Private International Law of Reinsurance and Insurance
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13
REINSURANCE AND INSURANCE: CHOICE OF LAW IN ARBITRATION DISPUTES
B. THE DIFFERENT CHOICE OF LAW ISSUES WHICH ARISE IN ARBITRATIONS
13.2 As we have already seen (see para. 8.3 above), a number of different choice of law issues arise in the context of arbitration. The arbitrators must determine:- (1) the law governing the agreement to submit the dispute to arbitration;
- (2) the law governing the reference to arbitration;
- (3) the law which regulates the conduct of the arbitration; and
- (4) the law which regulates the substantive rights of the parties.1
C. THE LAW GOVERNING THE AGREEMENT TO SUBMIT THE DISPUTE TO ARBITRATION
13.4 An arbitration clause in a contract constitutes a self-contained contract collateral to the main contract of which it forms part.3 The law governing this self-contained agreement need not be the same as that which governs the rest of the contract and must be determined separately.4 13.5 The law which governs the arbitration agreement will govern a number of issues, notably: whether the agreement to arbitrate is valid; the interpretation of the arbitration agreement, and in particular whether the arbitrator has jurisdiction over a specific issue; andPage 278
D. THE LAW GOVERNING THE REFERENCE TO ARBITRATION
13.8 There is in theory a distinction between the agreement to arbitrate and the actual reference to arbitration which constitutes a contract in its own right. In theory, at least, that contract is capable of having its own proper law. But the overwhelming likelihood is that they will be governed by the same law. Indeed, there is no case where the courts have held that the law applicable is different to that which governs the agreement to arbitrate.10 Thus, the laws at (1) and (2) above are nearly always the same.E. THE LAW GOVERNING THE ARBITRAL PROCEEDINGS
13.9 The law governing the arbitral proceedings, often referred to as the curial law, will govern procedural aspects of the arbitration, such as appointment of arbitrators, the conduct of the proceedings, and challenge to the award. The law of the arbitration will also be applied, as we will see, to decide what law the arbitrators are to apply to decide the substantive issues (i.e. issue (4) above).11Page 279
- (1) the parties;
- (2) the dispute;
- (3) the proposed procedures in the arbitration, including the place of any interlocutory or final hearings; and
- (4) the issue of the award.13
- (1) the parties may have agreed to arbitration in England in accordance with English law but have specifically excluded certain of the non-mandatory provisions. This is what happened in XL Insurance Ltd v. Owens Corning 15 where the parties had agreed to hold their arbitration in London but had excluded section 45 (application to the court for a ruling on a preliminary point of law) and section 69 (appeal on a point of law);
- (2) the parties may have agreed to arbitrate in accordance with the rules of one of the institutional arbitration organisations, for example they may have incorporated the Rules of the London Court of International Arbitration or the UNCITRAL Arbitration Rules. To the extent that those rules are inconsistent with non-mandatory provisions in the 1996 Act the rules will apply;
- (3) the parties may have chosen a different curial law. Where the procedural rules imposed by that law differ to the non-mandatory provisions in the 1996 Act the curial law will apply.
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“The choice of a law other than the law of England and Wales or Northern Ireland as the applicable law in respect of a matter provided for by a non-mandatory provision of this Part is equivalent to an agreement making provision about that matter.