Arbitration Bill Passes Second Reading at House of Lords

After the previous government called a general election in late May, the Arbitration Bill was left out of the set of bills that would be approved on an expedited basis. In mid-July, the King’s Speech reintroduced an updated Arbitration Bill to Parliament’s legislative agenda. The second reading of the Arbitration Bill at the House of Lords took place on 30 July 2024.

On 25 July 2024, the House of Lords Library published a briefing on the Arbitration Bill which states:

• The Law Commission has estimated that the arbitration industry could be worth at least £2.5bn to the UK economy each year, although its true value may be much higher. London has, over time, become a leading centre for the settlement of international disputes in particular.

• The Arbitration Bill [HL] would modernise the legal framework for arbitrations provided for by the Arbitration Act 1996, the principal legislation governing arbitrations in England and Wales and in Northern Ireland. The changes set out in the bill would implement recommendations from the Law Commission following extensive consultation with the sector.

The reforms attempt to modernise the legislative framework in England and Wales. As we reported in previous blog posts – including this October 2023 blog on the Law Commission’s review of the 1996 Arbitration Act and this November 2023 blog on the introduction of the Arbitration Bill – the most salient changes to the 1996 Arbitration Act are the following:

• Arbitrator duties and disclosure: Arbitrators will have a statutory duty to promptly disclose any potential conflicts of interest.
• Arbitrator immunity and liability: To safeguard arbitrators’ independence, the proposed changes strengthen arbitrators’ immunity against liability arising from resignations or applications for removal.
• Summary awards: The Arbitration Bill introduces arbitrators’ authority to issue summary awards on issues lacking a real prospect of success.
• Court powers and emergency arbitrators: The revised Arbitration Act clarifies court powers in support of arbitral proceedings. Additionally, the new provisions specifically address emergency arbitrators, streamlining their role in urgent cases.
• Challenges to jurisdiction under section 67 of the Arbitration Act: Courts will not conduct a full hearing or allow new evidence if the arbitrators have already ruled in their own jurisdiction.

The aim of the reforms, though moderate in scope, is to enhance the efficiency of the arbitral process by minimising the risk of the cost and complexity of separate court proceedings. This goal is notably achieved through the revamping of emergency arbitration procedures and the introduction of summary awards, aligning with several arbitral institutions – such as the International Chamber of Commerce (ICC), International Centre for Dispute Resolution (ICDR), London Court of International Arbitration (LCIA), Singapore International Arbitration Centre (SIAC) and Arbitration Institute of the Stockholm Chamber of Commerce (SCC) – which already contemplate these procedures.