Arbitration Bill [HL]

Debate between Lord Thomas of Cwmgiedd and Lord Bellamy

Lords Special Public Bill Committee
Wednesday 27th March 2024 Other Business

[The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bellamy) (Con)]

My Lords, in moving Amendment 1 to Clause 1, I extend my thanks and appreciation first to the Law Commission for all the work that has gone into the preparation of this Bill and secondly to the many stakeholders who submitted evidence to the Special Public Bill Committee, as well as all those who have assisted us throughout this Committee process. Although the submissions have been most carefully considered, in the event the Bill is little changed from the version submitted and prepared by the Law Commission.

None the less, the process has been, in the Government’s view, most valuable. We have thoroughly reviewed the Arbitration Act 1996, which has provided our arbitral framework for some quarter of a century and has underpinned the foremost position that we enjoy as a destination for international arbitration. I hope that the Committee and all concerned will accept that we now have a thorough review of the 1996 Act, which is a most important advance in maintaining an up-to-date and effective procedure for arbitration, especially international arbitration, in this country.

Clause 1 provides certainty beyond doubt that the law governing the arbitration agreement will be the law of the seat, unless the parties expressly agree otherwise. By inserted Section 6A(2), any law chosen to govern the main contract does not count as an express choice of law to govern the arbitration agreement. In the Government’s view, that is a much clearer approach than that provided by the common law, notably through the Supreme Court’s decision in Enka v Chubb.

Members of the Committee will be aware that there has been thoughtful input from stakeholders to the Committee on whether the default rule in Clause 1 should be further improved on. Subject to one change, and having carefully considered those views, the Government’s position is that Clause 1 should not be further amended. The Law Commission’s policy was to reverse the decision in Enka v Chubb but not go further than that. The Law Commission’s draft, which was widely consulted on, seeks to balance the views of the sector while not being overly prescriptive.

The Government support preserving Clause 1 as it is, subject to one change, which is the subject of Amendment 1. Amendment 1 will remove the words “of itself” from new Section 6A(2), following observations that those words were likely to cause undue confusion, a point first raised at Second Reading by the noble and learned Lord, Lord Hope of Craighead, and other noble Lords and further supported by stakeholders’ evidence to the Committee. Amendment 1 deletes those words and, subject to that amendment, I hope noble Lords will agree that Clause 1, as amended, should stand part of the Bill. I beg to move.

[Lord Thomas of Cwmgiedd (CB)]

My Lords, I will briefly make a few observations. First, I thank the clerk of the Committee, who has been invaluable to us all and extremely diligent in the work that he has done. One will have the opportunity no doubt to thank him again at a further stage of the Bill, but I wanted to put that on record. I thank the Committee Members, some of whom are absolutely expert in the law and some who found this an amusing and, I hope, interesting excursion into an important part of our law. I am also deeply grateful to the Minister and his private office for the assistance that they have given us.

The people who deserve the most thanks, however, are those—I prefer not to use the modern term “stakeholders”, because I do not think that it is an accurate description—who came to give evidence to us, who are expert in this highly technical area of the law. They gave us of their wisdom and their experience—not only practitioners, but those who ran the important institutions of arbitration and those who used it. We are immensely grateful for their diligence.

As the Minister said, this is an important Bill for arbitration. Having seen the achievement of the 1996 Act, particularly the work of Lord Mustill, Lord Steyn and Lord Saville in producing a readable document for those whose first language is not English, we have not been complacent. We have grasped the need for change and faced up to the increasingly severe competition for this desirable legal and dispute resolution business. It has been particularly helpful to have had the input of the judges on at least one of the clauses in ensuring that we keep up with the tradition of expert judicial input into this highly technical area of the law. I also thank Professor Sarah Green and her team for their work. Although, as will become apparent, we have concentrated on one or two points, the vast bulk did not need any review by us or the experts who assisted us.

The first of those issues that we have to consider today relates to this amendment. Although other forms of wording were suggested, there cannot be any doubt as to the intention of Parliament. I hope that, if this matter is ever litigated in the future—and I hope that that never arises—there will not be the kind of misunderstanding that occurred in the course of the judgments in Enka about Parliament’s intention.

I want to raise one point. The Law Commission was not adverted to the issue in respect of arbitrations under treaties. This was raised with us at a time, unfortunately, when we had completed the taking of evidence. I still think that there is a difficult issue that needs to be confronted and I hope that, between now and Report, it can be. I am not persuaded at present that this is not an issue that needs addressing. However, as it came up at a late stage, and as the Bill needs to be progressed as soon as possible, it is something to which we can return on Report after those concerned in government have had a chance to take advice from experts in this area—they are simply not “stakeholders”, which is a term that I find discourteous, although I am sure that the Minister intended no discourtesy to people who spend their lives in this kind of business and who in this area are far more expert than the Law Commission itself.

--- Later in debate ---

[Lord Bellamy (Con)]

My Lords, I again associate myself and the Government with the thanks to everyone that have been enunciated this morning, particularly to the noble and learned Lord, Lord Thomas, for his chairmanship of the Committee. One point that arises from the remarks that have been made is the question that was raised by the noble and learned Lord, Lord Thomas, about the bilateral investment treaty. This was not raised during the Law Commission consultations, the written submissions that the Committee received or the oral evidence. It was raised after the 28-day period for taking evidence was completed. However, the Government are now seized of the point, are reflecting carefully on it and will provide an update as soon as they are in a position to take a view on what should happen next.

[Lord Thomas of Cwmgiedd (CB)]

My Lords, may I say how grateful I am to the Minister for his last remarks? It is a misfortune in the experience of those who are lawyers that sometimes someone only sees a point at the very last minute. It is not unusual and no one is to be criticised for it, but once a point is seen it must be put to rest. I look forward to what the Minister has to say, but I am deeply grateful for his further consideration of the matter.

--- Later in debate ---

[Lord Thomas of Cwmgiedd (CB)]

This clause seeks to remove the special provisions in relation to domestic arbitration from the Act, and it is entirely right to do so. However, it gives rise to a question that needs to be addressed, particularly because the broad powers of the court are being removed in respect of domestic arbitration. It is therefore opportune to use this occasion to raise the issue that has come before us. It was raised at Second Reading in relation to the problems of fraud, corruption and other related issues in arbitration.

We were greatly assisted by the evidence that we received on this in the light of two recent decisions: that of Mr Justice Knowles in The Federal Republic of Nigeria v Process & Industrial Developments Ltd, which has won worldwide praise; and that of Mr Justice Butcher in Contax Partners Inc BVI v Kuwait Finance House, where he was asked to enforce an award that was completely fabricated.

My own experience means that I would be extremely surprised if this was an extensive problem, but there may be others who take the view that there is a little more to this. Whatever the view, this issue really has to be examined. We are particularly grateful to what Spotlight on Corruption told us in two submissions; they are valuable papers that deserve close scrutiny. The organisation highlighted the problems by reference to some other cases and put forward some solutions. What is important from the point of view of London, and indeed the rest of the UK, is that it drew attention to the position of other states, included information about important international arbitration centres such as Singapore and Sweden, and the work being done by the ICC task force.

We cannot afford to be complacent about this issue. Plainly, it was not examined by the Law Commission and cannot therefore be gone into in the Bill, but there are issues. How do we mitigate the risk that has been seen to arise? What, if any, duties ought to be imposed on arbitrators? These are extremely difficult questions and I hope this is a matter that His Majesty’s Government will consider.

My only suggestion is that this might be best done through the way in which arbitration law was originally brought up to date in this country: a departmental committee. That brings the practical expertise of people who really are involved in this, and the Government would have the benefit of it costing nothing because the private sector is always happy to help on such matters. I hope consideration will be given to this. That is merely a suggestion as to how it should be done, but it really is something that I believe should be.

The second issue that I want to raise is the way that the Special Public Bill Committee works. It has worked well in this Bill, and in another where I had the honour of chairing the committee, but there are three points that it would be useful to examine. The first is the period of time that the committee has to review the evidence. It is extremely discourteous when the Law Commission has taken, say, two years to review a subject if we tell all the people who want to say something that they have 14 days in which to do so. That does not seem an entirely fair balance. I am not saying we should veer away from 28 days, but we ought to be allowed to have a pause to give people time—not what the Government give people and are criticised for, which is six weeks, but, say, three weeks. We should be slightly more generous in our timetable. That would enable us to focus, see what people are concerned about and get witnesses to come without disrupting the lives of busy people.

Secondly, in these technical areas—some highly technical areas are coming along the road as we move to the greater use of digitalisation and artificial intelligence and the effect this has on legal matters—we have to get right the time at which detailed technical expertise is brought to bear. It is sometimes a mistake to see these areas of the law as being a bit like the rest of it. This Bill and the one relating to digital documentation are highly technical, and it is a question of getting expert help at the right stage before the Committee meets.

Thirdly, there ought to be greater clarity about what a Special Public Bill Committee can do by way of looking at the scope of a Bill, what is in it and what is and is not policy without in any way imperilling a procedure that enables us to get Bills on to the statute book quickly. We now have some experience of these Bills. Given the important question of getting our law right on adjustments that have to be made to face the age of digitalisation and artificial intelligence, it might be wise to have a rethink about the precise way in which this procedure works. It has not caused a problem due to the Minister’s helpful attitude towards this whole process, for which I am most grateful, but I foresee that there could be difficulties if we do not think of the problems that have arisen before more come down the line, which will be vital to the prosperity of the United Kingdom.

Having made those remarks, I do not wish to press my opposition to the incorporation of Clause 15 any further. In fact, I wholly welcome that clause as bringing about a much-needed improvement to the law.

[Lord Bellamy (Con)]

My Lords, in view of the noble and learned Lord’s indication that he is not pressing for the removal of these clauses—which, incidentally, have never been brought into effect—I will say a word or two about the important underlying issue that he raised about corruption. This was raised in the Nigeria and Kuwait cases that he referred to. Those cases revealed that there had been serious issues of corruption in the conduct of the arbitrations, and it is greatly to the credit of the Commercial Court of England and Wales that that was properly exposed and that, in the end, the system was seen to work well.

However, it is important that arbitrators navigating complex cross-border disputes are equipped and empowered to safeguard their process against any misuse or abuse and that everyone perceives our jurisdiction as one that facilitates clean and robust arbitration and is not tainted in any way by corruption. Certainly, it has been most important for the committee to have received evidence about that.

On that issue, I am aware that the ICC Commission on Arbitration and ADR has commissioned a task force

“to explore current approaches to allegations or signs of corruption in disputes and to articulate guidance for arbitral tribunals on how to deal with such occurrences”.

I have written to the principal arbitral institutions seeking their assistance in this matter: the Chartered Institute of Arbitrators, the International Chamber of Commerce, the London Court of International Arbitration, the London Maritime Arbitrators Association and the Grain and Feed Trade Association, as well as the Law Society and the Bar Council, many of whose members will be arbitrators or acting as counsel in arbitration. I have asked in particular what measures they have in place to mitigate the risk of corruption in arbitration, whether more should be done in the sector to mitigate corruption in arbitration, the best way to proceed and how the Ministry of Justice and the Government could support the sector’s efforts. Once we have received the responses, the Government will come to a view on what further action, if any, is needed.

Those matters are in train and this is an issue that the Government take seriously, because the reputation of London is crucial. I think that reputation is intact but we cannot be too careful in this important matter. I hope that that goes some way to reassure the noble and learned Lord that this matter has been properly raised, is on the radar and that action is being taken.

The noble and learned Lord also asked about the procedures of the Special Public Bill Committee, the timelines and the framework for dealing with that matter. Those points are well taken. I think it is a matter for the House authorities rather than the Government, so no doubt the House authorities will reflect on the points that have been made. The Government will support any sensible changes to the Special Public Bill Committee procedure in due course.

Victims and Prisoners Bill

Debate between Lord Thomas of Cwmgiedd and Lord Bellamy

Committee stage
Tuesday 12th March 2024 Lords Chamber

[Lord Bellamy (Con)]

I see the force of the points being made by the noble Lord, Lord Clarke. I respectfully suggest that the fear of the media is not the driving force in the case of this Lord Chancellor or, if I may say so, his Parliamentary Under-Secretary of State currently at the Dispatch Box. We are looking at the real question of public safety.

If I may ask it rhetorically, who speaks for Pauline Quinn? Admittedly, that was not an IPP case. Pauline Quinn was aged 73, was disabled and could not protect herself. She was brutally murdered by a convicted killer released on licence. I respectfully suggest that these risks are very difficult for any responsible Government to take, irrespective of what the media might say.

This raises another point. At the moment the Government are not convinced that this would make a significant difference, because the Parole Board, even under the revised test suggested by my noble friend Lord Moylan, would still have to be satisfied on the issue of the protection of the public. It is perfectly likely that one is simply raising false hopes. It does not change the process that the Parole Board has to go through to look at these very difficult individuals, who are very much at risk of harm and very difficult to manage in the community.

If you read the 2023 report from the Chief Inspector of Probation, you see how difficult it is to manage these individuals—those who have already been released, not the unreleased cohort. This is a very difficult area. At the moment the Government are not persuaded rightly or wrongly that it is a correct approach to make it easier to release dangerous people. That is the Government’s position, and I have explained it as best I can.

[Lord Thomas of Cwmgiedd (CB)]

I want to ask the noble and learned Lord about the word “proportionate”. Is there an objection to that word? It is key, because it enables you, in judging safety, to take into account the responsibility of the state for what we have done to these people.

Victims and Prisoners Bill

Debate between Lord Thomas of Cwmgiedd and Lord Bellamy

Tuesday 12th March 2024 Lords Chamber

[Lord Bellamy (Con)]

My Lords, I compliment the noble Baroness, Lady Fox of Buckley, for the force and sincerity with which she put forward her views, as indeed have other noble Lords who have supported Amendment 167, which would go down the road of the resentencing exercise that we have been discussing.

In setting out the Government’s position, I find it hard to improve on the remarks that the noble Lord, Lord Ponsonby, just made. This is a situation where we are dealing with the potential release of IPP offenders, who have committed mostly very serious sexual or violent offences. One would be overriding the decisions that the Parole Board has already taken, in most cases on multiple occasions, and would be putting the judge in the most difficult position.

Indeed, it is not a resentencing exercise in any normal sense of the word because, in most cases, the tariff has already expired. It is essentially a question of trying to do something different, dressed up as a resentencing exercise, to release persons who have already been held, on many occasions, to be unsafe to release. It is very difficult for the Government to go down that road. Again, there is a real risk, if one does go on that road, of wrongly raising the hopes of those who have put their faith in what is, in the Government’s view, not an appropriate way forward.

I want to add just one or two points. First, as the Committee is aware, I have on previous occasions—and I will do so on future occasions—emphasised the pressures we have at the moment on the prison population. The Government would be only too pleased to create further space in the prison population, or to relieve those pressures by releasing certain prisoners, but we have to consider the interests of public protection. It is not a question of being frightened of the media or of cowering in fear of the Daily Mail; it is a question of the protection of the public.

Any responsible Government would have to think very hard before a process that would allow the release, or that was envisaged to achieve the release—perhaps even unlicensed, without supervision—of large numbers of people in this position. I fully accept that the situation is regrettable. I accept the comments made by the noble and learned Lord, Lord Thomas, that it is very regrettable that the whole thing arose in the first place. Terrible things may well have been happening back in 2005, but we are where we are. I do not know whether the noble and learned Lord wants to intervene.

[Lord Thomas of Cwmgiedd (CB)]

I have made my point; I will not reprise it again. The fallacy in both the Minister’s arguments is that he says they are dangerous, but actually the state has helped make them dangerous, if they are dangerous, by acting in the way in which it has. Normally, someone who has made a mistake accepts it and bears the consequences. I am not going to say any more because I will not persuade the Minister otherwise.

[Lord Bellamy (Con)]

My Lords, from the point of view of the Government, I am not in a position to accept the premise advanced by the noble and learned Lord. I hear what he says. I do not accept, as I think the noble Baroness, Lady Fox, implied at one stage, that there is anything wrong with the Parole Board processes. I think I heard the word “dodgy” at one point, but I may have misheard. The Parole Board is a body that the Government have complete confidence in in this respect. This exercise should remain with the Parole Board.

I will say again: can we please distinguish between the problem of the released cohort and the problem of the never released cohort? We seem to drift from one to the other a lot of the time. Cases such as those of Matthew Price and, I think, the case of David Parker, which was mentioned by the noble Baroness, Lady Fox, are cases where people have been recalled after having been in the community for many years. That will no longer happen. The question of the recall is very largely dealt with, or very substantially improved, by the Government’s amendments in this Bill. What we are dealing with primarily is the never—not yet—released cohort.

I say again, in the light of my noble friend Lord Moylan’s remarks about the expected possible reaction of those who are still in prison and how to be particularly vigilant in supporting IPP prisoners in the light of these debates and related points, that the action plan is intended to give people hope. It is focused on their future to prepare them progressively with a sentence plan, the psychology services support, and a multidisciplinary progression panel towards eventual release. I think he would accept, even now, that the action plan has made a difference already; I see him nodding. We will take that forward and, as I say, it may well be the case the Government will be in a position to propose to your Lordships that the idea of an action plan should have a statutory basis, that the broad terms of its content should be set out and that the Secretary of State should report to Parliament so that—whatever Government comes into power—we can continue on the process that we have already started. The resentencing exercise is not, in the Government’s view, the way to go.

On that basis, the amendments proposed by my noble friend Lord Attlee would not arise because we are not going down that road. I do not think I need to say anything further about them, save to remark that what is being proposed would impose a very significant burden on our existing probation services. For that reason as well, one would have to reflect very seriously before going down that route. I invite the noble Baroness to withdraw her amendment on this point.

Economic Crime and Corporate Transparency Bill

Debate between Lord Thomas of Cwmgiedd and Lord Bellamy

Committee stage
Tuesday 25th April 2023 Grand Committee

[Lord Thomas of Cwmgiedd (CB)]

I ask the noble and learned Lord, as a little test of this commitment, is there is a draft Bill? If there is one, his assurance is really wonderful but, without one, is it not just a phrase for the long grass?

[Lord Bellamy (Con)]

I can tell your Lordships that the Government have not been idle in preparing possible drafts to deal with this matter, and I am very happy to keep in close contact with noble Lords between now and Report on progress and to discuss as widely as we need to how we should approach this matter.