LEX ARBITRI IN INTERNATIONAL ARBITRATION
The lex loci arbitri is the Latin term for "law of the place where arbitration is to occur" in the conflict of laws.
The core foundation for arbitration is appropriately referred to as lex arbitri, which is the law of arbitration. The seat of arbitration is sometimes called Lex Arbitri. It is of crucial significance to the Seat of Arbitration, for it is the courts of the seat that have supervisory authority over the arbitral process.
The underlying approach of the Model Law (and all of its national laws) is that the law applicable to each arbitration (lex arbitri) is the law of the country where the arbitration takes place (lex loci arbitri) and the choice of the location of arbitration (seat) of the arbitration.
For example, suppose Singapore is chosen as the seat of arbitration. In that case, the following will automatically adhere to that arbitration: the Singapore Arbitration Act ('AA') or the International Arbitration Act ('IAA') (as the case may be).
An early international opinion was expressed in the Geneva Protocol on Arbitration Clauses 1923 that the law applicable to arbitration should be that of the arbitral tribunal: “The arbitral process, including the constitution of the arbitral tribunal, shall be regulated by the will of the parties and by the law of the arbitral tribunal within the territory of which the arbitration takes place.” [Emphasis added].
In its decision, in the case of Bharat Aluminium Company Ltd v. Kaiser Aluminium Technical Service Inc ("Balco"), the Supreme Court held that the option of another country as the seat of arbitration necessarily imported the recognition that the law of that nation regulating the conduct and supervision of arbitrations would apply to the proceedings.
The link between the seat and the law in place is explicitly defined by Redfern and Hunter:
“To say the parties have chosen that particular law to govern the arbitration is rather like saying that an English woman who takes her car to France has ‘chosen’ French traffic rules law, which will oblige her to drive on the right side of the road, to give priority to vehicles approaching from the right, and generally to obey traffic laws to which she may not be accustomed. But it would be an odd use of language to say that this notional motorist had opted for ‘French traffic law.’ What she has done is to choose to go to France. The applicability of French law then follows automatically. It is not a matter of choice”.
The most critical influence of the arbitration seat is that the applicability of the arbitration law is decided by it. As soon as the seat of the arbitration has been fixed in that jurisdiction, the arbitration law of a particular jurisdiction, the lex loci arbitri, extends to arbitration. Therefore, setting the seat in a specific country creates a legal link between the arbitration on the one hand and the arbitration law and the courts of that country on the other territorial theory.
 (Art 2)
 (2012) 9 SCC 649.
 Redfern and Hunter, International Arbitration, p. 3.61 (Oxford University Press, 5th Ed, 2009).
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