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Exam AA Essay
“The arbitration agreement is the foundation of an…
Exam AA Essay
“The arbitration agreement is the foundation of an arbitration. On the one hand, a validly concluded arbitration agreement should be rigorously enforced; on the other, safeguards are needed to ensure that contracting parties are not bound by alleged arbitration agreements to which they did not consent.”
comments: some is relevant, some not very.... this essay needs to be relooked
intro
- AA are the foundation of an arbi
- party agreement is a fundamental feature of arbi and an arbi may not go ahead without it
- key issue is the extent to which AA should be enforced.
- a good balance has been shown
- on one hand, many pro arbi cts strive to uphold these agreements, through narrow means of holding them invalid, stay of litigation and even anti suit injunctions.
- on the other hand, parties do seem able to escape from arbi when its genuinely shown they did not consent to it
when enforcement occurs
- is not the sole responsibility of the ct
- tribunals have a role to play in ensuring they do not readily hold arbi agr to be invalid.
- under the principle of competence competence enshrined in AA, ML and institutional rules, tribunals are able to make such determinations.
- nevertheless, cts will generally have final say and are the most important forum in this regard
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2 forms of E
ASI
- ASI is a remedy that is particular to the common law. it is not available therefore in a jurisdiction such as france, which is a slight limit to its efficacy
- ASIs are designed to prevent a party to an AA seeking to litigate in another country. generally, there are issued by the seat of the arbitration. i.e. In the Angelic Grace: eng ct held it may issue an ASI where eng is the seat of arbi. there is a valid AA and the dispute is within the scope of that agreement. while noting that ASI should not be issued as a 'matter of course', Millet LJ also stated tat there should be 'good reasons' for not issuing are and the ct should not feel 'diffidence' in doing so. In WSG Nimbus, an ASI was issued in sg showing that jurisdiction willingness to use them.
- in IPOC, the Bermudan ct held it could issue ASI even where Bermuda was not the seat, because one of the parties was a Bermuda resident. this is not in accord w most countries approaches. when binding a party to its agreement to arbitrate is impt, it should not be pursued at the risk of infringing on the jurisdiction of the cts of the seat of arbi
limitations as a remedy
- cannot be brought after undue delay. ASI application was turned down in the Shier Star after the application was made 3y after litigation had commenced. this must be the right approach as while parties should be held to contractual agreements they validly make, they should not be permitted by the other party to waste resources pursuing a litigation the party does not actively seek to resist.
- similarly, a waiver is a further defence to ASI and must be seen as necessary for the same reasons
- following the decision in West Tankers, ASI cannot be issued when a party seeks litigation in another EU MS. This is a breach of Brussel I regulation. However, the ability for parties to evade arbi by using tactics such as the Italian Torpedo have vastl limited the Brussels I regulation Recast, since cts are no longer bound by foreign cts decisions as to the validity of AA. this may reduce the incentive for parties to pursue foreign liti in order to evade arbi
- ASI may not be issued where it will be ineffective. This may be where a party has no assets in the seat country. this seems to be a common sense limitation to enforcement
stays
- a stay is brought when a party to that is bound by a valid AA, breaches this and seeks to litigate
- the first way these upheld agreements is that the burden of proof is on the party seeking to litigate. after it is established the arbitration agreement is valid under eng law, they must show the agreement is "null and void, inoperative or incapable of performance".
- A8 ML has similar wording. these are derived from A II (3) of the NYC and impose a presumption of validity of arbitration agreements. the cts must refer the parties to arbitration unless one of the exceptions is proven.
- "null and voice" covers invalid AA, "inoperative" covers AA that ceased to be valid, and incapable of being performed covers exceptional circumstances that are rarely satisfied.
- these exceptions are interpreted narrowly just as ? evading enforcement are. this is necessarily the correct approach.
- consider is art II NYC (as implemented in the AA 1996 and the ML)
- The doctrine of separability is also a relevant aspect of the discussion – as this doctrine (to some extent) immunises the arbitration clause from the invalidity of the matrix contract.
why enforcement is impt
- enforcement of valid agreement is impt. (1) AA is a contract. parties are not readily released from k relations, they should not readily escape agreements to arbitr. this is the eng cts rationale behind ASI (2) the efficacy of intl arbi as a system is dependent on factors i.e. enforcement of agreements. while NYC binds countries courts to enforce arbitral awrds, it will be undermined if parties agreements to arbitrate are not respected. parties may timely revert to the jurisdiction of cts instead. arbi has many advs over litigation such ??? so it is important to make the system function
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