I.    Introduction
The UK Arbitration Act dated 1996 (the “Act”), has been the staple legislation for domestic and
international arbitration, provisions of which attract many actors across the globe to the UK. However,
England and Wales as a leading arbitration destination and London as one of the most popular seats for
international arbitration, the Act should catch the recent developments in international dispute
resolution.
For this purpose, on 6 September 2023, the England and Wales Law Commission (the “Law Commission”)
published its Review of the Arbitration Act 1996: Final report and Bill (the “Report”), upon the request of
the Ministry of Justice.

Considering that the report was published following a two-and-a-half-year review and consultation
process, the Law Commission’s proposal for reform goes to reflect the evolving practical needs. Founding
that complete reform of the Act was not required, the Law Commission listed its targeted
recommendations to the Act including the issues considered but not touched, along with the upcoming
future of the proposed amendments to the Act.

II.    The Commission’s Proposals for Amendment
The Law Commission concluded that root and branch review was neither required nor desired by the
users of the Act. Hence, the proposed amendments do not appear to bear momentous influence on the
substantive provisions of the Act. The Law Commission’s recommendations primarily aimed to clarify
certain aspects of the Act, codify the evolving industry practice, and overall, provide a plethora of notable
changes to be reflected in the following application of the Act.

A. Statutory Duty of Disclosure

The Law Commission recommended that the Act should explicitly include the arbitrator’s continuing
duty to disclose circumstances which might reasonably give rise to justifiable doubts as to their
impartiality. Under this framework, arbitrators should disclose the relevant matters that they are aware
of or reasonably ought to be aware of. In this regard, the Law Commission proposes extending the
continuous duty of disclosure to cover the circumstances which the arbitrator is expected to have known.
The Act was projected to confirm the common law duty of disclosure developed under the pre-existing

case law, e.g. the UK Supreme Court’s decision in Halliburton v Chubb [2020] UKSC 48. The Law
Commission further leaves the question as to which circumstances should be disclosed, to the discretion
of the arbitral tribunal and to be decided on a case-by-case basis.
B. Arbitrator Immunity Concerning Resignation and Applications for Removal
The Report proposed enhancing the immunity enjoyed by arbitrators by incorporating under the Act
that an arbitrator should undertake no liability for resigning from a tribunal unless their resignation is
unreasonable; or for the costs of an application for their removal from a tribunal, unless they acted in
bad faith. These recommendations balance the arbitrator’s position in the face of the parties of an arbitral
dispute by lowering the possibility that arbitrators shall give in to parties’ demands under the pressure of
possible removal applications and undertaking related costs; essentially so as to maintain that the
arbitrator stays impartial.

C. Authority to Summarily Dispose of Legal Claims

The Law Commission opines that the Act should include provisions empowering arbitrators to decide
on a summary basis and dismiss legal claims that “lack merit” or which have “no real prospect of success”.
The introduction of such authority would allow more efficient and equitable settlement of disputes, and
solidify the widespread practice embodied under various institutional rules.

D. Jurisdictional Challenges to Under Section 67

The Law Commission recommends an improved framework of Section 67. The Act is recommended
to confirm that, when a tribunal’s jurisdiction is appealed after it found itself competence upon a
challenge under Section 67, the appealing party cannot present new objections and evidence unless it
demonstrates that it could not have brought the same circumstances before the tribunal with reasonable
diligence. Moreover, evidence would not be re-heard, except in the interests of justice. The Law
Commission, therefore, does not propose a statutory change in this regard, however recommends
improving the scope of Section 67 to alleviate the current circumstance in which the challenging party is
bestowed an unequitable so-called “second bite of the cherry” to present its case with new evidence and
objections in a de novo hearing.

E. Governing Law of Arbitration Agreements

The Law Commission proposes that the Act should clearly confirm that, in case the parties failed to
expressly choose, the law governing the arbitration agreement shall be the law of the seat of arbitration.
The Law Commission favours the implementation of a statutory default rule, as opposed to the current
complex closest connection test adopted in arbitral practice in reference to the UK Supreme Court’s
decision in Enka v Chubb [2020] EWCA Civ 574. Clearly, the Law Commission is in favour of opting for a
statutory default provision that would provide clarity and simplicity for industry practitioners in its
application and encourage the global application of English law. Thus, if the draft legislation is adopted
by the UK Parliament, it shall be clearly regulated that although the parties agree on an applicable to the

main contract, the law of seat shall govern the arbitration agreement instead of the governing law for the
main contract.

F. Clarification of Court Powers in Support of Arbitral Proceedings and Emergency Arbitrators

The current version of Section 44 of the Act authorizes courts to make orders in support of arbitrators
when rendering orders for granting interim injunctions, freezing injunctions, orders for the inspection
and preservation of evidence, and gathering of witness evidence. The Law Commission proposes that the
Act to confirm that the courts may render such orders to bind third parties. In its recommendation, the
Commission also imposed a view that the Act should contain provisions that would enable third parties
to enjoy unlimited rights of appeal with the relevant appellate court’s consent. The recommendations
also purport that, emergency arbitrators should have the same authority to enforce their orders as
ordinary arbitrators by rendering decisions that are final, binding, and enforceable by national judicial
bodies. Under this framework, it is recommended that applications against third-party orders be made
before emergency arbitrators. In other words, parties can either apply to emergency arbitrators for an
immediate order or directly apply to courts as per section 44(4) of the Act. Therefore, under the
recommended version of the Act, the authorities of the emergency arbitrators clearly have been
expanded upon.

III.   Other Amendments that Were Considered but Not Recommended

For some of the issues, the Law Commission considered possible reforms however, came to the
conclusion that the status quo should be preserved. The Law Commission found that as for these fields,
inter alia, the Act had already proven to be adequate and that any possible change would be simply
impractical to follow through.

A. Confidentiality

Since common law recognizes confidentiality as a general duty in international arbitration, the Law
Commission disregarded the inclusion of an overall duty of arbitral confidentiality as a one-size-fits-all
statutory rule. The Law Commission also noted that a statutory rule of confidentiality would not address
future needs, given that each form of arbitration involves different confidentiality measures, e.g. for
state-investor arbitrations transparency is usually preferred.

B. Discrimination

The Law Commission highlighted that there already are existing prohibitions on discrimination for
matters aside from the appointment of arbitrators. Therefore, as for a potential statutory duty of the
prohibition of discrimination for the appointment of arbitrators, the Law Commission is of the view that
it would not offer a practical solution to relevant future problems. On the contrary, such type of
prohibition could pave the way for possible groundless challenges to awards and satellite litigation.

C. Arbitrator’s Independence 

The Law Commission concluded that a statutory duty of arbitral independence would not bring any
practical benefits and the already existing provisions provide sufficient protection. Further, given that
independence is already a widely adopted standard in arbitration and the encounters between parties
and the limited number of specialized arbitrators are nearly inevitable, there is no need to enact a
statutory duty of independence to provide arbitral impartiality.

D. Appeals Under Section 69

The Law Commission recommended no reform to be brought to Section 69 of the Act which allows
parties to appeal the awards on points of law. The Law Commission’s proposal to preserve the status quo
of the Section, shall likely be appreciated by the stakeholders of the sectors in which appeals on points
of law are mainstream, e.g. maritime disputes subject to the LMAA Terms.
IV. Final Remarks
The Report has provided an in-depth analysis and review of the Act, suggesting the necessary
amendments to its provisions considering today’s dispute resolution practice that has noticeably evolved
in the past years. The recommendations of the Law Commission aim to reduce uncertainty, encourage
efficiency in legal proceedings and bolster the domestic arbitration framework up to current standards,
by enhancing the Act through meaningful reforms, rather than radical changes, which shall ensure the
Act remains as the state-of-the-art arbitration legislation. This approach conforms with the Law
Commission’s final inference that the Act still proves to be an adequate protection mechanism across the
globe and ensures that the UK preserves its dominant position as the main center for international
arbitration. Undoubtedly, adoption of the recommended amendments shall serve to preserve London’s
popularity as a seat for international arbitrations while influencing other jurisdictions to reconsider their
arbitration legislations.
For queries on the above, please do not hesitate contact us via the contact information given below.

References

1- The Law Commission, Improvements recommended to Arbitration Act 1996 to ensure UK position as
international arbitration leader
2- Adam Tahsin & Marius B. Gass, Evolution, not revolution – the Law Commission recommends limited
reforms to ensure that the Arbitration Act (1996) remains state of the art
3- James Carter, Anna Mills, Barry Fletcher, Arbitration Act 1996: Law Commission final recommendations for
reform: a gold standard polished?
4- Conway Blake and others, England & Wales Law Commission Publishes Final Reform Recommendations for
Arbitration Act 1996
5- Oliver Browne and others, Quality Over Quantity: Law Commission Proposes Targeted Amendments to
English Arbitration Act