify a foreign procedural law for an English-seated arbitration (Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38).
In certain limited cases (eg, forgery), the arbitration agreement may be declared invalid on the same grounds as the contract in which it is contained (Fiona Trust Corporation and Ors v Privalov and Ors [2007] UKHL 40).
Answer contributed by
Oliver Marsden and
Rory McLeod
13. Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunals jurisdiction and competence?
United Kingdom
Unless otherwise agreed by the parties, the tribunal may rule on its own “substantive jurisdiction”, viz: whether there is a valid arbitration agreement; whether the tribunal is properly constituted; and what matters have been submitted to arbitration (section 30(1) of the Act). A party may challenge such a ruling (section 30(2)).
A party may apply to the court to determine the tribunal’s substantive jurisdiction (section 32(1)). However, such an application will not be considered unless it is made either: (i) with the agreement of all the parties; or (ii) with the permission of the tribunal and the court is satisfied, inter alia, that there is “good reason” why it should decide the matter (section 32(2)). For example, an application might be made to the court when the arbitration clause precludes a tribunal deciding on its own jurisdiction. This statutory mechanism does not formally remove the English courts’ residual jurisdiction to make a declaration as to the existence of a valid arbitration agreement, but in principle, the court should not entertain such an application where it is open to the applicant party to commence arbitration and should allow the tribunal to rule on any jurisdictional issue in the first instance (HC Trading Malta Ltd v Tradeland Commodities SL [2016] EWHC 1279 (Comm)).
In the context of enforcement proceedings (see questions 44 and 45), the English courts may revisit the question of the tribunal’s jurisdiction if the party resisting enforcement seeks to prove that there was no arbitration agreement binding upon it under the law of the country where the award was made (Dallah Real Estate and Tourism Holding Company v Ministry of Religious Affairs, Government of Pakistan [2010] UKSC 46).
Answer contributed by
Oliver Marsden and
Rory McLeod
14. Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?
United Kingdom
The English courts generally take a liberal and ‘arbitration-friendly’ approach to the construction of poorly worded arbitration clauses (see, eg, Fiona Trust Corporation & Ors v Privalov & Ors [2007] UKHL 40; Paul Smith Ltd v H&S International Holding Inc [1991] 2 Lloyd’s Rep 127; and, most recently, Helice Leasing S.A.S v PT Garuda Indonesia (Persero) TBK [2021] EWHC 99 (Comm)).
However, a clearly worded arbitration clause is obviously preferable. Parties should consider how (if at all) they wish to vary or carve out the Act’s non-mandatory provisions, eg, the right of appeal to the English courts on a question of law under section 69 (NB, this right may be deemed waived by the adoption of certain institutional rules, eg, the LCIA Rules) or the right to apply to the English courts for the determination of a preliminary point of law under section 45.
Following the UK’s withdrawal from the EU, where an agreement providing for arbitration seated in England includes parties based overseas, it may become more important to include a clause appointing a service of process agent in England so that any arbitration-related court proceedings (eg, an application for interim relief in support of the arbitration from the English courts) can be commenced without having to seek permission from the English courts to effect service on the relevant parties outside the jurisdiction. The Brexit transition period ended on 31 December 2020; as of this date, the Recast Brussels Regulation, which allowed parties to serve in any EU member state without the permission of the court, ceased to apply. As a result, beyond the narrow exceptions set out in CPR 6.32 and 6.33, common law rules apply and permission is required (applying the gateways set out in CPR 6.36 and PD 6B.3.1). It is still possible to serve, with court permission, on a defendant in an EU member state that is a party to the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (the Hague Service Convention) where it applies, and the UK has bilateral agreements covering service with a number of EU member states.
The English courts may however make an order for “alternative service” on a defendant who would otherwise have to be served abroad under the Hague Service Convention, or other permitted methods of service under English law where this will provide “speedy finality” to the parties’ dispute – see M v N [2021] EWHC 360 (Comm), applying CPR 6.15(1).
Answer contributed by
Oliver Marsden and
Rory McLeod
15. Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?
United Kingdom
Institutional international arbitration is often preferred to ad hoc arbitration for complex or high-value commercial disputes, or both. That said, ad hoc international arbitrations are common, particularly in the shipping, construction, commodities and real estate sectors. Parties to ad hoc arbitrations often adopt standard rules of procedure (eg, the UNCITRAL Rules).
Answer contributed by
Oliver Marsden and
Rory McLeod
16. What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.
United Kingdom
A multi-party clause may provide for the arbitration to be commenced as a multi-party proceeding or for the tribunal or parties to have the power to involve additional parties once proceedings have commenced, either through joinder (see question 9) or consolidation (see question 10).
In multi-party agreements, the clause should specify the procedure by which the tribunal is to be constituted. To ensure all parties have an equal opportunity to participate in the constitution of the tribunal, parties may wish to agree that the claimant parties collectively, and the respondent parties collectively, shall each nominate one arbitrator, and the chair of the tribunal shall be selected either jointly by the two party-nominated arbitrators or by the relevant institution. Many institutional rules permit the institution to appoint the entire tribunal in multi-party cases where the parties fail to agree on an effective appointment mechanism (see, eg, article 8 of the LCIA Rules and article 12(8) of the ICC Rules).
Where an arbitration agreement establishes a procedure for the constitution of the tribunal that does not provide each party with equivalent rights with respect to appointment, this is unlikely to render the arbitration agreement unenforceable as a matter of English law.
Answer contributed by
Oliver Marsden and
Rory McLeod
Appointing the tribunal
19. Does the law of your jurisdiction place any limitations in respect of a partys choice of arbitrator?
United Kingdom
English law has traditionally placed few limits on a party’s choice of arbitrator, although specific criteria in the arbitration agreement may fetter that choice. Parties are free to agree on the number of arbitrators and the procedure for their appointment (sections 15 and 16 of the Act). However, a party may apply to the court (or relevant arbitral institution) to remove an arbitrator if, inter alia, it has justifiable doubts as to the arbitrator’s impartiality (see further question 24).
Answer contributed by
Oliver Marsden and
Rory McLeod
20. Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?
United Kingdom
The appointment of a non-national arbitrator would be proscribed only by an agreement between the parties. The appointment of non-nationals is common and may even be required by institutional rules in some circumstances (see, eg, article 6.1 of the LCIA Rules).
Foreign arbitrators (including from the EEA) will be subject to standard immigration requirements, which may include obtaining a visa and work permit (see the UK Visas and Immigration website for further details).
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Oliver Marsden and
Rory McLeod
21. How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?
United Kingdom
The main institutional rules all include default procedures for the appointment of arbitrators and the proper constitution of the tribunal. Where parties have agreed to ad hoc arbitration and have not agreed on a mechanism for the constitution of the tribunal, sections 16-18 of the Act set out the default procedure. Under section 18, the English courts have the power to appoint arbitrators and make related directions in order to ensure that the tribunal is properly constituted.
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Oliver Marsden and
Rory McLeod
22. Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?
United Kingdom
Where the seat of arbitration is in England and Wales, an arbitrator is not liable for anything done or omitted in the discharge of his or her functions except where the act or omission is shown to have been in bad faith (section 29 of the Act).
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Oliver Marsden and
Rory McLeod
23. Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?
United Kingdom
The tribunal will generally require the parties to provide advance deposits in respect of its fees and expenses. The tribunal may refuse delivery of an award if its fees and expenses have not been paid (section 56(1) of the Act). All of the main institutions operate a fundholding service, which ensures that the tribunal remains in funds throughout the arbitration.
Answer contributed by
Oliver Marsden and
Rory McLeod
Challenges to arbitrators
24. On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?
United Kingdom
A party may challenge an arbitrator in the courts if circumstances give rise to justifiable doubts as to his or her impartiality (section 24(1)(a) of the Act). The test applied by the courts is whether a fair-minded and informed observer would conclude that there was a real possibility of bias (see, eg, A and others v B and another [2011] EWHC 2345; Cofely Ltd v Bingham & Anor [2016] EWHC 240 (Comm) confirmed in Halliburton Co v Chubb Bermuda Insurance Ltd (formerly Ace Bermuda Insurance Ltd) [2020] UKSC 48; and Sierra Fishing Company & Ors v Farran & Ors [2015] EWHC 140 (Comm)). The other grounds on which an arbitrator may be challenged are: lack of qualifications required by the arbitration agreement; physical or mental incapacity; or a refusal or failure properly to conduct proceedings, or to use reasonable despatch in conducting the proceedings or making an award (where this has caused or will cause substantial injustice to the applicant) (section 24(1)).
In Halliburton v Chubb [2018] EWCA Civ 817, the Court of Appeal rejected a challenge to an arbitrator on the basis of his failure to disclose his multiple appointments by the same party (Chubb) and in related cases (involving the question of Chubb’s liability to pay out under Halliburton’s insurance policy towards the cost of settling claims arising from the Deepwater Horizon disaster). Halliburton’s appeal before the Supreme Court was dismissed in November 2020 (Halliburton Co v Chubb Bermuda Insurance Ltd (formerly Ace Bermuda Insurance Ltd) [2020] UKSC 48). The Supreme Court held that unless otherwise agreed by the parties, an arbitrator has “a legal duty in English law” to disclose facts and circumstances which would or might reasonably give rise to the appearance of bias, and that the arbitrator in this case had breached that duty. In this case, however, the Supreme Court considered that the fair-minded and informed observer would not have concluded that there was a real possibility of bias because the fair-minded and informed observer test should be applied at the time of the court proceedings assessing the challenge to the arbitrator, not at the earlier time of the arbitrator’s failure to make a disclosure.
The applicant must first exhaust any available recourse under, inter alia, institutional rules to remove an arbitrator before applying to the court (section 24(2)).
Although the IBA Guidelines on Conflicts of Interest are non-binding, they are regarded as a "first port of call" for arbitral institutions considering a challenge and are likely to be given some weight before the courts. That said, the Commercial Court has criticised the IBA Guidelines and declined to set aside an award notwithstanding an arbitrator’s failure to disclose a circumstance on the Non-Waivable Red List of the Guidelines, indicating that the IBA Guidelines may not be followed to the letter: see W Ltd v M SDN BHD [2016] EWHC 422 (Comm), in which an arbitrator’s firm regularly advised a company with the same corporate parent as the respondent, but the Court held that to a fair-minded and informed observer the arbitrator was not conflicted as he operated as a sole practitioner, had completed the firm’s conflict check systems, and would have made a disclosure had he been aware of the relationship.
In Halliburton v Chubb, the Supreme Court endorsed the comments of Popplewell J in his first instance decision, H v L [2017] 1 W.L.R. 2280 (at para 16), and noted that while the IBA Guidelines may provide some assistance to the court on what may constitute an unacceptable conflict of interest and what matters may require disclosure, they do not of themselves give rise to obligations or override national law or the arbitral rules chosen by the parties.
Answer contributed by
Oliver Marsden and
Rory McLeod
Interim relief
25. What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?
United Kingdom
Both the tribunal and the courts have the power to grant interim relief (sections 38 and 44 of the Act), although the powers of the court do not extend to ICSID arbitrations, where any relief should be sought from the tribunal (ETI Euro Telecom International NV v Republic of Bolivia and Anor [2008] EWCA Civ 880).
However, once the tribunal is constituted, the court will act only where the tribunal has no power or is unable to act effectively (section 44(5)). In 2016, the Commercial Court addressed the interplay between section 44 and the "emergency arbitrator" provisions of the LCIA Rules (which are also found in other institutional rules, including the ICC and SCC Rules) in terms that some have taken to imply that the court’s powers under section 44 are limited by the possible availability of relief from an emergency arbitrator (Gerald Metals SA v The Trustees of the Timis Trust and others [2016] EWHC 2327 (Ch)).
The interim relief available from the tribunal includes an order for security for costs (section 38(3)) and directions in relation to the inspection, preservation, custody or detention of the subject matter (section 38(4)). The tribunal may also make interim awards, including a provisional order for the payment of money between the parties (section 39). The court’s powers under section 44 are more extensive and extend to orders against third parties (eg, freezing injunctions and orders relating to the taking of evidence).
The interim relief available from the tribunal also includes an anti-suit injunction to restrain court proceedings brought in breach of the parties’ arbitration agreement. In Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38, the Supreme Court held that in determining an application for such an injunction, ‘forum conveniens’ considerations do not apply. Such relief is available to restrain court proceedings brought outside the EU. The position with respect to court proceedings brought within the EU is discussed below.
In Allianz SpA and Others v West Tankers Inc C-185/07 [2009] AC 1138, the ECJ held that EU member state courts were not permitted to grant an anti-suit injunction to restrain proceedings commenced in the court of another EU member state in breach of an arbitration agreement. In Nori Holdings Ltd v Bank Otkritie Corporation [2018] EWHC 1343 (Comm), the English courts held that the principle established by the ECJ in West Tankers continued to apply notwithstanding the subsequent passing of the Recast Brussels Regulation; it opined that there was nothing in the Recast Brussels Regulation or its recitals indicating that the principles in the original Brussels Regulation (as affirmed in West Tankers) had been overturned. Following the end of the Brexit transition period, the Recast Brussels Regulation has been revoked in the UK pursuant to Regulation 89 of the Civil Jurisdiction and Judgments (Amendment) (EU Exit) Regulations 2019. West Tankers and Nori Holdings will now have the status of “retained EU case law” under section 6(7) of the European Union (Withdrawal) Act 2018. The Court of Appeal and Supreme Court are not bound by retained EU case law (section 6(4) of the European Union (Withdrawal) Act 2018 and Regulation 3(b) of the European Union (Withdrawal) Act 2018 (Relevant Court) (Retained EU Case Law) Regulations 2020). They may now depart from the West Tankers principle and once again grant anti-suit relief to restrain court proceedings brought within the EU.
Answer contributed by
Oliver Marsden and
Rory McLeod
26. Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?
United Kingdom
Unless the parties agree otherwise, the tribunal has the power to order the claimant to provide security for costs (sections 38(2)–(3) of the Act), which includes both the costs of the arbitrators and the parties’ own costs (section 39). Under the Act, the position is that this relief is now available only from the tribunal (save in court proceedings relating to the arbitration, eg, under sections 67–69).
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Rory McLeod
Procedure
27. Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (eg, general duties of the tribunal and/or the parties)?
United Kingdom
The Act lists in a separate schedule those of its provisions that are mandatory and will have effect whatever the parties have agreed. For example, the tribunal must act fairly and impartially as between the parties, giving each party a reasonable opportunity to put its case and deal with that of its opponent; and must adopt procedures that avoid unnecessary delay or expense (section 33(1)). Further key mandatory provisions to note include the following: the parties must do all things necessary for the proper and expeditious conduct of the arbitral proceedings (section 40); the courts may suspend legal proceedings brought in breach of an arbitration agreement (section 9); and the courts may remove arbitrators from office (section 24).
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Oliver Marsden and
Rory McLeod
28. What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?
United Kingdom
Under the Act, where a respondent fails to participate in an arbitration, the tribunal may proceed to an award on the basis of the evidence before it (section 41(4)). This is in line with the approach set out in article 25(c) of the Model Law and prevailing practice. The party in default will typically be given every opportunity to participate before the tribunal allows the arbitration to proceed in its absence. The tribunal may ask the non-defaulting party to attend a merits hearing and present its case (including witness evidence) in order that the tribunal is able to render a fully reasoned award. It remains open to the defaulting party to subsequently challenge the award on the usual grounds (see further under questions 41 and 42).
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Oliver Marsden and
Rory McLeod
29. What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Arbitration generally be taken into account?
United Kingdom
The prevailing practice is for written and oral factual and expert witness evidence to be admitted as well as documentary evidence. Ultimately, it is for the tribunal to decide all evidential matters, except where the parties have agreed otherwise (section 34(1) of the Act). Such matters include whether to apply strict rules of evidence (or any other rules) as to the admissibility, relevance or weight of any material produced (section 34(2)(f)).
The parties may agree that the IBA Rules on the Taking of Evidence in International Arbitration or the new Prague Rules on the Efficient Conduct of Proceedings in International Arbitration will apply to the proceedings in whole or in part.
It is common in practice for the IBA Rules to be adopted and, absent such an agreement, tribunals frequently look to the IBA Rules for guidance in any event. It remains to be seen whether the Prague Rules will become a credible alternative to the IBA Rules in UK-seated arbitrations. Given that the Prague Rules are designed to provide parties from civil law jurisdictions with a procedure that seeks to mirror more closely the inquisitorial approach in civil proceedings, the uptake of the rules may be more limited in common law jurisdictions such as England.
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Rory McLeod
30. Will the courts in your jurisdiction play any role in the obtaining of evidence?
United Kingdom
Unless otherwise agreed by the parties, the courts may make orders, inter alia, for: the taking of witness evidence; the preservation of evidence; and the inspection of property (sections 42 and 44 of the Act). Notwithstanding any contrary agreement, a party may apply to the court to secure the attendance of witnesses (section 43) (see DTEK Trading SA v Morozov [2017] EWHC 94 (Comm)).
The recent Court of Appeal decision in A & Anor v C & Ors [2020] EWCA Civ 409 held that a court may order the taking of evidence from witnesses who are non-parties to an arbitration agreement in support of an arbitration (seated in London or elsewhere). The decision was made on appeal from a High Court judgment that found that a court had no power to make orders under section 44 of the Act against a non-party to an arbitration agreement. While the Court of Appeal decision reversed this finding with respect to the taking of evidence from witnesses, it did not comment on whether other powers under section 44 are available against non-parties.
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Oliver Marsden and
Rory McLeod
31. What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?
United Kingdom
Unless the parties agree otherwise, it is for the tribunal to decide on the scope of document production (section 34(2)(d) of the Act). Procedures regulating document production are set out in the IBA Rules and Prague Rules and may be adopted by agreement of the parties or order of the tribunal. Parties generally produce those documents upon which they rely and, if necessary, request the production of certain documents or categories of documents from the opposing party. If a party fails to comply with a peremptory order for document production, the tribunal may, inter alia, draw adverse inferences or make appropriate orders as to costs (section 41(7)). Alternatively, the tribunal or non-defaulting party may seek an order from the court (section 42(1)).
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Rory McLeod
32. Is it mandatory to have a final hearing on the merits?
United Kingdom
While not mandatory, it is standard practice, to have a final hearing on the merits. This is reflected in the major institutional rules (see, eg, article 19.1 of the LCIA Rules and article 26(1) of the ICC Rules).
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Oliver Marsden and
Rory McLeod
33. If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?
United Kingdom
The seat is the legal – rather than physical – place of the proceedings. Accordingly, hearings and procedural meetings may be conducted elsewhere.
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Award
34. Can the tribunal decide by majority?
United Kingdom
Yes. Unless the parties have agreed otherwise, where there are three or more arbitrators, decisions are made by majority (section 20(3) of the Act). Where the tribunal is unable to reach a majority decision, the chairman’s vote will prevail (section 20(4)).
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Rory McLeod
35. Are there any particular types of remedies or relief that an arbitral tribunal may not grant?
United Kingdom
The parties are free to agree on the remedies or relief that the tribunal may grant (section 48(1) of the Act). Accordingly, subject to public policy restrictions, parties can provide that a remedy not available under English law (eg, punitive damages) may be awarded by the tribunal. With respect to public policy, the High Court has rejected a challenge to an award enforcing a penalty clause in a foreign law-governed contract (that would have been unenforceable had the contract been governed by English law), finding no public policy impediment to enforcement. Instead, the public policy of refusing to enforce penalty clauses was held to be outweighed by the public policy in favour of enforcing international arbitration awards (Pencil Hill Ltd v US Citta di Palermo Spa [2016] 1 WLUK 262).
For the remedies that a tribunal has the power to award by default, see sections 48(2)–(5). These include: declaratory relief; an order for the payment of a sum of money; an order that a party do or refrain from doing something; an order for specific performance of a contract (other than a contract relating to land); or the rectification, setting aside or cancellation of a deed or other document.
Answer contributed by
Oliver Marsden and
Rory McLeod
36. Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?
United Kingdom
Dissenting opinions are permitted under English law, although they continue to be relatively rare in practice. In the case of B v A [2010] EWHC 1626, which was a challenge to an award before the English courts, it was held that a dissenting opinion might be admissible as evidence in relation to procedural matters or it might inform the decision of the court where the proper law of the dispute is English law and there is an appeal on a point of law. However, the court held that a dissenting opinion does not form part of the award.
Answer contributed by
Oliver Marsden and
Rory McLeod
37. What, if any, are the legal and formal requirements for a valid and enforceable award?
United Kingdom
The parties are free to agree on the form of the award (section 52(1) of the Act). The default position under the Act is that the award must: be in writing and signed by all arbitrators (or those assenting to it); contain reasons, unless it is an agreed award or the parties have agreed to dispense with reasons; and state the seat of the arbitration and the date on which it is made (sections 52(3)-(5)). The grounds upon which recognition of a New York Convention award may be refused are set out in sections 103(2)-(3). Section 102 indicates the evidence to be produced by a party seeking recognition or enforcement of a New York Convention award.
Answer contributed by
Oliver Marsden and
Rory McLeod
38. What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?
United Kingdom
The tribunal is not subject to a time limit under the Act in rendering its award. However, some arbitral institutions have recently introduced reforms aimed at reducing delay in rendering awards. For example, the ICC has announced that it will reduce the fees paid to tribunals that fail to submit a draft award within three months of the final hearing or post-hearing submission. If the arbitration agreement imposes such a time limit, this may be extended by the court if it is satisfied that a "substantial injustice" would otherwise result (section 50(3) of the Act).
The tribunal may correct an award on its own initiative or on the application of either party. Any application must be made within 28 days of the award (sections 57(3)–(4)). Any correction must be made within 28 days of receipt of the application or, where made by the tribunal of its own motion, within 28 days of the award (section 57(5)). The parties are free to agree on different time limits (eg, by adopting institutional rules), which can themselves be extended by the court pursuant to section 79. The Commercial Court recently used the power under section 79 to extend the time limit set by the LCIA Rules for an application for correction of an award (see Xstrata Coal Queensland Pty Ltd and others v Benxi Iron and Steel (Group) International Economic and Trading Co Ltd [2016] EWHC 2022 (Comm)).
Answer contributed by
Oliver Marsden and
Rory McLeod
Costs and interest
39. Are parties able to recover fees paid and costs incurred? Does the "loser pays" rule generally apply in your jurisdiction?
United Kingdom
Unless otherwise agreed, the tribunal may make an award allocating the costs of the arbitration (including legal fees) between the parties and will generally require the unsuccessful party to pay the reasonable costs of the successful party (sections 61(1)-(2) of the Act).
In a notable case, the Commercial Court held that costs of the arbitration may include the costs of obtaining third-party funding (Essar Oilfields Services Ltd v Norscot Rig Management PVT Ltd [2016] EWHC 2361 (Comm)). This case should not, however, be taken to stand for the proposition that funding costs can be recovered in every case. The court stressed the particular circumstances of the case, including the respondent’s oppressive conduct in causing a situation in which the claimant required third-party funding to be able to bring its claims. On these facts, the court found that it was reasonable and appropriate to make an award that included as costs of the arbitration the costs of third-party funding pursuant to section 59 of the Act.
The potential recoverability of third-party funding costs in arbitration differs from the position in litigation in England and Wales. In litigation, success fees in conditional fee agreements and deferred contingent premiums for after-the-event insurance are not recoverable as costs pursuant to the Jackson reforms of 2013.
Answer contributed by
Oliver Marsden and
Rory McLeod
40. Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?
United Kingdom
The parties are free to agree on the tribunal’s power to award interest (section 49(1) of the Act). The default position under the Act is that the tribunal may award simple or compound interest at such rates and with such rests as it considers appropriate, up to the date of the award and from the date of the award to the date of payment, on: the whole or part of any amount awarded in respect of the principal claim; and any award as to costs. No mandatory or customary rate of interest is applicable.
Answer contributed by
Oliver Marsden and
Rory McLeod
Challenging awards
41. Are there any grounds on which an award may be appealed before the courts of your jurisdiction?
United Kingdom
Unless otherwise agreed, an award may be appealed before the courts on a question of English law (section 69 of the Act). Note that an agreement between the parties to adopt arbitration rules such as the LCIA Rules or the ICC Arbitration Rules constitutes an agreement to exclude the right of appeal on a question of English law under section 69. Before it will hear such an appeal, the court must be satisfied that: the determination of the question will substantially affect the rights of one or more of the parties; the question is one that the tribunal was asked to determine; on the basis of the tribunal’s findings of fact, its decision on the question is obviously wrong, or the question is one of general public importance and the decision of the tribunal is at least open to serious doubt; and it is just and proper for the court to determine the question notwithstanding the parties’ agreement to arbitrate (section 69(3)). On appeal, the court may: confirm the award; vary the award; remit the award to the tribunal, in whole or in part, for reconsideration; or, where the latter would be inappropriate, set aside the award, in whole or in part (section 69(7)).
Answer contributed by
Oliver Marsden and
Rory McLeod
42. Are there any other bases on which an award may be challenged, and if so what?
United Kingdom
A party may apply to the court to challenge an award on the grounds that: the tribunal lacked substantive jurisdiction (section 67 of the Act); or there has been a serious irregularity affecting the tribunal, the proceedings or the award (section 68). An exhaustive list of ‘irregularities’ is provided at section 68(2) (including the tribunal’s failure to act fairly and impartially as between the parties). In each case, the court must be satisfied that the irregularity has caused or will cause substantial injustice to the applicant. Both sections 67 and 68 are mandatory provisions of the Act (ie, they cannot be excluded by agreement).
With regard to challenges under section 67 of the Act, see the case of A v B referred to in response to question 10 on consolidation above. In the recent case of Exportadora de Sal SA de CV v Corretaje Maritimo Sud-American Inc [2018] EWHC 224 (Comm), the court emphasised that, given the importance of jurisdiction, a party raising a challenge under section 67 of the Act must act quickly and within a timescale of days not weeks. Baker J indicated that the general context in which the question of reasonable diligence falls to be assessed is that, when faced with a legal claim asserted through arbitration, logically and practically the first question any respondent can fairly be expected to consider and keep under review throughout is whether it accepts the validity of the process (at paragraph 48).
In Republic of Uganda v Rift Valley Rail (Uganda) Limited (In Liquidation) [2020] EWHC 3653 (Comm) the Commercial Court permitted the parent companies of a party to an arbitration to be joined in proceedings challenging an award under section 67. The court referred to CPR 19.2(2)(a), which contains two requirements to join a party to the proceedings: a jurisdictional test and a discretionary test. The court held that a joinder might be desirable and would be possible not only where the non-party’s interests are engaged, but also where there is some reason why joinder is in the broader interests of justice and the overriding objective.
The majority of challenges under section 68 are refused. A recent challenge was refused and summarily dismissed without a hearing on the basis that the section 68 application had no prospect of success (Asset Management Corporation of Nigeria v Qatar National Bank [2018] EWHC 2218 (Comm)).
An interesting example of how the courts address these issues is provided in the case of UMS Holding Ltd & Ors v Great Station Properties SA & Anor [2017] EWHC 2398 (Comm), which arose from an arbitration relating to a joint venture agreement and the price payable in respect of the exercise of a “put option”. The grounds of challenge were set out over 24 pages, prompting Teare J to comment on the appropriate scope of section 68 challenges. Teare J noted that an allegation that a tribunal has ignored or failed to have regard to evidence relied upon by one of the parties cannot be the basis of an allegation of serious irregularity. Similarly, the mere fact of the tribunal’s reasoning being manifestly illogical or not rationally sustained cannot amount to a serious irregularity. This approach has since been confirmed in another recent case, Pakistan v Broadsheet LLC [2019] EWHC 1832 (Comm), where the court held that the giving of “inadequate reasons” by a tribunal in an award did not amount to a serious irregularity.
Pursuant to section 68(3), the court may only set aside an award if it is satisfied that it would be inappropriate to remit the award for reconsideration by the same tribunal.
For example, in the case of Fleetwood Wanderers Limited (t/a Fleetwood Town Football Club) v AFC Fylde Limited [2018] EWHC 3318 (Comm), the arbitrator had emailed the judicial services manager at the Football Association and also carried out his own research in relation to a question in dispute (regarding the status of the FIFA Regulations on the Status and Transfer of Players in the Football Association’s Rules). The Football Association’s solicitors had disclosed the emails to the parties to the arbitration. Halliwell J, in considering a section 68(2)(a) challenge, concluded that “by making the relevant inquiries and eliciting information without at least sharing the information with the parties and giving them an opportunity to make representations” the arbitrator committed a breach of his general duties under section 33 and that this amounted to an irregularity which caused substantial injustice within the meaning of section 68(2), but that there was no reason why the award should not be remitted back to the arbitrator for reconsideration.
In the recent case of RJ and another v HB [2018] EWHC 2833 (Comm), an application was made to set aside an award under section 68(2)(a). This case concerned a dispute between HB and RJ (along with RJ’s corporate vehicle, L Ltd), in which the sole arbitrator had concluded that RJ was the beneficial owner of shares in a bank purchased either with his or his corporate vehicle’s money, even though neither party had put forward such a proposition. Andrew Baker J, in setting aside the award, concluded that the tribunal had failed to give the parties the opportunity to address such an argument and that this was an obvious case where the relevant parts of the award should be set aside rather than remitted due to “the nature of the serious irregularity … and … the extent of its impact on the dispositive relief”. Similarly, in another recent case, the tribunal failed to give the parties an opportunity to cross-examine a witness on the basis that the tribunal had found that both parties already had a “common assumption” on a particular issue. It would have become clear in cross-examination on this issue that there was no common assumption, and the failure to order cross-examination constituted a serious irregularity (P v D [2019] EWHC 1277 (Comm)).
Where a party frames a preliminary issue as dispositive of the arbitration proceedings, they may be estopped from subsequently bringing a challenge or appeal on a new basis (Daewoo Shipbuilding and Marine Engineering Company Limited v Songa Offshore Equinox Ltd [2020] EWHC 2353 (TCC)). In that case, the claimant took the position in the arbitration that if its case on a preliminary issue failed, that would be “the end” of its claim. However, when it lost on this issue, it applied to amend its claim and defence to counterclaim, which the tribunal rejected. The claimant then applied for permission to challenge or appeal the award under sections 68 and 69 of the Act. The court rejected the challenge or appeal, holding that the claimant had taken the position that the preliminary issue would be dispositive and was estopped from later seeking to advance new arguments in support of its case.
Answer contributed by
Oliver Marsden and
Rory McLeod
43. Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
United Kingdom
As noted above, the parties may agree to exclude the right of appeal on a question of law under section 69 of the Act, but cannot agree to exclude their right of challenge under section 67 or section 68, or both.
Answer contributed by
Oliver Marsden and
Rory McLeod
Enforcement in your jurisdiction
44. Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
United Kingdom
The English courts retain the discretion to enforce an award that has been set aside or suspended by the courts in the seat of arbitration (section 103(2)(f) of the Act), but this is rare in practice.
The English courts have exercised this discretion in cases where the set-aside judgments were obtained by fraud or in breach of the rules of natural justice (Yukos Capital SARL v OJSC Rosneft Oil Company [2014] EWHC 2188 (Comm)). The Court of Appeal has also confirmed that the “act of state” doctrine under English law will not prevent the English courts from inquiring into the circumstances surrounding the set-aside judgment and ruling on whether that judgment should be recognised and enforced in England and Wales (Yukos Capital SARL v OJSC Rosneft Oil Company (No 2) [2012] EWCA Civ 855). In a recent case that illustrates the difficulty of establishing that a set-aside judgment has been obtained by fraud or tainted by bias, the High Court held that “the Claimant bears a heavy burden to establish not only that a foreign court’s decisions were wrong or manifestly wrong but that they are so perverse as for it to be concluded that they could not have been arrived at in good faith or otherwise than by bias” (Maximov v Open Joint Stock CompanyOJSC "Novolipetsky Metallurgichesky Kombinat" [2017] EWHC 1911 (Comm)).
A court’s discretion to enforce an award that has been set aside is, however, limited where the judgment setting aside the award complies with the applicable requirements for the recognition of foreign judgments under English conflicts of law rules (Malicorp v Government of the Arab Republic of Egypt [2015] EWHC 361).
Answer contributed by
Oliver Marsden and
Rory McLeod
45. What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?
United Kingdom
As indicated in question 37, the Act incorporates into English law the provisions for the recognition and enforcement of awards that are found in the New York Convention (sections 101–103). The UK’s recent departure from the EU has no impact on the legal framework for enforcing arbitral awards in the UK under the New York Convention or the Act.
The courts favour the enforcement of awards and will only rarely refuse to enforce on public policy grounds (see, eg, Westacre Investments Inc v Jugoimport-SPDR Holding Co Ltd [1999] 3 WLR 811, where enforcement was ordered despite public policy considerations relating to alleged illegality; and R v V [2008] EWHC 1531). In the recent case of Alexander Brothers Ltd (Hong Kong SAR) v Alstom Transport SA [2020] EWHC 1584 (Comm), the High Court considered in detail whether to deny enforcement on the grounds of public policy, in circumstances where illegality is alleged. A French court had refused to enforce the arbitral award based on suspicions of bribery, and the respondent sought to challenge a without-notice order enforcing the award in England. The High Court held that the tribunal had jurisdiction to determine whether illegality had occurred, but the respondent had not pleaded illegality and on the facts presented to the tribunal there was no illegality. The court held that there was no scope for it to consider the issue of illegality, based on the same facts, at the enforcement stage.
Enforcement of an ICC award was refused in the case of Dallah Estate and Tourism Holding Company v Ministry of Religious Affairs, Government of Pakistan [2010] UKSC 46, although this was on the grounds, inter alia, that the government of Pakistan had not been a party to the operative arbitration agreement. The Supreme Court applied French law as the governing law, concluding that there was no evidence of a common intention on the part of Dallah and the government of Pakistan to make the government a party to the arbitration agreement.
The relevance of issue estoppel to enforcement has twice been considered by the English courts: in Yukos Capital Sarl v OJSC Rosneft Oil Co [2012] EWCA Civ 855, then more recently in Diag Human SE v Czech Republic [2014] EWHC 1639 (Comm). At issue in both cases was whether a decision by another state’s courts not to enforce an arbitral award gave rise to an issue estoppel as to the enforceability of the award that had to be taken into account in enforcement proceedings in the English courts. In Yukos, issue estoppel did not bar enforcement on the basis that the issue previously decided (the application of Dutch public policy) was not the same as that before the English courts (the application of English public policy). In Diag Human, issue estoppel was held to apply and, for what is understood to be the first time, barred enforcement of a foreign arbitral award by the English courts. The judgment in Diag Human, in particular, has been controversial, but it has not been appealed.
In IPCO (Nigeria) Limited (Respondent) v Nigerian National Petroleum Corporation [2017] UKSC 16, the Supreme Court clarified the position regarding the English courts’ power to order an award debtor to provide security for payment of the award under section 103(5) of the Act. The court may make such an order only where enforcement proceedings in England and Wales are adjourned pending resolution of a challenge to the award at the seat of the arbitration; the Act does not empower the court to make such an order in any other circumstances.
In Micula and ors v Romania [2020] UKSC 5, the Supreme Court held that a stay of enforcement proceedings pending a decision by the CJEU was unlawful under international and domestic law. The duty of sincere co-operation, on the basis of which Romania argued for a stay, did not require that, pending the CJEU’s decision, the UK courts refrain from carrying out their enforcement obligations under the ICSID Convention. The UK’s enforcement obligations, owed to non-EU states under articles 54 and 69 of the ICSID Convention, predated the UK’s membership of the EU and thus under TFEU article 351 were not governed by EU law, and in any event were not being considered by the CJEU.
Answer contributed by
Oliver Marsden and
Rory McLeod
46. To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
United Kingdom
Pursuant to section 9(1) of the State Immunity Act 1978, where a state or state entity has agreed in writing to submit a dispute to arbitration, it will be deemed to have waived any jurisdictional immunity. This includes a situation where a state enters into a bilateral investment treaty that contains an arbitration clause (Gold Reserve Inc v Bolivarian Republic of Venezuela [2016] EWHC 153 (Comm)).
In London Steam-Ship Owners' Mutual Insurance Association Ltd v Spain ("The Prestige") [2020] EWHC 1582 (Comm) the Commercial Court ruled that a state making a third-party claim under an insurance policy containing an arbitration clause: (i) thereby becomes a party to the arbitration agreement for purposes of the Act; and (ii) has “agreed in writing” to submit a dispute to arbitration within the meaning of section 9(1) of the State Immunity Act 1978.
A waiver of jurisdictional immunity will not extend to immunity from execution or immunity from interim relief, both of which must be expressly waived (section 13(2) and (3) of the State Immunity Act 1978). The courts will, however, allow execution against assets that are used solely for commercial purposes.
Answer contributed by
Oliver Marsden and
Rory McLeod
Further considerations
47. To what extent are arbitral proceedings in your jurisdiction confidential?
United Kingdom
There is no provision relating to confidentiality in the Act. However, under English common law it is an implied term of the arbitration agreement that the arbitration is private and that, as discussed in response to question 48, certain documents generated in relation to it are confidential (Michael Wilson & Partners Ltd v Emmott [2008] EWCA Civ 184, cited with approval in Halliburton v Chubb (see question 24)). However, the implied terms relating to confidentiality are subject to certain exceptions. The details of arbitral proceedings may, for example, become public if the courts make an order for disclosure in the interests of justice or for the protection of the legitimate interests of an arbitrating party in respect of a claim against or brought by a third party (the Michael Wilson case) or where the award is challenged in the courts.
Answer contributed by
Oliver Marsden and
Rory McLeod
48. What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?
United Kingdom
Under English law, parties to an arbitration are obliged as an implied term of the arbitration agreement to keep the evidence produced and pleadings filed during it confidential (Ali Shipping Corporation v ‘Shipyard Trogir’ [1999] 1 WLR 136). This obligation is not limited to commercially confidential information (Michael Wilson & Partners Ltd). In addition, certain institutional rules (eg, the LCIA Rules) expressly provide for confidentiality in respect of evidence and pleadings.
Materials produced in an arbitration may, in certain circumstances, be produced in court proceedings relating to that arbitration (for example, copies of pleadings from the arbitration proceedings may be submitted as evidence in court proceedings to set aside the award).
Except where they are publicly available, materials produced in an arbitration may be used in other proceedings only with the relevant party’s consent or if the court makes an order for disclosure (see question 47).
Answer contributed by
Oliver Marsden and
Rory McLeod
49. What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?
United Kingdom
Lawyers conducting proceedings in this jurisdiction (whether as counsel or arbitrator) will primarily be subject to any applicable ethical codes or professional standards in their own jurisdiction. Solicitors of England and Wales, registered foreign lawyers and registered European lawyers are bound by the Solicitors’ Regulation Authority (SRA) Standards and Regulations 2019 (StaRs) (including the SRA Code of Conduct 2019), which replaced the SRA Handbook 2011 and SRA Code of Conduct 2011 on 25 November 2019. The StaRs continue to integrate the Code of Conduct of the Council of Bars and Law Societies of Europe (CCBE) in relation to European cross-border activities. Significantly, however, there are now separate Codes of Conduct for firms and individual solicitors. Barristers of England and Wales are bound by the Code of Conduct of the Bar of England & Wales (administered by the Bar Council), as set out in the Bar Standards Board Handbook, the latest version of which came into force on 3 February 2020. Barristers are also bound by the CCBE Code of Conduct insofar as it is not inconsistent with the Bar Code of Conduct. These codes apply whether the solicitor or barrister is acting as counsel or arbitrator in the proceedings. There are also a number of non-binding ethical codes for arbitrators and counsel (including the IBA’s Rules of Ethics for International Arbitrators and its Guidelines on Conflicts of Interest in International Arbitration and the LCIA’s General Guidelines for the Parties’ Legal Representatives).
Answer contributed by
Oliver Marsden and
Rory McLeod
50. Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?
United Kingdom
Subject to the mandatory procedural rules in the Act (see question 27), tribunals generally adapt the procedure to suit the arbitration and the parties involved. There is no "standard" procedural framework.
Answer contributed by
Oliver Marsden and
Rory McLeod
51. Is third-party funding permitted in your jurisdiction? If so, are there any rules governing its use?
United Kingdom
Third-party funding is permitted in arbitration in England and Wales. The provision of funding remains subject to the common law doctrines against champerty and maintenance, but these have been interpreted in such a way as to apply (and invalidate funding agreements) only if an element of impropriety can be shown. This requires a case-by-case analysis that turns on a range of factors, including: the degree of control the funder has over the conduct of the litigation; the extent to which the funded party retains access to information and instructions to solicitors; the amount of return the funder stands to obtain; whether the funder is regulated; and whether there are other factors present that suggest a risk of damages being inflated, evidence being distorted or justice otherwise “sullied” by virtue of the funding agreement.
In our experience, third-party funding is increasingly prevalent in arbitrations in England and Wales.
Third-party funders in England and Wales are regulated pursuant to a voluntary Code of Conduct that is enforced by the Association of Litigation Funders (ALF). However, following the High Court’s decision in Re Ingenious Litigation [2020] EWHC 235 (Ch), in which Nugee J commented that the claimant’s litigation funder’s membership of the ALF was not “sufficient to give one enough confidence” to guarantee that it would pay any costs in the event of an unsuccessful outcome, reform and/or replacement of the ALF appears possible.
As noted above (see question 39), the English courts have endorsed the recovery by a successful party of the costs of funding in an appropriate case.
Unlike jurisdictions such as Hong Kong and Singapore, there is not (yet) a requirement in England for parties or their representatives to disclose the existence of a funding arrangement or the identity of the funder to the other parties and tribunal. However, there appears to be a consensus emerging among the English arbitration community including funders and lawyers (reflected in the recent ICCA-Queen Mary University Task Force of Third Party Funding published in April 2018) that some level of disclosure should be made in certain cases in order to facilitate checks for conflicts of interest for arbitrators, so it is possible that disclosure obligations may be introduced in the future in the form of legislation. Alternatively, or in addition, such obligations may be imposed by way of amendments to institutional rules; for example, there is a provision in the proposed 2020 ICSID Rules (not yet in force) addressing the requirement to disclose the existence of funding.
Answer contributed by
Oliver Marsden and
Rory McLeod
