In Process & Industrial Developments Ltd. v. Nigeria  EWHC 2241 (Comm.), the High Court had to construe the arbitration agreement between the parties which provided that “[t]he venue of the arbitration shall be London, England or otherwise as agreed between the parties” and to decide whether Nigeria’s arguments that the seat of the arbitral proceedings was in Nigeria while the venue, which was only referring to the location of the hearings, was grounded.
The Court held that “venue” means the legal seat of the proceedings, what is confirmed by its being decided by the parties and not by the arbitrator, while the location of the hearings is a matter which is within the authority of the arbitrators.
The distinction between the legal seat and location of hearings is very widely agreed upon, like that the selection of the former being reserved as a rule to the parties and therefore not subject to different rulings from the arbitrators, while the arbitrator may decide that the hearings and even some deliberations of the arbitrators may take place elsewhere.
How far can this freedom go ? Has it no limits up to the result that the entire proceedings may take place outside the venue of an arbitration ?
It is submitted that the choice of the venue or legal seat of the proceedings may not be fiction and that it is necessary that at least a part of the proceedings takes place there.
If, on the contrary, the arbitrator decides to hold the entire proceedings outside the legal seat, is the law applicable to such proceedings – or at least its mandatory proceedings – those of the venue or of the place where the proceedings have taken place ?
In this event, should the place where the award is made be decisive to establish in which jurisdiction it may be challenged ?