The Arbitration Act 1996 owes its origin to the UNCITRAL model law on international commercial arbitration created in 1985. Though there were disagreements regarding the adoption of the model law, there was a need for a new and uniform legislation in the UK.
The Departmental Advisory Committee recommended that the new act should set out the key principles of English arbitration law, both statutory and (to the extent practicable) common law; the new act should be set out in logical order and expressed in clear, user-friendly language; the new act should apply, in general, to domestic and international arbitrations alike; and should not be limited to the subject matter of the model law.
All above objectives have been achieved by the 1996 Act. The Act came into effect on 31st January, 1997. The Act has provided a framework for the resolution by private tribunals in the UK, barring Scotland, not only of disputes between UK companies, i.e., domestic arbitration, but also of disputes between foreign companies.
The guiding principles of the 1996 Act are laid down as follows:
the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense;
the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest; and
the court should not intervene, except as provided by the Act.
