In Roman law, there was a traditional distinction drawn between those who exercised judicial powers in civil disputes: the magistratus and the judex. It was from the latter than an arbiter was invited to act in the resolution of private disputes. The former exercised magisterial authority delegated by the state. In the words of one commentator, they "represent the law and say what the law is, and who shall have power to employ the force which the state places at the disposal of those it selects to administer justice". 2 The latter, applying not jus but judicium, performed "an inquiry … into particular facts, evidence has to be received and weighed, and an opinion formed and pronounced as to the real merits of the case".

This is, in part, the origin of the modern debate over the existence and scope of an arbitrator's imperium. An arbitrator exercises powers by virtue of his office, not exhaustively defined powers delegated to him under a contractual relationship with the parties. Adapting the famous words of Lord Mustill, an arbitrator is both Superman and Batman, the legal creature of both status and contract. Yet, an arbitrator is not a state judge, with the imperium or status of that judge. An arbitration tribunal, in accordance with the traditional language of an arbitration clause, "settles" a dispute, and its final decision is an "award", not a judgment. A tribunal can make orders binding on the disputing parties, but it cannot make orders binding on third persons, and it cannot even enforce its own orders against the parties without the further machinery of the state, available to the state judge. In Professor Jarrosson's analysis under French law, the arbitrator has imperium mixtum but not imperium merum. 3 No less significantly, unlike a state judge, an arbitrator pays VAT on his or her arbitral fees. [Page81:]

This limitation on arbitral imperium is evident from the difficulties that common law jurisdictions have experienced in enacting the 1985 UNCITRAL Model Law on Arbitration. At common law, it was historically uncertain whether an arbitration tribunal had any power to order interest or costs. In Bermuda, the Model Law was enacted with these supplementary powers expressly added to its 1993 Act. In Scotland, a power to order costs was added to its 1991 legislation; but, unfortunately, nothing as regards interest. It therefore remains impossible to obtain an award of interest in Scotland unless that power is expressly conferred by the parties on the tribunal (which neither the ICC Rules nor the UNCITRAL Arbitration Rules do).

In France, the scholarly discussion of arbitral imperium by Professors Mayer and Jarrosson has, curiously, been ignored in England. 4 No such discussion can be found in any of the many judgments or treatises on English arbitration. This may surprise some; but not others. The answer, as always, is more practical and mundane. The English, like Monsieur Jourdain, speak only prose. It suffices here to relate only the story of the compound interest and the "land exception" for specific performance under the English Arbitration Act 1996.

I. Compound interest

Under Section 49 of the English Arbitration Act 1996, an arbitration tribunal may award compound interest on any sum awarded (including costs) from any date to the date of final payment at such rates and with such rests as it considers meets the justice of the case. This provision is broadly stated. It was welcomed by arbitration users and commercial arbitrators, but it is not a power enjoyed by the English court. How can it be that a private arbitrator has greater imperium than the English court? The answer is disappointing: the UK government planned in 1996 to extend the powers of the English court by legislation promoted by the Law Commission equivalent to Section 49 of the 1996 Act. It remains an un-enacted plan. This statutory power does not therefore support the argument that an arbitrator enjoys a greater imperium than a judge. [Page82:]

II. The land exception to specific performance

Section 48 of the English Arbitration Act 1996 contains an odd exception regarding the remedies ordinarily available to an arbitration tribunal in England: Section 48(5)(b) of the 1996 Act provides that the tribunal has the same powers as the [English] court "to order specific performance of a contract (other than a contract relating to land)".

This English legal remedy of "specific performance" is not an unusual or extreme form of remedy, to be equated (for example) to punitive damages, penalties, astreintes or even compound interest (being at once formerly both a sin and a crime in England). Specific performance is a well-established equitable and statutory remedy ordered by the English court to enforce against a defendant the duty of what that defendant has contractually undertaken to do: pacta sunt servanda. It evolved many centuries ago in the Chancery Courts to address, in equity, those cases where the common law remedy of damages for breach of contract was regarded as inadequate. The English court also has power to enforce its order for specific performance by further orders, including (in appropriate cases) sequestration of the defendant's assets or committal, whether by fine or imprisonment.

Specific performance generally remains an essential part of English commercial law, available in a broad category of commercial disputes. For example, it has long been possible for the buyer to obtain an order against the defaulting seller for specific performance of a contract to deliver specific or ascertained goods. In 1856, this equitable power was enlarged and confirmed by statute. 5 There is no question that an arbitration tribunal ordinarily has the power to grant that remedy, as is now expressly confirmed by Section 48 of the 1996 Act. The tribunal itself has no power to order sequestration or committal against the defaulting defendant to compel compliance with its award of specific performance. However, the claimant can enforce the tribunal's award under Section 66 of the 1996 Act as "a judgment or order of the court to the same effect", and the English court can then apply to the defendant its powers of sequestration and contempt of court to enforce an arbitral award of specific performance against not only the non-complying respondent but also any third person thwarting the court's orders. [Page83:]

This statutory "land exception" is therefore an oddity. A contract to buy specific land is invariably the classic case for specific performance under English law, much more so than a contract for the sale of goods. In commerce, goods will often be a mere commodity, for which there exists a ready substitute in the market, and damages are accordingly an adequate remedy permitting the purchase of equivalent goods in that market. In contrast, the buyer of land (whether farmland or a building or any form of real property) is purchasing that particular land; there can be no exact equivalent. On the seller's breach, where damages are an inadequate remedy, the obvious and natural remedy will be an order for specific performance, ordering the seller to sell and transfer title to that land from the seller to the buyer.

Nor is this oddity based upon "public policy" under English law. The "land exception" in Section 48 is not a "mandatory" provision under Section 4 and Schedule 1 of the 1996 Act, and parties may therefore agree in writing to confer such a remedial power on the tribunal. Few parties do so, possibly because this limitation is little known. (I have never yet seen any such agreement in regard to land, although the contrary exists in certain arbitration rules in regard to contracts of insurance and reinsurance. 6) Nonetheless, parties do refer disputes over land to arbitration under the 1996 Act. It is surprising that, so far, no real controversy has arisen. For the unwary, it looks like an accident waiting to happen.

This provision in the 1996 Act is not new. It was reenacted from Section 15 of the Arbitration Act 1950, itself reenacting Section 7 of the Arbitration Act 1934 (adding paragraph (j) to the First Schedule to the Arbitration Act 1889). It originally provided: "the arbitrators or umpire shall have the same power as the Court to order specific performance of any contract other than a contract relating to land or any interest in land." As was made clear by the UK government's Departmental Advisory Committee on the Law of Arbitration in its First Report, the government in 1996 did not intend to change the law in regard to specific performance. Hence, the origin of the "land exception" must be found in the 1934 Act itself. [Page84:]

Before 1934, this was not a limitation known to English statutes on arbitration. The "land exception" was missing from the Arbitration Act 1889. It was likewise absent from the failed attempts to codify the law and practice of English arbitration in 1853 and 1884-1889 by Lord Brougham and Baron Bramwell, respectively. Moreover, this "land exception" would have seemed odd to these distinguished judges and experts on English arbitration.

Clause 28 of the 1853 Brougham Bill (drafted by Francis Russell, the first author of the leading arbitration work, Russell on Arbitration) empowered an arbitrator to deliver "possession" of land. While this remedy was not the same as specific performance, its existence is hardly consistent with the absence of any general arbitral power to order specific performance in regard to land. Later, Clause 105 of the Bramwell 1889 Bill declared that: "an award shall not pass the property in realty or personalty as to the title to which the arbitrator in his award determines. But where the title is so determined the parties to the submission shall be estopped from denying the title so determined." 7 As indicated above, this limitation is inherent in the legal fact that an award cannot, by itself, pass property in goods or land: an order for specific performance requires enforcement by the English court, as Clause 110 of the Bramwell Bill confirms. In the seventh edition of Russell on Arbitration of 1891, being the first edition published after the 1889 Act, the author records (with approval) the power of an arbitrator to order specific performance generally, in regard to the provision of receipts and the payment of money (p. 436). Nothing is said about any "land exception". In the United States, an arbitral power to order specific performance of land had been expressly recognized in 1829. 8

This 1934 provision resulted from the 1927 McKinnon Committee's Report on the Law of Arbitration. It was then thought "at least doubtful", in the Committee's view, whether an arbitration tribunal could make an award ordering any sort of specific performance. The Committee's distinguished members (Mr Justice McKinnon, Archibald, Chitty, Martin, Merriman, Raeburn and Cotton9) recommended that an arbitrator "should at any rate be given the power to order the delivery of specific goods under Section 52 of the Sale of Goods Act 1893, against payment of the price". 10 The Committee did not explain the reasons for these doubts, and it is not possible today to understand their origin. More significantly, these doubts would now seem misplaced. [Page85:]

At this point, the following sentence appears in the McKinnon Committee's Report: "It is perhaps a matter of policy but we see no reason why he [the arbitrator] should not also be given power to order specific performance of a contract by the delivery of any property other than land or money in any case in which the Court might lawfully do so." The first part of this recommendation was pragmatically sensible: it is always better to spell out a power expressly when doubts as to its existence exist, however misplaced. The second part is clearly the origin of the "land exception". It is impossible to understand now why it was advanced at all or why it was linked to an exception relating to "money". In particular, the Committee did not explain why an arbitration tribunal, capable of being entrusted with a decision to award damages measured in millions, or specific performance of any other contract, could not be trusted to order specific performance of the most modest dwelling or the smallest sum of money.

This "land exception" was later addressed (but not then publicly) in the UK government's 1934 Notes on Clauses to Clause 8 of the Arbitration Bill, later enacted as Section 7 of the 1934 Act. 11 It was a more elaborate explanation of English law, intended as advice to the government ministers entrusted with the 1934 Bill's passage through Parliament. These Notes recorded the government's acceptance of the Committee's recommendation, but with two qualifications.

As to the first, the government implicitly rejected the McKinnon Committee's exception for money. As to the second, it accepted the McKinnon Committee's exception for land. The Notes record: "There would, in fact, seem to be little reason why contracts relating to land should be excluded from the clause. When, however, this last point was discussed with members of the Committee at the meeting referred to [this was a reference to a private meeting on March 2, 1928 between MacKinnon, Archibald, Raeburn, the Solicitor General, Shuster and Parliamentary Counsel], they were of the opinion that where a question relating to land was referred it was, on the whole, desirable that the parties should confer express authority on the arbitrator to award specific performance if they so desired. The Bill gives effect to this view."

(p. 40). Again, no explanation was offered for this "opinion". Thus wasthe land exception introduced into the 1934 Act, later consolidated into the 1950 Act and re-enacted in the 1996 Act. [Page86:]

There can only be two possible explanations for the government's decision in 1934. The first can be rejected summarily. The McKinnon Committee and the government's informal, second committee in 1928 were not hostile to the practice of commercial arbitration. Indeed, Mr Justice McKinnon had been the chairman of the League of Nation's Committee of Experts responsible for drafting the 1923 Geneva Protocol on Arbitration Clauses.

The second explanation is the more likely: these specialists did not believe, 80 or so years ago, that private arbitrators had any power to order specific performance at all because none equated arbitrators with English judges. Accordingly, they wished to see, by statute, an extension of arbitral powers as to specific performance generally, akin to the powers of the English court. However, as with all law reformers, they would have been conscious of the risk of any possible parliamentary controversy frustrating the 1934 Bill entirely. They could reasonably have feared an adverse reaction from the non-arbitral community concerned at an over-extension of arbitral powers in a private form of justice by arbitrators who (in England) were predominately non-lawyers, still less lawyers publicly accountable as state judges appointed by the state. Hence the "land exception". Why was that topic more sensitive than any other? Again, the cause can now only be surmised. In 1925, Parliament had engaged in a massive reform of land law and land registration, unprecedented in English legal history and culminating in the Law of Property Act 1925 and related legislation. This was possibly not the time to equate arbitrators with judges in relation to land disputes.

III. Specific performance of arbitration agreements

There is another historical oddity, linking arbitration and specific performance, that has produced a much greater controversy: the English court's "anti-suit injunction", whereby a disputing party is prohibited from starting or maintaining legal proceedings before a foreign court in breach of an arbitration agreement.

The orthodox view under English law is that neither the English court nor any arbitration tribunal court may grant specific performance of an arbitration agreement. This view is supported by reference to a number of ancient cases. [Page87:]

For example, the authors of Mustill & Boyd state: 12

"For breach of an arbitration agreement, damages may in theory be awarded, but will not normally be a useful remedy; an injunction is rarely granted, and specific performance is not available at all."

In support of this proposition, the authors cite six cases decided between 1802 and 1911. 13 Likewise, Halsbury's Laws of England states that:

"[t]he court does not enforce the specific performance of agreements to refer to arbitration", and Snell's Equity does not distinguish between enforcement of the agreement and the appointment of an arbitrator, stating that equity will not "directly enforce an agreement to appoint an arbitrator". 14

Even for orthodox believers, this unanimity is impressive. Other distinguished English arbitration commentators have long expressed the same view, including Hogg and Russell. All, however, derive their opinions from the same ancient authorities, decided long before the 1958 New York Arbitration Convention. Moreover, the modern practice of the English court is to grant more easily orders for specific performance, 15 and arbitrators may now grant other equitable remedies, such as rectification and rescission for misrepresentation, both once considered beyond their powers. If, therefore, the emperor ever had any clothes, it is now legitimate to inquire whether he still has them. This is no academic question: it lies at the heart of the relationship under English law between the English court, an arbitration agreement and an arbitration tribunal with an English seat. Given the traditional absence of specific performance as a remedy to enforce a recalcitrant party's legal obligation to abide by an arbitration agreement, it has led to the different and increasingly controversial remedy of the "anti-suit" injunction by the English court.

As is well known, Article II(3) of the New York Convention provides that a state court "shall … refer the parties to arbitration" in appropriate cases. That is the language of specific performance and positive compulsion. However, influenced by orthodoxy, Parliament enacted Article II(3), both in 1975 and 1996, whereby the English court "shall grant a stay" of the legal proceedings before the (English) court brought in breach of an arbitration agreement. [Page88:]

The difference is manifest: a stay of English legal proceedings does nothing positively to compel the parties to comply with their arbitration agreement and to desist from legal proceedings in England and elsewhere in violation of that agreement. Bereft of the natural remedy of specific performance of an arbitration agreement, the English court gradually applied another equitable remedy, the anti-suit injunction, to fill the gap. It is worth considering whether the world's ire, so aroused by the anti-suit injunction, would have been similarly stirred by an order for specific performance directed at a contract-breaker in language reflecting Article II(3) of the New York Convention.

In conclusion, the moral of this story is that a rose is still a rose by any other name and that, by such other name, imperium matters in England. It did in 1934, many centuries after the departure from English soil of the last Roman legionnaire. It mattered again in 1996 when, as regards the land exception but not compound interest, a more cautious and traditional view prevailed in Parliament, recognizing limitations on English arbitral imperium. It matters even more when the fate of the anti-suit injunction remains to be determined under the Brussels Regulation. It all means that arbitrators, while not mere service providers under contract with the parties, do not and can never have the powers of a state judge, as a matter of both prose and poetry. [Page89:]

1
E-mail: vvveeder@londonarbitrators.net.

2
Sandars, The Statutes of Justinian (1922) p. lxiff. See also B. de Loynes de Fumichon and M. Humbert, 'L'arbitrage à Rome', Rev. Arb. (2003) p. 285. (I am much indebted to M. David Chekroun for this reference.)

3
Ch. Jarrosson, Mélanges Pierre Bellet (1991) p. 245, see also P. Mayer, Mélanges Poudret (1999) p. 437.

4
Contrast the lengthy discussion in T. Clay, L'arbitre (2001) paras. 108-111 (p. 95 ff.), with its absence in Mustill & Boyd: Commercial Arbitration (1989). The same contrast exists with other English scholarly texts, including Russell, Hogg, Merkin and Halsbury's Laws of England.

5
Section 2 of the Mercantile Law Amendment Act 1856.

6
For example, Article 14.1 of the ARIAS (UK) Arbitration Rules provides: "For the avoidance of doubt, the Tribunal shall NOT have additional equitable powers unless such powers have been specifically conferred upon them by the Parties in writing or by these Rules." This provision originates in the law and practice of New York insurance arbitrations whereby arbitrators have ordered specific performance of insurance contracts where (under English law) damages would be the appropriate remedy. In Telia v. Hilcourt (4 July 2003, unreported) the English Court confirmed the arbitrator's power to order refurbishment under a land lease, as a contractual obligation separate and distinct from the lease.

7
The Bramwell draft code cites no legal authority for this proposition. See (1992) Art. Int., 329, 379.

8
T.E. Elder, 'The Case Against Arbitral Awards of Specific Performance', 13(1) Arb. Int. (1997) p. 11.

9
Mr Justice McKinnon had been the chairman of the experts committee appointed by the League of Nations to draft the 1923 Geneva Protocol on Arbitration Clauses. Merriman was later Solicitor-General.

10
Cmnd 2817: para. 28 (p. 8).

11
At pp. 3940. (This was confidential government documentation at the time, but it later became publicly available at the Public Record Office under the 30-year rule of public disclosure.)

12
Mustill & Boyd, 2nd ed. (1989) p. 459.

13
The six cases cited by Mustill & Boyd are: (1) Street v. Rigby (1802) 6 Ves. 815; (2) The Purisima Concepcion (1849) 13 Jur. 545; (3) Gourlay v. Duke of Somerset (1815) 19 Ves. 429; (4) Agar v. Macklew (1825) 4 L.J.O.S. Ch 16; (5) Pena Copper Mines v. Rio Tinto Co. (1911) 105 L.T. 846 at 851; and (6) Re Smith & Service (1890) 25 Q.B.D. 548.

14
Halsbury's Laws of England, Vol. 44(1) on "Specific Performance", at para. 832; and Snell's Equity, 31st edn. (2004) at pp. 15-24.

15
Co-Operative Ins. v. Argyll [1998] 1 A.C. 1; see also the earlier commentary by G. Jones and W. Goodhart, Specific Performance, 2nd edn. (1996) p. 5: "Recent case law demonstrates that English courts, like American courts, are now prepared to accept that specific performance should be more freely granted and to reject precedent which inhibits their discretion to do so."