Favoring Validity: The Hidden Choice of Law Rule for Arbitration Agreements
Article, American Review of International Arbitration, Vol. 27, No. 3, pp. 327-358 (2016)
29 Pages Posted: 28 Sep 2015 Last revised: 14 Jul 2018
Date Written: October 11, 2015
Many commentators have noted how the courts of leading international arbitration centers — namely England, Singapore, and Hong Kong — apply divergent choice of law rules to determine the law governing the arbitration agreement. Although this may be true on the surface, this Note demonstrates that these courts have actually been applying the same choice of law rule: an in favorem validitatis rule. In light of this fact, this Note argues that the courts of England, Singapore, and Hong Kong should begin expressly adopting the in favorem validitatis rule rather than hiding it. The reason is that aspiring arbitration jurisdictions — such as India, China, and Malaysia — look to leading arbitration centers to design their own arbitration laws and rules, and consequently may be misled into invalidating arbitration agreements that courts in the leading arbitration centers would probably find to be valid.
Keywords: arbitration, international arbitration, international commercial arbitration, law governing the arbitration agreement, arbitration agreement, applicable law, Sulamerica, FirstLink, choice of law
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