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Identifying the law that governs an arbitration agreement is not a mere technical nicety. It determines the validity, scope and interpretation of the agreement to arbitrate, informs who has supervisory jurisdiction, and often dictates the availability of interim measures and challenges to awards. Three bodies of law are in play. First, the law governing the underlying contract (lex contractus) regulates substantive rights (for India, see Arbitration and Conciliation Act 1996 (ACA 1996), s 28). Second, the law governing the arbitration agreement addresses its formation, validity, interpretation and scope (as reflected in Article V(1)(a) of the New York Convention). Third, the law of the seat (lex arbitri) sets the procedural framework and supervisory court (in UK, Arbitration Act 1996 (AA 1996), ss 2–3; in the DIFC, DIFC Arbitration Law, Law No 1 of 2008, arts 24 and 27). In cross‑border contracting, these laws can diverge. The questions become pressing in two common scenarios: where the parties have specified both a seat and a governing law for the underlying contract; and where the seat is specified but the governing law of the underlying contract is not.
I. United Kingdom
Statutory framework and key provisions
The AA 1996 continues to supply the curial framework for arbitrations seated in England, Wales and Northern Ireland1. A significant recent reform is the Arbitration Act 2025 (AA 2025), which introduces s 6A to clarify the law governing the arbitration agreement. Section 6A provides a simple rule: the law governing the arbitration agreement is the law expressly chosen for that arbitration agreement. Failing any express choice, it is the law of the seat. Crucially, a clause choosing the governing law of the underlying contract is not, by itself, an express choice of law for the arbitration agreement. This reform replaces the more intricate common‑law approach developed in Sulamérica2 and Enka3.
Leading case law and approach
Before the 2025 reform, English courts applied the three‑stage Sulamérica methodology. Express choice, implied choice, and closest and most real connection. The Supreme Court in Enka v Chubb refined it. Enka endorsed a rebuttable inference that a governing law chosen for the underlying contract generally applies to the arbitration agreement, but where no such choice is made, the law of the seat will usually govern as the law most closely connected. In Kabab‑Ji SAL v Kout Food Group4 the Supreme Court held that an express governing‑law clause in the underlying contract governed the arbitration agreement absent a clear indication to the contrary, even where the seat was Paris. The AA 2025 has now simplified this analysis for future cases by providing that the law of the seat applies by default, unless the parties expressly choose a different law for the arbitration agreement.
Scenario analysis
Where both the seat and underlying contract's governing law are specified. Under s 6A, if the parties expressly choose a law for the arbitration agreement, that choice governs. If the underlying contract contains only a general governing‑law clause and is silent as to the arbitration agreement, that clause is not an express choice for the arbitration agreement. The default will therefore be the law of the seat. Practically, this reverses the Enka presumption that the underlying contract's governing law impliedly governs the arbitration clause and instead privileges the seat unless the parties say otherwise in clear terms.
Where the seat is specified but the underlying contract's governing law is not. The default rule is again straightforward: the law of the seat governs the arbitration agreement. The lex arbitri continues to apply to procedure and supervision. This position is confirmed by s 6A, which states that the law of the seat will govern the arbitration agreement unless the parties expressly opt for a different law.
Practical insights
This reform rewards drafting precision. If parties want the arbitration agreement governed by the same law as the underlying contract, they must say so expressly. Institutional rules may push towards the same result: for example, the LCIA Rules (2020), adopt a seat‑centric default for the law of the arbitration agreement5, which dovetails with s 6A of the Arbitration Act, 2025.
II. Dubai International Financial Centre (DIFC)
Statutory framework and key provisions
The DIFC Arbitration Law (DIFC Law No. 1 of 2008), as recently amended by Dubai Law No. (2) of 2025, is an UNCITRAL Model Law-based statute6 that prioritises party autonomy and empowers both tribunals and the DIFC Courts to grant interim measures7. The DIFC Courts exercise supervisory jurisdiction where the seat or place of arbitration is the DIFC; the seat or legal place of arbitration is not agreed but the proceedings take place within the DIFC; or the parties agree to the DIFC Court's involvement8.
Leading case law and approach
DIFC Courts have emphasised that choosing a DIFC seat brings the DIFC Court's supervisory jurisdiction, including the power to issue anti-suit injunctions,9 and a strong indication that DIFC law governs the arbitration agreement. In Oswin v Otila10, a 2025 decision concerning a shareholder dispute, the underlying Joint Venture Agreement mentioned DIFC as the seat. The defendants argued that the general choice of UAE law, combined with an exclusive jurisdiction clause favouring Abu Dhabi courts, displaced the DIFC Courts' jurisdiction. The DIFC Court concluded that the choice of a DIFC seat is not merely a choice of procedure but carries with it the lex arbitri and the law of the arbitration agreement. Absent "clear indicia to the contrary," the law of the seat (DIFC law) governs the arbitration agreement.
Scenario analysis
Where both the seat and underlying contract's governing law are specified. A DIFC seat means that DIFC curial law governs the arbitration procedure. If the underlying contract's governing law is not DIFC law, DIFC law will still govern the arbitration agreement unless the parties make a clear and separate choice to displace it. This position is similar to the current approach in the UK.
Where the seat is specified but the underlying contract's governing law is not. If the seat is the DIFC, the DIFC Arbitration Law applies as lex arbitri and, the law governing the arbitration agreement will ordinarily be DIFC Arbitration Law.
Practical insights
For DIFC seated arbitrations, the choice of seat does most of the legal work. A DIFC seat will ordinarily fix DIFC law as the curial law and as the law governing the arbitration agreement, and it will place supervisory jurisdiction with the DIFC Courts. If parties want UAE federal law or another system, such as English law, to govern the arbitration agreement, they should say so in clear terms that refer to the arbitration agreement itself rather than rely only on a general governing law clause.
III. India
Statutory framework and key provisions
The ACA 1996 draws a sharp territorial link. Part I applies where the seat is in India11; the lex arbitri includes provisions on seat, court support and interim measures, and the substantive law governing the merits12. The Supreme Court's Constitution Bench in Bharat Aluminium Co v Kaiser Aluminium Technical Services Inc (BALCO) confirmed that the seat determines the applicability of Part I and the exclusive supervisory jurisdiction of the courts at the seat13. Subsequent decisions have reaffirmed this seat‑centric approach while recognising limited statutory support for foreign‑seated arbitrations (including s 9 interim measures unless excluded by agreement), underscoring why the law governing the arbitration agreement still matters in cross‑border disputes.
Leading case law and approach
Indian courts have adopted the Sulamérica/Enka methodology to the law governing the arbitration agreement. Disortho S.A.S. v Meril Life Sciences (P) Ltd.14 carefully restated the three‑step analysis: look first for an express choice; failing that, infer an implied choice (with a strong presumption that lex contractus governs where the arbitration agreement is embedded in the underlying contract); and only then fall back on the closest‑connection test, under which the seat's law will often prevail. The Court reconciled this with the seat‑centric BALCO line by distinguishing the lex arbitri (supervision and procedure) from the law governing the arbitration agreement (validity, scope and interpretation). Decisions such as Mankastu Impex Pvt Ltd v Airvisual Ltd15 reinforce that where the seat is outside India and the arbitration agreement points to foreign curial law, Indian courts will generally decline supervisory functions. Indian courts have also embraced the Shashoua principle, originating in Roger Shashoua v Mukesh Sharma16, and developed domestically in BGS SGS Soma JV v NHPC Ltd17 in locating the juridical seat where a "venue" is named but the clause structure points to seat.
Scenario analysis
Where both the seat and underlying contract's governing law are specified. If the parties choose a foreign seat and specify a governing law for the underlying contract, Indian courts will first ask whether there is an express choice for the arbitration agreement. If there is none, the presumption is that the underlying contract's governing law governs the arbitration agreement, unless displaced, for example, because the chosen law would render the arbitration agreement ineffective, or because the law of the seat mandates that the arbitration agreement follows the seat. If the seat is India, Part I applies by force of section 2(2), and Indian law will govern the arbitration agreement unless the parties have unmistakably chosen otherwise for that agreement.18
Where the seat is specified but the underlying contract's governing law is not. Where the seat is outside India and no lex contractus is stipulated, the closest‑connection analysis generally points to the law of the seat for the arbitration agreement.19 Conversely, where the seat is in India, Part I applies and Indian law will both supply the lex arbitri and, typically, govern the arbitration agreement, subject to any express contrary choice for that agreement.
Practical insights
Indian jurisprudence places real weight on what the parties say, and, what they fail to say. A general governing‑law clause will often be treated as an implied choice for the arbitration agreement, but the presumption can be rebutted by risks of invalidity or seat‑based mandates. Draft with that presumption in mind, or displace it expressly.
IV. Comparative conclusion
The three jurisdictions can be plotted along a spectrum. The UK has moved decisively to a seat‑centric default for the law governing the arbitration agreement through s 6A (AA 2025): unless parties expressly choose otherwise for the arbitration agreement, the law of the seat applies. The DIFC lands in a similar place by virtue of statute and institutional rules: a DIFC seat ordinarily centralises DIFC curial law and supervision, and, in practice, points to DIFC law as the law governing the arbitration agreement unless the parties specify otherwise. India preserves the Sulamérica/Enka three‑stage analysis within a robust seat‑centric framework for curial law: where the arbitration agreement is part of an underlying contract, a general governing‑law clause exerts gravitational pull unless displaced by seat‑based imperatives or risks to validity20. Across all three systems, the seat unifies curial law and supervisory jurisdiction; the main divergence lies in the implied‑choice enquiry for the law governing the arbitration agreement.
For practitioners, the drafting lessons are simple and worth repeating. First, if you want the arbitration agreement to be governed by the same law as the underlying contract notwithstanding a different seat, say so expressly and specifically. This is now essential in the UK, DIFC and prudent everywhere. Second, name the seat unambiguously. Doing so fixes the supervisory court and, in most cases, resolves the law of the arbitration agreement. Third, when relying on institutional rules, be alert to their default choice‑of‑law provisions; these will often steer the arbitration agreement to the law of the seat. In practical terms, clarity on these three points reduces collateral skirmishing and lets the parties get on with the merits, the very point of agreeing to arbitrate.
Footnotes
1. Arbitration Act 1996 (UK), ss 2–3.
2. Sulamérica Cia Nacional de Seguros SA v Enesa Engenharia SA [2012] EWCA Civ 638.
3. Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38.
4. Kabab‑Ji SAL (Lebanon) v Kout Food Group (Kuwait) [2021] UKSC 48, [2022] AC 153.
5. LCIA Arbitration Rules (2020), art 16.4.
6. DIFC Arbitration Law 2008 (DIFC Law No 1 of 2008).
7. ibid arts 24 and 27.
8. Article 14 of Dubai Law No. (2) of 2025.
9. Narciso v Nash [2024] DIFC ARB 009; Brookfield Multiplex Constructions LLC v (1) DIFC Investments LLC (2) Dubai International Financial Centre Authority [2016] DIFC CFI 020 affirmed in Ledger v Leeor [2022] DIFC CA 013.
10. Oswin v Otila and Ondray [2025] DIFC ARB 032/2025.
11. Arbitration and Conciliation Act 1996, s 2(2).
12. ibid ss 9, 17, 20 and 28.
13. Bharat Aluminium Co v Kaiser Aluminium Technical Services Inc (2012) 9 SCC 552.
14. Disortho S.A.S. v Meril Life Sciences (P) Ltd 2025 SCC OnLine SC 570.
15. Mankastu Impex Pvt Ltd v Airvisual Ltd (2020) 5 SCC 399.
16. Roger Shashoua v Mukesh Sharma (2009) EWHC 957 (Comm).
17. BGS SGS Soma JV v NHPC Ltd (2020) 4 SCC 234.
18. Enercon (India) Ltd v Enercon GmbH (2014) 5 SCC 1.
19. Disortho S.A.S. v Meril Life Sciences (P) Ltd 2025 SCC OnLine SC 570.
20. Disortho (n 19); BALCO (n 13).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
