A seat of arbitration must respond to the needs of the business community and the users of international arbitration. Therefore one should always choose:
• A seat that is a signatory of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
• A seat whose laws favour arbitration and whose courts actively support, rather than interfere with, the arbitral process.
• A seat that respects the parties' intentions regarding their choice of procedure and applicable law.
• A seat that has the required professional and structural resources for a rapid, legally secure and efficient process.
Choosing a seat of arbitration is important for many reasons:
An arbitral process must be as rapid and efficient as possible.
There should be minimal intervention by the courts at the seat, except in a supporting role.
The law of the seat determines the extent to which the courts can intervene in the arbitral process.
Some laws provide that courts may intervene only in support of arbitration; in contrast, other laws may permit courts to interfere or even hinder the arbitral process.
Awards must be binding on the parties and internationally enforceable.
Arbitral awards should not be subject to any challenges that entail reopening the merits of the dispute.
The seat of the arbitration will be the place where the award is deemed to have been made.
The law of the seat will determine the grounds on which an award can be challenged before local courts. Such grounds may be limited or, on the contrary, they may allow broad challenges that may even amount to a reopening of the merits of the dispute. It is essential to choose a seat with limited grounds for challenge.
Anticipate the applicable law
By choosing the seat of the arbitration proceedings, you in fact choose the legal environment of your proceedings. A choice of Paris means French arbitration law will apply, offering a reassuring environment if problems arise. Judges in the jurisdiction of the seat may be called upon to intervene in the arbitration proceedings either at the stage of the constitution of the arbitral tribunal, or later to decide certain matters or to order interim and provisional measures. It is the law of the place of the seat that will determine what legal means are available to challenge the arbitral award. The Paris civil court (Tribunal de Grande Instance) includes a specialized judge who, in the rare event judicial intervention in support of arbitration is required, hears all applications relating to the appointment of arbitrators and the implementation of the arbitral proceedings, and who actively supports the arbitral process.
Often regarded as a last-minute formality, we advise you to pay the greatest possible attention to the drafting of your arbitration clauses, which should indicate the seat of the arbitration. Care in drafting the arbitration clause will save you time and minimise the danger of seeing your dispute settled by a local court that you did not intend to choose. It is important that your arbitration clause is drafted with guidance either from your usual counsel or from specialist legal advisers who will be able to advise on the most appropriate wording for the clause in light of the particular circumstances of your case. If you wish to choose Paris as the seat of your arbitration and to benefit from the advantages that the French capital can offer, you should include the following wording in your arbitration clause: “The place of arbitration shall be Paris, France.”