My Lords, I thank the noble Lord, Lord Wolfson, for welcoming me to my current position; I am very glad that he has 20/20 eyesight and is looking at these matters so closely. I am also thankful to my noble friend Lord Hacking for initiating this debate. He said very clearly when he introduced his amendment that he supports the Bill, and I am grateful for that. He is again raising the issue of protecting the arbitral process against corruption, and of course that is extremely important. Having considered this very carefully, the Government’s position is that our framework already provides a robust regime and that no law reform is necessary. A tribunal, like a court, must always guard against fraud and corruption, and I will explain what mitigations our existing regime already provides.
Under Section 33 of the Arbitration Act 1996, the tribunal is already under a duty to “act fairly and impartially”, and to
“adopt procedures suitable to the circumstances of the … case”.
An arbitrator who is corrupt would fail in their duties under Section 33. Furthermore, the arbitrator’s appointment can be revoked by the parties under Section 23, or an arbitrator can be removed by the court under Section 24. An arbitrator who acts in bad faith loses their immunity under Section 29 and can be sued.
When arbitral proceedings are tainted by fraud or corruption in the arbitral process, any arbitral award can be challenged in court under Section 68 for serious irregularity, as indeed was successfully done in the recent case of Nigeria v P&ID, which we heard about earlier. Indeed, the reason why arbitral corruption is currently a talking point is that the court identified corruption and prevented abuse in that case. Arbitral awards can also take account of corrupt conduct and deprive a corrupt party of any arbitral award which is sought to permit fraud or corruption. It would be unenforceable as contrary to public policy under Section 81. It is possible for an arbitrator to publish their award and denounce the fraud publicly. In ruling an award to be unenforceable, the court can also publish its judgment publicly. The scheme under the 1996 Act is sufficient and has not revealed any deficiency in practice.
The Government oppose legislative reform here precisely because it is unclear what additional benefit it would provide over the current regime, which provides both parties and arbitrators with routes to challenge and address corrupt conduct, as well as duties on the arbitrator to ensure fair and proper proceedings. A new, untested measure may simply introduce uncertainty for both parties and arbitrators.
The 1996 Act and the modernising impact of this Bill are designed to ensure robust and efficient arbitral proceedings. Our framework provides this balance and well equips the tribunal and courts to deal with corruption. The Government will continue to support the sector’s efforts on arbitral corruption. We will keep track of initiatives that are under way, such as that of the ICC anti-corruption task force, to which a number of noble Lords referred, and engage with the sector to push for the swift adoption of best practices as they are developed. I hope that this explanation reassures my noble friend and that he will withdraw his amendment.
To go a little further, as noble Lords are aware the previous Government wrote to leading arbitral institutions seeking views on the mitigations that are currently in place and whether more are needed. I understand that responses were received from the Chartered Institute of Arbitrators, the International Chamber of Commerce, the London Court of International Arbitration, the London Maritime Arbitrators Association and the Grain and Feed Trade Association, in addition to the Law Society and the Bar Council.
All those institutions mentioned mitigations they had in place against corrupt conduct. None expressed support for amending the Arbitration Bill to strengthen anti-corruption. In addition, concerns were raised that a one-size-fits-all approach would be ineffective and risk unintended consequences. Nigeria v P&ID was raised as a highly unusual case where the court effectively performed its proper role in setting aside the award. Where a role was suggested for the Government, it was in ensuring that the courts continue to be equipped to provide checks in cases put before them, as they did in the Nigeria case, and to engage in discussions with the sector and promote its work combating corruption.
The noble and learned Lords, Lord Bellamy and Lord Thomas, and the noble Lord, Lord Beith, raised the issue of the letters and whether they could be published. I am unable to share those letters. The noble and learned Lord, Lord Bellamy, can see the letters that were responded to when he was a Minister, but they were written specifically to him in that role. I would not necessarily be able to see those letters, which would create a difficult situation. I understand that a couple of letters came in when the new Government were formed. But I can say with complete confidence that the substance of those letters was explained and explored within the letter that I wrote to the noble and learned Lord, Lord Bellamy, which is in the public domain. I am confident that if I was wrong somehow in asserting that the substance was inaccurate, those various bodies would be able to draw that to my attention. I am confident that the substance of the letter I wrote on 15 August is completely accurate. I hope that noble Lords will accept that.
A number of noble Lords spoke of their reasons for opposing my noble friend’s amendment. They said that it might well be duplicative, unnecessary and problematic in various ways, which they explored. I have to say that I agree with the noble Lords who made those points.
In closing on one point, the noble Lord, Lord Wolfson, asked about relevant arbitral bodies being given a nudge regarding corruption. They are of course perfectly able to do that. It would be beneficial, and maybe they should remind themselves that they have that responsibility to give a nudge if they suspect corruption in particular cases. So, having said all that, I ask my noble friend to withdraw his amendment.