Judicial review under the UK and US Arbitration Acts: Is arbitration a better substitute for litigation?

Abstract

This paper will examine and analyse the respective arbitration acts of England and the U.S. with a view to determining which one of the jurisdictions provides a better system for confirmation, vacation and modification of arbitration awards. In order to attain this objective, the central issues will be whether judicial review is adopted in any of these jurisdictions, and if so, whether this adversely affects the speed and costs of arbitration. Consequently, in the first section, the US Federal Arbitration Act will be examined in order to determine the answer to the former question. In this respect, particular attention will be paid to the recent Supreme Court decision in Hall Street Associates v. Mattel Inc, inasmuch as the ruling has made a drastic impact on this matter. In this section, it will be concluded that the U.S. law does not recognise judicial review for error of law, and the U.S court’s reliance on the “manifest disregard of law” as a ground for the vacation of an award has now considerably reduced with the highlighted decision.

In the second section, the legal position under English law will be examined in light of the UK Arbitration Act. As a consequence, the paper will reveal the fact that the English approach pertaining to this issue is strikingly different from that in the U.S. law, as the English courts still retain the right to review the award for error of law.  After setting forth the parties’ positions in both jurisdictions, which jurisdiction is favourable for the parties seeking to arbitrate with less costs and delays will be discussed.