The first was the choice of an English seat. The choice of a court other than the seat of arbitration suggests that the law of that country regarding the enforcement and monitoring of arbitration proceedings applies to the proceedings. This indicates that the parties intended English law to regulate all aspects of the arbitration agreement, including issues relating to the formal validity of the agreement and the jurisdiction of the arbitrators. This is a difficult issue and depends on the circumstances of the case and the action of the arbitral tribunal or national court considering the matter. This ambiguity may lead to costly satellite procedures that would not be necessary if the law applicable to the arbitration agreement were defined in the arbitration agreement. If the parties have opted for the applicable law, the conflict-of-laws rules usually confirm their choice – party autonomy is the most important conflict rule in contractual disputes. However, the choice of parties may lead to non-compliance with other laws and, in some cases, this may lead to an invalid or unenforceable arbitral award. Imagine a treaty containing the choice of a right of a non-EU country. If the Treaty infringes EU competition law, the defaulting party can invoke EU competition law: that party has not fulfilled its obligations because it would have infringed EU competition law. The counterparty will signal the choice of law in the Treaty and exclude the applicability of EU competition law.

As we know and confirmed by the famous Eco-Swiss decision, a counter-decision contrary to EU competition law can be contrary to public policy and therefore risk being annulled or refused. The Tribunal may therefore take into account EU COMPETITION LAW in order to prevent an arbitral award from becoming invalid or unenforceable. But does the court have the power not to respect the choice of law established in the treaty? If the court exceeds its authority, the arbitral award is invalid and unenforceable. In a recent case of the Commercial Court of England, Habas Sinai, an agent (contrary to the instructions of the principal), voted a contract without applicable legislation and an arbitration clause providing for icc arbitration in London. In the absence of an explicit provision of the applicable law in the substantive contract, the applicable law of the arbitration agreement would normally be that of the registered office, i.e. English law. It was argued that in this case the seat should be ignored because it was agreed without real authority….

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Last Modified: September 15, 2021