§ 141 Clause 77, page 58, line 32, at end insert:
§ '(7) Rules of the Supreme Court may make provision for—
- (a) cases in which it is necessary to allocate references made under or by virtue of arbitration agreements to official referees;
- (b) the transfer of references from one official referee to another.'.
§ 142After Clause 78, insert the following clause:—
§ Power of parties in certain cases to fill vacancy
§ .—(1) In section 10 of the Arbitration Act 1950 (power of court in certain cases to appoint an arbitrator or umpire), the following shall be substituted for subsection (3)—
§ "(3) In any case where—
- (a) an arbitration agreement provides that the reference shall be to three arbitrators, one to be appointed by each party and the third to be appointed by the two appointed by the parties or in some other manner specified in the agreement; and
- (b) one of the parties ("the party in default") refuses to appoint an arbitrator or does not do so within the time specified in the agreement or, if no time is specified, within a reasonable time,
§ (3A) A notice under subsection (3) must indicate whether it is served for the purposes of subsection (3B) or for the purposes of subsection (3C).
§ (3B) Where a notice is served for the purposes of this subsection, then unless a contrary intention is expressed in the agreement, if the required appointment is not made within seven clear days after the service of the notice—
- (a) the party who gave the notice may appoint his arbitrator to act as sole arbitrator in the reference; and
- (b) his award shall be binding on both parties as if he had been appointed by consent.
§ (3C) Where a notice is served for the purposes of this subsection, then, if the required appointment is not made within seven clear days after the service of the notice the High Court or a judge thereof may, on the application of the party who gave the notice, appoint an arbitrator on behalf of the party in default who shall have the like powers to act in the reference and make an award (and, if the case so requires, the like duty in relation to the appointment of a third arbitrator) as if he had been appointed in accordance with the terms of the agreement.
§ (3D) The High Court or a judge thereof may set aside any appointment made by virtue of subsection (3B)."
§ (2) Section 10 of the Act of 1950 shall continue to apply in relation to any arbitration agreement entered into before the commencement of this section as if this section had not been enacted.
§ (3) Subsection (2) does not apply if a contrary intention is expressed in the arbitration agreement, whether or not as the result of a variation made after the commencement of this section.'.
§ 143 Clause 79, page 59, line 11, at end insert:
§ (3) For the purpose of keeping the provision made by this section and the corresponding provision which applies in relation to proceedings in the High Court in step, the Secretary of State may by order made by statutory instrument amend subsection (2) above.
§ (4) Before making any such order the Secretary of State shall consult the Lord Chancellor and such other persons as he considers appropriate.
§ (5) No such order shall be made unless a draft of the order has been laid before, and approved by resolution of, each House of Parliament.'.
§ The Lord ChancellorMy Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 141 to 143.
Amendment No. 141 allows the rules of the Supreme Court to regulate the allocation of arbitrations to particular official referees, where no such referee was nominated on the application, and the transfer of arbitrations between official referees as the state of their business demands. This provision is necessary so that the procedural details of the scheme established by the new Section 11 of the Arbitration Act 1950 substituted for the old by Clause 77 can be 1448 dealt with by rules of court. The details of how arbitrations are allocated and transferred among the official referees are clearly appropriate for the rules, but, because these arbitrations are not strictly proceedings in the High Court, a specific enabling provision of this kind is desirable.
The provision has not been necessary hitherto because, as Section 11 of the Arbitration Act is presently worded, applications are to specific referees to hear an arbitration, so no initial allocation is necessary, nor are transfers provided for. The provision will provide the flexibility needed to ensure the most efficient use of judicial resources.
The new clause, Amendment No. 142, takes forward a proposal made by the noble Lord, Lord Byron, in relation to arbitrations to a three-member tribunal and is supported by the departmental advisory committee on arbitration. Section 7 of the Arbitration Act 1950 provides a simple and effective method for dealing with the problem which arises when each of the two parties to an arbitration agreement is required to appoint an arbitrator where there is a dispute, but one fails to do so. The other party may in certain circumstances appoint his own arbitrator to act as sole arbitrator. However, this procedure only applies where the reference is to be to two arbitrators. Where it is to three arbitrators, and one party defaults in making art appointment, an application to the High Court is necessary under Section 10(3) of the 1950 Act for the court to appoint an arbitrator. Such an application of course costs time and money. This amendment, the key provision of which is the new subsection (3B), makes a similar provision to that in Section 7, so that the party who is not in default may appoint his arbitrator to act as sole arbitrator once the other party has failed to comply with a notice requiring him to make his appointment.
The present remedy is also to continue by virtue of new subsection (3C). This is needed because in some jurisdictions, it may not be possible to enforce an award which was intended to have been made by a three-member tribunal but has been made by a sole arbitrator appointed by one party alone.
Amendment No. 143 gives the Secretary of State the power to amend the conditions set out in subsection (2) of Clause 79 in order to bring them into line with those for the time being applying in the High Court. The power would be exercisable after consultation with the Lord Chancellor and any other persons the Secretary of State considers appropriate, and any order would require an affirmative resolution of both Houses.
Clause 79 does, of course, provide a new Section 13A to the Arbitration Act 1950, and not Section 11 as is stated in the explanatory document I issued with the list of Commons amendments to the Bill. I apologise for that error and mistaken reference.
Moved, That the House do agree with the Commons in their Amendments Nos. 141 to 143.— (The Lord Chancellor.)
§ Lord WilberforceMy Lords, with regard to Amendment No. 142, the noble and learned Lord is 1449 certainly to be congratulated on, and thanked for, giving effect to a proposal made about the subject matter by the noble Lord, Lord Byron, who was present earlier today. One can see that the clause has been given a good deal of attention and careful drafting. At the same time it is a complicated matter. It interacts with a large number of other matters relating to the law of arbitration. One cannot but be left with a little regret that piecemeal legislation in this important field should have been thought necessary rather than leaving it to a general and comprehensive overhaul of the Arbitration Act. However, I thank the noble and learned Lord on behalf of my noble friend for the trouble he has taken in bringing forward this amendment.
§ The Lord ChancellorMy Lords, I am grateful to my noble and learned friend for that message. I sympathise with his view about the desirability of a general revision of arbitration law. That was a reason for perhaps not acting on this suggestion. However, I felt that this was a specific problem which it was possible to deal with, and that if we could bring matters forward on this particular question it would be desirable to do so. I hope this will not impede more general consideration of arbitration law in due course. I do not think it will. It is something which can be dealt with on its own.
§ Lord WilberforceMy Lords, I am grateful to the noble and learned Lord.
§ On Question, Motion agreed to.