Crefovi's newsletter: Consultation review of the arbitration act 1996: an evolution, rather than a revolution?

Consultation review of the arbitration act 1996: an evolution, rather than a revolution?

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On 4 July 2023, I attended the LCIA‘s Paris-based breakfast seminar entitled ?The arbitration act 1996 review: part two”. After croissants and coffee, the members of the panel – who counted Nathan Tamblyn, a law professor who recently joined the Law commission – launched into an animated discussion on where proceedings stand, in terms of conducting, and completing, the consultation review of the England & Wales arbitration act 1996 (the ?Act”). The rationale of such Law commission’s consultation is that, now that the Act is 25 years’ old, it is due for a review. Also, England – and, in particular, London – wants to capitalise on the fact that the capital city of the United Kingdom (?UK”) has become the most preferred seat of arbitrations, worldwide, as evidenced by the report entitled ?2021 international arbitration survey: adapting arbitration to a changing world”, on a par with Singapore. This is no small feat, especially since we had ascertained, in our previous article ?Arbitration in France & the UK: who has the upper hand?”, that the English arbitration arsenal and structure were less sturdy and less pro-arbitration, compared to the French ones, in particular in terms of enforcing arbitral awards no matter what, on English soil. Also, since Brexit has decimated any fluid, clear and streamlined judicial collaboration between the UK and the European Union, in particular as far as cross-border enforcement of civil and commercial court judgments is concerned, arbitration has found renewed vigor and strength, in becoming the dispute resolution process of choice, for transnational business players. Let’s investigate further what the findings of the Law commission’s consultation review of the arbitration act 1996 are, shall we?

By way of preliminary remark, let’s clarify that the Act applies only to England & Wales, as well as Northern Ireland. It does therefore not apply to Scotland, where the Arbitration (Scotland) Act 2010 is in force (the ?Scottish act”).

The Law commission – a UK government body set up to promote the reform of the law – published its first consultation paper, entitled ?Review of the arbitration act 1996 consultation paper”, in september 2022 (the ?First report”). This opened the first consultation period, which closed down on 15 December 2022.

Then, the Law commission published its second consultation paper, entitled ?Review of the arbitration act 1996 second consultation paper”, in March 2023 (the ?Second report”). This opened the second consultation period, which closed down on 22 May 2023.

1. Confidentiality

In the First report, the Law commission assesses whether it is time to amend the Act, in order to insert a duty of confidentiality in arbitration in it.

The Law commission sets out, in the First report, that it does not think that making such duty of confidentiality mandatory, in the Act, is appropriate, because:

• in some areas of arbitration, the default is transparency, not confidentiality, for example in arbitrations involving investor claims against states or when there are child welfare concerns in family law arbitrations;
• there is a trend towards transparency, for example with an increasing practice of publishing arbitral awards, and
• there is a debate about the public interest in increased transparency, for example with arbitrations involving public procurement contracts.

So, if the Act provided a default rule of confidentiality, it would necessarily be qualified by (many) mandatory exceptions.

The Law commission therefore concludes that it is a strength that the law of confidentiality can be developed appropriately by the courts, case by case. Also, the Law commission refers to arbitral rules – probably from arbitral institutions such as LCIA and ICC – which contain a variety of approaches to confidentiality, and that, in practice the current regimes usually work well.

Some commentators disagree, in particular in comparison to the above-mentioned Scottish act, which provides that, pursuant to its rule 26, disclosure by a party, the tribunal or any arbitrator of confidential information is actionable as a breach of confidence unless the disclosure:

• is authorised, expressly or impliedly, by the parties (or can reasonably be considered as having been so authorised);
• is required by the tribunal or is otherwise made to assist or enable the tribunal to conduct the arbitration;
• is required (i) in order to comply with any enactment or rule of law; (ii) for the proper performance of the discloser’s public functions; or (iii) in order to enable any public body or office-holder to perform public functions properly;
• can reasonably be considered as being necessary to protect a party’s lawful interests;
• is in the public interest;
• is necessary in the interests of justice; or
• is made in circumstances in which the discloser would have absolute privilege had the disclosed information been defamatory.

If the Scottish act sets a general duty of confidentiality, before setting out key exemptions to that rule, including those recognised under the law of England & Wales, why would the Act could not?

Like in the French set of rules relating to arbitration, codified at articles 1442 to 1527 of the civil procedural code (?CPC”), which makes confidentiality the statutory default rule for domestic arbitral procedures (subject to statutory exceptions or explicit agreement between the parties deciding otherwise), setting out, in black and white, in the Act, that confidentiality is the default regime, would increase the attractiveness of arbitral proceedings in England, and London in particular. Referring to ?English case law, which assumes that arbitration proceedings are confidential” is too vague and muddled, for foreign parties who want to have explicit, clear and transparent provisions, set out in the Act, relating to the confidentiality of their future arbitration proceedings.

We therefore think that the Law commission passed a great opportunity to increase attractiveness of the Act, with respect to its findings on confidentiality.

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Crefovi's live webinar: Consultation review of the arbitration act 1996 -?an evolution, rather than a revolution?

2?August?2023 | 15:30pm London time

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Crefovi's live webinar will begin on Wednesday 2 August at 15:30pm London time (UK), and will provide an in-depth analysis on the consultation review of the England & Wales arbitration act 1996, launched by the Law commission.

You haven’t yet secured your free place for our upcoming webinar on UK and French arbitration law?

Here is your chance to join?Annabelle Gauberti ?on Wednesday 2 August 2023, 15:30pm London time (UK) as she explores how the Law commission is structuring its review of the arbitration act 1996.?

In this webinar, our expert speaker will discuss the various changes envisaged to the arbitration act 1996, as follows:?

• Confidentiality;
• Independence and disclosure;
• Discrimination;
• Immunity of arbitrators;
• Summary disposal;
• Court orders in support of arbitral proceedings;
• Challenging the jurisdiction of the tribunal;
• Appeals on a point of law, and
• Proper law of the arbitration agreement.

Join live webinar here

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