Arbitration & ADR, United Kingdom updates

Court of Appeal rules on arbitrability of shareholders' claims
  • United Kingdom
  • 15 September 2011

The extent to which parties may agree to submit intra-corporate disputes - in particular claims under company legislation - to arbitration has long been uncertain. The Court of Appeal recently ruled in favour of the arbitrability of a shareholder's unfair prejudice claim brought under Section 994 of the Companies Act 2006 and has provided important guidance on the arbitrability of corporate disputes more generally.

Arbitrators not employees in anti-discrimination legislation
  • United Kingdom
  • 04 August 2011

The Supreme Court ruling in Jivraj v Hashwani removes the question mark over the legality of provisions in certain institutional rules which restrict the nationality of arbitrators. After much recent uncertainty over nationality criteria, the ruling marks a welcome return to business as usual for those involved in arbitration in the United Kingdom.

Court allows party to reject adjudicator
  • United Kingdom
  • 14 July 2011

The Technology and Construction Court recently considered whether a party could reject a nominated adjudicator by abandoning the reference under the Housing Grants Construction and Regeneration Act 1996 Part 2. The case discloses a gap in the act: it appears that a referring party can withhold service of referral documentation with a view to obtaining the appointment of another adjudicator which is acceptable to it.

Costs consequences of lost opportunities for mediation
  • United Kingdom
  • 26 May 2011

A recent Court of Appeal decision provides a salutary warning to parties - even where they are partially successful - of the potential adverse costs consequences of refusing to mediate. It represents another endorsement of mediation by the Court of Appeal, which exercised its discretion to make no order as to costs.

Shareholders' unfair prejudice disputes may be arbitrated
  • United Kingdom
  • 03 March 2011

A High Court decision confirms that disputes which would otherwise be raised through an unfair prejudice petition before the courts can be referred to arbitration. It reflects the established pro-arbitration stance of the English courts by recognising that parties should be free to agree how their disputes are resolved.

Government plans to promote greater recourse to ADR
  • United Kingdom
  • 17 February 2011

The UK government has committed to greater use of mediation and other alternative dispute resolution (ADR) in the civil justice system, announcing its intention to consult on wider use of ADR in the civil courts. A study estimates that the government's 2001 pledge to seek to resolve public-sector disputes by ADR has saved £36 million, and that a similar move in Scotland could save £40 million in four years.

EU Mediation Directive: implementation and key changes
  • United Kingdom
  • 10 February 2011

The Ministry of Justice has confirmed that the EU Mediation Directive will apply only to cross-border disputes. The Civil Procedure Rules are being amended and a statutory instrument is being prepared to give effect to new rules on the enforceability of mediated settlement agreements, the confidentiality of mediation and the suspension of limitation periods while parties mediate.

No appeal from arbitral award on question of fact
  • United Kingdom
  • 02 December 2010

The Commercial Court has dismissed an appeal against an arbitral award made on a question of fact. The judge affirmed the view in The Chrysalis that it is "very doubtful" that the court has jurisdiction to hear an appeal of arbitrators' findings of fact, even if the parties have agreed to such an appeal.

Supreme Court rejects Dallah appeal and refuses enforcement of French ICC award
  • United Kingdom
  • 11 November 2010

The Supreme Court has concluded that both the Court of Appeal and the High Court were right to refuse to enforce an award obtained by Dallah, a Saudi Arabian company, against the government of Pakistan. It has clarified the scope of the doctrine of 'Kompetenz-Kompetenz' in England and the relationship, under English law, between the power of the tribunal to determine its jurisdiction and the court's power to do so.

Failure to decide dispute in accordance with chosen law
  • United Kingdom
  • 04 November 2010

In a recent case the claimant sought to challenge an award on the basis that the majority of the tribunal had failed to decide the dispute in accordance with Spanish law, being the substantive law chosen by the parties. In confirming a number of points in relation to challenges under the Arbitration Act, the High Court found that failure to decide a dispute in accordance with chosen law is insufficient grounds to set aside an award.

Proceeds of Crime Act: when do mediators risk criminal liability?
  • United Kingdom
  • 28 October 2010

Mediators have previously questioned whether Section 328 of the Proceeds of Crime Act - on arrangements that facilitate the acquisition, retention, use or control of criminal property - could apply to legal professionals involved in mediation if a settlement falls foul of the act. Guidance from the Civil Mediation Council draws attention to two potentially risky situations.

Application of Limitation Act to expert determination proceedings
  • United Kingdom
  • 14 October 2010

In a recently released judgment the judge considered, in passing, whether the Limitation Act 1980 applies to expert determination proceedings. He held that the expert determination proceedings commenced when one party wrote to the other asking it to agree on the appointment of an expert, rather than with the actual appointment of the expert.

Judge's views on ADR encourage Wembley litigation settlement
  • United Kingdom
  • 07 October 2010

The dispute between Brookfield Construction and Mott MacDonald arising from the construction of Wembley Stadium finally settled in the course of Summer 2010. During the Technology and Construction Court proceedings the judge had warned that his perception of the parties' willingness to participate in alternative dispute resolution would form an key part of his deliberations on costs orders.

Court of Appeal holds religious criteria for appointment of arbitrators unlawful
  • United Kingdom
  • 12 August 2010

The Court of Appeal has unanimously held that the Equality (Religion and Belief) Regulations 2003 rendered an arbitration agreement in a commercial contract void. This decision will restrict parties' ability to select characteristics of arbitrators in commercial agreements. It may even affect the choice of England for arbitrations and cause enforcement problems in jurisdictions where religious law is in place.

Court refuses to enforce adjudicator's decision
  • United Kingdom
  • 22 July 2010

In a recent case it was held that if an adjudicator fails to address a question referred to him or her because he or she takes an erroneously restrictive view of his or her jurisdiction - for example, failing even to consider the defence to the claim or some fundamental element thereof - such failure might make the subequent decision unenforceable on the grounds of jurisdiction or natural justice.

Validity of provision requiring one party to bear costs of adjudication
  • United Kingdom
  • 15 July 2010

In a recent case the adjudication clause in a trade contract provided that if the contractor referred a dispute to adjudication, it would be liable for its own legal and professional costs and those of the employer, regardless of the eventual decision. It was held that the clause was unenforceable, as it conflicted with Section 108 of the Construction Act and of the Scheme for Construction Contracts.

What constitutes 'taking a step in court proceedings' where a stay is sought?
  • United Kingdom
  • 24 June 2010

The High Court has provided guidance on what constitutes 'a step in proceedings' under Section 9(3) of the Arbitration Act 1996, and the interaction of that section with Part 11 of the Civil Procedure Rules. The case raised the possibility of a preferable new interpretation, whereby a Section 9 right would not be lost until service of a substantive defence in the court proceedings. However, the established test still applies.

Anti-suit injunctions in support of arbitration and non-EU proceedings
  • United Kingdom
  • 29 April 2010

In a recent case the Court of Appeal granted an anti-suit injunction restraining Tunisian proceedings brought in apparent breach of an arbitration agreement. Its judgment confirms the Commercial Court's view in Shashoua v Sharma that anti-suit injunctions in support of arbitration proceedings remain available insofar as they restrain parties from issuing proceedings outside the European Union.

Correcting adjudicators' mathematical errors - a lifeline for opposing enforcement?
  • United Kingdom
  • 11 March 2010

Adjudication is often described as a rough and ready form of justice, where mistakes in decisions inevitably occur. Some mistakes are the result of a mathematical error in the adjudicator's calculation of the sum to be paid. The orthodox view for many years has been that such an error cannot prevent the courts from enforcing the adjudicator's decision, but this view is under threat in light of a recent judgment.

Court rules that mediation and adjudication can run concurrently
  • United Kingdom
  • 04 March 2010

A recent case demonstrates that if parties want to make types of dispute resolution mutually exclusive, express wording is needed in the dispute resolution clause. The court found that as the agreement at issue had been drafted, mediation and adjudication were not mutually exclusive alternatives; rather, each was optional and the two could run concurrently.

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