Article: The Concept of the Seat in International Arbitration: Unlocking the Judicial Challenge of Interpretation of Conflict of Laws

Abstract

The continuing growth of international commerce has inevitably led to a situation where more and more countries, via their state entities and private companies, find themselves parties in disputes to be resolved through international arbitration. In Africa, particularly following the African Union Free Trade Agreement of 2018, the growth in cross-border and international investment and the maturity of the transaction landscape has led to a proportionate increase in dispute resolution proceedings. Sharore (O. Shasore, Nigeria. ‘The Seat’ of Arbitration – Approach to Arbitral Proceedings, Mondaq Africa Law Practice (2018)) argues that this activity arises from the interplay among relevant and applicable laws, the arbitration agreements, and the conduct of the proceedings. In this context, the arbitration ‘seat’ is especially important because previous studies have found that the reasons for preferring any one seat over others are strongly related to observed judicial attitudes toward arbitration and the legal infrastructure in that jurisdiction (M. T. Birgonul et al., Comparison of an Emerging Seat of Arbitration and Leading Arbitration Seats and Recommendations for Reform, 10(1) J. Legal Aff. & Disp. Resol. Eng’g & Reconstruction (2018)). In India, for instance, despite the country’s importance as a juridical seat of arbitration given under the 1996 Act, the jurisdiction of the courts over arbitral proceedings has remained with the civil court and high court. Considering international arbitration in general, the conflict between juridical seat and court jurisdiction has persisted because the roles of arbitral seat and venue (as decided by conflict of laws) have not been properly distinguished (Duvva Pavan Kumar, The Viewpoint: Seat of Arbitration v. Territorial Jurisdiction – Dichotomy Continues (2020), https:// www.barandbench.com/view-point/seat-of-arbitration-vs-territorial-jurisdictiondichotomy- continues (accessed 4 Mar. 2021)). This article examines how, in the absence of a clear and unambiguous clause specifying applicable law, the Nigerian courts and indeed other courts have adopted a seat-driven approach to resolving these difficulties. In conclusion, the article outlines the room for improvement that may exist.