TIME FOR AN UPDATE? UK PROPOSES ARBITRATION ACT 1996 REFORM
Since its introduction over 25 years ago, the Arbitration Act 1996 – which provides a framework for arbitration in England and Wales and Northern Ireland – has evolved to become a landmark piece of international arbitration legislation.
Generally speaking, the Act provides a national legal framework for arbitration and sets out the supportive powers of national courts before, during and after the arbitral process, such as upholding arbitration agreements, preserving evidence and assets, and enforcing arbitral awards.
Over the years, its influence has grown exponentially. According to the Law Commission, the Chartered Institute of Arbitrators has more than 17,000 members across 149 countries. Moreover, estimates suggest that international arbitration grew by about 26 percent between 2016 and 2020, with London the world’s most popular seat.
“The Arbitration Act 1996 has been a tremendous success,” concurs Jacob Grierson, a partner at Asafo & Co. “It has turned London from being a place where arbitration was treated with caution into one of the best places for international arbitration, alongside Paris, Geneva, Singapore and Hong Kong.”
Another key indicator of the Act’s success is the number of arbitrations taking place. The Law Commission estimates there are at least 5000 arbitrations in England & Wales each year, worth at least £2.5bn to the economy. “Many of those involve international parties, drawn to the UK by its long history of supporting arbitration,” adds Gordon Bell, a partner and head of international arbitration at Gowling WLG.
However, despite the international pre-eminence of the Act, the UK government has asked the Law Commission of England and Wales to review the Act, to ensure that it is fit for purpose and that it continues to promote the UK as a leading destination for commercial arbitration.
Apr-Jun 2023 issue
Fraser Tennant