UK: Forum shopping in arbitration

Last Updated: 11 October 2005
Article by Stephen Netherway

Recent events in the US, and the market disputes that are highly likely to follow, underline the need to consider carefully where to arbitrate. There are some major differences between the arbitration process in the US and that before an English tribunal and the parties to any dispute will want to give thought to the potential impact on the final outcome. A form of this article has also appeared in Insurance Day and Global Re.

To view the aricle in full, please see below:

Full Article

Unlike commercial litigation, forum shopping in arbitration is more like window shopping; you stare through the glassy window at what’s available and come back another day to actually sample the goods. Parties to a commercial contract with an international element choose the arbitration seat during their contractual discussions (if not, a court will, if necessary, later determine the parties’ implied choice). One might suppose that all tribunals, wherever they sit, when directed to apply the same substantive law to a dispute, will reach the same decision; as we see below this may not in fact be the case. The choice of arbitration seat will have repercussions and parties are well advised to give careful thought to such matters at the outset.

To take a topical example, consider Hurricane Katrina, which is widely being described as the costliest natural catastrophe in history – with estimates of insured damage ranging between $35 billion and $60 billion. It will undoubtedly have a huge impact on the global and London reinsurance markets. It is also inevitable that future disputes will arise with reinsurers of these exposures. Most reinsurance contracts nowadays contain arbitration clauses, and there is inevitably going to be an international dimension to some of these disputes (particularly with respect to reinsurances written by London Market Reinsurers of the direct carriers on the homeowners/commercial property market). Although the majority of these reinsurances will be subject to arbitration in the US, and the majority of retrocession protections purchased by London Market (Direct) Reinsurers will be subject to arbitration in England, it is possible that some disputes that arise between parties may be arbitrated before a tribunal in the US while other similar disputes will be arbitrated before a panel in England. The outcome of these apparently similar disputes, even if the same system of law is to be applied, may in fact differ, especially if there are no agreed procedural rules for that arbitration specified at the outset in the parties’ arbitration agreement. The reason for this can be attributed to some of the differences in the way US and English arbitrations are conducted and regulated by procedures, as well as the mindset of US and English tribunal members.

Arbitrator independence/lobbying of arbitrators

In England, impartiality of arbitrators is fundamental: Section 24 of The Arbitration Act 1996 empowers the removal of any arbitrator upon the application of a party, if circumstances exist that give rise to justifiable doubts as to an arbitrator’s impartiality. The requirement that arbitrators be impartial exists in the US but there is no specific right of removal. However, in English proceedings parties are expected not to communicate with arbitrators without notice to the other. It is not permissible to beauty-parade potential arbitrator appointees to an English tribunal, or to question them in relation to their general approach to issues that are likely to arise in the arbitration reference.

In the US, the process of appointment is completely different. For example, in a three-person tribunal in the US, very often what is procured by each party is an arbitrator who will have been cherry-picked to be an advocate for it for at least part of the arbitration process, and who will lobby the third appointed member of the tribunal. This, needless to say, constitutes a potentially different arbitration dynamic to that of an English panel.

Directions prior to final hearing

The directions that US/English arbitrators will give prior to a hearing will generally follow the procedures adopted by the courts of their jurisdiction. Both tribunals are conferred wide powers to fix procedures. Differences in case presentation however will often arise: in England statements of case, confined to statements of fact, are invariably exchanged, whilst in US proceedings, the parties’ statement of positions will usually combine statements of law, fact and argument.

Very often the ability to compel third parties to produce documents or other evidence in an arbitration will be highly relevant to its ability to make its case or not before a particular tribunal. Both in the US and in English procedure, third party discovery may be ordered by arbitrators. However there can be differences as to when that third party discovery must be produced. In England, tribunals may agree that a third party should produce documents pursuant to a witness summons in advance of any final hearing. This is obviously a very useful tool for preparing cases and even to assist settlement. In the US, the Courts are not unanimous as to when such third party discovery may be ordered and specifically whether this may be ordered in advance of the final hearing.

A further, more obvious, difference between US and English arbitration is the deposition process in the US arbitration process. Whilst witness statements and expert reports are invariably exchanged before a final hearing in English arbitration, unlike the US there is no taking of oral testimony by way of discovery; in the US, with opposing parties able to put questions to other parties’ witnesses or potential witnesses within a deposition process, positions (and arguably merits) can crystallise more quickly, again leading to a potentially different settlement dynamic.

The hearing: the determination

The conduct of the actual hearing is broadly similar whether one is arbitrating before a US panel or an English tribunal. It is also very often the case for example that reinsurance treaty wordings will contain what is referred to as an equity clause or an honourable engagement clause - essentially directing arbitrators not to bind themselves to strict rules of procedure and law. Arguably, it is more often the case that US panels are more willing and inclined to follow such directions. Indeed, in US arbitrations it is not necessary to follow formal rules of evidence as it would be in Court proceedings, and all of this promotes, in many cases, a more merit-driven determination of issues than that of an English panel, who are often particularly mindful that their awards may be subject to Court review on a point of law (see below). Under US laws, as arbitrators have broad powers to fashion appropriate remedies, it is often said that a US panel will be inclined to "split the baby" i.e. to give each party something, and that is often said to be a function of the fact that in the US reasoned awards are often not produced and substantive appeal of such decisions is simply not possible.

In England, as mentioned, an appeal on a point of law is permissible on certain legal grounds (the decision must be at least "obviously wrong", or "open to serious doubt" and raising a point of general importance) provided permission to appeal is obtained from the English Courts, whilst in the US effectively any legal challenge is confined to setting aside awards because of serious irregularity/bias regarding the panel and the process.

It is not the purpose of this article to question what mode of procedure is better, but the propensity for a different substantive determination of rights, on similar facts and applying similar legal principles, does exist. Hurricane Katrina is expected to have a far greater impact on the London reinsurance market than all four hurricanes of 2004 combined, and while all members of the market will wish to play their crucial part in the reconstruction efforts following Katrina, they ought to be aware of realistic explanations of how the disputes might be determined and how that may differ depending whether heard in England or in the US.

Window shopping is often considered a pleasant experience; it costs nothing, and you benefit from having had a thorough look through the options available before settling on your final decision. A rash purchase, on the other hand, could impact on the family purse for years and years.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 10/10/2005.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.