Choosing the right “seat” or venue for arbitration is critical. There are several common misconceptions concerning the seat that need to be addressed. Neither the applicable law of the contract nor the location of the arbitral institution chosen must be the same as the location of the seat. This means that an English contract that includes arbitration by the International Chamber of Commerce in Paris may be implemented. There is also no reason why a party may not use French lawyers in a Singapore arbitration, as attorneys are not needed to be qualified in the law of the jurisdictions in which they practice.
The Right Options for Arbitration
“Seat” or “place of arbitration,” as used in this context, is not necessarily synonymous with the site where the arbitration hearings would be held. It’s also possible that it doesn’t reflect the law that governs the transaction in question. It is, nevertheless, a fundamental framework for arbitration, including the assignment of jurisdiction to the courts at the site of arbitration’s seat over the arbitration proceedings, as well. The following are only a few of the important consequences of this:
The arbitrator’s home country courts have jurisdiction to review the arbitral ruling. While every country allows a prize to be challenged on certain grounds (for example, that the arbitrators were incompetent or corrupt), many additionally authorize a challenge on grounds of error of law or grounds of public order, which may mean different things depending on where you are. You need to choose the right Seat of Arbitration there.
According to the location of the arbitration, judicial participation varies greatly from case to case. France, for example, has a system of “compliance with arbitration” that restricts courts to acting in favour of arbitration. If other countries intervene in the arbitration or refuse to abide by the arbitration agreement, it might slow down or halt the procedures. This could have a substantial impact on the outcome.
- If the arbitral tribunal may award costs and interest or if a conflict of laws rule must be utilized in certain cases, then the legislation of the country where the arbitration takes place is important.
- There are restrictions on the number of seats that may be picked in certain rising countries, such as China.
It is critical to choose the right location for arbitration, as it can delay the process, increase the likelihood of parallel court proceedings, and allow the award to be challenged on general grounds in local courts, which may be unreliable or located in a jurisdiction where the counterparty is extremely well-connected, posing obvious risks to arbitration.
Additional options for “safe” seat locations include Paris; London; Geneva; Singapore and Hong Kong. Located in countries that support international arbitration, these seats are part of the New York Convention, which facilitates the enforcement of arbitral judgments on a global scale.
The protection of sensitive information is a potentially important legal difference. Unless the parties agree otherwise, confidentiality is essential in arbitrations heard in Hong Kong, Singapore, and London. As long as they’ve agreed to it or mentioned in the necessary rules and regulations, parties in Paris and New York aren’t liable unless they’re participating in internal arbitration. Therefore, if you want a Paris-based arbitration to remain confidential, you should seek this.
More articles like this here.