[co-author: Elspeth Aylett]
The UK government’s decision to call a snap general election has stalled the progression through Parliament of the Arbitration Bill, which was drafted to implement the Law Commission’s recommendations to modernise and streamline the English Arbitration Act 1996.
The Arbitration Bill (“Bill”) was designed to modernise the English Arbitration Act 1996 (“Act”), introducing several key reforms to the arbitral framework. One significant proposed change was the introduction of a simplified procedure for jurisdictional challenges to arbitral awards. This procedure, guided by court rules, limits applications to existing evidence and grounds, with few exceptions, avoiding full re-hearings.
The Bill also sought to clarify the position under English law in light of the Supreme Court’s decision in Enka v Chubb, by stipulating that the law of the seat (in a London seated arbitration clause) would govern the arbitration agreement rather than the governing law of the matrix contract, unless expressly agreed otherwise. The Bill also introduced a mechanism for disposing of issues with no real prospect of success, in a process similar to summary judgment in court proceedings.
The Bill had reached its second reading in the House of Lords, though its progress has now been halted by the calling of a general election on 4 July 2024. This triggered a “wash-up” period, where parties negotiated which bills could be pushed through in the last days before Parliament was prorogued on 24 May 2024. Like the Litigation Funding Agreements (Enforceability) Bill, the Bill ultimately was not included in the “wash-up”.
This means that the question of whether the Bill will be revived is one for the new government formed after the general election. Before the snap election announcement, the Bill had broad cross-party support and was a priority on the Law Commission’s agenda. This may make it likely to be revived by the next government. Such revival may offer up opportunities for further commentary on the substance of the Bill. This is particularly relevant given the High Court’s significant judgment in P&ID v Nigeria, which highlighted the challenges in tackling corrupt practices in arbitral proceedings.
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