NEWSLETTER-2017

162 NEWSLETTER 2017 plicable to the arbitration agreement 11 . In this decision, the High Court has set out the three steps that are to be taken in determining the proper law of the arbitration agreement. Pursuant to this decision, if there is no express choice, the law applicable to the arbitration agreement should be determined through the parties’ implicit choice of law, and in default of an implicit choice of law by the parties, the agreement shall be governed by the law of the country with which the agreement has the closest connection. In this direction, the court ruled that the law of the seat of arbitration is the most closely related law to the arbitration agreement. The Patent Court of London took the same ap- proach in its decision dated 19 December 2013 against Habaş Sınai ve Tıbbi Gazlar İstihsal Endüstrisi A.Ş. 12 The courts of other countries also take this approach. For in- stance, in a Swedish Supreme Court decision of 27 October 2000, the court decided that even though the parties determined to govern the underlying contract by Austrian law, the arbitration clause should be governed by Swedish law 13 . On 28 September 1995, the Court of First Instance in Rotterdam decided that New York law was applicable to the arbitration agreement in consequence of the parties’ choice of the seat of arbitration as New York 14 . Likewise, even the Court of First Instance decided that the arbitral clause is invalid as per the Swiss law, which was the law applicable to the underlying contract. The Swiss Supreme Court reversed the decision stating that the law applicable to the arbitration agreement should be determined separately from the law applicable to the underlying contract considering the principle 11 Please see: The High Court of Justice in England Sulamérica Cia Nacional de Seguros S.A. et al. v. Enesa Engenharia S.A. et al. decision dated 16 May 2012, XXXVII YBCA 2012, p. 464-467. For a similar decision please see: High Court of Justice in England’s XL Insurance Limited v. Owens Corning decision dated 28 July 1999, XXVI YBCA 2001, p. 869-885. 12 Please see: The Patent Court of London Habaş Sınai ve Tıbbi Gazlar İstihsal Endüstrisi AŞ v. VSC Steel Company Ltd decision dated 19 December 2013 and numbered 2012-1055, Kluwer Arbitration ITA Arbitration Report, Volume XII, Issue 1 (www.kluwerarbitration.com ). 13 Please see: Swedish Supreme Court’s Bulgarian Foreign Trade Bank Ltd. v. A.I. Trade Finance Inc. decision dated 27 October 2000, XXVI YBCA 2001, p. 291- 298. 14 Please see: The Court of First Instance Rotterdam Petrasol BV v. Stolt Spur Inc. , decision dated 28 September 1995 XXII YBCA 1997, p. 762 ed seq.