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ARBITRATION LAW
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Geneva, the existence or the validity of an arbitration agreement will be
examined under the law towhich the parties have subjected their arbitration
agreement. Failing any indication thereon, it shall be examined under the
law of the country in which the award is to be rendered or where, at the
time when the question is raised in court and the country in which the
award is to be rendered cannot be determined, under the competent law
by virtue of the rules of conflict of the court seized of the dispute.
Therefore, in order to determine the applicable law to the substance
of an arbitration agreement, it is important to find out at which point
such a question would arise. Yet, claims related to the substance of the
arbitration agreement may be asserted before the arbitral tribunal or
before the national courts at different stages, which will be explained
below.
Assertion of Invalidity of an Arbitration Agreement before an
Arbitral Tribunal
Claims of invalidity regarding the substance of an arbitration
agreement can be asserted before an arbitral tribunal. In such a case, the
arbitrators shall first examine the invalidity of the arbitration agreement
by taking into consideration the parties’ consent. However, the main
problem occurs in cases when there is no choice of law.
Arbitrators determine the applicable law to the substance of an
arbitration agreement by taking into consideration different criteria. It is
observed that arbitrators use the law of the place of arbitration, the law
applicable to the substance of the principal contract and the arbitration
rules of the chosen arbitral institution as criteria
3
.
In this regard, it might be useful to determine the law of the place
of arbitration as the law applicable to the substance of the arbitration
agreement in order to shield the arbitral award from annulment requests.
Such a choice would also be coherent with the arbitrators’ obligation
of maximum effort to facilitate the execution of arbitral awards, since
annulment of an arbitral award on the grounds of contradiction to the
law of place of arbitration can be avoided if the validity of the arbitration
agreement is subject to that law.
3
Ozel, Sibel,
“Milletlerarası Ticari Tahkimde Kanunlar İhtilafı Meseleleri”, Legal publications,
December 2008, p. 84.