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The Choice of Law for Arbitration Agreements, IPRax

November 07, 2021

Maximilian Pika discusses the German Federal Court of Justice’s (BGH) judgment of 26 November 2020 (I ZR 245/19). Ever since 2009, when the German choice-of-law provisions for contracts were removed and the Rome I Regulation with its carve-out for arbitration agreements entered into force, the choice of law for arbitration agreements has been debated in Germany.

On 26 November 2020, the German Federal Court of Justice addressed this matter, albeit inconclusively. The court held that the enforcement provision Article V (1) lit. a New York Convention applies already before or during arbitral proceedings. Pursuant to this provision, the arbitration agreement is governed by the law chosen by the parties and, subsidiarily, the law of the seat. This leads to an internationally well-known follow-up problem: whether the parties, when choosing the law applicable to the main contract, have impliedly chosen the law applicable to the arbitration agreement. This matter was left open by the Federal Court of Justice.

The IPRax (Praxis des internationalen Privat- und Verfahrensrechts) is Germany’s leading journal on all matters of private international law.

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