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Conflict of Laws and Arbitral Discretion - The Closest Connection Test by Hayward, Benjamin (5th January 2017)

4 A Proposed Solution—A Bright-Line Test

From: Conflict of Laws and Arbitral Discretion: The Closest Connection Test

Benjamin Hayward

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2015. All Rights Reserved.date: 27 May 2020

Subject(s):
Contractual obligations — Legal risk in multi-state transactions — Litigation risk — Transaction risk — Applicable law in multi-state transactions

This chapter demonstrates that reform of the current regulatory regime for arbitral conflicts of laws should be via a bright-line test. These are accurate: their correct application generates a particular result, so they give ‘clearer notice’ to arbitrating and commercial parties regarding the applicable law. Adopting a test for arbitral conflicts would not be over-regulating. The wholesale adoption of detailed procedural rules—the kind of State court procedure arbitration seeks to avoid—is different from appropriately regulating a particular procedural question for which broad discretions do not quite fit. What is advocated here falls far short of an unachievable universal arbitration law, the New York Convention showing that harmonization attempts are feasible over a modest and appropriate range of procedural issues.

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