Supreme Court Judgement On Arbitration Agreement

The compromise clause in the event that the parties fail to reach an out-of-court settlement with respect to disputes within 30 days, each party may obtain arbitration proceedings in Abu Dhabi, in English and subject to the rules of Abu Dhabi Commercial Conciliation – Arbitration Centre. If the contract specifies the jurisdiction of the Tribunal in a given location, only such a court has jurisdiction over the case and the parties who want to exclude all other jurisdictions. This case underscores the importance of the need to take more account of and advise the instruments executed by the parties. Although the direct involvement of this decision may include a delayed arbitration start after a compromise clause in an unstamped agreement, the broader implication is delayed the application of the right and the payment of the penalty because of the non-brand at the origin of the agreement. However, the Court indicated what the approach should be if there was no explicit or tacit choice of law for the arbitration agreement, i.e. if there was no clause of law in the main contract. The majority (Lords Hamblen, Leggatt and Kerr) considered that the law with the closest connection to the arbitration agreement was the seat law. The minority felt that there was a tacit choice for the arbitration agreement, which was consistent with the law applicable to the main contract that follows the English applicable law (Lord Burrows) or that the law was the law of the main contract (Lord Sales) with the closest connection with the arbitration agreement. In English law, the approach taken to determine the applicable law of an arbitration agreement was to participate in the analysis of common law disputes. Overall, an arbitration agreement is subject to its applicable law, namely: (1) the right chosen expressly or tacitly by the parties; (2) In the absence of such a choice, the law most closely related to the Arbitration Agreement.1 On 9 October 2020, the Supreme Court of the United Kingdom issued an important judgment on the determination of the applicable law of an arbitration agreement: Enka Insaat Ve Sanayi AS/ OOO Insurance Chubb [2020] UKSC 38. The decision brings welcome clarity to an area of arbitration law that had become unnecessarily complex and uncertain, as reflected in the conflicting decisions of the Court of Appeal. In this warning, we summarize the context of the decision and the decision itself before discussing some of the possible consequences for the parties who choose London as their seat for international arbitration. The majority of the Supreme Court found that, in general, if the parties did not explicitly or implicitly choose the law governing the arbitration agreement, they chose the law applicable to the main contract to promote safety and coherence, as the latter choice of the law on the application of the arbitration agreement.

Second, the Supreme Court “retraced” the culmination of the principle of separation, as recognized in Fiona Trust and approved by the Court of Appeal in Enka/Chubb. This seems to us to be inconsistent with the general approach agreed before 1996, notably Harbour Assurance Co (UK) Ltd v Kansa General International Insurance Co Ltd [1993] 1 Lloyd`s Rep 455. It is also surprising with respect, given the international importance attached to the principle that the House of Lords has described as “an integral part of the alphabet of the right to arbitration”. 24 However, another appeal has been lodged with the Bundesgerichtshof. At this point, the complainant submitted an Arabic translation of the Tribunal`s compromise clause and contains positive language that the parties have agreed on an arbitration procedure as a means of resolving disputes.