Arbitration Agreements Draft Them Carefully

When parties to a contract agree to submit future disputes to arbitration it is important that the arbitration agreement (AA) is carefully drafted and includes an express choice of law provision. This is especially important when drafting contracts with agreement and any arbitration provision. If the parties do not wish the law governing the contract to be the law governing the AA, they must make this express. Getting it right at the outset of the relationship avoids wasted time and costs if, or when, later there is a dispute.

The majority decision of the Supreme Court establishes the leading authority on the correct approach under English law to determine the proper law of an AA and the role of courts of the seat in granting anti suit injunctions.

The facts of the claim were that Enka, a Turkish construction and engineering company was one of many subcontractors working on the construction of power plants in Russia for Unipro. The subcontract contained an AA which provided that all disputes arising from or in connection with the subcontract were to be resolved by arbitration seated in London, England, under the Rules of Arbitration of the International Chamber of Commerce (ICC). The subcontract was executed in both Russian and English and provided that the Russian language version was to prevail in case of inconsistency
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Source: Steamship Mutual

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