UK Supreme Court clarifies scope of an appeal under the Arbitration Act

The UK Supreme Court’s decision in Sharp Corp Ltd v Viterra BV [2024] UKSC 14, has clarified the scope of, and limitations to, an appeal of law under section 69 of the English Arbitration Act 1996.

In the earlier Court of Appeal decision the Court had made findings of fact additional to those made by the original Tribunal. These related to a finding that one of the contracts in question had been varied. Further, the Court of Appeal had decided a question of law which had not been put to the Tribunal.

On the second point, the Supreme Court swiftly concluded that a valid appeal requires that “the point has to [have been] fairly and squarely before the arbitration tribunal for determination“. If the issue had not been before the Tribunal in this way the proceedings cannot properly be an “appeal” on that point.

On the question of whether a court hearing an appeal has the authority to make findings of fact, this point was also dealt with quickly by the Supreme Court at [71]:

The court’s jurisdiction under section 69 of the Act is limited to appeals on questions of law. It has no jurisdiction in relation to errors of fact and no power to make its own findings of fact“.

The decision is a clear statement of the limits of an appeal under section 69 of the Arbitration Act and serves as helpful guidance.

English court decision on anti-arbitration injunctions

The High Court in London has granted an anti-arbitration injunction to prevent the commencement of an arbitration within the context of a series of long-running disputes between the parties.

The case is Sodzawiczny v Smith (Re Arbitration Claim) [2024] EWHC 231 (Comm). The decision contains a useful and detailed review of the case law regarding anti-arbitration injunctions.

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UK Law Commission Publishes Its Review of the Arbitration Act 1996: Final Report and Bill

On 6 September the Law Commission published its final report and recommendations on reforms to the Arbitration Act. The full report is available here.

Below follows a non-exhaustive summary of some of the key changes:

Statutory Rule on Governing Law of an Arbitration Agreement

English law has developed common law rules to determine which law governs an arbitration agreement. These rules were summarised by the UK Supreme Court in Enka Insaat ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38, and largely confirmed in Kabab-Ji SAL v Kout Food Group [2021] UKSC 48. Broadly speaking, absent an agreement to the contrary the choice of law of the main contract would also apply to the arbitration agreement.

The proposed new Section 6A would alter that framework for agreements post-dating the new Act becoming law. The new Section 6A still recognises the parties’ positive choice of governing law in the arbitration agreement as determinative. Failing such choice, however, the law of the seat will be applied as the governing law.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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