Section 44 of the Arbitration Act 1996 Reframed: Court Orders Against Third Parties (Part III) – Cross-border, Procedure and Risk Management

Corporate Clients Insights, Corporate Disputes

Cross-Border Dimensions: Foreign-Seated Arbitrations

One of the most significant questions raised by the expanded section 44 powers is their availability in support of foreign-seated arbitrations or anti-suit injunctions.

The Statutory Framework

Section 2(3) of the 1996 Act provides that sections 43-44 (among others) apply “even if the seat of the arbitration is outside England and Wales or Northern Ireland or no seat has been designated or determined.”

In addition, section 44(1) of the 1996 Act now provides expressly that orders under section 44 can be made “whether in relation to a party or any other person”, therefore ending long-standing confusion on whether third parties were within the scope of section 44.

This means English courts can, in principle, make third-party orders in support of arbitrations seated anywhere in the world, subject to jurisdictional and discretionary considerations.

Jurisdictional Gateways

The amendments made to section 44(1) mean that the general jurisdictional gateway applicable to arbitration claims for remedies under section 44 (CPR 62(5)(1)(b) is now clearly applicable to such claims against third parties to foreign-seated arbitrations.

However, where remedies such as anti-suit injunctions based on arbitration agreements are sought or the case is otherwise outside the scope of CPR 62(5)(1)(b), arguments based on CPR Practice Direction 6B remain in play, typically:

• Gateway 3.1(6)(c): the claim is in respect of a contract governed by English law; or
• Gateway 3.1(9): the claim concerns property located within the jurisdiction; or
• Gateway 3.1(2): an injunction is sought ordering the defendant to do or refrain from doing an act within the jurisdiction

Proper Forum

Additionally, England must be shown to be the proper forum—a requirement that will typically be satisfied where:

• The third party is located in England
• The evidence or property is situated in England
• No other jurisdiction can provide effective relief

The Supreme Court’s recent decision in UniCredit Bank GmbH v RusChemAlliance LLC [2024] UKSC 30 (in the context of an anti-suit injunction) demonstrates the English court’s willingness to assert jurisdiction even for foreign-seated arbitrations where England is the proper place to grant relief.

Comity Considerations

When supporting foreign-seated arbitrations, English courts must navigate comity concerns—the principle of mutual respect between jurisdictions. Courts will consider:

• Whether the courts of the seat have jurisdiction to make similar orders
• Whether making the order would conflict with or undermine the supervisory jurisdiction of the seat
• Whether the seat’s legal system recognizes third-party orders in arbitration
• The connection between England and the third party or relief sought

Best practice suggests that where possible, applicants should:

• Notify the tribunal of the intended application
• Seek the tribunal’s endorsement or neutral position
• Consider whether parallel relief can be sought from the courts of the seat
• Demonstrate that the English order will support, not supplant, the arbitral process

Procedural Roadmap: Making the Application

Step 1: Pre-Application Considerations

Timing: Applications should generally be made:

• After arbitration has commenced (or when is about to commence)
• Before the evidence is at risk of destruction
• Before assets may be dissipated
• With sufficient urgency to justify court intervention

Alternative dispute resolution: Parties should consider first:

• Requesting voluntary third-party cooperation
• Seeking tribunal procedural orders (even if not enforceable, they may encourage compliance)
• Negotiating agreed preservation or disclosure protocols

Step 2: Application Without Notice vs On Notice

Without notice applications are appropriate where:

• Speed is essential and giving notice would defeat the purpose (e.g., asset freezing)
• Evidence might be destroyed if the third party is alerted
• There is a real risk of dissipation

The applicant must provide full and frank disclosure of all material facts, including those adverse to their case.

On notice applications are the default where:

• The third party’s cooperation is sought for evidence production
• No risk of destruction or dissipation exists
• Fairness requires hearing the third party’s position

Step 3: The Hearing and Order

Applications are typically heard by a High Court judge in the Commercial Court or London Circuit Commercial Court.

The order will typically specify:

• The precise acts required of the third party
• Time limits for compliance
• Safeguards for the third party (e.g costs protection, confidentiality)
• Consequences of non-compliance

Step 4: Third-Party Appeal Rights

Section 44(7) provides that third parties have a full right of appeal against orders made under section 44. Third parties’ retention of the full right of appeal under section 44(7) may result in increased litigation as non-parties seek to prevent courts from imposing costly orders upon them. Parties must anticipate and prepare for potential appeals, ensuring the initial order is robustly justified and proportionate.

Comparative Perspectives: Learning from Other Jurisdictions

Singapore

The Singapore International Arbitration Act (IAA) section 12A grants similar powers to make orders against third parties. Singapore courts have exercised these powers in support of both domestic and foreign-seated arbitrations, providing a useful comparator.

Hong Kong

Hong Kong’s Arbitration Ordinance section 45 allows court orders for preservation of evidence and interim measures, including against third parties, demonstrating convergence in leading arbitration seats.

France

French courts exercise supportive jurisdiction (juge d’appui) including against third parties, but with greater deference to tribunal autonomy than the English approach.

United States

U.S. federal courts under 28 U.S.C. § 1782 can order third-party discovery in support of foreign arbitration, though recent Supreme Court jurisprudence has created uncertainty about the scope of this power.

The English approach under the 2025 Act strikes a balance: more interventionist than the French model, but more structured than the U.S. approach, with clearer statutory authority and procedural safeguards.

Risk Management: Protecting Against Third-Party Order Applications

For respondents and third parties facing potential section 44 applications, proactive strategies include:

For Respondents

• Arbitration clause drafting: If compatible with the arbitration rules chosen, include express tribunal powers regarding third-party evidence
• Institutional rules: Select rules (e.g., LCIA, ICC) with robust third-party provisions
• Early evidence gathering: Secure third-party cooperation voluntarily before disputes arise
• Protective orders: Seek tribunal orders protecting confidential information from third-party disclosure

For Third Parties

• Monitoring: Corporate entities frequently involved in arbitrations (banks, logistics providers) should monitor for applications
• Immediate legal advice: Engage specialist arbitration counsel upon receiving notice
• Costs protection: Apply for costs orders ensuring compliance expenses are borne by the applicant
• Appeal preparation: Preserve appeal rights under section 44(7)
• Confidentiality: Request confidentiality provisions protecting sensitive third-party information

Costs Implications

Third-party order applications involve multiple cost layers:

Applicant’s Costs

• Court application fees
• Legal costs of preparing evidence and submissions
• Possible undertakings in damages to third party and any fortification of such undertakings by way of a bank guarantee or a payment into court
• Third party’s reasonable compliance costs (often applicant bears these)

Third Party’s Costs

• Legal advice on responding to application
• Compliance costs (document review, IT searches, witness time)
• Costs associated with challenging the order

Cost Protection Applications

If possible, third parties should routinely seek:

• Order that applicant bear all reasonable compliance costs
• Indemnity for legal costs of considering and complying with order
• Protection against claims arising from disclosure (save for bad faith)

Future Developments: The Case Law to Come

As the first section 44 third-party applications are determined under the 2025 Act, several key questions will likely require judicial resolution:

1. The “Appropriateness” Standard

What degree of necessity must applicants demonstrate? Will courts require exhaustion of other remedies?

2. Third-Party Appeals

How robustly will courts scrutinize applications knowing third parties have full appeal rights? Will this lead to more cautious initial grants?

3. Foreign-Seated Arbitrations

Will English courts freely grant third-party orders for all foreign-seated arbitrations, or develop principles limiting this to cases with sufficient English connections?

4. Proportionality

How will courts balance the value of evidence/relief sought against the burden imposed on third parties?

5. Institutional Rules Interaction

Where arbitration rules contain third-party provisions (e.g., LCIA Article 22.1(h)), how will these interact with statutory section 44 powers?

A New Era of Court Support

The expansion of section 44 to third parties represents one of the most significant practical developments in the Arbitration Act 2025. It addresses a genuine gap in the English arbitration framework, aligning court support powers with the realities of modern commercial disputes where crucial evidence and assets are often held by non-parties.

For claimants, these powers offer powerful new tools for evidence gathering and asset preservation. For respondents, they create new litigation risks requiring proactive management. For third parties—banks, service providers, former employees—they bring potential compliance burdens and costs.

The true impact of this reform will unfold through case law development over the coming years. Parties must approach these powers strategically, with careful attention to evidential requirements, procedural safeguards, and proportionality.