Assume that contracting parties (C and R) agree that their contract is governed by English law and that any dispute arising in connection with the contract should be referred to arbitration. A dispute arises which C refers to arbitration. An arbitral tribunal is appointed and, in due course, the tribunal renders an award ordering R to pay damages for breach of contract. R seeks either to have the award set aside (by the courts at the seat of arbitration under the lex arbitri) or to resist enforcement of the award (in another country under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (‘NYC’)) on the basis either that the tribunal applied French law to the dispute, instead of English law, or that the tribunal decided the dispute ex aequo et bono (ie, by the application of an equitable standard), rather than through the application of legal rules and principles. In such circumstances, does R have a legitimate ground for having the award set aside or for resisting enforcement?
If the seat of arbitration is in a country which has implemented the UNCITRAL Model Law on International Commercial Arbitration (‘Model Law’ or ‘ML’), such as Singapore, Hong Kong, New Zealand, Australia or Canada, this question should receive the same answer whether the context is setting aside or enforcement under the NYC: this is because the grounds for setting aside under article 34 ML are almost identical to the grounds on which recognition and enforcement may be refused under article V NYC. This blog post discusses this issue in depth. (more…)
A leading commentator has observed that ‘[t]he choice of the law applicable to an international commercial arbitration agreement is a complex subject’ (Born, International Commercial Arbitration (2nd edn, 2014) p 472). This complexity is reflected by the case law illustrating that the courts of different countries adopt different approaches to certain common scenarios. One area of divergence is the case where parties to a contract containing an arbitration clause choose state A as the seat of arbitration, but the law of state B as the law governing the matrix contract: which law governs the arbitration clause – the law of the seat or the law of the country chosen to govern the substantive contract?
Some legal systems, influenced in part by the doctrine separability (according to which a contractual arbitration clause is, conceptually, treated as a contract separate and independent from the matrix contract) and article V.1.a of the New York Convention of 1958, take the view that, in the absence of an express choice by the parties of the law applicable to the arbitration clause, the law of the seat should govern questions of material validity. English law, however, has never taken this view – although, arguably, the Court of Appeal came close to doing so in C v D  EWCA Civ 1282. (more…)
It is unlikely that many voters, when deciding how they would vote in the recent EU referendum, would have given any thought to the implications of Brexit for private international law in the United Kingdom. Nevertheless, Brexit is likely to have profound consequences in this (admittedly) complex and specialist field. The greatest effect will be felt in the commercial arena: in the context of cross-border litigation, for example, the EU has established, in civil and commercial matters, a common framework for the jurisdiction of national courts, the determination of the applicable law and the reciprocal recognition/enforcement of judgments granted by Member State courts. Brexit will also take the United Kingdom out of the EU-wide systems for the allocation of divorce jurisdiction and the mutual recognition of divorces and nullity decrees. (more…)