‘Much Ado About … The Law of the Arbitration Agreement: Who Wants to Know and for What Legitimate Purpose?’

Abstract

Common law cases and commentators have debated whether the law of an autonomous arbitration agreement should be the same as the law designated in a general choice of law clause or should instead, be that of the law of the Seat. The English Law Commission is currently considering this question. This article argues that when common law courts deal with this issue within mere preliminary applications, such as for a stay of litigation, they apply an inappropriate methodology, regardless of the conclusions they come to. They are wrongly trying to impose certainty when simply faced with unclear drafting, an impossible task. In addition, most of the cases that have opined as to the law of the arbitration agreement need not have done so. The cases should have been resolved more simply under different reasoning. The article then argues that, even if the law of the arbitration agreement is important, the proper question for mere preliminary courts should often simply be, could a reasonable tribunal find validity and sufficient scope under a law it may select under the choice of law and evidentiary discretions it has? If so, the right of a putative tribunal to consider the question fully should be supported. This would then leave it to annulment or enforcement courts to review those findings if asked to do so. Even courts empowered to make pre-emptive rulings on validity and scope cannot properly do so under the methodology outlined in the leading cases. At least where contested facts could be material, such courts should not decide on these questions without an adequate hearing and without deciding either way on a case by case basis as to the particular parties’ intent. Arbitration agreement, applicable law, preliminary courts, validity and scope challenges