What are the advantages of adhering to the lex loci principle?
Using the lex loci principle gives the state more sovereignty to control arbitral activities in its territory, it provides certainty to the arbitration parties, and the legislation of most countries reflects the lex loci principle. A rather practical effect that comes from applying this principle is that the arbitration award rendered in China according to Chinese law will be deemed as a Chinese award and can therefore be enforced by other countries who are members to the 1958 New York Convention. Using other principles than the lex loci will make it more difficult to determine the nationality of the award, which can make enforcement more difficult.
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