The UK remains a popular destination for resolving international business conflicts. International businesses all over the world often and willingly use English law as applicable by virtue of its flexible approaches, tools and principles in this area. Also, English law is often chosen as the law of the “third”, “neutral” state in case the international contract is concluded by parties from different states.
As for the English courts, first of all, it is quite logical when choosing English law as the applicable law to specify the English court for the settlement of disputes; secondly, the quality of English refereeing has a very high reputation and is valued throughout the world.
Is article will answer the question why the application of English law has long been commonplace for businesses from different countries, why English courts prefer arbitrary processes to law suits, and will describe the key features of the English courts in general.
Arbitration vs Legal Action
If you intend to resolve the dispute through arbitration in the UK, please note that in this jurisdiction, there is historical guidance from the Court of Appeal that the English courts must prohibit legal action in favor of agreements to resolve the dispute through arbitration.
A number of recent decisions of the English courts have proved their favourable attitude to arbitration. In many cases, anti-suit injunctions were granted. Within the last year period, the UK Supreme Court upheld several prohibitions on legal action, enforcing the parties to submit disputes to arbitration.
Case Study
The English court’s strict attitude to issues related to challenging arbitral awards is clearly shown in an example below that proves this statement true.
So, in the Islamic Republic of Pakistan and another v Broadsheet LLC (in liquidation) [2019] EWHC 1832 (Comm), the plaintiffs challenged the decision of the tribunal for damages in accordance with Section 68 of the Arbitration Law on the basis of serious violations, because, according to According to the plaintiff, this decision did not contain sufficient grounds.
The Supreme Court, in turn, rejected the request and ruled that improper reasons could not be considered a serious violation of Article 68. In doing so, the court applied the following principles to challenge the applicants:
- Section 68 of this Law is considered in relation to due process, and not whether the tribunal has made the right decision or not;
- an assessment of the adequacy of the grounds would include an assessment of the evidence by the court, which in itself would contradict the role of the tribunal as the only body examining the merits;
- this review would be regarded as inadmissible supervision of the arbitral proceedings.
The Court also emphasized that the main purpose of the Arbitration Act is to reduce court interference in arbitration in the UK, for which reason it would be inappropriate to interpret section 68 of this Law in a broad sense.
In particular, if Section 70 of the Law already assigned the court the power to require the tribunals to submit additional arguments in connection with the petitions in accordance with sections 67, 68 and 69 of the Law.
Another case of the year 2019. In Hiscox Dedicated Corporate Member v Weyerhauser Co, an anti-suit injunction was suggested by the High Court restraining US proceedings issued in breach of an arbitration agreement that had been incorporated by reference into an insurance policy.
The court held that this was necessary to make the parties arbitrate and that the reference to the jurisdiction of the US courts in the policy's "Service of Suit" clause did not undermine this interpretation, since that clause related only to enforcement.
To sum it up, this case is a clear example where courts focus their attention on the importance of supporting arbitral awards by creating prohibitions on legal action to challenge arbitral awards in English.
When deciding to resolve a dispute through arbitration in England, it is important to hand your case over to lawyers who are highly experienced in this particular matter.
IQ Decision UK is ready to provide legal assistance in resolving all kinds of commercial disputes in the UK.
Our lawyers provide a full range of legal services related to the conduct of arbitration cases, including:
- Legal advice and assessment of prospects for your problem;
- Consideration of the possibility of settlement of the dispute in pre-trial order;
- Preparation of the statement of claim and its submission to the arbitration court;
- Collection of evidence on arbitration courts of all instances: participation in the hearing; preparation and filing of applications; presentation of evidence, etc.
- Enforcement of the decision made by the arbitration court after its entry into force.
This list of services is not exhaustive - our lawyers will provide solutions to legal issues of any complexity.
Do not hesitate to contact us and find out more by ordering an individual consultation on arbitration in the UK with our specialists.
