Friday, August 24, 2012

Lord Saville: 15 Years of the English Arbitration Act

The UKSC Blog has highlighted a speech by Lord Saville, “Reflections on the English Arbitration Act 1996 after fifteen years”. Lord Saville, who was intimately connected with the drafting of the English Act, makes several interesting points.

He deals with the narrow right of appeal on questions of law u/s 69 of the English Act. In does so, he addresses the argument that having a narrow right of appeal hinders the orderly development of principles of commercial law. Hence (the argument goes), there ought to be a wide review of an arbitrator’s decision on pure questions of law. Lord Saville addresses the argument thus: “The fear has been expressed that by this means, English commercial law runs the risk of atrophying and losing its world-wide reputation as about the most developed system of laws governing international trade and commerce. There is undoubtedly force in this point, at least from the point of view of the development of English commercial law. But from the point of view of the majority of those using arbitration, I believe things look rather different. Commercial entities do not generally choose to resolve their disputes by arbitrating in order, at of course their expense and with added delay, to contribute to the body of English commercial law. They have chosen arbitration, as Michael Moser put it, because they do not want to go to court. I do find some difficulty (as did Lord Devlin many years ago) in accepting the proposition that those seeking a resolution of their disputes by arbitration rather than litigation should somehow be obliged nonetheless to finance the development of English commercial law by dragging their dispute from their chosen tribunal to the court…

Next, on the issue of independence and impartiality of arbitrators, Lord Saville questions “with great temerity… the need for independence as well as impartiality…” Undoubtedly, he says, a judicial officer and an arbitrator must be impartial and must have the appearance of impartiality. Given this, what is the additional need for “independence”? “Independence and impartiality are fine-sounding words. They form a phrase that sounds good. It has a ringing tone. But to my mind the phrase creates serious problems, because it contains two words where one would do on its own. The object is to ensure that arbitrators act fairly and even-handedly between the parties. The object is met by requiring impartiality and the appearance of impartiality. Independence adds nothing of value…” 

Lord Saville also deals with the issue of whether arbitrators should have the power of granting ex parte interim measures. He is convinced that they should not. On consolidation of connected arbitrations, he is of the view that consolidation is dealt with best by means of appropriate contractual drafting and not be means of external legal imposition. He also touches on issues of privacy and confidentiality. The text of the speech is available here.

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