On 5 September 2023, the Law Commission of England and Wales presented its Final Report and draft Bill in the context of its Final Review of the Arbitration Act 1996 to Parliament. In a nutshell the Law Commission has recommended the following major initiatives: codification of an arbitrator’s duty of disclosure; strengthening arbitrator immunity around resignation and applications for removal; introduction of a power of summary disposal; an improved framework for challenges under section 67; a new rule on the governing law of an arbitration agreement; and clarification of court powers in support of arbitral proceedings, and in support of emergency arbitrators.
We were pleased to note that the Final Report referenced, at page 168, an article previously co-written by our colleague Caroline Thomas, namely: C Thomas, K Duggal, and A Lee, “Reform of arbitration law: the Law Commission’s consultation on Enka”, (2023) originally published on Arbitration Law Monthly. The Law Commission has indeed just recommended that the Arbitration Act 1996 be amended to provide that the arbitration agreement is governed by the law of the seat, unless the parties expressly agree otherwise. Said recommendation is given effect by clause 1 of its draft Bill, the effect of which would be to add a new section to the Arbitration Act as follows:
“6A Law applicable to arbitration agreement
(1) The law applicable to an arbitration agreement is—
(a) the law that the parties expressly agree applies to the arbitration agreement, or
(b) where no such agreement is made, the law of the seat of the arbitration in question.
(2) For the purposes of subsection (1), agreement between the parties that a particular law applies to an agreement of which the arbitration agreement forms a part does not, of itself, constitute express agreement that that law also applies to the arbitration agreement.
(3) This section does not apply in relation to an arbitration agreement that was entered into before the day on which section 1 of the Arbitration Act 2023 comes into force.”
This legal update is brought by Caroline Thomas, Professor Kabir Duggal and Amanda Lee
