Contents Volume 74 Number 4 November 2008 Contributors iv Editorial 347 Articles Some Thoughts on the Scottish Arbitration Code 2007 FraserDavidson 348 Time Limits for Appealing Against or Challenging an Arbitral Award in England and Wales DavidAltaras 360 Electronic Discovery/Disclosure: From Litigation to International Commercial Arbitration CherSeatDevey 369 Resolution of Patent and Technology Disputes by Arbitration and Mediation: A View from the United States CraigMetcalf 385 Mediation Privilege and the EU Mediation Directive: An Opportunity? DavidCornes 395 Lectures and Addresses Alternative Dispute Resolution: An English Viewpoint LordPhillips 406 The Future Of Civil Mediation SirAnthony Clarke 419 Discussion Ignoring the Elephant in the Room: International Arbitration—Corporate Attitudes and Practices 2008 MichaelMcilwrath 424 The Development of Commercial Law Through Case Law: Is Section 69 of the English Arbitration Act 1996 Stifling Progress? PaoloEsposito 429 Notes and Reports Arbitration of Antitrust Claims in the United States and Europe ChristopherChinn 439 The Mediation Directive: What Will it Mean for Us? GordonBlanke 441 Legislation and Guidelines Legislative Proposals Could Significantly Alter Arbitration in the United States MarkKantor 444 ii  The Chartered Institute of Arbitrators 2008 Cases The Enforcement of Adjudicators’ Awards under the Housing Grants Construction and Regeneration Act 1996: Part 29 KennethT.Salmon 453 Confidentiality in English Arbitration: The Final Word? EmmottvMichael Wilson&PartnersLtd HewR.Dundas 458 Dismissal of a Claim for Claimant’s Inordinate and Inexcusable Delay: TAG WealthManagementvWest HewR.Dundas 467 Book Reviews Sir Peter Coulson ConstructionAdjudication NicholasGould 472 Cyril Chern ChernonDisputeBoards:PracticeandProcedure NicholasGould 472 Gordon Blanke ArbitratingCompetitionLaw Issues:AEuropeanand aUSPerspective AnitaLukaschek 473 Karl Mackie, David Miles, William Marsh and Tony Allen TheADR PracticeGuide:CommercialDisputeResolution GordonBlanke 475 Stewart Shackleton ArbitrationLawReportsandReview2001and2002 TheEditor 477 iii Contributors DAVIDALTARAS: FCIArb;barrister,36BedfordRow,London;RecorderoftheCrownCourt; chartered arbitrator. GORDONBLANKE: MCIArb; solicitor; associate, International Arbitration Group, SJ Berwin LLP, London. CHRISTOPHERCHINN: associate, Baker & McKenzie LLP, New York. SIRANTHONYCLARKE: The Master of the Rolls and Head of Civil Justice. DAVID L. CORNES: FCIArb (Arbitration and Mediation); AKC; FICE; solicitor (non- practising); Panel of Independent Mediators; member, Board of Management, CIArb. FRASERDAVIDSON: Professor of Law, University of Stirling. CHERSEATDEVEY: MCIArb (Arbitration and Mediation); independent IT Consultant. HEW R. DUNDAS: FCIArb; Immediate Past President, CIArb; chartered arbitrator; CEDR- accreditedmediator;PresidenteHonorario,CentroInternationaldeArbitrajeeMediacio´n, Quito. PAOLOESPOSITO: FCIArb, solicitor & avvocato, Studio Legale Esposito, Naples. MARKKANTOR: arbitrator; adjunct professor, Georgetown University Law Center; Fellow, ColumbiaProgramonInternationalInvestment,ColumbiaLawSchoolandEarthInstitute, Columbia University. CRAIGMETCALF: registered patent attorney and mediator, Kirton & McConkie, Salt Lake City, Utah. MICHAELMcILWRATH: senior litigation counsel, GE Oil & Gas, Florence. LORDPHILLIPSOFWORTHMATRAVERS: Lord Chief Justice of England and Wales 2005–2008. KENNETHT.SALMON: MCIArb; solicitor; partner, Mace and Jones, Manchester. iv (2008) 74 ARBITRATION 4 Editorial As I come to write this at the end of July, for the number which will complete the 2008 Volume,Icanreportwithconfidencethatnotonlythequantityofsubmissionshasincreased, so that I have more to choose from, but that the quality has also improved. Every reader has the right to judge whether the standard is improving but the system of peer review of articlesisworkingwelltoensureit.Peerreviewers,unpaidandanonymous,arecontributing their wise and generous criticism, which authors without exception so far have accepted with gratitude and with equally open minds. That process is naturally confidential but I want to give readers at least a glimpse of the quality of the interchange. For me it is a specialprivilegetoseeitatwork.Itconfirmsmyconvictionthatforthebetterpractitioners, whatever their primary profession, there is no conflict between theory and practice. They look to their practice for their theory; they then test their theory by how it stands up to practicalapplication;ifitsurvivesthattesttheyapplyitintheirdailywork.Theysharetheir ideas and are happy to subject them to criticism. If they do not spend part of their lives in academia, they may blush to be called scholars but that is what they are. Of course, there are bad scholars as well as good, as there are bad lawyers or surveyors or engineers. The point is that they are judged here asscholars and found by theirpeers to be sound. The five articles in this number cover a wide range: time limits for appeals in England and Wales (Altaras); statutory developments in Scotland (Davidson), patents in the United States (Metcalf); electronic discovery internationally (Devey); and the new EU Mediation Directive (Cornes), which is also the subject of a report by Gordon Blanke on a seminar at SJ Berwin. I must also thank David Cornes for alerting me to the recent speeches of the Lord Chief Justice and the Master of the Rolls and thank them for agreeing to their publication here. I can think of nothing that could better show the willingness of our top judgestodiscusscurrentproblemsopenlyandhelpfully.Letnobodypretendnowthatthere is a conflict between theory and practice! This is just the kind of thinking that everyone working in dispute management needs now. Who does not want to know what the courts will do with Halsey? One of the ambitions of this journal is to foster debate. It has proved hard to sustain worthwhile argument about the topics raised in our “Discussion” section. I shall despair if the two contributions to this number fail to provoke a response. Michael McIlwrath, who in these pages has come to represent the users of dispute resolution, denies the validity of the Queen Mary-Price Waterhouse study of corporate attitudes. Paolo Esposito attacks the opinions on the use of s.69 which we usually express in these pages. Don’t you want to challenge them? We don’t print “letters to the editor” but any argued response will be welcomed. Mark Kantor has tried to keep us up to date with recent legislative proposals in the United States which, if they proceed, will make sure that no one who can choose, and is properly advised, will make an agreement to arbitrate there. Christopher Chinn reports on developments in the arbitration of antitrust claims there. Ken Salmon continues his coverage of adjudication cases; Hew Dundas deals with two topics of immediate importance: delay and confidentiality. Iamdelightedtoendbythankingournewbookrevieweditor,GordonBlanke,forsetting upanimprovedschemeforallaspectsofreviews.Thoseinthisnumberareevidenceofhis work. The editorial board is delighted to welcome him as a member. DerekRoebuck Editor November2008 347 SOME THOUGHTS ON THE SCOTTISH ARBITRATION CODE 2007 Articles Some Thoughts on the Scottish Arbitration Code 2007 byFRASERDAVIDSON 1. INTRODUCTION November2007sawthelaunchofthenewScottishArbitrationCodebytheScottishBranch oftheInstitute.Thisreplacesthe1999versionoftheCode,whichwaspromulgatednotonly bytheBranchbutalsobytheScottishCouncilforInternationalArbitrationandtheScottish BuildingContractCommittee.ThenewCodeisalsoknownastheScottishArbitrationRules 2007.Thisishelpful,asindividualslikemyselfwillnolongerneedtoexplaintoourforeign students why the “Code” has no actual legislative status, but only applies if adopted by the parties. The Code was originally designed to apply in the construction and engineering industries, and while it was ultimately decided that it could apply in all forms of arbitral proceedings, its origins may be detected in certain provisions. This short article does not seek to provide a comprehensive survey of the Code, but rather seeks to draw attention to noteworthy features and the questionsthat may be raised thereby. 2. THE SCOTTISH CONTEXT Itisinterestingthat,intheabsenceofagreement oftheparties,thearbitratorhas thepower under art.9 to fix the seat of the arbitration, with the implication that Scotland may not be the chosen seat, since in certain other respects the Code seems to proceed on the basis that Scotsprocedurallawwillbeapplicable.Itseemsunlikelythatpartiestoarbitrationsoutside of Scotland would contemplate invoking the Scottish Arbitration Code, and it is submitted thatitsmainbenefitwillbetoprovideaframeworkfortheconductofarbitrationinScotland whichavoids,insofarasthisispossible,thepitfallsthatawaitunwarypartieswhochoose to arbitrate in Scotland. It is therefore usefulto sketch briefly thecontextin which theCode willmainly operate. Scotland is one of those rare jurisdictions that lacks a comprehensive arbitration statute. There is indeed legislation that deals with arbitration, but this is fragmentary and designed to deal with specific problems. This it does not always successfully and sometimes quite ineptly.1 Theoldestlegislationtouchingonarbitrationdatesbackto1695andisalarmingly archaic. It should of course be mentioned that this view is subject to the major corrective that in 1990 Scotland adopted the UNCITRAL Model Law on International Commercial Arbitration,2 andthatpartiestoanarbitrationagreementthatwouldnototherwisebesubject to the Model Law may contract into its provisions. The version of the Model Law that appliesinScotlandistheoriginalversion,withafewquestionableadaptations,3 noaccount being taken of the amendments that UNCITRAL made to the Model Law in 2006. 1 See Fraser Davidson, “The Law Relating to the Operation of Arbitral Tribunals—Room for Improvement?”(1989)57ScottishLawGazette 42. 2 By virtue of s.66 and Sch.7 to the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990. 3 See generally Fraser Davidson, International Commercial Arbitration: Scotland and the UNCITRALModelLaw (Edinburgh:WGreen,1991). 348 November2008 (2008) 74 ARBITRATION 4 Ofcourse,evenifpartiesdochoosetocontractintotheModelLaw,itisnotthecasethat every aspect of the arbitral process will be governed by the Model Law. The Model Law is, after all, a partial law, which operates within the context of the domestic legal regime governingarbitration,i.e.theScotscommonlawofarbitration.Here,freshdifficultiesareto be found since in an extraordinary number of respects the Scots common law of arbitration either provides no answers to commonplace questions regarding the practice of arbitration, or provides answers that are entirely unhelpful.4 It is therefore very important to be able to arbitrate under a set of rules such as the Scottish Arbitration Code, which recognises the problems created by the Scots common law of arbitration and seeks to overcome them, although,aswillbeseen,itisnotalwayspossibletoremedy thedeficiencies ofthelawvia agreement. It should be added that it is certainly not the case that the Scots are indifferent to the inadequacies of their law. The Scottish Advisory Committee on Arbitration Law, which had recommended that Scotland adopt the Model Law, went on to consider the weaknesses of the Scottish Domestic Law of Arbitration5 and eventually produced a draft Arbitration Bill in 1996.6 This remained unenacted, but the appearance of radical, modern arbitration legislationinavarietyofotherjurisdictionspromptedtheScottishCouncilforInternational Arbitration and the Scottish Branch of the Institute to produce a more ambitious and wide- rangingArbitrationBillin 2002.Thiswouldhaveserved to curepracticallyall ofthewoes oftheScotslawofarbitration.AlthoughthisBillalsoremainsunenacted,itisbelievedthat arbitration law reform is on the agenda of the new Scottish Government, and the Bill is likely to providethe template for any future legislation. ThedeficienciesofexistingScotsLawandhowthesemightberemediedbytheBillwere thesubject ofa masterly analysisin an article which appeared in this journal in 2004,7 and readers are referred to that article for an overview of the Scots law of arbitration and the provisionsoftheBill.Frequentreferencewillbemadetothoseprovisionsinexaminingthe Code, certain of the articles of which are patently inspired by the Bill. 3. KEY POWERS As might be expected, many of the provisions of the 1999 version are repeated in the new Code. Thus, for example, the arbitrator is given certain powers which he would certainly nothaveunderthelawofScotlandintheabsenceofagreement,suchasthepowertoaward damages,8thepowertoawardinterest,9thepower,ifsorequestedbyaparty,toorderinterim measures suchas theprovisionofsecurityfortheamount indisputeorforexpenses,orthe preservation, storage, sale or disposal of property under the control of a party and relating 4 See Fraser Davidson, “International Commercial Arbitration in Scotland” (1992) Lloyd’s MaritimeandCommercialLawQuarterly 376 5 TheOperationofArbitrationinScotlandinlightoftheUNCITRALModelLaw1990. 6 ConsultationPaperonLegislationforArbitrationinScotland1997.ForcommentaryseeFraser Davidson,“TheDraftArbitrationBill”(1997)2ScottishLawandPracticeQuarterly 171. 7 LordDervairdetal.,“ArbitrationinScotland—ANewEraDawns”(2004)70Arbitration 115. 8 ScottishArbitration Code1999art.12.3.Authorityforthe viewthatanarbitratorhasnosuch inherentpowerunderthelawofScotlandisprovidedbyAberdeenRyCovBlaikieBros (1853) 25D.(H.L.)20.Suchapowerwouldbeconferredbycl.22(1)(b)oftheBill. 9 While an arbitrator does haveanimplied powerto award intereston sumsdue from the date of his decree until payment, there is no such implied power to award interest on sums prior tothatdate—seeLordDunparkinJohnGMcGregor(Contractors)LtdvGrampianRegional Council 1991S.L.T.136at137L.ScottishArbitrationCode1999art.12.5,echoingcl.22(1)(d), of the Bill, empowers the arbitrator to order that simple or compound interest be payable at suchrateorratesandinrespectofsuchperiodasthearbitratordeterminestobeappropriate, withoutbeingboundbytheprevailinglegalratesofinterest. November2008 349 SOME THOUGHTS ON THE SCOTTISH ARBITRATION CODE 2007 to the subject matter of the arbitration,10 the power to rectify the terms of any contract,11 the power to correct clerical and similar errors in the award,12 and the power to make an additional award to cover claims presented but omitted from the award.13 The arbitrator is also given powers the existenceof which would at the least be doubtful,such as the power to make interim or partial awards.14 It is interesting that art.1.5.2 of the Code states quite baldly that a “single arbitrator shallbeappointed”,ratherthanathree-arbitratortribunalasiscommonplaceininternational arbitration. Whilethe parties could no doubt vary this rule by agreement, all the provisions of the Code, including those relating to the failure of appointment procedures, contemplate only a single arbitrator.15 This strengthens the supposition that, despite the occasional nod in favour of internationalism,theCode is essentially designed for domesticuse. 4. THE ARBITRATOR By virtue of art.3(1), the arbitrator may be a natural person of full age and capacity of whatever nationality. This may seem in part to be stating the obvious, but serves to deal withthoseScotsdecisionswhichindicatethataminor16 oranunincorporatedbody17 canbe validlyappointedasanarbiter.IfScotlandisnottheseatofthearbitration(andperhapseven where it is) the question may arise as to what legal system should determine whether the 10 See Scottish Arbitration Code 1999 art.16. Where a party fails to comply with suchan order thetribunalmaydismissanyclaimorcounter-claimordisallowanydefence—art.16(3).While art.17(1)oftheversionoftheModelLawwhichappliesinScotlandindicatesthatthetribunal may, at the request of a party order any party to take interim measures of protection, and to provideappropriatesecurityinconnectionwithanysuchmeasure,itissilentastowhatthose measures might be, so that the Code is useful in making this explicit. The 2006 version of the Model Law, which contains a number of detailed provisions regarding interim measures, has notbeenadoptedin Scotland.The Arbitration Bill 2002would dealwith suchmatters in cl.21(3)–(6). 11 To the extent permitted by the law applicable to it—Scottish Arbitration Code 1999 art.12.4. WhileanarbitratorwouldhavenoinherentpowerofrectificationunderScotslaw,therewould appeartobenoreasontosupposethatsuchpowercouldnotbeconferredbyagreement.Clause 22(1)(c)oftheArbitrationBill2002isinsimilarterms,butdoesnotactuallyindicatethatan arbitratoristohavethatpowerunderScotslaw. 12 See Scottish Arbitration Code 1999 art.19. A similar powerexists underArt.33(1)–(2) of the Model Law and would be conferred by cl.37 of the Bill, but probably does not exist under domesticlaw—SimpsonvStrachan (1736)Mor.17007.Butsucherrorsdonotaffordaground forreducinganaward—MorisonvRobertson (1825)1W.&S.143. 13 SeeScottishArbitrationCode1999art.19.AsimilarpowerexistsunderArt.33(3)oftheModel Law,butnotunderdomesticlaw.Indeedafailuretodealwithallclaimssubmittedisaground for reducinganaward—PollichvHeatley 1910S.C. 469.TheArbitration Bill 2002doesnot addressthisissue. 14 See TaylorWoodrowConstruction(Scotland)Ltdv SearsInvestmentTrustLtd (1992) S.L.T. 609. While Art.32(1) of the Model Law in referring to “final” awards seems to contemplate thatothersortsofawardsmaybemade,itprobablyleavesthequestionofwhetheratribunal actually has power to make such awards to domestic law. Clause 22(1)(a) of the Arbitration Bill2002wouldconferpowertomakeinterim,provisionalorpartialawards. 15 The Arbitration Bill 2002 cl.9 contains default appointing procedures in respect of tribunals involvingone,two orthreearbitrators. Thisis agreatimprovementupontheexistingdefault provisionsfordomesticarbitrationcontainedintheArbitration(Scotland)Act1894,whichare seriouslydeficient—seeFraserDavidson,“AppointingArbiters—ReinforcingtheLaw”(1989) ScotsLawTimes 373. 16 Gordonv Earlof Errol (1582) Mor. 8915. This may now be incompetent under the Age of LegalCapacity(Scotland)Act1991.TheArbitrationBill2002wouldnotaddressthisissue. 17 BremnervElder (1875)2R.(H.L.)136.Undercl.8oftheArbitrationBill2002onlyanatural personcouldactasarbitrator. 350 November2008 (2008) 74 ARBITRATION 4 arbitrator is of full age and capacity. There is also the question of what “full age” actually means,andhow,ifatall,itdiffersfromcapacity.Thequestionofnationalityunderart.3(1) mustpresumablybesubjecttotherequirementunderart.3(2)thatthearbitratormustbeand remainindependentandimpartial,sincesituationscanbeenvisagedwherenationalitywould have a direct bearing on such issues.18 It is notable that an arbitrator requires to be both independent and impartial,19 especially in light of the decision of the framers of the Arbitration Act 1996 to refer only to lack of impartialityasagroundforremovinganarbitratorins.24(1)(a).Explainingwhyareference to independence was not included, the Departmental Advisory Committee on Arbitration Law observed20 that its inclusion: “[W]ouldgiverisetoendlessarguments,asithas, forexample,inSweden andtheUnited States, where almost any connection (however remote) has been put forward to challenge theindependenceofan arbitrator.” OnepossiblereasonforitsinclusionisthatthefactthatArt.6(1)oftheECHRspeaksofan entitlementtoan “independentand impartial”tribunal,albeit thatthiswas obviouslynot an argument which commended itselfto the Government in passing the 1996 Act. 5. CHALLENGING THE ARBITRATOR Where an arbitrator is challenged on the basis of justifiable doubts as to his independence or impartiality, then in terms of art.4.3 he may decide to withdraw, and must do so if the other party agrees with the challenge.21 Otherwise, art.4.4 contemplates that the arbitrator shallinthefirst instancedeterminesuchachallenge.Thesame istrueifthechallengeisto the arbitrator’s jurisdiction, including any claim that the arbitration agreement is invalid or non-existent.22 Article 4.5 further provides that an arbitration clause is to be treated as an agreementindependentoftheothertermsofthecontract,andadecisionthat,“thearbitration clause is null and void shall not for that reason alone render the arbitration clause invalid”. 18 And certain institutional rules demand that if the parties are of different nationalities, the arbitratorcannotbeofthesamenationalityasaparty,unlessthepartiesagreeotherwise,e.g. LCIARulespara.6.1. 19 Although the author must concedethat other institutional rules feature a similar requirement, e.g. LCIA Rules para.5.2. Indeed the IBAGuidelinesonConflictsofInterestinInternational Commercial Arbitration (2004) also demand that every arbitrator must be and remain independent of the parties—Guideline 1. The Guidelines provide very detailed guidance of what is meant by independence and impartiality, with examples of the sorts of relationships and behaviourwhich would, might or would not compromise thosestandards.It is a perhaps a pity that the Code does not provide similar guidelines in an annex,or else invoke the IBA Guidelines.Clause13(1)(a)oftheArbitrationBill2002wouldrenderitagroundofchallenge thatcircumstancesexistthatgiverisetojustifiabledoubtsastothearbitrator’simpartialityor independence. 20 DepartmentalAdvisoryCommitteeonArbitrationLaw,ReportontheArbitrationBill (1996), para.102.Foranexampleofacasewhereanarbitratorwasregardedasimpartialalthoughnot strictlyindependentseeAT&TCorpvSaudiCableCo[2000]2Lloyd’sRep.127,CA.Seealso GillianEastwood,ARealDangerofConfusion:TheEnglishLawRelatingtoBiasinArbitrators (2001)17ArbitrationInternational 287.ItmightalsobenotedthatArt.11(1)oftheICCRules refers to challenge on the basis of lack of independence, but does not mention impartiality. Yves Derains and Eric A. Schwartz, A Guide to the New ICC Rules of Arbitration, 2nd edn (The Hague: Kluwer, 2005), p.109 explain that this is because independence is objectively verifiable,whereasimpartiality isessentiallyastateofmind. 21 Seethesimilartermsofcl.13(5)oftheArbitrationBill2002. 22 Andseecl.30oftheArbitrationBill2002. November2008 351 SOME THOUGHTS ON THE SCOTTISH ARBITRATION CODE 2007 Whiletheseprovisionsclearlyseektoinvokethewell-establishedprinciplesofcompetence- competence and the separability of the arbitration agreement, the form of words employed by art.4.5 is rather curious. Legislation23 and institutional rules24 that deal with this issue tend to indicate that the invalidity of the main agreement should not render the arbitration agreementinvalid.Itisnotclearwhattheabovewordingseekstoachieve.Nonetheless,the assertionoftheprinciplesofcompetence-competenceandseparabilityishelpfulinaScottish context,sincewhilethoseprincipleswouldcertainlyapplytoarbitrationsinScotlandwhich are governed by the Model law, their place in Scots domestic law is much less certain.25 Of course, the extent to which these principles can operate depends on the law of the seat. Ifthatlaw doesnotcountenancethoseprinciples,itisdubiouswhetherthatpositioncan be altered by the agreement of theparties. Article 4 is silent on the question of recourse to the courts, but it is clear that this is contemplated, since art.18.4, which looks to exclude the possibility of any sort of judicial review, is expressly stated to be subject to art.4. The fact that art.4 does not mention the relationshipbetweenthearbitrator’sdecisionandtheroleofthecourtisnodoubtduetothe factthatthismustdependineachcaseonthelawoftheseat.Itwouldbeararejurisdiction indeedwhichallowedanarbitraltribunal,especiallyasolearbitrator,tobethefinaljudgeon jurisdictional or other challenges, and certainly in Scotland, whether under the Model Law or domestic law, the arbitrator’s decision could be reviewed by the court.26 6. ARBITRATOR’S DUTY OF DISCLOSURE Underart.3.4apersonwhoisapproachedtoactasarbitratorhastodiscloseanycircumstances likely to give rise to justifiable doubts as to his impartiality or independence or confirm in writingthatnosuchcircumstances exist.Shouldsuchcircumstances ariseduringthecourse of the arbitration, he must promptly disclose them to the parties. This echoes art.12(1) of the Model Law, but goes further in pointing out that the relevant circumstances include (but are not limited to) bias, interest and past or present relationships with a party. Like the Model Law, however, there is no indication of the consequences of breach of such a duty.27 Does it compromise his right to remuneration?28 Should he be liable for the cost of any nugatory proceedings? Does it in that context amount to conscious and deliberate 23 e.g.ModelLawArt.16(1);Arbitration Act1996s.7. 24 e.g.LCIARulesArt.23.1. 25 Thus it has even been suggested that an arbitration clause would not survive a repudiatory breachofcontractinordertoallowthearbitratortoruleontheeffectofthebreach—seeLord ShawinMunicipalCouncilofJohannesburgvDStewart&Co 1909S.C.(H.L.)53at56.Itis tobehopedthattheScotscourtswouldnowadoptthemodernviewofseparability,whichfirst appearedclearlyinEnglandinHeymanvDarwins[1942]A.C.356;wasextendedincasessuch as HarbourAssuranceCo(UK)LtdvKansaGeneralInternational InsuranceCoLtd [1993] Q.B.701;andwasmostrecentlystatedbytheHouseofLordsinFionaTrust&HoldingCorp vPrivalov [2008] 1 Lloyd’s Rep. 254. The Arbitration Bill 2002 would follow the example of the 1996 Act in articulating the principles of separability and competence-competence in separateprovisions—cll6and30(1). 26 SeetheModelLawArts16(3)and34(2)(a)(iii); LordPresidentDunedininMcCoshvMoore (1905)8F.31at40.Seealsocll14(4)and30(9)oftheArbitrationBill2002. 27 It should, however, be mentioned that such duties are commonly imposed by institutional rules—see, e.g. UNCITRAL Arbitration Rules Art.9, ICC Rules Art.7, LCIA Rules Art.5(2). The LCIA Court is, however, entitled to decide upon the fees and expenses of an arbitrator removedforfailingtodiscloserelevantcircumstances—seer.10.1–2. 28 Although the Arbitration Act 1996 does not impose a similar duty of disclosure, where an arbitratorisremovedbythecourtunders.24(1)(a)onthebasisthatcircumstancesexistwhich give rise to justifiable doubts as to his impartiality, the court under s.24(4) may make such order as it thinks fit as regards his entitlement to fees and expensesor the repaymentof fees andexpensesalreadypaid.Arbitration Bill2002cl.14(5)isinidenticalterms. 352 November2008 (2008) 74 ARBITRATION 4 wrongdoing?(See“ArbitralImmunity”below.)TheCodedoesnotsayandthereiscurrently nothing in Scots law comparable to the power given to the court to determine a removed arbitrator’sentitlementtofeesunders.24(4)ofthe1996Act.Perhapstheruleisintendedto be hortatory. 7. RESIGNATION In terms of art.5.1 a person who accepts appointment as arbitrator is not entitled to resign exceptoncertifiedmedicalgrounds,nortowithdrawunlesschallengedbyoneoftheparties. Again,however,theCodeissilentastotheconsequencesifanarbitratorseekstoresignwhen notentitledtodoso,andoncemoreaScotscourthasnoinherentpowertograntanarbitrator relieffromliabilityanddeterminehisentitlementtofeesandexpenses,suchasexistsunder s.25(3) of the 1996 Act.29 It has to be presumed that the Code’s provisions regarding the appointmentofareplacementarbitratorapplytothesituationwhereanarbitratorhasresigned wrongfully just as they apply where the arbitrator has resigned legally, although this is not made explicit. 8. ARBITRAL IMMUNITY Importantly, under art.8 an arbitrator is not to be liable to a party “for any act or omission inconnectionwiththearbitration”otherthantheconsequencesof“consciousanddeliberate wrongdoing”. Is failure to disclose circumstances likely to give rise to justifiable doubts as tohisimpartialityorindependencean act oromissioninconnectionwiththearbitration?Is wrongful resignation? Could either amount to conscious and deliberate wrongdoing? More importantly,whilethearticleechoessimilarprovisionsinotherinstitutionalrules30andcl.19 oftheArbitration(Scotland)Bill,whatisthelegalbasisonwhichsuchprovisionsoperate? The Code can only apply when the parties so agree, and thus is essentially contractual in nature,thecontract existingbetween theparties.It isfar fromcertain whetherand forwhat an arbitrator might be liable to the parties under the law of Scotland,31 since unless and until the Bill is enacted Scots law features nothing like s.29 of the Arbitration Act 1996. Nonetheless, assuming that liability might arise, on what basis might the arbitrator seek to avoidthatliabilityonthebasisofacontracttowhichheisnotaparty?Theanswermightlie intheformofart.3.6,whichprovidesthatbyacceptingappointmentanarbitratorisdeemed tobe boundbytheCode. Again,hecan only beboundcontractually,so that theprovisions oftheCodemightbesaidtocreateacontractnotonlybetweentheparties,butalsobetween thearbitratorandeachoftheparties.Yetitmaybeaddedthattheexclusionofliabilityunder art.8 extends to any legal adviser and any nominating body or officer thereof. Unless it is arguedthatthereissomesortofimpliedcontractbetweensuchanindividualandtheparties under which they are exempted from liability, and this might be a difficult argument to sustainifitappearsthattheindividualinquestionwasunawareofthearticlewhenheacted, itisdifficulttodiscernthebasisonwhichhewouldbeexcludedfromliability.Certainly,it ishardtosaythattheconditionsfortheapplicationofthejusquaesitumtertio,underwhich a third party may enforce theterm of a contract intended to benefit him, are met.32 29 Arbitration Bill 2002cl.16(1)wouldallow resignationin responseto achallenge,orwith the agreement of the parties, or where the court is persuaded that there is sufficient reason for doingso.Clause16(3)wouldpermitinthateventualitythepartiesandthearbitratortoagree onquestionsofliabilityandentitlementtofeesandexpenses,withanapplicationtothecourt todecideonsuchmattersbeingopenundercl.16(4)intheabsenceofsuchagreement. 30 See,e.g.Art.31.1oftheLCIARules,Art.34oftheICCRules. 31 SeeFraserDavidson,Arbitration(Edinburgh:WGreen,2000),para.10.06;RobertL.C.Hunter, TheLawofArbitrationinScotland,2ndedn(Edinburgh:Butterworths,2002),paras8.49–8.55. 32 See William W. McBryde, TheLawofContractin Scotland, 3rd edn (Edinburgh: W Green, 2007),Ch.10. November2008 353