Originally from State of Arbitration

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This contribution addresses the ongoing debate on the proper law of agreements to arbitrate. Based on a comparative survey of 75 jurisdictions, four main approaches may be identified: the arbitration agreement may be governed by: (i) an ‘a-national’ rule of substantive law that is solely based on the parties’ intent; (ii) any relevant law that confirms the validity of the arbitration agreement (in favorem validitatis); (iii) the law governing the merits of the dispute; or (iv) the law of the seat of the arbitration. World-wide, the latter two approaches are most predominant. The present contribution analyses the remaining discrepancy between them, including whether the parties’ choice of law for the main contract applies to the arbitration agreement and to which law the arbitration agreement is most closely connected. It is submitted that a stronger focus on objective criteria in answering these questions increases legal certainty and promotes international uniformity.

I. INTRODUCTION

Professor Bermann has long been known to go beyond the confines of domestic legal systems and consider approaches to prolific questions of conflict of laws and international arbitration from a comparative perspective. A case in point is the question of which law should govern the arbitration agreement, a topic on which Professor Bermann has extensively lectured and written,  and that he rightly considers ‘among the most challenging choice of law arenas in private international law.’  Indeed, by any measure, this topic remains one of the ‘hot’ issues in contemporary international arbitration law and practice. In the past two years alone, the question of the proper law of the arbitration agreement has engaged appellate and supreme courts in Austria, Canada, France, Hong Kong, Germany, Singapore, Sweden, the United Kingdom and other jurisdictions.