He referred to lucky-Goldstar International (HK) Ltd v. NG Moo Kee Engineering Ltd [1993] HKCFI 14 (“Goldstar”)[3], in which the parties had agreed that arbitration would take place under the rules of procedure of a non-existent association. In Goldstar, Kaplan J. noted that the phrase “inoperable or incapacitated” had been taken from the 1958 New York Convention and agreed with the following commentary by academic commentators:[4] In some cases, at the stage of appointing the arbitrator under section 11 of the Arbitration and Conciliation Act of 1996 (the Act) or the reference to arbitration under p. 8 of the Act, the Court may conclude that the underlying contract is void. In such cases, the question arises as to whether the arbitration agreement existed after such a judicial conclusion. According to § 16 Abs. 1 of the law, which is based on the principle of jurisdiction-jurisdiction, the arbitral tribunal would have the power to decide on its own jurisdiction, including to rule on any objection to the validity of the arbitration agreement. The law emphasizes that an arbitration clause that is part of a contract is treated as an agreement independent of the terms of the contract. It also provides that a decision of the arbitral tribunal on the nullity of the contract does not render the arbitration clause permanently invalid. This case shows that the prospect of conflicting factual findings in various dispute settlement forums is not sufficient to render an arbitration agreement “incapable of enforcing it”. (1) The parties are free to agree on the language(s) to be used in the arbitration. If such an agreement is not concluded, the arbitral tribunal shall determine the language or languages to be used in the proceedings.

This Agreement or decision shall apply, except as otherwise provided in this Agreement, to any written statement by either party, to the hearing or award, decision or other communication of the arbitral tribunal. 2. The arbitral tribunal may order that all documents be accompanied by a translation into the language or languages agreed upon by the parties or determined by the arbitral tribunal. Article 23 Statements of claim and defence However, given the principle of severability, it seems to be a step backwards to assume that the parties have implicitly decided that their arbitration agreement is not exactly separable, since it is subject to the same law governing the main contract. This proposal undermines two cornerstones of international arbitration: party autonomy and divisibility. (i) a party to the arbitration agreement referred to in Article 7 has been incapacitated; the contract is not valid under the law to which the parties have submitted it or, in the absence of any reference to it, under the law of that State; or nothing in this Section X shall prevent the Majority Seller or Parent Buyer from immediately seeking jurisdiction to: (i) enforce the Terms or any arbitration award under this Section X; (ii) seek an injunction, injunction or other equitable remedy (including special enforcement) where such remedy is necessary to protect its interests, or (iii) grant recovery of a specific asset. All matters relating to arbitration remain strictly confidential. Another widely viewed and very convincing approach is the application of the law of the place most closely related to arbitration.

This happens on a case-by-case basis and is reflected in judgments without being explicitly taken into account, as in Firstlink. The English Court of First Instance granted the defendant`s claim on the ground that it did not have jurisdiction to rule on the distributor`s claims. The distributor appealed to the High Court. The distributor`s main argument was that an arbitration clause intended to apply foreign law which does not give effect to a mandatory provision of EU law is void and that the parties could not therefore be `parties to an arbitration agreement` within the meaning of Article 9(4) of the Law. The distributor based this proposal on the Opinion of the Advocate General and on the decision of the ECJ in Ingmar GB Ltd v Eaton Leonard Technologies Ltd [2000] ECR I-9305 [Ingmar]. The relevant principles arising from the present case are as follows: (a) Articles 17 to 19 of the Regulation are binding and (b) a payer (such as the payer) cannot evade mandatory EU law as set out in Articles 17 to 19 `by the mere purpose of a choice of law clause` (Ingmar, p. [25]). The distributor therefore argued that any contractual decision of the parties having the practical effect of depriving the commercial agent of his compensation is “contrary to Article 17 of the Mandatory Regulation”. The distributor also argued – on the basis of Case C-126/97 – Eco Swiss ECR. 1999, I-3055 (Eco Swiss) and Elisa Maria Mostaza Claro v Centro Móvil Milenium SL, C-168/05 [2006] E.C.R.

I-10421 (Claro) – that any arbitral award which `infringes a mandatory provision of EU law should itself be recognised by the national courts of the Member States`. Although it is a Queensland decision, the decision is of greater interest given the similarities in the legislation that applies in other Australian jurisdictions as a result of the harmonisation of national commercial arbitration legislation. As regards the expression `incapable of implementation`, Professor van den Berg considers that this seems to be the case in a case where arbitration cannot actually be initiated. The clause may be too vague or perhaps other terms of the contract contradict the parties` intention to arbitrate. It suggests that if an arbitrator expressly named in the arbitration agreement refuses to act, or if an appointing authority refuses to appoint, it could be concluded that the arbitration agreement “cannot be fulfilled”. However, this applies only if the law of the Curia of the State in which the arbitration takes place does not contain a provision corresponding to articles 9 and 12 of the Arbitration Rules and article 11 of the Model Law. “Article. 178 para. Art. 2: An arbitration agreement is valid in substance if it corresponds either to the law chosen by the parties, or to the law applicable to the subject matter of the dispute, in particular the main contract, or to Swiss law. Since the parties often fail to agree on the law governing their arbitration agreements, courts apply different choice of law rules to find the law applicable to the agreement, and several options could be considered – i.e. the law governing the underlying contract, the law of the registered office, the law most closely related to the arbitration, Internationally recognized principles and rules and a validation principle that enforces the arbitration agreement.

This exercise is long and costly, and therefore has a direct impact on the effectiveness of arbitration. The Supreme Court of India ruled in another Reva Electric Car case4 that the provisions of section 16(1) of the Act were taken into account in the context of jurisdiction, and it was found, among other things, that Parliament clarifies under section 16(1) that Parliament, in view of any objection to the existence or validity of the arbitration agreement, the arbitration clause, which formed an integral part of the contract, should be treated as an agreement independent of the other contractual conditions. That agreement referred to the provisions of paragraph (B) of section 16(1)(b) of the 1996 Act, according to which, even if the arbitral tribunal concludes that the contract is void, the arbitral tribunal cannot lawfully lead to an automatic invalidation of the arbitration clause. Therefore, it is understandable that the concept of severability of the arbitration clause/agreement of the underlying contract has been legally recognized in this country under p.16 of the 1996 Act. It was also held that paragraph 16(1)(a) of the 1996 Act requires the existence of a valid arbitration clause and requires that it be treated as an agreement independent of the terms of the contract. (i) the subject matter of the dispute cannot be settled by arbitration under the law of that State; or article II of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “Convention”) allows courts to dismiss a request for referral of the parties to arbitration if the arbitration agreement “is null and void, invalid or unenforceable”. However, the provision does not specify which law determines this, nor does it name a choice of law rule to be followed. Unfortunately, until the Court of Appeal has the opportunity to review the principles stemming from accentuate (and Fern), there is a risk that the applicability of arbitration agreements and even arbitral awards involving EU law will be impeded.

In order to minimise those risks, the parties should carefully consider their choice of law when drawing up an arbitration agreement where the mandatory principles of Union law are likely to have a significant impact on future disputes. This may be the case, for example, in the case of a distribution agreement or other contract where regulations could be invoked, or in the case of a contract where competition law issues may arise. .