Revisiting the Arbitrability of Corporate Disputes: Proposing a Unified Approach

The concept of arbitrability is dynamic, and its applicability to corporate disputes – such as shareholder disputes – can vary among jurisdictions and change over time. This creates uncertainty about the validity of arbitration agreements and the enforceability of arbitral awards, leading to less frequent use of arbitration in corporate disputes as compared to broader commercial disputes. To determine arbitrability, this article recommends that tribunals facing a challenge to arbitrability should apply both the lex arbitri (law governing arbitration) and the lex societatis (law governing the corporation). This cumulative approach aligns with parties’ expectations and balances interests across jurisdictions, promoting consistency in outcomes. The article also recommends establishing a presumption of arbitrability for corporate disputes. This would promote the use of arbitration while recognizing the rights of non-parties. Modern arbitration practices allow non-parties to engage meaningfully through mechanisms like joinder and consolidation, addressing most concerns about the impact on non-participating parties. However, this presumption of arbitrability may be rebutted by the existence of certain factors, including the exclusive jurisdiction of national courts or the presence of significant interests affecting non-participating parties.