The Arbitration Bill 2023

On 7th November 2023, His Majesty the King set out the government’s agenda in his state opening of Parliament. One noteworthy item among the government’s ambitious proposals was the Arbitration Bill, implementing the recommendations of the Law Commission’s review of the Arbitration Act 1996. This Bill will be of interest not only to members of the legal profession in the UK and overseas, but also to individuals and businesses who wish to solve their disputes in a jurisdiction renowned for its arbitral efficiency and fairness. This article offers a short introduction to the Bill, and the amendments to the Act that have been proposed.

Arbitration in England and Wales

Between 2016 and 2020, the number of international arbitration cases increased by approximately twenty-six percent, with London hailed as the world’s most popular seat. To maintain this reputation, efforts are being made to modernize the arbitration system of England and Wales. This comes in response to other jurisdictions, notably Singapore, Hong Kong, and Sweden, implementing changes to their own arbitration frameworks. Discussed below are some of the Bill’s main proposals. 

1.     Increasing powers for arbitrators to dispose of issues that are unlikely to succeed

Under the terms of this proposal, the Act would allow a Tribunal, subject to the parties’ agreement, to issue awards on a summary basis where it believes that the chances of one of the parties succeeding are low. This will allow arbitrators to overcome difficulties presented by section 33, which states that the Tribunal must balance the avoidance of ‘unnecessary delay or expense’ with allowing both parties ‘reasonable opportunity’ to make their case. Crucially, it will allow disputes to be resolved in a just, efficient, and cost-effective manner.

2.     Arbitrator impartiality and the duty to disclose

With this proposal, conflicts of interest will be avoided and transparency and trust in the arbitration process will be improved. Previously, in the case of Halliburton v Chubb, the Supreme Court ruled that arbitrators had a duty to disclose any facts giving rise to their apparent bias. The laws surrounding this duty will now be codified, with arbitrators expected to disclose any circumstances that might cast doubt on their impartiality.  

3.     Extending the immunity of arbitrators for resignations and removal

This would allow arbitrators to make decisions without fear of having a claim brought against them by a disgruntled party. However, it should be noted that arbitrators will not enjoy such immunity if they have acted in bad faith, or it can be shown that their actions were unreasonable.  

4.     Clarifying the law on arbitration agreements

Previously, questions surrounding the law applicable to arbitration agreements could be found in Enka v Chubb, in which theSupreme Court held that the law governing the arbitration agreement would be that chosen by the parties. If no choice was made, the law governing the underlying contract would be implied to govern the arbitration agreement. This new Bill will avoid the inevitable confusion arising from this position. It proposes that the law expressly agreed by the parties will apply to the arbitration agreement. If there is no such agreement, the law of the seat of arbitration will apply.

5.     Support for orders made by emergency arbitrators

The Bill also includes a provision for increasing the power of emergency arbitrators. If an emergency arbitrator makes an order which is then ignored, they may make a preemptory order. If that order is also ignored, it may then be enforced by the Court.

6.     Allowing court orders in support of proceedings against third parties

Currently, section 44 of the Act enables the court to make orders in support of arbitral proceedings, in relation to taking witness evidence and interim injunctions. It has now been recommended that section 44 will be amended so that orders can now be made by arbitrators against third parties.  

Next Steps

The Bill is currently making its way through Parliament and, if approved by both the House of Commons and House of Lords, it will receive Royal Assent next year and enter statute as the Arbitration Act 2024. In the meantime, practitioners in international arbitration will be monitoring the progress of the Bill closely.