Lloyd's Maritime and Commercial Law Quarterly
On the juridical character of the seat in the Arbitration Act 1996
Georgios Petrochilos *
Dubai Islamic Bank
v. Paymentech
The Arbitration Act 1996 purports, among other things, clearly to delineate the scope of application of English arbitration law. This chiefly revolves around the concept of “juridical seat” of the arbitration. The concept of the seat pursues two objectives, namely that the application of English law should not be predicated on a simple geographical test but party autonomy, and that the jurisdiction of English courts should in principle be coterminous with the application of English arbitration law. The recent judgment of the High Court in
Dubai Islamic Bank v. Paymentech, clarifies and gives effect to those objectives, applying the concept of the seat in a set of facts which is probably uncommon but at the same time a good test of the limits of the concept.
One of the most contentious points in English arbitration law, common and statutory, before the introduction of the Arbitration Act 1996 (“the Act”) was that its scope of application was not clearly demarcated. In other words, English law lacked a tidy and coherent set of connecting factors for its application as a matter of private international law. The Act purports to be more in the nature of an Arbitration Code, which necessitated the inclusion of such a connecting factor. Section 2(1) of the Act provides that Part I of the Act, which contains the bulk of the rules pertaining to the arbitral process, applies “where the seat of the arbitration is in England and Wales or Northern Ireland”.1
In turn, s. 3 of the Act reads:
In this Part “the seat of the arbitration” means the juridical seat of the arbitration designated—
- (a) by the parties to the arbitration agreement, or
- (b) by any arbitral or other institution or person vested by the parties with powers in that regard,
- (c) by the arbitral tribunal if so authorised by the parties, or determined, in the absence of any such designation, having regard to the parties’ agreement and all the relevant circumstances.
Dubai Islamic Bank Pjsc
v. Paymentech Merchant Services Inc.,
2
a judgment of the Commercial Court (Aikens, J.), is the first detailed discourse on the notion of “juridical seat”.3
That would be reason alone to justify a note on the judgment; but, additionally, the
* An Associate in the London International Commercial Arbitration Group of Freshfields Bruckhaus Deringer and a Lecturer at Trinity College, Oxford.
1. S. 2(2)–(5) contains certain exceptions to and qualifications of the basic rule, which do not strictly relate to the points raised by the judgment here noted.
3. There are two earlier cases: Caparo Ltd
v. Fagor Sociedad Cooperativa
(7 August 1998) Unreported (C.A.); and ABB Lummus Global Ltd
v. Keppel Fels Ltd
[1999] 2 Lloyd’s Rep. 24.
66