The Arbitration Act 1996: A Commentary, Fourth Edition

558 Pages·2007·4.03 MB·English

by  Bruce Harris

The
Arbitration
Act 1996
A COMMENTARY
Fourth Edition
Bruce Harris
FCIArb, FRSA
Rowan Planterose
MA (Cantab), LLB, FCIArb, Barrister
Jonathan Tecks
MA (Cantab), FCIArb, Barrister
FOREWORD BY
The Rt. Hon. The Lord Bingham of Cornhill KG
Senior Law Lord
PUBLISHED IN ASSOCIATION
WITH THE CHARTERED INSTITUTE OF ARBITRATORS
© 1996, 2000, 2003, 2007 by Bruce Harris, Rowan
Planterose and Jonathan Tecks
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First edition published 1996
Second edition published 2000
Third edition published 2003
Fourth edition published 2007
Library of Congress Cataloging-in-Publication Data
Harris, Bruce.
The Arbitration Act 1996 : a commentary / Bruce Harris, Rowan Planterose, Jonathan
Tecks.—4th ed.
p. cm.
Includes bibliographical references and index.
ISBN-13: 978-1-4051-3996-0 (pbk. : alk. paper)
ISBN-10: 1-4051-3996-X (pbk. : alk. paper) 1. Great Britain. Arbitration Act 1996.—
2. Arbitration and award—England. I. Planterose, Rowan. II. Tecks, Jonathan.
III. Title.
KD7645.A316H37 2007
347.42(cid:2)09—dc22 200702003
ISBN: 9781405139960
A catalogue record for this title is available from the British Library
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To:
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Elizabeth and Abigail
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Contents
Biographical Note vi
Foreword to Fourth Edition vii
Preface to Fourth Edition viii
References and Abbreviations xi
1. Materials 1
A. Arbitration Clauses 1
B. Agreements Prior to or on Constitution of Arbitration 3
C. Agreements as to Tribunal and Court Powers 9
D. Checklist for Preliminary Meetings 11
E. Agreement with Arbitrator on Resignation 14
F. Checklist for Awards 15
G. Agreements as to Costs 17
H. General Note on Arbitration Claims 18
2. The Arbitration Act 1996 23
Text of the Act and Commentary 23
Arrangement of Sections 25
3. Appendices 467
The Arbitration Act 1996 (Commencement No. 1) Order 1996 469
The Unfair Terms in Consumer Contracts Regulations 1999 471
The Arbitration Act 1950, Part II 480
Table of Cases 488
Index 498
v
Biographical Note
Bruce Harris is a full-time commercial and maritime arbitrator who
has been involved in more than 8000 arbitrations and made more
than 2000 awards. He has written, lectured and talked extensively on
arbitration, and was President of the London Maritime Arbitrators
Association in 1990/2 and Chairman of the Chartered Institute of
Arbitrators in 1993/4. He was a member of the DAC and recently
chaired a committee that reviewed and conducted a major survey into
the fi rst 10 years of the Act’s working.
Rowan Planterose is a former practising barrister, now a solicitor,
Chartered Arbitrator, and adjudicator. He is managing partner of the
solicitors fi rm Davies Arnold Cooper and runs the fi rm’s construc-
tion focus group. He is a construction and commercial lawyer, devot-
ing much of his time to arbitration, either as representative of a party
or as arbitrator. He has been a member of the Chartered Institute’s
Professional Committee, its Council and Executive Board. He lectures
widely on both domestic and international arbitration matters.
Jonathan Tecks is a Principal Lecturer and Director of Advocacy and
Dispute Resolution at the University of the West of England at Bristol.
He is extensively involved with the Chartered Institute of Arbitrators,
formerly as Chairman of the Examinations Board and currently as a
Course Director for Mediation Accreditation Assessments. He is External
Course Director for the Postgraduate Diploma in Arbitration at the
College of Estate Management, Reading. As a Chartered Arbitrator
and mediator he arbitrates and mediates in respect of a broad range of
civil and commercial disputes.
vi
Foreword to Fourth Edition
by the Rt. Hon. The Lord Bingham of Cornhill KG
Senior Law Lord
The fi rst edition of this book was written when the 1996 Act was on
the point of coming into force. The appearance of a fourth edition, in
little over a decade, is testimony to two things: fi rst, the continuing
vitality of the arbitration process in England and Wales; and, secondly,
the proven value of the earlier editions.
The citation in this edition of over a hundred cases on the Act
decided since the last edition four years ago is compelling evidence that
the arbitration process is alive and kicking. Since large sums of money
are often at stake, it is not surprising that parties, although commit-
ted to arbitrate, seek recourse to the court to advance or protect their
interests. But blessed is the arbitration which achieves no reference in
the law reports. I do not doubt that close attention to this commentary
is conducive to that happy result.
To be useful a commentary such as this must be (as this commentary
is) accurate, readily intelligible, comprehensive, strictly practical and
above all up-to-date. An out-of-date commentary is as much use as a
1920s Baedeker to someone wanting to book into a hotel. So it is time
for a new edition.
In welcoming the fi rst edition I expressed the hope that the 1996 Act
and the commentary would together raise the reputation of arbitration
in this country to new and unprecedented heights. This must remain
the goal of everyone seriously committed to this invaluable means of
resolving civil disputes.
Tom Bingham
House of Lords 6 June 2007
vii
Preface to Fourth Edition
When we prepared the Third Edition we thought that we were see-
ing, at least amongst lay arbitrators, a more enthusiastic embracing of
the philosophy underlying the Arbitration Act 1996 as expounded in
the DAC’s reports at the time the Act was passed. Our present impres-
sion is that there may now be something of a stasis; that arbitrators
and practitioners have not perhaps continued to change and develop
themselves and their practices so as to further the revolution that we
(and we think those who drafted it) hoped the Act would promote.
There are no great recent signs of increase in the adoption of imagina-
tive time- and cost-saving procedures that might have been hoped for.
Attacks (often seemingly spurious) on awards and arbitrators occur
very frequently, though happily they are usually fi rmly rebuffed by
the courts. The power to cap costs seems rarely to be used, perhaps
due to a widespread belief that it is the expenditure of costs that is to
be capped, rather than the level of costs that can be recovered.
If our impression is accurate, we can only hope that the present pla-
teau is temporary, and that the arbitral community will soon recom-
mence the journey towards the goals at which the Act is aimed, a
journey which—whilst not necessarily easy, because it involves exam-
ining and changing long-established practices and beliefs—can only
ultimately be rewarding.
It is satsifying to report that on the whole the courts have been very
supportive both of arbitration and of the philosophy underlying the
Act. As indicated, they have generally been very ready to reject spuri-
ous attempts to attack awards and tribunals, though sadly there have
been a few decisions which we respectfully fi nd questionable, as indi-
cated in the text where relevant.
For the present edition, we have looked at around 300 cases in
which the Act has been cited. Many of those contain no more than
passing references, and others say nothing of interest about it. Even
so, in this edition which follows the previous one after only about four
years, more than 125 new decisions are mentioned. That is more than
we dealt with in the Second and Third Editions, which together cov-
ered some seven years.
After 10 years of the Act’s life, and three editions of this book, we
have decided not to reproduce the Introduction that appeared pre-
viously, nor the Tables. The former sought to give a basic guide to
viii
Preface to Fourth Edition
the Act which no longer seems necessary. Similarly we see no need
now to reproduce the basic information about the Act, the details of
major changes in the law brought about by it, or the details of stat-
utory sources or ‘Destinations’ which the Tables contained. Those
who wish to consult these materials will no doubt refer to an earlier
edition.
We have modestly updated the Materials (formerly Part 3, now Part
1), and the Appendices (which now make up Part 3) have been revised
to incorporate legislative changes.
Only in relation to a relatively small proportion of the sections of
the Act is the commentary unchanged. Modest editorial changes
have been made to a number of sections. The vast majority have
been amended more or less substantially, as we note below. There
have been Court of Appeal decisions in relation to appeals from fi rst
instance judgments that are of some importance since they affect so
many sections, and we have mentioned those decisions wherever rel-
evant, namely in relation to ss.12, 17, 18, 21, 24, 25, 32, 42, 44, 45, 50,
56, 67–70, 77 and 79.
The most substantial changes have been made to the commentary
on the following sections, and we note below some of the more inter-
esting points:
s.2: i n particular an application to stay a claim seeking to
restrain an arbitrator in a Swiss arbitration;
s.3;
s.5: two contrasting cases on agreements ‘in writing’;
s.6;
s.7: two cases where the courts have tackled diffi cult ques-
tions arising where contracts are obtained by bribery or
are ultra vires;
s.9: i n relation to the continuing tension between a tribu-
nal deciding its own substantive jurisdiction on the one
hand, and the court staying proceedings on the other,
the Court of Appeal has confi rmed that generally the
tribunal should be the ‘fi rst stop’. There are also inter-
esting decisions on the scope of arbitration clauses,
what amounts to a dispute, access to court documents
where a stay is ordered and challenges under Art.6(1)
of the European Convention on Human Rights;
ss.12, 14, 18;
s.24: the modern test for bias, and some cases on that topic;
s.28;
s.30: t he question of jurisdiction in relation to cross-claims
and set-offs; and we touch on the question whether a
tribunal deciding that it has no jurisdiction can make an
award of costs;
ix
Preface to Fourth Edition
ss.3, 34;
ss.43 and 44: t here are interesting cases on obtaining disclosure from
third parties, the sale of goods the subject of a reference,
and a Court of Appeal decision of some importance on
the court’s powers;
ss.45, 48, 49;
s.57: q uestions of clarifi cation of and ambiguity in awards;
and what is involved in ‘dealing’ with ‘claims’;
ss.61 and 63: t he awarding of costs—’following the event’, ‘propor-
tionality’ and interim payments;
ss.65, 66;
s.67: ( with ss.68 and 69 one of the sections most dealt with
by the courts recently) raising grounds of objection to
substantive jurisdiction before the tribunal; implied
awards on jurisdiction; whether an appeal is justiciable,
and reliance on new evidence on an appeal;
s.68: t here are cases showing the happy continuation of the
courts’ strict approach to allegations of serious irregular-
ity (and an interesting question whether perceived bias
is a ground for such an allegation); and useful comments
on what amounts to a failure to deal with all matters
referred;
s.69: we note the relative dearth of appeals from awards,
the possibility of an exclusion agreement operating by
incorporation from another document; cases on the issue
as to whether any, or suffi cient, evidence exists to jus-
tify a fi nding is a question of law; and what documents
should be before the court on an appeal;
ss.70, 72, 73, 76, 79, 103.
The law is as we understand it to be as at 12 May 2007.
We are profoundly grateful to Alex Gullen for his invaluable assist-
ance in researching cases. As always, we must thank our partners,
family members, colleagues and friends for their unstinting support
and patience during the preparation of this edition.
Bruce Harris
Rowan Planterose
Jonathan Tecks May 2007
x