In its much anticipated judgment in the case of Enka v Chubb [2020] UKSC 38, the Supreme Court has now clarified the correct approach as a matter of English law for determining the governing law of an arbitration agreement. The Supreme Court held that the governing law of an arbitration agreement is: (i) the law chosen (either expressly or impliedly) by the parties or (ii) where the parties did not make such a choice, the law with which the arbitration agreement is most closely connected. Importantly, where the parties have not expressly agreed the law of the arbitration agreement, the Supreme Court held that:
- their choice of law governing the main agreement will generally apply to the arbitration agreement; or
- where (as in Enka), the parties make no choice of law for the main agreement, the default rule is that the law of the seat of the arbitration should apply to the arbitration agreement as it is the law which is most closely connected with the arbitration agreement.
Despite the powerful dissenting judgments of Lord Burrows and Lord Sales, the Supreme Court’s decision brings much needed certainty to this area of arbitral law.
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