Arbitration Bill [HL]

Lord Beith Excerpts

2nd reading
Tuesday 30th July 2024 Lords Chamber

[Lord Beith (LD)]

My Lords, the noble Lord, Lord Hacking, has raised the corruption issue, and I will refer to it in a moment. First, I thank him for his contribution and for the insights he gave on Second Reading, in the life before the Arbitration Act 1996, which were illuminating.

The Bill is extremely important. Arbitration is important; it is a major earner for this country. We need to keep our arbitration system up to date, and its legal framework needs to be reliable and able to deal with circumstances that can arise. I am delighted that the noble Lord, Lord Ponsonby, has set out the Bill for us and will respond at the end, and I am grateful for his close interest in it. It is an amazing Bill in that it has been through so many processes that it seems almost inconceivable that improvements could still be made to it. They could, actually, but it might be contrary to the public good if we in any way delayed the Bill, which is now somewhat overdue.

The Law Commission did the work. There were consultations arising out of it. The Special Public Bill Committee did extremely good work on it under the able chairmanship of the noble and learned Lord, Lord Thomas of Cwmgiedd. The noble and learned Lord, Lord Bellamy, was much engaged with it and will no doubt refer to it in a moment. Since the original consideration of that Bill in the previous Parliament, Clause 1 has been amended to deal with the state party issue, which was referred to at the later stages of the Special Public Bill Committee. It was very disappointing that the Bill did not get dealt with in the wash-up, but I welcome the Government having moved quickly to bring it back again. I genuinely believe that we could proceed with it expeditiously. I do not usually argue for shortcutting parliamentary procedures, but the Bill has had a lot of parliamentary procedures and a lot of attention, and I think it is in a fit state to be made statute.

On the corruption issue, which was raised at a relatively late stage in the Public Bill Committee, the noble and learned Lord, Lord Bellamy, in responding, agreed to write to arbitral institutions to see what they were doing to ensure that the arbitration frameworks that we have are not used as a device for money laundering and other forms of corruption to be pursued. I would be interested to know what response he got while he was still in office. To the extent that responses came later, perhaps the Minister can assist us and tell us what indications were given that institutions and organisations were alive to this problem and were looking for ways to ensure that it did not feature largely in arbitrations that were conducted under the terms of the Bill.

We have a very good reputation for arbitration and some of those most experienced in it took part in the Bill’s proceedings. The work they put into it means that this worthwhile Bill deserves an expeditious passage.

Arbitration Bill [HL]

Lord Beith Excerpts

Committee stage
Wednesday 11th September 2024 Lords Chamber

[Lord Thomas of Cwmgiedd (CB)]

My Lords, I agree with both the noble and learned Lords, Lord Hope and Lord Hoffmann, that this amendment ought not to be accepted. However, it seems to me, as the noble and learned Lord, Lord Hoffmann, said, that everyone agrees with the sentiment behind what the noble Lord, Lord Hacking, has proposed.

I had thought that we had agreed how to deal with this matter when the then Minister dealt with it at a hearing of the Special Public Bill Committee. I raised this point by way of an amendment to the old Arbitration Act. The Minister agreed, in response to that, that he would write to the arbitral institutions and we would see what the best practice was. I had assumed that all that would be made public, and I am entirely at a loss to understand why the letters that were written and the responses have not been made public. It would be extremely helpful to have all this information put into the public domain to show, for the benefit of London, what was being done to address this point. As I understand it, these were documents written by the Minister in his capacity of trying to deal with a problem that had arisen and was discussed in this House. It would be very helpful to have a discussion and look into the matter in detail. If something needs to be done—more than is being done—we can return to it. Certainly, we ought not to delay the Bill by this amendment.

[Lord Beith (LD)]

My Lords, in our Second Reading debate on 30 July, I asked the Minister to respond about these consultations that had taken place, which he did in a letter on, I think, 15 August. He set out in some detail the various ways in which the existing system deals with corruption.

It would be beneficial, as the noble and learned Lord has just pointed out, if the documents which the Minister was summarising were themselves made public, with the consent of the relevant organisations, because there is a lot of detail here that needs to be discussed. Indeed, the remarks of the noble and learned Lord, Lord Hoffmann, illustrate that we cannot proceed on the matter of this amendment without some pretty extensive discussion about how it could work and how it affects the role of the arbitrator. Although I am very sympathetic to the amendment, to try to introduce it at this stage would be an unnecessary delay to a Bill that has had quite a lot of delays already, not least because of the general election. That would be an unfortunate consequence.

The most reassuring thing in the Minister’s letter is the reminder that the case to which the noble and learned Lord, Lord Hoffmann, referred, and in which he was directly involved, was of course dealt with in the High Court. The High Court set aside the results of the arbitration, having discovered the corruption that had occurred. This is a demonstration that, even without new statutory provision, our system can deal with corruption of this kind. It is still there, however. There is a lot of corruption about and it is quite likely that it will emerge or be present in matters that are the subject of arbitration, particularly between states and very large commercial undertakings.

I therefore do not think that we should be content simply to set aside the amendment that the noble Lord, Lord Hacking, has introduced, but I do not think that we should attempt to insert it into the Bill at this stage. We should seek to establish whether both the substance of the law and our ability to enforce it would be improved by new statutory provision, and I am not yet persuaded that that is so. We strongly support the Bill and do not want to see its progress delayed.

Arbitration Bill [HL]

Lord Beith Excerpts

Committee stage
Wednesday 11th September 2024 Lords Chamber

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, in this group I will speak to Amendments 3 and 4, tabled in my name.

It has come to light that Clause 13 does not adequately codify the case law on appeals under Part 1 of the Arbitration Act 1996. I have tabled Amendment 3 to replace Clause 13 and correct the root cause of this issue: a drafting error in the 1996 Act that provided for an incorrect approach to appeals under Part 1 of the Act. Allow me to explain both the underlying issue and the approach I am taking to resolve it.

Clause 13 of this Bill as introduced seeks to codify case law regarding leave to appeal decisions on staying legal proceedings under Section 9 of the 1996 Act, namely the House of Lords decision from 2000 in Inco and First Choice Distribution. As such, the current Clause 13 inserts into Section 9 provision that

“the leave of the court is required for any appeal from a decision of the court under this section”.

During the passage of this Bill, certain noble and learned Lords raised the point that Clause 13 as drafted would permit leave for appeal to be sought only from the High Court—the High Court being what is meant by “the court” in the provision. However, the current situation established by case law provides that leave to appeal can be sought directly also from the Court of Appeal. It seems that Clause 13 as drafted would have the effect of inadvertently narrowing the existing position, which was never the intention.

The root cause of this issue is that the 1996 Act made an incorrect consequential amendment to Section 18(1) of the Senior Courts Act 1981 and Section 35(2) of the Judicature (Northern Ireland) Act 1978. In Inco and First Choice Distribution, the late Lord Nicholls of Birkenhead identified that this provision in the Senior Courts Act was originally meant to give effect to restrictions on the right to appeal contained in Sections 1 and 2 of the Arbitration Act 1979. The Senior Courts Act then needed updating to reflect additional appeal restrictions in the 1996 Act. But, as Lord Nicholls put it,

“for once, the draftsmen slipped up”.

The provision in the Senior Courts Act, when read literally, suggests that no appeals against decisions under Part 1 of the 1996 Act are allowed, except where expressly provided for in the 1996 Act. However, the intended and correct position is that appeals are indeed permitted unless expressly restricted by the 1996 Act. Due to this misunderstanding, Clause 13, in inserting its express language on appeals into Section 9 of the 1996 Act, establishes restrictions on those appeals. Accordingly, the provision that

“the leave of the court is required for any appeal from a decision of the court under this section”,

as used in other sections of the 1996 Act, is intended as a restriction providing that leave under those sections can be sought only from the High Court. As it was not the intention of the Law Commission or the Government to add such a restriction on Section 9 appeals, we must correct it.

Simply amending Clause 13 to permit direct appeals to the Court of Appeal under Section 9 could raise questions about other sections of the 1996 Act and whether similar provision should also be made elsewhere. Deleting Clause 13 would maintain the current appeal process but miss the opportunity to fix the issue properly. This seems remiss, given that the clear objective of this Bill is to refine and clarify our arbitral framework.

Amendment 3 therefore rectifies the underlying issue. It replaces the current Clause 13 with amendments to the Senior Courts Act 1981 and the Judicature (Northern Ireland) Act 1978. These clarify that appeals against High Court decisions under Part 1 of the 1996 Act, including under Section 9, may, subject to provision in that part, be made to the Court of Appeal. This will establish beyond doubt the current position on appeals.

Amendment 3 also necessitates a change to the Bill’s Long Title, which is currently:

“A Bill to amend the Arbitration Act 1996”.


However, under Amendment 3, it will now also amend the Senior Courts Act 1981 and the Judicature (Northern Ireland) Act 1978. This will not practically widen the scope of the Bill, given that it modifies that other legislation only to the extent that it relates to the 1996 Act. Nevertheless, Amendment 4 is required and updates the Long Title, adding “and for connected purposes”. I beg to move.

[Lord Beith (LD)]

My Lords, we support this amendment and are grateful to the Government for bringing it forward. The Minister’s remarks could usefully be framed and provided as an object lesson in the fact that drafting really does matter and that, when it goes wrong, the consequences mount up in subsequent legislation. He illustrated that well.

[Lord Wolfson of Tredegar (Con)]

My Lords, I am personally grateful to the Minister for engaging with me and others on this. These are technical matters, but it is important to get them right. I acknowledge the assistance I have had from my colleague Toby Landau KC, who, as the noble Lord, Lord Hacking, said on the previous group, did a lot of work on the original DAC report. I also acknowledge members of the Law Commission team with whom the Minister and I have both engaged, especially Nathan Tamblyn.

As the Minister said in moving his amendment, in Inco Europe, Lord Nicholls of Birkenhead, with whom the rest of the Appellate Committee agreed, said:

“I am left in no doubt that, for once, the draftsman slipped up”.


He put it in those terms because, again, as the noble Lord, Lord Hacking, said on the previous group, this is an extremely well-drafted Act. It is probably one of the best-drafted Acts on our on our statute book. To pick up the other phrase that Lord Nicholls used in that case, for once, Homer had nodded. This amendment rectifies the position—I am not sure what the opposite of nodding is, but, whatever it is, it puts Homer’s head back upright. I am grateful to the Minister for bringing forward this amendment, which we support.

Arbitration Bill [HL]

Lord Beith Excerpts

3rd reading
Wednesday 6th November 2024 Lords Chamber

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, the Bill has now benefited from the scrutiny of two parliamentary Sessions, following its introduction in the last Parliament and examination by a Special Public Bill Committee. It has undergone further scrutiny since its reintroduction by this Government.

I take this opportunity to thank some of the noble Lords who have engaged with and supported the Bill over the past year. I begin by thanking the noble and learned Lord, Lord Thomas of Cwmgiedd, in chairing the former Special Public Bill Committee. He marshalled and managed truly expert feedback on these reforms from across the arbitration sector and the judiciary. The committee process resulted in several technical improvements to the Bill, introduced by the noble and learned Lord, Lord Bellamy. I also extend my thanks to the noble and learned Lord for his commitment to driving forward these reforms, while always recognising the importance of getting the details right.

The Bill has been improved during this Session’s Committee stage too, thanks in no small part to the considered and well-informed input from the noble Lords, Lord Wolfson and Lord Verdirame, and the noble and learned Lord, Lord Mance, who advised that the previous Clause 13 did not adequately reflect the case law on arbitral appeals that it sought to codify. We remedied this issue through my amendments in Committee, fixing a long-standing error in what is otherwise considered a supremely well-drafted framework. Based on sector feedback, the Government also made an improvement to Clause 1 ahead of introducing the Bill a second time, ensuring that its default rule on governing law did not apply inappropriately to certain investor-state arbitrations.

I am also grateful to my noble friend Lord Hacking for his contributions, both as a member of the former Special Public Bill Committee and as an active participant throughout the Bill’s passage. I appreciate his continued interest in full and proper arbitration law reform, after witnessing at first hand so much of its development over many years.

The legislative scrutiny provided by this House has served only to give optimal effect to the Law Commission’s recommendations, made after two extensive consultations. I record my thanks to Professor Sarah Green and her colleagues at the commission, Nathan Tamblyn and Laura Burgoyne, for their brilliant work. I also thank the Bill managers, Iona Bonaventura and Harry McNeill Adams, along with the government lawyer, Wan Fan, the parliamentary counsel, Helen Hall and Neil Shah, and my policy lead, Lee Pedder. I also thank my private secretary, Paul Young.

The measures within the Bill have been much sought after by our arbitral community. I am hugely grateful for its support and engagement with these reforms since the Law Commission’s first consultation.

I conclude by reminding noble Lords of the Bill’s benefits. By reforming and modernising our arbitral framework, it will make dispute resolution more efficient, attract international legal business and promote UK economic growth. We pass the Bill to the Commons in excellent condition, and I hope its passage can be completed swiftly. I beg to move.

[Lord Beith (LD)]

My Lords, the noble Lord, Lord Ponsonby, and I share the distinction of being the only people participating in the proceedings on the Bill who have neither presided over arbitration nor appeared before arbitrators. We have had a panoply of very expert noble Lords taking part in proceedings, none more so than the noble and learned Lord, Lord Thomas of Cwmgiedd, and the Public Bill Committee.

This is an important—although small—Bill, because it will effectively underpin an important export earner and an important opportunity for this country to assist in many issues across the world, because of the popularity of London as a centre for resolving disputes. It has had two Law Commission consultations, a very well-argued Law Commission report, excellent drafting and two processes through the full proceedings of this House. Not much legislation gets all that. As a consequence, we can be pleased about what has been achieved and wish it well in the Commons.