The King’s Speech 2024 includes a proposed Arbitration Bill to reform and modernise the Arbitration Act 1996.
These are the details of the proposed Arbitration Bill:
The Arbitration Bill will support more efficient dispute resolution, attract international legal business, and promote UK economic growth.
It does so by enacting recent Law Commission recommendations to reform arbitration law and bolster our world-leading domestic and international arbitration sector.
What does the Bill do?
This Bill will implement the recommendations made in a 2022 Law Commission review of Arbitration Law, with the key reforms being:
- clarifying the law applicable to arbitration agreements that do not arise from investor-state agreements, providing that the law applicable will be those of the legal location chosen for arbitration unless parties expressly agree otherwise. This will ensure that, where arbitration is seated in England and Wales, or Northern Ireland, it will be fully supported by our arbitration law which is among the most supportive of arbitration globally.
- codifying a duty on arbitrators to disclose circumstances that might give rise to justifiable doubts about their impartiality, in line with international best practice.
- strengthening arbitrator immunity against liability for resignations and applications for removal, supporting arbitrators to make robust and impartial decisions without fear of being sued by a disappointed party.
- empowering arbitrators to make awards on a summary basis on issues that have no real prospect of success, avoiding nuisance claims and making arbitrations more efficient.
- empowering courts to make orders in support of emergency arbitrators so they have the same routes to enforce their orders as other arbitrators.
- revising the framework for challenges where the challenge alleges that the arbitral tribunal lacked jurisdiction.
Territorial extent and application
The Bill will extend and apply to England and Wales and Northern Ireland.
Key facts
Arbitration is a form of dispute resolution. If two or more parties have a dispute which they cannot resolve themselves, they might appoint a third person as an arbitrator to resolve the dispute for them by issuing an award or they might appoint a panel of arbitrators to act as an arbitral tribunal. Arbitration allows people and businesses to resolve legal issues on their own terms, often with more flexibility and privacy than protracted court trials. Many contracts require arbitration to resolve disputes.
According to the Law Commission of England and Wales there are at least 5,000 domestic and international arbitrations each year in England and Wales, worth £2.5 billion to the British economy in arbitration and legal fees alone. This Bill will give businesses the confidence to know that any arbitration carried out in England and Wales and Northern Ireland will be handled effectively and consistently.
The Arbitration Act 1996 must be modernised to continue attracting international legal business. Other jurisdictions have updated their legislation more recently: Singapore in 2023, Hong Kong in 2022, and Sweden and Dubai in 2018. In 2021, Singapore ranked equal first to London as the globally preferred choice for international arbitration.