The Arbitration Bill & applicable law

• The Supreme Court’s decision in UniCredit reconfirmed that the governing law of the main contract typically applies to arbitration agreements, even if the arbitration is seated in a different legal system.
• The Arbitration Bill, reintroduced in July 2024, sets a default rule that the law of the seat governs arbitration agreements unless expressly stated otherwise, which would have altered the outcome in UniCredit. While this provides greater legal certainty, it has sparked debate, highlighting the need for practitioners to explicitly state the governing law of arbitration agreements to avoid ambiguity.

The Supreme Court’s decision in Unicredit Bank GmbH v RusChemAlliance LLC [2024] UKSC 30 has provided further clarity on the applicable law governing arbitration agreements, particularly when the governing law of the main contract differs from the law of the arbitration agreement. This article examines the court’s reasoning