On 27 February 2020, the English Commercial Court (the Court) published its annual report for 2018-2019 (the Report). The Report confirms that despite the relatively high number of arbitration related applications handled by the Court, the Court rarely allows challenges to arbitral awards. The statistics reinforce the view that England remains an arbitration friendly jurisdiction and that the Court is reluctant to interfere in the arbitral process.
As London is a well-established centre for international arbitration, it is not surprising that the Court sees a relatively high number of arbitration matters referred to it, constituting around 30% of the Court’s overall case load. Such matters include challenges to arbitral awards (discussed below) as well as other arbitration related applications, including injunctions that arise from arbitrations or the enforcement of arbitration awards.
Challenges to awards under the Arbitration Act 1996 (the Act) may be made on three limited grounds:
- lack of substantive jurisdiction (section 67);
- serious irregularity (section 68); or
- appeal on a point of law (section 69 ).
The Report confirms that, while the number of total claims issued last year in the Court remained relatively stable (there were 830 claims compared against the 864 issued in the previous year), the Court witnessed a significant drop in application to challenge an award. In summary:
- there were four hearings of jurisdictional challenges under section 67 of the Act;
- there was a dramatic fall in section 68 applications, from 71 to 19. The Court notes that “very few such applications succeed” and that “the Court hopes that this statistic reflects the fact that parties are appreciating the point made repeatedly by the Court in its judgments that the hurdle for section 68 applications is very high”; and
- there was a significant drop in section 69 applications, from 87 to 39. A challenge under section 69 of the Act requires leave to appeal, and this process serves to filter out unmeritorious applications such that very few applications are actually heard. In fact, from the 39 applications made, only four applications were heard during 2018-2019 and none of those applications succeeded. The statistics bear out the extremely high hurdle to succeed in a section 69 application.
As we reported in 2018, following the publication of previous statistics issued by the Commercial Court Users’ Group in March 2018, challenges to arbitral awards in England are rarely successful. The latest statistics contained in the Report confirm that the position remains unchanged and that England continues to be an arbitration friendly jurisdiction.