Kabab-Ji SAL (Lebanon) v Kout Food Group. The UKSC in my view unconvincingly on governing law of an arbitration agreement.

Update 10 October 2022 In Decision no. 20-20.260 the French Supreme Court confirmed the Paris’ Court of Appeal’s opposite view at the end of September 2022: as Reed Smith summarise, faced with an express choice of Paris as the seat of arbitration, and even where the contract is governed by English law, it is the substantive rules of French arbitration law which govern the validity, effectiveness, transfer or extension of the arbitration clause. (Unless parties have made an express choice of law applicable to the arbitration agreement).

I am slowly getting through the in-tray with back cases, looking in this post at the UKSC judgment in Kabab-Ji SAL (Lebanon) v Kout Food Group [2021] UKSC 48. There is plenty of analysis on the case already out there, among Gilles Cuniberti and a team of CMS lawyers. I previously discussed the judgment appealed.

The SC dismissed the appeal and the judgment therefore stands: parties’ choice of English law for the underlying contract was found to also be an express choice of the law governing the arbitration agreement. I suggested that finding was optimistic on the facts of the case. Moreover it would seem at odds with the separability line previously towed by the English courts: there may be perfectly valid reasons for having a different lex causae for the underlying contract, the arbitration clause, the lex arbitri and indeed the lex curia. Identity should not be too readily assumed. The SC however would seem to have been swayed by the New York Convention’s call for straightforwardness in enforcement (here lies as the SC notes a difference with previous case-law which concerned the pre-enforcement stage).

Not only is the UKSC approach at odds with the French SC, as I noted in my review of the Court of Appeal judgment. I am also not convinced that for the enforcement stage the SC should insist one keeps things simple whilst at many other stages through its authority it encourages often convoluted argument.


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