- Arbitration Insights
Commercial Court reveals surge in arbitration-related claims as high bar to challenges remains
Sze Hian Ng
24 May 2023
The Commercial Court Report is an annual publication that provides statistics on the work of the Commercial and Admiralty Courts, a specialist division of the High Court of England & Wales that deals with complex and high-value business disputes, including arbitration claims.
According to the recently published report for the year 2021-2022, the Commercial Court has remained very busy, in part due to a “very significant increase in arbitration-related applications”, which made up 25% of the claims issued in the Court.
Arbitration claims include a range of applications to the court for various forms of relief in relation to the arbitration proceedings, such as challenging or enforcing awards, appointing or removing arbitrators and granting injunctions. The report noted that a majority of the arbitration claims pertained to challenges to awards on the grounds of substantive jurisdiction (s.67) and serious irregularity (s.68), and appeals on points of law (s.69).
Compared to the previous year, there were notable increases of 59% in s.67 applications, 54% in s.68 applications, and 8% in s.69 applications. The report also provided an update on the outcome of applications from previous judicial years that were unresolved at the date of last year’s report.
The report's main findings on arbitration claims are as follows:
- S.67 applications: 27 applications were filed during the judicial year of 2021-2022 of which six were dismissed, one was discontinued and 20 were pending. There was a 6% success rate for applications filed during the judicial year of 2020-2021 (one success from 17 applications, with three applications still to be determined). In both years, a majority of the dismissed applications were determined on the papers, i.e. summarily.
- S.68 applications: 40 applications were filed during the judicial year of 2021-2022 of which 6 were dismissed, 2 were discontinued and 31 were pending. There was a 4% success rate for applications filed during the judicial year of 2020-2021 (one success from 26 applications, with three applications still to be determined). As for s.67 applications, in both years a majority of the dismissed applications were determined on the papers.
- S.69 applications: 40 applications were filed during the judicial year of 2021-2022 of which 14 were dismissed or had permission refused and 24 were awaiting a permission or final decision. There was a 5% success rate for applications filed during the judicial year of 2020-2021 (two successes from 37 applications, with five applications still to be determined).
The large number of arbitration claims as a proportion of the Commercial Court’s caseload demonstrates London’s popularity as an arbitral seat and the court’s reputation for supporting and supervising arbitrations in a fair and efficient manner. Users of arbitration in London should be under no illusions about the prospects of success for challenges: the Commercial Court will, except in a small number of cases, refrain from interfering with the award that is produced.
The report is a reminder of the high bar to success on applications under ss.67, 68 and 69. The success rate for 2020/21 applications sits at just 6%, 4%, and 5% respectively. At the date of the report, there were no successful applications under ss.67, 68 or 69 filed during the judicial year 2021/22, although the majority of cases for that year have not yet been determined.
The figures for 2021/22 also project an ever-increasing willingness from the Commercial Court to dismiss ss.67 and 68 challenges on the papers, as provided for under the O8.6 mechanism in the Commercial Court Guide and in accordance with the policy of “speedy finality” underpinning the Act. Although the sample size for completed applications in 2021/22 is relatively small, the proportion of cases dismissed on the papers is significantly higher compared to previous years.
It is interesting to observe that the “very significant” increases in applications under ss.67 and 68 show that the consistently low prospects of success and well-established summary dismissal procedures have not deterred parties from trying their luck. Whether the increase in applications is a product of greater risk appetite from award debtors or a larger universe of arbitrations seated in London is not a matter discussed in the report. However, Foxton J observed in November 2022 that “[i]t is reasonable to treat the movement in [arbitration application] figures as a proxy for developments in the number of arbitrations being held with a seat in England and Wales” (Commercial Court Users’ Group meeting).
* Statistics taken from the Commercial Court Report 2020-2021 and the Commercial Court Report 2021-2022