In relating to an international contract that includes a provision that in 'All dispute in relation to user agreements will be referred to California by Arbitration
My question : If the disputes also involves an offence or a breach of law in a jurisdiction out side California , say United Kingdom , which is the place where the other aggrieved contractual party resides. can the clause be set aside ?
The clause refers to what might be a lawsuit, which can be adjudicated in appropriate government courts (cf. the choice of law clause), but instead would be submitted to an arbitrator. The contract will spell out the details. An offence is a punishable criminal act, which is outside the scope of civil suits. In US law, the government prosecutes the wrong-doer, not e.g. one of the parties to the contract (if for example the vendor ships an illegal substance to a customer). The same goes for a "breach of law", depending of course what you mean by breach of law. A breach of contract could not be pursued in court, given a mandatory arbitration clause. The fact that the two parties are in different countries does not nullify a mandatory arbitration clause, at least between the US and the UK.
Arbitration clauses are not just part of a contract, they are a contract in their own right: they can be upheld even if the arbitrator ultimately decides the contract they are in is invalid. This is known as the severability doctrine.
That said, they are contracts and can fail for all the same reasons any other contract can e.g. duress, fraud, misrepresentation etc. However, because they are separate from the contract they are in, this very rarely happens.
They are limited to the scope in the agreement. This one is quite narrow and only applies to disputes about “user agreement” - if the dispute between the parties is about something else then it falls outside the scope and would require agreement to be arbitrated. That is, the parties would need to enter another arbitration agreement to cover that dispute.
More broadly, keeping private disputes out of the courts is considered good public policy. As such, if there is a dispute resolution clause in a contract, whether it requires non-binding solutions (negotiation, mediation, conciliation) or binding resolution (expert determination, arbitration), courts will insist that they be followed.
