Arbitration Bill [Lords]

Kieran Mullan Excerpts

Committee of the whole House
Tuesday 11th February 2025 Commons Chamber

Finally, clauses 18 establishes the Bill’s title once in force.

[Dr Kieran Mullan (Bexhill and Battle) (Con)]

I rise to contribute to the Committee stage debate on the Arbitration Bill on behalf of the Opposition. I thank Lord Bellamy, the previous Conservative Minister who originally introduced the Bill in the Lords in the previous Parliament, and I recognise the work of the Law Commission. Much of this Bill is based on the excellent work that the Law Commission did in considering the original legal framework for arbitration.

We fully support this Bill’s objective of modernising and strengthening the UK’s arbitration framework. Arbitration is a vital pillar of our legal system, supporting businesses, individuals and international commerce while reinforcing London’s position as a world-leading hub for dispute resolution. It is important that this legislation is as robust, effective and fair as possible. The Committee stage presents an opportunity to ensure that the Bill delivers on its promise, and we welcome the improvement that it introduces. I do not intend to go through all the Bill’s clauses, but I reassure the House that the necessary scrutiny that one would expect from the Opposition in Committee is taking place. I will just touch on some of the key clauses.

First, clause 1 provides welcome clarity on the governing law of arbitration agreements, particularly in light of the Enka v. Chubb case in 2020. Defaulting to the law of the arbitration seat where no choice is specified increases certainty for businesses.

Secondly, clauses 3 and 4 extend arbitrator immunity to protect them from liability unless bad faith is proven. This is an important step to ensure that arbitrators can act independently without undue fear of litigation. We must retain an effective safeguard to challenge an unreasonable resignation, and we welcome the Minister’s reassurance that parties affected by an arbitration resignation are not unfairly disadvantaged.

Thirdly, clauses 5 and 6 streamline the process for jurisdictional challenges. Parties will either need to seek a preliminary ruling from the court under section 32 of the Arbitration Act 1996, or wait to challenge jurisdiction under section 67.

Fourthly, on the procedural innovations covered in clauses 7 to 9, the introduction of summary disposal of claims is an important step towards greater efficiency, though we would welcome reassurances from the Government that they will monitor its use so that we can be sure that it is applied carefully and fairly, and does not have any unintended consequences. We believe that the recognition of emergency arbitrators is a positive step that enhances the availability of urgent relief, aligning the UK with international best practice.

Also of note is the right of appeal in clause 13. As the Minister stated, there was an unusual previous drafting issue that suggested that appeals to the Court of Appeal were permitted only if expressly allowed under the 1996 Act. That was incorrect. Clause 13 corrects the error, ensuring that appeals are permitted unless specifically restricted. This is a vital change to uphold fairness and legal certainty.

I want to acknowledge an important issue that was raised in the other place by Lord Hacking, whose contributions to the discussion on arbitration have been incredibly valuable. I know that other Members have also pressed for greater scrutiny of how confidential arbitration could be misused to conceal corruption. We welcome the Minister’s assurances that arbitral institutions are taking steps to mitigate those risks, and we believe that the Government must remain actively engaged in monitoring and addressing potential abuses, and not rule out taking further action at an appropriate time if it becomes necessary.

Beyond the issue of corruption, other crucial areas were mentioned in the other place; these are important and warrant further Government attention. They include the need for expedited hearings to prevent undue delays in arbitration proceedings, the role of third-party funding, and ensuring transparency and accountability in funding arrangements, as well as the authority to mandate mediation between parties, where appropriate, to encourage resolution outside of arbitration. The Minister’s attention to these issues is essential, so I would welcome confirmation that they will be addressed in due course.

In conclusion, the Arbitration Bill is a necessary and welcome step in ensuring that the UK remains a pre-eminent jurisdiction for arbitration. However, as with any legislation, its success depends on the details. The Opposition remain committed to ensuring that the Bill delivers legal clarity, procedural efficiency and fairness while upholding the integrity of our arbitration framework. I commend this Bill to the Committee and look forward to seeing its rapid progress through the House.

[Josh Babarinde (Eastbourne) (LD)]

I rise in support of this Bill, which introduces important measures to modernise our arbitration framework. We Liberal Democrats welcome the approach that the Government have taken in refining the Bill’s provisions to ensure clarity and effectiveness.

Clause 1 is a key part of this new Bill, and we are fond of the changes made following the recommendations from the Special Public Bill Committee in the previous Parliament. For example, the Committee proposed removing two words to prevent undue confusion, and I am pleased that the Government have accepted that recommendation. In addition, the Government have further clarified that investor state arbitration agreements derived from treaties or non-UK legislation will not be subject to the default rule, which is a welcome and sensible step that is necessary to bring greater legal clarity to the process.

I also welcome the five amendments to clause 11, which enable procedural reforms under section 67 of the 1996 Act. These changes respond directly to concerns raised in the last Committee, and strike the right balance between efficiency and fairness in arbitration proceedings.

Further improvements were made in the other place, where the Government tabled amendments to clause 13 to correct drafting issues, which have been mentioned, and to ensure that access to the Court of Appeal aligns with established case law. These amendments received cross-party support and I am pleased to reinforce the Liberal Democrats’ support for them today.

This Bill strengthens the UK’s arbitration framework by improving clarity, ensuring fairness and refining procedures. We support its passage and urge the House to do the same. We do not expect any problems with that.

--- Later in debate ---

[Dr Mullan]

I join the Minister in his extensive and accurate list of thanks, and particularly in his thanks to Lord Bellamy, who introduced the original Bill, and to the Law Commission for its excellent work. The Minister also mentioned Lord Thomas, Lord Hacking and Lord Wolfson. I echo his comments on the effective role of the arbitration sector, and on the wealth that it brings to our economy because of its world-leading status and the certainty and confidence that it gives businesses that they will get an excellent service on which they can rely.

Finally, like most Members, I have had conversations with constituents who have said, “Why can’t you lot agree with each other more often? When I turn on the TV, it seems that all you ever do is argue,” but we work together quite effectively on Delegated Legislation Committees and in other forums. This debate is an excellent example of us working collaboratively in the national interest in the main Chamber—an example that Members might point their constituents towards.