This is the sixth in our series looking at the Law Commission’s review of the Arbitration Act 1996. In this commentary we turn to the review of section 44 which sets out the court’s powers to support arbitral proceedings in particular areas including evidence and freezing injunctions.
The starting point on section 44 is that there’s not a free for all for the court to get involved in arbitration; that would cut across arbitration’s independence. First of all, section 44 is a non-mandatory provision, so the parties can opt out from the court’s support. Secondly, sections 44(3) to 44(5) set out the circumstances in which the court can be called upon, namely if it’s urgent the court can act on application to preserve evidence or assets (only) and if it’s not urgent, the permission of the tribunal or the agreement of the parties is needed. And the overall caveat in section 44(5) that the court only acts if “the arbitral tribunal…has no power or is unable for the time being to act effectively”.
The Law Commission has identified two key aspects about section 44 for consideration: (1) whether the court can make orders about third parties and (2) how it works if the parties have already agreed to arbitration rules which provide for the possibility of an emergency arbitrator.
On third parties, the conclusion reached is that the law already provides that section 44 orders can be made against third parties, but does this need to be spelt out? The argument against the court being able to bind third parties in related arbitration proceedings (to which that third party has not agreed) goes to the core of the consensual nature of arbitration. But that concern is met by the safeguards already in place through sections 44(3) to 44(5) mentioned above – it’s not a free for all. It seems sensible to spell it out in the Act that third parties can face Court orders in support of arbitration. The Law Commission also suggests a fuller right of appeal for those third parties.
As for emergency arbitrators, this has been a hot topic over relatively recent years and was previously perceived as a weakness of arbitration. We were involved in the 2016 Timis case which is referred to in the review. Arbitral institutions (some of which are named in the review) provide for the possibility of emergency arbitrators to be appointed, but it seems that (i) the speed of their appointment is still not as rapid as court action and (ii) there is concern, based on the Timis case that if the parties agree to rules which provide for an emergency arbitrator, the parties cannot also rely on section 44 to seek urgent relief from the court. The Law Commission clarifies that that is not the case (you can have your rules for an emergency arbitrator and your bite at the court injunction cherry too), and query whether removing section 44(5) would assist in resolving that uncertainty. It seems to me that given that arbitral institutions are not yet up to court speed, there is a need for a court option but that section 44(5) is an important safety net and should not be removed, albeit some clarification around the interaction between the rules and the Act would be worthwhile.