Arbitration Agreement Legal Issues

In 2006, the Supreme Court of Buckeye Check Cashing, Inc. Cardegna, 546 U.S. 440, extended the separation doctrine to illegal contracts, although this meant that a party had to arbitrate an alleged violation, even though the underlying contract containing the arbitration agreement was completely invalid. The only exception that the court recognized was when a party asserted that there was illegality, fraud or any other contractual defence recognized in the arbitration clause itself. The question of which law governs an arbitration agreement can be important, as this case makes clear. The result determines whether a company has participated in an arbitration agreement. Although there is some disagreement in the case law in this area, the (complex) hierarchy of reflections is relatively clear: the French courts seek to give maximum legal effect to conciliation agreements. The French courts have held that international arbitration agreements are “autonomous” from any national legal system and are therefore directly subject to the general principles of international law. For example, the Dalico decision of the French Court of Cassation held 8: Conciliation of labour disputes has its own history, although one that corresponds to the general trends described above. The FAA contains a clause that appears to exclude labour disputes from coverage of status. Section 1 of the Statute states that “nothing applies to the employment contracts of seafarers, railway workers or any other category of workers working in foreign or intergovernmental trade.” Despite this language, the Supreme Court of Gilmer v.

Interstate/Johnson Lane Corp., 500 U.S.20, applied the FAA to a work case in 1991 and ruled that a staff member was required to file a complaint before an arbitration tribunal and not in an age discrimination court. The decision was unclear as to the effects of the legal exclusion on employment contracts, since in this case the compromise clause was not in a contract between a worker and an employer, but in a contract between a worker and the agency from which the worker had to register to obtain the work. The Supreme Court clarified the ambiguity in 2001 in Circuit City Stores, Inc. v. Adams, 532 U.S. 105, interpreted the “employment contract” exemption very concisely. It decided that the statute applied to all employment contracts, with the exception of those involving workers who, like seafarers and railway workers, crossed national borders in transport. Since then, the courts have applied the FAA to many work cases.

An explicit choice of law cannot be superseded by the choice of another legal law (determined by the seat of arbitration – here Paris). 3 This meaning of seat law has a significant harmonization effect on the determination of the law applicable to the validity of the arbitration agreement. It serves to avoid the frictions and contradictions that could arise if different laws applied to these issues. The freedom of decision created by the seat is important because the arbitration agreement is the very foundation of the court`s jurisdiction. This requires conflict rules of strict, fast, enforceable and generally accepted laws in order to avoid further complications when the jurisdiction of the Tribunal is unilaterally challenged. This is also consistent with the concept of partisan autonomy, which is one of the main maxima of international commercial arbitration. The seat is usually chosen by the parties or by the court or by the arbitration institution on their behalf.