THE LAW APPLICABLE TO THE ARBITRATION AGREEMENT: TOWARDS TRANSNATIONAL PRINCIPLES

Abstract

AbstractThis article examines the problem of the law governing the validity of the arbitration agreement. The cases ofSulaméricain the English Court of Appeal and ofFirstLinkin the High Court of Singapore demonstrate that leading arbitration jurisdictions around the world can come to diametrically opposite results. In particular, there are currently diverging views as to whether the law applicable to the arbitration agreement should be the law chosen by the parties to govern their substantive legal relationship or the law of the seat of the arbitration. The issue is unlikely to be settled soon at international level. However, without embracing extreme approaches that purport to determine the validity of the arbitration agreement without reference to any national legal system, a more ‘transnational’ approach should be encouraged. This may emerge, based on three structured principles which would be desirable for international convergence, namely the non-discrimination principle, the estoppel principle and the validation principle. These principles can be developed without conflicting with the conventional conflicts-of-laws approach which was adopted by the English Court of Appeal inSulamérica.