Full effect of the Law of the Internet Arbitration Rules
as expanded by the English Arbitration Act 1996
[Material in square brackets consists of explanatory comment.
This
"Arbitration Agreement" is provided so that those not familiar with the
Arbitration Act 1996 can, without constant cross-referencing, see the full legal
effect of the Law of the Internet Arbitration Rules. The Arbitration Act 1996 is
comprehensive and those who have legal doubts arising in their mind should read
on and will probably find that their doubts are resolved. It is not intended
that any Arbitration Agreement should take the form of this document, which is
really an edited version of the Arbitration Act 1996. Where the Law of the
Internet Arbitration Rules apply instead of the "default options" in the
Arbitration Act 1996 the relevant Rules are quoted in (round) brackets.
Certain Sections of the Arbitration Act 1996 are Mandatory and have been
annotated "Mandatory Provision" in what follows. Largely these mandatory
sections are reserve powers to enable such things as it being possible for a
court to remove an arbitrator who was found to be accepting bribes. Those that
drafted the Arbitration Act 1996 went to great lengths to see that it would not
be possible to "abuse the process of arbitration" by asking a court to intervene
without very good reasons indeed. The English courts’ decisions have supported
this intention and courts elsewhere who have to interpret the Arbitration Act
1996 should find language in the Act supporting the view.
As a solo effort
this document must be viewed on an E & EO basis. There is no implication that
this document is an interpretation of The Law of the Internet Arbitration Rules.
The author recognises that he has used his judgment in editing out not relevant
material from the Arbitration Act 1996 and craves the indulgence of those who
would take a different editorial approach.]
Preamble
This "arbitration agreement" has headings and a paragraph numbering that follows the Arbitration Act 1996. The equivalently numbered Sections of the Arbitration Act 1996 are inserted into this arbitration agreement where they have not been overridden by the Law of the Internet Arbitration Rules. The headings and paragraph numbers do not form part of this arbitration agreement. The word "Part" should be read as referring to the Arbitration Act 1996.
General principles.
It is agreed:
1. The provisions of this Part are founded on the following principles, and shall be construed accordingly
(a) the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense;
(b) the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest;
(c) in matters governed by this Part the court should not intervene except as provided by this Part.
[It is Section 1 of the Arbitration Act 1996, given above, that enshrines Party Autonomy.]
Scope of application of provisions.
The seat of the arbitration.
2. The seat of the arbitration is London. (7)
[There is no legal requirement that any arbitral activity shall have taken place at the place named as the seat of the arbitration. In some countries arbitral awards can only be enforced under their national law if there is a statement of the seat of the arbitration in the award. To bring the arbitral process within the scope of the Arbitration Act 1996 the seat of the arbitration has to be in England and Wales or Northern Ireland [S52]. Sections 2 and 3 of the Arbitration Act 1996 are given below to show that it is by sub-section (1) of Section 2 that it is necessary to fix the seat of the Arbitration.]
"2. (1) The provisions of this Part apply where the seat of the arbitration is in England and Wales or Northern Ireland.
(2) The following sections apply even if the seat of the arbitration is outside England and Wales or Northern Ireland or no seat has been designated or determined
(b) section 66 (enforcement of arbitral awards).
(b) section 44 (court powers exercisable in support of arbitral proceedings);
(4) The court may exercise a power conferred by any provision of this Part not mentioned in subsection (2) or (3) for the purpose of supporting the arbitral process where
(b) by reason of a connection with England and Wales or Northern Ireland the court is satisfied that it is appropriate to do so.
3. In this Part"the seat of the arbitration" means the juridical seat of the arbitration designated
(b) by any arbitral or other institution or person vested by the parties with powers in that regard, or
(c) by the arbitral tribunal if so authorised by the parties,
Mandatory and non-mandatory provisions.
4. (1) The mandatory provisions of this Part are listed in Schedule 1 and have effect notwithstanding any agreement to the contrary.
(2) The other provisions of this Part (the "non-mandatory provisions") allow the parties to make their own arrangements by agreement but provide rules which apply in the absence of such agreement.
(3) The parties may make such arrangements by agreeing to the application of institutional rules or providing any other means by which a matter may be decided.
Agreements to be in writing.
The arbitration may be conducted by written, aural or visual communication over the Internet [5].
5. (1) The provisions of this Part apply only where the arbitration agreement is in writing, and any other agreement between the parties as to any matter is effective for the purposes of this Part only if in writing. The expressions "agreement", "agree" and "agreed" shall be construed accordingly.
(2) There is an agreement in writing
(a) if the agreement is made in writing (whether or not it is signed by the parties),
(b) if the agreement is made by exchange of communications in writing, or
(c) if the agreement is evidenced in writing.
(3) Where parties agree otherwise than in writing by reference to terms which are in writing, they make an agreement in writing.
(4) An agreement is evidenced in writing if an agreement made otherwise than in writing is recorded by one of the parties, or by a third party, with the authority of the parties to the agreement.
(5) An exchange of written submissions in arbitral or legal proceedings in which the existence of an agreement otherwise than in writing is alleged by one party against another party and not denied by the other party in his response constitutes as between those parties an agreement in writing to the effect alleged.
(6) References in this Part to anything being written or in writing include its being recorded by any means.
Definition of arbitration agreement.
6. (1) In this Part an"arbitration agreement" means an agreement to submit to arbitration present or future disputes (whether they are contractual or not).
(2) The reference in an agreement to a written form of arbitration clause or to a document containing an arbitration clause constitutes an arbitration agreement if the reference is such as to make that clause part of the agreement.
Separability of arbitration agreement.
7. An arbitration agreement which forms or was intended to form part of another agreement (whether or not in writing) shall not be regarded as invalid, non-existent or ineffective because that other agreement is invalid, or did not come into existence or has become ineffective, and it shall for that purpose be treated as a distinct agreement.
Whether agreement discharged by death of a party.
8. (1) An arbitration agreement is not discharged by the death of a party and may be enforced by or against the personal representatives of that party.
Stay of legal proceedings.
9. Mandatory Provision.
(1) A party to an arbitration agreement against whom legal proceedings are brought (whether by way of claim or counterclaim) in respect of a matter which under the agreement is to be referred to arbitration may (upon notice to the other parties to the proceedings) apply to the court in which the proceedings have been brought to stay the proceedings so far as they concern that matter.
(2) An application may be made notwithstanding that the matter is to be referred to arbitration only after the exhaustion of other dispute resolution procedures.
(3) An application may not be made by a person before taking the appropriate procedural step (if any) to acknowledge the legal proceedings against him or after he has taken any step in those proceedings to answer the substantive claim.
(4) On application under this section the court shall grant a stay unless satisfied that the arbitration agreement is null and void, inoperative, or incapable of being performed.
(5) If the court refuses to stay the legal proceedings, any provision that an award is a
condition precedent to the bringing of legal proceedings in respect of any matter is of no effect in relation to those proceedings.
[It is Section 9 of the Arbitration Act 1996 that enforces Party Autonomy. Note that Section 9 is a Mandatory Provision.]
Reference of interpleader issue to arbitration.
10. Mandatory Provision.
(1) Where in legal proceedings relief by way of interpleader is granted and any issue between the claimants is one in respect of which there is an arbitration agreement between them, the court granting the relief shall direct that the issue be determined in accordance with the agreement unless the circumstances are such that proceedings brought by a claimant in respect of the matter would not be stayed.
(2) Where subsection (1) applies but the court does not direct that the issue be determined in accordance with the arbitration agreement, any provision that an award is a condition precedent to the bringing of legal proceedings in respect of any matter shall not affect the determination of that issue by the court.
Retention of security where Admiralty proceedings stayed.
11. Mandatory Provision. Not directly relevant
Power of court to extend time for beginning arbitral proceedings.
12. Mandatory Provision.
(1) Where an arbitration agreement to refer future disputes to arbitration proceedings, provides that a claim shall be barred, or the claimant's right extinguished, unless the claimant takes within a time fixed by the agreement some step
(a) to begin arbitral proceedings, or
(b) to begin other dispute resolution procedures which must be exhausted before arbitral proceedings can be begun,
the court may by order extend the time for taking that step.
(2) Any party to the arbitration agreement may apply for such an order (upon notice to the other parties), but only after a claim has arisen and after exhausting any available arbitral process for obtaining an extension of time.
(3) The court shall make an order only if satisfied
(a) that the circumstances are such as were outside the reasonable contemplation of the parties when they agreed the provision in question, and that it would be just to extend the time, or
(b) that the conduct of one party makes it unjust to hold the other party to the strict terms of the provision in question.
(4) The court may extend the time for such period and on such terms as it thinks fit, and may do so whether or not the time previously fixed (by agreement or by a previous order) has expired.
(5) An order under this section does not affect the operation of the Limitation Acts (see section 13).
(6) The leave of the court is required for any appeal from a decision of the court under this section.
Application of Limitation Acts.
13. Mandatory Provision.
(1) The Limitation Acts apply to arbitral proceedings as they apply to legal proceedings.
(2) The court may order that in computing the time prescribed by the Limitation Acts for the commencement of proceedings (including arbitral proceedings) in respect of a dispute which was the subject matter
(a) of an award which the court orders to be set aside or declares to be of no effect, or
(b) of the affected part of an award which the court orders to be set aside in part, or declares to be in part of no effect,
the period between the commencement of the arbitration and the date of the order referred to in paragraph (a) or (b) shall be excluded.
(3) In determining for the purposes of the Limitation Acts when a cause of action accrued, any provision that an award is a condition precedent to the bringing of legal proceedings in respect of a matter to which an arbitration agreement applies shall be disregarded.
(4) In this Part "the Limitation Acts" means
(a) in England and Wales, the Limitation Act 1980, the Foreign Limitation Periods Act 1984 and any other enactment (whenever passed) relating to the limitation of actions;
(b) in Northern Ireland, the Limitation (Northern Ireland) Order 1989, the Foreign Limitation Periods (Northern Ireland) Order 1985 and any other enactment (whenever passed) relating to the limitation of actions.
Commencement of arbitral proceedings.
14. The arbitration proceedings are regarded as commenced when one or more members of The Internet Arbitration Association serves on one or more members of The Internet Arbitration Association a notice in writing requiring him or them to appoint an arbitrator. (2)
The arbitral tribunal. Procedure for appointment of arbitrators.
15. and 16. The first opposing parties in an arbitration will each appoint one arbitrator and there shall be a chairman appointed by those two arbitrators [S15 and S20]. If 14 days after the commencement of the arbitration only one arbitrator has been appointed he shall act as a sole arbitrator. If 21 days after the commencement of the arbitration no chairman has been appointed he shall be appointed by the first appointed arbitrator
Power in case of default to appoint sole arbitrator.
17. Not directly relevant.
Failure of appointment procedure.
18. Not directly relevant.
Court to have regard to agreed qualifications.
19. Not directly relevant.
Chairman.
20. There shall be a chairman appointed by the two arbitrators. (3)
Umpire
21. Not directly relevant.
Decision-making where no chairman or umpire.
22. Not directly relevant.
Revocation of arbitrator's authority.
23. The authority of an arbitrator may only be revoked by the parties acting jointly.
Power of court to remove arbitrator.
24. Mandatory Provision.
(1) A party to arbitral proceedings may (upon notice to the other parties, to the arbitrator concerned and to any other arbitrator) apply to the court to remove an arbitrator on any of the following grounds
(a) that circumstances exist that give rise to justifiable doubts as to his impartiality;
(b) that he does not possess the qualifications required by the arbitration agreement;
(c) that he is physically or mentally incapable of conducting the proceedings or there are justifiable doubts as to his capacity to do so;
(d) that he has refused or failed
(i) properly to conduct the proceedings, or
(ii) to use all reasonable despatch in conducting the proceedings or making an award,
and that substantial injustice has been or will be caused to the applicant.
(2) If there is an arbitral or other institution or person vested by the parties with power to remove an arbitrator, the court shall not exercise its power of removal unless satisfied that the applicant has first exhausted any available recourse to that institution or person.
(3) The arbitral tribunal may continue the arbitral proceedings and make an award while an application to the court under this section is pending.
(4) Where the court removes an arbitrator, it may make such order as it thinks fit with respect to his entitlement (if any) to fees or expenses, or the repayment of any fees or expenses already paid.
(5) The arbitrator concerned is entitled to appear and be heard by the court before it makes any order under this section.
(6) The leave of the court is required for any appeal from a decision of the court under this section.
Resignation of arbitrator.
25. (1) The parties are free to agree with an arbitrator as to the consequences of his resignation as regards
(a) his entitlement (if any) to fees or expenses, and
(b) any liability thereby incurred by him.
(2) If or to the extent that there is no such agreement the following provisions apply.
(3) An arbitrator who resigns his appointment may (upon notice to the parties) apply to the court
(a) to grant him relief from any liability thereby incurred by him, and
(b) to make such order as it thinks fit with respect to his entitlement (if any) to fees or expenses or the repayment of any fees or expenses already paid.
(4) If the court is satisfied that in all the circumstances it was reasonable for the arbitrator to resign, it may grant such relief as is mentioned in subsection (3)(a) on such terms as it thinks fit.
(5) The leave of the court is required for any appeal from a decision of the court under this section.
[Comment: It is suggested that Section 25 is a good example of the balanced fairness of the Arbitration Act 1996. Prior to the Arbitration Act 1996 arbitrators acting under English law could not resign however an impossible position they might have found themselves in. The resignation of an arbitrator is now possible, if unlikely, and the consequences can be negotiated and agreed.]
Death of an arbitrator or person appointing him.
26. Mandatory Provision.
(1) The authority of an arbitrator is personal and ceases on his death.
(2) Unless otherwise agreed by the parties, the death of the person by whom an arbitrator was appointed does not revoke the arbitrator's authority.
Filling of vacancy, &c.
27. Mandatory Provision.
(1) Where the arbitrator ceases to hold office, the parties are free to agree
(b) whether and if so to what extent the previous proceedings should stand, and
(c) what effect (if any) his ceasing to hold office has on any appointment made him (alone or jointly).
Joint and several liability of parties to arbitrators for fees and expenses.
28. Mandatory Provision.
(1) The parties are jointly and severally liable to pay to the arbitrators such reasonable fees and expenses (if any) as are appropriate in the circumstances.
(2) Any party may apply to the court (upon notice to the other parties and to the arbitrators) which may order that the amount of the arbitrators' fees and expenses shall be considered and adjusted by such means and upon such terms as it may direct.
(3) If the application is made after any amount has been paid to the arbitrators by way of fees or expenses, the court may order the repayment of such amount (if any) as is shown to be excessive, but shall not do so unless it is shown that it is reasonable in the circumstances to order repayment.
(4) The above provisions have effect subject to any order of the court under section 24(4) or 25(3)(b) (order as to entitlement to fees or expenses in case of removal or resignation of arbitrator).
(5) Nothing in this section affects any liability of a party to any other party to pay all or any of the costs of the arbitration(see sections 59 to 65) or any contractual right of an arbitrator to payment of his fees and expenses.
(6) In this section references to arbitrators include an arbitrator who has ceased to act and an umpire who has not replaced the other arbitrators.
Immunity of arbitrator.
29. Mandatory provision.
(1) An arbitrator is not liable for anything done or omitted in the discharge or purported discharge of his functions as arbitrator unless the act or omission is shown to have been in bad faith.
(2) Subsection (1) applies to an employee or agent of an arbitrator as it applies to the arbitrator himself.
(3) This section does not affect any liability incurred by an arbitrator by reason of his resigning (but see section 25).
Competence of tribunal to rule on its own jurisdiction.
30. The arbitrator(s) may rule on their own substantive jurisdiction, that is, as to
(a) whether there is a valid arbitration agreement.
(b) whether the tribunal is properly constituted, and
(c) what matters have been submitted to arbitration in accordance with the arbitration agreement.
Objection to substantive jurisdiction of tribunal.
31. Mandatory Provision.
(1) An objection that the arbitral tribunal lacks substantive jurisdiction at the outset of the proceedings must be raised by a party not later than the time he takes the first step in the proceedings to contest the merits of any matter in relation to which he challenges the tribunal's jurisdiction.
A party is not precluded from raising such an objection by the fact that he has appointed or participated in the appointment of an arbitrator.
(2) Any objection during the course of the arbitral proceedings that the arbitral tribunal is exceeding its substantive jurisdiction must be made as soon as possible after the matter alleged to be beyond its jurisdiction is raised.
(3) The arbitral tribunal may admit an objection later than the time specified in subsection (1) or (2) if it considers the delay justified.
(4) Where an objection is duly taken to the tribunal's substantive jurisdiction and the tribunal has power to rule on its own jurisdiction, it may
(a) rule on the matter in an award as to jurisdiction, or
(b) deal with the objection in its award on the merits.
If the parties agree which of these courses the tribunal should take, the tribunal shall proceed accordingly.
(5) The tribunal may in any case, and shall if the parties so agree, stay proceedings whilst an application is made to the court under section 32 (determination of preliminary point of jurisdiction).
Determination of preliminary point of jurisdiction.
32. Mandatory Provision.
(1) The court may, on the application of a party to arbitral proceedings (upon notice to the other parties), determine any question as to the substantive jurisdiction of the tribunal.
A party may lose the right to object (see section 73).
(2) An application under this section shall not be considered unless
(a) it is made with the agreement in writing of all the other parties to the proceedings, or
(b) it is made with the permission of the tribunal and the court is satisfied
(i) that the determination of the question is likely to produce substantial savings in costs,
(ii) that the application was made without delay, and
(iii) that there is good reason why the matter should be decided by the court.
(3) An application under this section, unless made with the agreement of all the other parties to the proceedings, shall state the grounds on which it is said that the matter should be decided by the court.
(4) Unless otherwise agreed by the parties, the arbitral tribunal may continue the arbitral proceedings and make an award while an application to the court under this section is pending.
(5) Unless the court gives leave, no appeal lies from a decision of the court whether the conditions specified in subsection (2) are met.
(6) The decision of the court on the question of jurisdiction shall be treated as a judgment of the court for the purposes of an appeal. But no appeal lies without the leave of the court which shall not be given unless the court considers that the question involves a point of law which is one of general importance or is one which for some other special reason should be considered by the Court of Appeal.
[At this point a short explanation of the words "no appeal lies without leave of the court" is in order. In court proceedings cases may be appealed to higher courts either by leave of the lower court or after an appeal against a refusal of the lower court to grant leave to appeal. The words "no appeal lies without leave of the court" means that the appeal court is not empowered to override a refusal to grant leave to appeal on the part of a lower court. The purpose is to prevent the practice of disrupting the smooth running of arbitrations by taking trivial matters through the courts for no more reason than to delay or disrupt the arbitral process.]
General duty of the tribunal.
33. Important Mandatory Provision.
(1) The tribunal shall
(a) act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent, and
(b) adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined.
(2) The tribunal shall comply with that general duty in conducting the arbitral proceedings, in its decisions on matters of procedure and evidence and in the exercise of all other powers conferred on it.
[This Section is usually referred to as the arbitrator’s Section 33 duties. It is mandatory and taken seriously by arbitrators. Unlike earlier and more general arbitration law the Section 33 duties put arbitrators under a positive obligation (with ability) to stamp out delaying tactics. See also Sections 40 and 41.]
Procedural and evidential matters.
34. - (1) It shall be for the arbitrator(s) to decide all procedural and evidential matters.
(2) Procedural and evidential matters include -
(a) when and where any part of the proceedings is to be held;
(b) the language or languages to be used in the proceedings and whether translations of any relevant documents are to be supplied;
(c) whether any and if so what form of written statements of claim and defence are to be used, when these should be supplied and the extent to which such statements can be later amended;
(d) whether any and if so which documents or classes of documents should be disclosed between and produced by the parties and at what stage;
(e) whether any and if so what questions should be put to and answered by the respective parties and when and in what form this should be done;
(f) whether to apply strict rules of evidence (or any other rules) as to the admissibility, relevance or weight of any material (oral, written or other) sought to be tendered on any matters of fact or opinion, and the time, manner and form in which such material should be exchanged and presented;
(g) whether and to what extent the tribunal should itself take the initiative in ascertaining the facts and the law;
(h) whether and to what extent there should be oral or written evidence or submissions.
(3) The arbitrator(s) may fix the time within which any directions given by him are to be complied with, and may if he thinks fit extend the time so fixed (whether or not it has expired).
Consolidation of proceedings and concurrent hearings.
35 Rule 4.1 On a duly appointed arbitral tribunal becoming aware that substantially the same or some of the same matters have been referred to an arbitration with an earlier commencement date than its own it shall order that all or those some of the later disputes or differences referred to it be consolidated with the earlier arbitration (4.1).
Rule 4.2 An arbitral tribunal that has disputes or differences consolidated with its existing reference under Rule 4.1 may within 14 days refuse to accept the consolidation and those disputes or differences will be determined by the tribunal that ordered the consolidation. (4.2)
[The purpose of 4.2 is to avoid a situation where an earlier arbitration is delayed indefinitely by constantly commencing new (possibly fictitious) arbitrations that have to be consolidated and then considered judicially by the arbitrators of the earlier arbitration.]
Rule4.3 If all the matters in a reference have been consolidated off with a reference under Rules 4.1 and 4.2 or otherwise the arbitral tribunal appointed to deal with those matters shall cease to exist. The arbitrators whose reference have been consolidated off shall be entitled to their fees and expenses. (4.3)
Legal or other representation.
36. A party to the arbitral proceedings may be represented in the proceedings by a lawyer or other person chosen by him.
Power to appoint experts, legal advisers or assessors.
37.1.(a) the arbitrator(s) may -
(ii) appoint assessors to assist him on technical matters, and may allow any such expert, legal adviser or assessor to attend the proceedings; and
(b) the parties shall be given a reasonable opportunity to comment on any information, opinion or advice offered by any such person.
(2) The fees and expenses of an expert, legal adviser or assessor appointed by the tribunal for which the arbitrators are liable are expenses of the arbitrators for the purposes of this Part.
General powers exercisable by the tribunal.
38. - (3) The arbitrator(s) may order a claimant to provide security for the costs of the arbitration.
(4) The arbitrator(s) may give directions in relation to any property which is the subject of the proceedings or as to which any question arises in the proceedings, and which is owned by or is in the possession of a party to the proceedings -
(a) for the inspection, photographing, preservation, custody or detention
of the property by the tribunal, an expert or a party, or
(b) ordering
that samples be taken from, or any observation be made of or experiment
conducted upon, the property.
(5) The arbitrator(s) may direct that a party or witness shall be examined on oath or affirmation, and may for that purpose administer any necessary oath or take any necessary affirmation.
(6) The arbitrator may give directions to a party for the preservation for the purposes of the proceedings of any evidence in his custody or control.
Power to make provisional awards.
39. The arbitrator(s) shall have power to order on a provisional basis any relief which he would have power to grant in a final award.
General duties of the parties.
40. Mandatory Provision.
1) The parties shall do all things necessary for the proper and expeditious conduct of the arbitral proceedings.
2) This includes
(a) complying without delay with any determination of the tribunal as to procedural or evidential matters, or with any order or directions of the tribunal, and
(b) where appropriate, taking without delay any necessary steps to obtain a decision of the court on a preliminary question of jurisdiction or law (see sections 32 and 45).
Powers of tribunal in case of party's default.
41. - (3) If the arbitrator(s) are satisfied that there has been inordinate and inexcusable delay on the part of the claimant in pursuing this claim and that the delay
(a) gives rise, or is likely to give rise, to a substantial risk that it is not possible to have a fair resolution of the issues in that claim, or
(b) has caused, or is likely to cause, serious prejudice to the respondent,
the arbitrator(s) may make an award dismissing the claim.
(4) If without showing sufficient cause a party -
(a) fails to attend or be represented at an oral hearing of which due notice was given, or
(b) where matters are to be dealt with in writing, fails after due notice to submit written evidence or make written submissions,
the arbitrator(s) may continue the proceedings in the absence of that party or, as the case may be, without any written evidence or submissions on his behalf, and may make an award on the basis of the evidence before him.
(5) If without showing sufficient cause a party fails to comply with any order or directions of the arbitrator(s) the arbitrator(s) may make a peremptory order to the same effect, prescribing such time for compliance with it as the arbitrator(s) considers appropriate.
(6) If a claimant fails to comply with a peremptory order of the arbitrator(s) to provide security for costs, the arbitrator(s) may make an award dismissing his claim.
(7) If a party fails to comply with any other kind of peremptory order then, without prejudice to section 42 (enforcement by court of tribunal's peremptory orders), the arbitrator(s) may do any of the following -
(a) direct that the party in default shall not be entitled to rely upon any allegation or material that was the subject matter of the order;
(b) draw such adverse inferences from the act of non-compliance as the circumstances justify;
(c) proceed to an award on the basis of such materials as have been properly provided to him;
(d) make such order as he thinks fit as to the payment of costs of the arbitration incurred in consequence of the non-compliance.
Enforcement of peremptory orders of tribunal.
42. The court may not make an order requiring a party to comply with a peremptory order made by the arbitrator. (10.3)
Securing the attendance of witnesses.
43. Mandatory Provision.
(1) A party to arbitral proceedings may use the same court procedures as are available in relation to legal proceedings to secure the attendance before the tribunal of a witness in order to give oral testimony or to produce documents or other material evidence.(2) This may only be done with the permission of the tribunal or the agreement of the other parties.
(3) The court procedures may only be used if
(a) the witness is in the United Kingdom, and
(b) the arbitral proceedings are being conducted in England and Wales or, as the case may be, Northern Ireland.
(4) A person shall not be compelled by virtue of this section to produce any document or other material evidence which he could not be compelled to produce in legal proceedings.
Court powers exercisable in support of arbitral proceedings.
44. The court does not have the power to make orders about the matters listed in Section 44 of the Arbitration Act 1996. (10.1)
Determination of preliminary point of law.
45. The tribunal’s award shall not give reasons. (7)
[Section 45 is quoted below but note that the draft of The Law of the Internet Arbitration Rules provides by Clause 7 that the arbitrator(s) shall not give reasons so by the second sentence of sub-section (1) the court does not have the powers listed here.]
"(1) Unless otherwise agreed by the parties, the court may on the application of a party to arbitral proceedings (upon notice to the other parties) determine any question of law arising in the course of the proceedings which the court is satisfied substantially affects the rights of one or more of the parties.
An agreement to dispense with reasons for the tribunal's award shall be considered an agreement to exclude the court's jurisdiction under this section.
(2) An application under this section shall not be considered unless--
(a) it is made with the agreement of all the other parties to the proceedings, or
(b) it is made with the permission of the tribunal and the court is satisfied--
(i) that the determination of the question is likely to produce substantial savings in costs, and
(ii) that the application was made without delay.
(3) The application shall identify the question of law to be determined and, unless made with the agreement of all the other parties to the proceedings, shall state the grounds on which it is said that the question should be decided by the court.
(4) Unless otherwise agreed by the parties, the arbitral tribunal may continue the arbitral proceedings and make an award while an application to the court under this section is pending.
(5) Unless the court gives leave, no appeal lies from a decision of the court whether the conditions specified in subsection (2) are met.
(6) The decision of the court on the question of law shall be treated as a judgment of the court for the purposes of an appeal.
But no appeal lies without the leave of the court which shall not be given unless the court considers that the question is one of general importance, or is one which for some other special reason should be considered by the Court of Appeal."
Rules applicable to substance of dispute.
46. The arbitral tribunal shall decide the dispute according to the Law of the Internet which shall be whatever the arbitral tribunal hold it to be from time to time. No holding on the Law of the Internet establishes a precedent. The arbitration procedure shall follow these Rules under the laws of England. (6)
[As the Law of the Internet is a key part of the draft of The Law of the Internet Arbitration Rules Section 46 of the Arbitration Act 1996 (which is superseded by the words above) is quoted in full below.
"(1) The arbitral tribunal shall decide the dispute--
(a) in accordance with the law chosen by the parties as applicable to the substance of the dispute, or
(b) if the parties so agree, in accordance with such other considerations as are agreed by them or determined by the tribunal.
(2) For this purpose the choice of the laws of a country shall be understood to refer to the substantive laws of that country and not its conflict of laws rules.
(3) If or to the extent that there is no such choice or agreement, the tribunal shall apply the law determined by the conflict of laws rules which it considers applicable."
[Putting the procedure under English law has the effect of bringing in the Arbitration Act 1996.]
Awards on different issues &c.
47. The arbitrator(s) may make more than one award at different times on different aspects of the matters to be determined.
(2) The tribunal may, in particular, make an award relating--
(a) to an issue affecting the whole claim, or
(b) to a part only of the claims or cross-claims submitted to it for decision.
(3) If the tribunal does so, it shall specify in its award the issue, or the claim or part of a claim, which is the subject matter of the award.
Remedies.
48.
(4) The arbitrator(s) may order the payment of a sum of money, in any currency.
(5) The arbitrator(s) has the same powers as the court -
(a) to order a party to do or refrain from doing anything;
(b) to order specific performance of a contract (other than a contract relating to land);
(c) to order the rectification, setting aside or cancellation of a deed or other document.
Interest.
49. (3) The arbitrator(s) may award simple or compound interest from such dates, at such rates and with such rests as he considers meets the justice of the case -
(a) on the whole or part of any amount awarded by him in respect of any period up to the date of the award;
(b) on the whole or part of any amount claimed in the arbitration and outstanding at the commencement of the arbitral proceedings but paid before the award was made, in respect of any period up to the date of payment.
(4) The arbitrator(s) may award simple or compound interest from the date of the award (or any date) until payment, at such rates and with such rests as he considers meets the justice of the case, on the outstanding amount of any award (including any award of interest under (3) above and any award as to costs.
(5) References in this paragraph to an amount awarded by the arbitrator(s) include an amount payable in consequence of a declaratory award by the arbitrator(s).
Extension of time for making the award
50. Not directly relevant.
Settlement.
51. If during arbitral proceedings the parties settle the dispute, the arbitrator may record the settlement in the form of an agreed award.
Form of award. Place where award treated as made. Date of award. Notification of award.
52., 53., 54. and 55. - The arbitral award on a provisional or final basis shall be in the form of an email message sent by one arbitrator, and re-sent in substantially the same form by all the other arbitrators, to all the parties in the reference. Such an award is deemed to be in writing and signed by the arbitrators. On request by any party the arbitrators will within seven days of the request sign a paper counterpart of the award if such is essential for enforcement purposes. The award will state that the seat of the arbitration is London and the date that the award was made. (7)
Power to withhold award in case of non-payment.
56. Mandatory Provision.
(1) The tribunal may refuse to deliver an award to the parties except upon full payment of the fees and expenses of the arbitrators.
(2) If the tribunal refuses on that ground to deliver an award, a party to the arbitral proceedings may (upon notice to the other parties and the tribunal) apply to the court, which may order that
(a) the tribunal shall deliver the award on the payment into court by the applicant of the fees and expenses demanded, or such lesser amount as the court may specify,
(b) the amount of the fees and expenses properly payable shall be determined by such means and upon such terms as the court may direct, and
(c) out of the money paid into court there shall be paid out such fees and expenses as may be found to be properly payable and the balance of the money (if any) shall be paid out to the applicant.
(3) For this purpose the amount of fees and expenses properly payable is the amount the applicant is liable to pay under section 28 or any agreement relating to the payment of the arbitrators.
(4) No application to the court may be made where there is any available arbitral process for appeal or review of the amount of the fees or expenses demanded.
(5) References in this section to arbitrators include an arbitrator who has ceased to act and an umpire who has not replaced the other arbitrators.
(6) The above provisions of this section also apply in relation to any
arbitral or other institution or person vested by the parties with powers in
relation to the delivery of the tribunal's award.
As they so apply, the
references to the fees and expenses of the arbitrators shall be construed as
including the fees and expenses of that institution or person.
(7) The leave of the court is required for any appeal from a decision of the court under this section.
(8) Nothing in this section shall be construed as excluding an application under section 28 where payment has been made to the arbitrators in order to obtain the award.
Correction of award or additional award.
57. The arbitrator(s) may on his own initiative or on the application of a party
(a) correct an award so as to remove any clerical mistake or error arising from an accidental slip or omission or clarify or remove any ambiguity in the award, or
(b) make an additional award in respect of any claim (including a claim for interest or costs) which was presented to the arbitrator but was not dealt with in the award.
These powers shall not be exercised without first affording the other parties a reasonable opportunity to make representations to the tribunal.
(4) Any application for the exercise of those powers must be made within 28 days of the date of the award or such longer period as the parties may agree.
(5) Any correction of an award shall be made within 28 days of the date the application was received by the tribunal or, where the correction is made by the tribunal on its own initiative, within 28 days of the date of the award or, in either case, such longer period as the parties may agree.
(6) Any additional award shall be made within 56 days of the date of the original award or such longer period as the parties may agree.
(7) Any correction of an award shall form part of the award.
Effect of award.
58. An award made by the arbitrator(s) pursuant to the arbitration agreement is final and binding both on the parties and on any persons claiming through or under them.
Costs of the arbitration.
59. - (1) References to the costs of the arbitration are to -
(a)the arbitrators’ fees and expenses,
(c)the legal or other costs of the parties.
(2) Any such reference includes the costs of or incidental to any proceedings to determine the amount of the recoverable costs of the arbitration.
Agreement to pay costs in any event.
60. Mandatory Provision.
An agreement which has the effect that a party is to pay the whole or part of the costs of the arbitration in any event is only valid if made after the dispute in question has arisen.
Award of costs.
61. - (1) The arbitrator(s) may make an award allocating the costs of the arbitration as between the parties.
(2) The arbitrator(s) shall award costs on the general principle that costs should follow the event except where it appears to the arbitrator(s) that in the circumstances this is not appropriate in relation to the whole or part of the costs.
Effect of agreement or award about costs.
62.Unless the parties otherwise agree, any obligation under an agreement between them as to how the costs of the arbitration are to be borne, or under an award allocating the costs of the arbitration, extends only to such costs as are recoverable.
The recoverable costs of the arbitration.
63. - (3) The arbitrator(s) may determine by award the recoverable costs of the arbitration on such basis as he thinks fit.
He shall specify
(a) the basis on which it has acted, and
(b) the items of recoverable costs and the amount referable to each.
Recoverable fees and expenses of arbitrators.
64. The recoverable costs of the arbitration shall include in respect of the fees and expenses of the arbitrator only such reasonable fees and expenses as are appropriate in the circumstances.
Power to limit recoverable costs.
65.(1) The arbitrator may direct that the recoverable costs of the arbitration, or of any part of the arbitral proceedings, shall be limited to a specified amount.
(2) Any direction may be made or varied at any stage, but this must be done sufficiently in advance of the incurring of costs to which it relates, or the taking of any steps in the proceedings which may be affected by it, for the limit to be taken into account.
Enforcement of the award.
66.Mandatory Provision.
(1) An award made by the tribunal pursuant to an arbitration agreement may, by leave of the court, be enforced in the same manner as a judgment or order of the court to the same effect.
(2) Where leave is so given, judgment may be entered in terms of the award.
(3) Leave to enforce an award shall not be given where, or to the extent
that, the person against whom it is sought to be enforced shows that the
tribunal lacked substantive jurisdiction to make the award.
The right to
raise such an objection may have been lost (see section 73).
(4) Nothing in this section affects the recognition or enforcement of an award under any other enactment or rule of law, in particular under Part II of the Arbitration Act 1950 (enforcement of awards under Geneva Convention) or the provisions of Part III of this Act relating to the recognition and enforcement of awards under the New York Convention or by an action on the award.
[Note that the British parliament has expressly provided that arbitral awards made under the Arbitration Act 1996 are "New York Convention Awards". An English court must enforce an award made under the Arbitration Act 1996 and other New York Convention signatory states’ courts should do the same under the comity of nations, for the meaning of which expression consult a dictionary.]
Challenging the award: substantive jurisdiction.
67.Mandatory Provision.
1) A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court--
(a) challenging any award of the arbitral tribunal as to its substantive jurisdiction; or
(b) for an order declaring an award made by the tribunal on the merits to be of no effect, in whole or in part, because the tribunal did not have substantive jurisdiction.
A party may lose the right to object (see section 73) and the right to apply is subject to the restrictions in section 70(2) and (3).
(2) The arbitral tribunal may continue the arbitral proceedings and make a further award while an application to the court under this section is pending in relation to an award as to jurisdiction.
(3) On an application under this section challenging an award of the arbitral tribunal as to its substantive jurisdiction, the court may by order--
(a) confirm the award,
(b) vary the award, or
(c) set aside the award in whole or in part.
(4) The leave of the court is required for any appeal from a decision of the court under this section.
Challenging the award: serious irregularity.
68. Mandatory Provision.
(1) A party to arbitral proceedings may (upon notice to the other parties and
to the tribunal) apply to the court challenging an award in the proceedings on
the ground of serious irregularity affecting the tribunal, the proceedings or
the award.
A party may lose the right to object (see section 73) and the
right to apply is subject to the restrictions in section 70(2) and (3).
(2) Serious irregularity means an irregularity of one or more of the following kinds which the court considers has caused or will cause substantial injustice to the applicant--
(a) failure by the tribunal to comply with section 33 (general duty of tribunal);
(b) the tribunal exceeding its powers (otherwise than by exceeding its substantive jurisdiction: see section 67);
(c) failure by the tribunal to conduct the proceedings in accordance with the procedure agreed by the parties;
(d) failure by the tribunal to deal with all the issues that were put to it;
(e) any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award exceeding its powers;
(f) uncertainty or ambiguity as to the effect of the award;
(g) the award being obtained by fraud or the award or the way in which it was procured being contrary to public policy;
(h) failure to comply with the requirements as to the form of the award; or
(i) any irregularity in the conduct of the proceedings or in the award which is admitted by the tribunal or by any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award.
(3) If there is shown to be serious irregularity affecting the tribunal, the proceedings or the award, the court may
(a) remit the award to the tribunal, in whole or in part, for reconsideration,
(b) set the award aside in whole or in part, or
(c) declare the award to be of no effect, in whole or in part.
The court shall not exercise its power to set aside or to declare an award to be of no effect, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration.
(4) The leave of the court is required for any appeal from a decision of the court under this section.
Appeal on point of law.
69. The tribunal’s award shall not give reasons. (7)
[Clause 69 is quoted below but note that the draft of The Law of the Internet Arbitration Rules provides by Clause 7 that the arbitrator(s) shall not give reasons so by the second sentence of sub-section (1) the court does not have the powers listed here.]
"S69. (1) Unless otherwise agreed by the parties, a party to arbitral
proceedings may (upon notice to the other parties and to the tribunal) appeal to
the court on a question of law arising out of an award made in the proceedings.
An agreement to dispense with reasons for the tribunal's award shall be
considered an agreement to exclude the court's jurisdiction under this section.
(2) An appeal shall not be brought under this section except--
(a) with the agreement of all the other parties to the proceedings, or
(b) with the leave of the court.
The right to appeal is also subject
to the restrictions in section 70(2) and (3).
(3) Leave to appeal shall be given only if the court is satisfied
(a) that the determination of the question will substantially affect the rights of one or more of the parties,
(b) that the question is one which the tribunal was asked to determine,
(c) that, on the basis of the findings of fact in the award
(i) the decision of the tribunal on the question is obviously wrong, or
(ii) the question is one of general public importance and the decision of the tribunal is at least open to serious doubt, and
(d) that, despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the court to determine the question.
(4) An application for leave to appeal under this section shall identify the question of law to be determined and state the grounds on which it is alleged that leave to appeal should be granted.
(5) The court shall determine an application for leave to appeal under this section without a hearing unless it appears to the court that a hearing is required.
(6) The leave of the court is required for any appeal from a decision of the court under this section to grant or refuse leave to appeal.
(7) On an appeal under this section the court may by order--
(a) confirm the award,
(b) vary the award,
(c) remit the award to the tribunal, in whole or in part, for reconsideration in the light of the court's determination, or
(d) set aside the award in whole or in part.
The court shall not
exercise its power to set aside an award, in whole or in part, unless it is
satisfied that it would be inappropriate to remit the matters in question to
the tribunal for reconsideration.
(8) The decision of the court on an appeal under this section shall be
treated as a judgment of the court for the purposes of a further appeal.
But no such appeal lies without the leave of the court which shall not be given
unless the court considers that the question is one of general importance or is
one which for some other special reason should be considered by the Court of
Appeal."
Challenge or appeal: supplementary provisions.
70.Mandatory Provision.
(1) The following provisions apply to an application or appeal under section 67, 68 or 69.
(2) An application or appeal may not be brought if the applicant or appellant has not first exhausted
(a) any available arbitral process of appeal or review, and
(b) any available recourse under section 57 (correction of award or additional award).
(3) Any application or appeal must be brought within 28 days of the date of the award or, if there has been any arbitral process of appeal or review, of the date when the applicant or appellant was notified of the result of that process.
(4) If on an application or appeal it appears to the court that the award--
(a) does not contain the tribunal's reasons, or
(b) does not set out the tribunal's reasons in sufficient detail to enable the court properly to consider the application or appeal,
the court may order the tribunal to state the reasons for its award in sufficient detail for that purpose.
(5) Where the court makes an order under subsection (4), it may make such further order as it thinks fit with respect to any additional costs of the arbitration resulting from its order.
(6) The court may order the applicant or appellant to provide security for the costs of the application or appeal, and may direct that the application or appeal be dismissed if the order is not complied with. The power to order security for costs shall not be exercised on the ground that the applicant or appellant is--
(a) an individual ordinarily resident outside the United Kingdom, or
(b) a corporation or association incorporated or formed under the law of a country outside the United Kingdom, or whose central management and control is exercised outside the United Kingdom.
(7) The court may order that any money payable under the award shall be brought into court or otherwise secured pending the determination of the application or appeal, and may direct that the application or appeal be dismissed if the order is not complied with.
(8) The court may grant leave to appeal subject to conditions to the same or similar effect as an order under subsection (6) or (7). This does not affect the general discretion of the court to grant leave subject to conditions.
Challenge or appeal: effect of order of court.
71. Mandatory Provision.
(1) The following provisions have effect where the court makes an order under section 67, 68 or 69 with respect to an award.
(2) Where the award is varied, the variation has effect as part of the tribunal's award.
(3) Where the award is remitted to the tribunal, in whole or in part, for reconsideration, the tribunal shall make a fresh award in respect of the matters remitted within three months of the date of the order for remission or such longer or shorter period as the court may direct.
(4) Where the award is set aside or declared to be of no effect, in whole or in part, the court may also order that any provision that an award is a condition precedent to the bringing of legal proceedings in respect of a matter to which the arbitration agreement applies, is of no effect as regards the subject matter of the award or, as the case may be, the relevant part of the award.
Saving for rights of person who takes no part in proceedings.
72.Mandatory Provision.
(1) A person alleged to be a party to arbitral proceedings but who takes no part in the proceedings may question--
(a) whether there is a valid arbitration agreement,
(b) whether the tribunal is properly constituted, or
(c) what matters have been submitted to arbitration in accordance with the arbitration agreement,
by proceedings in the court for a declaration or injunction or other appropriate relief.
(2) He also has the same right as a party to the arbitral proceedings to challenge an award--
(a) by an application under section 67 on the ground of lack of substantive jurisdiction in relation to him, or
(b) by an application under section 68 on the ground of serious irregularity (within the meaning of that section) affecting him;
and section 70(2) (duty to exhaust arbitral procedures) does not apply in his case.
Loss of right to object.
73. The mandatory provisions of the Arbitration Act 1996 apply with a time allowed for objections and questions of seven days. (10.2)
The Mandatory Provisions are:
(1) If a party to arbitral proceedings takes part, or continues to take part, in the proceedings without making, either forthwith or within such time as is allowed by the arbitration agreement or the tribunal or by any provision of this Part, any objection--
(a) that the tribunal lacks substantive jurisdiction,
(b) that the proceedings have been improperly conducted,
(c) that there has been a failure to comply with the arbitration agreement or with any provision of this Part, or
(d) that there has been any other irregularity affecting the tribunal or the proceedings,
he may not raise that objection later, before the tribunal or the court, unless he shows that, at the time he took part or continued to take part in the proceedings, he did not know and could not with reasonable diligence have discovered the grounds for the objection.
(2) Where the arbitral tribunal rules that it has substantive jurisdiction and a party to arbitral proceedings who could have questioned that ruling--
(a) by any available arbitral process of appeal or review, or
(b) by challenging the award,
does not do so, or does not do so within the time allowed by the arbitration agreement or any provision of this Part, he may not object later to the tribunal's substantive jurisdiction on any ground which was the subject of that ruling.
Immunity of arbitral institutions &c.
74. Mandatory Provision.
(1) An arbitral or other institution or person designated or requested by the parties to appoint or nominate an arbitrator is not liable for anything done or omitted in the discharge or purported discharge of that function unless the act or omission is shown to have been in bad faith.
(2) An arbitral or other institution or person by whom an arbitrator is appointed or nominated is not liable, by reason of having appointed or nominated him, for anything done or omitted by the arbitrator (or his employees or agents) in the discharge or purported discharge of his functions as arbitrator.
(3) The above provisions apply to an employee or agent of an arbitral or other institution or person as they apply to the institution or person himself.
Charge to secure payment of solicitors' costs.
75. Mandatory Provision.
The powers of the court to make declarations and orders under section 73 of the Solicitors Act 1974 or Article 71H of the Solicitors (Northern Ireland) Order 1976 (power to charge property recovered in the proceedings with the payment of solicitors' costs) may be exercised in relation to arbitral proceedings as if those proceedings were proceedings in the court.
Service of notices &c.
76 Any communication between the parties and/or the tribunal over the Internet shall be effective as of the date and time of the timestamp of the delivery acknowledgement and communications shall be made in no other way. (5)
Powers of court in relation to service of documents
77. The court may not make any order -
(a) for the service of a document, or
(b) dispensing with the service of the document. (5)
Reckoning periods of time.
78. - (2) Periods of time shall be reckoned in accordance with the following.
(3) Where the act is required to be done within a specified period after or from a specified date, the period begins immediately after that date.
(4) Where the act is required to be done a specified number of clear days after a specified date, at least that number of days must intervene between the day on which the act is done and that date.
(5) Where the period is a period of seven days or less which would include a Saturday, Sunday or a public holiday in the place where anything which has to be done within the period falls to be done, that day shall be excluded.
Power of court to extend time limits relating to arbitral proceedings.
79. The court may not make an order extending any time limit under Section 79 of the Arbitration Act 1996.
Notice and other requirements in connection with legal proceedings.
80. Mandatory Provision. Not directly relevant.
[Of necessity to make this a readable document some of the wording in the Arbitration Act 1996 has been omitted as "not being directly relevant" to arbitrations carried out under the draft Law of the Internet Arbitration Rules. The document is also a one-man effort. Others are asked to bear these points in mind and comment appropriately.]