Originally from American Review of International Arbitration - ARIA

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I. INTRODUCTION

Arbitration laws and regulations should enhance the essential advantages of arbitration over litigation: speed, simplicity, confidentiality, and easy access to a method of dispute resolution better adapted to the needs of commercial and economic transactions. The principle of the separability of an arbitration agreement from its underlying contract should be approached in light of these aims.

According to a recent decision of Chamber “E” of the National Commercial Court of Appeals of Buenos Aires, the separability principle means that the agreement to arbitrate:

may or may not have been executed together with the contract to which it refers, but . . . does not depend on the latter as to its validity, the applicable law, or the determination of the court endowed with jurisdiction to decide a dispute [concerning the arbitration proceedings].1

The case concerned an international arbitration that was to take place in Argentina under the Arbitration Rules of the Argentine-German Chamber of Commerce of Buenos Aires.2 Since one party did not cooperate in selecting the arbitral panel, the other had to resort to the courts to obtain specific performance of the arbitration agreement.

Controversy arose over which country’s courts would have jurisdiction to grant specific performance of the arbitration agreement, i.e., the power to designate the members of the arbitral panel if a party failed to do so and, more generally, to grant the submission, or compromise, still required under Argentine law.3 Article 742 of the National Code of Civil and Commercial Procedure provides that a request for specific performance of an arbitration agreement must be filed with the court that would have had jurisdiction over the dispute had the contract contained no arbitration clause. The defendant (the recalcitrant party) argued that jurisdiction lies in the court of the country where it was domiciled or where the underlying contract was to have been performed, as provided in articles 1215 and 1216 of the Argentine Civil Code, which govern disputes arising from international contracts.4 The defendant claimed that jurisdiction resided in the German courts — the country where it had its domicile and the place of contractual performance.