Part I: Background to the Arbitration Act 1996

Now almost a quarter of a century old, 1 at the time of its implementation the Arbitration Act 1996 was intended to be both a fresh start and the closest thing to a definitive code of arbitration law that had ever been enacted in England. 2 It was appropriately described by the late, great Lord (Michael) Mustill as a ‘complete spring clean’ of English arbitration law. 3

The Act had taken some considerable inspiration from the United Nations Commission on International Trade Law (UNCITRAL) Model Law, 4 but, unlike many countries, including Ireland, the English approach was nowhere near a wholesale adoption of the Model Law. It would also be wrong to treat the 1996 Act as a code in the continental sense: the legislation is far from exhaustive, and, in the two decades since its coming into force, there have been several hundred decided cases arising from the statute’s many tricky provisions, many of which have developed, applied and interpreted the key principles of the Act. Even after such a passage of time, the body of law surrounding the Act is still evolving slowly, albeit with some coherence and with regard to a gradually ossifying set of established principles. For England and Wales and Northern Ireland at least, the law is unlikely to change radically without further legislative interference, save where cases that might once have been regarded as correct decisions may in the fullness of time be regarded with less sanctity and eventually either overturned or distinguished into oblivion.

The Act did not seek to codify the vast bulk of common law authority that had developed under earlier legislation (concerning e.g. confidentiality in arbitration, or the use of anti-suit injunctions in support of arbitration). In many cases, the old law was swept away entirely, and in others (e.g. incorporation of arbitration agreements by reference, in section 6(2)) it has remained unaffected. A decent amount of that case law therefore remains applicable, so that anyone brave (or bored) enough to read the entire Act will continue to receive only a part (albeit a substantial part) of the story. Such is the fate of the common lawyer.

The gestation of the Act involved a committee of practitioners and academics in the field. The Departmental Advisory Committee (DAC, many of whose members are still active practitioners) gathered the material with which to produce a draft Bill. In 1996, the DAC published its report (referred to in this book as the DAC Report) setting out the objectives of the Bill and explaining many of the then draft provisions in great detail. Shortly before the Act was brought into force, a Supplementary Report was published (referred to in this book as the DAC Supplementary Report), highlighting the features of the Act and pointing out any variations between the DAC’s original recommendations and the final version of the statute. References to the two reports (reprinted in full in Appendix 1) are incorporated at the appropriate places in the Notes. In reading the DAC Reports, care should be taken to note that various matters considered by the DAC did not ultimately find their way into the Act. For example, one important concept considered by the DAC, but left untouched by the Act (and deliberately so), was that relating to confidentiality in arbitrations. The word does not even exist anywhere in the statute. The reasons for this are well established (see the Notes to section 1). Any other differences are highlighted in the Notes to the sections of the Act itself. These minor matters aside, the reports have come to be regarded by the courts as an authoritative source on the interpretation of the Act and are cited with some regularity in judgments.

The Act incorporates many sections that involve applications to the courts. Most of these are only available where the seat of arbitration is England, Wales or Northern Ireland; some (principally section 44) may apply regardless of the location of the seat, but, in every case where an application to the court is required, a set of procedural rules governs such applications, which are termed in the Civil Procedure Rules (CPR) ‘arbitration claims’. Arbitration claims are governed by Part 62 of the CPR, as supplemented by a Practice Direction. Section I of Part 62 governs all applications to the court under the Arbitration Act 1996, Section II governs all applications under earlier arbitration legislation (now, of course, redundant), and Section III regulates applications for the enforcement of arbitration awards.

CPR Part 62 and its Practice Direction are set out in Appendix 3 and are now fully annotated. References to them will be made at appropriate places in the Notes to the relevant sections. We only comment here that they are in bad need of a major overhaul.

The 1996 Act has as one of its key underlying objectives the speed and finality of arbitration proceedings, with an implicit desire to avoid time-consuming and costly satellite litigation in the form of applications to the court and appeals from court decisions. Accordingly, the majority of those sections under which an arbitration application may be made set out specific provisions governing appeals from the order or judgment of the first instance court. The unifying feature is that an appeal may be made to the Court of Appeal only with the permission of the judge, and not with the permission of the Court of Appeal, 5 and it has been confirmed by the courts that there is no possibility of an application to the Court of Appeal for permission to appeal where this is refused by the judge under the 1996 Act itself. 6 That said, the Court of Appeal does have residual power to hear an appeal (under section 16 of the Senior Courts Act 1981) in the highly exceptional case where the judge has not made a valid decision at all, an argument from time to time invoked but yet to be successful, 7 and seemingly also where the...