Conditional agreements and arbitration law’s separability principle

MacMahon, Paul ORCID: 0000-0003-3386-0667 (2023) Conditional agreements and arbitration law’s separability principle. Lloyd's Maritime and Commercial Law Quarterly. ISSN 0306-2945

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Abstract

Arbitral authority usually requires consent. Parties typically express that consent in a clause found in a larger contractual document. In such cases, the arbitration clause is treated for some purposes as a separate agreement from the “main” contract. This internationally accepted principle of separability received explicit statutory recognition in English law through s.7 of the Arbitration Act 1996 and was underscored by the House of Lords in Fiona Trust. 1 Separability means that arbitral jurisdiction is typically unaffected by a defect in the main contract. To resist arbitral authority, one must impugn the alleged arbitration agreement itself. The separability principle, however, does not dispense with the need for the parties to have made an arbitration agreement. According to the Court of Appeal, that fundamental requirement for arbitral jurisdiction was lacking in DHL Project & Chartering Ltd v Gemini Ocean Shipping Co Ltd (The Newcastle Express) . 2 In that case, the parties to a proposed voyage charter party agreed a full set of terms, including an arbitration clause, subject to the approval of shippers and receivers. But the charterer never communicated an approval by any shipper or receiver. The owner contended that the parties had agreed to arbitration, but the Court of Appeal disagreed. The arbitration clause was, like all the other proposed terms, only binding on the fulfilment of conditions that never occurred.

Item Type:	Article
Official URL:	https://www.i-law.com/ilaw/doc/view.htm?id=433672
Additional Information:	© 2023 Lloyd's List Intelligence.
Divisions:	Law
Subjects:	K Law
Date Deposited:	27 Jan 2023 17:03
Last Modified:	02 Nov 2023 11:45
URI:	http://eprints.lse.ac.uk/id/eprint/118051

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