The long-awaited Act came into force on 31 January 1997 and will apply to all arbitral proceedings commenced on or after that date, regardless of the date of the arbitration agreement.

This is significant particularly for leases containing rent review clauses with provision for disputes to be settled by arbitration.

No matter when the lease began, a dispute arising under it which is referred to in arbitration will be governed by the new Act, with all the advantages and freedoms conferred by it.

The following is a brief summary of the Act's principal provisions:General principlesSection 1 sets out a new definition of the rules of natural justice, which is to govern the whole arbitration process, namely that 'the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense'.

The new order 73 also starts off with the definition.Mandatory and non-mandatory structureThe Act is divided into mandatory provisions (listed in sched 1), dealing with the powers of the court, general duties and so on; and non-mandatory, where the parties are given absolute freedom to run the arbitration, yet can adopt the rules of an arbitral institution, or make up rules themselves.

In so far as the parties omit to cover any aspect, the Act provides a complete fall-back for all eventualities.Appointment of arbitral tribunalA complete code is set out in ss 15 to 29 and includes, for the first time, power for the parties to revoke an arbitrator's appointment, as well as immunity for the arbitrator in the discharge of his or her functions, unless an act or omission is shown to have been done in bad faith (s.29).

Similar immunity for arbitral institutions appointing arbitrators is given by s.74.

The general pattern is for a sole arbitrator, but provision is made for three arbitrators, with rules for appointment and duties of a chairman or an umpire.ProceedingsSection 33 is important as setting out clearly the general duty of the arbitrator to act fairly between the parties, giving each of them proper opportunities to put the case and respond.

It states that the arbitrator (not the parties) has both the right and the duty to devise and adopt suitable procedures, minimising delay and expense.Strict rules of evidence can be jettisoned, since s.34 gives the arbitrator absolute powers to say how the reference shall be run and decide all questions of admissibility.

The arbitrator can for the first time rule on his or her own jurisdiction (s.30).

The parties can agree on consolidation, legal representation and general powers, including arrangements as to witnesses and what to do about delay or default by a party.

The arbitrator is given new extensive powers in fall-back provisions (ss.33 to 41), including the exclusive power to order security for costs (no longer the prerogative of the court) as well as power to make an Anton Piller order.

Section 40 lays a duty on the parties to get on with the arbitration and to obey any direction by the arbitrator.Court interventionsUnlike the pre-Act position, where the court heavily supervised the reference, and particularly the arbitrator, the new Act puts the parties and the arbitrator in control, reducing the court's role to one of supporting the arbitrator.Thus, s.42 encourages the court to enforce against a party any peremptory order made by the arbitrator.

So it will not be possible under the new Act for parties to bully arbitrators by threatening to get a court order if they do not comply with some demand.

Provided the arbitrator is acting fairly and reasonably, the court is likely to give its support..AwardThe power to correct errors extends to allowing amendments to remove ambiguities and to make an additional award.

Reasons for the award are to be given unless the parties agree otherwise.

Interest can be compound or simple and can run from the date of the award to the date of payment.

There is, however, no assistance on the problem of defining 'the event' in rent review arbitrations, when deciding on award of costs.AppealThe three grounds on which an award may be challenged are:-- substantive jurisdiction of the arbitrator (s.67)-- serious irregularity (an inventive euphemism for misconduct, see s.68)-- point of law (s.69): this is an updated version of s.1 of the 1979 Act, but now incorporating into statute the effect of the 'Nema' decision and certain others.MiscellaneousThe provisions of the Act which provide a separate regime for domestic arbitrations -- as under the present law -- will not be brought into force so that there will be one regime for all arbitrations, domestic or international.This article was written by Derek Kirby Johnson, chairman of the Law Society's Arbitration Law