Is it possible that the Arbitration agreement itself is valid while the rest of the contract is not, or vice versa? Yes, it is possible according to the Presumption of separability in international arbitration.

“The presumption of separability in international arbitration means that the validity of an international arbitration agreement is separate and analyzed independently from the rest of a contract.”

When Countries Recognized This Presumption Of Separability?

• In the early 20th century, Switzerland jurisdiction was the first one to implement the presumption of separability. Swiss courts see the agreement to arbitrate as procedural in nature, rather than substantive, and rely on this qualification to uphold the presumption, today found in Article 178 of the Swiss Law on Private International Law.
• In Germany, the notion of separability was recognized and accepted as early as the beginning of the 20th century.
• The United States recognized this presumption also very early, in Section 2 of the Federal Arbitration Act. Courts have upheld the presumption in both international and domestic cases.
• In France, the presumption of separability was upheld by the Court of cassation in Gosset v. Carapelli in 1963. It was then codified in Article 1442 of the New Code of Civil Procedure.
• In England, although first reluctant to accept the presumption of separability, the English Court of Appeal held in 1993, in Harbour Assurance Co v. Kansa General International Insurance Co, that the issue of the validity of a contract had no impact on the validity of the arbitration clause.

The reason for the widespread recognition of presumption is the desire to promote an efficient dispute resolution system by upholding the validity of the agreement to arbitrate despite doubts regarding the validity of an underlying contract. As the validity of an agreement is often in doubt in disputes, the arbitration itself will not be undermined by a finding that the underlying contract is invalid.

Want to learn more about arbitration? Please do not hesitate to contact Aceris Law LLC’s Arbitration Lawyers or visit https://www.acerislaw.com/