- The Law Commission has proposed a reform of the Arbitration Act 1996 to clarify the duties imposed on arbitrators regarding their independence and disclosure. The reform has confirmed that there will be no statutory duty of independence; however, the existing common law duty of disclosure will be codified.
- The reform would also introduce clarification regarding the immunity afforded to arbitrators in cases of their resignation or applications for their removal.
- While these steps are welcome, and serve only to strengthen the effectiveness of the arbitral process, their scope remains limited. As noted by the Law Commission Report itself, these issues will need to be developed by case law on an ad hoc basis.
In the fourth instalment of our series, focusing on reforms to the Arbitration Act 1996 (the Act) proposed by the Law Commission, we explore (i) the decision to exclude a statutory duty of independence, (ii) the proposal to amend the Act to establish a statutory duty of disclosure and (iii) the suggested clarifications regarding the scope of arbitrators’ immunity in cases of resignation and removal.
As acknowledged by the Law Commission, connections between arbitrators and other stakeholders are often inevitable, given the limited number of people with expertise in certain sectors and the encounters that naturally occur over time as those professionals develop their experience. This is particularly the case in certain fields such as maritime, commodity, insurance or sports arbitration. Nonetheless, one of the cornerstones of arbitration remains the trust that parties place in their arbitral tribunal. This trust is grounded in the fundamental requirement that arbitrators must be impartial and, in most cases, independent. Balancing these potentially conflicting elements is a delicate task and challenges can emerge at various stages of the arbitral process, from appointment to enforcement.
The Law Commission’s proposed reform has a clear objective: to underscore the importance of impartiality as a linchpin of the arbitral process. This entails two crucial components: first, ensuring that arbitrators disclose relevant facts and circumstances which might raise doubt as to their impartiality; and second, providing robust immunity to arbitrators, allowing them to fulfill their duties without fear or favor.