My Lords, I begin with an apology. I could not attend Second Reading because I was having my cataracts done. The happy consequence is that I can now see the Minister even more clearly on the Government Front Bench. I take this rather belated opportunity to welcome him to that place and to wish him well.
I declare two interests: first, as a barrister working in international commercial arbitration as both counsel and arbitrator. Secondly, in 2021, when I was in government, I invited the Law Commission to undertake this review of the Arbitration Act, to burnish what is generally regarded as a gold standard for an arbitration statute. It bears taking 30 seconds to put on record that the Law Commission is an underappreciated part of our legal landscape and does sterling work. Indeed, the Minister introduced earlier today the digital assets Bill, which also emanates from the Law Commission. The Government accepted all the Law Commission’s recommendations in this context.
I also pay tribute to my noble and learned friend Lord Bellamy, who, when he was a Minister, worked very hard on this issue and introduced a previous Bill before it fell, with others, at the general election. Nevertheless, this is a good Bill, and we should get it on to the statute book.
On the amendment before the Committee, the noble Lord, Lord Hacking, kindly referred to my role as counsel in the Nigeria v P&ID case. Of course, client confidentiality applies even now, but he was kind enough not to point out that I lost that case, and I am grateful to him for not making that clear. As to the other cases he mentioned, I appeared early on in the Mozambique litigation and acted in the Steinmetz proceedings before the ICSID tribunal in Paris. I also acted for BSG in the LCIA arbitration and the subsequent litigation in London. I won a number of those cases, fortunately.
Nobody wants corruption in arbitration—we all want to root it out—but we are not persuaded that the general duty either is necessary or would achieve its aims, for the reasons set out so clearly by the noble and learned Lord, Lord Hoffmann. It is not clear what arbitrators are meant to do; under Section 33 they already have a duty to resolve cases fairly, and if corruption disentitles a right to a remedy, the tribunal can say so.
As the noble and learned Lord, Lord Mance, pointed out, there are a number of issues here. Take a case where there is a London seat but the substantive contract is governed by Ruritanian law. Ruritanian law might regard as permissible that which English law regards as impermissible. Would this clause mean that the London-seated tribunal would have to decline to enforce or to give a remedy? The Act as presently drafted provides that public policy can trump an award in some cases. Section 103(3) deals with foreign awards, substantially reflecting Article V of the New York convention, and Section 68(2)(g) deals with appeals from London-seated arbitrations—that was a provision in the Nigerian case.
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But there is no definition of public policy, and in the noble Lord’s amendment there is no definition of what is meant by either “fraud” or “corruption”. That is not a straightforward matter. Take the case of Soleimany v Soleimany, where something that was regarded as entirely proper under the substantive law was regarded as
“contrary to English public policy”,
so the court refused to enforce the award because it conflicted with our rules about illegality in contracts. In that case, the court specifically left open the question of what the position would have been if the tribunal had considered the illegality point specifically and had found it not to disentitle the claimant to relief.
We are not able to support this amendment. However, we respectfully invite the Minister to consider the suggestion made by the noble and learned Lord, Lord Mance, of encouraging a tribunal to inform the authorities when appropriate; a nudge from the relevant arbitral bodies might be helpful there. Those bodies might also remind tribunals to be aware of the risks of corruption. As my noble and learned friend Lord Bellamy mentioned, we await the ICC response to the various consultations. We also look forward to the Minister’s response to my noble and learned friend’s questions about the questions which he asked when he was a Minister and to which we do not yet have any answers.