The presumption of separability in international arbitration means that the validity of an international arbitration agreement is separate and analyzed independently from the rest of a contract. It may be the case that only the arbitration agreement itself is valid while the rest of the contract is not, or vice versa.
This presumption is recognized in all developed jurisdictions. The reason for this widespread recognition is the desire to promote an efficient dispute resolution system by upholding the validity of the agreement to arbitrate despite doubts regarding the validity of an underlying contract. As the validity of an agreement is often in doubt in disputes, the arbitration itself will not be undermined by a finding that the underlying contract is invalid.
Switzerland was one of the first jurisdictions to implement the presumption of separability, in the beginning of the 20th century. Swiss courts see the agreement to arbitrate as procedural in nature, rather than substantive, and rely on this qualification to uphold the presumption, today found in Article 178 of the Swiss Law on Private International Law.
In Germany, the notion of separability was recognized and accepted as early as the beginning of the 20th century. However, the arbitration agreement’s independence was subject to the parties’ intent. It was only in 1998 that Germany enacted the UNCITRAL Model Law and fully integrated the separability presumption.
The United States recognized this presumption also very early, in Section 2 of the Federal Arbitration Act. Courts have upheld the presumption in both international and domestic cases. Two main cases have set the tone in this respect, i.e., Robert Lawrence Co v. Devonshire Fabrics Inc (a Second Circuit decision) and Prima Paint Corp. v. Flood & Conklin Mfg. Co. (a US Supreme Court decision of 1967). In the latter case, the Supreme Court seemed to consider that an exception to the presumption would be the parties’ agreement to the contrary. The court’s reasoning was inspired by German court decisions.
In France, the presumption of separability was upheld by the Court of cassation in Gosset v. Carapelli in 1963. It was then codified in Article 1442 of the New Code of Civil Procedure.
In England, although first reluctant to accept the presumption of separability, the English Court of Appeal held in 1993, in Harbour Assurance Co v. Kansa General International Insurance Co, that the issue of the validity of a contract had no impact on the validity of the arbitration clause.
