Melbourne Office - PO Box 452, COLLINS STREET WEST VIC 8007 AUSTRALIA
Sydney Office - GPO Box 2506, SYDNEY NSW 2001 AUSTRALIA
Telephone: Melbourne Office - +61 3 9629 3709 Sydney Office - +61 2 9233 2600
Facsimile: Melbourne Office - +61 3 9629 3217 Sydney Office - +61 2 9233 3044
Each country has its own procedural rules and which country's rules apply is determined by the parties agreeing as to the seat of the arbitration.
It is sometimes called the place of the arbitration and sometimes called the Lex arbitri.
It provides the general framework for rights, duties and conduct of the arbitration
The arbitration agreement must be construed to determine the seat.
It is different to the venue of the arbitration.
For example if the Sydney Australia was designated as the seat then the Commercial Arbitration Act 1974 (Cth) would apply subject to the other provisions of that act applying.
Thereafter the agreement pursuant to which the arbitration was commenced must be examined to see if it incorporates any rules or not.
Sometimes the agreement may incorporate some rules by reference.
eg. the ACICA model arbitration clause provides:
Any dispute, controversy or claim arising out of, relating to or in connection with this contract,
including any question regarding its existence, validity or termination,
shall be resolved by arbitration in accordance with the ACICA Arbitration Rules.
The seat of arbitration shall be Sydney, Australia [or choose another city].
The language of the arbitration shall be English [or choose another language].
The number of arbitrators shall be one [or three, or delete this sentence and rely on Article 8 of the ACICA Arbitration Rules].
It can be seen that by using this clause the entire ACICA Arbitration rules are incorporated and apply.
Our view is that the rules required for each arbitration vary and hence having one rule to suit all does not work.
The seat of the arbitration is not necessarily where it is held,
although where the parties have failed to choose the law governing the conduct of the arbitration
it will prima facie be the law of the country in which the arbitration is held
because that is the country most closely connected with the proceedings3)
The seat of the arbitration as compared to the actual place of hearing can be important
because it determines the procedural law to be applied and not just who has to pay for the airfares to get to the place where the dispute is heard.
Sometimes the governing law, which determines the applicable substantive laws, is the same as the seat but not always.
If it is not the same then problems can arise.