If the act does give ammunition to disgruntled losing parties, arbitration is in big trouble. But does it?
Arbitration needs the Human Rights Act like a hole in the head. The last couple of years have seen a substantial decline in the use of Arbitration needs the human rights act like a hole in the head. The past couple of years have seen a substantial decline in the use of arbitration in the UK. That is partly a result of recent case law, which confirms that the courts have the same powers as arbitrators to review contract administration decisions, and partly a result of the boom in adjudication. As if that wasn’t bad enough, along comes legislation that promises to be a recipe for court intervention in the arbitral process, despite the fact that a central aim of the 1996 Arbitration Act was to keep judicial interference to a minimum.

No wonder, then, that urgent steps are being taken to investigate the implications of the human rights legislation for arbitration. A working group has been established jointly by the Institute of Advanced Legal Studies and the ADR Group to look into these matters. Set up by Professor Bill Rees and chaired by Mr Justice Moses, the group contains a mix of heavyweight lawyers, academics and arbitrators. Its eagerly awaited conclusions will be published in the Journal of ADR, Mediation and Negotiation.

Central to the group’s remit will be the question of whether the very nature of the arbitration process is such that it offends against the principle enunciated in article 6.1 of the convention: “In the determination of his civil rights and obligations … everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.”

If it is established that the human rights legislation does extend to arbitration, we can expect numerous applications from losing parties. The flurry of adjudication enforcement cases in the past 18 months or so demonstrates how ready a disappointed party is to use any point, no matter how technical, as a means of trying to derail the enforcement process. Does arbitration offer the same opportunity?

Most of the adjudication cases boil down to disputes about the adjudicator’s jurisdiction. Since an arbitrator, unlike an adjudicator, can determine his own jurisdiction, a challenge of that nature is unlikely to get very far.

Although there is nothing in the nature of the arbitration process that directly clashes with most of the features referred to in article 6.1, the problem is that, whereas the convention requires a public hearing to take place, arbitration is almost invariably a private process. Indeed, the fact that arbitration takes place behind closed doors is one of its most attractive selling points.

Can a party that has entered into an arbitration agreement claim that it has been deprived of its right to a proper trial?

Perhaps an even more vulnerable area is the arbitrator’s conduct of proceedings. As far as the right to a fair hearing within a reasonable time goes, there may be plenty of opportunity for disappointed parties to grumble. Examples of areas where this may prove a particular problem are the timetabling of the proceedings and the capping of costs.

Alleged breaches of the rules of natural justice would also arguably have more serious consequences for arbitration than adjudication, both for the validity and the enforcement of awards.

All of this leads us to the question: does the legislation apply in the context of arbitration? In practical terms, can a party that has entered into an otherwise binding agreement to have disputes resolved by arbitration – an agreement which, by the way, the courts are bound to uphold – challenge the agreed process on the basis that it has thereby been deprived of its right to a proper trial in accordance with article 6?

It is not my intention to answer that question here. That will be the task of Mr Justice Moses’ working group. But as a matter of common sense, it would be surprising if a party that had freely entered into an arbitration agreement could raise such an argument. Surely, there would be a strong argument that, by entering into the agreement, it had waived its right of access to the courts to complain about the shortcomings of the process. However, where it has been given no choice about the matter, such as where arbitration is a statutory requirement, it seems to me that different considerations could apply.