A Mandatory Stay

The vast majority of the changes made by the English Arbitration Act 1996 (hereafter referred to as the ‘1996 Act’) have been warmly welcomed and have caused little or no concern to those practising in arbitration. One or two subtle changes, however, perhaps require some further consideration. One of those – a matter which may interest parties considering whether or not to include arbitration agreements in their contracts – is the change made to the basis on which the court has the power to refuse a stay of any court proceedings brought before it, notwithstanding the existence of an arbitration clause in the relevant contract. So far as international arbitration is concerned, the position before the 1996 Act was provided for by section 1 of the Arbitration Act 1975 (hereafter referred to as the ‘1975 Act’). In relevant part, that section provided that: > … the court, unless satisfied that the arbitration agreement is null and void, inoperative or incapable of being performed or that there is not in fact any dispute between the parties with regard to the matter agreed to be referred, shall make an order staying the proceedings. [emphasis added.] In contrast, section 9 of the 1996 Act provides, in relevant part, that: > (4): On an application under this section the court shall grant a stay unless satisfied that the arbitration agreement is null and void, inoperative or incapable of being performed. It will immediately be seen that the 1996 Act removes the ability of the court to refuse a stay of proceedings where there is ‘not in fact any dispute between the parties’. As a result of the change, it is no longer possible for a party to an agreement containing an arbitration clause to seek summary judgment from the court (rather than going to arbitration) on …