To achieve the purpose for which it was concluded by the parties, the arbitration agreement must be valid under the law applicable to it. Matters on the validity of the arbitration agreement are divided into two parts, those that deal with issues of formal validity which seek to prove that there is an arbitration agreement in existence, and those on substantive validity which seek to prove what the parties agreed on (the scope of the arbitration agreement).
Matters on the validity of the arbitration agreement are determined by the law applicable to the arbitration agreement or the law of the country where the award was made, or the proper law of the main contract, or in accordance with the intention of the parties to the arbitration agreement without reference to any particular national law.
To prove the existence of a party’s consent to arbitrate, most arbitration laws require that:
- This consent be evidenced in writing,
- The agreement should be signed,
- The agreement should be over a defined legal relationship,
- Matters which are arbitrable.
N/B The scope of the arbitration agreement affects the arbitrator’s contract to the extent that it determines the jurisdiction of the arbitrator, whether the arbitral reference will be ad hoc or institutional, the powers of the arbitrator and any limitations thereon and the remit of the arbitral reference.
Writing
Under most arbitration laws, the arbitration agreement is required to be in writing. An agreement to arbitrate contains a legally enforceable promise made by an individual or entity to opt out of its legally protected right to apply to a national court for the resolution of a covered dispute, and to seek resolution of the same dispute through the private dispute resolution mechanism of arbitration.
Signature
The New York Convention requires the arbitration agreement to be signed so that where the arbitration agreement is contained as a clause in the main contract then the signature of execution of the main contract suffices for purposes of the validity of the arbitration clause.
Defined Legal Relationship
The requirement for a defined legal relationship means that the underlying transaction is not limited to those of a contractual nature but will cover disputes arising from tortuous or delictual liabilities.
Arbitrability
Arbitrability is objective is based on the nature of the subject matter of the under lying transaction from which the disputes to be arbitrated emanate. The discussions on objective arbitrability concentrate on the question of whether disputes arising from a particular subject matter can be submitted to arbitration for resolution.
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