Recomendada - Chapter 4 - Choice of Law Governing International Arbitration Agreements

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Document information Chapter 4: Choice of Law Governing International

Arbitration Agreements
Publication (1)
International Commercial A recurrent and vitally-important issue in the arbitral process is the choice of the law
Arbitration (Third Edition) governing an international arbitration agreement. This subject arises in most disputes
over the existence, validity and interpretation of international arbitration agreements,
P 508 and continues to produce unfortunate confusion and uncertainty. This Chapter first
Bibliographic discusses the historic treatment of these choice-of-law issues, and then addresses
contemporary approaches and prospects for further development. It separately
reference addresses choice-of-law issues arising in connection with issues of substantive validity,
'Chapter 4: Choice of Law nonarbitrability, formal validity, capacity, authority to conclude and interpretation of
Governing International the arbitration agreement.
Arbitration Agreements', in
Gary B. Born , International §4.01 INTRODUCTION
Commercial Arbitration
(Third Edition), 3rd edition The choice of the law applicable to an international commercial arbitration agreement is
(© Kluwer Law a complex subject. The topic has given rise to extensive commentary, and almost equally
International; Kluwer Law extensive confusion. This confusion does not comport with the ideals of international
International 2021) pp. 507 commercial arbitration, which seeks to simplify, expedite and rationalize transnational
- 674 dispute resolution. (2) There have, however, been a number of encouraging developments
over the past decade suggesting solutions to these uncertainties, which provide the basis
for a durable and effective resolution of the issue.
Analysis of the choice of the law governing an international arbitration agreement begins
with the separability presumption. As discussed above, an international arbitration
agreement is presumptively separable from the underlying contract with which it is
associated. (3) As a consequence, it is theoretically possible (and common in practice) for
the parties’ arbitration agreement to be governed by a different law than the one
governing their underlying contract. (4)
Identifying the law that governs a separable international arbitration agreement – since
it is not necessarily the law governing the parties’ underlying contract – has often proved
to be a complex and confusing process. Different national courts, arbitral tribunals and
commentators have developed and applied a multiplicity of different choice-of-law rules
to the substantive validity of international arbitration agreements, ranging from the law
chosen by the parties to govern their underlying contract, to the law of the arbitral seat,
to the law of the judicial enforcement forum, to the law of the state with the “closest
P 509 connection” or “most significant relationship” to the parties’ agreement. (5) These
various choice-of-law rules, and the absence of any consensus with respect to any of
these rules, has often produced uncertainty about the choice of the law governing
international arbitration agreements.
This uncertainty can be exacerbated by the possibility that different issues relating to
international arbitration agreements may be governed by different applicable laws.
Thus, different laws may apply to issues of formal validity, substantive validity, capacity,
interpretation, assignment and waiver of an international arbitration agreement, as well
as to issues of nonarbitrability. (6) Questions of characterization also raise difficult
issues, as to which few clear rules exist, further complicating choice-of-law analysis in the
context of international arbitration agreements.
Moreover, questions regarding the choice of the law governing the arbitration agreement
routinely arise in multiple fora. These fora include the arbitral proceedings, judicial
enforcement fora requested to enforce the arbitration agreement (under Article II of the
New York Convention), judicial enforcement fora requested to annul the arbitral award
(under national law) and judicial enforcement fora requested to recognize the arbitral
award (under Articles III and V of the Convention). Different fora may apply different
choice-of-law rules, and may therefore reach different results regarding the law
applicable to the international arbitration agreement.
None of this complexity, or the uncertainties and costs it produces, comports with the
ideals and aspirations of the international arbitral process. In an effort to reduce these
complexities, some authorities and national courts have held that international
arbitration agreements are governed by principles of international law, rather than by
national law, or by a specialized validation principle. These principles of international
law provide a uniform set of standards governing international arbitration agreements,
designed both to reduce the complexities and uncertainties of current conflict of laws
analysis and to prescribe effective substantive rules for the enforcement of international
arbitration agreements.
Thus, as discussed below, it is well-settled that issues of formal validity of arbitration
agreements are subject to a uniform international rule, prescribed by Article II of the New
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York Convention. This rule mandates a “maximum” international form requirement, which
Contracting States are required to apply in enforcement proceedings under both Articles
II and V of the Convention. (7)
Broadly comparable, if distinguishable, approaches have been taken with respect to the
substantive validity of international arbitration agreements. As discussed below, French
judicial decisions and commentary have held that the substantive validity of
P 510 international arbitration agreements is directly governed by pro-arbitration principles
of substantive international law. (8) U.S. courts have taken a similar, but less sweeping,
approach, applying international minimum standards to the substantive validity of
arbitration agreements governed by the New York Convention. (9)
In a conceptually-related approach, Switzerland, Spain and several other states have
statutorily adopted a specialized validation principle that gives effect to international
arbitration agreements if they satisfy any one of several potentially-applicable national
laws with connections to the parties’ transaction. (10) Moreover, as discussed in greater
detail below, the better view of the New York Convention is that Articles II and V(1)(a)
mandate application of a comparable validation principle to the determination of the
substantive validity of international arbitration agreements. (11)
These various developments provide promising avenues for reducing the confusion and
uncertainty surrounding the choice of law applicable to international arbitration
agreements. In particular, they offer avenues for achieving the New York Convention’s
goals of facilitating the enforcement of international commercial arbitration agreements,
as well as giving effect to the objective intentions of parties to most such agreements.
§4.02 CONSEQUENCES OF SEPARABILITY PRESUMPTION FOR CHOICE OF LAW

APPLICABLE TO INTERNATIONAL ARBITRATION AGREEMENTS
The starting point for analysis of the choice of the law governing international arbitration
agreements is the separability presumption. As discussed above, this presumption
provides that an international arbitration agreement is presumptively separable from
the underlying contract with which it is associated. (12)
One of the most direct consequences of the separability presumption is the possibility
that the parties’ arbitration agreement may be governed by a different law than the one
P 511 governing their underlying contract. (13) That is, although the parties’ underlying
contract may be governed expressly, or impliedly, by the laws of State A, the associated
arbitration clause is not necessarily governed by State A’s laws, and may instead be
governed by the laws of State B or by principles of international law. This result follows,
almost inevitably, from the separability presumption, which postulates two separable
agreements, which can in principle be governed by two different legal regimes. (14) As
one arbitral award observed, “an arbitration clause in an international contract may
perfectly well be governed by a law different from that applicable to the underlying
contract.” (15) Or, in the words of a Singaporean judicial decision:
“The natural consequence of the doctrine of separability is that the parties’
choice as the proper law of an arbitration agreement is not necessarily the
same law which is their choice to be the proper law of their substantive
contract.” (16)
The separability doctrine does not mean that the law applicable to the arbitration clause
is necessarily different from that applicable to the underlying contract. (17) It instead
means that differing laws may apply to the main contract and the arbitration agreement.
Despite this possibility, however, in many cases, the same law governs both the
arbitration agreement and the underlying contract. (18)
The possibility that a different substantive law will apply to the parties’ arbitration
agreement than to their underlying contract is not merely of academic interest. Rather,
as discussed below, the result in a large proportion of the cases where the law applied to
the parties’ arbitration clause was different from the law applicable to the underlying
P 512 contract has been that the arbitration clause was more readily upheld against challenges
to its validity. (19) That is, by applying a law other than that governing the parties’
underlying contract, national courts and international tribunals have sought to safeguard
international arbitration agreements against challenges to their formal or substantive
validity based on local (often idiosyncratic or discriminatory) law. (20) Like the
separability presumption itself, (21) this has contributed significantly to the
enforceability of international arbitration agreements and the efficacy of the arbitral
process.
[A] Applicability of Different Laws to International Arbitration Agreement and

Underlying Contract
The effects of the separability presumption on the law applicable to international
arbitration agreements have been acknowledged in diverse sources. These authorities
provide that, where the arbitration agreement is separable from the underlying contract,
it may be governed by a different law from the underlying contract.
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[1] International Arbitration Conventions
Early international arbitration conventions did not address the question of what law
governed the arbitration agreement in any detail. Subsequent treaties have done so, but
only partially, leaving substantial scope for interpretation.
[a] Geneva Protocol and Geneva Convention
The Geneva Protocol provided that the courts of a Contracting State were required, as a
matter of international law, to recognize valid arbitration agreements; the Protocol did
so by prescribing, in Article 1, a uniform international standard of presumptive validity
applicable specifically to (certain international) agreements to arbitrate. (22) The
Protocol did not either refer expressly to the possibility of choosing the law governing
arbitration agreements, provide expressly that such law might differ from the governing
the underlying contract, or prescribe a rule for such a choice-of-law analysis. Instead, the
Protocol proceeded on the assumption that a different law applied to international
arbitration agreements than to the underlying contract and suggested that this law was a
uniform international standard (prescribed by the Protocol itself).
The Geneva Convention took a somewhat different approach to the issue. It indirectly
addressed the law governing the arbitration agreement, providing that one condition for
recognition of an arbitral award was that “the award has been made in pursuance of a
submission to arbitration which is valid under the law applicable thereto.” (23) This
provision rested on the premise that an international arbitration agreement would be
P 513 governed by a partic ular law, apparently national in character, which would prima
facie be selected by means of a choice-of-law analysis specifically conducted for the
arbitration agreement itself (“the law applicable thereto”). (24) The Convention did not,
however, prescribe what this choice-of-law analysis was.
[b] New York Convention
The New York Convention addresses the choice of the law governing an international
arbitration agreement more explicitly than either the Geneva Protocol or Convention. (25)
As discussed above, the New York Convention rests on the premise that the arbitration
agreement is a separable agreement, subject to specialized international rules of both
substantive and formal validity, which are set forth in Articles II(1), II(2) and II(3) of the
Convention. (26) Like Article 1 of the Geneva Protocol, Article II of the Convention does not
expressly prescribe a choice-of-law rule. Instead, Articles II(1) and II(3) set forth
substantive international rules of presumptive substantive validity, directly applicable
to (and only to) international arbitration agreements; in addition, Articles II(1), II(2) and
II(3) prescribe specialized international rules of formal validity, also applicable
specifically (and only) to international arbitration agreements. (27) The necessary
consequence of these substantive and formal standards of international law is that the
arbitration agreement will be subject, at least in part, to a different legal regime from the
parties’ underlying contract (to which these specialized rules do not apply).
Additionally, however, Article V(1)(a) of the Convention provides that an arbitral award
may be refused recognition where “the said [arbitration] agreement is not valid under the
law to which the parties have subjected it or, failing any indication thereon, under the
law of the country where the award was made.” (28) As discussed elsewhere, Article V(1)(a)
contemplates that parties may select a particular law to govern only their arbitration
agreement (“the law to which the parties have subjected it”) and establishes a
specialized default choice-of-law rule providing that, where the parties have not
explicitly or implicitly selected a law to govern their arbitration clause, that agreement
will be governed by “the law of the country where the award was made.” (29)
The Convention does not expressly address the relationship between Article II’s
international standards for the substantive and formal validity of international
arbitration agreements and Article V(1)(a)’s choice-of-law rules, apparently envisioning
application of national law rules to such agreements. It is clear, however, that the
purpose of Articles II and V is to enhance the validity and enforceability of international
P 514 commercial arbitration agreements. As discussed in greater detail below, these
provisions guarantee the presumptive validity of international arbitration agreements
and seek to minimize the impact of parochial national choice-of-law and substantive
rules governing the formation and validity of such agreements. (30) The essential point for
present purposes is that these provisions of the Convention rest on the premise that
international arbitration agreements are separable contracts, subject to a specialized
and sui generis international legal regime, which is not applicable to other contracts.
[c] European Convention
The European Convention is even more explicit in its treatment of the law applicable to
the arbitration agreement. Article VI(2) of the Convention provides a specialized set of
choice-of-law rules, applicable only to the “validity of an arbitration agreement.” (31) At
the same time, Article VII of the European Convention provides a separate regime for
determination of the law governing the “substance of the dispute” between the parties,
including particularly the law applicable to the parties’ underlying contract. (32) The
explicit contemplation of these provisions is that the parties’ arbitration clause is to be
treated as a separable agreement, which is subject to different and specialized conflict
3
of laws rules, and therefore potentially a different substantive legal regime, than the
parties’ underlying contract. (33)
[2] National Arbitration Legislation
National arbitration legislation and judicial decisions in a number of leading
jurisdictions recognize, either expressly or impliedly, that the parties’ arbitration
agreement is subject to different choice-of-law rules and may therefore be subject to
different substantive laws than that applicable to their underlying contract. A principal
objective of applying different substantive laws to the parties’ arbitration agreement
than to their underlying contract has been to enhance the enforceability of the former.
[a] UNCITRAL Model Law
Like Article II of the New York Convention, Article 8 of the UNCITRAL Model Law does not
expressly address choice-of-law issues but instead sets forth a substantive rule that
international arbitration agreements are presumptively valid and enforceable. (34)
Additionally, Article 7 of the Model Law parallels Article II of the Convention, prescribing
a specialized form requirement for international arbitration agreements. (35) Finally, like
Article V of the Convention, Articles 34(2)(a)(i) and 36(1)(a)(i) of the Model Law permit
annulment or non-recognition of an arbitral award if “a party to the arbitration
agreement … 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 [the country where the award was made].” (36)
P 515 As with Articles II and V(1)(a) of the Convention, these provisions acknowledge the
presumptive separability of international arbitration agreements for choice-of-law
purposes, and adopt specialized substantive and choice-of-law rules applicable to the
formal and substantive validity of such agreements (and not to other agreements). (37)
Consistent with these provisions, judicial authority in Model Law jurisdictions has
uniformly recognized that international arbitration agreements may be, and often are,
governed by a different law than that governing the underlying contract. (38)
[b] Swiss Law on Private International Law
The same basic approach as that of the UNCITRAL Model Law is followed in other
jurisdictions, which also prescribe statutory choice-of-law and substantive rules that are
applicable specifically and only to international arbitration agreements, irrespective of
the law governing the underlying contract. In particular, Article 178(2) of the Swiss Law on
Private International Law adopts this approach for international arbitration agreements
providing for arbitration in Switzerland. (39)
Thus, Article 178(2) prescribes a specialized choice-of-law regime applicable to
international arbitration agreements, but not to other types of agreements. Under Article
178(2), it is clear that the parties may select a law to govern their arbitration agreement
which differs from that applicable to their underlying contract, and that the applicable
choice-of-law rules under Article 178(2) may result in the application of a different law to
the arbitration agreement than to the underlying contract. (40) As explained by the Swiss
Federal Tribunal, “[t]he principle of the autonomy of the arbitral clause … means, inter
alia, that, in international commerce, the arbitration agreement and the main contract
can be subject to different laws.” (41)
In addition, it is clear that, under Article 178(2), different substantive legal rules will
apply to the arbitration clause than to the underlying contract. In particular, as discussed
in greater detail below, Article 178 prescribes an in favorem validitatis rule, or validation
principle, which has the effect that an arbitration agreement providing for arbitration in
P 516 Switzerland will be valid if it satisfies any of three possibly applicable laws (that
chosen by the parties, that applicable to the underlying contract, or Swiss law). (42)
This approach rests upon the presumptive separability of the arbitration clause, which
provides the premise for the application of specially-selected choice-of-law and
substantive laws to international arbitration agreements for the purpose of ensuring the
more effective enforceability of such agreements. Similarly, like the New York Convention
and UNCITRAL Model Law, Article 178(1) prescribes a special form requirement,
applicable only to international arbitration agreements. (43)
[c] French Code of Civil Procedure
French law also emphatically recognizes that a separable international arbitration
agreement can be – and indeed must be – governed by a different law from that
governing the underlying contract, and prescribes a specialized choice-of-law rule with
regard to the substantive validity of such agreements. As discussed elsewhere, French
courts hold that international arbitration agreements are “autonomous” from any
national legal system, and are instead directly subject to general principles of
international law; this approach is avowedly “pro-arbitration,” designed to give
maximum legal effect to agreements to arbitrate. (44) Thus, the French Cour de
Cassation’s landmark decision in Municipalité de Khoms El Mergeb v. Société Dalico held:
“according to a substantive rule of international arbitration law, the
arbitration clause is legally independent from the main contract in which it is
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included or which refers to it and, provided that no mandatory provision of
French law or international public policy (ordre public) is affected, that its
existence and its validity depends only on the common intention of the parties,
without it being necessary to make reference to a national law.” (45)
Other French authorities are to the same effect in affirming the existence of a specialized
conflict of laws and substantive legal regime applicable to international arbitration
agreements. (46)
[d] U.S. Federal Arbitration Act
The U.S. Federal Arbitration Act (“FAA”) does not expressly address the question of the law
applicable to international arbitration agreements. Nonetheless, as discussed elsewhere,
P 517 §2 of the domestic FAA prescribes a substantive rule of presumptive validity for
arbitration agreements, (47) which U.S. courts have interpreted as preempting a wide
range of discriminatory U.S. state law restrictions on the parties’ autonomy to enter into
valid agreements to arbitrate. (48) Section 2, and the federal common law rules based
upon it, set forth a specialized choice-of-law and substantive legal regime, broadly
comparable to that of the French Code of Civil Procedure and Swiss Law on Private
International Law, applicable only to arbitration agreements. The same analysis applies
to §§201, 208, 301 and 307 of the FAA, which implement the New York and Inter-American
Conventions. (49)
Consistent with this reasoning, U.S. courts have routinely held that international
arbitration clauses are governed by a different law than the underlying contract, typically
applying either U.S. federal common law rules derived from the New York Convention and
the FAA (50) or the law of the arbitral seat. (51)
Moreover, as discussed below, most U.S. courts have adopted an analysis of the
Convention which subjects international arbitration agreements to a different set of
substantive legal rules than that applicable to other contractual provisions. (52) Among
other things, the weight of U.S. judicial authority holds that substantive rules of
international law, derived from the Convention, limit the application of national law to
invalidate international arbitration agreements. (53) As with Swiss and French law, the
avowed purpose of these rules has been to enhance the enforceability of international
P 518 arbitration agreements.
Other U.S. authorities have also held that a different law may apply to an arbitration
agreement than to the underlying contract. Section 218 of the Restatement (Second)
Conflict of Laws explains:
“[T]he state whose local law governs the arbitration agreement will usually be
the same as the state whose local law would be applied to determine other
issues relating to the [underlying] contract. This will not, however, always be
so. … Situations will arise where the state of most significant relationship with
respect to the issue of arbitration is not the same as the state of most significant
relationship with respect to other issues relating to the [underlying] contract.”
(54)
As contemplated by §218, U.S. lower courts have frequently held that different state law
rules may apply to the parties’ arbitration agreement than to their underlying contract.
(55)
[e] Other Common Law Jurisdictions
Arbitration legislation in most common law jurisdictions does not expressly address the
law applicable to international arbitration agreements. (56) Even absent statutory
guidance, however, there is judicial precedent to the same effect as Model Law, French,
Swiss and U.S. authority, holding that the arbitration agreement may be governed by a
different law than the underlying contract. A leading English decision explains this
principle as follows:
“[I]t is by now firmly established that more than one national system of law
may bear upon an international arbitration. … [T]here is the proper law which
regulates the substantive rights and duties of the parties. … Exceptionally, this
may differ from the national law governing the interpretation of the
agreement to submit the dispute to arbitration.” (57)
P 519 Similarly, citing with approval an earlier English decision, the Indian Supreme Court
has concluded:
“[A]ll contracts which provide for arbitration and contain a foreign element
may involve three potentially relevant systems of law: (1) the law governing
the substantive contract; (2) the law governing the agreement to arbitrate and
the performance of that agreement; (3) the law governing the conduct of the
arbitration. In the majority of the cases all three will be the same, but (1) will
often be different from (2) and (3) and occasionally, but rarely, (2) may also
differ from (3). That is exactly the case here.” (58)
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Other common law jurisdictions have reached similar conclusions, also holding that the
arbitration agreement may be governed by a law different from that of the underlying
contract. (59)
[f] Other Civil Law Jurisdictions
Judicial decisions from civil law jurisdictions also recognize that an arbitration clause
may be governed by a different substantive law than the underlying contract. A few
national arbitration statutes (including in Algeria, Spain and Sweden) adopt approaches
to selecting the law applicable to the arbitration agreement that are broadly similar to
the specialized choice-of-law regime applicable in Switzerland. (60) China also has
statutory directives that confirm that the arbitration agreement may be governed by a
P 520 law different from that of the underlying contract. (61) The common theme of these
various legislative approaches is that the substantive law governing the arbitration
agreement is prescribed by specialized choice-of-law rules, and that this law may well be
different from that governing the parties’ underlying contract, either by virtue of the
parties’ choice or otherwise. (62)
In a representative decision applying such legislation, the Swedish Supreme Court held
that an arbitration clause, providing for arbitration in Stockholm, was subject to Swedish
law with respect to issues of validity, notwithstanding the parties’ express choice of
Austrian law to govern their underlying contract (which would arguably have invalidated
the arbitration agreement). (63) The court reasoned:
“no particular provision concerning the applicable law for the arbitration
agreement itself was indicated. In such circumstances, the issue of the validity
of the arbitration clause should be determined in accordance with the law of the
state in which the arbitration proceedings have taken place, that is to say,
Swedish law.” (64)
To similar effect, the Venice Court of Appeals held that “the arbitral clause is an
autonomous legal contract with respect to the contract in which it is included,” which
could be governed by a different substantive law than the underlying contract. (65) Courts
from other civil law jurisdictions have reached similar conclusions. (66)
Some jurisdictions have enacted idiosyncratic legislation addressing the law governing
an international arbitration agreement. For example, Turkish legislation provides that
the parties’ choice of law governing the arbitration agreement will be given effect, but
that, absent such a choice, Turkish law will apply to the agreement. (67) Like other civil
P 521 law jurisdictions, that statutory rule acknowledges the separable character of the
agreement to arbitrate, but, unlike most other jurisdictions, also adopts a discriminatory
conflict of laws rule, which is contrary to Turkey’s commitments under the New York
Convention (as discussed below). (68)
[3] International Arbitral Awards
International arbitral tribunals have also consistently recognized that an arbitration
clause may be governed by a different substantive law than the parties’ underlying
contract. Again, they have typically done so to avoid invalidation of an agreement to
arbitrate through application of local (and idiosyncratic) rules of law. Numerous
examples confirm this observation.
In the Final Award in ICC Case No. 6162, the tribunal applied Swiss law, as the law of the
arbitral seat, to the parties’ arbitration agreement; in doing so, it refused to apply the
substantive law selected by the parties’ choice-of-law clause to govern their underlying
contract, which would have invalidated the arbitration clause. (69) The tribunal in the
Final Award in ICC Case No. 1507 reached a similar conclusion, stating that “an arbitration
clause in an international contract may perfectly well be governed by a law different
from that applicable to the underlying contract.” (70) Another ICC tribunal likewise
observed that “the sources of law applicable to determine the scope and the effects of an
arbitration clause providing for international arbitration do not necessarily coincide with
the law applicable to the merits of a dispute submitted to such arbitration.” (71)
Similarly, the tribunal in the Final Award in ICC Case No. 4381 examined the validity of the
arbitration agreement by reference to the shared intentions of the parties and
international commercial custom, without considering the law applicable to the
underlying contract. (72) This prompted one commentator to opine that a “rule of arbitral
jurisprudence” was becoming established – namely, that “the validity and scope of an
arbitration agreement [are to be assessed] independently of the law governing the
P 522 contract and without reference to any national law.” (73) As with national court
decisions, the explicit purpose of the choice-of-law analysis adopted by international
arbitral tribunals for international arbitration agreements has been to minimize the
effect of national laws that restrict the parties’ autonomy to enter into those agreements
and to facilitate the enforceability of such agreements.
[B] Multiplicity of Choice-of-Law Rules for Law Governing International Arbitration

Agreements
An unfortunate consequence of the separability presumption in the choice-of-law context
6
has been the development of a multiplicity of different approaches to choosing the law
governing the formation, validity and termination of international arbitration
agreements. (74) National courts, arbitral tribunals and commentators have adopted a
wide variety of different choice-of-law rules governing issues of substantive validity,
ranging from application of the law of the judicial enforcement forum, (75) to the law of
the arbitral seat, (76) to the law chosen expressly or impliedly by the parties to govern
the arbitration agreement, (77) to the law governing the underlying contract, (78) to a
“closest connection” or “most significant relation” standard, (79) to a “cumulative”
approach looking to the law of all possibly-relevant states. (80)
Other authorities have suggested even more esoteric choice-of-law rules, including the
law of the arbitrator’s residence or lex mercatoria. Commentators have variously
identified three, four, or as many as nine approaches to the choice of law governing
international arbitration agreements. (81)
Moreover, even where a single choice-of-law rule is adopted, it is frequently applied in
significantly different ways; that is particularly true with respect to both implied choice
and “closest connection” standards, (82) where the same rule frequently produces
contradictory results. (83)
P 523 This multiplicity of choice-of-law rules potentially applicable to the arbitration
agreement does not advance the purposes of either arbitration agreements or the
international arbitral process. (84) The existence of multiple choice-of-law rules, and
conflicting applications of those rules, creates unfortunate uncertainties about the
substantive law applicable to arbitration agreements, as well as the risk of inconsistent
results in different fora.
In turn, this leads to uncertainty about the extent to which international arbitration
agreements can actually be relied upon to provide an effective means of resolving
international disputes. The multiplicity of choice-of-law rules also leads to delays and
expense, resulting from the need to engage in choice-of-law debates, before both arbitral
tribunals and national courts, when disputes arise concerning the formation or validity of
arbitration agreements. This is inconsistent with parties’ expectations of an efficient,
centralized dispute resolution mechanism in entering into international arbitration
agreements. (85)
Notwithstanding the uncertain state of their choice-of-law analyses, most national courts
and international arbitral tribunals have arrived at sensible results in resolving disputes
over the existence and validity of international arbitration agreements. In particular, as
discussed below, most national courts and arbitral tribunals have found ways to apply
existing choice-of-law doctrines so as to avoid the application of discriminatory or
idiosyncratic national laws and to instead generally uphold the validity of international
arbitration agreements. (86) Nonetheless, the analytical confusion about choice-of-law
questions regarding the arbitration agreement creates uncertainty, expense, delay and
the risk of inappropriate and unjust results, and should be clarified. The discussion in this
Chapter seeks to do so.
§4.03 ISSUES GOVERNED BY LAW APPLICABLE TO INTERNATIONAL

ARBITRATION AGREEMENTS
Preliminarily, a threshold inquiry in choice-of-law analysis is determining what issues are
governed by the law (or laws) applicable to an international arbitration agreement. These
issues potentially include: (a) formal validity of an arbitration agreement; (b) capacity of
parties to conclude an arbitration agreement; (c) authority of parties’ representatives to
conclude an arbitration agreement; (d) formation and existence of an arbitration
agreement; (e) substantive validity and legality of an arbitration agreement; (f)
“nonarbitrability” or “objective arbitrability”; (g) identities of the parties to an arbitration
agreement; (h) effects of an arbitration agreement; (i) means of enforcement of an
arbitration agreement; (j) interpretation of an arbitration agreement; (k) termination and
expiration of an arbitration agreement; (l) assignment of an arbitration agreement; and
(m) waiver of right to arbitrate. (87)
P 524 This Chapter addresses the choice-of-law treatment of a number of these issues. It
focuses in particular on questions of existence, substantive validity, formal validity,
termination, capacity and authority. Choice of law with regard to questions of the effects
and enforcement of an arbitration agreement, (88) assignment, (89) interpretation (90)
and waiver (91) are addressed separately in subsequent Chapters dealing with each of
these topics.
National courts or arbitral tribunals will not necessarily apply the same law to all of the
foregoing issues, even when they arise in relation to the same arbitration agreement. For
example, one national law may apply to questions of capacity (e.g., the law of a party’s
domicile), (92) while a different law applies to questions of form (e.g., the New York
Convention) (93) and substantive validity (e.g., the law of the arbitral seat). (94) Likewise,
different national laws may apply to questions of waiver (e.g., the law of the place where
a party commences judicial proceedings, in violation of an arbitration agreement) (95)
and to questions of nonarbitrability (e.g., the law purporting to establish objective
nonarbitrability). (96)
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It is also occasionally suggested that additional issues, beyond those identified above,
are governed by the law applicable to the parties’ arbitration agreement, including the
procedural law governing the arbitral proceedings (lex arbitri) or the law governing the
arbitral award (including form and publication). (97) In general, these suggestions fail to
distinguish adequately between the various aspects of the international arbitral process.
P 525 (98) Rather, as discussed below, it is relatively non-controversial that different choice-
of-law analyses, and potentially different substantive laws, may apply to these issues
than apply to the arbitration agreement. (99)
§4.04 CHOICE-OF-LAW RULES SELECTING LAW APPLICABLE TO EXISTENCE

AND SUBSTANTIVE VALIDITY OF INTERNATIONAL ARBITRATION AGREEMENTS
One of the most important issues affected by choice-of-law analysis in the context of
international arbitration agreements is the law applicable to the existence and
substantive validity of such agreements. This issue arises in a majority of the judicial
decisions and arbitral awards addressing choice-of-law questions in relation to
international arbitration agreements, and has important practical consequences for the
efficacy of any arbitration agreement. The following discussion considers: (a) the law
applicable to questions of existence and substantive validity where no agreement
selecting the law governing the arbitration agreement exists; and (b) the law applicable
to those issues where a choice-of-law agreement specifying the law governing the
arbitration agreement has been concluded.
[A] Choice of Law Applicable to Existence and Substantive Validity of International

Arbitration Agreements in Absence of Parties’ Agreement
There is almost universal consensus that parties may select the law applicable to their
international arbitration agreement. As discussed below, the parties’ autonomy to select
the law applicable to their arbitration agreement is confirmed by the New York
Convention (in Articles II(1) and V(1)(a)), (100) by other international treaties, (101) by
national arbitration legislation (including the UNCITRAL Model Law), (102) and by judicial
and other authorities. (103)
Although this basic principle of party autonomy is essentially undisputed, it has seldom
provided clear solutions in selecting the law governing international arbitration
agreements. That is principally because parties generally do not expressly specify the
law applicable specifically to international commercial arbitration agreements.
In relatively rare cases, involving large, highly complex transactions, parties may execute
separate “arbitration agreements,” as free-standing contracts that provide for the
arbitration of disputes arising from a specified set of transaction documents or from the
underlying project. (104) This sort of arbitration agreement will sometimes have its own
choice-of-law clause, specifically selecting the law applicable to the arbitration
agreement itself. (105) Similarly, more detailed arbitration provisions contained in
commercial contracts sometimes include choice-of-law clauses that are drafted to apply
specifically to the arbitration agreement itself. For example, such provisions may specify:
“This Article X (‘Arbitration’) shall be governed by the laws of State Y.” (106)
P 526 For the most part, however, it is unusual for parties to agree to choice-of-law clauses
specifically applicable to their arbitration agreement, either in provisions within the
arbitration agreement or otherwise. (107) Instead, international commercial contracts
frequently (in roughly 80% of cases) contain choice-of-law clauses which apply to the
underlying contract generally, without specific reference to the arbitration clause
associated with that contract. (108) For example, such “general choice-of-law clauses”
typically provide: “The Contract shall be governed by the laws of State Z” or “This
Agreement shall be construed and interpreted in accordance with the law of State W.”
(109)
It is ordinarily only in these “general choice-of-law clauses” that there will arguably be a
choice of the law applicable to the associated arbitration agreement. (110) As discussed
below, however, there is widespread disagreement about the proper interpretation of
general choice-of-law clauses.
In particular, there is little consensus on the question whether a general choice-of-law
provision in the parties’ underlying contract selects the law applicable to the separable
arbitration clause in that contract. (111) A number of authorities conclude that a general
choice-of-law clause ordinarily either expressly or impliedly selects the law applicable
to the arbitration agreement; (112) in contrast, a roughly equal body of authority reaches
the opposite conclusion, holding that a general choice-of-law provision ordinarily does
not extend to a separable arbitration clause. (113)
As a consequence, even where a contract contains a general choice-of-law clause, there is
substantial uncertainty whether that provision applies to the associated arbitration
clause. That uncertainty is heightened by the fact that choice-of-law provisions are
drafted in different ways, complicating consideration of the question whether such a
provision is either an express or implied choice of law governing the arbitration clause.
Moreover, a significant number of commercial contracts (roughly 20%) contain no choice-
of-law provision at all, (114) making the treatment of such provisions irrelevant to
8
selection of the law applicable to the arbitration agreement.
Where no general choice-of-law provision exists, or where such a provision is held
inapplicable to the arbitration clause, choice-of-law rules must be applied to select the
law applicable to the arbitration agreement. As detailed below, however, there is an
unfortunate multiplicity of competing approaches to the choice of the law governing
international arbitration agreements in the absence of a specific choice-of-law
agreement. (115) This variety of divergent conflict of laws approaches produces
P 527 uncertainty, expense and confusion, which contrast markedly with the objectives of
international arbitration, which aims at providing an efficient, predictable mechanism
for resolving international disputes. (116)
This confusion is not merely unfortunate, but also unnecessary. When the leading sources
of authority in the field are considered – international arbitration conventions, national
legislation, judicial decisions and arbitral awards – the confusion that sometimes
accompanies selection of the law applicable to international arbitration agreements can
be seen as largely unnecessary. These authorities point the way towards a reasonably
straightforward approach to choice-of-law issues, well-grounded in the text and
objectives of applicable international treaties and well-suited to provide for the
effective enforcement of international arbitration agreements in accordance with the
parties’ intentions.
As discussed below, the better choice-of-law approach for international arbitration
agreements is the default rule prescribed by Article V(1)(a) of the New York Convention
(and Article 34(2)(a)(i) of the UNCITRAL Model Law), which calls for application of the law
of the arbitral seat (and not the law selected by a general choice-of-law provision in the
underlying contract). The presumptive application of the law of the arbitral seat can be
rebutted but doing so should require a clear and specific choice of law applicable to the
arbitration agreement itself. This presumptive choice-of-law rule is consistent with, and
required by, the intentions of most commercial parties, the character and objectives of
international arbitration agreements and the default rules prescribed by the New York
Convention and UNCITRAL Model Law.
Moreover, where the application of choice-of-law rules would lead to application of a law
that would invalidate the parties’ arbitration agreement, then the better view is that the
New York Convention requires, and the Model Law contemplates, application of a
validation principle. As discussed below, this principle provides for application of the
law of that state, with a connection to the parties’ transaction, that would validate, rather
than invalidate, the arbitration agreement. (117) Again, this validation principle is
compelled by the presumptive intentions of commercial parties and the character and
objectives of international arbitration agreements.
A number of international arbitration conventions, including the European Convention
and the New York Convention, contain both substantive and choice-of-law rules that
apply to international arbitration agreements. These rules include substantive rules,
requiring the presumptive validity of international arbitration agreements, and default
choice-of-law rules, providing for selection of a national law in cases where the parties
have not expressly or impliedly chosen the law governing their arbitration agreement;
these default rules provide for application of the substantive law of the state where the
award will be made (i.e., the seat or place of arbitration). (118) Importantly, this rule is
not a complete answer to choice-of-law questions arising from international arbitration
agreements and must be complemented by additional principles, including the
P 528 international non-discrimination and validation principles discussed below. (119)

As noted above, neither the Geneva Protocol nor the Geneva Convention resolved the
question of the law applicable to the parties’ arbitration agreement. (120)
Notwithstanding its focus on international arbitration agreements, the Geneva Protocol
(dealing with arbitration clauses) was almost entirely silent on the question of applicable
law. (121) Instead, as noted above, Article 1 of the Protocol provided a uniform rule of
substantive international law, applicable to international arbitration agreements
regardless of the law chosen by the parties:
“Each of the contracting states recognizes the validity of an agreement whether
relating to existing or future differences between parties subject respectively
to the jurisdiction of different contracting states by which the parties to a
contract agree to submit to arbitration all or any differences that may arise in
connection with such contract relating to commercial matters or to any other
matter capable of settlement by arbitration, whether or not the arbitration is
to take place in a country to whose jurisdiction one of the parties is subject.”
(122)
In contrast, the Geneva Convention (dealing with arbitral awards) assumed that the
arbitration agreement might be subject to a national law in proceedings to recognize and
enforce arbitral awards, and that this law might be different from that governing the
underlying contract. (123) As noted above, the Convention required recognition of arbitral
9
awards where “the award has been made in pursuance of a submission to arbitration
which is valid under the law applicable thereto.” (124) The Convention did not, however,
provide any choice-of-law rules that addressed the choice of this national law, either
where there was a choice-of-law agreement or otherwise.
The New York Convention contains more detailed provisions than either the Geneva
Protocol or Geneva Convention regarding the choice of law applicable to the substantive
validity of international arbitration agreements. The Convention combines elements from
both the Geneva Protocol and Geneva Convention, together with additional provisions
that go beyond either of its predecessors.
The New York Convention’s treatment of the law governing international arbitration
agreements is complex. As discussed below, Article II(1) of the Convention, which deals
with the recognition and enforcement of arbitration agreements, does not expressly
address the question of the law applicable to the substantive validity of such
agreements. (125) Thus, Article II prescribes uniform rules of substantive international
P 529 law, including a rule of presumptive validity, applicable to all arbitration agreements
falling within the Convention’s scope, (126) without expressly addressing choice-of-law
issues.
The only express reference in the Convention to the law governing international
arbitration agreements is in Article V(1)(a), dealing with the recognition of arbitral
awards. (127) Article V(1)(a) provides a two-prong choice-of-law standard for selecting the
law governing an international arbitration agreement. Under this standard, an award may
be denied recognition if the arbitration agreement was “not valid under the law to which
the parties have subjected it or, failing any indication thereon, under the law of the country
where the award was made.” (128)
Articles II and V(1)(a) have given rise to a wide range of divergent interpretations and to
considerable uncertainty. Nonetheless, although complex, the provisions of Articles II
and V(1)(a) can be reconciled, producing a consistent and effective legal regime for the
recognition and enforcement of international arbitration agreements.
As discussed below, the better view of the New York Convention is that the same choice-
of-law rules apply under both Articles II and V; this result is required to avoid application
of different legal rules at different stages of the arbitral process and to ensure a
systematic interpretation of the Convention. Under this interpretation, Article II’s uniform
international rules of substantive validity apply in award recognition proceedings under
Article V, just as they apply in proceedings to enforce arbitration agreements under
Articles II(1) and II(3). At the same time, the national law selected by Article V(1)(a)’s
choice-of-law rule also applies, subject to Article II’s uniform international rules, in
proceedings under Article II to enforce the arbitration agreement.
As discussed in detail below, under Article V(1)(a)’s choice-of-law rule, the law applicable
to an international arbitration agreement is: (a) the law chosen by the parties to apply
specifically to the arbitration agreement; and (b) failing an express or implied choice of
law governing the arbitration agreement, the law of the arbitral seat. (129) Applying
Article V(1)(a), the better view is that a “general choice-of-law provision” in the parties’
underlying contract does not ordinarily constitute either an express or implied choice of
law governing the arbitration agreement; (130) rather, in most cases, the law governing
the existence and substantive validity of the arbitration agreement is the law of the
arbitral seat – applied as either the parties’ implied choice of law, or by virtue of Article
V(1)(a)’s default rule. (131)
Finally, and importantly, Article V(1)(a) also prescribes a validation principle. This
principle provides for application of the law of that state, with a connection to the
parties’ transaction, which will validate, rather than nullify, the parties’ arbitration
agreement. This validation principle is mandated by the Article V(1)(a), which gives effect
to the parties’ choice of law, either express or implied, including the parties’ overriding
intention that their international arbitration agreement will be valid and effective,
regardless of the jurisdictional and choice-of-law complexities that attend other
international contracts. (132)
P 530 [i] Article II: Substantive International Rule of Presumptive Validity and Validation
Principle
Paralleling the Geneva Protocol, Article II of the Convention prescribes a substantive
international rule of presumptive validity for international arbitration agreements.
Articles II(1) and II(3) of the Convention require Contracting States to recognize the
material terms of arbitration agreements and establish a rule of presumptive validity
applicable to those agreements. (133) As discussed elsewhere, this is a uniform,
mandatory rule of substantive international law that applies to all international
arbitration agreements falling within the scope of the Convention’s coverage. (134)
In particular, as discussed elsewhere, Article II prescribes international rules that
mandatorily allocate the burden of proof of invalidity of international arbitration
agreements to the party resisting enforcement (135) and require the application of
generally-applicable, non-discriminatory rules of contract law to issues of substantive
10
validity. (136) These uniform international rules apply regardless of the national law
chosen by the parties (or a court) to govern their international arbitration agreement.
That is clear from the text of Articles II(1) and II(3), both of which are expressed in
mandatory and unqualified terms, (137) and neither of which makes any provision for a
choice-of-law rule that might override or alter this language.
[ii] Article V(1)(a): Content of Article V(1)(a)’s Choice-of-Law Rules
In addition to paralleling the Geneva Protocol, the New York Convention also parallels
the Geneva Convention’s treatment of the law applicable to an international arbitration
agreement, while also containing additional provisions. (138) In particular, as noted
above, Article V(1)(a) of the New York Convention provides that an award need not be
recognized if the arbitration agreement was “not valid under the law to which the parties
have subjected it or, failing any indication thereon, under the law of the country where
the award was made.” (139) Article V(1)(a)’s two-part choice-of-law standard is
superficially straightforward.
First, as noted above, Article V(1)(a) provides for recognition of the parties’ autonomy and
application of the law chosen by the parties to govern their arbitration agreement. That
basic rule, permitting the parties to select the law governing the arbitration agreement,
is discussed in greater detail below. (140) Among other things, Article V(1)(a)’s first prong
gives effect to either an express or an implied choice of law governing the arbitration
agreement. (141)
Second, Article V(1)(a)’s second prong provides a default choice-of-law rule, applicable in
P 531 cases where the parties have not expressly or impliedly chosen the law governing their
arbitration agreement. That default rule provides for application of the law of the
arbitral seat to the substantive validity of the arbitration agreement. (142)
[iii] Article V(1)(a): Applicability to Recognition and Enforcement of Arbitration Agreement
Although its terms appear clear, Article V(1)(a)’s default choice-of-law rule has given rise
to substantial uncertainties in the context of the enforcement of arbitration agreements
(as distinguished from enforcement of arbitral awards). Initially, and most obviously, it is
not self-evident how to apply the law of the place the award “was” made in an action to
enforce an arbitration agreement, which by definition occurs well before any award is
rendered. Of course, one could try to predict where a future award “will” be made, which
will ordinarily be the parties’ chosen arbitral seat. (143) But, in some cases, the parties’
arbitration agreement specifies no arbitral seat, making it difficult even to speculate
about the place where an award might be made. (144)
In practice, parties often either select the seat of the arbitration in their arbitration
agreement (145) or agree to institutional rules providing a mechanism for selecting the
arbitral seat early in the arbitral process. (146) Accordingly, there should be few
instances in practice where it will be impossible to identify the place where the arbitral
award will be made. (147) Nonetheless, such cases exist (and parties or tribunals also
sometimes change the seat of the arbitration, in the course of the arbitral proceedings
(148) ). The reality is that the text of Article V(1)(a)’s default rule, looking to the place
where an award has been made, does not apply comfortably in the context of
proceedings to enforce arbitration agreements, which occur before any award has been
made.
In part for the reasons outlined above, there has been considerable debate and
uncertainty as to whether Article V(1)(a)’s choice-of-law rule applies at the stage of
recognition of an arbitration agreement (under Article II), as well as at the stage of
recognition of an arbitral award (under Article V).
A few authorities have held that Article V(1)(a)’s choice-of-law rule applies only in
proceedings to recognize and enforce arbitral awards; they reason that the absence of
any choice-of-law rule for the arbitration agreement in Article II leaves courts and
arbitral tribunals free to ignore Article V(1)(a), and to apply different standards when
P 532 deciding whether to recognize an arbitration agreement under Article II. As one
commentator summarized this analysis: “the law to be applied by a court … as
contemplated by Art. II(3) of the New York Convention, has nothing to do with the law to
be applied by a court, in case of a request for enforcement, under Art. V(1)(a) of the
Convention.” (149) Adopting this analysis, some courts have concluded that, at the stage
of deciding whether to recognize an arbitration agreement under Article II of the
Convention, national courts should apply their own substantive law, typically on the
grounds that the issue is whether their own jurisdiction was excluded. (150)
This analysis is unsatisfactory and wrong. There is little, if anything, to recommend
applying two different legal rules to the same arbitration agreement at different points in
time, with the choice-of-law rules and resulting choices of substantive law varying
depending on the point in time at which the issue is considered. That plainly makes little
or no sense, as a matter of logic, and squarely contradicts the objective of predictability
that underlies private international law and choice-of-law analysis generally, (151) the
international arbitration regime in particular (152) and the New York Convention
specifically. (153) Further, this analysis produces the highly undesirable result that an
arbitration agreement may be found valid (or invalid) at one stage of a dispute, and then
11
subjected to a different law and treated in the opposite manner at a later stage; that will
inevitably result in delays and wasted expense, as well as the possibilities of inconsistent
decisions about the validity of the same arbitration agreement. (154)
P 533 Nor does it make sense to suggest that different national courts should be either
encouraged or permitted to apply their own local law to the question whether an
international arbitration agreement is valid when presented with the question whether to
stay or dismiss a parallel litigation. (155) In fact, the opposite is true, particularly in
interpreting an international instrument, such as the New York Convention, specifically
designed to apply uniform rules and produce uniform results in different national courts.
(156)
The international arbitral process aspires generally towards a maximally uniform
approach by national courts presented with disputes about the substantive validity of a
particular international arbitration agreement. The New York Convention, and Articles II
and V(i)(a), are intended specifically to achieve the same objective. (157) A lack of
uniformity on this issue would result in some courts referring parties to arbitration, and
others refusing to do so, under the same arbitration agreement; that makes no sense and
results in unnecessary litigation, forum shopping and uncertainty. Rather, insofar as
possible, it is much more desirable for all national courts to reach the same conclusion
as to the validity (or invalidity) of a particular international arbitration agreement. (158)
Consistent with this analysis, better-reasoned national court decisions (159) and
commentary (160) have concluded that the same choice-of-law rules should apply under
P 534 the New York Convention to selecting the law governing an arbitration agreement’s
formation and substantive validity at both the stage of enforcing the agreement (under
Article II) and the stage of enforcing an arbitral award (under Article V). Specifically,
these authorities have concluded that the choice-of-law rules contained in Article V(1)(a)
of the Convention are equally applicable under Article II of the Convention. (161) As one
well-reasoned national court decision concluded:
“[P]reliminary issues concerning the validity of an arbitration agreement may
not be decided according to the lex fori. Hence, where the New York
Convention applies, reference should be made, for all issues which concern
the validity of an arbitration agreement and are not regulated by the
Convention itself, to the law to be determined according to Art. V(1)(a) of the
New York Convention.” (162)
This result also comports with the more recent and considered approach prescribed by
Articles VI(2) and IX of the European Convention. As discussed below, these provisions
were drafted to apply the same choice-of-law rules to arbitration agreements at all
stages at which the validity of such agreements is considered. (163)
As a consequence, the proper view is that Article V(1)(a)’s choice-of-law rule, which gives
effect to an express or implied choice of law by the parties or selects the law of the
arbitral seat absent such choice, applies in proceedings under Article II to recognize and
enforce international arbitration agreements. That ensures consistent treatment of
international arbitration agreements throughout the parties’ dispute and advances the
goals of enforcement and uniformity of the Convention.
[iv] Article V(1)(a): Default Rule Selecting Law of the Arbitral Seat
As discussed above, Article V(1)(a) prescribes a default choice-of-law rule, applicable in
cases where the parties have not expressly or impliedly chosen the law governing their
international arbitration agreement. That default rule provides for application of the law
of the arbitral seat to the existence and substantive validity of the arbitration
agreement. (164) This rule is apparent from the language of Article V(1)(a), which provides
that an award may be denied recognition if the underlying arbitration agreement was
“not valid under the law to which the parties have subjected it or, failing any indication
thereon, under the law of the country where the award was made.” (165)
P 535 The preparatory materials for the New York Convention make clear that the
specification of a choice-of-law rule was a critical aspect of negotiations on the text of
Article V(1)(a). (166) Similarly, commentary and court decisions are unanimous that
Article V(1)(a)’s default rule, in the absence of a choice-of-law by the parties for the
arbitration agreement, is the law of the arbitral seat. (167)
Article V(1)(a)’s default rule both reflects and gives effect to the likely intentions of
commercial parties and the objectives of the arbitral process. This conclusion is
confirmed by the identical default rules prescribed by the Inter-American Convention
(168) and the European Convention, (169) as well as by the UNCITRAL Model Law. (170)
Similarly, the Hague Convention on Choice of Court Agreements, addressing analogous
issues, prescribes the same choice-of-law rule for forum selection agreements (i.e., the
law of the chosen forum). (171)
As discussed elsewhere, it is elementary that the arbitration agreement is a separable
agreement, distinct from the parties’ underlying commercial contract. (172) It is therefore
both understandable and appropriate that the specialized default rule for the law
applicable to such agreements is the law of the arbitral seat, not the law governing the
12
underlying contract. Parties may, as discussed above, include a choice-of-law provision
in their arbitration agreement itself, selecting the law applicable to that agreement. (173)
When such a provision exists, Article V(1)(a) requires that it be given effect. (174) When
parties do not include a choice-of-law provision in their arbitration clause, and instead
only include a general choice-of-law provision in their underlying contract, there is no
reason to extend that provision to the separable arbitration agreement.
The separable arbitration agreement has a fundamentally different (“procedural” and
“adjudicative”) character from the underlying contract: the arbitration agreement is
“ancillary” or “parasitical,” providing for a sui generis adjudicative process that is
different in its terms, character and objectives from the parties’ underlying commercial
contract. (175) The parties’ arbitration agreement is concerned (exclusively) with the
P 536 adjudication of disputes using procedures specified in that agreement; (176) in
contrast, the parties’ underlying contract is concerned, again, exclusively, with
commercial terms of an economic transaction (e.g., price, goods of services, delivery,
warranties). The fundamentally different terms, character and objectives of the two
agreements are confirmed by the fact that many arbitration clauses in commercial
contracts can be replaced with different arbitration agreements, while those same
arbitration clauses could just as readily be used instead in other, entirely different
commercial contracts.
As a consequence, it is presumptively wrong to apply the law chosen by the parties to
govern their underlying contract (in a general choice-of-law clause) to the arbitration
agreement. Rather, a general choice-of-law provision presumptively selects the law
governing the parties’ underlying commercial contract, not the law governing the
procedural terms of the separable arbitration agreement.
In selecting the law governing their underlying contract, the parties’ intention is to
regulate that contract – and not ordinarily the very different terms of the arbitration
agreement. This is partially a consequence of the separability presumption, but, more
importantly, a result of the fundamentally different character, terms and objectives of
the two different agreements. The choice of law governing one of these agreements has
very little logical connection or practical relationship to the choice of law governing the
other, very different agreement.
This conclusion is confirmed by the Convention’s specialized choice-of-law rule in Article
V(1)(a) for international arbitration agreements selecting the law of the arbitral seat, as
well as by the Convention’s equally specialized rules of presumptive validity and formal
validity for international arbitration agreements. (177) Like similar rules applicable to
forum selection agreements, (178) these rules apply specifically, and only, to
international arbitration agreements, regardless of the law applicable to the underlying
contract. (179) The Convention’s treatment of choice-of-law rules and issues of substantive
and formal validity reflects, and provides further evidence of, the presumptive intentions
of commercial parties to treat their international arbitration agreements as separable
agreements, not either necessarily or ordinarily subject to the law applicable to the
underlying contract.
It is equally clear that the arbitration agreement is much more closely connected to the
arbitral seat, and its arbitration law, than to the law governing the underlying contract.
(180) The law of the arbitral seat provides the procedural law (or lex arbitri) of the
arbitration, governing virtually all aspects of the arbitral process. (181) Among other
things, and as discussed in detail elsewhere, the law of the arbitral seat governs the
arbitrators’ competence–competence, the number of arbitrators, the selection of the
arbitral tribunal, the arbitrators’ independence and impartiality, the language of the
arbitration, the procedures in the arbitration, disclosure, interim relief, the choice of
substantive law, confidentiality, consolidation and joinder, the tribunal’s remedial
powers and the form of the award. (182) With respect to each of these issues, the law of
the arbitral seat prescribes particular default or mandatory rules, which differ
(frequently materially) from those in other jurisdictions.
P 537 Critically, however, all of these procedural matters are also intimately and pervasively
interrelated with the terms of the arbitration agreement: that agreement’s principal
function, as a “procedural contract,” is to prescribe the details of precisely the same
aspects of the arbitral procedure that are governed by and implemented pursuant to the
law of the arbitral seat. (183) Thus, in many cases, arbitration agreements will expressly
(or impliedly) address virtually all of the procedural matters that are also regulated by
the law of the arbitral seat (such as competence–competence, constitution of the
tribunal, the arbitrators’ independence and impartiality, language, arbitral procedures,
interim relief, disclosure, consolidation, confidentiality and the like). (184)
Thus, the law of the arbitral seat may prescribe a validation principle (185) and a pro-
arbitration standard of proof for international arbitration agreements, (186) while the law
of the underlying contract does neither and instead prescribes an anti-arbitration
standard of proof; (187) or the law of the arbitral seat may prescribe broad rules for
applying the arbitration agreement to non-signatories, while the law of the underlying
contract provides narrow rules; (188) or the law of the arbitral seat may prescribe implied
confidentiality obligations, while the law of the underlying contract does not; (189) or the
law of the arbitral seat may prescribe broad implied authority for the arbitral (or other)
13
tribunal regarding competence-competence, (190) consolidation and joinder, (191)
provisional relief, (192) or remedial measures, (193) while the law of the underlying seat
may provide for no or narrower authority in each case. It makes no sense to adopt a
choice-of-law rule that inevitably produces these (and numerous other) conflicts – which
is precisely why the default choice-of-law rules in the New York Convention and UNCITRAL
Model Law do not do so, and instead provide that the law governing the arbitration
agreement is presumptively the law of the arbitral seat.
It makes no sense to subject the arbitration agreement – whose basic and principal
purpose is to prescribe the procedures of the arbitral process – to a different law from
that of the arbitral seat – whose law governs exactly the same arbitral process,
sometimes in mandatory terms. (194) Subjecting the arbitration agreement and the
arbitral process to two different laws gives rise to uncertainties and possibilities of
conflict that directly contradict the objectives of the arbitral process and the intentions
of most commercial parties. (195)
Moreover, because the law of the arbitral seat governs most aspects of the arbitral
procedures, it makes little sense to think that parties would intend for a different
jurisdictions’ law to govern their arbitration agreement’s provisions addressing precisely
the same issues. The simpler, more sensible conclusion is that parties presumptively
P 538 intend the same law to apply in both cases. Again, that is why the New York Convention
and UNCITRAL Model Law adopt precisely this default choice-of-law rule.
Likewise, the arbitral seat’s courts have primary (and exclusive) supervisory authority
over the arbitration, (196) including with respect to critical matters of constituting the
arbitral tribunal, ensuring compliance with the mandatory procedural norms of the
arbitral seat, assisting in evidence-taking and deciding applications to annul arbitral
awards. (197) Again, the natural and most sensible assumption is that the arbitration
agreement, which provides the procedures that the courts of the arbitral seat will
supervise, is governed by the law of the arbitral seat.
Relatedly, Article V(1)(a)’s default rule produces clear and easily-predictable results: in
the overwhelming majority of all cases, the arbitral seat is either specified by the parties
or clearly designated by the arbitral tribunal or institution. Application of the law of the
arbitral seat presents none of the interpretive issues and uncertainties that result from a
rule relying on the implied intent of general choice-of-law provisions. Although parties, of
course, have the autonomy to subject their arbitration agreement to the law governing
the underlying contract, rather than that of the arbitral seat, the presumptive rule is the
opposite as both a matter of the language of Article V(1)(a) of the Convention and the
most likely (and sensible) intentions of commercial parties.
For the reasons summarized above, absent clear language, a general choice-of-law
provision should not be interpreted as applying to the separable arbitration agreement.
The presumptive intentions of commercial parties in agreeing to general choice-of-law
provisions is to regulate their underlying commercial relationship, not their
fundamentally different dispute resolution procedures; rather, those arbitral procedures
are impliedly intended to be governed by the procedural law of the arbitration. As a
consequence of the foregoing, the better view is that the New York Convention requires
application of the law of the arbitral seat to the international arbitration agreement
(absent clear and specific contrary provisions in the parties’ contract). That conclusion is
mandated by Articles II(1) and V(1)(a), which require giving effect to the parties’ choice of
law governing their arbitration agreement: (198) for the reasons summarized above, the
parties’ implied intention is not that a general choice-of-law clause will select the law
applicable to the arbitration agreement, but instead that the law of the arbitral seat will
govern that agreement. Moreover, this result is also mandated by Article V(1)(a)’s default
choice-of-law rule, even if the selection of the arbitral seat is not regarded as an implied
choice of law.
[v] Article V(1)(a): Effects of Default Choice-of-Law Rule on International Substantive Rules
and Validation Principle
Although Article V(1)(a)’s choice-of-law rule applies in proceedings to enforce
international arbitration agreements under Article II, that conclusion is subject to
important qualifications. These qualifications concern Article II’s substantive
international rules and the validation principle, applied in a number of jurisdictions and
arguably required by Article II.
First, the applicability of Article V(1)(a)’s choice-of-law rules at the stage of enforcing an
arbitration agreement does not affect the Convention’s uniform international rules,
establishing the presumptive validity of international arbitration agreements and
limiting the grounds of invalidity of such agreements to internationally-neutral contract
P 539 law defenses. (199) As discussed above, Article II of the Convention allocates the
burden of proof of the invalidity of an international arbitration agreement to the party
resisting enforcement of the arbitration agreement and precludes application of
discriminatory or idiosyncratic national law rules to invalidate such agreements. (200)
These rules are mandatory substantive requirements of the Convention, that apply
without regard to the choice-of-law rules or national laws that are applied to an
arbitration agreement. (201)
14
Second, as discussed below, Article II is properly interpreted as requiring application of
a validation principle, in order to give effect to the parties’ intentions and Article II(3)’s
rule of presumptive validity of international arbitration agreements. (202) That validation
principle applies fully under Article V(1)(a). As discussed elsewhere, the validation
principle reflects the parties’ presumed, but overriding, intentions in concluding an
international arbitration agreement, which are that their arbitration agreement will be
valid and effective; those intentions are given effect under Article V(1)(a)’s first prong as
an implied choice of law, which supplements their choice of the law of the arbitral seat.
(203)
Finally, from a structural perspective, Article V(1)(a) could not have the effect of
precluding application of a validation principle. As discussed elsewhere, Articles III and V
of the Convention require recognition of arbitral awards by Contracting States in
specified cases, (204) while setting out permissive grounds on which Contracting States
may deny recognition of arbitral awards in other cases. Article V does not, however, ever
P 540 require non-recognition of an award, including when one of Article V(1)’s exceptions
applies. (205) Rather, as Article VII(1) makes clear, Article V(1)(a) permits, but does not
require, non-recognition of an award where the arbitration agreement is invalid under
the law of the arbitral seat. (206)
As a consequence, nothing in Article V(1)(a) would prevent a Contracting State from
applying a validation principle (or other conflicts rule) to grant broader or more favorable
recognition to an arbitral award than that resulting under the choice-of-law rule
contained in Article V(1)(a). The same analysis applies when Article V(1)(a)’s choice-of-law
rules are applied in the context of litigation over the validity of an arbitration agreement
under Article II: Contracting States may not deny recognition of an agreement that would
be valid under Article V(1)(a)’s choice-of-law rule, but are free to recognize the validity of
arbitration agreements through application of another law (whether applied by reason of
a validation principle or otherwise), even when Article V(1)(a)’s choice-of-law rule would
not provide for this result. (207)
The European Convention also contains provisions regarding the law applicable to
international arbitration agreements. Those provisions expressly recognize the parties’
autonomy to select the law governing their international arbitration agreement. Thus,
Article VI(2) of the Convention provides that, when required to rule on the existence or
validity of an arbitration agreement, the courts of a Contracting State shall do so:
“(a) under the law to which the parties have subjected their arbitration
agreement; (b) failing any indication thereon, under the law of the country in
which the award is to be made; (c) failing any indication as to the law to which
the parties have subjected the agreement, and where at the time when the
question is raised in court the country in which the award is to be made
cannot be determined, under the competent law by virtue of the rules of
conflict of the court seized of the dispute.” (208)
The same Article of the Convention goes on to provide that “[t]he courts may also refuse
recognition of the arbitration agreement if under the law of their country the dispute is
not capable of settlement by arbitration.” (209)
In substance, the European Convention provides a similar choice-of-law approach to that
of Article V(1)(a) of the New York Convention, giving primary effect to the parties’ choice-
of-law agreement, with a default rule selecting the law of the arbitral seat, if the parties
have not selected any law governing their arbitration agreement. (210) In addition, the
P 541 European Conven tion specifies a further, default choice-of-law rule. (211) This rule is
applicable in circumstances where the parties have made no express or implied choice
of law, and where it is impossible to determine the arbitral seat in advance, but it
provides nothing beyond the statement that a court may apply its generally-applicable
choice-of-law principles.
[d] Inter-American Convention
Choice-of-law analysis under the Inter-American Convention parallels that under the New
York Convention. As discussed elsewhere, Article 1 of the Inter-American Convention
parallels Article II(1) of the New York Convention, imposing a mandatory rule of
presumptive validity of international arbitration agreements, giving effect to the
material terms of such agreements. (212) Likewise Article 5(1)(a) parallels Article V(1)(a) of
the New York Convention, prescribing the same two-part choice-of-law rule. (213) As with
the New York Convention, these provisions are best interpreted as mandating a
presumptive rule that international arbitration agreements are governed by the law of
the arbitral seat, subject to a validation principle.
[e] Rome Convention and Rome I Regulation
Finally, the 1980 Rome Convention and subsequent Rome I Regulation also have potential
relevance to the choice of law applicable to some arbitration agreements. Nonetheless,
the importance of the Convention and Regulation for international arbitration
agreements is limited.
15
The Convention and Regulation are not of direct relevance to choosing the law applicable
to arbitration agreements because they expressly exclude such agreements from their
scope. (214) It has been suggested that this exclusion “helped to marginalize the choice-
of-law” approach to international arbitration agreements, in favor of direct application of
“international” standards, as applied by French courts. (215) That is misconceived.
The Rome Convention and Regulation excludes arbitration agreements from their scope
because of the special issues that those agreements raise and the particular treatment
that they require, insofar as the choice of applicable national law was concerned. (216)
This again underscores the distinct and separable character of arbitration agreements,
which were not considered to be subject to the same choice-of-law rules as the
commercial contracts with which they are associated. Nonetheless, the decision not to
P 542 address specialized questions of this nature, in a treaty and Regulation of general
application, in no way implies approval or disapproval of any particular approach to
selecting the law applicable to international arbitration agreements.
Nor has there been any indication, since the Rome Convention was adopted in 1980, that
choice-of-law issues have become less important with regard to arbitration agreements.
On the contrary, both national courts and international arbitral tribunals continue
routinely to grapple with questions of what law applies to international arbitration
agreements. (217) In this regard, the basic choice-of-law principles motivating the
provisions adopted in the Rome Convention and Rome I Regulation (i.e., party autonomy
and a “closest connection” default rule) have been applied by both national courts and
arbitral tribunals to the choice of the law governing international arbitration agreements.
(218)
P 543 Nonetheless, it is correct to say that the exclusion of arbitration agreements from the
scope of the Rome Convention and Regulation reflects the special character of those
agreements, which were recognized as a separable and distinct category of contracts.
That recognition further confirms one of the rationales of the separability presumption,
as well as the consequences of that presumption for choice-of-law analysis. (219) The
Convention and Regulation’s exclusion of arbitration agreements also reflects, and
confirms, the fact that those agreements are properly subject to specialized, sui generis
choice-of-law rules, derived from Articles II and V(1)(a) of the New York Convention, rather
than generally-applicable choice-of-law rules applicable to other contracts.
[f] U.N. Convention on Contracts for the International Sale of Goods
The United Nations Convention on Contracts for the International Sale of Goods (“CISG”)
applies to specified international sales contracts. (220) When the CISG applies to a
contract, it arguably also applies to the arbitration clause contained in that contract. The
separability presumption suggests the contrary, but some authorities have concluded
that the CISG should nonetheless apply to at least some aspects of arbitration clauses
associated with international sales contracts governed by the Convention.
A number of national courts have held that the CISG applies to questions of the formation
of arbitration clauses in international sales contracts. (221) Some authorities have also
suggested that the CISG applies to issues of formal validity, providing a less demanding
rule of formal validity than Article II of the New York Convention. (222) Other authorities
reject or question this view; (223) in the words of one commentator:
“The CISG cannot be employed for relaxing the formal requirements of
arbitration agreements. The scope of the freedom from form principle under
Article 11 CISG is limited to the formation process of an agreement to
arbitrate, while the requirements for its enforcement, both in the course of the
arbitral proceedings as well as for the purpose of enforcement and
recognition, are subject to non-unified national law.” (224)
P 544 This analysis reflects the better view: the CISG’s form requirements should not displace
the specialized form requirements of the New York Convention (or national arbitration
statutes), any more than other sources of generally-applicable form requirements do so.
Indeed, a few authorities conclude more generally that the CISG does not apply to
arbitration agreements at all, relying on the separability presumption. (225)
If the CISG is applied to international arbitration agreements, it should not affect the
applicability of the New York Convention’s uniform international rules (of presumptive
validity and neutrality) or the validation principle. These rules are specifically
applicable to international arbitration agreements and are not superseded or
overridden by the CISG’s general choice-of-law and substantive principles.
Notwithstanding Articles II and V(1)(a) of the New York Convention (and parallel
provisions of the Inter-American Convention), different national legal systems have taken
a wide variety of approaches to the choice of the law governing the existence and
substantive validity of international arbitration agreements. These approaches have
evolved significantly in the course of the past century; they also continue to differ
materially among different jurisdictions. The same multiplicity of choice-of-law
approaches is reflected in international arbitral awards rendered during this period.
16
As discussed below, in the absence of an express choice of law governing the arbitration
agreement, a number of jurisdictions look to the parties’ implied choice or apply some
variation of a “most significant relation” or “closest connection” standard in order to
select the law governing an international arbitration agreement. Under these standards,
courts and arbitral tribunals have generally looked alternatively to either the law of the
arbitral seat or the law chosen to govern the parties’ underlying contract as the most
decisive connecting factors for international arbitration agreements. As noted above, the
uncertainty resulting from these various, divergent choice-of-law approaches is
undesirable; the better course would be to adopt the choice-of-law rules mandated by
the New York Convention (discussed above). (226)
In addition, as discussed below, a number of leading jurisdictions – including France,
Switzerland and many U.S. courts – also look to the New York Convention or to general
principles of international law to supplement traditional choice-of-law analysis. In so
doing, courts in these jurisdictions typically either rely on substantive rules of
international law or apply a validation principle to deny effect to discriminatory or
idiosyncratic rules of national law. The same analysis is reflected in international arbitral
awards. These various approaches reflect a proper interpretation of the Convention,
giving effect to the provisions of Articles II(1) and V(1)(a) and to the Convention’s “pro-
enforcement” objectives. (227)
[a] Historic Application of Law of Judicial Enforcement Forum to Arbitration Agreement
The historic approach in many jurisdictions was that arbitration clauses were governed
by the law of the judicial enforcement forum. This choice-of-law rule often rested on the
P 545 (historic) characterization of the arbitration clause in some jurisdictions as a matter of
“remedies.” (228) As one U.S. court put it, in applying the law of the judicial enforcement
forum:
“Arbitration agreements relate to the law of remedies, and their enforcement,
whether at common law or under the broader provisions of the arbitration
acts, is a question of remedy to be determined by the law of the forum, as
opposed to that of the place where the contract was made or is to be
performed.” (229)
Application of the judicial enforcement forum’s standards for interpretation and
enforcement of the arbitration agreement was particularly well-established in common
law jurisdictions. In the United States, courts routinely declared that the law of the
judicial enforcement forum governed the validity of the arbitration agreement. (230) In
the words of one court:
“New York for conflicts purposes treats issues concerning arbitrability as part
of its ‘law of remedies,’ so that New York local law would apply in the case at
bar, rather than the law of England or France which have greater contacts with
the transactions involved here.” (231)
The same approach was taken in early decisions in England and other common law
jurisdictions. (232) More recently, a few states appear to have adopted idiosyncratic rules
resuscitating application of local law in the judicial enforcement forum to international
arbitration agreements (often with the objective of invalidating such agreements). (233)
P 546
[b] Criticism of Application of Law of Judicial Enforcement Forum to Arbitration Agreement

The application of the law of the judicial enforcement forum to an arbitration agreement
suffers from obvious deficiencies. As critics have pointed out, this approach meant that
different laws would necessarily apply to the arbitration agreement in different national
courts, inevitably producing a lack of uniformity and predictability. (234) This approach
also rested on an artificial characterization of the validity of an arbitration agreement as
a purely “remedial” matter, which does little to address the substance of the relevant
choice-of-law issues and interests. (235)
Moreover, even as a matter of abstract categorization, it is awkward at best to
characterize the validity of an arbitration agreement as simply a matter of remedies in
the enforcement forum (or, more accurately, fora). Doing so ignores the arbitration
agreement’s positive aspects, which affirmatively prescribe dispute resolution
procedures (as distinguished from negative obligations not to litigate in national courts).
(236) Similarly, application of the law of the judicial enforcement forum ignored the close
connection between the procedural law of the arbitration, applicable to the arbitral
process, and the procedural terms of the arbitration agreement. (237)
An early (1931) Swiss Federal Tribunal decision reflected these criticisms, rejecting the
automatic applicability of the judicial enforcement forum’s law in terms that could still
readily be relied on today:
“It is true that the opinion [that] the validity of an arbitration clause must be
P 547 appreciated pursuant to the law of the state whose jurisdiction is excluded
by that clause, has been expressed several times in the German doctrine. …
[Some] authors consider … that the validity of the arbitration agreement must
17
generally be judged pursuant to the law of the place where the contract is to
deploy its effects. Now, the principal effect of an arbitration agreement is not
to exclude the jurisdiction of the state courts, but to transfer the right of
decision to an arbitral tribunal: this positive effect of the contract is legally
realized in the state where the seat of the arbitral tribunal is located pursuant
to the contract. The negative effect, that is the exclusion of the state courts’
jurisdiction, only constitutes a consequence of the positive effect. … It shall be
added that, in international relations, an arbitration agreement normally
excludes the jurisdiction of the courts of several states, so that such a contract
should fulfill the requirements of the respective legislation of all these states,
if the question of its validity, examined as a result of a request for
enforcement of the arbitral award, was to be decided pursuant to the law of
the state or states whose jurisdiction is excluded by that of the arbitral
tribunal. This would constitute an unsatisfactory legal situation.” (238)
Other early civil law decisions were similar. (239)
Accordingly, the traditional application of the judicial enforcement forum’s substantive
law to arbitration agreements was in due course abandoned, in favor of more soundly-
grounded choice-of-law analyses. In particular, as detailed below, a number of
authorities adopted choice-of-law rules requiring application of either the substantive
law of the arbitral seat (240) or the substantive law chosen by the parties to govern their
underlying contract (241) to govern an international arbitration agreement. Few other
serious alternatives to these two options were developed when traditional choice-of-law
analyses were applied.
[c] Choice-of-Law Rules Providing for Application of Substantive Law of Arbitral Seat to
Arbitration Agreement
Particularly in more recent decades, a number of jurisdictions, both common and civil
law, have applied the substantive law of the arbitral seat to the validity of international
arbitration agreements (again, absent agreement by the parties on the law applicable to
the arbitration agreement). This result conformed with the default rule adopted by
Article V(1)(a) of the New York Convention (as discussed above), (242) but was also arrived
at by independent choice-of-law analysis in national courts, often on the basis that
selection of the arbitral seat was an implied choice of the law governing the arbitration
agreement.
The decision of one Swiss lower court is representative of decisions applying the law of
the arbitral seat, with the court holding that, “in the absence of a choice-of-law provision,
the validity of the arbitral clause must be decided according to the law of the seat of the
P 548 arbitral tribunal.” (243) This approach was also reflected in a 1994 decision of the Tokyo
High Court, relying on the “procedural” character of the arbitration agreement, which
reasoned:
“If the parties’ will is unclear we must presume, as it is the nature of
arbitration agreements to provide for given procedures in a given place, that
the parties intend that the law of the place where the arbitration proceedings
are held will apply.” (244)
Some jurisdictions have adopted the same approach by legislative enactment. Section
48 of the Swedish Act provides:
“If the parties have not reached [a choice-of-law] agreement, the arbitration
agreement shall be governed by the law of the country where, in accordance
with the parties’ agreement, the arbitration had or shall have its seat.” (245)
As with national arbitration legislation and court judgments, a number of arbitral awards
have applied the substantive law, (246) or, occasionally, the choice-of-law rules, (247) of
the arbitral seat. A leading example of an arbitral decision applying the substantive law
of the arbitral seat to the arbitration agreement was the Interim Award in ICC Case No.
6149, where the tribunal reasoned:
“If … the proper law of the three arbitration agreements could not necessarily
be derived from the proper law of the three sales contracts themselves, the
only other rule of conflicts of laws whose application would seem appropriate
P 549 … would be the application of the law where the arbitration takes place and
where the award is rendered. This conclusion would be supported also by Art.
V(1)(a) of the [New York Convention].” (248)
Other awards are to the same effect, applying the substantive law of the arbitral seat
(absent a different choice by the parties). (249)
The rationale for applying the substantive law of the arbitral seat to the arbitration
agreement is frequently not well-articulated. As discussed above, some national court
decisions and arbitral awards reason that, by seating the arbitration in a particular state,
the parties impliedly agreed that the arbitration clause should be governed by the law of
the seat. (250) As one national court reasoned, “[i]n the arbitral clause, New York is
18
chosen as the place of arbitration, which implies the choice for the law of New York as the
law applicable to the arbitration, including the question whether a valid arbitration
agreement has been concluded.” (251) Or, as a frequently-cited arbitral award adopting
P 550 an implied choice analysis concluded: “Except in cases where the parties make an
express choice concerning the law governing the arbitration agreement, the choice of
the place of arbitration generally implies a choice of the application of the arbitration
law of that place.” (252)
On the other hand, other authorities, as well as the New York, Inter-American and
European Conventions, (253) do not appear to rely on the parties’ intent or implied
choice in providing for the default application of the law of the arbitral seat, and instead
reflect at least in part the view that arbitration agreements are “procedural,” and
therefore almost inevitably subject to the law of the arbitral seat. (254) These decisions
rest on the close, pervasive inter-relationship between the law of the arbitral seat,
governing the arbitral procedures, and the arbitration agreement, consisting principally
of procedural terms. (255) They also rest on the express terms of the New York, Inter-
American and European Conventions – all of which prescribe a default rule in the
absence of contrary agreement by the parties. (256)
Similarly, a limited number of contemporary awards conclude that an arbitral tribunal is
apparently mandatorily obliged to apply the law of the arbitral seat, citing the
“procedural” character of the arbitration agreement. (257) In the words of one award that
adopts this rationale: “As a matter of principle, because of its autonomous character the
validity of the arbitration clause is governed by the law in force in the country of the
arbitral seat.” (258)
A high point of the “procedural” approach to the law governing arbitration agreements
was reflected in resolutions adopted by the Institute of International Law (Institut de
Droit International) in 1957 and 1959. These resolutions were adopted on the basis that “it
appears to be of the greatest utility that the conflicts of laws to which private arbitration
P 551 gives rise should be submitted to a single system of private international law.” (259)
Among other things, the resolution (first adopted in 1957, and reaffirmed in 1959)
provided:
“Parties shall be free in the arbitral agreement (submission or arbitral clause)
to exercise their free choice and to indicate the place where the arbitral
tribunal must sit; this choice shall imply that they intend to submit the private
arbitration to the law of the seat of the country [of] arbitration, to the extent
indicated by the following provisions. If the parties have expressly chosen the
law applicable to the arbitral agreement, without settling the seat of the
arbitral tribunal, they shall be deemed tacitly to have agreed that the
tribunal shall sit in the territory of the country the law of which has been
chosen by them.” (260)
Despite its asserted affirmation of party autonomy, the International Law Institute’s
resolution apparently provided that, where the parties seated the arbitration in one
country, but agreed that the law of another country should govern their arbitration
agreement, the parties’ selection of the arbitral seat should be overridden, in at least
some circumstances. (261) In effect, the resolution appeared to proceed from the
assumption that the law of the seat was required, as a matter of mandatory law, to govern
the arbitration agreement. (262)
Over time, the approach apparently taken in the International Law Institute’s resolution
lost favor. Requiring that the law of the arbitral seat govern the arbitration agreement,
regardless of the parties’ intentions, runs counter to principles of party autonomy – which
affirm the parties’ freedom to select the seat, the arbitral procedure and the law
governing their arbitration agreement. (263) The rigidity of such a mandatory rule was
also apparent from the 1957 International Law Institute’s resolution, which at once
purported to affirm the parties’ autonomy to select the seat and applicable law, but then
apparently required disregarding the parties’ selection of the seat if it did not conform to
their choice of law.
As a consequence, national court decisions, arbitral awards and commentary increasingly
relied upon the theory that the parties impliedly intended that the law of the arbitral
seat govern their arbitration agreement. (264) As discussed in greater detail below, the
P 552 parties’ implied choice-of-law would in turn be given effect under Article V(1)(a)’s first
prong and parallel provisions of national law, giving effect to the parties’ autonomy. (265)
An implied choice-of-law analysis frequently resulted in the application of the law of the
arbitral seat to the arbitration agreement, but would also permit application of other
laws in some circumstances. In particular, in some cases parties might be held to have
agreed that the law applicable to their underlying contract would also apply to the
arbitration agreement. For example, the Swedish Supreme Court held that where “no
particular provision concerning the applicable law for the arbitration agreement itself
was indicated” in the underlying contract, “the validity of the arbitration clause should
be determined in accordance with the law of the state in which the arbitration
proceedings have taken place.” (266)
The implied choice-of-law theory for selecting the law of the arbitral seat was
19
analytically preferable to the “procedural” approach, and more in keeping with the
principles of party autonomy on which the international arbitral process is founded. (267)
At the same time, as discussed below, this analysis introduced heightened complexity
and uncertainty into the choice-of-law process, by requiring greater case-by-case
consideration of the parties’ implied intentions. Thus, the terms of an arbitration
agreement, or the other circumstances of the parties’ agreement, could provide the basis
for concluding that the parties had impliedly subjected the arbitration clause to a law
other than that of the arbitral seat.
Judicial decisions in some jurisdictions illustrate the potential uncertainty arising from
an implied choice analysis. Thus, in the absence of a general choice-of-law clause,
English courts have repeatedly held that the closest connection to the arbitration
agreement is that of the arbitral seat. (268) That conclusion (correctly) reflects the
default rule prescribed by Article V(1)(a) of the New York Convention, the procedural
P 553 character of the arbitration agreement and the close relationship between the
arbitration agreement and the procedural law of the arbitration. (269)
Despite this, under English law, the law with the closest connection will only be applied
in the absence of either an express or implied choice of law by the parties. Moreover,
English authorities have frequently applied a presumption that, where parties expressly
choose the law governing the underlying contract in a general choice-of-law clause, they
intend this law (usually impliedly) to apply to the arbitration agreement. (270) That
presumption is both in tension with the English court’s closest connection analysis and
inconsistently applied, with courts variously finding different general choice-of-law
clauses to apply, (271) and not to apply, (272) to particular arbitration agreements.
The English courts’ inconsistencies reflect a broader tension in an implied choice
analysis. In particular, this analysis very frequently confronts two conflicting indications
of intentions – the choice of the arbitral seat and a general choice-of-law clause. Both of
these indications provide serious grounds for finding an implied choice and courts in
both England and elsewhere have failed to produce consistent results in deciding which
indicator to prefer.
[d] Choice-of-Law Rules Providing for Application of Law Selected by General Choice-of-Law
Provision in Underlying Contract to Arbitration Agreement
In parallel to decisions applying the law of the arbitral seat to the validity of the
arbitration agreement, other authorities adopted a different approach, instead applying
the law governing the parties’ underlying contract to this issue. As discussed in greater
detail below, this approach has been particularly influential in cases where parties
included a general choice-of-law clause in their underlying contract, expressly selecting
P 554 the law governing that contract: in these instances, a number of authorities have held
that the parties’ choice-of-law clause extended – either expressly or impliedly – to the
separable arbitration agreement. (273)
As noted above, although parties are free to do so, they frequently do not include specific
provisions in their arbitration clause that expressly select the law applicable to that
agreement (as distinguished from the parties’ underlying contract). Rather, a substantial
proportion of international commercial contracts (more than 80%) ordinarily contain
“general” choice-of-law clauses in their underlying contract, without specific reference to
the arbitration clause associated with that contract. (274) Determining whether such
general choice-of-law provisions apply to the separable arbitration agreement has given
rise to substantial controversy and uncertainty.
It is, of course, possible for general choice-of-law clauses to be drafted so as to more or
less literally encompass the arbitration clause contained in the parties’ contract, even
though that clause is “separable.” For example, parties might agree that: “All of the
provisions of this Contract (Articles 1-21) shall be governed by the law of State X” or “All of
the provisions of this Contract, including for the avoidance of doubt Article 10
(‘Arbitration’), shall be governed by the law of State X.” In such cases, there would be
relatively little doubt as a linguistic matter that the parties’ choice-of-law agreement
specifically applied to the arbitration clause, as well as to the underlying contract.
Typically, however, choice-of-law clauses are drafted less specifically. A common
approach is: “This Agreement will be governed by the laws of State X.” (275) There has
been substantial controversy about the applicability of this sort of general choice-of-law
clause in an underlying contract to the associated arbitration agreement. Different
authorities have arrived at contradictory conclusions in interpreting these provisions.
[i] Authorities Applying Law Selected in General Choice-of-Law Provision in Underlying
Contract to Arbitration Clause
Some authorities have interpreted general choice-of-law provisions as presumptively
extending to separable arbitration clauses contained within an underlying contract,
usually on the basis of an implied choice-of-law analysis. For example, according to one
Dutch judicial decision:
“parties, in general, would prefer – excluding special circumstances which do
not arise in this case – to submit the validity of the arbitration clause to the
20
same law to which they submitted the main agreement of which the
arbitration clause forms a part.” (276)
Other civil law authorities are to the same effect, (277) including a Japanese decision that
reasoned:
P 555 “since there was an agreement in the [underlying] contract making the law
of Korea the governing law, the law governing the validity of the relevant
arbitration agreement was the law of Korea.” (278)
Likewise, a number of common law judicial decisions have also concluded that a general
choice-of-law clause presumptively applies to the parties’ arbitration agreement. (279)
For example, the historic approach in England was that the law chosen by the parties to
govern their underlying contract also applied to the associated arbitration agreement
(although, as discussed below, this has not been consistently applied in other decisions).
In the words of one English decision adopting this view:
“Where the substantive contract contains an express choice of law, but the
agreement to arbitrate contains no separate express choice of law, the latter
agreement will normally be governed by the body of law expressly chosen to
govern the substantive contract.” (280)
The House of Lords also apparently expressed a comparable view (albeit guardedly and
in dicta):
“[T]here is the proper law which regulates the substantive rights and duties of
the parties to the contract from which the dispute has arisen. Exceptionally,
this may differ from the national law governing the interpretation of the
An Indian Supreme Court decision adopted a similar approach:
“where the proper law of the contract is expressly chosen by the parties, as in
the present case, such law must, in the absence of an unmistakable intention
to the contrary, govern the arbitration agreement which, though collateral or
ancillary to the main contract, is nevertheless a part of such contract.” (282)
P 556 A number of arbitral awards have also reached this conclusion, again typically relying
on the text of particular choice-of-law clauses and implied choice-of-law theories. (283)
Commentary from both common law and civil law authorities has arrived at similar
conclusions regarding the effect of a general choice-of-law provision. (284) In the words of
one authority:
“Since the arbitration clause is only one of many clauses in a contract, it would
seem reasonable to assume that the law chosen by the parties to govern the
contract will also govern the arbitration clause. If the parties expressly choose
a particular law to govern their agreement, why should some other law – which
the parties have not chosen – be applied to one of the clauses in the
agreement, simply because it happens to be the arbitration clause?” (285)
As discussed elsewhere, the Restatement of the U.S. Law of International Commercial and
Investor-State Arbitration adopts a similar conclusion. (286)
P 557 Most of these authorities treat the law chosen by the parties to govern the underlying
contract as only the law “presumptively,” “generally” or “ordinarily” applicable to the
separable arbitration agreement. These authorities generally rest on the premise that a
general choice-of-law clause does not expressly or specifically apply to an arbitration
clause in the parties’ contract and that an implied choice-of-law analysis is therefore
required. (287)
These and other decisions also recognize the possibility, in principle, that additional
considerations may argue in an implied choice analysis for the application of a law
different from that governing the underlying contract to the arbitration agreement. Thus,
in a substantial number of cases, courts and arbitral tribunals have concluded that the
parties’ selection of the arbitral seat, an arbitral institution’s rules, or other factors rebut
the presumptive application of the law chosen by a general choice-of-law provision and
constitute an implied choice of the law of the arbitral seat. (288)
[ii] Authorities Refusing to Apply Law Selected in General Choice-of-Law Provision in
Underlying Contract to Arbitration Clause
In contrast to the foregoing decisions, another substantial, and contradictory, body of
authority has held that a general choice-of-law clause does not encompass an arbitration
clause contained within the underlying contract and does not impliedly select the law
applicable to the arbitration clause. Rather, like the analysis outlined above, (289) these
authorities have concluded that a general choice-of-law clause applies only to the
parties’ underlying contract, and not to the “separable” arbitration agreement.
21
The foregoing conclusion is described as a consequence of the separability presumption,
as well as the particular characteristics of the arbitration agreement (e.g., an ancillary
agreement imposing, distinct “procedural” dispute resolution obligations; a separate
place of performance (i.e., arbitral seat)) and the intentions of rational commercial
parties. (290) As discussed above, these factors have been held to require a conclusion
that a “general” choice-of-law clause in an underlying contract is ordinarily not
applicable to the associated arbitration agreement. (291)
P 558 Consistent with this, a substantial number of authorities, again from both civil (292)
and common law (293) courts, have refused to apply a general choice-of-law clause in the
parties’ underlying contract to the arbitration agreement, particularly where the parties’
chosen law would invalidate the arbitration clause. As one award reasoned:
“Consent here falls to be tested by the law governing the agreement to
arbitrate which, I hold, is the Federal Arbitration Act. … I also hold that
Federal Law governs the arbitration even though the contract contains a State
choice of law provision. State law governs the substantive law of the contract
but the arbitration clause is autonomous.” (294)
A number of other arbitral awards are to the same effect. (295)
Similarly, a leading French commentary reasons that, because the parties may not have
given separate thought to the law applicable to an arbitration clause, “it would therefore
be going too far to interpret such [general choice-of-law] clauses as containing an express
choice as to the law governing the arbitration agreement.” (296) Another author concludes
similarly that the autonomy of the arbitration agreement means that “[e]ven where the
parties have chosen the law governing their contract it does not necessarily follow that
P 559 this law applies to the arbitration clause.” (297)
[e] Choice-of-Law Rules Providing for Application of Substantive Law Applicable to

Underlying Contract
Even in the absence of a general choice-of-law clause in the underlying contract, some
authorities have held that an arbitration clause is governed, either presumptively or
definitively, by the law applicable to the underlying contract. This conclusion applies
both where the law governing the underlying contract is selected as the parties’ implied
choice and where it is selected by default choice-of-law rules.
Thus, some English judicial decisions have held that the law governing the parties’
underlying contract was also applicable to the associated arbitration agreement even
absent a general choice-of-law clause in the underlying contract. (298) In the words of one
decision:
“In the absence of exceptional circumstances, the applicable law of an
arbitration agreement is the same as the law governing the contract of which it
forms a part.” (299)
As also discussed below, other national courts in both civil and common law jurisdictions
have reached similar conclusions, (300) as did a number of influential commentators.
(301) Thus, from a civil law perspective, some commentators concluded that, although the
arbitration agreement could be governed by a different law than the underlying contract,
“practically speaking, in most cases they are both governed by the same law, not because
of their interdependence – which is denied – but because their juridical ‘location’ is, in
fact, most often the same.” (302)
P 560 At the same time, a number of arbitral awards also looked to the substantive law
governing the parties’ underlying contract to provide the law applicable to the
associated arbitration agreement, even where the underlying contract did not contain an
express choice-of-law clause. (303) For example, the tribunal in the Final Award in ICC
Case No. 6752 held that, where the contract provided that “in respect to what has not
been expressly provided herein, reference is to be made to … Italian law,” such a
provision “necessarily applies to the arbitration agreement contained in the same
article.” (304)
[f] Choice-of-Law Rules Providing for Application of Substantive Law of State with “Closest
Connection” or “Most Significant Relationship” to Arbitration Agreement
Over time, as with earlier approaches, criticisms were made of each of the traditional
choice-of-law analyses described above – in particular, application of the law of the
arbitral seat or of the law of the underlying contract to the arbitration agreement. Each of
these analytical approaches was said to suffer from significant defects.
On the one hand, application of the law of the arbitral seat, based upon the procedural
aspects of the arbitration agreement, was criticized as unsatisfactory. This approach
minimized the relationship between the arbitration clause and the underlying contract,
particularly when the underlying contract contained a general choice-of-law clause that,
read literally, appeared to extend to the arbitration clause. In instances where the
arbitration agreement is integrally related to the parties’ underlying contract – as in the
case of a corporate charter or real estate transaction – application of the law governing
22
that contract to the arbitration clause was said to be necessary.
On the other hand, application of the law governing the underlying contract, as also
applying to the arbitration agreement, was also criticized unsatisfactory, even when
based upon the existence of a general choice-of-law clause. This approach was in
significant tension with the basic premises of the separability presumption, which
treated the parties’ underlying contract as distinct from the arbitration agreement. (305)
It also ignored the fact, discussed above, that the focus of a general choice-of-law
provision is on the commercial terms of the parties’ underlying contract, (306) as well as
P 561 the “procedural” character of the arbitration agreement, which is focused entirely on
the dispute resolution process. (307) As discussed elsewhere, the arbitration agreement is
a procedural agreement, (308) whose performance takes place within the legal framework
of the arbitral seat (309) – arguing for an implied choice of the law of the seat to govern
that agreement. (310)
Application of the law governing the underlying contract to the arbitration agreement
was also very difficult to square with the New York, Inter-American and European
Conventions. As discussed above, each of these instruments expressly adopted a default
choice-of-law rule that provided for application of the law of the arbitral seat to the
arbitration agreement, in the absence of contrary agreement. (311) That widely-
recognized default rule both reflected general understandings regarding the law
applicable to the arbitration agreement and inevitably shaped commercial expectations
about the same issue.
Given these various critiques, over the past several decades, authorities in a number of
jurisdictions increasingly rejected either an exclusive focus on the law of the arbitral seat
or the law of the underlying contract. Instead, these authorities turned to generally-
applicable contemporary choice-of-law criteria, (312) and particularly the “most
significant relationship” and “closest connection” standards. (313) In both theory and
application, these standards closely resembled implied choice-of-law analyses
(discussed above).
The influential Restatement (Second) Conflict of Laws, adopted in 1971 in the United
States, is representative. Section 218 of the Restatement (Second) impliedly rejects
characterization of the arbitration agreement as “procedural,” instead applying
generally-applicable conflicts rules for contracts to the formation and validity of
P 562 arbitration agreements. (314) Thus, §218 pro vides that the “validity of an arbitration
agreement, and the rights created thereby,” are to be determined by applying the
generally-applicable conflicts rules of §§187 and 188. (315) In turn, §§187 and 188 give
effect to the parties’ choice of law to govern their arbitration agreement or, failing such
agreement, provided for application of the law of the state with the “most significant
relationship” to the parties’ contract. (316)
The comments to §218 of the Restatement (Second) implied, but did not require, that the
state that will often have the most significant relationship to an agreement to arbitrate is
that where the arbitral seat is located. (317) Similarly, as discussed in greater detail
below, U.S. courts applying the Restatement (Second) have sometimes, but not
consistently, concluded that the law with the most significant relation to the arbitration
agreement was the law of the seat (absent contrary choice by the parties). (318)
Other national courts took similar approaches. In the Netherlands, for example, a court
held that a choice of New York as the place of arbitration “implies the choice for the law
of New York as the law applicable to the arbitration, including the question whether a
valid arbitration agreement has been concluded.” (319) Again paralleling developments
in national courts, a number of arbitral awards also attempted to apply either a “closest
connection” or “most significant relationship” standard in determining the validity of the
Despite their adoption in some jurisdictions and arbitral awards, the “closest connection”
and “most significant relationship” tests for international arbitration agreements have
also proven unsatisfying, much like their various predecessors. In practice, courts and
P 563 tribunals have encountered substantial difficulties determining what connecting
factors or indicators of an implied choice are decisive in selecting the law governing an
arbitration agreement. In particular, it has proven difficult to choose in a principled
manner between the law of the arbitral seat and the law selected by the parties to
govern the underlying contract when these two formulae point in different directions.
This is well-illustrated by a decision of the Hague Gerechtshof, which held that an
arbitration agreement was governed by the law with the “closest connection” to that
agreement. (321) The court then proceeded to consider, variously, the law of the arbitral
seat, the procedural law governing the arbitral proceedings and the law that the parties
had selected to govern their underlying contract. Because all of these connecting factors
pointed to the same applicable law, the court had little difficulty in applying that law to
Despite this, the Dutch court’s inability to prioritize these various connecting factors
illustrates how the “closest connection” standard provides little meaningful guidance in
selecting the law governing an arbitration agreement in anything but the most
straightforward case. In particular, this standard provides little assistance in determining
23
whether the law governing the underlying contract or the law of the arbitral seat has the
“closer connection” to the parties’ arbitration agreement. (323) Likewise, the “closest
connection” test provides no meaningful guidance in ascertaining the parties’ intentions
when selecting the seat and including a general choice-of-law clause in their underlying
contract.
The same shortcomings are apparent in choice-of-law analyses from other jurisdictions,
whether formulated as “closest connection” or implied choice analyses. Thus, English
judicial decisions have shifted, over the space of two decades, from a relatively absolute
rule that the law chosen to govern the underlying contract governs the arbitration
agreement to a strong presumption that the law of the arbitral seat governs the
arbitration agreement, notwithstanding a contrary choice-of-law agreement selecting the
law governing the underlying contract, largely back to a rebuttable presumption that the
law chosen to govern the underlying contract is an implied choice of law for the
As discussed above, the same ambivalence is reflected in the divergent results of U.S.
lower court decisions considering the law applicable to international arbitration
agreements. These decisions have variously interpreted general choice-of-law clauses as
P 564 impliedly selecting – or as not selecting – the law governing the arbitration agreement.
(325) Likewise, these courts have variously concluded that the state where the arbitral
seat is located – or, alternatively, the state whose law governs the underlying contract –
has the “most significant relationship” with the arbitration agreement. (326) Much like
English courts, U.S. lower courts have been unable to arrive at consistent conclusions
regarding the law governing the arbitration agreement, or to explain how those
conclusions reflect either the intentions of rational commercial parties or sound policy.
Similarly, academic commentary on this issue is deeply divided. A distinguished
European commentator observed that application of the substantive law of the arbitral
seat to the arbitration agreement “finds … support in the consideration that, inasmuch as
it may be said that the place of performance of the arbitration agreement is at the seat
of the arbitration, the law of the seat is the one having the closest connection with such
an agreement (according to a rule of conflict which has gained wide acceptance).” (327)
Other distinguished commentators conclude, with equal conviction, that “[s]ince the
arbitration clause is only one of many clauses in a contract, it would seem reasonable to
assume that the law chosen by the parties to govern the contract will also govern the
arbitration clause.” (328)
Neither school of authority has, however, satisfactorily explained why its favored solution
– the law of the arbitral seat or the law of the underlying contract – is “closer,” “more
significant” or a better reflection of the parties’ implied choice than alternative options.
That is in part because most authorities have devoted insufficient attention to the
particular character and objectives of international arbitration agreements or to the
default rules prescribed by the New York, Inter-American and European Conventions. It is
also because most authorities have focused on abstract assessments of “closeness” and
implied choice, which are arbitrary and unprincipled, ignoring the real objects of both
international arbitration agreements and the international and national legal regimes
that seek to enforce them. A preferable approach is discussed below.
[g] “Cumulative” Choice-of-Law Analysis
In part because of the difficulties outlined above, some arbitral tribunals have applied a
so-called “sequential” or “cumulative” choice-of-law analysis, which looks to the rules
P 565 under every potentially applicable law. (329) The cumulative approach may appear
comforting when all possible alternatives yield the same result, but it provides no
meaningful guidance when a “true conflict” exists. If the potentially-applicable
substantive laws yield differing results, then the cumulative approach does not assist in
deciding which of the potentially-applicable legal system’s results should be preferred.
(330)
[h] Miscellaneous Other Choice-of-Law Rules
Other arbitral awards and national decisions have either applied or considered other
choice-of-law standards, including general principles of international law, (331) the law of
P 566 the place where the arbitration agreement was concluded, (332) the seat of a domestic
trade organization which has published a standard form contract/arbitration agreement,
(333) or the law of the place where the arbitral award would likely require recognition
and enforcement. (334) In general, each of these various rules suffered from serious
shortcomings, and therefore attracted little attention or support.
[i] Mandatory Application of Law of Arbitral Seat to International Arbitration Agreements
Despite the foregoing diversity of choice-of-law rules, premised on the arbitrators’
freedom to select a suitable choice-of-law rule, a number of arbitral awards hold that
arbitrators are mandatorily required to apply the law of the arbitral seat to the
arbitration agreement. (335) Thus, a few tribunals have held that they are mandatorily
required to apply the substantive law of the arbitral seat to the arbitration agreement. In
the words of one award:
24
“This is an arbitration having its seat in London, England. Accordingly, the
Arbitral Tribunal must apply English Arbitration Law – the English Arbitration
Act, 1996 – to the question whether it has jurisdiction.” (336)
In other cases, tribunals have applied the choice-of-law rules of the arbitral seat. This
conclusion has been particularly likely where the arbitral tribunal was seated in a
jurisdiction (like Switzerland) where the national arbitration statute prescribes a
specialized choice-of-law rule designed for and applicable to international arbitration
agreements (like Article 178 of the Swiss Law on Private International Law). (337)
P 567 The mandatory application of the substantive law of the arbitral seat to the arbitration
agreement has little to recommend it. It contradicts the basic choice-of-law rule in
Articles II(1) and V(1)(a) of the New York Convention, giving effect to the parties’
autonomy, (338) as well as more general principles of party autonomy in the choice-of-
law context. (339) This approach also rests on archaic analogy of the arbitral tribunal to a
national court. (340) Mandatory application of the substantive law of the arbitral seat to
the arbitration agreement should therefore be rejected.
Likewise, mandatory application of the conflict of laws rules of the arbitral seat should
also be rejected. Most fundamentally, this approach ignores the uniform international
standards imposed by the New York Convention for selection of the law governing the
[j] Choice-of-Law Rules for Law Applicable to International Arbitration Agreements Under
National Arbitration Legislation
National arbitration legislation and national court decisions adopt different approaches
to the choice of law governing international arbitration agreements. As discussed below,
however, the better view is that national law parallels the New York Convention,
presumptively requiring application of the law of the arbitral seat and a validation
principle.
[i] Choice-of-Law Rules Applicable to International Arbitration Agreements Under UNCITRAL
Model Law
The UNCITRAL Model Law parallels the New York Convention in its treatment of the law
governing international commercial arbitration agreements. As discussed above, and
paralleling Article II of the Convention, Article 8 of the Model Law provides a rule of
presumptive validity, which allocates the burden of proof of invalidity of an international
arbitration agreement to the party resisting enforcement, (342) while also requiring
application of generally-applicable contract law rules to the substantive validity of such
agreements. (343) These substantive rules are mandatorily applicable to all international
arbitration agreements falling within the Model Law’s scope, regardless of the law
applicable to other aspects of the agreement. (344)
Paralleling Article V(1)(a) of the Convention, Articles 34(2)(a)(i) and 36(1)(a)(i) of the
UNCITRAL Model Law also provide that an arbitral award may be annulled or denied
recognition if the parties’ arbitration agreement “is not valid under the law to which the
parties have subjected it or, failing any indication thereon, under the law of [the state
where the award was made].” (345) These provisions adopt the same two-prong standard
P 568 as that of Article V(1)(a) of the Convention, giving effect to any express or implied
choice-of-law by the parties and, failing such agreement, prescribing a default rule,
selecting the law of the arbitral seat.
There is relatively limited judicial authority on the choice of law governing international
arbitration agreements in Model Law jurisdictions. (346) Given the substantially identical
text, structure and purposes of the Convention and Model Law, the same analysis that
applies under Articles II and V of the Convention should apply equally under the Model
Law. (347) That is confirmed by well-reasoned authority concluding that the two
instruments should be interpreted consistently and uniformly. (348)
As discussed above, the better view of Articles II and V(1)(a) of the Convention – and
Article 8 of the Model Law – is that they presumptively provide for application of the law
of the arbitral seat to the validity of an international arbitration agreement. Except
where parties specifically select the law applicable to the arbitration agreement, the
default rule prescribed by Article V(1)(a) (and by Articles 34(2)(a)(i) and 36(1)(a)(i) to the
Model Law) both reflects and confirms the presumptive application of the law of the
arbitral seat to the arbitration agreement. (349) In addition, the better view of the
Convention (and the Model Law) is that it requires application of a validation principle;
under that principle, the law applicable to the arbitration agreement is the law of the
state, with a connection to the parties’ transaction, that will give effect to the arbitration
agreement, rather than invalidate it. (350)
[ii] Choice-of-Law Rules for International Arbitration Agreements Under English
Arbitration Act
The approach of English courts to the choice of the law governing international
arbitration agreements is uncertain and, in many respects, unsatisfactory. English courts
adopt a three-part test for selecting the law applicable to an international arbitration
25
agreement: (a) is there an express choice of law governing the arbitration agreement; (b)
if not, is there an implied choice of law governing the arbitration agreement; and (c) if
not, with what system of law does the arbitration agreement have its closest and most
real connection? (351) Although this framework for analysis has remained relatively
constant, its application by English courts has varied significantly and unpredictably over
time, particularly, with regard to the treatment of general choice-of-law clauses.
P 569 As discussed elsewhere, the historical rule under English law was that a general choice-
of-law provision in the underlying contract extended – typically as an implied choice – to
the arbitration clause (provided that there was no separate choice-of-law provision in
the arbitration clause). (352) In the words of one English judicial decision:
“In the absence of exceptional circumstances, the applicable law of an
arbitration agreement is the same as the law governing the contract of which it
forms a part.” (353)
Or, as another English lower court decision held:
“Where the substantive contract contains an express choice of law, but the
agreement will normally be governed by the body of law expressly chosen to
govern the substantive contract.” (354)
A number of other English decisions reached the same conclusion, (355) frequently relying
on dicta from an early House of Lords decision:
“[T]here is the proper law which regulates the substantive rights and duties of
the parties to the contract from which the dispute has arisen. Exceptionally,
this may differ from the national law governing the interpretation of the
English courts have interpreted this observation – and its reference to “exceptionally” –
as a direction to presumptively apply the law selected by general choice-of-law
provisions to the arbitration clause. (357)
However, other English decisions rejected application of a general choice-of-law clause
to the arbitration agreement. (358) Instead, a number of cases held that a general choice-
of-law provision did not select the law applicable to the arbitration agreement, and that
this agreement was governed by the law of the arbitral seat, either because it was the law
P 570 impliedly chosen by the parties (359) or because it was the law with the closest
connection with the arbitration agreement. (360) Indeed, one Court of Appeal decision
reasoned: “it would be rare for the law of the (separable) arbitration agreement to be
different from the law of the seat of the arbitration,” because the arbitration agreement
“will normally have a closer and more real connection” with the place of the seat. (361)
While well-considered, that general statement was difficult to reconcile with either the
House of Lord’s dicta quoted above or the proposition that a general choice-of-law
clause ordinarily extended by implication to the arbitration agreement.
More recent English authority has nonetheless held that a choice-of-law clause for the
underlying contract gives rise to the presumption that the parties intended that law to
govern the arbitration agreement: (362)
“A search for an implied choice of proper law to govern the arbitration
agreement is therefore likely (as the dicta in the earlier cases indicate) to
lead to the conclusion that the parties intended the arbitration agreement to
be governed by the same system of law as the substantive contract.” (363)
English lower courts have held that this presumption (that the law chosen by a general
choice-of-law clause to govern the underlying contract also applies to the arbitration
clause) is not displaced where the law of the arbitral seat chosen by the parties differs
from the law chosen for the underlying contract. (364)
English commentary has undergone the same shifts. It has moved from a strong
presumption that the arbitration agreement is governed by the law chosen by the parties
in a general choice-of-law clause to govern their underlying contract to the contrary
(albeit weaker) presumption that the arbitration agreement is typically governed by the
law of the arbitral seat, and then back to a presumption that the arbitration agreement is
governed by the law chosen for the underlying contract. (365) In yet another shift, more
P 571 recent English authority law has held that, absent an express choice of law of the
arbitration agreement, there is no longer a presumption that the law chosen in a general
choice-of-law clause is the parties’ choice of law for the arbitration agreement, and
instead parties are presumed to have chosen the law of the seat as the law governing the
The current approach of English courts to general choice-of-law was recently addressed
by the U.K. Supreme Court, which held that “a choice of governing law for the contract will
generally apply to an arbitration agreement which forms part of the contract” as a matter
of inference or implied choice-of-law, and that “the choice of a different country as a seat
is not sufficient, without more, to negate” such inference. (367) The Court held that this
26
implied choice could be overcome by specific provisions of the law of the seat stating to
the contrary or where there is a “serious risk that, if governed by the same law as the
main contract, the arbitration agreement would be ineffective.” (368) In so holding, the
Supreme Court expressly endorsed the application of the validation principle, namely
the maxim that “the contract should be interpreted so that it is valid rather than
ineffective,” to the law governing the arbitration agreement. (369)
Although the Supreme Court treated the application of general choice-of-law provisions
to the arbitration agreement as a matter of inference, the Court of Appeal also recently
held that a general choice-of-law clause was a specific and express choice of the law
governing the arbitration agreement when read together with a separate contractual
provision that defined the “Agreement” referred to in the choice-of-law clause as “the
terms of the agreement set forth herein below.” (370)
Decisions in other common law jurisdictions have frequently paralleled those in England.
Thus, a Singaporean first instance decision held that there is a rebuttable presumption
that the law chosen expressly by the parties to govern the underlying contract is an
implied choice of the law governing the arbitration agreement. In the words of the court:
“[T]he implied choice of law for the arbitration agreement is likely to be the
same as the expressly chosen law of the substantive contract. This
presumption is supported by the weight of authority and is, in any event,
preferable as a matter of principle. … Where the arbitration agreement is a
clause forming part of a main contract, it is reasonable to assume that the
contracting parties intend their entire relationship to be governed by the
same system of law. If the intention is otherwise, I do not think it is
unreasonable to expect the parties to specifically provide for a different
system of law to govern the arbitration agreement.” (371)
P 572 On the other hand, other Singapore courts have also suggested that the law with the
closest connection to the arbitration agreement is the law of the arbitral seat. (372) Thus,
another decision of the Singapore High Court concluded that the law of the arbitral seat
applied to the arbitration agreement on the basis that the parties’ choice of a seat is, in
the absence of an express choice of law, an implied choice of the law governing the
arbitration agreement. (373) Nonetheless, subsequent Singaporean decisions have
questioned this reasoning and followed English authorities in adopting a presumption
that the parties impliedly intended the law governing the underlying contract to apply to
English decisions considering the law applicable to the substantive validity of
international arbitration agreements are comparable to English decisions interpreting
the scope of arbitration clauses prior to the House of Lords’ decision in Fiona Trust. (375)
In those decisions, English courts devoted considerable effort to drawing fine distinctions
between different linguistic formulations of agreements to arbitrate (e.g., distinguishing
“arising under” or “arising out of” from “relating to”). (376) In Fiona Trust, the House of
Lords rejected those distinctions as arbitrary and out-of-touch with the genuine
objectives and intentions of commercial parties, holding that “the distinctions … reflect
no credit upon English commercial law” and “that the time has come to draw a line under
the authorities to date and make a fresh start.” (377)
Very similar reasoning applies to decisions selecting the law applicable arbitration
agreements. Efforts to discern whether particular general choice-of-law clauses,
interpreted together with either entire agreement provisions or definitions of
“Agreement” or “Contract,” extend to the arbitration agreement are both arbitrary and
almost entirely detached from commercial parties’ objectives and intentions. They also
ignore the default choice-of-law rule prescribed by the New York Convention (in Article
V(1)(a)).
The reality is that commercial parties virtually never devote any particularized attention
to the question whether a general choice-of-law provision applies to their arbitration
agreement. As experienced commentators have observed, in agreeing to a general
choice-of-law clause, “the parties will of course only very rarely have given thought to the
law applicable to the arbitration agreement.” (378) Moreover, insofar as parties do
consider the law applicable to their arbitration agreement, linguistic study of the text of
general choice-of-law provisions does very little to identify their intentions. (379) Rather,
P 573 again like Fiona Trust, the better guide to the parties’ intentions, and the surer basis
for judicial policy, is the basic character and commercial purpose of international
commercial arbitration agreements. (380)
Applying this analysis, it ordinarily makes little or no commercial sense to interpret a
general choice-of-law clause as extending, either expressly or impliedly, to a separable
arbitration agreement; parties may (and sometimes do) include a choice-of-law provision
in their arbitration agreement itself, (381) but when they do not, their general choice-of-
law clause should not ordinarily be extended to the arbitration agreement. Instead, as
discussed above, a general choice-of-law clause is ordinarily applicable to the
commercial terms of the parties’ underlying contract, and not to the procedural terms of
the ancillary arbitration agreement. (382) As a consequence, as discussed elsewhere, the
law applicable to the arbitration agreement should presumptively be that of the arbitral
27
seat. (383) That result follows from either application of the default choice-of-law rule
prescribed by Article V(1)(a) of the New York Convention or an implied choice-of-law
(based on the parties’ selection of the arbitral seat). (384)
[iii] Choice-of-Law Rules for International Arbitration Agreements Under Swiss Law on
Private International Law
The approach to the choice of law governing international arbitration agreements under
Swiss law is both innovative and successful. As discussed above, Article 178(2) of the Swiss
Law on Private International Law prescribes a statutory choice-of-law rule. (385) Article
178(2) provides:
“As regards its substance, an arbitration agreement is valid if it conforms
either to the law chosen by the parties, or to the law governing the subject-
matter of the dispute, in particular the main contract, or to Swiss law.” (386)
Article 178(2) adopts a validation principle, which upholds the validity of an international
arbitration agreement if it is valid under the law of any one of the states with a
connection to that agreement (i.e., law chosen by parties, law governing underlying
contract, Swiss law). (387)
P 574 Article 178(2)’s statutory choice-of-law rule has functioned well in practice. Disputes
over the law applicable to the substantive validity of international arbitration
agreements have required little attention from Swiss courts and arbitral tribunals and
have unsurprisingly, produced predictable results. (388)
[iv] Choice-of-Law Rules for Law Governing International Arbitration Agreements Under
French Law
In part because of the difficulties encountered by the analysis of English and other courts
(as discussed above), contemporary French judicial decisions have generally eschewed
application of traditional choice-of-law analyses to international arbitration agreements.
Instead, French courts have applied principles of international law (or international
arbitration law) to the formation and validity of international arbitration agreements.
(389)
French courts have for nearly two decades held that international arbitration agreements
are “autonomous” from any national legal system and, as a consequence, are directly
subject to general principles of international law. As discussed elsewhere, the Cour de
Cassation’s Dalico decision held that “according to a substantive rule of international
arbitration law,” the existence and validity of an international arbitration agreement
“depends only on the common intention of the parties, without it being necessary to make
reference to a national law.” (390) Or, as another frequently-cited French decision
concluded:
“In international commercial arbitration, the principle of the autonomy of the
arbitration agreement is a principle of general application, being an
international substantive rule consecrating the legality of the arbitration
agreement, beyond all reference to a system of conflict of laws. The validity of
the agreement is only subject to the requirements of international public
policy.” (391)
Other French authorities are uniformly to the same effect, (392) as are decisions in a few
P 575 other jurisdictions which have adopted the approach of French courts. (393) Recent
amendments to the French Code of Civil Procedure left this line of authority undisturbed,
with substantive principles of international law continuing to apply to international
arbitration agreements in French courts. (394)
A substantial line of arbitral authority, particularly in international arbitrations seated in
France, has similarly directly applied international law principles to the formation and
validity of international arbitration agreements. (395) In the words of one leading award,
P 576 the arbitration agreement’s “existence and validity are to be ascertained, taking into
account the mandatory rules of national law and international public policy, in the light
of the common intention of the parties, without necessarily referring to a state law.” (396)
This choice-of-law analysis parallels that adopted by French courts. (397)
[v] Choice-of-Law Rules Governing International Arbitration Agreements Under U.S. Law
Selecting the law applicable to an international arbitration agreement gives rise to
particular complexities under U.S. law, which warrant separate discussion. As discussed
below, nothing in the text of the FAA’s first or second chapters directly addresses the
question of what law is applicable to the formation or substantive validity of an
international arbitration agreement. (398) In part because of this absence of legislative
guidance, the relationship between U.S. federal law (derived from the FAA and New York
Convention) and U.S. state law (derived from state contract law principles) gives rise to
special difficulties.
Particularly to foreign observers, (399) U.S. approaches to the choice of law applicable to
international arbitration agreements are often confusing, especially insofar as the
28
relationship between U.S. federal and U.S. state law is concerned. In recent years,
however, increased judicial and academic attention has been devoted in the United
P 577 States to choice-of-law questions under the FAA in the international arbitration context.
(400) Moreover, as discussed below, U.S. choice- of-law analysis with regard to
international arbitration agreements generally produces sensible results, using methods
that are broadly similar to those in other developed jurisdictions.
(1) Law Governing Substantive Validity of Domestic Arbitration Agreements Under Chapter
1 of Federal Arbitration Act
As a starting point, most contracts in the United States are governed by the laws of one of
the several States, rather than federal law. (401) There is no general federal legislation,
and no federal common law, dealing comprehensively with commercial contracts or
issues of contract law generally. (402) That is generally as true in the case of international
business transactions as it is in interstate and local transactions. (403)
Arbitration agreements are a significant exception to this general rule that state law
governs the interpretation, validity and enforcement of commercial contracts in the
United States. As discussed above, at the heart of Chapter 1 of the FAA is §2’s provision
that a written arbitration provision in a contract involving interstate or foreign commerce
shall be “valid, irrevocable and enforceable,” subject only to a savings clause permitting
non-enforcement on “such grounds as exist at law or in equity for the revocation of any
contract.” (404) The section’s stated purpose was to “revers[e] centuries of judicial
hostility to arbitration agreements … by plac[ing] arbitration agreements ‘upon the same
footing as other contracts.’” (405)
As discussed below, §2 has been applied by U.S. courts in a substantial body of cases,
including particularly to issues concerning: (a) substantive validity, (b) formation, (c)
formal validity, and (d) interpretation of arbitration agreements. (406) Different rules
P 578 have been developed with regard to each of these various issues, with different
approaches also being taken by U.S. courts in domestic and international cases.
With regard to the substantive validity of arbitration agreements, the U.S. Supreme Court
has repeatedly held that §2 of the domestic FAA creates a sui generis body of substantive
federal contract law, applicable to interstate and international arbitration agreements:
“Congress declared a national policy favoring arbitration and withdrew the power of the
states to require a judicial forum for the resolution of claims which the contracting
parties agreed to resolve by arbitration.” (407) As the Supreme Court has repeatedly held:
“Section 2 [of the FAA] is a congressional declaration of a liberal federal policy
favoring arbitration agreements, notwithstanding any state substantive or
procedural policies to the contrary. The effect of the section is to create a body
of federal substantive law of arbitrability, applicable to any arbitration
agreement within the coverage of the Act.” (408)
Section 2 requires, as a matter of substantive federal law, that courts “enforce privately
negotiated agreements to arbitrate, like other contracts, in accordance with their terms.”
(409) In particular, “Section 2 embodies the national policy favoring arbitration and
places arbitration agreements on equal footing with all other contracts.” (410) This
federal law is binding in both federal and state courts, (411) and it preempts (or
supersedes) inconsistent state law. (412)
Applying this federal substantive law, U.S. courts have repeatedly refused to apply, and
instead held preempted, a wide variety of state law provisions which were aimed at
rendering arbitration clauses invalid. For example, U.S. courts have held that domestic
state laws forbidding the arbitration of particular categories of disputes (e.g., state
securities law, tort claims), (413) granting an administrative agency exclusive jurisdiction
over certain types of disputes, (414) imposing particular formal requirements (e.g., notice
P 579 of arbitration clause typed in underlined capital letters on the first page of the
contract), (415) and mandating use of particular arbitral procedures (416) are preempted
by the FAA.
The overall consequence of §2 is to require enforcement of arbitration agreements in
accordance with generally-applicable and non-discriminatory rules of contract law. An
essential element of §2 is its “savings clause,” which provides that arbitration agreements
shall be “valid, irrevocable and enforceable,” save that they may be denied enforcement
on “such grounds as exist at law or in equity for the revocation of any contract.” (417) U.S.
courts have interpreted this savings provision to permit challenges to the validity or
enforceability of arbitration agreements only under neutral, generally-applicable
contract law defenses (such as fraud, mistake, duress, or vagueness) which also apply to
other types of contracts. (418) As the Supreme Court has summarized the law:
“The FAA … places arbitration agreements on an equal footing with other
contracts and requires courts to enforce them according to their terms. Like
other contracts, however, they may be invalidated by ‘generally applicable
contract defenses, such as fraud, duress, or unconscionability.’” (419)
Under this analysis, the FAA preempts discriminatory state (and foreign) law rules which
single out arbitration agreements for special burdens, disfavor, or requirements that do
29
not apply to other types of contracts. (420) Additionally, the FAA preempts state (and
foreign) laws that “stand as an obstacle to the accomplishment of the FAA’s objectives,”
(421) for example, by imposing procedures that are incompatible with the objectives of
arbitration.
Importantly, however, in the U.S. domestic context, the generally-applicable contract law
rules that ordinarily apply to arbitration agreements are provided by U.S. state law,
subject to the FAA’s prohibition against state law rules that discriminate against
arbitration agreements. (422) Thus, as discussed below, U.S. courts have generally
applied state law contract rules regarding the validity of contracts to domestic
arbitration agreements. (423) As a recent Supreme Court decision held:
P 580 “[G]enerally applicable contract defenses, such as fraud, duress, or
unconscionability, may be applied to invalidate arbitration agreements
without contravening §2. Courts may not, however, invalidate arbitration
agreements under state laws applicable only to arbitration provisions.” (424)
Consistent with this, the overwhelming weight of U.S. judicial decisions apply generally-
applicable U.S. state law rules of contract validity, such as unconscionability, fraud,
mistake, frustration, impossibility and the like, to domestic arbitration agreements. (425)
Similarly, U.S. courts have overruled earlier authority holding that federal common law
provides a general body of contract law governing all aspects of the validity of domestic
arbitration agreements. (426)
U.S. courts have not clearly resolved the question whether a general choice-of-law clause
in the parties’ underlying contract extends to the contract’s arbitration clause in
domestic cases under Chapter 1 of the FAA, with lower courts reaching inconsistent
results. (427) Most courts have held, however, that a choice-of-law clause, if applicable to
the arbitration agreement, only chooses substantive contract law rules and not rules of
arbitration law, including rules regarding the allocation of authority between arbitral
P 581 tribunals and courts. (428)
(2) Law Governing Substantive Validity of International Arbitration Agreements Under

Chapter 2 of Federal Arbitration Act
A broadly similar approach to that applicable under Chapter 1 of the domestic FAA
applies to most international arbitration agreements in U.S. courts. Given the universal
character of the New York Convention, most international arbitration agreements are
governed in U.S. courts by §203 of Chapter 2 of the FAA. (429) U.S. courts have repeatedly
held that federal common law, derived from the Convention and §§2 and 203 of the FAA,
preempts state law rules which single out international arbitration agreements for
special disfavor or burdens, as is the case with domestic agreements. (430)
In addition, as discussed below, many U.S. courts have gone further with regard to
international arbitration agreements, as distinguished from domestic arbitration
agreements, holding that federal common law principles apply also to questions of
contract validity (rather than generally-applicable state law contract rules). (431) For
P 582 example, in Marchetto v. DeKalb Genetics Corp., the court cited §203 of the FAA in
concluding that “the validity of an arbitration agreement is determined by reference to
the [FAA] and the federal substantive law of arbitrability.” (432) In another court’s words:
“When we exercise jurisdiction under Chapter Two of the FAA, we have
compelling reasons to apply federal law, which is already well-developed, to
the question of whether an agreement to arbitrate is enforceable.” (433)
The result of the foregoing developments has been that the substantive validity of
international arbitration agreements can ordinarily be challenged in U.S. courts only on
the basis of generally-applicable contract law defenses (such as fraud, mistake,
impossibility, unconscionability and the like), ordinarily prescribed by federal common
law rules. As discussed elsewhere, this is generally true even where the parties have
included a choice-of-law clause in their underlying contract, with most U.S. courts
interpreting such provisions as inapplicable to the arbitration agreement (434) or
refusing to apply the law chosen by the parties’ agreement if it imposes discriminatory or
idiosyncratic prohibitions to agreements to arbitrate. (435) Despite this general
approach, a few U.S. courts have applied the law governing the underlying contract to the
arbitration agreement, almost always upholding the validity of the arbitration
agreement. (436)
(3) Law Governing Formation of Domestic Arbitration Agreements Under Federal
Arbitration Act
Until fairly recently, many U.S. courts generally applied substantive federal common law
rules derived from §2 of the domestic FAA to the formation of domestic arbitration
agreements without engaging in any meaningful choice-of-law analysis. (437) This
conclusion historically resulted from the view that Congress intended the FAA to preempt
state (and foreign) law in U.S. courts, which directly mandated substantive rules and
obviated the need for choice-of-law analysis. (438) As a consequence, federal courts
P 583 applied judicially-fashioned federal common law rules of contract formation, which
30
provided a pro-enforcement legal regime for domestic arbitration agreements. (439)
More recently, however, the U.S. Supreme Court has apparently held that, in the domestic
context, U.S. state law applies to questions concerning the formation (as distinguished
from the validity) of arbitration agreements. For example, the Supreme Court held, in
First Options of Chicago, Inc. v. Kaplan, that federal as well as state courts “should apply
ordinary state-law principles that govern the formation of contracts” in determining the
existence of an agreement to arbitrate. (440) The Court has also concluded that “[n]either
[§2 nor §3 of the FAA] purports to alter background principles of state contract law
regarding the scope of agreements. … [S]tate law, therefore, is applicable to determine
which contracts are binding under §2 and enforceable under §3.” (441) Other recent U.S.
domestic authorities under the FAA are to the same effect. (442)
Although it is beyond the scope of this discussion, one may question whether this analysis
is well-considered as a matter of domestic U.S. law. A more coherent analysis, in better
keeping with the FAA’s objectives, would be to characterize the question whether an
“arbitration agreement” exists, for purposes of the FAA, as a matter of federal law. This
would further the FAA’s objectives of facilitating the arbitral process and ensuring that
state (or foreign) law does not obstruct the enforcement of arbitration agreements. More
fundamentally, it is difficult to understand how the FAA could effectively regulate the
validity of arbitration agreements without also regulating both what those agreements
are and how they are validly formed. (443)
For the present, however, this appears to be a path not yet taken in the domestic U.S.
context. It remains to be seen whether the application of state law principles of contract
formation will impede the enforceability of domestic arbitration agreements in the
United States.
(4) Law Governing Formation of International Arbitration Agreements Under Chapter 2 of
Federal Arbitration Act
Despite the foregoing developments with regard to domestic U.S. arbitration agreements,
many U.S. lower courts have continued to apply substantive rules of federal common law
to the formation of international arbitration agreements that are subject to the New York
P 584 Convention, (444) as distinguished from domestic arbitration agreements. For
example, a U.S. appellate court applied “general principles of the law of contract
formation” to determine whether the parties had validly concluded an international
arbitration agreement. (445) Likewise, another decision declared that, “if an arbitration
agreement meets the requirements of either the FAA or N.Y. Convention, then those
federal standards are the default standards that a court must apply, even in the face of a
general choice-of-law provision.” (446)
Given the conclusion by many U.S. courts that the New York Convention and §§2 and 203
of the FAA establish a body of substantive federal common law, applicable to the
formation and validity of international arbitration agreements, there have been few
instances where the application of foreign law to international arbitration agreements
has been considered in U.S. litigation. Rather, in many cases, U.S. courts have simply
applied U.S. substantive federal common law contract principles to determine the
existence and validity of international arbitration agreements, without considering or
applying foreign law. (447) As one lower court put it:
P 585 “[N]ormal conflict of laws rules should not be used to determine which law
should govern the validity of an arbitration clause when the parties are
subject to the dictates of the Convention. Neither the law of a foreign country,
or the law of a particular state (or territory) can ever be chosen – only federal
law is controlling.” (448)
Despite this, not all U.S. courts adopt the approach of applying federal common law rules
of contract formation to international arbitration agreements. Extending the analysis set
out for domestic arbitration agreements in First Options, (449) some U.S. lower courts
have applied the same basic approach to international arbitration agreements subject to
the New York Convention as is applied to domestic arbitration agreements. These
decisions have applied U.S. state or foreign law rules of contract formation (and validity)
to international arbitration agreements. (450)
Those U.S. courts that have applied state or foreign law have generally done so after
applying traditional choice-of-law rules to select the law applicable to international
arbitration agreements. In doing so, these courts have encountered the same difficulties
that most other national courts have in selecting the law applicable to the existence and
validity of international arbitration agreements. (451)
When adopting this approach, some U.S. courts have applied the law of the arbitral seat,
(452) while others have applied the law governing the underlying contract, particularly
P 586 where that contract contains a choice-of-law clause. (453) Other U.S. courts have
looked to the “most significant relationship” standard of the Restatement (Second)
Conflict of Laws, (454) with results that are similar to those in other jurisdictions (with U.S.
lower courts engaging in debates whether the law of the arbitral seat or the law governing
the underlying contract has the closer relationship to the arbitration agreement). (455)
31
P 587 The application of either the law of the arbitral seat or the law chosen by a general
choice-of-law clause remains a minority position in the United States. The better-
reasoned decisions of U.S. courts instead apply a judicially-fashioned body of federal
common law, derived from the New York Convention and Chapter 2 of the FAA, to
questions of formation and validity of international arbitration agreements, rather than
looking to either state or foreign law. This analysis bears significant parallels to French
law, where courts apply international law principles, and to Swiss law, where courts apply
specialized choice-of-law and substantive rules, in each case rather than a particular
national law selected through a traditional choice-of-law analysis. (456)
(5) Choice-of-Law Provision in Underlying Contract Under Federal Arbitration Act
As noted above, U.S. courts have taken divergent approaches to the applicability of
general choice-of-law clauses in commercial contracts to associated international
arbitration agreements. There is no U.S. Supreme Court authority addressing the issue
and lower court decisions have reached inconsistent results. (457)
Some U.S. courts have concluded, usually without analysis, that a general choice-of-law
clause in a commercial contract applies to the associated arbitration agreement, and
that the (state or foreign) law selected by the choice-of-law clause governs the formation
and validity of the arbitration agreement. (458) In the words of one court:
P 588 “Defendants claim that a choice-of-law clause does not govern questions of
contract validity where the ultimate issue is one of arbitrability. … But where
the parties have chosen the governing body of law, honoring their choice is
necessary to ensure uniform interpretation and enforcement of that
agreement and to avoid forum shopping. … In short, if defendants wish to
invoke the arbitration clauses in the agreements at issue, they must also
accept the Swiss choice-of-law clauses that govern those agreements.” (459)
Other U.S. courts have not applied choice-of-law provisions in underlying contracts to the
associated arbitration agreement, instead generally applying federal common law
principles derived from the FAA to the formation and validity of international arbitration
agreements. (460) As one court adopting this analysis reasoned: “a general choice-of-law
clause within an arbitration provision does not trump the presumption that the FAA
supplies the rules for arbitration.” (461) Some U.S. lower courts have adopted the same
analysis, applying federal common law principles to the question whether a non-
signatory is bound by an international arbitration agreement. (462)
P 589 Several U.S. courts have adopted a third approach, holding that they will apply the law
chosen in a choice-of-law provision in the underlying contract to the validity of the
arbitration agreement only where the clause expressly and unambiguously provides for
this result. (463) In the words of one court:
“courts should apply federal arbitrability law absent ‘clear and unmistakable
evidence’ that the parties agreed to apply non-federal arbitrability law.” (464)
A number of courts adopting this analysis have held that a general choice-of-law clause
in a contract will not ordinarily be interpreted as incorporating state (or foreign) law
governing arbitration agreements (and will instead apply only to the law governing the
parties’ underlying commercial contract). (465) As one court put it, “[a] general choice of
law clause, without more, does not show that the parties intended to incorporate state
P 590 procedural rules on arbitration.” (466) As discussed below, U.S. courts have applied
similar principles to general choice-of-law clauses in other procedural contexts. (467)
The U.S. Supreme Court explained this approach to interpreting a choice-of-law clause as
selecting only rules of substantive law, applicable to the merits of the parties’ dispute,
not rules of arbitration law:
“the best way to harmonize the choice-of-law provision with the [contract’s]
arbitration provision is to read ‘the laws of the State of New York’ [in the
choice-of-law clause] to encompass substantive principles that New York
courts would apply, but not to include special rules limiting the authority of
arbitrators. Thus, the choice-of-law provision covers the rights and duties of
the parties, while the arbitration clause covers arbitration.” (468)
This rationale, particularly its final sentence, presumptively excludes the parties’
arbitration clause from the scope of their choice-of-law clause. (469)
U.S. courts are particularly likely to interpret a general choice-of-law clause as not
applying to an arbitration agreement when the putatively selected state or foreign law
would deny effect to the parties’ arbitration agreement. As one decision observed, “[i]n
cases where courts have applied an agreement’s choice of law, such action would ‘ensure
uniform interpretation and enforcement of that agreement and … avoid forum shopping.’”
(470) In contrast, where the law selected by a general choice-of-law clause would deny
effect to an arbitration agreement, U.S. courts have typically refused to apply it. (471)
(6) Application of International Law Principles to Formation and Substantive Validity of
International Arbitration Agreement Under Chapter 2 of Federal Arbitration Act
32
In addition to the various choice-of-law analyses described above, the weight of U.S.
federal court authority in cases involving the formation or validity of international
arbitration agreements has applied substantive principles of international law, derived
from Article II(3) of the New York Convention, to the formation and validity of
international arbitration agreements. These decisions have held that Article II(3)
P 591 prescribes uniform international substantive rules of law, reflecting international
minimum standards, that supersede discriminatory or idiosyncratic provisions of foreign
(or state) law applicable to international arbitration agreements.
These U.S. decisions rest on the premise (discussed above) that Article II of the
Convention is self-executing (or directly-applicable) in national courts and that it
prescribes substantive rules of international law applicable to the formulation and
validity of international arbitration agreements, which preclude the application of
national law rules that discriminate against international arbitration agreements or that
adopt idiosyncratic rules of invalidity that are not applied neutrally on an international
scale. (472) Alternatively, even where the Convention is not self-executing or directly
applicable, its mandatory international rules have a substantial effect on the
interpretation of national arbitration legislation. (473)
For example, in Ledee v. Ceramiche Ragno, the U.S. Court of Appeals rejected a challenge
to an international arbitration agreement based upon a Puerto Rican law invalidating
arbitration agreements in automobile dealer contracts. (474) Relying on Article II(3) of the
Convention, and Chapter 2 of the FAA (implementing the Convention), the Court refused to
apply the Puerto Rican law, reasoning:
“by acceding to and implementing the [New York Convention], the federal
government has insisted that not even the parochial interests of the nation
may be the measure of interpretation. Rather, the clause [Article II(3)] must be
interpreted to encompass only those situations – such as fraud, mistake, duress,
and waiver – that can be applied neutrally on an international scale.” (475)
Similarly, in Rhone Mediterranee Compagnia Francese di Assicurazioni e Riassicurazioni v.
Lauro, the U.S. Court of Appeals rejected a challenge to an international arbitration
agreement based on its alleged invalidity under Italian law (the law of the arbitral seat).
(476) The relevant Italian legislation denied effect to arbitration agreements providing
for an even number of arbitrators, which the parties’ agreement arguably contemplated.
Again relying on Article II(3) of the Convention, the court held:
“[A]n agreement to arbitrate is ‘null and void’ only (1) when it is subject to an
internationally recognized defense such as duress, mistake, fraud, or waiver, (2)
when it contravenes fundamental policies of the forum state. The ‘null and
void’ language [in Article II(3) of the Convention] must be read narrowly, for the
signatory nations have jointly declared a general policy of enforceability of
agreements to arbitrate.” (477)
The court continued:
“[S]ignatory nations have effectively declared a joint policy that presumes the
enforceability of agreements to arbitrate. Neither the parochial interests of
the forum state, nor those of states having more significant relationships with
the dispute, should be permitted to supersede that presumption. The policy
of the Convention is best served by an approach which leads to upholding
agreements to arbitrate. The rule of one state as to the required number of
P 592 arbitrators does not implicate the fundamental concerns of either the
international system or [judicial enforcement] forum, and hence the
agreement is not void.” (478)
Likewise, another lower court refused to give effect to a “purported Italian law rule [that]
appears to be a special requirement governing agreements to arbitrate, but inapplicable
to other contractual terms and conditions.” (479)
A number of other U.S. courts have adopted the same approach, looking to
internationally-applicable principles of neutrality and non-discrimination derived from
Article II(3). These decisions have relied on such principles to give effect to international
arbitration agreements, notwithstanding national law rules that either singled-out such
agreements for particular rules of invalidity or that imposed idiosyncratic limitations on
the validity of such agreements. (480) One U.S. decision declared:
“it is well-established that it is not state law, but internationally-recognized
defenses to contract formation or public policy concerns of the forum nation,
which make a valid agreement to arbitrate the subject of the dispute
unenforceable.” (481)
U.S. courts have relied on both the language and objectives of the Convention in adopting
this interpretation of Article II(3). According to one court:
“our interpretation of the Article II(3) proviso must not only observe the strong
policy favoring arbitration, but must also foster the adoption of standards
33
which can be uniformly applied on an international scale.” (482)
P 593 Another decision reasoned that “[t]he ‘null and void’ clause must be read narrowly
because the signatory nations have declared a general policy of enforceability of
agreements to arbitrate.” (483)
Applying this analysis, the course of U.S. judicial decisions during the past four decades
has been extremely favorable towards the enforcement of international arbitration
agreements. U.S. courts have repeatedly upheld the existence and validity of
international arbitration agreements, affording litigants a relatively high degree of
certainty that their agreements will be enforced in accordance with their terms in U.S.
litigation. Indeed, one lower U.S. court recently remarked that it was aware of:
“no United States federal cases where a court has applied the law of the
foreign country and declared that an arbitration clause would be invalid
under that country’s law.” (484)
More recently, a number of U.S. lower courts have refused to apply national and state law
rules of unconscionability (485) and public policy (486) under Article II, on the basis that
the rules at issue were not internationally neutral.
(7) International Minimum Standards Versus Direct Application of International Law
There are two principal interpretations of these U.S. decisions relying on Article II(3) of
the Convention. First, Article II(3) may incorporate a comprehensive body of substantive
international law which is directly applicable in national courts. This would parallel the
analysis of French courts, looking directly to international law for substantive contract
P 594 law standards, governing all aspects of the formation and validity of international
arbitration agreements (subject to a “public policy” exception). (487) It would also
roughly parallel U.S. judicial decisions adopting federal common law rules of contract
formation and validity for application to international arbitration agreements. (488)
Second, an alternative interpretation of Article II(3) would conclude that the provision
permits the application of generally-applicable contract law defenses (under applicable
national law) but imposes a substantive international prohibition against national law
defenses which discriminated against international arbitration agreements, which is
again directly applicable in national courts. This approach would parallel the
application of the domestic FAA and its preemptive effect on discriminatory state laws.
(489) This approach would also retain an important role for choice-of-law analysis, and
the application of national law, but would subject national law to reasonably demanding
international limitations, designed to safeguard the presumptive validity of the
arbitration agreement and to ensure that idiosyncratic or discriminatory national laws do
not obstruct the formation and enforcement of international arbitration agreements.
Each of the foregoing approaches has significant merits and represents an important
advance in international arbitration law. Each of these approaches takes an important
step in preventing parochial national legislation from frustrating both the intentions of
parties agreeing to international arbitration agreements and the intentions of
Contracting States that have ratified the Convention.
The more firmly-grounded of these two analyses interprets Article II(3) of the Convention
as imposing international limitations on national law rules governing the formation and
substantive validity of international arbitration agreements, as in Ledee, Rhone and their
progeny. At least at present, (490) this is more readily sustained than an approach –
based on either customary international law or Article II(3) – that seeks to rely on the
existence of a comprehensive, stand-alone body of international substantive contract
law principles governing international arbitration agreements. This conclusion is
supported by several related arguments.
First, the Ledee/Rhone analysis rests on the internationally-recognized terms of the
Convention, providing a firm textual basis for applying international law principles in
national courts. In the absence of an international treaty obligation, it is difficult to
demonstrate the existence of an independent body of rules of customary international
law governing the substantive validity and formation of commercial arbitration
agreements (491) or to rely on such principles to override national law rules applicable to
arbitration agreements generally. (492) Relying on Article II(3) of the Convention offers a
P 595 more cogent and defensible foundation for the application of international law
principles than either customary international law or general conceptions of
international public policy.
As discussed above, international arbitration agreements have long and almost uniformly
been regarded as being governed by national law principles, selected through traditional
choice-of-law analysis. (493) As discussed above, such agreements have historically been
considered to be subject variously to the national law of the judicial enforcement forum,
the national law of the arbitral seat, the national law governing the underlying contract,
or the national law with the closest connection to the arbitration clause: (494) the one
uniform theme throughout this history, including throughout virtually the entire 20th
century, has been that it was always national law – not international law – that was
considered applicable to international arbitration agreements.
34
Indeed, as discussed above, both the New York and European Conventions expressly
provide for the application of national law – not international law – to determine at least
elements of the existence and substantive validity of international arbitration
agreements. (495) That history makes it very difficult to accept, at present, the direct
application of international law to all issues relating to the validity of international
commercial arbitration agreements.
Additionally, it is unclear whether international law currently provides a body of
substantive contract and other commercial law rules which would be capable of affording
business enterprises the certainty and predictability that they require in international
commercial transactions. There is no general international convention or code,
prescribing rules of international contract law, which could be applied to international
arbitration agreements. Nor is it easy to conclude that there is widespread agreement on
the substantive content of rules of contract law, which might provide the basis for
formulating general principles of law that could be applied to international arbitration
agreements. (496)
P 596 Nonetheless, there is much to recommend the idea that customary international law
principles could develop over time, to provide an internationally-recognized body of
contract law principles applicable to international commercial arbitration agreements.
The development of international law rules governing the formation and validity of
investor-state arbitration agreements (497) indicates the plausibility of the development
of comparable rules for international commercial arbitration agreements. Moreover, the
“constitutional” status of the New York Convention (discussed above) (498) leaves
substantial scope for the development over time of a comprehensive body of contract
law applicable to international arbitration agreements in the same manner that rules of
customary international law are developed.
For the time being, however, the development of a generally-accepted body of
international law, applicable to the contract and other commercial law issues raised by
challenges to international commercial arbitration agreements, remains aspirational.
Particularly in areas such as capacity, authority and corporate powers, it is difficult to
conclude that a free-standing body of substantive international commercial law,
sufficient to provide a reliable framework governing the formation and validity of
international agreements, currently exists. In turn, the absence of such a body of law
provides a powerful argument against concluding that international commercial
arbitration agreements are governed by international, rather than national, law.
Some authorities reason that there is no need for a system of contract law to govern
international arbitration agreements, which can be subject “only to the common
intention of the parties, without it being necessary to make reference to a national law.”
(499) That analysis falls of its own weight.
It makes no sense to speak of contracts governed “only [by] the common intention of the
parties,” without any “reference to a national law.” Parties’ intentions take legally-
binding form (i.e., become valid contracts) only by virtue of external legal regimes, as
well as through application of external legal rules (concerning issues of consent, duress,
unconscionability, certainty and definiteness, frustration, impossibility, repudiation,
waiver and the like), which have been developed in many legal systems over centuries.
Dismissing such rules is both unwise (because it discards accumulated learning and
useful guidance) and disingenuous (because the same issues addressed by these
doctrines will in any event continue to arise and require analysis and resolution).
Second, it is entirely justifiable – and in fact essential – to interpret Article II(3) of the
Convention as imposing international limitations on national law rules regarding the
formation and validity of arbitration agreements. As explained in decisions such as Ledee
and Rhone, Article II(3) requires that international arbitration agreements be enforced,
except where they are “null and void, inoperative or incapable of being performed.”
P 597 Article II(3)’s rule of presumptive validity of international arbitration agreements, and
prescription of an international standard requiring the recognition and enforcement of
international arbitration agreements, would have little content or practical value if
Contracting States were free to adopt discriminatory or idiosyncratic national law rules
that made it impossible or difficult to validly form such agreements in the first place.
Equally, such rules of national law would contradict the fundamental objectives of the
Convention – to promote the use and enforceability of international arbitration
agreements. (500)
Given the Convention’s purposes, Article II(3)’s exception, permitting non-recognition of
an arbitration agreement that is “null and void, inoperative or incapable of being
performed,” can only sensibly be interpreted as prescribing at least a partial body of
international standards for the validity of international arbitration agreements. Under
these standards, Article II(3)’s requirement that Contracting States recognize and enforce
international arbitration agreements would not permit a state to adopt legislation
rendering all arbitration agreements, or all international arbitration agreements, “null
and void” or invalid. Nor would Article II(3) permit a Contracting State to require local
regulatory approval of all international arbitration agreements as a condition of their
validity.
35
In each case, such legislation would render Article II(3)’s mandatory requirement that
international arbitration agreements be recognized meaningless. This contradicts the
Convention’s basic purposes and cannot have been contemplated by its drafters, who
instead permitted non-recognition of arbitration agreements only in specified
circumstances, (501) pursuant to a uniform and mandatory international choice-of-law
regime. (502)
This conclusion draws support from the text, structure and purposes of the Convention.
Textually, Article II(3) requires Contracting States to recognize arbitration agreements,
and refer the parties to arbitration, save where “the said agreement is null and void,
inoperative or incapable of being performed.” (503) It makes no sense – from a drafting or
structural perspective – to impose an international rule that mandatorily requires
Contracting States to recognize arbitration agreements, save in specifically identified
circumstances, if those circumstances are then left wholly undefined and subject to the
discretion of Contracting States.
The Convention does not require Contracting States to recognize arbitration agreements
unless “they deem it unadvisable to do so,” or unless “national law precludes
recognition,” but rather when those agreements are “null and void, inoperable or
incapable of being performed” within the meaning of Article II(3). The specification of
particular exceptions to an arbitration agreement’s validity in Article II(3)’s textual
formula contemplates and requires substantive content – and, particularly,
internationally-binding content derived from the Convention (504) – to give meaning to
Article II(3)’s text. (505)
P 598 The Convention’s structure and purposes require the same result. The basic objective
of prescribing uniform international rules, in order to make international arbitration
agreements more readily enforceable, (506) demands that the circumstances in which
such agreements will be recognized be the subject of international standards. Leaving
issues of substantive validity entirely to national law would produce neither uniformity
nor a reliable “pro-enforcement” approach to arbitration agreements. Equally, it would
be anomalous for the Convention to prescribe a uniform international standard for the
formal validity of arbitration agreements, as it does, (507) and then leave issues of
substantive validity wholly unaddressed by international standards. Likewise, one of the
Convention’s basic objectives was to reverse historical discrimination against
international arbitration agreements, (508) which again requires application of
international (rather than purely national) standards.
The proper content of Article II(3)’s substantive international standards is suggested by
the analysis in Rhone, Ledee and their progeny, which requires recognition of the validity
of international arbitration agreements except where such agreements are invalid under
generally-applicable, internationally-neutral contract law defenses. Under this standard, a
Contracting State may not avoid its obligations to recognize and enforce international
arbitration agreements under Article II(3) by adopting special rules of national law that
make such agreements invalid (or “null and void, inoperative or incapable of being
performed”). (509) For example, national legislation that imposed unusual notice
P 599 requirements (e.g., particular font or capitalization), consent requirements (e.g., that
arbitration agreements be specifically discussed and approved or established by
heightened proof requirements), regulatory approval requirements (e.g., executive or
legislative approval), procedural requirements (e.g., only institutional arbitration
agreements are permitted) or invalidity rules (e.g., arbitration agreements applicable to
future disputes, fraud claims or tort claims are invalid) would all be impermissible and
ineffective under this interpretation of Article II(3).
Much the same analysis would apply if a Contracting State applied idiosyncratic national
law requirements, applicable to domestic arbitration agreements, but out-of-step with
essentially universal approaches of other Contracting States, to international arbitration
agreements. For example, this would preclude legislative requirements for particular
arbitrator appointment mechanisms (e.g., requirements for naming the arbitrator in the
arbitration agreement), qualifications of arbitrators (e.g., local nationality, religion),
institutional arbitration requirements (e.g., forbidding ad hoc arbitration agreements) or
language requirements (e.g., requiring use of a specified language). These local
requirements would not qualify as internationally-neutral contract law defenses, but
would instead constitute idiosyncratic local rules. As the courts in Ledee and Rhone
explained, these sorts of defenses contradict the purposes of the Convention and should
not be given effect in the context of international arbitration agreements. (510)
These requirements of international neutrality and non-idiosyncrasy are derived from the
Convention’s purposes of promoting uniform treatment of international arbitration
agreements and facilitating their enforcement. (511) Both purposes are frustrated by
discriminatory or idiosyncratic local laws which purport to invalidate agreements to
arbitrate. Equally, the obligation of Contracting States to perform their treaty obligations
in good faith (pursuant to the principle of pacta sunt servanda) (512) precludes states
from maintaining discriminatory rules of contractual invalidity that render arbitration
agreements invalid, even when they satisfy all of the requirements for substantive
validity applicable to other types of contracts. These obligations are particularly
appropriate given the “constitutional” character of the Convention, providing an
international legal regime within which the efficacy of the international arbitral process
36
is encouraged and progressively extended. (513)
The Ledee/Rhone analysis gives appropriate meaning to Article II(3), by relying on it to
hold Contracting States to their treaty commitments and to supersede national law rules
discriminating against, or imposing idiosyncratic burdens on, international arbitration
agreements. At the same time, this analysis does not attribute a broader meaning to
Article II(3), by attempting to interpret the provision as establishing a complete body of
substantive contract law, governing all issues of capacity, authority, formation, consent,
certainty, mutuality, validity, illegality and termination of international arbitration
agreements. At least for the present, it is difficult to sustain such an interpretation of
Article II(3), which contains only a half-sentence requirement that arbitration clauses be
enforced, save where they are “null and void, inoperable or incapable of being
performed,” without offering any real textual basis for a comprehensive set of contract
law principles. (514)
This analysis is not altered by the “nonarbitrability” doctrine, recognized in Articles V(2)
(a) and II(1) of the Convention. (515) As discussed below, the nonarbitrability doctrine
permits the application of a judicial enforcement forum’s mandatory prohibitions against
the arbitration of particular kinds of disputes (e.g., criminal, domestic relations) even
where the parties’ arbitration agreement is valid and otherwise enforceable. (516)
Although the nonarbitrability doctrine is an exceptional escape device, it is also best
P 600 understood as subject to interna tional limitations derived from the Convention (as
discussed below, requiring that local public policies be specifically articulated and that
nonarbitrability exceptions be narrowly-tailored to achieve these policies). (517) In any
event, the existence of the nonarbitrability doctrine, permitting Contracting States an
exceptional escape device for particular categories of disputes, is not inconsistent with,
and arguably confirms, the international character of the obligations imposed by Article
II.
Third, reliance upon Article II(3) fosters international uniformity and maximum
enforceability of international arbitration agreements, by imposing a treaty obligation on
all Contracting States to apply internationally-neutral, non-discriminatory contract law
principles to such agreements. This also means that not only leading arbitral centers,
such as Switzerland, England, France, the United States, Singapore and Hong Kong, but all
Contracting States of the Convention, are required to apply only internationally-neutral
defenses – thereby fostering a uniform international approach to the enforcement of
arbitration agreements which can be developed over time through the evolution of
textually-grounded customary international law norms. This is more sensible than
individual nations adopting individual views of international (or national) law, based
upon local legislation or policy, which would be the result of an analysis not relying on
the development of uniform international rules under the Convention.
(8) Anomalous U.S Lower Court Decision Considering Choice-of-Law Rules for International
Arbitration Agreements
There are occasional decisions by U.S. courts that do not adopt the foregoing approach to
Article II, but they are isolated and contrary to the decided weight of U.S. authority. One
example of such an exception was a lower court decision that applied Rhode Island law
to the validity of an international arbitration agreement, rather than Article II’s
international standards, because “[t]he Convention relates to recognition of arbitral
awards and not the validity of arbitration agreements.” (518) That conclusion, and its
rationale, are plainly wrong: the Convention, specifically Article II of the Convention,
clearly does apply to international arbitration agreements. (519)
Another example of an anomalous U.S. decision under the Convention is the U.S. Court of
Appeals’ decision in Sarhank Group v. Oracle Corp., which refused to recognize an arbitral
award made in Egypt. (520) There, the court rejected the tribunal’s decision, interpreting
a choice-of-law clause in the parties’ underlying contract to apply to the arbitration
agreement and holding that the non-signatory U.S. parent of the respondent in the
arbitration had assented to the contract and its arbitration agreement. Applying federal
common law standards, the court held that U.S. law governed questions regarding
formation of an agreement to arbitrate by a U.S. company. (521)
This decision reflects a parochial insistence on applying local law, notwithstanding a
foreign arbitral seat, (522) a choice-of-law clause selecting foreign law (523) and the
P 601 absence of any con nection of the relevant contract to the United States. (524) Given
the choice-of-law rule in Article V(1)(a), it is very difficult to see what could justify this
application of U.S. law.
Moreover, the Sarhank decision very unusually did not ignore the law that would have
been selected by the parties’ choice-of-law clause or by a traditional choice-of-law
analysis in order to give effect to the agreement to arbitrate (as is the case under Swiss,
French and most U.S. decisions); (525) rather, the court disregarded the law that would
have been selected by normal choice-of-law principles to invalidate an arbitration
agreement. That is a serious departure from the obligations imposed by the New York
Convention (Articles V(1)(a) and II(3)), (526) as well as the overwhelming weight of judicial
authority in both the United States and most other jurisdictions. (527)
(9) Restatement of U.S. Law of International Commercial and Investor-State Arbitration
37
Similarly, the American Law Institute’s Restatement of the U.S. Law of International
Commercial and Investor-State Arbitration adopts a treatment of U.S. choice-of-law rules
for international arbitration agreements that is contrary to Article V(1)(a) of the New York
Convention (and the weight of U.S. and other authority) in important respects. The
Restatement’s approach ignores the Convention’s (and the FAA’s) requirements and would
produce results that are out-of-step with other Contracting States.
Preliminarily, the Restatement suggests that U.S. courts both may and do ignore the New
York Convention’s choice-of-law rules and in deciding whether or not to recognize and
enforce an arbitration agreement. According to the Restatement, the New York and Inter-
American “Conventions do not purport to govern the question of applicable law at the
time that an arbitration agreement is sought to be enforced.” (528) As a consequence,
there is assertedly “room to simplify determination of the applicable law and to allow a
court somewhat greater flexibility in the matter” (529) than the “somewhat rigid” (530)
choice-of-law rule prescribed by Article V(1)(a). These observations are incorrect.
As discussed above, the better view is clearly that Article V(1)(a)’s choice-of-law rule for
international arbitration agreements applies to these agreements throughout the arbitral
process, including in proceedings to recognize both arbitration agreements and awards.
(531) It is therefore wrong to suggest that the Convention does “not purport to govern the
P 602 question of applicable law” in proceedings to enforce an arbitration agreement. (532)
Indeed, the Convention’s choice-of-law rules for international arbitration agreements are
among the Convention’s central achievements, (533) and disregarding them in enforcing
arbitration agreements would significantly undercut the Convention’s objectives.
It is also incorrect to characterize the Convention’s choice-of-law rules as “rigid” or to
conclude that U.S. (and other) courts generally ignore these rules. In fact, Article V(1)(a)’s
choice-of-law rule is relatively flexible and not materially different from other choice-of-
law rules: Article V(1)(a) prescribes a two-part rule, looking first to either the express or
implied choice of the parties and, absent any choice, providing a default choice. (534) It
is very difficult to see how that rule, which focuses on ascertaining the parties’ intentions,
is rigid.
Likewise, contrary to the Restatement’s suggestion, both U.S. (535) and other (536)
national courts have routinely, and properly, applied Article V(1)(a)’s choice-of-law rule. A
contrary approach, ignoring the Convention’s choice-of-law rules, would again violate the
Convention and frustrate its objectives.
Moreover, the Restatement prescribes a default rule for the law governing the substantive
validity of international arbitration agreements that requires application of the law
selected by a general choice-of-law clause in the parties’ underlying contract. Under the
Restatement rule:
“If the parties have not agreed upon a body of law to govern the arbitration
agreement (either expressly or impliedly), a general choice-of-law clause in
the contract determines the law governing the validity of the arbitration
P 603 agreement. If the parties have neither selected any law to govern the
arbitration agreement nor included in the contract a general choice-of-law
clause, the law of the seat of arbitration, without resort to its choice-of-law
rules, governs the issue.” (537)
This formulation is also ill-considered and should not be followed. In cases where “the
parties have not agreed upon a body of law to govern the arbitration agreement (either
expressly or impliedly),” then Article V(1)(a)’s second prong expressly prescribes a
mandatory international default rule. That default rule, which was one of the
Convention’s major innovations, is the law of the arbitral seat, not the law governing the
underlying contract. It violates the Convention for national courts to reject this default
rule, in favor of either the law governing the underlying contract, the law of the
enforcement forum, or otherwise.
The Restatement approach is also very difficult to follow analytically. In light of the
separability presumption, the only analytical route to applying the law chosen by a
general choice-of-law clause in the underlying contract to the arbitration agreement
would be on the basis that this was either the parties’ implied or express choice.
However, that analysis would contradict the premise of the Restatement approach,
quoted above, which is that the parties have not chosen the law governing their
arbitration agreement “either expressly or impliedly.” More fundamentally, the
Restatement approach ignores the parties’ genuine intentions regarding the law
governing their international arbitration agreement, which, as discussed in detail below,
are reflected in the validation principle, not by arbitrary choice-of-law rules selecting
either the law of the arbitral seat or the law of the underlying contract. (538)
Finally, the Restatement also concludes that “[n]either the New York Convention nor the
FAA prescribes the law applicable to the existence of an arbitral agreement on the
occasion of the agreement’s enforcement.” (539) As a consequence, the Restatement
provides that the judicial enforcement forum may apply its own choice-of-law rules to
determine the existence (as distinguished from the validity) of an international
38
As discussed below, this approach is out-of-step with both choice-of-law rules in multiple
other contexts and with the Convention’s international character. (541) Instead, as
national courts have typically concluded, the same choice-of-law rules apply to both the
existence and validity of international arbitration agreements. (542)
P 604 [3] Applicability of Choice-of-Law Rules Where Party Challenges Existence of
The choice-of-law rules applicable to international arbitration agreements under the
New York (and Inter-American) Convention and the UNCITRAL Model Law apply equally to
both the existence and the substantive validity of such agreements. This approach is
prescribed by general choice-of-law rules in other contexts, including the Hague
Principles on Choice of Law in International Commercial Contracts, (543) U.S. choice-of-law
rules, (544) the Rome I Regulation, (545) the Rome Convention, (546) English law, (547) and
otherwise. (548) Application of the Convention’s (and Model Law’s) choice-of-law rules to
issues of both existence and validity makes particular sense because different
Contracting States characterize issues of “existence” and “validity” differently a single,
uniform approach to both sets of issues is therefore both sensible and necessary to
achieve the Convention’s (and Model Law’s) objectives of uniformity. (549) Consistent with
this analysis, most national courts have concluded that the same choice-of-law rules
P 605 apply to both the existence and the validity of the arbitration agreement. (550)
[4] Future Directions: Choice-of-Law Rules for International Arbitration Agreements

The existing treatment of choice-of-law rules for the law governing international
arbitration agreements by national courts (and arbitral tribunals) is flawed. As discussed
above, national courts currently apply a wide variety of different choice-of-law rules to
international arbitration agreements. (551) Most importantly, different courts and arbitral
tribunals adopt different approaches to “general” choice-of-law provisions and, more
broadly, to the question whether an arbitration agreement is governed by the law of the
arbitral seat or the law applicable to the underlying contract. (552)
The diversity of approaches to interpreting general choice-of-law clauses is illustrated by
the evolution of decisions in England. As discussed above, English judicial decisions and
commentary have shifted from the historical view that a general choice-of-law clause
virtually always selected the law governing the arbitration agreement to the contrary (if
weaker) presumption that the law governing the arbitration agreement is that of the
arbitral seat, and then, more recently, back to a presumption that the choice-of-law
clause is an implied choice of law for the arbitration agreement. (553)
The diversity of approaches adopted in different jurisdictions to general choice-of-law
provisions is undesirable and inconsistent with the terms and objectives of the New York
Convention and UNCITRAL Model Law. (554) It produces uncertain and unpredictable
results, as well as inconsistent decisions, none of which benefits either commercial
parties or the international arbitral process, and all of which contradicts the Convention’s
objectives of uniformity.
As discussed above, parties are free to include a choice-of-law provision in their
arbitration clause (and, in some cases, do so (555) ). (556) If parties do not include a
provision in their arbitration agreement, the better view is that a general choice-of-law
provision in the parties’ underlying contract does not ordinarily extend to the separable
arbitration clause. (557) Instead, a general choice-of-law provision is directed towards
the commercial terms of the parties’ underlying contract, not the procedural terms of the
ancillary and separable arbitration agreement. (558) Interpreting a general choice-of-law
provision as applying to the separable arbitration agreement ignores the principal
commercial purpose of such provisions and extends them to other subjects, to which very
P 606 different considerations apply.
Critically, as discussed elsewhere, the parties’ selection of the arbitral seat is not a
choice of geographical location; instead, it is a choice of law and, in particular, a choice
of the arbitration law of the arbitral seat. (559) In turn, the arbitral seat’s law applies, as
the procedural law of the arbitration, to the procedural conduct of the arbitration. (560)
As discussed above, the law of the arbitral seat will govern (sometimes in mandatory
terms) virtually all aspects of the arbitral procedure – including the arbitrators’
competence-competence, the number and qualifications of the arbitrators, the
arbitrators’ independence and impartiality, the constitution of the arbitral tribunal, the
language of the arbitration, the arbitral procedures (including due process rights),
disclosure, the choice of substantive law, confidentiality, interim relief, the tribunal’s
remedial authority and numerous other issues. (561)
At the same time, in virtually all instances, the procedural conduct of the arbitration will
also depend, in significant part, on the terms of the arbitration agreement (562) –
consistent with its character as a “procedural” contract. (563) Each of the aspects of the
arbitral procedures that is governed by the law of the arbitral seat – such as constitution
of the arbitral tribunal, independence and impartiality of arbitrators, provisional
measures, confidentiality, consolidation and the tribunal’s remedial authority – is also
typically addressed (either expressly or impliedly) by the arbitration agreement. As a
consequence, the arbitration agreement is inevitably and intimately connected to the
law of the arbitral seat, governing precisely the same procedural issues as that law does.
39
Subjecting the arbitral process and the arbitration agreement to different laws is both
likely to produce uncertainty and inconsistent requirements and unlikely to accord with
the expectations of commercial parties (who would reasonably expect all aspects of the
arbitral procedures to be subject to a single legal regime). (564)
Equally important, and as also discussed above, commercial parties presumptively
regard their arbitration agreement as a separable agreement, distinct from the
commercial terms of their underlying contract. (565) It is sometimes suggested that an
arbitration agreement is separable only for limited purposes (concerning the validity of
the arbitration clause), and not for choice-of-law or other purposes. (566) As discussed
above, that is not correct: the separability of the arbitration agreement arises from the
agreement’s character (as a “procedural” contract), terms and objectives, which are all
fundamentally different from those of the underlying commercial contract. (567) The
separability of an arbitration agreement for purposes of validity is a product of these
differences, and not a free-standing and isolated rule, detached from the character and
purposes of agreements to arbitrate. (568) As discussed above, these same
P 607 characteristics and purposes also argue decisively for treating the arbitration
agreement as separable from the underlying contract for choice-of-law purposes. (569)
Similarly, in many cases, the connecting factors relevant to the arbitration agreement are
materially different from those for the underlying contract. The arbitration agreement
involves the parties’ obligations to resolve their disputes according to particular
procedures, in a particular place, according to a legal regime prescribed by the arbitral
seat. (570) In contrast, the underlying contract involves the parties’ obligations to do
particular acts (e.g., deliver goods, provide services, lend money) in a particular place. In
most instances, there is no connection, and certainly no necessary connection, between
the places of performance of the underlying contract and the arbitration agreement. (571)
Where such a disconnection exists, it argues against interpreting a choice-of-law clause in
the underlying contract as being intended to apply to the associated arbitration
agreement. The reasons that led the parties to select a particular legal system for their
underlying contract have little or no application to their arbitration agreement.
The fundamental differences between the arbitration agreement and the underlying
contract are also confirmed by the differing legal frameworks of the two agreements. As
discussed elsewhere, arbitration agreements are subject to specialized rules of formal
validity, (572) substantive validity, (573) interpretation (574) and termination (575) that do
not apply to other types of contracts. These differences underscore the fundamental
differences between commercial contracts and arbitration agreements, undercutting
suggestions that a choice of law for one agreement should be extended to the other.
This analysis is consistent with the treatment of general choice-of-law clauses in related
contexts. As discussed elsewhere, general choice-of-law provisions are interpreted as
applying only to the substantive, commercial terms of contracts, and not to “procedural”
questions (such as burdens of proof, standards of proof, pleading requirements,
privileges and the like). (576) Similarly, as discussed above, general choice-of-law
provisions are interpreted as not ordinarily extending to questions of arbitration law or
nonarbitrability. As the U.S. Supreme Court has reasoned:
“[T]he best way to harmonize the choice-of-law provision with the [contract’s]
arbitration provision is to read ‘the laws of the State of New York’ [in the
choice-of-law clause] to encompass substantive principles that New York
courts would apply, but not to include special rules limiting the authority of
arbitrators. Thus, the choice-of-law provision covers the rights and duties of
the parties, while the arbitration clause covers arbitration.” (577)
Other U.S. decisions are similar, holding that a general choice-of-law provision will
extend to the arbitration clause only if it is unmistakably clear that this was the parties’
intention. (578)
P 608 This conclusion is confirmed, for many of the same reasons, by the default choice-of-
law rule prescribed by the New York Convention (and, uniformly, by other international
arbitration conventions, including the Inter-American and European Conventions). (579)
The UNCITRAL Model Law prescribes the same default choice-of-law rule (in Articles 34
and 36). (580) Likewise, as discussed above, the Hague Convention on Choice of Court
Agreements prescribes an analogous default choice-of-law rule, subjecting forum
selection clauses to the law of the chosen state. (581)
As discussed above, except where parties have otherwise agreed, Article V(1)(a) of the
Convention and Articles 34 and 36 of the Model Law provide for application of the law of
the arbitral seat to the arbitration agreement. (582) That rule both reflects and shapes
the expectations of commercial parties regarding the character of, and law applicable to,
their arbitration agreement. Treating a general choice-of-law clause as expressly or
impliedly selecting the law governing the arbitration agreement largely nullifies or
reverses this universal default rule, instead subjecting arbitration agreements to the law
applicable to the underlying contract. (583)
These considerations point decisively towards interpreting general choice-of-law
provisions as not applying to the arbitration clause and instead ordinarily applying the
law of the arbitral seat to such agreements. This result is not only required by the
40
character of the arbitration agreement, but also by the objectives of the arbitral process.
Application of Article V(1)(a)’s (and Article 8’s) default choice-of-law rule not only accords
better with the intentions of commercial parties, but also produces more predictable
and consistent results. Rather than (ultimately arbitrary) interpretations of general
choice-of-law clauses, and assorted other generally fortuitous contract provisions, in an
effort to discern an individualized implied choice, the default choice-of-law rule in the
New York Convention and UNCITRAL Model Law provide a straightforward and easily-
administrable standard.
The foregoing standard, requiring application of the law of the arbitral seat, is a
presumptive rule, which can be rebutted. As discussed below, parties can include a
choice-of-law provision in their arbitration agreement or expressly agree that the law
P 609 applicable to the arbitration agreement is the law governing their underlying contract
or another law (rather than the law of the arbitral seat). A general choice-of-law provision
does not constitute such an agreement, but other types of contractual provisions might
do so. Thus, a choice-of-law clause providing “this contract (including its arbitration
provision),” or “this contract (including Article 21 (‘Arbitration’),” would ordinarily
overcome the presumption that the arbitration clause is governed by the law of the
arbitral seat.
Finally, the better view of both the New York Convention and the Model Law is that they
also prescribe a validation principle. Where choice-of-law analysis results in application
of a law that invalidates an international arbitration agreement, the better approach is
to apply the law of the jurisdiction, having some connection to the parties’ transaction,
that will uphold the arbitration agreement. (584) That approach accords with both the
implied intentions of commercial parties and the House of Lords’ most considered
treatment of the issues in (Hamlyn & Co. v. Talisker Distillery), (585) which was which was
most recently affirmed by the U.K. Supreme Court. (586)
Preliminarily, there are substantial grounds for criticizing the application of traditional
choice-of-law rules (such as those selecting the law of the underlying contract on the law
of the arbitral seat) to international arbitration agreements. Indeed, it is in substantial
part for that reason that courts in France, the United States and elsewhere have applied
rules of international law to international arbitration agreements: doing so seeks to
minimize the uncertainties arising from choice-of-law analysis and to apply specialized
rules of international law formulated for international arbitration agreements to those
agreements.
Moreover, a general choice-of-law rule selects the law of a single jurisdiction, based on a
particular criterion, with little regard for the fundamental objectives and commercial
expectations of the parties and the interests of the relevant states. (587) That is true of
both choice-of-law rules selecting the law of the arbitral seat (588) and choice-of-law
rules treating general choice-of-law clauses in the parties’ underlying contract as an
implied (or express) choice of law governing the arbitration agreement. (589)
Similar criticisms apply to a “closest connection” or “most significant relationship”
standard. The fundamental difficulty with the closest connection/most significant
relationship standards is their failure to provide effective guidance in determining what
factors qualify as “closest” or “most significant” in particular cases. Again, that is because
these standards look to relatively mechanical connecting factors and ignore both the
parties’ fundamental objectives and commercial expectations, in entering into
international arbitration agreements, and the interests of relevant legal systems. (590)
The validation principle provides a superior approach, better-rooted in the parties’ true
intentions and the objectives of the New York Convention (and contemporary national
arbitration statutes), to the choice of the law governing international arbitration
agreements. An early example of a more considered analysis giving effect to the
validation principle can be found in a 19th century House of Lords decision, in Hamlyn &
Co. v. Talisker Distillery. (591) There, the parties agreed to a contract for the purchase of
P 610 grain, to be performed entirely in Scotland, with an arbitration clause providing for
“arbitration by two members of the London Corn Exchange, or their umpire, in the usual
way.” (592) When disputes arose under the grain purchase agreement, Scottish courts
refused to dismiss a litigation, relying on provisions of Scots law that invalidated any
arbitration agreement that did not name the arbitrators. On appeal, the House of Lords
reversed, holding that the arbitration clause was subject to English, not Scots, law, and
that the agreement to arbitrate was valid under English law. (593)
Among other things, the House of Lords reasoned that the arbitration clause was
governed by English law (because of the parties’ reference to arbitrators sitting in
England and drawn from “a commercial body in London of a conventional tribunal which
is to act ‘in the usual way,’ or, in other words, in the manner which is customary in
London” (594) ). These connecting factors were held to supersede the underlying
contract’s exclusive connection to Scotland. Equally important, and of more convincing
and enduring guidance, Lord Ashbourne reasoned that “the arbitration clause becomes
mere waste paper if it is held that the parties were contracting on the basis of the
application of the law of Scotland,” and that “[i]t is more reasonable to hold that the
parties contracted with the common intention of giving entire effect to every clause,
rather than of mutilating or destroying one of the most important provisions.” (595)
41
The House of Lords’ analysis, although more than a century old, is both well-reasoned and
compelled (today) by the New York Convention and UNCITRAL Model Law. Properly
conceived, the choice of law governing an international arbitration agreement should be
drawn, not from abstract connecting factors, but from the commercial purposes of parties
to international arbitration agreements and from the underlying objectives of the
international arbitral process. (596)
As discussed above, the parties’ purposes and commercial expectations in concluding an
international arbitration agreement are not connected abstractly to one particular
national jurisdiction. (597) That would generally be contrary to the essential nature and
purpose of an international arbitration agreement, which is inherently international in
character, and to the basic conception of contemporary international arbitration, which
is also fundamentally international in character. Instead, ascertaining the parties’
purposes and expectations in entering into an international arbitration agreement
requires reference to the parties’ underlying objective of obtaining efficient resolution of
international disputes, and, in particular, of overcoming the peculiar jurisdictional and
choice-of-law uncertainties that ordinarily accompany transnational transactions. (598)
P 6112 These objectives are not served, and are in fact frustrated, by formulaic application of
either the law of the arbitral seat or the underlying contract where doing so would
invalidate the parties’ agreement.
Rather, the law which rational commercial parties expect an international arbitration
agreement to be governed by (absent clear contrary language), and which most closely
mirrors and best accomplishes the purposes of such an agreement, is the law of the
jurisdiction, from among those connected with the parties’ transaction, which gives effect
(rather than denies effect) to the parties’ objectives in entering into that agreement.
Absent contrary language, the parties’ overriding objective in entering into an
international arbitration agreement is to make an agreement that is valid and
enforceable (rather than “mere waste paper” (599) ), and that provides an effective means
of neutrally resolving international disputes, without regard to differing national choice-
of-law and substantive law rules. (600)
Where the parties have subjected their underlying contract to a law that would, if applied
to their arbitration agreement, invalidate that agreement, the separability presumption
provides sound analytical reasons not to apply that law to the parties’ arbitration
agreement. As discussed above, it makes very little commercial sense to assume that the
parties intended that the law governing their underlying contract would also be extended
to the presumptively separate arbitration agreement, if the consequence thereof was to
invalidate that agreement. (601) Rather, in that case, the law of the arbitral seat would
presumptively apply to the parties’ agreement to arbitrate.
Conversely, where the parties’ arbitration agreement would be invalid under the law of
the arbitral seat, there is every reason to apply the law governing the parties’ underlying
contract to give effect to the arbitration clause. Again, if parties select a law governing
their underlying contract which would give effect to their arbitration agreement, they
cannot reasonably be assumed to have intended that law not to extend to their
arbitration agreement where such a limitation would result in application of a law (that
of the seat) which would invalidate their agreement, and leave them facing all the
uncertainties, expenses and other problems of international litigation that the
arbitration agreement was meant to avoid. (602)
For the same reasons, as discussed above, Article V(1)(a) of the New York Convention is
fully consistent with, and requires application of, the validation principle. (603) When
Article V(1)(a) provides for application of the “law to which the parties have subjected”
their arbitration agreement, (604) it permits an implied choice of law. (605) In particular,
Article V(1)(a) recognizes that parties ordinarily intend that the law governing their
international arbitration agreement is the law of the jurisdiction, having some connection
to the parties’ contract, that makes that agreement work and that will enforce it
effectively. This conclusion is confirmed by the pro-enforcement objectives of the
P 612 Convention and by Article II’s rule of presumptive validity (discussed above). (606)
Consistent with this analysis, numerous authorities have adopted the validation principle
in the context of international arbitration agreements, either expressly or in practice. As
discussed above, Article 178 of the Swiss Law on Private International Law adopts the
validation principle, providing that an agreement to arbitrate in Switzerland is valid if it
satisfies either the law chosen by the parties to govern the arbitration agreement, Swiss
law or the law applicable to the underlying dispute. (607) Similar legislation has been
enacted in Algeria and Spain. (608)
Likewise, a number of arbitral awards have applied some version of the validation
principle. Under this approach, where different potentially-applicable national laws
have produced different results with regard to the existence or validity of an arbitration
agreement, arbitral tribunals have applied that national law which will uphold the
agreement. (609) This analysis has been justified on the grounds that:
“an arbitral clause has a closer relationship to the law that upholds its
existence than to the law that denies it.” (610)
Although not generally so characterized in express terms, judicial decisions in a number
42
of developed jurisdictions are also properly understood as applying an unstated
validation principle. (611) As discussed above, national courts have consistently engaged
P 613 in choice-of-law analyses that select the law that gives effect to international
arbitration agreements. (612) When that is the law of the arbitral seat, the arbitral seat’s
law is applied, and when it is the law of the underlying contract, that law is applied.
In contrast, in very few cases does a developed court’s choice-of-law analysis lead to
application of a law that invalidates the agreement to arbitrate when another
potentially-applicable law would validate the agreement. Moreover, in some
jurisdictions, such as the United States and France, the application of either
international or federal common law principles – notwithstanding otherwise applicable
national laws that would invalidate or restrict the parties’ arbitration agreement – can be
seen as a variation of the validation principle. (613)
Some national courts have also expressly cited a validation principle in addressing
challenges to the validity of international arbitration agreements. In a recent decision,
citing the second edition of Gary Born’s International Commercial Arbitration (2014) as a
“monumental work,” the U.K. Supreme Court affirmed the application of the validation
principle to arbitration agreements as a well-established principle of contractual
interpretation. (614) The Supreme Court further reasoned:
“The principle that contracting parties could not reasonably have intended a
significant clause in their contract, such as an arbitration clause, to be invalid
P 614 is a form of purposive interpretation, which seeks to interpret the language
of the contract, so far as possible, in a way which will give effect to – rather
than defeat – an aim or purpose which the parties can be taken to have had in
view.” (615)
In similar vein, a decision of the Singapore High Court has reasoned:
“The parties’ intention to arbitrate is clear in the present case. … [T]he law
should give the fullest effect to this clear intention such that an interpretation
which confers validity to the arbitration agreement should be preferred to
other interpretations which would invalidate the agreement.” (616)
Other authorities are to the same effect in approving a validation principle. A 1989
Resolution of the International Law Institute declared:
“Where the validity of the agreement to arbitrate is challenged, the tribunal
shall resolve the issue by applying one or more of the following: the law
chosen by the parties, the law indicated by the system of private international
law stipulated by the parties, general principles of public or private
international law, general principles of international arbitration, or the law
that would be applied by the courts of the territory in which the tribunal has
its seat. In making this selection, the tribunal shall be guided by the principle in
favorem validitatis.” (617)
Commentary which considers the issue, while limited in volume, also approves of the
validation principle. (618)
P 615 These authorities provide practical confirmation, from a wide range of differing
perspectives, of the analytical foundations of the validation principle. Long recognized in
other contexts, (619) the validation principle is peculiarly applicable in the context of
international arbitration agreements, which are entered into precisely to avoid the
uncertainties and choice-of-law complexities that otherwise attend transnational
transactions. (620) Given the particular, and very narrow, character of agreements to
arbitrate, involving only exchanges of promises to arbitrate disputes, it makes no
commercial or logical sense to conclude that parties would intentionally select a law to
govern that agreement which would then invalidate it.
Finally, application of a validation principle is entirely consistent with, and, on a proper
analysis, required by, the New York Convention. As discussed above, a validation
principle rests fundamentally on the parties’ intentions: it gives effect to the parties’
authentic and objective intentions in concluding an international arbitration agreement,
rather than disregarding those intentions on the basis of formalistic choice-of-law and
other analyses. (621) As such, the validation principle is properly characterized as an
implied choice-of-law by the parties, which Contracting States are mandatorily required
to apply under the first prong of Article V(1)(a)’s choice-of-law standard (discussed
elsewhere). (622) In particular, where the first prong of Article V(1)(a) applies, giving effect
to an implied choice of law, there is no need to, and no basis to, apply Article V(1)(a)’s
default rule (of the law of the arbitral seat).
This result is also consistent with the Convention’s pro-enforcement objectives and with
the substantive rule of presumptive validity of international arbitration agreements,
mandated by Articles II(1) and II(3) of the Convention. (623) Those provisions require
Contracting States to give effect to the material terms of international arbitration
agreements; (624) that includes the obligation to give effect to the parties’ implied
choice of the law that upholds their arbitration agreement. Those provisions also require
43
the imposition of the burden of proof of showing invalidity on the party resisting
enforcement of the arbitration agreement (625) and the non-application of
discriminatory and idiosyncratic rules of contract law that would invalidate the
P 616 arbitration agreement. (626) As discussed below, the Convention’s rule of presumptive
validity, coupled with the absence of any choice-of-law rule in Article II, is best
effectuated by a validation principle, maximizing the enforceability of international
arbitration agreements.
Criticisms of the validation principle are unconvincing. Some commentators have
suggested that the principle is “difficult to accept because the parties cannot by fiat
make an agreement valid or invalid,” without due consideration of which legal system
that attaches to the contract. (627) This ignores the well-settled and non-controversial
application of the validation principle in numerous other choice-of-law contexts. (628) It
also ignores the parties’ autonomy, exercised by way of either express or implied
agreement, under almost all developed legal systems to select the law governing their
relationship, (629) and the specific recognition of that autonomy in both the New York
Convention (in Articles II(1) and V(1)(a)) and the UNCITRAL Model Law (in Articles 8 and
34(2)(a)(i)). Giving effect to the parties’ agreement is not “fiat,” but instead a
straightforward application of a fundamentally important principle of private
international law, given specific effect in this context by the Convention and the Model
Law.
Others critics have argued that the validation principle “proves too much” or is “nakedly
instrumental” because it would validate an arbitration agreement in circumstances
where it would have been invalid under both the law of the underlying contract and the
law of the arbitral seat. (630) This misunderstands the validation principle, which does
not operate to validate the arbitration agreement so long as any possible law in any
jurisdiction would validate it. Rather, the validation principle provides that, among the
laws that may potentially apply to an arbitration agreement (typically only that of the
arbitral seat or the underlying contract), parties should be presumed to have intended
the arbitration agreement to be governed by the law that would validate it. This is a
choice-of-law rule based on the parties’ presumptive intentions, not a substantive rule of
validity, and it requires no different analysis than that adopted by the House of Lords in
Hamlyn & Co. v. Talisker Distillery.
[B] Choice-of-Law Agreements Selecting Law Applicable to Existence and

Substantive Validity of International Arbitration Agreements
Analysis of the law governing international arbitration agreements where the parties have
expressly selected the law applicable to such an agreement builds on the choice-of-law
P 617 analysis outlined above. In particular, both substantive rules of international law and a
validation principle play a central role in the choice-of-law analysis in the presence of an
agreement selecting the law governing an international arbitration agreement.
Almost all contemporary authorities recognize the autonomy of parties to select the law
applicable to the formation and substantive validity of their international arbitration
agreement. This is a specific application of the more general autonomy of parties under
most contemporary legal regimes to agree upon the substantive law applicable to their
commercial relations. (631) This general principle applies with particular force to
international arbitration agreements, where party autonomy enjoys special status, (632)
and is confirmed by both international treaties and national arbitration legislation. (633)
Under most national legal systems, there are limits to the parties’ autonomy to select the
law applicable to their legal relations. (634) These types of restrictions also exist with
regard to agreements selecting the law applicable to international arbitration clauses. In
general, the limits on the parties’ autonomy to choose the law applicable to their
international arbitration agreement are expressed as “nonarbitrability” rules or as
mandatory requirements directed specifically at the validity of agreements to arbitrate.
Both of these subjects are addressed in greater detail in Chapter 6 below. (635)
Despite general acceptance of principles of party autonomy, a number of developed
legal systems also adopt additional choice-of-law rules, designed to maximize the
enforceability of international arbitration agreements, which are arguably in tension with
principles of party autonomy. In particular, as discussed above, a number of leading
jurisdictions apply either a validation principle (e.g., Switzerland) or international
principles (e.g., France, United States) in order to give effect to international arbitration
agreements, including agreements that the law chosen by the parties’ choice-of-law
agreement would arguably invalidate. As discussed below, this analysis is best explained
as an effort to give effect to the parties’ true and authentic intentions regarding their
agreement to arbitrate, which are typically not expressed in a choice-of-law clause that
would invalidate that agreement. (636)
[1] Need for Conflict of Laws Analysis in Cases Involving Choice-of-Law Agreement
Preliminarily, the existence of a choice-of-law agreement by the parties selecting the law
applicable to an international arbitration agreement does not obviate the need for a
conflict of laws analysis. Rather, as in other contexts, (637) conflict of laws rules must be
applied to give effect to (or invalidate) and to interpret a putative choice-of-law
P 618
44
P 618
agreement specifying the law applicable to an arbitration clause. (638)
In turn, the need to apply some set of conflict of laws rules to choice-of-law agreements
in international arbitral proceedings necessarily requires selecting the appropriate
conflicts rules. The same issue, of “choice of choice-of-law rules,” arises in the context of
the arbitral tribunal’s selection of the substantive law governing the parties’ underlying
dispute. (639)
As discussed above, courts and arbitral tribunals have applied a variety of conflict of
laws rules, including the conflict of laws rules of the arbitral seat, to select the
substantive law applicable to an international arbitration agreement; nonetheless, there
is little uniformity or consistency on this issue. (640) This diversity in the choice of choice-
of-law rules argues again in favor of an internationally-uniform validation principle, as
well as for application of uniform substantive rules of international law.
The autonomy of parties to select the law governing their international arbitration
agreement is expressly recognized in leading arbitration conventions. (641) Indeed, these
instruments confirm the parties’ freedom to choose the law governing their arbitration
agreements without express qualifications for mandatory law limitations (although such
limitations may fairly be inferred). At the same time, as discussed elsewhere, the New
York Convention and most other international arbitration conventions also contain
uniform international rules of substantive validity, applicable to international
arbitration agreements, which apply regardless of the law chosen by the parties to govern
their arbitration agreement. (642)
As noted above, neither the Geneva Protocol nor the Geneva Convention addressed the
question of the law applicable to the parties’ arbitration agreement, including the
validity or enforceability of agreements selecting the law applicable to the arbitration
agreement. (643) Instead, Article 1 of the Geneva Protocol provided only a uniform rule of
substantive international law, applicable to international arbitration agreements
regardless of the law chosen by the parties. (644) The Geneva Convention took a
somewhat different approach, assuming that the arbitration agreement might be subject
to a national law in proceedings to recognize and enforce arbitral awards. (645) The
Convention did not, however, provide choice-of-law rules addressing either the choice of
that national law or the question whether parties could select the law applicable to their
P 619 international arbitration agreement.

As discussed above, the New York Convention combines elements from both the Geneva
Protocol and Geneva Convention, together with additional provisions that go beyond
either of its predecessors. (646)
[i] Article II: Substantive International Rule of Presumptive Validity
As discussed above, Articles II(1) and II(3) of the Convention prescribe a substantive
international rule of presumptive validity for international arbitration agreements. (647)
In particular, Article II mandatorily imposes the burden of proof of invalidity of
international arbitration agreements on the party resisting enforcement of the
agreement (648) and requires application of non-discriminatory rules of generally-
applicable contract law to issues of the arbitration agreement’s substantive validity.
(649) As discussed above, these uniform international rules apply regardless of the
national law chosen by the parties to govern their international arbitration agreement.
(650)
[ii] Article II: Party Autonomy and Validation Principle
Article II(1)’s requirement that Contracting States recognize international arbitration
agreements extends to the material terms of the parties’ agreement to arbitrate. Among
other things, that requirement includes the obligation to recognize the parties’
agreement on the law governing their agreement to arbitrate; that obligation extends to
both express and implied choices of law. (651) The effect of Article II(1) is to require
Contracting States to recognize and enforce arbitration agreements which are valid under
the law chosen by the parties, either expressly or impliedly, to govern those agreements.
(652)
The better view of the Convention is also that it contemplates application of Article V(1)
(a)’s default rule, requiring application of the law of the arbitral seat, rather than the law
chosen by a general choice-of-law clause, to the arbitration agreement. (653) As
discussed above, the law of the arbitral seat, rather than that specified by a general
choice-of-law provision, is ordinarily that intended by the parties to govern the
arbitration agreement. (654) That implied choice is entitled to recognition under Article
II of the Convention.
Moreover, the better view is also that Article II of the Convention requires application of a
validation principle, requiring Contracting States to apply the law of the state, with a
45
connection to the parties’ agreement, that would give effect to the arbitration
agreement. (655) As discussed above, that conclusion reflects the parties’ implied choice
and is supported by the pro-enforcement objectives of the Convention; moreover, a
validation principle is also the most appropriate means for giving effect to Article II’s
respect for the parties’ autonomy and mandatory international rule of presumptive
validity. (656)
P 620 There is tension between a validation principle and principles of party autonomy,
particularly where the validation principle is applied to uphold an arbitration agreement
that would be invalid under the law selected by the parties. In practice, such tension
rarely arises: as a practical matter, parties generally do not expressly select the law
applicable to the arbitration agreement itself and, when they do so, they do not
ordinarily select a law that invalidates their arbitration agreement. (657)
In any event, in cases where the parties’ putative choice of law would invalidate their
agreement to arbitrate the proper analysis is that this choice does not constitute a
genuine indication of the parties’ intentions. Rather, the best way to effectuate the
parties’ intentions, in agreeing to arbitrate in an international transaction, is to uphold
their arbitration agreement by applying that national law, with a connection to the
parties’ transaction, that would uphold that agreement. This validation principle gives
the most faithful effect to the parties’ intentions. As discussed in greater detail below,
that result is not only permitted by, but is in fact required by, principles of party
autonomy and Articles II and V(1)(a) of the Convention.
Finally, by virtue of Article VII(1) of the Convention, Article II only forbids non-recognition
of arbitration agreements based on a law other than that chosen by the parties. (658) Like
Article V(1)(a) of the Convention, Article II does nothing to forbid recognition of arbitration
agreements, including recognition of arbitration agreements as a result of application of
a law other than that chosen by the parties, if that is what national law would provide.
(659) Indeed, as discussed below, the better view is that Article II(3) contemplates
application of a validation principle, requiring Contracting States to apply the law of the
state that would give effect to the arbitration agreement, including when that is a law
different from the law chosen by the parties to govern their arbitration agreement. (660)
[iii] Article V(1)(a): Party Autonomy and Validation Principle
As discussed above, Article V(1)(a) of the Convention provides that an award need not be
recognized if the arbitration agreement was “not valid under the law to which the parties
have subjected it or, failing any indication thereon, under the law of the country where the
award was made.” (661) The clear import of the first prong of Article V(1)(a)’s choice-of-law
standard is that the validity of an international arbitration agreement is governed, at
least at the stage of recognizing an award, by the law (if any) selected by the parties.
P 621 National courts (662) and commentators (663) uniformly reach the same conclusion,
holding that Article V(1)(a) does not permit denying recognition of an award on the basis
of a law different from that chosen by the parties to govern the arbitration agreement. (As
discussed elsewhere, Article V(1)(a) also provides a default rule, in cases where parties
have not selected an applicable law, providing for application of the law of the arbitral
seat. (664) )
Article V(1)(a) contains no requirement that the law chosen by the parties have a
“reasonable relationship” to the parties’ transaction, as applies to choice-of-law
agreements in some legal systems. (665) This is consistent with both the text of the
Convention and with more general choice-of-law rules in most jurisdictions. (666)
Article V(1)(a) also contains no requirement that the parties’ choice-of-law agreement be
express or clearly stated; rather, Article V(1)(a)’s first prong applies equally to both
express and implied choices of law by the parties. (667) This conclusion is consistent with
the treatment of choice-of-law agreements in other contexts, including the Rome
Regulation and the ALI’s Restatement (Second) Conflict of Laws; (668) it is also consistent
with the text of Article V(1)(a), which refers expansively to the existence of an “indication”
by the parties of the applicable law. (669)
It is important to note, however, that Article V(1)(a) has an additional specific, and
limited, effect. Article V(1)(a) establishes a prohibition against relying on laws other than
that chosen by the parties to deny recognition to an arbitral award, or, absent a choice of
law, the law of the arbitral seat. Article V(1)(a) does not forbid relying on laws other than
that chosen by the parties (or, absent choice, the law of the arbitral seat) to give effect to
an arbitration agreement, but only the opposite. (670)
P 622 In this respect, Article V(1)(a) serves the Convention’s “pro-enforcement” objectives,
and its choice-of-law rule does not require application of the parties’ chosen law where
doing so would require invalidation of their agreement to arbitrate. Indeed, as discussed
elsewhere, Article II(3) of the Convention contemplates application of a validation
principle, which would in some circumstances give effect to an arbitration agreement
even if it were invalid under the law chosen by the parties. (671)
[iv] Applicability of Article V(1)(a)’s Recognition of Party Autonomy at Stage of Recognition
of Arbitration Agreement
As discussed in greater detail above, some authorities have suggested that Article V(1)(a)
46
of the Convention applies only at the stage of recognition of an award, and not at earlier
stages (including decisions under Article II by national courts considering whether a
litigation should be stayed because of the parties’ arbitration agreement). (672) Under
these analyses, Article V(1)(a) is only applicable to define the circumstances when an
award may be denied recognition, and not when an arbitration agreement is valid.
According to this interpretation of the Convention, the questions whether an arbitration
agreement is valid and whether a national court litigation should be stayed in favor of
arbitration, pursuant to Article II of the Convention, require reference to choice-of-law
rules other than those in Article V(1)(a). (673)
The weight of authority is to the contrary. That authority instead holds that the choice-of-
law standard set forth in Article V(1)(a) is applicable outside the specific context of
recognition of an award; in particular, this authority holds that Article V(1)(a)’s rule is
applicable when national courts are required to consider whether to recognize an
arbitration agreement and refer claims to arbitration under that agreement pursuant to
Article II of the Convention. (674)
The better view is that the same choice-of-law and substantive rules are applicable to
international arbitration agreements under Articles II and V(1)(a). That means that Article
II’s rule of presumptive validity of international arbitration agreements, as well as its
validation principle, apply equally under Article V(1)(a). (675) Conversely, it means Article
V(1)(a)’s prohibition against denying recognition of arbitration agreements under a law
different from that chosen by the parties also applies fully under Article II. (676)
These conclusions are necessary to avoid inconsistent treatment of the substantive
validity of international arbitration agreements in proceedings to recognize agreements
(under Article II) and proceedings to recognize awards (under Article V). As discussed
P 623 above, it would make little sense, and produce significant inefficiencies, to subject
international arbitration agreements to different choice-of-law rules, and therefore
different substantive laws, at different points in the course of a dispute. (677) Rather, the
same choice-of-law and substantive rules should apply to the validity of international
arbitration agreements under both Article II and Article V.
Importantly, as already discussed, both Article V(1)(a) and Article II impose obligations on
Contracting States to recognize arbitration agreements in specified circumstances, and
do not impose any obligation to deny recognition to arbitration agreements. Thus,
nothing in either Article forbids a Contracting State from applying a law other than that
chosen by the parties to give effect to an agreement to arbitrate; Article II and Article V(1)
(a) only forbid Contracting States from applying a law other than that chosen by the
parties to deny effect to an arbitration agreement. (678)
[v] Applicability of Choice-of-Law Agreement Where Party Challenges Existence or Validity
of Agreement
A choice-of-law agreement is effective to select the law governing the arbitration
agreement even if one party denies the validity or existence of the choice-of-law
agreement itself. This conclusion is consistent with general choice-of-law rules in other
national and international instruments. (679) Contrary conclusions by a few authorities
(680) are mistaken.
P 624 [vi] Nonarbitrability and Mandatory Law Limitations on Party Autonomy Under New
York Convention
One notable absence from Article V(1)(a) is any reference to possible limitations on the
parties’ choice of law governing their arbitration agreement. (681) The absence of any
such reference does not imply that the Convention excludes, or forbids application of,
limits on the parties’ autonomy. Rather, these constraints are acknowledged elsewhere in
the Convention, as exceptional escape devices from the uniform substantive rules and
choice-of-law regime established by Articles II and V(1)(a).
As discussed in greater detail below, Article V(2)(a) of the Convention exceptionally
allows non-recognition of an award in an individual Contracting State where, under the
laws of the judicial recognition forum, parties may not validly agree to arbitrate a
particular matter. (682) To the same effect is Article II(1) of the Convention, providing
exceptionally for non-recognition of arbitration agreements in a particular Contracting
State as to matters defined as nonarbitrable under local mandatory law. (683)
The effect of Articles V(2)(a) and II(1) is to permit individual Contracting States to impose
limits on the enforceability of international arbitration agreements, notwithstanding the
validity of such agreements under the Convention and applicable law. By virtue of Article
V(2)(a), and the parallel terms of Article II(1), the Convention not only does not exclude,
but affirmatively gives effect (in exceptional circumstances) to, the general concept of
such constraints on party autonomy. (684) As discussed below, such constraints are
extremely narrow, and subject to international limitations, but, in principle, they are
acknowledged by the Convention as possible escape devices from the general
substantive rules and choice-of-law regime established by Articles II and V(1)(a). (685)
Importantly, however, the “nonarbitrability” exceptions of Article II(1) and V(2)(a) do not
provide for the invalidity of arbitration agreements. Rather, as discussed below, these
exceptions provide for the unenforceability of arbitration agreements as applied to
47
particular categories of disputes; the arbitration agreements are not rendered void or
invalid, as a consequence of Articles II(1) and V(2)(a), but Contracting States are instead
permitted, exceptionally, to deny enforcement of those agreements under local law in
P 625 particular circumstances. (686)

The European Convention also contains provisions regarding the law applicable to
international arbitration agreements. As discussed above, those provisions expressly
recognize the parties’ autonomy to select the law governing their international
Most national arbitration legislation confirms the freedom of contracting parties to select
the law governing their international arbitration agreements, applying the law chosen by
the parties to govern their arbitration agreement to issues of substantive validity. As with
international conventions, this autonomy is subject to limitations based on mandatory
national laws and public policies, but these limitations are exceptional and very narrow.
In addition, a number of leading national arbitration regimes adopt additional rules,
which supplement the parties’ autonomy to choose the law governing their arbitration
agreement. As detailed above, a number of national courts apply either substantive
principles of international law (U.S., French) or a validation principle (Swiss, Austrian,
English) to give effect to international arbitration agreements even where the parties
appear to have chosen a national law that would not do so. (688) This analysis rests on
the conclusion that when parties’ choice-of-law clauses select a law that invalidates their
arbitration agreement, those clauses generally do not reflect genuine or authentic
selections of the law to govern their arbitration agreement.
[a] UNCITRAL Model Law
As noted above, the UNCITRAL Model Law parallels the New York Convention in its
treatment of the parties’ autonomy to choose the law governing their arbitration
agreement. (689) As discussed above, Article 8 of the Model Law provides a rule of
presumptive validity, which requires imposing the burden of proof of invalidity of an
international arbitration agreement on the party opposing enforcement, (690) while
requiring application of generally-applicable contract law rules to the substantive
validity of arbitration agreements. (691) As required by the mandatory text of Article 8,
these substantive rules are applicable to all international arbitration agreements falling
within the Model Law’s scope, regardless of the law applicable to other aspects of the
agreement. (692)
The Model Law also provides, in Articles 34(2)(a)(i) and 36(1)(a)(i), that an arbitral award
may be annulled or denied recognition if the parties’ arbitration agreement “is not valid
under the law to which the parties have subjected it or, failing any indication thereon,
P 626 under the law of [the state where the award was made].” (693) Like the Convention,
(694) the first prong of the choice-of-law standard prescribed by these provisions gives
effect to the parties’ choice of law governing their arbitration agreement. Also paralleling
the Convention, this recognition of party autonomy is subject to exceptional
nonarbitrability escape devices (set forth in Article 34(2)(b) and Article 36(1)(b)). (695)
Like the Convention, there is no requirement under the Model Law that the parties’
chosen law have a “reasonable relationship” to the parties’ transaction or that the
choice-of-law agreement satisfy a “clear statement” standard. (696) Rather, Articles 8,
34(2)(a)(i) and 36(1)(a)(i) all provide for recognition of the parties’ choice of law governing
their arbitration agreement regardless whether the choice is express or implied.
Although there is limited precedent, national courts applying the Model Law (or similar
legislation) have consistently recognized the parties’ autonomy to choose the law
governing their international arbitration agreement. (697) As the English High Court has
explained, in a decision under England’s variation of the Model Law:
“It is a general principle of English private international law that it is for the
parties to choose the law which is to govern their agreement to arbitrate and
the arbitration proceedings, and that English law will respect their choice. …
Parties’ freedom of choice includes freedom to choose different systems of law
to govern different aspects of their relationship.” (698)
Similarly, in the more general words of the Canadian Supreme Court, “[t]he parties to an
arbitration agreement are free, subject to any mandatory provisions by which they are
P 627 bound, to choose any place, form and procedures they consider appropriate.” (699)
Indeed, in virtually no reported cases decided under the Model Law have mandatory law
restrictions on this autonomy been invoked to deny recognition of an international
Finally, paralleling analysis under Article II of the Convention, the better view is that the
Model Law contemplates application of a validation principle, applying the national law
that gives effect to international arbitration agreements. National court authority in most
jurisdictions has not expressly adopted a validation principle under Article 8 of the
48
Model Law. As discussed below, however, the best explanation for judicial decisions in a
number of jurisdictions, including Model Law jurisdictions, is by reference to a validation
principle. (701)
More fundamentally, application of a validation principle under the Model Law
effectuates the parties’ intentions, constituting an implied choice of law that is entitled
to recognition under Article 8, as well as under the first prong of the choice-of-law
standards in Articles 34(2)(a)(i) and 36(1)(a)(i). This again parallels analysis under Articles
II and V of the Convention. (702) Paralleling those provisions of the Convention, Articles
34(2)(a)(i) and 36(1)(a)(i) prohibit relying on a law other than that chosen by the parties to
deny recognition to an arbitral award, or, absent a choice of law, the law of the arbitral
seat. In contrast, those provisions also do not forbid reliance on laws other than that
chosen by the parties (or, absent choice, the law of the arbitral seat) to give effect to an
arbitration agreement.
The application of a validation principle is also supported by the general pro-
enforcement objectives of the Model Law and by the Model Law’s character as a uniform
international legislative instrument. (703) Both aspects of the Model Law argue in favor of
a uniform validation principle, applicable in all Model Law jurisdictions, which would
facilitate the enforcement of international arbitration agreements. This conclusion is also
supported by the combination of Article 8’s rule of presumptive validity and omission of
any specific choice-of-law rule. In the absence of any choice-of-law rule, Article 8’s rule of
presumptive validity is best and most fully given effect by application of a validation
principle, resulting in application of the national law that upholds the validity of the
parties’ agreement to arbitrate.
[b] U.S. Federal Arbitration Act
In the United States, choice-of-law analysis under the FAA is complex, particularly
because of the interplay of federal law (under the FAA) and state law principles. (704) As
discussed above, although there is a diversity of authority, the better view is that the FAA
gives effect to the parties’ autonomy to select the law governing an international
arbitration agreement, but also applies international principles of non-discrimination
and validation to the substantive validity of such agreements. (705)
In general terms, it is well-settled in case law under the FAA that parties are free to agree
upon the law governing their arbitration agreement (in both domestic and international
settings). (706) For example, in Volt Information Sciences, Inc. v. Stanford University, the
P 628 U.S. Supreme Court held that, because “[a]rbitration under the [Federal Arbitration]
Act is a matter of consent, not coercion, and parties are generally free to structure their
arbitration agreements as they see fit,” the parties were free to “agree[] that their
arbitration agreement [would] be governed by the law of California,” rather than by
federal (or other) law. (707) Or, as one lower U.S. court concluded:
“[T]he Agreement contains a choice of law provision stating that New York law
shall apply. The parties’ choice of New York law will be honored.” (708)
The Restatement (Second) Conflict of Laws similarly affirms the parties’ autonomy in this
respect, providing that the law applicable to the arbitration agreement will be that of
“the state chosen by the parties, if they have made such a choice under the
circumstances stated in §187.” (709) U.S. courts have also emphasized that the parties’
contractual autonomy is subject to application of (limited) exceptions for
nonarbitrability and public policy. (710)
Despite this, the treatment of party autonomy to select the law applicable to
international arbitration agreements subject to Chapter 2 of the FAA is more complex.
While recognizing the parties’ autonomy to select the applicable law, U.S. courts have
also applied international non-discrimination and validation principles that give effect
to international arbitration agreements even when the substantive law apparently
chosen by the parties would produce a different result.
Thus, a number of lower U.S. courts have confirmed the parties’ freedom under the
Convention and FAA to select the law governing their international arbitration agreement.
(711) As one court explained:
P 629 “The substantive law governing an agreement to arbitrate is susceptible to
conflicts of law and choice-of-law provisions. Where a transnational
agreement contains both choice-of-law and arbitration provisions and the law
selected by the choice-of-law clause governs the arbitration provision, courts
should generally enforce the agreement to arbitrate in accordance with the
law selected by the parties.” (712)
At the same time, however, U.S. courts have been very reluctant to conclude that the
parties have in fact agreed upon the application of a law that would deny effect to their
international arbitration agreement. (713) Indeed, as discussed in greater detail below, a
number of U.S. courts have refused to give effect to choice-of-law clauses (albeit choice-
of-law clauses contained in the parties’ underlying contract, rather than in the arbitration
agreement itself (714) ), instead applying federal common law standards to the formation
and substantive validity of international arbitration agreements. (715)
49
P 630 There is arguably tension between these holdings and principles of party autonomy,
but they are ultimately well-considered and consistent with the parties’ true intentions.
The proper explanation of these decisions is that the parties’ putative choice of a law
that would invalidate their agreement to arbitrate – particularly when made in their
underlying contract – does not constitute a genuine indication of the parties’ intentions.
Rather, the best way to effectuate the parties’ intentions, in agreeing to arbitrate, is to
give effect to their arbitration agreement by applying any potentially-applicable
national law that would uphold that agreement. As discussed above, it is this validation
principle, rather than arbitrary application of choice-of-law theories, that gives true
effect to the parties’ intentions. That result is not only permitted by, but is in fact
required by, principles of party autonomy and Articles II and V(1)(a) of the Convention.
[c] English Arbitration Act
English law has long affirmed the parties’ autonomy to select the law governing the
arbitration agreement. (716) One leading English decision explained, in holding that the
parties may select the law governing their arbitration agreement:
“The parties may make an express choice of the law to govern their
commercial bargain and that choice may also be made of the law to govern
their agreement to arbitrate. In the present case it is my view that … the
parties have chosen the law of India not only to govern the rights and
obligations arising out of their commercial bargain but also the rights and
obligations arising out of their agreement to arbitrate.” (717)
P 631 As noted above, the same result continues to apply under the English Arbitration Act,
1996. (718) A recent English Court of Appeal decision held:
“[T]he proper law of the arbitration agreement is to be determined in
accordance with the established common law rules for ascertaining the proper
law of any contract. These require the court to recognize and give effect to the
parties’ choice of proper law, express or implied, failing which it is necessary to
identify the system of law with which the contract has the closest and most
real connection.” (719)
English commentary is to the same effect. (720)
At the same time, English courts seldom conclude that the parties have in fact
selected a law applicable to their arbitration agreement that would deny it
effect. Rather, English courts have in practice applied the law that gives effect
to the parties’ arbitration agreement, (721) on occasion referring expressly to a
validation principle. (722) In this respect, English courts have adopted an
approach to the choice of law governing international arbitration agreements
that parallels that of U.S. courts under the FAA and the better view of the
UNCITRAL Model Law. (723)
[d] Swiss Law on Private International Law
Swiss law also confirms the parties’ autonomy to select the law governing their
international arbitration agreement, albeit again with an important qualification. That
qualification is comparable to choice-of-law approaches in U.S. and English courts in
international cases, and to the better view of choice-of-law analysis under the UNCITRAL
Model Law.
P 632 Article 178(2) of the Swiss Law on Private International Law provides that “[a]s regards
its substance, an arbitration agreement shall be valid if it conforms either to the law
chosen by the parties or to the law governing the subject matter of the dispute, in
particular the law governing the main contract, or if it conforms to Swiss law.” (724) That
is, Swiss law will give effect to the parties’ choice-of-law agreement, in the first instance,
in order to uphold their arbitration clause. (725)
In addition, however, where the parties’ chosen law invalidates their agreement to
arbitrate in Switzerland, Swiss law will not give exclusive application to that choice;
Article 178(2) will instead require a Swiss court (or arbitral tribunal) to go on to look to
either the law applicable to the substance of the parties’ dispute or to Swiss law in order
to uphold the arbitration clause. This approach, discussed further below, could be
characterized as effectively constraining the parties’ autonomy to choose the law
governing their arbitration agreement, by effectively overriding a choice-of-law
agreement that has the consequence of invalidating the parties’ agreement to arbitrate.
(726) On a more fundamental level, however, Article 178(2) reflects the Swiss legislature’s
(correct) judgment that a putative choice-of-law agreement selecting a law that
invalidates the parties’ arbitration agreement is ordinarily either not an exclusive or not
an authentic choice. Rather, that choice is either best seen as either a mistake that ought
not be given effect in enforcing the parties’ true agreement (which was to arbitrate), (727)
or as a non-exclusive choice with respect to issues of validity which does not preclude
the application other national laws that would validate the arbitration agreement.
[e] French Code of Civil Procedure
50
Until the early 1990s, French courts applied the law chosen by the parties to govern their
arbitration agreement, without further analysis. (728) More recently, however, French
courts have adopted a more nuanced choice-of-law analysis.
Since the early 1990s, French courts have held that international arbitration agreements
are “autonomous” from any national legal system, and subject only to “mandatory rules of
French law and of international public policy.” (729) As one decision explained:
P 633 “[b]ecause of the autonomy of international arbitration clauses, the scope
and effects of an arbitration clause are determined according to the common
intention of the parties; it is unnecessary to refer to the law of a State.” (730)
In so doing, French law aims to give maximum effect to the parties’ agreement to
arbitrate, without regard to the idiosyncrasies of national law, and without regard to the
parties’ choice of national law in a general choice-of-law provision (which will not be
applied to supplement the rules of international arbitration law ordinarily applied by
French courts). (731)
In many respects, the French approach is comparable to that in both Switzerland and the
United States – where specialized, pro-arbitration choice of law and substantive law
govern the validity of international arbitration agreements. (732) In each of these
jurisdictions, a choice-of-law agreement (particularly in the underlying contract) that
invalidates the agreement to arbitrate will not be given effect if the law of another
jurisdiction connected to the agreement would validate it. (733)
[f] Other Jurisdictions
Other jurisdictions also give effect to parties’ agreements on the law governing their
international arbitration agreement, while also frequently adopting validation or similar
principles. For example, the 1999 Swedish Arbitration Act provides that the validity of an
arbitration agreement is governed by the law selected by the parties or, failing any
choice, the law of the arbitral seat: “Where an arbitration agreement has an international
connection, the agreement shall be governed by the law agreed upon by the parties.”
(734) Scotland’s 2010 legislation takes a similar approach. (735) These statutory provisions
directly address the question of the law applicable to an international arbitration
agreement, although without express reference to a validation principle.
Chinese legislation appears to parallel the text of both the New York Convention and
UNCITRAL Model Law, expressly recognizing the parties’ choice of the law applicable to
P 634 the arbitration agreement. (736) The Chinese Supreme People’s Court has also issued
judicial interpretations of the Chinese Arbitration Law that adopt the same conclusion:
“the law as agreed by the parties concerned shall apply to the examination
over the validity of foreign-related arbitration agreements; where the parties
concerned have not agreed on the applicable law but have agreed on the
place of arbitration, the law of the place of arbitration shall apply; and where
neither the applicable law nor the place of arbitration is agreed or the
agreement on the place of arbitration is not clear, the law of the place where
the court is located shall apply.” (737)
Chinese commentators suggest that the Supreme People’s Court will generally give effect
to the parties’ choice of law governing the arbitration agreement. (738)
Finally, the Hague Conference on Private International Law has also affirmed the central
importance of the principle of party autonomy in the Hague Principles on the Choice of
Law in International Commercial Contracts. The Hague Principles provide, in their
preamble and elsewhere, for an affirmation of “the principle of party autonomy with
limited exceptions.” (739) Although not applicable directly to arbitration agreements,
(740) the Hague Principles provide further confirmation of the importance of party
autonomy in selecting the law applicable to such agreements.
[g] Idiosyncratic Approaches to Law Governing International Arbitration Agreements
A few jurisdictions have placed limitations on the parties’ freedom to select the law
governing their arbitration agreement. For example, Article 61 of the (former) 1988
Spanish Arbitration Act provided that an international arbitration agreement would be
governed by the legal system chosen by the parties, provided that this law had “some
connection with the main legal transaction or with the dispute.” (741) Article 9(6) of the
P 635 2003 Spanish Arbitration Act aban doned this approach and instead adopted a
validation principle identical to that contained in the Swiss Law on Private International
Law. (742)
The 2001 Turkish International Arbitration Law provides that the validity of an arbitration
agreement is governed by the law selected by the parties as applicable to the arbitration
agreement, or failing any such choice, Turkish law. (743) This provision is retrograde and
impossible to reconcile with the New York Convention or the choice-of-law approaches in
most jurisdictions. As discussed in greater detail below, statutory application of the law
of the judicial enforcement forum is contrary to Article V(1)(a) of the Convention, and to
parallel provisions of most national arbitration statutes, which provide for application of
51
the law of the arbitral seat (as a default rule, absent contrary choice by the parties). (744)
Turkey’s statutory application of local Turkish law as a default rule for the law governing
international arbitration agreements is both parochial and contrary to Article V(1)(a).
[4] Institutional Arbitration Rules
Most institutional arbitration rules do not specifically address the question of the law
applicable to the parties’ arbitration agreement. (745) One exception is found in the
WIPO Arbitration Rules, Article 61(c) of which adopts a validation principle providing that
an arbitration agreement shall be “regarded as effective” if it complies with the
requirements of either the law chosen by the parties or the law of the arbitral seat. (746)
The LCIA Rules also address the law applicable to the arbitration agreement, with Article
16(4) prescribing a default rule that the law governing the arbitration agreement is the
law of the arbitral seat unless the parties have agreed in writing on the application of
other laws “and such agreement is not prohibited by the law applicable at the arbitral
seat.” (747)
Although sometimes useful (and further evidence of the importance of the law of the
arbitral seat), Article 16(4) of the LCIA Rules is of little assistance where a contract
contains a general choice-of-law clause. In these cases, parties arguably have agreed on
the application of a different law than that of the arbitral seat (namely, the law governing
the underlying contract). Article 16(4) provides no guidance in these circumstances.
P 636 Some national trade associations have also promulgated standard form contracts and
arbitration rules that either expressly or implicitly adopt a specified national law
applicable to both the parties’ underlying contract and arbitration agreement. (748)
Similarly, the HKIAC includes a provision on the law governing the arbitration agreement
as part of its Model Clause, although the HKIAC Rules do not otherwise address this issue
of applicable law, (749) The HKIAC Model Clause provides:
“Any dispute, controversy, difference or claim arising out of or relating to this
contract, including the existence, validity, interpretation, performance,
breach or termination thereof or any dispute regarding non-contractual
obligations arising out of or relating to it shall be referred to and finally
resolved by arbitration administered by the Hong Kong International
Arbitration Centre (HKIAC) under the HKIAC Administered Arbitration Rules in
force when the Notice of Arbitration is submitted.
The law of this arbitration clause shall be … (Hong Kong law).” (750)
It is unclear how conflicts between the HKIAC Model clause (when included in an
arbitration provision) and the choice-of-law provision in the parties’ contract would be
resolved; presumably, the specific choice in the arbitration clause would prevail.
[5] International Arbitral Awards
International arbitral awards generally give effect to parties’ choice-of-law agreements
selecting the law applicable to their arbitration clause. (751) In the words of one award:
“In the case at hand, the arbitration agreement is submitted to English Law.
Clause 22 provides in its last sentence, directly following the sentence
providing for arbitration: ‘This contract shall be governed by English Law.’ This
choice also extends to the arbitration clause contained in the contract.
P 637 Irrespective of its separability there are no indications that the parties in
the present case wanted to submit the arbitration agreement to a different
law than the main contract.” (752)
There are virtually no instances of awards refusing to give effect to agreements selecting
the law governing the arbitration agreement.
[6] Application of Choice-of-Law Clause to Disputes over Existence of Arbitration
Agreement
Where one party denies that any arbitration agreement was validly formed, there is
arguably no basis for applying the law that the parties allegedly “agreed” upon to govern
their “contract.” (753) On the other hand, authority in more general choice-of-law contexts
rejects this view, holding that the formation of an agreement is governed by the law that
would apply if the agreement had existed. That is true under the Rome Convention and
the Rome Regulation, (754) the Restatement (Second) Conflict of Laws (755) and other
authorities. (756)
In the context of international arbitration agreements specifically, Article V(1)(a) of the
Convention permits non-recognition of an arbitral award if the arbitration “agreement is
not valid under the law to which the parties have subjected it or, failing any indication
P 638 thereon, under the law of the country where the award was made.” (757) This choice-of-
law rule is drafted to require application of the parties’ putatively chosen law where the
existence or validity of their arbitration (and choice-of-law) agreement is challenged.
This rule applies by its terms, and its rationale, where one party denies that its actions
gave rise to any arbitration agreement at all. (758)
52
Similar considerations apply to claims of illegality. In principle, claims of illegality are
subject to the law governing the arbitration agreement (selected in the manner discussed
elsewhere). (759) Indeed, that is the result required by the choice-of-law rule contained in
Article V(1)(a) of the Convention, providing for application of the law chosen by the
parties to govern their arbitration agreement. (760) Nonetheless, choosing the law
applicable to claims that an arbitration clause is invalid on grounds of illegality also
raises special issues. (761)
There is a plausible argument that parties’ private choices of law should not be given
effect to circumvent otherwise applicable mandatory national (or foreign) law which
would render an arbitration agreement invalid. (762) For example, where mandatory
trade sanctions or embargoes render agreements to arbitrate illegal, (763) that result
should arguably not be altered if the parties agree to the application of a foreign state’s
laws to govern their arbitration agreement. (Of course, this result would apply only where
the relevant national legislation renders the agreement to arbitrate illegal (as
distinguished from the underlying contract (764) ).)
Nonetheless, under Article V(1)(a), where parties have agreed to arbitrate under a
specified law which does not render their arbitration agreement invalid, but the
mandatory law of another state provides that the arbitration agreement is illegal, then
the parties’ chosen law ought to be applied: that is what the Convention mandates. Only
in limited cases, where the parties’ chosen law would give effect to foreign mandatory
law, and the Convention would permit this, (765) would the parties’ chosen law not be
given effect. (766)
P 639 If the parties have not agreed on an applicable law, then, as discussed elsewhere, the
better approach is to apply a validation principle, giving effect to the parties’ arbitration
agreement if it is valid under the law of any state having a connection with the parties’
transaction. (767) If one instead applied Article V(1)(a)’s default choice-of-law rule,
providing for the application of the law of the arbitral seat, (768) there may be rare
instances where the law of the arbitral seat would give effect to otherwise applicable
mandatory laws of a different state insofar as the parties’ arbitration agreement is
concerned. (769)
§4.05 CHOICE OF LAW GOVERNING NONARBITRABILITY (770)

The nonarbitrability doctrine raises potentially complex choice-of-law questions in
determining what law(s) apply to determine whether a claim or dispute is nonarbitrable.
There is little agreement among national courts and commentators on the resolution of
this issue. As one despairing commentator remarked, “[a]greement on the conclusion that
there is disagreement seems to be the only common denominator that one can find
between arbitrators, courts, and publicists regarding the question which is the
applicable law on arbitrability.” (771)
Part of the difficulty in determining the choice of law applicable to questions of
nonarbitrability results from the fact that these questions can arise at different stages in
the arbitral process and in different fora: at least in principle, different choice-of-law
considerations may exist depending upon the procedural posture and forum of a dispute.
For example, in a judicial proceeding to enforce an arbitration agreement, the national
court might look either to its own law, the law of the arbitral seat, or the law governing
the arbitration agreement – without considering the law in the place where any
subsequent award might be enforced. Conversely, a decision to enforce an award might
P 640 look only to the law of the judicial enforcement forum – without considering whether
the arbitration involved claims that were not arbitrable under the law governing the
arbitration agreement (or any other law).
In principle, a number of choices of law to govern nonarbitrability issues are possible: (a)
the law of the nation in which enforcement of an award is being or will eventually be
sought; (b) the law governing the substantive validity of the parties’ arbitration
agreement; (c) the law of the seat of the arbitration; (d) the law of the judicial forum
where an arbitration agreement is sought to be enforced; (e) the law that provides the
basis for the relevant substantive claim that is claimed to be nonarbitrable; or (f) a
uniform international definition of nonarbitrability derived from the New York
Convention (or other relevant conventions). (772) As discussed below, selecting from
among these various options is not straightforward and there is, as yet, little uniformity
among national courts and other authorities in making this choice.
[A] Choice of Law Governing Nonarbitrability Under New York Convention

As discussed above, Article II of the New York Convention does not expressly address
choice-of-law questions regarding nonarbitrability. (773) Similarly, Article V(1)(a)’s choice-
of-law rule offers no assistance as to the issue of nonarbitrability. (774) Nevertheless, as
discussed below, the Convention contains choice-of-law rules with respect to
nonarbitrability which can be applied in the context of enforcing arbitration agreements.
[1] Article V(2)(a)’s Exception for Local Nonarbitrability Rules
The subject of the law applicable to issues of nonarbitrability is addressed specifically in
Article V(2)(a) of the Convention, which provides that an award need not be recognized in
53
a particular Contracting State if “the subject matter of the dispute is not capable of
settlement by arbitration under the law of that country.” (775) Article V(2)(a) plainly
contemplates that, at the time of recognition and enforcement of an award, a state may
exceptionally apply its own law to refuse recognition and enforcement of an otherwise
valid and binding award on nonarbitrability grounds. As noted elsewhere, this is a form of
“escape mechanism” which is available without regard to the otherwise applicable
choice-of-law rule set forth in Article V(1)(a). (776) Thus, if parties from States A and B
agree to arbitrate in State C (with the parties’ arbitration agreement being governed by
P 641 the law of State C) and an award is made in State C, which is then sought to be
enforced in State D, State D may exceptionally apply its own nonarbitrability standards
to deny recognition to the award. (777)
Article V(2)(a)’s formula cannot be directly transposed to the stage of enforcing
arbitration agreements, as distinguished from arbitral awards. In particular, the fact that
a state might rely on its local public policies/nonarbitrability rules under Article V(2)’s
exception at the award enforcement stage in no way suggests that other states should –
or may – rely on those same rules to decline enforcement of an arbitration agreement
that is otherwise valid. That is, if parties from States A and B agree to arbitrate in State C,
over a dispute arising in States A and B, then the fact that State D might regard the
dispute as nonarbitrable in proceedings to recognize an award (under Article V(2)(a))
should have no bearing at all on how States A, B and C regard the same issue. Most
national courts that have considered this possibility have specifically rejected it. (778)
Some commentators have suggested that Article V(2)(a) can be applied “by analogy” at
the stage of enforcing an arbitration agreement, resulting in application of the national
law of the court where enforcement of the arbitration agreement is sought. (779) Similarly,
some national courts have held that the law of the judicial enforcement forum applies to
determine whether a dispute is nonarbitrable under Article II(1) in proceedings to
P 642 enforce an arbitration agreement. (780) The reasoning is that, since the Convention
permits an exceptional reliance on national nonarbitrability rules of the judicial
enforcement forum at the award-enforcement stage, it should be interpreted to permit
the same reliance on the enforcement forum’s local nonarbitrability rules at the
agreement-enforcement stage.
To the same effect, Article VI(2) of the European Convention provides that national courts
“may also refuse recognition of the arbitration agreement if under the law of their country
the dispute is not capable of settlement by arbitration.” (781) This solution contemplates
that the national law of the judicial enforcement forum, at the stage of attempting to
enforce an arbitration agreement, will apply to questions of nonarbitrability.
Properly understood, this solution has considerable appeal: most importantly, it is
consistent with the exceptional character of nonarbitrability as a local “escape device”
under Article V(2) of the Convention and under more general private international law
notions of public policy exceptions. (782) It is also more consistent than any other
approach with a proper interpretation of the text of Article V(2)(a).
This approach does not mean that the particular substantive nonarbitrability rules of the
judicial enforcement forum should be applied mechanically to issues of nonarbitrability.
For example, if parties from States A and B agree to arbitrate a dispute involving conduct
in States A and B in an arbitration seated in State C, then there is ordinarily no reason
why the courts of State C should apply the nonarbitrability rules applicable under the
law of State C to the parties’ dispute. If the parties’ underlying claims arise under the
laws of either State A or B and concern activities in those states, then it ordinarily makes
no sense for State C’s laws to be applied to render the parties’ dispute nonarbitrable.
That is particularly true if the laws of States A and B would permit arbitration of the
dispute, so that every state with a material connection to the underlying dispute would
not only permit, but would require, that the dispute be arbitrated.
Indeed, if the nonarbitrability rules of the judicial enforcement forum (here, State C) are
examined carefully it is unlikely that they would, by their own terms, apply to the
conduct at issue in this example. There is ordinarily no reason why State C would have an
interest in rendering nonarbitrable matters that were arbitrable under the laws of states
whose substantive legislation and public policies were at issue. Nor, if State C’s laws
purported to render the dispute nonarbitrable, would there be any reason why other
states should recognize or give effect to such a choice (which would involve an exorbitant
jurisdictional claim on the part of State C).
The more difficult cases concern whether the judicial enforcement forum (State C) should
give effect to the nonarbitrability rules of states whose legislation is at issue in a
particular dispute (States A or B). In such cases, the better course is for the judicial
enforcement forum not to give effect to foreign nonarbitrability rules, but instead to
P 643 recognize the otherwise valid agreement to arbitrate. (783) This permits the state
whose nonarbitrability rules are at issue to allow litigation to proceed in local courts
(subject to the Convention’s limitations), with other states being free to determine
whether to give effect to either the resulting judgments or an arbitral award. This is
consistent with the character of the nonarbitrability doctrine as an exceptional escape
valve, which Contracting States may invoke locally, but which does not bind other states.
[2] International Limits on Local Nonarbitrability Rules
54
Although nonarbitrability rules are defined in principle by national law, the New York
Convention is best interpreted as subjecting application of the nonarbitrability doctrine
by Contracting States to substantive international limitations. These limits leave
considerable scope for Contracting States to give effect to local legislative policies, but
require that this be done in a manner that is consistent with the basic structure and
premises of the Convention and the nonarbitrability exception.
In particular, for the reasons discussed below, Contracting States must treat the
nonarbitrability doctrine as an exceptional dispensation from the Convention’s basic
structure, rules of substantive validity, choice-of-law regime and purposes. (784) In turn,
that imposes the obligation on Contracting States to adopt nonarbitrability exceptions
only when tailored to achieving specifically-defined, articulated public policies and only
by means that are non-discriminatory and not inconsistent with the practices of other
Contracting States. (785) Those limitations apply with particular force to commercial
matters, which have historically been treated as arbitrable (under the Geneva Protocol
and most national arbitration regimes). (786)
[B] Choice of Law Governing Nonarbitrability Under National Law

As noted above, there are a variety of possible choice-of-law approaches that might be
used to determine the law governing issues of nonarbitrability. Different states have
adopted different approaches to this issue.
One approach would be to apply the nonarbitrability rules of the arbitral seat. The theory
would be that, since the arbitration is to proceed in the territory of the seat, the law of
that jurisdiction should determine the threshold question whether the dispute is subject
to arbitration. (787) In fact, however, most courts have refused to apply the law of a
foreign arbitral seat to hold disputes nonarbitrable, typically rejecting this standard as
anachronistic and concluding that the seat does not necessarily have any connection to
the parties’ underlying dispute or claims. (788)
P 644 Another possible approach would be to apply the nonarbitrability rules of the judicial
enforcement forum where litigation over the arbitration agreement is pending (as
discussed above (789) ). In practice, most national courts have taken this approach,
applying their own law to the issue of nonarbitrability, without considering the possible
impact of foreign law. That is true of U.S., (790) French, (791) Swiss, (792) Dutch, (793)
P 645 Belgian, (794) Italian, (795) Austrian, (796) Swedish (797) and other (798) courts, and
appears to be contemplated by the UNCITRAL Model Law. (799) As one Italian decision
reasoned:
“[W]hen an objection for foreign arbitration is raised in [Italian] court
proceedings concerning a contractual dispute, the arbitrability of the dispute
must be ascertained according to Italian law as this question directly affects
jurisdiction, and the court seized of the action can only deny jurisdiction on
the basis of its own legal system. This also corresponds to the principles
expressed in Arts. II and V of the [New York Convention].” (800)
The same approach (applying the law of the judicial enforcement forum) is also adopted
by the weight of academic commentary. (801) As already discussed, this is consistent with
an application by analogy of Article V(2)(a) of the Convention. (802)
Another possible option is to apply the law governing the substantive validity of the
arbitration agreement to issues of nonarbitrability. This has been urged by some
commentators: “The answer is that the Arbitral Tribunal will decide the issue [of
nonarbitrability] by application of the law which governs the arbitration agreement.”
P 646 (803) This result has been (wrongly) attributed to the principles adopted in Article VI(2)
of the European Convention and to the notion that the parties’ choice of applicable law
should be given effect. (804) Other authorities also apply the law of the arbitral seat.
(805)
[C] Future Directions: Choice of Law Governing Nonarbitrability

None of the foregoing choice-of-law analyses for choosing the law governing issues of
nonarbitrability are capable of producing coherent or satisfactory results. Applying the
substantive nonarbitrability rules of the arbitral seat, the judicial enforcement forum, or
the state whose law governs the arbitration agreement produces arbitrary results that do
not achieve any useful legislative purpose and that frustrate the parties’ objectives in
agreeing to arbitrate.
[1] Deficiencies in Current Choice-of-Law Analyses
The foregoing criticism is illustrated by the example (noted above) of parties from States
A and B agreeing to arbitrate a dispute concerning conduct in States A and B, giving rise
to both contractual and statutory claims under the law of State B, before an arbitral
tribunal seated in State C. (806) Suppose that proceedings to enforce the arbitration
agreement with regard to the statutory claims then arise in both States C and D, with the
possibility of enforcement of any award in State E being specifically identified. In these
circumstances, it is very difficult to see why: (a) the substantive nonarbitrability rules of
States C or D, as the judicial enforcement fora, should apply to claims arising under the
55
law of State B, to claims concerning transactions in States A and B, or to an arbitration
seated in State C; or (b) why the substantive nonarbitrability rules of State C, as the
arbitral seat, should apply to claims arising under the laws of State A and transactions
concerning States A and B; or (c) why the substantive nonarbitrability rules of State C,
P 647 whose laws might putatively govern the arbitration agreement, should apply; or (d) why
the substantive nonarbitrability rules of State E, where the award might be enforced,
should apply at the stage of enforcing the arbitration agreement.
In each one of the foregoing cases, the laws of fora other than State B – under whose laws
the relevant substantive claims were being asserted – would be relied upon under
conventional choice-of-law rules to determine nonarbitrability. In many cases, this
makes no sense or, at best, is only a partial and unsatisfactory answer.
Specifically, if the laws of State B permitted arbitration of the claims in question (under
State B’s laws) it is almost impossible to see why this should not be permitted in other
states. Certainly, the fact that the substantive nonarbitrability rules of States A, C, D and
E would not permit such claims to be arbitrated, if they were asserted under these states’
respective national laws, should be irrelevant to how statutory claims under State B’s
laws should be treated: if State B permits (and perhaps even encourages or requires)
such statutory claims to be arbitrated, then it is almost inconceivable that another
approach should be taken, based on the laws of States A, C, D, or E. (807)
On the other hand, if the laws of State B provide that the relevant statutory claims (under
the laws of State B) are nonarbitrable, then analysis becomes more difficult (and
interesting). Although there might be good reasons ultimately not to apply State B’s
nonarbitrability rules in this example, they certainly should be considered – a result not
provided for under the traditional conflicts rules applying the law of the arbitral seat or
the arbitration agreement. The reason that State B’s laws should be applied in these
cases is that they directly address the relevant issues, for reasons of obvious importance
to State B.
[2] Possible Applicability of Foreign Nonarbitrability Rules
A better approach to the foregoing choice-of-law issues involves taking into account the
fact that the nonarbitrability doctrine is in the nature of an exceptional escape device,
closely akin to a local public policy exception. (808) It is therefore useful to consider the
choice-of-law analysis that governs issues of nonarbitrability from the perspective of
traditional conflict of laws rules governing questions of public policy. These principles
provide that a state will apply either its own public policy or the public policy of another
state with materially closer connections to the issue at hand. (809)
Applying this analysis to the hypothetical set forth above, it would permit a State B court
to apply State B’s nonarbitrability standards to determine the arbitrability of State B
statutory law claims in an arbitration seated in State C; it would not require, but instead
permit, application by State B’s courts of State C’s nonarbitrability standards. At the
same time, traditional conflicts rules would provide for courts in States A, C, D and E to
consider State B’s nonarbitrability standards, depending upon the connection between
the dispute and State B, rather than their own nonarbitrability standards (which, as
noted above, it makes no sense to apply).
This approach has the important benefit that it does not require the nonarbitrability of
claims based upon a legal system that did not (and could not) have any reason for
producing such a result. That is, in the above example, State C’s legal system and
P 648 nonarbitrability standards have virtually no interest in rendering State B’s statutory
claims nonarbitrable when State B would itself permit these claims to be arbitrated.
Conversely, if State B’s laws provide that certain claims only be litigated, and not
arbitrated, then the attempted arbitration of those issues in other jurisdictions should
require at least some reference to State B’s laws, and not exclusive reliance on the laws
of States A, C, D, or E. Applying traditional choice-of-law analyses, the courts of States A,
C, D and/or E should at least consider the public policies and mandatory laws of State B
in determining whether statutory claims under State B’s laws are arbitrable.
The foregoing analysis would correspond to Article VII(1) of the New York Convention and
to similar provisions of §187 of the Restatement (Second) Conflict of Laws, where a court
may take into account the public policies and mandatory laws of other jurisdictions. (810)
(Of course, State B’s laws would only even potentially be given effect (subject to other
limitations) where they purported by their own terms to apply. (811) ) A few national court
decisions have adopted analyses that reflect these approaches. (812)
[3] Limitations on Application of Foreign Nonarbitrability Rules
The possibility that a foreign nonarbitrability rule might be applied in another state (or
an arbitration) does not mean that it necessarily will, or should, be applied. Only where
the foreign jurisdiction has a materially closer connection to the issues in question than
other jurisdictions and where the application of that jurisdiction’s laws would not be
exorbitant would it be legitimate even to consider applying its nonarbitrability rules.
(813) In other cases, there is no basis even to consider applying a foreign nonarbitrability
rule.
56
Moreover, the fact that a foreign public policy is potentially applicable does not mean
that this public policy must be applied, particularly in the context of nonarbitrability
P 649 exceptions under the New York Convention. The forum court in a Contracting State has
no obligation to give effect to a foreign nonarbitrability rule and is only permitted to do
so under Article V(2)(a) when the foreign nonarbitrability rule gives rise to a violation of
the nonarbitrability rules of the judicial enforcement forum itself.
The forum court is also fully entitled to deny effect to a foreign nonarbitrability rule if it
conflicts with a mandatory law or public policy of the forum itself – including specifically
with public policies of the forum that favor international arbitration. Thus, even if the
laws of State B provide that particular statutory claims under State B’s laws may not be
resolved by arbitration, State C courts may properly decide that State C’s public policy is
to give broad effect to international arbitration agreements, including with regard to
particular categories of disputes, and that State B’s nonarbitrability rules will therefore
not be applied in State C. (814)
Application of the forum state’s pro-arbitration policy makes particular sense, given the
exceptional character of Article V(2)(a)’s nonarbitrability provision as an escape device
from the generally-applicable choice-of-law regime of Article V(1)(a). (815) Under Article
II(1), Contracting States are permitted to rely on their own nonarbitrability standards to
deny effect to an arbitration agreement, in the same fashion that a Contracting State may
rely on its own nonarbitrability standards to deny recognition to an arbitral award under
Article V(2)(a). (816) Importantly, however, this is a local decision that should not affect
mandatory recognition of the arbitration agreement in other Contracting States, just as a
decision denying recognition to an award on nonarbitrability grounds under Article V(2)
(a) does not affect recognition of the award in other Contracting States. (817) In both
instances, a state is permitted to avail itself (within the non-discrimination limits noted
above) of a local public policy rule, but this will not ordinarily alter the effects of either
the agreement or the award in other states. (818)
P 650 Thus, it is only in rare and exceptional cases that a foreign nonarbitrability rule should
be given effect by a national court (or arbitral tribunal). Consistent with this, the weight of
authority concludes that a court or tribunal should only take into account the
nonarbitrability rules of a foreign jurisdiction in extremely limited instances, generally
involving a violation of either international or local public policy or mandatory law. (819)
Although not ordinarily articulated in the foregoing terms, this analysis is consistent with
national court authority. As discussed above, national courts and arbitral tribunals have
generally refused to give effect to foreign nonarbitrability rules (e.g., Belgium’s
prohibition against arbitration of distribution agreement terminations, Russia’s apparent
prohibition against arbitration of corporate law disputes, or Italy’s apparent prohibition
against arbitration of tort and labor disputes). (820) In many cases, these decisions have
cited the pro-arbitration policies of the judicial enforcement (or arbitral) forum in
denying effect to foreign nonarbitrability rules.
At the same time, examples of cases where it could be appropriate for a court to give
effect to a foreign nonarbitrability rule can be hypothesized. For example, if an arbitral
tribunal seated in State A were requested to approve a merger of two State B companies
under State B’s law, or to issue a patent under State B’s law, there would be substantial
grounds for such claims to be denied as nonarbitrable by the arbitral tribunal or for the
courts of State A to annul a resulting award (or deny judicial assistance to the arbitral
process). The involvement of State A, even in the attenuated capacity of the arbitral seat,
in an arbitral tribunal’s purported issuance of administrative decisions affecting the
rights of third parties under a foreign law would provide sufficient grounds in State A’s
public policy to refuse to permit claims for the requested relief to proceed.
[4] Limitations on Interlocutory Decisions Regarding Nonarbitrability Claims
Beyond the foregoing, there is a substantial argument that, in proceedings to enforce an
arbitration agreement, courts should simply enforce international arbitration
P 651 agreements, regardless of whether foreign nonarbitrability standards might suggest
otherwise. For example, in the foregoing hypotheticals, there is a powerful argument that
State C and D courts should not give effect to State B’s nonarbitrability standards in
deciding whether to recognize an arbitration agreement providing for arbitration of State
B’s statutory claims in State C. The better course would be for State C and D courts to give
effect to the arbitration agreement (dismissing or staying any litigation subject to that
agreement), and leave application of State B’s nonarbitrability rules for the arbitral
tribunal and State B’s courts, as well as in the award enforcement stage.
This approach would avoid the delays, expenses and uncertainties that would inevitably
result from national courts attempting to evaluate foreign nonarbitrability standards.
This makes particular sense given the extent to which nonarbitrability standards tend to
be poorly defined in national legislation (often being left to delicate judicial
development) (821) and bound up with local public policies (which may be difficult for
foreign courts properly to interpret or apply). (822) This approach would also give
maximal effect to the objectives of the Convention – to render international arbitration
agreements and awards readily and uniformly enforceable (823) – by limiting the effect of
national legislation that is inconsistent with these objectives save where specifically
authorized by Article V(2)(a), being at the award enforcement stage in the judicial
57
enforcement forum.
As discussed below, this latter approach has been taken by a number of U.S. courts, in
both domestic and international cases. (824) A leading U.S. Supreme Court decision,
PacifiCare Health Systems, Inc. v. Book, held that questions of the nonarbitrability of
certain Racketeer Influenced and Corrupt Organization (“RICO”) Act claims in a domestic
case should be considered in the first instance by the arbitral tribunal. (825) The Court
reasoned that “since we do not know how the arbitrator will construe the remedial
limitations, the question … whether they render the parties’ agreements unenforceable,”
is better left for initial arbitral consideration. (826)
The Supreme Court adopted the same analysis in Vimar Seguros v. MV Sky Reefer, (827)
where it held that Carriage of Goods by Sea Act (“COGSA”) claims were arbitrable,
notwithstanding evidence that the arbitral tribunal (sitting in Japan) might not apply U.S.
statutory COGSA protections. The Vimar Court held that “mere speculation that the
foreign arbitrators might apply Japanese law which, depending on the proper
construction of COGSA, might reduce respondents’ legal obligations, does not in and of
itself” render the claim nonarbitrable. (828) The court therefore compelled arbitration,
reserving for the stage of award enforcement questions regarding nonarbitrability.
The same approach has been taken by U.S. lower courts in international cases, where
they have held that issues of U.S. statutory law and arbitrability should be submitted first
to arbitration, with the possibility of subsequent judicial review in recognition and
P 652 enforcement proceedings. (829) It has also been taken, in similar circumstances, by
courts in other jurisdictions. (830) This approach is even more sensible where a national
court is presented with claims that a dispute is nonarbitrable under foreign law (rather
than the national court’s own law): in these circumstances, predictions about whether
foreign courts might invoke the Convention’s exceptional escape devices are particularly
inappropriate.
[5] International Limits on Nonarbitrability Doctrine
As noted above, there are instances in which international principles, derived from the
New York Convention, limit the application of national law standards that purport to
render particular disputes nonarbitrable. These limits have not as yet been consistently
formulated in national judicial decisions or commentary, which have struggled with
choice-of-law issues in this context.
One possible analysis would be that Article II of the Convention should be interpreted,
consistent with the Convention’s objectives of uniformity and constitutional character,
(831) as prescribing international standards of nonarbitrability. (832) That is, Article II(1)
P 653 should be construed as establishing a uniform international definition of those
disputes whose subject matter is “capable of settlement by arbitration.”
Under this view, Contracting States would be obliged to enforce arbitration agreements
except where they concerned a subject matter falling within Article II(1)’s international
definition of nonarbitrability. Even if national law provided that a dispute was
nonarbitrable, the arbitration agreement would be enforceable with regard to that
dispute if Article II(1)’s uniform international definition of nonarbitrability was not
satisfied.
Although this approach has persuasive policy justifications, there is little direct textual
basis for interpreting Article II as establishing a uniform international standard of
nonarbitrability. In particular, Article II(1) provides nothing beyond the brief phrase “not
capable of settlement by arbitration.” It is not straightforward to derive specific
international nonarbitrability rules (e.g., regarding particular subjects such as consumer
or competition disputes) from this abbreviated reference.
The best textual basis for concluding that Article II(1) provides an international definition
of nonarbitrability is the absence of any reference to a choice-of-law rule or national
forum in Article II(1) – in contrast to Article V(2)(a), which refers to the nonarbitrability
rules of the recognition forum. (833) Article II(1)’s generalized reference to a category of
disputes that are “not capable of settlement by arbitration,” without any reference to
national law, provides a reasonably cogent basis for concluding that Article II(1)
contemplates, and requires Contracting States to respect, an international definition of
nonarbitrable disputes: under this interpretation, Contracting States could (if they chose)
declare particular categories of disputes nonarbitrable, provided that these categories
of disputes fell within Article II(1)’s international definition of disputes that are “not
capable of settlement by arbitration.”
This textual analysis is supported by the history of the nonarbitrability exception. In
particular, the Geneva Protocol envisaged limitations on the nonarbitrability doctrine. It
did so by providing for the recognition and enforcement of agreements
“by which the parties to a contract agree to submit to arbitration all or any
differences that may arise in connection with such contract relating to
commercial matters or to any other matter capable of settlement by arbitration,
whether or not the arbitration is to take place in a country to whose
jurisdiction one of the parties is subject.” (834)
58
The text of the Geneva Protocol fairly clearly contemplated that all arbitration
agreements “relating to commercial matters” would be enforceable, as well as
agreements relating to “any other matter capable of settlement by arbitration.” That
suggests an international definition of arbitrable matters, which includes at a minimum
all “commercial matters.” Given that the New York Convention was intended to expand
upon the enforceability of international arbitration agreements, improving the regime
contained in the Geneva Protocol, (835) it would be odd to conclude that the Convention
was intended to permit Contracting States to withdraw various “commercial matters”
from the scope of Article II.
Nonetheless, Article II(1)’s language strongly suggests that national law must play a
leading role in application of the nonarbitrability doctrine. Even assuming that the
Convention prescribes an international definition of nonarbitrability, it is very difficult to
derive more than international limitations on national law categories of nonarbitrability
from Article II(1). Article II(1) does not contain a general formula, affirmatively defining
P 654 what disputes are nonarbitrable, much less a catalogue of specific nonarbitrability
defenses (such as competition, consumer, employment, or bankruptcy disputes).
More importantly, it is very difficult to reconcile the view that Article II prescribes a
uniform international catalogue of nonarbitrable disputes with Article V(2)(a)’s clear
textual prescription that national law, and specifically “the law of that country” (i.e., the
recognition forum), will apply to questions of nonarbitrability at the award enforcement
stage. (836) That interpretation also makes structural sense, because the relatively clear
intention of the Convention’s drafters was to treat the nonarbitrability doctrine as an
exceptional escape device for local public policies of particular Contracting States, not
as a uniform international standard to be applied in all states. (837)
Nonetheless, Article V(2)(a)’s reference to the law of the recognition forum can be
reconciled with the view that the Convention imposes international limitations on
nonarbitrability rules of Contracting States. Under this view, Contracting States would be
free to apply local rules of nonarbitrability (as contemplated by Article V(2)(a)), but only
subject to international limitations requiring that such rules fall within an international
definition of disputes “not capable of settlement by arbitration.”
The Convention’s drafting history also provides little direct support for a uniform
international rule of nonarbitrability (apart from the treatment of nonarbitrability in the
Geneva Protocol). As a representative example, the presidential statement
accompanying the U.S. ratification of the Convention made clear that national law
definitions of nonarbitrability were contemplated, observing that:
“[T]he requirement that the agreement apply to a matter capable of
settlement by arbitration is necessary in order to take proper account of laws
in force in many countries which prohibit submission of certain questions to
arbitration. In some of the United States, for example, disputes affecting the
title to real property are not arbitrable.” (838)
The clear expectation of the United States, as well as other Contracting States, (839) was
that national law would play a leading role in application of the nonarbitrability
doctrine.
The more persuasive interpretation of the Convention is that it does not prescribe either
a single, uniform international definition of nonarbitrability or a definition of
nonarbitrability that is based exclusively on national law. Rather, the Convention
P 655 contemplates that both national and international rules will be relevant to application
of the nonarbitrability doctrine. In particular, Article II(1) exceptionally permits
Contracting States to single out particular subjects as nonarbitrable, as defined by local
law, but requires that this be done in a manner that does not conflict with the
Convention’s basic structure and objectives, which impose international limitations on
national nonarbitrability rules. (840) The Convention contains an escape valve for local
public policies, but it must be seen as a regulated, not wholly discretionary, escape
device.
The foregoing results would effectuate the basic objectives of the Convention, while
acknowledging the exceptional right of individual Contracting States to declare
particular categories of disputes (e.g., bankruptcy, criminal) nonarbitrable pursuant to
Article V(2)(a), (841) even where the parties’ arbitration agreement is otherwise valid
under the choice-of-law rules of Article V(1)(a). Importantly, unlike the generally-
applicable choice-of-law and contractual validity rules under Article V(1)(a), Article V(2)
(a)’s nonarbitrability provision is an exception, applicable only in the judicial
enforcement forum, without broader effect on courts in other Contracting States – which
remain bound by Article V(1)(a)’s choice-of-law regime.
Under this approach, several international limitations would apply to a Contracting
State’s application of nonarbitrability exceptions. These exceptions are based on the
Convention’s basic structure and are designed to ensure that the nonarbitrability
exception does not frustrate the objectives and premises of the Convention.
First, a Contracting State may only treat specific subjects as nonarbitrable on an
exceptional basis, in order to further discrete, articulated public policies. (842) A state
59
therefore cannot, consistently with the Convention, declare all disputes – or broad
categories of issues (843) – nonarbitrable. Similarly, the Convention would not permit a
Contracting State to declare, as an Australian administrative agency has done, that
disputes over the alleged “unfairness” of a contract were nonarbitrable, (844) or, as a
P 656 Pakistani court has held, that all fraud claims are nonarbitrable, (845) or, as an arbitral
tribunal seated in Indonesia has rejected, that all claims for termination of a contract
are nonarbitrable. (846) These nonarbitrability rules would contradict the basic
conception and nature of the nonarbitrability exception: they are not exceptions,
tailored to safeguard specific local public policies, but are instead general rejections of
the basic structure, purposes and commitments of the Convention to ensure the
enforceability of international arbitration agreements.
Rather, the Convention should be interpreted to permit a Contracting State to treat only
a specific category of disputes, where arbitration is incapable of safeguarding relevant
legislative objectives, as nonarbitrable. (847) The Convention requires that
nonarbitrability exceptions be narrowly-tailored to accomplish articulated national
objectives and that they interfere with the enforcement of arbitration agreements only
insofar as necessary. (848) It also requires Contracting States to apply nonarbitrability
rules with restraint and as an exceptional escape device, in order to minimize conflict
with the objectives of the Convention and the basic commitment of all Contracting States
to recognize and enforce international arbitration agreements.
Second, Contracting States would be precluded from adopting nonarbitrability rules that
discriminate against international arbitration agreements as compared to domestic
arbitration agreements or forum selection clauses. If a dispute is nonarbitrable under
domestic law, it could also be treated as nonarbitrable under the Convention, but
discriminatory rules of nonarbitrability could not be applied to international arbitration
agreements. Adopting such discriminatory rules is contrary to the basic objectives and
structural premises of the Convention, which are to treat international arbitration
agreements (and awards) at least as favorably as domestic ones. (849)
Thus, national law provisions providing that no subjects could be arbitrated in a foreign
arbitral seat, under foreign law, or before foreign arbitrators would be precluded by the
Convention; equally, a provision that certain disputes (e.g., consumer disputes or claims
against a bankrupt company) were not arbitrable abroad, although arbitrable
domestically, would be contrary to the Convention. Neither of these types of
nonarbitrability rules would be consistent with the Convention’s basic premise that
international arbitration agreements will be treated no less favorably than domestic
agreements.
Finally, the better view of the Convention is that a Contracting State’s application of
nonarbitrability exceptions must be consistent with the evolving practice of other states.
P 657 This was the underlying premise of the U.S. Supreme Court in Mitsubishi Motors, when it
declared that “it will be necessary for national courts to subordinate domestic actions of
arbitrability to the international policy favoring commercial arbitration.” (850) Other
authorities are to the same effect, in emphasizing the necessity for deference to the
Convention’s policies in application of nonarbitrability rules. (851)
Under this analysis, Contracting States would be required to exercise restraint in
applying nonarbitrability exceptions, doing so only when necessary to effectuate vital
local public policies and only consistently with the approaches of other states to
particular subjects. Thus, Contracting States would not be permitted to adopt
idiosyncratic nonarbitrability rules, out of step with those in other jurisdictions. This
limitation would serve to ensure that Contracting States did not undercut their basic
commitment to enforce international arbitration agreements by adopting unusual or
idiosyncratic nonarbitrability rules, and instead that the Convention’s constitutional
status and purposes would be progressively realized over time as national courts took
steps to effectuate its policies.
On the other hand, as discussed above, the nonarbitrability exception is by its nature an
exception that permits individual states to give effect to local policies. There is therefore
room for real doubts as to whether a prohibition against “idiosyncratic” national laws is
consistent with the structure of the nonarbitrability doctrine as an escape device (under
Article II(1)). Nonetheless, the better view is that the Convention imposes structural
limitations on the extent to which individual Contracting States may exercise this
exceptional right, in contradiction to Article II’s basic commitments, in an idiosyncratic
manner.
Even so, any limitation on use of the nonarbitrability doctrine ought to be applied only in
instances of a well-established consensus, shared by the substantial majority of
Contracting States, regarding the arbitrability of particular subjects (e.g., rules holding
tort and fraud claims arbitrable). (852) Where such a consensus exists, however, the
Convention should be interpreted as precluding individual Contracting States from
escaping Article II’s basic obligation to recognize and enforce international arbitration
agreements.
§4.06 CHOICE-OF-LAW RULES APPLICABLE TO FORMAL VALIDITY OF

INTERNATIONAL ARBITRATION AGREEMENTS
60
The choice of law governing the form of international arbitration agreements has
frequently given rise to disputes. As discussed in greater detail below, the formal validity
of international arbitration agreements is governed in substantial part by uniform
international rules, imposed by international conventions (particularly the New York
Convention). (853) The principal choice-of-law issues arising in connection with the form
of international arbitration agreements concern the relationship between these
P 658 conventions and national laws, with secondary questions arising in connection with the
application of national law when the conventions’ standards are not applicable.
[A] Choice of Law Governing Formal Validity of International Arbitration Agreements

Under International Arbitration Conventions
As discussed in detail below, Article II of the New York Convention establishes a uniform
substantive rule governing the formal validity of international arbitration agreements
subject to the Convention. (854) In particular, Articles II(1) and II(2) impose a “maximum”
form requirement, which requires that international arbitration agreements be in writing
but forbids imposition of more demanding form requirements under national law. (855)
Article 1 of the Inter-American Convention is similar, (856) as is Article I(2) of the
European Convention. (857) These requirements are given effect by what amounts to a
choice-of-law rule, with the provisions of the conventions superseding otherwise
applicable national law.
[1] “Maximum” Form Requirement Under New York Convention
It is almost universally accepted that the New York Convention’s writing requirement
establishes a standard for formal validity of arbitration agreements which Contracting
States cannot replace or supplement with more demanding or stringent national law
rules of formal validity. (858) Put differently, Article II adopts a “maximum” standard for
formal validity that precludes Contracting States from requiring additional or more
demanding formal requirements under national law. This standard is properly regarded
as a hybrid choice-of-law and substantive rule of law, applicable only to the form of
Thus, as discussed in greater detail below, in cases where the Convention is otherwise
applicable to an agreement to arbitrate, Article II’s formal requirements apply,
superseding more demanding national form requirements. (859) It is reasonably clear
that Article II’s maximum form requirement should apply in preference to all national
form requirements, including those of any national law selected by the parties to govern
P 659 their arbitration agreement. (860) The fact that the parties have agreed to a particular
national law (particularly in a general choice-of-law clause in their underlying contract)
does not contract out of the uniform international protections of the Convention, which
are applicable in all Contracting States; thus, if the parties do select a national law
governing their arbitration agreement, that choice is the specified national law (of a
Contracting State) together with the Convention, including Article II and its maximum
form requirement.
P 660 [2] No “Minimum” Form Requirement Under New York Convention: Article VII(1)
Preserves Less Demanding Form Requirements
A more difficult choice-of-law question is presented by national arbitration legislation
that imposes less demanding form requirements on international arbitration agreements
than those under Article II. As discussed below, this is the case with most developed
arbitration legislation, which often permits either oral or tacit arbitration agreements, or
imposes less stringent writing requirements than under Article II. (861)
As discussed below, authority is divided on whether Article II prescribes a “minimum”
form requirement, which Contracting States are required to apply, even if national law
permits a less demanding form requirement. A number of national courts and some
commentators have concluded that Article II prescribes a “minimum” form requirement,
from which Contracting States cannot deviate. (862) On the other hand, the majority view
among both courts and commentators is that Article II does not impose a “minimum”
form requirement, but instead permits Contracting States to apply a less demanding (or
no) form requirement; that interpretation relies on Article VII(1) of the Convention, which
permits Contracting States to recognize awards (and, by analogy, arbitration
agreements). (863)
As discussed below, this latter view is clearly to be preferred. (864) That conclusion is
confirmed by UNCITRAL’s adoption of a recommendation that accepted this
interpretation of Article VII(1) of the Convention in connection with its 2006 Revisions of
the UNCITRAL Model Law. The UNCITRAL Recommendation provides for Contracting States
to apply Article VII(1) of the Convention to allow “any interested party to avail itself of
rights it may have, under the law or treaties of the country where an arbitration
agreement is sought to be relied upon, to seek recognition of the validity of such an
arbitration agreement.” (865) That recommendation reflects the better view of the
Convention, particularly given its structure and purposes. (866)
[3] No “Minimum” Form Requirement Under New York Convention: Article II(2) Is Non-
Exclusive
61
A related question is whether Article II(2) is exclusive or non-exclusive. A number of
authorities hold that Article II(2) is non-exclusive, merely listing some examples of the
types of arbitration agreements that would satisfy Article II(1)’s “agreement in writing”
requirement, but not excluding other types of agreements from also satisfying that
“writing” requirement. Under this analysis, Article II(2) sets forth an illustrative or non-
exclusive list of arbitration agreements which clearly satisfy the Convention’s “writing”
requirement, without prejudice to the conclusion in particular cases that other types of
agreements also constitute “agreements in writing” which are subject to the Convention.
As discussed in detail below, authorities addressing this issue are divided, but the better
view is that Article II(2) is non-exclusive, and that other types of “written” agreements
may satisfy Article II(1) and thus fall within the Convention’s protections. (867) Again, this
is the view adopted by an UNCITRAL Recommendation addressing the topic, which
concludes by recommending that “article II, paragraph 2, of the [New York Convention] be
applied recognizing that the circumstances described therein are not exhaustive.” (868)
It is important to note that this interpretation rests on the premise that Article II(1) sets
forth an international definition of “agreement in writing” that must be elaborated by
national courts and other authorities, but that, as it is elaborated, is binding on all
Contracting States. At the same time, as discussed below, Article VII of the Convention
leaves national courts free to give effect to arbitration agreements that do not satisfy
Articles II(1) or II(2), including by adopting less demanding national law standards of
“written” arbitration agreements. (869)
[B] Choice of Law Governing Formal Validity Under National Arbitration Legislation
Choice-of-law issues concerning the formal validity of international arbitration
agreements under national law arise relatively infrequently. That is because of the
central importance of the New York Convention’s formal requirements, whose uniform
international form requirements largely eliminate the need (and possibility) for choice-
of-law analysis. Instead, in many cases, the only question is whether the Convention’s
“maximum” form requirement applies, precluding application of more demanding
national form requirements.
Nonetheless, choice-of-law questions can arise in determining the law governing the
formal validity of an arbitration agreement when the directly-applicable substantive and
P 661 choice-of-law rules of the Convention (or another international convention) are
inapplicable. This possibility can arise when either arbitration agreements not governed
by the Convention are involved (870) or when the Convention’s formal requirements are
not satisfied, but a court or tribunal concludes that those requirements do not establish
minimum standards; in each case, no uniform international form requirement applies
and choice-of-law rules must be applied to select the applicable national legal system to
prescribe a form requirement. (871) In these cases, different choice-of-law approaches
can be taken to the question of formal validity.
[1] Form Requirements of Judicial Enforcement Forum
First, questions of formal validity might be governed by the laws of the judicial
enforcement forum where litigation concerning the putative arbitration agreement is
pending. Many contemporary arbitration statutes contain definitions of a “written”
arbitration agreement, which are by their terms applicable to arbitration agreements
providing for arbitration in national territory (i.e., the arbitral seat is on national
territory).
Thus, as discussed in greater detail below, Article 7(2) of the original 1985 UNCITRAL
Model Law set forth a definition of a written arbitration agreement (amended in the 2006
Revisions to the Model Law). (872) Article 1(2) of the Model Law provides that this
definition is applicable to any agreement providing for arbitration within national
territory, and that this definition is applicable only to such agreements. (873)
Similarly, English, Swiss, U.S., Singaporean, Dutch, Japanese and other national
arbitration statutes contain requirements for formal validity that appear applicable to
any litigation involving a putative agreement to arbitrate within national territory,
without the necessity for further choice-of-law analysis. (874) The same approach is taken
in France, where French conceptions of international law, generally-applicable to
international arbitration agreements, apply to the formal validity of such agreements.
(875)
P 662 These provisions resolve the question of what form requirements apply – at least in the
first instance (876) – to arbitration agreements providing for arbitration seated within
national territory; they provide that the form requirements of the local arbitration
legislation apply to such agreements. Like many national arbitration statutes, (877)
however, the Model Law does not address the question of what form requirements apply
if the arbitral seat is located outside the territory of the national court. In these
circumstances, recourse to generally-applicable choice-of-law principles (including
particularly those discussed below) is necessary.
Courts in Model Law jurisdictions have nonetheless not infrequently applied Article 7
while considering agreements which purported to provide for arbitration in a foreign
62
jurisdiction. (878) These decisions generally do not, however, address choice-of-law issues
in any detail, and there is little basis for automatically applying the law of the judicial
enforcement forum to issues of formal validity of the arbitration agreement. Rather, as
discussed below, the better analysis is to apply the law governing the substantive
validity of the arbitration agreement, together with the validation principle.
[2] Form Requirements of Jurisdiction Whose Law Governs Substantive Validity of
Second, questions of formal validity might be governed by the law applicable to the
substantive validity and formation of the arbitration agreement itself. (879) As one award,
adopting this approach, reasoned:
P 663 “It is a generally accepted principle of private international law that the
formation of and the requirements as to the form of a contract are governed
by that law which would be the proper law of the contract, if the contract was
validly concluded.” (880)
This has the benefits of simplicity and consistency, which are of substantial importance
given the other uncertainties and complexities in choice-of-law analysis affecting
international arbitration agreements. (881) Further, in cases where the parties have
selected the law governing their arbitration agreement, application of this law to issues
of form accords with principles of party autonomy. (882)
[3] Specialized Choice-of-Law Rules for Formal Validity
Alternatively, issues of form might be subject to specialized choice-of-law rules. If the
parties have not selected any governing law, questions of form might be governed by the
law of the place where the arbitration agreement was executed. (883) This accords with
historic approaches to the choice of law applicable to the formal validity of ordinary
contracts in many jurisdictions. (884) Alternatively, questions of form might be governed
by the law of the arbitral seat. This approach was adopted in some early awards, (885)
but has been rejected by more recent national court decisions. (886)
[4] Future Directions: Formal Validity and Validation Principle
As already discussed, national arbitration legislation does not provide material guidance
in selecting among the foregoing choice-of-law rules. (887) Absent legislative direction,
the proper choice-of-law analysis for questions of formal validity draws from the
approaches taken to questions of substantive validity and formation of arbitration
agreements. (888)
The same considerations and objectives are equally applicable in both contexts, as well
as the desirability of uniformity and simplicity. Accordingly, questions of formal validity
should be presumptively governed by the law of the arbitral seat, unless the parties have
otherwise expressly agreed. As with issues of substantive validity, a general choice-of-law
P 664 provision in the parties’ underlying contract should not be sufficient to rebut the
presumptive application of the law of the arbitral seat. (889)
Moreover, questions of formal validity should also be subject to a validation principle,
which upholds the validity of an international arbitration agreement if it satisfies either
the laws of the judicial enforcement forum, the laws governing the substantive validity of
the parties’ arbitration agreement, or the laws of the place where the arbitration
agreement was executed. As discussed above, the validation principle accords with the
underlying objective of the international arbitration process, which is to provide simple,
readily-enforceable dispute resolution mechanisms notwithstanding the choice-of-law
and jurisdictional complexities inherent in transnational transactions. (890) It also
accords with contemporary developments in choice-of-law analysis applicable to form
requirements in other contexts.
Thus, while inapplicable to arbitration agreements, Article 11 of the Rome I Regulation
and Article 9 of the Rome Convention adopt a validation principle with regard to matters
of form, upholding the formal validity of contracts that satisfy either the requirements of
the law governing the substantive validity of the contract or the law of the place the
contract was executed. (891) Similarly, authorities from a number of jurisdictions have
adopted the validation principle in relation to issues of formal validity concerning
contracts generally. (892) The Hague Principles on the Choice of Law in International
Commercial Contracts adopt a similar approach to issues of formal validity. (893)
The validation principle is particularly well-suited for application to questions of the
form of international arbitration agreements. As already discussed above, the purpose of
such agreements is to provide an effective, enforceable mechanism for resolving
transnational commercial disputes, notwithstanding the complexities arising from
differences among national legal systems. (894) Applying national form requirements to
invalidate an agreement of this character makes particularly little sense.
This is the result reached by the (relatively few) national court decisions that have
considered issues of formal validity which have not been resolved solely by reference to
P 665 the New York Convention. (895) It is also the result that is reached by those arbitral
awards which have considered the question, (896) although there are anomalous
63
exceptions. (897) Well-reasoned commentary is to the same effect. (898)
The application of the foregoing choice-of-law principles to issues of formal validity can
be briefly summarized. If an arbitration agreement provides for arbitration in a
jurisdiction that has adopted the UNCITRAL Model Law (or legislation with similar
territorial limits), then the question in the first instance is whether the agreement
satisfies the form requirements of Article 7 of the Model Law (or analogous provisions of
other legislation). In this case, Article 1(2) of the Model Law clearly provides for the
recognition of the arbitration agreement if Article 7’s requirements are satisfied. (899)
Even if an arbitration agreement does not satisfy the form requirements of Article 7, it
may nonetheless fulfill the form requirements of the law which the parties have agreed
will govern that agreement or the law of the place where the agreement was made. In
these circumstances, the validation principle should permit the agreement to be upheld.
(900) This accords with the treatment of issues of formation and substantive validity,
application of a validation principle in other private international law contexts and the
objectives of the international arbitral process. (901)
In cases where an arbitration agreement provides for arbitration in a place outside of
national territory, then the foregoing choice-of-law analysis remains applicable. That is, if
the agreement satisfies the formal requirements of the legal regime selected by the
parties to govern their arbitration agreement, the place where the seat of the arbitration
is located, or the judicial enforcement forum, then its validity should be upheld.
P 666 In practical application, the foregoing analysis provides a resolution to issues of formal
validity if parties from States A and B agree to arbitrate in State C, while also agreeing
that their agreement to arbitrate is subject to the laws of State D. In this case, if the
parties’ arbitration agreement satisfies the form requirements of State C’s arbitration
law, then it is formally valid (regardless what State D’s law provides). If, however, the
formal requirements of State C’s law are not satisfied, then the agreement should
nonetheless be formally valid if it satisfies State D’s requirements of formal validity.
§4.07 CHOICE-OF-LAW RULES APPLICABLE TO CAPACITY TO CONCLUDE

The choice-of-law rules applicable to the capacity to conclude international arbitration
agreements raise special issues. As discussed below, the New York Convention and other
international arbitration conventions refer to the need to apply choice-of-law rules
applicable to questions of capacity, but do not provide either such choice-of-law rules or
substantive rules governing the subject (in contrast to the approach to questions of
formal validity). (902) As a consequence, it is left almost entirely to national law to
provide the choice-of-law rules that apply to the capacity to conclude arbitration
agreements, subject to the non-discrimination provisions of the Convention.
[A] Choice-of-Law Rules Governing Capacity Under International Arbitration

Conventions
Article V(1)(a) of the Convention indirectly addresses the question of the law applicable
to capacity to conclude an international arbitration agreement. It provides that an award
may be denied recognition if “the parties to the [arbitration agreement] were, under the
law applicable to them, under some incapacity.” (903) The clear import of this provision is
that national law applies to determine questions of capacity, at least in the first
instance. (904)
Relying on Article V(1)(a)’s statement that capacity is determined “under the law
applicable to” the party, some commentators have suggested that the Convention
contains a choice-of-law rule selecting the law of the party’s domicile or place of
organization. (905) Other commentators have concluded that Article V(1)(a) does not
address the question of applicable law, leaving it to national courts to apply their own
national conflict of laws rules in order to resolve this issue. (906)
P 667 The better view is that Article V(1)(a) contemplates a different choice-of-law analysis
for issues of capacity than for those of substantive validity (by reason of Article V(1)(a)’s
references to two separate choice-of-law rules for issues of capacity and issues of
substantive validity). It is difficult to see why the Convention’s drafters would have
prescribed a choice-of-law rule for issues of substantive validity (which they did), (907)
but not issues of capacity. Equally, Article V(1)(a)’s reference to “the law applicable to
them” fairly clearly implies a reference to the personal law of a party – being either the
law of a company’s place of organization or the law of the domicile (or state of
nationality) of a natural person. (908)
[B] Choice of Law Governing Capacity Under National Arbitration Legislation

Like leading international arbitration conventions, most national arbitration statutes do
not address the question of what law applies to questions of capacity to conclude
international arbitration agreements. Article 34(2)(a)(i) of the UNCITRAL Model Law
provides for the annulment of arbitral awards if “a party to the arbitration agreement …
was under some incapacity,” but without indicating what law applies to determine
64
questions of capacity. (909) Many national arbitration statutes are similar, failing to
provide either choice-of-law rules applicable to capacity or substantive rules of
capacity. (910)
[1] Application of Law of Party’s Domicile, Seat, or Place of Incorporation to Issues of
Capacity
Most national courts and arbitral tribunals have looked to generally-applicable national
choice-of-law rules in dealing with questions of capacity. This has produced diverse
results, although most authorities have applied the personal law of the party to issues of
capacity.
A few decisions have looked to the law governing the substantive validity of the
arbitration agreement or to international principles. (911) In many cases, however, courts
and tribunals have applied the law of the domicile or principal place of business of
P 668 the party in question. (912)
For example, in one early award, the tribunal applied French law to determine the
powers of the officers of a French company, apparently on the (unarticulated) basis that
the powers of corporate entities are governed by their national law of incorporation. (913)
Similarly, an arbitral tribunal seated in Switzerland concluded that, according to “wide-
spread practice,” the law of a party’s own territory will determine questions of that
party’s capacity. (914)
To the same effect, the Swiss Federal Tribunal relied on general choice-of-law rules in
holding that the capacity of a bankrupt party was governed by its personal law (being its
place of incorporation). (915) Likewise, in an enforcement action, Germany’s
Bundesgerichtshof applied German choice-of-law principles and concluded that the legal
capacity of a seller was to be ascertained according to its personal law. (916)
Commentary is almost unanimous in adopting the personal law of the party with regard
to issues of capacity. (917)
P 669 Although there is general agreement on application of a party’s personal law to issues
of capacity, there is disagreement about what constitutes a party’s personal law. It is
often observed that national choice-of-law rules dealing with capacity differ from
jurisdiction to jurisdiction. In civil law jurisdictions, the capacity of natural persons is
generally governed by the law of their nationality, while in common law jurisdictions,
capacity of natural persons is governed by the law of their domicile. (918) Similarly, the
capacity of juridical persons in civil law jurisdictions is generally governed by the law of
the seat of the entity, while in common law jurisdictions the law of the place of
incorporation is ordinarily applicable. (919)
This diversity of choice-of-law rules presents obvious problems for international arbitral
tribunals, because different national choice-of-law rules will provide for differing
applicable laws of capacity in many cases. Some authorities have suggested that the
choice-of-law rules of the arbitral seat should be applied to determine capacity to
conclude an arbitration agreement. (920) For example, the Institute of International Law’s
1957 resolutions dealing with arbitration declared that “capacity to submit to arbitration
shall be regulated by the law indicated according to the rules of choice of law in force at
the seat of the arbitral tribunal.” (921)
On the other hand, the arbitral seat may well be selected for reasons such as neutrality
and lack of connection to the transaction. (922) These reasons would make it anomalous
to apply the arbitral seat’s choice-of-law rules to select a national law that would render
one (or both) parties incompetent to conclude an arbitration agreement. That would be
particularly true where the choice-of-law rules of the seat would select a law that
incapacitated a party, when the law of both parties’ home jurisdictions did not.
P 670 [2] Application of Validation Principle to Issues of Capacity
The better approach, again, is to apply a validation principle, discussed above, to
questions of capacity (as well as to issues of substantive and formal validity (923) ). Where
parties enter into international transactions, calling by definition for activities affecting
multiple states, their contractual agreements should be given maximum effect,
notwithstanding local law provisions that would impede the enforceability of contractual
arrangements in a domestic setting. As one arbitral tribunal held:
“if a person has capacity either by the proper law of the contract or by the law
of his domicile and residence then the contract is valid, so far as capacity is
concerned.” (924)
That is, in a transaction affecting States A and B, with an arbitral seat in State C, the
parties’ capacity to enter into an arbitration agreement should be upheld where any of
the laws of States A, B, or C would reach this result. Taking a concrete (albeit unlikely)
example, if an 18-year-old from State A entered into an international arbitration
agreement, when the age of majority in State A was 21, the arbitration agreement should
be given effect so long as either State B or State C adopted an age of majority of 18 or
younger. This approach is broadly similar to that under French law where, consistent with
general choice-of-law analysis, French courts apply international law directly to the
65
questions of authority and capacity. (925)
[3] Application of International Non-Discrimination Principles to Issues of Capacity
Additionally, where national legislatures have adopted restrictions on the capacity of
parties to conclude arbitration agreements, these limitations should be subject to the
international neutrality and non-discrimination requirements of the New York Convention
(discussed above, in the context of substantive validity of arbitration agreements). (926)
P 671 For example, where a state adopts restrictions on the capacity of local companies to
enter into arbitration agreements (e.g., limits on state entities’ capacity to conclude
international arbitration agreements), these restrictions should not be given effect as to
agreements within the ambit of the Convention. (927) Doing so would be inconsistent with
the basic commitment of Contracting States to the Convention to recognize and enforce
international arbitration agreements, save where they are null and void; as discussed
above, this commitment overrides national law rules that single out international
arbitration agreements for special burdens or limitations or that impose idiosyncratic
domestic restrictions on such agreements. (928)
This rule is reflected, albeit in a specific application, in the Swiss Law on Private
International Law, followed by comparable judicial authority in other jurisdictions. As
discussed below, Article 177(2) provides that “if a party to the arbitration is a state or an
enterprise or organization controlled by it, it cannot rely on its own law in order to
contest its capacity to be a party to an arbitration.” (929) Article 177(2) reflects an
approach whereby states may not invoke their own legislation to escape their otherwise-
valid agreements to arbitrate. (930)
The same neutrality rationale applies more generally to all questions of capacity. For
example, if a Contracting State to the Convention enacted legislation providing that no
local corporation would have the capacity to enter into an international arbitration
agreement unless unanimously approved at a shareholders’ meeting or validated by a
local regulatory official, that legislation should not be given effect under the Convention.
On this analysis, provisions of national law purporting to discriminate between the
capacity to participate in local judicial or arbitral proceedings and the capacity to
participate in foreign or international arbitral proceedings (or to conclude agreements
providing for such participation) are not properly regarded as limitations on capacity
and should not be given effect. (931) As a Swiss court observed, albeit applying Swiss law:
“[I]f [Portuguese law] prevented an insolvent Portuguese entity from appearing
as a party in a Portuguese arbitration, this would have no influence on its
capacity to be a party in an international arbitration seated in Switzerland. It
is decisive in this respect that Portuguese law affords the Appellant a legal
personality through which it may be allocated rights and obligations.” (932)
The same analysis applies under the Convention’s requirements of non-discrimination
P 672 and international neutrality.
§4.08 CHOICE-OF-LAW RULES APPLICABLE TO AUTHORITY TO CONCLUDE

The same choice-of-law principles that apply to issues of capacity are also applicable to
related issues of agency and authority, where the question is whether a representative of
a putative party (e.g., an agent or officer of a company) had the authority to bind that
party (e.g., a principal or corporation) to an international arbitration agreement. (933)
Although there are important distinctions between issues of authority and issues of
capacity, there are sound reasons to read Article V(1)(a)’s treatment of capacity as
extending to questions of agency and authority, not merely to capacity in the narrow
sense. These reasons include the Convention’s drafting style (being brief, broadly-worded
and “constitutional,” rather than narrowly or technically expressed) (934) and its need to
deal with a host of differing legal systems. Article V(1)(a)’s general approach to questions
of capacity – referring to the law applicable to the parties on such issues – also applies
with equal logic to issues of agency and authority.
The most significant point, in each case, is that the Convention contemplates the
application of national laws to govern issues of agency and authority, as selected by
applicable choice-of-law rules (and as limited by the Convention’s neutrality and non-
discrimination requirements). (935) Some commentators have suggested that issues of
authority should be directly governed by international principles, without reference to
national law rules. (936) As with questions regarding the substantive validity of the
arbitration agreement, (937) however, this analysis ignores the historic role of national
law in international arbitration and the terms of the Convention (and other international
arbitration conventions). Rather, the appropriate analysis is the selection of applicable
national law, in accordance with choice-of-law rules contemplated or provided by the
Convention, but subjected to the international non-discrimination protections of the
Convention.
Consistent with the foregoing analysis, national courts and arbitral tribunals have almost
invariably applied national law to issues of representative power. In some instances, the
66
law governing the agency agreement has been held applicable to govern the agent’s
authority to conclude an agreement to arbitrate; more often, the law of the place where
the agent acted is applied. (938) Other authorities have simply applied the law governing
P 673 the substantive validity of the arbitration agreement. (939)
Particularly where a party has no knowledge of the terms of the agency agreement
entered into by its counter-party, it is difficult to accept that the party should be
disadvantaged by the law governing the agency agreement. In these circumstances,
application of a validation principle, permitting reliance on either the law governing the
arbitration agreement or the place where the agent acted, would be appropriate.
As discussed below, some domestic laws (e.g., France, (940) Austria, (941) Greece (942) )
limit the powers of agents to enter into domestic arbitration agreements on behalf of
their principals. Even where selected by applicable choice-of-law rules, these limitations
on agency and authority should not be given effect in the context of international
arbitration agreements. They are inconsistent with the validation principle and the
general requirement, imposed by Articles II(1) and II(3) of the Convention, that national
law not single out arbitration agreements for special burdens.
§4.09 CHOICE-OF-LAW RULES APPLICABLE TO INTERPRETATION OF

Choice-of-law analysis is also necessary to select the law applicable to interpretation of
an international arbitration agreement. Many (but not all) jurisdictions apply the same
law to the interpretation of an arbitration agreement as to its formation and substantive
validity. (943) One of the few arguable exceptions to this rule is the United States, where
some U.S. courts have held that federal common law rules apply to issues of
interpretation, but not necessarily questions of formation and validity. (944) These issues
P 673 are considered in detail below. (945)
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and Their Enforcement 172-202 (2d ed. 2010); Jhangiani, Conflicts of Law and
International Commercial Arbitration: Can Conflict Be Avoided?, 2(1) BCDR Int’l Arb.
Rev. 99 (2015); Karrer, The Law Applicable to the Arbitration Agreement, 26 Sing. Acad.
L.J. 849 (2014); Leong & Tan, The Law Governing Arbitration Agreements: BCY v. BCZ
and Beyond, 30 Sing. Acad. L.J. 70 (2018); Lew, The Law Applicable to the Form and
Substance of the Arbitration Clause, in A. van den Berg (ed.), Improving the Efficiency
of Arbitration Agreements and Awards: 40 Years of Application of the New York
Convention 114 (1999); Miles & Goh, A Principled Approach Towards the Law Governing
Arbitration Agreements, in N. Kaplan & M. Moser (eds.), Jurisdiction, Admissibility and
Choice of Law in International Arbitration: Liber Amicorum Michael Pryles, 385 (2018);
G. Moss, International Commercial Arbitration 279-99 (3d ed. 2013); Nazzini, The Law
Applicable to the Arbitration Agreement: Towards Transnational Principles, 65 Int’l &
Comp. L.Q. 681 (2016); Oliveira, The English Law Approach to Arbitrability of Disputes,
19 Int’l Arb. L. Rev. 155 (2016); Ortolani, Article 34: Application for Setting Aside as
Exclusive Recourse Against Arbitral Award, in I. Bantekas et al. (eds.), UNCITRAL Model
Law on International Commercial Arbitration: A Commentary 870 (2020); Pearson,
Sulamérica v. Enesa: The Hidden Pro-Validation Approach Adopted by the English
Courts with Respect to the Proper Law of the Arbitration Agreement, 29 Arb. Int’l 115
(2013); Petsche, International Commercial Arbitration and the Transformation of the
Conflict of Laws Theory, 18 Mich. St. J. Int’l L. 453 (2010); Polkinghorne et al., Article 36:
Grounds for Refusing Recognition or Enforcement, in I. Bantekas et al. (eds.),
UNCITRAL Model Law on International Commercial Arbitration: A Commentary 943
(2020); Razumov, The Law Governing the Capacity to Arbitrate, in A. van den Berg
(ed.), Improving the Efficiency of Arbitration Agreements and Awards: 40 Years of
Application of the New York Convention 260 (1996); Schwenzer & Tebel, The Word Is
Not Enough: Arbitration, Choice of Forum and Choice of Law Clauses Under the CISG, 31
ASA Bull. 741 (2013); Silberman, The New York Convention After Fifty Years: Some
Reflections on the Role of National Law, 38 Ga. J. Int’l & Comp. L. (2009); Thorn &
Grenz, The Effect of Overriding Mandatory Rules on the Arbitration Agreement, in F.
Ferrari & S. Kröll (eds.), Conflict of Laws in International Arbitration 187 (2011);
Thrope, A Question of Intent: Choice of Law and the International Arbitration
Agreement, 54 Disp. Resol. J. 16 (1999); Trukhtanov, The Proper Law of Arbitration
Agreement: A Farewell to Implied Choice?, 2012 Int’l Arb. L. Rev. 140; Tzeng, Favoring
Validity: The Hidden Choice of Law Rule for Arbitration Agreements, 27 Am. Rev. Int’l
Arb. 327 (2016); Yang, The Proper Law of the Arbitration Agreement: Mainland Chinese
and English Law Compared, 33 Arb. Int’l 121 (2017).
2) See §1.02[B].
3) SeeChapter 3.
4) See §3.03_[B]; §4.02[A]. This may result from either an express or implied choice of
law by the parties, where they intend different laws to govern their underlying
contract and their arbitration agreement, or from the application of conflict of laws
rules, which results in the application of different laws to the parties’ two
agreements. See §4.04.
5) See §4.02[B].
6) See §4.03. This is not significantly different from the choice-of-law analysis in other
contexts, where different laws may apply to different issues arising from a
contractual relationship. See, e.g., Rome Convention, Art. 3(1) (“By their choice the
parties can select the law applicable to the whole or a part only of the contract”);
Rome I Regulation, Art. 3(1); Restatement (Second) Conflict of Laws §188 (1971) (“The
rights and duties of the parties with respect to an issue in contract are determined
by the local law of the state which, with respect to that issue, has the most
significant relationship to the transaction and the parties”); Gertz, The Selection of
Choice of Law Provisions in International Commercial Arbitration: A Case for
Contractual Dépeçage, 12 Nw. J. Int’l L. Bus. 163 (1991); Heiskanen, Forbidding
Dépeçage: Law Governing Investment Treaty Arbitration, 32 Suffolk Trans. L. Rev. 367,
395-97 (2009) (discussing dépeçage in international arbitration agreements); Jayme,
Betrachtungen zur “Dépeçage” im Internationalen Privatrecht, in K. Kegel, H.-J.
Musielak & K. Schurig (eds.), Festschrift für Gerhard Kegel zum 75 Geburtstag 253
(1987); Reese, Dépeçage: A Common Phenomenon in Choice of Law, 73 Colum. L. Rev.
58 (1973).
7) See §5.02[A][2][d]; §25.04[A][5].
8) See §4.04[A][2][j][iv]; Judgment of 8 July 2009, D’Etudes et Représentations Navales et
Industrielles v. Air Sea Broker Ltd, 2009 Rev. Arb. 529 (French Cour de Cassation Civ.
1); Judgment of 30 March 2004, Rado v. Painewebber, 2005 Rev. Arb. 115 (French Cour
de Cassation Civ. 1); Judgment of 21 May 1997, Renault v. V 2000, 1997 Rev. Arb. 537
(French Cour de Cassation Civ. 1); Judgment of 20 December 1993, Municipalité de
Khoms El Mergeb v. Dalico, 1994 Rev. Arb. 116 (French Cour de Cassation Civ. 1);
Judgment of 7 April 2011, 2011 Rev. Arb. 747 (Paris Cour d’Appel); Judgment of 18
November 2010, République de Guinée Équatoriale v. SA Bank Guinea Équatorial, 2010
Rev. Arb. 980 (Paris Cour d’Appel); Judgment of 25 November 1999, SA Burkinabè des
Ciments et Matériaux v. Société des Ciments d’Abidjan, 2001 Rev. Arb. 165 (Paris Cour
d’Appel); Judgment of 17 December 1991, Gatoil v. Nat’l Iranian Oil Co., 1993 Rev. Arb.
281 (Paris Cour d’Appel).
68
9) See §4.02[A][2][d]; Rhone Mediterranee Compagnia Francese di Assicurazioni e
Riassicurazioni v. Lauro, 712 F.2d 50, 53-54 (3d Cir. 1983); Ledee v. Ceramiche Ragno,
684 F.2d 184, 187 (1st Cir. 1982). The same standards apply under the Inter-American
Convention.
10) See §4.04[B][3][d]; Swiss Law on Private International Law, Art. 178(2); Spanish
Arbitration Act, Art. 9(6) (“When the arbitration is international, the arbitration
agreement shall be valid and the dispute may be subject to arbitration if the
requirements stipulated by the law chosen by the parties to govern the arbitration
agreement, the law applicable to the substance of the dispute, or Spanish law, are
fulfilled”); Algerian Code of Civil and Administrative Procedure, Art. 458 bis 1, ¶3
(same). See also Judgment of 26 August 2008, XXXIV Y.B. Comm. Arb. 404-05 (Austrian
Oberster Gerichtshof) (2009) (“If the wording of the declaration of intent allows for
two equally plausible interpretations, the interpretation which favors the validity of
the arbitration agreement and its applicability to a certain dispute is to be
preferred”).
11) See §4.04[A][1][b]. Similar conclusions apply with respect to issues of capacity.
See §4.07[A].
12) SeeChapter 3.
13) See §3.03[B].
14) See §3.01; §3.03[B].
15) Final Award in ICC Case No. 1507, cited in S. Jarvin & Y. Derains (eds.), Collection of
ICC Arbitral Awards 1974-1985 215, 216 (1990) (emphasis added). See also Sulamérica
Cia Nacional de Seguros SA v. Enesa Engenharia SA [2012] EWCA Civ 638, ¶11 (English
Ct. App.) (“It has long been recognised that in principle the proper law of an
arbitration agreement which itself forms part of a substantive contract may differ
from that of the contract as a whole”).
16) BNA v. BNB, [2019] SGHC 142, ¶17(e) (Singapore High Ct.) (emphasis added).
17) See, e.g., Final Award in ICC Case No. 20686/RD, Arb. Intell. Mat., ¶¶157-58 (“[T]he
doctrine of separability does not mean that an arbitration agreement will
necessarily be governed by a different law from the law governing the main
contract. The doctrine of separability merely calls for the arbitration agreement to
be treated as a separate and distinct agreement from the main contract.”); Interim
Award in ICC Case No. 4131, IX Y.B. Comm. Arb. 131, 133. (1984) (“sources of applicable
law for determining the scope and the effects of an arbitration clause, which is the
basis of an international arbitration, are not necessarily the same as the law
applicable to the merits of the dispute referred to this arbitration”) (emphasis
added); Final Award in CAM Case No. 8416 of 28 November 2017, XLIII Y.B. Comm. Arb.
292, 318 (2018) (in light of “autonomy of the arbitration clause … it cannot simply be
assumed” that law of underlying contract applies to arbitration agreement);
Judgment of 21 March 1995, XXII Y.B. Comm. Arb. 800, 803 (Swiss Fed. Trib.) (1997)
(“arbitration agreement and the main contract can be subject to different laws”)
(emphasis added).
18) See §3.03_[B]; §4.04_[B][6]; Final Award in ICC Case No. 6850, XXIII Y.B. Comm. Arb. 37
(1998) (applying choice-of-law clause in underlying contract to arbitration
agreement); Final Award in ICC Case No. 6752, XVIII Y.B. Comm. Arb. 54, 55-56 (1993)
(applying general choice-of-law clause to arbitration clause); Final Award in ICC Case
No. 6379, XVII Y.B. Comm. Arb. 212, 215 (1992) (applying law governing underlying
contract to arbitration agreement); Final Award in ICC Case No. 5294, XIV Y.B. Comm.
Arb. 137, 140-41 (1989) (applying Swiss law to both arbitration agreement and
underlying contract); Final Award in ICC Case No. 3572, XIV Y.B. Comm. Arb. 111 (1989)
(applying law chosen by parties to govern underlying contract to arbitration
agreement).
Under some national laws, notably French law, a different rule applies. As discussed
below, French law subjects international arbitration agreements to international
law (and not any national legal system), thereby requiring that such agreements be
governed by a different legal system from the parties’ underlying contract.
See §4.04[A][4]. A similar approach has been adopted by some U.S. courts.
See §4.04[A][4].
19) See §34.03[B].

20) See §4.02[A][3].
21) See §3.01; §3.02_[E]; §3.03[C].
22) Geneva Protocol, Art. 1 (“Each of the contracting states recognizes the validity of an
agreement whether relating to existing or future differences between parties subject
respectively to the jurisdiction of different contracting states by which the parties to
a contract agree to submit to arbitration all or any differences that may arise in
connection with such contract relating to commercial matters or to any other
matter capable of settlement by arbitration, whether or not the arbitration is to
take place in a country to whose jurisdiction one of the parties is subject”)
(emphasis added).
23) Geneva Convention, Art. 1(a) (emphasis added); §3.02[A][1].
24) Article 1(a) also implied that the law governing the arbitration agreement could
differ from the law governing other aspects of the parties’ relations.
69
25) Some commentators have termed the Convention’s choice-of-law provisions its
“essential achievement” (“la grande conquête”). Bredin, La Convention de New York
du 10 Juin 1958 pour la Reconnaissance et l’Exécution des Sentences Arbitrales
Étrangères, 87 J.D.I. (Clunet) 1003, 1020, 1029 (1960).
26) See §3.02_[A][2]; §5.02[A][2].
27) See §2.01[A][1][a]; §4.04[A][1][b][i].
28) New York Convention, Art. V(1)(a). See also §3.02_[A][2]; §4.04[A][1][b][ii].
29) See §4.04[A][1][b][ii]; §4.04[B][1]. See also Schramm, Geisinger & Pinsolle, Article II, in
H. Kronke et al. (eds.), Recognition and Enforcement of Foreign Arbitral Awards: A
Global Commentary on the New York Convention 37, 54 (2010).
Article V(1)(a) also provides for non-recognition where “[t]he parties to the
[arbitration agreement] were, under the law applicable to them, under some
incapacity.” New York Convention, Art. V(1)(a). See also §26.05[C][2]. This provision
again prescribes a specialized choice-of-law rule for issues of capacity to conclude
arbitration agreements. See §4.07[A].
30) See §4.04[A][1][b][i].
31) European Convention, Art. VI(2). As discussed below, these rules provide for
application of the law chosen by the parties, or failing which, the law of the arbitral
seat. See §4.04[A][1][c]; Hascher, European Convention on International Commercial
Arbitration of 1961: Commentary, XX Y.B. Comm. Arb. 1006 (1995).
32) European Convention, Art. VII. These rules are discussed below. See §4.04[A][1][c].
33) See §3.02[A][3].
34) See §2.01_[A][2]; §5.01[C][1].
35) See §2.02_[B]; §4.06[B][1].
36) UNCITRAL Model Law, Arts. 34(2)(a)(i), 36(1)(a)(i); §3.02[B][3][e]; §25.03_[A][2];
§26.03[D][1]. See P. Binder, International Commercial Arbitration and Mediation in
UNCITRAL Model Law Jurisdictions 449 (4th ed. 2019); H. Holtzmann & J. Neuhaus, A
Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative
History and Commentary 915-16, 1058-59 (1989).
37) See §4.02[A][2][a]. That rule gives effect to the parties’ choice of law and, absent
such a choice, the law of the arbitral seat. See Ortolani, Article 34: Application for
Setting Aside as Exclusive Recourse Against Arbitral Award, in I. Bantekas et al. (eds.),
UNCITRAL Model Law on International Commercial Arbitration: A Commentary 870
(2020); Polkinghorne et al., Article 36: Grounds for Refusing Recognition or
Enforcement, in id. at 943.
38) See, e.g., BNA v. BNB, [2019] SGHC 142, ¶17(e) (Singapore High Ct.); BCY v. BCZ, [2017] 3
SLR 357, ¶44 (Singapore High Ct.); Recyclers of Australia Pty Ltd v. Hettinga Equip.
Inc., [2000] 175 ALR 725, ¶22 (Australian Fed. Ct.) (applying Iowa law, selected by
choice-of-law clause in underlying contract, to validity of arbitration clause); Nirma
Ltd v. Lurgi Energie und Entsorgung GmbH, XXVIII Y.B. Comm. Arb. 790, 803 (Gujarat
High Ct. 2002) (2003). See also Sulamérica Cia Nacional de Seguros SA v. Enesa
Engenharia SA [2012] EWCA Civ 638, ¶11 (English Ct. App.); AES Ust-Kamenogorsk
Hydropower Plant LLC v. Ust-Kamenogorsk Hydropower Plant JSC [2011] EWCA Civ 647
(English Ct. App.); XL Ins. Ltd v. Owens Corning [2000] 2 Lloyd’s Rep. 500, 508 (QB)
(English High Ct.).
39) Swiss Law on Private International Law, Art. 178(2) (“As regards its substance, an
arbitration agreement is valid if it conforms either to the law chosen by the parties,
or to the law governing the subject-matter of the dispute, in particular the main
contract, or to Swiss law”).
40) See B. Berger & F. Kellerhals, International and Domestic Arbitration in Switzerland
¶399-400 (2d ed. 2010); P. Lalive, J.-F. Poudret & C. Reymond, Le Droit de l’Arbitrage
Interne et International en Suisse Art. 178, ¶15 (1989); Wenger, in S. Berti et al. (eds.),
International Arbitration in Switzerland Art. 178, ¶22 (2000).
41) Judgment of 21 March 1995, XXII Y.B. Comm. Arb. 800, 803 (Swiss Fed. Trib.) (1997).
42) See §4.02[A][2][b]; §4.04[B][3][d]; Judgment of 15 September 2015, DFT 4A_136/2015,
¶2.2.1 (Swiss Fed. Trib.); Judgment of 7 July 2014, DFT 4A_124/2014, ¶3.3 (Swiss Fed.
Trib.); Judgment of 19 April 2011, DFT 4A_44/2011, ¶2.4.1 (Swiss Fed. Trib.); Judgment
of 19 August 2008, DFT 4A_128/2008, ¶3.2 (Swiss Fed. Trib.); Judgment of 16 October
2003, 22 ASA Bull. 364, 387 (Swiss Fed. Trib.) (2004).
43) Swiss Law on Private International Law, Art. 178(1). See §2.04_[B]; §5.02[A][5][d].
44) See §3.02[B][3][d]; §4.04_[A][4]; §4.04[B][3][e].
45) Judgment of 20 December 1993, Municipalité de Khoms El Mergeb v. Dalico, 1994 Rev.
Arb. 116, 117 (French Cour de Cassation Civ. 1) (emphasis added).
70
46) See §4.04_[A][4]; §4.04[B][3][e]; Judgment of 7 April 2011, 2011 Rev. Arb. 747, 750 (Paris
Cour d’Appel) (“according to a substantive rule of international arbitration law
applicable to an arbitration seated in France, the arbitration clause is legally
independent from the main contract in which it is included, and subject to public
international policy, its existence and validity depends only on the common
intention of the parties, without it being necessary to make reference to national
law”); Judgment of 8 July 2009, Société d’Etudes et Représentations Navales et
Industrielles v. Air Sea Broker Ltd, 2009 Rev. Arb. 529 (French Cour de Cassation Civ.
1); Judgment of 30 March 2004, Uni-Kod v. Ouralkali, 2005 Rev. Arb. 959 (French Cour
de Cassation Civ. 1); Judgment of 21 May 1997, Renault v. V 2000, 1997 Rev. Arb. 537
(French Cour de Cassation Civ. 1); Judgment of 25 November 1999, SA Burkinabe Des
Ciments et Matériaux v. Société des Ciments d’Abidjan, 2001 Rev. Arb. 165 (Paris Cour
d’Appel); Judgment of 3 March 1992, Sonetex v. Charphil, 1993 Rev. Arb. 273 (French
Cour de Cassation Civ. 1).
47) U.S. FAA, 9 U.S.C. §2; §1.04[B][1][e]; §2.01_[A][2]; §5.01[C][2].
48) See §1.04[B][1][e]; §4.04_[A][3]; §4.04[B][3][b]; AT&T Mobility LLC v. Concepcion, 563
U.S. 333, 343 (U.S. S.Ct. 2011); Preston v. Ferrer, 552 U.S. 346, 359 (U.S. S.Ct. 2008);
Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 444-48 (U.S. S.Ct. 2006);
Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265 (U.S. S.Ct. 1995); Southland Corp. v.
Keating, 465 U.S. 1 (U.S. S.Ct. 1984).
49) See §1.04[B][1][e]; §4.04[B][3][b]. The U.S. Supreme Court left open the question of
the law applicable to the arbitration agreement (in the context of a non-signatory
dispute) in GE Energy Power Conversion France sas, Corp. v. Outokumpu Stainless
USA, LLC, 590 U.S. 590, – (U.S. S.Ct. 2020) (not addressing question of “which body of
law governs that determination” of applicability of equitable estoppel to bind a
non-signatory).
50) See §4.04[A][2][j][v]; §4.04[B][3][b]; Brennan v. Opus Bank, 796 F.3d 1125, 1129 (9th Cir.
2015); Quilloin v. Tenet HealthSystem Philadelphia, Inc., 673 F.3d 221, 228 (3d Cir.
2011); Sourcing Unlimited, Inc. v. Asimco Int’l, Inc., 526 F.3d 38, 41-42 (1st Cir. 2008)
(applying federal common law even though the parties’ underlying contract
selected Chinese law); Bridas SAPIC v. Turkmenistan, 447 F.3d 411, 416 (5th Cir. 2006);
Int’l Paper Co. v. Schwabedissen Maschinen & Anlagen GmbH, 206 F.3d 411, 417 n.4
(4th Cir. 2000) (FAA and New York Convention “create a body of federal substantive
law of arbitrability, applicable to any arbitration agreement within the coverage of
the Act”); Campaniello Imps., Ltd v. Saporiti Italia SpA, 117 F.3d 655, 666 (2d Cir. 1997);
Thomson-CSF v. Am. Arb. Ass’n, 64 F.3d 773 (2d Cir. 1995); Masefield AG v. Colonial Oil
Indus., Inc., 2005 WL 911770 (S.D.N.Y.).
A few U.S. courts have held that general choice-of-law clauses in the parties’
underlying contract apply to the associated arbitration agreement, at least in some
circumstances. See, e.g., Cape Flattery Ltd v. Titan Maritime, LLC, 647 F.3d 914, 921
(9th Cir. 2011) (“courts should apply federal arbitrability law absent ‘clear and
unmistakable evidence’ that the parties agreed to apply non-federal arbitrability
law”); GAR Energy & Assocs. v. Ivanhoe Energy Inc., 2011 WL 6780927 (E.D. Cal.)
(applying choice-of-law clause specifying California law validity of arbitration
agreement).
51) See §4.04[A][2][j][v](4); Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan
Gas Bumi Negara, 364 F.3d 274, 292 n.43 (5th Cir. 2004); Nissho Iwai Corp. v. MV Joy
Sea, 2002 A.M.C. 1305, 1311 (E.D. La.) (applying English law where “parties did select
an English forum, which is at least some evidence that English law was meant to
govern”); Bergesen v. Lindholm, 760 F.Supp. 976, 981 n.9 (D. Conn. 1991).
52) See §4.04[B][3][b].
53) See §4.04[A][2][j][v](2).
54) Restatement (Second) Conflict of Laws §218 comment b (1971) (emphasis added).
55) See Samenow v. Citicorp Credit Serv., Inc., 253 F.Supp.3d 197, 202-03 n.5 (D.D.C. 2017)
(applying District of Columbia law to determine the validity and enforceability of
arbitration agreements notwithstanding fact that contract was governed by South
Dakota law, because “the Arbitration Agreements are severable”); Ulbrich v.
Overstock.com, Inc., 887 F.Supp.2d 924, 930 n.1 (N.D. Cal. 2012) (“Thus, the Court’s
ruling on the choice of law issue with respect to enforceability of the arbitration
agreement has no bearing on which state’s law will apply to the underlying claims”);
Authenment v. Ingram Barge Co., 878 F.Supp.2d 672, 679-80 (E.D. La. 2012) (applying
federal maritime law to validity of arbitration agreement and English law to
substance of dispute); Siglain v. Trader Publ’g Co., 2008 WL 3286974 (N.D. Cal.)
(applying Virginia law to enforceability of arbitration agreement and California law
to substance of dispute); Joseph L. Wilmotte & Co. v. Rosenman Bros., 258 N.W.2d 317,
326 (Iowa 1977) (“New York can be seen as having the most significant relationship to
the issue of the validity and effect of the arbitration provisions of the contract,”
though Iowa had most significant relationship to underlying contract); Marchant v.
Mead-Morrison, 169 N.E. 386 (N.Y. 1929) (arbitration clause subject to different law
than underlying contract).
71
56) One exception is Scotland, where the Scottish arbitration statute provides: “Where –
(a) the parties to an arbitration agreement agree that an arbitration under that
agreement is to be seated in Scotland, but (b) the arbitration agreement does not
specify the law which is to govern it, then, unless the parties otherwise agree, the
arbitration agreement is to be governed by Scots law.” Scottish Arbitration Act,
§§6(a)-(b).
Arbitration legislation in most other common law jurisdictions adopts the
separability presumption, see §3.02[B][3], but does not further address the law
governing the arbitration agreement.
57) Channel Tunnel Group Ltd v. Balfour Beatty Constr. Ltd [1993] AC 334, 357-58 (House of
Lords). See also Sulamérica Cia Nacional de Seguros SA v. Enesa Engenharia SA [2012]
EWCA Civ 638, ¶11 (English Ct. App.) (“It has long been recognised that in principle
the proper law of an arbitration agreement which itself forms part of a substantive
contract may differ from that of the contract as a whole”); C v. D [2007] EWCA Civ
1282, ¶24 (English Ct. App.); Naviera Amazonica Peruana SA v. Compania
Internacional de Seguros del Peru [1988] 1 Lloyd’s Rep. 116, 119 (English Ct. App.);
Deutsche Schachtbau- und Tiefbohrgesellschaft mbH v. Ras Al Khaimah Nat’l Oil Co.
[1987] 2 Lloyd’s Rep. 246, 250 (English Ct. App.) (arbitration clause “need not be
governed by the same law” as the underlying contract), rev’d on other grounds,
[1988] 2 Lloyd’s Rep. 293 (House of Lords); Abuja Int’l Hotels Ltd v. Meridien SAS [2012]
EWHC 87, ¶¶20, 22 (Comm) (English High Ct.) (“[A]s the Tribunal rightly held, Nigerian
law is irrelevant to the validity of the arbitration agreement as it is governed by
English law. … The fact that the Management Agreement is governed by Nigerian law
does not mean that the separable and distinct arbitration agreement is so
governed.”); Black Clawson Int’l Ltd v. Papierwerke Waldhof Aschaffenburg AG [1981] 2
Lloyd’s Rep. 446, 483 (QB) (English High Ct.); L. Collins et al. (eds.), Dicey, Morris and
Collins on The Conflict of Laws ¶16-012 (15th ed. 2012 & Update 2018) (“Although, in
many cases, the law applicable to the main contract will have a strong influence on
the law applicable to the arbitration agreement, this will not be so in every case”).
58) M.S. Dozco India Pvt Ltd v. MS Doosan Infracore Co., [2010] INSC 839, ¶¶12-13 (Indian
S.Ct.) (quoting Naviera Amazonica Peruana SA v. Cia Internacional de Seguros del Peru
[1988] 1 Lloyd’s Rep. 116, 119 (English Ct. App.)). See also Nat’l Thermal Power Corp. v.
Singer Co., XVIII Y.B. Comm. Arb. 403, 406 (Indian S.Ct. 1992) (1993) (“The proper law of
the arbitration agreement is normally the same as the proper law of the contract. It
is only in exceptional cases that it is not so even where the proper law of the
contract is expressly chosen by the parties. Where, however, there is no express
choice of the law governing the contract as a whole, or the arbitration agreement as
such, a presumption may arise that the law of the country where the arbitration is
agreed to be held is the proper law of the arbitration agreement. But that is only a
rebuttable presumption.”).
59) See, e.g., Thyssen Canada Ltd v. Mariana Maritima SA, [2000] 3 FC 398, ¶22 (Canadian
Fed. Ct. App.) (“As to the proper law of the arbitration agreement it is necessary to
ask whether the parties have expressly chosen the law which is to apply to the
agreement. If so the choice of law will prevail even if the chosen law differs from the
law of the underlying contract or the curial law.”); BNA v. BNB, [2019] SGHC 142,
¶17(e) (Singapore High Ct.) (“the parties’ choice as the proper law of an arbitration
agreement is not necessarily the same law which is their choice to be the proper
law of their substantive contract”); Klöckner Pentaplast GmbH & Co. KG v. Advance
Tech. (H.K.) Co., [2011] 4 HKLRD 262, ¶¶23-24 (H.K. Ct. First Inst.) (“There is no doubt
that the proper law of the contract and the [law governing the arbitration
agreement] may be different”). Compare Comandate Marine Corp. v. Pan Australia
Shipping Pty Ltd, [2006] FCAFC 192 (Australian Fed. Ct.) (suggesting that, absent
contrary choice, law of judicial forum governs validity of arbitration agreement);
BHP Billiton Ltd v. Oil Basins Ltd, [2006] VSC 402 (Victoria Sup. Ct.). See also Nottage
& Garnett, Top Twenty Things to Change in or Around Australia’s International
Arbitration Act, 6 Asian Int’l Arb. J. 1, 9 n.26 (2010).
60) See §§4.04[B][3][f]-[g].
61) See Chinese Law Applicable to Foreign-Related Civil Relationships Law, Art. 18 (“The
parties may choose the law applicable to the arbitration agreement. In the absence
of such choice, the law at the place of the arbitral institution or the law of the place
of arbitration shall apply.”).
62) See Swedish Arbitration Act, 2019, §48 (“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. The
first paragraph shall not apply to the issue of whether a party was authorized to
enter into an arbitration agreement or was duly represented.”); Spanish Arbitration
Act, Art. 9(6) (“When the arbitration is international, the arbitration agreement shall
be valid and the dispute may be subject to arbitration if the requirements
stipulated by the law chosen by the parties to govern the arbitration agreement,
the law applicable to the substance of the dispute, or Spanish law, are fulfilled”);
Algerian Code of Civil and Administrative Procedure, Art. 458 bis 1, ¶3 (adopting
verbatim language of Article 178(2) of Swiss Law on Private International Law).
72
63) Judgment of 27 October 2000, Bulgarian Foreign Trade Bank, Ltd v. A.I. Trade Fin., Inc.,
XXVI Y.B. Comm. Arb. 291, 293 (Swedish S.Ct.) (2001).
64) Id. (emphasis added).
65) Judgment of 26 April 1980, VII Y.B. Comm. Arb. 340, 341 (Venice Corte di Appello)
(1982) (recognizing award rendered in London).
66) See, e.g., Judgment of 4 August 1993, Owerri Commercial Inc. v. Dielle Srl, XIX Y.B.
Comm. Arb. 703 (Hague Gerichtshof) (1994); Judgment of 19 February 2004, 2005
SchiedsVZ 54 (Austrian Oberster Gerichtshof); Judgment of 22 September 1994, 2 Ob
566/94 (Austrian Oberster Gerichtshof). See also J.-F. Poudret & S. Besson,
Comparative Law of International Arbitration ¶179 (2d ed. 2007).
67) Turkish International Arbitration Law, Art. 4 (“The validity of an arbitration
agreement is governed by the law selected by the parties to be applicable to the
arbitration agreement, or failing any choice, by Turkish law”). See also Balssen &
Kınıkoğlu, Drafting Arbitration Agreements and Arbitrability, in A. Yesilirmak & I. Esin
(eds.), Arbitration in Turkey 43 (2015) (“According to Article 4, in case parties have not
chosen a law to be applied to the arbitration agreement, the arbitration agreement
shall be valid only if it is in compliance with Turkish law”).
68) See §4.04[B][3][g].
69) Final Award in ICC Case No. 6162, XVII Y.B. Comm. Arb. 153, 160-62 (1992).
ICC Arbitral Awards 1974-1985 215, 216 (1990).
71) Interim Award in ICC Case No. 4131, IX Y.B. Comm. Arb. 131, 133 (1984). See also Final
Award in ICC Case No. 20686/RD, Arb. Intell. Mat., ¶¶157-58 (“[T]he doctrine of
separability does not mean that an arbitration agreement will necessarily be
governed by a different law from the law governing the main contract. The doctrine
of separability merely calls for the arbitration agreement to be treated as a
separate and distinct agreement from the main contract.”); Final Award in ICC Case
No. 7453, XXII Y.B. Comm. Arb. 107 (1997) (Michigan choice-of-law clause in underlying
contract not applicable to arbitration clause; instead, FAA applies); Award in ICC
Case No. 5730, 117 J.D.I. (Clunet) 1029, 1032 (1990); Preliminary Award in ICC Case No.
5505, XIII Y.B. Comm. Arb. 110, 116-17 (1988) (“Parties may submit an arbitration
agreement to a law which is not the substantive law of the main contract”); Interim
Award in ICC Case No. 4504, 113 J.D.I. (Clunet) 1118 (1986); Final Award in CAM Case No.
8416 of 28 November 2017, XLIII Y.B. Comm. Arb. 292, 318 (2018) (Italian choice-of-law
provision not applicable to arbitration agreement in light of “autonomy” of
arbitration agreement).
72) Award in ICC Case No. 4381, 113 J.D.I. (Clunet) 1102, 1104 (1986). See also Partial Award
in ICC Case No. 9987, Dallah Real Estate & Tourism Holding Co. v. Ministry of Religious
Affairs, Pakistan, 2(4) Int’l J. Arab Arb. 337, 352 (2010) (“By reason of the international
character of the Arbitration Agreement coupled with the choice, under the main
Agreement, of institutional arbitration under the ICC Rules without any reference in
such Agreement to any national law, the Tribunal will decide on the matter of its
jurisdiction and on all issues relating to the validity and scope of the Arbitration
Agreement … by reference to those transnational general principles and usages
reflecting the fundamental requirements of justice in international trade and the
concept of good faith in business”).
73) Derains, Observation on Final Award in ICC Case No. 4381, in S. Jarvin, Y. Derains & J.-J.
Arnaldez (eds.), Collection of ICC Arbitral Awards 1986-1990 268 (1994).
74) The remaining sections of this Chapter focus first on the law applicable to the
formation, validity and termination of international arbitration agreements.
Additional or separate choice-of-law issues are raised with regard to form, capacity
and authority with respect to international arbitration agreements, which are
discussed in greater detail below. See §§4.06-4.08.
75) See §4.04[A][2][a].
76) See §§4.04[A][2][c] & [i].
77) See §4.04[A][2][d].
78) See id.
79) See §4.04[A][2][e].
80) See §4.04[A][2][g].
73
81) Bernardini, Arbitration Clauses: Achieving Effectiveness in the Law Applicable to the
Agreements and Awards: 40 Years of Application of the New York Convention 197, 200-
02 (1999) (“the international arbitrator may take at least three different approaches
in order to determine the substantive law of the arbitration clause”); Blessing, The
Law Applicable to the Arbitration Clause, in A. van den Berg (ed.), Improving the
Efficiency of Arbitration Agreements and Awards: 40 Years of Application of the New
York Convention 168-69 (1999) (“[I]n addition to the above four approaches
[mentioned by other commentators], five further solutions have been advocated in
international arbitration practice. … All these nine solutions have also been
advocated (and indeed practiced) regarding arbitrability. … Are we thus faced with
a magnificent confusion?”); Lew, The Law Applicable to the Form and Substance of the
Agreements and Awards: 40 Years of Application of the New York Convention 114, 141-
44 (1999) (“There are four main conflict rules for determining the applicable law to
govern the arbitration agreement”). See also §4.04[A][2][g].
82) See §4.04[A][2][j].
83) See id.; §4.04[A][3].
84) See Judgment of 21 March 1995, XXII Y.B. Comm. Arb. 800, 804 (Swiss Fed. Trib.) (1997)
(warning of danger that, due to application of different choice-of-law rules, “an
arbitration agreement may, when relied upon [in a request for referral], cause under
certain circumstances the lack of jurisdiction of the courts according to the lex fori,
whereas the arbitral award based on that arbitration agreement may be denied
recognition because the agreement is invalid according to a foreign law”). See also
M. Bühler & T. Webster, Handbook of ICC Arbitration: Commentary, Precedents,
Materials 78-79 (2d ed. 2008) (“domestic litigators may find it surprising that there is
no clear answer to this question” of what law governs the arbitration agreement in
the absence of a choice of law by the parties); Graffi, The Law Applicable to the
Validity of the Arbitration Agreement, in F. Ferrari & S. Kröll (eds.), Conflict of Laws in
International Arbitration 19, 53 (2011) (“To simply put it, in no way a uniform criterion
can be, or has been, found to assess the substantive validity of an arbitration
agreement and each jurisdiction tends to adopt a unique and rather unpredictable
approach to this issue”).
85) See §1.02[B].
86) See §4.04_[A][2]; §4.04[B][3].
87) Different authorities identify different categories of issues that are potentially
subject to the law governing an international arbitration agreement. See Judgment
of 23 July 2001, XXXI Y.B. Comm. Arb. 825, 830 (Spanish Tribunal Supremo) (2006)
(determining law applicable to arbitration agreement “is somewhat complex
because the applicable law splits into specific applicable laws for specific aspects:
capacity, effects, etc.”); Nat’l Thermal Power Corp. v. Singer Co., XVIII Y.B. Comm. Arb.
403, 406 (Indian S.Ct. 1992) (1993) (“The validity, effect, and interpretation of the
arbitration agreement are governed by its proper law. Such law will decide whether
the arbitration clause is wide enough to cover the dispute between the parties.
Such law will also ordinarily decide whether the arbitration clause binds the parties
even when one of them alleges that the contract is void, or voidable or illegal or
that such contract has been discharged by breach or frustration … The proper law of
arbitration will also decide whether the arbitration clause would equally apply to a
different contract between the same parties or between one of those parties and a
third party.”); Bernardini, Arbitration Clauses: Achieving Effectiveness in the Law
Applicable to the Arbitration Clause, in A. van den Berg (ed.), Improving the Efficiency
of Arbitration Agreements and Awards: 40 Years of Application of the New York
Convention 197, 198 (1999) (law governing arbitration agreement applies to “(i) the
validity of the clause, including the arbitrability of future disputes; and (ii) its scope
of application, from both a subjective and an objective viewpoint”); O.
Chukwumerije, Choice-of-Law in International Commercial Arbitration 34 (1994) (“The
law governing the arbitration agreement applies to limited issues of consent (such
as whether or not the agreement was induced by fraud, misrepresentation, or undue
influence), and the interpretation, effect, and scope of an arbitration agreement”);
L. Collins et al. (eds.), Dicey, Morris and Collins on The Conflict of Laws ¶16R-001 (15th
ed. 2012 & Update 2018) (“The material validity, scope and interpretation of an
arbitration agreement are governed by its applicable law”).
88) See §8.02[D].
89) See §4.08; §10.02[A].
90) See §9.02[D].
91) See §5.10.
92) See §4.07[A].
93) See §4.06.
94) See §4.04.
95) See §5.10.
96) See §4.05. Matters can be even more complex in federal systems, such as the United
States and Canada. In U.S. courts, U.S. federal law governs the validity and
interpretation of domestic arbitration agreements, while issues of formation may
be governed by U.S. state law. See §4.04[A][2][j][v].
74
97) See §1.04[F] for a general overview of choice-of-law issues in international
arbitration.
98) See id.; §11.05_[A][1]; §19.01.
99) See §11.05[A][2].
100) New York Convention, Arts. II(1), V(1)(a); §4.04[B].
101) Inter-American Convention, Arts. 1, 5(1)(a); European Convention, Art. VI(2); §4.04[B]
[2].
102) UNCITRAL Model Law, Arts. 8, 34(2)(a)(i); §4.04[B][3][a].
103) See §§4.04[B][3]-[5]
104) G. Born, International Arbitration and Forum Selection Agreements: Drafting and
Enforcing 29 (5th ed. 2016). See also §19.04.
105) The same is true for submission agreements, covering an existing dispute. G. Born,
International Arbitration and Forum Selection Agreements: Drafting and Enforcing
Appendix H (5th ed. 2016).
106) See In re Salander O’Reilly Galleries, 453 B.R. 106, 111 (Bankr. S.D.N.Y. 2011) (“Channel
Islands law will apply to this agreement, including the Arbitration (Jersey) Law
1998”); Judgment of 14 September 2000, XXVII Y.B. Comm. Arb. 265, 265 (German
Bundesgerichtshof) (2002). For a representational example, see G. Born,
International Arbitration and Forum Selection Agreements: Drafting and Enforcing 73
(5th ed. 2016).
107) See, e.g., Bond, How to Draft An Arbitration Clause (Revisited), 1(2) ICC Ct. Bull. 14
(1990).
108) See §19.04. See also G. Born, International Arbitration and Forum Selection
Agreements: Drafting and Enforcing 138 (5th ed. 2016) (providing typical choice-of-
law clause).
109) See §19.04.
110) An implied choice-of-law agreement, as to the law governing the arbitration
agreement, may also be derived from the parties’ selection of the arbitral seat. See
§§4.04[A][2][c] & [e]. See also §19.04[E][2].
111) See §4.04[A][2][d].
112) See §4.04[A][2][d][i].
113) See §4.04[A][2][d][ii].
114) See §19.03.
115) See §4.04[A][2].
116) See §1.02[B].
117) The validation principle selects only the law applicable to the substantive validity
of the arbitration agreement, and not to other issues, including interpretation,
performance, waiver and the like.
118) New York Convention, Art. V(1)(a); European Convention, Art. VI(2). See §4.04[A][1].
119) See §4.04[A][5].
120) See §§1.01[C][1]-[2]; §4.02[A][1][a].
121) See §1.01[C][1]. Article 2 of the Geneva Protocol provides: “The arbitral procedure,
including the constitution of the tribunal, shall be governed by the will of the
parties and by the law of the country in whose territory the arbitration takes place.”
Geneva Protocol, Art. 2. As discussed below, this provision deals with the procedural
law of the arbitration, not the law governing the arbitration agreement.
See §11.04[A][1].
122) Geneva Protocol, Art. 1 (emphasis added). The Protocol also provided for the
specific performance of international arbitration agreements, requiring in Article 4
that, where an agreement subject to Article I existed, the courts of Contracting
States “shall refer the parties on the application of either of them to the decision of
the arbitrators.” Geneva Protocol, Art. 4 (emphasis added). See also §5.01[B][1].
123) See §1.01_[C][2]; §4.02[A][1][a]; Geneva Convention, Art. 1(a).
124) Geneva Convention, Art. 1(a) (emphasis added); §1.01_[C][2]; §3.02[A][1].
125) See §4.02[A][1][a].
126) See §1.04[A][1][c][i]; §4.04[A][1][b][i].
127) See §4.04[B][2][iii].
128) New York Convention, Art. V(1)(a) (emphasis added). See §4.02[A][1].
129) See §4.04[A][1][b][ii].
130) See §4.04[A][1][b][iv].
131) See §4.04[A][1][b][iv]; §4.04[A][3].
132) See §4.04_[A][3]; §4.04[B][2][b][ii].
133) See §1.04[A][1][c][i]; §5.01[B][2].
134) See §1.04[A][1][c][i]; §2.01[A][1][a]; §4.02_[A][1]; §5.01[B][2].
135) See §2.01[A][1][a]; §5.04[B][1].
136) See §1.04_[F][2]; §4.04[B][2][b][i].
137) New York Convention, Art. II(1) (“Each Contracting State shall recognize …”), Art. II(3)
(“The court of a Contracting State … shall … refer the parties to arbitration …”).
See §8.02[A][1].
138) See §2.01[A][1][a].
75
139) New York Convention, Art. V(1)(a). See Nacimiento, Article V(1)(a), in H. Kronke et al.
(eds.), Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary
on the New York Convention 205 (2010); Schramm, Geisinger & Pinsolle, Article II, in
id. at 37, 54; A. van den Berg, The New York Arbitration Convention of 1958 282-83
(1981) (describing drafting history of choice-of-law rule in Article V(1)(a)).
140) See §§4.04[B][2][b][ii]-[iii].
141) See §4.04[B][2][b][iii].
142) See §4.04[B][2][b][iii].
143) See §11.03[A].
144) See §2.03[C][1][a][ii](2). See also K.V.C. Rice Intertrade Co. Ltd v. Asian Mineral Res. Pte
Ltd, [2017] SGHC 32, ¶18 (Singapore High Ct.).
145) This is recommended by model institutional arbitration clauses and is common in
practice. See §1.04_[E][4]; §14.01[B].
146) The selection of an arbitral seat is provided for under all leading institutional rules.
See §14.03_[C]; §14.07.
147) The sensible, and proper, approach under Article V(1)(a) in these (relatively unusual)
circumstances is to apply a validation principle, giving effect to the arbitration
agreement if it would be valid under the law of any plausible future arbitral seat. As
discussed below, a validation principle provides the most appropriate means of
giving effect to Article II’s rule of presumptive validity of international arbitration
agreements and the Convention’s pro-enforcement objectives. See §4.04[A][3]. There
is no reason not to permit an arbitration to proceed if there appear to be
reasonable prospects that it will do so in a place where the resulting applicable law
would uphold the agreement’s validity. That gives effect to the parties’ agreement
to arbitrate and avoids assuming that the parties and arbitral tribunal will be
unable to proceed in a manner that ensures the validity of the arbitration
agreement.
148) See §14.07.
Agreements and Awards: 40 Years of Application of the New York Convention 197, 200
(1999). See also Restatement of the U.S. Law of International Commercial and
Investor-State Arbitration §2.13 Reporters’ Note e (2019) (“Neither the New York
Convention nor the FAA prescribes the law applicable to the existence of an arbitral
[sic] agreement on the occasion of the agreement’s enforcement”).
150) See, e.g., Changzhou AMEC E. Tools & Equip. Co. v. E. Tools & Equip., Inc., 2012 U.S. Dist.
LEXIS 106967, at *39 (C.D. Cal.) (in context of determining law applicable under
Article V(2)(b), looking to analysis under Article II(3) and noting that “[s]ome district
courts have applied domestic state law to determine the issue of validity”); Ferrara
SpA v. United Grain Growers, Ltd, 441 F.Supp. 778, 780-81 n.2 (S.D.N.Y. 1977) (dicta that
forum’s laws should apply, on grounds that New York Convention’s legislative history
contemplates this and that it “is consistent … with the view that enforceability of an
agreement to arbitrate relates to the law of remedies and is therefore governed by
the law of the forum”), aff’d mem., 580 F.2d 1044 (2d Cir. 1978). See also Lindo v. NCL
(Bahamas), Ltd, 652 F.3d 1257, 1281 (11th Cir. 2011) (“This Circuit has also uniformly
cited or discussed Article II at the arbitration-enforcement stage and Article V at
the award-enforcement stage”).
151) Restatement (Second) Conflict of Laws §§1, 6(2) (1971); B. Audit, Droit International
Privé ¶¶157 et seq. (8th ed. 2018); L. Collins et al. (eds.), Dicey, Morris and Collins on
The Conflict of Laws ¶4-034 (15th ed. 2012 & Update 2018); M. Giuliano & P. Lagarde,
Report on the Convention on the Law Applicable to Contractual Obligations O.J. C 282
31/10/1980, ¶1 (“The object [of the Convention] was to eliminate the inconveniences
arising from the diversity of the rules of conflict, notably in the field of contract
law”); M. Reimann, Conflict of Laws in Western Europe: A Guide Through the Jungle 109-
12 (1995); E. Scoles et al., Conflict of Laws ¶3.57 (4th ed. 2004); S. Symeonides, Private
International Law and the End of the 20th Century: Progress or Regress? 43-45 (2000).
152) See §1.02[B].
153) See §1.04_[A][1]; A. van den Berg, The New York Arbitration Convention of 1958 286
(1981) (“Convention’s provisions must be deemed to be interrelated as the
underlying purpose is to attain as much uniformity as possible in the legal regime
governing international commercial arbitration; in principle, the Convention’s text
must be considered to constitute a whole”).
154) Silberman, The New York Convention After Fifty Years: Some Reflections on the Role of
National Law, 38 Ga. J. Int’l & Comp. L. 42 (2009) (applying different laws under
Articles II and V “may result in an arbitration agreement that will be respected by a
court even though the subsequent award may not eventually be enforced”).
76
155) See, e.g., Bülow, Das UN-Übereinkommen über die Anerkennung und Vollstreckung
Ausländischer Schiedssprüche, Zeitschrift für Konkurs-, Treuhand- und
Schiedsgerichtswesen 1, 3-4 (1959); Contini, International Commercial Arbitration: The
United Nations Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, 8 Am. J. Comp. L. 283, 296 (1959) (courts will apply own law including conflict
rules); Pisar, The United Nations Convention on Foreign Arbitral Awards, 33 S. Cal. L.
Rev. 14, 16 (1959) (Article II(3) refers to national conflict of laws rules only as last
resort); T. Rüede & R. Hadenfeldt, Schweizerisches Schiedsgerichtsrecht 231 (2d ed.
1993); Silberman, The New York Convention After Fifty Years: Some Reflections on the
Role of National Law, 38 Ga. J. Int’l & Comp. L. 42 (2009) (“disadvantage with the
application of forum law is that it might also lead to litigation maneuvering by the
respective parties in order to secure a choice of law advantage on the issue of
validity”).
156) See §1.04[A][1].
157) See id.; §5.01[B][2].
158) See also L. Collins et al. (eds.), Dicey, Morris and Collins on The Conflict of Laws ¶16-
114 (15th ed. 2012 & Update 2018) (choice-of-law rule in Article V(1)(a) provides
“strong indication” of choice-of-law rule of more general application to arbitration
agreement).
159) See, e.g., Judgment of 21 March 1995, XXII Y.B. Comm. Arb. 800, 804-05 (Swiss Fed.
Trib.) (1997); Judgment of 3 February 1990, Della Sanara Kustvaart: Bevrachting &
Overslagbedrijf BV v. Fallimento Cap. Giovanni Coppola Srl, XVII Y.B. Comm. Arb. 542,
543 (Genoa Corte di Appello) (1992) (“Considering the eadem ratio and the close
connection between [Articles II(3) and V], the criteria for the evaluation of the
arbitration clause which are to be applied in enforcement proceedings must also
be applied when the clause is invoked in order to derogate from the jurisdiction of
the national courts”).
160) See, e.g., Emanuele, Molfa & Marvasi, International Arbitration Agreements, in C. F.
Emanuele & M. Molfa (eds.), Selected Issues in International Arbitration: The Italian
Perspective 18, 45 (2014) (“Insofar as issues of substantive validity and enforceability
(other than arbitrability) of arbitration agreements are concerned, the conflict of
law rules set forth in Article V(1)(a) New York Convention apply, including … for
purposes of Article II(3)”); J. Lew, L. Mistelis & S. Kröll, Comparative International
Commercial Arbitration ¶¶6-32, 6-55 (2003) (“Though [Article V(1) of the New York
Convention and Article 36(1)(a)(i) of the UNCITRAL Model Law] address the issue only
from the perspective of the annulment or enforcement judge, there is a strong
argument in favor of applying the same criteria at the pre-award stage”); McMahon,
Implementation of the United Nations Convention on Foreign Arbitral Awards in the
United States, 2 J. Mar. L. & Comm. 735, 757 (1971) (same); A. van den Berg, The New
York Arbitration Convention of 1958 126-28, 291-95 (1981) (Article II(3) should be read
to incorporate Article V(1)(a)’s choice-of-law rule: “A systematic interpretation of the
Convention, in principle, permits the application by analogy of the conflicts rules of
Article V(1)(a) to the enforcement of the agreement”). Compare Haas, Convention on
the Recognition and Enforcement of Foreign Arbitral Awards, New York, June 10, 1958,
in F.-B. Weigand (ed.), Practitioner’s Handbook on International Arbitration (2d ed.
2009); Martiny, in K. Rebmann, F. Säcker & R. Rixecker (eds.), Münchener Kommentar
zum Einfuehrungsgesetz zum Bürgerlichen Gesetzbuch Vorbem. Art. 3, ¶51 (5th ed.
2010); J. Robert, L’arbitrage, Droit Interne, Droit International Privé ¶280 (5th ed.
1983); van Houtte, Parallel Proceedings Before State Courts and Arbitral Tribunals, in
P. Karrer (ed.), Arbitral Tribunals or State Courts: Who Must Defer to Whom? 35 (2001).
161) That conclusion is supported by the reference to Article II in Article V(1)(a)’s
recognition provisions, reflecting the interrelation between the provisions. A. van
den Berg, The New York Arbitration Convention of 1958 127 (1981) (“As Article V(1)(a)
incorporates Article II – ‘… the agreement referred to in Article II …’ – Article II can
be deemed to incorporate Article V(1)(a)”).
162) Judgment of 21 March 1995, XXII Y.B. Comm. Arb. 800, 804-05 (Swiss Fed. Trib.) (1997).
163) See §4.04[A][1][c].
164) See §4.04[A][1][b][ii].
165) New York Convention, Art. V(1)(a). See Nacimiento, Article V(1)(a), in H. Kronke et al.
(eds.), Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary
on the New York Convention 205 (2010); Schramm, Geisinger & Pinsolle, Article II, in
id. at 37, 54; A. van den Berg, The New York Arbitration Convention of 1958 282-83
(1981) (describing drafting history of choice-of-law rule in Article V(1)(a)).
166) See U.N. Economic and Social Council, Summary Record of the Eleventh Meeting of
the United Nations Conference on International Commercial Arbitration, U.N. Doc.
E/Conf.26/SR.11, at 1 (1958) (comments of Israeli delegate on importance of spelling
out choice-of-law rules instead of leaving “vague and obscure”); U.N. Economic and
Social Council, Summary Record of the Fourteenth Meeting of the United Nations
Conference on International Commercial Arbitration, U.N. Doc. E/Conf.26/SR.14, at 4-
5, 8 (1958) (comments of Israel and France delegates on the essentiality of
specifying the choice of law in Article V(1)(a)).
77
167) See, e.g., Judgment of 2 October 1931, DFT 57 I 295 (Swiss Fed. Trib.); Judgment of 24
November 1994, XXI Y.B. Comm. Arb. 635, 638 (Rotterdam Rechtbank) (1996); Citation
Infowares Ltd v. Equinox Corp., (2009) 7 SCC 220, ¶15 (Indian S.Ct.); Nat’l Thermal
Power Corp. v. Singer Co., XVIII Y.B. Comm. Arb. 403, 405 (Indian S.Ct. 1992) (1993);
Judgment of 30 May 1994, XX Y.B. Comm. Arb. 745, 747 (Tokyo High Ct.) (1995). See also
W. Craig, W. Park & J. Paulsson, International Chamber of Commerce Arbitration ¶5.05
(3d ed. 2000) (“most national court decisions under the New York Convention have
applied the law of the country where the award was rendered” to arbitration
agreement); A. van den Berg, The New York Arbitration Convention of 1958 124 (1981)
(“law governing the arbitration agreement is in practice almost always the same law
as the law governing the arbitral procedure”); §11.01[C].
168) See §4.04[A][2][d].
169) See §4.04[A][1][c].
170) See §4.04[A][2][a].
171) Hague Convention on Choice of Court Agreements, Art. 9(a) (“the law of the State of
the chosen court”).
172) See §3.01; §3.02[B].
173) See §4.04[A][1].
174) See §4.04[A][1][b][ii].
175) See §1.05; §2.02_[C]; §3.02.
176) See §2.02_[C]; §3.02.
177) See §1.04[A][1][c][i]; §4.06_[A]; §5.02.
178) See, e.g., Hague Convention on Choice of Court Agreements, Art. 9(a) (“the law of the
State of the chosen court”).
179) See §4.06_[A]; §5.02.
180) See §1.04_[B]; §2.02[C][1]. See also §4.04[A][2][c]; §5.01_[B]; §5.02[C].
181) See §1.04_[B]; §2.02_[C]; §11.01_[B]; §11.03[C]-[D]; §§15.02-15.04.
182) See §5.04; §7.04; §11.05; §12.01_[C]; §15.02_[B]; §15.03_[B]; §16.02_[A]; §17.02_[A][3];
§18.02_[B][1]; §19.03[B].
183) See §1.05; §2.02_[C]; §3.02; §11.03[C].
184) See §5.04; §7.04; §11.05; §12.01_[C]; §§15.02-15.03; §16.02_[A]; §17.02_[A][4]; §17.02_[C];
§18.02[C].
185) See §5.02[C][1].
186) See §5.04[B][4].
187) See §5.04[C].
188) See id.
189) See §20.03[D].
190) See §7.04.
191) See §18.02[B][1].
192) See §17.02[F].
193) See §23.07_[F]; §23.08_[D]; §23.09[B].
194) See §11.01_[B]; §11.03[C]-[D]; §12.01[B][2][a]; §12.01_[C][2]; §15.04.
195) As discussed below, however, Article V(1)(a) also requires application of a validation
principle, which may in some cases require application of a law other than that of
the arbitral seat, in order to give effect to the parties’ arbitration agreement; where
this principle does not apply, however, that agreement will generally be governed
by the law of the arbitral seat. See §4.02[A][1][b][v]; §4.04[A][3].
196) See §11.03[C]-[D].
197) See §11.03[D]-[E]; §12.01_[C]; §15.04; §16.02_[A]; §25.02.
198) See §4.04[A][2][b][iv].
199) See §4.04[A][1][b].
200) See §2.01_[A][2]; Escobar v. Celebration Cruise Operator, Inc., 805 F.3d 1279, 1286 (11th
Cir. 2015) (“The null-and-void clause encompasses only those defenses grounded in
standard breach-of-contract defenses – such as fraud, mistake, duress, and waiver –
that can be applied neutrally before international tribunals”); Bautista v. Star
Cruises, 396 F.3d 1289, 1302 (11th Cir. 2005); Rhone Mediterranee v. Lauro, 712 F.2d 50,
53 (3d Cir. 1983) (applying federal common law rules and international principles
derived from New York Convention); Wior v. BellSouth Corp., 2016 WL 11528970, at *4
(N.D. Ga.) (“at the arbitration-enforcement stage, the only affirmative defense
available pursuant to the New York Convention is one that demonstrates the
arbitration agreement is ‘null and void, inoperative or incapable of being
performed’”); Hodgson v. Royal Caribbean Cruises, Ltd, 706 F.Supp.2d 1248, 1256-61
(S.D. Fla. 2009) (“The null-and-void clause encompasses ‘only those situations – such
as fraud, mistake, duress, and waiver – that can be applied neutrally on an
international scale’”) (quoting Bautista v. Star Cruises, 396 F.3d 1289, 1302 (11th Cir.
2005)); Apple & Eve, LLC v. Yantai N. Andre Juice Co., 499 F.Supp.2d 245, 248 (E.D.N.Y.
2007) (“The limited scope of the Convention’s null and void clause must be
interpreted to encompass only those situations – such as fraud, mistake, duress,
and waiver – that can be applied neutrally on an international scale”), vacated on
other grounds, 610 F.Supp.2d 226 (E.D.N.Y. 2009).
78
201) The analysis in the text differs from that of some commentators who have suggested
that Article II imposes an international standard that displaces or replaces the
choice-of-law rules of Article V(1)(a) at the stage of enforcing agreements. Friedland
& Hornick, The Relevance of International Standards in the Enforcement of Arbitration
Agreements Under the New York Convention, 6 Am. Rev. Int’l Arb. 149, 154 (1995)
(“Both the text of the Convention and the travaux suggest strongly that Article V’s
choice-of-law rules should not be read into Article II, and that disputes under
Article II should be resolved based on a potentially different, international
standard”). The correct analysis is that the Convention’s prohibition against
discriminatory and idiosyncratic rules applies equally under both Articles II and V,
and is a substantive rule of law derived from the Convention’s purposes and
structure – not that different choice-of-law and substantive rules apply under
Articles II and V. See §4.04[A][1][b].
202) See §4.04[A][3].
203) See §4.04[A][2][b][iii].
204) It is clear that Article V(1)(a)’s choice-of-law rule displaces use of national choice-of-
law rules as a basis for denying recognition of an award. Judgment of 21 March 1995,
XXII Y.B. Comm. Arb. 800, 804 (Swiss Fed. Trib.) (“The conflicts rules in Art. V(1)(a) of
the New York Convention must be applied, in order to determine the applicable
material law, rather than the conflict rules which would be otherwise applicable in
the ‘referral State’”). A Contracting State may only deny recognition of an award
based on invalidity or non-existence of the arbitration agreement by application of
the choice-of-law rule set forth in Article V(1)(a).
205) See §26.03[B][6].
206) See §4.04[A][1][b][iii]; §4.04[B][2][b][iv].
207) Although the text of Article VII refers only to “arbitral awards,” the provision is
properly interpreted as extending to arbitration agreements for the same reasons
discussed in relation to the application of the choice-of-law rule in Article V(1)(a).
See §4.04[A][1][b][iii].
208) European Convention, Arts. VI(2)(a)-(c). For commentary, see Hascher, European
Convention on International Commercial Arbitration 1961: Commentary, XX Y.B.
Comm. Arb. 1006, 1027-28 (1995); §1.04_[A][2]; §4.02[A][1][c].
209) European Convention, Art. VI(2).
210) Unlike the New York Convention, the European Convention directly addresses the
question of the law applicable to the arbitration agreement, rather than doing so
indirectly, through provisions regarding recognition of arbitral awards or
enforcement of agreements to arbitrate. This is preferable to the New York
Convention’s indirect approach, because, among other things, it avoids doubts as to
whether the same law is applicable to an arbitration agreement at the stage when it
is recognized and at the stage when the award is recognized. See §4.04[A][1][b];
§4.04[B][2][b].
211) European Convention, Art. VI(2)(c).
212) See §1.04_[A][3]; §5.01[B][3].
213) See §1.04_[A][3]; §26.05[C].
214) Rome Convention, Art. 1(2)(d); Rome I Regulation, Art. 1(2)(e). See also H. Gaudemet-
Tallon, JurisClasseur Europe Traité, Fasc. 3200, ¶55 (2016); M. Giuliano & P. Lagarde,
Report on the Convention on the Law Applicable to Contractual Obligations, O.J. C 282
31/10/1980, Art. 1, ¶5; Le Vay Lawrence & Shakinovsky, Selecting A Forum and System
of Law in International Transactions: A UK Perspective on the Rome and Brussels
Conventions, 2 Int’l Co. & Comm. L.R. 189, 192 (1991); McGuiness, The Rome
Convention: The Contracting Parties’ Choice, 1 San Diego Int’l L.J. 127, 139 (2000); R.
Plender & M. Wilderspin, The European Contracts Convention: The Rome Convention
of the Choice of Law for Contracts ¶4-19 (2d ed. 2001).
215) E. Gaillard & J. Savage (eds.), Fouchard Gaillard Goldman on International
Commercial Arbitration ¶422 (1999).
216) M. Giuliano & P. Lagarde, Report on the Convention on the Law Applicable to
Contractual Obligations, O.J. C 282, 31/10/1980, Art. 1, ¶5; R. Plender & M. Wilderspin,
The European Contracts Convention: The Rome Convention of the Choice of Law for
Contracts ¶4-20 (2d ed. 2001).
217) See §4.02_[B]; §4.04[A].
79
218) See Enka Insaat Ve Sanayi AS v. OOO Ins. Co. Chubb [2020] UKSC 38, ¶¶27-28 (U.K. S.
Ct.) (“Because the Rome I Regulation does not apply to arbitration agreements, an
English court … must apply the rules developed by the common law. Those rules are
that a contract (or relevant part of it) is governed by:(i) the law expressly or
impliedly chosen by the parties; or (ii) in the absence of such choice, the law with
which it is most closely connected.”); Sulamérica Cia Nacional de Seguros SA v. Enesa
Engenharia SA [2012] EWCA Civ 638, ¶9 (English Ct. App.) (“[T]he proper law of the
arbitration agreement is to be determined in accordance with the established
common law rules for ascertaining the proper law of any contract. These require the
court to recognise and give effect to the parties’ choice of proper law, express or
implied, failing which it is necessary to identify the system of law with which the
contract has the closest and most real connection.”); Sonatrach Petroleum Corp.
(BVI) v. Ferrell Int’l Ltd [2002] 1 All ER 627, ¶32 (Comm) (English High Ct.) (closest
relationship). See also Judgment of 21 September 2005, XXXI Y.B. Comm. Arb. 679, 683
(German Bundesgerichtshof) (2006) (closest relationship); Judgment of 28 November
1963, 1964 NJW 591, 592 (German Bundesgerichtshof) (party autonomy); Judgment of 2
April 1992, 1992 NJW 3107 (Landgericht Kassel) (party autonomy); Judgment of 4
August 1993, Owerri Commercial Inc. v. Dielle Srl, XIX Y.B. Comm. Arb. 703, 705 (Hague
Gerechtshof) (1994) (in relation to law applicable to arbitration agreement in
absence of express choice: “The court is of the opinion … that the closest connection
is with English law”); BCY v. BCZ, [2017] 3 SLR 357, ¶40 (Singapore High Ct.) (“It is not
disputed that the governing law of an arbitration agreement is to be determined in
accordance with a three-step test: (a) the parties’ express choice; (b) the implied
choice of the parties as gleaned from their intentions at the time of contracting; or
(c) the system of law with which the arbitration agreement has the closest and most
real connection”); N. Blackaby et al. (eds.), Redfern and Hunter on International
Arbitration ¶¶3.97-110 (6th ed. 2015); L. Collins et al. (eds.), Dicey, Morris and Collins
on The Conflict of Laws ¶16R-001 (15th ed. 2012 & Update 2018) (“The material
validity, scope and interpretation of an arbitration agreement are governed by its
applicable law, namely: (a) the law expressly or impliedly chosen by the parties; or,
(b) in the absence of such choice, the law which is most closely connected with the
arbitration agreement”); §4.04[A][3].
219) See §1.04_[F][2]; §3.02. The Rome Convention’s drafting history is also instructive.
See M. Giuliano & P. Lagarde, Report on the Convention on the Law Applicable to
Contractual Obligations, O.J. C 282 31/10/1980, ¶5 (“[The U.K. delegate] emphasized
that an arbitration agreement does not differ from other agreements as regards the
contractual aspects and that certain international Conventions do not regulate the
law applicable to arbitration agreements, while others are inadequate in this
respect. … Other delegations … opposed the [U.K.] proposal, emphasizing
particularly that any increase in the number of conventions in this area should be
avoided, that severability is accepted in principle in the draft and the arbitration
clause is independent, that the concept of ‘closest ties’ [is] difficult to apply to
arbitration agreements, that procedural and contractual aspects are difficult to
separate, that the matter is complex and the experts’ proposals show great
divergences; that since procedural matters and those relating to the question
whether a dispute was arbitrable would in any case be excluded, the only matter to
be regulated would be consent; … the [ICC] – which, as everyone knows, has great
experience in this matter – has not felt the need for further regulation. … The Group
… excluded arbitration agreements from the scope of the uniform rules.”).
220) See CISG, Art. 1(1) (“This Convention applies to contracts of sale of goods between
parties whose places of business are in different States”); M. Bridges, The Sale of
Goods (3d ed. 2014); S. Kröll et al. (eds.), The United Nations Convention on Contracts
for the International Sale of Goods (2d ed. 2018); I. Schwenzer (ed.), Commentary on
the UN Convention on the International Sale of Goods (4th ed. 2016).
221) See, e.g., Filanto SpA v. Chilewich Int’l Corp., 789 F.Supp. 1229, 1240-41 (S.D.N.Y. 1992)
(applying CISG to formation of arbitration agreement in international sales
contract); Judgment of 19 June 1997, 1997 RIW 873 (Landgericht Hamburg) (applying
CISG to determine that arbitration agreement was validly formed); Judgment of 17
February 1998, Case No. ATS 1332/1998, Legal Ground No. 4 (Spanish Tribunal
Supremo) (applying CISG to determine, in recognition action, that arbitration
agreement was not validly formed). See also Giammarco & Grimm, CISG and
Arbitration Agreements: A Janus-Faced Practice and How to Cope with It, 25 J. Arb.
Stud. 33, 49 (2015).
222) Giammarco & Grimm, CISG and Arbitration Agreements: A Janus-Faced Practice and
How to Cope with It, 25 J. Arb. Stud. 33, 51 (2015) (no inconsistency with New York
Convention to apply more liberal form requirements under CISG); Walker, Agreeing
to Disagree: Can We Just Have Words? CISG Article 11 and the Model Law Writing
Requirement, 25 J. L. & Comm. 153, 163 (2005-2006) (arbitration agreements in
international sales contracts governed by CISG are subject to CISG, including lack of
form requirement).
80
223) B. Piltz, Internationales Kaufrecht 106 (2d ed. 2008) (arbitration agreements in
international sales contracts governed by CISG are subject to CISG, but not including
issue of formal validity); U. Schroeter, UN-Kaufrecht und Europäisches
Gemeinschaftsrecht: Verhältnis und Wechselwirkungen 6, 40 (2005) (same); Schwenzer
& Tebel, The Word is Not Enough: Arbitration, Choice of Forum and Choice of Law
Clauses Under the CISG, 31 ASA Bull. 741, 745 (2013) (arbitration agreements are not
contracts of sale under Article 1(4) of the CISG).
224) Koch, The CISG as the Law Applicable to Arbitration Agreements, in C. Andersen & U.
Schroeter (eds.), Sharing International Commercial Law Across National Boundaries:
Festschrift for Albert H. Kritzer on the Occasion of His Eightieth Birthday 267, 276, 286
(2008).
225) Kröll, Selected Problems Concerning the CISG’s Scope of Application, 25 J. L. & Comm.
39, 43-46 (2005-06) (CISG does not govern arbitration clauses in international sales
contracts, because of separability presumption).
226) See §4.04[A][2][d].
227) See §4.04[A][1][b]; §4.04[A][3].
228) See G. Graham, To Validate Certain Agreements for Arbitration, H.R. Rep. No. 68-96, 1
(1924) (“Whether an agreement for arbitration shall be enforced or not is a question
of procedure to be determined by the law court in which the proceeding is brought
and not one of substantive law to be determined by the law of the forum in which
the contract is made”). See also §1.05[A].
229) Theofano Maritime Co. v. 9,551.19 Long Tons of Chrome Ore, 122 F.Supp. 853, 858 (D.
Md. 1954).
230) For U.S. authorities adopting the historic common law choice-of-law approach to
arbitration agreements, see Robert Lawrence Co. v. Devonshire Fabrics, Inc., 271 F.2d
402, 405 n.3 (2d Cir. 1959) (“For choice-of-law purposes it has been generally held
that the forum is free to apply its own ‘remedy’ and is not compelled to enforce an
arbitration agreement by applying the law of the State with the controlling
contracts”); Sinva, Inc. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 253 F.Supp. 359,
364 (S.D.N.Y. 1966); Theofano Maritime Co., 122 F.Supp. at 858; The Eros, 241 F. 186, 191
(E.D.N.Y. 1916) (“general arbitration clause … goes to the remedy, not to the rights, of
the parties, and … its effect is to be determined by the law of the forum”), aff’d, 251
F. 45 (2d Cir. 1918); Aktieselskabet Korn-Og Foderstof Kompangniet v.
Rederiaktiebolaget Atlanten, 232 F. 403, 405 (S.D.N.Y. 1916) (Hand, J.) (arbitration
clauses “do not affect to touch the obligations of the parties, as surely they do not;
they prescribe how the parties must proceed to obtain any redress for their wrongs,
which covers only remedies”), aff’d, 252 U.S. 313 (U.S. S.Ct. 1920); Meacham v.
Jamestown, Franklin & Clearfield R.R., 211 N.Y. 346, 352 (N.Y. 1914) (“An agreement
that … differences arising under a contract shall be submitted to arbitration relates
to the law of remedies, and the law that governs remedies is the law of the forum”);
Gantt v. Felipe Y. Carlos Hurado & Cia, 297 N.Y. 433, 438-39 (N.Y. 1948) (following
Meacham); Elec. Res. Prods. Inc. v. Vitaphone Corp., 171 A. 738, 747-48 (Del. Ch. 1934)
(following Meacham); Restatement (Second) Conflict of Laws §218, Reporters’ Note
(1971) (citing cases); G. Graham, To Validate Certain Agreements for Arbitration, H.R.
Rep. No. 68-96, 1 (1924).
231) Sinva, Inc. v. Merrill, Lynch, Pierce, Fenner & Smith, Inc., 253 F.Supp. 359, 364 (S.D.N.Y.
1966).
232) Compare Hamlyn & Co. v. Talisker Distillery [1894] AC 202, 210 (House of Lords) (“it is
argued that an agreement to refer disputes to arbitration deals with the remedy
and not with the rights of the parties, and that consequently the forum being Scotch
the parties cannot by reason of the agreement into which they have entered
interfere with the ordinary course of proceedings in the Courts of Scotland”).
233) See, e.g., Turkish International Arbitration Law, Art. 4 (“The validity of an arbitration
agreement is governed by the law selected by the parties to be applicable to the
arbitration agreement, or failing any choice, by Turkish law”).
234) For criticism of the traditional view, see Foerster, Arbitration Agreements and the
Conflict of Laws: A Problem of Enforceability, 21 Arb. J. 129, 132 (1966); Lorenzen,
Commercial Arbitration: International and Interstate Aspects, 43 Yale L.J. 716, 751-57
(1934). Compare Restatement (Second) Conflict of Laws §218 (1971).
235) An enforcement forum might well have significant interests and policies which
would be implicated by enforcement or non-enforcement of an arbitration clause.
However, these interests could be taken into account by way of public policy and
nonarbitrability principles, without requiring wholesale application of the
enforcement forum’s substantive law to an agreement with no connection to that
forum and as to which other fora had substantially closer connections and interests
in enforcement.
236) See §1.04_[E]; §8.02. The validity of arbitration agreements concerns issues of
substantive contract law (e.g., consent, consideration, certainty, unconscionability,
mistake, fraud, duress, illegality) relevant to the formation and existence of the
arbitration agreement, which cannot properly or usefully be considered merely
“remedial” in nature. SeeChapter 5.
237) See §1.04_[B]; §2.02_[C][1]; §11.01_[B]; §§11.03[C]-[D]; §§15.02-15.04.
238) Judgment of 2 October 1931, DFT 57 I 295, 304 et seq. (Swiss Fed. Trib.).
81
239) See, e.g., Judgment of 15 April 1970, 1971 NJW 323, 324 (German Bundesgerichtshof)
(“The rules of German private international law apply; the law governing the
conclusion of an [arbitration] agreement is therefore not always the lex fori”);
Judgment of 17 November 1971, I Y.B. Comm. Arb. 183, 183 (Austrian Oberster
Gerichtshof) (1976) (“validity of the arbitration agreement must be decided, failing a
choice of law by the parties, under the law of the country where the award was
made”); Judgment of 27 March 1954, 45 Rev. Critique de Droit Int’l Privé 511 (Italian
Corte di Cassazione) (1956). See also Judgment of 30 May 1994, XX Y.B. Comm. Arb.
745, 747 (Tokyo High Ct.) (1995) (“extent to which an arbitration agreement bars
litigation shall be determined in principle by the law governing the arbitration
agreement”); P. Schlosser, Das Recht der Internationalen Privaten
Schiedsgerichtsbarkeit ¶¶249 et seq. (2d ed. 1989).
240) See §4.04[A][2][c].
241) See §4.04[A][2][d]; §4.06[B][2].
242) New York Convention, Art. V(1)(a). See §4.04[A][2][c].
243) Judgment of 26 May 1994, XXIII Y.B. Comm. Arb. 754, 757 (Bezirksgericht Affoltern am
Albis) (1998) (emphasis added). See also Balkan Energy Ltd v. Ghana, 302 F.Supp.3d
144, 152-53 (D.D.C. 2018) (“because the parties designated in the arbitral clause that
The Hague, Netherlands was to serve as the seat of the arbitration, Dutch law
supplied the law applicable to the arbitration agreement”), appeal dismissed, 2018
WL 5115572 (D.C. Cir.); Judgment of 2 October 1931, DFT 57 I 295 (Swiss Fed. Trib.);
Judgment of 24 November 1994, XXI Y.B. Comm. Arb. 635, 638 (Rotterdam Rechtbank)
(1996) (“law applicable to the arbitration agreement is the law of the place of
arbitration”); FirstLink Inv. Corp. Ltd v. GT Payment Pte Ltd, [2014] SGHCR 12, ¶16
(Singapore High Ct.) (“In the absence of indications to the contrary, parties have
impliedly chosen the law of the seat as the proper law to govern the arbitration
agreement, in a direct competition between the chosen substantive law and the law
of the chosen seat of arbitration. All things being equal, the mere fact of an express
substantive law in the main contract would not in and of itself be sufficient to
displace parties’ intention to have the law of the seat be the proper law of the
arbitration agreement.”), questioned in BCY v. BCZ, [2017] 3 SLR 357 (Singapore High
Ct.); Citation Infowares Ltd v. Equinox Corp., (2009) 7 SCC 220, ¶15 (Indian S.Ct.)
(“There is, in the absence of any contrary intention, a presumption that the parties
have intended that the proper law of [the] contract as well as the law governing
[the] arbitration agreement are the same as the law of the country in which the
arbitration is agreed to be held”); Nat’l Thermal Power Corp. v. Singer Co., XVIII Y.B.
Comm. Arb. 403, 406 (Indian S.Ct. 1992) (1993) (“Where … there is no express choice of
the law governing the contract as a whole, or the arbitration agreement as such, a
[rebuttable] presumption may arise that the law of the country where the
arbitration is agreed to be held is the proper law of the arbitration agreement”);
Judgment of 29 October 2015, Case No. 2013 Da 74868, ¶38 (S. Korean S.Ct.) (2015) (“As
provided in Art. V(1)(a) of the New York Convention, the establishment and validity
of an arbitration agreement shall be governed by the law that the relevant parties
have designated as the law governing the arbitration agreement. If not designated,
the law of the country of the seat of arbitration shall govern ...”); W. Craig, W. Park &
J. Paulsson, International Chamber of Commerce Arbitration §5.05 (3d ed. 2000)
(“most national court decisions under the New York Convention have applied the
law of the country where the award was rendered” to the arbitration agreement); A.
van den Berg, The New York Arbitration Convention of 1958 124 (1981).
244) Judgment of 30 May 1994, XX Y.B. Comm. Arb. 745, 747 (Tokyo High Ct.) (1995)
(emphasis added).
245) Swedish Arbitration Act, §48 (emphasis added). The provision also contains a
proviso, making clear that this choice-of-law rule does not apply to questions of
authorization or representation. See §4.08.
246) See, e.g., Final Award in ICC Case No. 14046, XXXV Y.B. Comm. Arb. 241, 245 (2010)
(“Given the generally recognized principle of the autonomy of the arbitration clause
on the one hand, and the fact that the law applicable to the arbitration clause is
rarely the subject of a specific stipulation, on the other, most national courts’
decisions under the New York Convention have applied the law of the country where
the award was rendered. … In the case at hand, the arbitration clause does not
contain any reference to the law applicable to it. As a consequence thereof, the
validity of the arbitration clause must be examined under the law of the seat of the
arbitration, namely Swiss law.”); Interim Award in ICC Case No. 6149, XX Y.B. Comm.
Arb. 41, 44-45 (1995); Final Award in ICC Case No. 5294, XIV Y.B. Comm. Arb. 137, 140
(1989) (arbitration clause is “governed by … lex fori of the arbitrator”); Interim Award
in ICC Case No. 4504, 113 J.D.I. (Clunet) 279, 280-81 (1986); Final Award in ICC Case No.
1507, cited in S. Jarvin & Y. Derains (eds.), Collection of ICC Arbitral Awards 1974-1985
215, 216 (1990) (“As a matter of principle, because of its autonomous character the
validity of the arbitration clause is governed by the law in force in the country of the
arbitral seat”).
247) Award in ICC Case No. 5832, 115 J.D.I. (Clunet) 1198, 1198-99 (1988) (“According to
unanimous Swiss doctrine, the validity of an arbitration agreement must be
determined in virtue of the law of the forum, which is the law of the Canton of Zurich
as the law of the seat of the arbitral tribunal”).
248) Interim Award in ICC Case No. 6149, XX Y.B. Comm. Arb. 41, 44-45 (1995).
82
249) See, e.g., Final Award in ICC Case No. 18643, XLIV Y.B. Comm. Arb. 145, 158 (2019) (“the
Sole Arbitrator holds that the law applicable to arbitration agreement is lex
arbitri”); Final Award in CAM Case No. 8416 of 28 November 2017, XLIII Y.B. Comm. Arb.
292, 318 (2018) (“it is generally held – an opinion shared by the Arbitrator – that in
the absence of an express choice by the Parties, the law of the state of the seat of
the arbitration (lex arbitri) applies”); Final Award in ICC Case No. 14046, XXXV Y.B.
Comm. Arb. 241, 245 (2010); Final Award in ICC Case No. 6162, XVII Y.B. Comm. Arb. 153,
162 (1992) (applying Swiss law, as law of arbitral seat, to arbitration agreement;
refusing to apply substantive law governing underlying agreement); Award in ICC
Case No. 5730, 117 J.D.I. (Clunet) 1029, 1034 (1990) (French law applies to arbitration
agreement “first of all, because it is the law of the place of arbitration”); Final Award
in ICC Case No. 5294, XIV Y.B. Comm. Arb. 137, 140-41 (1989) (applying law of arbitral
seat, not law governing underlying contract, to determine whether “agreement to
arbitrate is binding”); Preliminary Award in ICC Case No. 5505, XIII Y.B. Comm. Arb.
110, 117 (1988) (“law governing the arbitration clause itself … is mostly thought to be
governed either by the selected law or by the ‘lex fori’ (the law of the place of
arbitration)”); Interim Award in ICC Case No. 4472, 111 J.D.I. (Clunet) 946, 947 (1984)
(same).
250) See, e.g., Hamlyn & Co. v. Talisker Distillery [1894] AC 202, 208 (House of Lords)
(“Where … the parties agree that any dispute arising out of their contract shall be
‘settled by arbitration by two members of the London Corn Exchange, or their
umpire, in the usual way,’ it seems to me that they have indicated as clearly as it is
possible their intention that that particular stipulation, which is a part of the
contract between them, shall be interpreted according to and governed by the law,
not of Scotland, but of England”); Bangladesh Chem. Indus. Corp. v. Henry Stephens
Shipping Co. [1981] 2 Lloyd’s Rep. 389, 392 (English Ct. App.) (Lord Denning) (“It seems
to me as plain as can be that under the typed clause the arbitration was to be in
London: and arbitration is to be in accordance with the Arbitration Act, 1950:
together with the usual consequence that [the arbitration clause] is to be governed
by English law”); Halpern v. Halpern [2006] EWHC 603, ¶55 (Comm) (English High Ct.),
overruled on other grounds, [2007] EWCA Civ 291 (English Ct. App.); Egon Oldendorff v.
Liberia Corp. [1995] 2 Lloyd’s Rep. 64, 67, 69-70, 76 (QB) (English High Ct.) (both
arbitration clause and underlying contract were governed by English law where
arbitration clause provided: “Any dispute arising under the Charter to be referred to
arbitration in London”). See also FirstLink Inv. Corp. Ltd v. GT Payment Pte Ltd, [2014]
SGHCR 12, ¶15 (Singapore High Ct.) (“In addition, parties’ selection of the neutral
seat would invariably come with the implicit acceptance of the lex arbitri of that
chosen seat to govern their arbitration. This also means that parties have implicitly
selected the lex arbitri of the seat to govern matters including the supervisory
court’s powers to determine a jurisdictional dispute in relation to the validity of an
arbitration agreement”), questioned in BCY v. BCZ, [2017] 3 SLR 357 (Singapore High
Ct.).
251) Judgment of 28 September 1995, XXII Y.B. Comm. Arb. 762, 765 (Rotterdam
Arrondissementsrechtbank) (1997).
252) Partial Award in ICC Case No. 7373, discussed in Grigera Naón, Choice-of-Law
Problems in International Commercial Arbitration, 289 Recueil des Cours 73 (2001).
253) This rule gained substantial support from the New York, Inter-American and
European Conventions. As discussed in detail above, these conventions adopted
default rules providing for the application of the substantive law of the arbitral seat
to the substantive validity and enforceability of an international arbitration
agreement (where the parties had not selected the law governing their arbitration
agreement). See §§4.04[A][1][b]-[c]; New York Convention, Art. V(1)(a); European
Convention, Art. VI(2).
254) Some courts appear to adopt this rationale. See, e.g., Judgment of 7 October 1933,
Tobler v. Justizkommission des Kantons Schwyz, DFT 59 I 177, 179 (Swiss Fed. Trib.)
(“According to settled case law of the Swiss Federal Tribunal the arbitration clause
is not an agreement of substantive law but of procedural nature”); Judgment of 28
May 1915, Jörg v. Jörg, DFT 41 II 534 (Swiss Fed. Trib.) (arbitration clause is procedural
contract); Judgment of 30 May 1994, XX Y.B. Comm. Arb. 745, 747 (Tokyo High Ct.) (1995)
(“it is the nature of arbitration agreements to provide for given procedures in a
given place, that the parties intend that the law of the place where the arbitration
proceedings are held will apply”); Judgment of 10 April 1990, XVII Y.B. Comm. Arb.
568, 570 (S. Korean S.Ct.) (1992) (“because the arbitration clause provided for
arbitration in accordance with the Arbitration Rules of the London Court of
Arbitration, the afore-mentioned agreement in writing did not need to be so
specific as to stipulate expressly the institution and the place of arbitration, as well
as the proper law”). Compare Judgment of 4 August 1993, Owerri Commercial Inc. v.
Dielle Srl, XIX Y.B. Comm. Arb. 703, 706 (Hague Gerechtshof) (1994) (“it is usual to
make a connection with the so-called lex fori of the arbitrators”).
255) See §1.04_[B]; §2.02_[C]; §11.01_[B]; §§11.03[C]-[D]; §§15.02-15.04.
256) See §4.04[A][1].
83
257) See, e.g., Award in ICC Case No. 5832, 115 J.D.I. (Clunet) 1198, 1198-99 (1988); Final
Award in ICC Case No. 5294, XIV Y.B. Comm. Arb. 137, 140 (1989); Interim Award in ICC
Case No. 4504, 113 J.D.I. (Clunet) 279, 280-81 (1986); Partial Award in Hamburg
Chamber of Commerce Case of 21 March 1996, XXII Y.B. Comm. Arb. 35, 36 (1997)
(“choice of German law can be inferred … from the agreement to refer disputes to a
German arbitral tribunal”).
ICC Arbitral Awards 1974-1985 215, 216 (1990).
259) Institute of International Law, II Annuaire de l’Institut de Droit International,
Resolutions on Arbitration in Private International Law (Amsterdam) 491 (1957). See
also J. Lew, L. Mistelis & S. Kröll, Comparative International Commercial Arbitration
¶6-72 (2003).
Resolutions on Arbitration in Private International Law (Neuchâtel) 394 (1959)
(emphasis added).
261) This follows from the provisions that selection of the arbitral seat “shall imply”
selection of the law governing the arbitration agreement and that the parties “shall
be deemed” to have agreed that the arbitration shall be seated in the state whose
law they have selected to govern the arbitration agreement.
262) See E. Gaillard & J. Savage (eds.), Fouchard Gaillard Goldman on International
Commercial Arbitration ¶424 (1999) (“The Institute thus implicitly characterized the
arbitration agreement as procedural and applied a supposed principle that the
arbitral procedure was necessarily governed by the law of the country where the
arbitration was held”).
263) See §1.02_[B][6]; §4.04[B]. This approach is equally inconsistent with the validation
principle (discussed below). See §4.04[B][3].
264) See §4.04[A][2][c]; Blessing, The Law Applicable to the Arbitration Clause, in A. van
den Berg (ed.), Improving the Efficiency of Arbitration Agreements and Awards: 40
Years of Application of the New York Convention 174 (1999) (“There is a strong
tendency (also strengthened by the New York Convention) that the substantive
validity of the arbitration clause should be governed by the law of the place of
arbitration”); E. Gaillard & J. Savage (eds.), Fouchard Gaillard Goldman on
International Commercial Arbitration ¶430 (1999) (“In earlier decisions, some courts
considered that where the parties had chosen the seat of the arbitration, it could
be inferred that they intended to subject the arbitration agreement to the law of
that place”). Compare L. Collins et al. (eds.), Dicey, Morris and Collins on The Conflict
of Laws ¶16-019 (15th ed. 2012 & Update 2018) (“If there is no express choice of the
law to govern either the contract as a whole or the arbitration agreement, but the
parties have chosen the seat of arbitration, the contract will frequently (but not
necessarily) be governed by the law of that country on the basis that the choice of
the seat is to be regarded as an implied choice of the law governing the contract”).
See also §4.04[A][2][e]; Trukhtanov, The Proper Law of Arbitration Agreement: A
Farewell to Implied Choice?, 2012 Int’l Arb. L. Rev. 140, 144 (shift from implied choice
approach to strong presumption in favor of law of seat is “tacitly … well under way”
in English courts).
265) See §4.04[B][2][b][iii].
266) Judgment of 27 October 2000, Bulgarian Foreign Trade Bank, Ltd v. A.I. Trade Fin., Inc.,
XXVI Y.B. Comm. Arb. 291, 293 (Swedish S.Ct.) (2001). See also Judgment of 10 May
1984, 1984 NJW 2763, 2764 (German Bundesgerichtshof); Judgment of 20 March 1980,
1980 NJW 2022, 2024 (German Bundesgerichtshof); Judgment of 7 January 1971, 1971
NJW 986 (German Bundesgerichtshof); Judgment of 18 February 2009, 11 Sch 07/08
(Oberlandesgericht Dresden); Geimer, in R. Zöller (ed.), Zivilprozessordnung §1029,
¶¶17a et seq. (31st ed. 2016); J.-P. Lachmann, Handbuch für die Schiedsgerichtspraxis
¶¶269 et seq. (4th ed. 2016); Münch, in G. Lüke & P. Wax (eds.), Münchener
Kommentar zur Zivilprozessordnung §1029, ¶32 (5th ed. 2016).
267) See §1.02_[B][6]; §4.04[B].
84
268) See Hamlyn & Co. v. Talisker Distillery [1894] AC 202, 208 (House of Lords) (“Where …
the parties agree that any dispute arising out of their contract shall be ‘settled by
arbitration by two members of the London Corn Exchange, or their umpire, in the
usual way,’ it seems to me that they have indicated as clearly as it is possible their
intention that that particular stipulation, which is a part of the contract between
them, shall be interpreted according to and governed by the law, not of Scotland,
but of England”); Sulamérica Cia Nacional de Seguros SA v. Enesa Engenharia SA
[2012] EWCA Civ 638, ¶¶17-18, 32 (English Ct. App.) (“agreement to resolve disputes
by arbitration in London, and therefore in accordance with English arbitral law,
does not have a close juridical connection with the system of law governing the
policy of insurance, whose purpose is unrelated to that of dispute resolution; rather,
it has its closest and most real connection with the law of the place where the
arbitration is to be held and which will exercise the supporting and supervisory
jurisdiction necessary to ensure that the procedure is effective”); Bangladesh Chem.
Indus. Corp. v. Henry Stephens Shipping Co. [1981] 2 Lloyd’s Rep. 389, 392 (English Ct.
App.) (Lord Denning) (“It seems to me as plain as can be that under the typed clause
the arbitration was to be in London: and arbitration is to be in accordance with the
Arbitration Act, 1950: together with the usual consequence that [the arbitration
clause] is to be governed by English law”); Habas Sinai ve Tibbi Gazlar Istihsal v. VSC
Steel Co. Ltd [2014] 1 Lloyd’s Rep. 479, ¶101(3) (English High Ct.) (in the absence of
express choice of law for underlying contract, choice of seat is of “overwhelming”
significance for the law governing arbitration agreement). See also L. Collins et al.
(eds.), Dicey, Morris and Collins on The Conflict of Laws ¶16-019 (15th ed. 2012 &
Update 2018); Pearson, Sulamérica v. Enesa: The Hidden Pro-Validation Approach
Adopted by the English Courts with Respect to the Proper Law of the Arbitration
Agreement, 29 Arb. Int’l 115, 118-21 (2013).
269) See §4.04[A][1][b][iv].
270) See §4.04[A][2][d]; Enka Insaat Ve Sanayi AS v. OOO Ins. Co. Chubb [2020] UKSC 38,
¶170 (U.K. S.Ct.); Sulamérica Cia Nacional de Seguros SA v. Enesa Engenharia SA [2012]
EWCA Civ 638, ¶¶27-29 (English Ct. App.); Habas Sinai ve Tibbi Gazlar Istihsal v. VSC
Steel Co. Ltd [2014] 1 Lloyd’s Rep. 479. ¶101(2) (English High Ct.); Arsanovia Ltd v. Cruz
City 1 Mauritius Holdings [2012] EWHC 3702, ¶¶17-21 (Comm) (English High Ct.)
(choice-of-law clause in underlying contract (selecting Indian law) was implied
choice-of-law governing arbitration agreement despite London seat).
271) See, e.g., Kabab-Ji SAL (Lebanon) v. Kout Food Group [2020] EWCA Civ 6, ¶62 (English
Ct. App.); Habas Sinai ve Tibbi Gazlar Istihsal v. VSC Steel Co. Ltd [2014] 1 Lloyd’s Rep
479, ¶101(2) (English High Ct.); Arsanovia Ltd v. Cruz City 1 Mauritius Holdings [2012]
EWHC 3702, ¶¶17-21 (Comm) (English High Ct.).
272) See, e.g., Sulamérica Cia Nacional de Seguros SA v. Enesa Engenharia SA [2012] EWCA
Civ 638, ¶¶29-31 (English Ct. App.); C v. D [2007] EWCA Civ 1282, ¶26 (English Ct. App.).
273) This is discussed in detail above. See §4.04[A][3].
274) See §4.04_[A]; §19.04.
275) See G. Born, International Arbitration and Forum Selection Agreements: Drafting and
Enforcing 160 (4th ed. 2013). See also Brown, Choice of Law Provisions in Concession
and Related Contracts, 39 Modern L.R. 625, 638 (1976); P. Friedland, Arbitration
Clauses for International Contracts 183-84 (2d ed. 2007); Jaffey, Limitations in Choice
of Law Provisions: A Comment, 40 Modern L.R. 440 (1977); J. Paulsson, N. Rawding & L.
Reed, The Freshfields Guide to Arbitration and ADR: Clauses in International Contracts
11-12 (3d ed. 2011).
276) Judgment of 4 August 1993, Owerri Commercial Inc. v. Dielle Srl, XIX Y.B. Comm. Arb.
703, 706 (Hague Gerechtshof) (1994) (emphasis added).
277) See, e.g., Judgment of 12 February 1976, II Y.B. Comm. Arb. 242 (German
Bundesgerichtshof) (1977) (assuming without analysis that law of underlying contract
governed arbitration clause); Judgment of 28 November 1963, 1964 NJW 591-92
(German Bundesgerichtshof) (parties typically intend to subject arbitration clause
to same law as main contract). Judgment of 7 April 1989, 1990 RIW 585, 586
(Oberlandesgericht München). Compare Judgment of 8 July 2003, DFT 129 III 675, 679
(Swiss Fed. Trib.) (“[A]ccording to Article 178(2) [of the Swiss Law on Private
International Law], the arbitration agreement is valid provided it conforms to the
law chosen by the parties, to the law applicable to the dispute, in particular, that
applicable to the principal contract, or to Swiss law. The first alternative comes into
play only if the parties have chosen a law for their arbitration agreement deviating
from the law applicable to the principal contract. Since this is not true in the
present case and the principal contract – according to the choice of law by the
parties – is subject to Swiss law, the latter applies with regard to the validity of the
arbitration agreement.”).
278) Judgment of 28 August 2007, 1991 Hanrei Jiho No. 89 (Tokyo Dist. Ct.).
85
279) See, e.g., Recyclers of Australia Pty Ltd v. Hettinga Equip. Inc., [2000] 175 ALR 725
(Australian Fed. Ct.) (applying Iowa law, selected by choice-of-law clause in
underlying contract, to validity of arbitration clause); Aastha Broadcasting Network
v. Thaicom Public Co., [2011] O.M.P. 528/2011, ¶31 (Delhi High Ct.) (“Where the proper
law of contract is expressly chosen by the parties, such law must, in the absence of
an unmistakable intention to the contrary, govern the arbitration agreement”). See
also R. Merkin, Arbitration Law ¶7.12 (1991 & Update August 2019) (“choice-of-law
clause for the entire agreement [i.e., including the underlying contract] is likely to
be construed as expanding to the arbitration clause”).
280) Sonatrach Petroleum Corp. (BVI) v. Ferrell Int’l Ltd [2002] 1 All ER 627, ¶32 (Comm)
(English High Ct.).
Lords).
282) Nat’l Thermal Power Corp. v. Singer Co., XVIII Y.B. Comm. Arb. 403, 406-07 (Indian
S.Ct. 1992) (1993). See also MS Indtel Tech. Servs. Pvt Ltd v. W.S. Atkins Rail Ltd, [2008]
10 SCC 308, ¶24 (Indian S.Ct.) (“it is fairly well-settled that when an arbitration
agreement is silent as to the law and procedure to be followed in implementing the
arbitration agreement, the law governing the said agreement would ordinarily be
the same as the law governing the contract itself”).
283) See, e.g., Final Award in ICC Case No. 20686/RD, Arb. Intell. Mat., ¶¶157-58 (applying
parties’ choice of Brazilian law for underlying contract to arbitration agreement);
Award in ICC Case No. 14617, cited in J.-J. Arnaldez, Y. Derains & D. Hascher (eds.),
Collection of ICC Arbitral Awards 2012-2015 119 (2018) (applying parties’ choice of
German law for underlying contract to arbitration agreement); Award in ICC Case No.
11869, XXXVI Y.B. Comm. Arb. 47, 52-53 (2011) (applying parties’ choice of English law
to both underlying contract and arbitration agreement, where choice-of-law clause
followed immediately after arbitration clause: “Irrespective of its separability there
are no indications that the parties in the present case wanted to submit the
arbitration agreement to a different law than the main contract”); Award in ICC Case
No. 10579, discussed in Grigera Naón, Choice-of-Law Problems in International
Commercial Arbitration, 289 Recueil des Cours 9, 45-46 (2001) (alternative holding
that choice-of-law clause in underlying contract applies to arbitration agreement);
Award in ICC Case No. 10044, discussed in id. at 93-94 (law selected by parties to
apply to underlying contract also presumptively applies to arbitration clause); Final
Award in ICC Case No. 6850, XXIII Y.B. Comm. Arb. 37, 38 (1998) (applying choice-of-
law clause in underlying contract to arbitration agreement); Final Award in ICC Case
No. 6752, XVIII Y.B. Comm. Arb. 54, 55-56 (1993) (applying general choice-of-law
clause to arbitration clause); Final Award in ICC Case No. 6379, XVII Y.B. Comm. Arb.
212, 215 (1992) (applying law governing underlying contract, not law of arbitral seat,
to arbitration clause); Final Award in ICC Case No. 3572, XIV Y.B. Comm. Arb. 111, 115
(1989) (concluding that law applicable to underlying contract also governed
arbitration clause).
284) See, e.g., M. Bühler & T. Webster, Handbook of ICC Arbitration: Commentary,
Precedents, Materials ¶6-6 (3d ed. 2014) (“tendency to assume that the choice of law
made by the parties [for the underlying contract] is equally applicable to the
arbitration agreement”); Jarvin, The Sources and Limits of the Arbitrator’s Powers, in J.
Lew (ed.), Contemporary Problems in International Arbitration 52 (1987) (law selected
by parties to govern underlying contract applies to arbitration agreement, including
interpretation); Nacimiento, Article V(1)(a), in H. Kronke et al. (eds.), Recognition and
Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York
Convention 205, 223 (2010) (“if no particular choice is made as to the arbitration
agreement, it will be presumed that the law governing the main contract applies to
the arbitration clause as well”); J.-F. Poudret & S. Besson, Comparative Law of
International Arbitration ¶178 (2d ed. 2007) (“several authors and courts presume
that the parties also intended to submit the arbitration agreement to the law
chosen for the contract”).
285) N. Blackaby et al. (eds.), Redfern and Hunter on International Arbitration ¶3.12 (6th
ed. 2015).
286) Restatement of the U.S. Law of International Commercial and Investor-State
Arbitration §4-14 comment b (2019) (“If the parties have not agreed upon a body of
law to govern the arbitration agreement (either expressly or impliedly), a general
choice-of-law clause in the contract that includes the arbitration agreement
determines the applicable law. If the parties have not selected any law to govern
the arbitration agreement or to govern the contract generally, the law of the seat of
arbitration, without resort to its choice-of-law rules, governs the matters submitted
to arbitration.”). See §4.04[A][1][b][iv].
287) See, e.g., Nacimiento, Article V(1)(a), in H. Kronke et al. (eds.), Recognition and
Convention 205, 223 (2010) (“if no particular choice is made as to the arbitration
agreement, it will be presumed that the law governing the main contract applies to
the arbitration clause as well”); J.-F. Poudret & S. Besson, Comparative Law of
International Arbitration ¶178 (2d ed. 2007) (“several authors and courts presume
that the parties also intended to submit the arbitration agreement to the law
chosen for the contract”).
86
288) Sulamérica Cia Nacional de Seguros SA v. Enesa Engenharia SA [2012] EWCA Civ 638,
¶29 (English Ct. App.) (“Although there are powerful factors in favour of an implied
choice of Brazilian law as the governing law of the arbitration agreement, two
important factors point the other way. The first is that identified by Toulson J. in XL
Insurance v Owens Corning. As the parties must have been aware, the choice of
another country as the seat of the arbitration inevitably imports an acceptance that
the law of that country relating to the conduct and supervision of arbitrations will
apply to the proceedings.”); C v. D [2007] EWCA Civ 1282, ¶26 (English Ct. App.);
FirstLink Inv. Corp. Ltd v. GT Payment Pte Ltd, [2014] SGHCR 12, ¶16 (Singapore High
Ct.) (“In the absence of indications to the contrary, parties have impliedly chosen
the law of the seat as the proper law to govern the arbitration agreement, in a
direct competition between the chosen substantive law and the law of the chosen
seat of arbitration”), questioned in BCY v. BCZ, [2017] 3 SLR 357 (Singapore High Ct.).
289) See §4.04[A][2][c].
290) See §1.04_[F][2]; §§3.02[B] et seq. (especially §3.02[B][2]).
291) See §4.02.
292) See, e.g., Judgment of 7 April 2011, 2011 Rev. Arb. 747 (Paris Cour d’Appel); Judgment of
27 October 2000, Bulgarian Foreign Trade Bank, Ltd v. A.I. Trade Fin., Inc., XXVI Y.B.
Comm. Arb. 291 (Swedish S.Ct.) (2001).
293) See, e.g., Rhone Mediterranee v. Lauro, 712 F.2d 50, 52-54 (3d Cir. 1983) (Italian law,
applicable to underlying contract, not applied to invalidate arbitration agreement);
Ledee v. Ceramiche Ragno, 684 F.2d 184, 186-87 (1st Cir. 1982) (Puerto Rican law,
applicable to contract, not applied to invalidate arbitration agreement); Farrell v.
Subway Int’l, BV, 2011 WL 1085017 (S.D.N.Y.) (refusing to apply choice-of-law
provision of underlying contract where doing so would invalidate arbitration
agreement); Westbrook Int’l, LLC v. Westbrook Techs., Inc., 17 F.Supp.2d 681, 684 (E.D.
Mich. 1998) (refusing to apply general choice-of-law clause of underlying contract to
validity of arbitration agreement absent clear statement that this was intended;
application of chosen law would have invalidated arbitration clause as applied to
dispute in question); Prograph Int’l, Inc. v. Barhydt, 928 F.Supp. 983, 989 (N.D. Cal.
1996); Technetronics, Inc. v. Leybold-Geaeus GmbH, 1993 WL 197028, at *6 (E.D. Pa.); W.
of England Ship Owners Mut. Ins. Ass’n (Luxembourg) v. Am. Marine Corp., 1992 WL
37700, at *4 (E.D. La.); Sulamérica Cia Nacional de Seguros SA v. Enesa Engenharia SA
[2012] EWCA Civ 638, ¶¶29-31 (English Ct. App.) (choice of Brazilian law for
underlying contract not applied to invalidate arbitration agreement, which was
instead governed by English law).
294) Final Award in ICC Case No. 7453, XXII Y.B. Comm. Arb. 107, 111 (1997).
295) See, e.g., Award in ICC Case No. 16655, 4(2) Int’l J. Arab Arb. 125, 185 (2012) (“The
Parties have not expressly chosen a law governing the arbitration clause. Even if the
Parties chose in Article 19 of the Distribution Agreement French Law to govern the
subject-matter of the dispute, by virtue of a substantive rule of international
arbitration, the arbitration clause is legally independent from the main Agreement
containing it (autonomy of the arbitration clause) and French Law does not
automatically apply to said arbitration clause.”); Award in ICC Case No. 16015, cited
in J.-J. Arnaldez, Y. Derains & D. Hascher (eds.), Collection of ICC Arbitral Awards 2012-
2015 177 (2018) (applying Spanish law, as law of arbitral seat, and not applying Swiss
law, which was law governing underlying agreement); Final Award in ICC Case No.
6162, XVII Y.B. Comm. Arb. 153, 160-62 (1992) (applying Swiss law, as law of arbitral
seat, to arbitration agreement; refusing to apply substantive law governing
underlying contract); Award in ICC Case No. 4381, 113 J.D.I. (Clunet) 1102, 1104 (1986)
(arbitration clause is not subject to law governing underlying contract; validity of
arbitration clause can be determined without reference to any national law); Final
Award in ICC Case No. 1507, cited in S. Jarvin & Y. Derains (eds.), Collection of ICC
Arbitral Awards 1974-1985 215, 216 (1990) (applying law of arbitral seat, rather than
law selected by choice-of-law clause in underlying contract).
Commercial Arbitration ¶425 (1999).
(1999).
298) See §4.04[A][3].
299) Svenska Petroleum Exploration AB v. Lithuania [2005] EWHC 2437, ¶76 (Comm)
(English High Ct.). See also Tonicstar Ltd v. Am. Home Assur. Co. [2004] EWHC 1234,
¶11 (Comm) (English High Ct.) (“[I]t seems to me clear that the proper law of the
whole contract is English law. … I do not consider that the applicable law of the
arbitration agreement is different from the applicable law of the reinsurance
contract into which it has been incorporated.”).
87
300) See §4.04_[A][3]; Judgment of 24 January 2003, XXX Y.B. Comm. Arb. 509, 515
(Oberlandesgericht Hamburg) (2005) (“law applicable to the disputed legal
relationship [is] applied to the arbitration agreement where no choice of law had
been made specifically for the arbitration agreement”); BMO v. BMP, [2017] 3 SLR
267, ¶¶39-40 (Singapore High Ct.) (in absence of express choice of law in underlying
contract, Vietnamese law, which was parties’ implied choice to govern underlying
contract, governed arbitration agreement as well); Judgment of 10 March 2000,
Krauss Maffei Verfahrenstechnik GmbH v. Bristol Myers Squibb, XXVI Y.B. Comm. Arb.
816, 820 (Italian Corte di Cassazione) (2001) (applying Italian law, governing
underlying contract through Rome Convention choice-of-law rules, rather than law
of foreign arbitral seat). See also Restatement of the U.S. Law of International
Commercial and Investor-State Arbitration §4-14 comment b (2019) (“If the parties
have not agreed upon a body of law to govern the arbitration agreement (either
expressly or impliedly), a general choice-of-law clause in the contract that includes
the arbitration agreement determines the applicable law. If the parties have not
selected any law to govern the arbitration agreement or to govern the contract
generally, the law of the seat of arbitration, without resort to its choice-of-law rules,
governs the matters submitted to arbitration.”).
301) See, e.g., G. Petrochilos, Procedural Law in International Arbitration 33 (2004) (“The
proper law of the agreement to arbitrate will, absent countervailing circumstances,
follow the proper law of the (main) contract”); M. Mustill & S. Boyd, Commercial
Arbitration 63 (2d ed. 1989) (“The starting point is to determine the proper law of the
contract in which the arbitration is embodied. As a general rule the arbitration
agreement will be governed by the same law, since it is part of the substance of the
underlying contract.”); Collins, The Law Governing the Agreement and Procedure in
International Arbitration in England, in J. Lew (ed.), Contemporary Problems in
International Arbitration 127 (1987) (“The proper law of the arbitration agreement is
normally the same as the proper law of the contract of which it forms a part”).
302) B. Goldman, Arbitrage (Droit International Privé), in P. Francescakis (ed.),
Encyclopédie Dalloz: Droit International ¶59 (1968).
303) See, e.g., Award in ICC Case No. 9987, Dallah Real Estate & Tourism Holding Co. v.
Ministry of Religious Affairs, Pakistan, 2(4) Int’l J. Arab Arb. 370, 389 (2010) (“In the
absence of any contrary express agreement, the proper Law of the Arbitration
Agreement shall be the same as that which is applicable to the Main Agreement,
such law being the Law of Pakistan which is the law that has the closest
connections/nexus with the agreement”); Award in ICC Case No. 9480, discussed in
Grigera Naón, Choice-of-Law Problems in International Commercial Arbitration, 289
Recueil des Cours 9, 55-56 (2001) (parties’ arbitration clause is presumptively
governed by law governing underlying contract); Final Award in ICC Case No. 6840,
cited in J.-J. Arnaldez, Y. Derains & D. Hascher (eds.), Collection of ICC Arbitral Awards
1991-1995 467, 469 (1997) (“it is reasonable and natural … to submit the arbitration
clause to the same law as the underlying contract”); Final Award in ICC Case No. 6379,
XVII Y.B. Comm. Arb. 212, 215 (1992) (applying law governing underlying contract, not
law of arbitral seat).
304) Final Award in ICC Case No. 6752, XVIII Y.B. Comm. Arb. 54, 56 (1993).
305) See §3.02[E]. See also A. van den Berg, The New York Arbitration Convention of 1958
145-46 (1981).
306) See §1.04_[E][7]; §2.02_[C]; Chapter 4; §19.03; §§19.05-19.06. See also Preston v. Ferrer,
552 U.S. 346, 363 (U.S. S.Ct. 2008) (“the ‘best way to harmonize’ the parties’ adoption
of the AAA [R]ules and their selection of California law [in a choice-of-law clause for
the entire contract] is to read the latter to encompass prescriptions governing the
substantive rights and obligations of the parties, but not the State’s ‘special rules
limiting the authority of arbitrators’”) (quoting Mastrobuono v. Shearson Lehman
Hutton Inc., 514 U.S. 52, 64 (U.S. S.Ct. 1995)); Mastrobuono, 514 U.S. at 64 (choice-of-
law clause “encompass[es] substantive principle that New York courts would apply,”
but does not include arbitration law).
307) See §2.02_[C]; §3.02_[B][2]; §11.01_[B]; §11.03[C]-[D].
308) See §2.02_[D]; §3.02[B][2].
309) See §11.01_[B]; §15.01; §15.04; §15.07. See also Y. Derains & E. Schwartz, A Guide to the
ICC Rules of Arbitration 111-14 (2d ed. 2005); J. Lew, L. Mistelis & S. Kröll, Comparative
International Commercial Arbitration ¶6-23 (2003).
310) This was particularly true in cases where the local law of one of the parties’ home
states governed the underlying commercial relationship, but the arbitration
agreement provided for arbitration in a neutral forum. See §1.04[F][2]. For example,
the parties’ underlying contract might be expressly subject to the national law of
the place of performance (e.g., in a sales agreement), while the arbitral seat might
be located elsewhere, precisely to disassociate the arbitration agreement from the
host state.
311) See §§1.04[A][1]-[3]; §§4.03[A][1][b]-[c].
88
312) See, e.g., Restatement (Second) Conflict of Laws §§187-88 & §218 comment a (1971);
Judgment of 4 August 1993, Owerri Commercial Inc. v. Dielle Srl, XIX Y.B. Comm. Arb.
703, 706 (Hague Gerechtshof) (1994); Bernardini, Arbitration Clauses: Achieving
Effectiveness in the Law Applicable to the Arbitration Clause, in A. van den Berg (ed.),
Improving the Efficiency of Arbitration Agreements and Awards: 40 Years of
Application of the New York Convention 197 (1999); Blessing, The Law Applicable to the
(1999); Lew, The Law Applicable to the Form and Substance of the Arbitration Clause,
in A. van den Berg (ed.), Improving the Efficiency of Arbitration Agreements and
Awards: 40 Years of Application of the New York Convention 114 (1999).
313) See Rome Convention, Art. 4; Rome I Regulation, Art. 4; Interim Award in ICC Case No.
4367, XI Y.B. Comm. Arb. 134 (1986) (citing closest relationship standard, although
contract contained choice-of-law clause); Judgment of 4 August 1993, Owerri
Commercial Inc. v. Dielle Srl, XIX Y.B. Comm. Arb. 703, 706 (Hague Gerechtshof) (1994)
(“The court is of the opinion … that the closest connection is with English law”). See
also L. Collins et al. (eds.), Dicey, Morris and Collins on The Conflict of Laws ¶¶16-016-
019 (15th ed. 2012 & Update 2018); E. Gaillard & J. Savage (eds.), Fouchard Gaillard
Goldman on International Commercial Arbitration ¶¶425 et seq. (1999); J. Lew, L.
Mistelis & S. Kröll, Comparative International Commercial Arbitration ¶6-60 (2003).
314) Restatement (Second) Conflict of Laws §218 comment a (1971) (“Whether a judicial
action may be maintained in violation of the provisions of an arbitration agreement
should be determined not by the local law of the forum but rather by the law
selected by application of [the generally-applicable choice-of-law principles in §§187
and 188]”) (emphasis added).
315) Id. at §218. The Restatement (Second) made it clear that the relevant agreement on
which this inquiry focused was the parties’ arbitration agreement (as distinguished
from their underlying contract). Id. at §218 comment b.
316) Id. at §188. Section 219 provides that the “method” of enforcing an arbitration
agreement is determined by the law of the enforcement forum, notwithstanding the
applicability of §218’s rules to the agreement’s validity. Thus, under §219, the
availability in a national court of an order compelling arbitration, a stay of
litigation, and/or damages for breach of an arbitration agreement would be
controlled by the forum’s law.
317) Id. at §218 comment b (“Situations will arise where the state of most significant
relationship with respect to the issue of arbitration is not the same as the state of
most significant relationship with respect to other issues relating to the contract. A
possible example is where a contract whose principal elements are located in state
X provides for arbitration in state Y. Here it may be that, although X is the state of
most significant relationship with respect to most of the issues relating to the
contract Y is the state of most significant relationship with respect to the issue of
arbitration.”). Compare Joseph L. Wilmotte & Co. v. Rosenman Bros., 258 N.W.2d 317,
326 (Iowa 1977) (finding that “New York can be seen as having the most significant
relationship to the issue of the validity and effect of the arbitration provisions of
the contract,” although Iowa was state of most significant relationship with respect
to underlying contract).
318) See authorities cited §4.04[A][2][j][v].
319) Judgment of 28 September 1995, XXII Y.B. Comm. Arb. 762, 765 (Rotterdam
Arrondissementsrechtbank) (1997).
320) See, e.g., Partial Award in ICC Case No. 6719, 121 J.D.I. (Clunet) 1071, 1072 (1994) (“The
court is of the opinion that the national law which has the closest link with the
question of arbitrability [is] the law of the seat of the arbitration especially if the
seat has been mutually agreed on by the parties”); Award in ICC Case No. 5730, 117
J.D.I. (Clunet) 1029, 1033-34 (1990); Interim Award in ICC Case No. 4367, XI Y.B. Comm.
Arb. 134 (1986) (considering argument for closest connection standard, although
contract contained express choice-of-law clause); Lew, The Law Applicable to the
Form and Substance of the Arbitration Clause, in A. van den Berg (ed.), Improving the
Efficiency of Arbitration Agreements and Awards: 40 Years of Application of the New
York Convention 114, 142 (1999).
321) Judgment of 4 August 1993, Owerri Commercial Inc. v. Dielle Srl, XIX Y.B. Comm. Arb.
703, 706 (Hague Gerechtshof) (1994).
322) Id.
Commercial Arbitration ¶¶426, 434 (1999) (closest connection test gives rise to
“great uncertainty” because of difficulty in giving weight to various connecting
factors). See also R. David, Arbitration in International Trade 219-20 (1985) (“The
occasional pronouncements of the courts [in respect of the law applicable to the
arbitration agreement] cannot be interpreted as an adhesion to a given doctrine
and are only meant in general to explain in a convenient manner how the court has
arrived at a solution in the particular case”).
89
324) See §4.04[A][2][e]. Compare C v. D [2007] EWCA Civ 1282, ¶¶22, 26, 28 (English Ct.
App.) (international arbitration agreement is “more likely” to be governed by “law of
the seat of arbitration than the law of the underlying contract”) and Abuja Int’l
Hotels Ltd v. Meridien SAS [2012] EWHC 87, ¶¶20-24 (Comm) (English High Ct.)
(“arbitration agreement provides for arbitration in London and is implicitly
governed by English law”) with Svenska Petroleum Exploration AB v. Lithuania [2005]
EWHC 2437, ¶¶76-77 (Comm) (English High Ct.) (“In the absence of exceptional
circumstances, the applicable law of an arbitration agreement is the same as the
law governing the contract of which it forms a part”) and Sonatrach Petroleum Corp.
(BVI) v. Ferrell Int’l Ltd [2002] 1 All ER (Comm) 627, ¶32 (Comm) (English High Ct.)
(“Where the substantive contract contains an express choice of law, but the
agreement will be governed by the body of law expressly chosen to govern the
substantive contract”).
325) See §4.04[A][2][c]-[d].
326) See §4.04[A][2][e].
(1999). See also Dallah Real Estate & Tourism Holding Co. v. Ministry of Religious
Affairs, Pakistan, Partial Award in ICC Case No. 9987, 2(4) Int’l J. Arab Arb. 337, 367
(2010) (“we see no reason to apply the Pakistan Arbitration Acts to the present
Arbitration, the seat of which is not within Pakistan”); Final Award in ICC Case No.
5485, XIV Y.B. Comm. Arb. 156, 161 (1989) (“Art. 26 [now Art. 35] of the ICC Rules of
Arbitration establishes that the arbitrators shall make every effort to make sure
that the award is enforceable at law. As the place of this arbitration is the city of
Paris (France), the Tribunal has examined French law (Nouveau Code de Procédure
Civile, Arts. 1492 to 1497) and ha[s] concluded that said law contains nothing which is
in conflict with the full validity and effectiveness of the arbitration clause in
dispute.”); Award in ICC Case No. 4392, cited in S. Jarvin & Y. Derains (eds.), Collection
of ICC Arbitral Awards 1974-1985 473, 474 (1990) (“arbitrator must verify the validity of
the arbitration agreement according to the law in force at the seat of the arbitral
tribunal”); Interim Award in ICC Case No. 4145, XII Y.B. Comm. Arb. 97, 99 (1987)
(“Should … the arbitral tribunal be of the opinion that there is no precise
applicable law clause in the Agreement, then Austrian Law would have to be
advanced as the law of the seat of arbitration”); J. Lew, L. Mistelis & S. Kröll,
Comparative International Commercial Arbitration ¶¶6-69 to 71 (2003).
ed. 2009).
329) See, e.g., Award in ICC Case No. 8385, cited in J.-J. Arnaldez, Y. Derains & D. Hascher
(eds.), Collection of ICC Arbitral Awards 1996-2000 474 (2003) (“all three systems
[international, New York and Belgian] recognize that, at least in some instances, the
corporate veil may be pierced”); Final Award in ICC Case No. 6850, XXIII Y.B. Comm.
Arb. 37, 38-40 (1998) (cumulatively applying both German and French law to validity
of arbitration clause and issues of capacity); Interim Award in ICC Case No. 6149, XX
Y.B. Comm. Arb. 41, 44-45 (1995); Final Award in ICC Case No. 5485, XIV Y.B. Comm. Arb.
156, 160-62 (1989) (applying, cumulatively, ICC Rules, arbitral seat’s law, law
governing underlying contract and trade usages); Interim Award in ICC Case No. 4695,
XI Y.B. Comm. Arb. 149 (1986) (cumulative application of possibly connected laws to
uphold validity of arbitration agreement); Award in ICC Case No. 953, III Y.B. Comm.
Arb. 214, 215 (1978). See also Final Award in ICC Case No. 7722, XXXII Y.B. Comm. Arb.
13, 27-28 (2007) (“[M]any circumstances in this case lead us to find attachment to
country X and its law as most closely connected with the present hearing. … In the
present case, we note that the country X law was specifically chosen as the proper
law of the Contract. Besides the chosen place of hearing is the capital city of
country X, the place where the works were to have been executed is country X,
country X is domicile of the respondent, and it is country X where the Contract was
signed.”); Judgment of 19 August 2008, DFT 4A_128/2008, ¶4.1.1 (Swiss Fed. Trib.)
(“The question as to the subjective bearing of an arbitration agreement – at issue is
which parties are bound by the agreement and to determine to what extent one or
several third parties not mentioned there nonetheless fall within its scope ratione
personae – relates to the merits and accordingly falls within Art. 178(2) [of the SLPIL].
This question falls under Swiss law as it is not established that the parties to the
Contract would have submitted the arbitration agreement to another law and the
two other possibilities anticipated by that provision (i.e., the lex causae and the lex
fori) also lead to the application of that law.”).The same approach is also sometimes
taken to the substantive law applicable to the merits of the parties’ dispute.
See §19.03[D][3][d].
90
330) The cumulative approach differs analytically from the validation principle
(discussed elsewhere). The cumulative analysis does not validate the arbitration
agreement based upon its validity under a single national law, as with the
validation principle. See §19.03[D][3][d]; B. Berger & F. Kellerhals, International and
Domestic Arbitration in Switzerland ¶372 (2d ed. 2010); Wenger, in S. Berti et al.
(eds.), International Arbitration in Switzerland Art. 178, ¶24 (2000). Instead, the
cumulative analysis looks to all potentially-applicable national laws, without
providing guidance in the case of conflicts between those various laws.
331) See, e.g., Final Award in ICC Case No. 17818, XLIV Y.B. Comm. Arb. 30, 43 (2019)
(applying French law and transnational principles to validity of arbitration
agreement); Award in ICC Case No. 17050, 29 ASA Bull. 634, ¶34 (2011) (“it is
unnecessary to decide the issue of the law governing the arbitration agreement,
since the Parties’ rights and obligations flow directly from the contract (the
Agreement), and the terms of the arbitration agreement, referring to the ICC Rules”);
Award in ICC Case No. 16655, 4(2) Int’l J. Arab Arb. 125, 185 (2012) (notwithstanding
French choice-of-law clause, arbitrator may decide arbitration agreement’s validity
“without applying any national law whatsoever in compliance with the requirements
of international public policy”); Dallah Real Estate & Tourism Holding Co. v. Ministry
of Religious Affairs, Pakistan, Partial Award in ICC Case No. 9987, 2(4) Int’l J. Arab Arb.
337, 352 (2010) (“those transnational general principles and usages reflecting the
fundamental requirements of justice in international trade and the concept of good
faith in business”); Interim Award in ICC Case No. 4695, XI Y.B. Comm. Arb. 149 (1986);
Award in ICC Case No. 4381, 113 J.D.I. (Clunet) 1102, 1104 (1986) (validity of arbitration
clause can be determined without reference to any national law); Judgment of 9 May
1996, Arabe des Engrais Phosphates et Azotes v. Gemanco Srl, XXII Y.B. Comm. Arb. 737,
741 (Italian Corte di Cassazione) (1997) (“The law governing the arbitration clause –
that is, the law governing the arbitration agreement either by agreement of the
parties or as lex fori – is not Tunisian law directly but, according to the arbitral
award, lex mercatoria, a body of ‘rules of law’ based on the usages of international
commerce”).
332) See Award in ICC Case No. 5730, 117 J.D.I. (Clunet) 1029, 1033 (1990).
Commercial Arbitration ¶428 (1999). See, e.g., Judgment of 10 April 1957, Myrtoon S.S.
v. Agent Judiciaire du Tresor, JCP G 1957, II, 10078 (Paris Cour d’Appel); Judgment of 9
December 1955, Goldschmidt v. Viz et Zoon, 1956 Dalloz 217 (Paris Cour d’Appel).
334) See Final Award in ICC Case No. 5485, XIV Y.B. Comm. Arb. 156, 162 (1989) (treating ICC
Rules as applicable law, but interpreting Rules as requiring tribunal to “make every
effort to ensure that the award is enforceable at law,” and therefore referring also to
French law as law of place of arbitration).
335) See, e.g., Final Award in ICC Case No. 14046, XXXV Y.B. Comm. Arb. 241, 245 (2010) (“In
the case at hand, the arbitration clause does not contain any reference to the law
applicable to it. As a consequence thereof, the validity of the arbitration clause
must be examined under the law of the seat of the arbitration, namely Swiss law.”);
Award in ICC Case No. 10044, discussed in Grigera Naón, Choice-of-Law Problems in
International Commercial Arbitration, 289 Recueil des Cours 9, 69 (2001) (applying
law of arbitral seat to validity of arbitration agreement because tribunal reasoned
that this is mandatory for arbitrations seated in England); Award in ICC Case No.
9548, discussed in Grigera Naón, Choice-of-Law Problems in International
Commercial Arbitration, 289 Recueil des Cours 9, 41-42 (2001) (Article 178(2) of Swiss
Law on Private International Law is mandatory choice-of-law rule for arbitrations
seated in Switzerland); Award in ICC Case No. 7373, discussed in Grigera Naón,
Choice-of-Law Problems in International Commercial Arbitration, 289 Recueil des
Cours 9, 71 (2001) (applying law of arbitral seat to validity of arbitration agreement
because tribunal reasoned that this is mandatory for arbitrations seated in the
Netherlands); Award in ICC Case No. 6476, discussed in Grigera Naón, Choice-of-Law
Problems in International Commercial Arbitration, 289 Recueil des Cours 9, 76 (2001)
(applying Article 178(3) of Swiss Law on Private International Law on grounds that it
is mandatorily applicable in arbitrations seated in Switzerland).
336) Award in ICC Case No. 10760, discussed in Grigera Naón, Choice-of-Law Problems in
International Commercial Arbitration, 289 Recueil des Cours 9, 44 (2001).
337) See authorities cited §4.02_[A][2]; §4.04[B][3][d]. See also Restatement of the U.S.
Law of International Commercial and Investor-State Arbitration §2.13(c) (2019) (“A
court determines the existence of a putative international arbitration agreement or
a putative contract that includes an arbitration agreement pursuant to the law
indicated by the choice-of-law rules of the forum”).
338) See §4.04[B][2][b][i].
339) See §4.04[B][2][b][ii].
340) See §4.04[A][2][c].
341) See §4.04[A][1][b]
342) See §2.01_[A][2]; §4.04[B][3][a].
343) See §2.01_[A][2]; §4.04[B][3][a].
344) As discussed below, Article 8(1) is expressed in mandatory terms: “A court … shall …
refer the parties to arbitration unless ….” UNCITRAL Model Law, Art. 8(1). See §4.04[B]
[3][a].
91
345) UNCITRAL Model Law, Arts. 34(2)(a)(i), 36(1)(a)(i). See P. Binder, International
Commercial Arbitration and Mediation in UNCITRAL Model Law Jurisdictions 449 (4th
ed. 2019); H. Holtzmann & J. Neuhaus, A Guide to the UNCITRAL Model Law on
International Commercial Arbitration: Legislative History and Commentary 915-16,
1058-59 (1989); Ortolani, Article 34: Application for Setting Aside as Exclusive Recourse
Against Arbitral Award, in I. Bantekas et al. (eds.), UNCITRAL Model Law on
International Commercial Arbitration: A Commentary 870 (2020); Polkinghorne et al.,
Article 36: Grounds for Refusing Recognition or Enforcement, in id. at 943.
346) UNCITRAL, Digest of Case Law on the Model Law on International Commercial
Arbitration 176 (2012) (“Few cases discuss the law governing the arbitration
agreement in greater detail”).
347) See §1.04[B][1][a].
348) See §4.04[B][3][a].
349) See §4.04[A][1][b][iv]; §4.04[A][3].
350) See §4.04[A][1][b][v]; §4.04[A][3].
351) Enka Insaat Ve Sanayi AS v. OOO Ins. Co. Chubb [2020] UKSC 38, ¶170 (U.K. S.Ct.);
Kabab-Ji SAL (Lebanon) v. Kout Food Group [2020] EWCA Civ 6, ¶37 (English Ct. App.);
Sulamérica Cia Nacional de Seguros SA v. Enesa Engenharia SA [2012] EWCA Civ 638,
¶25 (English Ct. App.) (“the proper law is to be determined by undertaking a three-
stage enquiry into (i) express choice, (ii) implied choice and (iii) closest and most
real connection”); Habas Sinai ve Tibbi Gazlar Istihsal v. VSC Steel Co. Ltd [2014] 1
Lloyd’s Rep. 479, ¶101(2) (English High Ct.); Arsanovia Ltd v. Cruz City 1 Mauritius
Holdings [2012] EWHC 3702, ¶8 (Comm) (English High Ct.).
352) See §4.04[A][3][a]; §4.04[A][5][a].
353) Svenska Petroleum Exploration AB v. Lithuania [2005] EWHC 2437, ¶76 (Comm)
(English High Ct.).
354) Sonatrach Petroleum Corp. (BVI) v. Ferrell Int’l Ltd [2002] 1 All ER 627, ¶32 (Comm)
(English High Ct.).
355) See, e.g. Leibinger v. Stryker Trauma GmbH [2006] EWHC 690, ¶38 (Comm) (English
High Ct.); Svenska Petroleum Exploration AB v. Lithuania [2005] EWHC 2437, ¶¶76-77
(Comm) (English High Ct.); Peterson Farms Inc. v. C&M Farming Ltd [2004] 1 Lloyd’s
Rep. 603, 610 (QB) (English High Ct.); Union of India v. McDonnell Douglas Corp. [1993]
2 Lloyd’s Rep. 48, 50 (QB) (English High Ct.) (“it is my view that by art. 11 the chosen
parties have chosen the law of India not only to govern the rights and obligations
arising out of their commercial bargain but also the rights and obligations arising
out of their agreement to arbitrate”).
Lords) (emphasis added).
357) See Leibinger v. Stryker Trauma GmbH [2006] EWHC 690, ¶38 (Comm) (English High
Ct.); Svenska Petroleum Exploration AB v. Lithuania [2005] EWHC 2437, ¶¶76-77
(Comm) (English High Ct.); Peterson Farms Inc. v. C&M Farming Ltd [2004] 1 Lloyd’s
Rep. 603, 610 (QB) (English High Ct.); Union of India v. McDonnell Douglas Corp. [1993]
2 Lloyd’s Rep. 48, 50 (QB) (English High Ct.).
358) See §4.04[B][6][a]; Enka Insaat Ve Sanayi AS v. OOO Ins. Co. Chubb [2020] UKSC 38,
¶170(iv) (U.K. S.Ct.); C v. D [2007] EWCA Civ 1282 (English Ct. App.); XL Ins. Ltd v. Owens
Corning [2000] 2 Lloyd’s Rep. 500 (QB) (English High Ct.).
359) XL Ins. Ltd v. Owens Corning [2000] 2 Lloyd’s Rep. 500, 508 (QB) (English High Ct.)
(English law governed validity of arbitration agreement providing for London as
arbitral seat because it was parties’ implied choice, despite general choice-of-law
clause selecting New York law).
360) C v. D [2007] EWCA Civ 1282, ¶26 (English Ct. App.) (“an agreement to arbitrate will
normally have a closer and more real connection with the place where the parties
have chosen to arbitrate than with the place of the law of the underlying contract”).
361) Id. at ¶¶22, 26, 28 (English Ct. App.) (noting additional considerations that pointed
to English law as governing arbitration agreement).
362) See Sulamérica Cia Nacional de Seguros SA v. Enesa Engenharia SA [2012] EWCA Civ
638, ¶¶26-27 (English Ct. App.); Habas Sinai ve Tibbi Gazlar Istihsal v. VSC Steel Co.
Ltd [2014] 1 Lloyd’s Rep. 479, ¶101(2) (English High Ct.); Arsanovia Ltd v. Cruz City 1
Mauritius Holdings [2012] EWHC 3702, ¶¶17-21 (Comm) (English High Ct.) (choice-of-
law clause in underlying contract (selecting Indian law) was implied choice-of-law
governing arbitration agreement despite London seat).
363) Enka Insaat Ve Sanayi AS v. OOO Ins. Co. Chubb [2020] UKSC 38, ¶170 (U.K. S.Ct.);
Sulamérica Cia Nacional de Seguros SA v. Enesa Engenharia SA [2012] EWCA Civ 638,
¶¶26-27 (English Ct. App.).
364) See Arsanovia Ltd v. Cruz City 1 Mauritius Holdings [2012] EWHC 3702, ¶¶17-21 (Comm)
(English High Ct.) (choice-of-law clause in underlying contract (selecting Indian law)
was implied choice-of-law governing arbitration agreement, despite choice of
London seat).
92
365) Compare L. Collins (ed.), Dicey, Morris and Collins on The Conflict of Laws ¶16-017
(14th ed. 2006) (“If there is an express choice of law to govern the contract as a
whole, the arbitration agreement will also be governed by that law”) (emphasis
added) with L. Collins et al. (eds.), Dicey, Morris and Collins on The Conflict of Laws
¶16-017 (15th ed. 2012) (“If there is an express choice of law to govern the contract as
a whole, the arbitration agreement may also be governed by that law”) (emphasis
added) with Glick & Venkatesan, Choosing the Law Governing the Arbitration
Agreement, in N. Kaplan & M. Moser (eds.), Jurisdiction, Admissibility and Choice of
Law in International Arbitration: Liber Amicorum Michael Pryles 131, 135 (2018) (“The
current position in English law – at least before the level of the Supreme Court –
may thereby be illustrated by this example. If the matrix contract is expressly
governed by New York law and the parties chose London as the seat of arbitration,
the English court will treat the parties as having impliedly chosen New York law for
the arbitration agreement unless there is some additional factor – i.e. beyond the
choice of seat – which points to English law or (at least) away from New York law.”).
See also Trukhtanov, The Proper Law of Arbitration Agreement: A Farewell to Implied
Choice?, 2012 Int’l Arb. L. Rev. 140, 142 (“Prior to C v D, judicial and academic
orthodoxy was that it would be exceptional for the proper law of an arbitration
agreement to differ from the law applicable to the substantive contract, of which
the former is an ‘adjunct’ and ‘part and parcel.’ C v D took the reverse approach that
‘it would be rare for the law of the (severable) arbitration agreement to be different
from the law of the seat of the arbitration.’”).
366) Enka Insaat Ve Sanayi AS v. OOO Ins. Co. Chubb [2020] EWCA Civ 574, ¶¶91-105
(English Ct. App.).
367) Enka Insaat Ve Sanayi AS v. OOO Ins. Co. Chubb [2020] UKSC 38, ¶170 (U.K. S.Ct.)
(citing G. Born, International Commercial Arbitration 1403 (2d ed. 2014)).
368) Id. at ¶¶70-72, 95-109, 170.
369) Id. at ¶¶95-109.
370) Id.
371) BCY v. BCZ, [2017] 3 SLR 357, ¶¶49, 59 (Singapore High Ct.) (emphasis added).
372) See BNA v. BNB, [2019] SGHC 142, ¶119 (Singapore High Ct.) (“At the third stage, the
parties’ arbitration agreement has its closest and most real connection with
Singapore, that being the seat of the arbitration chosen by the parties”).
373) FirstLink Inv. Corp. Ltd v. GT Payment Pte Ltd, [2014] SGHCR 12, ¶16 (Singapore High
Ct.) (“In the absence of indications to the contrary, … parties have impliedly chosen
seat of arbitration. All things being equal, the mere fact of an express substantive
law in the main contract would not in and of itself be sufficient to displace parties’
intention to have the law of the seat be the proper law of the arbitration
agreement.”), questioned in BCY, [2017] 3 SLR 357.
374) See BNA, [2019] SGHC 142, ¶17; BCY, [2017] 3 SLR 357, ¶¶42-50.
375) Premium Nafta Prods. Ltd v. Fili Shipping Co. Ltd [2007] UKHL 40 (House of Lords).
See §3.03[A][2][c].
376) See Heyman v. Darwins Ltd [1942] AC 356, 366 et seq. (House of Lords); Fillite
(Runcorn) Ltd v. Aqua-Lift [1989] 45 BLR 27 (English Ct. App.). See also §9.02[E].
377) See Premium Nafta Prods. Ltd [2007] UKHL 40, ¶12.
Commercial Arbitration ¶425 (1999). See also Mastrobuono v. Shearson Lehman
Hutton Inc., 514 U.S. 52, 59-63 (U.S. S.Ct. 1995).
379) That is well-illustrated by the English Court of Appeal’s recent decision in Kabab-Ji,
where the court held that the parties’ (boilerplate) definition of Agreement
extended the choice-of-law provision to the arbitration clause. Kabab-Ji SAL
(Lebanon) v. Kout Food Group [2020] EWCA Civ 6, ¶62 (English Ct. App.). The
likelihood that the parties in Kabab-Ji intended to select the law governing their
arbitration agreement in this manner is infinitesimal. In further recent
developments, the Paris Court of Appeal disagreed with the English Court of Appeal,
applying the law of the seat, French law, and refusing to set aside the award. See
Judgment of 23 June 2020, Case No. 17/22943 (Paris Cour d’Appel).
380) See Premium Nafta Prods. Ltd v. Fili Shipping Co. Ltd [2007] UKHL 40, ¶8 (House of
Lords) (“A proper approach to construction therefore requires the court to give
effect, so far as the language used by the parties will permit, to the commercial
purpose of the arbitration clause”).
381) See §4.04_[A][1]; G. Born, International Arbitration and Forum Selection Agreements:
Drafting and Enforcing 73 (5th ed. 2016).
382) See §4.04[A][3].
383) See id.
384) See §4.04[A][1][b][iv]; §4.04[A][3].
385) See §4.04[A][2][b].
386) Swiss Law on Private International Law, Art. 178(3).
93
387) See also Bärtsch & Petti, The Arbitration Agreement, in E. Geisinger & N. Voser (eds.),
International Arbitration in Switzerland: A Handbook for Practitioners 29 (2d ed. 2013);
B. Berger & F. Kellerhals, International and Domestic Arbitration in Switzerland ¶369
(2d ed. 2010) (“The conflict of laws rule in PILS, Art. 178(2) follows the principle in
favorem validitatis. It enables an arbitral tribunal to regard as valid an arbitration
agreement that would be invalid under the law chosen by the parties or under the
law applicable to the main contract, provided that it at least satisfies the
substantive requirements of Swiss law in relation to the conclusion of contracts.”);
Karrer, The Law Applicable to the Arbitration Agreement, 26 Sing. Acad. L.J. 849, ¶18
(2014); J.-F. Poudret & S. Besson, Comparative Law of International Arbitration ¶300
(2d ed. 2007) (“In Switzerland, Art. 178(2) [of the Swiss Law on Private International
Law] establishes a conflict of law rule in favorem validitatis which provides that the
arbitration agreement is materially valid providing it ‘fulfils the requirements
either of the law chosen by the parties, of the law governing the merits of the
dispute and notably the law applicable to the main agreement, or finally those of
Swiss law.’ Therefore, the arbitrator will have jurisdiction providing the arbitration
agreement is valid according to one of these three laws.”); Wenger, in S. Berti et al.
(eds.), International Arbitration in Switzerland Art. 178, ¶22 (2000) (“[Swiss law]
widens the spectrum of laws to be taken into account from the point of view of favor
validitatis”).
388) D. Girsberger & N. Voser, International Arbitration: Comparative and Swiss
Perspectives 85 (3d ed. 2016) (“The approach of Art. 178(2) SPILA also aims to ensure
predictability and to reduce challenges of an award”); Muller & Riske, in M. Arroyo
(ed.), Arbitration in Switzerland: The Practitioner’s Guide Art. 178, 71, 81-82 (2018).
389) See §4.02[A][2][c].
Arb. 116, 117 (French Cour de Cassation Civ. 1) (emphasis added). See also §4.02[A][2]
[c].
391) Judgment of 24 February 1994, Ministry of Public Works v. Bec Frères, XXII Y.B. Comm.
Arb. 682, 687 (Paris Cour d’Appel) (1997).
392) See, e.g., Judgment of 11 July 2006, PT Andhika Lines v. AXA, Case No. 03-19838, JCP G
2006, IV, 2778 (French Cour de Cassation Civ. 1) (common intention of parties was to
replace arbitration agreement by jurisdiction clause in favor of carrier’s place of
incorporation, resulting in nullity of arbitration agreement); Judgment of 21 May
1997, Renault v. V 2000, 1997 Rev. Arb. 537 (French Cour de Cassation Civ. 1); Judgment
of 7 April 2011, 2011 Rev. Arb. 747 (Paris Cour d’Appel) (arbitration agreement’s
validity depends on common intent of parties; no reference to any national law
needed); Judgment of 24 February 2005, Sidermetal v. Arcelor Int’l Exp., 2005 Rev. Arb.
787, 787 (Paris Cour d’Appel) (“arbitration agreement is not subject to any formal
rule [regle de forme] but is subject to a validity principle depending on the sole
intention of the parties”); Judgment of 10 June 2004, Bargues Agro Indus. SA v. Young
Pecan Cie, XXX Y.B. Comm. Arb. 499, 502 (Paris Cour d’Appel) (2005) (“According to a
substantive provision of French international arbitration law, the parties’ intention
suffices to validate an arbitration agreement. Hence, that agreement does not fall
under a national law because it is fully autonomous, also with regard to form.”);
Judgment of 25 November 1999, SA Burkinabe des Ciments et Matériaux v. Société des
Ciments d’Abidjan, 2001 Rev. Arb. 165 (Paris Cour d’Appel). See also J.-L. Delvolvé, G.
Pointon & J. Rouche, French Arbitration Law and Practice ¶93 (2009); E. Gaillard & J.
Savage (eds.), Fouchard Gaillard Goldman on International Commercial Arbitration
¶436 (1999).
393) See, e.g., Judgment of 22 March 1976, III Y.B. Comm. Arb. 283, 283 (Tunis Ct. First Inst.)
(1978) (“[I]t is generally accepted that international commercial relations are
subject to their own customs. It follows from there that the present question does no
longer depend on the personal law of the parties, but rather on the subject matter
of the contract. The latter is the result from the parties’ will, and constitutes their
own law since the contract is an international contract concluded in order to
correspond to the needs of the parties on the one hand hand [sic] and to
international commercial customs on the other.”). See also OHADA Uniform Act on
Arbitration Law, Art. 4 (“The arbitration agreement shall be independent of the main
contract. Its validity shall not be affected by the nullity of the contract, and it shall
be interpreted in accordance with the common intention of the parties, without
necessarily referring to national law”).
94
394) See, e.g., Judgment of 16 March 2016, M. Ali Marzooq Ali Bin Kamil Al Shamsi v.
Shackleton, 2016 Rev. Arb. 636 (French Cour de Cassation Civ. 1) (“By virtue of a
substantive/material rule of international arbitration law, the existence and
validity of an arbitration agreement shall be assessed without reference to
domestic law, and only by reference to the parties’ common will to resort to
arbitration …”); Judgment of 8 July 2009, Société d’Etudes et Représentations Navales
et Industrielles v. Air Sea Broker Ltd, 2009 Rev. Arb. 529 (French Cour de Cassation Civ.
1); Judgment of 20 December 2018, Cameroun v. SPRL Projet Pilote Garoubé, 2019 Rev.
Arb. 472 (Paris Cour d’Appel); Judgment of 18 December 2018, New Euro. Corporate
Advisory Ltd v. Innova 5/LP-ès Qualités de Liquidateur de la Société Twelve
Hornbeams Sarl, 2018 Rev. Arb. 847 (Paris Cour d’Appel) (“According to a substantive
rule of international arbitration law, the existence and validity of an international
arbitration agreement depends only on the common intention of the parties,
without it being necessary to make reference to a national law”); Judgment of 7 April
2011, 2011 Rev. Arb. 747, 750 (Paris Cour d’Appel) (“By virtue of a material rule of
international arbitration, applicable to an arbitration seated in France, the
arbitration agreement is legally independent from the underlying contract; then, its
existence and enforceability shall be assessed in light of the parties’ common will,
subject to international public policy, without it being necessary to make reference
to a domestic law”). See also Hook, Arbitration Agreements and Anational Law: A
Question of Intent?, 28 J. Int’l Arb. 175, 180-81 (2011) (“One of its most remarkable
features is that, instead of relying on a choice of law approach to determine the
validity or existence of arbitration agreements, French courts apply the so-called
substantive validity method, combining elements of the contractual and
autonomous theory. The effect of the substantive validity rule is to separate the
arbitration agreement from any applicable law other than French mandatory laws
and international public policy. Consequently, because the arbitration agreement
exists independently from national laws, questions as to its formation or validity
must be resolved in accordance with French principles of international public
policy – principles that, according to French law, are fundamental in an
international context.”).
395) See, e.g., Final Award in ICC Case No. 17146, 2015:1 ICC Disp. Resol. Bull. 114 (“[I]t has
been widely held in France as well as in international arbitral awards that the
existence, validity and scope of an arbitration agreement ‘need only be examined
by reference to transnational rules and trade usages.’ … These rules are the same as
those commonly adopted for the interpretation of contracts in national laws. They
include (i) the principle of good faith, (ii) the principle of effective interpretation
and (iii) the principle of interpretation contra proferentem. … [T]he Arbitral Tribunal
will interpret the Arbitration Clause pursuant to these three generally accepted
principles.”) (quoting E. Gaillard & J. Savage (eds.), Fouchard Gaillard Goldman on
International Commercial Arbitration ¶475 (1999)); Partial Award in ICC Case No. 9987,
Dallah Real Estate & Tourism Holding Co. v. Ministry of Religious Affairs, Pakistan, 2(4)
Int’l J. Arab Arb. 337, 353 (2010) (assessing validity and scope of arbitration
agreement “by reference to those transnational general principles and usages
reflecting the fundamental requirements of justice in international trade and the
concept of good faith in business”); Final Award in ICC Case No. 9302, XXVIII Y.B.
Comm. Arb. 54 (2003) (arbitral tribunal seated in France applied international
principles, instead of national law, to substantive validity of arbitration clause);
Final Award in ICC Case No. 8938, XXIV Y.B. Comm. Arb. 174, 176 (1999); Partial Award in
ICC Case No. 7920, XXIII Y.B. Comm. Arb. 80 (1998) (arbitral tribunal entitled to
depart from national law, and apply general principles of law, in determining
validity of arbitration agreement); Award in ICC Case No. 5721, 117 J.D.I. (Clunet) 1019,
1023 (1990); Interim Award in ICC Case No. 4131, IX Y.B. Comm. Arb. 131, 134 (1984)
(applying “in particular, French case law” and adopting a result “compatible with
international public policy, particularly in France”); Award in ICC Case No. 2375, 103
J.D.I. (Clunet) 973 (1976).
396) Final Award in ICC Case No. 8938, XXIV Y.B. Comm. Arb. 174, 176 (1999).
397) See §4.02[A][2][c].
398) See §4.04[B][3][b]. The separate choice-of-law analyses applicable to the formal
validity and interpretation of international arbitration agreements in U.S. courts
are discussed elsewhere. See §4.05_[B]; §4.09.
399) See XL Ins. Ltd v. Owens Corning [2000] 2 Lloyd’s Rep. 500, 507 (QB) (English High Ct.);
N. Blackaby et al. (eds.), Redfern and Hunter on International Arbitration ¶¶3.22-25
(5th ed. 2009).
95
400) For U.S. decisions discussing the choice-of-law issues raised by international
arbitration agreements, see, e.g., Lindo v. NCL (Bahamas) Ltd, 652 F.3d 1257, 1264
(11th Cir. 2011); Todd v. S.S. Mut. Underwriting Ass’n (Bermuda) Ltd, 601 F.3d 329, 334
(5th Cir. 2010); Thomas v. Carnival Corp., 573 F.3d 1113 (11th Cir. 2009); Certain
Underwriters at Lloyd’s London v. Argonaut Ins. Co., 500 F.3d 571 (7th Cir. 2007); Bridas
SAPIC v. Turkmenistan, 447 F.3d 411 (5th Cir. 2006); Trippe Mfg Co. v. Niles Audio Corp.,
401 F.3d 529 (3d Cir. 2005); Motorola Credit Corp. v. Uzan, 388 F.3d 39 (2d Cir. 2004);
Bridas SAPIC v. Turkmenistan, 345 F.3d 347 (5th Cir. 2003); InterGen NV v. Grina 344
F.3d 134 (1st Cir. 2003); Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 154-55 (3d Cir. 2001);
U.S. Titan, Inc. v. Guangzhou Zhen Hua Shipping Co., 241 F.3d 135, 146 (2d Cir. 2001);
Int’l Paper Co. v. Schwabedissen Maschinen & Anlagen GmbH, 206 F.3d 411 (4th Cir.
2000); Smith/Enron Cogeneration LP v. Smith Cogeneration Int’l, Inc., 198 F.3d 88 (2d
Cir. 1999); Becker Autoradio U.S.A., Inc. v. Becker Autoradiowerk GmbH, 585 F.2d 39, 43
nn.8, 9 (3d Cir. 1978); Cvoro v. Carnival Corp., 2018 WL 1660669, at *3-4 (S.D. Fla.);
Pysarenko v. Carnival Corp., 2014 WL 1745048, at *5 (S.D. Fla.); FR 8 Singapore Pte Ltd
v. Albacore Maritime Inc., 754 F.Supp.2d 628 (S.D.N.Y. 2010); Coimex Trading (Suisse)
SA v. Cargill Int’l SA, 2005 WL 1216227 (S.D.N.Y.); A.T. Cross Co. v. Royal Selangor(s) Pte,
Ltd, 217 F.Supp.2d 229, 234-35 (D.R.I. 2002); W. of England Ship Owners Mut. Ins. Ass’n
(Luxembourg) v. Am. Marine Corp., 1992 WL 37700, at *4 (E.D. La.); Marchetto v. DeKalb
Genetics Corp., 711 F.Supp. 936, 939-40 (N.D. Ill. 1989); Ferrara SpA v. United Grain
Growers, Ltd, 441 F.Supp. 778, 781 (S.D.N.Y. 1977), aff’d mem., 580 F.2d 1044 (2d Cir.
1978).For commentary, see Diamond, Choice of Law Clauses and Their Preemptive
Effect upon the Federal Arbitration Act: Reconciling the Supreme Court with Itself, 39
Ariz. L. Rev. 35 (1997); Friedland & Hornick, The Relevance of International Standards
in the Enforcement of Arbitration Agreements Under the New York Convention, 6 Am.
Rev. Int’l Arb. 149 (1995); Malloy, Current Issues in International Arbitration, 15 Trans.
Law. 43, 48-52 (2002); Thrope, A Question of Intent: Choice of Law and the
International Arbitration Agreement, 54 Disp. Resol. J. 16 (1999).
401) U.S. v. Little Lake Misere Land Co., 412 U.S. 580, 591 (U.S. S.Ct. 1973); Clearfield Trust
Co. v. U.S., 318 U.S. 363, 374-75 (U.S. S.Ct. 1943). See also §1.04[B][1][e].
402) For commentary, see Aksen, Prima Paint v. Flood & Conklin: What Does It Mean?, 43
St. John’s L. Rev. 1, 22-23 (1968); Drahozal, In Defence of Southland: Reexamining the
Legislative History of the Federal Arbitration Act, 78 Notre Dame L. Rev. 101 (2002);
Furnish, Commercial Arbitration Agreements and the Uniform Commercial Code, 67
Cal. L. Rev. 317 (1979); Hirshman, The Second Arbitration Trilogy: The Federalization of
Arbitration Law, 71 Va. L. Rev. 1305 (1985); Sturges & Murphy, Some Confusing Matters
Relating to Arbitration Under the United States Arbitration Act, 17 L. & Contemp.
Probs. 580 (1952).
403) Garvey & Heffelfinger, Towards Federalizing U.S. International Commercial Arbitration
Law, 25 Int’l Law. 209 (1991).
404) U.S. FAA, 9 U.S.C. §2; §1.04[B][1][e][ii]; §2.01[A][2]. The savings clause preserves
otherwise applicable state contract law dealing with issues of formation and
validity of domestic arbitration agreements, subject however to federal preemption
of state laws that single out domestic arbitration agreements for special disfavor.
See §1.04[B][1][e][iii]; Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 630-31 (U.S. S.Ct.
2009); Perry v. Thomas, 482 U.S. 483 (U.S. S.Ct. 1987).
405) Shearson/Am. Express, Inc. v. McMahon, 482 U.S. 220, 225-26 (U.S. S.Ct. 1987) (quoting
Scherk v. Alberto-Culver Co., 417 U.S. 506, 510-11 (U.S. S.Ct. 1974)).
406) See also §§1.04[B][1][e]et seq.; §§9.02[D][1][a]et seq.
407) Southland Corp. v. Keating, 465 U.S. 1, 10 (U.S. S.Ct. 1984). See also Preston v. Ferrer,
552 U.S. 346, 349 (U.S. S.Ct. 2008); Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S.
440, 443 (U.S. S.Ct. 2006).
408) Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (U.S. S.Ct. 1983)
(emphasis added). See also AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 343 (U.S.
S.Ct. 2011).
409) Volt Info. Sciences, Inc. v. Stanford Univ., 489 U.S. 468, 478 (U.S. S.Ct. 1989). See also
AT&T Mobility, 563 U.S. at 343; Rent-A-Ctr, W., Inc. v. Jackson, 561 U.S. 63, 65 (U.S. S.Ct.
2010) (“The FAA … requires courts to enforce [arbitration agreements] according to
their terms”); Prima Paint Corp. v. Flood & Conklin Mfg Co., 388 U.S. 395, 404 n.12 (U.S.
S.Ct. 1967) (Congress intended to “make arbitration agreements as enforceable as
other contracts, but not more so”).
410) Buckeye Check Cashing, 546 U.S. at 443.
411) See Preston, 552 U.S. at 349 (“The Act, which rests on Congress’ authority under the
Commerce Clause, … calls for the application, in state as well as federal courts, of
federal substantive law regarding arbitration”); Buckeye Check Cashing, 546 U.S. at
446 (“this arbitration law applies in state as well as federal courts”); Volt Info., 489
U.S. at 477 n.6.
96
412) See Preston, 552 U.S. at 353 (“The FAA’s displacement of conflicting state law is ‘now
well-established’”) (quoting Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 272
(U.S. S.Ct. 1995)); Buckeye Check Cashing, 546 U.S. at 447-49; Volt Info, 489 U.S. at 477
(“The FAA contains no express preemption provision, nor does it reflect a
congressional intent to occupy the entire field of arbitration. But even where
Congress has not completely displaced state regulation in an area, state law may
nonetheless be preempted to the extent that it actually conflicts with federal law.”);
Perry, 482 U.S. at 491.
413) Allied-Bruce Terminix Cos., 513 U.S. at 269, 272-73; Southland Corp., 465 U.S. at 10.
414) See Preston, 552 U.S. at 349-50 (California law granting Labor Commissioner
exclusive jurisdiction over certain claims preempted by FAA).
415) Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 683 (U.S. S.Ct. 1996) (“Montana’s first-
page notice requirement, which governs not ‘any contract,’ but specifically and
solely contracts ‘subject to arbitration,’ conflicts with the FAA and is therefore
displaced by the federal measure”).
416) AT&T Mobility LLC, 563 U.S. at 339-43 (application of state law unconscionability rule
to require use of class action procedures, notwithstanding parties’ agreement
waiving such procedures, preempted by FAA).
417) U.S. FAA, 9 U.S.C. §2 (emphasis added). See §1.04[B][1][e][ii]; §2.01[A][2].
418) Doctor’s Assocs., Inc., 517 U.S. at 687; Perry, 482 U.S. at 489 (“Section 2, therefore,
embodies a clear federal policy of requiring arbitration unless the agreement to
arbitrate … is revocable ‘upon such grounds as exist at law or in equity for the
revocation of any contract’”); Nagrampa v. MailCoups, Inc., 469 F.3d 1257, 1268 (9th
Cir. 2006).
419) Rent-A-Ctr, W., Inc. v. Jackson, 561 U.S. 63, 67-68 (U.S. S.Ct. 2010).
420) See, e.g., AT&T Mobility, 563 U.S. at 339 (“a court may not ‘rely on the uniqueness of
an agreement to arbitrate as a basis for a state-law holding that enforcement would
be unconscionable, for this would enable the court to effect what … the state
legislature cannot’”) (quoting Perry, 482 U.S. at 493 n.9); Doctor’s Assocs., Inc., 517
U.S. at 687.
421) AT&T Mobility, 563 U.S. at 341 (“Although §2’s saving clause preserves generally
applicable contract defenses, nothing in it suggests an intent to preserve state-law
rules that stand as an obstacle to the accomplishment of the FAA’s objectives”).
422) See §§1.04[B][1][e][ii]-[iv]; §4.04[A][2][j][v]; Arthur Andersen LLP v. Carlisle, 556 U.S.
624, 630-31 (U.S. S.Ct. 2009).
423) See §4.04[A][2][j][v](3).
424) Doctor’s Assocs., 517 U.S. at 687. See also Arthur Andersen, 556 U.S. at 630-31 (“Section
2 explicitly retains an external body of law governing revocation. … ‘[S]tate law,’
therefore, is applicable to determine which contracts are binding under §2 and
enforceable under §3 ‘if that law arose to govern issues concerning the validity,
revocability, and enforceability of contracts generally.’”) (emphasis in original)
(quoting Perry, 482 U.S. at 483, 493); First Options of Chicago, Inc. v. Kaplan, 514 U.S.
938, 944 (U.S. S.Ct. 1995) (“When deciding whether the parties agreed to arbitrate a
certain matter (including arbitrability), courts generally … should apply ordinary
state-law principles that govern the formation of contracts”).
425) See, e.g., AT&T Mobility, 563 U.S. at 337 (“This saving clause [in FAA §2] permits
agreements to be invalidated by ‘generally applicable contract defences, such as
fraud, duress, or unconscionability’”) (quoting Doctor’s Assocs., Inc., 517 U.S. at 687);
Nicosia v. Amazon.com, Inc., 834 F.3d 220, 229 (2d Cir. 2016) (“The threshold question
of whether the parties indeed agreed to arbitrate is determined by state contract
law principles”); Quilloin v. Tenet HealthSystem Philadelphia, Inc., 673 F.3d 221, 230
(3d Cir. 2012) (“We generally apply state contract principles to determine whether
an arbitration agreement is unconscionable”); In re Checking Account Overdraft Litg.,
685 F.3d 1269 (11th Cir. 2012) (applying South Carolina unconscionability law to
arbitration agreement); Bank of Am., NA v. UMB Fin. Servs., Inc., 618 F.3d 906, 912 (8th
Cir. 2010) (“state contract law governs the threshold question of whether an
enforceable arbitration agreement exists between litigants”); Sultan v. Coinbase,
Inc., 354 F.Supp.3d 156, 159 (E.D.N.Y. 2019); Mason v. Regions Bank, 2017 WL 10742443,
at *2 (W.D. Tex.) (“courts apply ordinary state contract law principles to the question
of whether the parties formed a valid agreement to arbitrate”).
426) See, e.g., Cohen v. Wedbush, Noble, Cooke, Inc., 841 F.2d 282, 285 (9th Cir. 1988) (“[The
FAA] governs our disposition of this case. … The availability and validity of defenses
against arbitration are therefore to be governed by application of federal
standards.”), overruled by Ticknor v. Choice Hotels Int’l, Inc., 265 F.3d 931, 941-42 (9th
Cir. 2001) (“we must overrule [Cohen] insofar as [it] hold[s] that state law adhesion
contract principles may not be invoked to bar arbitrability of disputes under the
[FAA]”).
97
427) Compare Halprin v. Verizon Wireless Servs., LLC, 2009 WL 1351456 (D.N.J.) (applying
New Jersey conflict of laws rules to determine whether to give effect to choice-of-
law provision specifying Virginia law) with Sphere Drake Ins. Ltd v. Clarendon Nat’l
Ins. Co., 263 F.3d 26, 32 n.3 (2d Cir. 2001) (where the contract specified that New York
and New Jersey law would apply to disputes arising from the contract; “[court]
consider[ed] New York and New Jersey law, as appropriate, for questions relating to
contract formation”); Todd v. S.S. Mut. Underwriting Ass’n, Ltd, 2011 WL 1226464, at *5
(E.D. La.) (“Louisiana courts have held that the validity of an arbitration agreement
is determined by the law selected in the agreement itself”); Tierra Right of Way
Servs., Ltd v. Abengoa Solar Inc., 2011 WL 2292007, at *2 n.2 (D. Ariz.) (where contract
specified that “[t]his Agreement is made under and shall be governed, construed,
and interpreted according to the laws of the State of New York,” court held that the
“unconscionability analysis is guided by New York law”).
428) See, e.g., Mastrobuono v. Shearson Lehman Hutton Inc., 514 U.S. 52, 52 (U.S. S.Ct.
1995); Cape Flattery Ltd v. Titan Maritime, LLC, 647 F.3d 914, 921 (9th Cir. 2011); Sovak
v. Chugai Pharm. Co., 280 F.3d 1266, 1270 (9th Cir. 2002) (general choice-of-law clause
does not override presumption of FAA’s application); Roadway Package Sys., Inc. v.
Kayser, 257 F.3d 287, 288–89 (3d Cir. 2001), overruled on other grounds, Hall St.
Assocs., LLC v. Mattel, Inc., 552 U.S. 576 (U.S. S.Ct. 2008); UHC Mgt Co. v. Computer
Sciences Corp., 148 F.3d 992, 996-97 (8th Cir. 1998) (court would not “interpret an
arbitration agreement as precluding the application of the FAA unless the parties’
intent that the agreement be so construed is abundantly clear”); Ferro Corp. v.
Garrison Indus., Inc., 142 F.3d 926, 937 (6th Cir. 1998) (contract’s general choice-of-law
provision selecting Ohio law did not evidence parties’ unequivocal selection of Ohio
law to determine scope of arbitration agreement); Alfa Laval U.S. Treasury, Inc. v.
Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 857 F.Supp.2d 404, 416 (S.D.N.Y. 2012)
(choice-of-law clause in arbitration agreement incorporates only the chosen state’s
“substantive rights and obligations, not the State’s allocation of power between
alternative tribunals”); Jung v. Ass’n of Am. Med. Colleges, 300 F.Supp.2d 119, 152
(D.D.C. 2004) (“Numerous courts of appeals have concluded that Mastrobuono
requires that the intent of the contracting parties to apply state arbitration rules or
law to arbitration proceedings … be explicitly stated in the contract and that … a
general choice of law provision does not evidence such intent”).
429) See §1.04[B][1][e][ii]; §4.02[A][2][d]; U.S. FAA, 9 U.S.C. §203 (“An action or proceeding
falling under the [New York] Convention shall be deemed to arise under the laws
and treaties of the United States. The district courts of the United States … shall
have original jurisdiction over such an action or proceeding, regardless of the
amount in controversy.”). Where the Inter-American Convention applies, §302 of the
FAA governs. U.S. FAA, 9 U.S.C. §302 (“Sections 202, 203, 204, 205, and 207 of this title
shall apply to this chapter as if specifically set forth herein, except that for the
purposes of this chapter ‘the Convention’ shall mean the Inter-American
Convention”). Sections 203 and 302 implement the New York and Inter-American
Conventions respectively in the United States. See §1.04[B][1][e][ii].
430) See, e.g., David L. Threlkeld & Co. v. Metallgesellschaft Ltd, 923 F.2d 245, 249-50 (2d
Cir. 1991); Bakoss v. Certain Underwriters at Lloyds of London, 2011 WL 4529668, at *5
(E.D.N.Y.) (application of federal law to enforceability of arbitration agreement).
431) See §4.04[B][3][b]; Copape Produtos de Pétroleo Ltda v. Glencore Ltd, 2012 WL 398596
(S.D.N.Y.) (applying federal common law, comprised of generally-accepted
principles of contract law and Uniform Commercial Code, to determine existence
and validity of arbitration agreement); Nanosolutions, LLC v. Prajza, 793 F.Supp.2d
46, 54 n.5 (D.D.C. 2011) (“In cases arising under the New York Convention, … there are
‘compelling reasons to apply federal law, which is already well-developed, to the
question of whether an agreement to arbitrate is enforceable’”) (quoting
Smith/Enron Cogeneration LP, Inc. v. Smith Cogeneration Int’l, Inc., 198 F.3d 88, 96 (2d
Cir. 1999)); JSC Surgutneftegaz v. President & Fellows of Harvard College, 2005 WL
1863676, at *3 (S.D.N.Y.); W. of England Ship Owners Mut. Ins. Ass’n (Luxembourg) v.
Am. Marine Corp., 1992 WL 37700, at *4 (E.D. La.) (applying federal law, not Louisiana
or English law, to decide whether arbitration agreement was “null and void”);
McDonnell Douglas Corp. v. Denmark, 607 F.Supp. 1016, 1018-20 (E.D. Mo. 1985) (FAA
and New York Convention “set forth the relevant federal statutory law governing the
applicability and validity of arbitration clauses in international commercial
contracts”); Antco Shipping Co. v. Sidermar SpA, 417 F.Supp. 207, 215 (S.D.N.Y. 1976)
(applying federal public policy in analysis of whether arbitration agreement was
null and void).
432) Marchetto v. DeKalb Genetics Corp., 711 F.Supp. 936, 939 (N.D. Ill. 1989).
433) Smith/Enron Cogeneration LP v. Smith Cogeneration Int’l, Inc., 198 F.3d 88, 96 (2d Cir.
1999).
434) See §4.04[B][3][b]; Preston v. Ferrer, 552 U.S. 346, 363 (U.S. S.Ct. 2008); Mastrobuono,
514 U.S. at 63-64.
435) See §4.04[B][3][b]; §4.04[B][6][c].
436) See, e.g., Todd v. S.S. Mut. Underwriting Ass’n, Ltd, 2011 WL 1226464, at *5 (E.D. La.)
(applying state choice-of-law rules to validity of international arbitration
agreement, which court interpreted to require application of parties’ chosen
English law); Bartlett Grain Co. v. Am. Int’l Group, 2011 WL 3274388 (W.D. Mo.)
(applying English law as law governing underlying insurance policy).
98
437) See, e.g., Gutfreund v. Weiner, 68 F.3d 554, 559 (2d Cir. 1995) (“‘[o]nce a dispute is
covered by the [FAA], federal law applies to all questions of interpretation,
construction, validity, revocability, and enforceability’”) (quoting Coenen v. R.W.
Pressprich & Co., 453 F.2d 1209, 1211 (2d Cir. 1972)); Genesco, Inc. v. T. Kakiuchi & Co.,
815 F.2d 840, 845 (2d Cir. 1987) (applying federal substantive common law to
determine whether party was bound by arbitration agreement); Johnson Controls,
Inc. v. City of Cedar Rapids, 713 F.2d 370, 375 (8th Cir. 1983); Church v. Gruntal & Co.,
698 F.Supp. 465, 467 (S.D.N.Y. 1988) (applying federal substantive law to
determination of existence and scope of arbitration agreement); Hall v. Prudential-
Bache Sec., Inc., 662 F.Supp. 468, 469 (C.D. Cal. 1987) (“The issue of whether an
agreement to arbitrate is valid is determined by federal law. … Federal law clearly
preempts state law on issues of arbitrability.”); Lippus v. Dahlgren Mfg Co., 644
F.Supp. 1473, 1482 (E.D.N.Y. 1986) (“Under the [FAA], ‘federal law applies to all
questions of interpretation, construction, validity, revocability, and enforceability
[of arbitration agreements]’”) (quoting Coenen, 453 F.2d at 1211).
438) See §4.04[B][3][b]; §4.04[B][6][c].
439) See authorities cited §4.04[B][3][b].
440) First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (U.S. S.Ct. 1995).
441) Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 630-31 (U.S. S.Ct. 2009).
442) See, e.g., Granite Rock Co. v. Int’l Bhd of Teamsters, 561 U.S. 287, 292 (U.S. S.Ct. 2010)
(applying “ordinary … principles that govern the formation of contracts” in analyzing
arbitration agreements); Arthur Andersen, 556 U.S. at 631 (applying “‘traditional
principles’ of state law”); Jaludi v. Citigroup, 933 F.3d 246, 254 (3d Cir. 2019) (“We thus
apply ‘ordinary state-law principles that govern the formation of contracts’ to
determine whether the subsequent arbitration agreement supersedes a prior
agreement”) (quoting Century Indem. Co. v. Certain Underwriters at Lloyd’s, 584 F.3d
513, 524 (3d Cir. 2009)); Applied Energetics, Inc. v. NewOak Capital Mkts, LLC, 645 F.3d
522, 526 (2d Cir. 2011) (applying New York contract law principles “in deciding
whether a contractual obligation to arbitrate exists”); Will-Drill Res., Inc. v. Samson
Res. Co., 352 F.3d 211, 214 (5th Cir. 2003); Bell v. Cendant Corp., 293 F.3d 563, 566 (2d
Cir. 2002) (“Because an agreement to arbitrate is a creature of contract … the
ultimate question of whether the parties agreed to arbitrate is determined by state
law”); Ruiz v. New Avon LLC, 2019 WL 4601847, at *7 (S.D.N.Y.); Nicosia v. Amazon.com,
Inc., 384 F.Supp.3d 254, 263 (E.D.N.Y. 2019); Fellerman v. Am. Retirement Corp.
Imperial Plaza Inc., 2010 WL 1780406, at *2 (E.D. Va.); Hojnowski v. Vans Skate Park,
901 A.2d 381, 392 (N.J. 2006) (“state contract-law principles generally govern a
determination whether a valid agreement to arbitrate exists”); Anderson v. Ashby,
873 So.2d 168, 192 (Ala. 2003).
443) As discussed above, it is settled that U.S. federal law defines what constitutes an
“arbitration” agreement (as distinguished from a mediation or other ADR
agreement) under the FAA. See §§2.02[B] et seq.
99
444) See, e.g., BOSC, Inc. v. Bd of County Comm’ners, 853 F.3d 1165, 1170 (10th Cir. 2017);
Doscher v. Sea Port Group Sec., LLC, 832 F.3d 372, 385 (2d Cir. 2016) (“The Supreme
Court has repeatedly stated that the Act, particularly §2, ‘is a congressional
declaration of a liberal federal policy favoring arbitration agreements’ whose effect
‘is to create a body of federal substantive law of arbitrability, applicable to any
arbitration agreement within the coverage of the Act’”) (quoting Moses H. Cone Mem.
Hosp., 460 U.S. at 24); Casa del Caffe Vergnano SpA v. ItalFlavors, LLC, 816 F.3d 1208,
1211 (9th Cir. 2016) (“Because this case arises under Chapter 2 of the Federal
Arbitration Act, the issue of whether the Commercial Contract constituted a binding
agreement is governed by federal common law”); Vedachalam v. Tata Am. Int’l Corp.,
477 F. Supp. 2d 1080, 1086 (N.D. Cal. 2007), aff’d, 339 F.App’x 761 (9th Cir. 2009)
(applying federal common law of contracts to decide on the existence of
international arbitration agreement); InterGen NV v. Grina, 344 F.3d 134, 143 (1st Cir.
2003); Int’l Paper Co. v. Schwabedissen Maschinen & Anlagen GmbH, 206 F.3d 411, 417
n.4 (4th Cir. 2000) (FAA and New York Convention “create a body of federal
substantive law of arbitrability, applicable to any arbitration agreement within the
coverage of the Act”); David L. Threlkeld & Co. v. Metallgesellschaft Ltd, 923 F.2d 245,
249-50 (2d Cir. 1991) (“The international business transactions at issue are governed
by federal arbitration law”); Psara Energy, Ltd v. Space Shipping, Ltd, 2018 WL
6929342, at *2 (E.D. Tex.) (“Simply put, the FAA, [which codified the New York
Convention], creates substantive federal law regarding the enforceability of
arbitration agreements”); Glencore Ltd v. Degussa Eng’d Carbons LP, 848 F.Supp.2d
410, 435-36 (S.D.N.Y. 2012); Copape Produtos de Pétroleo Ltda v. Glencore Ltd, 2012 WL
398596, at *4 n.33 (S.D.N.Y.); Changzhou AMEC E. Tools & Equip. Co. v. E. Tools & Equip.,
Inc., 2012 WL 3106620, at *13 (C.D. Cal.) (applying federal law to question whether
parties consented to arbitration agreement); JSC Surgutneftegaz v. President &
Fellows of Harvard College, 2005 WL 1863676, at *2 (S.D.N.Y.); Coimex Trading (Suisse)
SA v. Cargill Int’l SA, 2005 WL 1216227, at *1 (S.D.N.Y.) (“determination whether there
is an agreement to arbitrate depends on federal, not state, law”); DaPuzzo v.
Globalvest Mgt Co., 263 F.Supp.2d 714, 718-20 (S.D.N.Y. 2003); Filanto SpA v. Chilewich
Int’l Corp., 789 F.Supp. 1229, 1234-36 (S.D.N.Y. 1992) (applying federal, not state, law).
Compare 21 Williston on Contracts §57:56 (4th ed. 1990 & Update 2013) (“[The New
York Convention and the FAA] create a body of federal substantive law of
arbitrability, applicable to any arbitration agreement. Generally federal law, rather
than the state of the forum and its conflict of laws rules, governs the question
whether an agreement to arbitrate was made.”).
445) U.S. Titan, Inc. v. Guangzhou Zhen Hua Shipping Co., 241 F.3d 135, 146-47 (2d Cir. 2001).
446) Khan v. Parsons Global Servs., Ltd, 480 F.Supp.2d 327, 338 (D.D.C. 2007), rev’d on other
grounds, 521 F.3d 421 (D.C. Cir. 2008).
447) See, e.g., Brennan v. Opus Bank, 796 F.3d 1125, 1129 (9th Cir. 2015); Quilloin v. Tenet
HealthSystem Philadelphia, Inc., 673 F.3d 221, 228 (3d Cir. 2011); Bridas SAPIC v.
Turkmenistan, 447 F.3d 411, 416 n.5 (5th Cir. 2006) (applying federal common law to
arbitration agreement despite English choice-of-law clause and arbitral seat in
Sweden); Sarhank Group v. Oracle Corp., 404 F.3d 657, 662 (2d Cir. 2005) (rejecting
argument that arbitration agreement was binding on U.S. non-signatory under
Egyptian law because “[i]t is American federal arbitration law that controls”);
Smith/Enron Cogeneration LP v. Smith Cogeneration Int’l, Inc., 198 F.3d 88, 96 (2d Cir.
1999) (applying federal law to enforceability of arbitration agreement); McDermott
Int’l, Inc. v. Lloyds Underwriters of London, 944 F.2d 1199 (5th Cir. 1991); David L.
Threlkeld & Co. v. Metallgesellschaft Ltd, 923 F.2d 245, 249-50 (2d Cir. 1991); Genesco,
Inc. v. T. Kakiuchi & Co., 815 F.2d 840, 845 (2d Cir. 1987) (validity of arbitration
agreement “is determined under federal law, which comprises generally accepted
principles of contract law”); Rhone Mediterranee v. Lauro, 712 F.2d 50, 53-54 (3d Cir.
1983) (applying federal common law, not parties’ chosen Italian law, to
enforceability of arbitration agreement); Glencore Ltd v. Degussa Eng’d Carbons LP,
848 F.Supp.2d 410, 435-36 (S.D.N.Y. 2012) (applying federal common law to existence
of agreement to arbitrate); Copape Produtos de Pétroleo Ltda v. Glencore Ltd, 2012
WL 398596, at *4 n.33 (S.D.N.Y.) (applying federal law); Nanosolutions, LLC v. Prajza,
793 F.Supp.2d 46, 54 n.5 (D.D.C. 2011); Apple & Eve, LLC v. Yantai N. Andre Juice Co., 499
F.Supp.2d 245, 251 (E.D.N.Y. 2007) (“no United States federal cases where a court has
applied the law of the foreign country and declared that an arbitration clause
would be invalid under that country’s law”), vacated on other grounds, 610 F.Supp.2d
226 (E.D.N.Y. 2009); Khan v. Parsons Global Servs., Ltd, 480 F.Supp.2d 327, 338 (D.D.C.
2007) (following Ledee v. Ceramiche Ragno, 684 F.2d 184 (1st Cir. 1982)), rev’d on other
grounds, 521 F.3d 421 (D.C. Cir. 2008); Filanto SpA v. Chilewich Int’l Corp., 789 F.Supp.
1229, 1236 (S.D.N.Y. 1992).
448) Rhone Mediterranee v. Lauro, 555 F.Supp. 481, 484 (D.V.I. 1982), aff’d, 712 F.2d 50 (3d
Cir. 1983).
449) See §4.04[A][2][j][v](3).
100
450) See §4.04[A][2][j][v](4). See also Progressive Cas. Ins. Co. v. C.A. Reaseguradora
Nacional de Venezuela, 991 F.2d 42, 46 (2d Cir. 1993) (“Thus, while §2 of the [FAA]
preempts state law which treats arbitration agreements differently from any other
contracts, it also ‘preserves general principles of state contract law as rules of
decision on whether the parties have entered into an agreement to arbitrate.’”)
(quoting Cook Chocolate Co. v. Salomon, Inc., 684 F.Supp. 1177, 1182 (S.D.N.Y. 1988)).
451) These difficulties are outlined above. See §4.04[A][2][e].
452) See, e.g., Steel Corp. of Philippines v. Int’l Steel Servs., Inc., 354 F.App’x 689, 692-93 (3d
Cir. 2009) (presumption that law of arbitral seat will apply to arbitration
agreement); Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, 364 F.3d 274, 292 n.43 (5th Cir. 2004) (“Certain sections and comments of the
Restatement … support a determination that Swiss law [i.e., law of the arbitral seat]
applied to the arbitration agreement”); AO Techsnabexport v. Globe Nuclear Serv. &
Supply, Ltd, 656 F.Supp.2d 550, 558 (D. Md. 2009) (applying Swedish law, law of
arbitral seat, to validity of arbitration agreement), aff’d, 404 F.App’x 793 (4th Cir.
2010); Balkan Energy Ltd v. Ghana, 302 F.Supp.3d 144, 153 (D.D.C. 2018) (applying law
of arbitral seat to arbitration agreement); Nissho Iwai Corp. v. MV Joy Sea, 2002 A.M.C.
1305, 1311 (E.D. La. 2002) (law of arbitral seat is implied choice of law governing
arbitration agreement); Spier v. Calzaturificio Tecnica, SpA, 71 F.Supp.2d 279, 283
(S.D.N.Y. 1999) (applying Italian law, as law of arbitral seat, to validity of arbitration
agreement); Bergesen v. Lindholm, 760 F.Supp. 976, 981 n.9 (D. Conn. 1991) (citing
Second Restatement for proposition that “the parties’ selection of a location for
arbitration may evidence an intention that the law of this same location govern the
contract as a whole”).
453) See, e.g., Yavuz v. 61 MM, Ltd, 465 F.3d 418, 428 (10th Cir. 2006) (“in the international
context,” no reason why “forum-selection clause should [not be] interpreted in
accordance with the law chosen by the contracting parties”); Motorola Credit Corp. v.
Uzan, 388 F.3d 39, 51 (2d Cir. 2004) (“if defendants wish to invoke the arbitration
clauses in the agreements at issue, they must also accept the Swiss choice-of-law
clauses that govern those agreements”); Sphere Drake Ins. Ltd v. Clarendon Nat’l Ins.
Co., 263 F.3d 26, 32 n.3 (2d Cir. 2001) (FAA “does not preempt choice-of-law clause”);
Progressive Cas. Ins. Co. v. C.A. Reaseguradora Nacional de Venezuela, 991 F.2d 42, 45-
46 (2d Cir. 1993) (applying state contract law to formation of international
arbitration agreement); Milanovich v. Costa Crociere, SpA, 954 F.2d 763, 766 (D.C. Cir.
1992) (applying law chosen by choice-of-law provision); Int’l Chartering Serv., Inc. v.
Eagle Bulk Shipping Inc., 138 F.Supp.3d 629, 642-43 (S.D.N.Y. 2015) (choice-of-law
clause selecting English law governs arbitration agreement); GAR Energy & Assocs. v.
Ivanhoe Energy Inc., 2011 WL 6780927 (E.D. Cal.) (applying generally-applicable state
contract law to validity of arbitration agreement); A.O.A. v. Doe Run Res. Corp., 2011
WL 6091724, at *2 (E.D. Mo.) (applying state contract law to determine parties to
international arbitration agreement); CCP Sys. AG v. Samsung Elecs. Corp., Ltd, 2010
WL 2546074 (D.N.J.) (applying law chosen by choice-of-law provision to non-signatory
issues); FR 8 Singapore Pty Ltd v. Albacore Maritime Inc., 754 F.Supp.2d 628, 636
(S.D.N.Y. 2010) (applying parties’ chosen English law in determining arbitrability);
Frydman v. Cosmair, Inc., 1995 WL 404841, at *4 (S.D.N.Y.) (“The court must look to the
state law which governed the contract formation. … Since the contract in dispute
here was formed in France between French citizens, French law applies in the
determination of whether it constitutes an agreement to arbitrate.”).
454) See, e.g., Errato v. Am. Express Co., 2019 WL 3997010, at *7 (D. Conn.) (applying “most
significant relationship test” under Connecticut law to select law governing
arbitration agreement); Harrington v. Atl. Sounding Co., 2007 WL 2693529, at *3
(E.D.N.Y.) (“The court will apply New Jersey law, since … that state has the most
significant relationship to the arbitration agreements and the employment
relationship between the parties”), vacated on other grounds, 602 F.3d 113 (2d Cir.
2010); Jureczki v. Banc One Tex., NA, 252 F.Supp.2d 368, 371 (S.D. Tex. 2003) (applying
Texas law because “state with the most significant relationship to the arbitration
clause is Texas [because plaintiffs] are Texas residents, plaintiffs’ deposit account
was opened and maintained in Texas, and the arbitration clause at issue provides
that ‘the federal judicial district that includes [plaintiffs’] mailing address at the
time the Claim is filed’ is the forum for arbitration”); Owen v. MBPXL Corp., 173
F.Supp.2d 905, 912-13 (N.D. Iowa 2001) (Iowa law had most significant relationship to
arbitration agreement because, among other reasons, agreement was formed while
employee was employed in Iowa); Specht v. Netscape, 150 F.Supp.2d 585 (S.D.N.Y.
2001) (California had most significant relationship to litigation where product was
designed by corporation with principal place of business in California and
distributed from website maintained in California), aff’d, 306 F.3d 17, 32, 35 (2d Cir.
2002); Ferrara SpA v. United Grain Growers, Ltd, 441 F.Supp. 778, 781 (S.D.N.Y. 1977)
(raising, but not deciding, possible applicability of (a) federal standards of
enforceability under Chapter 1 of the FAA, (b) “a uniform body of international law
embodied in the Convention,” or (c) New York law; suggesting that FAA standards
would apply); I.S. Joseph Co. v. Toufic Aris & Fils, 54 A.D.2d 665, 666 (N.Y. App. Div.
1976) (holding that as to arbitration agreement, New York law has “most significant”
contacts). See §4.04[A][2][e].
101
455) Finally, as discussed above, other U.S. lower courts have adopted a third approach,
holding that a choice-of-law clause will be interpreted to select the law governing
the arbitration agreement where it is unmistakably clear that this was the parties’
intention. See §4.02[A][2][d]; Portland Gen. Elec. Co. v. Liberty Mut. Ins. Co., 862 F.3d
981, 985 (9th Cir. 2017) (incorporation of ICC Rules constituted “clear and
unmistakable evidence”); Brennan v. Opus Bank, 2015 WL 4731378, at *3 (9th Cir.) (“To
overcome the default application of federal arbitrability law, parties to an
arbitration agreement must ‘clearly and unmistakably designate that nonfederal
arbitrability law applies’”) (quoting Cape Flattery Ltd v. Titan Maritime, LLC, 647 F.3d
914, 921 (9th Cir. 2011)); Ario v. Underwriting Members of Syndicate 53 at Lloyds, 618
F.3d 277, 293 (3d Cir. 2010); ASUS Computer Int’l v. InterDigital, Inc., 2015 WL 5186462,
at *3 (N.D. Cal.); Westbrook Int’l, LLC v. Westbrook Techs., Inc., 17 F.Supp.2d 681, 684
(E.D. Mich. 1998).
456) See §§4.02[A][2][b]-[c]; §4.03_[A][3]; §4.04[A][4][a].
457) Lower courts have commented on the lack of clear authority on the issue. See, e.g.,
Cape Flattery Ltd v. Titan Maritime, LLC, 647 F.3d 914, 918 (9th Cir. 2011) (“Neither the
Supreme Court nor [the Ninth Circuit] has decided whether federal arbitrability law
allows contracting parties to agree to apply a non-federal law of arbitrability to
interpret a given arbitration agreement. If the parties can agree to apply a non-
federal arbitrability law, it is also undecided how courts should determine whether
the parties have so agreed.”); Farrell v. Subway Int’l BV, 2011 WL 1085017, at *3
(S.D.N.Y.) (noting split in authority regarding whether to apply federal common law
or parties’ chosen substantive law to determine validity of arbitration agreement);
FR 8 Singapore Pte Ltd v. Albacore Maritime Inc., 754 F.Supp.2d 628, 634 (S.D.N.Y.
2010) (applying choice-of-law clause to arbitration agreement, although “[w]here
the choice of law in a Convention case is between the law specified by the choice-
of-law clause and federal common law, Second Circuit precedent has been less than
crystal clear”).
458) See §4.04[A][2][j][v](2); Homa v. Am. Express Co., 558 F.3d 225, 227-32 (3d Cir. 2009);
Telenor Mobile Commc’ns AS v. Storm LLC, 584 F.3d 396, 431 (2d Cir. 2009) (applying
parties’ chosen law to question whether signatory to arbitration agreement had
apparent authority to bind principal); Motorola Credit Corp. v. Uzan, 388 F.3d 39, 50
(2d Cir. 2004); Sphere Drake Ins. Ltd v. Clarendon Nat’l Ins. Co., 263 F.3d 26, 32 n.3 (2d
Cir. 2001); Int’l Minerals & Res., SA v. Pappas, 96 F.3d 586, 592 (2d Cir. 1996); Hofer v.
Emley, 2019 WL 4575389, at *5 (N.D. Cal.) (applying law chosen to govern underlying
contract to validity of arbitration agreement); Bausch & Lomb Inc. v. Mimetogen
Pharms., Inc., 2016 WL 2622013, at *7 (W.D.N.Y.) (applying parties’ chosen law of
underlying contract to question of whether non-signatories were bound by
arbitration agreement); Int’l Chartering Servs., Inc. v. Eagle Bulk Shipping Inc., 138
F.Supp.3d 629, 636-37 (S.D.N.Y. 2015) (same); McNeal v. Glazman, 2018 U.S. Dist. LEXIS
146695, at *17 (D. Del.); Bartlett Grain Co. v. Am. Int’l Group, 2011 WL 3274388 (W.D.
Mo.) (applying English law as law governing underlying insurance policy); Todd v. S.S.
Mut. Underwriting Ass’n, Ltd, 2011 WL 1226464, at *5 (E.D. La.); Tierra Right of Way
Servs., Ltd v. Abengoa Solar Inc., 2011 WL 2292007 (D. Ariz.) (applying law chosen by
parties to govern underlying contract (New York) to determine validity of arbitration
clause); CCP Sys. AG v. Samsung Elecs. Corp., 2010 WL 2546074, at *7-8 (D.N.J.)
(applying choice-of-law clause to arbitration agreement); FR 8 Singapore Pte Ltd v.
Albacore Maritime Inc., 754 F.Supp.2d 628, 634 (S.D.N.Y. 2010); Di Martino v. Dooley,
2009 WL 27438 (S.D.N.Y.) (applying law chosen by parties to govern underlying
contract to determine whether non-signatory was bound by arbitration agreement);
Bolden v. FedEx Ground Package Sys., Inc., 60 So.3d 679, 684-85, 689 (La. Ct. App.
2011).
459) Motorola Credit Corp. v. Uzan, 388 F.3d 39, 50-51 (2d Cir. 2004).
102
460) See §4.04[A][2][j][v](2); Monfared v. St. Luke’s Univ. Health Network, 767 F.App’x 377,
379 (3d Cir. 2019); Cape Flattery Ltd, 647 F.3d at 922; Century Indem. Co. v. Certain
Underwriters at Lloyd’s, 584 F.3d 513, 522 (3d Cir. 2009) (“The [FAA] … creates a body
of federal substantive law establishing and governing the duty to honor agreements
to arbitrate disputes”); Genesco, Inc. v. T. Kakiuchi & Co., 815 F.2d 840, 845-46 (2d Cir.
1987) (applying federal common law to determine whether party validly agreed to
arbitration in an agreement governed by Convention); Morse v. Levine, 2019 U.S. Dist.
LEXIS 219277, at *23 (S.D.N.Y.); Authenment v. Ingram Barge Co., 878 F.Supp.2d 672
(E.D. La. 2012) (despite English choice-of-law clause, court’s choice-of-law analysis
resulted in application of federal maritime law to determine whether non-signatory
was bound by arbitration agreement); Changzhou AMEC E. Tools & Equip. Co. v. E.
Tools & Equip., Inc., 2012 WL 3106620 (C.D. Cal.) (noting decisions in which courts
addressing law applicable to arbitration agreement did not apply foreign choice-
of-law provision); Maritima de Ecologia, SA de CV v. Sealion Shipping Ltd, 2011 WL
1465744 (S.D.N.Y.) (despite parties’ choice of English law to govern dispute, court
applied federal law to determine existence of arbitration agreement); Powertrain
Prod. Sys., LLC v. Nemak of Canada Corp., 2009 WL 3757106, at *3 (E.D. Mich.) (“issue of
arbitrability must be initially addressed by looking to the federal law of the United
States (i.e., the [FAA]) even though the parties in this case agreed that the
arbitration is to be conducted ‘in accordance with’ the Arbitration Act of Canada”);
Storm LLC v. Telenor Mobile Commc’ns, 2006 WL 3735657, at *8 n.4 (S.D.N.Y.) (“The
weight of the authority suggests that in [cases under the New York Convention],
federal law governs the issue of whether the parties have agreed to arbitrate”)
(emphasis in original); Borsack v. Chalk & Vermilion Fine Arts, Ltd, 974 F.Supp. 293,
299 n.5 (S.D.N.Y 1997) (“where jurisdiction is alleged under chapter 2 of the [FAA] the
issue of enforceability and validity of the arbitration clause is governed by federal
law”); Rhone Mediterranee v. Lauro, 555 F.Supp. 481, 484 (D.V.I. 1982) (“Neither the law
of a foreign country, or the law of a particular state (or territory) can ever be chosen
– only federal law is controlling”), aff’d, 712 F.2d 50 (3d Cir. 1983); Diamond
Waterproofing Sys. v. 55 Liberty Owners Corp., 4 N.Y.3d 247, 254 (N.Y. 2005) (applying
federal common law despite choice-of-law provision in underlying contract
selecting New York law).
461) Johnson v. Gruma Corp., 614 F.3d 1062, 1066 (9th Cir. 2010).
462) See, e.g., Hogan v. SPAR Group Inc., 914 F.3d 34, 41 (1st Cir. 2019) (applying federal
common law to determine whether a non-signatory was bound by arbitration
agreement); Sourcing Unlimited, Inc. v. Asimco Int’l, Inc., 526 F.3d 38, 41, 46-47 (1st
Cir. 2008) (applying federal common law to determine whether non-signatory was
bound by arbitration agreement on estoppel theory); InterGen NV v. Grina, 344 F.3d
134, 143-44 (1st Cir. 2003); Int’l Paper Co. v. Schwabedissen Maschinen & Anlagen
GmbH, 206 F.3d 411, 417 n.4 (4th Cir. 2000) (FAA and New York Convention “‘create a
body of federal substantive law of arbitrability, applicable to any arbitration
agreement within the coverage of the Act.’ … Because the determination of whether
… a signatory[] is bound by the [contract] presents no state law question of contract
formation or validity we look to the ‘federal substantive law of arbitrability’ to
resolve this question.”) (quoting Moses H. Cone Mem. Hosp., 460 U.S. at 24);
Smith/Enron Cogeneration LP v. Smith Cogeneration Int’l, Inc., 198 F.3d. 88, 96 (2d Cir.
1999) (applying federal law to arbitration clause in contract containing Texas
choice-of-law clause).
463) See, e.g., Ario v. Underwriting Members of Syndicate 53 at Lloyds, 618 F.3d 277, 289 (3d
Cir. 2010) (“Although Volt … addressed only the domestic FAA, the principles
undergirding those decisions apply to the [New York] Convention’s implementing
legislation”; holding that parties may agree to apply state law standards to
international arbitration agreement, but must use “clear and unambiguous
language” to do so); Johnson v. Gruma Corp., 614 F.3d 1062, 1067 (9th Cir. 2010) (where
parties clearly agree to application of state law, courts must apply state standard);
Doctor’s Assocs., Inc. v. Distajo, 107 F.3d 126, 131 (2d Cir. 1997) (“even the inclusion in
the contract of a general choice-of-law clause does not require application of state
law to arbitrability issues, unless it is clear that the parties intended state
arbitration law to apply on a particular issue”); Sonic Auto., Inc. v. Younis, 2015 WL
12656915, at *3 (C.D. Cal.) (presumption that FAA governs not trumped by a general
choice-of-law clause); Freaner v. Valle, 2011 WL 5596919, at *4 (S.D. Cal.) (refusing to
apply general choice-of-law provision to question of arbitrability without “clear and
unmistakable evidence” of parties’ intent); Volk v. X-Rite, Inc., 599 F.Supp.2d 1118,
1125 (S.D. Iowa 2009) (“Agreement’s generic choice-of-law provisions applying
Michigan law do not displace the FAA because the parties do not make their intent
to use state arbitration law ‘abundantly clear’”) (quoting UHC Mgt Co. v. Computer
Sciences, Corp., 148 F.3d 992, 996-97 (8th Cir. 1998)); Westbrook Int’l, LLC v. Westbrook
Techs., Inc., 17 F.Supp.2d 681, 684 (E.D. Mich. 1998).
464) Cape Flattery Ltd v. Titan Maritime, LLC, 647 F.3d 914, 920 (9th Cir. 2011).
103
465) See, e.g., Amtax Holdings 463, LLC v. KDF Communities-Hallmark, LLC, 2018 WL
4743386, at *4 (C.D. Cal.) (general choice-of-law clause does not affect “the
allocation of decisional authority regarding arbitrability”); Alfa Laval U.S. Treasury,
Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 857 F.Supp.2d 404, 417 (S.D.N.Y. 2012)
(general choice-of-law clause in contract, even choice-of-law clause in arbitration
agreement that designates New York state law as governing procedure,
administration, interpretation or construction of arbitration agreement, does not
unequivocally “overcome the rule that general choice-of-law clauses incorporate
only the chosen state’s ‘substantive rights and obligations, [but] not the State’s
allocation of power between alternative tribunals’”) (quoting Mastrobuono v.
Shearson Lehman Hutton Inc., 514 U.S. 52, 60 (U.S. S.Ct. 1995)); Javier v. Carnival Corp.,
2010 WL 3633173, at *3 (S.D. Cal.) (with respect to arbitral jurisdiction, “the Seafarer
Agreement’s choice of Panama law is irrelevant”); Saturn Telecommc’ns Servs., Inc. v.
Covad Commc’ns Co., 560 F.Supp.2d 1278, 1282 (S.D. Fla. 2008) (“Parties may, of
course, specify in a contract the rules under which arbitration will be conducted. In
this case, however, the parties made no express provision in the BIA Agreement
regarding the rules which would govern the arbitration. As a result, the FAA
applies.”); Mech. Power Conversion, LLC v. Cobasys, LLC, 500 F.Supp.2d 716, 719 (E.D.
Mich. 2007) (applying federal common law to determine validity of arbitration
agreement despite general choice-of-law clause selecting Michigan law); Sea Bowld
Marine Group, LDC v. Oceanfast Pty, Ltd, 432 F.Supp.2d 1305, 1312 (S.D. Fla. 2006)
(“[T]he Agreement here contains choice-of-law and arbitration provisions that both
reference foreign law. While these designations are relevant to the substantive law
to be used, and the location of arbitration, they say nothing, and mean nothing, as
to the threshold issue of arbitrability. Federal law controls my interpretation of
whether the Arbitration Clause covers the dispute in this case.”); Chloe Z Fishing Co.
v. Odyssey Re (London) Ltd, 109 F.Supp.2d 1236, 1252 (S.D. Cal. 2000).
466) BioMagic, Inc. v. Dutch Bros. Enters., LLC, 729 F.Supp.2d 1140, 1146 (C.D. Cal. 2010). The
court relied on “the common sense principle that a generic choice of law clause
doesn’t show agreement to be bound by” the arbitration law, as opposed to the
substantive law, of the chosen jurisdiction. Id. at 1148.
467) See §19.05[B][3]. See also Restatement (Second) Conflict of Laws §122 comment a
(1971).
468) Mastrobuono v. Shearson Lehman Hutton Inc., 514 U.S. 52, 63-64 (U.S. S.Ct. 1995).
469) Although Mastrobuono was a state law case, the same analysis applies, and similar
results have been reached by lower courts, in international cases. See §4.04[A][2][j]
[v](2).
470) Farrell v. Subway Int’l, BV, 2011 WL 1085017, at *3 (S.D.N.Y.) (quoting Motorola Credit,
388 F.3d at 50-51).
471) See, e.g., Campaniello Imps., Ltd v. Saporiti Italia SpA, 117 F.3d 655, 668-69 (2d Cir.
1997) (applying federal law to arbitration clause in contract containing Italian
choice-of-law clause); Rhone Mediterranee v. Lauro, 712 F.2d 50, 52-54 (3d Cir. 1983)
(Italian law, applicable to underlying contract, not applied to invalidate arbitration
agreement); Ledee v. Ceramiche Ragno, 684 F.2d 184, 186-87 (1st Cir. 1982) (Puerto
Rican law, applicable to contract, not applied to invalidate arbitration agreement);
Becker Autoradio U.S.A., Inc. v. Becker Autoradiowerk GmbH, 585 F.2d 39, 43 (3d Cir.
1978); FR 8 Singapore Pte Ltd v. Albacore Maritime Inc., 794 F.Supp.2d 449 (S.D.N.Y.
2011) (applying parties’ choice-of-law clause, except in cases where it conflicts with
federal law concerning issues related to tribunal’s authority); Farrell v. Subway Int’l,
BV, 2011 WL 1085017, at *3 (S.D.N.Y.) (applying federal common law rather than
contractual choice-of-law clause to avoid invalidating parties’ arbitration
agreement); Chloe Z Fishing Co. v. Odyssey Re (London) Ltd, 109 F.Supp.2d 1236, 1253
(S.D. Cal. 2000).
472) See §4.04[A][2][j][v].
473) See §1.04[A][1][d].
474) Ledee v. Ceramiche Ragno, 684 F.2d 184 (1st Cir. 1982).
475) Id. at 187 (emphasis added).
476) Rhone Mediterranee v. Lauro, 712 F.2d 50, 53-54 (3d Cir. 1983).
478) Id. at 54.
479) Ferrara SpA v. United Grain Growers, Ltd, 441 F.Supp. 778, 781 (S.D.N.Y. 1977).
104
480) See, e.g., Suazo v. NCL (Bahamas), Ltd, 822 F.3d 543, 552 (11th Cir. 2016); Aggarao v.
MOL Ship Mgt Co., 675 F.3d 355, 373 (4th Cir. 2012); Balen v. Holland Am. Line, Inc., 583
F.3d 647, 655 (9th Cir. 2009); Bautista v. Star Cruises, 396 F.3d 1289, 1302 (11th Cir.
2005); Becker Autoradio U.S.A., Inc. v. Becker Autoradiowerk GmbH, 585 F.2d 39, 43 n.8
(3d Cir. 1978) (U.S. court would not apply “law of state X [that] will not enforce, or
gives very limited effect to arbitration clauses”); Townsend Ventures, LLC v. Hybrid
Kinetic Group Ltd, 2017 U.S. Dist. LEXIS 139466, at *15 (D. Md.); Eazy Elecs. & Tech., LLC
v. LG Elecs., Inc., 226 F.Supp.3d 68, 74 (D.P.R. 2016); Alghanim v. Alghanim, 828
F.Supp.2d 636, 645-46 (S.D.N.Y. 2011); Matthews v. Princess Cruise Lines, Ltd, 728
F.Supp.2d 1326, 1329-30 (S.D. Fla. 2010); Hodgson v. Royal Caribbean Cruises, Ltd, 706
F.Supp.2d 1248, 1260 (S.D. Fla. 2009) (jurisdictional objection did not present “the
kind of fraud falling under the scope of the Convention’s null-and-void clause, a
fraud ‘that can be applied neutrally on an international scale’”) (quoting Bautista v.
Star Cruises, 396 F.3d 1289, 1302 (11th Cir. 2005)); Apple & Eve, LLC v. Yantai N. Andre
Juice Co., 499 F.Supp.2d 245, 248-49 (E.D.N.Y. 2007), vacated on other grounds, 610
F.Supp.2d 226 (E.D.N.Y. 2009); Khan v. Parsons Global Servs., Ltd, 480 F.Supp.2d 327,
339-40 (D.D.C. 2007), rev’d on other grounds, 521 F.3d 421 (D.C. Cir. 2008); Prograph
Int’l, Inc. v. Barhydt, 928 F.Supp. 983 (N.D. Cal. 1996); Technetronics, Inc. v. Leybold-
Geaeus GmbH, 1993 WL 197028, at *6 (E.D. Pa.) (“traditionally recognized
international defenses such as fraud, duress or mistake”); W. of England Ship Owners
Mut. Ins. Ass’n (Luxembourg) v. Am. Marine Corp., 1992 WL 37700, at *4-5 (E.D. La.)
(rejecting application of Louisiana law to international arbitration agreement,
which would have rendered agreement null and void); Marchetto v. DeKalb Genetics
Corp., 711 F.Supp. 936, 939 (N.D. Ill. 1989) (rejecting claim that arbitration agreement
was void under Italian law because it applied to tort claims and because
nonparties were sued: “possibility that Italian law might divest a panel of Italian
arbitrators of jurisdiction is not determinative”); Dev. Bank of Philippines v. Chemtex
Fibers Inc., 617 F.Supp. 55, 57 n.12 (S.D.N.Y. 1985); Antco Shipping Co. v. Sidermar SpA,
417 F.Supp. 207, 216 (S.D.N.Y. 1976) (enforcement of arbitration agreement should be
denied “only where enforcement would violate the forum state’s most basic notions
of morality and justice”).
481) Chloe Z Fishing Co. v. Odyssey Re (London) Ltd, 109 F.Supp.2d 1236, 1258-59 (S.D. Cal.
2000) (emphasis added).
482) I.T.A.D. Assocs., Inc. v. Podar Bros., 636 F.2d 75, 77 (4th Cir. 1981). See also Marchetto v.
DeKalb Genetics Corp., 711 F.Supp. 936, 939 (N.D. Ill. 1989) (court should “reject
challenges to arbitration based in legal principles unique to a signatory nation”).
483) Matthews v. Princess Cruise Lines, Ltd, 728 F.Supp.2d 1326, 1329-30 (S.D. Fla. 2010).
484) Apple & Eve, LLC v. Yantai N. Andre Juice Co., 499 F.Supp.2d 245, 251 (E.D.N.Y. 2007),
vacated on other grounds, 610 F.Supp.2d 226 (E.D.N.Y. 2009).
485) See, e.g., Suazo v. NCL (Bahamas), Ltd, 822 F.3d 543, 552 (11th Cir. 2016); Bautista v.
Star Cruises, 396 F.3d 1289, 1302 (11th Cir. 2005) (rejecting application of state-law
principles of unconscionability in “null and void” analysis under Article II of
Convention); Eazy Elecs. & Tech., LLC v. LG Elecs., Inc., 226 F.Supp.3d 68, 74 (D.P.R.
2016) (rejecting unconscionability defence with respect to arbitration agreements
under New York Convention); Estibeiro v. Carnival Corp., 2012 WL 4718978 (S.D. Fla.)
(following Bautista and rejecting unconscionability as defense under Article II of
Convention); Matthews v. Princess Cruise Lines, Ltd, 728 F.Supp.2d 1326, 1329-30 (S.D.
Fla. 2010) (“traditional principles of procedural unconscionability … do not fit within
the limited scope of defenses to the enforceability of an arbitration agreement
provided for by the Convention”); Lathan v. Carnival Corp., 2009 WL 6340059, at *2
(S.D. Fla.) (“The Eleventh Circuit also made it clear that state-law principles of
unconscionability do not fit within the limited scope of defenses allowed by the
Convention”); Polychronakis v. Celebrity Cruises, Inc., 2008 WL 5191104, at *3 n.2 (S.D.
Fla.) (“Plaintiff also seems to argue that the agreement was unconscionable. … The
Court finds that this is not an affirmative defense authorized by the Convention.”);
Khan v. Parsons Global Servs., Ltd, 480 F.Supp.2d 327, 339-40 (D.D.C. 2007) (rejecting
unconscionability as defense to enforceability of arbitration agreement: “By its very
nature, the defense of unconscionability seeks to promote those very tenets that
are contrary to a finding of certainty, namely: policy, fairness, and appeals to a
court’s discretion outside of the letter of the law”), rev’d on other grounds, 521 F.3d
421 (D.C. Cir. 2008).
486) See, e.g., Aggarao v. MOL Ship Mgt Co., 675 F.3d 355, 373 (4th Cir. 2012) (rejecting
application of public policy defense at arbitration enforcement stage because
defense “cannot be applied ‘neutrally on an international scale’”) (quoting Lindo v.
NCL (Bahamas), Ltd, 652 F.3d 1257, 1278 (11th Cir. 2011)); Maxwell v. NCL (Bahamas),
Ltd, 454 F.App’x 709, 710 (11th Cir. 2011) (“public policy is not a valid defense to
enforcement of an arbitration agreement” because it cannot “be applied neutrally
throughout the world”); Eazy Elecs. & Tech., LLC v. LG Elecs., Inc., 226 F.Supp.3d 68, 74
(D.P.R. 2016) (rejecting public policy defense based assertedly inconvenient forum
under New York Convention); Dev. Bank of Philippines v. Chemtex Fibers Inc., 617
F.Supp. 55, 57 n.12 (S.D.N.Y. 1985) (“it is clear that the Convention does not
contemplate the expression of local public policy as a barrier to the arbitrability of
claims”).
487) See §4.02[A][2][c]; §4.04[A][4][a].
105
488) See §4.02[A][2][d].
489) See §4.04[A][2][j][v](1).
490) There are reasonable prospects for the development, over time, of international
rules of contract (and other commercial) law applicable to international
commercial arbitration agreements; at present, it is doubtful that a body of such
rules exists with sufficient clarity and comprehensiveness to provide a reliable
framework for enforcing international arbitration agreements. See §19.06[C].
491) The basis for the principles of “international law” or “international arbitration law”
cited in French decisions, see §4.02[A][2][c], is unclear, as is the legal nature and
character of these principles. It is doubtful that they can be justified as principles
of customary international law, but this appears to have been the contemplation of
the French courts.
492) That is, absent some firm basis in international law for rules governing the
formation and validity of arbitration agreements, and some similarly secure basis
warranting the application of such rules in preference to national law, it is difficult
to justify overriding national law on the basis of such principles.
493) See §§4.03 et seq.
494) See §4.04[A]. Citing a variety of reasons, most authorities have concluded that
Article II requires application of some national law to decide whether an arbitration
agreement is “null and void” under the New York Convention. See, e.g., Award in ICC
Case No. 5730, 117 J.D.I. (Clunet) 1029, 1032-33 (1990) (“faithful to the traditional
concept of even international arbitration, this tribunal considers that to be
effective, the arbitration agreement must draw its force from an attachment to a
legal order, even though the parties would be free to choose the latter”). See also B.
Berger & F. Kellerhals, International and Domestic Arbitration in Switzerland ¶328 (3d
ed. 2015); Contini, International Commercial Arbitration: The United Nations
Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 8 Am. J.
Comp. L. 283, 296 (1959) (since Article II(3) is silent, courts may make determination
on basis of forum law, including forum choice-of-law rules); J.-L. Delvolvé, J. Rouche
& G. Pointon, French Arbitration Law and Practice ¶93 (2009); Graffi, Securing
Harmonized Effects of Arbitration Agreements Under the New York Convention, 28
Hous. J. Int’l L. 663, 694-97 (2006); Hook, Arbitration Agreements and Anational Law: A
Question of Intent?, 28 J. Int’l Arb. 175 (2011) (under English law, “any implied or
express choice of anational law to govern the arbitration agreement will have to be
overridden”); Pisar, The United Nations Convention on Foreign Arbitral Awards, 33 S.
Cal. L. Rev. 14, 16 (1959) (Article II(3) refers to national conflict of laws rules); J.-F.
Poudret & S. Besson, Comparative Law of International Arbitration ¶180 (2d ed.
2007).
495) See §§4.04[A][1][b]-[c]. In particular, Article V(1)(a) of the New York Convention
expressly contemplates that international arbitration agreements will be governed
by either the national law chosen by the parties or the national law of the arbitral
seat (in the absence of a contrary choice by the parties). Likewise, Article VI(2) of the
European Convention provides that a court determining the existence or validity of
an arbitration agreement looks to the national law chosen by the parties, the
national law of the arbitral seat, or (where neither of the preceding can be
determined) the national law applicable under the court’s own choice-of-law rules.
See §§4.04[A][1][b]-[c].
496) The development of international commercial codes such as the UNIDROIT
Principles of International Contracts and the European Principles of Contract Law
suggests that, in time, a satisfactory international legal regime for arbitration
agreements may evolve. At present, however, it is difficult to conclude that such a
regime exists. See Linarelli, Analytical Jurisprudence and the Concept of Commercial
Law, 114 Penn. St. L. Rev. 119, 137-86 (2009) (discussing various sources of commercial
law and questioning whether they constitute “transnational legal order”).
497) See Ecuador v. Occidental [2005] EWCA Civ 1116, ¶30 (English Ct. App.) (“protection of
investors at which the whole scheme is aimed is likely to be better served if the
agreement to arbitrate is subject to international law, rather than to the law of the
State against which an investor is arbitrating”); C. Schreuer et al., The ICSID
Convention: A Commentary Art. 25, 250-51, ¶585 (2d ed. 2009) (noting
“methodological mix involving treaty interpretation, statutory interpretation and
general principles of contract law”).
498) See §1.04[A][1][f].
Arb. 116, 117 (French Cour de Cassation Civ. 1).
500) See §1.04[A][1][c]; §2.01[A][1][a]; §4.04[A][1][b]; §4.04[B][2][b]; §5.01_[B][2]; §8.02[A][1].
501) See §1.04_[A][1]; §4.04[A][1][b]; §5.01_[B][2]; §5.04_[B][1]; New York Convention, Art.
II(3) (“null and void, inoperative or incapable of being performed”).
502) See §4.02[A][1][b]; §4.04[A][1][b]; New York Convention, Art. V(1)(a).
503) New York Convention, Art. II(3). See §1.04_[A][1]; §2.01[A][1][a].
106
504) Similar conclusions have been reached in well-reasoned authority under the
European Convention. See Benteler v. Belgium, Award in Ad Hoc Case of 18 November
1983, 1989 Rev. Arb. 339 (“[T]he legal concepts and terms used in the Convention in
general have the same meaning as they have in international commercial relations.
It would in fact be contrary to the very aims of the Convention to accept that its
terms must be interpreted according to concepts of domestic law, because such an
interpretation would lead to the very sort of difficulties which the authors of the
Convention intended to avoid.”).
505) Some commentators have relied on the absence of detailed specification of
international standards in Article II(3). A. van den Berg, The New York Arbitration
Convention of 1958 123 (1981) (“question when an agreement is to be considered null
and void etc. may again depend on some municipal law because the Convention
does not give much guidance as to what should be understood by these words”).
This absence of detailed specification is characteristic of the Convention’s generally
“constitutional” drafting style, and is relevant to the nature of the international
standards prescribed by the Convention, and not whether or not such standards
exist.
506) See §1.04[A][1][c]; §4.04[A][1][b]; Glencore Ltd v. Degussa Eng’d Carbons LP, 848
F.Supp.2d 410, 422 (S.D.N.Y. 2012) (“The goals of the Convention (and thus FAA
chapter 2), were to ‘unify the standards by which agreements to arbitrate are
observed’ internationally … and to ‘unify the standards by which’ … ‘arbitral awards
are enforced in the signatory countries’”) (quoting Scherk v. Alberto-Culver Co., 417
U.S. 506, 520 n.15, 94 (U.S. S.Ct. 1974)).
507) The existence of this standard, which is discussed below, is undisputed. See
§§5.01[B][2] et seq.
508) §1.04[A][1].
509) This analysis parallels that under the domestic FAA in the United States: “[An
arbitration agreement] shall be valid, irrevocable, and enforceable, save upon such
grounds as exist at law or in equity for the revocation of any contract.” U.S. FAA, 9
U.S.C. §2. See AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 337 (U.S. S.Ct. 2011)
(under FAA §2, arbitration agreements may be “invalidated by generally applicable
contract defenses … but not by defenses that apply only to arbitration or that
derive their meaning from the fact than an agreement to arbitrate is at issue”); Perry
v. Thomas, 482 U.S. 483, 490 (U.S. S.Ct. 1987); §5.01[B][2].
510) See §4.04[A][2][j][v]; §4.04[A][4][b].
511) See §1.04[A][1][c]; §4.04[A][1][b].
512) Vienna Convention on the Law of Treaties, Arts. 26, 31(3) (1969); A. McNair, The Law of
Treaties 493 (1961).
513) See §4.04[A][1][b].
514) That said, both French courts (applying international law) and U.S. courts (applying
federal common law) appear to have had significant success in developing common
law contract rules for international arbitration agreements. See §4.03[B][3][e];
§4.04_[A][4]; §4.04[B][3][b]. Similarly, as noted above, arbitral tribunals (and courts)
have developed substantive rules of contract for investor-state arbitration
agreements. See §4.04[A][4][c]. These developments suggest that it may well be
possible to develop principles of international common law through further judicial
(and arbitral) decisions, particularly in light of the Convention’s “constitutional”
status. See §1.04[A][1][f]. Still, the application of such principles to subjects such as
capacity, authority and illegality poses serious challenges.
515) New York Convention, Arts. II(1), V(2)(a); §4.05_[A]; §6.02[B].
516) See §4.05_[C][5]; §6.01.
517) See §4.04[B][2][b][vi]; §4.05_[A][1]; §6.02[B].
518) A.T. Cross Co. v. Royal Selangor(s) Pte, Ltd, 217 F.Supp.2d 229, 234-35 (D.R.I. 2002).
519) See §1.04[A][1][c][i].
520) Sarhank Group v. Oracle Corp., 404 F.3d 657 (2d Cir. 2005).
521) Id. at 662.
522) Id. at 661.
523) Id. at 658. The choice-of-law clause in the underlying contract provided for the
application of Egyptian law (which was the law applied by the arbitral tribunal).
524) Id. at 658. The dispute arose out of an agreement between two Egyptian companies
(one being a subsidiary of a U.S. company) concerning matters in Egypt.
525) See §§4.02[A][2][b]-[d]; §4.04[A][3][d]; §§4.04[A][4][a]-[b].
526) As discussed elsewhere, Article V(1)(a) requires giving effect to the parties’ choice of
law governing the arbitration agreement or, absent any agreement, the law of the
arbitral seat. See §4.02[A][1][b]; §4.04[A][1][b]; §26.05[A]. The Sarhank court’s
decision violated Article V(1)(a) by refusing to apply either of these choices. It is
conceivable that the court’s decision might be defended on the grounds of public
policy under Article V(2) of the Convention, although the Sarhank court did not
invoke public policy in its opinion. It is difficult, however, to see how the
misinterpretation (such as it was) of contract law principles amounts to a violation
of public policy.
527) See §§4.04[A][2] & [4].
Arbitration §2.14 comment d & Reporters’ Note d (2019).
107
529) Id.
530) Id.
531) See §4.04[A][1][b][ii].
Arbitration §2.14 comment d (2019).
533) See §4.04[A][1][b].
534) See §4.04[A][1][b][iii].
535) See, e.g., Steel Corp. of Philippines v. Int’l Steel Servs., Inc., 354 F.App’x 689, 692-93 (3d
Cir. 2009) (presumption that law of arbitral seat will apply to arbitration
agreement); Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, 364 F.3d 274, 291 (5th Cir. 2004) (“Under the New York Convention, an
agreement specifying the place of the arbitration creates a presumption that the
procedural law of that place applies to the arbitration”); Balkan Energy Ltd v.
Ghana, 302 F.Supp.3d 144, 152-53 (D.D.C. 2018) (“because the parties designated in
the arbitral clause that The Hague, Netherlands was to serve as the seat of the
arbitration, Dutch law supplied the law applicable to the arbitration agreement”),
appeal dismissed, 2018 WL 5115572 (D.C. Cir.).
536) See, e.g., Judgment of 2 October 1931, DFT 57 I 295 (Swiss Fed. Trib.); Judgment of 24
November 1994, XXI Y.B. Comm. Arb. 635, 638 (Rotterdam Rechtbank) (1996) (“law
applicable to the arbitration agreement is the law of the place of arbitration”);
FirstLink Inv. Corp. Ltd v. GT Payment Pte Ltd, [2014] SGHCR 12, ¶16 (Singapore High
Ct.) (“In the absence of indications to the contrary, parties have impliedly chosen
seat of arbitration. All things being equal, the mere fact of an express substantive
law in the main contract would not in and of itself be sufficient to displace parties’
intention to have the law of the seat be the proper law of the arbitration
agreement.”), questioned in BCY v. BCZ, [2017] 3 SLR 357 (Singapore High Ct.); Citation
Infowares Ltd v. Equinox Corp., (2009) 7 SCC 220, ¶15 (Indian S.Ct.) (“There is, in the
absence of any contrary intention, a presumption that the parties have intended
that the proper law of [the] contract as well as the law governing [the] arbitration
agreement are the same as the law of the country in which the arbitration is agreed
to be held”); Nat’l Thermal Power Corp. v. Singer Co., XVIII Y.B. Comm. Arb. 403, 406
(Indian S.Ct. 1992) (1993) (“Where … there is no express choice of the law governing
the contract as a whole, or the arbitration agreement as such, a [rebuttable]
presumption may arise that the law of the country where the arbitration is agreed
to be held is the proper law of the arbitration agreement”); Judgment of 29 October
2015, Case No. 2013 Da 74868, ¶38 (S. Korean S.Ct.) (2015) (“As provided in Art. V(1)(a)
of the New York Convention, the establishment and validity of an arbitration
agreement shall be governed by the law that the relevant parties have designated
as the law governing the arbitration agreement. If not designated, the law of the
country of the seat of arbitration shall govern. ...”).
Arbitration §4-10 comment c (2019). See also id. at §2.13(c) comment e, §2.14(b)
comment d, §4-12 comment c.
538) See §4.04[A][3].
Arbitration §2.13 Reporters’ Note e(i) (2019).
540) Id. at §2.13(c) (“A court determines the existence of a putative international
arbitration agreement or a putative contract that includes an arbitration
agreement pursuant to the law indicated by the choice-of-law rules at the forum”),
§2.13 comment c. The Restatement also incorrectly conflates the choice of the law
governing the arbitration agreement with the law governing the underlying contract.
That is clearly wrong. See §3.02_[E]; §4.04[A][2].
541) See §4.04[A][3].
542) Judgment of 21 March 1995, XXII Y.B. Comm. Arb. 800, 804-05 (Swiss Fed. Trib.) (1997);
Judgment of 24 January 2003, 11 Sch 06/01, ¶18 (Hanseatisches Oberlandesgericht)
(“Pursuant to Art. 27(4) together with Art. 31(1) EGBGB, (10) the existence and validity
of the parties’ agreement on the applicable law are governed by the law which
would be applicable if the contract or the provision were valid. [The] ECC provides
on this point that the contract must be interpreted according to the law of the state
of the agreed place of arbitration. …”); Judgment of 3 February 1990, Della Sanara
Kustvaart: Bevrachting & Overslagbedrijf BV v. Fallimento Cap. Giovanni Coppola Srl,
XVII Y.B. Comm. Arb. 542, 543 (Genoa Corte di Appello) (1992) (“Considering the
eadem ratio and the close connection between [Arts. II(3) and V], the criteria for the
evaluation of the arbitration clause which are to be applied in enforcement
proceedings must also be applied when the clause is invoked in order to derogate
from the jurisdiction of the national courts”).
543) Hague Conference on Private International Law, Principles on Choice of Law in
International Commercial Contracts Arts. 6(1)-(2) (2015) (“1. Subject to ¶2 – (a)
whether the parties have agreed to a choice of law is determined by the law that
was purportedly agreed to; … 2. The law of the State in which a party has its
establishment determines whether that party has consented to the choice of law if,
under the circumstances, it would not be reasonable to make that determination
under the law specified in ¶1”).
108
544) Restatement (Second) Conflict of Laws §187 (1971).
545) Rome I Regulation, Art. 10(1) (“The existence and validity of a contract, or of any
term of a contract, shall be determined by the law which would govern it under this
Regulation if the contract or term were valid”), Art. 10(2) (“Nevertheless, a party, in
order to establish that he did not consent, may rely upon the law of the country in
which he has his habitual residence if it appears from the circumstances that it
would not be reasonable to determine the effect of his conduct in accordance with
the law specified in ¶1”).
546) Rome Convention, Art. 8. See Egon Oldendorff v. Liberia Corp. [1995] 2 Lloyd’s Rep. 64
(QB) (English High Ct.); M. Giuliano & P. Lagarde, Report on the Convention on the Law
Applicable to Contractual Obligations, O.J. C 282 31/10/1980, Art. 8, ¶1. See also
Hague Convention of 22 December 1986 on the Law Applicable to Contracts for the
International Sale of Goods, Art. 10; Hague Convention of 15 June 1955 on the Law
Applicable to International Sales of Goods, Art. 2(3).
547) L. Collins et al. (eds.), Dicey, Morris and Collins on The Conflict of Laws ¶32-110 (15th
ed. 2012 & Supp. 2019) (“There are three English decisions which … [are] to varying
degrees, authority for the view that the question whether a concluded contract
came into existence depended on the putative governing law”). See Union Transp.
plc v. Cont’l Lines SA [1992] 1 WLR 15 (House of Lords); The Parouth [1982] 2 Lloyd’s
Rep. 351 (English Ct. App.); Albeko Schuhmaschinen v. Kamborian Shoe Mach. Co.
(1961) 111 LJ 519 (English High Ct.).
548) Swiss Law on Private International Law, Art. 116(2) (Switzerland); German EGBGB, Art.
27 (Germany; referring to Rome Convention).
549) See §1.04[A][1][c]; §2.03_[C][1]; §4.04[A][1].
550) See, e.g., Judgment of 24 January 2003, 11 Sch 06/01, ¶18 (Hanseatisches
Oberlandesgericht) (“Pursuant to Art. 27(4) together with Art. 31(1) EGBGB, (10) the
existence and validity of the parties’ agreement on the applicable law are governed
by the law which would be applicable if the contract or the provision were valid.
[The] ECC provides on this point that the contract must be interpreted according to
the law of the state of the agreed place of arbitration. …”); Judgment of 21 March
1995, XXII Y.B. Comm. Arb. 800, 804-05 (Swiss Fed. Trib.) (1997); Judgment of 3
February 1990, Della Sanara Kustvaart: Bevrachting & Overslagbedrijf BV v. Fallimento
Cap. Giovanni Coppola Srl, XVII Y.B. Comm. Arb. 542, 543 (Genoa Corte di Appello)
(1992) (“Considering the eadem ratio and the close connection between [Articles II(3)
and V], the criteria for the evaluation of the arbitration clause which are to be
applied in enforcement proceedings must also be applied when the clause is
invoked in order to derogate from the jurisdiction of the national courts”).
551) See §4.04[A][2].
552) See §4.04[A][2][d].
553) See §4.04[A][2][e]; Enka Insaat Ve Sanayi AS v. OOO Ins. Co. Chubb [2020] UKSC 38,
¶170 (U.K. S.Ct.); Glick & Venkatesan, Choosing the Law Governing the Arbitration
Agreement, in N. Kaplan & M. Moser (eds.), Jurisdiction, Admissibility and Choice of
Law in International Arbitration: Liber Amicorum Michael Pryles 131, 135 (2018) (“The
current position in English law – at least before the level of the Supreme Court –
may thereby be illustrated by this example. If the matrix contract is expressly
governed by New York law and the parties chose London as the seat of arbitration,
the English court will treat the parties as having impliedly chosen New York law for
the arbitration agreement unless there is some additional factor – i.e. beyond the
choice of seat – which points to English law or (at least) away from New York law.”);
Pearson, Sulamérica v. Enesa: The Hidden Pro-Validation Approach Adopted by the
English Courts with Respect to the Proper Law of the Arbitration Agreement, 29 Arb.
Int’l 115 (2013).
554) See §4.04[A][1][b]; §4.04[A][2][i]. In the same manner, a general choice-of-law clause
will ordinarily not apply to “procedural” issues, such as burden of proof and
pleading requirements. SeeChapter 19 (choice of law).
555) G. Born, International Arbitration and Forum Selection Agreements: Drafting and
Enforcing 73 (5th ed. 2016).
556) See §4.04[A][1].
557) See §4.04[A][1][b][iv].
558) See §1.04_[B]; §2.02_[C][1]; §4.04[A][2][c]; §5.01_[B]; §5.02[C].
559) See §1.04_[F][3]; §4.04[A][1][b][4]; §11.05.
560) See §1.04_[B]; §2.02_[C]; §11.01_[B]; §§11.03[C]-[D]; §§15.02-15.04.
561) See §1.04_[E][4]; §4.04[A][1][b][4].
562) See §11.05; §15.02.
563) See §1.04_[B]; §2.02[C][1].
564) See §4.04[A][1][b][4].
565) See §3.02[B].
566) See Kabab-Ji SAL (Lebanon) v. Kout Food Group [2020] EWCA Civ 6, ¶66 (English Ct.
App.); Sulamérica Cia Nacional de Seguros SA v. Enesa Engenharia SA [2012] EWCA Civ
638, ¶26 (English Ct. App.); BCY v. BCZ, [2017] 3 SLR 357, ¶60 (Singapore High Ct.). See
also Restatement of the U.S. Law of International Commercial and Investor-State
Arbitration §2.14 Reporters’ Note d (2019).
109
567) See §2.02; §3.02[B]. As discussed above, an arbitration agreement has a different
“procedural” or “adjudicative”) character from underlying commercial contracts,
See §1.04_[B]; §2.02[C][1]. Unsurprisingly, the terms of arbitration agreements are
also fundamentally different from those of underlying commercial contracts, as is
the place of performance. See §2.01_[A]; §2.02.
568) See §2.02; §3.02[B].
569) See §4.04[A][2][d][ii].
570) See §1.04_[F][3]; §3.03_[B]; §4.03; §4.04[A][2][c]; §11.01_[B]; §11.03.
571) See §4.04[A][2][e].
572) See §2.01_[B]; §5.02.
573) See §1.04[A][1][b][i]; §5.06.
574) See §§1.04[A][1][d]-[e]; Chapter 9.
575) See §3.03_[A]; §5.06[D][6].
576) See §4.04[A][1][b][iv]; §4.04[B][2][d][ii].
577) Mastrobuono v. Shearson Lehman Hutton Inc., 514 U.S. 52, 63-64 (U.S. S.Ct. 1995). See
also Restatement (Second) Conflict of Laws §122 comment a (1971).
578) See, e.g., Ario v. Underwriting Members of Syndicate 53 at Lloyds, 618 F.3d 277, 289 (3d
Cir. 2010) (“Although Volt … addressed only the domestic FAA, the principles
undergirding those decisions apply to the [New York] Convention’s implementing
legislation”; holding that parties may agree to apply state law standards to
international arbitration agreement, but must use “clear and unambiguous
language” to do so); Johnson v. Gruma Corp., 614 F.3d 1062, 1067 (9th Cir. 2010) (where
parties clearly agree to application of state law, courts must apply state standard);
Doctor’s Assocs., Inc. v. Distajo, 107 F.3d 126, 131 (2d Cir. 1997) (“even the inclusion in
the contract of a general choice-of-law clause does not require application of state
law to arbitrability issues, unless it is clear that the parties intended state
arbitration law to apply on a particular issue”); Sonic Auto., Inc. v. Younis, 2015 WL
12656915, at *3 (C.D. Cal.) (presumption that FAA governs not trumped by a general
choice-of-law clause); Freaner v. Valle, 2011 WL 5596919, at *4 (S.D. Cal.) (refusing to
apply general choice-of-law provision to question of arbitrability without “clear and
unmistakable evidence” of parties’ intent); Volk v. X-Rite, Inc., 599 F.Supp.2d 1118,
1125 (S.D. Iowa 2009) (“Agreement’s generic choice-of-law provisions applying
Michigan law do not displace the FAA because the parties do not make their intent
to use state arbitration law ‘abundantly clear’”) (quoting UHC Mgt Co. v. Computer
Sciences, Corp., 148 F.3d 992, 996-97 (8th Cir. 1998)); Westbrook Int’l, LLC v. Westbrook
Techs., Inc., 17 F.Supp.2d 681, 684 (E.D. Mich. 1998).
579) See §4.04_[A][1]; §25.04_[A][7]; §26.05[C][10][f]. The UNCITRAL Model Law and other
national arbitration statutes prescribe the same default rule.
580) See §4.02[A][2][d].
581) Hague Convention on Choice of Court Agreements, Art. 9(a) (“the law of the State of
the chosen court”).
582) See §4.04[A][1][b][iv].
583) As discussed below, some 80% of all international commercial contracts contain
express choice-of-law clauses; a non-trivial additional number of such contracts
entail implied choices of law. See 19.04. As a consequence, treating general choice-
of-law agreements as selections of the law governing the arbitration agreement
makes Article V(1)(a)’s default rule largely irrelevant.
584) See §4.04[A][2][b].
585) See Hamlyn & Co. v. Talisker Distillery [1894] AC 202, 210 (House of Lords).
586) Enka Insaat Ve Sanayi AS v. OOO Ins. Co. Chubb [2020] UKSC 38, ¶¶95-109 (U.K. S.Ct.)
(citing G. Born, International Commercial Arbitration 1403 (2d ed. 2014))..
587) See §4.04[A][2][i].
588) See §4.04[A][2][c].
589) See §4.04[A][2][d].
590) See §1.02_[B]; §1.03; §1.04[B][1].
591) Hamlyn & Co. v. Talisker Distillery [1894] AC 202, 215 (House of Lords).
592) Id. at 203.
593) Id. at 214-16.
594) Id. at 213 (emphasis added). The House of Lords left open the possibility that Scots
courts could have refused to enforce an arbitration clause that was “tainted with
immorality” or in “conflict with deeply-rooted and important considerations of local
policy.”
110
596) See §1.02_[B]; §1.03; §1.04_[B][1]; §4.01. In a related context, the U.S. Supreme Court
adopted a similar approach to the validity of an arbitration agreement (in a
domestic context) in Mastrobuono. The Court rejected a claim that the parties’
chosen law contained a provision forbidding the arbitration of particular claims (for
punitive damages), which was made applicable to the parties’ arbitration
agreement by reason of their choice-of-law agreement. Instead, relying on the
parties’ presumptive intention to arbitrate their disputes, the Court held that the
parties’ choice-of-law clause “encompass[ed] substantive principles that New York
courts would apply, but not … special rules limiting the authority of arbitrators.”
Mastrobuono v. Shearson Lehman Hutton Inc., 514 U.S. 52, 63-64 (U.S. S.Ct. 1995)
(emphasis added). Although not described as application of a validation principle,
the Court’s approach to interpretation of the parties’ choice-of-law clause rested on
the same policies.
597) See §§4.04[A][2][c], [e] & [h].
598) See §1.02_[B]; §4.04.
599) Hamlyn & Co. v. Talisker Distillery [1894] AC at 215.
600) See §§1.02[B][1]-[2]. For applications of the validation principle, see §4.04[A][3].
601) See §3.02[E].
602) See id.
603) See §4.04[A][1][b][v].
604) See §4.04[A][1][b][ii].
605) See id.
606) See §4.04[A][1][b][i]. In any event, as noted above, Article V(1)(a) is permissive,
allowing states to deny recognition to awards, but not requiring them to do so.
See §1.04[A][1][c][ii]; §4.04[A][1][b][iv]. Nothing in Article V(1)(a) precludes national
courts from recognizing arbitral awards (or arbitration agreements) following
application of the validation principle.
607) Swiss Law on Private International Law, Art. 178. See §4.04[A][3] for further discussion
and commentary. See also Judgment of 15 September 2015, DFT 4A_136/2015, ¶2.2.1
(Swiss Fed. Trib.); Judgment of 7 July 2014, DFT 4A_124/2014, ¶3.3 (Swiss Fed. Trib.);
Judgment of 19 April 2011, DFT 4A_44/2011, ¶2.4.1 (Swiss Fed. Trib.); Judgment of 19
August 2008, DFT 4A_128/2008, ¶3.2 (Swiss Fed. Trib.); Judgment of 16 October 2003,
22 ASA Bull. 364, 387 (Swiss Fed. Trib.) (2004); Lalive, The New Swiss Law on
International Arbitration, 4 Arb. Int’l 2, 10 (1988) (“With regard to ‘material validity’ …
Art. 178(2) contains a ‘conflict rule,’ of an alternative character, which indicates the
policy of favor validitatis pursued by the Statute: the arbitration convention is valid
whenever it complies with the conditions laid down either by the law chosen by the
parties, or by the law governing the substance of the dispute (e.g., the main
contract) or by Swiss law.”).
608) Spanish Arbitration Act, Art. 9(6) (adopting verbatim Article 178(2) of Swiss Law on
Private International Law); Algerian Code of Civil and Administrative Procedure, Art.
1040 bis 1, ¶3 (same). See Mantilla-Serrano, The New Spanish Arbitration Act, 21 J.
Int’l Arb. 367 (2004).
609) See, e.g., Final Award in ICC Case No. 17818, XLIV Y.B. Comm. Arb. 30, 43 (2019) (not
applying choice-of-law provision that selected Turkish law and instead applying
French law); Award in ICC Case No. 11869, XXXVI Y.B. Comm. Arb. 47, 57 (2011)
(“arbitration agreements should be interpreted in a way that leads to their validity
in order to give effect to the intention of the parties to submit their disputes to
arbitration”); Partial Award in ICC Case No. 7920, XXIII Y.B. Comm. Arb. 80 (1998)
(applying validation principle to uphold validity of ambiguous arbitration clause);
Final Award in ICC Case No. 6162, cited in J.-J. Arnaldez, Y. Derains & D. Hascher (eds.),
Collection of ICC Arbitral Awards 1991-1995 75, 84 (1997) (considering fact that
Egyptian law governing substantive dispute would have invalidated arbitration
agreement); Final Award in ICC Case No. 5485, XIV Y.B. Comm. Arb. 156, ¶12-14 (1989);
Partial Award in ICDR Case No. 1-14-0001-0023, Arb. Intell. Mat., ¶29 (arbitrator held
that parties validly chose Panamanian law only after first considering whether it
invalidated arbitration agreement); Preliminary Award in Zurich Chamber of
Commerce of 25 November 1994, XXII Y.B. Comm. Arb. 211 (1997). See also Lew, The Law
Applicable to the Form and Substance of the Arbitration Clause, in A. van den Berg
(ed.), Improving the Efficiency of Arbitration Agreements and Awards: 40 Years of
Application of the New York Convention 114, 139-40 (1999).Not all such awards rely
expressly on the validation principle. For example, one award upheld the validity of
an arbitration clause by looking to the ICC Rules of Arbitration as the “source of law
governing the arbitration agreement.” Final Award in ICC Case No. 5485, XIV Y.B.
Comm. Arb. 156, 161 (1989).
610) Award in ICC Case No. 7154, 121 J.D.I. (Clunet) 1059, 1061 (1994).
111
611) See, e.g., §4.02_[B]; §4.04_[A][2]; Enka Insaat Ve Sanayi AS v. OOO Ins. Co. Chubb
[2020] UKSC 38, ¶¶95-109 (U.K. S.Ct.).(citing G. Born, International Commercial
Arbitration (2d ed. 2014)) (endorsing “[t]he principle that contracting parties could
not reasonably have intended a significant clause in their contract, such as an
arbitration clause, to be invalid” as a form of “purposive interpretation, which seeks
to interpret the language of the contract, so far as possible, in a way which will give
effect to – rather than defeat – an aim or purpose which the parties can be taken to
have had in view.”) Rhone Mediterranee v. Lauro, 712 F.2d 50, 54 (3d Cir. 1983)
(“Neither the parochial interests of the forum state, nor those of states having more
significant relationships with the dispute, should be permitted to supersede that
presumption [that international arbitration agreements are valid]. The policy of the
Convention is best served by an approach which leads to upholding agreements to
arbitrate.”); Farrell v. Subway Int’l, BV, 2011 WL 1085017 (S.D.N.Y.) (refusing to apply
choice-of-law provision where doing so would invalidate arbitration agreement);
Apple & Eve, LLC v. Yantai N. Andre Juice Co., 499 F.Supp.2d 245, 251 (E.D.N.Y. 2007),
vacated on other grounds, 610 F.Supp.2d 226 (E.D.N.Y. 2009) (“no United States
federal cases where a court has applied the law of the foreign country and declared
that an arbitration clause would be invalid under that country’s law”); Star Shipping
AS v. China Nat’l Foreign Trade Transp. Corp. [1993] 2 Lloyd’s Rep. 445, 452 (English Ct.
App.) (“the Court will always tend to favour the interpretation which gives a sensible
and effective interpretation to the arbitration clause”); XL Ins. Ltd v. Owens Corning
[2000] 2 Lloyd’s Rep. 500, 506-08 (QB) (English High Ct.) (giving effect to English law,
as law of arbitral seat, which validated agreement, rather than New York law, which
appeared to invalidate it); Judgment of 24 February 1994, Ministry of Public Works v.
Bec Frères, XXII Y.B. Comm. Arb. 682 (Paris Cour d’Appel) (1997) (refusing to apply
Tunisian law, under which arbitration agreement would be void, in order to give
effect to parties’ agreement); Judgment of 16 October 2003, 22 ASA Bull. 364 (Swiss
Fed. Trib.) (2004); Hamlyn & Co. v. Talisker Distillery [1894] AC 202, 215 (House of
Lords) (“It is more reasonable to hold that the parties contracted with the common
intention of giving entire effect to every clause, rather than of mutilating or
destroying one of the most important provisions.”). See also Sulamérica Cia Nacional
de Seguros SA v. Enesa Engenharia SA [2012] EWCA Civ 638, ¶¶30-31 (English Ct. App.)
(refusing to apply choice-of-law provision selecting Brazil law because parties could
not have intended to choose a law that would have resulted in invalidity of the
arbitration agreement); BCY v. BCZ, [2017] 3 SLR 357 (Singapore High Ct.); FirstLink
Inv. Corp. Ltd v. GT Payment Pte Ltd, [2014] SGHCR 12, ¶¶14, 15 (Singapore High Ct.)
(“parties would not intend to have an arbitration agreement be valid under other
laws, including the chosen substantive law, only for if to be declared invalid under
the law of the seat, for that would run a serious risk of creating an unenforceable
award”), questioned in BCY v. BCZ, [2017] 3 SLR 357 (Singapore High Ct.); Pearson,
Sulamérica v. Enesa: The Hidden Pro-Validation Approach Adopted by the English
Courts with Respect to the Proper Law of the Arbitration Agreement, 29 Arb. Int’l 115
(2013).
612) See §4.02_[B]; §4.04[A][2].
613) See §§4.02[A][2][c]-[d]. See also Weissfisch v. Weissfisch [2006] EWCA Civ 218 (English
Ct. App.) (giving effect to arbitration agreement notwithstanding claim that
agreement was invalid under law of foreign arbitral seat; court left resolution of
issue for foreign courts or arbitral tribunal).
614) Enka Insaat Ve Sanayi AS v. OOO Ins. Co. Chubb [2020] UKSC 38, ¶95 (U.K. S.Ct.).
615) Id. at ¶¶95-109106 (U.K. S.Ct.) (citing G. Born, International Commercial Arbitration
(2d ed. 2014)).
616) FirstLink Inv. Corp. Ltd v. GT Payment Pte Ltd, [2014] SGHCR 12, ¶17 (Singapore High
Ct.) (“the law should give the fullest effect to this clear intention such that an
interpretation which confers validity to the arbitration agreement should be
preferred to other interpretations which would invalidate the agreement”),
questioned in BCY v. BCZ, [2017] 3 SLR 357 (Singapore High Ct.).
617) International Law Institute, Resolution on Arbitration Between States, State
Enterprises or State Entities and Foreign Entities Art. 4 (1989) (emphasis added).
112
618) See W. Craig, W. Park & J. Paulsson, International Chamber of Commerce Arbitration
¶5.07 (3d ed. 2000); E. Gaillard & J. Savage (eds.), Fouchard Gaillard Goldman on
International Commercial Arbitration ¶¶446 et seq. (1999); Leong & Tan, The Law
Governing Arbitration Agreements: BCY v. BCZ and Beyond, 30 Sing. Acad. L.J. 70, ¶29
(2018) (“[T]he validation principle finds ample support in international arbitration
law. It is also sound in principle because the law that rational commercial parties
expect an international arbitration agreement to be governed by, and the law which
best accomplishes the purpose of such agreement, is the system of law that gives
effect to the arbitration agreement.”); Miles & Goh, A Principled Approach Towards
the Law Governing Arbitration Agreements, in N. Kaplan & M. Moser (eds.),
Jurisdiction, Admissibility and Choice of Law in International Arbitration: Liber
Amicorum Michael Pryles 385 (2018) (validation principle “may be the only
principled way to reconcile the divergent views while also acknowledging the
compelling arguments behind them”); Nazzini, The Law Applicable to the Arbitration
Agreement: Towards Transnational Principles, 65 Int’l & Comp. L.Q. 681, 700-02 (2016)
(“[C]ourts should develop, or apply more robustly, the validation principle. There is
a presumption that the parties intended their choice of law to uphold the validity
of the arbitration agreement.”); Nacimiento, Article V(1)(a), in H. Kronke et al. (eds.),
Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the
New York Convention 205, 220, 227 (2010) (“This presumption [in favor of the validity
of the arbitration agreement] is consistent with the generally applied principle that
in the interpretation of arbitration agreements, courts and tribunals should follow
the parties’ intention as closely as possible. … Generally, common international
practice is in favorem validitatis of the arbitration clause.”); Wenger, in S. Berti et al.
(eds.), International Arbitration in Switzerland Art. 178, ¶22 (2000) (“Swiss law is more
arbitration-friendly than the New York Convention: it widens the spectrum of laws to
be taken into account from the point of view of favor validitatis from two to three
legal systems, adding to the list the law applicable to the dispute”); Fouchard,
Suggestions to Improve the International Efficacy of Arbitral Awards, in A. van den
Berg (ed.), Improving the Efficiency of Arbitration Agreements and Awards: 40 Years of
Application of the New York Convention 601, 604-05 (1999); Hanotiau, The Law
Applicable to Arbitrability, in A. van den Berg (ed.), Improving the Efficiency of
Arbitration Agreements and Awards: 40 Years of Application of the New York
Convention 146, 156-57 (1999); Paulsson, Arbitrability, Still Through A Glass Darkly, in
ICC, Arbitration in the Next Decade 95, 102-04 (1999) (proposing codification of
validation principle in revised New York Convention); Derains, Determination de la
Lex Contractus, in ICC, L’Apport de la Jurisprudence Arbitrale 1, 28 (1986) (law should
presume that parties “did not want to locate their contractual relationship in a
legal system which is not ready to welcome it as it was originally conceived”).
619) See §4.03[B][4][e].
620) See §1.02_[B]; §4.04[A]. The validation principle is related to, and complements,
international law rules against national laws that discriminate against international
arbitration agreements. See §4.04_[A][2]; §4.04[A][4][c]. As discussed below, these
rules (like the validation principle) often accept that arbitration agreements are
governed in principle by national law, but (in a manner broadly comparable to the
validation principle) subject the application of national law to international limits.
See §4.04[A][4][b]. Alternatively, as under French law, international law is applied
directly. See §4.04[A][4][a]. In both instances, the choice among national laws is
made by way of principles that take into account the particular characteristics and
objectives of international arbitration agreements.
621) See §4.04[A][2].
622) See §4.04[B][2][b][iii].
623) See §4.04[B][2][b][i].
624) See §4.04[B][2][b][ii].
625) See §2.02[A][1][a]; §5.04[B][1].
626) See §4.04[A][1][b][i]; §5.01[B][2].
627) Glick & Venkatesan, Choosing the Law Governing the Arbitration Agreement, in N.
Kaplan & M. Moser (eds.), Jurisdiction, Admissibility and Choice of Law in International
Arbitration: Liber Amicorum Michael Pryles 131, 148-49 (2018)
628) See, e.g.,§4.02_[A][2]; §19.04[A][6][d]. See also H. Gaudemet-Tallon, JurisClasseur
Europe Traité, Fasc. 3201, ¶¶102-04 (1996); M. Giuliano & P. Lagarde, Report on the
Convention on the Law Applicable to Contractual Obligations, O.J. C 282 31/10/1980,
Art. 9; P. Nygh, Autonomy in International Contracts 119 (1999); R. Plender & M.
Wilderspin, The European Contracts Convention: The Rome Convention of the Choice
of Law for Contracts ¶¶10-09 et seq. (2d ed. 2001); Richman & Riley, The First
Restatement of Conflict of Laws on the Twenty-Fifth Anniversary of Its Successor:
Contemporary Practice in Traditional Courts, 56 Md. L. Rev. 1196, 1215-16 (1997)
(discussing validation principle in U.S. states’ usury laws); R. Weintraub,
Commentary on the Conflict of Laws 371 (6th ed. 2010) (parties should be protected
from unwise or uninformed choices when chosen law would invalidate their bargain
and objectively applicable law would sustain it).
629) See §4.04_[B]; §19.04.
113
630) BNA v. BNB, [2019] SGHC 142, ¶53 (Singapore High Ct.); Chan & Teo, Ascertaining the
Proper Law of an Arbitration Agreement: The Artificiality of Inferring Intention When
There is None, 37(5) J. Int’l Arb. 635, 643-44 (2020); Glick & Venkatesan, Choosing the
Law Governing the Arbitration Agreement, in N. Kaplan & M. Moser (eds.), Jurisdiction,
Admissibility and Choice of Law in International Arbitration: Liber Amicorum Michael
Pryles 131, 149 (2018).
631) See §19.04[A].
632) See §1.02[B][6].
633) See §4.04[B].
634) See §19.04[C].
635) See §§6.01 et seq.
636) See §§4.04[B][3][b], [d]-[e].
637) It is well-established in more general private international law contexts that a
choice-of-law agreement gives rise to conflict of laws issues and requires a
particular type of choice-of-law analysis. See Rome Convention, Art. 3(1); Rome I
Regulation, Art. 3(1); Restatement (Second) Conflict of Laws §§187-88 (1971); L. Collins
et al. (eds.), Dicey, Morris and Collins on The Conflict of Laws ¶32-083, ¶¶32-124 to
125, (15th ed. 2012 & Update 2018). See also Wallis v. AD Astra Recovery Servs., Inc.,
2011 WL 745961, at *2 (E.D. Wis.) (applying Wisconsin conflict of laws rules to
determine whether to give effect to choice-of-law provision designating Kansas law
to govern arbitration clause); Halprin v. Verizon Wireless Servs., LLC, 2009 WL 1351456
(D.N.J.) (applying New Jersey conflict of laws rules to determine whether to give
effect to choice-of-law provision specifying Virginia law).
638) See authorities cited §4.04[A][2][e].
639) See §19.01; §19.04[A].
640) See §4.04[A][2]. Some decisions have applied a “closest connection” test and others
have applied cumulative choice-of-law analyses, which consider the substantive
laws selected by all potentially-applicable conflicts rules. See, e.g. Grigera Naón,
Choice-of-Law Problems in International Commercial Arbitration, 289 Recueil des
Cours 9 (2001). In other cases, national courts have applied their own choice-of-law
rules.
641) See New York Convention, Art. V(1)(a); European Convention, Art. VI(2); ICSID
Convention, Art. 42(1).
642) See §4.04[A][1][b][i]; §4.04[B][2][b][i].
643) See §§1.01[C][1]-[2]; §4.02[A][1].
644) See Geneva Protocol, Art. 1; §4.04[A][1][a].
645) See §1.01_[C][2]; §4.02[A][1][a]; Geneva Convention, Art. 1(a).
646) See §1.04[A][1][a].
647) See §1.04[A][1][c][i]; §5.01[B][2].
648) See §2.02[A][1][a]; §5.04[B][1].
649) See §4.04[A][1][b][i]; §5.01[B][2].
650) See §4.04[A][1][b][i]; §9.05[A].
651) See §1.04[A][1][c]; §4.04[A][1][b][i].
652) See §1.04[A][1][c].
653) See §4.04[A][1][b][iv].
654) See §4.04[A][1][b][iv].
655) See §4.04[A][1][b][i]; §19.04[A][6][d].
656) See §4.04_[B][3]; §5.01[B][2].
657) See §4.04[B][3].
658) See §4.04[A][1][b][i].
659) See §§4.04[A][1][b][i] & [iii].
660) See §4.04[A][1][b][v]; §4.04[A][3].
661) New York Convention, Art. V(1)(a) (emphasis added). See Nacimiento, in H. Kronke et
al. (eds.), Recognition and Enforcement of Foreign Arbitral Awards: A Global
Commentary on the New York Convention 205 (2010); Schramm, Geisinger & Pinsolle,
Article II, in H. Kronke et al. (eds.), Recognition and Enforcement of Foreign Arbitral
Awards: A Global Commentary on the New York Convention 37, 54 (2010); A. van den
Berg, The New York Arbitration Convention of 1958 282-83 (1981) (describing drafting
history of choice-of-law rule in Article V(1)(a)).
662) See, e.g., Four Seasons Hotels & Resorts, BV v. Consorcio Barr SA, 377 F.3d 1164, 1171
(11th Cir. 2004); OJSC Ukrnafta v. Carpatsky Petroleum Corp., 2017 WL 4351758, at *11
(S.D. Tex.); Yukos Capital Sarl v. OAO Samaraneftegaz, 2012 WL 3055863, at *3
(S.D.N.Y.); Changzhou AMEC E. Tools & Equip. Co. v. E. Tools & Equip., Inc., 2012 WL
3106620, at *9-10 (C.D. Cal.); Encyclopaedia Universalis, SA v. Encyclopaedia
Britannica, Inc., 2003 WL 22881820, at *6 (S.D.N.Y.), aff’d in relevant part, 403 F.3d 85,
(2d Cir. 2005); Henry v. Murphy, 2002 WL 24307, at *3 (S.D.N.Y.); Overseas Cosmos, Inc.
v. NR Vessel Corp., 1997 WL 757041, at *3 (S.D.N.Y.). See also §4.03_[A][2]; §26.05[C][1][f]
[i](1).
114
663) See, e.g., N. Blackaby et al. (eds.), Redfern and Hunter on International Arbitration
¶¶3.09 et seq. (6th ed. 2015) (“under the New York Convention, an arbitration
agreement is valid if it is judged to be so either by the law chosen by the parties to
govern that agreement or, failing any such choice, by the law of the place of the
arbitration”); Nacimiento, Article V(1)(a), in H. Kronke et al. (eds.), Recognition and
Convention 205, 223 (2010) (“Article V(1)(a) … explicitly gives precedence to the
parties’ choice of law for the arbitration agreement”); Patocchi & Jermini, in S. Berti
et al. (eds.), International Arbitration in Switzerland: An Introduction and Commentary
on Articles 176-194 of the Swiss Private International Law Statute Art. 194, ¶68 (2000);
Schramm, Geisinger & Pinsolle, Article II, in H. Kronke et al. (eds.), Recognition and
Convention 37, 54 (2010); A. van den Berg, The New York Arbitration Convention of 1958
267 (1981).
664) See §4.04[A][1][b][iv].
665) See §4.04[A][2][e]. See also Report of the United States Delegation to the United
Nations Conference on International Commercial Arbitration (Aug. 15, 1958),
reprinted in 19 Am. Rev. Int’l Arb. 91, 101 (2008) (Convention does not establish a
“fixed rule” for choice of law governing arbitration agreement, but “[o]n the
contrary, … permits free choice of law by the parties”).
666) See §4.04[B][3].
667) See Adolphsen, in T. Rauscher, P. Wax & J. Wenzel (eds.), Münchener Kommentar
Zivilprozessordnung Art. V, ¶23 (5th ed. 2016); Hass, Convention on Recognition and
Enforcement of Foreign Arbitral Awards, New York, June 10, 1958, in F.-B. Weigand
(ed.), Practitioner’s Handbook on International Arbitration Art. V, ¶18 (2002);
Nacimiento, Article V(1)(a), in H. Kronke et al. (eds.), Recognition and Enforcement of
Foreign Arbitral Awards: A Global Commentary on the New York Convention 205, 224
(2010).
668) See §19.04[E][1].
669) Contrary commentary is unreasoned and unpersuasive. See A. van den Berg, The New
York Arbitration Convention of 1958 292-93 (1981).
670) See §4.04[A][1][b][v]; Rhone Mediterranee v. Lauro, 712 F.2d 50, 52-54 (3d Cir. 1983)
Rican law, applicable to underlying contract, not applied to invalidate arbitration
agreement); Farrell v. Subway Int’l, BV, 2011 WL 1085017, at *7-9 (S.D.N.Y.); Apple &
Eve, LLC v. Yantai N. Andre Juice Co., 499 F.Supp.2d 245, 251 (E.D.N.Y. 2007)
(compelling arbitration in China despite inability to determine whether Chinese
courts would enforce arbitration agreement, noting that court could identify “no
United States federal cases where a court has applied the laws of a foreign country
and declared that an arbitration clause would be invalid under that country’s law”),
vacated on other grounds, 610 F.Supp.2d 226, 231 (E.D.N.Y. 2009).
671) See §4.04[B][2][b][ii]; §5.02[A][2][e].
672) See §4.04[A][1][b][iii].
673) See authorities cited §4.04[A][1][b][iii].
674) See §4.04[A][1][b][iii]. In any event, this issue should be of limited importance where
parties have made a choice of law governing their arbitration agreement because
Article V(1)(a) parallels the similar recognition of the parties’ autonomy in Article
II(1). See §4.04[B][1][b]. Different considerations apply where the parties have not
made a choice-of-law agreement. See §§4.04[B][1][b][ii]et seq. See also Schramm,
Geisinger & Pinsolle, Article V(1)(a), in H. Kronke et al. (eds.), Recognition and
Convention 37, 56 (2010).
675) See §26.05[C][1][d].
676) See §4.04[A][1][b][v]; §26.05[C][1][d].
677) See §4.04[A][2][f].
678) As noted above, this is confirmed by Article VII(1) of the Convention. See §4.04[A][1]
[b][v].
115
679) Rome I Regulation, Art. 10(1) (“The existence and validity of a contract, or of any
term of a contract, shall be determined by the law which would govern it under this
Regulation if the contract or term were valid”), Art. 10(2) (“Nevertheless, a party, in
order to establish that he did not consent, may rely upon the law of the country in
which he has his habitual residence if it appears from the circumstances that it
would not be reasonable to determine the effect of his conduct in accordance with
the law specified in ¶1”); Restatement (Second) Conflict of Laws §§186-88 (1971);
Hague Conference on Private International Law, Principles on Choice of Law in
International Commercial Contracts Arts. 6(1)-(2) (2015) (“1. Subject to ¶2 – (a)
whether the parties have agreed to a choice of law is determined by the law that
was purportedly agreed to; … 2. The law of the State in which a party has its
establishment determines whether that party has consented to the choice of law if,
under the circumstances, it would not be reasonable to make that determination
under the law specified in ¶1”). L. Collins et al. (eds.), Dicey, Morris and Collins on The
Conflict of Laws ¶¶16-011 to 28 (15th ed. 2012 & Update 2018); Hague Conference on
Private International Law Permanent Bureau, Consolidated Version of Preparatory
Work Leading to the Draft Hague Principles on the Choice of Law in International
Contracts Arts. 5(1)-(2) (2012) (“(1) The consent of the parties as to a choice of law is
determined by the law that would apply if such consent existed. (2) Nevertheless, to
establish that a party did not consent to the choice of law, it may rely on the State
where it has its place of business, if under the circumstances it is not reasonable to
determine that issue according to the law specified in the preceding paragraph.”).
680) See, e.g., Restatement of the U.S. Law of International Commercial and Investor-State
Arbitration §2.13 comment e (2019) (“The defense of nonexistence of the arbitration
agreement is governed by the law designated by the general choice-of-law rules of
the forum, which will most likely point to the contract law of one jurisdiction or
another. If the existence of the arbitration agreement is challenged, it would not be
appropriate to treat the law of the seat designated in the arbitration agreement as
the law applicable to the existence question”), §4-10 comment c & Reporters’ Note
(“In cases in which a party’s assent to the main contract is challenged, using the law
specified in a choice-of-law clause in the contract or the law of the arbitral seat
would be ‘bootstrapping’ – giving effect to a contract provision when the party’s
assent to that contract provision is at issue”).
681) In virtually all private international law contexts, including in the selection of the
substantive law applicable to an underlying contract and the procedural law of the
arbitration, the parties’ autonomy is subject to constraints. See §11.03_[E][1];
§11.05_[B]; §19.03_[B]; Restatement (Second) Conflict of Laws §187(2) (1971); Rome
Convention, Arts. 3(3), 5(2), 6(1), 7; Rome I Regulation, Arts. 3(3), 9; G. Born & P.
Rutledge, International Civil Litigation in United States Courts 742-44 (6th ed. 2018); L.
Collins et al. (eds.), Dicey, Morris and Collins on The Conflict of Laws ¶16-018 (15th ed.
2012 & Update 2018). In particular, as discussed below, the parties’ choice-of-law
agreements are generally subject to constraints imposed by public policy and
mandatory laws. See §19.03[B][6]. These same types of constraints are, in principle,
equally applicable to the parties’ autonomy to select the law governing their
682) See §6.02[B]. Specifically, Article V(2)(a) provides that an award need not be
recognized if “[t]he subject matter of the difference is not capable of settlement by
arbitration under the law of that country.” New York Convention, Art. V(2)(a).
683) New York Convention, Art. II(1). See §6.02[B].
684) Article V(2)(a) does so by allowing Contracting States to refuse recognition of awards
concerning certain “nonarbitrable” subjects, notwithstanding the fact that the
parties’ agreement to arbitrate such matters would be valid under the law which
they selected to govern their agreement.
685) See §4.05_[C][5]; §6.02[H].
686) See §5.06[B][1].
687) European Convention, Art. VI(2). For commentary, see Hascher, European Convention
on International Commercial Arbitration of 1961: Commentary, XX Y.B. Comm. Arb.
1006, 1027-28 (1995); §1.04_[A][2]; §4.02[A][1].
688) See §§4.04[B][3][b] & [d]-[e].
689) See §4.02[A][2][a].
690) See §1.04[B][1][a]; §5.04[B][2].
691) See §2.01_[A][2]; §5.06[C].
692) As discussed below, Article 8(1) is expressed in mandatory terms: “A court … shall …
refer the parties to arbitration unless ….” UNCITRAL Model Law, Art. 8(1). See §8.03[B]
[1].
693) UNCITRAL Model Law, Arts. 34(2)(a)(i), 36(1)(a)(i). See P. Binder, International
Commercial Arbitration and Mediation in UNCITRAL Model Law Jurisdictions 449 (4th
ed. 2019); H. Holtzmann & J. Neuhaus, A Guide to the UNCITRAL Model Law on
International Commercial Arbitration: Legislative History and Commentary 915-16,
1058-59 (1989).
694) See §4.02[A][2][a].
695) See id.; §4.04_[B]; §12.01_[C]; §15.02_[B]; §15.04_[B]; §25.03_[A]; §26.05[B].
696) See §4.02[A][2][a].
116
697) See, e.g., Judgment of 17 September 1998, XXIV Y.B. Comm. Arb. 645, 646 (Bayerisches
Oberstes Landesgericht) (1999) (“arbitration agreement is not invalid according to
English law, on which the parties agreed”); W. Grain Cleaning & Processing v.
Lashburn AG Ventures Ltd, [2003] SKCA 60, ¶8 (Saskatchewan Ct. App.) (“In this
jurisdiction the first step … is to ascertain if there has been a choice of law by the
parties. This, if contractually binding between the parties, is respected by the
Court.”); BNA v. BNB, [2019] SGHC 142, ¶17(b) (Singapore High Ct.); BCY v. BCZ, [2017] 3
SLR 357, ¶40 (Singapore High Ct.) (governing law of arbitration agreement
determined by three-step test, with first step being parties’ express choice of law);
Recyclers of Australia Pty Ltd v. Hettinga Equip. Inc., [2000] 175 ALR 725 (Australian
Fed. Ct.) (applying Iowa law, selected by choice-of-law clause in underlying
contract, to validity of arbitration clause); Citation Infowares Ltd v. Equinox Corp.,
(2009) 7 SCC 220, ¶15 (Indian S.Ct.) (parties have “freedom to choose … substantive
law of arbitration agreement as well as the procedural law governing the conduct of
the arbitration”); Nat’l Thermal Power Corp. v. Singer Co., XVIII Y.B. Comm. Arb. 403,
406 (Indian S.Ct. 1992) (1993) (“The parties have the freedom to choose the law
governing an international commercial arbitration agreement … as well as the
procedural law governing the conduct of the arbitration”); Nirma Ltd v. Lurgi Energie
und Entsorgung GmbH, XXVIII Y.B. Comm. Arb. 790, 803 (Gujarat High Ct. 2002) (2003).
698) XL Ins. Ltd v. Owens Corning [2000] 2 Lloyd’s Rep. 500, 506 (QB) (English High Ct.). See
also AES Ust-Kamenogorsk Hydropower Plant LLC v. Ust-Kamenogorsk Hydropower
Plant JSC [2011] EWCA Civ 647, ¶189 (English Ct. App.) (“the parties’ autonomy in
choosing an English law arbitration agreement would, on English conflict of laws
principles, prevail”); Naviera Amazonica Peruana SA v. Compania Internacional de
Seguros del Peru [1988] 1 Lloyd’s Rep. 116 (English Ct. App.).
699) Dell Computer Corp. v. Union des Consommateurs, 2007 SCC 34 (Canadian S.Ct.).
700) For a decision applying the law chosen to govern the underlying contract to the
arbitration clause, see Aloe Vera of Am., Inc. v. Asianic Food (S) Pte Ltd, [2006] 3 SLR
174, ¶61 (Singapore High Ct.).
701) See §§4.04[B][3][c]-[e]; Pearson, Sulamérica v. Enesa: The Hidden Pro-Validation
Approach Adopted by the English Courts with Respect to the Proper Law of the
Arbitration Agreement, 29 Arb. Int’l 115 (2013).
702) See §4.04[A][1][b].
703) See §1.04[B][1][a].
704) See §4.04[A][2][j][v].
705) See §4.04[A][2][j][v](1).
706) The text of the FAA does not itself address the question of the law governing an
arbitration agreement.
707) Volt Info. Sciences, Inc. v. Stanford Univ., 489 U.S. 468, 470, 479 (U.S. S.Ct. 1989). The
Volt decision arose from a domestic case which involved the question whether the
parties’ choice-of-law clause, selecting California law, applied to issues relating to
enforcement of the parties’ arbitration agreement (specifically, the applicability of
a California state law provision permitting the stay of arbitral proceedings). Id. at
470-73. Nonetheless, the Court’s opinion more broadly addressed in dicta the
autonomy of the parties to select the law governing an arbitration agreement.
708) Coastal Caisson Corp. v. E.E. Cruz/NAB/Frontier-Kemper, 2007 WL 2285936, at *4
(S.D.N.Y.), rev’d in part on other grounds, 346 F.App’x 717, 720 (2d Cir. 2009).
709) Restatement (Second) Conflict of Laws §218 comment b (1971). As discussed below,
§187 imposes limited public policy constraints on choice-of-law agreements.
See §4.04[B][6].
710) See CompuCredit Corp. v. Greenwood, 56 U.S. 95, 96 (U.S. S.Ct. 2012); Gilmer v.
Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (U.S. S.Ct. 1991); Mitsubishi Motors Corp.
v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (U.S. S.Ct. 1985) (“Having made the
bargain to arbitrate, the party should be held to it unless Congress itself has
evinced an intention to preclude a waiver of judicial remedies for the statutory
rights at issue”); Matthews v. Ultimate Sports Bar, LLC, 2016 WL 4035655, at *1 (N.D.
Ga.) (“There may also be legal constraints precluding arbitration, such as a clear
congressional intention that a certain claim be heard in a judicial forum”); Jallow v.
Convergenz LLC, 2015 WL 12831722, at *1 (S.D. Tex.) (“Just as it is the congressional
policy manifested in the [FAA] that requires courts liberally to construe the scope of
arbitration agreements covered by that Act, it is the congressional intention
expressed in some other statute on which the courts must rely to identify any
category of claims as to which agreements to arbitrate will be held unenforceable”);
Meyer v. T-Mobile U.S.A. Inc., 836 F.Supp.2d 994, 1004-05 (N.D. Cal. 2011); Will v.
Parsons Evergreene, LLC, 2008 WL 5330681, at *5 (D. Colo.); Wells v. Mobile County Bd
of Realtors, Inc., 387 So.2d 140 (Ala. 1980); §4.04[A][2][j][v].
117
711) See, e.g., Internaves de Mexico SA de CV v. Andromeda S.S. Corp., 898 F.3d 1087, 1092
(11th Cir. 2018) (“The FAA reflects the overarching principle that arbitration is a
matter of contract. And consistent with its text, courts must rigorously enforce
arbitration agreements according to their terms.”); Escobar v. Celebration Cruise
Operator, Inc., 805 F.3d 1279, 1286 (11th Cir. 2015) (“under the New York Convention
and Supreme Court and Circuit precedent, there is a strong presumption in favor of
freely-negotiated contractual choice-of-law and forum-selection provisions, and
this presumption applies with special force in the field of international
commerce”); Telenor Mobile Commc’ns AS v. Storm LLC, 584 F.3d 396, 411 n.11 (2d Cir.
2009) (giving effect to parties’ agreement that their contract would be governed by
New York law “without giving effect to any conflicts of laws principles … which would
result in the application of the laws of another jurisdiction”); Motorola Credit Corp. v.
Uzan, 388 F.3d 39, 51 (2d Cir. 2004) (with respect to interpretation of arbitration
agreement, “respecting the parties’ choice-of-law is fully consistent with the
purposes of the FAA”); Int’l Minerals & Res., SA v. Pappas, 96 F.3d 586, 592 (2d Cir.
1996); Batson Yarn & Fabrics Mach. Group, Inc. v. Saurer-Allma GmbH-Allgauer
Maschinenbau, 311 F.Supp. 68, 77 (D.S.C. 1970) (“There can be no dispute that parties
are free to select the applicable law governing rights created by an arbitration
agreement and the Court will give effect to such selection”); Necchi Sewing Mach.
Sales Corp. v. Carl, 260 F.Supp. 665, 667 (S.D.N.Y. 1966) (“as a general proposition
parties are free to select the applicable law governing rights created by an
arbitration agreement”); Kamaya Co., Ltd v. Am. Prop. Consultants, Ltd, 959 P.2d 1140,
1142 (Wash. Ct. App. 1998) (“Although the FAA governs whether the parties agreed to
arbitrate a particular contractual dispute, the contract’s choice-of-law provision is
a pertinent factor that courts must consider in applying the FAA”).
712) Mayakan v. Carnival Corp., 721 F.Supp.2d 1201, 1203 n.5 (M.D. Fla. 2010).
713) See §4.04[A][2][j][v]; Rhone Mediterranee v. Lauro, 712 F.2d 50, 52-54 (3d Cir. 1983)
Rican law, applicable to contract, not applied to invalidate arbitration agreement);
Eazy Elecs. & Tech., LLC v. LG Elecs., Inc., 226 F.Supp.3d 68, 77-78 (D.P.R. 2016)
(refusing to apply law applicable to underlying contract to invalidate arbitration
agreement); Farrell v. Subway Int’l, BV, 2011 WL 1085017, at *7-9 (S.D.N.Y.) (refusing to
apply choice-of-law provision where doing so would invalidate agreement’s choice-
of-forum provision); Apple & Eve, LLC v. Yantai N. Andre Juice Co. Ltd, 499 F.Supp.2d
245, 251 (E.D.N.Y. 2007) (compelling arbitration in China despite inability to
determine whether Chinese courts would enforce arbitration agreement), vacated
on other grounds, 610 F.Supp.2d 226, 231 (E.D.N.Y. 2009); Acosta v. Norwegian Cruise
Line, Ltd, 303 F.Supp.2d 1327 (S.D. Fla. 2003); Marchetto v. DeKalb Genetics Corp., 711
F.Supp. 936, 940 (N.D. Ill. 1989) (refusing to deny effect to arbitration clause
allegedly invalid under law of foreign arbitral seat: “underlying the Supreme Court’s
willingness to enforce arbitration agreements is the assumption that signatory
nations to the Convention will honor arbitration agreements and reject challenges
to arbitration based on legal principles unique to the signatory nation”).
714) The interpretation of choice-of-law clauses, including a choice-of-law clause in the
parties’ underlying contract that applies to the arbitration agreement, is discussed
below. See §19.04.
118
715) See, e.g., Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (U.S.
S.Ct. 1985); Brennan v. Opus Bank, 796 F.3d 1125, 1129 (9th Cir. 2015); Cape Flattery Ltd
v. Titan Maritime, LLC, 647 F.3d 914, 921 (9th Cir. 2011) (“We therefore conclude … that
courts should apply federal arbitrability law absent ‘clear and unmistakable
evidence’ that the parties agreed to apply non-federal arbitrability law”) (quoting
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (U.S. S.Ct. 1995)); Ario v.
Underwriting Members of Syndicate 53 at Lloyds, 618 F.3d 277, 288 (3d Cir. 2010)
(“though the FAA allows parties to choose state-law arbitration standards, they
cannot ‘opt out’ of the FAA”); Bridas SAPIC v. Turkmenistan, 447 F.3d 411 (5th Cir.
2006); Int’l Paper Co. v. Schwabedissen Maschinen & Anlagen GmbH, 206 F.3d 411, 417
n.4 (4th Cir. 2000) (“[FAA and New York Convention] ‘create a body of federal
substantive law of arbitrability, applicable to any arbitration agreement within the
coverage of the Act.’ … Because the determination of whether … a nonsignatory is
bound by the [contract] presents no state law question of contract formation or
validity, we look to the ‘federal substantive law of arbitrability’ to resolve this
question.”) (quoting Mitsubishi Motors Corp., 473 U.S. at 631); Smith/Enron
Cogeneration LP v. Smith Cogeneration Int’l, Inc., 198 F.3d 88, 96 (2d Cir. 1999);
Campaniello Imps., Ltd v. Saporiti Italia SpA, 117 F.3d 655 (2d Cir. 1997); Thomson-CSF
v. Am. Arb. Ass’n, 64 F.3d 773 (2d Cir. 1995); Hernandez v. San Gabriel Temp. Staffing
Servs., LLC, 2018 WL 1582914, at *3 (N.D. Cal.) (“In the Ninth Circuit, parties may agree
‘to have arbitrability governed by nonfederal arbitrability law,’ but this requires
‘clear and unmistakable evidence’ of the parties’ intent to do so.”) (quoting Cape
Flattery Ltd, 647 F.3d at 921); Amtax Holdings 463, LLC v. KDF Communities-Hallmark,
LLC, 2018 WL 4743386, at *4 (C.D. Cal.); Villarreal v. Perfection Pet Foods, LLC, 2017 U.S.
Dist. LEXIS 54643, at *8-9 (E.D. Cal.); Holzer v. Mondadori, 2013 U.S. Dist. LEXIS 37168,
at *22 (S.D.N.Y). See also Ecuador v. ChevronTexaco Corp., 376 F.Supp.2d 334 (S.D.N.Y.
2005), rev’d on other grounds, 638 F.3d 384, 391 n.6 (2d Cir. 2011).A number of
decisions arise in non-signatory contexts, involving issues of alter ego status,
estoppel, agency and the like. See §4.08; §19.04[C]. Other U.S. lower court decisions
apply federal common law rules to the validity of international arbitration
agreements. See §4.04[A][2][j][v].
716) See, e.g., Sulamérica Cia Nacional de Seguros SA v. Enesa Engenharia SA [2012] EWCA
Civ 638, ¶25 (English Ct. App.); AES Ust-Kamenogorsk Hydropower Plant LLC v. Ust-
Kamenogorsk Hydropower Plant JSC [2011] EWCA Civ 647, ¶189 (English Ct. App.);
Peterson Farms Inc. v. C&M Farming Ltd [2004] 1 Lloyd’s Rep. 603 (QB) (English High
Ct.); XL Ins. Ltd v. Owens Corning [2000] 2 Lloyd’s Rep. 500, 506 (QB) (English High Ct.).
See also R. Merkin, Arbitration Law ¶7.8 (1991 & Update July 2019) (“an express term
… will be regarded as conclusive even if the nominated law has no connection with
the underlying contract to which it relates, given the divisibility of the arbitration
agreement and the underlying contract”); D. Sutton, J. Gill & M. Gearing, Russell on
Arbitration ¶2-119 (24th ed. 2015).
717) Union of India v. McDonnell Douglas Corp. [1993] 2 Lloyd’s Rep. 49, 50 (QB) (English
High Ct.) (emphasis added). Compare Channel Tunnel Group Ltd v. Balfour Beatty
Constr. Ltd [1992] 2 Lloyd’s Rep. 7, 15 (English Ct. App.) (Section 5(2)(b) of English
Arbitration Act, 1975 [replaced by §103(2)(b) of Arbitration Act, 1996], “suggests …
that the validity of an arbitration agreement is governed by the law which the
parties have chosen”).
718) Sulamérica Cia Nacional de Seguros SA [2012] EWCA Civ 638, ¶¶29-30; AES Ust-
Kamenogorsk Hydropower Plant LLC [2011] EWCA Civ 647, ¶189 (“In any event the
parties’ autonomy in choosing an English law arbitration agreement would, on
English conflict of laws principles, prevail”); Arsanovia Ltd v. Cruz City 1 Mauritius
Holdings [2012] EWHC 3702, ¶8 (Comm) (English High Ct.) (“the court first decides
whether the parties expressly or impliedly chose a law applicable to the arbitration
agreement; if they did, the court gives effect to the parties’ choice”); Peterson Farms
Inc. [2004] 1 Lloyd’s Rep. 603 (parties agreed to Arkansas law to govern their
contract and arbitration agreement; tribunal was bound to apply that law); XL Ins.
Ltd [2000] 2 Lloyd’s Rep. 500, 506.
719) Sulamérica Cia Nacional de Seguros SA [2012] EWCA Civ 638, ¶9 (emphasis added).
720) L. Collins et al. (eds.), Dicey, Morris and Collins on The Conflict of Laws ¶16-017 (15th
ed. 2012 & Update 2018) (“If there is an express choice of law to govern the
arbitration agreement, that choice will be effective, irrespective of the law
applicable to the contract as a whole”); R. Merkin, Arbitration Law ¶¶7.8-12 (1991 &
Update July 2019). See also English Arbitration Act, 1996, §103(2) (“Recognition or
enforcement of the award may be refused if the person against whom it is invoked
proves … that the arbitration agreement was not valid under the law to which the
parties subjected it”) (emphasis added); D. Sutton, J. Gill & M. Gearing, Russell on
Arbitration ¶2-119 (24th ed. 2015).
721) See Pearson, Sulamérica v. Enesa: The Hidden Pro-Validation Approach Adopted by
the English Courts with Respect to the Proper Law of the Arbitration Agreement, 29
Arb. Int’l 115, 125 (2013) (“A review of the case law shows that the courts have applied
the law expressly chosen by the parties to govern the underlying contract to the
arbitration agreement unless such application would lead to its invalidity”).
119
722) Enka Insaat Ve Sanayi AS v. OOO Ins. Co. Chubb [2020] UKSC 38, ¶¶95-109 (U.K. S.Ct.);
Hamlyn & Co. v. Talisker Distillery [1894] AC 202, 215 (House of Lords). See §19.04[A][6]
[d].
723) For a recent exception to the historic approach of English courts, see Kabab-Ji SAL
(Lebanon) v. Kout Food Group [2020] EWCA Civ 6 (English Ct. App.), where the court
applied the law assertedly selected by a general choice-of-law provision to
invalidate the parties’ arbitration agreement, in circumstances where the
arbitrators had applied the law of the arbitral seat (French law) to conclude that
there was a valid arbitration agreement. The court was not presented with, and
apparently did not consider, either application of the validation principle or the
historic pattern of English judicial decisions, which was to apply the law that would
validate the parties’ agreement.
724) Swiss Law on Private International Law, Art. 178(2) (emphasis added). Swiss courts
have given effect to the general affirmation of the parties’ autonomy in Article
178(2). See, e.g., Judgment of 16 October 2003, 22 ASA Bull. 364, 387 (Swiss Fed. Trib.)
(2004).
725) B. Berger & F. Kellerhals, International and Domestic Arbitration in Switzerland
¶¶400-02 (3d ed. 2015); P. Lalive, J.-F. Poudret & C. Reymond, Le Droit de l’Arbitrage
Interne et International en Suisse Art. 178, ¶15 (1989); J.-F. Poudret & S. Besson,
Comparative Law of International Arbitration ¶300 (2d ed. 2007); Wenger, in S. Berti
et al. (eds.), International Arbitration in Switzerland Art. 178, ¶¶22, 25 (2000) (“The
PILS emphasizes the importance of party autonomy by naming first the law chosen
by the parties”) (emphasis in original).
726) See §4.04[B][5].
727) B. Berger & F. Kellerhals, International and Domestic Arbitration in Switzerland ¶393
(3d ed. 2015); P. Lalive, J.-F. Poudret & C. Reymond, Le Droit de l’Arbitrage Interne et
International en Suisse Art. 178, ¶15 (1989); Wenger, in S. Berti et al. (eds.),
International Arbitration in Switzerland Art. 178, ¶¶25-27 (2000) (“If the agreement to
arbitrate is valid under Swiss law, it can therefore still be upheld even if it were
invalid under the law explicitly chosen by the parties”).
728) See, e.g., Judgment of 7 May 1963, Ets Raymond Gosset v. Carapelli, JCP G 1963, II, 13,
¶405 (French Cour de Cassation Civ. 1) (upholding autonomy of arbitration clause);
Judgment of 21 October 1983, Isover-Saint-Gobain v. Dow Chem. France, 1984 Rev. Arb.
98, 100 (Paris Cour d’Appel) (“law applicable to the determination of the scope and
the effects of the arbitration clause … does not necessarily coincide with the law
applicable to the substance of the dispute”); Judgment of 25 January 1972, Aguero v.
Laporte, 1973 Rev. Arb. 158, 159 (Paris Cour d’Appel) (“performance [of the arbitration
agreement] is not necessarily governed by the law governing [the underlying
contract]”).
729) See §7.03_[B]; Judgment of 7 April 2011, 2011 Rev. Arb. 747, 750 (Paris Cour d’Appel)
(“according to a substantive rule of international arbitration law applicable to an
arbitration seated in France, the arbitration clause is legally independent from the
main contract in which it is included, and subject to public international policy, its
existence and validity depends only on the common intention of the parties,
without it being necessary to make reference to national law”); Judgment of 30
March 2004, Uni-Kod v. Ouralkali, 2005 Rev. Arb. 959 (French Cour de Cassation Civ. 1);
Judgment of 20 December 1993, Municipalité de Khoms El Mergeb v. Dalico, 1994 Rev.
Arb. 116, 117 (French Cour de Cassation Civ. 1) (“according to a substantive rule of
international arbitration law, the arbitration clause is legally independent from the
main contract in which it is included or which refers to it and, provided that no
mandatory provision of French law or international public policy (ordre public) is
affected, that its existence and its validity depends only on the common intention
of the parties, without it being necessary to make reference to a national law”); J.-L.
Delvolvé, J. Rouche & G. Pointon, French Arbitration Law and Practice ¶93 (2d ed.
2009); J.-F. Poudret & S. Besson, Comparative Law of International Arbitration ¶180
(2d ed. 2007).
730) Judgment of 31 May 2001, UNI-KOD Sarl v. Ouralkali, XXVI Y.B. Comm. Arb. 1136, 1139
(Paris Cour d’Appel) (2001), aff’d, Judgment of 30 March 2004, 2004 Rev. Arb. 723
(French Cour de Cassation Civ. 1).
731) See §3.02[B][3][d]; §4.04[A][4][a].
732) See §§4.02[A][2][b]-[d]; §4.04[A][3].
733) See §§4.04[A][3]-[4].
734) Swedish Arbitration Act, §48.
735) Scottish Arbitration Act, §6 (“Where … the parties to an arbitration agreement agree
that an arbitration under that agreement is to be seated in Scotland, but … the
arbitration agreement does not specify the law which is to govern it, then, unless
the parties otherwise agree, the arbitration agreement is to be governed by Scots
law”).
736) See Chinese Law on the Law Applicable to Foreign-Related Civil Relationships, Art,
18 (“The parties may choose the law applicable to the arbitration agreement. In the
absence of such choice, the law at the place of the arbitral institution or the law of
the place of arbitration shall apply.”).
120
737) Chinese Supreme Court, Judicial Interpretation on Several Issues in Applying the
Arbitration Law of the PRC of 26 December 2005, [2006] Fa Shi No. 7. See also Davis
Standard Corp. v. Ningbo Xiecheng Elec. Wire Ltd, [2004] Minsi Tazi No. 13 (Chinese
S.Ct.), discussed in Weidong, Law Applicable to Arbitration Agreements in China, XI
Y.B. Private Int’l L. 255, 260-61 (2009).
738) Weidong, Law Applicable to Arbitration Agreements in China, XI Y.B. Private Int’l L.
255, 258 (2009). See, e.g., Nantong Gangzha Shipbuilding Factory v. IHDA Shipbuilding
Servs. BV, [2006] Wuhai Fashangzi No. 81 (Chinese S.Ct.), discussed in Weidong, Law
Applicable to Arbitration Agreements in China, XI Y.B. Private Int’l L. 258 (2009).
International Commercial Contracts Preamble, ¶1 (2015) (“This instrument sets forth
general principles concerning choice of law in international commercial contracts.
They affirm the principle of party autonomy with limited exceptions.”). See also id.
at Commentary on ‘Purpose and Scope of the Principles’, ¶1.11 (“The overarching
aim of the Principles is to reinforce party autonomy and to ensure that the law
chosen by the parties has the widest scope of application, subject to clearly
defined limits”).
740) Id. at Art. 1(3)(b) (“These Principles do not address the law governing arbitration
agreements and agreements on choice of court”).
741) Spanish Arbitration Act, 1988, Art. 61 (repealed). Compare Donovan, International
Commercial Arbitration and Public Policy, 27 N.Y.U. J. Int’l L. & Pol. 645, 651 (1995) (“At
least where the law chosen has some connection to the dispute and does not yield a
result that violates the fundamental public policy of the forum, courts will generally
apply the parties’ chosen law even though the forum would otherwise have
jurisdiction to prescribe rules governing the commercial relationships at issue”).
742) Spanish Arbitration Act, 1988, Art. 9(6). See Spanish Arbitration Act, Preamble III
(under revised Spanish Act, “the arbitration agreement will be valid if it is governed
by any of the three legal regimes indicated in Article 9(6): the law chosen by the
parties, the law applicable to the substance of the dispute or Spanish law”);
Judgment of 23 July 2001, XXXI Y.B. Comm. Arb. 825, 831 (Spanish Tribunal Supremo)
(2006) (“there is here a clear submission to the substantive law of the specific AAA
Rules and the laws of the State of New York”); Mantilla-Serrano, The New Spanish
Arbitration Act, 21 J. Int’l Arb. 367, 371 (2004) (“In international arbitration, the
principle in favorem validitatis finds its fullest expression in Article 9.6, which turns
to the most favorable choice of law for establishing validity of the arbitration
agreement and arbitrability of the dispute”).
743) Turkish International Arbitration Law, Art. 4.
744) See §11.05[G].
745) That is true of the ICC, SIAC, ICDR, HKIAC, JCAA, SCC and VIAC Rules. It is possible to
interpret the provisions of many institutional rules, governing the choice of law
applicable to the substance of the parties’ dispute, as extending to the law
governing an arbitration agreement. See, e.g., 2010 UNCITRAL Rules, Art. 35; 2017 ICC
Rules, Art. 21; 2016 SIAC Rules, Art. 31(1); 2014 ICDR Rules, Art. 31; 2012 Swiss Rules,
Art. 33; 2018 HKIAC Rules, Art. 36(1); 2012 PCA Rules, Art. 35(1); 2017 SCC Rules, Art. 27;
2018 VIAC Rules, Art. 27. Nonetheless, this is not the most straightforward reading of
such provisions and has not attracted substantial attention in practice.
746) 2014 WIPO Arbitration Rules, Art. 61(c). See also 2015 CIETAC Rules, Art 5(3) (“Where
the law as it applies to an arbitration agreement has different provisions as to the
form and validity of the arbitration agreement, those provisions shall prevail”).
747) 2014 LCIA Rules, Art. 16.4.
748) See, e.g., 2017 LMAA Terms, Art. 6(a)-(b) (“In the absence of any agreement to the
contrary the parties … agree: (a) that the law applicable to their arbitration
agreement is English; and (b) that the seat of the arbitration is in England”); Award
in Amsterdam Grain Trade Association Case of 11 January 1982, VIII Y.B. Comm. Arb.
158, 160 (1983) (Article 16 of Association of Dutch Producers of Edible Oils and Fats
(VERNOF) conditions provided that Dutch law applied to all sales contracts on
VERNOF standard terms); Kulberg Fins. Inc. v. Spark Trading DMCC, 628 F.Supp.2d 510,
514 (S.D.N.Y. 2009) (form contract of Grain and Feed Trade Association provides that
“contract ‘shall be deemed to have been made in England and to be performed in
England, … [and] shall be construed and take effect in accordance with the laws of
England’”).
749) See HKIAC Model Clause.
750) Id.
121
751) See, e.g., Final Award in ICC Case No. 20686/RD, Arb. Intelligence Mat., ¶¶157-58
(applying parties’ choice of Brazilian law for underlying contract to arbitration
agreement); Award in ICC Case No. 10579, discussed in Grigera Naón, Choice-of-Law
Problems in International Commercial Arbitration, 289 Recueil des Cours 9, 45-46
(2001); Final Award in ICC Case No. 6850, XXIII Y.B. Comm. Arb. 37, 38 (1998) (applying
choice-of-law clause in underlying contract to arbitration agreement); Final Award in
ICC Case No. 6379, XVII Y.B. Comm. Arb. 212, 215 (1992); Final Award in ICC Case No.
6363, XVII Y.B. Comm. Arb. 186 (1992); Interim Award in ICC Case No. 4695, XI Y.B.
Comm. Arb. 149 (1986); Award in ICC Case No. 4504, 113 J.D.I. (Clunet) 1118 (1986)
(arbitration agreement was, as a result of parties’ choice of law, subject to law
different from that of underlying contract); Award in ICC Case No. 4381, 113 J.D.I.
(Clunet) 1102, 1103 (1986); Interim Award in ICC Case No. 4131, IX Y.B. Comm. Arb. 131,
133 et seq. (1984); Final Award in ICC Case No. 3572, XIV Y.B. Comm. Arb. 111, 115 (1989).
752) Award in ICC Case No. 11869, XXXVI Y.B. Comm. Arb. 47, 51-52 (2011).
753) See, e.g., Glencore Ltd v. Degussa Eng’d Carbons LP, 848 F.Supp.2d 410, 424-25
(S.D.N.Y. 2012) (“Glencore’s principal basis for applying New York law, the choice-of-
law provision in ¶11, is part of the very same provision of the [contract] to which
Evonik claims it is not bound. To rely on the choice-of-law clause would therefore
amount to bootstrapping.”); Ecuador v. ChevronTexaco Corp., 376 F.Supp.2d 334
(S.D.N.Y. 2005), rev’d on other grounds, 638 F.3d 384, 391 n.6 (2d Cir. 2011); Javier v.
Carnival Corp., 2010 WL 3633173, at *3 (S.D. Cal.) (“[O]bviously, the Seafarer
Agreement’s choice of Panama law is irrelevant. To proceed otherwise and actually
consult Panamanian law on contract formation would be to treat the Seafarer
Agreement as a valid agreement.”). See also W. Craig, W. Park & J. Paulsson,
International Chamber of Commerce Arbitration ¶5.07 (3d ed. 2000) (“That the parties
may themselves determine what law applies to the question of the validity of their
agreement to arbitration may appear somewhat like Baron von Munchhausen lifting
himself out of a bog by his own pigtail”).
754) Rome Convention, Art. 8(1); Rome I Regulation, Art. 10(1); L. Collins et al. (eds.), Dicey,
Morris and Collins on The Conflict of Laws ¶¶32R-106, 32-108 (15th ed. 2012 & Update
2018) (“The effect of the [Rome] Regulation is to refer questions relating to the
existence of a contract to the putative governing law”); M. Giuliano & P. Lagarde,
Report on the Convention on the Law Applicable to Contractual Obligations, O.J. C 282
31/10/1980, Art. 8 (“this provision is also applicable with regard to the existence and
validity of the parties’ consent as to choice of the law applicable”).
755) Restatement (Second) Conflict of Laws §218 comment a (1971) (“Arbitration
agreements are one kind of contract. The choice-of-law rules applicable to
contracts in general should also be applicable to them. So much has never been
doubted with respect to issues relating to their validity.”).
756) See, e.g., Motorola Credit Corp. v. Uzan, 388 F.3d 39, 50 (2d Cir. 2004) (“a choice-of-law
clause in a contract will apply to disputes about the existence or validity of that
contract”); I.S. Joseph Co. v. Toufic Aris & Fils, 54 A.D.2d 665, 666 (N.Y. App. Div. 1976);
In re Elec. & Missile Facilities, Inc., 236 N.Y.S.2d 594, 596-97 (N.Y. Sup. Ct. 1962); Midgulf
Int’l Ltd v. Groupe Chimique Tunisien [2010] EWCA Civ 66, ¶56 (English Ct. App.) (“it is
a well established principle of English private international law that questions
relating to the existence and terms of a contract are governed by the putative
proper law”); Compania Naviera Micro SA v. Shipley Int’l, Inc. [1982] 2 Lloyd’s Rep. 351,
353 (English Ct. App.); Egon Oldendorff v. Liberia Corp. [1995] 2 Lloyd’s Rep. 64 (QB)
(English High Ct.) (validity of putative arbitration clause determined in accordance
with putative proper law); L. Collins et al. (eds.), Dicey, Morris and Collins on The
Conflict of Laws ¶¶32R-106, 32-110-13 (15th ed. 2012 & Update 2018); R. Merkin,
Arbitration Law ¶7.6.1 (1991 & Update August 2018) (“The validity of an agreement to
arbitrate must, under English conflict of laws rules, be tested by reference to the
law which – assuming the validity of the clause – would have applied to it”).
757) See §4.04[A][1][b].
758) As noted above, this is consistent with the approach under other choice-of-law
systems. See §4.04[A][2].
759) See §§4.04[A]-[B].
760) See §4.04[A][1][b].
761) The law determined by the application of choice-of-law rules may, in turn, provide
that the arbitration agreement is unenforceable if it is illegal according to the law
of the place of performance. See, e.g., Restatement (Second) Conflict of Laws
§§202(1)-(2) (1971) (“(1) The effect of illegality upon a contract is determined by the
law selected by application of the rules of §§187-188. (2) When performance is
illegal in the place of performance, the contract will usually be denied
enforcement.”); Ralli Bros. v. Compañia Naviera Sota y Aznar [1920] 2 KB 287 (English
Ct. App.); Tamil Nadu Elec. Bd v. St-CMS Elec. Co. Pvt Ltd [2007] EWHC 1713, ¶46
(Comm) (English High Ct.) (contract would not be enforceable under English law
“insofar as performance of it is unlawful by the law of the country where the contract
has to be performed”); L. Collins et al. (eds.), Dicey, Morris and Collins on The Conflict
of Laws ¶¶32.190-93 (15th ed. 2012 & Update 2018).
122
762) See §19.04_[B][1]; Kreindler, Aspects of Illegality in the Formation and Performance of
Contracts, in A. van den Berg (ed.), International Commercial Arbitration: Important
Contemporary Questions 209, 249-50 (2003). See also Y. Derains, Les Commissions
Illicites 65-68 (1992); El-Kosheri & Leboulanger, L’Arbitrage Face à la Corruption et
aux Trafics d’Influence, 1984 Rev. Arb. 3, 13; Lalive, Ordre Public Transnational (ou
Réellement International) et Arbitrage International, 1986 Rev. Arb. 329, 355.
763) Judgment of 7 May 1994, Fincantieri-Cantieri Navali Italiani SpA v. Ministry of Defence,
Armament & Supply Directorate of Iraq, XXI Y.B. Comm. Arb. 594, 600 (Genoa Corte di
Appello) (1996) (arbitration agreement between Italian seller and Iraqi buyer
violated EU trade sanctions against Iraq, and was therefore unenforceable).
764) SeeChapter 3; §5.06[D][11].
765) The application of any foreign mandatory law would be subject to the Convention’s
non-discrimination requirements. See §4.04[B][2][b].
766) See §4.04[B][2][b][ii]; Rome Convention, Arts. 3(3), 7(1); Rome I Regulation, Arts. 3(3),
9; Restatement (Second) Conflict of Laws §187(2) (1971). As discussed below, most
developed conflict of laws rules provide for the application of foreign mandatory
laws and public policies in limited instances where the concerned foreign state has
a very substantial relationship to the relevant conduct or transaction.
See §§19.04[B][2] & [5]. See also Grigera Naón, Choice-of-Law Problems in
International Commercial Arbitration, 289 Recueil des Cours 9, 85 (2001) (“one
wonders if in particular – most likely exceptional – circumstances, international
Arbitral Tribunals should not take into account and possibly apply lois de police, not
belonging to the laws or rules of law normally governing the arbitration clause, when
judging on its jurisdiction (most likely in connection with arbitrability issues)”).
767) See §4.04[B][2][b][iii].
768) See id.
769) Rome Convention, Arts. 3(3), 7(1); Rome I Regulation, Arts. 3(3), 9; Restatement
(Second) Conflict of Laws §187(2) (1971).
770) For commentary, see Arfazadeh, Arbitrability Under the New York Convention: The Lex
Fori Revisited, 17 Arb. Int’l 73 (2001); Brekoulakis, Law Applicable to Arbitrability:
Revisiting the Revisited Lex Fori, in L. Mistelis & S. Brekoulakis (eds.), Arbitrability:
International and Comparative Perspectives 99 (2009); Grigera Naón, Choice-of-Law
Problems in International Commercial Arbitration, 289 Recueil des Cours 9 (2001);
Hanotiau, The Law Applicable to Arbitrability, 26 Sing. Acad. L.J. 874 (2014); Hanotiau,
L’Arbitrabilité, 296 Recueil des Cours 29 (2002); Hanotiau, The Law Applicable to
Arbitrability, in A. van den Berg (ed.), Improving the Efficiency of Arbitration
(1999); Hanotiau, What Law Governs the Issue of Arbitrability?, 12 Arb. Int’l 391 (1996);
L. Mistelis & S. Brekoulakis (eds.), Arbitrability: International and Comparative
Perspective (2009); Paulsson, Arbitrability, Still Through A Glass Darkly, in ICC,
Arbitration in the Next Decade 95 (1999).
771) Böckstiegel, Public Policy and Arbitrability, in P. Sanders (ed.), Comparative
Arbitration Practice and Public Policy in Arbitration 177, 184 (1987). See also JSC
Surgutneftegaz v. President & Fellows of Harvard College, 2005 WL 1863676, at *3 n.5
(S.D.N.Y.) (“It is not clear under Article II whether the enforcing jurisdiction’s law
applies to questions of enforceability or whether some other law controls such as
the law of the place of arbitration, the substantive law to be applied to the dispute,
or general principles of law”).
772) See generally Arfazadeh, Arbitrability Under the New York Convention: The Lex Fori
Revisited, 17 Arb. Int’l 73 (2001); Blessing, The Law Applicable to the Arbitration Clause,
in A. van den Berg (ed.), Improving the Efficiency of Arbitration Agreements and
Awards: 40 Years of Application of the New York Convention 168-69 (1999).
773) See §4.04[A][1][b]. In particular, Article II(1) provides that arbitration agreements
need only be recognized as applied to matters that are “capable of settlement by
arbitration,” without indicating what law governs this issue.
774) See §4.02[A][1][b]; §4.04[A][1][b]. The applicability of the choice-of-law provisions in
Articles V(1)(a) and V(2)(a) at the stage of enforcing an arbitration agreement (as
distinguished from an arbitral award) is disputed. As discussed above, the correct
view is that Article V’s choice-of-law provisions apply in determining the validity of
an arbitration agreement. See §4.04[A][1][b][iii].
775) New York Convention, Art. V(2)(a) (emphasis added); A. van den Berg, The New York
Arbitration Convention of 1958 368-75 (1981).
776) See §4.04_[A][4]; §6.02[B]. As discussed above, Article V(1)(a)’s choice-of-law rules
are generally-applicable rules of contractual validity, which are designed to have
universal application. See §4.02[A][1][b]; §4.04[A][1][b][ii].
123
777) As discussed below, denying recognition to an award where a dispute is categorized
as nonarbitrable under local law would not always (or even often) be appropriate.
See §4.05_[A][2]; §4.05[C][3]. For example, if, under the laws of Russia, employment
disputes are nonarbitrable, and Russian courts are requested to enforce a French
award, granting relief under U.S. employment laws (which are arbitrable under both
French and U.S. law), in a dispute having no connection to Russia, it is difficult to
conceive why Russian courts ought not enforce the award in these circumstances,
irrespective of Russian nonarbitrability standards. Of course, different
considerations would apply if the French award had involved the application of
Russian employment laws, which Russian law treated as nonarbitrable; there,
Article V(2)(a) would sensibly permit Russian courts to deny enforcement of the
award (while leaving others Contracting States free to recognize it). The appropriate
course, therefore, is that a state would apply its nonarbitrability standards insofar
as claims arising under its own laws are concerned, but would not attempt to apply
or transpose those standards to claims based on other nations’ laws. See §4.05[C][3].
778) See, e.g., Scherk v. Alberto-Culver Co., 417 U.S. 506, 519 n.14 (U.S. S.Ct. 1974); Meadows
Indem. Co. v. Baccala & Shoop Ins. Servs., Inc., 760 F.Supp. 1036, 1042 (E.D.N.Y. 1991)
(rejecting argument that, under Article V(2), law of state where enforcement of
award will be sought governs nonarbitrability); Rhone Mediterranee v. Lauro, 555
F.Supp. 481, 485 (D.V.I. 1982), aff’d, 712 F.2d 50 (3d Cir. 1983) (rejecting argument that
Italian law should apply to nonarbitrability because it is defendants’ place of
residence and business); Judgment of 4 October 1985, XIV Y.B. Comm. Arb. 618, 619-20
(Brussels Cour d’Appel) (1989). See also G. Haight, Convention on the Recognition and
Enforcement of Foreign Arbitral Awards: Summary Analysis of Record of United
Nations Conference 27-28 (1958); Hanotiau, What Law Governs the Issue of
Arbitrability?, 12 Arb. Int’l 391, 399-401 (1996); J. Lew, L. Mistelis & S. Kröll,
Comparative International Commercial Arbitration ¶9-33 (2003) (“tribunals have
been reluctant to deny jurisdiction on the basis that the dispute is not arbitrable
under the law of the possible place of enforcement or even another interested
country”).
779) See Judgment of 15 October 2004, Colvi NV v. Interdica, XXXI Y.B. Comm. Arb. 587, 591
(Belgian Cour de Cassation) (2006) (“The lex fori that is applied when assessing
arbitrability at the stage of recognition and enforcement also determines whether a
dispute is arbitrable in the context of an objection of lack of jurisdiction”); Judgment
of 20 September 1999, Matermaco SA v. PPM Cranes, Inc., XXV Y.B. Comm. Arb. 673, 675
(Brussels Tribunal de Commerce) (2000) (“The similarity between [Article] II(1) and
[Article] V(2)(a) and a consistent interpretation of the Convention require that the
arbitrable nature of a dispute be determined … under the same law, that is, the lex
fori”). See also Arfazadeh, Arbitrability Under the New York Convention: The Lex Fori
Revisited, 17 Arb. Int’l 73, 76 (2001); C. Reithmann & D. Martiny, Internationales
Vertragsrecht ¶2380 (7th ed. 2010); A. van den Berg, The New York Arbitration
Convention of 1958 152 (1981) (“it must be presumed that for the enforcement of the
arbitration agreement also the lex fori governs the question of arbitrability”).
780) Lindo v. NCL (Bahamas), Ltd, 652 F.3d 1257, 1266 (11th Cir. 2011); In re U.S. Lines, Inc.,
197 F.3d 631, 639 (2d Cir. 1999); Alghanim v. Alghanim, 828 F.Supp.2d 636, 658 (S.D.N.Y.
2011) (“Art. II(1) of the Convention … contemplates exceptions to arbitrability
grounded in domestic law”) (quoting Mitsubishi Motors Corp. v. Soler Chrysler-
Plymouth, Inc., 473 U.S. 614, 639 n.21 (U.S. S.Ct. 1985)); Judgment of 16 November 2006,
Van Hopplynus Instruments v. Coherent Inc., Case No. C.02.0445.F, 8 (Belgian Cour de
Cassation) (“The arbitrable nature of a dispute must be decided, whenever the
question is raised, under the law of the judge seized, since this nature decides when
State courts and tribunals will validly lack jurisdiction”). See also Hanotiau, The Law
Applicable to Arbitrability, 26 Sing. Acad. L.J. 874, 883 (2014) (“better view” is that
court requested to enforce arbitration agreement should apply its own national
law).
781) European Convention, Art. VI(2) (emphasis added).
782) See §4.04_[A][4]; §4.04[B][2][b][vi]; §6.02[B].
783) This is also the course that many national courts have taken. See §4.05_[B]; §4.05_[C]
[3]; §6.08.
784) See §4.05_[C][5]; §6.02[B]. This was recognized in the U.S. Supreme Court’s decisions
in Scherk and Mitsubishi Motors. See §4.05_[C][3]; Scherk, 417 U.S. 506; Mitsubishi
Motors Corp., 473 U.S. 614.
785) See §4.05[C][5].
786) See §6.02[A].
Commercial Arbitration ¶655 (1999); Kaufmann-Kohler & Lévy, Insolvency and
International Arbitration in H. Peter, N. Jeandin & J. Kilborn (eds.), The Challenges of
Insolvency Law Reform in the 21st Century: Facilitating Investment and Recovery to
Enhance Economic Growth 257, 260 (2006) (“In principle, an arbitrator sitting in an
international arbitration in Switzerland will not apply any prohibition or restriction
of arbitrability existing under a different legal system”).
124
788) See, e.g., JLM Indus. v. Stolt-Nielsen SA, 387 F.3d 163 (2d Cir. 2004) (rejecting argument
that English law was applicable because London was likely seat); Alghanim v.
Alghanim, 828 F.Supp.2d 636, 659-63 (S.D.N.Y. 2011) (rejecting argument that Kuwaiti
law was relevant to subject matter arbitrability). See also Hanotiau, What Law
Governs the Issue of Arbitrability?, 12 Arb. Int’l 391, 395 (1996) (“As a matter of
principle, the arbitrability of a dispute should not be decided by application of the
law of the seat of the arbitration”).
789) See §4.05[A][1].
790) See, e.g., JLM Indus., 387 F.3d 163 (applying U.S. federal law on subject matter
arbitrability without considering English law); Genesco, Inc. v. T. Kakiuchi & Co., 815
F.2d 840, 848-49 (2d Cir. 1987) (applying U.S. federal law without considering impact
of Japanese law as law of arbitral seat); Meadows Indem. Co. v. Baccala & Shoop Ins.
Servs., Inc., 760 F.Supp. 1036, 1043 (E.D.N.Y. 1991) (applying U.S. federal policy in
favor of arbitral dispute resolution despite claims that Guernsey law should apply
as the place where enforcement of the award is likely to be sought).Similarly, in
Mitsubishi and Scherk, the U.S. Supreme Court looked exclusively to U.S. law to
determine whether antitrust and securities claims were capable of settlement by
arbitration in international disputes – albeit while attaching considerable
importance to the New York Convention and international character of the parties’
transactions. Mitsubishi Motors Corp., 473 U.S. 614; Scherk, 417 U.S. 506. Notably,
however, both Scherk and Mitsubishi involved the arbitrability of U.S. statutory
claims. It is not clear from the Court’s opinions (which did not address choice-of-law
issues), what nation’s law the Mitsubishi and Scherk Courts would have looked to if
foreign statutory claims were at issue. The likely result is that nonarbitrability
arguments based on foreign law would be rejected by U.S. courts and left for foreign
courts to apply. See §4.04[A][2][j][v].
791) See, e.g., Judgment of 12 February 1985, 1986 Rev. Arb. 47 (French Cour de Cassation
Soc.); E. Gaillard & J. Savage (eds.), Fouchard Gaillard Goldman on International
Commercial Arbitration ¶¶441, 559 (1999).
792) See, e.g., Swiss Law on Private International Law, Art. 177(1); Judgment of 16 October
2003, 22 ASA Bull. 364, 387-88 (Swiss Fed. Trib.) (2004); Judgment of 8 July 2003, DFT
129 III 675 (Swiss Fed. Trib.); Judgment of 16 May 1995, 14 ASA Bull. 667, 671-72 (Swiss
Fed. Trib.) (1996); Judgment of 2 September 1993, Nat’l Power Corp. v. Westinghouse,
DFT 119 II 380, 384 (Swiss Fed. Trib.); Judgment of 23 June 1992, DFT 118 II 353, 355
(Swiss Fed. Trib.). See also Bärtsch & Petti, The Arbitration Agreement, in E. Geisinger
& N. Voser (eds.), International Arbitration in Switzerland: A Handbook for
Practitioners 25, 38-40 (2d ed. 2013); F. Knoepfler & P. Schweizer, Arbitrage
International 265, 267-68 (2003).
793) See, e.g., Judgment of 24 November 1994, XXI Y.B. Comm. Arb. 635, 638-39 (Rotterdam
Rechtbank) (1996) (refusing to consider possible nonarbitrability of dispute under
law of third state (other than arbitral seat or enforcement forum), when that law was
not relied on in arbitral proceedings).
794) See, e.g., Judgment of 16 November 2006, Van Hopplynus Instruments v. Coherent Inc.,
Case No. C.02.0445.F, 8 (Belgian Cour de Cassation) (“Article II(3) and V(1) or (2) of the
New York Convention do not exclude to apply the lex fori to the matter of the
dispute’s arbitrability at the stage of the denial of jurisdiction, neither do they
oblige to submit this question exclusively to the law applicable to the contract”);
Judgment of 20 September 1999, Matermaco SA v. PPM Cranes, Inc., XXV Y.B. Comm.
Arb. 673, 675-76 (Brussels Tribunal de Commerce) (2000) (refusing to stay litigation,
based on agreement to arbitrate in Belgium, because Belgian law provided for
nonarbitrability of dispute). Compare Judgment of 5 October 1994, Van Hopplynus v.
Coherent Inc., XXII Y.B. Comm. Arb. 637, 640-42 (Brussels Tribunal de Commerce)
(1997) (rejecting argument that “[Article] V(2)(a) of the New York Convention
expressly refers to the lex fori for the evaluation of the arbitrability of the dispute in
the phase of the recognition of the award, and considers, in the name of a
consistent interpretation of the Convention, that the arbitrability of the dispute
must be evaluated under the same law when an objection to jurisdiction is raised
before a court”; holding that nonarbitrability is governed by law governing
arbitration agreement, and specifically law selected by parties).
795) See, e.g., Judgment of 27 April 1979, VI Y.B. Comm. Arb. 229 (Italian Corte di
Cassazione) (1981) (dispute between Italian company and Italian employee,
employed in Saudi Arabia, not subject to arbitration in Saudi Arabia, because
employment dispute is nonarbitrable under Italian law); Judgment of 7 May 1994,
Fincantieri-Cantieri Navali Italiani SpA v. Ministry of Defence, Armament & Supply
Directorate of Iraq, XXI Y.B. Comm. Arb. 594, 599-600 (Genoa Corte di Appello) (1996);
Judgment of 18 July 1987, XVII Y.B. Comm. Arb. 534, 535 (Bologna Tribunale) (1992)
(“Italian law applies to review arbitrability”).
796) See, e.g., F. Schwarz & C. Konrad, The Vienna Rules: A Commentary on International
Arbitration in Austria ¶¶27.058-59 (2009).
125
797) See, e.g., Judgment of 20 February 2004, Arkhangelskoe Geologodobychnoe
Predpriyatie v. Archangel Diamond Corp., Case No. T-2277-04 (Svea Ct. App.)
(annulling negative jurisdictional ruling by arbitrators, which held that Swedish-
seated tribunal lacked jurisdiction because Russian Subsoil Law prohibited
arbitration of parties’ dispute; holding that question whether dispute was
arbitrable should be determined under Swedish law, since this issue had closer
connection to law governing arbitration agreement than law governing merits of
dispute (i.e., Russian law) and fact that dispute was not arbitrable under Russian
law did not affect court’s conclusion).
798) See, e.g., Casaceli v. Natuzzi SpA, [2012] FCA 691, ¶¶31-32 (Australian Fed. Ct.) (raising
but not deciding whether law governing nonarbitrability is substantive law
governing contract or law of judicial enforcement forum).
799) UNCITRAL Model Law, Arts. 1(5), 34(2)(b)(i). See also Swiss Law on Private
International Law, Art. 177(2); German ZPO, §1030(3).
800) Judgment of 7 May 1994, Fincantieri-Cantieri Navali Italiani SpA v. Ministry of Defence,
Armament & Supply Directorate of Iraq, XXI Y.B. Comm. Arb. 594, 600 (Genoa Corte di
Appello) (1996).
801) See G. Haight, Convention on the Recognition and Enforcement of Foreign Arbitral
Awards: Summary Analysis of Record of United Nations Conference 28 (1958); J. Lew, L.
Mistelis & S. Kröll, Comparative International Commercial Arbitration ¶9-17 (2003)
(“each national court determines the arbitrability of a dispute according to its own
law”); A. van den Berg, The New York Arbitration Convention of 1958 153 (1981) (“all
courts [have] decided the question of arbitrability exclusively under their own law
and [have] not take[n] account of the law of the country where the arbitration was to
take place or was taking place”). See also Brekoulakis, Law Applicable to
Arbitrability: Revisiting the Revisited Lex Fori, in L. Mistelis & S. Brekoulakis (eds.),
Arbitrability: International and Comparative Perspectives 99, 100 (2009) (“prominence
of lex fori as the most relevant law to determine arbitrability remains
unquestionable”); Hanotiau, The Law Applicable to Arbitrability, 26 Sing. Acad. L.J.
874, 884 (2014) (the “better view” is that the court called upon to enforce the
arbitration agreement should apply its own national law); Nacimiento, Article V(1)
(a), in H. Kronke et al. (eds.), Recognition and Enforcement of Foreign Arbitral Awards:
A Global Commentary on the New York Convention 205, 222 (2010) (“Under the
Convention, arbitrability is thus governed by the law of the enforcing court and not
by the law applicable to the arbitration agreement”).
802) See §4.05[A][1].
803) Hanotiau, The Law Applicable to Arbitrability, 26 Sing. Acad. L.J. 874, ¶16 (2014) (“This
is the solution which is expressly provided by Art II(1) and Art V(1)(a) of the [New
York Convention] and by Art VI(2) of the [European Convention]”); Hanotiau, What
Law Governs the Issue of Arbitrability?, 12 Arb. Int’l 391, 393 (1996).
804) Hanotiau, The Law Applicable to Arbitrability, 26 Sing. Acad. L.J. 874, ¶16 (2014);
Hanotiau, What Law Governs the Issue of Arbitrability?, 12 Arb. Int’l 391, 393-94 (1996).
805) See, e.g., Award in ICC Case No. 14046, XXXV Y.B. Comm. Arb. 241, 251 (2010) (applying
Swiss law to question of nonarbitrability because Switzerland was “seat of the …
arbitration, and therefore … the law according to which the issue of arbitrability
must be decided”); Partial Award in ICC Case No. 8910, 127 J.D.I. (Clunet) 1085, 1086-87
(2000) (applying law of French arbitral seat to arbitrability of claims and rejecting
nonarbitrability claim based upon foreign law, where no showing had been made
that French international public policy contained similar rule); Award in ICC Case
No. 8594, discussed in Grigera Naón, Choice-of-Law Problems in International
Commercial Arbitration, 289 Recueil des Cours 9, 79-80 (2001) (applying law of Swiss
arbitral seat to arbitrability of claims); Partial Award in ICC Case No. 8420, XXV Y.B.
Comm. Arb. 328, 331 (2000) (“arbitrability of this litigation is governed by the lex
arbitri”); Award in ICC Case No. 4604, in S. Jarvin & Y. Derains (eds.), Collection of ICC
Arbitral Awards 1974-1985 546, 548-49 (1990) (arbitration clause and issue of
nonarbitrability are governed by law of arbitral seat (Switzerland), not law
governing underlying contract). See also D. Girsberger & N. Voser, International
Arbitration: Comparative and Swiss Perspectives 80 (3d ed. 2016) (for arbitrations
seated in Switzerland, arbitrability is “exclusively governed by Art. 177 [of the Swiss
Law on Private International Law]”); Grigera Naón, Choice-of-Law Problems in
International Commercial Arbitration, 289 Recueil des Cours 9, 81 n.63 (2001) (“It is
according to the lex arbitri that the arbitrability of a claim is more currently
decided upon”); J. Lew, L. Mistelis & S. Kröll, Comparative International Commercial
Arbitration ¶9-29 (2003) (“In the majority of cases, … [arbitral] tribunals determine
the arbitrability of a dispute on the basis of the provisions of the place of
arbitration [(lex loci arbitri)]”).
806) See §4.05[A][1].
807) For example, in a securities dispute involving statutory protections under the laws
of State B, which State B affirmatively channels into arbitration, it is very difficult to
see why State B’s policies should be denied effect in an arbitration seated in
another state.
808) See §4.05_[A][1]; §6.02[G].
809) See §6.02_[G]; §19.04_[B][5]; Rome Convention, Arts. 3(3), 7(1); Rome I Regulation,
Arts. 3(3), 9; Restatement (Second) Conflict of Laws §187(2)(b) (1971).
126
810) See Rome I Regulation, Art. 9(3) (“Effect may be given to the overriding mandatory
provisions of the law of the country where the obligations arising out of the contract
have to be or have been performed, in so far as those overriding mandatory
provisions render the performance of the contract unlawful. In considering whether
to give effect to those provisions, regard shall be had to their nature and purpose
and to the consequences of their application or non-application.”); Rome
Convention, Art. 7(1) (“When applying under this Convention the law of a country,
effect may be given to the mandatory rules of the law of another country with which
the situation has a close connection, if and in so far as, under the law of the latter
country, those rules must be applied whatever the law applicable to the contract. In
considering whether to give effect to these mandatory rules, regard shall be had to
their nature and purpose and to the consequences of their application or non-
application.”). See also Restatement (Second) Conflict of Laws §187(2) (1971); M.
Giuliano & P. Lagarde, Report on the Convention on the Law Applicable to Contractual
Obligations, O.J. C 282 31/10/1980, Art. 7, ¶3 (“the judge must be given a power of
discretion, in particular in the case where contradictory mandatory rules of two
different countries both purport simultaneously to be applicable to one and the
same situation, and where a choice must necessarily be made between them”);
§§19.04[B][5][b]-[c].
811) See Final Award in ICC Case No. 6379, XVII Y.B. Comm. Arb. 212 (1992) (when deciding
validity of arbitration clause, judge of third state, like arbitrator sitting in third
state, is not to consider that Belgian law would apply beyond what is required by its
explicit purposes, when doing so might result in conflict between Belgian law and
another law claiming application).
812) See, e.g., Judgment of 23 May 2012, DFT 4A_654/2012, ¶3.4 (Swiss Fed. Trib.) (“case
law of the Federal Tribunal considered the possibility to reject the arbitrability of a
specific matter to the extent that foreign provisions provide for the mandatory
jurisdiction of State Courts and should be taken into consideration from the point of
view of public policy”).
813) For example, in the example outlined above, if State B’s statutory laws were
purportedly applicable to conduct occurring entirely in State A, with no material
effects in State B, then there would be no justification for applying State B’s
nonarbitrability rules.
814) For examples of decisions adopting this approach, see Ledee v. Ceramiche Ragno,
684 F.2d 184 (1st Cir. 1982); JSC Surgutneftegaz v. President & Fellows of Harvard
College, 2005 WL 1863676, 3 (S.D.N.Y.) (refusing to consider argument that issues of
Russian internal corporate governance were nonarbitrable under Russian law);
Meadows Indem. Co. v. Baccala & Shoop Ins. Servs., Inc., 760 F.Supp. 1036, 1043
(E.D.N.Y. 1991) (refusing to consider arguments that claims were not arbitrable under
Guernsey law and instead applying U.S. “federal policy in favor of arbitral dispute
resolution”). See also Partial Award in ICC Case No. 8420, XXV Y.B. Comm. Arb. 328
(2000) (tribunal sitting in Switzerland refused to apply Italian nonarbitrability rules
regarding labor disputes).
815) See §4.04_[A][4]; §4.04[B][2][b][vi]; §6.02[B]. This analysis also ensures that
idiosyncratic nonarbitrability rules with regard to particular issues, or sweeping
nonarbitrability rules, do not frustrate the Convention and its objectives.
816) See §26.03[B][1].
817) See §26.03[B][6].
818) See Scherk v. Alberto-Culver Co., 417 U.S. 506, 515-16 (U.S. S.Ct. 1974); Quintette Coal
Ltd v. Nippon Steel Corp., 50 BCLR2d 207, ¶27 (B.C. Ct. App. 1990) (“it will be necessary
for national courts to subordinate domestic notions of arbitrability to the
international policy favoring commercial arbitration”); W. Craig, W. Park & J.
Paulsson, International Chamber of Commerce Arbitration ¶5.07 (3d ed. 2000) (“Such
an objection is particularly difficult to accept when the rule of nonarbitrability is
allegedly derived from a national law other than the one stipulated as applicable
to the substance of the dispute – but even when it is the same law it is doubtful that
a rule of nonarbitrability, even if it can be shown that it would be applied by
national courts with respect to internal transactions, should be effective in an
international context. … Another way of putting it is that the effect of domestic
legislation should be attenuated – if not neutralized – with respect to international
transactions to which they were not intended to apply (or in the context of which
the domestic legislation may violate international law, which is preeminent even
within the national sphere), while the security of contractual stipulations requires
an especially high degree of recognition, free of national protectionism, in an
international context.”).
127
819) See §19.04_[B][5]; §25.02; §26.03; B. Berger & F. Kellerhals, International and
Domestic Arbitration in Switzerland ¶274 (3d ed. 2015) (“arbitrators sitting in
Switzerland need to observe ‘foreign’ mandatory rules on arbitrability only to the
extent that there are sound reasons to believe that, by rendering a decision on the
merits, they would breach fundamental legal principles, making the award simply
incompatible with transnational legal and moral values”); A. Bucher & P.-Y. Tschanz,
International Arbitration in Switzerland ¶76 (1988) (Swiss courts should treat
disputes as nonarbitrable where parties agree upon Swiss arbitration “only for the
purpose of avoiding mandatory court jurisdiction of such foreign legal system for
matters such as antitrust, labor relations or exchange controls”); Vischer, in D.
Girsberger et al. (eds.), Zürcher Kommentar zum IPRG Art. 177, ¶22 (2d ed. 2004)
(courts should disregard foreign nonarbitrability provisions unless they form part of
“international public policy”). Contra Judgment of 23 June 1992, DFT 118 II 353, 358
(Swiss Fed. Trib.) (“Since the legislator has chosen an arbitrability criterion
depending on the nature of the clause and not on the law applicable to it, there is
in principle no necessity to take into consideration foreign law restrictions and
prohibitions concerning the arbitrability of the dispute”); P. Lalive, J.-F. Poudret & C.
Reymond, Le Droit de l’Arbitrage Interne et International en Suisse Art. 177, ¶¶3-5
(1989).
820) See, e.g., Partial Award in ICC Case No. 8420, XXV Y.B. Comm. Arb. 328 (2000) (tribunal
sitting in Switzerland refused to apply Italian nonarbitrability rules regarding labor
disputes); Final Award in ICC Case No. 6379, XVII Y.B. Comm. Arb. 212 (1992) (refusing
to give effect to Belgian nonarbitrability rule because parties had chosen Italian
law to govern arbitration agreement, and under Italian law, arbitration clause was
valid); JSC Surgutneftegaz v. President & Fellows of Harvard College, 2005 WL
1863676, at *3 (S.D.N.Y.) (refusing to consider argument that issues of Russian
internal corporate governance were nonarbitrable under Russian law).
821) See §6.03[C].
822) See id.
823) See §1.04[A][1][c]; §4.02[A][1].
824) See §6.03[C][4].
825) PacifiCare Health Sys., Inc. v. Book, 538 U.S. 401 (U.S. S.Ct. 2003).
826) Id. at 407.
827) Vimar Seguros y Reaseguros, SA v. MV Sky Reefer, 515 U.S. 528 (U.S. S.Ct. 1995).
829) See Dillon v. BMO Harris Bank, NA, 856 F.3d 330, 333 (4th Cir. 2017); Escobar v.
Celebration Cruise Operator, Inc., 805 F.3d 1279, 1288-89 (11th Cir. 2015); Aggarao v.
MOL Ship Mgt Co., 675 F.3d 355, 373 n.16 (4th Cir. 2012) (ordering arbitration despite
plaintiff’s argument that he would be denied U.S. statutory remedy if Philippine law
were applied by arbitral tribunal: “It is possible that the Philippine arbitrator(s) will
apply United States law with respect to the Jones Act and Seaman’s Wage Act
claims, or that Aggarao will be able to effectively vindicate the substance of those
claims under Philippine law and obtain an adequate remedy”); Lindo v. NCL
(Bahamas), Ltd, 652 F.3d 1257, 1269 (11th Cir. 2011) (“even if a contract expressly says
that foreign law governs … courts should not invalidate an arbitration agreement at
the arbitration-enforcement stage on the basis of speculation about what the
arbitrator will do, as there will be a later opportunity to review any arbitral award”);
Lim v. Offshore Specialty Fabricators, Inc., 404 F.3d 898, 907-08 (5th Cir. 2005)
(rejecting plaintiffs’ argument that Fair Labor Standards Act claims were “rooted in
United States law” and were “incapable of resolution by foreign arbitration,” noting
that Filipino arbitral tribunal could resolve such claims); Simula, Inc. v. Autoliv, Inc.,
175 F.3d 716, 723 n.4 (9th Cir. 1999) (“[I]t is possible that the Swiss Tribunal might
apply U.S. antitrust law to the dispute. … Moreover, even if Swiss law is applied to
the dispute, there has been no showing that it will not provide Simula with
sufficient protection.”); George Fischer Foundry Sys., Inc. v. Adolph H. Hottinger
Maschinenbau GmbH, 55 F.3d 1206, 1210 (6th Cir. 1995) (“Mitsubishi stands for the
proposition that arbitration should go forward even if there is a chance that United
States antitrust statutory rights will not be fully recognized. … [B]ecause the Zurich
[arbitral] tribunal has yet to decide what law it will apply, this case is not ripe for
review.”); Rhone Mediterranee v. Lauro, 712 F.2d 50 (3d Cir. 1983) (enforcing
arbitration agreement despite argument that it violated Italian law, law of arbitral
forum); JSC Surgutneftegaz v. President & Fellows of Harvard College, 2005 WL
1863676 (S.D.N.Y.) (arbitral tribunal to consider arguments regarding public policy
and internal corporate governance); In re Hops Antitrust Litg., 655 F.Supp. 169, 173
(E.D. Mo. 1987). But see Thomas v. Carnival Corp., 573 F.3d 1113, 1120-26 (11th Cir. 2009)
(declining to compel arbitration under agreement with foreign choice-of-law and
foreign choice-of-forum clauses because agreement functioned as prospective
waiver of plaintiff’s U.S. statutory rights).
830) See, e.g., Thyssen Canada Ltd v. Mariana Maritima SA, [2000] 3 FC 398, ¶23 (Canadian
Fed. Ct. App.) (refusing to consider issues of Romanian law, allegedly requiring
nonarbitrability of dispute subject to arbitration in London: “It is not the role of this
Court in proceedings initiated under the federal Commercial Arbitration Act to
make determinations as to the proper law of a particular contract. … [I]t is for the
arbitration panel in London to determine the proper law of the contract(s).”).
831) See §1.04[A][1][c]; §4.04[A][1][b].
128
832) Consistent with this, some commentators have asserted that “when examining the
objective arbitrability of an international dispute, a court must apply its
conception of international public policy.” E. Gaillard & J. Savage (eds.), Fouchard
Gaillard Goldman on International Commercial Arbitration ¶559 (1999). Although
leaving scope to national courts, the foundation of this analysis is a conception of
an “international public policy” which would be binding on individual Contracting
States.
833) See §6.02[B].
834) Geneva Protocol, Art. 1 (emphasis added).
835) See §1.04[A][1].
836) See §4.05_[A][1]; §6.02[B].
837) See §4.04[A][1][b]; §4.05_[A][1]; §6.02[B].
838) Senate Executive Document E, 90th Cong., 2d Sess. 19 (1968). This statement is
nonetheless clearly confused, among other things because U.S. state law restrictions
on arbitrability are preempted by the FAA. See §4.04[A][2][j][v].
839) See U.N. Economic and Social Council, Summary Record of the Fifteenth Meeting of
the United Nations Conference on International Commercial Arbitration, U.N. Doc.
E/CONF.26/SR.15, 3 (1958) (“Yugoslavia would in fact be able to apply the provisions
of the Convention only to awards made in other contracting countries and
connected with commercial disputes”), 4 (“The United Kingdom’s representative
“failed to see why countries which wished to distinguish between commercial and
other disputes should be unable to formulate a reservation to that effect”), 7 (“It was
essential [for Peru] to include a reservation regarding reciprocity inasmuch as the
legislation of some States placed such broad matters as property laws, inheritances
and civil status outside the scope of arbitration. The reciprocity clause would
therefore appear to be a minimum condition which would have to be accepted if
the Convention was to be realistic.”).Reservations were not ultimately permitted
but on ratification several states took the opportunity afforded by Article I(3) to
declare that they would “apply the Convention only to differences arising out of
legal relationships, whether contractual or not, which are considered as commercial
under the national law of the State making such declaration.”
840) As discussed elsewhere, there are instances in which international law principles
derived from the Convention limit the application of national law standards that
purport to invalidate international arbitration agreements. See §4.04[A][1][b];
§5.01[B][2]. Specifically, Article II(3) of the Convention is best interpreted as giving
rise to prohibitions against discriminatory and idiosyncratic national laws with
regard to the substantive validity of international arbitration agreements: this rule
precludes Contracting States from applying rules of substantive validity that
discriminate against either arbitration agreements generally or international
arbitration agreements (as compared to domestic arbitration agreements), or from
applying idiosyncratic rules of domestic law to international arbitration
agreements. See §4.04[A][1][b]. Under this analysis, the same rules of formation,
mistake, illegality, fraud, unconscionability, impossibility and the like must be
applied to arbitration agreements as to other contracts, and states cannot disfavor
international arbitration agreements as compared with domestic ones.
841) See §§6.02[A] et seq.
842) This is compelled by Article II(1)’s treatment of nonarbitrability as an exception to
the general rule of presumptive validity of international arbitration agreements
and its objective of enhancing the enforceability of international arbitration
agreements. See §1.04[A][1][c][i]. Article II(1)’s nonarbitrability provision is an
exceptional deviation from the international rule of presumptive validity of
arbitration agreements, and must therefore be applied consistently with its basic
character.
843) For example, a Contracting State should not be permitted to treat all contract
disputes or tort claims as nonarbitrable. Equally, a Contracting State should not be
permitted to treat all future disputes as nonarbitrable. See §§2.03[E]-[F].
844) Metrocall Inc. v. Elec. Tracking Sys. Pty Ltd, [2000] NSWIRComm 136 (N.S.W. Indus.
Relations Comm’n). See §6.04. That is true even where statutory protections
restricted the right of parties to conclude “unfair contracts” in particular industrial
sectors.
845) Hub Power Co. v. Pakistan WAPDA, 16 Arb. Int’l 439 (2000) (Pakistan S.Ct. 2000).
See §6.04.
846) Himpurna Cal. Energy Ltd v. PT (Persero) Perusahaan Listruik Negara, Final Award in
Ad Hoc Case of 4 May 1999, XXV Y.B. Comm. Arb. 13, 31-32 (2000). See §6.04.
847) Examples of such disputes include granting or revocation of intellectual property
rights or declaration of bankruptcy. See §6.04[D] & [F].
848) Questions would arise as to how carefully-tailored or specifically-articulated a
particular nonarbitrability rule was required to be under the Convention. Given the
Convention’s constitutional terms, the resolution of such questions would be a
developing process, as Contracting States continue to gain confidence in the
arbitral process and jointly demand more specifically-articulated justification for
nonarbitrability rules.
129
849) See §1.04[A][1]. See also Judgment of 5 October 1994, Van Hopplynus v. Coherent Inc.,
XXII Y.B. Comm. Arb. 637 (Brussels Tribunal de Commerce) (1997) (refusing to apply
nonarbitrability rule of local (Belgian) law, citing fact that Belgian courts would
permit choice-of-forum clause selecting foreign courts involving same claims); van
Houtte, L’Arbitrabilité de la Résiliation des Concessions de Vente Exclusive, in R.
Vander Elst (ed.), Mélanges Offerts à Raymond Vander Elst 821 (1986) (rejecting
approach whereby “Belgian court accepts … that its foreign colleagues ignore the
Law of 1961 [regarding nonarbitrability of certain distribution terminations] but
does not tolerate that foreign arbitrators do the same”).For the same reasons, a
Contracting State could not adopt nonarbitrability rules that conflict with the basic
premises of the Convention. For example, a state could not treat all future disputes
or all noncontractual disputes as nonarbitrable. In each case, it is a basic premise
of the Convention, reflected in the Convention’s text, that arbitration agreements
applying to these categories of disputes will be enforceable. See §§2.03[E]-[F].
850) Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 639 (U.S. S.Ct.
1985). See §6.03_[A]; §6.03[C][4].
851) See, e.g., Hodgson v. Royal Caribbean Cruises, Ltd, 706 F.Supp.2d 1248, 1256 (S.D. Fla.
2009) (“The ‘null and void’ language must be read narrowly, for the signatory nations
have jointly declared a general policy of enforceability of agreements to arbitrate”);
JSC Surgutneftegaz v. President & Fellows of Harvard College, 2005 WL 1863676
(S.D.N.Y.); Quintette Coal Ltd v. Nippon Steel Corp., (1990) 50 BCLR2d 207 (B.C. Ct.
App.).
852) It is less clear whether the arbitrability of competition or antitrust claims would
constitute such a consensus, forbidding a Contracting State from treating antitrust
or competition claims as nonarbitrable. See §6.04[A]. The possibility of the
development of further international constraints derived from the constitutional
character of the Convention’s language, structure and objectives is discussed below.
See §6.04_[A]; §11.03.
853) See §4.06_[A]; §5.02[A][2].
854) See §4.06[A][1]. As discussed below, the uniform international standards contained
in Article II of the Convention regarding the formal validity of the arbitration
agreement are not applicable to the substantive validity of the agreement.
See §4.06_[A][1]; A. van den Berg, The New York Arbitration Convention of 1958 177
(1981) (“[T]he uniform rule character of Article II(2) concerns only the form of the
arbitration agreement. It does not concern other aspects of the validity of the
arbitration agreement – also called the substantial validity – which aspects have, in
principle, to be judged under the applicable law.”) (emphasis in original).
855) New York Convention, Art. II(2). The contents of this uniform substantive rule are
discussed below. See §5.02[A][2].
856) Inter-American Convention, Art. 1. See §5.02[A][4].
857) European Convention, Art. I(2). See §5.02[A][3].
858) See §5.02[A][2][d].
859) See id.
860) A. van den Berg, The New York Arbitration Convention of 1958 287 (1981). Compare
Patocchi & Jermini, in S. Berti et al. (eds.), International Arbitration in Switzerland: An
Introduction and Commentary on Articles 176-194 of the Swiss Private International
Law Statute Art. 194, ¶67 (2000); A. Samuel, Jurisdictional Problems in International
Commercial Arbitration 82-84 (1989). See also Judgment of 7 February 1984, Tradax
Export SA v. Amoco Iran Oil Co., XI Y.B. Comm. Arb. 532, 533-34 (Swiss Fed. Trib.)
(1986) (“It results from the text of the Convention itself … that Art. II contains rules of
uniform applicability which, in cases where the Convention is applicable, replace
national law. … It is therefore exclusively in the light of these treaty provisions that
the question of the validity of the arbitration clause in question must be resolved.”).
861) This includes, for example, the UNCITRAL Model Law, the U.S. FAA, English
Arbitration Act, 1996, French Code of Civil Procedure and Swiss Law on Private
International Law. See §5.02[A][5].
862) See §§5.02[A][2][d]-[e].
863) See §5.02[A][2][e].
864) See id.
865) UNCITRAL, Report on the Work of Its Thirty-Ninth Session, Recommendation
Regarding the Interpretation of Article II, Paragraph 2, and Article VII, Paragraph 1, of
the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, U.N.
Doc. A/61/17, Annex II (2006); UNCITRAL, Revised Articles of the Model Law on
International Commercial Arbitration and the Recommendation Regarding the
Interpretation of Article II, Paragraph 2, and Article VII, Paragraph 1, of the Convention
on the Recognition and Enforcement of Foreign Arbitral Awards, U.N.G.A. Resol. No.
61/33, Annex II (2006).
866) See §1.04[A][1][e].
867) See §5.02[A][2][f]. See also Schramm, Geisinger & Pinsolle, Article II, in H. Kronke et
al. (eds.), Recognition and Enforcement of Foreign Arbitral Awards: A Global
Commentary on the New York Convention 37, 75-76 (2010) (“While courts in certain
jurisdictions apply Article II(2) liberally, others follow a strict approach. Under the
liberal approach, Article II(2) constitutes a non-exhaustive list of ways to satisfy the
‘in writing’ requirement, whereas under the strict approach, Article II(2) defines the
writing requirement exhaustively.”).
130
868) UNCITRAL, Report on the Work of Its Thirty-Ninth Session, Recommendation
Regarding the Interpretation of Article II, Paragraph 2, and Article VII, Paragraph 1, of
the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, U.N.
Doc. A/61/17, Annex 2 (2006).
869) See §1.04[A][1][c][ii]; §2.01[A][1][a]; §4.04[B][2][b]; §5.01_[B][2]; §25.02_[B]; §26.03[B]
[5]. Article VII is also applicable if Article II(2)’s list is interpreted as exclusive. See
Landau, The Requirement of A Written Form for An Arbitration Agreement: When
“Written” Means “Oral,” in A. van den Berg (ed.), International Commercial Arbitration:
Important Contemporary Questions 19, 73 (2003) (“If the word ‘include’ in Article II(2)
indicates an exhaustive criteria, the question arises as to whether national courts
may apply their own more liberal laws (where these exist) under Article VII(1) of the
Convention, rather than the stricter requirements of the Convention”).
870) See §§2.01 et seq. (especially §2.01[B][1]); §§2.03 et seq. for a discussion of the
Convention’s jurisdictional requirements.
871) See §2.03. Of course, even if national law (as distinguished from the Convention)
upholds the formal validity of an arbitration agreement by applying less stringent
requirements than Article II of the Convention, the Convention and its obligations
concerning recognition and enforcement of awards will remain applicable.
See §1.04[A][1][c].
872) In the original 1985 text, UNCITRAL Model Law, Article 7(2) provided: “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.” See also H. Holtzmann & J. Neuhaus, A Guide to the UNCITRAL Model Law on
International Commercial Arbitration: Legislative History and Commentary 260-64
(1989); §5.02[A][5][a]. The 2006 Revisions of the Model Law provided new (and
reduced) form requirements, also contained in Article 7. See §5.02[A][5][a].
873) UNCITRAL Model Law, Art. 1(2) (“The provisions of this law … apply only if the place of
arbitration is in the territory of this State”). As discussed elsewhere, Article 1(2)
generally provides that most provisions of the Model Law apply only to agreements
to arbitrate within the territory of the national jurisdiction. See §2.03; §2.04_[B];
§11.03.
874) U.S. FAA, 9 U.S.C. §1; English Arbitration Act, 1996, §5(3); Swiss Law on Private
International Law, Arts. 176(1), 178(1); Swiss Code of Civil Procedure, Arts. 353(1), 358;
Netherlands Code of Civil Procedure, Art. 1021; Singapore International Arbitration
Act, §2A; Japanese Arbitration Law, Art. 13. As noted below, these national law
provisions tend to be more liberal than the form requirements in Article II(2) of the
New York Convention. See §5.02[A][5].
875) See, e.g., Judgment of 24 November 2011, EGPC v. NATGAS, 2012 Rev. Arb. 134 (Paris
Cour d’Appel); Judgment of 18 November 2010, République de Guinée Équatoriale v. SA
Bank Guinea Équatorial, 2010 Rev. Arb. 980 (Paris Cour d’Appel) (appellant cannot
rely on formal requirements for arbitration agreement imposed by its domestic
law); Judgment of 10 June 2004, Bargues Agro Indus. SA v. Young Pecan Cie, XXX Y.B.
Comm. Arb. 499, 502 (Paris Cour d’Appel) (2005) (“According to a substantive
provision of French international arbitration law, the parties’ intention suffices to
validate an arbitration agreement. Hence, that agreement does not fall under a
national law because it is fully autonomous, also with regard to form.”).
876) Even if an arbitration agreement providing for arbitration within national territory
does not satisfy applicable form requirements of local legislation (e.g., Article 7(2)
of the 1985 UNCITRAL Model Law), there remains the question whether the
agreement should be deemed valid if it satisfies the form requirements of other
jurisdictions (e.g., the law selected by the parties to govern their arbitration
agreement). As discussed below, under the validation principle, the answer to this
question should be in the affirmative. See §4.06[B][4].
877) U.S. FAA, 9 U.S.C. §1; English Arbitration Act, 1996, §5; Swiss Law on Private
International Law, Arts. 176(1), 178(1); Swiss Code of Civil Procedure, Arts. 353(1), 358;
Belgian Judicial Code, Art. 1681. See P. Binder, International Commercial Arbitration
and Mediation in UNCITRAL Model Law Jurisdictions 35 (4th ed. 2019); H. Holtzmann &
J. Neuhaus, A Guide to the UNCITRAL Model Law on International Commercial
Arbitration: Legislative History and Commentary 258 (1989).
878) Thyssen Canada Ltd v. Mariana Maritima SA, [2000] 3 FC 398 (Canadian Fed. Ct. App.);
Nanisivik Mines Ltd v. Canarctic Shipping Co., [1994] 2 FC 662 (Canadian Fed. Ct. App.);
Dongnam Oil & Fats Co. v. Chemex Ltd, [2004] FC 1732 (Canadian Fed. Ct.); Ferguson
Bros. of St. Thomas v. Manyan Inc., [1999] O.J. No. 1887 (Ontario Super. Ct.); Schiff Food
Prods. Inc. v. Naber Seed & Grain Co., [1996] CanLII 7144 (Saskatchewan Q.B.).
131
879) See, e.g., Award in ICC Case No. 16168, cited in J.-J. Arnaldez, Y. Derains & D. Hascher
(eds.), Collection of ICC Arbitral Awards 2012-2015 205 (2018); XL Ins. Ltd v. Owens
Corning [2000] 2 Lloyd’s Rep. 500, 508 (QB) (English High Ct.); Judgment of 20 January
1987, Bomar Oil NV v. Entreprise Tunisienne d’Activités Pétrolières, 1987 Rev. Arb. 482
(Paris Cour d’Appel), rev’d on other grounds, Judgment of 11 October 1989, 1990 Rev.
Arb. 134 (French Cour de Cassation Civ. 1); Judgment of 27 March 1962, Compagnie
Marchande de Tunisie v. Costa de Marfil, JPC G 1963, II, 13036 (Paris Cour d’Appel);
Judgment of 29 September 1959, Goldschmidt v. Cottaropoulos, 88 J.D.I. (Clunet) 168
(Aix-en-Provence Cour d’Appel) (1961); O. Lando, Contracts, III International
Encyclopedia of Comparative Law 102 (1977).
880) Econ. Forms Corp. v. Iran, Award in IUSCT Case No. 55-165-1 of 14 June 1983, 3 Iran–U.S.
CTR 42, 47-48 (1983).
881) See §4.02_[B]; Judgment of 21 September 2005, XXXI Y.B. Comm. Arb. 679 (German
Bundesgerichtshof) (2006) (suggesting that formal requirements applicable to
arbitration agreement were governed by law selected by parties’ choice-of-law
agreement).
882) See §4.04[B] (especially §4.04_[B][3]; §§4.04[B][6][d]et seq.).
883) Award in ICC Case No. 5832, 115 J.D.I. (Clunet) 1198 (1988).
884) Rome Convention, Art. 9(4) (specifying, as alternative grounds, “the law of the
country where the act was done”); Rome I Regulation, Art. 4; Judgment of 18 April
1865, D.P., I, ¶342 (1865) (French Cour de Cassation Req.); Restatement (Second)
Conflict of Laws §199(2) (1971) (“Formalities which meet the requirements of the
place where the parties execute the contract will usually be acceptable”).
885) See, e.g., Award in ICC Case No. 4392, cited in S. Jarvin & Y. Derains (eds.), Collection
of ICC Arbitral Awards 1974-1985 473-76 (1990).
886) See, e.g., Judgment of 20 January 1987, Bomar Oil NV v. Entreprise Tunisienne
d’Activités Pétrolières, 1987 Rev. Arb. 482 (Paris Cour d’Appel), rev’d on other grounds,
Judgment of 11 October 1989, 1990 Rev. Arb. 134 (French Cour de Cassation Civ. 1).
Compare Lew, The Law Applicable to the Form and Substance of the Arbitration
Clause, in A. van den Berg (ed.), Improving the Efficiency of Arbitration Agreements
and Awards: 40 Years of Application of the New York Convention 141-42 (1999).
887) See §4.06[B][1].
888) See §4.04[A][4][c]; §4.04[B][6][d].
889) See §4.04[A][1][b][iv]; §4.04[A][3].
890) See §4.04[A][4][c]; §4.04[B][6][d].
891) Rome I Regulation, Art. 11(3) (contract is formally valid if it satisfies formal
requirements of “the law of the country where the person by whom it was done had
his habitual residence at that time”); Rome Convention, Art. 9(4); M. Giuliano & P.
Lagarde, Report on the Convention on the Law Applicable to Contractual Obligations,
O.J. C 282 31/10/1980, Art. 9.
892) Swiss Law on Private International Law, Art. 124(1) (“A contract is formally valid if it
conforms either to the law applicable to the contract or to the law of the place the
contract was executed”); Judgment of 28 May 1963, JCP 1964, II, 13347, ¶1 (French Cour
de Cassation Civ. 1) (“The ‘locus regit actum’ rule does not prevent international
contracts to be passed in France in a form determined by the foreign law governing
their substance”); L. Collins et al. (eds.), Dicey, Morris and Collins on The Conflict of
Laws ¶¶16.023-26 (15th ed. 2012 & Update 2018). See also Restatement (Second)
Conflict of Laws §188 comment b (1971).
International Commercial Contracts Arts. 9(1)-(2) (2015) (“(1) The law chosen by the
parties shall govern all aspects of the contract between the parties, including but
not limited to: (a) interpretation; (b) rights and obligations arising from the
contract; (c) performance and the consequences of non-performance, including the
assessment of damages; (d) the various ways of extinguishing obligations, and
prescription and limitation periods; (e) validity and the consequences of invalidity
of the contract; (f) burden of proof and legal presumptions; (g) pre-contractual
obligations. (2) Paragraph 1(e) does not preclude the application of any other
governing law supporting the formal validity of the contract.”).
894) See §1.02[B].
895) See Judgment of 26 March 1991, Comité Populaire de la Municipalité d’El Mergeb v.
Dalico Contractors, 1991 Rev. Arb. 456 (Paris Cour d’Appel).
896) See, e.g., Final Award in ICC Case No. 6162, cited in J.-J. Arnaldez, Y. Derains & D.
Hascher (eds.), Collection of ICC Arbitral Awards 1991-1995 75, 83-84 (1997) (although
lack of writing might render arbitration agreement void under law governing
substantive validity of agreement, arbitrators upheld agreement on grounds it was
valid under law of arbitral seat); Award in ICC Case No. 5832, cited in J.-J. Arnaldez, Y.
Derains & S. Jarvin (eds.), Collection of ICC Arbitral Awards 1986-1990 352-58 (1994).
132
897) See Award in Zurich Chamber of Commerce Case of 7 August 2007, 25 ASA Bull. 755, 761
(2007) (in an arbitration seated in Switzerland, with English law chosen to govern
substance of dispute, arbitrator applied Swiss law to determine validity of
arbitration agreement: “When examining whether an arbitration clause is formally
valid one must exercise caution. … For an arbitration clause to be valid there must
be (a) an express common will of the parties to submit the dispute in question to an
arbitral tribunal; (b) a determinable dispute or disputes covered by the clause; and
(c) written evidence of a ‘mutual acceptance by the parties to submit themselves to
arbitration’”; arbitrator concluded that agreement was not formally valid under
Article 178(2) of Swiss Law on Private International Law).
898) See, e.g., Lew, The Law Applicable to the Form and Substance of the Arbitration
Clause, in A. van den Berg (ed.), Improving the Efficiency of Arbitration Agreements
and Awards: 40 Years of Application of the New York Convention 139 (1999) (concluding
that, in practice, when faced with choice-of-law issue, arbitrators have assessed
formal validity of arbitration clause under whichever law, when applied, would
validate arbitration clause); Mayer, L’autonomie de l’Arbitre International dans
l’Appréciation de sa Propre Compétence, 217 Recueil des Cours 319, ¶¶114 et seq.
(1989).
899) See §4.06[B][1].
900) See id. Compare Landau, The Requirement of A Written Form for An Arbitration
Agreement: When “Written” Means “Oral,” in A. van den Berg (ed.), International
Commercial Arbitration: Important Contemporary Questions 19, 67 (2003) (“if an
arbitration agreement is valid under its own applicable law in respect of form, it is
unlikely to be defeated by Article II(2), [but] national courts do not always take this
approach”).
901) See §4.04[A][4][c]; §4.04[B][6][d].
902) See §5.03[B].
903) New York Convention, Art. V(1)(a) (emphasis added).
904) That is what most commentary concludes. See, e.g., E. Gaillard & J. Savage (eds.),
Fouchard Gaillard Goldman on International Commercial Arbitration ¶454 (1999);
Heiskanen, Forbidding Dépeçage: Law Governing Investment Treaty Arbitration, 32
Suffolk Trans. L. Rev. 367, 379-81 (2008-2009) (“issues such as capacity seem more
appropriately resolved by reference to the ‘personal law’ of the party in question,
i.e., the law governing the party’s nationality or domicile … or the place of
incorporation or principal place of business or … the public law … of the state in
question”); J. Lew, L. Mistelis & S. Kröll, Comparative International Commercial
Arbitration ¶6-51 (2003); A. van den Berg, The New York Arbitration Convention of 1958
276-77 (1981) (“The drafters of the Convention left open the question how the law
applicable to a party – also referred to as the ‘personal law’ – is to be determined.
The question must therefore be resolved by means of the conflict of laws rules of
the law of the court before which the enforcement of the arbitral awards is sought. …
The phrase in Article V(1)(a) gives a half-way conflict rule since what is to be
considered as the personal law is still to be determined by the conflict rules of the
forum.”).
905) W. Craig, W. Park & J. Paulsson, International Chamber of Commerce Arbitration ¶5.02
n.3 (3d ed. 2000).
ed. 2015); A. van den Berg, The New York Arbitration Convention of 1958 276 (1981).
907) See §4.02[A][1][b]; §4.04[A][1][b]; §4.04[B][2][b].
908) See §4.02[A][1][b].
909) Article 34(2)(a)(i) omits reference to the New York Convention’s phrase “the law
applicable to them.” UNCITRAL Model Law, Art. 34(2)(a)(i). See also UNCITRAL Model
Law, Art. 36(1)(a); H. Holtzmann & J. Neuhaus, A Guide to the UNCITRAL Model Law on
International Commercial Arbitration: Legislative History and Commentary 915-16
(1989). Section 1059(2)(1)(a) of the UNCITRAL-based German ZPO refers to the “law
applicable to [the parties],” but without specifying how that law is to be selected.
German ZPO, §1059(2)(1)(a).
910) English Arbitration Act, 1996, passim; French Code of Civil Procedure, passim.
Similarly, the U.S. FAA does not contain provisions dealing expressly with questions
of capacity. See U.S. FAA, passim.
133
911) See, e.g., Award in ICC Case No. 10663, discussed in Grigera Naón, Choice-of-Law
Problems in International Commercial Arbitration, 289 Recueil des Cours 9, 98-99
(2001) (declining to apply national law to issues of capacity; holding that
international principles insulate arbitration agreement from national laws “directly
or indirectly restricting access to international arbitration”). See also Italian Code of
Civil Procedure, Art. 808 (“The validity of the arbitration clause shall be evaluated
independently from the underlying contract; nevertheless, the capacity to enter
into the contract includes the capacity to agree to the arbitration clause”); Svenska
Petroleum Exploration AB v. Lithuania (No. 2) [2006] EWCA Civ 1529, ¶7 (English Ct.
App.) (applying Lithuanian law to conclude that Lithuania was bound by arbitration
agreement, which specified application of Lithuanian law “supplemented, where
required, by [international rules] if they do not contradict” Lithuanian law);
Judgment of 10 April 1990, XVII Y.B. Comm. Arb. 568 (S. Korean S.Ct.) (1992) (applying
English law, as law of arbitral seat and law governing underlying contract, to
question of agent’s capacity); L. Collins et al. (eds.), Dicey, Morris and Collins on The
Conflict of Laws ¶16-027 n.59 (15th ed. 2012 & Update 2018) (“The answer should
depend on the law governing the arbitration agreement, rather than the law of the
State concerned, but Arbitration Act 1996, §103(2)(a) (and the corresponding
provision in the New York Convention) suggest otherwise in the context of
enforcement”).
912) See, e.g., Final Award in ICC Case No. 17818, Nat’l Bank of Xanadu v. ACME Co., XLIV
Y.B. Comm. Arb. 30 (2019) (“The capacity of a corporation to enter into an agreement
is governed primarily by its statutes and by the law of its place of incorporation.”);
Award in ICC Case No. 9899, discussed in Grigera Naón, Choice-of-Law Problems in
International Commercial Arbitration, 289 Recueil des Cours 9, 99-100 (2001)
(applying law of corporate seat to issues of corporate capacity to commence
arbitration); Award in ICC Case No. 7373, discussed in id. at 98-99 (“The question of
capacity and power of authority to sign a contract is generally governed by the law
of the domicile or the national law of the concerned person. This solution is
followed in nearly all countries of both the Civil and the Common Law systems.”);
Interim Award in ICC Case No. 7337, XXIV Y.B. Comm. Arb. 149, 151 (1999) (“legal
capacity of a party is determined according to the law at its place of domicile”);
Award in ICC Case No. 6476, discussed in id. at 100-01 (“wide-spread practice …
regards questions of capacity as relating to status and the personal law”); Award in
ICC Case No. 5803, discussed in id. at 105 n.94 (2001) (“capacity matters are, in
general, governed by local law (lex domicilii)”); Award in ICC Case No. 4381, 113 J.D.I.
(Clunet) 1102, 1106 (1986) (“each party’s capacity to agree to arbitration is governed
by that party’s personal law”); Judgment of 5 May 1976, V Y.B. Comm. Arb. 217, 218
(Swiss Fed. Trib.) (1980) (“all problems concerning the legal status of a legal entity
are governed by the law of the State in which it has its seat and from which it
derives its legal capacity”); Judgment of 23 April 1997, Dalmine SpA v. M&M Sheet
Metal Forming Mach. AG, XXIV Y.B. Comm. Arb. 709 (Italian Corte di Cassazione) (1999)
(applying Italian law to issue of capacity of general manager to conclude arbitration
agreement for Italian company).
913) Award in ICC Case No. 2694, cited in S. Jarvin & Y. Derains (eds.), Collection of ICC
Arbitral Awards 1974-1985 320-25 (1990).
914) Partial Award on Jurisdiction and Admissibility in ICC Case No. 6474, XXV Y.B. Comm.
Arb. 279 (2000).
915) Judgment of 31 March 2009, Vivendi SA v. Deutsche Telekom AG, 28 ASA Bull. 104, 109
(Swiss Fed. Trib.) (2010). See also Aebi & Frey, Impact of Bankruptcy on International
Arbitration Proceedings: A Special Case Does Not Make A General Rule, 28 ASA Bull. 113
(2010); Karrer, The Swiss Federal Supreme Court Got It Wrong, Wrong, Wrong and
Wrong A Fourth Time, 28 ASA Bull. 111 (2010); Naegeli, Bankruptcy and Arbitration:
What Should Prevail? The Impact of Bankruptcy on Pending Arbitral Proceedings, 2010
Austrian Y.B. Int’l Arb. 193.
916) Judgment of 23 April 1998, XXIV Y.B. Comm. Arb. 928, 930 (German Bundesgerichtshof)
(1999).
134
917) See, e.g., Bärtsch & Petti, The Arbitration Agreement, in E. Geisinger & N. Voser (eds.),
International Arbitration in Switzerland: A Handbook for Practitioners 25, 40 (2d ed.
2013) (“According to the [Swiss] Federal Tribunal, the issue of capacity is to be
determined under the law applicable by operation of the general conflict of law
rules governing the capacity of persons and corporate entities … as opposed to the
conflict of laws rule of Article 178(2) of the [Swiss Law on Private International Law]”);
B. Berger & F. Kellerhals, International and Domestic Arbitration in Switzerland ¶348
(3d ed. 2015) (“[T]he capacity to be a party to an arbitration is not governed by the
special conflict of laws rule of Art. 178(2) [of the Swiss Law on Private International
Law]. Instead, it is determined by the law applicable by operation of the general
conflict of laws rules of the [Swiss Law on Private International Law] governing the
legal capacity of individuals and legal entities. … For the capacity of legal entities
the ‘closest-connection test’ of Art. 187(1) will normally lead to the law of the place
of incorporation.”); N. Blackaby et al. (eds.), Redfern and Hunter on International
Arbitration ¶¶2.34-41 (6th ed. 2015); Blessing, Drafting An Arbitration Clause, in M.
Blessing (ed.), The Arbitration Agreement: Its Multifold Critical Aspects 32, 44 (1994)
(“Capacity matters are normally governed by the lex incorporationis, i.e., the
domestic law of each party”); D. Girsberger & N. Voser, International Arbitration:
Comparative and Swiss Perspectives 80 (3d ed. 2016) (“in most cases the law of a
party’s nationality or domicile … or the law of the seat or place of incorporation … is
applied”); P. Lalive, J.-F. Poudret & C. Reymond, Le Droit de l’Arbitrage Interne et
International en Suisse Art. 178, ¶19 (1989) (“For arbitrations taking place in
Switzerland one might be tempted to apply the alternative connecting factor of Art.
178(2) of [the Swiss Law on Private International Law] favoring the material validity
of the arbitration agreement. The majority of authors rightly reject this solution and
submit that capacity is governed by the personal law.”); Mantilla-Serrano,
International Arbitration and Insolvency Proceedings, 11 Arb. Int’l 51, 63 (1995)
(“Regarding matters concerning the capacity of the insolvent party (or its
representatives) to pursue the arbitration, the arbitrators consistently refer such
issues to the personal law of the party, which for corporations is generally the law of
the place of incorporation”).
918) See, e.g., Restatement (Second) Conflict of Laws §198(b) (1971); Foustoucos, Conditions
Required for the Validity of An Arbitration Agreement, 5(4) J. Int’l Arb. 113, 117 (1988).
Compare L. Collins et al. (eds.), Dicey, Morris and Collins on The Conflict of Laws ¶32R-
168 (15th ed. 2012 & Update 2018) (“The capacity of an individual to enter into a
contract is governed by the law of the country with which the contract is most
closely connected or by the law of his domicile and residence”).
919) See, e.g., Restatement (Second) Conflict of Laws §302(b) (1971); A. Foustoucos,
Conditions Required for the Validity of An Arbitration Agreement, 5(4) J. Int’l Arb. 113,
117 (1988).
920) See also the discussion above of awards holding that the conflicts rules of the
arbitral seat are mandatorily-applicable in arbitral proceedings. See §4.04[A][2][c].
Resolutions on Arbitration in Private International Law (Neuchâtel) 396 (1959).
See §4.04[A][2][c].
922) See §4.03_[A][3]; §4.04[B][6][d]; §4.05[C].
923) See §4.04_[A][3]; §4.06[B][4].
924) Award in ICC Case No. 7373, discussed in Grigera Naón, Choice-of-Law Problems in
International Commercial Arbitration, 289 Recueil des Cours 9, 98-99 (2001);
Restatement (Second) Conflict of Laws §§198(1)-(2) (1971) (“(1) The capacity of the
parties to contract is determined by the law selected by application of the rules of
§§187-188. (2) The capacity of a party to contract will usually be upheld if he has
such capacity under the local law of the state of his domicil.”). See also L. Collins et
al. (eds.), Dicey, Morris and Collins on The Conflict of Laws ¶30R-020 (15th ed. 2012 &
Update 2018) (“(1) The capacity of a corporation to enter into any legal transaction
is governed both by the constitution of the corporation and by the law of the
country which governs the transaction in question. (2) All matters concerning the
constitution of a corporation are governed by the law of the place of
incorporation.”).
135
925) See Judgment of 10 June 2004, Bargues Agro Indus. SA v. Young Pecan Cie, XXX Y.B.
Comm. Arb. 499, 502 (Paris Cour d’Appel) (2005) (“Since arbitration clauses are thus
independent of national provisions, the lack of capacity of the representative of
one of the parties to conclude an arbitration agreement is not evaluated pursuant
to a national law, but rather directly by the court when examining the facts of the
case, [to determine] whether the other party could legitimately and in good faith
believe that this power was not lacking”). See also Judgment of 8 July 2009, Société
d’Etudes et Représentations Navales et Industrielles v. Air Sea Broker Ltd, 2009 Rev.
Arb. 529 (French Cour de Cassation Civ. 1); Judgment of 18 November 2010, République
de Guinée Équatoriale v. SA Bank Guinea Équatorial, 2010 Rev. Arb. 980 (Paris Cour
d’Appel); Judgment of 22 March 1976, III Y.B. Comm. Arb. 283 (Tunis Ct. First Inst.)
(1978) (“[I]t is generally accepted that international commercial relations are
subject to their own customs. … [The] present question does no longer depend on
the personal law of the parties, but rather on the subject matter of the contract. The
latter is the result from the parties’ will, and constitutes their own law since the
contract is an international contract concluded in order to correspond to the needs
of the parties on the one hand hand [sic] and to international commercial customs
on the other.”).
926) See §4.04[A][1][b]; §4.04[B][2][b]; §4.08; §11.03_[B]; §12.04_[A][4]; §12.04_[B][7];
§15.02[A].
927) See §5.03[D].
928) See §1.04[A][1].
929) Swiss Law on Private International Law, Art. 177(2). See also §5.03[E].
930) Judgment of 13 October 1992, 11 ASA Bull. 68, 78 (Swiss Fed. Trib.) (1993) (“[Article
177(2)] follows from the principle of good faith which applies just as much to a state
participating in international economic transactions as it does to private persons.
The intent of this provision is to avoid that the state uses its legislative power to its
advantage in its agreements with private persons and thereby frustrates the
arbitral proceedings.”).
931) For a similar analysis under Swiss law, see Judgment of 16 October 2012, DFT
4A_50/2012, ¶3.1.2.5 (Swiss Fed. Trib.) (“When the foreign entity is a legal person
according to its status at the place of incorporation, it is also capable of standing as
a party in an international arbitration seated in Switzerland. Possible limitations of
the legal status as a person or a legal entity that are specific to the arbitral
proceedings and leave the legal personality of the foreign entity untouched, are
fundamentally irrelevant from the point of view of the capacity to be a party to an
arbitration seated in Switzerland.”).
932) Id. at ¶3.2.
933) These subjects are sometimes confused with matters of capacity, but are more
correctly considered as issues of authority or corporate power. See §5.03_[F][1];
Restatement (Second) Conflict of Laws §292 (1971); Devaud, La Convention d’Arbitrage
Signée par un Représentant sans Pouvoirs, 23 ASA Bull. 2, 3-5 (2005).
934) See §1.04[A][1][f].
935) See §4.04[A][4][c]; §4.04[B][6][d]. See also A. van den Berg, The New York Arbitration
Convention of 1958 226 (1981) (“New York Convention does not provide a solution for
the question under which law the form of the authorization to conclude an
arbitration agreement is to be judged”).
Commercial Arbitration ¶¶468-70 (1999).
937) See §4.04[A][4][c].
938) See Award in ICC Case No. 14617, cited in J.-J. Arnaldez, Y. Derains & D. Hascher (eds.),
Collection of ICC Arbitral Awards 2012-2015 119 (2018) (applying German law to
relationship between alleged representative and principal because it was place
where agent acted); Judgment of 4 September 2003, XXX Y.B. Comm. Arb. 528
(Oberlandesgericht Celle) (2005); Restatement (Second) Conflict of Laws §292(2)
(1971); Rees & Flesch, Agency and Vicarious Liability in Conflict of Laws, 60 Colum. L.
Rev. 764, 767-68 (1960). See also Final Award in ICC Case No. 6850, XXIII Y.B. Comm.
Arb. 37 (1998) (sole arbitrator considered chosen law governing underlying contract
(French law) and law of place of incorporation of company (Germany) to conclude
that two agents were not bound personally by arbitration clause in contract they
signed on behalf of company that lacked legal personality at time of signing);
Judgment of 23 April 1997, Dalmine SpA v. M&M Sheet Metal Forming Mach. AG, XXIV
Y.B. Comm. Arb. 709, 710 (Italian Corte di Cassazione) (1999) (determination of
authority of representatives who executed agreement was issue of capacity,
governed by law of party’s domicile, not law of arbitration agreement: “In the New
York Convention provision at issue [Article V(1)(a)], capacity means not only the
capacity of a physical person to perform an act, but any capacity, both a legal
capacity to perform an act – with an eye towards so-called special legal
incapacities – and the capacity of physical and legal persons”); Razumov, The Law
Governing the Capacity to Arbitrate, in A. van den Berg (ed.), Planning Efficient
Arbitration Proceedings: The Law Applicable in International Arbitration 260 (1996).
136
939) Award in GMAA Case of 8 November 2005, XXXI Y.B. Comm. Arb. 66 (2006) (authority of
party’s representative to enter into arbitration agreement was governed by law
governing arbitration agreement, not law of party’s or representative’s domicile);
Derains, Observation on Final Award in ICC Case No. 4381, in S. Jarvin, Y. Derains & J.-J.
Arnaldez (eds.), Collection of ICC Arbitral Awards 1986-1990 268, 271 (1994).
940) See §5.03_[F][3]; French Civil Code, Art. 1989 (“agent cannot act beyond the scope of
its mandate: the power to settle disputes does not confer a power to enter into
arbitration agreements”).
941) See §5.03_[F][3]; Austrian Civil Code, §1008 (agents exercising contractual authority
require special power of attorney to conclude arbitration agreement, except in
cases involving specified commercial contexts); G. Zeiler, Schiedsverfahren §§577-618
ZPO idF des SchiedsRÄG 2006 §584, ¶¶28 et seq. (2006) (agent’s power to enter into
arbitration agreement on behalf of principal must be in writing). See also
Oberhammer, Rechtspolitische Schwerpunkte der Schiedsrechtsreform, in B. Kloiber
et al. (eds.), Das Neue Schiedsrecht: Schiedsrechts-Änderungsgesetz 2006 93, 106 et
seq. (2006); A. Reiner, The New Austrian Arbitration Law: Arbitration Act 2006 73 et seq.
(2006).This provision has not been amended in recent revisions to the Austrian
arbitration laws (Schiedsrechts-Änderungsgesetz 2012, 3/51 ME), despite serious
opposition expressed by Austrian practitioners. See C. Koller, Abschluss Durch
Schiedsvereinbarungen Durch Rechtsgeschaeftliche Vertreter-Problemfelder de Lege
Lata, Ecolex 878 (2011).
942) See §5.03_[F][3]; Greek Civil Code, Art. 217(2).
943) See §9.05[B].
944) See §9.05[A].
945) See §9.05.
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Document information Chapter 4: Choice of Law Governing International

§4.02 CONSEQUENCES OF SEPARABILITY PRESUMPTION FOR CHOICE OF LAW

[A] Applicability of Different Laws to International Arbitration Agreement and

[B] Multiplicity of Choice-of-Law Rules for Law Governing International Arbitration

§4.03 ISSUES GOVERNED BY LAW APPLICABLE TO INTERNATIONAL

§4.04 CHOICE-OF-LAW RULES SELECTING LAW APPLICABLE TO EXISTENCE

[A] Choice of Law Applicable to Existence and Substantive Validity of International

[a] Geneva Protocol and Geneva Convention

[b] Criticism of Application of Law of Judicial Enforcement Forum to Arbitration Agreement

[e] Choice-of-Law Rules Providing for Application of Substantive Law Applicable to

(2) Law Governing Substantive Validity of International Arbitration Agreements Under

[4] Future Directions: Choice-of-Law Rules for International Arbitration Agreements

[B] Choice-of-Law Agreements Selecting Law Applicable to Existence and

[b] New York Convention

[c] European Convention

§4.05 CHOICE OF LAW GOVERNING NONARBITRABILITY (770)

[A] Choice of Law Governing Nonarbitrability Under New York Convention

[B] Choice of Law Governing Nonarbitrability Under National Law

[C] Future Directions: Choice of Law Governing Nonarbitrability

§4.06 CHOICE-OF-LAW RULES APPLICABLE TO FORMAL VALIDITY OF

[A] Choice of Law Governing Formal Validity of International Arbitration Agreements

§4.07 CHOICE-OF-LAW RULES APPLICABLE TO CAPACITY TO CONCLUDE

[A] Choice-of-Law Rules Governing Capacity Under International Arbitration

[B] Choice of Law Governing Capacity Under National Arbitration Legislation

§4.08 CHOICE-OF-LAW RULES APPLICABLE TO AUTHORITY TO CONCLUDE

§4.09 CHOICE-OF-LAW RULES APPLICABLE TO INTERPRETATION OF

19) See §34.03[B].

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