Understanding the Concept of Lex Arbitri in International Arbitration

Introduction

In international arbitration, the parties’ autonomy is a hallmark feature. However, this autonomy operates within a legal framework that governs and supports the arbitral process. One of the most fundamental, yet often under-discussed, elements of this framework is the lex arbitri, or the law of the seat of arbitration. The lex arbitri plays a critical role in shaping the arbitration proceedings, influencing issues ranging from the constitution of the tribunal to the validity and enforceability of the final award. This article explores the concept of lex arbitri, its scope, and its interaction with other legal regimes in international arbitration.

Definition and origin

The term lex arbitri refers to the law governing the arbitral procedure, as determined by the juridical seat of arbitration. It is distinct from the substantive law governing the merits of the dispute (lex causae) and from the rules of arbitration that the parties may adopt (such as the UNCITRAL Rules or ICC Rules).

The concept finds its foundation in the principle that every arbitration has a “seat” or legal home, which anchors the arbitration to a particular legal system. This connection ensures that the arbitration process has the necessary judicial support and oversight, without which the process would lack legitimacy and enforceability.

This blog is a part of our Arbitration Blogpost.

Role and scope of Lex Arbitri

The lex arbitri governs key procedural aspects of the arbitration, including:

1. 1. Constitution and challenge of arbitrators
   2. Jurisdictional issues and kompetenz-kompetenz[1]
   3. Interim measures granted by the tribunal or courts (like temporary orders to preserve assets or evidence)
   4. Judicial supervision over the arbitral process
   5. Grounds and procedure for setting aside an award
   6. Recognition and enforcement of the award under local law

In essence, the lex arbitri functions as the procedural backbone of the arbitration, operating in tandem with party-agreed rules and international treaties (such as the New York Convention).

Determination of the Lex Arbitri

The lex arbitri is determined by the choice of the seat of arbitration. When parties select a particular city or country as the seat (e.g., India, London, Paris, Singapore, or Dubai), they are implicitly subjecting their arbitration to the arbitration law of that jurisdiction.

This choice is often made consciously, with due regard to the pro-arbitration stance, judicial competence, neutrality, and enforceability prospects offered by the chosen seat. Where parties fail to designate a seat, the institutional rules or the arbitral tribunal itself may determine the seat based on the circumstances of the case.

Interaction with institutional rules

A frequent point of confusion arises when parties adopt institutional arbitration rules and assume these rules supplant the lex arbitri. This is not the case. While institutional rules govern the internal management of the arbitration, they operate within the framework permitted by the lex arbitri. For example, rules concerning the appointment of arbitrators or the consolidation of proceedings are valid only to the extent they do not conflict with the mandatory provisions of the arbitration law of the seat.

Therefore, any potential conflict between institutional rules and the lex arbitri must be resolved in favor of the latter, particularly where the lex arbitri contains mandatory provisions (e.g., rules on due process or arbitrability).

Mandatory vs. non-mandatory provisions

The lex arbitri typically contains both mandatory and default rules. Mandatory rules, such as those ensuring equal treatment of parties or the tribunal’s duty to act fairly and impartially, cannot be derogated from, even by party agreement. Non-mandatory or default provisions, on the other hand, may be overridden by party choice or institutional rules.

Understanding this distinction is crucial, as parties may unintentionally conflict with mandatory norms when drafting arbitration clauses or procedural frameworks.

Judicial intervention and supervisory role

One of the defining features of lex arbitri is the extent of permissible judicial intervention. While most modern arbitration laws adopt a non-interventionist stance (reflecting the UNCITRAL Model Law), they still allow national courts to assist or supervise the arbitration in the following areas:

1. 1. Appointment or removal of arbitrators
   2. Rulings on jurisdictional objections
   3. Issuance of interim relief
   4. Setting aside or vacating the award
   5. Supporting enforcement proceedings

The courts of the seat are thus primary supervisory authorities, and their decisions may determine the fate of the arbitration and award. This reinforces the importance of choosing an arbitration-friendly seat with a predictable and arbitration-supportive judicial system.

Practical implications for drafting arbitration clauses

Given the centrality of the lex arbitri, it is imperative that parties clearly designate the seat of arbitration in their arbitration agreement. A well-drafted arbitration clause should:

1. 1. Specify the seat of arbitration (e.g., “The seat of arbitration shall be Singapore.”)
   2. Distinguish between the seat and the venue (physical location of hearings)
   3. Recognize the application of institutional rules subject to the lex arbitri

Failure to do so can result in procedural uncertainty, costly jurisdictional disputes, and challenges to the enforceability of the award.

Lex arbitri substantive law vs. curial law

It is essential to distinguish lex arbitri from related concepts:

• Substantive law (lex causae) governs the underlying contract and merits of the dispute.
• Curial law is often used synonymously[2] with lex arbitri, though some authors interpret curial law as broader, encompassing both national law and institutional rules governing the arbitration procedure.

Understanding these distinctions helps prevent conceptual confusion and ensures that parties and practitioners navigate arbitration proceedings with clarity and confidence.

Case study: The Supreme Court clarifies the law governing arbitration agreements

The Supreme Court recently issued a significant ruling in Disortho S.A.S. v. Meril Life Sciences Private Limited[3] on the “lex contractus“ (the law of the contract) as a primary indicator for the law governing an arbitration agreement, even when it’s part of a broader contract. This principle applies unless there are clear contradictory signals. This determination arose from an arbitration petition filed by Disortho S.A.S., a company based in Colombia, against Meril Life Science Private Limited, an Indian company.

A three-Judge Bench, composed of CJI Sanjiv Khanna, Justice Sanjay Kumar, and Justice K.V. Viswanathan, articulated that while the law of the seat governs the procedural aspects of arbitration, it doesn’t automatically extend to the formation or validity of the arbitration agreement itself. They highlighted that if an arbitration agreement is embedded within the main contract, the contract’s governing law serves as a strong presumption for the arbitration agreement’s governing law, a presumption not easily overcome by simply choosing a different arbitral seat.

Case background and the court’s reasoning

The dispute stemmed from an International Exclusive Distributor Agreement signed in 2016 between Disortho S.A.S. and Meril Life Science Private Limited for medical product distribution in Colombia. When disagreements arose, Disortho S.A.S. petitioned the Supreme Court under Section 11(6) of the Arbitration and Conciliation Act, 1996 (the “1996 Act”), seeking the appointment of an Arbitral Panel. Central to the dispute were two clauses within the agreement that appeared to contradict each other. Clause 16.5 specified that the agreement was to be governed by Indian law, with judicial oversight from courts in Gujarat. Conversely, Clause 18 outlined provisions for arbitration to take place in Bogota, adhering to the rules of the Center for Arbitration and Conciliation of the Bogota Chamber of Commerce and under Colombian law. Meril Life Science, headquartered in Gujarat, contested the petition, arguing that the arbitration clauses did not empower Indian courts to appoint arbitrators.

In its analysis, the Court extensively drew upon established principles from both national and international legal precedents. A key framework employed was the three-law framework in arbitration, which distinguishes:

• The lex contractus, which governs the contract’s core obligations.
• The lex arbitri, which dictates the validity and interpretation of the arbitration agreement.
• The lex fori, which pertains to procedural matters, including judicial involvement.

Citing Melford Capital Partners v. Digby[4] and Paul Smith Ltd. v. H&S International Holdings Inc[5]., the Court affirmed that while an arbitration agreement is separate from the primary contract, it remains governed by the contract’s chosen law unless a clear deviation is indicated. The Court adopted the reasoning from Enka Insaat Ve Sanayi AS v. Chubb[6], which posits that in the absence of an explicit choice of law for the arbitration agreement, the governing law of the main contract applies unless strong contrary indications exist. Applying the precedent of Mankastu Impex v. Airvisual[7], the Court concluded that designating Bogotá as the arbitration “venue” did not automatically establish it as the “juridical seat.” Consequently, with Indian law governing the arbitration agreement, Indian courts retained the authority to appoint an arbitrator.

The Supreme Court opined that matters concerning the appointment or removal of arbitrators, especially without a clear mechanism in the arbitration agreement, should generally be governed by the law applicable to the arbitration agreement itself, rather than solely by procedural rules. The Court emphasized that consistency and uniformity are vital for fairness in international commerce.

It held that there was a strong presumption for Indian law (lex contractus) to govern the arbitration agreement. The Court clarified that the choice of a “place” for arbitration, such as Bogota, was insufficient to override this presumption, particularly since no “seat” was explicitly chosen. They concluded that the parties had implicitly agreed to Indian law governing the arbitration agreement.

Furthermore, the Court stated that specifying Colombian law for the arbitration award or designating a venue in Bogota did not diminish the effect of the clause stipulating Indian law for the overall agreement and related disputes. This implies the applicability of the 1996 Act and the jurisdiction of Indian courts for appointments. Ultimately, with both parties consenting to arbitration in India and the appointment of a sole arbitrator, the Court appointed Justice S.P. Garg, a retired Delhi High Court Judge, as the Sole Arbitrator. The venue and rules for the arbitration would be mutually decided by the parties and the Arbitrator, with the arbitration governed by the rules of the Delhi International Arbitration Centre.

Conclusion

In sum, the lex arbitri is more than just a procedural rule; it’s the bedrock upon which the legitimacy and effectiveness of international arbitration rest. While parties cherish their autonomy, it’s this foundational law that provides the necessary oversight and support, preventing an arbitral award from becoming a hollow victory. By prioritizing a precise designation of the arbitration’s seat and appreciating its far-reaching influence, practitioners can actively shape a more robust and predictable dispute resolution process, safeguarding their clients’ interests and avoiding common pitfalls that can derail even the most carefully constructed agreements.

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Foot Notes

[1] Kompetenz-Kompetenz (literally, “competence-competence”) denotes the principle that an arbitral tribunal has the authority to rule on its own jurisdiction and on challenges to the existence or validity of the arbitration agreement.

[2] Curial law is often used interchangeably with lex arbitri, referring to the law of the seat governing the arbitration procedure

[3] 2025 INSC 352

[4] 2021 EWHC 872

[5]  [1991] 2 Lloyd’s Rep 127

[6] [2020 UKSC 38]

[7] (2020) 5 SCC 399