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April 8, 2021

Arbitration Agreement Supreme Court

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The UKSC – anti-suit orders in favour of English arbitration Enforcement above, as there was no specific choice of the law for the compromise clause, the UKSC examined whether a choice of law had been made (expressly or tacitly) for the contract. This was not the case, so the compromise clause under English law was subject to the “following context” test [147-156]. The Court of Appeal. As discussed at the time, the Court of Appeal (Popplewell, Flaux and Males LJJ) unanimously appealed to Enka in May 2020 and decided that English law governed the arbitration agreement. The Court upheld its supervisory jurisdiction and also issued a referral order against the appeal. The Court held that, under English law, the choice of seat of the parties leads to a presumption that the law of the courts regulates the validity and scope of the arbitration agreement. The Court also held that the dissociability of the arbitration agreement means that a provision of the law in the main contract is not automatically extended to the arbitration agreement. At trial, the judge dismissed the injunction. He found that the compromise clause was governed by Russian law, but that the injunction required an assessment to determine whether the English court had been properly seized. On the facts (including Enka`s involvement in Russia and the delay), he did not feel. The Supreme Court stated that “when an international trade treaty contains an arbitration dispute settlement agreement, at least three systems of national law are invoked in the event of a dispute.” It is (i) the law that governs the content of the dispute; (ii) the right that governs the conciliation agreement; and (iii) the law applicable to the arbitration procedure.

Although the underlying principles are now clarified, the weight that the Supreme Court places on a tacit choice of primary contractual law is more uncertain for the parties with respect to AA (if not expressly elected). This will likely result in further litigation that will only be resolved by the courts on the facts of each case. The Supreme Court approved the Court of Appeal`s decision that it would be appropriate for an English court to issue an injunction if the English court is the seat of arbitration chosen by the parties. The Supreme Court found that the principles for granting an injunction in support of an arbitration agreement with an English headquarters do not depart from the question of whether the arbitration agreement is governed by English or foreign law. If the English court finds that the parties have agreed on an arbitration procedure and not through litigation, the English court could and should enforce this obligation by way of reference.

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