Originally from European International Arbitration Review

Preview Page

I.  Introduction 

The question of the law applicable to the substance of the relationship between the parties is only one of the several choice-of-law issues that may arise in arbitration.2 Typically, only arbitrators deal with that specific question in the framework of international commercial arbitration.3 In the context of applications for setting aside an arbitral award or when recognition or enforcement is sought, the possibility that a state court will review the law or rules arbitrators apply to the substance is limited. The relevant exceptions concern mainly the disregard of overriding mandatory provisions (public policy)4 or express choice-of-law by the parties.5 Additionally, as will later be discussed, the issue of the effectiveness of overriding mandatory provisions is, to a great extent, independent from the issue of which law is applicable to a contract. Moreover, if a state court finds that an arbitration agreement is not valid (under the law applicable to such an agreement) or that the dispute does not fall within the terms of the submission to arbitration, the issue of the law applicable to the merits by arbitrators loses its relevance.  

A.  Law Applicable to the Merits in Commercial Arbitration in the European Union 

1.  Legal Framework in the Union and Its Member States 

In general terms, the EU instruments on Private International Law usually address arbitration with the purpose of excluding it or certain related issues from their scope of application.6