Arbitration Law

Chapter 10



10.1 Arbitrators derive their powers and duties from a combination of the agreement between the parties, the contract (if any) between the parties and the arbitrators, and the law applicable to arbitrations as set out in the Arbitration Act 1996. The jurisdiction of the arbitrators stems exclusively from the arbitration agreement, which delimits the disputes to be referred to arbitration, and for this purpose the arbitrators may be empowered by the parties, under s 30 of the Arbitration Act 1996, to determine their own jurisdiction. The appointment of arbitrators will in the first instance follow the agreement of the parties, but the law provides a variety of consensual and judicial supplementary powers of appointment in respect of arbitrators who cannot or will not act. The procedure to be adopted by the arbitrators is, under s 34(1) of the 1996 Act, a matter for them to decide, although the parties may dictate some or all points and in particular the parties may provide for submission to some form of institutional arbitration under the auspices of an international organisation or a trade association, in which case the arbitration rules are set by the institution itself. All procedures are, however, subject to the overriding requirement of English law that the arbitrators must act fairly and without bias,1 and the court is given powers to remove arbitrators who offend against these principles.2 Arbitrators, unlike ordinary employees, cannot be removed (except by order of the court), cannot be sued for negligence (without proof of bad faith), and are not subject to the control of anyone (except perhaps their appointing institution, if any) and owe duties equally to both or all parties. Finally, the fees payable to arbitrators rest upon the contract under which the arbitrators are appointed, although the 1996 Act again regulates various aspects of this question, including the cases where no fees are agreed or where the fees charged are excessive.3 Consequently, it is not possible to classify the status of arbitrators as either fully contractual or fully statutory, and it has indeed been said that the appointment of an arbitrator “is not like anything else at all”.4 This prompted Browne-Wilkinson V-C in K/S Norjarl A/S v. Hyundai Heavy Industries Co Ltd 5 to comment that an arbitrator’s duties flowed from the conjunction of contract and status. On this analysis, an arbitration agreement is a bilateral contract which becomes trilateral on the arbitrator’s appointment. Under the trilateral contract the arbitrator assumes the status of a quasi-judicial adjudicator with the duties and disabilities inherent in that status.6

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