High Court Jurisdiction in Arbitration

Question 1

Which powers does AA give the courts to support or intervene in arbitrations?

Answer 1

• Orders to prevent parties breaching agreements to arbitrate
• Assistance in appointment where there has been a problem
• Orders over procedural steps
• Interim remedies to preserve the status quo
• Judicial review and enforcement of awards

Question 2

What can be done to prevent a party from breaching an agreement to arbitrate?

Answer 2

• Where proceedings have begun, apply for a stay
• Where proceedings may be commenced, apply for an anti-suit injunction

Question 3

What is the effect of a stay?

Answer 3

• Halts the proceedings temporarily
• Usually stays are permanent because the issue is then arbitrated

Question 4

How can a stay be sought?

Answer 4

• Application in the same court as the claim
• Must file acknowledgement of service first, and tick the box ‘intending to contest court’s jurisdiction’
• Set out explanation of circumstances in witness statement, and why the dispute actually comes within the arbitration agreement
• Must be served on all other parties

Question 5

How is the question of a stay determined?

Answer 5

• Both parties have to be parties to the agreement
• If the dispute in litigation actually comes under the arbitration agreement, the court must grant a stay
• Unless it is satisfied that the agreement is void, inoperative or incapable of being performed

Question 6

Should the applicant refrain from taking a step in the proceedings?

Answer 6

• Application must be made before the applicant takes any step in the proceedings to answer the claim
• Not every step, just that shows he’s willing to continue the claim (e.g. filing a defence)

Question 7

Why would the court extend the time for appointment?

Answer 7

Where there is a time limit on the clause

Extension can be granted before or after time limit has elapsed on the grounds that:

• There has been a change of circumstances not contemplated by the parties
• The conduct of the other side makes it unjust to hold the applicant to the limit

Question 8

Setting aside the appointment of a sole arbitrator

Answer 8

• Where one side refuses to appoint his arbitrator, the other party has a right to appoint his arbitrator as sole arbitrator
• The refusing party has a right to apply to set this aside

Question 9

Failure in the appointment procedure

Answer 9

• Where there is a failure, either party can apply for directions/orders
• An order is made where there is a good arguable case for the agreement
• The court may appoint itself

Question 10

What are the grounds for removal of arbitrators?

Answer 10

• Justifiable doubts over impartiality
• He doesn’t have the qualifications required by the agreement
• Mental/physical incapacity
• Refusal or failure to conduct the arbitration properly or with all reasonable dispatch

Question 11

How is impartiality measured?

Answer 11

A doubt is only justifiable if a fair-minded and informed observer would conclude a real possibility that the arbitrator was biased, or

If there was a reasonable appearance of bias

Question 12

Can an arbitrator apply for relief from liability after resignation?

Answer 12

Yes, for relief from liability for breaking his contract

But it must have been reasonable for him to resign in the circumstances

Question 13

What powers does the tribunal have in the determination of proceedings?

Answer 13

Depends on what powers the parties conferred. Otherwise the AA allows the tribunal to:

• Appoint experts
• Inspect, preserve and order samples of the subject matter (if possessed by a party)
• Preserve evidence in the control of a party
• Give permission to a party to apply to the court for a witness summons

Question 14

What limits are there on the tribunal’s powers?

Answer 14

• Only applies to evidence in the possession of a party
• The tribunal won’t give permission for a witness summons if the tribunal and the other parties disagree
• Interim injunction power can only be given by institutional rules (e.g. UNCITRAL)

Question 15

Under s44, what is the court’s jurisdiction on procedural matters?

Answer 15

• Taking evidence of witnesses
• Preservation of evidence
• Orders relating to property which is the subject of the proceedings or a question therein
• Sale of goods the subject of the proceedings
• Granting an interim injunction
• Appointing of a receiver

Question 16

What is the difference between the court’s power and tribunal’s power in this respect?

Answer 16

• Evidence doesn’t have to be in the possession of the parties
• The court acts where the tribunal can’t do so effectively (e.g. tribunal not appointed yet)

Question 17

Disclosure in aid of arbitration

Answer 17

Norwich Pharmacal orders

• Court procedures to procure documents/material evidence may only be used with the permission of the tribunal or the agreement of the other parties
• However a Norwich Pharmacal order may be made before a dispute has been referred to arbitration in order to preserve assets or remedies

Can a court order non-party disclosure?

• No
• However, where there is a risk that the documents may cease to exist or become unavailable, it may be possible to obtain an order for their preservation

Question 18

Interim injunctions

Answer 18

What are they for?

• To protect the status quo before an arbitrator is appointed
• They can also bind third parties

What is the procedure for seeking an interim injunction?

• Application under s44
• Must state the steps being taken to appoint an arbitrator

Question 19

Applications for procedural orders

Answer 19

On-notice applications

• Made with Part 8 if there’s time
• Three clear days’ notice

Urgent applications

• If there’s no time, the court can make an order without notice
• But as much notice as possible should be attempted, unless it is impossible, or secret

Question 20

How can the court’s discretion (s44) be excluded?

Answer 20

• The power of the court under s44 can be excluded through party agreement
• Excluding words must be clear

Question 21

What 4 foems does Judicial review take?

Answer 21

Challenges to jurisdiction of arbitrators

Preliminary points of law

Challenges to decisions for serious irregularity

Appeals on a point of law

Question 22

What are the conditions to be fulfilled for determination of a preliminary point of law?

Answer 22

Either the parties must agree or the tribunal does. If the tribunal does:

• The court must be satisfied that determination will produce substantial savings in costs and
  
  • The application must be made without delay
  • Reasons for the award have not been dispensed with in the agreement
• the point substantially affects the rights of one or more of the parties

Question 23

What is the procedure for applications on preliminary points of law?

Answer 23

Part 62 claim form

• Form must identify the question of law
• Witness statement should state whether it’s under the parties’ permission or the tribunal’s
• If the tribunal’s, must state on which grounds the question should be determined

Question 24

What conditions must be fulfilled to challenge an award for serious irregularity?

Answer 24

• There must be a serious irregularity affecting the tribunal, proceedings, or award, and
• It caused or will cause substantial injustice

Question 25

What is a ‘serious irregularity’?

Answer 25

• Failure by the tribunal to comply with the general duty to act fairly and impartially, giving each party a reasonable opportunity to put its case
• Tribunal or arbitral institution exceeding its powers
• Failure to follow the agreed procedure
• Failure to deal with all the issues
• Uncertainty/ambiguity with the award
• Obtaining the award by fraud or against public policy
• Irregularity in the conduct of the proceedings or the award

Question 26

When is an irregularity serious enough for s68?

Answer 26

When there is a defect that isn’t an acceptable consequence of the lower formality of arbitration as compared to litigation

Question 27

General duty to act fairly and impartially

Answer 27

Including failure to recuse when there is a real possibility of bias

Question 28

Exceeding powers

Answer 28

Exercising a power it doesn’t have

Not wrongly exercising a power it does have

A mere error of law is not an excess of power

Question 29

Failing to deal with all the issues

Answer 29

• Essential issues
• Not dealt with the case at all
  
  • A claim has been overlooked
  • The decision cannot be justified as a particular key issue has not been decided
• Arbitrators are not required to deal with every argument on every point raised
• This is not to deal with:
  
  • How the tribunal dealt with the issues or whether an answer was right
  • The reasons given

Question 30

Fraud and public policy

Answer 30

• The alleged conduct must amount to serious impropriety
• Requires cogent evidence

Question 31

Substantial injustice

Answer 31

• Where the decision would clearly have been different if the irregularity had not occurred
• Where the irregularity results in the denial of a fair hearing
• All circumstances must be taken into account
• Not sufficient on its own – there must also be a specific irregularity
• Not available where an irregularity has been remedied

Question 32

When is the right to object lost?

Answer 32

• Right right to object on the basis of serious irregularity is lost if not taken immediately
• This happens if the party continues to take part in arbitration without objecting straight away or within the time allowed in the agreement

Question 33

What powers are available to deal with serious irregularity?

Answer 33

• The court may (in whole or in part):
  
  • Remit the award to the tribunal for reconsideration
  • Set aside the award
  • Declare the award to be of no effect
• The second two can’t be used unless remission is inappropriate.
• Remission is appropriate if the tribunal failed to deal with the issues, if the award is ambiguous, or if there is a formal defect in the award.

Question 34

What are the conditions that must be fulfilled for an appeal on a point of law?

Answer 34

• It must be a question of law
  
  • Question of law includes disputes over legal principles applied, meaning of statutory provisions, and questions of contract construction
  • Must identify the question of law from the findings and explain the error
  • Only questions of England & Wales law
  • Questions of foreign law are questions of fact
• No contrary agreement
  
  • The parties must not have agreed otherwise
  • Clear, express wording is required
• There must not have been any agreement to dispense with reasons for the award
• The tribunal must have been asked to determine the question
• Can only be made once all arbitral appeal and review opportunities have been exhausted
• Can only be made on a point arising from a final award
• Must be made within 28 days
• Can only be made with the agreement of the other parties or the permission of the court

Question 35

How is permission to appeal applied for?

Answer 35

Must issue an arbitration claim form with a witness statement, which must address reasons

Question 36

What must the court be satisfied of in order to grant permission to appeal?

Answer 36

The determination will substantially affect the rights of the parties

• ‘Substantially’ means of major importance
• ‘Rights’ means the issues in dispute in the arbitration, not technical points

The question must have been raised with the tribunal

Either:

• The decision of the tribunal on the question is obviously wrong, or
  
  • i.Error so obvious that it’s major intellectual aberration
  • ii.Absolutely no chance that the arbitrator was right
• The question is of general public importance, and the decision is open to serious doubt
  
  • i.A matter of general legal principle likely to arise often in other cases
  • ii.Clearly a lower test
  • iii.Must be shown whether there is a split decision, or conflicting decisions in the courts/previous arbitrations

It must be just and proper for the court to determine the question

Even if the court is satisfied of the three conditions, permission will only be granted if it is just and proper

The fact that the parties have agreed to arbitrate instead of litigate is a powerful factor

Question 37

Which powers are available to deal with points of law?

Answer 37

The court may:

• Confirm the award
• Vary the award
• Remit the award to tribunal
• Set aside the award

Question 38

Procedure for question of law

Answer 38

Arbitration claim form (N8) or Part 8 procedure

The form should state all the details of appeal (grounds, reasons, whether arbitral appeal was made, is it within 28 days)

Question 39

Time limit

Answer 39

28 day time limit may be extended by:

• issuing an application notice if the time limit has not expired
• in a separate part of the arbitration claim form if the time limit has expired

The three important considerations are:

• Length of the delay
• Whether the defaulting party nevertheless acted reasonably
• Whether the respondent or the arbitrator contributed to the delay

Question 40

When must the arbitrator be made a defendant to the arbitration claim?

Answer 40

• Applications to remove an arbitrator
• Applications to consider & adjust arbitrator’s fees and expenses
• Applications to determine fees ad expenses where the award has been withheld pending payment

Question 41

What is the procedure for service of arbitration claims?

Answer 41

• Claim form must be served within one month of issue
• Court may grant permission to serve outside the jurisdiction
• D must acknowledge service within 14 days
• All arbitration claims are allocated to the multi-track
• C should apply for a hearing date as soon as possible

Question 42

Which questions in applications are usually made without hearings?

Answer 42

• Points of jurisdiction and points of law as to substantial savings in cost and whether the application is made without delay
• Whether to grant permission to appeal on a point of law
• Whether to extend the 28-day limit

Question 43

CAN APPEALS ON POINTS OF LAW BE MADE TO THE COURT OF APPEAL?

Answer 43

Only if the High Court grants permission

Question 44

What are the considerations of the HC when deciding whether to allow appeal?

Answer 44

• If the appeal would have a real prospect of success or
• if there is some other compelling reason why the appeal should be heard
• Whether the appeal warrants the consideration of the Court of Appeal

Question 45

When can the Court of Appeal reveal a refusal by the HC to appeal?

Answer 45

• the HC judge had no jurisdiction to make the order
• the refusal of permission was unfair or arbitrary