Establishing the proper law of an arbitration agreement is key, says Khawar Qureshi QC
In the case of Sulamérica Cia Nacional De Seguros SA v Enesa Engenharia SA [2012] EWCA Civ 638, [2012] All ER (D) 145 (May), the Court of Appeal underlined the significance of the choice of the seat of arbitration (London in that case). This could give rise to unexpected consequences, where parties have hitherto assumed that the choice of governing law for the agreement also meant that the same law applied to the arbitration agreement.
The decision is not without controversy, and may be criticised by some as being an example of an unduly “pro-London arbitration” approach on the part of the English courts, which may also generate uncertainty in international contracts containing London arbitration clauses. However, the decision makes it all the more important to ensure that the dispute resolution clause in a contract is drafted carefully, and expressly identifies the law applicable to the arbitration agreement.
The facts
The case concerned claims under
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