5.4. International Arbitration Practice
6-69 In most cases tribunals relying on Article V(1)(a) New York Convention, consider the place of arbitration as the relevant factor to determine the applicable law, if no choice has been made by the parties.79 A typical example is the interim award in ICC Case 6149.80 The dispute concerned three sales contracts between a Korean seller and a Jordanian buyer which provided for arbitration under the ICC rules. The defendant challenged the jurisdiction of the arbitration tribunal alleging that the arbitration clause was not valid according to a mandatory provision of Jordanian law. The tribunal decided that this provision was not applicable since the validity of the arbitration agreement was governed by a different law. In determining that law it held
Pursuant to [the then] Art. 13(3) of the ICC Rules of Conciliation and Arbitration, failing any indication by the parties as to the applicable law, the arbitrator shall apply the law designated as the proper law by the rule of conflict which he deems appropriate. If, according to the second doctrine, the proper law of the three arbitration agreements could not necessarily be derived from the proper law of the three sales contracts themselves, the only other rule of conflicts of laws whose
application would seem appropriate in the sense of the above-mentioned Art. 13(3), would be the application of the law where the arbitration takes place and where the award is rendered.
This conclusion would be supported also by Art. V(1)(a) of the ...[1958 New York] Convention which has been ratified by the Republic of Korea, Jordan, France and Iraq. According to the said Art. V, the validity of the arbitration agreement has to be determined 'under the law of the country where the award was made'.81
6-70 The reason for such an approach is primarily the often claimed duty to render an enforceable award. So for example, in ICC Case 548582 the tribunal in determining the applicable law held
Whereas Art. 26 [now Article 35] of the ICC Rules of Arbitration establishes that the arbitrators shall make every effort to make sure that the award is enforceable at law. As the place of this arbitration is the city of Paris (France), the Tribunal has examined French law (Nouveau Code de Procedure Civile, Arts. 1492 to 1497) and have concluded that said law contains nothing which is in conflict with the full validity and effectiveness of the arbitration clause in dispute. Again, the parties have sustained nothing to the contrary.83
6-71 Determining the validity of an arbitration agreement by reference to the same rules as the courts at the place of arbitration may reduce the risk of rendering an award which is unenforceable or susceptible to challenges. Enforcement can normally be resisted if the award has been set aside in the country where it was rendered. In those annulment procedures at the place of arbitration the courts base their findings on the existence of a valid arbitration agreement on their own law, i.e. the law of the place of arbitration. If an arbitrator has determined the validity of the agreement under a different law it is possible that the courts could decide in annulment proceedings that the agreement was invalid under the law of the place of arbitration.
81Ibid, 44 et seq; see also ICC case no 5721 of 1990, 117 Clunet 1019 (1990) 1021; ICC case no 4504, 113 Clunet 1118 (1986) 1119; ICC case no 5485 of 1987, XIV YBCA 156 (1989) 160 et seq; Preliminary Award in ICC case no 5505 of 1987, Xlll YBCA 110 (1988) 116 et seq; Interim Award in ICC case no 4145, XII YBCA 97 (1987); ICC case no 4392, 110 Clunet 907 (1983); ICC case no 4472, 111 Clunet 946 (1984) 947.
82ICC case no 5485 of 1987, XIV YBCA 156 (1989).
83Ibid, para 15.