Revisiting the Proper Law of the Arbitration Agreement

Three recent decisions of the Courts of Appeal in Singapore and England provide an opportunity to revisit the common law approach to determining the proper law of the arbitration agreement. The proper law of the arbitration agreement is often overlooked in the drafting of arbitration clauses but is of primary importance where the validity of the arbitration agreement is in question.

The three decisions are:

1. BNA v BNB & Anor [2019] SGCA 84 ("BNA v BNB");
2. Kabab-JI S.A.L v Kout Food Group [2020] EWCA Civ 6 ("Kabab v Kout"); and
3. Enka Insaat Ve Sanayi A.S. v OOO "Insurance Company Chubb" & Ors [2020] EWCA Civ 574 ("Enka v Chubb").

Much has been written about BNA v BNB and Kabab v Kout already. Enka v Chubb was released more recently on 29 April 2020. In this re-evaluation I focus on whether the common law approach to determining the proper law of the arbitration agreement, as exemplified in these three cases and going back to the English Court of Appeal decision in Sulamérica Cia Nacional de Seguros SA & Ors v Enesa Engelharia SA & Ors [2012] EWCA Civ 638; [2013] 1 WLR 102 ("Sulamérica"), accords with the obligations in the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("New York Convention") and the corresponding obligations in the UNCITRAL Model Law on International Commercial Arbitration ("the Model Law").

I also consider whether courts, even the most international arbitration friendly ones like England and Singapore, give enough attention to the multifaceted interplay of choice of law in the interpretation of international arbitration agreements.

Given the brevity of this note for the form in which it is published, I only identify points where the common law approach diverges from the New York Convention and, in my view, insufficient attention has been given to the interplay of choice of law in the interpretation of international arbitration agreements, leaving a more in-depth discussion of these issues to a less succinct paper in future.

You can read Steven Lim's full post on our Commercial, Construction & International Arbitration Blog here.