193 / 473
NEWSLETTER 2013
180
The Applicable Law to the Substance of an
Arbitration Agreement
*
Att. Fatih Isik
Introduction
As is known, an arbitration agreement and the underlying contract
between the parties are independent of each other
1
. In this regard, “the
applicable law to the substance of the dispute (i.e. the dispute to be settled
via arbitration)” and “the applicable law to substance of the arbitration
agreement” are different.
The applicable law to the substance of an arbitration agreement
must also be evaluated separately from the law applicable to the form
requirements of an arbitration agreement and to the capacity of the parties.
The applicable law to the substance of the arbitration agreement basically
applies to the arbitration agreement, the validity/invalidity of the parties’
intentions, the fulfillment (delay, impossibility etc.) and extent of the
arbitration agreement; it is not applicable to form requirements of the
arbitration agreement and to the capacity of the parties
2
.
It is essential to consider the intentions of the parties in order to
determine the law applicable to the substance of an arbitration agreement.
Parties may agree on the law applicable to the substance of the arbitration
agreement; however, in practice, the problems occur when parties do not
clearly agree on this before or after a dispute arises.
For instance, pursuant to Art. VI(2) of the 1961 European Convention
on International Commercial Arbitration, which opened for signature at
*
Article of October 2013
1
For details regarding the relation between the arbitration agreement and the underlying
contract, please see
Isik, Fatih,
“The Separability of an Arbitration Clause from the
Underlying Contract”, Erdem & Erdem Newsletter July 2013
http://www.erdem-erdem.av.tr/en/articles/the-separability-of-an-arbitration-clause-from-the-underlying-contrat/ (Access
date 05.11.2013).
2
However, applicable law to substance of arbitration agreement, to form requirements, to
capacity of parties, and even to substance of dispute might be the same in some cases. Thus,
evaluations shall be made by taking into account conditions of each different case.