One burning question that has historically occupied the attention of arbitral tribunals and supervising national courts in the field of international commercial arbitration is that of how to determine the system of national law that governs the validity and scope of an arbitration agreement. This question has continued to recur because out of the three different laws that are potentially applicable to disputes arising from cross border contracts with an arbitration agreement, while parties routinely select the law governing the substance of their dispute and the law governing the arbitration process, more often than not, the parties are silent on the law governing the arbitration agreement, often with significant practical consequences. This paper provides a spotlight on how the UK Supreme Court laid this controversy to bed in Enka v. Chubb and highlights the impact of the decision on the practice of international arbitration in general, and commercial arbitration in Nigeria in particular.
1. Introduction
When a dispute arises in relation to a cross-border contract which contains an agreement to resolve such dispute by arbitration, three different laws are potentially applicable – the law governing the substance of the parties’ dispute; the law governing the arbitration process, i.e., the lex arbitri (which is generally the law of the “seat” of the arbitration); and the law
governing the arbitration agreement.1 More often than not, parties express their choice of the law governing the substance of their dispute and the law of the seat or such choice(s) may be implied from the circumstances of the case. What is less common is for parties to expressly stipulate the law governing the arbitration agreement.
Consequently, one agelong controversy in the field of international commercial arbitration has been how to determine the system of national law that governs the validity and scope of an arbitration agreement in cases where the parties to the agreement have failed to express their choice, and where the law governing the substance of the dispute differs from the law of the seat. As will be seen presently, this often comes with significant practical consequences. In what follows, this paper analyses the 2020 decision of the United Kingdom (UK) Supreme Court in Enka Insaat Ve Sanayi AS v. OOO Insurance Company Chubb (‘Enka v. Chubb’)2 to reveal how the UK Supreme Court arrived at the determination of the law governing the arbitration agreement. In the final analysis, the paper will highlight the impact of the decision on the practice of international commercial arbitration, in general, and commercial arbitration in Nigeria, in particular. Before then, some prefatory words about the concept of the seat of arbitration are imperative.
2. The Concept and Legal Significance of the Seat of Arbitration
One concept of central importance to the international arbitral process is the seat of arbitration.3 The arbitral seat, which also goes by way of other labels including: the place of arbitration, the forum, the siege, the situs or the locus arbitri,4 has been described as the legal location of the
