An arbitration agreement forms the basis of arbitral decision-making, as it reflects the parties’ consent to submit certain disputes to an arbitral tribunal rather than to a national court. The New York Convention and the UNCITRAL Model Law refer to a situation in which a validly concluded arbitration agreement subsequently ceases to have effect as an “inoperative arbitration agreement”. The Slovenian legislature transposed this category into the Slovenian Arbitration Act by providing that the arbitration agreement has “ceased to have effect”.
The master’s thesis distinguishes an inoperative arbitration agreement from an agreement that does not exist, is null and void, or is incapable of being performed. Under the doctrine of separability, whether an arbitration agreement has become inoperative must be assessed independently of the fate of the main contract, in accordance with the law governing the arbitration agreement and in light of the pro-arbitration presumption of its validity.
The central finding of the thesis is that an arbitration agreement may become inoperative for various reasons that produce different legal consequences. The thesis therefore first examines termination in the narrow sense, particularly unilateral and mutual termination and waiver of the right to arbitrate, before analysing other grounds on which an arbitration agreement may become inoperative in the broader sense. A particular ground may result in the termination of the agreement in its entirety, its ineffectiveness in relation to a specific dispute or claim, or the loss of a party’s right to rely on it.
In light of the pro-arbitration presumption of validity, an arbitration agreement may become inoperative only in exceptional and clearly established circumstances. Where the parties’ intention to resolve their dispute through arbitration can still be given effect, the arbitration agreement should, as a rule, be upheld.
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