Arbitration reform to propel UK’s world leading role in international arbitration

The UK’s new Arbitration Bill has taken another step on its legislative journey to becoming law, as it progresses to the committee stage following the second reading held on 17 January 2024. The Bill is intended to implement amendments recommended by the Law Commission of England and Wales to the existing Arbitration Act 1996.

The Bill – on which Pinsent Masons was involved in the consultation process – will clarify the law governing arbitration agreements, strengthen the courts’ supporting powers, and facilitate speedier dispute resolution. Among all the changes set out in the Bill, four reforms are of particular significance, according to arbitration expert Clea Bigelow-Nuttal of Pinsent Masons.

“Arbitration is frequently lauded for its ability to provide an efficient and effective process leading to a binding solution, reached impartially. The key reforms from the Bill will ensure the UK’s arbitration legislative framework is an up-to-date gold standard,” she said.

The Bill updates the current arbitral framework by empowering arbitrators to expediate decisions on issues that have no real prospect of success. This will make arbitrations more efficient and aligns with summary judgments available in court proceedings.

The Bill clarifies that the law governing an arbitration agreement will be the law of the seat chosen for arbitration unless parties expressly agree otherwise. This helps address with certainty the UK’s position in respect of governing law following the Supreme Court’s decision in Halliburton v Chubb in 2020 – the leading English law case on arbitrator conflict.

The Bill also imposes a new statutory duty on arbitrators to disclose circumstances which might give doubts about impartiality. This will codify the common law and align English law with international best practice to promote trust in arbitration.

In addition, it will empower UK courts to make orders supporting emergency arbitrators, so the decisions of emergency arbitrators will have the same efficacy of those of “full” tribunals.

“It is exciting to see these reforms take shape in a new arbitration law, and will mean that the UK continues to be – and be seen as – a leading jurisdiction with a competitive legal edge over other jurisdictions,” said Bigelow-Nuttal.

The Bill still needs to go through the committee stage, the report stage and third reading in the House of Lords and the House of Commons before it will receive Royal Assent. Once enacted, the new arbitration law will apply automatically in England and Wales, but the government has said it will propose that the provisions are given effect in Northern Ireland too.