UK: Human Rights & Arbitration

Parties to a contract containing an arbitration agreement may be surprised to learn that their agreement could be affected by the Human Rights Act 1998. This Act incorporates the provisions of the European Convention on Human Rights (Convention) into UK domestic law.

The Human Rights Act entered into force on 2 October 2000. Although its implications have been widely reviewed little if anything has been written on its potential impact on UK arbitration procedure. It is generally assumed that the Human Rights Act does not apply to arbitration as it is a private dispute resolution mechanism, excluding the public courts, to which the parties consent.

On closer examination, however, there may be some cause for concern when choosing to arbitrate under English law, or for a party seeking to enforce a foreign arbitration award in the UK. Section 6 of the Act imposes a duty on public authorities, including courts and tribunals, to act in a manner compatible with the Convention. One of the rights protected under Article 6 of the Convention is the right to a fair trial, which was the subject of a recent appeal from an arbitral award to the Commercial Court.

In this case, Mousaka Inc v. Golden Seagull Maritime Inc and Another¹ the applicant had requested permission to appeal against an arbitration award in the High Court under the terms of Section 69 of the Arbitration Act 1996. Mousaka submitted that the majority decision in the award was "obviously wrong" on certain questions of law; or, in the alternative the questions were of general public interest and the decision was "in serious doubt." Mr Justice Steel refused permission to appeal without giving any reasons for his decision. He merely confirmed that the questions of law referred to by the applicant were not of general public importance and the arbitral decision was not wrong². The question to be decided was whether a judge, when refusing an appeal from an arbitration award, has a duty under the Human Rights Act to state his reasons in full. Mr Justice Steel concluded, having reviewed relevant case law under the Convention³, that the applicant had a right to know the reasons for refusing the appeal. However, Section 69 of the Arbitration Act clearly set out these grounds and no further elucidation was necessary.⁴ He dismissed the application although noting "the tentacles of the Human Rights Act 1998 reach into some unexpected places."

Another area that may need to be considered is the fact that arbitration applications are generally heard in private. This is in direct contravention of the right to a public hearing in Article 6(1). The European Commission of Human rights has already decided that the refusal of an application to have an arbitration hearing in a County Court held in public violated the fundamental right to a public hearing provided for in the Convention.⁵ What of the absolute right to an independent and impartial hearing under Article 6? Will this lead to increased challenges being made to arbitrators appointed by the parties or perhaps to the inclusion of a renunciation of the full application of that article in an arbitration agreement. The full impact of the Human Rights Act on arbitration procedures in the UK will emerge over time but its terms must be considered when entering into an arbitration agreement.