The Commercial Court and Arbitration
London is one of the world’s leading centres for international arbitration. The number of international civil disputes resolved through arbitration, mediation and adjudication in the UK exceeded 43,000 in 2020. English Law is the law of choice governing 40% of all global corporate arbitrations.
A significant part of the business of the Commercial Court involves arbitration matters (approximately 25% of claims issued in the Commercial Court are arbitration claims).
Applications to the Court under the Arbitration Acts 1950 – 1996 and other applications relating to arbitrations are known as ‘arbitration claims’. The Commercial Court Guide (PDF) has a specific section (O.1 – O.13) setting out rules and guidance relating to arbitration claims.
The Commercial Court’s arbitration related work is threefold:
- It is the principal supervisory court for international arbitrations with a London seat. It hears applications for relief in aid of arbitration proceedings with a London seat (e.g. applications for freezing orders, information orders). During 2021-2022 there were 15 applications for injunctions made by parties to London arbitral proceedings made under s44 of the UK Arbitration Act 1996. It also hears applications for anti-suit injunctions to restrain parties from bringing foreign proceedings in breach of an arbitration agreement, where that agreement specifies a London seat or there is some other nexus with England and Wales. Such applications are typically made under s37 of the Senior Courts Act 1981. It also determines applications for the appointment of an arbitrator, where a contractual framework is lacking or fails.
- It determines challenges made to awards where the arbitral tribunal is seated in England. The bulk of these claims are: (i) challenges to awards on the grounds of lack of substantive jurisdiction under s67 of the 1996 Act; (ii) challenges alleging serious irregularity (under s68 of the 1996 Act); and (iii) appeals on points of law (under s69 of the 1996 Act), although these are fewer in number. The success rate of such challenges continues to be low (around 11% of applications filed in 2019-2020) underlining that the UK remains an ‘arbitration friendly’ jurisdiction in which great importance is attached to the finality of arbitral awards.
- It determines applications under s101 of the 1996 Act to recognise and enforce arbitral awards issued in the territory of a state (other than the United Kingdom) which is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (a New York Convention award; see s100(1)). The Court also hears applications to enforce arbitration awards rendered under the ICSID Convention under the Arbitration (International Investment Disputes) Act 1966.
There is a substantial body of case law in these three areas.
The Court has been actively involved in the Law Commission’s recent review of the Arbitration Act 1996 (external link), which will lead to some limited changes to the Act, in line with feedback from those involved in London Arbitration.
Specifying London as a ‘seat’ of arbitration
London is commonly specified as the ‘seat’ of arbitration in commercial contracts. Such a specification provides commercial parties with the comfort that the English Commercial Court has supervisory jurisdiction over the arbitral process. Various surveys suggest London is the world’s most popular seat of arbitration. It is also open to the parties to select English Law as the law governing their arbitration agreement, whatever choice of law they make for their transaction, which ensures that arbitration agreement benefits from English Law principles which adopt a generous approach to the interpretation of arbitration agreements and as to the types of dispute which can be determined in arbitration.
The LCIA is one of the world’s leading international institutions for commercial arbitration. Over 84% of arbitrations administered pursuant to LCIA Rules specified a seat in England (according to the LCIA’s 2020 Report). The London Maritime Arbitrators’ Association – a specialist arbitral association handling disputes in the maritime sector– recorded 2,986 arbitral appointments in 2022 (excluding small, intermediate and fast and low cost claims). The International Chamber of Commerce Dispute Resolution Statistics Report 2020 recorded that 12% of its arbitrations had a London seat (just behind Paris with 12.2%).
In addition, numerous commercial arbitrations take place in London on the terms of trade bodies such as the Grain and Feed Trade Association (GAFTA), the Federation of Oils, Seeds and Fats Associations (FOSFA), the Refined Sugar Association (RSA), the Federation of Cocoa Commerce (FCC) and the International Cotton Association (ICA). Finally, a large number of arbitrations in London are undertaken on an ‘ad hoc’ basis rather than under the auspices or on the rules of an arbitral institution or body.