The Future Of Arbitration In England: The Law Commission's Consultation On The English Arbitration Act 1996

• Published date: 26 September 2022
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution
• Law Firm: Debevoise & Plimpton
• Author: Mr Lord Goldsmith QC, Samantha J. Rowe, Patrick Taylor, Conway Blake, Shreya Aren, Sara Ewad, Diana Moise, Alma Mozetič and Maria Epishkina

Over the past 25 years, the English Arbitration Act 1996 (the "1996 Act") has played a significant role in consolidating London's position as a leading arbitral seat. The passage of time, and rapid and successive revision of arbitration legislation in rival jurisdictions, have prompted users of arbitration to reflect critically on the efficacy of the legislative framework for arbitration in England and Wales. As part of this process, the Law Commission of England and Wales (the "Law Commission") launched a review of the 1996 Act earlier this year, with the stated aim of maintaining the attractiveness of London as an arbitral seat and the "pre-eminence of English law as choice of law".

Following an extensive review of the 1996 Act and pre-consultation discussions with stakeholders (including Debevoise & Plimpton), on 22 September 2022, the Law Commission published its formal consultation paper (the "Consultation Paper"; available here), inviting responses from stakeholders on key areas of the 1996 Act by 15 December 2022. Thereafter, the Law Commission will proceed to make formal recommendations to the UK government as to how to revise and update the 1996 Act. Users of international arbitration should therefore be mindful of the current consultation and reform process as it is likely to have important implications for the future operation of the arbitral regime in England and Wales.

Below, we identify key highlights from the Consultation Paper, including: (i) the specific areas identified by the Law Commissions for potential reform; (ii) those areas where the Law Commission has recommended that the status quo should be preserved or the law left for the courts to develop; and (iii) specific points on which the Law Commission has requested input from the broader legal community

There are six areas of reform that the Law Commission has provisionally identified at this stage:

Arbitrators' Duty of Disclosure and Impartiality

The 1996 Act provides that an arbitral tribunal must act fairly and impartially.¹ As such, a court may remove an arbitrator in the event of "justifiable doubts" as to their impartiality.² However, the 1996 Act is silent on an arbitrator's duty to disclose matters that could lead to such doubts. In 2020, the Supreme Court in Halliburton v Chubb, on which we reported here, held that an arbitrator has a legal duty to disclose matters that might "reasonably give rise to the real possibility of bias". Failure to disclose such matters may lead to justifiable doubts as to the arbitrator's impartiality.³ Given the importance of this issue for ensuring the integrity of the arbitral process, the Law Commission has proposed to codify the case law that imposes a continuing duty on arbitrators to disclose circumstances that might reasonably give rise to justifiable doubts as to their impartiality.⁴

Non-Discrimination in Arbitral Appointments

The Law Commission has also taken account of the growing emphasis among users of international arbitration on issues of diversity and equality and the fact that much of the arbitral process sits outside the framework of UK equalities law.⁵ It has, accordingly, made modest proposals for aligning the 1996 Act with nondiscrimination legislation. The Law Commission has proposed that, where an arbitration agreement specifies criteria for the appointment of an arbitrator:

• The appointment should not be susceptible to challenge on the basis of the arbitrator's legally "protected characteristics" as defined under the Equality Act (e.g race, sex or religion); and
• Any agreement between the parties in relation to the arbitrator's protected characteristics should be unenforceable unless, in the context of that...