The relationship between the elements of Section 9 of the Arbitration Act 1996, which requires a court to interpret its procedure where there is a valid and applicable compromise clause with respect to litigation, is a matter of some difficulties. The long judgment of Aikens LJ, which argues in favour of the Court of Appeal of the Joint Stock Company “Aeroflot Russian Airlines” against Berezovsky  EWCA Civ 784, provides a welcome clarification. In Mangistaumunaigaz Oil Production Association v. United World Trade Inc., the Tribunal upheld the clause which provided for “a rebuttion, if any, by ICC rules in London,” and rejected the argument that the words “if any” are inconsistent with an unconditional conciliation agreement. The court found that the words “if ever” were either “surplus” that could be ignored, or an acronym for “in the event of litigation.” On the other hand, in the Kruppa/Benedetti case, the Tribunal found that the following clause did not result in a binding conciliation agreement: “The parties will try to resolve the matter first through a Swiss arbitration. If there is no decision, the English courts are not exclusively competent. It is “logically not possible” to have an effective multi-stage dispute settlement clause at two binding levels (arbitration and court proceedings). Steyn J suggested that the “simple and simple” way to reconcile the clauses was to interpret clause 13 as a stand-alone arbitration agreement and clause 14 as a clarification of the arbitration agreement law. In view of its contractual situation, the strange reference to the English courts therefore did not address the validity of the arbitration agreement. However, not all “gaps” make a compromise clause ineffective.
Some of these imperfections can be solved by the interpretive instrument. As Professor Benjamin G. Davis said, “the fortuitous – but unpredictable – support of state courts, institutions and imaginative arbitrators could still make them work” (cited by the Singapore Court of Appeal in Insigma/Alstom). Singapore is also known for its courts` willingness to respect arbitration agreements. As explained by the Singapore Court of Appeal in the famous (and highly controversial) Insigma/Alstom case: In yegiazaryan/Smagin  EWCA Civ 1290, the Court of Appeal heard a complaint from Teare J`s decision on the importance of a dispute settlement clause. By mutual consent, the compromise clause was poorly worded and affirmed the union of a person who was not a party to the agreement to which the clause referred. The Court of Appeal accepted Teare J. that the provision is effectively considered a compromise clause.
Parties should therefore avoid unnecessary battles (and the costs associated with them) by adopting a conservative approach at all times during development, clearly identifying all the key elements of a valid arbitration agreement and staying away from potential pitfalls. For example, although Insigma`s hybrid arbitration clause was eventually upheld, the parties had to devote considerable time and cost to submit its interpretation to the ICC, SIAC, the tribunal, the Singapore High Court and the Singapore Court of Appeal before the fight could even begin on its merits. The reasons for the recognition and execution of a sentence are strictly limited, particularly in the case of a foreign arbitration award and its validity must be determined in accordance with the New York Convention. Tugendhat J in Accentuate Ltd/Asigra Inc  EWHC 2655 (QB) has been added to the list of prices that cannot be recognized and applied in England.