Tag Archives: Jonathan Hill

Setting aside of arbitral awards under the Arbitration Act 1996 and the UNCITRAL Model Law on International Commercial Arbitration: failure to deal with all the issues

By Prof Jonathan Hill, Professor of Law (University of Bristol Law School).

© liza31337 (Flickr)

Back in the 1980s, the Departmental Advisory Committee on Arbitration Law recommended against England adopting the UNCITRAL Model Law on International Commercial Arbitration (‘Model Law’ or ‘ML’). Nevertheless, during the course of the reform process that led to the Arbitration Act 1996, the Model Law played a significant role and its impact can clearly be seen in terms of the 1996 Act’s structure, style and content. Nevertheless, English law retains a number of distinctive features and, even in those areas in which the objectives of the 1996 Act broadly mirror those of the Model Law, there are places where the two legislative schemes diverge.

One significant area of difference is the setting aside of awards. On this issue, the Model Law is, at first blush, simplicity itself. The six grounds for setting aside under art 34 ML replicate bases set out in article V of the New York Convention of 1958 (‘NYC’) on which an award rendered in country A may be refused recognition/enforcement in country B. (For obvious reasons, art 34 ML contains no provision corresponding to art V.1.e NYC.)

The Arbitration Act 1996 approaches setting aside in a very different way. First, in keeping with the traditions of English arbitration law, the 1996 Act provides that, albeit in carefully circumscribed and narrow circumstances, an award may be set aside on the basis that, as regards the merits of the dispute, the arbitral tribunal made an error of English law (s 69). The Model Law, by contrast, follows the modern international practice of making no provision for setting aside because the tribunal did not reach the correct result, either on the facts or the law. Secondly, the 1996 Act separates ‘jurisdictional’ defects (s 67) from ‘procedural’ and other defects (s 68). Thirdly, section 68 lists a total of twelve ‘procedural’ grounds on which an award may be set aside. This contrasts with the ML’s two ‘procedural’ grounds (art 34.2.a.ii and iv). Fourthly, whereas article 34 ML provides simply that an award ‘may’ be set aside if one of the grounds is established (giving the supervisory court a degree of flexibility), an award cannot be set aside under section 68(2) unless the procedural defect relied on by the applicant has caused or will cause substantial injustice to the applicant.

The combined effect of these differences is to produce setting-aside regimes which, although largely seeking to implement the same policies, work in rather different ways. This point can be illustrated by the quite common scenario in which, after an award has been rendered, one of the arbitrants (typically, a respondent whose defence was wholly or partly unsuccessful) challenges the award on the basis that it fails to address an issue which was raised in the arbitration. Continue reading

‘Bare’ arbitration clauses under the UNCITRAL Model Law on International Commercial Arbitration

By Prof Jonathan Hill, Professor of Law (University of Bristol Law School).

As every student of international commercial arbitration ought to know, an arbitration agreement should not only impose on the parties a binding obligation to refer a certain dispute (or certain types of dispute) to arbitration but also, as a minimum, indicate the place (or seat) of arbitration and provide a mechanism for the appointment of the arbitral tribunal. Unfortunately, the drafting of arbitration clauses in commercial contracts often leaves much to be desired; in a case involving a badly-drafted arbitration clause, disputing parties who are unable to resolve their disputes by negotiation may find themselves getting bogged down in one or more of the procedural problems to which pathological arbitration clauses frequently give rise.

Particular difficulties may be posed by so-called ‘bare’ clauses – that is, clauses which merely provide for submission of disputes to arbitration without specifying the place of the arbitration, the number of arbitrators or the method for establishing the arbitral tribunal. If, once a dispute has arisen, the parties are unable to agree on the appointment of an arbitral tribunal, the claimant may encounter practical difficulties in activating the arbitration machinery and getting the arbitral tribunal established. Continue reading

The law governing an arbitration clause

By Prof Jonathan Hill, Professor of Law (University of Bristol Law School).

A leading commentator has observed that ‘[t]he choice of the law applicable to an international commercial arbitration agreement is a complex subject’ (Born, International Commercial Arbitration (2nd edn, 2014) p 472). This complexity is reflected by the case law illustrating that the courts of different countries adopt different approaches to certain common scenarios. One area of divergence is the case where parties to a contract containing an arbitration clause choose state A as the seat of arbitration, but the law of state B as the law governing the matrix contract: which law governs the arbitration clause – the law of the seat or the law of the country chosen to govern the substantive contract?

Some legal systems, influenced in part by the doctrine separability (according to which a contractual arbitration clause is, conceptually, treated as a contract separate and independent from the matrix contract) and article V.1.a of the New York Convention of 1958, take the view that, in the absence of an express choice by the parties of the law applicable to the arbitration clause, the law of the seat should govern questions of material validity. English law, however, has never taken this view – although, arguably, the Court of Appeal came close to doing so in C v D [2007] EWCA Civ 1282. Continue reading

Brexit and private international law

By Prof Jonathan Hill, Professor of Law (University of Bristol Law School).

GlobesIt is unlikely that many voters, when deciding how they would vote in the recent EU referendum, would have given any thought to the implications of Brexit for private international law in the United Kingdom. Nevertheless, Brexit is likely to have profound consequences in this (admittedly) complex and specialist field. The greatest effect will be felt in the commercial arena: in the context of cross-border litigation, for example, the EU has established, in civil and commercial matters, a common framework for the jurisdiction of national courts, the determination of the applicable law and the reciprocal recognition/enforcement of judgments granted by Member State courts. Brexit will also take the United Kingdom out of the EU-wide systems for the allocation of divorce jurisdiction and the mutual recognition of divorces and nullity decrees. Continue reading

International Commercial Arbitration: the removal of arbitrators for apparent bias

By Prof Jonathan Hill, Professor of Law (University of Bristol Law School).

iba1It is a fundamental principle of arbitration law that arbitrators – whether appointed by one of the arbitrants, by the arbitrants jointly or by a third party (such as an arbitral institution or a national court) – must be impartial. This principle is enshrined in institutional arbitration rules and national legislation. It is, therefore, not surprising that, when doubts as to an arbitrator’s impartiality arise, one of the arbitrants will seek to have the arbitrator removed. The importance of the parties’ right to challenge an arbitrator on the basis of justifiable doubts as to the arbitrator’s impartiality is illustrated by the recent decision of the High Court in Sierra Fishing Co v Farran [2015] 1 All ER (Comm) 560. The decision is notable in two respects.

The significance of the IBA Guidelines on Conflicts of Interest in International Arbitration

Because, in international cases, arbitrants and arbitrators often come from different countries and different legal traditions, they may have different conceptions of what types of circumstance give rise to a conflict of interests and different assumptions about how any such conflict might be resolved. The IBA guidelines, which were originally formulated in 2004 and have been subsequently revised (most recently in 2014), aim to assist the arbitration community by providing a typology of different kinds of conflict and a system for grading their seriousness. The guidelines list a wide variety of professional, financial and personal connections and place them in three lists: red (split into waivable and non-waivable); orange (waivable); and green (irrelevant). Since their inception, the guidelines have frequently been used by arbitrators (in assessing what circumstances need to be disclosed prior to appointment, or thereafter) and arbitral institutions (when determining challenges under institutional rules).

Continue reading

Conflicting jurisdiction and arbitration agreements: Exmek Pharmaceuticals SAC v Alkem Laboratories Ltd

By Prof Jonathan Hill, Professor of Law (University of Bristol Law School).

© Investment News, 2013.

© Investment News, 2013.

A previous blog addressed certain problems surrounding the interpretation of arbitration clauses, particularly in relation to a lack of transparency concerning the parties’ choice of the seat of arbitration. This blog continues the same theme – albeit in the context of different interpretative questions.

Although the notion of the ‘pathological’ arbitration clause has been part of the international arbitration literature for nearly half a century, difficulties generated by poor drafting continue to bedevil both arbitral tribunals and the courts. Notwithstanding the availability of a wealth of clear and helpful advice (see, for example, Born, International Arbitration and Forum Selection Agreements: Drafting and Enforcing (4th edn, 2014), a surprising number of those who draft commercial contracts seem to be either unaware of the available advice or incapable of heeding it. Continue reading

The interpretation of arbitration clauses: where is the seat of arbitration?

By Prof Jonathan Hill, Professor of Law (University of Bristol Law School).

© http://wordstodeeds.com/

© http://wordstodeeds.com/

It is a truism that arbitration clauses are often poorly drafted, not infrequently agreed at the 11th hour or lifted (inappropriately) from unrelated contracts. As a consequence, courts often have to try to make sense of clauses which are unclear or potentially inconsistent. In Shagang South-Asia (Hong Kong) Trading Co Ltd v Daewoo Logistics [2015] EWHC 194 (Comm), [2015] 1 All ER (Comm) 245 the parties had agreed that arbitration was to be ‘held in Hong Kong’, but that ‘English law [was] to be applied’. After the tribunal had rendered its award, the claimant applied to the English court for setting aside of the award under section 67 of the Arbitration Act 1996. As in Dubai Islamic Bank v Paymentech [2001] 1 Lloyd’s Rep 65, the English court’s setting aside jurisdiction depended on England being the seat of arbitration (see Arbitration Act 1996, s 2(1)). Continue reading