Arbitral proceedings in the United Kingdom

16 Сен
16.09.2015

В публикации рассматривается британская юрисдикция с точки зрения арбитража (третейского суда). Приводится законодательство, содержащее нормы, регулирующие арбитражный процесс, причем особое внимание уделяется авторами институциональному международному коммерческому арбитражу, а также исполнению иностранных арбитражных решений, в частности, в заморских территориях, таких как, Гибралтар, например. Значительное внимание авторы уделяют также арбитражному соглашению, трибуналу, арбитражному производству, издержкам, арбитражному решению. Рассматриваются и другие вопросы, в том числе об ответственности арбитров и взаимоотношениях арбитража с государственным судом. Освещение правил, регулирующих эти отношения и отношения третьих лиц в споре вызывает повышенный интерес к настоящей публикации.

Legal framework

National arbitration laws
What legislation applies to arbitration in your jurisdiction?

The Arbitration Act 1996 governs domestic and international arbitration seated in England and Wales or Northern Ireland.  On some issues, the common law also provides important authority or guidance.

Mandatory laws
Are there any mandatory laws?

Schedule 1 to the Arbitration Act 1996 lists the mandatory provisions of the act (pursuant to Section 4(1)). These include provisions dealing with:

  • the power of the court to stay legal proceedings (Section 9);
  • objections to the substantive jurisdiction of the tribunal (Section 31);
  • determination by the court of any question as to the substantive jurisdiction of the tribunal (Section 32);
  • the tribunal’s general duty to act fairly and impartially (Section 33)
  • enforcement of the award (Section 66);
  • challenge of an award on the basis of lack of substantive jurisdiction (Section 67);
  • challenge of an award on the ground of serious irregularity (Section 68); and
  • the loss of a party’s right to object (Section 73).

New York Convention
Is your country a signatory to the New York Convention? If so, what is the date of entry into force?

The United Kingdom is a signatory to the New York Convention, which entered into force on December 23 1975.

Are there any reservations to the general obligations of the convention?

The United Kingdom has entered into the reciprocity reservation, meaning that the New York Convention applies to the recognition and enforcement of awards made in the territory of another contracting state only. The coverage of the New York Convention has been extended to British overseas territories (eg, Gibraltar, Isle of Man).

Treaties and conventions
What other treaties and conventions in relation to arbitration is your jurisdiction party to?

The United Kingdom is a party to:

  • the Geneva Convention on the Execution of Foreign Arbitral Awards 1927;
  • approximately 100 bilateral investment treaties;
  • the Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1966; and
  • the Energy Charter Treaty.

UNCITRAL
Has your jurisdiction adopted the UNCITRAL Model Law?

No, although the Arbitration Act 1996 was inspired in part by the UNCITRAL Model Law.

Reform
Are there any impending plans to reform the arbitration laws in your jurisdiction?

No.

Arbitration agreements

Validity
What are the validity requirements for an arbitration agreement?

An arbitration agreement must be in writing or evidenced in writing to fall within the scope of the Arbitration Act 1996 (Section 5(1)). The writing requirement is broadly defined (Sections 5(2) to (5)). Oral arbitration agreements fall outside the coverage of the Arbitration Act 1996, but are recognised and enforceable under the common law (see Section 81(1)(b)). Oral arbitration agreements also fall outside the scope of the New York Convention.

English courts generally take a broad view as to what constitutes an arbitration agreement under the Arbitration Act 1996. It suffices for the parties to have recorded in writing nothing more than an intention to refer any disputes to arbitration (Section 6(1)).

Enforcement of agreements
How are arbitration agreements enforced in your jurisdiction? What is the attitude of the national courts towards arbitration agreements?

The Arbitration Act 1996 promotes party autonomy and the English courts are expected to adopt a non-interventionist approach where parties have agreed to submit their disputes to arbitration. The English courts have proven to be arbitration friendly and to construe arbitration agreements in a manner that is supportive of arbitration. If timely sought, the courts will stay their proceedings in respect of a matter which under the arbitration agreement is to be referred to arbitration (Section 9), and might also issue an anti-suit injunction against the party acting in breach of the arbitration agreement.

Unless otherwise agreed by the parties, the tribunal has the power to rule on its own substantive jurisdiction – that is, as to whether there is a valid arbitration agreement governing the dispute (Section 30(1)). Where certain conditions are met, however, the court is entitled, on request, to make a preliminary determination of any question as to the substantive jurisdiction of the tribunal (Section 32(1)).

Consolidation
Can an arbitral tribunal with its seat in your jurisdiction consolidate separate arbitral proceedings under one or more contracts, and, if so, in what circumstances?

Unless the parties agree to confer such power on the tribunal, the tribunal has no power to consolidate separate arbitration proceedings. However, the parties are free to agree – ex ante, through a compromis or implicitly by virtue of arbitration rules incorporated in an arbitration agreement – that proceedings be consolidated or that concurrent hearings be held on such terms as may be agreed (Section 35).

Choice of law
How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?

The primary rule is that the tribunal will apply the law chosen by the parties as applicable to the substance of the dispute (Section 46(1)(a)). In the absence of agreement between the parties as to the applicable law, the tribunal shall apply the law determined by the conflict of laws rules which it considers applicable (Section 46(3)).

Separability
Are there any provisions on the separability of arbitration agreements?

Section 7 provides that an arbitration agreement which forms or was intended to form part of another agreement (whether or not in writing) shall not be regarded as invalid, non-existent or ineffective because that other agreement is invalid, did not come into existence or has become ineffective, and  shall for that purpose be treated as a distinct agreement.

Multiparty agreements
Are multiparty agreements recognised?

English courts recognise multi-party agreements. Sections 16(7) and 18(2) expressly acknowledge circumstances where there may be more than two parties to an arbitration agreement.

In drafting a multi-party agreement, attention must be paid to the procedure in respect of the constitution of the tribunal. Where there is no express agreement between the parties in this regard, any party to the arbitration agreement may, upon notice to the other parties, apply to the court to give directions as to the making of any necessary appointments or to make any necessary appointment itself. An appointment made by the court has effect as if made with the agreement of the parties (Section 18(4)). In the absence of agreement between the parties as to the number of arbitrators, and where there is no application to the court by any of the parties, the dispute will be resolved by a sole arbitrator (Section 15(3)).

Arbitral tribunal

Criteria for arbitrators
Are there any restrictions?

The Arbitration Act requires arbitrators to:

  • be impartial;
  • possess the qualifications required by the arbitration agreement; and
  • be physically and mentally capable of conducting the proceedings.

As to the qualifications required by the arbitration agreement, the parties enjoy virtually complete autonomy with regard to which criteria to adopt. For example, they need not comply with anti-discrimination provisions contained in labour law when selecting their arbitrators (Jivraj v Hashwani [2011] UKSC 40).

Contractual stipulations
What can be stipulated about the tribunal in the agreement?

The arbitration agreement may stipulate:

  • the number of arbitrators;
  • their necessary qualifications;
  • the procedure for their appointment; and
  • any other matters that do not infringe the mandatory rules under the Arbitration Act 1996.

Parties are not required to comply with anti-discrimination provisions contained in labour law when selecting their arbitrators (Jivraj v Hashwani [2011] UKSC 40).

Default requirements
Are there any default legal requirements as to the selection of a tribunal – for example, concerning the number of arbitrators or their characteristics?

Section 15(3) provides that in the absence of an agreement as to the number of arbitrators, the dispute will be resolved by a sole arbitrator. No default requirements are provided in respect of the characteristics of arbitrators.

Challenging the appointment of an arbitrator
Can the appointment of an arbitrator be challenged? Can an arbitrator be disqualified? What is the procedure for this?

The appointment of an arbitrator may be challenged under the Arbitration Act 1996. The court has the power, on request, to remove an arbitrator on the following specified grounds:

  • Circumstances exist that give rise to justifiable doubts as to his impartiality;
  • He does not possess the qualifications required by the arbitration agreement;
  • He is physically or mentally incapable of conducting proceedings or there are justifiable doubts as to his capacity to do so; or
  • He has refused or failed properly to conduct proceedings or to use reasonable dispatch in conducting proceedings or making an award; and, in each case, where substantial injustice has been or will be caused to the applicant (Section 24(1)).

If there is an arbitration institution vested by the parties with the power to remove an arbitrator, the court shall not exercise its power of removal unless it is satisfied that institutional recourses have first been exhausted. During the pendency of an application before the court, the tribunal may continue the proceedings. The arbitrator concerned is entitled to appear and be heard by the court before it makes any order under this section.

Jurisdictional objections
How should an objection to jurisdiction be raised?

An objection to the substantive jurisdiction of a tribunal at the outset of arbitration proceedings should be raised swiftly (ie, no later than the time that party takes the first step in the proceedings to contest the merits of any matter in relation to which it challenges the tribunal’s jurisdiction).

The party may also object to jurisdiction during the course of the proceedings, provided that the objection is made as soon as possible after the matter alleged to be beyond the jurisdiction of the tribunal is raised (Sections 31(1) and (2)). The tribunal may admit an objection later in the proceedings if it considers that the delay is justified (Section 31(3)). Similarly, if the court determines the jurisdiction of the tribunal by way of preliminary ruling (Section 32), or if the award determining the jurisdiction is subsequently challenged (Section 67), a jurisdictional objection may not be admitted if the party has not raised such objection timely during the arbitration proceedings (Section 73).

Replacement of an arbitrator
Why and how can an arbitrator be replaced?

An arbitrator can be replaced following:

  • revocation of his authority by the parties (Section 23);
  • judicial removal (Section 24);
  • his resignation (Section 25); or
  • his death (Section 26).

The vacancy should be filled in accordance with the ordinary rules for the appointment of an arbitrator or arbitrators.

Powers and obligations
What powers and obligations do arbitrators have?

The Arbitration Act 1996 provides the tribunal with numerous powers, such as:

  • the power to rule on its own substantive jurisdiction (Section 30);
  • the power to appoint experts or legal advisers (Section 37(1)); and
  • the power to order a claimant to provide security for the costs of the arbitration (Section 38).

The tribunal is under a general duty to act fairly and impartially as between the parties, giving each party a reasonable opportunity to put its case forward and deal with that of its opponent, and to adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined (Section 33(1)).

Liability of arbitrators
Are arbitrators immune from liability?

An arbitrator is not liable for anything done or omitted in the discharge or purported discharge of his functions as arbitrator, unless the act or omission is shown to have been in bad faith (Section 29). This immunity applies equally to an employee or agent of the arbitrator. However, an arbitrator is not immune from any liability incurred because of his resignation.

Communicating with the tribunal
How do the parties communicate with the tribunal?

As a general principle, a party should provide the other party with a copy of all of its communications with the tribunal so as to avoid doubts as to the impartiality of the tribunal. The Arbitration Act 1996 does not, however, expressly regulate the communication of parties with the tribunal. In practice, email communications are a well-accepted means of communication.

Reaching decisions
Is unanimous agreement of the tribunal required? If there is disagreement, does the will of the majority suffice? What are the implications of this?

If there is no unanimity among arbitrators, decisions, orders and awards can be made by a majority of the arbitrators. The view of the chairman shall prevail in relation to a decision, order or award in respect of which there is neither unanimity nor a majority (Sections 20(3) to (4)).

Arbitrability
Are there any disputes incapable of being referred to arbitration?

The Arbitration Act 1996 includes no express provisions on what disputes are incapable of being referred to arbitration. However, Section 81(1)(a) preserves the English common law position that a limited range of disputes are incapable of resolution by arbitration. These include disputes under illegal contracts, matters involving criminality and claims under the Employment Rights Act 1996 (which renders void any agreement that would prevent an employee from having its case heard before an employment tribunal).

Can the arbitrability of a dispute be challenged?

The arbitrability of disputes may be challenged before the tribunal (Section 31) or in the courts (Sections 32 and 67).

Jurisdiction and competence-competence
Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?

English law recognises the principle of competence-competence in international commercial arbitration – namely, that a tribunal is empowered to make a determination as to its own jurisdiction. A tribunal thus has the power to rule on:

  • whether there is a valid arbitration agreement;
  • whether the tribunal is properly constituted; and
  • what matters have been submitted to arbitration in accordance with the arbitration agreement (Section 30).

Any such ruling, however, may be challenged not only by any available arbitration process of appeal or review (Section 30(2)), but also before a court (Section 32 (preliminary point of jurisdiction) and Section 67 (challenge)) or an enforcing court in another jurisdiction. Review by the English courts on a tribunal’s jurisdiction is de novo(Peterson Farms v C & M Farming Ltd (2004) 1 Lloyd’s Rep 603).

Arbitral proceedings

Starting an arbitration proceeding
What is needed to commence arbitration?

Unless otherwise agreed by the parties (eg, via the rules of an arbitration institution that have been agreed in the arbitration agreement), the arbitration proceedings are commenced when one of the parties sends a notice in writing to the other party:

  • requiring that party to appoint an arbitrator or agree to the appointment of an arbitrator; or
  • where an arbitrator is named in the arbitration agreement, submitting the matter set out in the notice to the person so named.

Where the arbitrator or arbitrators are to be appointed by a third party, proceedings are commenced when one party gives notice in writing to that third party requesting it to make the appointment in respect of that matter (Section 14).

Limitation periods
Are there any limitation periods for the commencement of arbitration?

There are no limitation periods for the commencement of arbitration, unless provided for in the arbitration agreement. If the parties have agreed to a limitation period, the court may at its discretion extend such period (Section 12). The ordinary limitation periods applicable to legal proceedings also apply to arbitration proceedings (Section 13). Thus, for purely contractual claims, the limitation period is six years (12 years if the contract is under seal) from the date of the breach; and for non-contractual tortious claims, the limitation period is six years from the date on which the cause of action accrued (subject to the rules on personal injury, latent damage and knowledge of the accrual of the cause of action). If the contract is governed by a foreign law, the limitation period(s) of that law should apply.

Procedural rules
Are there any procedural rules that arbitrators must follow?

Arbitrators must abide by the procedural rules agreed upon by the parties, including the arbitration rules under which the tribunal must conduct the case. The tribunal remains subject to the general duties under Section 33. The tribunal enjoys extensive powers to decide all procedural and evidentiary matters, subject to the right of the parties to agree on any matter (Section 34).

Dissenting arbitrators
Are dissenting opinions permitted under the law of your jurisdiction?

The right of an arbitrator to issue a dissenting opinion is recognised in this jurisdiction, and there is no prohibition under English law against a dissenting opinion being produced and delivered by a member of the tribunal. Although not a rule or even standard practice, it also is not unusual for arbitrators to consider themselves under a duty to inform the parties of the reasons for their dissent.

Judicial assistance
Can local courts intervene in proceedings?

English courts may rule on the substantive jurisdiction of the tribunal (under Sections 32 and 67) where the necessary conditions are met. English courts may also intervene to assist arbitration proceedings by, among other things, making orders requiring a party to comply with a peremptory order made by the tribunal (eg, in evidentiary matters).

Can the local courts assist in choosing arbitrators?

Where there has been a failure of the procedure for the appointment of the tribunal, the parties are free to agree under Section 18(1) what is to happen. In principle, the parties may agree in those circumstances that an arbitrator is to be appointed by the court. Further, if there is no agreement, any party to the arbitration agreement may apply to the court to exercise its powers, which include powers:

  • to give directions as to the making of any necessary appointments;
  • to direct that the tribunal shall be constituted by such appointments as have been made;
  • to revoke any appointments already made; and
  • to make any necessary appointments itself (Section 18).

What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration? Can they compel parties to arbitrate? Can they issue subpoenas to third parties?

Where a respondent fails to participate in arbitration without sufficient cause, the tribunal may proceed to an award on the basis of the evidence before it. In those circumstances, the tribunal will provide a full opportunity to the party in default to participate before making an award in its absence on the basis of the evidence before it (Section 41(4)), including making a peremptory order against the defaulting party and prescribing such time for compliance with it as the tribunal considers appropriate.

The tribunal has no power to compel a third party to attend a hearing. Similarly, a court has no power in respect of third parties which are not party to the arbitration agreement, save for its power to secure the attendance of witnesses (under Section 43).

Third parties
In what instances can third parties be bound by an arbitration agreement or award?

English law requires the consent of a party in order for that party to be bound by an arbitration agreement or award. English law does not recognise the group of companies doctrine. However, as a matter of English law, where contractual rights are assigned or novated, the assignee or incoming party will usually be bound by any applicable arbitration agreement contained in the original contract. Similarly, subrogated insurers or other third parties may be bound by any arbitration agreement that applies to the subrogated rights or claims. Finally, non-parties to a contract may be able to invoke or be bound by an arbitration agreement contained in a contract where that party has, or has assumed, rights under that contract pursuant to the Contracts (Rights of Third Parties) Act 1999.

An arbitration award is binding on parties who claim a title or right under, through or on behalf of another party. This includes:

  • ancestors and heirs;
  • successors to rights and/or liabilities; and
  • trustee beneficiaries.

Although not binding on third parties, an award may produce an effect on third parties (eg, the finding of liability of a debtor may affect a guarantor not bound by the arbitration agreement).

Default language and seat
Unless agreed by the parties, what is the default language and location for arbitrations?

There is no default language or location under the Arbitration Act 1996. In the absence of agreement between the parties, the tribunal has discretion to decide the language and the seat of the arbitration proceedings (Sections 3 and 34(2)(a) and (b)).

Gathering evidence
How is evidence obtained by the tribunal?

This is a matter, subject to any agreement of the parties, that falls within the procedural discretion of the tribunal. The tribunal typically obtains evidence pursuant to exhibited and/or other documentary evidence, filed witness statements, filed expert reports and oral evidence given by witnesses and experts, as well as site visits.  It also has the power to appoint experts, whether legal or technical.

What kinds of evidence are acceptable?

The tribunal has broad discretion to decide on evidentiary matters, including whether to apply strict rules of evidence (or any other rules) as to the admissibility, relevance or weight of any material (oral, written or other) sought to be tendered on any matters of fact or opinion, and the time, manner and form in which such material should be exchanged and presented (Section 34(2)(f)).

Confidentiality
Is confidentiality ensured?

The Arbitration Act 1996 does not expressly provide for confidentiality in arbitration proceedings. However, subject to the parties’ express agreement in relation to confidentiality, under English common law there is an implied duty of confidentiality in all arbitration agreements. This duty arises from the concept of the essentially private nature of arbitration (see Emmott v Michael Wilson & Partners Ltd [2008] 1 Lloyd’s Rep 616 (CA)).

Can information in arbitral proceedings be disclosed in subsequent proceedings?

The confidentiality of arbitration proceedings is not protected in the following circumstances:

  • The parties agree otherwise;
  • There are parallel or subsequent court proceedings or subsequent arbitral proceedings;
  • The party that originally produced the material has consented to disclosure;
  • Matters relating to the arbitration are the subject of court proceedings (eg, as a result of a party’s application to the court for preliminary relief, enforcement or appeal);
  • It is reasonably necessary for the protection of the legitimate interests of an arbitrating party; or
  • Disclosure is otherwise necessary in the interests of justice.

Ethical codes
What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?

Solicitors of England and Wales, registered foreign lawyers and registered European lawyers are bound by the Solicitors’ Regulation Authority (SRA) Handbook 2011 (including the SRA Code of Conduct 2011).

Barristers of England and Wales are subject to the Code of Conduct of the Bar of England and Wales.

These codes do not apply to foreign lawyers who are not registered as foreign or European lawyers, or to other professionals involved in arbitration proceedings in England.

The new rules of the London Court of International Arbitration (LCIA) contain conduct standards that will apply to all representatives in LCIA arbitrations.

Costs

Estimation & allocation
How are the costs of arbitration proceedings estimated and allocated?

The tribunal may make an award allocating the costs of the arbitration as between the parties, subject to any agreement of the parties (Section 61(1)).

Potential elements of a costs award will include:

  • the fees and expenses of the arbitrator or arbitrators;
  • the fees and expenses of any arbitration institution concerned; and
  • the legal and other costs of the parties (Section 59).

Unless the parties agree otherwise, the tribunal shall award costs on the general principle that costs should follow the event (meaning that legal costs will be awarded to the successful party), except where it appears to the tribunal that in the circumstances this is not appropriate in relation to the whole or part of the costs (Section 61(2)).

The tribunal has broad discretion to determine the recoverable costs where the parties have not themselves agreed what costs of the arbitration are recoverable (Section 63). The tribunal may, if sufficiently in advance of the incurring of costs, limit the recoverable costs of the arbitration (Section 65).

If the tribunal does not determine what costs (if any) are recoverable, any party to the arbitration may apply to the court for a determination (Section 63(4)).

Security for costs
Can the national court or tribunal order security for costs under the law in your jurisdiction?

Unless the parties agree otherwise, the tribunal has the power to order the claimant to provide security for costs (Section 38(3)),

If a claimant fails to comply with a peremptory order of the tribunal to provide security for costs, the tribunal may make an award dismissing its claim (Section 41(6)).

The court may order an applicant or appellant to provide security for costs in respect of proceedings pending before it, such as an appeal to the court against the award of the tribunal (Section 70(5)).

The award

Requirements
What legal requirements are there for recognition of an award? Must reasons be given for the award? Does the award need to be reviewed by any other body?

The parties are free to agree on the form of the award (Section 52(1)). In the absence of agreement, the award must:

  • be in writing;
  • be signed by all arbitrators (or those assenting to the award);
  • contain the reasons for the award (unless it is an agreed award or the parties have agreed to dispense with reasons);
  • state the seat of the arbitration; and
  • state the date on which the award is made (Section 52(3) to (5)).

There is no obligation for an award to be reviewed by another body before it becomes final and binding. An award made by a tribunal pursuant to an arbitration agreement is final and binding, without more, both on the parties and on any persons claiming through or under them (Section 58(1)). The parties are, however, free to agree to any additional requirements to be met, which could in principle include review by another body, before an award becomes final and binding.

Timeframe for delivery
Are there any time limits on delivery of the award?

The tribunal is not subject to a time limit for making the arbitral award, unless the parties have agreed otherwise. If the arbitration agreement imposes such a time limit, the court may extend it if it is satisfied that a substantial injustice would otherwise result (Section 50(3)).

Remedies
Does the law impose limits on the available remedies? Are some remedies not enforceable by the court?

Under Section 48, the parties are generally free to agree on the scope of the tribunal’s power to grant remedies.  Unless the parties have agreed otherwise, the tribunal has the same powers as the court to order a party to do or refrain from doing anything, order specific performance or order rectification, setting aside or cancellation of a deed or other document.

The freedom of a tribunal to grant remedies, however, is subject to any applicable public policy exceptions. For example, a tribunal has no power under English law to award punitive damages for breach of contract and an English court will generally have no power to enforce any such award. While it has been argued that, where the parties’ agreement is sufficiently wide to encompass claims under a foreign statute and that foreign statute provides for special damages or punitive damages (eg, triple damages in US antitrust or civil Racketeer Influenced and Corrupt Organisation Act claims), a tribunal may be entitled to award such damages in an arbitration sited in England and Wales or Northern Ireland, it is not established whether such awards would be enforced in England. A tribunal cannot assume sovereign powers, such as the power to order imprisonment or the payment of fines to the state, as these powers are reserved to certain courts. The powers of the court in Section 48(5) are limited to those possessed by the High Court and the County Court (under Section 105(1)).

What interim measures are available? Will local courts issue interim measures pending constitution of the tribunal?

The court is empowered to grant interim relief in support of arbitration proceedings (Section 44), but will issue interim relief only when the tribunal has no power or is unable to act effectively (Section 44(5)). That will be the case where the tribunal has not yet been constituted or when the tribunal does not have the necessary powers to grant the interim relief requested (eg, orders against third parties). Even where the court is satisfied that the tribunal has no power or is unable to act effectively, the case for interim relief must be one of urgency; otherwise, the court will require the permission of the tribunal or the written consent of all the parties to the arbitration (Sections 44(3) and (4)).

The court is entitled under Section 44 to grant orders for the full range of injunctions which the court is ordinarily entitled to grant (eg, freezing injunctions, mandatory injunctions, anti-suit injunctions and anti-arbitration injunctions).

In relation specifically to anti-suit injunctions, the English court is not permitted under EU law to issue an anti-suit injunction to restrain proceedings brought in the courts of another EU or European Free Trade Agreement (EFTA) member state on the ground that such proceedings would violate an arbitration agreement (Allianz SpA v West Tankers Inc, Case C-185/07 [2009] 1 AC 1138). The English High Court has, however, confirmed that no principle of EU law prevents a tribunal from entertaining a claim for damages or an indemnity for breach of an arbitration agreement arising out of proceedings brought before the court of another EU member state (West Tankers Inc v Allianz SpA [2010] EWHC 854 (Comm) (Flaux J)). English courts remain fully willing and able to restrain proceedings brought in courts outside EU/EFTA countries in violation of an arbitration agreement.

Interest
Can interest be awarded?

The parties are free to agree on the tribunal’s power to award interest (Section 49). In the absence of such agreement, the tribunal may award simple or compound interest from such dates, at such rates and with such rests as it considers appropriate, up to the date of the award and from the date of the award to the date of payment.

At what rate?

The court may award interest on the whole or part of any amount awarded, and any award as to costs.

Finality
Is the award final and binding?

Unless otherwise agreed by the parties, an award made by the tribunal pursuant to an arbitration agreement is final and binding both on the parties and on any persons claiming through or under them (Section 58(1)), save that the award may be challenged by any available arbitration process of appeal or review or otherwise under the applicable provisions of the Arbitration Act 1996.

What if there are any mistakes?

Where there are mistakes in an award, the tribunal may, on its own initiative or on the application of a party:

  • correct the award so as to remove any clerical mistake or  any error arising from an accidental slip or omission; or
  • in respect of any ambiguity in the award, clarify or remove it (Section 57(3)(a)).

Further, the tribunal may make an additional award in respect of any claim (including a claim for interest or costs) which was presented to the tribunal but not dealt with in the award, but only after all the parties have received a reasonable opportunity to make representations to the tribunal (Section 57(3)(b)).

Any application for the exercise of the foregoing powers of the tribunal under Section 57(3) must be made within 28 days of the date of an award or such longer period as the parties may agree (Section 57(4)). Any correction of an award must be made within 28 days of the date on which the tribunal receives the application or, where the correction is made by the tribunal on its own initiative, within 28 days of the date of the award; or in either case within such longer period as the parties may agree (Section 57(5)). Any additional award must be made within 56 days of the date of the original award or such longer period as the parties may agree (Section 57(6)).

Can the parties exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?

The parties may agree to exclude the right of appeal to the court on a question of law under Section 69. The adoption of arbitration rules that exclude appeal to state courts is deemed to constitute an agreement by the parties to exclude the application of Section 69. In contrast, Sections 67 and 68 are mandatory provisions (under Schedule 1 to the Arbitration Act 1996) from which it is not permissible to derogate.

Appeal
On what grounds can parties appeal an award?

There are three grounds on which a party may appeal (or challenge) an award made in England and Wales or Northern Ireland to the court.

First, a party may argue under Section 67 that the tribunal lacked substantive jurisdiction to make the award.

Second, a party may challenge an award on the grounds of serious irregularity under Section 68. ‘Serious irregularity’ may arise where, for example, the tribunal has failed to comply with its general duty under Section 33 to act fairly and impartially, or has failed to conduct the proceedings in accordance with the parties’ agreed procedure, and in each case the court considers that this has caused or will cause substantial injustice to the applicant.

Third, unless the parties have agreed otherwise, a party to arbitration proceedings may in certain circumstances appeal to the court under Section 69 on a question of law arising out of an award made in the proceedings. This is limited under Section 82(1) to domestic law, so that the English courts will not seek to deal with issues of foreign law. An appeal under Section 69 may not be brought without either the agreement of all parties to the proceedings or leave of the court (Section 69(2)), which will be granted only if the four conditions under Section 69(3) are met. As a general rule, the only documents admissible in a Section 69 appeal are the award itself, the contract governing the dispute between the parties and any documents clearly incorporated into the foregoing by reference (see Sylvia Shipping Co Ltd v Progress Bulk Carriers Ltd [2010] EWHC 542 (Comm), at [86], per Hamblen J).

What is the procedure for challenging awards?

An application to challenge an award under Section 67 or 68, or an appeal under Section 69, must be brought “within 28 days of the date of the award or, if there has been any arbitral process of appeal or review, of the date when the applicant or appellant was notified of the result of that process” (Section 70(3)). However, under Section 70(2), no application or appeal may be brought under Section 67, 68 or 69 unless the applicant or appellant has first exhausted any available arbitration process of appeal or review and any available recourse for correction of the award under Section 57.

An appeal against an arbitral award is commenced by the issue of an arbitration claim form (in accordance with Part 62 of the English Rules of Civil Procedure (CPR)). The claim form must state the section of the Arbitration Act 1996 under which the application is brought and give details of the award being challenged, identifying which part or parts are being challenged and specifying the grounds for the challenge (Rule 62.4(1) of the CPR).

Enforcement
What steps can be taken to enforce the award if there is a failure to comply?

The successful party may apply to the court, by leave of the court, to enter a judgment or order of the court on the same terms as the award (Section 66 and Section 101 (for New York Convention awards)). A party that holds a judgment in its favour incorporating the arbitral award may use all ordinary measures under English law to enforce that judgment, including:

  • execution against goods belonging to the judgment debtor (effected by obtaining from the High Court a writ offieri facias or from the county court a warrant of execution);
  • a third-party debt order (transforming a debt payable by a third party to the judgment debtor into an obligation incumbent on that third party to pay the debt to the judgment creditor);
  • an attachment of earnings order, where the judgment debtor is employed with earnings; or
  • a charging order (an order “imposing on any such property as may be specified in the order a charge for securing the payment of any money due or to become due under [a] judgment or order” (Charging Orders Act 1979, Section 1(1))).

In addition, an award creditor may apply to the court for a freezing injunction in aid of execution of an award debt.

Can awards be enforced in local courts?

Yes, both domestic arbitral awards and foreign arbitral awards can be enforced in the English courts.

How enforceable is the award internationally?

Awards made in this jurisdiction are internationally enforceable:

  • under the New York Convention in the jurisdictions where the New York Convention is in force;
  • under the Geneva Convention in the remaining non-New York Convention countries that are still parties to the Geneva Convention; and
  • pursuant to other domestic law provisions (if such exist) in the jurisdictions in which these conventions do not apply.

To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

Generally (and subject to certain limitations), the assets of a state enjoy immunity before the English courts at the enforcement stage, unless the foreign state has explicitly waived such immunity or the property is being used or intended to be used for commercial purposes (Sections 13(2) to (4) of the State Immunity Act 1978).

Are there any other bases on which an award may be challenged, and if so, by what?

Under Section 66, leave to enforce an award shall not be given where the tribunal lacked substantive jurisdiction to make the award.  Moreover, a number of discretionary bases on which enforcement may be refused have been recognised by the English courts, many of which resemble the defences against enforcement of a New York Convention award (eg, award obtained by fraud, enforcement is contrary to public policy etc).

Section 103 contains an exhaustive list of the grounds for refusing recognition or enforcement of a New York Convention award, in accordance with the grounds specified by the New York Convention.

Section 37 of the Arbitration Act 1950 sets out the grounds on which recognition and enforcement of a Geneva Convention award can be refused (eg, lack of a valid arbitration agreement).

Section 9 of the Administration of Justice Act 1920 and Section 4 of the Foreign Judgments (Reciprocal Enforcement) Act 1933 list the grounds for refusing to register the award under these statutes (eg, fraud, lack of jurisdiction).

Action on an award at common law will be dismissed where there is “real ground for doubting the validity of the award” (Middlemiss & Gould v Hartlepool Corp [1972] 1 WLR 1643, at 1647, per Lord Denning MR). The validity of an award may be impeached where, for example, the arbitration agreement is shown to have been invalid according to the law applicable thereto or the award itself is shown to be invalid and/or not final according to the law governing the arbitration proceedings.

How enforceable are foreign arbitral awards in your jurisdiction?

There is a liberal enforcement regime in relation to foreign arbitral awards in England.  New York Convention awards may, by leave of the court, be enforced in the same manner as a judgment or order of the court (Section 66).

Foreign arbitral awards which are made in the territory of a state which is a party to the Geneva Convention but not the New York Convention are enforceable under Part II of the Arbitration Act 1950 (Section 99 of the Arbitration Act 1996).   The enforcement regime is set out under Sections 37 to 39 of the Arbitration Act 1950.
The Administration of Justice Act 1920 and the Foreign Judgments (Reciprocal Enforcement) Act 1933 allow for the enforcement of arbitral awards made mainly in former Commonwealth countries.  After registration, such arbitral awards can be enforced as if they were an English judgment.
Finally, a successful party in an arbitration can bring an action on the award at common law. An action on the award is appropriate where the validity of the award or the right to proceed upon it is so doubtful that leave to enforce it under Section 66 cannot be obtained.

Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?

Under Section 103(2)(f), recognition or enforcement of a New York Convention award may be refused if the party against which it is invoked proves that the award has been set aside by the courts at the seat of the arbitration. The English courts have yet to settle conclusively the circumstances, if any, in which a foreign arbitral award will be enforced in England notwithstanding its annulment by the courts at the seat of the arbitration. In a recent High Court decision it was held that arbitration awards annulled by the foreign supervisory courts may still, under certain circumstances, be given effect under common law (Yukos Capital SàRL v OJSC Oil Company Rosneft [2014] EWHC 2188 (Comm)). As permission to appeal in this case has been granted, the controversial issue is now likely to be settled by the English Court of Appeal.

Third-party funding

Rules and restrictions
Are there rules or restrictions on third-party funders?

Third-party litigation funders are subject to the Code of Conduct for Litigation Funders (published in 2011 by the Civil Justice Council, an agency of the UK Ministry of Justice), which sets out the standards of best practice and behaviour for litigation funders. Among other things, the code:

  • requires funders to maintain adequate financial resources at all times to meet their obligations to fund all of the disputes they have agreed to fund and to cover aggregate funding liabilities under all of their funding agreements for a minimum period of 36 months;
  • provides that funders must behave reasonably and may withdraw from funding only in specific circumstances; and
  • prevents funders from taking control of litigation or settlement negotiations, as well as from causing the litigant’s lawyers to act in breach of their professional duties.

Class-action or group arbitration

Concept
Is there a concept in your jurisdiction providing for class-action arbitration or group arbitration? If so, are there any limitations to the arbitrability of such claims or requirements that must be met before such claims may be arbitrated?

Arbitration practice in England does not endorse the concept of class action arbitration. It is generally thought that a representative action is anathema to the principles of privity and party autonomy (where claimants face respondents in the same proceedings who are party to the same contract) that form the touchstone of English arbitration law.

Hot topics

Emerging trends
Are there any hot topics or trends emerging in arbitration in your jurisdiction?

New London Court of International Arbitration (LCIA) Arbitration Rules have recently been formally adopted by the LCIA Court and the LCIA Board of Directors. The rules will come into effect on October 1 2014.

Авторы: Jay L. Alexander, Johannes Koepp

Источник: http://www.lexology.com/library/detail.aspx?g=1d6d7570-ace1-4e81-9285-89f5ac952381