Answer ... The Singapore courts apply a three-step approach. The courts will first give effect to the express choice of the parties; absent which the courts will look at all relevant facts and circumstances of the case to determine whether there is an implied choice as to the law of the arbitration agreement. If no implied choice can be determined, the courts will then apply the law that has the closest and most real connection to the arbitration agreement (BNA v BNB [2019] SGHC 142; BCY v BCZ [2017] 3 SLR 357). In this regard, the Singapore courts have held that, absent an express choice by the parties, where an arbitration agreement is a clause forming part of a main contract, it is reasonable to assume that the parties intended their entire relationship to be governed by the same system of law, and as such, the substantive governing law of the main contract is a strong indicator of the parties’ implied choice as to the law governing the arbitration agreement. The choice of a seat of arbitration different from the governing law of the main contract is insufficient to displace this presumption, which should be displaced only if the consequences of choosing the governing law of the main contract as the law governing the arbitration agreement would negate the arbitration agreement and the parties’ intentions to arbitrate their disputes.

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Answer ... Yes, the arbitral tribunal is bound to decide the dispute in accordance with the law chosen by the parties, as applicable to the substance of the dispute (Section 32(1) of the Arbitration Act; Article 28 of the UNCITRAL Model Law). Any reference to the laws of a particular state exclude its conflict of laws rules, unless otherwise expressed by the parties (Article 28(1) of the Model Law).

If the parties have not decided on an applicable law, the law applicable to the substance of the dispute will be decided by the arbitral tribunal, in accordance with the conflict of laws rules that it considers applicable (Section 32(2) of the Arbitration Act; Article 28(2) of the Model Law). Under the Model Law, a tribunal may decide the dispute ex aequo et bono or as amiable compositeur only upon express authorisation by the parties (Article 28(3) of the Model Law).

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