Arbitration - Should courts get involved?

• Author: Roy Goode
• Position: Emeritus Professor of Law in the University of Oxford, Emeritus Fellow of St. John's College, Oxford
• Pages: 33-49

ARBITRATION -

SHOULD COURTS GET INVOLVED?

ROY GOODE*

I. INTRODUCTION

The relationship between arbitral tribunals and courts

is one that has generated intense debate around the world.

Courts have a fourfold role in the arbitral process: to prevent

a party who has agreed to arbitrate from pursuing his claim

by litigation; to provide judicial assistance to arbitral

tribunals and the parties in the course of a reference; to

exercise powers of review of arbitral awards in defined

conditions; and to provide the necessary machinery for the

enforcement of awards. This paper is concerned solely with

the third of these, the power of judicial review. I should like

in particular to explore the differences in approach between

the Irish Arbitration statutes, and in particular the Arbitration

(International Commercial) Act, 1998 (referred to hereafter

as the Arbitration Act, 1998), and the English Arbitration

Act, 1996.1 My paper is limited to commercial arbitration;

consumer disputes raise distinct policy questions which I

shall not address.

For a long time English courts, as well as courts

overseas, were quite hostile to the arbitration process, seeing

33 Judicial Studies Institute Journal [2:2

1 Technically the Arbitration Act, 1996 is a UK statute (Scotland did not

acquire a separate Parliament until after the enactment and

implementation of the Scotland Act, 1998). However it does not apply to

Scotland, for which separate legislation has been enacted adopting the

UNCITRAL Model Law on International Commercial Arbitration. So to

avoid confusion the 1996 Act is referred to hereafter as the English Act.

* Emeritus Professor of Law in the University of Oxford, Emeritus

Fellow of St. John’s College, Oxford. This is a slightly revised version of

a paper presented at the Irish Annual Circuit Court Conference at Adare

on 13th April 2002.

it as an attempt to oust their jurisdiction. In England in

particular, right up to the enactment of the Arbitration Act,

1979, the powers of judicial intervention were both wide and

extensively used. If a party ignored the arbitration agreement,

brought proceedings and applied for summary judgment on

the ground that there was no defence to the claim, the court

could grant the application and disregard the arbitration

clause on the ground that since there was no arguable defence

there was no dispute to be arbitrated! Under the Arbitration

Act, 1950 a party could at any time request the arbitrator to

state a special case asking for a ruling on a point of law

arising in the arbitration, a process causing a good deal of

delay and expense, and it was not competent to the parties to

exclude the case stated procedure by the terms of their

agreement. The High Court had power, after an award, to

remit to the reconsideration of the arbitrator any matters the

subject of the reference or to set aside the award for

“misconduct” by the arbitrator (a term far broader in meaning

than its popular significance) or error of law on the face of

the award.

The Arbitration Act, 1979 was the first serious

response to the concern that the breadth of judicial

intervention might be adversely affecting London’s position

as a leading centre for international commercial arbitration.

The case stated procedure was abolished, appeals required

leave of the High Court in the absence of consent by all the

parties, and the parties were given power, with certain

exceptions, to exclude appeals on a point of law. Yet this was

not enough. First, the 1979 Act did not affect the court’s

power to displace the arbitration mechanism where it

considered there was no arguable defence to the claim.

Secondly, the Act was in my view fundamentally flawed

because of its entirely open-ended statutory provision that the

High Court was not to grant leave to appeal “unless it

considers that, having regard to all the circumstances, the

determination of the question of law concerned could

2002] Arbitration 34