1 Legal framework
1.1 What is the relevant legislation on arbitration in your jurisdiction? Are there any significant limitations on the scope of the statutory regime – for example, does it govern oral arbitration agreements?
The Arbitration Act 1996 applies to domestic and international arbitrations seated in England and Wales. Common law rules may also place obligations on parties and arbitrators - for example, in relation to confidentiality.
The Arbitration Act applies only where the arbitration agreement is in writing (including an agreement made in writing (whether signed or unsigned), an agreement made by the exchange of communications in writing or an agreement evidenced in writing) (Section 5). While oral arbitration agreements therefore fall outside the scope of the act, they may still be recognised and enforced at common law (Section 81(1)(b)).
1.2 Does this legislation differentiate between domestic arbitration and international arbitration? If so, how is each defined?
In practice, the Arbitration Act draws no distinction between domestic and international arbitration. While the act does include provisions related exclusively to domestic arbitration agreements (Sections 85 to 87), these have never been brought into force and we have seen no indication that this is set to change.
1.3 Is the arbitration legislation in your jurisdiction based on the UNCITRAL Model Law on International Commercial Arbitration?
The United Kingdom has not adopted the UNCITRAL Model Law, but the Arbitration Act incorporates many of its principles.
1.4 Are all provisions of the legislation in your jurisdiction mandatory?
Mandatory provisions under the Arbitration Act apply notwithstanding any agreement to the contrary (Section 4(1)). These are listed in Schedule 1. Among the most significant mandatory provisions are those concerning the tribunal's duty to act fairly and impartially (Section 33) and the Sections 67 and 68 grounds for challenging an arbitral award.
1.5 Are there any current plans to amend the arbitration legislation in your jurisdiction?
Not at present. In December 2017, the Law Commission identified arbitration (in particular, summary judgment procedures in arbitration and trust law arbitration) as a subject area which is not currently being taken forward as part of the existing law reform programme, but which may be considered in the future.
1.6 Is your jurisdiction a signatory to the New York Convention? If so, have any reservations been made?
The United Kingdom, including England and Wales, is a signatory to the New York Convention, which is enacted into domestic legislation by Sections 100 to 104 of the Arbitration Act.
This is subject to the ‘reciprocity reservation', meaning that the United Kingdom's obligations under the New York Convention apply only to the recognition and enforcement of arbitral awards made in the territory of another contracting state. The United Kingdom has also extended the territorial application of the convention to certain of its overseas territories and dependencies.
1.7 Is your jurisdiction a signatory to any other treaties relevant to arbitration?
England and Wales, as part of the United Kingdom, is also a party to:
- the International Centre for Settlement of Investment Disputes Convention;
- the Energy Charter Treaty;
- the Geneva Convention on the Execution of Foreign Arbitral Awards;
- numerous bilateral investment treaties; and
- the United Nations Convention on Transparency in Treaty-based Investor-State Arbitration.
2 Arbitrability and restrictions on arbitration
2.1 How is it determined whether a dispute is arbitrable in your jurisdiction?
The Arbitration Act includes no express provisions on arbitrability. However, certain disputes cannot be arbitrated under statute and/or common law, including:
- disputes under an illegal contract;
- certain criminal matters; and
- certain disputes in the employment and consumer contexts.
The arbitrability of a dispute can be challenged before an arbitral tribunal (under Section 31) or before the courts (under Sections 32 and 67).
2.2 Are there any restrictions on the choice of seat of arbitration for certain disputes?
The Arbitration Act applies only to arbitrations seated in England and Wales or Northern Ireland. However, parties domiciled or operating in England and Wales are free to choose another seat of arbitration for the resolution of any dispute.
3 Arbitration agreement
3.1 What are the validity requirements for an arbitration agreement in your jurisdiction?
The Arbitration Act applies only where the arbitration agreement is in writing (including an agreement made in writing (whether signed or unsigned), an agreement made by the exchange of communications in writing or an agreement evidenced in writing) (Section 5).
Arbitration agreements are typically set out in a clause within a larger commercial contract, but may also be set out in a separate document, incorporated into a contract by reference (Section 6(2)).
Oral arbitration agreements fall outside the scope of the Arbitration Act, but may also be recognised as valid under common law (Section 81(1)(b)).
3.2 Are there any provisions of legislation or any other legal sources in your jurisdiction concerning the separability of arbitration agreements?
Under Section 7 of the Arbitration Act, unless otherwise agreed by the parties, an arbitration agreement which forms or was intended to form part of another agreement (whether in writing or not) 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.
The leading English authority on the doctrine of separability is the House of Lords decision in Fiona Trust & Holding Corporation v Privalov  UKHL 40, which confirms that the effect of Section 7 is that the "arbitration agreement must be treated as a ‘distinct agreement' and can be void or voidable only on grounds which relate directly to the arbitration agreement and not merely as a consequence of the invalidity of the main agreement".
3.3 Are there provisions on the seat and/or language of the arbitration if there is no agreement between the parties?
The Arbitration Act contains no default provision on either of these elements. Where there is no agreement between the parties, the arbitral tribunal has the discretion to decide the language and the seat of the arbitration proceedings (Sections 3 and 34(2)(a) and (b)).
4 Objections to jurisdiction
4.1 When must a party raise an objection to the jurisdiction of the tribunal and how can this objection be raised?
Under Section 31 of the Arbitration Act, an objection that the arbitral tribunal lacks substantive jurisdiction at the outset of the proceedings must be raised by a party no later than the time it takes the first step in the proceedings to contest the merits of any matter in relation to which it challenges the tribunal's jurisdiction.
It is also possible for a party to object to the tribunal's jurisdiction during the course of the proceedings. Section 31(2) states that any objection during the course of the arbitral proceedings that the arbitral tribunal is exceeding its substantive jurisdiction must be made as soon as possible after the matter alleged to be beyond its jurisdiction is raised.
In either case, the tribunal may allow a later objection if the delay is considered justified (Section 31(3)). A party's ability to challenge an award on the basis of lack of jurisdiction (Section 67) may be lost if that party has not raised a timely jurisdictional objection during the arbitral proceedings themselves (Section 73).
4.2 Can a tribunal rule on its own jurisdiction?
Yes. Under Section 30 of the Arbitration Act, unless otherwise agreed by the parties, the arbitral tribunal may rule on its own substantive jurisdiction - that is, 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.
4.3 Can a party apply to the courts of the seat for a ruling on the jurisdiction of the tribunal? In what circumstances?
The Arbitration Act allows a party to request that the court make a preliminary finding on the substantive jurisdiction of a tribunal (Section 32(1)). Further, a party may challenge jurisdiction after an award has been issued and the court will revisit the question of jurisdiction (Section 67). The arbitral tribunal may continue the arbitral proceedings and make a further award while an application to the court under this section is pending in relation to an award as to jurisdiction.
It is also open to a party not to participate in the arbitration and to challenge the jurisdiction of the tribunal under Section 72. A party may choose to use Section 72 where it considers that it is not a party to the arbitration agreement, or that the arbitration agreement does not apply to the dispute in question. It is critical that a party which intends to make use of Section 72 does not compromise that position by participating in the proceedings in any way, such as by making any submissions on jurisdiction to the tribunal (Broda Agro Trade (Cyprus) Ltd v Alfred C Toepfer International GmbH  EWCA Civ 1100), or being involved in the appointment of the tribunal. However, writing to an arbitral institution informing it of a party's jurisdictional objections is unlikely to constitute ‘participation' (see The Law Debenture Trust Corporation v Elektrim Finance BV  EWHC 1412). Because Section 72 can only be used by a party which maintains it is not bound to arbitrate, Sections 70(2) and 73 do not apply. Section 72 enables a non-participating party to apply for "a declaration or injunction or other appropriate relief" at any time during the ongoing arbitration, including in relation to jurisdiction. Once an award has been rendered, Section 72(2) also allows a non-participating party to challenge the award under Section 67 on the grounds of lack of substantive jurisdiction. Finally, under Section 66(3), a party may argue that the tribunal lacked jurisdiction to resist enforcement of the award.
5 The parties
5.1 Are there any restrictions on who can be a party to an arbitration agreement?
Any party with the legal capacity to enter into a contract or agreement can be a party to an arbitration agreement, including individuals, corporate bodies, partnerships, states, state entities and public authorities. There may, however, be formalities which must be followed when certain types of parties sign an arbitration agreement (eg, who can sign the arbitration agreement in order to bind the party in question).
5.2 Are the parties under any duties in relation to the arbitration?
The parties' general duty is set out in Section 40 of the Arbitration Act, which provides that they are under a duty to "do all things necessary for the proper and expeditious conduct of the arbitral proceedings", such as "complying without delay with any determination of the tribunal as to procedural or evidential matters, or with any order or directions of the tribunal" and, "where appropriate, taking without delay any necessary steps to obtain a decision of the court on a preliminary question of jurisdiction or law".
As discussed in question 44, under common law, it is generally accepted that the parties have an implied duty to maintain the confidentiality of the hearing, documents generated and disclosed during the arbitral proceedings and the award, subject to a limited number of exceptions discussed in question 45.
5.3 Are there any provisions of law which deal with multi-party disputes?
The English courts uphold multi-party arbitration agreements and the Arbitration Act expressly identifies situations in which there may be more than two parties to an arbitration agreement (Sections 16(7) and 18(2)).
Where the arbitration agreement or any arbitration rules chosen by the parties do not include an express procedure for the appointment of the tribunal in a multi-party scenario, the Arbitration Act allows for the parties to apply to court to make such appointment or direct the appointment process (Section 18(2)).
6 Applicable law issues
6.1 How is the law of the arbitration agreement determined in your jurisdiction?
The doctrine of separability means that it is possible for an arbitration agreement to be governed by a different law from the law of the substantive contract. The governing law of an arbitration agreement is to be determined by reference to three factors (as set out in Sulamerica CIA Nacional de Seguros SA v Enesa Engenharia SA  EWCA Civ 638):
- express choice (ie, the parties may expressly agree on the governing law of the arbitration agreement);
- in the absence of express choice, an implied choice of law (eg, based on the governing law of the substantive contract or the choice of seat); and
- failing that, the law with the "closest and most real connection" to the arbitration agreement (again, it is likely that the governing law of the substantive contract and the choice of seat will be relevant to this analysis).
6.2 Will the tribunal uphold a party agreement as to the substantive law of the dispute? Where the substantive law is unclear, how will the tribunal determine what it should be?
Yes, Section 46(1) of the Arbitration Act provides that the tribunal shall decide a dispute in accordance with the law chosen by the parties as applicable to the substance of the dispute. If there is no such choice or agreement, the tribunal shall apply the law determined by the conflict of laws rules which it considers applicable (Section 46(3)).
7 Consolidation and third parties
7.1 Does the law in your jurisdiction permit consolidation of separate arbitrations into a single arbitration proceeding? Are there any conditions which apply to consolidation?
The tribunal has no residual power to order the consolidation of proceedings, but such power may be conferred on it by the parties' agreement (Section 35).
The parties are free to agree the terms and conditions which may apply to consolidation. Such agreement may be given expressly through the arbitration agreement or by the incorporation of arbitral rules providing for consolidation in certain circumstances.
7.2 Does the law in your jurisdiction permit the joinder of additional parties to an arbitration which has already commenced?
The tribunal has no residual power to order the joinder of additional parties to an arbitration which has already been commenced, but such power may be conferred on it by the parties' agreement.
The parties are free to agree the terms and conditions which may apply to joinder. Such agreement may be given expressly through the arbitration agreement or by the incorporation of arbitral rules providing for joinder in certain circumstances.
7.3 Does an arbitration agreement bind assignees or other third parties?
Under English law, where contractual rights are assigned, the assignee will usually be bound by any applicable arbitration agreement under the original contract. In such circumstances, the assignee takes the transferred rights with the benefit and the burden of any applicable arbitration agreement. This is consistent with Section 82(2) of the Arbitration Act, which states that references to a party to an arbitration agreement include any person claiming "under or through a party to the agreement".
A third party with rights under the Contracts (Rights of Third Parties) Act 1999 may also be treated as a party to an arbitration agreement in the underlying contract in respect of any disputes relating to the enforcement of such third-party rights.
8 The tribunal
8.1 How is the tribunal appointed?
The arbitration agreement may stipulate the procedure for appointment of the tribunal, including the procedure for appointing a chair (Section 16(1)).
If there is no such agreement, and:
- the tribunal is to consist of a sole arbitrator, the sole arbitrator shall be jointly appointed by the parties within 28 days of one party's written request (Section 16(3));
- the tribunal is to consist of two arbitrators, each party shall appoint one arbitrator within 14 days of one party's written request (Section 16(4)); or
the tribunal is to consist of three arbitrators:
- each party shall appoint one arbitrator within 14 days of one party's written request to do so; and
- the two so appointed shall forthwith appoint a third arbitrator as the chairman of the tribunal (Section 16(5)).
The parties are free to agree what will happen in the event of the failure of the procedure for the appointment of the arbitral tribunal (Section 18). Where there is no such agreement, the court may exercise certain powers, including "to give directions as to the making of any necessary appointments; to direct that the tribunal shall be constituted by such appointments (or any one or more of them) as have been made; to revoke any appointments already made; and to make any necessary appointments itself" (Section 18(3)).
8.2 Are there any requirements as to the number or qualification of arbitrators in your jurisdiction?
The parties may agree on the number of arbitrators to form a tribunal and on the qualification of the arbitrators. If there is no such agreement, the tribunal shall consist of one arbitrator (Section 15). There are no default requirements regarding the characteristics of arbitrators.
8.3 Can an arbitrator be challenged in your jurisdiction? If so, on what basis? Are there any restrictions on the challenge of an arbitrator?
Under Section 24(1) of the Arbitration Act, a party to the arbitration may apply to the court for the removal of an arbitrator where ‘substantial injustice' has been or will be caused by any of the following:
- Circumstances exist which give rise to justifiable doubts as to the arbitrator's impartiality;
- The arbitrator does not possess the qualifications required by the arbitration agreement;
- The arbitrator is physically or mentally incapable of conducting the proceedings, or there are justifiable doubts as the arbitrator's capacity to do so; or
- The arbitrator has failed or refused to conduct the proceedings properly or efficiently.
If the arbitration is governed by institutional rules which provide the institution 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 (Section 24(2)).
Where an application to remove an arbitrator has been made, the tribunal may continue the arbitral proceedings and make an award while such application is pending (Section 24(3)).
8.4 If a challenge is successful, how is the arbitrator replaced?
The parties are free to decide the process for replacing an arbitrator who has ceased to hold office. Where there is no such agreement in place (including through institutional rules), the provisions of Sections 16 (procedure for appointment of arbitrators) and 18 (failure of appointment procedure) apply in relation to the filling of the vacancy as in relation to an original appointment (Section 27).
8.5 What duties are imposed on arbitrators? Are these all imposed by legislation?
In conducting the arbitral proceedings, in its decisions on matters of procedure and evidence and in the exercise of all other powers conferred on it, the tribunal has a general duty to:
- act fairly and impartially as between the parties, giving each party a reasonable opportunity to present its case and deal with that of its opponent; and
- adopt procedures suitable to the circumstances of the particular dispute, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined (Section 33).
Subject to limited exceptions, the tribunal is under an implied duty to maintain the confidentiality of the hearing, the documents generated and disclosed during the arbitral proceedings and the award.
8.6 What powers does an arbitrator have in relation to: (a) procedure, including evidence; (b) interim relief; (c) parties which do not comply with its orders; (d) issuing partial final awards; (e) the remedies it can grant in a final award and (f) interest?
(a) Procedure, including evidence?
Subject to the right of the parties to agree to any matter, the arbitral tribunal shall decide all procedural and evidential matters (Section 34). These matters include:
- when and where any part of the proceedings is to be held;
- the language or languages to be used;
- whether written statements are required and if so, in what form;
- which documents or classes of documents should be disclosed between the parties (if any);
- whether strict rules of evidence should apply regarding the admissibility and relevance of material presented, and the time, manner and form in which such material should be exchanged;
- whether the tribunal should take the initiative in ascertaining the facts and the law; and
- whether there should be oral or written evidence or submissions (Section 34(2)).
(b) Interim relief?
Unless otherwise agreed by the parties, the tribunal has the power to grant certain interim measures, including security for costs and measures to preserve evidence (Sections 38 and 39). The parties may also agree to give further powers to the tribunal to grant interim measures, either in the arbitration agreement or by reference to institutional arbitration rules which themselves provide such powers.
The court can grant interim measures in support of arbitration, including in relation to the taking of witness evidence, the preservation of evidence and the granting of interim injunctions (Section 44). However, the court can order interim measures only where the tribunal has no power (eg, where the tribunal has not yet been constituted or where the tribunal lacks the necessary power) or is unable to act effectively (Section 44(5)). In this context, there is some uncertainty as to the impact of emergency and expedited provisions in institutional rules on the ability of the English court to order interim measures. In Gerald Metals SA v Timis  EWHC 2327 (Ch), the English court held that where there is sufficient time for an applicant to obtain relief from an expedited tribunal or emergency arbitrator under the rules, the court has no power to grant urgent relief.
Otherwise, the court may grant ex parte relief where the matter is urgent. In the absence of urgency, the court will require the permission of the tribunal or the written consent of the parties (Sections 44(3) and (4)).
(c) Parties which do not comply with its orders?
If a party fails to comply with any order or directions of the tribunal and cannot show sufficient cause, the tribunal may make a "peremptory order" to the same effect, prescribing an appropriate time limit for compliance, such as the tribunal considers appropriate (Section 41(5)).
If a claimant fails to comply with a peremptory order to provide security for costs, the tribunal may make an award dismissing its claim (Section 41(6)). Otherwise, if a party fails to comply with any other kind of peremptory order, tthe tribunal may:
- direct that the party in default shall not be entitled to rely upon any relevant allegation or material;
- draw adverse inferences from the act of non-compliance;
- proceed to an award based on such materials as have been properly provided to it; and/ or
- make such order as it thinks fit as to the payment of costs of the arbitration incurred in consequence of the non-compliance (Section 41(7)).
Further, unless otherwise agreed by the parties, the court may make an order requiring a party to comply with a peremptory order made by the tribunal, but only where the applicant has exhausted any arbitral process available (Section 42).
(d) Issuing partial final awards?
Under Section 47 of the Arbitration Act, and unless otherwise agreed by the parties, the tribunal may make more than one award at different times and on different aspects of the case to be determined. The tribunal may, in particular, make an award relating to:
- an issue affecting the whole claim; or
- a part only of the claims or cross-claims submitted to it for decision.
(e) The remedies it can grant in a final award?
The parties are generally free to agree on the tribunal's power to grant remedies (Section 48). Unless the parties have agreed otherwise, the tribunal has the same powers as the English High Court and the county court (Section 105(1)) to order:
- a party to do or refrain from doing anything;
- specific performance of a contract (other than a contract relating to land); or
- rectification, setting aside or cancellation of a deed or other document.
A tribunal does not have the power under English law to award punitive damages or to order imprisonment or the payment of fines.
Subject to the parties' agreement, the tribunal may award simple or compound interest "from such dates, at such rates and with such rests" as it considers meets the justice of the case, both up to the date of the award and between the date of the award and of payment (Section 49).
8.7 How may a tribunal seated in your jurisdiction proceed if a party does not participate in the arbitration?
Where a respondent fails to participate in arbitration without showing sufficient cause, the tribunal may continue the proceedings without that party and may make an award on the basis of the evidence before it (Section 41(4)). Tribunals will typically give non-participating respondents every opportunity to participate as the case progresses and, mindful of its duties under Section 33(1) of the Arbitration Act, the tribunal may in practice raise points for the claimant to address which would have been available for the respondent had it chosen to participate.
8.8 Are arbitrators immune from liability?
Arbitrators and their employees and agents are immune for acts and omissions in the discharge or purported discharge of their duties, unless they have been shown to have acted in bad faith. However, an arbitrator may not be immune from any liability incurred by reason of the arbitrator's resignation (Section 29).
9 The role of the court during an arbitration
9.1 Will the court in your jurisdiction stay proceedings and refer parties to arbitration if there is an arbitration agreement?
Yes, if legal proceedings are initiated against a party to an arbitration agreement, such party can apply to the court for a stay of proceedings. The court shall grant the stay once it is satisfied that the arbitration agreement is not null and void, inoperative or incapable of being performed (Section 9).
9.2 Does the court in your jurisdiction have any powers in relation to an arbitration seated in your jurisdiction and/or seated outside your jurisdiction? What are these powers? Under what conditions are these powers exercised?
Yes, the England and Wales legal framework provides a ‘pro-arbitration' environment, with the court being afforded a range of powers to assist and support the arbitral tribunal. The courts have the following powers in relation to an arbitration seated in England and Wales:
- Stay court proceedings in the face of a valid arbitration clause (Section 9);
- Rule on the tribunal's jurisdiction as a preliminary issues upon application by one party, either with the tribunal's permission or with the agreement of all parties to the arbitral proceedings (Section 9(4) or Section 32);
- Extend the time for commencing an arbitration, provided that the parties have first exhausted any available remedies before the tribunal (Section 12);
- Make directions as to the making of any necessary appointments or make any appointments itself in circumstances where there is no provision in the arbitration agreement regarding appointment and no agreed appointment between the parties (Section 18);
- Terminate the arbitrator's appointment in limited circumstances, including where there is a joint revocation of the tribunal's authority (Section 23), dismissal for bias or misconduct (Section 24), resignation or death (Sections 25 and 26);
- Determine the arbitrators' fees where these have not been agreed by the parties prior to an award being made, where the court has removed an arbitrator under Section 24, after the award is made but before it is delivered (Section 56), and after it is published (Section 64);
- Enforce tribunal peremptory orders, with the tribunal's permission (Section 42);
- Secure attendance of witnesses, with the tribunal's permission (Section 43);
Order interim injunctive relief either in cases of urgency or with tribunal permission on the following matters (Section 44):
- the taking of evidence of witnesses;
- the preservation of evidence;
orders relating to property which is subject to the arbitral proceedings, concerning:
- inspection, photographing, preservation, custody or detention; and
- the taking of samples from the property, or experiments to be conducted upon it;
- the sale of goods that are the subject of the arbitral proceedings; and
- the granting of an interim injunction or the appointment of a receiver;
- Determine preliminary points of law with all parties' agreement or the tribunal's permission (Section 45);
- Extend the time for making an arbitral award upon application by the tribunal or any party to the arbitral proceedings, provided that any available arbitral process for obtaining an extension of time has been exhausted (Section 50);
- Determine the recoverable costs of the arbitration in the absence of a tribunal determination upon application by any party to the arbitral proceedings (Section 63);
- Enforce the tribunal award in the same manner as a judgment or order of the court (Section 66);
- Determine challenges to awards on jurisdictional grounds (Section 67) or on the grounds of serious irregularity (Section 68), and appeals from awards on questions of (English) law (Section 69), provided that any available arbitral process of appeal or review has been exhausted;
- Order the tribunal to state the reasons for its award in sufficient detail (Section 70); and
- Extend the time limits relating to arbitral proceedings, provided that the parties have first exhausted any available remedies before the tribunal (Section 79).
Sections 9 to 11 (stay of legal proceedings) and Section 66 (enforcement of arbitral awards) apply even if the seat of the arbitration is outside England and Wales or Northern Ireland, or where no seat has been designated or determined.
The powers conferred by Section 43 (securing the attendance of witnesses) and Section 44 (court powers exercisable in support of arbitral proceedings) apply even if the seat of the arbitration is outside England and Wales or Northern Ireland, or if no seat has been designated or determined. However, the court may refuse to exercise any such power if, in its opinion, the fact that the seat of the arbitration is outside England and Wales or Northern Ireland - or that, when designated or determined, the seat is likely to be outside England and Wales or Northern Ireland - makes it inappropriate to do so.
The court may exercise a power conferred by the Arbitration Act for the purpose of supporting the arbitral process where no seat of the arbitration has been designated or determined, and by reason of a connection with England and Wales or Northern Ireland, the court is satisfied that it is appropriate to do so.
9.3 Can the parties exclude the court's powers by agreement?
The parties may exclude the powers set out:
- under Section 42 to enforce peremptory orders of a tribunal;
- under Section 44 to make orders support of arbitral proceedings;
- under Section 45 to determine preliminary points of law; and
- under Section 69 to challenge arbitral awards on a question of law.
The right to challenge an arbitral award on jurisdictional grounds (Section 67) or serious irregularity (Section 68) cannot be excluded.
10.1 How will the tribunal approach the issue of costs?
In the absence of agreement between the parties, the tribunal can determine which costs of the arbitration are recoverable (Section 63(1)) and make an award allocating those costs (Section 63). In advance of the parties incurring costs, the tribunal may also direct that recoverable costs be limited (Section 65).
The costs of the arbitration include:
- the fees and expenses of the arbitrator or arbitrators (provided that that they are reasonable or appropriate in the circumstances (Section 64(1));
- the fees and expenses of any arbitration institution concerned; and
- the legal and other costs of the parties (Section 59).
The general principle under English law is that costs should follow the event (ie, the successful party will be awarded its costs), unless this is not considered appropriate in the circumstances (Section 61(2)).
If the tribunal does not determine what costs (if any) are recoverable, any party to the arbitration may apply to the court for a costs determination (Section 63(4)).
There is no requirement for the parties to provide an estimate or budget of the anticipated costs at the outset of the arbitration proceedings.
Unless the parties agree otherwise, the tribunal may order a claimant to provide security for the costs of the arbitration under Section 38(3) of the act. If a claimant then fails to comply with such an order, the tribunal may make an award dismissing the claim (Section 41(6)).
10.2 Are there any restrictions on what the parties can agree in terms of costs in an arbitration seated in your jurisdiction?
Any agreement that one party is to pay the whole or part of the costs of the arbitration in any event shall not be valid unless agreed after the dispute in question has arisen (Section 60). This prohibits a ‘pre-agreement' that one party shall bear the costs irrespective of the outcome of the case.
11.1 Is third-party funding permitted for arbitrations seated in your jurisdiction?
Third-party funding of arbitration is permitted. Indeed, London is one of the most active jurisdictions globally for third-party funding. Most third-party funders adhere to the Code of Conduct for Litigation Funders, which sets out standards of best practice and behaviour.
12.1 What procedural and substantive requirements must be met by an award?
The arbitrators should decide the dispute in accordance with:
- the law applicable to the substance of the dispute; and
- other considerations agreed between the parties or determined by the tribunal (Section 46).
The parties may agree on the form of the award. If there is no agreement, the award shall:
- be in writing;
- be signed by all arbitrators or all 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; and
- state the seat of the arbitration and the date on which the award was made (Section 52).
Parties can agree on the way in which an award should be notified. If not, an award is notified by serving the parties with a copy of the award "without delay after the award is made" (Section 55).
12.2 Must the award be produced within a certain timeframe?
An arbitration agreement may specify the timeframe within which the award should be made. Unless otherwise agreed by the parties, the court may, by order, extend that time upon application by the tribunal or by any party to the arbitral proceedings. The court shall make such an order only where any available arbitral process has been exhausted and where it is satisfied that substantial injustice would otherwise be done (Section 50).
13 Enforcement of awards
13.1 Are awards enforced in your jurisdiction? Under what procedure?
Yes, the English courts have a pro-enforcement stance and both domestic and foreign arbitral awards can be enforced in the English courts. As a signatory to the New York Convention, the courts recognise foreign arbitration awards made in the territory of a state that is a party to the New York Convention in accordance with Section 101 of the Arbitration Act; but awards made in the territory of non-signatory states may also be enforced.
The party seeking to enforce the award will apply to the court to enter a judgment or order of the court on the same terms as the award (under Section 66 or 101 of the act (for awards made in the territory of another state which is a party to the New York Convention 1958)). A party may also be able to enforce an arbitral award at common law. In either case, the courts will refrain from examining the merits of the award.
Enforcement of the award can then take place using all means available to a court under English law, such as enforcement against goods or assets or third-party debt orders.
Where an award has been set aside by the courts in the seat of arbitration, the English courts have discretion as to whether to enforce such an award (Section 103(2)(f); Yukos Capital SARL v OJSC Rosneft Oil Company  EWHC 2188 (Comm)). The English courts will question a foreign court's decision on its own law and/or to undermine a foreign court's judgment for bias or unfairness where there is compelling evidence (Malicorp Ltd v Government of the Arab Republic of Egypt  EWHC 361 (Comm)).
14 Grounds for challenging an award
14.1 What are the grounds on which an award can be challenged, appealed or otherwise set aside in your jurisdiction?
England and Wales provides for the challenge of an award on two mandatory grounds and one non-mandatory ground. Taking first the mandatory grounds, which cannot be excluded by party agreement, a party may apply to the court to challenge an award on the grounds that:
- the tribunal lacked substantive jurisdiction (Section 67); or
- there was a serious irregularity affecting the tribunal, the proceedings or the award (Section 68).
Section 68 provides an exhaustive list of irregularities, and in each case the court must be satisfied that the irregularity has caused or will cause substantial injustice to the applicant. The courts adopt a relatively strict approach to the interpretation of Section 68 and do not permit appeal on the merits of the case disguised as Section 68 applications. The courts' statistics consistently underline the point that successful Section 68 applications are rare.
A party may also seek to appeal an award on the grounds that the tribunal made an error on a question of law (Section 69). An appeal on a question of law is non-mandatory and the parties can therefore agree to exclude this as a ground for challenging an award. Many institutional arbitration rules expressly exclude all non-mandatory rights of appeal. It is not possible, for example, to challenge an award issued in a London-seated arbitration under the International Chamber of Commerce or LCIA Rules on the grounds that there has been an error of law in the award.
14.2 Are there are any time limits and/or other requirements to bring a challenge?
A Section 67 or 68 challenge 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 on which the applicant or appellant was notified of the result of that process (Section 70(3)). However, the applicant or appellant must first have exhausted any available arbitration process of appeal or review and any available recourse for correction of the award (Section 70(2)).
The applicant must file an arbitration claim form to bring a challenge. Part 62 of the English Rules of Civil Procedure will apply.
14.3 Are parties permitted to exclude any rights of challenge or appeal?
As set out above, the parties are permitted to exclude the right to challenge an award on a question of law (Section 69).
15.1 Is arbitration seated in your jurisdiction confidential? Is a duty of confidentiality found in the arbitration legislation?
The Arbitration Act is deliberately silent on the question of confidentiality (see Departmental Advisory Committee on Arbitration (DAC) Report on Arbitration Bill 1996). However, under English law, parties to the arbitration and the tribunal are under implied duties to maintain confidentiality (see Ali Shipping Corporation v Shipyard Trogir  EWCA Civ 3054). How this implied duty arises is controversial, but was analysed in Ali Shipping as being an implied term of the arbitration agreement. This legal analysis (but not the principle of confidentiality) has been questioned in later case law, but has not been overturned (Emmott v Michael Wilson & Partners Ltd  EWCA Civ 184).
The extent of the implied duty of confidentiality covers the arbitral hearing itself (which could also be described as privacy), and documents generated and disclosed during the arbitral proceedings (Ali Shipping and Emmott). The award and reasoning are also prima facie covered by confidentiality. This duty may be subject to certain exceptions discussed in question 45. It is unclear whether the implied duty of confidentiality extends to the fact of the arbitration (eg, that an arbitration is taking place between particular parties) or whether witnesses are bound by duties of confidentiality.
Because of the lack of clarity surrounding the extent of these implied duties, where possible, confidentiality is best addressed in the arbitration agreement or by adopting arbitral institutional rules which provide for confidentiality. The parties and the tribunal may wish to address confidentiality in the first procedural order. Parties may also wish to discuss confidentiality with their witnesses and service providers.
15.2 Are there any exceptions to confidentiality?
As discussed in question 44, the parameters of the implied duty of confidentiality are still developing.
The current case law identifies a number of potential exceptions to confidentiality of the documents generated and disclosed during the proceedings, although these may be context specific (Emmott):
- The parties may consent, expressly or impliedly, to disclosure;
- Disclosure is ordered or permitted by the court;
- Disclosure is reasonably necessary to establish or protect the legal interests of an arbitrating party (Hassneh Insurance Co v Mew  1 Lloyd's Rep 243 and Westwood Shipping Lines Inc v Universal Schiffahrtsgesellschaft MBH  EWHC 3837 (Comm)); or
- Disclosure is in the interests of justice (see Ali Shipping, Westwood Shipping, Emmott). The scope of this exception remains debatable.
In terms of an arbitral award, there are certain obvious exceptions to confidentiality. A party may need to disclose the award to a court to enforce it. Similarly, if a party seeks to challenge an award before a court with supervisory jurisdiction, the award will need to be subject to limited disclosure.
The English court seeks to protect the confidentiality of the award and documents produced before it. Arbitration claim forms may be inspected by a non-party only if the court grants permission (see Practice Direction 188.8.131.52), and permission will be given only if that non-party can satisfy the court that disclosure is reasonably necessary to protect or establish a legal right (see Glidepath Holding BV v Thompson  EWCA Civ 1071). Arbitration hearings are generally held in private (CPR 62.10). In UMS Holding Ltd v Great Station Properties SA  EWHC 2473 (Comm), the English court also considered that it had an inherent jurisdiction to regulate access to an award that was in the public domain following an order to disclose.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.