A Study on the Determination of the Applicable Law in the UK when there is no Designation of the Applicable Law in the Arbitration Agreement

Abstract

Purpose The purpose of this study aims to analyze the determination of the governing law in the UK when there is no designation of the governing law in the arbitration agreement in Enca v. Chubb. Design/Methodology/Approach In order to analyze Enca v. Chubb, this study adopts a literature analysis that analyzes various precedents on the determination of the governing law. Findings The UK Supreme Court determined the law governing the underlying contract by applying the closest connection test. Since there was no choice of law governing the contract, the law governing the arbitration agreement had to be determined by applying the closest connection test, and in that regard, London, as the seat of arbitration, was considered a close connection in that determination. Accordingly, English law was determined as the law governing the arbitration agreement, and although the UK Supreme Court adopted different reasoning, it upheld the anti-suit injunction passed by the UK Court of Appeal. Research Implications The Supreme Court’s decision provides much-needed clarification regarding the English legal approach to determining the governing law of an arbitration agreement. Although the majority ultimately upheld the Court of Appeal’s decision, it did so by a taking a different route and affirmed the choice-of-law approach previously set forth by authorities. The Supreme Court also displayed remarkable sensitivity to the provisions of the New York Convention, and demonstrated admirable receptivity to international authorities, with both the majority and dissents relying on an expansive range of international commentary and judicial decisions