Are arbitration clauses considered separable from the main contract?

International Arbitration (4th edition)

Argentina Small Flag Argentina

Yes. Art. 1653 of the NCCC provides that the arbitration agreement is independent from the contract to which it relates. Any inefficacy of the contract containing the arbitration agreement is without prejudice to the validity of the arbitration agreement, so that even in case of nullity of the contract, the arbitrators maintain their competence to determine the respective rights of the parties and to decide on their claims and arguments.

Austria Small Flag Austria

Although legislation governing arbitration in Austria is based on the UNCITRAL Model Law on International Commercial Arbitration, the specific wording of Article 16 (1) of the Model Law regarding separability was not adopted. The doctrine of separability is, however, recognised by the courts. Austrian courts evaluate the question of the validity of an arbitration clause contained in an invalid contract on a case-by-case basis by interpreting the intention of the parties. In practice, this may lead to the result that the parties’ intent was that the arbitration agreement remains valid where the contract is null and void or was terminated. In cases of consensual termination of the main contract, courts have held that the arbitration clause contained in the contract may also be considered terminated if the parties’ intention was to terminate the entire contractual relationship.

Bulgaria Small Flag Bulgaria

Arbitration clauses are considered separable from the main contract and such view is strictly followed in the Bulgarian court practice. However, the doctrine substantiates that the concept of severability shall not be interpreted as absolute, especially in situations of signing the main contract by virtue of power of attorney (without explicit authorization to include arbitration clause in it) and in cases where the presumption of Art. 301 of the Bulgarian Commerce act (CA) applies, namely: it is deemed that the merchant is bound by actions (including contracts) on its behalf if it has not objected those actions immediately upon becoming aware of them. Such flexible concept of severability shall be applied also in cases of legal succession and/or transformation or subrogation on the side of one of the parties and/or in case of assignment, where the arbitration clause was not expressly excluded.

United States Small Flag United States

Yes. While the FAA is silent on this question, the U.S. Supreme Court has held that “an arbitration provision is severable from the remainder of the contract.” Buckeye Check Cashing, 546 U.S. at 445; see also Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 403–04 (1967).

Canada Small Flag Canada

Arbitration clauses are considered separable from the main contract. Some domestic arbitration statutes, such as those in Alberta and Ontario, expressly provide that arbitration clauses are separable from the main contract, while other domestic arbitration statutes do not. In the provinces and territories with domestic arbitration statutes that do not provide that arbitration clauses are separable from the main contract, such as British Columbia, the courts apply the common law doctrine of separability. See, for example, James v Thow, 2005 BCSC 809. Every international commercial arbitration statute, including the Federal Commercial Arbitration Act, incorporates Article 16 of the UNCITRAL Model Law, which provides that arbitration clauses are separable from the main contract.

Cyprus Small Flag Cyprus

Nothing except than to say they permitted. No statutory provisions constraining parties from entering into multi-party or multi-contract arbitration exist.

Czech Republic Small Flag Czech Republic

Yes, the separability doctrine also applies under Czech law.

The arbitration clause is considered separable. In other words, If the underlying agreement becomes unenforceable, this does not automatically render the arbitration clause contained in the underlying agreement unenforceable.

UAE Small Flag UAE

Article 6 of the UAE Arbitration Law confirms the UAE’s acceptance of the principle that arbitral agreements are distinct from the underlying contract.

An arbitration agreement is, therefore, unaffected by the ‘nullity, rescission or termination of the contract’ in which it resides, unless the capacity of the parties is affected.

The DIFC Arbitration Law (Article 23), ADGM Regulations (Regulation 14), DIFC-LCIA Arbitration Rules (Article 23) and the DIAC Rules (Article 6) recognises the principle of separating the arbitration agreement/clause from the underlying contract.

United Kingdom Small Flag United Kingdom

Unless otherwise agreed by the parties, an arbitration agreement is separable from the main contract (s.7 of the 1996 Act and Fiona Trust & Holding Corporation v. Privalov [2007] UKHL 40).

Germany Small Flag Germany

Yes. Section 1040 (1) ZPO provides for the separability or independence of the arbitration agreement from the other terms of a contract. The invalidity of the main contract does not automatically affect the validity of the arbitration agreement. The law, however, does not categorically rule out that severe defects causing the nullity of the main contract may also affect the validity of the arbitration agreement.

India Small Flag India

The arbitration clauses are considered separate from the main contract in India. In National Agricultural Coop. Mktg. Federation India Ltd. v. Gains Trading Ltd. , the Supreme Court held that an arbitration clause is a collateral term in the contract, which relates to resolution of disputes, and not performance. Even if the performance of the contract comes to an end on account of repudiation, frustration or breach of contract, the arbitration agreement would survive for the purpose of resolution of disputes arising under or in connection with the contract. In the case of Enercon (India) ltd. vs Enercon Gmbh and Anr. , 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.

Moreover, the Indian Courts in number of cases has consistently held that an Arbitration Clause survives even in a void/voidable contract.

Indonesia Small Flag Indonesia

Yes. The Arbitration Law provides that the arbitration agreement survives termination of the underlying agreement.

Liechtenstein Small Flag Liechtenstein

The doctrine of separability, as expressly set out in Article 16 para 1 of the UNCITRAL Model Law is recognized by jurisprudence and in legal literature in principle, but has not been legislated for in the Liechtenstein law on arbitration. From a dogmatic perspective, the independence of the arbitration agreement from the main contract can only be justified if the parties have expressly agreed to it in the arbitration agreement or if the independence is (at least) in conformity with the parties’ hypothetical will, determined on the basis of the parties’ will’s supplementary interpretation.

Malaysia Small Flag Malaysia

Yes. Section 18(2)(a) of the Arbitration Act states that an arbitration clause which forms part of an agreement shall be treated as an agreement independent of the other terms of the agreement.

Section 18(2)(b) of the Arbitration Act provides that a decision by the arbitral tribunal having the effect of rendering the main contract null and void shall not, by operation of law, result in an arbitration clause being invalid.

Mexico Small Flag Mexico

Yes, according to article 1432 of the Commerce Code, an arbitration clause included as part of the contract shall be considered as an agreement independent from the other stipulations of the contract. In this sense, a decision from the arbitral tribunal in which it declares the main contract to be null and void, does not translate in a nullity of the arbitration clause.

Nigeria Small Flag Nigeria

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 and separate 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.

Norway Small Flag Norway

Yes – the doctrine of separability is codified in Section 18 of the Arbitration Act. The act states that:

  • arbitration agreements must be regarded as separate agreements, independent from the other parts of the contract; and
  • an arbitral tribunal may declare the contract void without that leading to the arbitration agreement being declared void.

Philippines Small Flag Philippines

Yes. An arbitration clause, which forms part of a contract, shall be treated as an agreement independent of the other terms of the contract. A decision by an arbitral tribunal that the contract is null and void does not ipso jure entail the invalidity of the arbitration clause. (Art. 4.16, IRR)

Saudi Arabia Small Flag Saudi Arabia

According to Article 21 of the Arbitration Law, an arbitration clause which forms part of a contract is treated as an agreement independent of the other terms of the contract, and as such, is separable. The nullification, revocation or termination of the contract which includes said arbitration clause shall not entail nullification of the arbitration clause therein, if such clause is valid.

Singapore Small Flag Singapore

Yes. Art. 16(1) of the UNCITRAL Model Law states in relevant part as follows:
‘The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract.’

South Korea Small Flag South Korea

The principle of separability of arbitration agreement is recognized by the Korean Arbitration Act (the “Act”). The Act states that “an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other clauses of the contract” (Article 17(1)).

France Small Flag France

French law recognizes the principle of separability of arbitration agreements from the main contract (FCCP Articles 1447 and 1506).

The nullity of the main contract does not affect the validity of the arbitration agreement and an arbitral tribunal has jurisdiction to rule on claims as to the nullity of the main contract if that contract contains an arbitration clause that is not manifestly void. The jurisdiction of the arbitral tribunal is based on the principle of competence-competence (see at 19 below).

French courts have in fact established a “substantive” rule of international arbitration (“règle matérielle”) regarding the legal “autonomy” of the arbitration clause (Municipality of Khoms El Mergeb v. Dalico, Court of Cassation, First Civil Chamber, 20 December 1993, No. 91-16.828). Under this principle, an arbitration clause is presumed valid unless otherwise proven (Zanzi v. J.de Coninck and others, Court of Cassation, First Civil Chamber, 5 January 1999, No. 96-21.430).

Egypt Small Flag Egypt

According to the EAL, the arbitration clause is considered separable from the main contract and is not affected by the latter’s invalidity, termination and/or rescission insofar as the arbitration agreement itself is valid (article 23). The principle of separability of the arbitration clause from the main contract has also been confirmed by Egyptian courts and considered as one of the fundamental pillars of arbitration in Egypt. (Court of Cassation, challenge no. 824 of JY 71, hearing session dated 24 May 2007; and challenge no. 933 of JY 71, hearing session dated 24 May 2007)

Ecuador Small Flag Ecuador

Yes, according with the third paragraph of Art. 5 the LAM, the annulment of the contract shall not affect the validity of the arbitration agreement.

Chile Small Flag Chile

Yes. The principle of separability is contained in article 16 of the ICA Act. There is not a similar rule for domestic arbitration. However, according to general substantive contract law provisions, the arbitration agreement should be subject to the same principle.

Switzerland Small Flag Switzerland

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.

Taiwan Small Flag Taiwan

Yes. Article 3 of the AL specifically states that for contracts containing an arbitration agreement, the validity of the arbitration agreement shall be determined independently from that of the remainder of the contract. Even if the contract is invalid, voided, rescinded or terminated, the validity of the arbitration agreement shall be unaffected.

Greece Small Flag Greece

Yes. 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.

Turkey Small Flag Turkey

Yes. The concept of severability is addressed under Article 4 of the IAL which provides that the arbitration agreement not to be contested on the basis that the arbitration agreement concerns a dispute which had not yet arisen or the main contract is not valid.

Updated: January 20, 2020