United Kingdom: Arbitration

The In-House Lawyer Logo

This country-specific Q&A provides an overview of the legal framework and key issues surrounding arbitration law in the United Kingdom.

This Q&A is part of the global guide to Arbitration.

For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/index.php/practice-areas/arbitration/

  1. What legislation applies to arbitration in your country? Are there any mandatory laws?

    The Arbitration Act 1996 applies to arbitrations in England, Wales and Northern Ireland. The Arbitration (Scotland) Act 2010 applies to Scottish arbitrations. Schedule 1 of the Arbitration Act 1996 and section 8 of the Arbitration (Scotland) Act 2010 state the mandatory provisions.

  2. Is your country a signatory to the New York Convention? Are there any reservations to the general obligations of the Convention?

    The United Kingdom, Gibraltar and the Isle of Man contracted into the New York Convention on 5th May 1980, with a reciprocity reservation.

  3. What other arbitration-related treaties and conventions is your country a party to?

    The United Kingdom is signatory to the (a) Geneva Protocol 1923, (b) Geneva Convention on the Execution of Foreign Arbitral Awards 1927, (c) New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958, (d) Washington Convention on the Settlement of Investment Disputes Between States and Nationals of Other States 1965 and (e) various Bilateral and Multilateral Investment Treaties (BITs & MITs).

  4. Is the law governing international arbitration in your country based on the UNCITRAL Model Law? Are there significant differences between the two?

    UNCITRAL has not been adopted but has influenced the Arbitration Act 1996 to some extent. The main differences are arbitrability, seperability, competence of the arbitral tribunal to rule on its own jurisdiction and judicial intervention at all stages in arbitral proceedings including appeals.

  5. Are there any impending plans to reform the arbitration laws in your country?

    The Law Commission is currently undertaking consultation on whether or not to amend the Arbitration Act 1996 to make it more streamlined, for example introducing Summary Judgments and allowing Trust disputes to become arbitral.

  6. What arbitral institutions (if any) exist in your country?

    There are many such as London Court of International Arbitration (LCIA), International Chamber of Commerce (ICC), International Centre for Dispute Resolution (ICDR), Chartered Institute of Arbitrators (CIArb), London Maritime Arbitrators’ Association (LMAA) and Insurance and Reinsurance Arbitration Society (ARIAS).

  7. What are the validity requirements for an arbitration agreement under the laws of your country?

    An agreement must be evidenced in writing (section 5).

  8. Are arbitration clauses considered separable from the main contract?

    Yes (section 7).

  9. Can claims under more than one contract be brought in the one arbitral proceeding? Can an arbitral tribunal with its seat in your country consolidate separate arbitral proceedings under one or more contracts, and, if so, in what circumstances?

    Yes, but only with the agreement of the parties (section 35). There have been exceptions to this in limited circumstances where there (a) agency, (b) piercing of the corporate veil or (c) assignment.

  10. How is the law applicable to the substance determined?

    By considering any express agreement or the application of conflict of laws rules. The tribunal may determine any procedural and evidential matters not agreed by the parties (section 34).

  11. Are any types of dispute considered non-arbitrable? What is the approach used in determining whether or not a dispute is arbitrable?

    Almost all commercial disputes are arbitrable, save for a few exceptions such as (a) breach of statutory employment rights, (b) insolvency and (c) criminal matters.

  12. In your country, are there any restrictions in the appointment of arbitrators?

    Arbitrators must be fair and impartial (section 33(1)).

  13. Are there any default requirements as to the selection of a tribunal?

    Yes, in the absence of agreement (sections 16 & 17). Where a sole arbitrator shall be appointed, this should be done jointly within 28 days of a party’s request to do so. Where a panel of 3 is required a party shall appoint one arbitrator within 14 days of a request to do so, the requesting party appointing the second and the 2 arbitrators appointing the third.

  14. Can the local courts intervene in the selection of arbitrators? If so, how?

    Yes (section 18). Parties may apply to court (under Part 62 of the Civil Procedure Rules (CPR)) for (a) directions on appointment (b) constitution of appointment or (c) appointment itself. The court shall have regard to any agreed qualification required of the arbitrators (section 19).

  15. Can the appointment of an arbitrator be challenged? Can an arbitrator be disqualified? What is the procedure for such challenge?

    Yes (section 24). Parties may apply to court (under Part 62 of the CPR) to remove an arbitrator if they (a) give justifiable doubts to their impartiality, (b) do not possess the requisite qualifications, (c) are or become incapacitated, (d) refuse or fail to properly conduct proceedings or make an award.

    Parties may also (section 23) (a) agree the circumstances upon which an arbitrator’s authority shall be revoked or (b) subscribe to prescribed rules of an arbitral institution.

  16. Are arbitrators immune from liability?

    Yes (section 29). The 2 exceptions are (a) bad faith and (b) resignation.

  17. Is the principle of competence-competence recognised in your country? What is the approach of local courts towards a party commencing arbitration in apparent breach of an arbitration agreement?

    Yes (section 30). The tribunal may determine its own substantive jurisdiction in relation to (a) validity of the arbitral agreement (b) proper constitution of the tribunal and (c) issues it must decide.

    On an application by a party (section 9), the court shall stay proceedings unless (a) that party has taken a step in the court proceedings (having deemed to have waived their right to arbitrate) or (b) the court finds the arbitral agreement is null, void, inoperative or incapable or being performed.

  18. How are arbitral proceedings commenced in your country? Are there any key provisions under the arbitration laws relating to limitation periods of which the parties should be aware?

    Arbitral proceedings commence (section 14) when service is effected, of a written request to (a) refer a matter to a pre-selected arbitrator (b) require the appointment of an arbitrator or (c) a third party requesting the appointment of an arbitrator.

  19. What is the applicable law (and prevailing practice) where a respondent fails to participate in the arbitration? Can the local courts compel parties to arbitrate? Can they order third parties to participate in arbitration proceedings?

    Parties cannot be compelled to arbitrate, but an application can be made to court for the appointment of an arbitrator (see question 14 above), who will then have the power to determine their own jurisdiction (see question 17 above) and proceed appropriately.

    The tribunal may dismiss a defence (section 41) where the respondent fails to (a) attend a hearing or (b) comply with a peremptory order.

    Third parties cannot be ordered to participate in arbitral proceedings, save as stated in question 9.

  20. In what instances can third parties or non-signatories be bound by an arbitration agreement or award (e.g. by joinder)?

    See question 9 above.

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

    The tribunal may grant (a) security for costs (section 38(3)), (b) directions in relation to property which is subject of the proceedings (section 38(4)), (c) preservation of any evidence in the custody or control of the parties (section 38(6)).

    The courts may exercise powers in support of arbitral proceedings (section 44) in relation to (a) evidence (sections 44(2)(a) & (b)), (b) property (section 44(2)(c)), (c) sale of goods (section 44(2)(d) and (d) interim injunctions or the appointment of a receiver (section 44(2)(e)).

    The court is restricted in granting anti-suit injunctions (Allianz SpA v West Tankers Inc, Case C-185/07 [2009] 1 Lloyds Rep 413) against proceedings within the European Union.

  22. Are there particular rules governing evidentiary matters in arbitration? Will the local courts in your jurisdiction play any role in the obtaining of evidence?

    An arbitrator may order the disclosure of documents or attendance of witnesses (sections 34 & 43). Rules of evidence are normally taken from either the (a) CPR or (b) International Bar Association (IBA) Rules on Taking of Evidence in International Arbitration.

    The court may assist where necessary (section 44).

  23. What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your country?

    An arbitrator must comply with the (a) principle of fairness and impartiality (section 33) and (b) if they are a member of CIArb, their code of ethics. Any counsel or arbitrator who is a lawyer must adhere to the code of ethics of his or her governing professional body. If a foreign lawyer acts as counsel in the UK he or she must additionally comply with any applicable local rules.

  24. How are the costs of arbitration proceedings estimated and allocated?

    Parties can agree a costs regime or the tribunal may award any recoverable costs it thinks fit (section 63).

  25. Can interest be included on the principal claim and costs incurred?

    Yes (section 49). Interest on costs is not usually awarded, unless the losing party is in breach of the award. Interest may run on costs from the date of breach.

  26. Does the law impose limits on the available remedies? Are some remedies not enforceable by the local courts?

    The parties may agree whatever remedy is available to the tribunal. In the absence of the same the tribunal may (section 48) (a) make a declaration, (b) order the payment of a sum of money or (c) order a party to do or refrain from doing something.

    Remedies may not be enforceable in certain jurisdictions, subject to the local laws of that jurisdiction.

  27. What legal requirements are there in your country for the recognition of an award?

    An award shall be recognised and enforced where a tribunal with jurisdiction, pursuant to a valid arbitral agreement, made it.

  28. Can arbitration proceedings and awards be appealed or challenged in local courts? What are the grounds and procedure?

    Yes. An award may always be challenged on the grounds of (a) lack of substantive jurisdiction (sections 67) or (b) serious irregularity (section 68). An award may also be appealed (section 69) on a point of law, where the parties or institutional rules do not prohibit the same.

    Foreign awards may also be locally challenged under Article V of the New York Convention, or if they offend public policy (section 103).

    A party who wishes to challenge or appeal an award may make an application to the court (under Part 62 of the CPR) within 28 days of the award being published (section 70).

  29. Can the parties waive any rights of appeal or challenge to an award by agreement before the dispute arises (such as in the arbitration clause)?

    Yes, they can waive their right to appeal on a point of law (section 69).

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

    Generally, where the state or state entity in the UK submits to a valid arbitral agreement, it waives immunity (section 9(1) of the State Immunity Act 1978). By the enforcement stage the state or state entity will most likely be prohibited from raising such objection (section 73).

  31. Are there rules or restrictions on third-party funders in your country?

    No, except where they are in breach of the torts of Champerty and/or Maintenance.

  32. Is there a concept in your country providing for class-action 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?

    Yes, by agreement of all the parties. See question 9 above. Articles 7 - 10 of the ICC Rules allows for consolidation of multiple arbitrations.

  33. Is diversity in the choice of arbitrators (e.g. gender, age, origin) actively promoted in your country? If so, how?

    Yes, where counsel and arbitrators are lawyers by the equality and diversity policies of their governing professional bodies. See question 23.

  34. Is emergency arbitrator relief available in your country? Is this actively used?

    Yes, subject to institutional rules. For example Article 9B of the LCIA Rules and Article 29 of Appendix V of the ICC Rules provide for emergency arbitrators.

  35. Have measures been taken by arbitral institutions in your country to promote transparency in arbitration?

    No. However, Lord Chief Justice Thomas instigated debate on the transparency of jurisprudence in arbitral awards, in the context of the development of the common law.

  36. Are efforts being made by arbitration institutions or local courts to impose strict deadlines for the rendering of awards?

    The ICC has launched Expedited Procedure Rules where awards must be rendered within 6 months of the case management conference, which come into force on 1st March 2017. The current Law Commission consultation also is exploring a more streamline approach, see question 5 above.

  37. Have steps been taken in your country to publish reasoned decisions on arbitrator challenges and provide more insight into the drivers behind arbitrator selection by institutions?

    No.

  38. Are there arbitral laws or arbitration institutional rules in your country providing for simplified procedures for claims under a certain value?

    Yes, LMAA Small Claims Procedure and ICC Expedited Procedure Rules.