Ascertaining the proper law of an arbitration agreement: The artificiality of inferring intention when there is none

• Main Authors: CHAN, Darius, TEO, Jim Yang
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2020
• Subjects: governing law; proper law; arbitration agreement; choice of law; conflict of laws; Sulamérica; Kabab-Ji; Enka; BNA; separability; validation principle; Article V(1)(a); New York Convention.; Dispute Resolution and Arbitration
• Online Access: https://ink.library.smu.edu.sg/sol_research/3200; https://ink.library.smu.edu.sg/context/sol_research/article/5158/viewcontent/JOIA_37_0504.pdf
• Institution: Singapore Management University

The common law choice of law principles for determining the proper law of an arbitration agreement previously thought to be settled by the English Court of Appeal’s decision in Sulamérica v. Enesa [2013] 1 W.L.R. 102 have now been thrown into disarray after a recent string of three judgments: starting with the Singapore Court of Appeal’s decision in BNA v. BNB [2019] S.G.C.A. 84, followed by two decisions from the English Court of Appeal in Kabab-Ji v. Kout Food Group [2020] EWCA Civ 6 and Enka Insaat Ve Sanayi A.S. v. OOO ‘Insurance Company Chubb’ [2020] EWCA Civ 574.This article undertakes a comparative analysis of English and Singapore case law and argues that the common law should take party autonomy more seriously by ascertaining whether the parties have a clear and real intent to choose a particular system of law to govern their arbitration agreement. The current reliance on presumptions or inferences of what the parties must have intended is in reality an artificial arrogation to judges and arbitrators on what ‘commercial’ sensibilities businessmen should be taken to have. In the absence of a clear and real intent, arbitrators and state signatories to the New York Convention ought to apply the law of the seat as the default choice of law rule in the New York Convention.