Chapter 2 emphasizes the importance of arbitration agreements, their separability from the main contract, and the need for clarity and validity to ensure enforceability of an arbitration award. It also highlights ongoing efforts to modernize and harmonize the interpretation and enforcement of arbitration agreements through international conventions and model laws. First, it discusses the general characteristics of the arbitration clause. Second, it discusses the concept of separability which allows the arbitration clause to remain valid and enforceable even if the main contract is potentially invalid. Third, it discusses the issue of validity of the arbitration agreement and the fact that different courts interpret the requirements for valid arbitration agreement differently, leading to a non-uniform application of the New York Convention. To address this, UNCITRAL has made recommendation for more flexible interpretationd and has revised provisions of the UNCITRAL Model Law on Arbitration to promote harmonization in the interpretation and enforcement of arbitration agreements.

An arbitration agreement expresses the consent of the parties to a legal relationship to submit the settlement of their disputes to an arbitral tribunal. As such, it is a unique type of contractual arrangement. While it has a contractual origin, it also confers the arbitral tribunal a jurisdictional power to settle legal disputes which would otherwise be submitted to State courts, hence bearing jurisdictional effects. This dual nature is further demonstrated by the variety of rules governing arbitration agreements, mainly contracts and procedural law, to such extent that it is a commonplace to assert nowadays that arbitration is dual or sui generis. These two aspects further need to be assessed by taking into account the unique legal framework enacted over the years to safeguard or limit the legal effects of arbitration agreements. This Chapter further dives into the sui generis nature of arbitration agreements and the dialectical tension between the contractual and jurisdictional aspects of arbitration as a dispute settlement mechanism. While the validity and applicability of arbitration agreements, mostly inspired by contracts law and the principle of party autonomy, determine the arbitrators’ jurisdiction, the legal mechanisms triggered by arbitration agreements are mainly focused on safeguarding the arbitral tribunal’s jurisdiction.

The insolvency of a party has considerable effects on all its legal relationships. The restriction imposed by the national insolvency law naturally also affect the ability to pursue claims in arbitration. The entry discusses in its first parts the various types of restrictions contained in the national insolvency laws and their effect on the arbitration agreements, the arbitral tribunals jurisdiction, the arbitration proceedings and the parties involved as well as the underlying policies. In presenting the various approaches adopted, which often differ considerably, exemplary provisions and cases for each approach are presented without focusing on specific jurisdictions. The second part is devoted to the important conflict of laws questions in international cases where the place of arbitration and the place of the insolvency are located in different jurisdictions. They are adressed both from the perspective of the state courts as well as from the perspective of the arbitral tribunal.

The severability of the arbitration agreement, a cornerstone principle of international arbitration that is considered in the first chapter of this book, is more firmly established now than it was three decades ago. Yet respondents still from time to time call that principle into question by attempting to vitiate the arbitral process by invoking a (supposed) defect in the underlying contract or treaty, while difficult issues also remain concerning the precise scope and limits of the principle. These issues underscore the merit in analyzing and revisiting what remains a jurisprudentially subtle and practically important question.