I.INTRODUCTION During the negotiation of arbitration agreements, parties usedto unduly dismiss the issue of the seatof arbitration and not pay much attention to consequences of choosing the seatof arbitration. In recent years, as arbitration has continued its march forward,the choice of the seat has become crucialand has taken on significance with many ramifications. The clauses in an arbitrationagreement may vary significantly fromcontract to contract, however, we seethat a clause on the seat of arbitration has become a regular part ofarbitration agreements nowadays. In essence,the legal jurisdiction of an arbitration is tiedto the “seat” of the arbitration. It is almostuniversally acknowledged that, with regards to an international arbitration,the seat of arbitration has an importantrole to play1. In the words of oneleading commentator:”A concept of central importance to theinternational arbitral process is that of the arbitral seat.
Thelocation of the arbitral seat is fundamental to de?ning the legal framework forinternational arbitral proceedings and can have profound legal and practicalconsequences in an international arbitration2″Similar statements can be found in mostaccounts of the law of international arbitration3. There are various international arbitration institutionsall over the world and their institutionalrules are becoming standardized and according tomodern international instruments, the arbitral proceedings shall be governed bythe will of the parties and by the law of the country in whose territoryarbitration takes place4.Thewordings of international conventions like 1923 Geneva protocol and the Newyorkconvention has been influenced and derived from it. Article 2 of the 1923 Geneva Protocol states: ‘The arbitralprocedure, including the constitution of the arbitral tribunal, shall begoverned by the will of the parties and by the law of the country in whoseterritory the arbitration takes place5.
Thereforethe law applicable to each arbitration will be the law of the place or the countrywhere the arbitration takes place i.e ‘Lex Arbitri’.The basic framework for arbitration is properly called as Lex Arbitri,which translates from Latin as the law of arbitration.6Parties generally do not make a direct choice of the law which will beapplicable to their arbitration, instead, they make a choice with the regardsto the seat of the arbitral tribunal, this choice is generally dependent on thevarious preferences of the parties and the applicable ‘Lex arbitri’ then stemsfrom this choice7. The relationship betweenthe seat and the applicable law is vividly described by Redfern and hunter8 “To say that the parties have ‘chosen’ thatparticular law to govern the arbitrationis rather like saying that an English woman who takes her car to France has’chosen’ French traffic law, which will oblige her to drive on the right-handside of the road, to give priority to vehicles approaching from the right, andgenerally to obey traffic laws to which she may not be accustomed.
But it wouldbe an odd use of language to say that this notional motorist had opted for’French traffic law’; rather, she has chosen to go to France—and theapplicability of French law then follows automatically. It is not a matter ofchoice”The seat of arbitration directly influences a number of issues like arbitrability,determination of the governing law, whether substantive or procedural and determination of the place forthe annulment proceedings of the arbitral award. The parties to aninternational arbitration have the autonomy to choose the arbitral seat9so the parties should bear in mind different options which are available tothem as by selecting a place as the seat of arbitration, that country’s mandatory national laws are also thenapplicable to the arbitration and parties might be surprised by theunfamiliarity of the applicable procedural law.
This article is divided intothree parts. The first part will briefly introduce the concept and significanceof the seat. The second part will set out the relevant considerations inselecting a seat. Finally, the third part will illustrate the importance ofdrafting the arbitration agreement clearly so that the selection of the seatand curial law is clear to parties, tribunals and any court which has toconsider the issue1 G Petrochilos, Procedural Law in InternationalArbitration (OUP 2004) ch 2 and 3.2 GBBorn, International Arbitration: Lawand Practice (Kluwer LawInternational 2012)105.3 See, for example, N Blackaby et al, Redfernand Hunter on International Arbitration (5th edn, OUP 2009) para 3.51; LordCollins et al (eds), Dicey, Morris & Collins on the Con?ict of Laws (15thednn, Sweet & Maxwell 2012) para 16–0364 Article2 of the Protocol on Arbitration clauses (adopted 24 september 1923)5 Article2 of the 1923 Geneva protocol6Alastair Henderson Lex Arbitri, Procedural Law and the seat of Arbitration (Singapore Academy law Journa 2014l) 8877 NigelBlackaby et al, Redfern and Hunter on international Arbitration (OxfordUniversity press, 6th ED, 2014) at para 3.638 NigelBlackaby et al, Redfern and Hunter on international Arbitration (OxfordUniversity press, 6th ED, 2014) at para 3.639 UNCITRALModel Law, art 20.1; Arbitration Act 1996, section 3(a).