In accordance with Article 19(1) of the Federal Civil Transactions Act of 1985 of the United Arab Emirates and the ALF, the parties are free to choose the applicable law of an agreement. In practice, however, uae courts are likely to apply UAE law independently of a choice-of-law contractual clause. It is therefore expected that, whether or not an agreement contains a clause of the applicable law, the law of the United Arab Emirates will apply to any interpretation of the arbitration agreement. For example, the ALF contains many provisions dealing with the validity of the arbitration agreement, and these are commonly interpreted in the courts of the United Arab Emirates under the law of the United Arab Emirates, such as. B matters relating to the arbitration of the parties. Model arbitration agreements rarely provide for the applicable law of the arbitration agreement. But problems can arise if this is not regulated in the agreement – providing for this is good practice. In practice, the parties generally do not specify which law applies to their arbitration agreement. This law governs the existence, validity and interpretation of the arbitration agreement itself (see also our recommendations on the design of an arbitration clause in 2021). An express choice of applicable law cannot be replaced by the choice of another curial law (determined by the seat of the arbitral tribunal – in this case Paris). Copies of the rules and recommended language for arbitration clauses will be published by the above-mentioned institutions on their websites. However, these may need to be completed. The application of the right of domicile is reflected in Firstlink.9 In the present case, one party forced arbitration on the basis of an arbitration clause providing for proceedings before the Arbitration Institute of the Stockholm Chamber of Commerce, based in Sweden.
The choice of law clause applicable to the underlying agreement provided that it „shall be governed and construed in accordance with the laws of the Arbitration Institute of the Stockholm Chamber of Commerce“. Therefore, the other party opposed the action to force arbitration on the grounds that the arbitration agreement was null and void. The Supreme Court of Singapore explicitly disagreed with the rebuttable presumption created in the SulAmérica case, stating that „it cannot always be assumed that commercial parties want the same legal system to regulate their relationship with the performance of substantive obligations under the contract and the very different (and often unfortunate) relationship with dispute settlement in case of problems“. The Court held that, in the absence of an express choice of applicable law, it must be presumed that the parties had implicitly chosen the law of the place of arbitration to govern their arbitration agreement. Parties should carefully choose an appropriate applicable law. The applicable law of a contract may be decisive not only for its formation and validity, but also for whether disputes arising out of or in connection with the contract may be subject to arbitration and what remedies may be granted by arbitrators. It is therefore always advisable to specify the applicable law when drafting the contract. If the parties do not choose an applicable law, the choice will be made by the arbitrators for them. In practice, this means that unless another applicable law is applicable to the arbitration agreement, the applicable law of the main contract is generally applicable to the arbitration agreement. If no applicable law is specified in the main contract, the seat of the arbitration is a convincing indicator that the parties intended the applicable law of the registered office to apply. The boundary between each of the three stages of the investigation is good, and the relative importance that should be attached to the choice of the law of the underlying contract on the one hand and the choice of the seat of arbitration on the other hand is something that has been blurred in English jurisprudence.
The case of Enka v. Chubb in the UK Supreme Court shows that the parties would be well advised to add another item to their arbitration clause checklist that could save them years of unwanted satellite disputes: the law that governs the arbitration clause itself. If the parties do not express a choice as to the law applicable to the arbitration agreement contained therein, it is generally assumed, with reference to the choice of law governed by the contract as such, that the parties also wished that applicable law to apply to the arbitration clause. Ad hoc arbitration does not have the „support network“ of an institution and depends for its full effectiveness on a spirit of cooperation between the parties, which is usually absent when disputes have arisen. Potential problems with arbitration in general, such as the possibility of delaying proceedings, are more likely to arise in ad hoc arbitration. The question of which law governs an arbitration agreement may be important, as this case makes clear. The result determined whether an entity was a party to an arbitration agreement. Although there is some disagreement in the case law on this issue, the (complex) hierarchy of considerations is relatively clear: however, the lex arbitri generally does not specify in detail how arbitration is to be conducted.
The detailed arbitration procedure is mainly determined by the applicable institutional rules (e.B. The ICC Rules 2021) or the ad hoc rules (e.B the UNCITRAL Arbitration Rules 2013), the procedural orders of the tribunal and the arbitration agreement itself. For the second reason, the Court of Appeals agreed with the judge that a clause without an „oral change“ in the FDA was effective in preventing Kut from becoming a party to the arbitration agreement through his conduct. We take a closer look at this aspect of the decision here. Far from choosing a preferred set of laws, whether it is the law of the registered office or the law applicable to the dispute, Article 9.6 of the Law applies an approach of the „most favourable criteria“, the agreement being valid in Spanish law as long as it complies with one or the other: the law chosen by the parties for the arbitration agreement; the law applicable to the substance of the dispute, or; Spanish law. The DIFC has its own status and jurisdiction and, in accordance with the provisions of Section 8(2) of the Civil and Commercial Law Act of the DIFC, English law may be applied to fill in the gaps, except in cases provided for by DIFC law or in the law chosen by the parties. However, in the current jurisprudence of the DIFC, there is no case analogous to Enka v. Chubb or the application of this decision. In this context, it is expected that the DIFC courts and all arbitral tribunals based in the DIFC will follow the approach of the SUPREME Court of the United Kingdom in interpreting an arbitration clause.
The surest way to retain control of the law governed by the arbitration agreement is to state it explicitly in the arbitration clause […].