Mandatory rules for
Arbitration
The lex arbitri is a set of mandatory rules of law applicable to
the arbitration at the seat of the arbitration. It also can be
defined as the juridical seat of arbitration.
Lex arbitri also “determines the relationship between the arbitral
tribunal and national courts." For instance, what extent court
intervention during the arbitral proceedings is authorized.
“International commercial arbitration is presumed to be governed by the
law of the place in which it is held." This is the ‘lex
arbitri’ or the law of the ‘seat’ of arbitration. But, it includes the
principal of party autonomy, which allows the parties to choose the applicable
law. “The parties are free to choose rules, which govern their
contract." According to Geneva Protocol, “the arbitral
procedure, including the constitution of the arbitral tribunal, shall be
governed by the will of the parties and by the law of the country in whose
territory the arbitration takes place." This article
demonstrates that there is a strong link between the law of the country where
the arbitration takes place and the law governing that arbitration (lex
arbitri).
The law of the arbitration agreement (lex arbitri), may be different
from the proper law and the procedural law (curial law). “Proper law of the
contract governs issues of interpretation, performance, non-performance and
liability under the contract and is determined by using the conflict of law
rules." Contracting parties usually insert a clause to
determine the proper law to govern the contract. “The lex arbitri is generally
different from the proper law of the contract."
On the other hand, the curial law is the law that governs the procedure
of the arbitration. It can be said that, “it is the part of the lex
arbitri," because, they are, in most cases, the same as the law
of the seat of arbitration. And the parties generally do not separate them.
“Curial law is determined by parties’ choice, if there is no choice, the curial
law is the law of the place of arbitration."
It is sometimes possible for the curial law to be different from the law
of the seat of arbitration. For instance, “parties can choose to hold
arbitration in one country but make it subject to the procedural law of another
country." Under the Union of India case, arbitration clause providing
for the seat to be in London but the procedural law was the Indian Arbitration
Act 1940. However, “if parties have not made an express agreement as to the law
to govern the arbitral proceedings then it is usual the law of the seat of
arbitration will apply to the procedure." According to the
Union of India case, “English procedural law governed the proceedings, with the
addition of the sections of Indian Statute that were not inconsistent with
English procedure, because Indian procedural law cannot override the mandatory
provisions of the English Arbitration Act 1996."
Furthermore, delocalised arbitration is “to detach an international
commercial arbitration from control by the law of the place in which it is
held." The idea is that international commercial arbitration “has no forum". It is not under
control of the lex arbitri and the court of the place of enforcement of award.
The party autonomy becomes more important and control should come from one
place that is “the law of place of enforcement."
One example is given below is that parties have expressly chosen the
German law as a proper law of the contract.
Agreement: ICC Arbitration in London, English/Swiss Arbitrator (ie
individual with dual nationality) as Chairman.
It is an institutional arbitration. The best-known institutional
arbitrations are the ICC, the LCIA and the ICDR (AAA). The main feature is
that, “it provides the arbitrators to settle rules directly and do not need to
make a specific references to a national law procedure."
When parties are drafting an arbitration agreement, they mostly specify
the seat of arbitration. The choice of seat is not a physical choice, but it is
a legal choice, which allocates the arbitration law applicable to the
arbitration procedure. For instance, if parties choose the seat of the
arbitration in Turkey, but they required to be decided the substantive issues
in accordance with the law of England, nevertheless, the arbitration process will
be subject to the national arbitration law of Turkey. Moreover, “if parties do
not make an express choice of place of arbitration, the choice will be made,
either by the arbitral tribunal itself or arbitral
institution."
According to the ICC Rules 14, which provide that “in the absence of
agreement the place of arbitration shall be fixed by the Court of Arbitration
and a choice is most commonly based upon the most convenient for the arbitrator
himself such as his home country." In the instant case, the
arbitrator has a dual nationality (Swiss and English). So, there is a
possibility for Swiss Law to govern the arbitration agreement but England does
not recognise delocalisation. It is not possible to apply Swiss Law in the UK.
It is clear under the Arbitration agreement that the arbitration takes
place in London under the ICC arbitration. However, it does not necessarily
mean that “the lex arbitri is the place of the
arbitration" but, “in the absence of the choice of lex abitri,
it will be the seat of the arbitration that has the closest
connection." So, the law of the arbitration agreement (lex
arbitri) will be the national arbitration law of England. The reasons for that
may find under the section 2 of Arbitration Act 1996 provide that “the
provisions of this part apply where the seat of the arbitration is in England
and Wales or Northern Ireland." The seat of arbitration means “the juridical
seat of the arbitration", which is mostly lex arbitri of the arbitration.
