Reform of the UK Arbitration Act 1996
After the July 2024 UK General Election, the Arbitration Bill 2024 was reintroduced to amend the Arbitration Act 1996 based on the Law Commission's recommendations. Sent to the House of Commons on 6 November, the Bill promotes efficiency and competitiveness in arbitration.
Key reforms include:
Law of the Arbitration Agreement (Clause 1): Following the Supreme Court ruling in Enka v Chubb, there has been a call for clearer legislative guidance on the law for arbitration agreements. Once the Bill is enacted, the law may be amended to stipulate that if the parties do not specify the law for the arbitration agreement, the applicable law will default to the law of the arbitration seat.- Disclosure Obligations for Arbitrators (Clause 2): The Bill establishes a legal obligation for arbitrators (or potential arbitrators) to disclose any “relevant circumstances” that could raise doubts about the arbitrator's impartiality in the proceedings. This duty extends to situations that the arbitrator knows or should properly know about.
- Immunity for Arbitrators (Clauses 3-4): The Bill expands immunity for arbitrators if they reasonably resign or if a party applies to the court to remove an arbitrator. Arbitrators will be immune from liability unless it can be proved that the resignation was unreasonable or that they acted in bad faith in connection with procedural matters.
- Emergency arbitrators will have the authority to issue peremptory orders that can be enforced by the court (Clause 8).
- Challenges to the Tribunal’s Jurisdiction: A party that has engaged in arbitration and objected to the tribunal's jurisdiction, after receiving a jurisdictional decision from the tribunal, will only be able to challenge that decision without introducing new facts, new evidence, or re-examining evidence (unless the court decides otherwise to ensure justice).
- Court powers: The court will have authority over third parties regarding matters such as witness testimony, interim emergency measures, preservation of evidence, and asset protection.
- Summary awards: Arbitrators will have the power to issue summary awards on claims that lack a real prospect of success.
The reform of the Arbitration Act 1996 was a significant step for the United Kingdom in enhancing the professionalism and competitiveness of its arbitration system, positioning the UK as a leading international arbitration seat.
As Vietnam is also in the process of revising its 2010 Commercial Arbitration Law, based on the experiences of the UK, Vietnam can also consider several important aspects to help it become an international arbitration seat in the future such as:
(i) The law of the seat of arbitration will apply in the absence of the parties' agreement.
(ii) Immunity for arbitrators unless their actions or omissions are proven to be in bad faith.
Full text of the Bill at: https://bit.ly/4fQxPhd
