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Lord Hacking: If there is a divide in the army, it is rather difficult for one leader to go in one direction and

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the other leader to go in the other direction and to keep the army, or the argument, intact. I therefore address noble Lords from a divided camp, and in the circumstances--let alone all the noble and learned Lords, once again arguing against me--I am not in a position to press this matter further forward in Committee. However, it is a real concern and I ask the noble Lords to accept that.

I have noted the observations of the noble and learned Lord, Lord Roskill, and the noble and learned Lord, Lord Donaldson, about costs of commercial solicitors. I am aware that there are various ways of resolving the issue of costs. However, there is still a problem, and I most sincerely put that problem before your Lordships as one who practises law and who advises clients on the issue of costs--whether it be arbitration or litigation--and come across this as part of my daily work. On that basis, certainly for the present, I withdraw my amendment.

Amendment, by leave, withdrawn.

Clause 61 agreed to.

Clauses 62 to 67 agreed to.

Clause 68 [Challenging the award: serious irregularity]:

Lord Fraser of Carmyllie moved Amendment No. 14:


Page 25, line 22, after ("ambiguity") insert ("as to the effect").

The noble and learned Lord said: This is a small but nevertheless important amendment. This clause enables the party to apply to the court to challenge an award on the grounds of serious irregularity affecting the tribunal, the proceedings or the award. The clause provides a closed list of grounds which can be classed as serious irregularities. One such is "uncertainty or ambiguity of the award". On reflection we believe this ground needs to be drawn more tightly.

By virtue of Clause 52 the arbitrator's reasons form part of the award, but the intention is not that ambiguity or uncertainty in the arbitrator's reasons should be a ground for challenging the award. Rather we want to limit the ground to a shortcoming in the decisions which form the award, and this is achieved by focusing on the effect of the award. If there is ambiguity or uncertainty as to that effect, a challenge is possible. I beg to move.

On Question, amendment agreed to.

Clause 68, as amended, agreed to.

Clause 69 [Appeal on point of law]:

Lord Fraser of Carmyllie moved Amendment No. 15:


Page 26, line 40, leave out ("unless the court certifies") and insert ("which shall not be given unless the court considers").

The noble and learned Lord said: In speaking to both Amendments Nos. 8 and 12 I spoke to Amendment No. 15. I beg to move.

On Question, amendment agreed to.

Clause 69, as amended, agreed to.

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Clause 70 [Challenge or appeal: supplementary provisions]:

Lord Fraser of Carmyllie moved Amendment No. 16:


Page 27, line 3, after ("applicant") insert ("or appellant").

The noble and learned Lord said: In moving Amendment 16 it may be helpful if I speak also to Amendment 17. These are minor and obvious drafting changes. I beg to move.

On Question, amendment agreed to.

Lord Fraser of Carmyllie moved Amendment No. 17:


Page 27, line 10, after ("applicant") insert ("or appellant").

On Question, amendment agreed to.

Lord Fraser of Carmyllie moved Amendment No. 18:


Page 27, line 20, leave out subsection (6) and insert--
("(6) The court may order the applicant or appellant to provide security for the costs of the application or appeal, and may direct that the application or appeal be dismissed if the order is not complied with.
The power to order security for costs shall not be exercised on the ground that the applicant or appellant is--
(a) an individual ordinarily resident outside the United Kingdom, or
(b) a corporation or association incorporated or formed under the law of a country outside the United Kingdom, or whose central management and control is exercised outside the United Kingdom.
(7) The court may order that any money payable under the award shall be brought into court or otherwise secured pending the determination of the application or appeal, and may direct that the application or appeal be dismissed if the order is not complied with.
(8) The court may grant leave to appeal subject to conditions to the same or similar effect as an order under subsection (6) or (7).
This does not affect the general discretion of the court to grant leave subject to conditions.").

The noble and learned Lord said: I have spoken to two minor amendments to this clause, but this is one of rather greater substance. The clause deals with a number of supplementary procedural matters relating to challenges to the award or appeals on a point of law under Clauses 67, 68 or 69. As subsection (6) of the clause stands, the court can order security for costs or money to be brought into court only in respect of a challenge to awards under Clauses 67 and 68. There is merit in enabling the court to impose these requirements as a condition of granting leave to appeal on a point of law under Clause 69. This would help to avoid a situation where the ability of the losing party to honour the award becomes reduced, whether by design or otherwise, while the award is pending.

The only other changes are as follows. We thought it would be helpful to provide expression for the position on appeal from a decision under this clause. The rules of the court apply, but there is merit again in terms of user-friendliness and clarity in including a provision on the face of this Bill. The wording of subsection (6) is brought into line with the amendment to Clause 38 on security for costs. To accommodate these changes the

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second half of the clause has been re-ordered slightly. That is rather complicated, but I trust that the reasoning behind the amendment is clear enough. I beg to move.

Lord Hacking: I intervene to ask my noble friend whether my understanding is correct. My understanding on the drafting of this amendment, which reads in the second paragraph:


    "The power to order security for costs shall not be exercised on the ground that the applicant or appellant is--

(a) an individual ordinarily resident outside the United Kingdom," (and the other ground) is that that drafting has the approval of the DTI advisory committee chaired by Lord Justice Saville, as indeed did the drafting of the earlier clause when we were looking at security for costs in Amendment No. 10. The importance of that is that in the original report--which was received by your Lordships in February this year--the word "only" was used and then subsequently, as we know from Amendment No. 10 and this amendment, the word "only" has been removed. I understand that the word "only" has been removed on the recommendation of the committee chaired by Lord Justice Saville. The reason for its removal, as advanced by my noble friend Lord Byron is that it would act as a deterrent to arbitrations being conducted in this country.

Lord Fraser of Carmyllie: Those who have had the opportunity to consider the report to which I referred earlier will find that the line of argument I deployed in moving this amendment is succinctly set out in paragraph 380, but the reasoning is exactly the same. I can confirm to my noble friend that, following our acceptance of the proposal that there should be an amendment, as he might have anticipated, there has been a very useful and constructive discussion with Lord Justice Saville, among others, which led to the amendment being framed in the terms which now appear on the Marshalled List.

Lord Hacking: Does it apply also to Amendment No. 10?

Lord Fraser of Carmyllie: I certainly understand that that amendment was also subject to discussion with Lord Justice Saville, and that that particular deletion met with his approval. If I am wrong about that, doubtless I will be corrected.

On Question, amendment agreed to.

Clause 70, as amended, agreed to.

Clauses 71 to 75 agreed to.

Clause 76 [Service of notices &c.]:

Lord Fraser of Carmyllie moved Amendment No. 19:


Page 29, line 8, after ("be") insert ("given or").

The noble and learned Lord said: In moving Amendment No. 19, I speak also to Amendment No. 20. Clause 76 is about the service of notices or other documents, which is mentioned at various points in the Bill. At other places the expression "to give notice" is used. For example, in Clause 17 where a party is to

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appoint an arbitrator and fails to do so within the time specified, the other party may give notice to the party in default that he proposes to appoint his arbitrator to act as sole arbitrator. These two amendments are designed to link in the giving of notice with the provisions of Clause 76 on the service of notices or other documents. I beg to move.

On Question, amendment agreed to.

Lord Fraser of Carmyllie moved Amendment No. 20:


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