Which law is applied in determining the validity of an arbitration clause?
In shipping practice, it is universally accepted that all matters of procedure are governed by lex fori, that is, the law of the place where the court is sitting; on the other hand, all matters of substance are governed by the law to which the court is directed by its choice of law rule. Therefore, to determine what law to apply in the matter of the validity of an arbitration clause, the court shall, first of all, decide whether the validity of an arbitration clause is a matter of substance or procedure. Also, Article 20 of the Arbitration Law of the People's Republic of China provides that "an arbitration agreement shall contain….(3) a designated arbitration commission." Under this provision, any arbitration clause without having designated an arbitration commission is null and void.
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