Are English Arbitration Awards ‘Final, Conclusive And Binding'? – Revisiting The Right To Challenge Arbitration Awards In English Courts

Recent debate on the right to appeal Under limited circumstances, a party to an English arbitration award who is dissatisfied with the result can challenge that award in the courts. There are concerns that the current legal framework for such a challenge (or at least, the operation in practice of the framework) does not strike the right balance between upholding awards and allowing defective awards to be challenged.

Reed Smith attended the Commodity Arbitration Club lunch in May 2015, which hosted a number of representatives of main arbitration bodies, arbitrators and legal practitioners. One of the hotly debated topics of the day was appealing arbitration awards in the courts. Concerns were expressed that appeals on points of law may be happening too often. Whether this frequency is a perception or a reality, the possibility that your English law arbitration award may be appealed on a point of law is a reality. So, can you make your arbitration awards truly "final, conclusive and binding"?

This alert sets out the current position regarding the right to appeal on points of law under English law and some of the more commonly used arbitration rules. We will also discuss the pros and cons of excluding your right to appeal and how this may impact your choice of arbitration rules and arbitration clauses.

The position under English law: the Arbitration Act 1996

When can you appeal or challenge an award?

The English legal framework for arbitration is governed by the Arbitration Act 1996 (the 'Act'). The Act provides that arbitration awards can be challenged or appealed to the court by:

1. challenging the tribunal's substantive jurisdiction to decide the case under Section 67

2. challenging the award on the basis of a serious (procedural) irregularity under Section 68

3. appealing the award on a point of law under Section 69

Sections 67 and 68 challenges are said to preserve proper administration of justice and therefore apply to all English seat arbitration awards and cannot be excluded. In contrast, Section 69 applies only "[u]nless otherwise agreed by the parties"1. Therefore the Section 69 right of appeal can be excluded in the arbitration agreement, and requires further consideration by the parties.

Scope of Section 69 of the Act The scope of Section 69 is already significantly restricted by law (in keeping with the principle that arbitration awards should, in general, be final):

Section 69 can be used only to appeal questions of law, not to...