The Application of the Doctrine of Severability
Arbitration is considered one of the best means available to parties to resolve their disputes.
Courts are strongly encouraging arbitration too. However, there are uncertainties and grey
areas that might be detrimental to arbitration and may result in the parties’ tendency to avoid
recourse to arbitration. This happens when there are some clauses in the contract that may be
null and void or voidable to a certain extent.
For instance, after a dispute was referred to arbitration, the Tribunal finds that the Contract
was invalid. The tribunal then will only have one of the following two options:
(i) to issue an award to accept or reject the case; or
(ii) omit from issuing any award because it lacks jurisdiction.
Under the first scenario, the losing party may argue that upon invalidation of the Contract, the
arbitration clause becomes null and void too, therefore the Tribunal should not have any power
or authority to issue an award (due to lack of jurisdiction).
Under the second scenario, the parties may possibly insist that the invalidity of the Contract
shall not affect the proceedings, as the parties have agreed on arbitration, therefore the
Tribunal has the necessary jurisdiction to adjudge the pending dispute. Either way may be
detrimental to arbitration bearing in mind that the losing party (the party against whom the
award is made) would still wish to invalidate the whole arbitral proceedings and attempt to
nullify its conclusion, i.e. the award. Hence, the concept of severability comes in.
The Doctrine of Severability lies behind the concept that the arbitration clause is considered
separable and distinct from the Contract and not contingent upon the validity of the entire
contract. Therefore, any defects in the Contract may not affect the arbitration agreement,
unless otherwise, those defects nullify the arbitration agreement per se. In the end, this
concept empowers the Tribunal to issue an award without affecting its jurisdiction.
Accordingly, for Arbitration to be effective, there was a need to apply the doctrine of
severability. However, specific legal standards, exceptions, and limitations were required to
draw a clear distinctive line between the court’s role and involvement in arbitration, as well as,
to avoid negative impacts (such as the recognition of void contracts or allowing parties to
arbitrate some illegal matters).
This severability doctrine was well-recognized by local courts and is now expressly provided for
in the UAE Arbitration Law.
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