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Arbitration Agreement
International
Commercial Law II
Assaduzzaman
Taylors Law School
Lecture Outline
Arbitration Agreement
Writing requirement of Arb.
Agreement
Incorporation of Arb. Agreement
Separability of Arb. Agreement
Doctrine of competence-competence
What is an arbitration
agreement?
Malaysian Arbitration Act 2005.
S. 9 (1) In this Act, arbitration agreement
means an agreement by the parties to submit
to arbitration all or certain disputes which have
arisen or which may arise between them in
respect of a defined legal relationship, whether
contractual or not.
(2) An arbitration agreement may be in the
form of an arbitration clause in an agreement
or in the form of a separate agreement.
What is an arbitration
agreement?
Sec. 6 Arbitration Act 1996, (English Arb. Act.)
(1) In this Part an arbitration agreement means
an agreement to submit to arbitration present or
future disputes (whether they are contractual or
not).
Sec. 2 Federal Arbitration Act 1925
A written provision in any maritime transaction or
a contract evidencing a transaction involving
commerce to settle by arbitration a controversy
thereafter arising out of such contract or
transaction, .
Agreement in Writing
New York Convention, Art II
(1) Agreement in writing under which the parties
undertake to submit to arbitration all or any
differences which have arisen or which may arise
between them in respect of a defined legal
relationship, whether contractual or not,
concerning a subject matter capable of being
settled by arbitration.
(2) The term agreement in writing shall
include an arbitral clause in a contract or an
arbitration agreement, signed by the parties or
contained in an exchange or letters or telegrams.
Agreement in Writing
Art 7 of UNCITRAL Model Law, (Option I)
(2) The arbitration agreement shall be in writing.
(3) An arbitration agreement is in writing if its content is recorded in any
form, whether or not the arbitration agreement or contract has been
concluded orally, by conduct, or by other means.
(4) The requirement that an arbitration agreement be in writing is met by
an electronic communication if the information contained therein is
accessible so as to be useable for subsequent reference; electronic
communication means any communication that the parties make by
means of data messages; data message means information generated,
sent, received or stored by electronic, magnetic, optical or similar means,
including, but not limited to, electronic data interchange (EDI), electronic
mail, telegram, telex or telecopy.
(5) Furthermore, an arbitration agreement is in writing if it is contained in
an exchange of statements of claim and defence in which the existence of
an agreement is alleged by one party and not denied by the other.
(6) The reference in a contract to any document containing an arbitration
clause constitutes an arbitration agreement in writing, provided that the
reference is such as to make that clause part of the contract.
Agreement in Writing
Sec. 5(1) provisions of this part apply
only where the arbitration agreement
is in writing,.
Sec. 5(2) agreement is in writing if
a) is made in writing
b) communications in writing
c) evidenced in writing
d) reference to terms which are in writing
e) is recorded by one of the parties
f) an exchange of written submissions in arbitral
proceedings
g) its being recorded by any means.
Agreement in Writing
Malaysian Arbitration Act 2005.
S. 9 (3) An arbitration agreement shall be in writing.
(4) An arbitration agreement is in writing where it is contained
in
(a) a document signed by the parties;
(b) an exchange of letters, telex, facsimile or other means of
communication which provide a record of the agreement; or
(c) an exchange of statement of claim and defence in which the
existence of an agreement is alleged by one party and not
denied by the other.
(5) A reference in an agreement to a document containing an
arbitration clause shall constitute an arbitration agreement,
provided that the agreement is in writing and the reference is
such as to make that clause part of the agreement.
Judgment of 5 November
1985 XII YB Comm Arb 511
On December 6, 1980, Tracomin and Sudan Oil Seeds (SOS)
entered into a commodity sale contract. After disputes arose,
SOS asked Tracomin by a telex dated May 18, 1981, by a
subsequent letter dated July 4, and by a telex dated July 16 to
submit the dispute to arbitration before the Arbitration Board of
the Federation of Oils, Seeds and Fats Associations (FOSFA) in
London.
By a letter dated July 21, Tracomin appointed its arbitrator, with
express reference to SOS's most recent telex. The tribunal made
an award against Tracomin.
Tracomin refused to comply with the award, and SOS sought to
enforce it in Switzerland. Tracomin contended that the arbitration
agreement, pursuant to which the award was made, was invalid
under Articles II(1) and (2) of the New York Convention. The
Swiss Federal Supreme Tribunal rejected Tracomin's objections.
Incorporation of Arbitration
Agreement
UNCITRAL Model Law, Art 7, Option I
(6) The reference in a contract to any document
containing an arbitration clause constitutes an
arbitration agreement in writing, provided that the
reference is such as to make that clause part of
the contract.
UNCITRAL Model Law, Art 7, Option II
Arbitration agreement is an agreement by the
parties to submit to arbitration all or certain
disputes which have arisen or which may arise
between them in respect of a define legal
relationship whether contractual or not.
Incorporation of
Arbitration Agreement
Sec. 6 Arbitration Act 1996, (English
Arb. Act.)
(2) The reference in an agreement to a
written form of arbitration clause or to a
document containing an arbitration
clause constitutes an arbitration
agreement if the reference is such as to
make that clause part of the agreement.
Incorporation of
Arbitration Agreement
Malaysian Arbitration Act 2005.
S. 9 (3) An arbitration agreement shall be in writing.
(4) An arbitration agreement is in writing where it is contained in
The doctrine of
Separability
The concept of the separability of
arbitration
clause
refers
to
the
arbitration clause in a contract is
considered to be separate from the main
contract of which it forms part and as
such survives the termination of main
contract.
exceptions
If there is any irregularities and illegality
found in relation to the formation of
arbitration agreement together with the main
contract then the arbitration agreement will
not survive.
Besides main contract if the claim is fraud
in the inducement of the arbitration clause
itself an issue which goes to the making of
the agreement to arbitrate, the federal court
may proceed to adjudicate it. (Case Prima
Paint)
Soleimany v Soleimany
[1998] 3 WLR 811,
The claimant applied to the High
Court under section 26 of the
Arbitration Act 1950 to register the
award as a judgment. The
defendant applied to set aside the
order on the grounds that illegality
rendered the claimant's claim void
or unenforceable in an English
court;
Soleimany v Soleimany
[1998] 3 WLR 811,
it would be contrary to public
policy for an award founded on an
illegal agreement or transaction to be
enforced as a judgment.
Waller LJ: held an award can only be
valid if the arbitrator had jurisdiction
founded on a contract between the
parties. If that contract is itself invalid
the award will be unenforceable.
Soleimany v Soleimany
[1998] 3 WLR 811,
In this case we were referred to the
cases relating to the separability of an
arbitration clause. But, the fact that in
a contract alleged to be illegal the
arbitration
clause may not itself be infected by the
illegality, does not mean that it is
always so, and does not mean that an
arbitration agreement that is separate
may not be void for illegality.
Doctrine of competencecompetence
The doctrine of competencecompetence or the deciding
discretion of arbitration tribunal is a
principle which allows the arbitrators
to determine jurisdictional issues of
the tribunal itself.
It has been adopted in the Arbitration
Act 1996 followed by UNCITRAL Model
Laws.
Doctrine of competencecompetence
Article 16 .1 of the UNCITRAL Model Law
The arbitral tribunal may rule on its own
jurisdiction , including any objections with
respect to the existence or validity of the
arbitration agreement
which justifies that an arbitration clause
which forms part of a contract shall be
treated as an agreement independent of
the other terms of the contract .
Article 21 .2 of the UNCITRAL Arbitration
Rules (UNCITRAL , 1976 ).
Westinghouse case
Art 6 (2) of the 1998 ICC Rules of Arbitration
was referred in this case which states the
Court may decide , without prejudice to the
admissibility or merits of the plea or pleas,
that the arbitration shall proceed if it is
prima facie satisfied that an arbitration
agreement under the Rules may exist
A decision by the arbitral tribunal that the
contract is null and void shall not entail ipso
jure the invalidity of the arbitration clause.