English Commercial Arbitration In 2023: A Round-Up

• Published date: 11 January 2024
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution
• Law Firm: Herbert Smith Freehills
• Author: Mr Craig Tevendale, Paula Hodges, Andrew Cannon, Chris Parker KC, Christian Leathley, Charlie Morgan, Hannah Ambrose, James Doe, David Nitek, Mike McClure, Vanessa Naish and Elizabeth Kantor

What are the most important English commercial arbitration developments of 2023? We have put together a round-up below.

1. Reform of the English Arbitration Act

On 6 September 2023, the Law Commission of England & Wales released its Final Report on reform of the Arbitration Act 1996, alongside a draft Bill. While emphasising that "root and branch reform is not needed or warranted", a number of notable reforms were proposed, including codifying an arbitrator's duty of disclosure, introducing a new rule regarding the governing law of the arbitration agreement, and introducing a power of summary disposal for decisions on issues that have no real prospect of success. For a summary of the Law Commission's recommendations in its final report, please see our previous blog post here.

The Law Commission declined to make proposals on topics such as confidentiality, discrimination and appeals on a point of law.

The King's Speech on 7 November confirmed that the Law Commission's draft Bill will be considered in the forthcoming parliamentary session. The draft Bill was put before Parliament with a first reading in the House of Lords on 21 November 2023, and a second reading on 19 December 2023. We understand that the Law Commission intends to invoke a special procedure which may mean that the new legislation could receive royal assent mid to late 2024.

For more information, see our blogposts here and here.

2. Anti-suit injunctions in support of foreign-seated arbitrations - view from the English courts

In two separate cases brought by Deutsche Bank and Commerzbank respectively against RusChemAlliance the Court of Appeal and High Court have granted anti-suit injunctions (ASIs) restraining a Russian party from bringing proceedings in Russia in breach of an arbitration clause in an English law governed contract. The courts granted these ASIs despite the seat of arbitration being in Paris. In a third similar case brought by Unicredit against RusChemAlliance, where the arbitration agreement was governed by French law, the English High Court refused to grant an ASI. This third case is being appealed this month.

In general, English courts may grant an ASI where a contracting party brings proceedings in a foreign jurisdiction, in breach of an exclusive English jurisdiction clause or an arbitration agreement. In the past, the English court has only granted ASIs in support of English seated arbitrations. These cases confirmed that an ASI can be granted in support of a foreign seated arbitration, though the court will need to be satisfied that England is the proper forum for granting relief.

ASIs have become all the more important for transactions involving Russian parties, following the introduction of a Russian law which allows the Russian courts to take exclusive jurisdiction over disputes which involve sanctioned parties. These two decisions may lead to more applications for ASIs from the English courts where Russian proceedings have been commenced, particularly where there is an...