Complications abound on which laws govern arbitration clauses: Guy Pendell calls for harmonisation across jurisdictions
- Courts in France, England and Wales, and Singapore take markedly different approaches to determining the governing law of arbitration agreements, leading to uncertainty in cross-border contracts.
- The Kabab-Ji case illustrates the contrast between French and English legal reasoning, while Singapore’s three-step test highlights a more nuanced approach.
- England’s upcoming Arbitration Act 2025 introduces section 6A, which defaults to the law of the seat unless expressly agreed otherwise—potentially influencing global arbitration norms.
When it comes to arbitration clauses in contracts, which laws should govern them? In the absence of an express choice of jurisdiction by the parties, should it be the law governing the underlying contract? Or the law governing the seat of arbitration? Or some other law? What are the commercial parties’ expectations during contract negotiations? How are tribunals or courts in different jurisdictions likely to approach this issue? Is there a case for harmonising the laws of different nations on this point? And in the absence of such harmonisation, how should commercial parties proceed?
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