Download this Paper Open PDF in Browser

The Impact of Internationally Mandatory Laws on the Enforceability of Arbitration Agreements

World Arbitration & Mediation Review, Vol. 3, pp. 91-120, 2009

LSE Legal Studies Working Paper No. 22/2009

32 Pages Posted: 2 Nov 2009 Last revised: 28 Nov 2014

Jan Kleinheisterkamp

London School of Economics - Law Department; Cornell University - Law School

Date Written: October 30, 2009

Abstract

This article examines the impact that internationally mandatory rules of the forum state may have on the effectiveness of arbitration agreements. This question arises when claims are based on such internationally mandatory rules, but the parties submitted their contract to a foreign law. The specific problems of conflicts of economic regulation are illustrated and discussed on the basis of Belgian and German court decisions relating to commercial distribution and agency agreements. European courts have adopted a restrictive practice of denying the efficacy of such tandems of choice-of-law and arbitration clauses if there is a strong probability that their internationally mandatory rules will not be applied in foreign procedures. This article shows that neither this approach nor the much more pro-arbitration biased solutions proposed by critics are convincing. It elaborates a third solution, which allows national courts to reconcile their legislator’s intention to enforce a given public policy with the parties’ original intention to arbitrate and to optimize the effectiveness of both public interests and arbitration.

Keywords: international arbitration, conflict of laws, public policy

JEL Classification: F23, K12, K33, K40, K41, K42

Suggested Citation

Kleinheisterkamp, Jan, The Impact of Internationally Mandatory Laws on the Enforceability of Arbitration Agreements (October 30, 2009). World Arbitration & Mediation Review, Vol. 3, pp. 91-120, 2009; LSE Legal Studies Working Paper No. 22/2009. Available at SSRN: https://ssrn.com/abstract=1496923 or http://dx.doi.org/10.2139/ssrn.1496923

Jan Kleinheisterkamp (Contact Author)

London School of Economics - Law Department ( email )

Houghton Street
London WC2A 2AE, WC2A 2AE
United Kingdom
+44 20 7955 7256 (Phone)

HOME PAGE: http://www.lse.ac.uk/collections/law/staff/jan-kleinheisterkamp.htm

Cornell University - Law School ( email )

Myron Taylor Hall
Cornell University
Ithaca, NY 14853-4901
United States

Paper statistics

Downloads
1,714
Rank
7,496
Abstract Views
4,510