December 22, 2025

Determination Of The Law Applicable To The Arbitration Agreement In International Arbitration

By Suneha Bhandary and Srihari S. Somayaji

With International Arbitration gaining traction globally, it is important to understand one of the crucial aspects pertaining to it – the Arbitration Agreement. This article aims to address fundamental questions related to the applicable law in the context of an Arbitration Agreement.

Why is there a need to determine the law applicable to the Arbitration Agreement?

  1. As disputes are becoming global, in the sense that they cross more than one territorial jurisdiction to another1, there is an interplay between laws, especially when it comes to the field of Arbitration. Parties generally adopt a written set of rules or procedure to govern the Arbitration, in the case of a dispute.
  2. Some of the different sets of rules/laws applicable to the Arbitration that may be categorized as hereunder2 –
    1. A law governing the Arbitration Agreement;
    2. A law governing the Arbitral proceedings itself, also known as the “curial law” or “lex arbitri”3;
    3. Law governing the merits of the Dispute itself;
    4. Law governing the enforcement and recognition of the Award;
  3. Each of the aforesaid rules and laws would play a different role and impact the Arbitral proceedings as would be enunciated further; however, the present Article would only focus on the aspect of the law governing the Arbitration Agreement.
  4. There is a need to determine the law applicable to the Arbitration Agreement, in the case where there is a dispute, or an objection raised in so far as the scope, validity and interpretation of the Arbitration Agreement is required.

What does the law governing the Arbitration Agreement entail?

  1. An Arbitration Agreement contained (sometimes) in the main contract or the Matrix Contract is usually presumed to be a separate contract entered into between the Parties4. The same is done to insulate and protect the Arbitration Clause independent to the various merits and challenges that the parties may raise to the Matrix Contract itself5.
  2. Keeping the aforesaid presumption of separability, the law governing the Arbitration Agreement would render itself to adjudicate any dispute that may arise on the validity, scope or interpretation of the Arbitration Agreement itself6 and thus may remain separate and its adjudication therefore, separate from the law governing the Matrix Contract itself7.
  3. The law governing the Arbitration Agreement would render assistance when the Parties either raise a challenge to the validity, scope and interpretation of the Arbitration Agreement itself.8,9

What happens when there is no choice of the Parties towards the law governing the Arbitration Agreement?

  1. The cornerstone of the aspect of Dispute Resolution through Arbitration itself is Party Autonomy10 and Consent11. While determining the law applicable to the Arbitration Agreement, it is trite, keeping the cornerstones in mind, to see if an express choice of the Parties in choosing such a law, is applicable.
  2. In the case that there is no express consent of the Parties to such choice of law, we would further look at such choices as may be made applicable-
    1. Applicable choice of law rules – Article V (1) (a) of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958)12 would indicate that in the case there is a challenge to the validity of the Arbitration Agreement, it would have to be shown that it was invalid under which the Parties have expressly chosen, or under the law in which the Award was made i.e., usually made under the “seat” of Arbitration13.
    2. Apart from the foregoing, the Tribunals and Court may also take into consideration the “business” aspect of entering into such Contract. It is assumed that when two commercially intent parties intend to contract with each other, they would not have intended that the Arbitration Agreement would be governed by a law different to that as made applicable to the Entire Matrix Contract. The presumption is that the Parties would have likely intended to cover the entire Contract to be under one law, whereby the Arbitration Agreement would form a part of that Contract, unless there are such factors to decide otherwise.
    3. Another aspect in determination of the law applicable to the Arbitration Agreement may be in terms of the “seat” chosen by the Parties; this may especially be the case when we look at certain national legislations and/or the institutional rules. Examples:
      1. Article 16.4 of the London Court of International Arbitration14 would indicate that the Law applicable to the Arbitration Agreement shall be the seat.
      2. Similar is the case when we see the Swedish Arbitration Act15 and the Arbitration (Scotland) Act 201016 and the recent amendment to the English Arbitration Act 2025.17
    4. Validation Principle – That the law governing the Arbitration Agreement may be chosen to be the seat, in the case there is a conflict or/choosing the law governing the Matrix Contract to govern the Arbitration Agreement would render it invalidated.18
    5. Another determination of the law applicable to the Arbitration Agreement would be to see which law it would have its closest and most real connection with. There may be various deciding factors when it comes to the said test, taking into account rights/determination and obligations of Parties, where the Contract was formed, etc. The Express and Implied Choices can further be seen through some of the leading case commentaries.

Conclusion Through Case Commentaries

  1. Let us now see the principles as laid down in the cases – Enka Insaat ve Sanayi AS v OOO Insurance Company Chubb19 [para 70 80, 81, 88, 90, 91] Kabab-Ji S.A.L. v Kout Food Group20 [para 67, 68, 70], Sulamérica Cia Nacional de Seguros S.A. v Enesa Engenharia S.A.21 [para 9, 11, 16, 17], BNA v BNB22 [para 44 – 48].
  2. In sum and substance, based on the aforesaid cases, we would look at (1) Has there been an Express Choice for a law to govern the Arbitration Clause? If the answer is No, then (2) Has there been an Implied Choice? By looking for an Implied Choice, we would first look at if the Parties have chosen a law governing the Matrix Contract which would most likely govern the Arbitration Clause failing, or if there is a displacement of such presumption, we would look towards the Law chosen for the Seat; If the answer continues to remain None or indiscernible, then (3) what would be law that has the real and closest connection to the Arbitration Agreement.23
    While it is always easier to indicate a choice of law applicable to the Arbitration Agreement, the aforesaid would act as guiding factors and principles to ultimately determine such objections that may be raised against the Arbitration Agreement, without there being any express consent to the law applicable by the Parties.
1. Nigel Blackaby, Constantine Partasides and Alan Redfern, ‘Introduction’ in Redfern and Hunter on International Arbitration (7th edn, OUP 2022) Ch - 01 (Kluwer Arbitration).
2. Nigel Blackaby, Constantine Partasides and Alan Redfern, “Applicable Laws” in Redfern and Hunter on International Arbitration (7th edn, Oxford University Press 2022) para 3.05. (Kluwer Arbitration).
3. Gary B Born, ‘Chapter 1: Introduction to International Arbitration’ in International Arbitration: Law and Practice (3rd edn, Kluwer Law International 2021) § 1.08 (Kluwer Arbitration).
4. Gary B Born, ‘Chapter 1: Introduction to International Arbitration’ in International Arbitration: Law and Practice (3rd edn, Kluwer Law International 2021) § 2.04 (Kluwer Arbitration).
5. Ibid.
6. Nigel Blackaby, Constantine Partasides and Alan Redfern, “Applicable Laws” in Redfern and Hunter on International Arbitration (7th edn, Oxford University Press 2022) para 3.07. (Kluwer Arbitration).
7. Emmanuel Gaillard and John Savage (eds), ‘Part 2: Chapter I – The Autonomy of the Arbitration Agreement’ in Fouchard, Gaillard, Goldman on International Commercial Arbitration (Kluwer Law International 2022) para 412 (Kluwer Arbitration).
8. Gary B Born, ‘Chapter 1: Introduction to International Arbitration’ in International Arbitration: Law and Practice (3rd edn, Kluwer Law International 2021) § 2.04 (Kluwer Arbitration).
9. Nigel Blackaby, Constantine Partasides and Alan Redfern, ‘Applicable Laws’ in Redfern and Hunter on International Arbitration (7th edn, OUP 2022) para 3.07 (Kluwer Arbitration).
10. Nigel Blackaby, Constantine Partasides and Alan Redfern, ‘Applicable Laws’ in Redfern and Hunter on International Arbitration (7th edn, OUP 2022) para 6.07 (Kluwer Arbitration).
11. Gary B Born, ‘Chapter 1: Introduction to International Arbitration’ in International Arbitration: Law and Practice (3rd edn, Kluwer Law International 2021) s 1.01[A][1] (Kluwer Arbitration).
12. Convention on the Recognition and Enforcement of Foreign Arbitral Awards (adopted 10 June 1958, entered into force 7 June 1959) art V(1)(a), available at https://www.newyorkconvention.org/english accessed 5 November 2025.
13. Julian D M Lew, Loukas A Mistelis and Stefan Kröll, ‘Chapter 26: Recognition and Enforcement of Foreign Arbitral Awards’ in Comparative International Commercial Arbitration (Kluwer Law International 2022) para 26-44 (Kluwer Arbitration).
14. London Court of International Arbitration, LCIA Arbitration Rules (2020) art 16.5, available at https://www.lcia.org/Dispute_Resolution_Services/lcia-arbitration-rules-2020.aspx#Article%2016 accessed 8 November 2025.
15. Swedish Arbitration Act (SFS 1999:116, amended 2018:1954) s 48, (English translation via SCC) https://sccarbitrationinstitute.se/wp-content/uploads/2024/12/the-swedish-arbitration-act_1march2019_eng-2.pdf accessed 8 November 2025.
16. Arbitration (Scotland) Act 2010 (asp 1) s 6.
17. Arbitration Act 2025 (2025 c 4) (UK) (as referenced via LCIA) https://www.lcia.org/the-english-arbitration-act-2025.aspx accessed 9 November 2025.
18. Nigel Blackaby, Constantine Partasides and Alan Redfern, ‘Applicable Laws’ in Redfern and Hunter on International Arbitration (7th edn, OUP 2022) para 3.33, 3.34, 3.35 (Kluwer Arbitration).
19. Enka Insaat ve Sanayi AS v OOO Insurance Company Chubb [2020] EWCA Civ 574 https://www.bailii.org/ew/cases/EWCA/Civ/2020/574.html accessed 29 September 2025.
20. Kabab-Ji S.A.L. v Kout Food Group [2020] EWCA Civ 6 https://www.bailii.org/ew/cases/EWCA/Civ/2020/6.html accessed 29 September 2025.
21. Sulamérica Cia Nacional de Seguros S.A. v Enesa Engenharia S.A. [2012] EWCA Civ 638 https://www.bailii.org/ew/cases/EWCA/Civ/2012/638.html accessed 29 September 2025.
22. BNA v BNB and another [2019] SGCA 84 https://www.elitigation.sg/gd/s/2019_SGCA_84 accessed 29 September 2025.
23. BNA v BNB and another [2019] SGCA 84, para 48 https://www.elitigation.sg/gd/s/2019_SGCA_84 accessed 29 September 2025.

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