Arbitration in Great Britain is used as an effective way of resolving disputes. However, to make this process as smooth & hassle-free as possible, parties negotiating a deal should pay special attention to reservations they will be including in their agreements. So, let’s look at the specifics of the regulation of arbitration clauses in Great Britain.
Laws Governing Arbitration Agreements
Laws governing arbitration agreements are applicable to the resolution of disputes in Great Britain that may arise in connection with the validity, scope or interpretation of arbitration agreements. This aspect is important because whenever disputes over whether a claim falls within the scope of an arbitration clause arise, they can be resolved by applying laws governing arbitration agreements.
It’s worth noting that laws applicable to arbitration clauses may differ from the ones applicable to the main contract. When it comes to international treaties, governing laws of the main contract may differ from the laws of the country chosen as an arbitration site. A typical example of this is when parties to an international treaty governed by English law decide to settle their dispute in the ICC arbitration court in France. Hence it follows that if you intend to resolve a dispute through arbitration in Europe, you should indicate in your agreement which laws govern an arbitration clause.
In some jurisdictions, courts may render judgements under which (unless otherwise specified in the agreement) laws of the arbitration site may also be applicable to arbitration clauses.
How British Courts Handle Arbitration Clauses
To determine laws governing arbitration clauses, British courts apply a three-step approach which centers around the three following questions:
- Are applicable laws explicitly defined?
- Is it implied that a specific law will be applied?
- Which system of law is an arbitration agreement linked to most realistically?
Those planning on resolving a financial dispute through arbitration in Great Britain should keep in mind that if there’s an explicit choice of laws in the main contract, this may be tantamount to a direct choice of laws governing an arbitration agreement.
If you have any additional questions on the topic of the article, you can always ask them to our experts. Sign up for an individual consultation on initiating arbitration proceedings in England & they will gladly provide you with all the necessary information on the regulation of arbitration in Great Britain. IQ Decision UK is your number one choice when it comes to resolving disputes through arbitration in Great Britain & the EU.