The proper law of the arbitration agreement: Why you should pay attention to that clause

16 Aug 2019

In BNA v BNB and another [2019] SGHC 142, the Singapore High Court dismissed an application challenging an arbitral tribunal’s jurisdiction. The plaintiff argued that the tribunal lacked jurisdiction as the arbitration agreement was governed by the law of the People’s Republic of China, under which the arbitration agreement was substantively invalid. The Court disagreed. It determined that the tribunal had jurisdiction over the dispute referred to it because the law governing the arbitration agreement was Singapore law, under which the arbitration agreement was found to be substantively valid.
 
In determining the proper law of the arbitration agreement, the Court affirmed the three-stage choice-of-law approach and rejected the “Validation Principle” thesis.
 
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