My Lords, before I address my amendment, I would like to express to your Lordships complete support for this Bill. I had the honour to be a member of the Special Public Bill Committee, so ably chaired by the noble and learned Lord, Lord Thomas. I sat through all the hearings and then sat with my co-members of the committee throughout our deliberations.
Perhaps I can do no better in expressing my support for the Bill than to quote from the Explanatory Notes. Paragraph 6 reads as follows:
“The intent of the Bill is to further the principle found in section 1 of the Arbitration Act 1996: to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense. Thereby, the aim is to fulfil the policy objective of ensuring that the Act is fit for purpose and that it continues to promote the UK as a leading destination for arbitrations”.
I now move to my amendment and, as I do so, I express thanks to my learned friend—or rather, my noble friend—the Minister. Unfortunately, he does not take the “learned” with his name, although he is very learned. I am very grateful to him for his letter to me of 15 August on the corruption issue. I have read the entire contents of that letter and express gratitude without reserve, but I am afraid to tell your Lordships—for reasons that I will now develop—that the reply in this letter is not complete.
First, we must look at the extent of corruption and I am afraid that it is bad news. There is the Nigeria case and the judgment of Mr Justice Robin Knowles on 23 October 2023; nobody in this Committee knows more about that case than the noble Lord, Lord Wolfson of Tredegar, KC, who took the role of a senior counsel throughout the long hearings before Mr Justice Knowles. The fact is, however, that in the arbitration proceedings resulting in that case, there were two very distinguished English arbitrators—former judges of the High Court—who made a very large award of $11 billion. Because of the corruption that was found by Mr Justice Robin Knowles, that very large award had to be set aside in its entirety.
Moreover, this is not the only case where corruption has evidenced itself. The charity under the title of Spotlight on Corruption has identified three recent cases in which serious corruption was found. There was the Mozambique case before the UK Supreme Court in September 2023; the Steinmetz case before the ICSID tribunal in Paris in May 2022; and the BSG case before the LCIA in April 2019. So this is a serious problem and I remind your Lordships of what I said at Second Reading: that I have had experience as an arbitrator in commodity arbitrations relating to Ukraine and Russia, where corruption was most evident, often with the bribing of officials to obtain export licences.
4.15 pm
Facing all of this, I am offering a very simple measure, which will show the international community that corruption or fraud in all arbitrations where the seat is England is quite unacceptable. It will not stop corruption in arbitration, but it will place, as it were, a firm flag in the ground. How will it work? What should the arbitral tribunal do? If I was sitting as a chairman of an arbitral tribunal, or as a sole arbitrator, at the commencement of the arbitration—when traditionally the tribunal draws together all the parties and counsels to settle the terms of the proposed arbitration—I would say to the counsel in the hearing and the parties involved in the dispute that there should be no taint of corruption and fraud. I know this from my days as a counsel and solicitor. When a counsel or solicitor takes instruction from a client and prepares witness statements, there is plenty of opportunity to smoke out potential acts of corruption and fraud. I suggest that this should be addressed now and not in some distant opportunity for arbitral reform.
As I said at Second Reading, I have been involved in arbitration law reform for a very long time—since 1978, 46 years ago. Looking at the time between the 1979 Act, for which I had a lot of responsibilities, and the 1996 Act, in which I also had responsibility, that is a period of 17 years. The period between the 1996 Act and now is 28 years. It is essential that we address the issue now in this Bill.
I know the Minister is rightly anxious to get this Bill without delay on to the statute book, and I commend him strongly for that. However, there will not be any significant delay. One of the Whips is moving their hand; I was wondering if that was addressed to me, but apparently it is not. The reason there would not be a significant delay is because of what I envisage, if the Minister will assist. This very simple amendment should
be sent before all the bodies that appeared before the Committee chaired by the noble and learned Lord, Lord Thomas. Each of those parties—the Chartered Institute of Arbitrators, the London Court of International Arbitration, the ICC and so forth—should have an opportunity to express their views. Following the request from the noble and learned Lord, Lord Bellamy, when he was the Minister, letters were sent out and received in reply from the main institutes on the issue of corruption, but that was a wide remit. This is a very precise and small remit—namely, the wording of my amendment.
It will not be possible, unfortunately, for the Committee chaired by the noble and learned Lord, Lord Thomas, to meet again. However, answers can be easily obtained if my noble friend the Minister would kindly help. The House would then know the answers, within a month of responses being received, on the drafting of my amendment. Above all, I ask my noble friend the Minister to have an open mind. As far as we know, unlike last time, this Government are not under pressure as there is no danger of a sudden Dissolution, so there is time to make proper inquiries so that this very important amendment is included in the Bill. I beg to move.