Arbitration

It was established that the starting point for any inquiry into the proper law of an arbitration agreement was, first, even if an arbitration agreement had formed part of a substantive contract, its proper law might not be the same as that of the substantive contract. Secondly, the proper law was to be determined by undertaking a three-stage inquiry into: (i) express choice; (ii) implied choice; and (iii) closest and most real connection.

A search for an implied choice of proper law to govern the arbitration agreement was likely to lead to the conclusion that the parties had intended the arbitration agreement to be governed by the same system of law as the substantive contract, unless there were other factors present which pointed to a different conclusion. That might include the terms of the arbitration agreement itself or the consequences for its effectiveness of choosing the proper law of the substantive contract.