Are arbitration clauses considered separable from the main contract?
International Arbitration (2nd Edition)
Malaysia statutorily recognises the separability principle in section 18(2)(a) and (b), AA. The sub-provisions acknowledge the self-contained nature of an arbitration agreement as a contract distinct and collateral to the main agreement between arbitral parties. Accordingly, the invalidity or rescission of the main contract does not necessarily invalidate the arbitration agreement. Instead, the arbitration agreement continues to bind contracting parties. Consequently, an allegation that the main contract is null and void will not deprive an arbitral tribunal of its power to determine its jurisdiction or a claim under the contract. Nonetheless, the arbitration agreement is still susceptible to vitiating factors relating directly to the arbitration agreement, such as, mistake, duress, and bribery.
The doctrine of separability is not recognized in the Code of Judicial Organization, nor in the Code of Civil Procedure, being those two statutes the applicable laws to domestic arbitration. Nevertheless, in some cases Chilean courts have assign autonomy to the arbitration agreement in domestic arbitral procedures.
As for international arbitration, the doctrine of separability is recognized in Article 16(1) of the International Commercial Arbitration Law No 19.971, which states that “an arbitral clause that is contained in a contract will be considered as an independent agreement from the rest of the contract stipulations”. Therefore, under ICAL, the invalidity of a contract may not affect the validity of its arbitration clause.
The arbitration clause is deemed to be an autonomous agreement entered into between the parties and therefore separate from the remaining of the contract. Thus, any issues concerning the non-existence, nullity, revocability, voidability or unenforceability of the main contract remaining clauses do not endanger the validity and efficacy of the arbitration clause.
There are no specific provisions in the law on the separability of arbitration agreements.
In 2003, the Court of Appeal ruled that an arbitration clause is ancillary to the principal contract and must thus be declared void where the principal contract is declared void.
Article 8-4 of the Arbitration Centre rules (version of 1 March 2014), however, expressly provides that the invalidity or inexistence of the underlying contracts does not make the arbitration agreement null and void.
The concept of severability of the arbitration clause is explicitly stipulated in art. 178 para 3 PILA and art. 357 para 2 CPC. Both provisions provide for the arbitration agreement not to be contested on the grounds that the main contract is not valid or that the arbitration agreement concerns a dispute which had not yet arisen.
Yes. An arbitration clause is treated as an independent agreement, separate from the rest of the contractual provisions (section 1040 (1) ZPO). Consequently, the invalidity of the main contract does not automatically render the arbitration agreement invalid as well.
The Arbitration Act mirrors the approach established in the Article 16 (1) of 1985 UNCITRAL Model Law with respect to the separability of the arbitration agreement.
Arbitration clauses are considered separable from the main contract.
It is widely accepted in the UAE that defects in a contract, even those rendering it unenforceable, will not undermine the application of an arbitration agreement therein, provided that the voidness of the contract does not extend to the arbitration clause itself.
The DIFC Arbitration Law (Article 23), ADGM Regulations (Regulation 14), DIFC-LCIA Arbitration Rules (Article 23) and the DIAC Rules (Article 6) recognizes the principle of separating the arbitration agreement / clause from the underlying contract.
Yes, Sweden recognizes the doctrine of separability.
Under the Spanish legal system, the arbitration agreement may adopt the form of either a separate agreement or an arbitration clause included in the main contract. Such possibility is contemplated in Section 9.1 of the SAA.
Either if the arbitration clause adopts the form of a separate agreement, or, if it is included in a contract’s clause, the SAA requires that such clause must be in writing, in a document signed by the parties or an exchange of letters, telegrams, faxes or other telecommunication methods that ensure a record that the agreement has been reached (Section 9.3 SAA).
Yes, the principle of severability of the arbitration clause is accepted in Serbian law, and as such, it is explicitly expressed within the Law on Arbitration.
Yes. The Special ADR Rules expressly recognizes the principle of separability of the arbitration clause. The arbitration clause is an agreement independent of the other terms of the contract of which it forms part.
The arbitration clauses are considered separate from the main contract in India. Like in the case of Enercon (India) ltd. vs Enercon Gmbh and Anr., Civil Appeal No. 2086 of 2014 (Arising out of SLP (C) No. 10924 of 2013), it was affirmed by the Supreme Court that:
“The concept of separability of the arbitration clause/agreement from the underlying contract is a necessity to ensure that the intention of the parties to resolve the disputes by arbitration does not evaporate into thin air with every challenge to the legality, validity, finality or breach of the underlying contract. The Indian Arbitration Act, 1996, as noticed above, under Section 16 accepts the concept that the main contract and the arbitration agreement form two independent contracts. Commercial rights and obligations are contained in the underlying, substantive, or the main contract.”
The Indian Courts in number of cases has consistently held that an Arbitration Clause survives even in a void/voidable contract.
Arbitration clauses are separable from the main contract. In this case, the arbitration agreement must be made in the form of a document, stating the name of the parties and the unequivocal determination of the legal transaction in question. Exchange of letters or any other written communication means is also accepted.
Yes, the autonomy of the agreement to arbitrate is recognized as established through court precedents.
The Arbitration Act is based on the principle of separability. An arbitration clause or agreement which is included in and forms part of a contract, is treated as an agreement independent of the other terms of the main contract. Thus, a decision by the arbitral tribunal that the contract is invalid does not in itself entail that the arbitration agreement is invalid.
The Arbitration Act provides for separability of the arbitration clause from the main contract. An arbitration clause forming part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision of the arbitral tribunal that the contract is null and void does not automatically invalidate the arbitration clause.
Section 16(1) of the ICA Law states that an arbitration agreement which forms part of a contract is to be considered as a separate agreement from the rest of the contract and that an Arbitral Tribunal’s decision that the contract is void ab initio does not necessarily affect the validity of the arbitration agreement. Note however that section 9(2) of the Cap.4 allows the Cypriot Court to order at its discretion that the arbitration agreement shall cease to have effect when an issue of fraud on behalf of one of the parties is raised. This of course must go to the substance of the arbitration agreement itself.
French law recognizes the principle of the autonomy or separability of arbitration agreements (Article 1447, CCP).
The nullity of the main contract thus does not affect the validity of the arbitration agreement, and an arbitral tribunal has jurisdiction to rule on allegations made by a party as to the nullity of the main contract, if that contract contains a valid, or at least not manifestly void, arbitration clause.
In order to assess the validity of an international arbitration agreement, the French courts do not refer to the law applicable to the main contract (or to any national law). Instead the courts have established a “substantive” rule of international arbitration (règle matérielle) and look only to the parties’ consent to arbitrate their disputes as a factual matter (see Court of Cassation, First Civil Chamber, 20 December 1993, No. 91-16.828, Dalico). There is a presumption of validity, and a party challenging an arbitration agreement bears the burden of proving its nullity (see Court of Cassation, First Civil Chamber, 5 January 1999, No. 96-21.430, Zanzi).
As a general rule, pursuant to 808 CCP, arbitration clauses are considered separable from the main contract. The fact that the contract is void does not in itself affect the validity of the arbitration clause contained therein.
In Nigeria, arbitration agreements are considered separate from the main contract. In other words, arbitration clauses are generally treated as agreements independent of the other terms of the contract in which they are contained. Both the ACA and the Lagos Law recognize an arbitration agreement as an independent agreement. Section 12(2), ACA and section 19(2), Lagos Law. The fact that the main contract which contains an arbitration clause is not valid does not render the arbitration clause invalid.
Arbitration clauses are considered separable.
It may also be noted in this context that they can, of course, take the form of an entirely separate agreement or be included in a contract only by way of reference (section 583 para 2 Austrian Code of Civil Procedure).
The separability doctrine is well established both in case law as well as in legal literature. It is also provided for in article 16 para. 1 L. 2735/1999 which incorporates verbatim the respective provision of the Model Law. Hence, the invalidity, illegality or termination of the underlying contract does not adversely affect the arbitration clause and vice versa. Furthermore, since the arbitration agreement is considered a separate agreement it may be governed by a law different than that of the underlying contract.
Yes. A valid agreement to arbitrate remains enforceable notwithstanding a successful challenge to the validity of the contract in which it appears. See Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967).
Yes. An arbitration clause that is included in a general agreement is considered as having 'independent life'. Meaning, under the adjudication in Israel, an arbitration clause can be valid even when the general agreement into which it was incorporated has expired or should be cancelled. An arbitration clause is designed to regulate the legal relations between the parties to the agreement, and therefore, by nature, continues to apply after the cancellation thereof and separately from the issue of the validity of the agreement.
Unless otherwise agreed by the parties, an arbitration agreement is separable from the main contract (s.7 of the 1996 Act).
Both the Code of Civil Procedure and the rules of arbitration of CICA expressly provide for the separability of arbitration agreements, to the effect that the validity of the arbitration clause is independent from the validity of the contract comprising it.
Yes, they are. Arbitration clauses are considered separable from the main contract. Invalidity of the arbitration clause in the main contract does not cause the invalidity of the whole contract; and vice versa, any invalid provision of the main contract does not harm the valid and explicit arbitration intention of the parties written in the contract.
In fact, the authorization of arbitration does not necessarily have to be done within the contract regulating the commercial relationship between the parties, meaning that a separate agreement can be signed solely for the terms and conditions of arbitration.