Determination On The Effectiveness Of International Commercial Pathological Arbitration Agreement

International Commercial Arbitration gains increasingly more popularity as a mechanism to resolve international commercial disputes by virtue of party autonomy, flexibility in application of the law, as well as the effectiveness of the implementation of an arbitral award. A valid arbitration agreement is the basis of international commercial arbitration while pathological arbitration clause which contains a defect or defects is liable to disrupt the smooth progress of the arbitration. Determination of the effectiveness of pathological arbitration agreement directly concerns the realization of the parties’intention to refer their disputes to arbitration. As international conventions and domestic laws set different provisions on formal requirements and substantive requirements, and arbitrators or judges also show different attitudes towards pathological arbitration, the law applicable and proper construction concerns a lot to determine the effectiveness of pathological arbitration agreement. The article stands to apply the law which supports the validity of the arbitration agreement and make remedial interpretation so as to protect the parties’ legitimate expectations.This thesis consists of three parts and analyses applicable laws and construction concerning pathological arbitration agreement in main national laws and international commercial arbitration institutions.Chapter One deals with the notion of pathological arbitration clause and summarizes typical formal and substantive defects.Chapter Two illustrates the approaches taken to determine effectiveness of the arbitration agreement. The party’s autonomy is the cornerstone of the arbitration system, so the parties’intention should be respected and the validity principle should be adopted. As for determination of formal validity, the New York Convention requirements on form requirements should be construed as the maximum standards.If domestic laws provide more favorable requirements, they should be applied in accordance with the provision of Article7.2of the New York Convention. As for determination of substantive validity, the intention to arbitrate is the key factor and validity principle approach which combines the choice-of-law method and substantive method should be adopted to determine the applicable law. Based on the law applied, pathologies, which are inconsistent, uncertain and infeasible defects in arbitration agreements, should be interpreted in order to promote the arbitration proceedings.Chapter Three introduces the legislation and practices about effectiveness determination of international commercial pathological arbitration agreements in China. Based on case study and comparative research, suggestions for identifying effectiveness of pathological arbitration agreement are put forward.