Reference no: EM133682962

Explain these in more detail including their case laws, Beyond Filanto: Additional Benefits of Option 1

The Filanto case exemplifies the flexibility of Option 1, but its advantages extend further. Here are some additional reasons why Option 1 aligns better with the validation principle:

Focus on Party Intent: Option 1 encourages courts to delve deeper into the specific circumstances of each case. By considering factors like the parties' negotiations, the nature of the transaction, and any prior dealings, courts can make a more informed decision about the law that best reflects the parties' intended outcome for the arbitration agreement (Srivastava and Srivastava, 2020).

Alignment with International Trade Practices: International commercial transactions often involve parties from diverse legal backgrounds. Option 1 promotes a more nuanced approach that considers the broader commercial context. Courts can take into account established international trade practices and principles when interpreting the parties' intentions regarding the governing law (Saidov, 2021).

Promoting Efficiency and Cost-Effectiveness: By allowing parties to choose the governing law, Option 1 can potentially streamline the arbitration process. Parties familiar with a particular legal system can anticipate how the arbitration agreement will be interpreted and enforced, potentially reducing the risk of future disputes about the applicable law. This can lead to a more efficient and cost-effective arbitration process.