A seat of Arbitration does not necessarily refer to where hearings will be held. It also does not necessarily reflect the law of a contract. However, it typically provides the framework underlying the arbitration, giving courts of the seat supervisory jurisdiction over the proceedings.

The seat need not be the same as the governing law of the contract, or be based in the same place as the chosen arbitral institution. Thus, there is no reason why a contract cannot be governed by English law but provide for ICC arbitration in Paris. Moreover, counsel does not need to be qualified in the law of the seat, so there is no reason why a party could not (if it wanted to) instruct French lawyers in an arbitration-taking place in Singapore.

An arbitration Award may be challenged in the courts of the seat. Every country will allow an award to be challenged on certain, limited grounds (for example, that the arbitrators lacked jurisdiction or were corrupt), but some also allow the challenge of the award based on errors of law or grounds of public policy, which means different things in different jurisdictions.

The law of the seat is important with respect to certain procedural issues, for instance whether the arbitral tribunal may award costs or interest, or whether a conflict of law rules has to be applied. Some emerging markets, such as China, impose restrictions on the choice of the seat.

One of the most important factors is typically neutrality. The ability to select a neutral seat (i.e., not in either party’s “home” jurisdiction) is one of the key advantages of arbitration. But typically that will only rule out a few of these options, still leaving several seats to choose among.

Choosing the wrong seat can severely delay the arbitration, increase the risk of parallel court proceedings, and allow the award to be challenged on broad grounds in local courts, which may not be reliable or may be in a jurisdiction where the counterparty is very well connected, posing evident risks.

There are many “safe” options in terms of seat, including Paris, London, Geneva, Singapore, and Hong Kong. These seats are arbitration-friendly jurisdictions, which are in countries that are parties to the New York Convention, which plays an important role in allowing the enforcement of arbitral awards internationally. The other seats are also unique in some ways. Paris is one of the safest seats of arbitration, but New York may be preferred by the parties to a contract for non-legal factors.

The seat can also play a role in the constitution of the tribunal—it is one-factor institutions consider in choosing a sole arbitrator or chair. In turn, the nationality and background of the sole arbitrator or chair may inform his or her approach to the arbitration.

For more information, get in touch with France Arbitration Lawyers desk.

Aceris Law’s France arbitration lawyers desk is a dedicated team of lawyers, which accompanies clients involved in arbitrations concerning France, i.e., where French law applies, a contract is executed in France, the dispute is brought by or against a party in France, or the French State or a French State entity is involved.