CYIL vol. 12 (2021)

CYIL 12 (2021) Universal, Regional, and National Ways of Regulation of Jurisdiction … advantageous as it is likely to cover a broader range of disputes. If the concept of arbitrability is narrower, then the conclusion of jurisdiction agreements could more convenient. II. The Material Validity of Jurisdiction and Arbitration Agreements The following chapter analyses the concept of material validity of jurisdiction and arbitration agreements under the NY Convention, Brussels Ibis Regulation, and the Hague Convention. The NY Convention An arbitration agreement represents the parties’ arrangement that their dispute shall be resolved in arbitration – the parties’ consensus is indispensable. 51 This is reflected in the NY Convention which provides that a court when seized of an action in a matter in respect of which the parties have made an arbitration agreement, shall refer them to arbitration unless the agreement is null and void, inoperative, or incapable of being performed. 52 The expressions “ null and void, 53 inoperative 54 or incapable of being performed 55 ” refer to insurmountable obstacles to arbitration proceedings. 56 Bělohlávek stipulates that these expressions are overlapping and that many courts do not make difference between them. 57 Consequently, the question arises as to which law should be applied to assess whether an arbitration agreement is null and void, inoperative, or incapable of being performed. The NY Convention does not give a straightforward answer. 58 The material validity of arbitration agreements is often governed by the law to which the parties have subjected it or, failing any indication thereon, by the law of the arbitral seat. 59 Some authors claim that the material 53 The term “ null and void ” encompasses all cases in which arbitration agreements were defective or invalid from the outset for reasons such as fraud or fraudulent inducement, duress, unconscionability, illegality, or mistake. 54 “ Inoperative ” arbitration agreements are agreements that have ceased to have effects due to waiver, revocation, repudiation, termination of the arbitration agreement, or failure to comply with jurisdictional time limits prescribed by the arbitration agreement. 55 The expression “ incapable of being performed ” involves cases where the arbitral process cannot be set in motion for reasons such as the death of the arbitrator, vagueness of arbitration agreements etc. 56 Kronke, H. (op. cit. sub 16), p. 102. 57 Bělohláv , J. A. Arbitration: Principles & particularities (op. cit. sub 1), p. 60. 58 Born, B. G. (op. cit. sub 1), p. 493; see also Kronke, H. (op. cit. sub 16), p. 53; see also Paulsson, M. The 1958 New York Convention in Action . Alphen aan den Rijn: Kluwer Law International, 2016, p. 68. 59 This stems from Art. V(1)(a) of the NY Convention which regulates the recognition and enforcement of arbitration agreements. It has been confirmed in literature and case law that this provision is applicable to assess the material validity of arbitration agreements even before the recognition and enforcement phase. Thus, material validity of arbitration agreement shall be governed by the law to which the parties have subjected it or, failing any indication thereon, by the law of the arbitral seat. In literature see Bělohláv , J. A. Arbitration: Principles & particularities (op. cit. sub 1), p. 31 Born, B. G. (op. cit. sub 1), pp. 494, 495; see also International Council for Commercial Arbitration. (op. cit. sub 14), p. 51; see also Kronke, H. (op. cit. sub 16), pp. 53, 54; see also Paulsson, M. (op. cit. sub 57), p. 68. In case law see A SA v. I SA , High Court in Switzerland, judgment of 20 th December 1990, available at: https://www.kluwerarbitration.com/document/ IPN6459#a0036; see also Della Sanara Kustvaart – Bevrachting & Overslagbedrijf BV v. Fallimento Cap. Giovanni Coppola srl, in liquidation , Court of Appeal in Genoa, Italy, judgment of 3 February 1990, available at: https:// www.kluwerarbitration.com/document/IPN4311. 51 Rozehnalová, N. (op. cit. sub 1), pp. 130, 164; see also Kronke, H. (op. cit. sub 16), pp. 49, 50. 52 Art. II(3) of the NY Convention; see also UNCITRAL. UNCITRAL Secretariat Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958). (op. cit. sub 15), p. 69.

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