What are the validity requirements for an arbitration agreement under the laws of your country?
International Arbitration (3rd edition)
A valid arbitration agreement must be in writing (but could be established also through exchanges of written correspondence). If the arbitration agreement was concluded after the dispute, then the arbitration agreement must specify the dispute to be resolved. If the parties incorporate within their agreement a model form of contract that includes an arbitration provision, they must expressly confirm that they also incorporate the arbitration provision. An administrative contract with a public body requires explicit ministerial approval of the arbitration clause.
There are other additional non-mandatory but recommended best practice provisions not mentioned in the Arbitration Law. The Arbitration Law sets an 18-month time limit for rendering awards (unless otherwise agreed by the parties). If the parties foresee the need for a longer period, they should specify a longer period in their agreement. If the parties want to grant the tribunal the power to award interim measures and injunctive relief this must be expressly provided for in the arbitration provision. If the parties wish for the proceedings to be conducted in a language other than Arabic, it is recommended that this be expressly stated (the default, absent agreement or a decision by the tribunal, is Arabic).
In domestic arbitration, an arbitration agreement must be in writing to be valid (Article 1443, CCP).
In international arbitration, French law does not impose any formal requirements, and the arbitration agreement does not need to be in writing or in any specific form (Article 1507, CCP). However, it is easier to prove the existence of an arbitration agreement where there is a writing.
For both domestic and international arbitration, there are no substantive requirements, apart from the requirement that the underlying dispute be arbitrable (see Question 11).
For domestic arbitration, article 2(1) (b) of Arbitration Law Cap. 4 provides that an arbitration agreement is a written agreement to submit present or future disputes to arbitration. No other special requirements exist for its validity.
For international arbitration, section 7 of Law no 101/1987, provides that an agreement to arbitrate may be for present or future disputes and must be in writing. Section 7(3) of the said law provides when such agreement is deemed to be in writing.
For international arbitration for past or future disputes section 7(3) of Law no 101/1987 provides that an agreement to arbitrate may , in order to be valid, must be in writing. According to section 7(3) of the said law an agreement is deemed to be in wring if it is contained in:
(i) a document signed by all parties;
(ii) in exchanged correspondence;
(iii) a telex or telegraph;
(iv) any other means of telecommunication which record the agreement; or
(v) in the form of exchange of Statements of Claim and of Defense where one party does not dispute the other party’s claim that an arbitration agreement exists.
In principle, the only formal requirement set by the Czech legislation is that the arbitration agreement must be in writing, otherwise it is invalid. However it is also possible to conclude the agreement by electronic means, if those enable to determine the content of the agreement and the identification of the respective parties to the agreement.
The arbitration clause must be concluded in writing and must provide the manner of appointment of arbitrators. In the case of institutional arbitration, it is sufficient to provide reference to the institution or the rules of the institution administering the arbitration.
The compromise must mention the subject-matter of the dispute, the names of the arbitrators, or the manner of appointment thereof in the case of ad-hoc arbitration. In case the arbitration agreement refers to a litigation related to the transfer of ownership rights and/or the constitution of another real right over an immovable asset, the agreement must be concluded in authentic notarized form. Failure to comply with these requirements renders the arbitration clause void of any effects.
Under the aforementioned Act on Arbitration, valid arbitration agreement must meet both formal and substantive requirements. Formal requirement obliges that the agreement shall be in writing.
As for substantive requirements, the agreement must be made regarding a defined legal relationship, i.e. general arbitration agreements concerning all future disputes between the parties are forbidden.
Furthermore, subject matter of the dispute must be arbitrable under Serbian law.
Also, the number of arbitrators must be odd.
Finally, it must not be concluded under duress, fraud or in error.
Same as any other agreement, validity of the arbitration agreement calls for the parties to have the legal capacity to enter into an arbitration agreement.
The requirements for a valid arbitration agreement are set out in Article 16 of the Arbitration Law, which stipulates that it must be in writing and include an expression of intent to apply for arbitration, the matters to be arbitrated, and a designated arbitration institution.
Besides, if an arbitration agreement requires disputes to be submitted to an arbitration institution outside mainland China, while the underlying transaction between the parties does not involve any foreign-related factor, then the arbitration agreement would be rendered invalid.
a. The validity requirements are limited. Basically, arbitration agreements can be entered within all legal matters subject to the freedom of contract. However, with regards to consumers, the arbitration agreement is only valid, if entered after the dispute has arisen.
In principle, an arbitration agreement must be made in writing or contained in correspondence (including electronic correspondence, if it enables the content to be recorded). It may also be incorporated by reference (e.g. in general terms and conditions).
There are specific requirements for arbitration agreements in regard to employment and consumer disputes – they may be concluded only after a dispute has arisen and only in writing. Moreover, an arbitration agreement which covers consumer disputes is invalid, unless the content clearly indicates that the parties are aware of the consequences of this agreement, in particular the legal effects of an arbitral award or a settlement concluded before an arbitral tribunal upon their recognition or enforcement by a state court.
A valid arbitration agreement in international arbitration must meet minimum requirements of form and substance. In terms of formal requirements, the arbitration agreement must be made in writing, by telegram, telex, facsimile or any other means of communication allowing it to be evidenced by text. Strictly speaking, signature or exchange of the arbitration agreement is not required as long as the parties' agreement can otherwise be evidenced based on written documents. The revised chapter 12 of the PILA is expected to provide for a relaxation of these formal requirements, allowing for an arbitration agreement to be validly concluded even if only one party fulfils the aforementioned formal requirements.
As regards content requirements, such arbitration agreement must stipulate the parties' intent to resolve a determined or determinable dispute by way of arbitration, thereby excluding the jurisdiction of the state courts.
The same conditions apply to arbitration agreements in domestic arbitration pursuant to art. 357 and 358 CPC.
With regard to the criteria on substance, an international arbitration agreement is deemed valid if it displays the legal requirements for a mutual party intent concerning the essential aspects either based on (i) the law chosen by the parties to specifically govern the arbitration agreement, or (ii) the law governing the subject matter of the dispute (i.e. in general the underlying contract), or (iii) Swiss law.
UAE - Federal
The UAE Arbitration Law sets out the express requirements for a valid arbitration agreement.
Physical Person with Legal Capacity
The parties entering into this agreement must be physical persons with the legal capacity to act (Article 4(1)).
The risk of a person, entering into an arbitration agreement, not being deemed to have the required authority to do so, remains very present, as does the consequent risk that arbitral award could be nullified.
The Matter in dispute must be Capable of ‘Conciliation’
The matter to be arbitrated must be capable of ‘conciliation’ (Article 4(2)) and, therefore, cannot relate to matters of a criminal nature.
The Arbitration Agreement must be in Writing
The requirement for an arbitration agreement to be in writing, is satisfied where the arbitration agreement is:
‘contained in a document signed by the Parties or mentioned in an exchange of letters or other means of written communication or made by an electronic communication…’ (Article 7(2)(a))
This requirement for a written agreement, is further satisfied where the arbitration agreement makes a clear reference to ‘a Model Contract, international agreement or any other document containing an arbitral clause’ which will form part of the contract (Article 7(2)(b)).
As the UAE Arbitration Law has only been promulgated in June 2018, there is some uncertainty as to how a UAE Courts will interpret any attempt at incorporation, or what test the UAE Courts will apply in determining whether an incorporation is valid.
The requirements for an arbitration agreement to be in writing, may further be satisfied by:
‘an exchange of written statements between the Parties during the arbitration proceedings or upon acknowledgement before the Court, where one party requests that the dispute be referred for Arbitration and no objection is made by the other party in the course of his defence’. (Article 7(2)(d))
The above denotes an offer and unconditional acceptance of an arbitration agreement.
This is, however, subject to the issuer of such pleadings having the authority to bind the represented party to arbitration, whether by an exchange of pleadings or otherwise.
UAE - Free-zone Jurisdictions
The DIFC Arbitration Law (Article 12) and the ADGM Regulations (Regulation 13) broadly require that the arbitration agreement is in writing.
To fall within the scope of the 1996 Act, an arbitration agreement must be in writing or be evidenced in writing. This includes an oral agreement to arbitrate by reference to ‘terms which are in writing’ (s.5(3) of the 1996 Act).
Article 2 of the Law of Arbitration provides that the arbitration agreement may not prejudice the rules of Shariah and International Conventions to which the KSA is a party. The provisions of the Law of Arbitration shall apply to any arbitration, regardless of the nature of the dispute, if such arbitration takes a place in the KSA and is a civil and commercial arbitration.
The provisions of the Law of Arbitration shall not apply to personal status disputes and matters wherein conciliation is not permitted, such as Hudud.
Article 2 of the Law further requires that a person must have legal capacity before entering into an arbitration.
Article 9(2) requires that any arbitration agreement must be in writing. Under Article 10(3), an arbitration agreement will be deemed in writing if:
- it is included in a document issued by the two relevant parties;
- it is in an exchange of documented correspondence, telegrams or any other electronic or written means of communication;
- it appears as a reference in a contract or a mention therein of any document containing an arbitration clause; and
- it appears as a reference in the contract to the provisions of a model contract, international convention or any other document containing an arbitration clause, so long as the reference clearly deems the clause as part of the contract.
Article 10(1) of the Law of Arbitration provides that the arbitration agreement may only be concluded by persons having legal capacity to dispose of their rights (or designees) or by corporate persons.
Article 10(2) of the Law of Arbitration prohibit Government bodies to enter into arbitration agreements except upon approval by the Prime Minister, unless allowed by a special provision of law.
The FAA provides that arbitration agreements must be in writing, must be part of a valid contract, may be incorporated by reference and need not be signed by the parties. 9 U.S.C. § 2. The presumption of validity of written arbitration agreements contained in the FAA is subject to the ordinary principles that govern the formation of contracts, including defenses such as fraud and duress. See Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 68 (2010).
Austrian law requires that the arbitration agreement must identify the parties and a defined legal relationship which are to be submitted to arbitration. The arbitration agreement must be in writing, either as a part of a document signed by the parties or as an exchange of letters, telefax, emails or any other means of communication that provide a record of the arbitration agreement. Regarding the exchange of documents, the Austrian Supreme Court (OGH 18 OCg 1/15v) has clarified that “exchanged documents” do not need to be signed irrespective of the means of communication used. Additional formal requirements must be met if consumers or employees are parties to the arbitration agreement.
By section 1(1) of the ACA, an arbitration agreement, to be valid, must be in writing or otherwise evidenced in writing. Further, both parties must have mutually agreed or consented to the arbitration agreement and the arbitration agreement must be in respect of a commercial relationship. The parties must have legal capacity to enter into the arbitration agreement as with every other contract, the arbitration agreement must satisfy the basic legal requirements of a valid contract of offer, acceptance, and consensus ad idem.
In order to be valid, the arbitration agreement must refer either to disputes involving economic interests or to disputes, which, although not involving economic interests, may be settled by the parties, provided that said disputes have not been exclusively submitted by a special law to the State courts or to compulsory arbitration.
In addition, the subject matter of an arbitration agreement must be a present or a future dispute, arising from a legal, contractual or non-contractual relationship. Also, in private contracts involving a public entity disputes may only be submitted to arbitration if so authorised by a special act.
Furthermore, the arbitration agreement must be in writing, although not necessarily included in a document signed by the parties. It may simply be inserted in exchanged letters, telexes, telegrams, and other means of communications of which there is a written proof.
Within international arbitration, the arbitration agreement is valid as to its substance if the requirements set out either (i) in the law chosen by the parties to govern the arbitration agreement, (ii) in the law applicable to the subject-matter of the dispute (lex causae) or (iii) in Portuguese law (lex fori) are met (art. 51 LAV).
An arbitration agreement must be made in writing, whether as a separate agreement or an arbitration clause incorporated into the main contract, and specify types of existing or future disputes it covers. Аn arbitration agreement can also be concluded by way of the exchange of letters, faxes, emails, and other electronic means or by the exchange of claim and response in which the existence of an agreement is alleged by one party and not denied by another. A reference to another document which contains an arbitration agreement is also sufficient if the nature of the reference makes the arbitration agreement part of the main agreement. In addition, there is contradictory case law, in which some courts required that an arbitration agreement must also clearly and accurately designate an arbitral institution.
The Arbitration Act, 2010 adopts Option 1 of Article 7 of the UNCITRAL Model Law which requires that an arbitration agreement must be in writing (recorded in any form, including electronic communication). An arbitration agreement may be found in an arbitration clause in a contract or in a separate agreement. An agreement is in writing if it is contained in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other.
An agreement to arbitrate may be made in nearly any commercial matter. The agreement may concern a dispute that has already arisen, or the parties may agree that all potential disputes in a particular relationship, typically a contract, shall be resolved by arbitration. Today, most commercial contracts contain an arbitration clause. There are no formal requirements to such agreements, and even an oral agreement to arbitrate is in principle enforceable. However, the importance normally attached to an agreement to arbitrate, will inevitably lead the courts to look for clear evidence that an arbitration agreement has in fact been entered into. In consumer disputes, arbitration agreements may only be entered into after the dispute has arisen.
Sections 1029 to 1033 ZPO deal with the arbitration agreement under German law.
Pursuant to section 1029 (2) ZPO, the arbitration agreement may take the form of an independent arbitration agreement or that of an arbitration clause contained in a contract.
The formal requirements are enshrined in section 1031 ZPO. The arbitration agreement shall be contained in a document signed by the parties, or in an exchange of letters, telefaxes, telegrams, or other means of telecommunication which provide for a record of the agreement.
Pursuant to section 1031 (2) ZPO, an arbitration agreement can also take the form of a document transmitted from one party to the other party or by a third party to both parties, provided that no objection to the document was raised in good time and that common usage allows to qualify the terms of the document as contractual content.
Pursuant to section 1031 (3) ZPO, reference to a document which contains an arbitration clause can also constitute an arbitration agreement if the reference is such as to make that clause part of the contract.
The formality requirements differ in case of a contract to which a party is a consumer. Pursuant to section 1031 (5) ZPO, the arbitration agreement to which a consumer is party must be contained in a contract which has been personally signed by the parties.
The notion of a "consumer" is dealt with at section 13 of the German Civil Code (Bürgerliches Gesetzbuch, BGB). It may be interpreted wider than perhaps customary in an international context. However, the qualified written form protecting consumers may be substituted by the electronic form pursuant to section 126a BGB. The arbitration agreement with a consumer must not contain any other agreements than the agreement to arbitrate, but this rule does not apply in case of a notarial recording.
Any non-compliance with the form requirements is cured if the parties do not object against the arbitral tribunal's competence before arguing on the substance in the arbitral proceedings (section 1031 (6) ZPO).
The arbitration agreement may be concluded in the form of an arbitration clause or in the form of a separate arbitration agreement.
The Croatian Arbitration Act provides that the arbitration agreement needs to be concluded in writing. The written form requirement is satisfied if the agreement is contained in documents signed by the parties or in an exchange of letters, telex, faxes, telegrams or other means of telecommunication that provide a record of the agreement, irrespective whether signed by the parties.
It shall be also deemed that an arbitration agreement is concluded in writing if: a) the arbitration agreement is contained in one party’s written offer, or b) one party refers to the previously concluded oral arbitration agreement in a written notice and the other party fails to raise a timely objection against an such offer/notice and such failure to object may be considered to constitute acceptance of the offer/content of the notice according to usages in commerce.
Furthermore, it is possible agree to arbitration through incorporation by reference. There are also specific provisions for consumer contracts and bill of lading.
Arbitration agreements are considered to be contracts under Chilean law (Article 1.545 of the CC). Therefore, they must comply with the general requirements for contracts, in order to be valid and enforceable, such as the consent and legal capacity of the contracting parties. Also, the subject matter of the agreement must comply with national public policy.
In domestic arbitration there are two types of arbitration agreements. If the parties do not designate the arbitrator, the agreement is known as an arbitration clause (cláusula compromisoria) and if the parties do designate the arbitrator who will have to solve the dispute, the agreement is known as submission agreement (compromiso arbitral).
The CJO does not regulate the arbitration clause, but only the submission agreement. Under Article 234 of the CJO, the appointment of an arbitrator shall be made in written and the document in which such appointment is made, must contain the following: (i) the individualization of the parties on dispute, (ii) the individualization of the appointed arbitrator(s), (iii) the dispute that is being submitted to arbitration, and finally (iv) the powers that the parties grant to the arbitrator(s) and the place and period of time in which the arbitrator(s) must perform her or his functions.
As for the arbitration clause, it is considered a contract under Chilean law. Therefore, the contracting parties may only manifest their will to submit a future or existing dispute to the resolution of an arbitrator, with no further obligation to determine the arbitrator’s individuality or to comply with specific formal requirements.
In international arbitration, the arbitration agreement is regulated in Chapter II of the ICAL. Under Article 7(1) of ICAL, the arbitration agreement may be contained in a contract or in a separate agreement. Also, Article 7(2) states that such agreement must be written. Under such provision, an agreement is considered to be written when it is “contained in a document signed by the parties or in an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement, or in an exchange of statements of claim and defense in which the existence of an agreement is alleged by one party and not denied by another”.
Under Section 2 of Republic Act No. 876, otherwise known as the Arbitration Law, arbitration agreements may arise either through a submission to arbitrate, or through an arbitration agreement incorporated in a contract. Such submission or contract shall be valid, enforceable and irrevocable, except if a ground for revoking a contract exists. Section 4 of the Arbitration Law further requires the submission or contract to be in writing and signed by the parties or their lawful agents.
As regards international commercial arbitral proceedings having their seat in Greece, articles 7 para. 3 and 5 L. 2735/1999 incorporate verbatim the provisions of article 7 para. 2 of the Model Law. Hence, both the written form requirement as well as the exchange of letters requirement are preserved. The latter casts doubt on the validity of the conclusion of an arbitration agreement by means of an oral or tacit acceptance of a respective offer made in writing. At the same time though, article 7 L. 2735/1999 introduces three provisions unknown to the Model Law seeking to ease the written form requirement or the consequences of its absence: (a) In para. 4 it is provided that the form requirement shall be deemed to have been fulfilled in case an arbitration agreement concluded orally is recorded in a document transmitted from one party to the other party or by a third party to both parties, assuming that no objection was made in good time, and that the contents of such documents may be deemed to consist part of the contract with common usage. This provision is similar to Section 1031 (2) of the German Code of Civil Procedure, (b) In para. 6 it is provided that the issuance of a bill of lading making explicit reference to an arbitration clause in a charter party constitutes a valid arbitration agreement. This provision is similar to the former Section 1031 (4) of the German Code of Civil Procedure, (c) In para. 7 it is provided that the lack of written requirement is remedied in case the parties participate in the arbitration proceedings without raising any objection – reservation as to it. This provision is a reproduction of the provision of article 869 para. 1 of the GrCCP controlling domestic arbitration. It is obviously similar to the provision of the Model Law (also incorporated in article 7 para. 3 of Law 2735) that an arbitration is in writing in case it is contained in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by another.
In relation to domestic arbitration, article 869 para. 1 of the GrCCP adopts also both the written form requirement as well as the exchange of documents requirement. It should be noted that said provision explicitly demands with regard to the exchange of documents (letters, facsimiles etc.) that each of them be signed by the parties. Said provisions of Law 2735/1999 and of Model Law relaxing the written form requirement are unknown to the GrCCP. It is provided though, as mentioned before, in said article, that in case the parties participate in the proceedings without making any reservation or objection the lack of written form requirement is remedied.