The Supreme Court held that the applicable law to determine the validity and scope of an arbitration agreement—in the absence of an express choice of law applicable specifically to the arbitration agreement—is generally the law chosen as the governing law of the main contract. The choice of a different country as the seat of arbitration is in itself not sufficient to negate an inference that the choice of law to govern the main contract also applies to the arbitration agreement. Additional factors which may negate such inference are (a) any provision of the law of the seat which indicates that, where an arbitration is subject to that law, the arbitration will also be treated as governed by that country’s law; or (b) the existence of a serious risk that, if governed by the same law as the main contract, the arbitration agreement would be ineffective.

 Where there is no express or implied choice of a law governing the contract, however, the arbitration agreement is governed by the law with which it is most closely connected, namely, the law of the seat of arbitration. In the case at hand, the Supreme Court held that the applicable law to the arbitration agreement was English law as (a) there was no express or implied choice of law governing the main contract and, consequently, the arbitration agreement; and (ii) the arbitration agreement had its closest and most real connection with English law, being the law of the seat. The Court observed, inter alia, that the conflict rules of Article V(1)(a) of the New York Convention, applicable to the enforcement of the award, are also applicable at the stage of enforcement of the arbitration agreement under Article II(3) of the Convention.

 The Court further observed that the law governing the arbitration agreement is not relevant for the exercise of jurisdiction by the English courts over an application for anti-suit injunction, i.e., it is irrelevant whether the arbitration agreement is governed by English law or by foreign law. Article II(3) of the Convention pertains to the recognition and enforcement of arbitration agreements and does not concern issues of jurisdiction.