Revision of the Arbitration Act 1996: The Case for Arbitral Independence

• Date: 01 January 2023

43

Revision of the Arbitration Act 1996: e Case

for Arbitral Independence

JAMES STITT  JOSEPH MATTHEWS*

‘In a cross-border context, the prohibition on bias justies itself by reference

to the very same goal underlying the decision to arbitrate: promoting a level

playing eld. A commitment to subject future disputes to arbitration usually

aims to enhance a relative measure of adjudicatory neutrality, at least when

compared with the prospect of the other side’s hometown courts.’

Professor William Park 1

Introduction

For more than a century, London has successfully, and with justiable pride,

oered itself and its formidable corps of legal and other professionals in service

to the world’s business community for the resolution of cross-border disputes by

means of international commercial arbitration. Its barristers, retired High Court

judges, solicitors and other professionals have provided what Professor Park in the

above quoted passage, calls ‘adjudicatory neutrality, at least when compared with

the prospect of the other side’s hometown courts.’ Such adjudicatory neutrality is

the raison d’être for international arbitration.2

Twenty-ve years aer the introduction of the Arbitration Act 1996 (the “1996

Act”), England still clings to a view of adjudicatory neutrality that does not include

a statutory requirement for arbitrators to be independent of the parties and their

counsel as a condition precedent for accepting service as arbitrator.

It is hard to square this continued willingness to discount the relevance

of independence at the time of selection with the importance given to the

independence of a party-appointed arbitrator under English law. Section 33 of

* James Stitt is a barrister practising at the Bar of Northern Ireland. Joe Matthews is a Fellow and

Chartered Arbitrator of the Chartered Institute of Arbitrators, a Fellow and Former President of

the International Academy of Trial Lawyers, and acts as an independent arbitrator and mediator.

He has been a member of the Florida and District of Columbia bars in the United States based in

Miami, Florida and Washington, D.C. for more than 45 years. He is an Honorary Bencher of the

Inn of Court of Northern Ireland.

1 Wil liam Park, ‘Rectitude in International Arbitration’ (2011) 27 (3) Arbitration International 473,

475.

2 Maria Slobodchikova, Interview with Professor William Park (Oxford Law Vox Podcast, 22

September 2015) k-talks-to-law-

vox-about-arbitration-international> accessed 20 June 2023.

44     

the 1996 Act requires only that the tribunal ‘act fairly and impartially as between

the parties, giving each party a reasonable opportunity of putting his case and

dealing with that of his opponent.’ And yet, this provision has been interpreted by

English courts, including the Supreme Court, to impose on every party-nominated

arbitrator, a ‘duty to act independently and impartially… owing no allegiance to

the party appointing them. Once appointed they are entirely independent of their

appointing party and bound to conduct and decide the case fairly and impartially.’3

e Law Commission of England and Wales was tasked with conducting a review

of the 1996 Act on the twenty-h anniversary of its adoption.4 In summary,

with respect to arbitrator independence and disclosure, the Law Commission has

proposed that the 1996 Act should (1) not be amended to include a requirement

for arbitrators to be independent of the parties to the arbitration or the subject

matter of the dispute; and (2) that it should be amended to include a continuing

duty of disclosure on arbitrators.5

e Law Commission’s nal report will be published upon completion of the

public consultation, which was originally scheduled to end on 15 December 2022.

Following feedback from the rst consultation paper, a second consultation paper

was published in March 2023, which addressed additional topics beyond the scope

of this article.6 e Ministry of Justice, along with other interested departments

of government will determine whether to implement any recommendations of the

Law Commission.

If the Law Commission’s recommendation is accepted by the government, London

will continue to stand alone as the only major hub for international arbitration

whose applicable law does not impose a duty of independence on arbitrators. is

dogged refusal by law makers and courts in England and Wales to endorse a specic

duty of independence for arbitrators at the time of their appointment, owes its

intellectual provenance to the chambers system by which English barristers organise

3 See Halliburton v Chubb [2017] EWHC 137 (Comm) [19]; cited by Lord Hodge SCJ in

Halliburton v Chubb [2020] UKSC 48 (Halliburton) [63].

4 e Law Commission commenced its review in January 2022; it issued its rst Consultation Paper

in September 2022 (Law Commission of England and Wales, Review of the Arbitration Act of 1996

(Law Com CP no 257, 2022)). It identied issues relating to arbitrator impartiality, independence,

and the duty of disclosure among eight major areas of potential reform under consideration.

5 e Consultation uestions posed with respect to these subjects are:

Consultation uestion 2. We provisionally conclude that the Arbitration Act 1996 should not

impose a duty of independence on arbitrators. Do you agree?

Consultation uestion 3. We provisionally propose that the Arbitration Act 1996 should

provide that arbitrators have a continuing duty to disclose any circumstances which might

reasonably give rise to justiable doubts as to their impartiality. Do you agree?

6 Law Commission of England and Wales, Review of the Arbitration Act 1996 (Law Com CP no 258,

2023): the second Consultation Paper poses six Consultation uestions, none of which relate to

the duty of independence of arbitrators – comments on these questions were requested by 22 May

2023.