Abstract
‘Arbitration agreement’ is an agreement by the parties to submit their disputes to arbitration, which may be a clause in a contract or a separate agreement. The parties may choose a national law to govern their arbitration agreement. In the absence of such an express choice of law and any applicable choice of law rules, national courts and scholars are divided by two alternative choices – the law governing the contract, or the law of the seat of arbitration. This disagreement persists because of different interpretations of the parties’ intention, different views about implied choice of law and the law with the closest connection, as well as different approaches to the principles of separability (of arbitration agreement) and validation. After exploring these disparities together with relevant provisions in the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and UNCITRAL Model Law on International Commercial Arbitration, this Chapter makes recommendations based on the author’s preferred choice of law in light of different scenarios.
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Notes
- 1.
Kaplan, K., Moser, M. (ed.) (2018). n 1., Jurisdiction, admissibility and choice of law in international arbitration. The Netherlands: Kluwer Law International.
- 2.
Convention on the Recognition and Enforcement of Foreign Arbitral Awards, (10 June 1958)., 330 U.N.T.S. 38. (‘New York Convention’). Art II(1) and Model Art 7.
- 3.
Ibid., Art II(2).
- 4.
Ibid., Art II(1).
- 5.
For example: ‘The governing law of this arbitration clause shall be the law of [insert jurisdiction].’
- 6.
See, e.g. s 48 of Swedish Arbitration Act (as an example of legislative choice of law rule) and Art 16.4 of LCIA Rules (as an example of institutional choice of law rule), and their excerpts in footnote 62 of this Chapter.
- 7.
Kaplan, K., Moser, M. (ed.) (2018). n 1., 77 (Abraham T et. Al., Chapter 5: Interaction of laws in international arbitration: an Asian perspective).
- 8.
New York Convention.
- 9.
United Nations Commission on International Trade Law, UNCITRAL Model Law on International Commercial Arbitration, U.N. Doc. A40/17, Annex 1. (21 June 1958). (‘Model Law’).
- 10.
New York Convention. Art V(1)(a); Model Law. Art 36(1)(a)(i).
- 11.
Model Law. Arts 16(3) and 34.
- 12.
Symeonides, S. (2014). Codifying choice of law around the world. New York: Oxford University Press., 122; Kaplan, K., Moser, M. (ed.) (2018). n 1., 132 (Glick I, Niranjan V, Chapter 9: Choosing the law governing the arbitration agreement).
- 13.
Kaplan, K., Moser, M. (ed.) (2018), n 1., 77 & 79.
- 14.
C v D [2007] EWCA Civ 1292.
- 15.
Ibid., 26.
- 16.
FirstLink Investments Corp Ltd v Payment Pte Ltd [2014] SGHCR 12, 13 (‘FirstLink case’).
- 17.
Ibid., 15.
- 18.
Ibid., 16.
- 19.
SulAmerica Cia National de Seguros S.A. v Enesa Engenharia S.A. [2012] EWCA Civ 638 (‘SulAmerica case’).
- 20.
Ibid., 25.
- 21.
Ibid., 31.
- 22.
See, e.g. Trukhtanov A (2012). ‘The proper law of arbitration agreement – A farewell to implied choice?’ International Arbitration law Review, 15(4), 140–144, 141.
- 23.
SulAmerica case, 32.
- 24.
BCY v BCZ [2016] SGHC 249., 49.
- 25.
Ibid., 59.
- 26.
Ibid., 60 & 61.
- 27.
Ibid., 63.
- 28.
Ibid., 65.
- 29.
Ibid., 67.
- 30.
Ibid., 66.
- 31.
SulAmerica case, 26.
- 32.
Ibid., 57 & 59.
- 33.
Trukhtanov A (2012). n 22., 141.
- 34.
New York Convention. Art II(3); Model Law. Art 8(1).
- 35.
Model Law. Art 16(1)(3).
- 36.
New York Convention. Art V(1)(a)(c)(d) and (2)(a); Model Law. Art 36(1)(a)(i)(iii)(iv) and (1)(b)(i).
- 37.
See Model Law. Art 34(2).
- 38.
See, e.g. SulAmerica case, 26.
- 39.
See, e.g. Trukhtanov A (2012). n 22.,142.
- 40.
See, e.g. Kaplan, K., Moser, M. (ed.) (2018). n 1., 137–138.
- 41.
See New York Convention. Art V(1)(a); Model Law. Arts 34(2)(a)(i) and 36(1)(a)(i).
- 42.
Kaplan, K., Moser, M. (ed.) (2018). n 1., 391 citing Born, G. (Miles, W., Goh, N., Chapter 24: A principled approach towards the law governing arbitration agreements).
- 43.
Ibid., 148.
- 44.
Ibid., 393 & 394.
- 45.
SulAmerica case, 25.
- 46.
Ma, W (2003). ‘What’s my choice – deciphering the provisions of conflict of laws in the Trade Practices Act’. Trade Practices Law Journal, 11(3), 149–165, 154–155.
- 47.
Kaplan, K., Moser, M. (ed.) (2018). n 1.,75.
- 48.
Trukhtanov A (2012). n 22., 142.
- 49.
Akai Pty Ltd v The People’s Insurance Co Ltd (1996) CLR 418 (‘Akai case’).
- 50.
Ma, W. (2003). n 46., 155.
- 51.
Akai case., 440–442.
- 52.
BCY v BCZ., 63.
- 53.
See, e.g. FirstLink case., 14: ‘parties would not have intended a specific place to be the arbitral seat if there is a serious risk that the law of the seat would invalidate the agreement, or if they had not intended the laws of that seat to give life to the agreement in the first place’.
- 54.
SulAmerica case., 31.
- 55.
Kaplan, K., Moser, M. (ed.) (2018). n 1., 389.
- 56.
FirstLink case., 14.
- 57.
See New York Convention. Art II(1); Model Law. Art 7.
- 58.
FirstLink case.,14.
- 59.
See New York Convention. Art II(2); Model Law. Art 7(1) Option I.
- 60.
SulAmerica case., 26.
- 61.
BCY v BCZ., 67.
- 62.
Swedish Arbitration Act (SFS 1999:116), s 48 provides: ‘Where an arbitration agreement has an international connection, the agreement shall be governed by the law agreed upon by the parties. Where the parties have not reached such an agreement, the arbitration agreement shall be governed by the law of the country in which, by virtue of the agreement, the proceedings have taken place or shall take place’. LCIA Rules (2014), Art 16.4 provides: ‘The law applicable to the Arbitration Agreement and the arbitration shall be the law applicable at the seat of the arbitration, unless and to the extent that the parties have agreed in writing on the application of other laws or rules of law and such agreement is not prohibited by the law applicable at the arbitral seat’.
- 63.
Kaplan, K., Moser, M. (ed.) (2018). n 1., 76.
- 64.
See, e.g. Ma, W. (2015). ‘The law applicable to the substance of arbitral disputes: arbitrators’ choice in absence of parties’ choice. Contemporary Asia Arbitration Journal, 8(2), 185–227.
- 65.
Ibid., 202.
- 66.
See, e.g. CAAI Rules, Art 19.1: ‘The parties may agree on the Seat of Arbitration. Absent such an agreement, the Seat of Arbitration shall be Hong Kong, unless the Tribunal determines that another seat is more appropriate in the circumstances after consulting with the parties’.
References
Hayward, B. (2017). Conflict of laws and arbitral discretion. Oxford: Oxford University Press.
Kaplan, K., & Moser, M. (Eds.). (2018). Jurisdiction, admissibility and choice of law in international arbitration. Alphen aan den Rijn: Kluwer Law International.
Ma, W. (2003). What’s my choice – Deciphering the provisions of conflict of laws in the trade practices act. Trade Practices Law Journal, 11(3), 149–165.
Ma, W. (2015). The law applicable to the substance of arbitral disputes: Arbitrators’ choice in absence of parties’ choice. Contemporary Asia Arbitration Journal, 8(2), 185–227.
Symeonides, S. (2014). Codifying choice of law around the world. New York: Oxford University Press.
Trukhtanov, A. (2012). The proper law of arbitration agreement – A farewell to implied choice? International Arbitration Law Review, 15(4), 140–144.
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Ma, W.JM. (2019). Conflicting Conflict of Laws in International Arbitration? Choice of Law for Arbitration Agreement in Absence of Parties’ Choice. In: Farrar, J., Lo, V., Goh, B. (eds) Scholarship, Practice and Education in Comparative Law. Springer, Singapore. https://doi.org/10.1007/978-981-13-9246-7_8
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