Worldwide: The Effect Of Brexit On International Arbitration

Last Updated: 6 June 2017
Article by Rini Agarwal

'When life gives you orange, make orange juice'1

Does life always give oranges, you may ask? To some, oranges are acidic but for a few a morning without orange juice is like a day without sunshine. They are packed with vitamin C and...but hang on; this was not my topic...back to business.

Not all news is interesting and as such some news calls for rethinking. These headlines may mean more than sunshine and oranges so perhaps may leave a reader shocked, in deep thinking, or intrigued. That is exactly what happened with the Brexit.

Britain's exit from the European Union shocked nations across the globe. The people of Britain voted for a British exit, or Brexit, from the EU in a historic referendum in June 2016. The outcome has prompted jubilant celebrations among Euro-sceptics around Europe and sent economic shockwaves around the globe. There are several concerns and issues which are unanswered and have left a lot of businesses with the impatient thought of what happens next. This article intends to present a brief on the implications surrounding international arbitration and the global importance of London as a seat of arbitration.

Numerous jurists have expressed their views that the position post-Brexit would remain unchanged when it comes to London as a seat of arbitration. In the midst of 2016, when Britain showcased their exit from the UK, London was the seat of 4,738 international commercial arbitrations, mediations, and adjudications. The main legislation that provides the framework for arbitration in the UK, the Arbitration Act 1996, is not triggered by EU law and will continue in force following the UK's exit from the EU. The Act remains supportive and it is unlikely to impose any adverse effects. Considering the interpretation of Arbitration Act over the last two decades, the English and Welsh courts have majorly developed arbitration friendly and noninterventionist approach, which we assume uninterrupted with Brexit.

It is imperative to consider that the UK remains a signatory to Convention on the Recognition of Enforcement of Foreign Arbitral Awards 1958 (more commonly known as the New York Convention), which provides for the enforcement of arbitral awards across currently 156 jurisdictions, including all EU Member States. When the parties choose their contracts to be governed by English or Welsh Law, the choice of London as the arbitral seat is preferred.  The popularity of English and Welsh law (and also English language) in international commercial transactions is unlikely to wane significantly post-Brexit. The most preferred for this jurisdiction is a pool of experienced arbitrators, counsel, and experts, which is also home to several popular arbitration institutions, such as the LCIA (London Court of International Arbitration) and CIArb (Chartered Institute of Arbitrators). Arbitration is likely to become a popular choice in light of Brexit, as it will provide stability and certainty. Most notably, we know that arbitration awards rendered in the UK will continue to be enforceable across the EU pursuant to the New York Convention. This contrasts with the enforcement of English and Welsh judgments, the regime for which will probably change once the UK exits the EU.

Brexit may also improve London's attractiveness as a seat for arbitration. Not only may third parties see English and Welsh law as being more certain and neutral if it no longer binds itself to the decisions of the Court of Justice of the European Union (and thus adopt 'English law, English seat' when drafting dispute resolution provisions), but the English and Welsh courts may also be willing to re-establish the use of anti-suit injunctions, currently prohibited under EU law, in respect of EU related jurisdictional disputes, to prevent parties from commencing actions in EU courts in breach of arbitration agreements.

Hurdles Ahead?

A member state wishing to leave the EU must trigger the exit process by notifying the EU under Article 50 of its intention to leave. The UK decides on the timing of the notification. Once served, the notice triggers a period of up to two years during which negotiations will take place between the UK and the remaining 27 member states as to the terms of its exit. The two-year period can be extended, but that requires unanimous agreement of all EU member states.

Further, implications on the contractual obligations and relationships would be a major concern where parties may avoid their obligations relying on force majeure clause or a material change clause or may argue that the contract is frustrated. The contractual mechanism will be considered carefully where the parties may seek to avoid any negotiations about contractual performances, once the parties assess the legal, economic and regulatory landscape of this political exit.

Changes in the regime would also establish the scope for investors to claim against the UK under its bilateral and multi-lateral investment treaties, based for example, on their expectations as to the stability of the regulatory system into which they invested. The fact that there may be uncertainty as to the content of English law after a withdrawal could in itself lead to disputes, as parties seek to test the position. The situation may arise where any UK legislation would be appealed or amended and it would no longer be required to comply with an EU directive. In addition, there may be scope for argument in the context of principles established by EU case law prior to the exit should continue to influence the UK courts' interpretation of UK law, unless, where UK legislation introduced post-exit is similar to an EU Regulation.

In regard to dispute resolution procedures, exit from the EU will mean that key EU legislation regarding jurisdiction and reciprocal enforcement of judgments (namely the Brussels Regulation) would no longer apply to the UK. It is likely that the UK would seek to reach an agreement with the EU on such matters, or seek to join existing conventions such as the 2007 Lugano Convention or 2005 Hague Convention on Choice of Court Agreements. In default of that, English law has its own domestic rules on jurisdiction and enforcement of judgments which would very likely apply in international cases in the English courts involving EU parties. Importantly such rules will respect any choice of court provision, and so in commercial cases where a choice has been exercised, there is unlikely to be any material effect on the conduct of cases.

Overall, although there may be some instability and uncertainty, it seems unlikely that Brexit would substantially damage the UK's position as a premier dispute resolution center. Arbitration with a seat in London should not be affected by the exit from the EU because the UK will remain a party to the New York Convention 1958, along with all the remaining EU Member States.


1 Inspired by the original quote of Elbert Hubbard

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.