April 21, 2023

Commercial Court Report 2022: The Increasing Influence of Arbitration

The Commercial Court of England and Wales (the Commercial Court) recently released its annual report for 2021-22. Notably, the report charts a “very significant increase in the number of arbitration-related applications”, highlighting London’s status as a premier international arbitration centre.

Around 25% of the Commercial Court’s work in 2021-22 related to arbitration: 11% arose from challenges to arbitral awards, under sections 67 – 69 of the Arbitration Act 1996 (the Arbitration Act); 7% related to ‘other arbitration appeals/applications’; 4% concerned arbitration enforcement applications; 2% related to arbitration injunctions; and 1% corresponded with applications to appoint arbitrator.

Applications to Challenge Arbitral Awards on the Increase

The Commercial Court’s report provides that applications to challenge arbitral awards formed the bulk of its arbitration related work.

Through 2021-22 there were increases of:

  • 8% in applications under section 69 of the Arbitration Act (appeals on a point of law)
  • 54% in challenges brought under section 68 of the Arbitration Act (challenges alleging irregularity)
  • 59% in challenges brought under section 67 of the Arbitration Act (challenges to jurisdiction)

The Commercial Court’s report notes that the success rate of these types of application was low in 2020-21 (the last year where they could undertake a full analysis of closed applications). There was a:

  • 5% success rate for section 69 applications
  • 4% success rate for section 68 applications
  • 6% success rate for section 67 applications

We would expect the same types of success rate for 2021-22.

If adopted, it will be fascinating to see if the changes proposed by the Law Commission to section 67 of the Arbitration Act (referred to in our updates on the Law Commission’s first and second consultation papers) have a knock-on impact on the number, and success rate, of challenges to the arbitral tribunal’s substantive jurisdiction.

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