II.
Framework of Laws Applicable to the Arbitration
A. Laws which may impact an arbitration
1. Law governing capacity to enter into an arbitration
➢ The New York Convention establishes that the parties’ capacity is governed by
the “law applicable to them” (article V.I.a). This concept does not appear in the
Model Law.
➢ There is no uniform understanding concerning the law applicable to the legal
capacity of individuals. It will depend on the system of conflicts of law of the forum
called to consider the arbitration agreement. The prevailing criterion is the legal
capacity should be governed by the personal law of each party, which may either be
the parties “nationality or their domicile”. 2. Law governing the agreement to
arbitration (Arbitration Agreement)
➢ Arbitration agreements are regarded under most national laws and institutional
arbitration rules as “separable” from the underlying contract in which they appear.
One consequence of this is that the parties' arbitration agreement may be governed
by a different national law than that applicable to the underlying contract. This can
occur either by the parties' express choice of law or by the application of conflict of
laws rules (which theoretically may select different substantive laws for the parties'
arbitration agreement and their underlying contract).
➢ As described below, four alternatives for the law governing an arbitration
agreement are of particular importance: (a) the law chosen by the parties to govern
the arbitration agreement itself; (b) the law of the arbitral situs; (c) the law
governing the parties' underlying contract; and (d) the law of the forum in which
judicial enforcement of the agreement is sought (for example, the FAA in a U.S.
court). In the absence of a choice by the parties, arbitral tribunals and national
courts tend to apply the law of the arbitral situs.
3. Law governing the procedure of the arbitration or the Lex Arbitri
➢ G.R: the parties in arbitration or an international commercial arbitration are free
to determine the rules that will govern their proceedings.
➢ In default thereof, the arbitral tribunal shall apply the UNCITRAL Arbitration
Rules, unless the arbitral tribunal finds said Rules inappropriate, in which case, it
shall determine the appropriate procedure.
4. Law governing the underlying commercial contract subject of the arbitration
➢ Under the separability doctrine, an arbitration clause is viewed as presumptively
separable from the parties' underlying contract. As a consequence, defects in the
formation of the underlying contract do not necessarily affect the formation of the
arbitration clause.
➢ The substantive law applicable to the formation, validity, and interpretation of
an arbitration agreement may be different from the substantive law governing the
parties' underlying commercial agreement.
➢ The validity of the contract cannot be the subject of arbitration proceedings.
These questions are legal in nature and require the application and interpretation of
laws and jurisprudence which is necessarily a judicial function.
B. The Concept of Lex Arbitri
Lex loci arbitri is the Latin term for "law of the place where arbitration is to take
place" in the conflict of laws. In applying conflict of laws, it determines which
between the domestic laws of 2 or more states should apply to the resolution of a
dispute involving foreign elements.
1. Compare with:
i. Venue
▪ or place of ADR is the actual site where the arbitration is being conducted.
▪ In an international commercial arbitration, the place or venue of arbitration shall
be determined by the parties.
▪ In the absence thereof, the default place shall be in Metro Manila unless the
arbitral decides on a different place of arbitration taking into consideration the
circumstances of the case.
a. SEC. 30. Place of Arbitration. - The parties are free to agree on the place of
arbitration. Failing such agreement, the place of arbitration shall be in Metro
Manila, unless the arbitral tribunal, having regard to the circumstances of the case,
including the convenience of the parties shall decide on a different place of
arbitration.
The arbitral tribunal may, unless otherwise agreed by the parties, meet at any place
it considers appropriate for consultation among its members, for hearing witnesses,
experts, or the parties, or for inspection of goods, other property or documents.

b. Article 20 - Place of arbitration
1. The parties are free to agree on the place of arbitration. Failing such agreement,
the place of arbitration shall be determined by the arbitral tribunal having regard to
the circumstances of the case, including the convenience of the parties.
88
2. Notwithstanding the provisions of paragraph (1) of this article, the arbitral
tribunal may, unless otherwise agreed by the parties, meet at any place it
considers appropriate for consultation among its members, for hearing
witnesses, experts or the parties, or for inspection of goods, other property or
documents.
The Scope and Relative Importance of Lex Arbitri
* India v. McDonnell Douglas, award, 1992 (p. 412)
Facts : (SHORT) Arbitration between India and McDonnell Douglas. The parties
chose the law of India to govern the contract and affirmed that the arbitration shall
be conducted in accordance with the procedure provided by the Indian Arbitration
Act. However, the place of arbitration was London.
(LONG) Facts
The disputes between Union of India and Reliance arose from two oil and gas
production-sharing contracts. These contracts were governed by Indian substantive
law, and provided for UNCITRAL arbitration, with the seat in London, and the
arbitration agreement governed by the laws of England. Reliance commenced
arbitration, and Union of India challenged the arbitrability of certain claims. On 12
September 2012, the tribunal issued a final partial award concluding that the claims
put forward by Reliance were arbitrable.
Union of India started proceedings to set aside that award in the Delhi High Court,
India. These proceedings were filed according to Section 34, Part I, of the Indian
Arbitration and Conciliation Act 1996 (“ACA”). Section 34, in essence, provides for
the application for setting aside an arbitral award.
Although the seat of the arbitration was London, the Delhi High Court accepted
jurisdiction to hear the set aside proceedings. It reasoned this decision on three
points: (i) the applicability of Part I of the ACA had not been excluded; (ii) English
procedural law did not extend to issues of arbitrability or challenges to an award;
and, (iii) since the dispute raised by Union of India carried considerations of the
public policy of India, the jurisdiction of the Indian courts could not be excluded.
Reliance, in turn, lodged a special appeal in the SCI. It argued that the parties had
excluded the application of Part I of the ACA and, therefore, the set aside
proceedings should have been filed in the seat of the arbitration, i.e., English courts.
The SCI overturned the Delhi High Court’s decision on jurisdiction. It found that the
Indian courts had no jurisdiction to hear the set aside proceedings because the
arbitration agreement provided for: (i) London-seated arbitration; and (ii) English
law as the law governing the arbitration agreement. According to the SCI,
this “would clearly show that the parties have by express agreement excluded the
applicability of Part I of the [Indian Arbitration Act] to the arbitration proceedings”.
- Legal issue : What law governed the arbitration proceedings?
- Decision : The lex arbitri should be the law of the seat of the arbitration. Indian law
would apply when it is not inconsistent with English law.
To the extent that you choose the law, various laws come into play. There’s the law
applicable to the contract (basic choice of law with respect to substantive issues).
There’s the law applicable to the arbitration proceeding. There’s the law applicable
to the external proceeding. It is normal for the substantive law to differ from the
law of the proceedings (which are usually based on the seat of the arbitration).
When dealing with the law regulating the arbitral procedure, more than one law
could be involved. There could be internal procedure (internal deadlines, hearings,
how to deal with evidence — everything procedural in the sense that a procedural
code would specify who had to do what and the admissibility and weight of the
evidence) and the external procedure (i.e. the external controls/monitoring on the
arbitration).
In this case, where the arbitration is in London, if you say that the law of India
governs the external proceedings, it would be very impractical. You’d have to stop
the proceedings in London so you could go to India and argue there, and there
could be conflicting local rules on party agreement. The administrability of such a
decision would be so inconvenient and impractical, therefore, should be avoided.
The contract can import certain things into English law (supervisory law) by party
agreement. It needs to be done with the approval of the English Court. If there is a
conflict between party choice of law and public policy convenience by the court, the
court will like to go against the agreement. The parties could refuse to arbitrate in
the event the Lex Arbitri can’t be chosen, but otherwise it would just be considered
a defect on the contract.
Þ There are three kinds of law:
1. The one that governs the contract.
2. The one that governs the arbitration
3. The one that governs the procedure of arbitration, which are divided into two:
a) internal – which can be chosen by the party. In the case was the Indian Act, and
the
b) external – which is the national law of the place where the arbitration is being
held. It is the supervision enforced by the courts.
The internal law chosen by the parties cannot go against the public policy of the
external law of the place of the arbitration.
ii. Procedural Rules
▪ “The law applicable to the arbitral proceeding”. It is the law which will govern
arbitral proceedings and vest jurisdiction on the arbitrator.
- The procedural law of the arbitration is sometimes referred to as the lex
arbitri or curial law. The procedural law that will apply depends on the
place, or 'seat', of the arbitration.
The procedural law determines to what extent the local courts will be involved in
the process, for example:
 any formalities to be complied with;
 the extent to which the arbitration agreement excludes court jurisdiction;
 how much autonomy and discretion the parties have in choosing the
arbitral procedure;
 what support the court will give to the arbitration;
 whether the decision of the arbitral tribunal can be appealed, and what
timescales will apply;
 enforceability of the award.
The value of the local court's involvement in the arbitration depends on the speed
and quality of the courts in that particular jurisdiction.
III. Substantive law
The substantive law is the law governing the subject and merits of the dispute. It is
sometimes described as the 'applicable law', 'governing law' or 'law of the contract'.
In most jurisdictions, the parties are free to choose the law that will apply. An
arbitration agreement will generally set out its governing law at the outset, and the
parties' right to do so is enshrined in various international conventions and
institutional rules.
2. Importance of Lex Arbitri
I.What is the Lex Arbitri
Arbitral proceedings is variously referred to as the procedural law of the arbitration,
the curial law, the lex arbitri, or the loi de l'arbitrage.
Among other things, the procedural law applicable to an arbitration typically deals
with such issues as the appointment and qualifications of arbitrators, the
qualifications and professional responsibilities of parties' legal representatives, the
extent of judicial intervention in the arbitral process, the procedural conduct of the
arbitration, and the form of any award.
Different national laws take significantly different approaches to these various
issues. In some countries, national law imposes significant limits or requirements on
the conduct of the arbitration and local courts have broad powers to supervise
arbitral proceedings. Elsewhere, and in most developed jurisdictions, local law
affords international arbitrators virtually unfettered freedom to conduct the arbitral
process – subject only to basic requirements of procedural regularity (“due process”
or “natural justice”).
In most cases, the procedural law applicable to the arbitral proceedings will be the
law of the arbitral situs – the place where the parties have agreed that the
arbitration will be seated and that arbitral hearings are conducted. Parties
nonetheless have the power, under many developed legal systems, to agree to the
application of a different procedural law than that of the arbitral situs. This seldom
occurs in practice, and the effects of such an agreement are uncertain.
II. The content of the Lex Arbitri
a. Curial Support
b. Setting aside of an award:
An arbitral award may be set aside by the court specified in article 6 only if:
(a) the party making the application furnishes proof that:
 (i) a party to the arbitration agreement referred to in article 7 was under
some incapacity; or the said agreement is not valid under the law to which the
parties have subjected it or, failing any indication thereon, under the law of
this State; or
(ii) the party making the application was not given proper notice of the
appointment of an arbitrator or of the arbitral proceedings or was otherwise
unable to present his case; or
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(iii) the award deals with a dispute not contemplated by or not falling within
the terms of the submission to arbitration, or contains decisions on matters
beyond the scope of the submission to arbitration, provided that, if the
decisions on matters submitted to arbitration can be separated from those
not so submitted, only that part of the award which contains decisions on
matters not submitted to arbitration may be set aside; or
153
(iv) the composition of the arbitral tribunal or the arbitral procedure was not
in accordance with the agreement of the parties, unless such agreement was
in conflict with a provision of this Law from which the parties cannot
derogate, or, failing such agreement, was not in accordance with this Law; or
154
(b) the court finds that:
(i) the subject-matter of the dispute is not capable of settlement by
arbitration under the law of this State; or
(ii) the award is in conflict with the public policy of this State.
3. An application for setting aside may not be made after three months have
elapsed from the date on which the party making that application had
received that award or, if a request had been made under article 33, from the
date on which that request had been disposed of by the arbitral tribunal.
4. The court, when asked to set aside an award, may, where appropriate and
so requested by a party, suspend the setting aside proceedings for a period of
time determined by it in order to give the arbitral tribunal an opportunity to
resume the arbitral proceedings or to take such other action as in the arbitral
tribunal's opinion will eliminate the grounds for setting aside.
The effects and limits of awards rendered in ICA
1. There would be self-contained finality of arbitral awards if i) award in principle
enforced AND
ii) award not able to be set aside or refused enforcement by any court.
Þ The present status of ICA satisfies in general the 1st requirement (awards have in
principle effects from the moment they are rendered; requirements of confirmation
are very rare nowadays) BUT not the second one (awards can always be set aside or
refused enforcement) although the more you see judicial review to be deferential
to arbitrators, the more we advance towards a full status of self contained
finality of arbitral awards.
2. Question if ICA will ever become independent of national courts? Not likely.
→The real question is that of the depth & degree of control that national courts
exercise over awards.
→ Today, tendency to defer more and more to arbitrators but national courts are
still careful with matters of strong public policy & jurisdictional
issues (of the arbitral tribunal).
3. Recognition & enforcement can take place in all contracting states of the NY
Convention without prior confirmation in the country of origin.
4. In most countries, awards must be confirmed to be enforceable but have
preclusive effects without court scrutiny.
→ But the lex arbitri may pose a time-limit within
which confirmation can be sought. If this time-limit has expired, holder of the
unconfirmed (and unconfirmable) award may not even be able to restart an
arbitration proceeding upon the same claim.
5. Standard that is very much advocated for independence of the arbitration is: “the
award is enforceable and has preclusive effects without court scrutiny”.
C. ENFORCEMENT:
Awards subject to the NY Convention
- Awards have practical value only if they are recognized & enforced in national
courts.
- Major purpose of the NY Convention: to ensure the efficacy of awards by limiting
the grounds upon which a national court could refuse to recognize or enforce an
award.
- Question: Which awards are governed by the NY Convention?
Under art. 1, two types of awards:
i) those made in the territory of a State other than the State where the recognition
& enforcement of such awards are sought
ii) those not considered as domestic awards in the State where their recognition
and enforcement are
sought.
→ 2 standards of applicability of the Convention, which don’t necessarily coincide.
This arrangement came around because some of the European Countries
had tradition that applicable law wasn’t place of arbitration but a different one.
Germany & France didn’t want to give up that situation. → So, Convention adopted
both criteria. → The effect of that is to expand the scope of the NY Convention.
- NY Convention is a Universal Convention: No reciprocity requirement in principle,
unless if a contracting state chooses to make the reservation of reciprocity allowed
under art. I-3.
3. The substantive law
i. Article 28 - Rules applicable to substance of dispute
1. The arbitral tribunal shall decide the dispute in accordance with such rules
of law as are chosen by the parties as applicable to the substance of the
dispute. Any designation of the law or legal system of a given State shall be
construed, unless otherwise expressed, as directly referring to the substantive
law of that State and not to its conflict of laws rules.
2. Failing any designation by the parties, the arbitral tribunal shall apply the
law determined by the conflict of laws rules which it considers applicable.
3. The arbitral tribunal shall decide ex aequo et bono or as amiable
compositeur only if the parties have expressly authorized it to do so.
4. In all cases, the arbitral tribunal shall decide in accordance with the terms
of the contract and shall take into account the usages of the trade applicable
to the transaction.
Compagnie Case
FACT SUMMARY: Tunisian company, i.e., the Respondent had a dispute with the
French Ship-owner i.e., the Appellant and the matter of dispute was the
identification of Proper law of the contract based on the circumstances. Rule of
Law: To determine the appropriate Rule of law in the case, the court applied the
test of:  „Real and Closest Connection‟, by reference to which the contract was
entered into by the parties.  This is used at the time when there is no express
choice of law nor there is any implied choice of law specified by the parties in their
contract.
FACTS: In 1967, three parties, the Respondent, a Tunisian company and French ship-
owners, i.e., the Appellants conveyed a contract through a broker in Paris for the
transport of specified quantities of crude oil from one Tunisian port to another
(from La Skhirra to Bizerta). This contract was left to the brokers to prepare whose
nature was of written contract. Both parties, mutually, selected an English printed
form which appeared to be often used abroad. This form was for a tanker voyage
charter party which required considerable adaptation because under the contract
there were to be a number of shipments spread over nine months in vessels
supplied as required by the Appellants. After six shipments, dispute arose and the
respondent claimed damages. The contract entered between the parties provided
that any dispute shall be settled in London, each party appointing a
broker/merchant as an arbitrator of their own choice.
. ISSUES: To determine the law governing the contract, (i) What possible meaning
can be given to Clause 13 of the form1 which was decided by the Court of Appeal to
be meaningless and inapplicable? (ii) On the basis of Issue No. (i), which system of
law was the proper law of the contract? (iii) Whether the Court of Appeal was
correct in further deciding that the physical presence in the contract of clause 13
did not operate to displace the influence which would otherwise fall to be drawn
from the inclusion in the contract of London arbitration clause?
HOLDING AND DECISION: (i) LORD REID (LORD MORRIS OF BORTH-Y-GEST,
VISCOUNT DILHORNE AND LORD DIPLOCK also gave the judgment on similar
reasoning as that of Lord Reid) According to Lord Reid, Clause 13, like any other
provision in a contract, must be construed in light of the facts known to both parties
at the time when it was agreed. They knew that the Appellants owned a number of
tankers flying the French flag and it is found in the interim award that it was
contemplated by both parties that vessels owned by the Appellants would be used
at least primarily to perform the contract. Based on this, Clause 13 could be held to
mean that the contract was to be governed by the law of the flag of those vessels
i.e. the law of France. But he found this finding too indefinite to justify such a gloss.
In the absence of any positive indication of intention in the contract, the law will
determine the proper law by deciding with what country or system of law the
contract has the „closest connection‟. After weighing various factors, the system of
law can be held to be in favour of French law as Tunisian system of law is recently
been closely associated or are very similar but are different from English law. The
contract was negotiated in France in the French language through a French firm of
brokers and was made in France. There was to be payment in France and in French
currency. One party was a company incorporated in Tunisia. The other party was a
company incorporated under French law which at the time was registered as a
French company. Even if the parties decided London to be the place of arbitration,
it cannot be equaled to determine the proper law of the contract as both of them
has a different meaning under the International Contracts and Arbitration per se.
II. The Arbitration Agreement
A. Types
1. Ad Hoc Submission
When the parties decide to submit their disputes to arbitration, they may
choose between two types of proceedings: ad hoc arbitration or institutional
arbitration (also known as “administered arbitration”).
In ad hoc arbitration, it is the parties themselves who, in the absence of the
assistance of an arbitration institution, must choose the arbitrators or set up
the mechanisms for their appointment. They should further agree on the place
and language of arbitration, the applicable procedural rules, the arbitrators’
fees, etc. The most effective way to provide for these matters is to use the
UNCITRAL Model Arbitration Clause, which calls for arbitration under the
UNCITRAL Arbitration Rules.
Ad hoc arbitrations are not conducted under the auspices or supervision of an
arbitral institution. Instead, parties simply agree to arbitrate, without
designating any institution to administer their arbitration. Ad hoc arbitration
agreements will often choose an arbitrator or arbitrators, who is to resolve the
dispute without institutional supervision or assistance. The parties will
sometimes also select a preexisting set of procedural rules designed to govern
ad hoc arbitrations. For international commercial disputes, the United Nations
Commission on International Trade Law (“UNCITRAL”) has published a
commonly-used set of such rules.
Where ad hoc arbitration is chosen, parties usually will (and certainly should)
designate an “appointing authority,” that will select the arbitrator(s) if the
parties cannot agree. If the parties fail to select an appointing authority, then
the national arbitration statutes of many nations permit national courts to
appoint arbitrators.
2. Separate Arbitration Agreement
Historically, it used to be interpreted that when the arbitration agreement
was in the form of a clause contained in a contract, the clause was
accessory to the contract. It was thus concluded that the invalidity of the
contract also entailed the invalidity of the arbitration agreement. On the
basis of that interpretation, whenever a party pleaded invalidity of the
main contract and perforce of the arbitration agreement, thereby
challenging the arbitrators’ jurisdiction, the arbitrators were obliged to
suspend the arbitration proceedings until the question was decided by a
court.
In order to avoid this situation, most modern laws and rules on arbitration
have included two main principles: the principle of “separability”,
“autonomy” or “independence” of the arbitration clause, and that of
“KompetenzKompetenz” or “compétence de la compétence”.
Since the arbitration agreement is currently regarded as autonomous or
separate from the main contract or the underlying agreement, the
invalidity of the contract does not entail the automatic invalidity of the
arbitration agreement. It establishes full autonomy of an arbitration
agreement. Moreover, as arbitrators are empowered to examine and rule
on pleas raised against their jurisdiction, the arbitration is not teminated or
suspended by the mere raising of a motion that the arbitrators lack
jurisdiction.
B. Definitions of Arbitration Agreement
Article 7 - Definition and form of arbitration agreement
1. "Arbitration agreement" is an agreement by the parties to submit to
arbitration all or certain disputes which have arisen or which may arise
between them in respect of a defined legal relationship, whether contractual
or not. An arbitration agreement may be in the form of an arbitration clause
in a contract or in the form of a separate agreement.
2. The arbitration agreement shall be in writing. An agreement is in writing if
it is contained in a document signed by the parties or in an exchange of
letters, telex, telegrams or other means of telecommunication which provide
a record of the agreement, or in an exchange of statements of claim and
defence in which the existence of an agreement is alleged by one party and
not denied by another. The reference in a contract to a document containing
an arbitration clause constitutes an arbitration agreement provided that the
contract is in writing and the reference is such as to make that clause part of
the contract.
_2. The original 1985 version of the provision on the definition and form of
arbitration agreement (article 7) closely followed article II (2) of the New
York Convention, which requires that an arbitration agreement be in
writing. If the parties have agreed to arbitrate, but they entered into the
arbitration agreement in a manner that does not meet the form
requirement, any party may have grounds to object to the jurisdiction of
the arbitral tribunal.
It was pointed out by practitioners that, in a number of situations, the
drafting of a written document was impossible or impractical. In such
cases, where the willingness of the parties to arbitrate was not in question,
the validity of the arbitration agreement should be recognized.
3.
For that reason, article 7 was amended in 2006 to better conform to
international contract practices. In amending article 7, the Commission
adopted two options, which reflect two different approaches on the
question of definition and form of arbitration agreement.
C.
The first approach follows the detailed structure of the original 1985 text.
It confirms the validity and effect of a commitment by the parties to submit
to arbitration an existing dispute (“compromis”) or a future dispute
(“clause compromissoire”). It follows the New York Convention in requiring
the written form of the arbitration agreement but recognizes a record of
the “contents” of the agreement “in any form” as equivalent to traditional
“writing”. The agreement to arbitrate may be entered into in any form (e.g.
including orally) as long as the content of the agreement is recorded.
This new rule is significant in that it no longer requires signatures of the
parties or an exchange of messages between the parties. It modernizes the
language referring to the use of electronic commerce by adopting wording
inspired from the 1996 UNCITRAL Model Law on Electronic Commerce and
the 2005 United Nations Convention on the Use of Electronic
Communications in International Contracts.
It covers the situation of “an exchange of statements of claim and defence
in which the existence of an agreement is alleged by one party and not
denied by another”. It also states that “the reference in a contract to a
document” (for example, general conditions) “containing an arbitration
clause constitutes an arbitration agreement in writing, provided that the
the reference is such as to make that clause part of the contract”.
It thus clarifies that applicable contract law remains available to determine
the level of consent necessary for a party to become bound by an
arbitration agreement allegedly made “by reference”. The second
approach defines the arbitration agreement in a manner that omits any
form requirement. No preference was expressed by the Commission in
favour of either option I or II, both of which are offered for enacting States
to consider, depending on their particular needs, and by reference to the
legal context in which the Model Law is enacted, including the general
contract law of the enacting State. Both options are intended to preserve
the enforceability of arbitration agreements under the New York
Convention.
Article II, NYC
The term “agreement in writing” shall include an arbitral clause in a
contract or an arbitration agreement, signed by the parties or contained in
an exchange of letters or telegrams.
“In writing” & “Written agreement”
1. Article 7, Model Law
The arbitration agreement shall be in writing. An agreement is in
writing if it is contained in a document signed by the parties or in an
exchange of letters, telex, telegrams or other means of
telecommunication which provide a record of the agreement, or in an
exchange of statements of claim and defence in which the existence of
an agreement is alleged by one party and not denied by another. The
reference in a contract to a document containing an arbitration clause
constitutes an arbitration agreement provided that the contract is in
 writing and the reference is such as to make that clause part of the
contract.

2. Article II, NYC

1. Each Contracting State shall recognize an agreement in writing under

which the parties undertake to submit to arbitration all or any differences

which have arisen or which may arise between them in respect of a

defined legal relationship, whether contractual or not, concerning a subject

matter capable of settlement by arbitration.

2. The term “agreement in writing” shall include an arbitral clause in a

contract or an arbitration agreement, signed by the parties or contained in

an exchange of letters or telegrams.

3. The court of a Contracting State, when seized of an action in a matter in

respect of which the parties have made an agreement within the meaning

of this article, shall, at the request of one of the parties, refer the parties to

arbitration, unless it finds that the said agreement is null and void,

inoperative or incapable of being performed.