Agreement to abandon the arbitration

It is plainly open to the parties to a reference to arbitration to agree to abandon the reference. In accordance with general principle, what is required is an offer to abandon made by one party, and acceptance of that offer by the other party. If the offer and acceptance are explicit, no problem arises. However, the English courts have – at least before 1991 – had to deal with a large number of cases in which the parties, having embarked upon their arbitration, had failed to take further steps to pursue it. The general attitude of the English courts is that failure by the claimant to prosecute his case cannot amount to an offer to abandon the arbitration, as nothing can be presumed by silence and inactivity. Equally, and for the same reason, the absence of any attempt by the respondent to provoke the claimant into renewed action cannot be construed as an acceptance of any implied offer of abandonment, particularly as the respondent is not required to do anything in the arbitration unless the claimant makes the first move. The leading authorities on these points are The Bremer Vulcan [1981] 1 Lloyd’s Rep 253 and The Hannah Blumenthal [1983] 1 Lloyd’s Rep 103, in which the House of Lords held that, in the absence of any agreement to abandon, neither the arbitrators nor the courts had the right to bring an end to the arbitration. The outcome of these cases was that the arbitrators could be left wondering whether their services are to be called upon again, and the respondent was left in doubt as to whether the claim against him was to be pursued. The problem has to some extent largely been overcome in England by what is now section 41(3) of the Arbitration Act 1996 (reenacting an earlier amendment that came into force in 1991), under which in the event of inordinate and inexcusable delay on the part of the claimant, the respondent can apply to the arbitrators for an award dismissing the claim. There is an equivalent, albeit very limited, power in article 25(a) of the Model Law, whereby arbitrators can terminate the proceedings if the claimant fails to communicate his statement of claim in accordance with the arbitral timetable. A recent contribution to the jurisprudence on the abandonment issue is the decision of the Supreme Court of New South Wales in Multiplex Constructions Pty Ltd v Suscindy Management Pty Ltd [2000] NSWSC 484, which considers the effect of delay at common law.