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Until recently Russian and CIS clients would often, without hesitation, choose London as the seat of arbitration and the London Court of International Arbitration Rules as the rules governing the arbitral procedure. Today, parties now opt for more non-traditional alternatives, and in so doing recognise that there is no strict correlation between the choice of the seat and the arbitration rules adopted by the parties.
The arbitration rules set out the parties’ agreement about the procedural framework of the arbitration. In the absence of the parties’ agreement, the arbitration act of the relevant seat provides the statutory framework for the arbitral procedure. The “seat” in actuality is a legal fiction of sorts. It is not the geographical location of the arbitration proceedings that is its venue; it is the law governing the arbitration procedure. This can be significant, as it will also determine the degree of involvement or intervention which the courts exercising jurisdiction at the seat will assert. The arbitration proceedings can take place in any country and indeed in many countries.
The BVI as the Seat of Arbitration
The BVI Arbitration Act 2013 (the “Act”) came into force on 1 October 2014, following the BVI acceding to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The Act takes account of modern developments in international arbitration: it is forward thinking, flexible and in many respects innovative. For example, the Act expressly states that the arbitral tribunal has the power to consolidate arbitral proceedings. It allows the parties to choose the law governing the contract other than the law of the seat of arbitration and gives the parties a choice to exclude an appeal of the award on points of law and serious irregularity. The Act also allows the parties to conduct arbitration proceedings anywhere in the world and gives the freedom to select a legal representative of their choice without restriction relating to nationality or qualification.
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Choosing the BVI as the Seat of Arbitration