Arbitration: Basic features of the convention's regime on arbitration agreements

The drafters of the Convention intended to eliminate the possibility for a party to an arbitration agreement to go back on its commitment to arbitrate and instead submit the dispute to State courts. Accordingly, the Convention sets forth a “pro-enforcement” , “pro-arbitration” regime which rests on the presumptive validity formal and substantive of arbitration agreements (“Each Contracting State shall recognize an agreement in writing …” ). This presumptive validity can only be reversed on a limited number of grounds (“… unless it finds that the said agreement is null and void, inoperative or incapable of being performed” ).

The pro-enforcement bias means that the New York Convention supersedes less favourable national legislation. Courts may not apply stricter requirements under their national law for the validity of the arbitration agreement (such as, for example, the requirement that the arbitration clause in a contract be signed separately). Conversely, a number of courts increasingly hold that Article II(2) allows them to rely on more favourable national legislation. If the law of the State allows an arbitration agreement to be concluded orally, or tacitly, this law applies.

When the court finds that there is a valid arbitration agreement, it shall refer the parties to arbitration, at the request of one of the parties, instead of resolving the dispute itself. This enforcement mechanism is provided for by Article II(3). The Convention was intended to leave no discretion to courts in this respect.

The “referral to arbitration” is to be understood as meaning either a stay of the court proceedings pending arbitration or the dismissal of the claim for lack of jurisdiction, in accordance with national arbitration or procedural law.

A court shall only refer the parties to arbitration “at the request of one of the parties” , which excludes this being done on the court’s own motion.

Author: international