Choosing a Place of Arbitration - Chapter 5 - Arbitration Clauses for International Contracts - 2nd Edition
Paul Friedland is a Partner at White & Case LLP and Chair of the firm's International Arbitration Practice Group. Mr. Friedland was Chair of the Task Force that developed the recent "IBA Guidelines for Drafting International Arbitration Clauses." Mr. Friedland is Chair of the Law Committee and a Member of the Board of Directors of the AAA and a Court Member of the LCIA.
Originally from Arbitration Clauses for International Contracts - Second Edition
CHOOSING A PLACE OF ARBITRATION
(1) Why it Matters
“Place of arbitration” as used herein refers to the formal situs or “seat” of the arbitration, that is, the place where the arbitration is considered held from a legal point of view. The place of arbitration is usually the place where the hearings take place, but it need not be. The selection of the place of arbitration in an international contract is vital both juridically and practically.
There are two critical consequences of the choice of place of arbitration respecting enforceability of an eventual arbitral award.
The first is that the pro-enforcement regime of the New York Convention is in most instances available only with respect to awards rendered in nations that are party to the Convention. No parties should choose as a place of arbitration a nation that is not a signatory to the New York Convention unless there are strong countervailing reasons, independent of enforceability.
The second consequence of the choice of place of arbitration respecting enforceability of an eventual arbitral award is that standards differ as to the grounds for challenging and setting aside arbitral awards, even among the signatories to the New York Convention, and under the Convention one of the permissive grounds for non-enforcement of an award is that it was set aside by the courts at the place of arbitration.