ENGLAND & WALES Law and Practice Contributed by: James Stacey, Peter Wickham, Samantha Holland and William Humphries, Slaughter and May
See also 13.1 Class Action or Group Arbitration . 3.3 National Courts’ Approach Courts’ Approach to Determining the Governing Law of the Arbitration Agreement Prior to the 2025 Act reforms taking effect on 1 August 2025, the English courts determined the governing law of the arbitration agreement according to the test in Enka Insaat Ve Sanayi AS v OOO Insurance Com- pany Chubb [2020] UKSC 38, as follows. • The law applicable to the arbitration agreement will be the law chosen by the parties to govern it or, in the absence of such a choice, the system of law with which the arbitration agreement is most closely connected. • Whether the parties have agreed on a choice of law to govern the arbitration agreement will be ascer - tained by construing the arbitration agreement and its matrix contract as a whole, applying English law rules on contractual interpretation. • Where the law applicable to the arbitration agree - ment is not specified, a choice of governing law for the matrix contract will generally apply to the arbitration agreement, as an implied choice. • However, additional factors may negate such an inference and instead imply that the arbitration agreement was intended to be governed by the law of the seat. Such factors include: (a) any provision of the law of the seat which indicates that, where an arbitration is subject to that law, the arbitration agreement will also be treated as being governed by that country’s law; or (b) the existence of a serious risk that the arbi - tration agreement would be ineffective if it was governed by the same law as the matrix contract. • In the absence of any choice of law, the arbitration agreement is governed by the law with which it is most closely connected. Where the parties have chosen a seat of arbitration, the closest connec - tion will generally be to the law of the seat, even if this differs from the law applicable to the matrix contract. Since 1 August 2025, the 2025 Act simplifies the approach to determining the governing law of the arbi -
Contractual and non-contractual disputes may be submitted to arbitration (Section 6 (1)). Beyond this, the 1996 Act does not define nor describe the matters that are capable of resolution by arbitration. Instead, Section 81 (1)(a) of the 1996 Act provides that com - mon law governs whether matters are capable of set - tlement by arbitration. The 1996 Act is founded on the principle that par - ties should be free to agree how their disputes are resolved, subject only to public policy safeguards (Section 1 (b)). In addition, English courts emphasise the importance of upholding party autonomy to agree to arbitration to resolve their disputes. Consistent with this: • English courts have held that a broad range of non- contractual disputes (including tort, competition, intellectual property and certain statutory claims) are capable of resolution by arbitration; and • there is a strong assumption when construing an arbitration clause under English law that the par - ties intended to have disputes arising out of their relationship decided in the same forum ( Fiona Trust & Holding Corporation v Privalov [2007] UKHL 40). In practice, albeit more a question of scope than arbi - trability, the English courts generally interpret arbitra - tion agreements broadly to encompass non-contrac - tual as well as contractual disputes. In recent years, there has been an apparent trend towards widening the range of disputes that may be capable of resolution by arbitration. However, a dis - pute will not generally be arbitrable under English law if it involves matters of public policy or public rights, for example. Consistent with this, disputes that are generally not capable of being resolved by arbitration under English law include: • criminal, planning and certain family law matters; • certain insolvency-related claims, including dis - putes arising from the exercise of statutory powers by a liquidator under the Insolvency Act 1986; and • certain employment disputes, in which an employ - ee has a statutory right to be heard by an employ - ment tribunal.
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