The English court and security for costs during arbitral proceedings The courts of England and Wales have no power to order security for costs during the arbitral proceedings; such power is vested exclusively in the tribunal. This has not always been the case. The House of Lords in Coppée-Lavalin v Ken-Ren Chemicals and Fertilizers; Voest-Alpine v Ken-Ren Chemicals and Fertilizers, looking at the court’s powers under section 12(6)(a) of the Arbitration Act 1950, confirmed that it was not to be precluded from making an order for security of costs in an international arbitration, with the House agreeing with the general approach to the operation of this discretion as set out by Lord Mustill. However, the House was split as regards the ultimate application of the court’s discretion, finding by a majority decision that an order for security for costs should be granted in an International Chamber of Commerce (ICC) arbitration taking place in London. Lords Keith, Slynn and Woolf found that there was a real risk that the applicant would not be able to recover its

Security for costs in arbitration proceedings This Practice Note considers the arbitral tribunal’s power to order security for costs under the Arbitration Act 1996 (AA 1996), which principally applies to arbitrations seated in England, Wales or Norther Ireland (England and English are used as a convenient shorthand). The notion of ‘security for costs’ will be familiar to common lawyers but perhaps less so to civil lawyers, as it is closely related to the common law rule that, in general, the costs of bringing proceedings should ‘follow the event’ or, put more simply, the losing party should pay. In English litigation, the general rule, if a court decides to make an order on costs, is that the unsuccessful party will be ordered to pay the recoverable costs of the successful party, although the court retains a wide discretion in this regard—see: Costs orders—overview. To bolster this principle, the mechanism of security  for costs exists and allows a defendant (whether to the main claim or a counterclaim) to apply for an order that the claimant provides security for the likely recoverable costs the defendant will incur in defending the claim—see Practice

Challenges and appeals for error of law against arbitral awards to the court under sections 67, 68 and 69 of the Arbitration Act 1996 (AA 1996) have the capacity to substantially delay enforcement and, in some cases, prejudice the ability of an award creditor to collect under its award. Indeed, in some instances, losing parties may try to use AA 1996, ss 67–69 for this very purpose. The English and Welsh court’s powers to order security in the amount of the award (AA 1996, s 70(7)) and security for costs (AA 1996, s 70(6)) in respect of any challenge/appeal are therefore important tools that should be considered by any respondent to such a challenge/appeal. Used in appropriate circumstances, the security provisions under AA 1996, s 70 can save parties substantial time and costs. This Practice Note considers the power of the English court to order security in the amount of the award. For guidance on the court’s power to order security for costs in respect of a challenge to or appeal

This Practice Note considers how to serve an arbitration claim form issued in the courts of England and Wales (England and English are used as for convenience) on defendants within and outside the jurisdiction. While the English courts tend to take a non-interventionist approach to arbitration proceedings, there are occasions when the parties to an arbitration (or the arbitral tribunal) may wish to make an application to the English court—see Practice Note: AA 1996—court powers in support of arbitration—an introduction for a overview of the court’s powers in support of arbitration proceedings under the Arbitration Act 1996 (AA 1996). All arbitration claims and applications under the AA 1996 are made using an arbitration claim form (Form N8) and issued in accordance with CPR 8 and CPR 62 (and the associated practice direction), with the exception of applications under AA 1996, s 9 (stay of court proceedings in favour of arbitration), which are made pursuant to the ordinary application process in the existing court proceedings (CPR 23).

This Practice Note sets out the rules on serving notices and other documents during arbitration proceedings pursuant to sections 76–77 of the Arbitration Act 1996 (AA 1996). It should be read in conjunction with the guidance on commencing arbitration proceedings pursuant to the AA 1996—see, for example, Practice Note: AA 1996—starting an arbitration. The approach to service taken pursuant to AA 1996 is flexible and should ensure that there is always a method by which service can be effected, except in the exceptional circumstances discussed below. The parties are also free to agree on how service is to be effected in their arbitration and the court has no power to interfere with such agreement (AA 1996, s 76, which is a non-mandatory provision of the Act). Service of notices and other documents Note that section 76(5) makes it clear that section 76 does not apply to the service of documents for the purposes of legal proceedings, namely the service of an arbitration claim form or other application in arbitration-related court proceedings, which are

This Practice Note considers the general procedure for commencing arbitration claims before the English and Welsh courts under the Arbitration Act 1996 (AA 1996) (English and England are used as a convenient shorthand in this Practice Note). Any additional considerations relevant to specific arbitration claims will be dealt with in the Practice Notes or other content which focus on such applications. What is an arbitration claim? For those considering making an application to court pursuant to AA 1996 for the first time, the terminology of ‘starting an arbitration claim’ using an ‘arbitration claim form’ may be confusing as it may suggest the commencement of substantive arbitration proceedings. Arbitration proceedings are, generally, commenced by notices of arbitration (in ad hoc arbitration) or requests/demands/notices for arbitration (in institutional arbitration), rather than by way of a claim form as used to commence litigation proceedings. Despite this potential confusion, the CPR, Practice Directions and the English judiciary generally refer to ‘arbitration claims’ rather than arbitration-related applications, although in some cases the language of ‘applications’ is also used by the courts. For

This Practice Note considers applications to the courts of England and Wales (England and English are used as convenient shorthand) to stay litigation proceedings in favour of arbitration proceedings pursuant to section 9 of the Arbitration Act 1996 (AA 1996). Despite parties including arbitration clauses in their substantive contracts, when disputes arise one of the parties may decide that it no longer wishes to arbitrate. In such instances, that party may, instead, commence litigation proceedings to have the dispute determined in court. The reasons for taking such a stance can be varied—for example: the dispute may involve three or more parties, one of which is a not a party to the arbitration agreement; or, the parties have concluded a number of substantive agreements with conflicting jurisdiction clauses and the party considers (incorrectly) that it is contractually entitled to litigate the relevant dispute; or, the circumstances mean that litigation conducted in public is more aligned with the overall aims of the party in question. For a summary of key decisions considering

This Practice Note considers the statutory time limits for bringing challenges and appeals in respect of arbitral awards before the English and Welsh courts (England and English are used as convenient shorthands) pursuant to the Arbitration Act 1996 (AA 1996), as well as related matters. Where relevant, this Practice Note should be read with our guidance on the substantive challenge and/or appeal applications: • AA 1996—challenging and appealing arbitral awards in the English court • AA 1996—challenging substantive jurisdiction post-award (s 67) • AA 1996—challenging the award on grounds of serious irregularity (s 68) • AA 1996—challenging the award—categories of serious irregularity (s 68) • AA 1996—challenging the award—serious irregularity by fraud or public policy (s 68) • AA 1996—appealing the award—leave to appeal (s 69) The time limit for bringing challenges and/or appeals against arbitration awards Under the AA 1996, challenges and appeals in respect of arbitral awards can be brought under the following sections: • AA 1996, s 67—challenging the award for lack of substantive jurisdiction

Arbitrators’ powers regarding the conduct of the arbitral process are, for the most part, a matter for the agreement of the parties, which may be ad hoc or found in the institutional rules that the parties have adopted. These matters may, if not otherwise agreed, be resolved at a preliminary meeting between the arbitrators and the parties. The Arbitration Act 1996 (AA 1996), which applies to any arbitration with its seat in England and Wales or Northern Ireland, does not lay down any mandatory rules for the conduct of an arbitration other than the basic principle in AA 1996, s 33, which requires the arbitrators to act fairly in their conduct of the proceedings. However, AA 1996 lays down a number of default rules that will apply unless the parties have agreed to exclude them. It is open to the parties to confer such powers on the arbitrators as they wish, although they have to be exercised in accordance with the overriding principle in AA 1996, s 33. Powers that can be excluded by party agreement AA

The AAA and the origins of the AAA Commercial Rules Founded in 1926, the American Arbitration Association (AAA) is a not-for-profit public service organisation providing dispute resolution services. These services include mediation and domestic and international arbitration services. For arbitrations, the AAA has established a number of sets of arbitration rules. The most used, and the focus of this Practice Note, are the Commercial Arbitration Rules and Mediation Procedures including the Procedures for Large, Complex Commercial Disputes (the Commercial Rules or the AAA Commercial Rules), amended and effective 1 September 2022. A Fee Schedule applies to Commercial Rules arbitrations (effective 1 May 2018). In light of the rapid technological advances (eg generative AI) in the field of arbitration, the AAA launched a web centre to support AAA users in navigating these developments. AAAi Lab provides AAA users, in-house counsel and law firms, and arbitrators with access to policy guidance, educational webinars and tools for the effective use of AI in ADR. The AI Arbitrator, available

The AAA Commercial Arbitration Rules and Mediation Procedures including the Procedures for Large, Complex Commercial Disputes (the Commercial Rules or the AAA Commercial Rules) were revised with effect from 1 September 2022. A Fee Schedule applies to AAA Commercial Rules arbitrations (effective 1 May 2018). This Practice Note reflects the revised AAA Commercial Rules. For an introduction to the AAA and the Commercial Rules, see Practice Note: AAA Commercial Rules. Note: each of the Commercial Rules is prefixed by a letter, eg 'R' or 'L'. Relevant rule letters/numbers are set out below. Administrative/institutional fees Each party asserting claims or counterclaims must choose between one of two different fee schedules, the 'Standard Fee Schedule' and the 'Flexible Fee Schedule'. The Standard Fee Schedule has two payment triggers; the Flexible Fee Schedule has three. Assuming the arbitration runs its course, the fees paid under either schedule would be the same. The idea behind the choice is straightforward. The Flexible Fee Schedule requires lower

The American Arbitration Association (AAA) Commercial Arbitration Rules and Mediation Procedures including the Procedures for Large, Complex Commercial Disputes (the Commercial Rules or the AAA Commercial Rules) were revised with effect from 1 September 2022. A Fee Schedule applies to AAA Commercial Rules arbitrations (effective 1 May 2018). This Practice Note reflects the revised AAA Commercial Rules. For an introduction to the AAA and the Commercial Rules, see Practice Note: AAA Commercial Rules. Note: each of the Commercial Rules is prefixed by a letter, eg 'R' or 'L'. Relevant rule letters/numbers are set out below. Evidence General Principles The arbitrator is vested with authority to determine the admissibility, relevance and materiality of any evidence offered and has the power to exclude evidence deemed to be cumulative or irrelevant (R.34(b)). Arbitrators also have express authority to receive witness testimony by declaration or affidavit. (R.34(d)). In practice, this may also include considering expert witness reports and affidavits. The parties shall give written notice to any witness