The Effect of the Place of Arbitration on the Enforcement of the Agreement to Arbitrate

Abstract

THERE are three stages to any inquiry about the effect of the place of arbitration on the validity or applicability of arbitral agreements. First, it is necessary to determine the contexts in which an attack on the validity of the agreement to arbitrate may occur. Courts will occasionally consider this subject using different rules and deferring to other legal systems depending on the stage reached in the arbitration, the location of the arbitral proceedings and the context in which the issue came to the court's attention. The second stage in the investigation concerns the question of the law to be applied in determining the applicability of the arbitral clause in question. Finally, one has to look at some concrete cases where the choice of a place of arbitration can make a difference. This will identify some of the traps lurking in municipal laws concerning the enforceability of arbitral clauses. Since most of these rules apply to all arbitrations taking place within their territories, they demonstrate the effect that the law of the seat may have on the smooth running of arbitral proceedings. Depending on the place of arbitration, there are a number of ways in which a party can seek to attack the enforceability of an arbitral clause. The extent to which the court is prepared to deal with such challenges prior to the rendering of a final award varies a great deal from country to country. In this context, there is always a risk that a court will either refuse to hear a challenge to the agreement to arbitrate or will only permit it to prevail if it is obviously justified. The Anglo-American tradition, followed by Sweden, and to a lesser extent Germany, is to permit either party to apply to court for a ruling on the arbitrator's jurisdiction …