The new Act effectively integrates the 1996 Act, rather than replacing it entirely.
The new provisions of the Act include the following:
1. Governing law of arbitration This is now the law that the parties have expressly agreed to apply to the arbitration agreement. Where there is no such agreement, the law of the seat of arbitration applies. This provision is contained in section 1 of the new Act and is included in the 1996 Act as section 6A.
2. Codification of arbitrator’s duty to disclose This change follows the 2020 UK Supreme Court decision in Halliburton v Chubb. The Supreme Court emphasised the importance of arbitrators’ impartiality in English arbitrations and confirmed that an arbitrator has a duty to disclose facts and circumstances that are likely or reasonably likely to create the appearance of bias. This provision is included in section 2 of the new Act and is inserted into the 1996 Act as section 23A.
3. Immunity of arbitrators This issue is dealt with by sections 3 and 4 of the new Act, which amend sections 23 and 24 of the 1996 Act. The new legislation extends the immunity of arbitrators to proceedings to remove them and also confirms that an arbitrator is not personally liable for the costs of the arbitration unless he/she has acted in bad faith.
4. Power to dismiss claims or issues on summary grounds The new provision gives the tribunal power to dismiss claims or issues on summary grounds where one of the parties has no realistic prospect of success in the claim or defence. This is provided for in section 7 of the new Act and is inserted into the 1996 Act as section 39A.
5. Emergency arbitrators These changes are aimed at strengthening the enforcement of orders of emergency arbitrators. Emergency Arbitrators can now:
- issue orders on non-enforcement of their decisions, subject to enforcement by the court;
- give permission to make an application to the court under section 44 of the 1996 Act.
Section 9 of the new Act amends section 44 of the 1996 Act to enable the court to make orders not only against the parties to the arbitration but also against third parties.
7. Challenges to jurisdiction of arbitral tribunal under section 67 of the Arbitration Act
The amendments to section 11 of the new Act seek to establish rules restricting the ability of parties to present new grounds or evidence to the court when challenging the jurisdiction of the arbitral tribunal. It also restricts the ability of the court to rehear evidence unless otherwise required in the interests of justice.
8. Judicial determination of preliminary issues of jurisdiction
The procedure for judicial determination of preliminary issues under section 32 of the 1996 Act (dealing with jurisdiction) and section 45 of the 1996 Act (dealing with English law) is amended. The English court can now consider such matters even if the parties have not expressly agreed that they can be referred to the court. The requirement for the consent of the arbitral tribunal remains, but the court is given a wide discretion in deciding whether to consider such matters.
Coming into force of the Act
Sections 16 to 18 come into force on the date of the Act’s formal adoption, which is today. The remaining provisions will be brought into force by a separate regulation of the Secretary of State.
Nadmitov, Ivanov & Partners advises on international commercial arbitration, represents clients in commercial disputes in international arbitration, and provides services on sanctions issues.
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