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Determine the validity of the arbitration clause according to the law of the place of arbitration

[Basic case]
Osland signed the Strategic Supplier Agreement with Nova Verizon to reach an agreement on the purchase of relevant rare earth products, and agreed that all disputes related to the agreement would be finally settled by three arbitrators in Munich in accordance with the Arbitration Rules of the International Chamber of Commerce. Oslan purchased rare earth products from New Verizon. After the reconciliation between the two parties, Oslan still owed the payment for the goods. Nova Verizon filed a lawsuit, and Osland filed a jurisdictional objection, claiming that the international goods sales contract dispute involved in the case was a dispute arising from the implementation of the Strategic Supplier Agreement, and should be subject to the arbitration clause, and requested to dismiss the lawsuit of Nova Verizon.

[Judgment result]
The Wuxi Intermediate People’s Court held that the arbitration clause in the case agreed that the place of arbitration was Munich, Germany. According to the provisions of the Law on the Application of Law in Civil Relations Involving Foreign Affairs, German law should be applied to judge its effectiveness. According to the German Civil Procedure Law submitted by Osland and the legal opinions of German lawyers, find out the legal provisions of the German Civil Procedure Law on the effectiveness of arbitration clauses. The arbitration clause in the case meets the conditions for the validity of the arbitration agreement stipulated by German law. The dispute in this case is related to the Strategic Supplier Agreement, and the arbitration clause in the agreement shall apply. The people’s court has no jurisdiction over the case, and accordingly dismissed the lawsuit of New Verizon. Neither party filed an appeal.

[Typical significance]
In international commercial transactions, parties can choose the way to settle disputes by signing arbitration clauses and other methods. The arbitration clause is also an important part of the contract. If the arbitration clause does not stipulate the applicable law, the validity of the arbitration clause should be determined according to the law of the place of arbitration. The parties may submit foreign legal texts and legal expert opinions to help the people’s court identify and apply foreign laws, and finally determine whether the international commercial arbitration clause is valid. This case reflects the people’s court’s judgment concept of respecting the parties’ right of autonomy in choosing the dispute resolution method and supporting international commercial arbitration.



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