This is theoretically possible since the Enka v Chubb judgment refers to “ any provision of the law of the seat” and not just ‘statutory provisions’.

Taken to its logical conclusion, this line of reasoning can be extended beyond statutory provisions to jurisprudence established by court decisions. To illustrate, the UKSC referred to Section 48 of the Swedish Arbitration Act and Section 6 of the Arbitration (Scotland) Act 2010, which provide that in the absence of an express choice of governing law of the arbitration agreement, the law of the seat will apply. The UKSC, in the Enka v Chubb judgment, acknowledged this possibility and held that “ any provision of the law of the seat which indicates that, where an arbitration is subject to that law, the arbitration agreement will also be treated as governed by that country’s law” may imply that the arbitration agreement was intended to be governed by the law of the seat. Other than the obvious consequence of granting supervisory jurisdiction to French courts, the choice of Paris as a seat may also connote an implied intention of the parties that certain legal provisions and settled jurisprudence of French law would apply. The parties’ choice of a Paris-seated arbitration in Kabab-Ji has important implications.

Why the UKSC should have considered the French approach There are compelling reasons why the UKSC should have analysed or at least considered French law while determining the law applicable to the arbitration agreement. This reasoning, though attractive, understates the importance of analysing the French legal position and its implications. In this regard, the UKSC (para 32 of the Kabab-Ji judgment) has reasoned that since there is a lack of “ clear consensus” among the courts of contracting states of the New York Convention regarding the interpretation of Article V(1)(a), English courts must “ form their own view based on first principles.” The UKSC further concluded (at paras 87 to 90) that since French and English courts take “ a very different approach” to deciding the law applicable to the arbitration agreement, English courts could not be bound by French court decisions and the risk of contradictory judgments was unavoidable. The UKSC’s Kabab-Ji judgment places substantial reliance on the Enka v Chubb judgment but does not analyse or consider the French legal position or the decision of the Paris Court of Appeal. In deciding the Kabab-Ji case, the UKSC had the benefit of two preceding decisions – first, its judgment in Enka v Chubb (the Enka v Chubb judgment) (discussed on the Blog here and here), and second, the Paris Court of Appeal’s decision upholding the Kabab-Ji award (discussed on the Blog here). UKSC’s rationale for not considering the approach of French courts In a contract where the parties have not expressly provided the law applicable to the arbitration agreement, English courts apply the law governing the underlying contract and French courts apply the law of the seat. The Kabab-Ji saga provides a case study on the English-French law divide and has been discussed at length on this Blog ( here, here, here, and here). The recent judgment of the United Kingdom Supreme Court (the UKSC) in Kabab-Ji v Kout Foods (the Kabab-Ji judgment) has reopened issues concerning the differing approaches of English and French courts to determining the law governing arbitration agreements.

Shut in french