NEWSLETTER-2017

156 NEWSLETTER 2017 The application of the law of the seat of arbitration to the arbitra- tion agreement is supported both in doctrine and in decisions. How- ever, the seat of arbitration is not always determined by the parties. In practice, the seat of arbitration can be determined by arbitration institutions or arbitral tribunals. Considering such, the law of the seat of arbitration should not be applied to the arbitration agreement where the seat of arbitration is undetermined by the parties. Application of the State Laws and International Principles to the Arbitration Agreement In some state laws, it is accepted that their national laws or in- ternationally accepted principles, such as the principle of good faith, should be applied to the arbitration agreement. For instance, Swiss, Spanish, Iranian and Turkish laws refer the arbitration agreement to their national laws, while in France, arbitration agreements are held to be subject to supranational principles, without making reference to any national laws. Except for France, the laws of Switzerland, Spain, Iran and Tur- key determine the applicable law to the arbitration agreement to be their national law. According to Art. 178/2 of the Swiss International Private Law, which regulates the applicable law to arbitration agree- ments, arbitration agreements are valid as per the law determined by the parties; if there is no indication thereto, the law applicable to the substance of the dispute, or Swiss law, will apply to the arbitration agreement. It is sufficient for the arbitration agreement to be valid as per any of these laws. Therefore, in the event of invalidity of the arbi- tration agreement under the law applicable to the underlying contract, it may be considered valid according to another law, as a reflection of the in favorem validatis approach of Swiss law . Similarly, according to Spanish Arbitration Act Art. 9/6, the va- lidity of an arbitration agreement is subject to the law determined by the parties, and if there is no such indication, to the law applicable to the substance of the dispute and, lastly, to Spanish law. Under Turkish law, according to the Act on International Arbitra- tion (“AIA”) Art. 4/3, the law applicable to an arbitration agreement is