The Arbitration Act 1996 (“the 1996 Act”) was introduced, after a wide-ranging consultation with industry and the judiciary, to enhance and clarify the law of arbitration as it applies in England, Wales and Northern Ireland. Its aim was not to radically reform arbitration law, which had evolved over three centuries but, rather, to fine-tune the system and reflect best-practice.
The 1996 Act replaced Pt I of the Arbitration Act 1950, the Arbitration Acts of 1975 and 1979 and the Consumer Arbitration Agreements Act 1988.
Part I of the Arbitration Act 1996 covers arbitration pursuant to an arbitration agreement (defined in ss.5(1) and 6), the general principles of which are summarised as follows:
Part II lists other provisions relating to arbitration, covering:
Part III governs the recognition and enforcement of certain foreign awards, covering:
A person alleged to be a party to arbitration proceedings but who takes no part in the proceedings may question whether there is a valid arbitration agreement by applying to the court for a declaration or injunction or other appropriate relief: s.72(1)(a).
In Broda Agro Trade (Cyprus) Ltd v Alfred C Toepfer International GmbH  EWCA Civ 1100;  2 All E.R. (Comm) 327 it was held that a person who had not taken part in arbitration proceedings leading to an interim award on jurisdiction, but had thereafter taken part in the proceedings on the merits, could not make an application under s.72(1)(a) questioning whether there was a valid arbitration agreement.
“The court” for the purposes of the 1996 Act means the High Court or a county court: s.105. With a few notable exceptions, applications under the 1996 Act must be commenced in the High Court: The High Court and County Courts (Allocation of Arbitration Proceedings) Order 1996/3215.
Mandatory provisions of the 1996 Act: Sections 9 to 11 (stay of legal proceedings); s.12 (power of court to extend agreed time limits); s.13 (application of Limitation Acts); s.24 (power of court to remove arbitrator); s.26(1) (effect of death of arbitrator); s.28 (liability of parties for fees and expenses of arbitrators); s.29 (immunity of arbitrator); s.31 (objection to substantive jurisdiction of tribunal); s.32 (determination of preliminary point of jurisdiction); s.33 (general duty of tribunal); s.37(2) (items to be treated as expenses of arbitrators); s.40 (general duties of the parties); s.43 (securing the attendance of witnesses); s.56 (power to withhold award in case of non-payment); s.60 (effectiveness of agreement for payment of costs in any event); s.66 (enforcement of award); s.67 (challenging the award: substantive jurisdiction); s.68 (challenging the award: serious irregularity); s.70 (challenge or appeal: supplementary provisions); s.71 (challenge or appeal: effect of order of court); s.72 (saving for rights of person who takes no part in proceedings); s.73 (loss of right to object); s.74 (immunity of arbitral institutions etc.); s.75 (charge to secure payment of solicitors’ costs).
Separability of arbitration agreement: Unless otherwise agreed by the parties, the arbitration agreement does not become invalid, non-existent or ineffective because the main agreement is invalid, or did not come into existence or has become ineffective: s.7.
See Fiona Trust & Holding Corp v Privalov  UKHL 40;  4 All E.R. 951 where it was held that the principle of separability contained in s.7 meant that the invalidity or rescission of the main contract did not necessarily entail the invalidity or rescission of the arbitration agreement. The arbitration agreement had to be treated as a distinct agreement and could be void or voidable only on grounds which related directly to it. Fiona Trust was considered in Beijing Jianlong Heavy Industry Group v Golden Ocean Group Ltd  EWHC 1063 (Comm);  2 All E.R. (Comm) 436 where it was held that the concept of separability had been codified in 1996 Act s.7. However, an arbitration agreement could be rendered void or unenforceable if it was directly impeached on grounds which related to the arbitration agreement itself and were not merely a consequence of the invalidity of the underlying contract.
See also Hyundai Merchant Marine Co Ltd v Americas Bulk Transport Ltd (The Pacific Champ)  EWHC 470 (Comm);  2 All E.R. (Comm) 649.
The “seat of the arbitration” means the juridical seat of the arbitration designated by the parties to the arbitration agreement or such other persons appointed with the agreement of the parties: s.3. The seat of the arbitration is the legal, rather than physical, place of the arbitration proceedings.
An arbitration has to have a juridical seat before it begins and the requirement imposed upon the court by s.3(c) to consider the “relevant circumstances” in the determination of the appropriate jurisdiction of the seat, is one which involves consideration of the pre arbitration circumstances, not those subsequently arising: Dubai Islamic Bank PJSC v Paymentech Merchant Services Inc  1 All E.R. (Comm) 514.
Where London is chosen as the seat of the arbitration, the parties are taken to have agreed that proceedings on the award should be only those permitted by English law. A choice of seat for the arbitration is, in effect, a choice of forum for remedies seeking to attack the award: C v D  EWCA Civ 1282;  1 All E.R. (Comm) 1001.
See also: Tamil Nadu Electricity Board v ST-CMS Electric Co Private Ltd  EWHC 1713 (Comm);  2 All E.R. (Comm) 701; Sulamerica Cia Nacional de Seguros SA v Enesa Engenharia SA  EWCA Civ 638;  1 W.L.R. 102 and Arsanovia Ltd v Cruz City 1 Mauritius Holdings  EWHC 3702 (Comm);  1 Lloyd’s Rep. 235.
Application of the Limitation Acts: The Limitation Acts (see Key Acts and Key Subordinate Legislation above) apply to arbitration as they apply to legal proceedings: s.13.
In National Ability SA v Tinna Oils & Chemicals Ltd (The Amazon Reefer)  EWCA Civ 1330;  2 All E.R. 899 it was held that the limitation period of six years under the Limitation Act 1980 s.7 was applicable to an application to enforce an arbitration award in the same manner as a judgment under s.66 of the 1996 Act.