My Lords, I thank the noble Lord, Lord Whitty, and the noble Lord, Lord Browne, for these amendments. Regarding the amendment tabled by the noble Lord, Lord Whitty, for reasons I shall explain, we do not believe it should be possible for third parties to refer disputes to arbitration. Clause 2
simply supplements the arbitration provisions in the groceries supply order 2009. Article 11 of the order does not allow a trade association or other third party to refer a dispute to arbitration so, if we provided that in the Bill, we would be departing from the order. In any event, we do not think that it is right that a third party should be able to refer a dispute to arbitration. A dispute is between a retailer and a supplier, not with a third party. If a supplier seeks compensation or some other remedy for its own benefit, it should come forward to submit the dispute to arbitration itself and on a named basis. This is consistent with the normal way in which disputes between two parties are resolved. Any other approach would risk unfairness to the retailer concerned. However, a trade association or other third party will be able to complain to the adjudicator if it considers that a retailer has breached the code. The adjudicator could then take that information into account in deciding whether to commence an investigation. That is how third parties can get involved. There is a distinction between arbitrations, which must be between retailers and suppliers, and investigations, where the adjudicator will be able to consider information from any source, including trade associations.
The remainder of my remarks are now directed more to the amendment of the noble Lord, Lord Browne, concerning the process for appointing an arbitrator, and to explaining why his amendment is not necessary. As I say, Clause 2 supplements the 2009 order. Because the order and the Bill provide for arbitration between retailers and suppliers, the arbitrations will be statutory arbitrations for the purposes of the Arbitration Act 1996 for England, Wales and Northern Ireland and of the Arbitration (Scotland) Act 2010. In the latter case, Clause 21(6) applies the provisions of the 2010 Act, pending that Act coming into force in relation to arbitrations under the Bill.
Section 94 of the Arbitration Act 1996 applies the provisions of Part I of that Act to every statutory arbitration, but this is subject to the adaptations and exclusions in Sections 95 to 98 of that Act. Also, the provisions of Part I will not apply to the extent that they are inconsistent with the groceries supply order 2009 or with the Bill; that is why I used the word “broadly” in referring to Section 94 in Committee. In Scotland, the effect of Section 16 of the Arbitration (Scotland) Act 2010 is similar in applying the Scottish arbitration rules set out in Schedule 1 to that Act to arbitrations under the 2009 order and the Bill. Again, there are certain exceptions set out in Section 16 and, again, the Scottish arbitration rules will not apply to the extent that they are inconsistent with the groceries supply order or the Bill; that is also why I used the word “broadly” in referring to Section 16 in Committee.
I will briefly give a couple of examples of inconsistency. The mechanism for the appointment of an arbitrator in Clause 2 of the Bill and provisions in Article 11(7) of the order for the payment of the arbitrator’s costs will each take precedence over provisions in the Arbitration Act 1996 and the Scottish arbitration rules about appointment and costs. I should also explain at this point that Article 11(6) of the order provides for the arbitration to be conducted in accordance with the
rules of the Chartered Institute of Arbitrators or any other dispute resolution body nominated by the appointed arbitrator. The rules of the relevant dispute resolution body and/or provisions of Part I of the Arbitration Act 1996 and the Scottish arbitration rules will protect the parties against the risks of the arbitration being carried out by an arbitrator who is not capable, impartial and fair. I refer in particular to Sections 24, 33 and 68 of the Arbitration Act 1996 and to rules 8, 10, 12, 24 and 68 of the Scottish arbitration rules.
In addition, it is worth noting that the adjudicator, as a public authority, must act reasonably and respect the right of the parties to a fair trial in appointing any arbitrator. Those duties will also act as a safeguard against the appointment of an arbitrator who is not capable, impartial, independent and fair. All that means that the amendment tabled by the noble Lord, Lord Browne, is not necessary.
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On a minor point, we have noted that in at least one respect it would be sensible to bring Article 11 of the order up to date to reflect the Arbitration (Scotland) Act 2010. Article 11(8) refers to Sections 67 to 69 of the Arbitration Act 1996 but not to the similar provisions of the Arbitration (Scotland) Act 2010, which of course came after the order. The Government will therefore consider whether this updating could usefully be facilitated by a minor and technical amendment to our Bill.
Clause 21(6) is a slightly unusual provision but it provides a practical solution to an issue which in our view is technical and uncontroversial. For the reasons I have explained, we want the Scottish arbitration rules in the Arbitration (Scotland) Act 2010 to apply to arbitrations between a retailer and a supplier which take place in Scotland. That will make the position in Scotland similar to the position which applies in England, Wales and Northern Ireland under the Arbitration Act 1996. However, the provisions of the 2010 Act which will bring this about are not yet in force in relation to statutory arbitrations such as these.
As explained in the Explanatory Notes, Clause 21(6) therefore applies the 2010 Act to arbitrations under the order and our Bill as if the 2010 Act were in force, until it is in force. At that point Clause 21(6) will fall away. Therefore, the effect is similar to the commencement of the relevant provisions of the Arbitration (Scotland) Act 2010, but only for that clear and very limited purpose. Therefore, I suggest that Clause 21(6) is a practical solution to what is essentially a timing difference connected with the Scottish arbitration rules, and one which is very specific to the needs of our Bill. I suggest that the position under the 2010 Act is clear.
The question has been raised of whether Clause 21(6) should be the subject of a legislative consent Motion under the Sewel convention. Our view is that the convention is not triggered. The Bill relates to matters of competition law and is a reserved matter. It does not fall within the legislative competence of the Scottish Parliament because, although arbitration generally is a devolved matter, the Scottish Parliament could not provide for matters of arbitration only by the adjudicator or a person appointed by the adjudicator. I hope that I have not spoken too fast for noble Lords to take in the
points that they deeply need and, with all those explanations in place, I request that the noble Lord withdraws his amendment.