Conor Considine, FE1 Candidate and MCL graduate University College Dublin.
Conor Considine recently completed the second year in the Masters in Common Law programme at University College Dublin. He previously completed an undergraduate degree in History and English at Trinity College Dublin. Conor plans to qualify as a solicitor and is preparing to complete his remaining Law Society of Ireland entrance examinations.
Abstract
This article examines the default rules in determining the law governing an arbitration agreement and their recent examination by the United Kingdom Supreme Court in Enka Insaat ve Sanayi AS v OOO Insurance Company Chubb. Irish courts and tribunals have not given extensive consideration to the default rules applicable to the law of an arbitration agreement, meaning that the decision in Enka may be persuasive. However, as this article argues, the criticism which followed the decision in Enka reveals how the resulting law was both legally complex and at-odds with the commercial realities of arbitration agreements. In examining both the recent amendments to the English Arbitration Act 1996 and the applicable default rules in other jurisdictions, this paper proposes legislative amendment to the Irish Arbitration Act 2010 which would provide for the law of the arbitral seat as the default law of the arbitration agreement. Adopting such a default rule would provide legal certainty and ensure that Ireland stays up to date with evolving trends in international commercial arbitration.
Writing in 2021, Johannes Koepp and David Turner stated, ‘it is high time for the United Kingdom (and other jurisdictions) to consider a fresh approach to the perennially thorny question of the choice of law governing the arbitration agreement.’[1] That statement was delivered in response to the decision in Enka Insaat ve Sanayi AS v OOO Insurance Company Chubb,[2] a case which presented the United Kingdom Supreme Court with the same “thorny question” that had divided English judicial reasoning for decades. Hamstrung by the baggage of previous caselaw, the court in Enka delivered a decision which drew criticism from commentators and ultimately required legislative change to clarify the law applicable to the arbitration agreement.[3] In Ireland, this question has not seen judicial consideration, leaving uncertain the approach Irish courts and tribunals are likely to take in answering it. It is the purpose of this paper to examine the recent developments in England and how they may affect Irish law. This paper will be structured in four parts which will; (I) outline the significance of the choice of law of an arbitration agreement; (II) examine recent developments in England; (III) outline the options for legislative reform, and; (IV) recommend the approach that should be taken in Ireland. In doing so, it will be argued that the reasoning in Enka was unsatisfactory and that the Irish Arbitration Act 2010 (“2010 Act”) should be amended to provide the law of the arbitral seat as the default law of the arbitration agreement in the absence of an express choice of the parties.
Part I – The Law of the Arbitration Agreement
The choice of the law governing an arbitration agreement establishes the rules which are applied in disputes relating to the validity of, scope of and arbitrability of claims under the agreement.[4] This law governing the arbitration agreement can have a huge impact on the outcome of disputes, as that choice (Russian or English, for example, as was the case in Enka) can determine whether the arbitral tribunal’s jurisdiction extends to a certain issue, or whether there was ever a valid arbitration agreement in the first place.[5] Where parties make an express choice of law governing the arbitration agreement, this choice will be applied by courts and tribunals, even when that law differs from the substantive law of the underlying contract. It is often the case, however, that the law governing the arbitration agreement is not expressly chosen, as commercial parties assume that the law of the arbitration agreement is the same as the law governing the substantive dispute.[6]This assumption is wrong, as the separability and autonomy of the arbitration agreement allows it to exist independently of the governing contract, with the practical effect that the law of the two need not be the same.[7]
In the absence of an express choice, national courts and arbitral tribunals are required to determine the law applicable to the arbitration agreement. Where the question is raised before an arbitral tribunal, there are no formal conflict of law rules which must be applied, whereas a national court will usually have set conflict of law rules.[8] In either case, the determining body will look either to the parties’ implied choice or apply a “closest connection” standard in order to determine the law governing the arbitration agreement.[9] In applying these standards, courts and tribunals will view either; (a) the law of the substantive contract, often (though not always) expressed in a general governing law clause; or (b) the law of the arbitral seat as an indication of the parties’ implied choice or as a factor connected to the arbitration agreement.[10] As Gary Born notes, both of these indications provide serious grounds for finding an implied choice or close connection, with the result that many jurisdictions have failed to produce consistent results in deciding which indicator to prefer.[11] Other commentators have similarly noted the remarkable divergence which exists between the approaches taken to this task in different jurisdictions, and the inconsistencies which can exist within jurisdictions themselves.[12]
In Ireland, the small size and relative inexperience of this jurisdiction as a place of international arbitration means that there has been no judicial consideration of questions relating to the law governing the arbitration agreement in the absence of an express choice of the parties.[13] This is understandable, as the question rarely arises in the context of domestic arbitration where both the seat of the arbitration and the law of the substantive dispute is Irish.[14] But what about Irish seated arbitrations in which the substantive disputes aren’t to be determined under domestic law? Since its adoption of the United Nation Commission on International Trade Law Model Law (“Model Law”) in 2010, Ireland has made strides in displaying its support for arbitration in its effort to promote Dublin as an arbitral seat.[15] While this positive trend is continuing with the recent signing of the Arbitration (Amendment) Act 2026 to facilitate international commercial arbitration,[16]Irish courts and tribunals must be prepared to address questions related to the law governing the arbitration agreement clearly and predictably. For example, in the absence of an express choice by the parties, what would the law governing an arbitration agreement be for a contract governed by French law but seated in Ireland? The answers to this question can have huge consequences, as demonstrated recently in Kabab-Ji SAL v Kout Food Group[17] where an arbitration agreement was valid under French law (the law of the arbitral seat), but invalid under English law (the law of the governing contract).[18] Given this, parties to arbitration agreements will look for clarity in how issues arising in relation to the law of the arbitration agreement are to be decided.
Part II – Developments in England
Under common law conflict of law rules, the law applicable to the arbitration agreement is; (a) the law chosen by the parties to govern it (express or implied) or; (b) in the absence of such a choice, the system of law with which the arbitration agreement is most closely connected.[19] This rule provides a starting point for an Irish court or tribunal looking to determine the law governing the arbitration agreement, but it does not establish whether the law of the seat or the law of the contract should be the determining indicator of the parties’ intentions or which is most closely connected with the arbitration agreement. In the absence of judicial consideration on this question in this jurisdiction, it is likely that Irish courts and tribunals will consider English judicial reasoning. Although England has recently implemented its own statutory amendments to this area of the law, the reasoning of previous English decisions may still be persuasive. This would not be a departure from normal practice for Irish courts, as decisions from our neighbouring jurisdiction have frequently been cited with approval in matters relating to arbitration.[20]
An immediate problem with this approach is that English decisions on the application of the common law rule have varied significantly and unpredictably over time.[21] As Lord Neuberger noted, “[o]ne might have expected the cases to have provided clear and consistent guidance. However … the attitude of the courts over the past twenty years or so has not been entirely consistent.[22] The result of this inconsistency is that an analysis of English case law does little to indicate a principled basis for whether parties’ choice of arbitral seat or the law governing the main contract is to be preferred as an indication of the implied law or law most closely connected with the arbitration agreement.[23] The traditional position is that, in the absence of an express choice of law governing an arbitration agreement, English courts have applied the law governing the underlying contract (often outlined in a general choice of law clause) as the implied law intended by the parties.[24] Support for this approach has been found in the reasoning of the House of Lords in Tunnel Group Ltd v Balfour Beatty Constr. Ltd[25] that the law of the arbitration agreement may differ from the law of the underlying contract in “exceptional” circumstances.[26] Other decisions, however, have favoured the law of the arbitral seat as the implied law of the arbitration agreement, as indicated by the dicta of Longmore LJ in C v D[27] that “[i]t would be rare for the law of the (separable) arbitration agreement to be different from the law of the seat of the arbitration.”[28] This approach was most recently applied in Sulamérica S.A. v Enesa Engenharia S.A[29] where the application of the law set out in a general choice of law clause for the underlying contract would have invalidated the arbitration agreement.[30]
Clarity to this confused and contradictory caselaw has been provided in the relatively recent decision of the United Kingdom Supreme Court in Enka Insaat ve Sanayi AS v OOO Insurance Company Chubb.[31] In that case, the court had to determine whether an arbitration agreement was to be governed by English law as the arbitral seat, or by Russian law as the law of the underlying contract. Acknowledging the diverging approaches adopted by English courts in the past, the Supreme Court set out that: (1) Where the parties have made an express choice of law governing the arbitration agreement, that is to be given effect;[32] (2) where no such choice has been made, an express or implied choice of law for the underlying contract will usually apply, though this may not apply where its application would invalidate the agreement or the law of the seat mandates that the arbitration agreement be subject to its law;[33] (3) where there is no choice of law governing the contract, the law of the seat will apply as the law most closely connected with the arbitration agreement.[34] The court was split 3-2 in relation to this final point, with the minority reasoning that the law of the underlying contract should be considered the law most closely related to the arbitration agreement. Applying the approach of the majority, the court held that in the absence of an express or implied choice of law governing the underlying contract, the law which applied was the law of the arbitral seat, as the law most closely connected to the arbitration agreement.[35]
The decision in Enka was broadly met with criticism from commentators and legal practitioners.[36]Some defended the decision, arguing that in allowing the courts to identify the parties’ intentions on a case by case basis, flexibility was given to parties which did not want to make difficult decisions as to the law governing the arbitration agreement.[37] The opinion of the majority however was that the decision did not provide sufficient clarity or certainty. Commentators criticised the application of the law governing the matrix contract to the arbitration agreement on the grounds that: (i) it undermined the separability of the arbitration agreement from the underlying contract;[38] and (ii) it did not reflect the commercial reality that, in deciding on the law of the matrix contract, parties did not intend that it extend to the arbitration clause within that contract.[39] In the view of Gary Born and Lord Hoffman, the practical reality was that where parties choose an arbitral seat, they expect that all matters relating to arbitration will be governed by that law.[40] The Law Reform Commission of England and Wales, in reviewing the Arbitration Act 1996, noted such criticisms and came to the conclusion that an amendment which provided for the default law of the seat would clarify the legally complex rule in Enka.[41] The Law Reform Commission recommended that the Arbitration Act 1996 be amended to provide that the law applicable to the arbitration agreement is: (1) the law expressly chosen by the parties, or (2) in the absence of an express choice, the law of the arbitral seat.[42]
Part III – Options For Legislative Reform
It was suggested in Part II of this paper that Irish courts and tribunals may find the reasoning in Enka as persuasive authority for the approach to be adopted in applying the common law conflict of law rule in determining the law governing the arbitration agreement. Following an analysis of this decision and the criticism it received however, it is clear that the decision in Enka, to apply the general law of the underlying conflict as the implied law of the arbitration agreement, is not a satisfactory position. As academic commentators and the Law Reform Commission of England and Wales note, a default rule applying the law of the arbitral seat in the absence of an express indication by the parties is more satisfactory and is the position now reflected in English legislation. Writing extra-judicially, Barniville P of the High Court noted that the decision in Enka gave rise to “uncertainties and complexities” which required legislative intervention.[43]
The reaction to the decision in Enka and the subsequent statutory amendment to the Arbitration Act 1996 gives a strong indication to Irish courts and tribunals that in determining the law governing the arbitration agreement: the law of the arbitral seat is to be favoured. But does our own legislation give any indication? Articles 34(2)(a)(i) and 36(1)(a)(i) of the Model Law provide that an arbitral award may be set-aside or refused where the arbitration agreement under which the award was made “is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of this State.”[44] The 2010 Act gives a further indication that the default law of the agreement is the law of the arbitral seat through its giving of force of law to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention 1958”).[45] As Born notes, Article V(1)(a) of the New York Convention 1958 prescribes a default rule similar to the Model Law that, in the absence of an express choice of law by the parties, the law of the arbitral seat applies to the arbitration agreement.[46] Such an analysis suggests that the 2010 Act, through the enforcement of the Model Law and New York Convention 1958, gives an indication that the default law of the arbitration agreement is the law of the arbitral seat.
It is argued that based both on developments in England and indications from provisions in the Model Law, Irish courts and tribunals should apply the law of the arbitral seat as the implied law of the arbitration agreement in the absence of an express choice of the parties. Such a default rule would; (i) protect the separability of the agreement; (ii) reflect the parties’ intentions that all aspects of the arbitration be governed by the law of the seat; (iii) give effect to the indications from provisions in the Model Law, and; (iv) avoid the application of the legally complex common law rules as in Enka. While it is possible that an Irish court or tribunal would adopt such an approach and depart from Enka without legislation, the lack of clarity on the issue is an unnecessary hurdle to international arbitration by giving parties the opportunity to raise arguments as to the correct approach to the implied law.[47] In order to promote legal certainty and encourage international arbitration, it is recommended that the legislature be proactive and adopt legislation to amend the 2010 Act.
Turning to consider the approaches taken in other jurisdictions, there are several options which can be adopted to reform Irish law. One option is the “validation” approach which has been adopted in Switzerland and the Netherlands.[48] In the absence of an express choice by the parties, the “validation” approach determines the law applicable to the arbitration agreement by reference to whichever law is most favourable to arbitration, without considering whether the law of the seat or the law of the contract is the implied law or law most closely connected with the arbitration.[49] While this principle was tacitly endorsed in Enka in relation to the validity of the agreement, there is no reason why in an Irish context it could not extend to include issues relating to the scope or arbitrability.[50] Similar in its pro-arbitration nature is the French “delocalisation” approach which determines the existence and validity of the arbitration agreement exclusively by reference to the parties’ common intentions.[51] As with the validation approach, delocalisation aims to give effect to the parties’ intentions to arbitrate without considering the parties’ implied choice based on either the law of arbitral seat the or the law of the underlying contract.[52]
The adoption of either the “validation” or “delocalisation” approaches into Irish law would do much to clarify the question on the law of the arbitration agreement. Both approaches;
(i) retain party autonomy in their choice of law;
(ii) give effect to the separability of the arbitration agreement, and;
(iii) give effect to the parties’ intention to arbitrate.
A simpler approach however, and one in line with our neighbouring jurisdictions in Scotland and England, is the adoption of the law of the arbitral seat as the default rule.[53] As mentioned in Part II of this paper, a recent amendment to the English Arbitration Act 1996 now provides that the law applicable to the arbitration agreement is: (1) the law expressly chosen by the parties, or (2) in the absence of an express choice, the law of the arbitral seat.[54] The adoption of this rule into Irish legislation would bring the same benefits as outlined in the validation/delocalisation approaches (autonomy, separability, party intention), but in a simpler rule which also gives effect to the indication of Articles 34 and 36 of the Model Law that the default law is the law of the arbitral seat. As such, this paper would recommend that the 2010 Act be amended by insertion of section 8A providing for the law of the arbitration agreement to be governed by the law of the seat in the absence of express agreement by the parties, in line with section 6A of the 1996 Arbitration Act.
Part IV – Conclusion
Having recommended legislative reform, it is time to return to the hypothetical scenario posed earlier in this paper; in the absence of an express choice by the parties, what would the law applicable to an arbitration agreement be for a contract governed, for example, by French law but seated in Ireland? If Irish courts and tribunals were to apply the reasoning in Enka, the arbitration agreement would likely be governed by French law, requiring questions of the agreement’s scope, validity and arbitrability to be determined under this foreign system of law. Under the proposed amendment to the 2010 Act however, courts and tribunals would apply Irish law as the law of the arbitral seat without the need to apply legally complex rules and entertain arguments surrounding the parties’ implied choices or which law was most closely connected with the agreement.[55] By adopting the Model Law in 2010, Ireland was seen as having put itself “to the forefront internationally in terms of having a thoroughly modern arbitration law.”[56] As Koepp and Turner note however, the demands of international commerce do not stand still, and neither should the law.[57] If Ireland wants to keep itself at “the forefront” of arbitration law and promote itself as an arbitral seat, the legislature must be proactive in amending our law to provide legal certainty and clarity as our neighbouring jurisdictions have.
[1] Johannes Koepp and David Turner, ‘A Massive Fire and a Mass of Confusion: Enka Chubb and the Need for a Fresh Approach to the Choice of Law Governing the Arbitration Agreement’ (2021) 38(3) Journal of International Arbitration 377, 393.
[2] [2020] UKSC 38, [2020] EWCA Civ 574.
[3] Lord Hoffman, Rihcard Aikens, Salim Moolan and Ricky Diwan, “An important realignment and an opportunity missed? The law applicable to the arbitration agreement, jurisdictional re-hearings, stays to court proceedings, and the Arbitration Act 2025” (2025) 41(3) Arbitration International 465, 471.
[4] Aran Dowling-Hussey and Derek Dunne, Arbitration Law (3rd edn, Round Hall 2018), 3-61.
[5] Nigel Blackaby, Constantine Partasides and Alan Redfern, Redfern and Hunter on International Arbitration (7th edn, Oxford 2022), 3-07.
[6] ibid 3.08 and Enka (n 2) [43].
[7] Premium Nafta Products Ltd v Fili Shipping Company Ltd (“Fiona Trust”) [2007] UKHL 40 and K&J Townmore Ltd v Kildare and Wicklow Education Board [2018] IEHC 770.
[8] UNCITRAL Model Law Art 16.
[9] Gary Born, International Arbitration (3rd edn, Kluwer 2021) 762.
[10] ibid.
[11] ibid 768.
[12] Blackaby, Partasides and Redfern (n 5) 3-13 and Koepp and Turner (n 1) 378.
[13] UNCITRAL, Digest of Case Law on the Model Law on International Commercial Arbitration (2012) 176; “Few cases discuss the law governing the arbitration agreement.”
[14] Dowling-Hussey and Dunne (n 4) 3-64.
[15] James Stitt and Joseph Matthews, “Revision of the Arbitration Act 1996: The Case for Arbitral Independence” (2023) 22(22) Hibernian Law Journal 43, 49.
[16] The purpose of the Act is to address the constitutional issues identified by the Irish Supreme Court in Costello v The Government of Ireland, Ireland, and the Attorney General [2025] 1 IR 1 by granting the High Court discretion in the enforcement of arbitral awards under the EU-Canada Comprehensive Economic and Trade Agreement where enforcement would breach the Irish Constitution.
[17] [2020] EWCA Civ 6, [2021] UKSC 48.
[18] In the absence of an express choice of law governing the arbitration agreement, French courts applied French law (as France was the law of the arbitral seat) while English courts applied Enka and held that the arbitration agreement was governed by English law (as the law of the governing contract). This was significant as the agreement was valid under French law (which allowed the inclusion of non-signatories to an agreement in proceedings) but not valid under English law. For more, see; Blackaby, Partasides and Redfern (n 5) 3-12, and; Law Reform Commission (England and Wales), Review of the Arbitration Act 1996 Second Consultation Paper (LRC CP 258 – 2023) 2.29.
[19] Enka (n 2) [170].
[20] See Irish courts’ adoption of Fiona Trust (n 7).
[21] Born (n 9) 906.
[22] Sulamérica S.A. v Enesa Engenharia S.A [2012] EWCA Civ 638 [52].
[23] Koepp and Turner (n 1) 384.
[24] Sonatrach Petroleum Corp (BVI) v Ferrell International Ltd [2002] 1 All E.R. (Comm) 627.
[25] [1993] AC 334.
[26] ibid 357.
[27] EWCA Civ 1282.
[28] C v D (n 26) [26].
[29] Sulamérica (n 21).
[30] Koepp and Turner (n 1) 393 and Blackaby, Partasides and Redfern (n 5) 2-26 note that the decision in Sulamérica demonstrates an application of a pro-arbitration “validation” principle by English courts which applies the law of the arbitral seat as a means of avoiding invalidating the agreement.
[31] [2020] UKSC 38, [2020] EWCA Civ 574.
[32] Enka (n 2) [170]
[33] ibid Majority [53], also Burrows [257] and Sales [267].
[34] ibid Majority [156] – [157].
[35] ibid Majority [186].
[36] LRC Second Consultation Paper (n 18) 2.28.
[37] Law Reform Commission (England and Wales), Review of the Arbitration Act 1996– Final Report and Bill (LRC 413 – 2023) 12.27.
[38] Hoffman, Aikens, Moolan and Diwan (n 3) 468.
[39] Born (n 9) 909 and Gaillard E and Savage J, Fouchard Gaillard Goldman on International Commercial Arbitration (Kluwer 1999)425.
[40] Hoffman, Aikens, Moolan and Diwan (n 3) 467 and Born (n 9) 909.
[41] LRC Final Report and Bill (n 37) 12.17.
[42] ibid.
[43] David Barniville, “The Arbitration Act 2010 – 15 Years On” (Summer/Autumn 2025) Chartered Institute of Arbitrators Ireland Newsletter 17.
[44] ‘Emphasis added’ MAL (n 8).
[45] United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958).
[46] Born (n 9) 907.
[47] Enka (n 2) decision invited such arguments: Koepp and Turner (n 1)
386, and LRC Final Report and Bill (n 37) 12.77.
[48] Koepp and Turner (n 1) 390.
[49] ibid.
[50] Koepp and Turner (n 1) 390
[51] Blackaby, Partasides and Redfern (n 5) 2-26.
[52] Born (n 9) 913.
[53] Arbitration Act 2010 (Scotland) s. 6.
[54] LRC Final Report and Bill (n 37) 12.77.
[55] LRC Final Report and Bill (n 37) 12.77.
[56] Louise Reilly, “Harmonisation of Irish Arbitration Law: Arbitration Act 2010” (2011) 28(2) Journal of International Arbitration 163, 164.
[57] Koepp and Turner (n 1) 393.
UCD Law Review 