By Robert Price
Selecting the right seat for an arbitration is critical. The courts at the seat of the arbitration can affect the arbitral process in a number of ways, including the following
- Support or intervention Jurisdictions which are pro-arbitration generally allow the parties a high degree of procedural autonomy. For example, if the courts intervene in England, a well- known and respected jurisdiction, , they will generally only do so in order to support the arbitral process. The English courts have useful powers (given by the Arbitration Act 1996), including the ability to compel witnesses to give oral testimony or produce documents, grant freezing injunctions to preserve assets whilst the arbitration takes place, and order a party to comply with the tribunal’s instructions (orders).
- Challenge The arbitration award can only be “set aside” or “annulled” in the courts of the seat of arbitration. So, the arbitration laws at the seat of the arbitration will determine the ways in which a party can challenge the tribunal’s award. Pro-arbitration jurisdictions tend to limit the parties’ ability to challenge an award, ensuring that the arbitration process is as final as possible. This is a priority for commercial parties.
- Recognition and Enforcement One of arbitration’s major advantages over domestic litigation is the regime for recognition and enforcement provided by the New York Convention. Parties should always try to select a seat in a country that is a signatory to the New York Convention to ensure recognition and enforceability of any award.
Clear drafting will ensure that the seat of arbitration is in the jurisdiction the parties intended and avoid the considerable time and expense of jurisdictional challenges.
Where there is ambiguity, the English courts will attempt to ascertain the parties’ choice of a seat of arbitration, even where the drafting of the parties’ agreement is not wholly clear. Click here for further analysis.