NEWSLETTER-2017

154 NEWSLETTER 2017 the law determined to be applicable to the substance of the dispute should also be applied to the arbitration agreement. Such issue may raise different problems. Firstly, it can be con- sidered whether it is possible to determine the law applicable to the underlying contract and law applicable to the arbitration agreement to be different from each other. In other words, can the parties determine the law applicable to the arbitration agreement in addition to the ap- plicable law to the underlying contract? Later, it should be considered whether it is possible for the law that is determined to be applicable to the underlying contract by the parties or arbitrators or state courts can also apply to the arbitration agreement. If such solution is impossible, should this law be determined separately on the basis that the law ap- plicable to the arbitration agreement is undetermined? Application of Law Applicable to the Underlying Contract and also to the Arbitration Agreement It can be considered that the applicable law determined by the parties without making a distinction between the underlying contract and arbitration agreement is not determined only for the underlying contract, but also for the arbitration agreement. Indeed, it is reasonable for an arbitration agreement to be subjected to the law determined by the parties -to be applied to the underlying contract- instead of being subject to a law that is not “chosen” by the parties. As a matter of fact, it can be accepted as a strong indication that the law determined by the parties to be applied to the underlying contract is also determined by them to be applied to the arbitration agreement. Accordingly, the acknowledgement of the principle of separability as an irreplaceable principle, and the idea of the underlying contract and the arbitration agreement to be subject to different laws, are criticized. Within this scope, there are arbitral awards and court decisions where the arbitra- tion agreement is held subject to the law determined by the parties to be applied to the underlying contract.