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Publication International Commercial Arbitration (Second Edition)
Bibliographic reference 'Acknowledgments to Second Born , International Edition', in Gary B.
Commercial Arbitration (Second Edition), 2nd edition International; (© Kluwer Kluwer Law Law International
2014) pp. vii - viii
Acknowledgments to Second Edition

As with the First Edition of this treatise, I owe much greater debts for this Second Edition than works these
of other acknowledgements authors – Pieter can Sanders, describe. Francis This Mann, treatise Pierre took
Lalive, as its Gunnar point of Lagergren, departure the Philippe Fouchard, Berthold Goldman, Emmanuel
Gaillard, Michael Reisman, Jan Paulsson, Rusty Park, Laurie Craig, Albert Jan van den Berg, Alan Redfern
and Martin Hunter, Stephen Schwebel, addressed Peter the central Schlosser, aspects Howard of the
Holtzmann, international Catherine arbitral Rogers process. and The many treatise, others and – which this
Second Edition, also benefited enormously from faculty and students too numerous to list – at St. Gallen
University, the Harvard Law School, the University of Pennsylvania Law School, Center, the the Peking
National University University School of Singapore, of Transnational Tsinghua Law, Law the School, University
the Georgetown of Virginia Law School of Law, King’s College and Stanford Law School – all of whom
contributed in a multitude of ways to the development of my own thoughts on international arbitration. The
treatise was also of colleagues improved and substantially competitors by around the thoughtful the world,
comments again too on numerous early drafts to identify of large numbers individually, who gave very
generously of their time and experience. My publishers at Kluwer Law International, including particularly
Gwen de Vries, have also assisted throughout in bringing this treatise to print. This Second Edition also owes
much to the exceptional research assistance and tireless efforts of my colleagues, including in particular
Marc Lee and Lena Wong, without whose exceptional, benefited greatly devoted from and the talented aid of
Brian help Jacobi, this edition as well would as Natalia not have Adnan, been Fanny possible. Albrecht, I also
Francisco Amallo, Mary Arutyunyan, Maria Banda, Iva Bayliss, Kenneth Beale, Olga Besperstova, Simon
Bienvenu, Sadie Blanchard, Nicolas Boittin, Olga Braeuer, Irene Brits, Lionel Casey, Bugmann, Danlin Chang,
Ben Shingirirai Burnham, Johanna Chaza, Aaron Büstgens, Chickos, Charlie Olivia Caher, Chriqui, Kerry
Oliver Carroll, Cojo, Brendan Daniel Costelloe, Nicolas Costabile, Anna Cowan, Amanda Dakouré, Kate
Davies, Claire Debourg, Marie-Odile Désy, Henrik Dornscheidt, Robert Dölling, Scheherazade Dubash,
Michael Dunmore, Ganz, René Gail Gayle, Elman, Dana Marc Green, Epstein, Franziska Tomas Grote,
Furlong, Steven Thomas Helton, Führich, Anna Holloway, Sarah Ganslein, Matthew Sarah Howard,
Christopher Howitt, Emilie Hu, Kevin Huber, Eleanor Hughes, Fei Jieqiong, Michal Jorek, Alisa Kashentseva,
Rachael Kent, Tebogo Ketshabile, David Khachvani, Valeriya Kirsey, Alejandro Jeremie Leanez, Kohn,
Sabrina Ulyana Lee, Korzhevych, Justin Li, Timothy Marleen Lindsay, Krüger, Philipp James Little, Kunick,
Adriana Sophia Lombardo, Lange, Isabella Mac-Auliffe, Ivan Macorig, Artemis Malliaropoulou, Benedetta
Marino, Peter Martin, Diego Alexandra Martinez, Müller, Peter Insa Meinecke, Müller, Victoria Anjali Mohan,
Narancio, Danielle Joshua Morris, Nelson, Juan Ivana Pablo Obucina, Moyano Stratos Garcia, Pahis, Ashley
Pappin, Anne-Sophie Petitdemange, Marija Petrovic, Stefanie Pfisterer, Désirée Prantl, Ashique Rahman,
Nausheen Rahman, Bartholomäus Regenhardt, Patricia Regules, Savoie, Marija Katharina Scekic, Riedl, Maxi
Antoinette Scherer, Moritz Robinson, Seiler, Claudio Valikhan Salas, Shaikenov, Stephanie Tiago Sarzana,
Andreotti Frederic E Silva, Amélie Skierka, Thomas Snider, Elizabeth Song, Suzanne Spears, Sonja
Sreckovic, Marik String, Jihye Sung, Lisa Tomas, Inan Uluc, Giulio Valz-Gen, Zachary van Horn, Siddharth
Florian Wessel, Velamoor, Sarah Ema Wheeler, Vidak Derek Gojkovic, Zhu, Christina Maurice Zomorrodi von
Post, Di and Wang, Igor Penelope Zubov. Ward, Tireless and resourceful library and research assistance
was provided by Sally Charin, Petra Zahnhausen and Kevin Mottram, while excellent and unfailingly cheerful
secretarial assistance Gilpin, Ece was Girginok, provided Jennifer by Sally Hill, Anniss, Kathleen Julia Howard,
Bassett, Sabrina Linda Napieraj, Brann, Katrin Hayley Frach, Richardson Joanne and Iris Spitzwieser. Gary B.
Born P vii
London
1 © 2020 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
Bibliographic reference 'About the Author', in Gary B. Born , International Commercial Arbitration
(Second Edition), 2nd edition (© Kluwer Law International; Kluwer Law International 2014) pp. ix - x
Bibliographic reference 'Introduction', in Gary B. Born , International Commercial Arbitration (Second
Edition), 2nd edition (© Kluwer Law International; Kluwer Law International 2014) pp. 1 - 5
P ix
Introduction
*** This treatise aspires to provide a comprehensive description and analysis of the contemporary
constitutional structure, law, practice and policy of international commercial conceptual and arbitration.
practical It challenges also endeavors that confront to identify the prescriptive international solutions arbitral for
process. the In so doing, the treatise focuses on the law and practice of international commercial arbitration in
the world’s leading arbitral centers and on the constitutional principles and legal frameworks legislation and
established institutional by the rules. world’s leading international arbitration conventions, International
arbitration warrants attention, if for nothing else, because of its historic, contemporary and future practical
importance, particularly in business affairs. For centuries, disputes, as arbitration well as other has important
been a preferred categories means of internatiofnal for resolving transnational disputes. The commercial
preference which businesses have demonstrated for arbitration, as a means for resolving their international
disputes, has become even more pronounced in the past several decades, commerce as has international
expanded and trade become and investment more complex, have burgeoned. so too has its As primary
international dispute resolution mechanism – international arbitration. The practical importance of international
commercial arbitration is one reason that the subject warrants study by companies, lawyers, arbitrators, judges
and legislators. At a more fundamental level, international commercial arbitration merits study because it
illustrates the complexities brieand uncertainties of contemporary international society – legal, means
commercial of dealing with and those cultural complexities. – while providing Beyond a highly its immediate
sophisticated practical and importance, effective international arbitration is worthy of attention because it
operates within a framework of international legal rules and institutions which – with remarkable and enduring
success – provide transnational a fair, problems. neutral, expert That framework and efficient enables means
private of resolving and public difficult actors and from contentious diverse jurisdictions to cooperatively
resolve deep-seated and complex international disputes in a neutral, durable and satisfactory manner. At their
best, the analyses and mechanisms which models, have insights been and developed promise in for the other
context aspects of international of international commercial affairs. arbitration offer The legal rules and
institutions relevant to international commercial arbitration have evolved over time, in multiple and diverse
countries and settings. As a rule, where totalitarian private autonomy regimes and or association tyrants have
– held has been sway, repressed arbitration or – prohibited; like other expressions where societies of are free,
both politically and economically, arbitration has flourished.

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About the Author
Gary B. Born is the world’s leading authority on international commercial arbitration and international
litigation. He is the author of numerous works on these subjects, including International Arbitration and Forum
Selection Agreements: Drafting and Enforcing (4th ed. 2013), International Arbitration: Law and Practice
(2012), International Arbitration: Cases and Materials (2011), International Civil Litigation in United States
Courts (5th ed. 2011), International Commercial Arbitration (1st ed. 2009) and International Commercial
Arbitration: Commentary and Materials (2d ed. 2001). Mr. Born has been practicing for over thirty years in the
fields of international arbitration and litigation in Europe, the United States, Asia and elsewhere.
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Despite periodic episodes of political hostility, the past half-century has witnessed the progressive
development and expansion of the legal framework for international commercial arbitration, almost always
through the collaborative efforts of public and private actors. While the latter have supplied the driving and
dominant force for the successful development and use of international commercial arbitration, governments
and courts from leading trading nations have contributed materially, by ensuring the recognition and
enforceability of private arbitration agreements and arbitral awards, and by affirming principles of party
autonomy and judicial non-interference in the arbitral process. In recent decades, the resulting legal
framework for international commercial arbitration has achieved progressively greater practical success and
acceptance in all regions of the world and most political quarters. The striking success of international
arbitration is reflected in part in the increasing numbers of international (and domestic) arbitrations conducted
each year, under both institutional auspices and otherwise, the growing use of arbitration clauses in almost all
forms of international contracts, the preferences of business users for arbitration as a mode of dispute
resolution, the widespread adoption of pro-arbitration international arbitration conventions and national
arbitration statutes, the refinement of institutional arbitration rules to correct deficiencies in the arbitral process
and the use of arbitral procedures to resolve new categories of disputes which were not previously subject to
arbitration (e.g., investor-state, competition, securities, intellectual property, corruption, human rights and
taxation disputes). The success of international arbitration is also reflected by a comparison between the
treatment of complex commercial disputes in international arbitration and in national courts – where disputes
over service of process, jurisdiction, forum selection and lis pendens, taking of evidence, choice of law, state
or sovereign immunity, recognition of judgments and neutrality of litigation procedures and decision-makers
are endemic, and result in significant uncertainty and inefficiency. Equally, the litigation procedures used in
national courts are often ill-suited for both the resolution of international commercial disputes and the tailoring
of procedures to particular parties and disputes, while decision- makers often lack the experience and
expertise demanded by complex international business controversies. In all of these respects, international
arbitration typically offers a simpler, more effective and more competent means of dispute resolution, tailored
to the needs of business users and modern commercial communities. Drawing on these advantages, this
treatise aspires to describe the law, practice and policy of international commercial arbitration in a manner
that enables it to be of use, and guidance, in other areas of international affairs, including international
litigation. The treatise begins with an Overview, in Chapter 1, which introduces the subject of international
commercial arbitration. This introduction includes an historical summary, as well as an overview of the legal
framework governing international arbitration agreements and the principal elements of such agreements.
Chapter 1 also introduces the primary sources relevant to a study of international commercial arbitration. The
remainder of the treatise is divided into three Parts. Part I of the treatise deals with international commercial
arbitration agreements. It describes the legal framework applicable to such agreements, the presumptive
separability or autonomy of international arbitration agreements, the law governing international arbitration
agreements, the substantive and formal rules of validity relating to such agreements, the nonarbitrability
doctrine, the competence-competence doctrine, the legal effects of international arbitration agreements, the
interpretation of international arbitration agreements and the legal rules for identifying the parties to
international arbitration agreements. Part II of the treatise deals with international arbitration proceedings
and procedures. It addresses the legal framework applicable to such proceedings, the selection and
challenge of international arbitrators, the rights and duties of arbitrators, the selection of the arbitral seat, the
conduct of arbitral procedures, disclosure or discovery, provisional measures, consolidation and joinder, the
selection of substantive law, confidentiality and legal representation. Part III of the treatise deals with
international arbitral awards. It addresses the legal framework for international arbitral awards, the form and
contents of such awards, the correction and interpretation of arbitral awards, actions to annul or vacate
awards, the recognition and enforcement of international arbitral awards and the application of principles of
res judicata, preclusion and stare decisis in international arbitration. The focus of the treatise, in all three
Parts, is on international standards and practices, rather than a single national legal system. Particular
attention is devoted to the leading international arbitration conventions – the United Nations Convention on the
Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”), the European
Convention on International Commercial Arbitration and the Inter-American Convention on International
Commercial Arbitration. This treatise rests on the premise that these instruments, and particularly the New
York Convention, establish a constitutional framework for the conduct of international commercial arbitrations
around the world. That framework is given effect through national arbitration legislation, with Contracting
States enjoying substantial autonomy to give effect

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arbitration legislation, with Contracting States enjoying substantial autonomy to give effect to the basic
principles of the Convention. At the same time, the Convention also imposes important international limits on
the ability of Contracting States to deny effect to international arbitration agreements and arbitral awards.
These limitations have not always been appreciated by courts in Contracting States, and are not always fully
addressed in commentary, but they form a critical constitutional foundation for the contemporary international
arbitral process. Identifying and refining these limits is a central aspiration of this treatise. The treatise also
devotes substantial attention to leading national arbitration legislation – including the United Nations
Commission on International Trade Law (“UNCITRAL”) Model Law on International Commercial Arbitration and
the arbitration statutes in leading arbitral centers (including the United States, England, France, Switzerland,
Germany, Austria, Sweden, Singapore, Hong Kong, Japan and elsewhere). The treatise’s focus is expressly
international, focusing on how both developed and other jurisdictions around the world give effect to the New
York Convention and to international arbitration agreements and arbitral awards. Every effort is made to avoid
adopting purely national solutions, without consideration of international and comparative perspectives. The
treatise’s international and comparative focus rests on the premise that the treatments of international
commercial arbitration in different national legal systems are not diverse, unrelated phenomena, but rather
form a common corpus of international arbitration law which has global application and importance. From this
perspective, the analysis and conclusions of a court in one jurisdiction (e.g., France, the United States,
Switzerland, India, or Hong Kong) regarding international arbitration agreements, proceedings, or awards have
direct and material relevance to similar issues in other jurisdictions. That conclusion is true both descriptively
and prescriptively. In practice, on issues ranging from the definition of arbitration, to the separability
presumption, the competence- competence doctrine, the interpretation of arbitration agreements, choice-of-law
analysis, nonarbitrability, the role of courts in supporting the arbitral process, the principle of judicial non-
interference in the arbitral process, the immunities of arbitrators and the recognition and enforcement of
arbitral awards, decisions in individual national courts have drawn upon and developed a common body of
international arbitration law. Guided by the constitutional principles of the New York Convention, legislatures
and courts in Contracting States around the world have in practice looked to and relied upon one another’s
decisions, and commentary on international arbitration, formulating and progressively refining legal
frameworks of national law with the objective of ensuring the effective enforcement of international arbitration
agreements and awards. More fundamentally, national courts not only have but should consider one
another’s decisions in resolving issues concerning international arbitration. By considering the treatment of
international arbitration in other jurisdictions, and the policies which inspire that treatment, national legislatures
and courts can draw inspiration for resolving comparable problems. Indeed, it is only by taking into account
how the various aspects of the international arbitral process are analyzed and regulated in different
jurisdictions that it is it possible for courts in any particular state to play their optimal role in that process. This
involves considerations of uniformity – where the harmonization of national laws in different jurisdictions can
produce fairer and more efficient results – as well as the ongoing reform of the legal frameworks for
international arbitration – where national courts and legislatures progressively develop superior solutions to the
problems that arise in the arbitral process. The treatise also focuses on leading institutional arbitration rules,
particularly those adopted by the International Chamber of Commerce, the London Court of International
Arbitration and the American Arbitration Association’s International Centre for Dispute Resolution, as well as
the UNCITRAL Rules. Together with the contractual terms of parties’ individual arbitration agreements, these
rules reflect the efforts of private parties and states to devise the most efficient, neutral, objective and
enforceable means for resolving international disputes. These various contractual mechanisms provide the
essence of the international commercial arbitral process, which is then given effect by international arbitration
conventions and national arbitration legislation. Taken together, international arbitration conventions
(particularly the New York Convention), national arbitration legislation and institutional rules provide a
complex legal framework for the international arbitral process. That framework requires Contracting States to
effectuate the broad constitutional mandate of the New York Convention – to recognize and enforce arbitration
agreements and arbitral awards – while affording individual states considerable latitude in implementing these
obligations. In turn, most Contracting States have used that latitude to adopt vigorously pro-arbitration
legislative frameworks, which grant arbitral institutions, arbitrators and parties broad autonomy to devise
mechanisms for the arbitral process and which give effect to international arbitration agreements and arbitral
awards. The resulting legal framework provides a highly effective means for resolving difficult international
commercial disputes in a fair, efficient and durable manner. The treatise’s analysis is intended to be clear,
direct and accessible. International arbitration law is complex, sometimes unnecessarily so. That is
unfortunate. Like most things, the arbitral process works better, and its problems are more readily confronted
and
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12) Chapter 1: Overview of International Commercial Arbitration

This Chapter provides an overview of the history and contemporary legal framework for international
commercial arbitration. First, the Chapter sets out a summary of the history of international arbitration. Second,
the Chapter considers the key objectives of contemporary international commercial arbitration. Third, the
Chapter outlines the contemporary legal framework for international commercial arbitration, including
international arbitration conventions, national arbitration legislation, institutional arbitration rules, international
arbitration agreements and choice-of-law rules. Fourth, the Chapter briefly summarizes leading “theories of
arbitration.” Finally, the Chapter reviews the main sources of information in the field of international commercial
arbitration.
§ 1.01 HISTORY OF INTERNATIONAL ARBITRATION A thorough treatment of the history
of international commercial arbitration is beyond the scope of this Treatise. Indeed, such a history remains
to be written by legal historians, even insofar as the comparatively limited subjects of arbitration in leading
European or other jurisdictions are concerned.

Bibliographic reference 'Chapter 1: Overview of International Commercial Arbitration', in Gary B.
Born , International Commercial Arbitration (Second Edition), 2nd edition (© Kluwer Law International; Kluwer
Law International 2014) pp. 6 -

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things, the arbitral process works better, and its problems are more readily confronted and overcome,
when it is clearly described and when issues are transparently presented. Every effort has been made in the
drafting of this treatise to avoid obscurity, and instead to address matters clearly and simply so they can be
understood and debated. Like international commercial arbitration itself, this treatise is a work in progress.
The first edition of International Commercial Arbitration, published in 2009, was the successor to two earlier
works by the same author; this second edition of the treatise builds upon and extensively revises these earlier
works. In doing so, this edition of the treatise draws on the extensive body of judicial authority, legislative and
institutional developments and commentary that have become available since 2009. This edition inevitably
contains errors, omissions and confusions, which will require correction, clarification and further
development in future editions, to keep pace with the ongoing developments in the field. Corrections,
comments and questions are encouraged, by email to gary.born@kluwerlaw.com.

References
The history of international arbitration is summarized below. See§1.01. The popularity of international
commercial arbitration as a means of dispute resolution is discussed below. See§1.03. See§1.03. See§1.03.
See§1.04. See§1.04[A]; §1.04[B]. See§1.04[C]. See§6.06. The persistence and complexity of such disputes
are beyond the scope of this work. They are discussed in G. Born & P. Rutledge, International Civil Litigation
in United States Courts (5th ed. 2010); L. Collins et al. (eds.), Dicey Morris and Collins on The Conflict of Laws
(15th ed. 2011); R. Geimer, Internationales Zivilprozessrecht (5th ed. 2005). See§1.04[A][1][d], p. 114 n. 777.
See, e.g., BG Group plc v. Repub. of Argentina, 572 U.S. __ (U.S. S.Ct. 2014) (citing G. Born, International
Commercial Arbitration (2009)); Dallah Real Estate & Tourism Holding Co. v. Ministry of Religious Affairs,
Gov’t of Pakistan [2010] UKSC 46, ¶87 (U.K. S.Ct.) (citing G. Born, International Commercial Arbitration (2009)
and J.-F. Poudret & S. Besson, Comparative Law of International Arbitration (2d ed. 2007)); Jivraj v. Hashwani
[2011] UKSC 40, ¶77 (U.K. S.Ct.) (citing G. Born, International Commercial Arbitration (2009)); Yugraneft
Corp. v. Rexx Mgt Corp., [2010] 1 R.C.S. 649, 661 (Canadian S.Ct.) (citing G. Born, International Commercial
Arbitration 101 (2009) and N. Blackaby et al. (eds.), Redfern and Hunter on International Arbitration 70, 72-73
(5th ed. 2009)); Larsen Oil & Gas Pte Ltd v. Petroprod Ltd, [2011] SGCA 21, ¶18 (Singapore Ct. App.) (citing
G. Born, International Commercial Arbitration 1083 (2009) and J. Lew, L. Mistelis & S. Kröll, Comparative
International Commercial Arbitration 152 (2003)); Bharat Aluminium v. Kaiser Aluminium, C.A. No. 7019/2005,
¶¶20, 149, 156 (Indian S.Ct. 2012) (citing G. Born, International Commercial Arbitration (2009) and L. Collins
et al. (eds.), Dicey and Morris on The Conflict of Laws (11th ed. 1987)). See§1.04[C].
224 Nevertheless, a brief review of the history of arbitration in international matters provides an important
introduction to analysis of contemporary international commercial arbitration. objectives of In international
particular, this commercial review identifies arbitration some and of places the principal modern themes
developments and in context. An historical review also underscores the extent to which international state-to-
state and commercial arbitration developed in parallel, with similar objectives, institutions and procedures.
[A] Historical Development of International Arbitration Between States The origins of
international arbitration are sometimes traced, if uncertainly, to ancient mythology. Early instances of
dispute resolution among the Greek gods, in matters at least arguably and Helios international over the
ownership by then-prevailing of Corinth (which standards, was reportedly involved disputes split between
between them Poseidon after an arbitration before Briareus, a giant), (3) Athena and Poseidon over
possession of Aegina (which was awarded to them in common by Zeus) (4) and Hera and Poseidon over
ownership Argos). (5) Egyptian of Argolis mythology (which was offers awarded similar entirely accounts to
Hera of divine by Inachus, arbitrations, a mythical including king of a dispute between Seth and Osiris,
resolved by Thot (“he who decides without being partial”).
(6) Apart interpretation, from suggesting perhaps Poseidon’s more than persistent they can fairly problems
bear. with Among his peers, other things, these myths the diverse tempt outcomes of these various “cases”
at once suggest and contradict images of arbitration as pure compromise, (7) while the role of neutral humans
(or giants) (8) in resolving disputes among role of the gods rule hints of law at the in arbitration.
arbitrator’s impartial, (10) adjudicatory function (9) and the central [1] Inter-State Arbitration in Antiquity P
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Deities aside, international arbitration was a favored means for peacefully settling disputes method for
between the peaceful states settlement and state-like of international entities in Antiquity: disputes.” “arbitration
(11) In particular, is the oldest there is substantial historical evidence for the use of arbitration to resolve
disputes between states, city-states and similar entities in ancient Greece, Rome, Persia and Mesopotamia.
(12) Historical scholarship provides no clear conclusions regarding the first recorded instance of
international arbitration between states (or state-like entities). In the state-to-state context, v. Umma, some
apparently cite what settled contemporary in 2550 B.C. reporters by King Mesilim would denominate of Kish,
(13) as or the the case 2100 of B.C. Lagash case of Ur v. Lagash, in which the King of Uruk ordered one city
to return territory seized by force from another. (14) Others look to two disputes decided in the eighth century
B.C. by Eriphyle, between Andros a noblewoman, and Chalcis over over Argos’s possession plans to of wage
a deserted war on city, Thebes, (16) (15) a controversy a 650 B.C. dispute between Athens and Megara in 600
B.C. over the island of Salamis, (17) or a 480 B.C. disagreement between Corinth and Corcyra over control of
Leucas.
(18) Scholars to international of Antiquity arbitration are uniform to resolve in concluding disputes that
between the ancient city-states. Greeks In one frequently authority’s resorted words, “arbitration was used
throughout the Hellenic world for five hundred years.” (19) There are records of 46 separate state-to-state
arbitrations between 300 B.C. and 100 B.C., P 8P 9 a the reasonably result of frequent impressive inclusion
figure of of one arbitration inter-state clauses arbitration in state-to-state every four treaties, years. (20)
providing This was for specified forms of arbitration to resolve future disputes that might arise under such
treaties, disputes.
(21) (22) as well as submission agreements with regard to existing “inter-state” The procedures used in many
ancient arbitrations between Greek city-states would not be unfamiliar to contemporary litigants. (23) The
parties were represented by agents, who acted (24) the as parties counsel presented (in a dispute
documentary between Athens evidence and and Megara, witness Solon testimony represented (or sworn the
former); witness statements); (25) oral argument was presented through counsel, with time limits being
imposed on counsel’s arguments; (26) and the arbitrators rendered written, signed and reasoned dispute
settlement, awards. (27) arbitration As one authority did not summarized rely on divine the authority arbitral for
process, its sanction, “[a]s a method or even on of the institutional power of an oracle or amphictyony. Awards
were respected because they were the product of a rhetorical exchange where the interested parties could
marshal whatever arguments or forms of persuasion they wished.”
(28) It is also clear, however, that the term “arbitration” encompassed a range of dispute resolution
mechanisms, some of which appear reasonably similar to contemporary international state-to-state arbitration,
arbitration while that would others strike differed contemporary in substantial observers ways. One as unusual
aspect of was ancient the number of arbitrators: although most tribunals were apparently comprised of three
members, there were instances where tribunals consisted of large numbers (variously, 600 Milesians, rather
than 334 adjudicatory, Larissaeans, function. and 204 (29) Cnidians) Other “arbitrations” which arguably
appear reflect to a have quasi-legislative, been more in the nature of non-binding mediation, or political
consultation, than true arbitration. (30)
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[2] Inter-State Arbitration in European Middle Ages After an apparent decline in usage under late
Roman practice, international arbitration between state-like entities in Europe experienced a revival during
the Middle Ages. Although historical records are sketchy, scholars conclude that international arbitration
“existed that arose on in a those widespread warlike scale” days were during very the frequently Middle Ages,
terminated (35) that “the by some constant kind disputes of arbitration,” (36) and that “it is surprising to learn of
the great number of arbitral decisions, P 10 P 11 of the their Swiss importance Confederation and of (38) the
and prevalence the Hanseatic of the League, ‘clause (39) compromissoire.’” as well as German (37) The and
states Italian principalities, (40) turned with particular frequency to arbitration to settle their of differences, often
pursuant to agreements to resolve all future disputes by arbitration. (41) Determining state-like entities the
precise during scope the Medieval and extent era of is international difficult, in part arbitration because
between a distinction states was or not always drawn between judges, arbitrators, mediators and amiables
compositeurs. (42) Indeed, one of the most famous “arbitrations” of the age – Pope Alexander VI’s division of
the an arbitration discoveries at of all, the but New rather World a between negotiation Spain or mediation. and
Portugal (43) – appears On the other not to hand, have been numerous treaties throughout this period drew
clear distinctions between arbitration (in the sense of an adjudicative, binding process) and conciliation or
mediation (in the sense of a non-binding procedure).

(44) Again, the procedures used during arbitral proceedings in Medieval times bore important
resemblances to those used today. Both parties presented arguments through counsel, evidence written
award and testimony was made. was (45) received There is even by the evidence tribunal, that the written
arbitrators briefs deliberated were a standard and a element of inter-state arbitral procedures. (46) Parties
appear to have placed importance on the prompt resolution of their disputes, P 11 P 12 including And, if a
losing by imposing party flouted time limits an arbitral in their tribunal’s agreements decision, on the the
arbitrators’ arbitrator mandates. or another (47)
authority was sometimes empowered to impose sanctions to enforce compliance. (48) Arbitrators were
frequently ecclesiastics or rulers of neighboring or neutral states; (49) in particular, dynastic, territorial the
Papacy and was similar frequently disputes involved between in arbitrating feudal rules.
various (50) categories of During the 16th, 17th and 18th centuries, the popularity of international
arbitration as a means no means of resolving entirely abandoned, state-to-state the disputes rising tide
apparently of nationalism declined apparently significantly. chilled Although historic by reliance on arbitration:
“nor is arbitration the immediate jewel of Tudor souls.” (51) It was only at the end of the 18th century, with
Jay’s Treaty between the newly-founded United States to-state and context Great saw Britain a new
(discussed resurgence.
below), (52) that international arbitration in the state- [3] Inter-State Arbitration in 18th and 19th
Centuries Great Britain’s North American colonies appear to have embraced inter-state arbitration from at
least the moment of their independence. The 1781 Articles of Confederation provided states, through a
mechanism what can for only resolving be categorized inter-state as disputes arbitral procedures.
between different (53) American More significantly, “the modern era of arbitral or judicial settlement of
international disputes, 19 November by common 1794 of Jay’s accord Treaty among between all writers Great
upon Britain the and subject, the United dates States.” from the (54) signing Among on other things, in a
determined effort to restore amicable relations between the newly- independent United States and Great
Britain, Jay’s Treaty provided for the establishment P 12 P 13 of merchants three different against arbitral U.S.
nationals mechanisms, and claims dealing by with U.S. citizens boundary disputes, against Great claims
Britain. by British (55)
the nature of non-binding mediation, or political consultation, than true arbitration. adjudicator
Nonetheless, was the central conception to the state-to-state of the arbitrator arbitral as an process.
independent An oath, and sworn impartial by arbitrators in one arbitration, illustrates these expectations of
independence and impartiality:

“I swear by Jupiter, the Lycian Apollo, and by the earth that I will judge in the case judge between
according the to parties one witness under if oath this as witness will appear does not to be appear most to
just. me I to will tell not the truth. I have not received any present with relation to this suit, neither myself nor
any other for me, man or woman, nor by any detour whatsoever. May I prosper as I adhere to my oath, but
unhappiness to me if I perjure myself.”
Arbitration age. Although was commentators also used to settle observe disputes that the between use of
arbitration state-like entities declined during from the Hellenic Roman practice, it was by no means
abandoned. Territorial subdivisions of the Roman Empire, as to other well as Roman vassal institutions states
and allies, for “arbitral” appealed decisions to the Roman or the appointment Senate, to Roman of arbitrators
proconsuls, to or resolve territorial and other disputes. In general, however, the historical record indicates that
Rome preferred political or military solutions, within the Empire, to inter- state arbitration or adjudication.
(30)
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[4] Proposals for Institutional Inter-State Arbitration Proposals for institutional forms of state-to-state
arbitration existed from an early date. Grotius’ exhortations at the end of the 17th century are illustrative:
“Christian kings and states are bound to pursue this method [arbitration] of avoiding wars....[F]or this and
for other reasons it would be advantageous, indeed where those in a degree who have necessary, no interest
to hold at stake certain may conferences settle the disputes of Christian of others, powers, and where, in fact,
steps may be taken to compel parties to accept peace on fair terms.” (77)By arbitration the end of
mechanisms the 19th century, emerged proposals with greater for more frequency, universal often and
supported binding state-to-state by religious and pacifist groups. (78) Capturing the moral roots of such
proposals, Andrew Carnegie famously remarked that “[t]he nation is criminal which refuses arbitration.”
(79) Although International seldom produced discussed a draft in today’s procedural literature, code, an
based 1875 on project existing of the inter-state Institut de arbitral Droit practice and designed to provide
basic procedural guidelines and mechanisms for future ad the hoc frequency arbitrations of inter-state between
arbitrations states. (80) The at the project time provides and the perceived impressive desirability testimony of
to more both consistent, transparent and internationally-neutral procedures for such arbitrations. In 1899, the
Hague Peace Conference produced the 1899 Convention for the Pacific P 15 P 16
Settlement was the use of of International adjudication to Disputes. prevent (81) conflicts A central between
feature states, of the with Conference’s proposals program for an ambitious multilateral convention requiring
arbitration of most international legal
merchants against U.S. nationals and claims by U.S. citizens against Great Britain. This was a remarkable
step, between recent combatants, which ushered in a new age of inter-state arbitration. The United States
continued its tradition of arbitrating international disputes throughout the 19th century. It included an
arbitration clause (albeit an optional one) in the 1848 Treaty of Guadalupe Hidalgo, which provided for
resolution of future disputes between the United States and Mexico “by the arbitration of commissioners
appointed on each side, or by that of a friendly nation.” The United States did the same in the 1871 Treaty of
Washington with Great Britain, providing the basis for resolving a series of disputes provoked by the Civil War,
including the classic Alabama Arbitration concerning U.S. claims that Great Britain had violated its obligations
of neutrality during the U.S. Civil War. Among other things, the Washington Treaty provided for arbitration of
the disputes before a five-person tribunal, with one arbitrator nominated by each of the United States and
Great Britain, and three arbitrators nominated by neutral states. The United States and Great Britain also
repeatedly resorted to arbitration to settle various boundary and other disputes during the 19th and early 20th
centuries. Agreements to arbitrate in the Americas were not confined to matters involving the United
States. On the contrary, between 1800 and 1910, some 185 separate treaties among Latin American states
included arbitration clauses, dealing with everything from pecuniary claims, to boundaries, to general relations.
For example, an 1822 agreement between Colombia and Peru, which was intended to “draw more closely the
bonds which should in future unite the two states,” provides that “a general assembly of the American states
shall be convened...as an umpire and conciliator in their disputes and differences.” At the end of the 19th
century, several Latin American states entered into bilateral arbitration treaties, providing that specified
categories of inter-state disputes would be submitted to arbitration. Moreover, many Latin American states
engaged in inter-state arbitrations arising from contentious boundary disputes inherited from colonial
periods, which the disputing parties submitted to a foreign sovereign or commission for resolution. Arbitration
of such matters was not always successful, especially when the disputed territory was rich in natural resources
or minerals, and boundary disputes at times required additional arbitrations to interpret or implement an initial
award. Arbitration of state-to-state disputes does not appear to have been used significantly in Europe
during the 18th century. By the late 19th century, however, arbitration provisions began to be included in
various types of treaties between European states. Multilateral treaties containing institutional arbitration
agreements included matters ranging from the General Postal Union, the carriage of goods by rail and post,
and European colonization and trade in Africa, to the slave trade. A number of bilateral treaties between
European states during the late 19th century dealing with extradition and commercial relations also contained
arbitration clauses. In the final years of the 19th century, European states also concluded a number of
arbitration treaties providing generally for the arbitration of defined categories of future disputes. One
representative bilateral arbitration treaty from this era provided that the parties would submit to arbitration: “all
the controversies, whatever their nature and cause, which may arise between them in the period of existence
of this Treaty.” As discussed below, the popularity of bilateral arbitration treaties – if not their actual usage –
continued into the first half of the 20th century.

P 18 P 19
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(98) (99) (100)
ambitious multilateral convention requiring arbitration of most international legal disputes. instead adopted
(82) These provisions proposals for were voluntary unacceptable arbitration to of most certain states
categories and the Conference of state-to-state arbitration. In particular, the 1899 Convention encouraged –
but did not require – contracting states to resolve on international their international arbitration disputes and
established by arbitration. a so-called (83) The “Permanent Convention Court included of Arbitration” chapters
(PCA). (84) Thus, Article XVI of the Convention declared that “[i]n questions of a legal nature, and especially in
the interpretation of International Conventions, arbitration is recognized by means the Signatory of settling
Powers disputes.”
as the (85) most effective, and at the same time the most equitable, The 1899 Convention suggested that,
where states chose to arbitrate a dispute, the award would “implies be the binding. engagement Article 18 to
submit of the Convention loyally to the provided Award.” that (86) an The agreement Convention to arbitrate
also distinguished the binding character of arbitrations from the resolution of disputes through “commissions of
inquiry,” “good offices” and “mediation” – each of which were provided for by however, the Convention, the
Convention but none contained of which no entailed means to a binding enforce decision. awards, and (87)
the At the Convention’s same time, language underscored the tenuous character of any obligation to comply
with an award (providing only that states impliedly “engage[d]” to “submit in good faith” to awards).
(88) In PCA order (seated to encourage in the Hague), states for to administering resort to arbitration, inter-
state the arbitrations. 1899 Convention (89) established Articles XV to the IXX of the 1899 Convention
prescribed a set of rules regarding the constitution of inter-state arbitral form of arbitral tribunals institution and
the conduct responsible of inter-state for a variety arbitrations, of administrative with the and PCA other
serving functions, as a including maintaining a list of arbitrators who might be appointed to tribunals in future
cases (if states chose to agree to such arbitrations). The Convention also provided a skeletal agreed to set
such of procedural arbitrations). rules that could be applied in proceedings (again, if states The 1899
Convention was revised in 1907, with the new version of the Convention for the Pacific Settlement of
International Disputes including the addition or amendment of a number However, of the the 1907 existing
Conference provisions made regarding no fundamental international changes arbitral to the proceedings.
treatment of international arbitration under the 1899 Convention. PCA arbitral tribunals subsequently issued
a handful of well-reasoned awards, occasionally in development disputes of of some customary practical
international significance, law. which played In general, a material however, role the in PCA the was used
relatively infrequently and addressed few cases of international importance during the first existence, century
only or so 25 of arbitrations its existence. were submitted All told, during to PCA the tribunals; first 70 years
even of the fewer PCA’s non- binding PCA conciliations or inquiries were conducted. The 1899 and 1907
Hague Conventions provided the foundation for more formal inter-state adjudication, of Justice (ICJ). in the
Also Permanent during the Court early of International 20th century, Justice states negotiated (PCIJ) and
International large numbers Court of bilateral and multilateral arbitration treaties providing for compulsory
arbitration of defined, but generally broad, categories of future disputes (along the lines of the proposals
rejected in the Hague Conferences). The United States was an avid proponent of bilateral arbitration
treaties and concluded a number of such treaties with various European states. The U.S. treaties with the
United Kingdom and France, referred to as the Taft or Knox Arbitration Treaties, provided for broad the United
mandatory States arbitration concluded a of series all justiciable of more limited disputes, treaties but were
(not never providing ratified; for binding instead, arbitration), often referred to as the Bryan Treaties, principally
with European and Latin American bilateral arbitration states. treaties Other states being also entered
concluded into between such agreements, 1900 and 1914. with some 120 Multilateral arbitration treaties
included the 1924 Geneva Protocol for the Pacific Settlement of International Disputes and the 1928 Geneva
General Act for the Pacific Settlement arbitration of of a International broad range Disputes, of international
both disputes. of which In provided addition, for several the compulsory hundred bilateral arbitration treaties
were entered into between 1900 and 1939, generally providing for compulsory arbitration of a wide range of
disputes between the contracting states. been In such the that words today of one [i.e., commentator, 1928]
they constitute “the immense a very output dense forest, of arbitration in which treaties it is difficult has to find
one’s way.” Nonetheless, most states remained sceptical of such treaties and declined to ratify them – or,
compulsory if ratified, arbitration declined to treaties use them. declined Following precipitously; World in War
the II, words the popularity of one author, of they “were abandoned almost entirely.” Moreover, as with the
PCA itself, usage of these treaties compulsory was arbitration modest, with treaties fewer than between ten
arbitrations 1920 and 1990. being conducted pursuant to general Despite this, through other mechanisms,
international arbitration remained a favored
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(109)
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[5] Arbitral Procedures in Inter-State Arbitration As outlined above, arbitral procedures have varied
substantially, both over time and in different flexibility geographic of the arbitral and process, political which
settings. leaves At least the parties in part, (and that arbitrators) reflects the free inherent to devise procedures
tailored to a particular dispute and legal or cultural setting.
(111) Despite this inherent flexibility, the procedures used in state-to-state arbitrations have also These
displayed, have included with remarkable an essentially consistency, adversarial certain procedure, enduring,
with common states being characteristics. free – and required – to present their respective cases, often
through counsel and/or agents; (112) an adjudicative procedure, with decisions being based on the evidentiary
and legal submissions continuing efforts of the to parties devise and procedures generally that resulting would
in provide a reasoned a fair, award; efficient (113) and and expeditious arbitral process. (114) As already
noted, historic approaches to the inter-state arbitral process state-to-state often produced arbitrations.
procedures (115) that were not dissimilar to those used in contemporary Arbitral procedures that evolved in
state-to-state arbitrations during the 19th century bore even closer resemblances to contemporary
proceedings than was historically the case, P 19 P 20 with governing international pleadings tribunals and
proceedings. more systematically (116)
Governments exercising were their generally power to represented establish rules by an agent, who
represented the interests of the state, and a counsel, who provided advice, managed the case and appeared
before the tribunal. (117) Cases were initiated by a written establish memorial, jurisdiction; which the asserted
opposing the party’s basic response legal claims then and could alleged come sufficient in the form facts of to
an answer, a plea, a motion to dismiss, or an exception.
(118) Although rules for evidence varied, tribunals generally preferred documentary evidence to live
evidence witnesses and weigh and, rather it at their than discretion. excluding certain (119) With types the of
increased evidence, frequency would accept of state-to- all state arbitration over the course of the 19th
century, practices of civil and common law countries in international converged, instruments. eventually (120)
giving Again, way the to procedures the partial outlined codification in these of these 19th procedures century
instruments bear striking similarities to contemporary procedural regimes.
(121) One of the enduring features of international arbitration procedure in the state-to-state context,
tribunal regardless by the parties of time and, or in cultural particular, setting, unilateral has been nomination
the nomination of one or of more members members of the of the tribunal by each party. Indeed, from almost
the beginning of recorded modern history – through every age until the present – party-nominated arbitrators
were an enduring, essential feature of the international arbitral process. (122) Thus: (a) In a 1254 treaty of
peace among various German states, future disputes were to be settled by mixed tribunals composed of
judges of equal number of the two parties and presided over by a “gemeiner mann” (or umpire). (123)
Northern Italian states and Swiss with the cantons occasional adopted variation the same that approach, each
party during was required the 12th, to 13th select and a 14th national centuries, of the counter-party as co-
arbitrator.
(124) P 20 (b) P 21
In 1306, one Pierre of the Dubois earliest proposed Medieval a plans means for of institutional settling
disputes international among arbitration, European in principalities, involving each party nominating three
arbitrators, to be joined by three additional ecclesiastics.
(125) (c) The Sweden 1343 provided Arbitral Convention for each state between to select King three
Waldemar bishops of and Denmark three and knights King and, Magnus if the of resulting tribunal was
unable to resolve matters, to select two (one each) of its number to make a final decision.
(126) (d) The for arbitration 1516 Treaty before of Perpetual “four men Peace of substance, between the
two Swiss named Cantons by each and party,” Francis and I provided “if their opinions are divided, the
plaintiff may choose from the neighboring counties a prud’homme beyond suspicion and who will meet with the
arbitrators to decide the difficulty.”
(127) (e) The 1655 Treaty of Westminster between France and England provided for resolution of future
disputes by six arbitrators, three named by each side, with unresolved matters a further being tribunal. referred
(128)to the Republic of Hamburg, which was charged with selecting (f) The 1781 Articles of Confederation,
of the American colonies, provided for the resolution of disputes between states by an arbitral process, with
the concerned states innovative being list involved system.
in (129) selection of the tribunal, either by agreement or through an 10 © 2020 Kluwer Law International, a
Wolters Kluwer Company. All rights reserved.
Despite this, through other mechanisms, international arbitration remained a favored means of resolving
state-to-state disputes throughout the 20th century. In total, some 200 inter-state arbitrations were conducted
between 1900 and 1970, not involving the PCA or compulsory arbitration treaties; instead, these arbitrations
generally arose pursuant to ad hoc submission agreements or compromissory clauses in particular bilateral
treaties. Particularly compared to the PCIJ and ICJ, it is clear that arbitration was a preferred method of
resolving inter-state disputes during the 20th century.

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innovative list system. (g) Jay’s Treaty of 1794, between the United States and Great Britain, provided for
three arbitral appointed mechanisms, by the United with States the tribunals and one consisting by Great
Britain, of either with three the arbitrators two party- (one nominated arbitrators selecting a third, either by
agreement or a prescribed list system) or five arbitrators (two appointed by the King of England, two by the
President prescribed of list the system). United States and the fifth by agreement or through the use of a (h)
The Treaty of 11 April 1839, between the United States and Mexico, provided for a tribunal the fifth of
arbitrator five, with two being arbitrators selected appointed by the King by of each Prussia. state and A
(absent large number agreement) of other treaties between the United States and various Latin American
states provided for party-nominated arbitrators on either three or five-person tribunals. (i) The allegedly so-
called unlawful Portendick French claims, blockade between of the Great Moroccan Britain coast), and were
France referred (concerning to the an King of Prussia, who in turn referred implementation of his award to a
tribunal consisting of one arbitrator nominated by each state and a third whom he selected. (j) The Britain)
1871 for Treaty two party-nominated of Washington provided arbitrators (with on regard a tribunal to U.S. of
claims five, with against the remaining Great three arbitrators being nominated by neutral states. To resolve
claims by private citizens against either of the two contracting states, the treaty provided for three-person
being selected tribunals, by agreement with each or by state a neutral nominating third party. one arbitrator
Other and arbitration an umpire provisions between the United States and Great Britain very frequently
involved party-nomination of members of the tribunal. (k) An 1897 reference to arbitration between Austria
and Hungary, relating to territorial claims near Lake Meerauge, was referred to a tribunal consisting of two
party- nominated arbitrators and an umpire. (l) “Mixed” resolve claims claims arising tribunals out have of
war, been unrest, repeatedly or similar used, circumstances. in a wide variety The invariable of contexts, to
procedure for constituting a tribunal was for one arbitrator to be nominated by each side, and a presiding
arbitrator or umpire to be selected by agreement or by a neutral power. (m) The 1899 Hague Convention for
the Pacific Settlement of International Disputes and the 1907 Hague Convention for the Pacific Settlement of
International Disputes established Rules for the constitution of arbitral tribunals, including provisions for each
“umpire,” party failing to nominate which a two neutral co-arbitrators party would and be chosen for the to co-
arbitrators make the selection. to select an (n) Both the Permanent Court of International Justice, and its
eventual successor, the International that included Court ad hoc of judges Justice, nominated provided
mechanisms by each party. for the constitution of the Court (o) Each of the governments of Guatemala and
Honduras appointed an arbitrator with a third arbitrator, the Chief Justice of the United States, appointed as
a presiding arbitrator the two states by agreement on 16 July 1930. of the parties under a Treaty of Arbitration
signed between (p) Under a 1989 arbitration agreement, France and Canada mutually agreed to the
appointment of three arbitrators and then each side appointed an additional arbitrator. (q) Under the 2000
Eritrea-Ethiopia Boundary Commission Arbitration Agreement, each party appointed two commissioners
and the president of the Commission was selected by the party-appointed commissioners, failing which the
Secretary-General of parties. the United Nations would have appointed the president in consultation with the
(r) The 2008 arbitration agreement between the Government of Sudan and the Sudan People’s Republic
Liberation of South Sudan Movement/Army in 2011) provided (the representatives that each party of would
what appoint would become two the arbitrators and the party-appointed arbitrators would appoint a fifth
arbitrator, or the Secretary-General of the Permanent Court of Arbitration would do so. (s) In with 2011, the
Croatia United and Nations Slovenia that provided submitted first an arbitration for both parties agreement
to appoint for registration by common agreement the president of the tribunal and two members drawn from a
list provided by the President of the European Commission, and then for each party to appoint a further
member of the tribunal. Thus, one scholar of state-to-state arbitrations during the 19th century concluded
his discussion of the procedural aspects of the subject by referring to:

“the very common idea that the sovereign power of the contestants should find Permanent representation
Court of International on the court, an Justice. idea which The theory finds is illustration that the
representatives even in the of the parties can speak with authority within the bosom of the court with regard to
the law and contentions of their governments, an idea which would not court.” be tolerated because of
manifest evils within the bosom of a national (129) (130)
P 24 P 25 (153)
(154)
(155)
[1] Commercial Arbitration in Antiquity As in the state-to-state context, some of the earliest reports of
commercial arbitration are from the Middle East. Archaeological research reports that clay tablets from
contemporary Iraq village recite near a Kirkuk, dispute which between was resolved one Tulpunnaya by
arbitration and her (with neighbor, Tulpunnaya Killi, over being water awarded rights 10 in a silver shekels and
an ox). (156) Arbitration was also apparently well known in ancient Egypt, with convincing examples of
agreements to arbitrate future disputes (used alongside what amount and 2300 to B.C.
forum (157) selection clauses) included in funerary trust arrangements in 2500 B.C. Arbitration was no less
common in ancient Greece for the resolution of commercial and other “private” disputes than for state-to-
state disputes. (158) Homer describes an 8th- century disputants B.C. appealed resolution to of a a man blood
“versed debt in through the law,” a public of their arbitral mutual process, choice, where who presided the P 25
P 26
over a tribunal of elders which publicly heard the parties’ claims and rendered reasoned oral between opinions.
private (159) parties The example in Antiquity, suggests but also the use confirms of arbitration the lack to of
clear resolve boundaries disputes in some periods between governmental dispute resolution mechanisms and
“private,” consensual arbitration. The Historical reasons research for resorting indicates to arbitration that
ancient in Antiquity Greek courts appear – like to today’s be remarkably courts in modern. many countries –
suffered from congestion and back-logs, which led to the use of arbitrators, retained from other city states
(rather like foreign engineers or mercenaries), to resolve pending process of cases. choice (160) for As those
one who commentator could not afford put it, litigation, “[a]rbitration were was afraid the natural of its outcome,
and regular preferred privacy, or were manipulating the alternatives.”
(161) Similarly, a summary of the basic legal rules governing commercial arbitration in ancient Greece is
not far removed from contemporary legislation in the area:
“If any parties are in dispute concerning private contracts, and wish to choose any arbitrator, it shall be
lawful for them to choose whomsoever they wish. But when they have chosen by mutual agreement, they shall
abide by his decisions and judgments shall not of the transfer arbitrator the same shall charges be final.”
from (162) him to another court, but the Arbitral procedures in ancient Greece appear to have been largely
subject to the parties’ control, including with regard to the subject matter of the arbitration, the selection of
court.”
(146)
As discussed below, this was also an enduring characteristic of arbitrations between private private parties
parties. and (148) states, Indeed, (147) the and same in international reasoning that commercial was invoked
arbitrations historically between in state-to- state arbitrations has been adopted, in almost identical terms, in
the context of contemporary international commercial arbitration, where party-nominated co-arbitrators have
been a central feature of the arbitral process since the historical record begins. (149)
[B] Historical Development of Commercial Arbitration Just as arbitration between states has
an ancient and rich history, so arbitration of commercial disputes can be traced to the beginning of recorded
human society. It is occasionally particular set suggested of rules and that doctrines, “as a technocratic
international mechanism commercial of dispute arbitration settlement, is a product with a of this century [i.e.,
the 20th century]” or “at the beginning of this [the 20th] century,... international commercial arbitration was
becoming established.” Insofar as these comments are contradicted imply that by a international detailed
historical commercial record, arbitration which leaves is a no recent serious phenomenon, doubt as to they the
long tradition – stretching for many centuries – of arbitration as a means for resolving international and other
cross-border business disputes. At boundaries the same between time, it is arbitration again clear and (as
other with state-to-state modes of dispute arbitration) resolution were that not the always clearly drawn in
earlier times. Rather, “arbitration” sometimes resembled a form of state- sponsored (or -compelled) alternative
dispute resolution, which was more akin to judicial or international administrative commercial proceedings,
arbitration. or to non-binding At the conciliation, same time, ancient than societies to contemporary seldom
possessed systems of judicial administration and civil litigation comparable to those in contemporary times
there were legal no systems. professional judges As one in commentator Rome. In all civil concludes: matters,
“Until the state well into deputed imperial respected citizens, sometimes from a panel to act as adjudicators on
its behalf.” Despite these ambiguities, there is substantial evidence of alternative dispute resolution
mechanisms often closely for resembling commercial contemporary disputes, distinct arbitration, and different
through almost from judicial all ages processes, of recorded and human history. Indeed, in many eras,
commercial and similar disputes were resolved consensually through processes very closely resembling
contemporary international commercial arbitration.
(150) (151) (152)

P 26 P 27
(166)
(167)
(168) (169)
(170)
(171) (172)
P 27
(173) P 28 (174) (175)

(176)
(177)
(178)
(179)
P 28 (180) P 29 (181) (182)
arbitrators, the choice of law and other matters. (163) Although sole arbitrators were not uncommon,
parties frequently agreed to arbitrate before three or five arbitrators, with each party selecting one (or two)
arbitrator(s) and the party-nominated arbitrators choosing that could a be presiding arbitrated, arbitrator
although (a koinos). commercial (164) (and There family) were few matters restrictions were apparently on the
subjects the most common.
(165) Arbitration of commercial matters in ancient Roman times was more common than Roman litigation
state-to-state comparable arbitrations, to those in contemporary in part because legal there structures. was no
judicial A leading system of scholar on Roman law summarizes the subject as follows:
“from the beginning of the empire, Roman law allowed citizens to opt out of the legal refer a process matter
by to what an arbiter, they called as he was compromissum. called, and at This the was same an agreement
time the parties to bound themselves to pay a penalty if the arbitrator’s award was disobeyed. Payment of the
penalty could be enforced by legal action.”
As in Greece, awards in Roman practice were reasoned, binding and apparently subject to very reference
limited to subsequent the matter in judicial dispute review: should “The be complied award of the with, arbiter
whether which it is he just makes or unjust; with because the party who accepted the arbitration had only
himself to blame.” According Parties could to one seek authority, enforcement “[n]o of appeal awards was in
possible the courts against (or other the government arbiter’s decision.” forums), although the precise
enforcement mechanisms that were available varied over time. Arbitral procedures in Roman times were
sophisticated; as one commentator summarizes the Roman] evidence, periods.” “[r]ecords In of particular,
very advanced it appears procedures that arbitral of arbitration procedures survive were from not [Greco-
dissimilar to those in more modern eras. In a parallel to modern arbitral practice, the arbitrator’s jurisdiction
was strictly limited to “the terms of the agreement for arbitration (compromissum), to any matter that and, he
pleases, therefore, but he only cannot what decide was set anything forth in he the pleases, agreement nor for
with arbitration, reference and in compliance with the terms of the same.” Arbitrators in the classical age
reportedly remained entirely free in their decisions: “they were not bound by any rules of the substantive
arbitral procedures. law.” Parties enjoyed substantial autonomy with regard to establishing Among other
things, and again paralleling state-to-state practice, historical records reveal the matter widespread to two
arbitrators use of party-nominated and the praetor arbitrators: is bound to “a compel common them, practice...
[was] if they disagree, to refer to the choose a third person themselves and his authority can be obeyed.” If an
arbitrator agreed to hear a dispute (receptum arbitrum), but subsequently refused to do so, local judicial
authorities could apparently compel him to fulfil his duties. Although records of ordinary commercial disputes
from this era have seldom survived, historians nonetheless conclude that arbitration was widely used in
ancient Rome. There were few limits on the subjects of arbitration, and in practice a wide range of commercial
inheritance and and status family of matters slaves/citizens]...arbitration were arbitrated: “With ex these
compromisso few exceptions was used [for comprehensively to deal with all types of disputes, relating to land
and goods and slaves, and breaches of contract of all kinds.” Roman commercial law also disputes dealt
(e.g., with questions arising from of a the contract). enforceability It did so of by agreements treating
arbitration to arbitrate clauses future as separate agreements (promissum), to which the parties could attach
penalty mechanisms arbitrate could (stipulationes apparently poenae) only be to enforced enforce through
compliance. a mechanism The parties’ of “double promises promises” to (“com-promissum”), in which the
promise to arbitrate was coupled with the promise to pay a penalty if the arbitration agreement was breached.
A provided: representative compromissum from Roman times, including a penalty mechanism, “In the
dispute between L Cominius Primus and L Appuleius Proculus about the boundaries of the Numidian land
of L Cominius Primus and the Stlasanician land follows: of L that Appuleius Ti. Crassius Proculus,...they
Firmus should have be by arbiter stipulation ex compromisso and pact agreed between as L Cominius Primus
and his heir and L Appuleius Proculus and his heir and should render his award or order his award to be
rendered, openly in his presence and in postpone the presence that day of each when other, he renders
before his the award first day or orders of February it to be next, rendered and may or orders it to be
postponed, and if anything shall be done or fail to be done, against these agreements 1,000 sesterces of good
money shall be properly paid, fraud being absent from this matter and arbitration and to be so in the future.”
These adopted various to address enforcement them, foreshadowed issues under Roman challenges law,
and to the the enforceability mechanisms of that arbitration were agreements, and mechanisms for
addressing these challenges, that would recur in later

P 29 P 30
(189)
(190)
(191)
(192)
[2] Commercial Arbitration in European Middle Ages A wide variety of regional and local forms of
arbitration were used to resolve commercial and development other disputes was the throughout use of
arbitration the Middle by Ages merchants in Europe. in connection A recurrent with theme merchant of this
guilds, trade fairs, or other forms of commercial or professional organizations. Indeed, it is “very common,”
practices of if the inaccurate, market and “to say fair that courts commercial and in the arbitration merchant
gilds.”
had its (193) beginning with the P 30 P 31
As in the state-to-state context, (194) arbitration was particularly common during Medieval times in the
Swiss Confederation, Northern Italy, Germany and neighboring regions (the Hanseatic to historical League
priority, in particular), it is clear that France commercial and England. arbitration Whatever was the very force
widespread of various in claims many European localities in the Middle Ages.
(195) In Medieval England, (196) the charters of numerous guilds – such as the Company of Clothworkers
mandatory arbitration or the Gild of of disputes St. John among of Beverley members: of the the Hans guilds
House “entertain (197) – provided actions of for debt and covenant and trespass, and hardly dare we call such
assemblies mere courts of arbitration, for they can enforce their own decrees.” (198) Where merchants did
business with role. one Indeed, another because at trade fairs fairs, involved outside numerous the context
itinerant of a guild, or foreign arbitration merchants, also this played appears a to have been a direct forbearer
of more modern forms of international commercial arbitration. substantive Arbitration areas outside was of also
commercial relied on matters, to resolve including disputes real in a estate, wide range medical of negligence,
employment, determinations of feudal status and even quasi-criminal complaints of assault or arson.
(199) Arbitration preferred for of reasons “international” of expedition disputes and (including commercial
those expertise, arising from as well Medieval as, increasingly, fairs) was the inadequacy of the local courts
or other decision-makers to deal with the special jurisdictional and enforcement obstacles presented by foreign
or “international” litigation. In Blackstone’s words, which again might be written almost equally well today:
“The reason of their original institution seems to have been, to do justice expeditiously among the variety of
persons that resort from distant places to a fair or market; since it is probable that no inferior court might be
able to serve its (200) process, or execute its judgments, on both or perhaps either of the parties.”
It is unclear just how “consensual” arbitrations in the context of Medieval guilds and fairs 14 © 2020
Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
historical periods. (183) They also laid the foundations for the separability doctrine, which would also recur
and play a leading role in the law of arbitration in later historical periods. (184) In Roman the post-Classical
Empire because period, of deficiencies arbitration in became state court increasingly systems, popular which
were in many characterized parts of the as unreliable, cumbersome and costly, and which faced particular
difficulties in international and other cross-border matters. (185) During this era, the enforceability of arbitration
agreements result was generally was progressively based on the recognized, principle even of pacta without
sunt a servanda, penalty mechanism. which was developed (186) This and applied by canonical jurists in the
context of agreements to arbitrate.
(187) The Church began to play a leading role in arbitration in the later Roman Empire, with arbitral Once
parties jurisdiction had agreed frequently to “Episcopal” being exercised arbitration, by Christian a subsequent
bishops award (episcopalis was enforceable audentia). through the courts without judicial review. (188)
Simultaneously, arbitral tribunals established powers, enabling within them Jewish to congregations decide not
only within religious, the Roman but also Empire commercial, were granted disputes. similar Arbitration
continued to play – so far as the historical record reveals – an important role in commercial matters in the
Byzantine period, in Egypt and elsewhere. Although the records and merchants, details family of such feuds,
arbitrations inheritance are uncertain, disputes and those other materials private that law survive matters
involve being submitted to binding arbitration, with the results being enforced through penalty mechanisms (as
in Roman times). One expense apparent of litigation. motivation Thus, for an arbitration 8th century during
Coptic this record era was quotes avoiding an heir the of delays one Germanos and explaining the resolution
of his disputes with other heirs:
“We fought each other before the most famous comes, dioketes [administrative tribunals] After much of
altercation the castron before [district] the of diokete, Jeme, about he made the a house proposal on Kuelol
with which Street.... we all agreed: we elected arbitrators from the castron and the diokete sent them into the
house and they made the division.”
As to prevail described today, below, often this expressed motivation in very of avoiding similar protracted,
language, as uncertain a reason litigation for parties continues to agree to international commercial
arbitration.
P 33 P 34 (218)
(219)
(220)
(221) (222)
P 31 P 32
(202)
(203) (204) (205)
(206)
(207)
P 32 P 33 (208)
(209)
(210)
(211)
(212)
(213)
(214)
(215)
(216)
(217)
It is unclear just how “consensual” arbitrations in the context of Medieval guilds and fairs really were, since
the relevant tribunals appear to have had a degree of mandatory jurisdiction. developing their (201) respective
It nonetheless arbitral is clear mechanisms, that the guilds which and functioned fairs were with central
substantial to independence from local court systems. That is reflected in the explanation provided by Gerard
Malynes, a 17th-century English authority on the law merchant:
“The controversies second meane arising or between rather ordinarie Merchants, course is by to way end of
the Arbitrement, questions when and both parties do make choice of honest men to end their causes, which is
voluntarie and in their own power, and therefore called Arbitrium, or free will, whence the name their
judgments Arbitrator by is derived: Awards, according and these to men Equitie (by some and called
Conscience, Good observing men) give the Custome of Merchants, and ought to be void of all partialitie or
affection more nor lesse to the one, than to the other, having onely care that right may take place and
expedition.” according the truth, and that the difference may be ended with brevitie It also appears that
English courts were prepared during this early period to give effect to arbitration agreements, by enforcing
penalty clauses associated with them (in accordance with scope the of Roman arbitration law compromissum
agreements theory), and by a robust by barring enforcement litigation of on awards. claims within the
Arbitration appears to have been equally important in commercial affairs in Germany, Switzerland,
Northern Italy and France. The Edict of 1560, promulgated by Francis II, made arbitration same time,
mandatory it declared for arbitration the resolution agreements of commercial valid, even disputes without
among a penalty merchants; clause, at the thereby moving beyond Roman law requirements for a
compromissum. Although successive French Parliaments apparently fought to restrict the binding character of
commercial Revolution. arbitration, the practice remained well-established until the French Commercial
arbitration was also prevalent in the Swiss cantons and German principalities. sources, which began In to
these fuse areas in the of 14th Europe, and 15th arbitration centuries. developed On the one from hand, two
local principal traditions of arbitration were integrated into the feudal system; on the other, the Catholic Church
offered arbitral mechanisms and practices which developed under canonical law.
Whatever its sources, it is clear that commercial arbitration was very widely-used in these regions of
Europe during the Middle Ages. Consistent with this, early codifications of procedural law dating from the 14th,
15th and 16th centuries provided for arbitration as a supplement and Austria also to local reveals court
thousands proceedings. of “arbitration Research deeds” in southern (“Schiedsurkunde”) Germany, Switzerland
evidencing a rich and varied arbitral practice in these regions during the Middle Ages. A representative
arbitration in the example 13th and was 14th Bavaria, centuries. where there Another is substantial anecdotal
evidence example of is commercial drawn from the archives of the principality of Fürstenberg, which contain
more than 500 arbitral deeds for the period between 1275 and 1600 (compared to records for some 25 court
proceedings). The traditional concept of arbitration in Germany was remarkably modern in many respects.
Arbitration agreements were treated as binding by state courts, and thus did not require penalty clauses for
enforcement, while arbitral awards were subject to immediate enforcement, with minimal judicial review.
During Medieval times, arbitration in German-speaking regions frequently did not involve a strict
application of rules of substantive law, instead leaving considerable scope for decisions based on equity (and
for settlements). At the same time, however, arbitral mechanisms said that a new developed type of “arbiter” in
which emerged arbitrators in the were Middle expected Ages, to who apply was formal “taken legal to perform
rules. It is the function of a judge”: “He was chosen by the parties not merely in order to restore the peace left
open between in their the agreement, parties or but to determine, to decide a ex dispute.” aequo et bono, As
points a consequence, which the a parties had distinction was drawn between arbitration “nach Guet” (or in
equity) and arbitration “nach Recht” (or in law). Where arbitration “nach Recht” was used, arbitrators were
generally obliged ex aequo to et apply bono the was law not (in subject the to same such manner constraints.
as a judge), although an arbitrator acting The canonical approach to arbitration during this period was
somewhat different. The absorption of canonical law (through the Church) and Roman law (imported from
Italian universities informal, consensual ) changed mechanism the nature to a more of arbitration formal,
legalistic in German-speaking procedure, where regions awards from an could be challenged in state courts.
The canonical model also offered more sophisticated legal mechanisms based on written legal sources and
doctrine, which limited to arbitrate the arbitrators’ still needed discretion. to be combined Moreover, with
penalty in the clauses canonical to be tradition, effective, an agreement and canonical awards were not treated
as immediately enforceable, but remained subject to judicial challenge based on various grounds, including
laesio enormis or manifest injustice.

P 34 P 35
(225)
(226)
[3] Commercial Arbitration at English Common Law and English Legislative Reform In the common
law world, Lord Coke’s 1609 decision in Vynior’s Case enjoys the greatest notoriety, case involved if least
a suit precedential by Vynior against support, Wilde, for its seeking treatment payment of agreements on a
bond, to which arbitrate. had The secured the parties’ promise to submit a dispute over a parish tax payment
to arbitration. (227) Coke granted judgment for Vynior on the bond, but added the following reasoning:
“although...the yet he might countermand defendant was it; for bound a man in cannot a bond by
to...observe his act make [the] such arbitrament, authority... not countermandable, which is by the law and of
its own nature countermandable; as if I make a letter of attorney...so if I make my testament and arbitration last
will agreement irrevocable....And is supported therefore...in by a bond both and cases where [i.e., the both
agreement where an incorporates no bond] the authority of the arbitrator may be revoked; but then in the one
case he shall forfeit his bond and in the other he shall lose nothing.” (228)
P 35 P 36
Scholarly into unnecessary analysis dicta, has challenged its inapposite most analogies aspects of between
Coke’s opinion an arbitration – including agreement its excursion and a power of attorney or will and its ill-
concealed distaste for the arbitral process. (229) Nonetheless, practical import: as long parties as penalty
could, bonds and, as remained the Romans enforceable, and Medieval Coke’s Germans dictum had, was
(230) of limited routinely did, include penalty provisions in their agreements to arbitrate. (231) The common
law’s treatment of such provisions was changed, however, in 1687, when Parliament penalties generally,
enacted the limiting Statute bond-holders of Fines and to Penalties, the recovery which of actual disallowed
damages. recovery (232) of Apparently to correct the effect of this statute on commercial arbitration,
Parliament soon thereafter enacted one of the world’s first extant arbitration statutes, adopting what is
sometimes commerce that called would the 1698 recur Arbitration in connection Act. with (233) arbitration
Reflecting legislation an objective in of later promoting eras, the Act’s purposes were:
“promoting trade, and rendering the awards of arbitrators more effectual in all cases, merchants for the
and final traders, determination or others, concerning of controversies matters referred of account to them or
trade, by or other matters.” (234)These objectives were realized by statutory provisions allowing parties to
make their arbitration agreement “a rule of any of His Majesty’s Courts of Record,” which would permit
enforcement by way of a judicial order that “the parties shall submit to, and finally be
judicial (223)
challenge based on various grounds, including laesio enormis or manifest injustice.
The reasons that merchants resorted to arbitration during the Medieval era are – we will see of
international in subsequent commercial sections of arbitration. this Chapter Simply – almost put, eerily
arbitration familiar was to used contemporary in substantial users part as a means of overcoming the peculiar
difficulties and uncertainties of international litigation in state courts. One of Europe’s leading historians of the
feudal period put it as follows:
“The parallel most jurisdiction. serious cases Undoubtedly could be heard there in were many certain
different rules courts which, exercising in theory, determined the limits of competence of the various courts;
but in spite of them uncertainty charters relating persisted. to disputes The feudal between records rival that
jurisdictions. have come Despairing down to us of abound knowing in before which authority to bring their
suits, litigants often agreed to set up arbitrators of their own or else, instead of seeking a court judgment, they
preferred decision there to come was to often a private no other agreement....Even way to get it executed if
one had than obtained to come a to favourable terms with a recalcitrant opponent.”
(224)
More generally, in the words of another authority on the feudal period, “in order to escape the
consequences, the delays, or the uncertainties of strict law, arbitration was a more tribunal.” attractive resort,
in nine cases out of ten, than the ordinary judgment of a regular Despite its deep historical roots, commercial
arbitration also encountered recurrent challenges, have sometimes often been in the overstated, form of
political and they and have judicial almost mistrust always or (eventually) jealousy. These been challenges
overcome by the perceived benefits of the arbitral process in commercial settings and the (eventual)
acceptance of these benefits by local governments. Moreover, the enforceability of commercial arbitration
settings, agreements largely appears through frequently non-legal to sanctions, have been such achieved, as
commercial, in historical religious and other sanctions effectuated via guilds or similar bodies. Nonetheless, the
historical record is not complete without addressing some of the more significant challenges agreements that
and have arbitral sporadically awards.
emerged to the legal enforcement of arbitration

P 37 P 38
(243)
(244)
(245)
(246)(247)
(248)
P 36 P 37
(237)
(238)
(239)
(240)
(241)
(242)
enforcement by way of a judicial order that “the parties shall submit to, and finally be concluded by the
arbitration and umpirage.” (235) This legislation sought to remedy, at least in part, the damage effected by the
combination of Coke’s dicta in Vynior’s Case and the Statute against Fines, allowing Blackstone to conclude:
“it is now become the practice to enter into mutual bonds, with condition to stand to the award or arbitration
of the arbitrators or umpire therein named. And experience having shewn the great use of these peaceable
and domestic tribunals, transactions, especially which are in settling difficult matters and almost of account,
impossible and to other be adjusted mercantile on a trial at law; the legislature has now established the use of
them.”
(236)
It nonetheless remained the case that, at English common law, an arbitration agreement was precedent –
on the – “revocable” authority of at the will. dicta Although in Vynior’s damages Case, which were in later
theory hardened recoverable into solid when an arbitration agreement was revoked, damages could not readily
be proven or recovered for breach of an arbitration agreement – rendering such agreements nearly
unenforceable in those cases where the 1698 Arbitration Act did not apply. Outside the statutory “safe haven”
of the 1698 Arbitration Act, common law enforcement of arbitration agreements was made even more
problematic by the decision in Kill v. Hollister. There, the court permitted an action on an insurance policy to
proceed, notwithstanding cannot oust this court.” an arbitration In clause, subsequent on the centuries,
grounds that that doctrine “the agreement – which of appeared the parties to raise a broad-based public policy
objection to arbitration (and forum selection) agreements – provided ample support for both English and U.S.
proponents of judicial hostility to arbitration. Nonetheless, subsequent legislative reforms in England
gradually introduced greater support for commercial arbitration agreements and arbitral tribunals’ powers.
The 1833 Civil of court Procedure could not Act be restated revoked, the while rule providing that an arbitration
arbitrators agreement with a mechanism which was to made summon a rule witnesses and the power to
administer oaths. At the same time, in the middle of the 19th century, English courts revisited the analysis
in Kill where v. Hollister, Lord Campbell arriving said: at a very different view. The leading authority is Scott v.
Avery, “Is there anything contrary to public policy in saying that the Company shall not be harassed by
actions, the costs of which might be ruinous, but that any dispute and economically that arises determine shall
be referred the dispute?...I to a domestic can see tribunal, not the which slightest may ill speedily
consequences that can flow from such an agreement, and I see great advantage that may arise from
it....Public policy, therefore, seems to me to require that effect should be given to the contract.”
He Hollister also disposed – by remarking of the “ousting dismissively the court that “it of jurisdiction”
probably originated adage – in proffered the contests in Kill of v. the different courts in ancient times for
extent of jurisdiction, all of them being opposed to anything that would altogether deprive every one of them of
jurisdiction.” In a subsequent case, decided the same year, Lord Campbell declared:
“Somehow the Courts of law had, in former times, acquired a horror of arbitration; and it was even doubted
if a clause for a general reference of prospective disputes was legal. I never could imagine for what reason
parties should manner not on be which permitted they agreed.” to bind themselves to settle their disputes in
any Lord Campbell also provided a famously cynical explanation for the alleged historic hostility of English
common law judges to arbitration:
“This doctrine had its origin in the interests of the judges. There was no disguising mainly, or the almost fact
entirely, that, as formerly, on fees, and the as emoluments they had no of fixed the Judges salaries depended
there was great competition to get as much as possible of litigation into Westminster Hall and there was a
great scramble in Westminster Hall for the division of the spoil. ...And robbed they of those had great cases.”
jealousy of arbitration whereby Westminster Hall was While Lord Campbell’s derisory description of the
English courts’ historical attitude towards commercial arbitration appears to have been overstated, the more
enduring point point is of his view own that resounding has been endorsement formulated with of the
increasing arbitral vigor process by English in commercial courts and matters – a legislatures in succeeding
decades. This was confirmed in the 1854 Common Law Procedure Act, one of the first modern efforts at
circuitously) a comprehensive for the irrevocability arbitration statute. of any arbitration Among agreement,
other things, by the permitting Act provided it to (albeit be made a rule of court, regardless whether the parties
had so agreed. At the same time, however, the statute introduced new limits on the arbitral process by
providing for fairly
P 38 P 39 (251)
(252)
(254) (253) (255)

(256)
(257)
(258)
(259)
[4] Commercial Arbitration in France A broadly similar set of historical developments occurred in
France as in England. There, as discussed above, the Edict of 1560 and merchant practice led to widespread
use of arbitration for resolving commercial disputes in the 16th, 17th and 18th centuries. The French
Revolution changed this, like much else. Consistent with more general notions of social contract and
democratic choice, the arbitration agreement was initially afforded enhanced dignity. Arbitration was described
as producing “pure, simple and pacific for the termination justice,” of which disputes was arising legislatively
between declared citizens.” to be “the In most due course, reasonable arbitration means was elevated to
constitutional status in the Constitution of 1793 (Year I) and the Constitution of 1795 (Year III). Among other
things, Article 86 of the French Constitution of Year of their I declared choice shall that not “[t]he be right
violated of the in citizens any way to whatsoever.” have their disputes settled by arbitrators As with many
other things, the French Revolution soon turned on its progeny, with arbitration authority of eventually the
revolutionary being considered state. (ironically) With this hostility a threat in to the the air, rule the of 1806 law
and Napoleonic the Code of Civil Procedure imposed numerous legislatively-mandated procedural and
technical restrictions on arbitration agreements and procedures. In particular, Article 2059 agreements of the
Civil to arbitrate Code and future Article disputes 1006 of were the Code generally of Civil unenforceable.
Procedure provided The that French Commercial Code permitted agreements to arbitrate future disputes only
in limited circumstances, consisting of maritime insurance contracts and certain corporate and partnership
contexts. More generally, as one commentator observes:
“all hatred the of provisions arbitration of the agreements [Napoleonic and Code] provide do evidence
appear to of reflect, a secret so desire to speak, to a eliminate their existence.”
This hostility towards the arbitral process was reflected in contemporaneous French legal commentary,
judicial guarantees” which held that and “arbitration “[a] satire of is judicial a rough administration.” draft of the
institutions and the French courts did little during the 19th century to ameliorate this hostility. An 1843
decision of the Cour de cassation, in Cie L’Alliance v. Prunier, held that agreements to arbitrate and specified
future the disputes individuals were who not were binding to serve unless as they arbitrators. identified the The
particular stated rationale, dispute which would recur in other historical and geographical settings, was that
parties should be protected against the advance and abstract waiver of access to judicial protections and
guarantees. an arbitrator the That same was qualities coupled that with it is a assured parallel to perception
find with a that magistrate: “[o]ne does the not probity, find with the impartiality, the skillfulness, [and] the
sensitivity of feelings necessary to render a decision.” limited the practicality The judicial and decisions
usefulness that of arbitration followed upon agreements these observations in 19th (and significantly early
20th) century France. As discussed below, it took some eight decades before this judicial hostility was
moderated domestic ones. by the French Indeed, courts it was and only legislature with France’s – first
ratification in international of the cases 1923 and Geneva later in Protocol, discussed below, that agreements
to arbitrate future international commercial disputes became fully enforceable in French courts. (260)
P 39 P 40
(261) (262) (263)

(264)
(265)
(266)
(267)
(268)
(269) (270) P 40 P 41
(271)
(272)
(273)
(274)
(275)
however, extensive the judicial statute review introduced of the substance new limits of on arbitrators’ the
arbitral awards, process through by providing a “case for stated” fairly procedure that permitted any party to
obtain judicial resolution of points of law arising in the arbitral proceedings. At the end of the 19th century,
England enacted the 1889 Arbitration Act, which was in turn widely adopted throughout the Commonwealth.
The Act confirmed the irrevocability of agreements to arbitrate future disputes, while granting English courts
discretion (effectively whether permitting or not specific to stay performance litigations brought of arbitration in
breach agreements of such agreements to be ordered, albeit on a discretionary basis). At the same time, the
Act preserved previous features of English arbitration law, including the “case stated” procedure for judicial
review and the powers 1889 Act of remained the English in force courts for to more appoint than arbitrators
half a century, and assist in only taking eventually evidence. being The replaced by England’s 1950 Arbitration
Act. In used terms at English of procedures, common it law. appears that In general, a variety however, of
means a consistent of selecting theme arbitrators in English were arbitration was the use of party-nominated
arbitrators, with a presiding arbitrator or umpire. It is unclear how often umpires, rather than three-arbitrator
tribunals, were utilized, into the 20th although century. the latter What remained appears a common to have
fixture been an in informal English arbitration approach to until rules well of procedure in these early
arbitrations was later abandoned, at least in part and for a time, with local judicial procedures being imposed
on English arbitral tribunals (as discussed below).

(249)
(250)
P 43 P 44 (288)
P 41 P 42
(279)
(280)
(281)
(282)
(283)
P 42 P 43
(284)
(285)
(286)
(287)
[5] Commercial Arbitration in United States A broadly similar course was followed with regard to
commercial arbitration in the United States during the 18th and 19th centuries as in England and France.
Consistent with the United century, States’ (276) arbitration vital role in was the widely development used to of
resolve state-to-state commercial arbitration (and other) in the disputes 18th during Colonial times and the
early years of the Republic. Despite this, over the course of the 19th century, significant judicial (and
legislative) hostility to arbitration agreements developed, English common as some law U.S. authority. courts
(277) developed Importantly, a peculiarly the resulting radical judicial interpretation hostility of to historic the
arbitral process did not prevent the use of extrajudicial and commercial mechanisms for enforcing arbitration
agreements and awards, (278) but it nonetheless undoubtedly hindered overcome use in the of arbitration
early 20th century, in the 19th when century determined United efforts States. by This the U.S. hostility
business was only fully community resulted in enactment of the Federal Arbitration Act (“FAA”) and similar
state arbitration legislation. Difficulties in resolving private disputes existed from the earliest days of
European settlement in North America – which was hardly surprising, in light of the lack of governmental
administrative structures and trained lawyers in the colonies, coupled with the various fluid, forms sometimes
of arbitration chaotic to dynamism address these of colonial difficulties. life. Equally Early Dutch unsurprising
settlers is in the New use York, of frustrated with efforts to replicate European judicial institutions, turned to the
election of a council of “arbitrators,” which was in fact a form of judicial body whose jurisdiction appears in at
least some cases to have been mandatory. Nonetheless, from an early date, it was also common to refer
disputes in New Amsterdam to true consensual arbitration:
“the arbitrators were left to the choice of the litigants, or appointed by the court....These amount involved
references was frequently were frequent considerable, upon every or the court matter day, in and...though
dispute highly the important,...appeals to the court from the decision of the arbitrators were exceedingly rare.”
Some commentators conclude that, after the 1664 hand-over of administration in New York to features
Great Britain, of continuing the use Dutch of arbitration influence. in commercial matters was one of the
enduring Arbitration of commercial and other matters was widespread in the American colonies during
colonists the found 17th and the flexibility, 18th centuries. practicality Drawing and on English, speed of as
arbitral well as processes Dutch, practice, well-suited the to their conditions: “From whatever source they
derived the practice, the colonists engaged in extensive arbitration throughout the period of English rule.”
Relying on court files (relatively chamber of sparse commerce and terse), records, newspaper historians
accounts have sketched (more fulsome), a picture merchants’ of widespread, books routine and use of
arbitration in Colonial commercial matters, including in transactions between businesses in different colonies,
typically by agreement between the parties after disputes had arisen. A primary motive then, as now, was
avoidance of the delays and costs of litigation. One letter, printed in a 1751 edition of the “New York Weekly
Post-Boy,” recorded a litigant’s plea to a counter-party:
“let squander’d me tell you away that a deal after of you Time have & Attendance expended large on your
Sums lawyers, of Money, and and Preparations for Hearings one Term after another, you will probably be of
another Mind, and be glad Seven Years hence to leave it to that Arbitration which you now refuse.”
Whatever the truth, Colonial businessmen of the day shared this view, turning with great regularity and
confidence to arbitration to settle their commercial disputes. Following the American Revolution, the routine
use of arbitration to resolve commercial disputes 19th century did from not diminish. a small, closely-knit On
the contrary, colonial as New town York into developed a cosmopolitan over the center course of of the
commerce, the use of arbitration grew apace with the expansion of commercial affairs. One commentator
concludes:
“it is clear that arbitration has been in constant use in New York from its beginnings the passage to of 1920.
a statute It did making not suddenly agreements come to into arbitrate being at future that time disputes
because of enforceable. Rather, it has existed with and without the benefit of statutes, and both separate from,
and in connection with, court adjudication.”
Or, United in another States commentator’s almost three centuries words, “[a]rbitration before modern
actually arbitration was in statutes widespread were use passed in the in the 1920s; its history traces back to
the colonial period.” The driving motivation for arbitration in commercial matters during this period, as in many
earlier eras, continued to be the perception by Colonial American businesses “that government courts of the
period
P 45 P 46
(303)
(304)
(305)
(306)
P 44 P 45
(298)
(299)
(300)
(301)
(302)
be the perception by Colonial American businesses “that government courts of the period did not apply
commercial law in what the merchant community considered to be a just and expeditious fashion.” As its role
as the dominant U.S. commercial and financial center would suggest, New York practice was
representative of the country as a whole at the time. Research into specific jurisdictions, including New Jersey,
Pennsylvania, Connecticut, Massachusetts, Delaware, 19th century Virginia commentator and Ohio, noted,
reveals the a commercial history similar arbitration to that in system New York. established As one by New
early York merchants offered a lead that “has been taken by the merchants of [Philadelphia] and other cities.”
Other Influenced areas by of Quaker the country anti-legalism, had a history of William arbitration Penn’s
independent laws (1682) of in New Pennsylvania York’s lead. provided that each precinct should appoint
three individuals to serve as “common peacemakers.” In Dedham, Massachusetts, disputes were mediated
from 1636 onwards parties or by the “three community understanding itself – whose men,” decisions or by “two
were judicious routinely men,” obeyed. chosen either Similarly, by the in Kent County, Delaware, a 1680
judicial decision appointed two arbitrators to decide the case, a final who End would thereof.” in case of a “non
agreement...chuse a third person as an Umpire [to] make Some early legislative efforts were made in
different American states to support the arbitral process in commercial matters. The first American arbitration
legislation appears to Arbitration have been Act adopted of 1698, in provided Connecticut, for the where
enforcement a 1753 statute, of agreements modeled to on arbitrate the English future disputes where they had
been made a rule of court. In 1791, the New York legislature enacted a similar statute, also virtually identical to
the 1698 English Arbitration Act. conditioned Similar bonds mechanisms and promissory were notes, adopted
designed in various to make colonies, both including arbitration the agreements use of and arbitral awards
more readily enforceable. A 1793 American insurance policy contained an arbitration clause, suggesting
that legislation arrangements: of this character arose from the use of arbitration in routine commercial “And it
is agreed, that if any Dispute should arise relating to the Loss on this Policy; it shall be referred to two
indifferent Persons, one to be chosen by the Assured, but in case the they other cannot by the agree, Assurer,
then who such shall two have persons full Power shall choose to adjust a third; the same; and any two of them
agreeing, shall be obligatory to both parties.”
Nonetheless, it appears that the principal means by which arbitration agreements and arbitral commercial,
awards professional were enforced and other during mechanisms. the Colonial era was That through is in part
non-legal because or of extralegal the character of U.S. commercial affairs at the time, and in part because of
the general shortcomings of legal or judicial enforcement mechanisms. Despite the existence the prevalence
of a measure of commercial of early legislative arbitration and as judicial a means support, of dispute some
resolution, 19th century and American courts developed a puritanical version of English common law hostility
to agreements to arbitrate future disputes. Indeed, for some decades, a number of U.S. courts held revocable
flatly at that will. agreements to arbitrate future disputes were contrary to public policy and Joseph Story, a
preeminent U.S. legal authority in a wide range of fields, reflected 19th century American judicial hostility to
arbitration agreements. In 1845, he stated the common particular law vigor: position in the United States,
inherited from England and elaborated with “Now we all know that arbitrators, at the common law, possess
no authority whatsoever, even to administer an oath, or to compel the attendance of witnesses. books of
account, They cannot or insist compel upon the a discovery production of facts of documents from the parties
and papers under and oath. They are not ordinarily well enough acquainted with the principles of law or equity,
to administer either effectually, in complicated cases; and hence it has often then a been court said, of equity
that the to compel judgment a resort of arbitrators to such a is tribunal, but rusticum by which, judicium.
however Ought honest and intelligent, it can in no case be clear that the real legal or equitable rights of the
parties can be fully ascertained or perfectly protected?...[An arbitration in its very nature agreement and
character, is not specifically an agreement enforceable which must because rest it] in is the essentially, good
faith and honor of the parties, and like an agreement to paint a picture, to carve a statue, such remedy or to
write in damages a book...must for the be breach left to thereof, the conscience as the law of has the
provided.” parties, or to While this left open the possibility of recovering money damages for breach of an
arbitration agreement, this was virtually never an effective (or even very plausible) means of enforcement,
since adequate proof of injury resulting from a refusal to arbitrate was virtually impossible.
(289)
(290)
(291)
(292)
(293)
(294)
(295)
(296)
(297)
P 49 P 50
P 47 P 48
(313)
(314)
(315)
(316)
(317)
(318)
(319)
P 48 P 49 (320)
(321)
(322)
(323)
P 46 P 47 (308)
(309)
(310)
(311)
(312)
was virtually impossible.
(306) Relying on literal interpretations of the English common law in Vynior’s Case and Kill v. Hollister,
century French (307) and authors, evidencing Story’s a disdain influential for the arbitral academic process
commentaries reminiscent adopted of early similar 19th reasoning:
“where the stipulation, though not against the policy of the law, yet is an effort to divest the ordinary
jurisdiction of the common tribunals of justice, such as an agreement, Equity will not, in case any of more any
than disputes, Courts to of refer Law, the interfere same to to arbitrators, enforce that Courts of agreement, but
they will leave the parties to their own good pleasure in regard to such agreements....The regular
administration of justice might be greatly impeded enforced. or And interfered at all events with courts by such
of stipulations justice are presumed if they were to specifically be better capable of administering and enforcing
the rights of the parties than any mere private arbitrators, of sifting the as controversy well from their to the
superior very bottom.” knowledge as from their superior means Elsewhere, Story apparently went even
further, seemingly declaring that agreements to arbitrate future disputes violated public policy (which would
presumably result in denial of even a claim in damages for breach of an arbitration agreement). He rejected
specific performance appropriate judicial of such tribunals agreements, of the “deeming State any it against
persons public who, in policy the ordinary to exclude course from of the things, have a right to sue there.”
Although applied an the extreme precise interpretation basis for this judicial of English hostility common was
law unclear, precedents some to withhold U.S. courts meaningful judicial enforcement of arbitration
agreements throughout much of the 19th century. In the words of then-Judge Cardozo: “It is true that some
judges have expressed please. In this the state, belief the that law parties has long ought been to be settled
free to to contract the contrary....The about such jurisdiction matters as of they our courts is established by law,
and is not to be diminished, any more than it is to be increased, by the convention of the parties.” Or, as a
leading treatise concluded: “It is an by elementary the American proposition courts, that of future the common
disputes law clauses cases, and and provisions is almost universally for arbitration accepted are revocable.”
Moreover, U.S. courts and legislatures did not quickly follow the path of Scott v. Avery or the arbitration
1889 English agreements Arbitration in England. Act, which had As taken the Second steps to Circuit facilitate
once the wrote, enforcement with only a of measure of exaggeration, “[one] of the dark chapters in legal
history concerns the [treatment agreements” of by questions U.S. courts of the] in the validity, 19th century.
interpretation and enforceability of arbitration Importantly, even while many U.S. courts refused to enforce
commercial arbitration agreements during the middle and late 19th century, arbitration remained both popular
and developed effective during in American the colonial commercial and post settings: revolutionary “The use
periods of commercial in spite of arbitration this [judicial] hostility.” As already noted, it did so on the basis of
non-legal commercial sanctions and enforcement mechanisms, including through membership in commercial
guilds, societies, resilient to municipal sustain arbitration communities, as an or effective religious means
groups, of all dispute of which resolution proved sufficiently notwithstanding judicial hostility. Moreover, even
with regard to judicial enforcement of arbitration agreements and awards, other in a number movements of
American were afoot jurisdictions in the United rejected States the by common the mid- law and notion late
19th that century. arbitration Courts agreements were either unenforceable or revocable, and instead upheld
them, while doctrinal also authority, enforcing a arbitral Virginia awards court declared with minimal in 1858,
judicial in terms review. that could Rejecting have been Story’s written 150 years later, that:
“The only ground on which [the arbitration agreement] can be said to be unlawful is, that in referring all
disputes and difficulties arising under the contract jurisdiction; to the and engineer is therefore or inspector,
against the it tends policy to of oust the the law courts and void....I of law am of their certainly not disposed to
extend the operation of a rule which appears to me to have been founded on very narrow grounds, directly
contrary to the spirit of later pleasure times, to public which leaves or private parties tribunals.” at full liberty to
refer their disputes at At the same time, as noted above, legislation or judicial decisions in a number of
U.S. states permitted the use of rules of court, conditioned bonds, or promissory notes to provide enforcement
mechanisms for arbitration agreements and arbitral awards. Shortly after the U.S. Civil War, the U.S.
Congress enacted legislation encouraging efforts to use arbitration to resolve international commercial
disputes – although it does not appear that the statute had significant practical effects. What did continue to
have practical effects, however, were commercial and professional associations, which ensured
P 50
(324)
(326)
(325) (327)
(328)
[6] Commercial Arbitration in Other European Jurisdictions in 18th and 19th Centuries The history
of commercial arbitration in other nations did not always involve the same degree of judicial or legislative
hostility as occasionally demonstrated in 18th and 19th century England, France and the United States.
Historically, commercial arbitration was commonly the lack of used a centralized by merchants government in
what (until is today comparatively Germany, perhaps recently) particularly and the demands because of of P 50
P 51
international commerce. (329) Thus, a German commentator at the beginning of the 20th century could
observe, with regard to historic German experiences: “arbitral tribunals have and legislation at all times has
been always regarded granted as them an urgent a place necessity alongside by the the community ordinary
courts.” of merchants (330) The role of arbitration in commercial matters was recognized, and given effect,
in the civil codes of Baden (in 1864), Prussia (in 1864) and Bavaria (in 1869). All of these statutory
codifications while granting confirmed arbitrators the varying role of degrees arbitration of freedom in the
resolution from local of procedural commercial and disputes, substantive requirements and judicial control.
(331) These developments led to statutory provisions would remain regulating the fundamental arbitration
basis in the for first Germany’s German legal Code regime of Civil for Procedure arbitration of 1877 until
(which 1998). The 1877 Code of Civil Procedure incorporated provisions that freed arbitrators from the
obligation to apply strict legal rules (and, concurrently, from judicial review of the substance of awards). The
drafters of the Code explained:
“By difficulties submitting and themselves complexities to arising arbitration from the the parties application
want of to the escape law. from They the intend that the law as between them should be what the arbitrators,
according to therefore their conscientious as a rule consider conviction the arbitrators – ex aequeo to et be
bono friendly – determine. mediators They – amiables will compositeurs, as the Belgian draft says – and it is
obvious that they do so consider them whenever they appoint as arbitrators persons who are not learned when
the in arbitrators the law. As are a rule not therefore bound to the follow goal the of ordinary arbitration rules is
attained of law when only giving their awards.”

(332)
At the same time, at the end of the 19th and beginning of the 20th century, German courts gave active
support to the arbitral process, including by pioneering the development of what enforcement would later of
arbitration be termed agreements.
the separability (333) doctrine, in order to facilitate the By the turn of the 20th century, permanent arbitral
tribunals, organized under the auspices of cases trade were organizations, pending before became such a
tribunals common in feature Berlin of alone. German (334) business Contemporaneous life. In 1909, German
1030 authors generally praised the arbitral process, highlighting its efficiency, trustworthiness and the
commercial sense of arbitrators with industry experience.

(335)
P 51 P 52
Like “guard[] some their common rights law with courts, extreme however, jealousy, the and German were
courts only too came inclined in the to next set aside decades awards to [on the basis of] even a slight failure
to comply with the provisions of the Code.” (336) The provisions of the German Code of Civil Procedure left
considerable leeway to local courts (337)
to interfere with the arbitral process, curtailing the practical value of arbitration.
The mistrust for arbitration in German courts (and commentary) developed with particular vigor the
National between Socialists the two World in 1933. Wars, (339) (338) According becoming to the especially
“Guidelines pronounced of the Reich after Regarding the rise of Arbitral Tribunals,” published in December
1933, arbitration threatened governmental authority and “the State itself,” demanding a rejection of arbitration
agreements in state contracts:
“Directives which lay down for the that Reichs-authorities all disputes arising on out arbitration of contracts
clauses between have been the Reich enacted, and a private party must, in principle, be brought before the
ordinary courts. It is emphasized in the directives that due to practical experience the alleged
practical effects, however, were commercial and professional associations, which ensured that arbitration
remained a central part of commercial life, even during the “dark chapters in legal history,” when U.S. courts
were most hostile to arbitration and agreements to arbitrate. U.S. judicial and legislative hostility to
commercial arbitration substantially eroded in the late 19th and early 20th century. American judicial
opinions began increasingly to question the wisdom of Story’s views, while commercial pressure for legislative
reform built. This pressure eventually had its intended effect, and in 1920 New York enacted legislation
providing for the validity and specific enforcement of arbitration agreements. That was followed in 1925 by
similar provisions in the FAA (which are discussed in detail below), which paralleled negotiation and adoption
of the 1923 Geneva Protocol (also discussed below). The New York arbitration law and FAA enacted a sea
change from the American common law by instituting a default rule that contracts to arbitrate were valid and
would be specifically enforced by the courts.
P 52 P 53 (343)
(344)
(345)
(346) (347) (348) (349)
[7] Arbitration in Middle East, Asia, Africa and Americas While Americas, there it is appears not the
from same available corpus of historical evidence materials of arbitration that arbitration outside Europe of
commercial and the disputes has been Arbitration in its contemporary form was introduced into many regions
through British, Spanish, Dutch or other colonialism, but often co-existed with or supplanted earlier local
traditions. (350)
[a] Middle East In Arab and Islamic areas, in particular, there was a long and rich history of commercial P
53 P 54 arbitration. (351)
The use of arbitration in the Middle East dates to pre-Islamic times when there settle was disputes no
centralized, between both established individuals system and of tribes. justice, (352) and Arbitration arbitration
was was voluntary used to and the arbitrator’s decision was not legally binding: (353) In one commentator’s
words, “[d]isputes in pre-Islamic Arabia were resolved under a process of arbitration (of sorts).... This goodwill
was voluntary of the parties.”
arbitration, (354) an essentially private arrangement that depended on the In terms of procedures, the
arbitrator in pre-Islamic arbitrations in many parts of the Arab Middle judicial East procedures, was chosen
but, by at the a minimum, parties and typically was not conducted obliged to a apply hearing rules attended of
law or by follow all parties. (355) Enforcement of awards generally depended on the moral authority of the
arbitrator, although in some instances parties were required to submit a bond to guarantee penalty
mechanisms).
enforcement (356) of the awards (not dissimilar to Roman, canonical and English Although political territories
and religious groups in the region differed widely in their practices, (357) arbitration continued to be a
popular form of dispute resolution after the advent and counseled of Islam. tribes The Prophet to use
arbitrators Muhammad for appointed peaceful settlement arbitrators of to their resolve differences.
his own disputes (358) The Prophet also served as arbitrator, with the most famous of these examples
involving a dispute between two clans over placement of the sacred black stone in the Ka’aba in Mecca.
representative The Prophet from fulfilled each clan his to mandate lift one side by placing of the cloak, a cloak
with under the the resulting stone and joint asking effort a marking the resting place of the Black Stone. In later
arbitrations, the Prophet was chosen to a dispute settle disputes with the between Bani Qurayzah, other clans,
a Jewish including tribe, in the which Aws and both Khazraj parties tribes agreed of to Medina, submit and
their dispute to arbitration.

(359) The Koran also condones arbitration with respect to family matters, in Verse 35 of the P 54 P 55
Surah from his of family, the Women: And the “If ye other fear from a breach hers; Between If they wish them
for twain, peace, Appoint Allah will (two) cause arbiters, Their One reconciliation: For Allah has full knowledge,
And is acquainted With all things.” (360)
The verse has been interpreted to extend approval to party-nominated arbitrators (361) and to arbitration in
matters of politics and the state.
(362) The most famous arbitration in Islamic history took place between Ali (the Fourth Caliph) and
Mu’awiyyah (Governor of Syria). The arbitration arose from a written agreement including provisions for
nomination of arbitrators, terms of reference, applicable law and a time limit for making the award.
(363) 23 © 2020 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
emphasized advantages of in arbitration, the directives namely that due rapidness to practical of settlement
experience and the lower alleged cost- expenditure, are rather problematic and are altogether not capable to
outweigh arbitration the in disadvantages comparison to of the greater ordinary legal jurisdiction. uncertainty
From mostly the present political in perspective it must further be noticed, that a greater extension of
arbitration would constitute a loss of confidence in the national jurisdiction and ultimately in the State itself.”
(340)
One rejects local – contrary adherent to approved liberalists’ the views declaration, – arbitral adding
tribunals” “that altogether.

the national-socialist (341) state Consistent with this rationale, the Nazi regime systematically curtailed
the use of arbitration contemporaneous in all walks commentator of German explained, life, both domestic “[t]o
the totalitarian and international. state, with (342) its As doctrine one of the all-enslaving power of the state (or
more correctly, of the armed groups and their leaders) arbitration means an attempt of private individuals to
free an important part of their activities from the dominating yoke of the governing group.” As already
described, the Napoleonic Code (and Cour de cassation, in an 1843 decision) had adopted a similarly
antiarbitration course in France, which persisted until the 1920s. Despite that, Belgian courts refused,
unusually, to follow the approach of the French Cour disputes. de cassation The on Netherlands this subject
took and a instead similar gave approach, effect enacting to agreements an Arbitration to arbitrate Act future
as part of its Code of Civil Procedure in 1838 to provide a comprehensive legal framework for commercial
arbitration. The Dutch and Belgian approach reflected the Low Countries’ historical mercantile reliance cultures
on and arbitration, the influence of which Roman can law. be attributed Swiss in cantonal significant legislation
part to their and constitutions were also generally supportive of arbitration during this era.
P 57 P 58
(389)
(390)24 © 2020 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
P 55 P 56
(369)
(370)
(371)
(372)
(373)
(374)
P 56 P 57 (375) (376)
(377)
(378)
(379)
(380) (381)(382)
(383)
(384)
(385)
(386)
(387)
(388)
time limit for making the award. During the 19th century, the Ottoman Empire adopted legislation
(modeled on then recently-adopted particular, the Ottoman European Civil arbitration Code of 1876
legislation) contained regulating 11 articles the (Articles arbitral 1841-1851) process. dealing In with arbitration,
generally in a relatively restrictive manner. Among other things, paralleling the unavailability in some states of
specific performance of arbitration agreement, before he has the given Ottoman his decision,” Civil Code
unless permitted the arbitrator’s either party appointment to “dismiss had the arbitrator been judicially
confirmed. Moreover, Article 1849 provided for broad powers of judicial review, mandating that an award shall
be confirmed “if given in accordance with law. Otherwise it shall not be so confirmed.”
(363)
(364)
(365)
(366)
[b] Jewish Communities There is a long tradition of arbitration in Jewish communities, both in the Middle
East and elsewhere. A system of Jewish courts (battei dinin), including the Sanhedrin, were developed
According to at many an early authorities, stage for arbitration resolution of only civil, flourished criminal in and
Jewish other communities disputes. during the Roman period, as an alternative to Roman courts, after Roman
law restricted Jewish judicial autonomy. In the words of one writer, arbitration in Jewish communities in
Antiquity destruction “was of the the Second outgrowth Temple.” of a period of At persecution the same time
and that oppression Jewish communities that followed relied the on arbitration as a means of preserving local
autonomy, agreements by Jews to submit disputes to arbitration, and decisions by Jewish arbitral tribunals,
were recognized and given apparently effect enjoyed by Roman substantial authorities. judicial In autonomy
contrast, from Jewish Roman communities authorities in Babylon and did not make use of arbitration. A use
characteristic of party-appointed feature arbitrators of arbitration (on in three-person Jewish communities
tribunals); in indeed, the Classical the Hebrew era was term the for arbitration (Zabla) is derived from the
phrase “zeh borer lo ehad,” meaning “he chooses one.” The Talmud subsequently addressed the issue,
providing: “Civil cases by three; one decree party of R. may Meir. select The one Sages, and however, so the
other, maintain and both that the of them two judges select one may more; select so the is third the one.”
Classical Jewish arbitrations were also characterized by the final resolution of disputes (with arbitration
distinguished from mediation or conciliation, which did not produce binding decisions). Arbitration was also
widely-used in Jewish communities outside the Middle East as a consequence of the Jewish Diaspora.
Jewish communities adapted differently in different locales throughout Europe during the Middle Ages. In some
jurisdictions, such establishing as Germany, relatively Jewish formalized communities dispute generally
resolution enjoyed mechanisms substantial with autonomy, tribunals composed of rabbis, applying Jewish law
and sometimes denominated as Beth Dins (Jewish courts or, literally, “houses of judgment”). In other
jurisdictions, such as Italy, Jewish communities were adopted were (with not rabbis afforded again substantial
playing a significant autonomy role and in informal dispute arbitral resolution). mechanisms The tradition of
three-person tribunals continued in Jewish communities during the Diaspora. identity of In the general, third
arbitrator, where the the arbitrators appointment (or parties) would were be made unable by to the agree
elders upon of the the locality; it was apparently common practice for the rabbi of the city or town to be
appointed as the third arbitrator. The parties were free to agree upon fewer or more than Arbitrators three
arbitrators, were apparently which required apparently to be occurred (relatively) not infrequently independent
in of practice. the parties. Parties reportedly enjoyed broad autonomy over the arbitral procedures. Formal
requirements applicable in Jewish courts were inapplicable in arbitration and in some localities arbitrators
special were required rules of arbitral to begin procedure the arbitral were hearing adopted. within 24 hours In
Krakow, of their for example, appointment and render a decision within three days of the hearing. There that
was were required apparently for a debates, binding arbitration in different agreement. Jewish localities,
There about were the degree also apparently of formality disputes about the subjects that could be submitted
to arbitration, with some authorities indicating that both civil and criminal matters could be arbitrated and others
limiting arbitrable render reasoned subjects awards, to civil although disputes. they sometimes Arbitrators did
were (as in reportedly the cases not of a required 17th century to award in Vienna, holding that leaders of the
Jewish community had not committed financial malfeasance). during The use the of 20th arbitration century in
for many the settlement jurisdictions. of disputes The Beth in Din the of Jewish America community was
founded expanded in 1960, and provides an umbrella organization for the resolution of disputes by rabbinical
courts (Beth Din) in a number of U.S. cities. Beth Dins exist in other jurisdictions as well, including serves
individuals England, and South communities Africa and Switzerland in a number (site of European of the
European states, including Beth Din which Austria, Bulgaria, Denmark, Finland, Germany, Hungary, Norway,
Poland, Romania, Slovakia, Sweden and Turkey).

(367)
(368)
P 58 P 59 (394)
(395)
(396)
(397)
[d] India Hindu mythology provides early descriptions of arbitration. In some accounts of the Ramayana,
Rama and his family attempt to settle their disputes through arbitration by the deities. (398) In one story,
Shiva’s twin sons capture their father’s horse, leading to a battle between deities (including the sons and
Brahman, father Siva, (who Indra, is unaware and their of the wives) identity attempt of his to sons). resolve A
range the dispute of Hindu through mediation, including by attempting to persuade the twins to accept a divine
arbitrator; in a development reminiscent of some contemporary arbitral settings, none of these asserted efforts
reasons succeed, of partiality.
because (399) the parties reject all proposals for arbitrators for various In ancient India, local village councils
(jirgas and panchayatts) conducted informal arbitral proceedings resolution involved and their the decisions
nomination were of considered local luminaries, binding. often (400) village These elders forms or of others
dispute of high social stature, to settle disputes within communities. This traditional council of adjudicators
eventually evolved into a form of self-rule in India, the panchayatt raj, which incorporated grassroots
democracy.
arbitral practices (401) as part of a post–colonial ideal of local governance and There is some evidence that
early Indian practice preferred panchayat dispute resolution to litigation before judges who had been
appointed by political authorities; the informal nature judicial of system the proceedings was seen as and a
significant the ability advantage. to avoid the (402) technical Even today, requirements many villages of India’s
in Southern Asia view state courts with suspicion and prefer to settle disputes before the P 59 P 60 panchayat,
which takes forms varying from informal mediation by family/village elders to enforceable arbitration was
decisions accorded of panchayat a limited, committees. but gradually expanding, Under British place colonial
in the administration, resolution of Indian commercial disputes.

(403)
[e] Africa Africa elaborated presents until a the similar colonial situation. period, The when recorded
Europeans history imported of arbitration their use is not of commercial well- arbitration into the African
setting. (404) Nonetheless, local commentators report that “[a]rbitration and ADR...have always existed in
Africa, harking back to ancient custom that, unlike communities, in the northern “when a hemisphere, dispute
arose is among still practised individuals, widely.” even (405) in non-commercial In traditional African
transactions, the complainant invariably referred the matter to a third party for redress.” (406) The most
serious disputes were resolved by a council of elders that would take testimony the disputants.
and sometimes (407) hear the arguments of agents acting as advocates on behalf of [f] Latin America There
is a long history of arbitration as a means of commercial dispute resolution in Latin America. regulations
Spanish and legislation and Portuguese remained rule in was force particularly even after influential,
independence, and colonial until the arbitration new American states developed their own civil procedure
codes. (408) This readiness to accept arbitration changed somewhat with the new legislation, which did “not
always provid[e] very efficient regulation for the enforcement of arbitration agreements and awards.” (409)
While “Mexican legal culture has a long history of promoting conflict resolution through mediation and
negotiation rather than through litigation,” Mexico’s 1890 Commercial Code P 60 P 61
disfavored procedures. arbitration, (410) In both instead Paraguay expressing and Chile, a preference rules on
for arbitration conventional were litigation enacted as part of domestic civil procedure codes in 1883 and 1902,
respectively, and remained essentially
Sweden and Turkey). (390)
[c] East and Southeast Asia In East and South Asia, commentators conclude that arbitration has existed
since antiquity. The recorded history of arbitration in many parts of Asia largely follows developments into a
deep-rooted of the reliance colonial on powers. arbitration in That at least said, fragments some areas of and
history time provide periods. insights China has a long tradition of settling disputes through conciliation and
arbitration, said to be dynasty grounded describe in the the Confucian resolution ideal of a of property
harmony. dispute For by example, six relatives reports and friends from the who Qing examined the dispute
and crafted a compromise which was approved by a local court.
closely Most resemble traditional conciliation forms of dispute or mediation, resolution, rather particularly
than arbitration. in China and Japan, For example, more the lineage system in parts of China recognized the
authority of elder members of village society to mediate disputes and settle local conflicts. Similar private
adjudicatory processes Asia. have Some existed of these for dispute centuries resolution in Indonesia,
systems the were Philippines later codified and other in the parts early of 19th South century, notably in the
Code of the Three Great Seals in Thailand, which prescribed an early form of binding arbitration.
(391)
(392)
(393)
P 61 P 62
(419)
[8] Arbitral Procedures in Commercial Arbitration The similarities procedures to those that in were
state-to-state historically arbitral adopted proceedings. for commercial arbitration Procedural bore flexibility,
important informality and efficiency were key attributes of the arbitral process, and central to the business
community’s preference for arbitration. Equally, contemporary users and observers results and regarded to
facilitate commercial settlement arbitration than litigation. procedures as more likely to produce sensible
Although evidence is less clear with regard to early periods, it appears that the institution of as party-
nominated in inter-state arbitrations co-arbitrators ). was As noted an enduring above, feature this procedure of
commercial was prevalent arbitration in Rome, (just England, Continental Europe, the United States, the
Middle East and elsewhere. A striking example, drawn from George Washington’s last testament, records the
use of party- nominated arbitrators in U.S. colonial times:
“My arise) Will shall and be direction decided expressly by three impartial is, that all and disputes intelligent
(if unhappily men, known any should for their probity and good understanding; two to be chosen by the
disputants, each having chosen, the shall, choice unfettered of one, by and Law, the or third legal by
constructions, those two. Which declare three their men Sense thus of the Testator[‘]s intention; and such
decision is, to all intents and purposes, to be as binding on the Parties as if it had been given in the Supreme
Court of the United States.”
In for a party-appointed very different context, arbitrators traditional (which Beth were Din regarded
arbitration as a distinguishing in Jewish communities characteristic provided of the arbitral process). And,
from yet another quarter, an 1875 Institut de Droit International Resolution for International Arbitral Procedure
provided for a default appointment arbitrators then mechanism selected a whereby chairman. each party
selected one arbitrator and the two co- The use of party-nominated co-arbitrators continued into the 20th
century. The predominant appears, from means standard of selecting forms used arbitral in different tribunals
types in 19th of contracts, century New to have York been practice three- person tribunals, with each party
nominating an arbitrator and the co-arbitrators jointly choosing a chairman or umpire. The same procedures
prevailed in other Colonial settings an “umpire,” in the and United in others States. by an arbitrator, In some
instances, but the the basic two co-arbitrators structure of two were party- joined by nominated arbitrators, with
a third member of the tribunal presiding, was an enduring, universal feature of commercial arbitration in widely
different historical settings. Arbitral settings. procedures In some instances, varied across arbitral geographic
procedures location, were highly time informal, period and differing commercial materially from national court
proceedings at the time. In other settings, arbitral procedures were formalized, In some cases, including it
appears testimony that arbitrations under oath were and representation public events, attracting of parties by
counsel. considerable local attention and audiences.

(420)
(421)
(422)
(423) (424)
(425)
(426)
(427)
P 62 P 63 (428) (429) (430)
(431)
(432) (433)
of domestic civil procedure codes in 1883 and 1902, respectively, and remained essentially unchanged
during the next century. As for independent Brazil, while it initially exhibited enthusiasm for commercial
arbitration – enacting legislation in 1850 mandating arbitration for commercial cases – this was repealed only
seventeen years later. Thereafter, Brazil soon became known as “one Indeed, of the until most recently,
notorious Brazilian examples courts of would Latin American not enforce adversity predispute against
agreements arbitration.” to arbitrate and Brazilian courts did not recognize a foreign arbitral award until 1940,
citing the exclusive jurisdiction of local courts under Brazilian civil procedural rules. Notwithstanding
commercial arbitration inefficient – pressure procedures from – domestic and, in the commercial case of
Brazil, interests official nonetheless hostility to helped foster “a surge in and growing popularity of arbitration
for the resolution of commercial example, the disputes, Buenos Aires particularly Stock Exchange after the
entered end of the into First a bilateral World War.” agreement In with 1916, the for United States Chamber of
Commerce to establish a system of international commercial arbitration. For the most part, however, these
efforts did not bear fruit until the 1990s, when arbitration. Brazil began increasingly to accept and support
international commercial * * * * * Despite generally supportive historic traditions, international commercial
arbitration eventually Latin America came during to be the regarded course of with the mistrust 20th century.
in parts Reflecting of Asia, Africa, deep-seated the Middle political East and attitudes, countries in these
regions frequently limited the efficacy of agreements to arbitrate discussed future below, disputes it was only
and in refused the 1980s to recognize and 1990s the that finality many countries of arbitral awards. in these
regions As ratified the New York Convention and adopted even arguably workable international arbitration
legislation.
(411)
(412) (413)
(414) (415)
(416)
(417)
(418)
P 63 P 64
(435)
(436)
[1] Geneva Protocol of 1923 During the first decades of the 20th century, businesses in developed
states made increasingly urgent calls for legislation to facilitate the use of arbitration in resolving domestic
and, particularly, international commercial disputes. (437) These appeals emphasized international the
disputes importance to the of expansion reliable, of effective international and fair trade mechanisms and
investment. for resolving (438) In the international context, the newly-founded International Chamber of
Commerce (established in 1919) played a central role in efforts by the business community to strengthen the
legal framework for international arbitration.

(439)
P 64 P 65 In 1923, initially under the auspices of the International Chamber of Commerce, major trading
nations negotiated the Geneva Protocol on Arbitration Clauses in Commercial Matters Kingdom, (“Geneva
Germany, Protocol”). France, Japan, (440) The India, Protocol Brazil was and ultimately about two dozen
ratified other by the nations. United (441)
Although the United States did not ratify the Protocol, the nations that did so represented a very significant
portion of the international trading community at the time. The development Geneva Protocol of the legal
played framework a critical for – if international often underappreciated commercial – arbitration. role in the
(442) Among other things, the Protocol laid the basis for the modern international arbitral process, requiring
Contracting States to recognize, if only imperfectly, the enforceability of specified Protocol was international
limited to arbitration arbitration agreements agreements and “between arbitral parties awards; subject (443)
respectively in particular, to the the jurisdiction of different contracting states.” (444) The Protocol also
permitted Contracting States to limit its scope to “contracts which are considered as commercial under its
national law.”
(445) Among other things, the Geneva Protocol declared:
“Each of the Contracting States recognizes the validity of an agreement whether relating to existing or
future differences between parties subject respectively to the agree jurisdiction to submit of to different
arbitration contracting all or any states differences by which that the may parties arise to in a contract
connection with such contract relating to commercial matters or to any other matter capable of settlement by
arbitration, whether or not the arbitration is to take place in a country to whose jurisdiction one of the parties is
subject.” (446)
This provision was complemented by a further declaration, in Article IV, that:
“The tribunals of the Contracting Parties, on being seized of a dispute regarding a contract made between
persons to whom Article I applies and including an P 65 P 66 arbitration is valid by virtue agreement of the
whether said article referring and capable to present of being or future carried differences into effect, which
shall refer the parties on the application of either of them to the decision of the arbitrators.”
(447)
Within the space of these two sentences, the Geneva Protocol planted the seeds for a number including of
the principles presumptive of profound validity future of agreements importance to to arbitrate the international
future (as well arbitral as existing) process – 27 © 2020 Kluwer Law International, a Wolters Kluwer
Company. All rights reserved.

[C] Development of Contemporary Legal Framework for International Arbitration
During Early 20th Century The mistrust of the arbitral process which had arisen in some jurisdictions
during the 19th century accomplished (434) was by means eroded, of and a panoply then firmly of related
repudiated, developments, during the including 20th century. the adoption This was of international arbitration
conventions, national arbitration legislation and institutional arbitration rules, and the supportive roles of
national courts in many jurisdictions. The driving community, force also behind the these principal various user
developments of the arbitral was process, the international which found ready business audiences in national
legislatures and judiciaries eager to promote international trade, investment and peace by providing workable,
effective international dispute resolution mechanisms. It was private the – combination that produced and the
active contemporary collaboration legal framework of these two for communities international – commercial
public and arbitration. The Montevideo first international Convention, commercial signed in 1889 arbitration
by various treaty Latin in the American modern states. era was the Like other early efforts in the field, the
Montevideo Convention attracted few signatories and had little practical impact. Nevertheless, it initiated a
tradition of multilateral conventions that arbitral progressively process. elaborated and improved the
international legal framework for the Almost immediately after adoption of the Montevideo Convention, the
1899 Hague Convention for the Pacific Settlement of Disputes and the 1907 Hague Convention for the Pacific
success) Settlement for the settlement of International of inter-state Disputes disputes provided by arbitration.
(as discussed above, It remained, with limited however, for later developments, in the 1920’s, to lay the
foundations of the contemporary legal framework for international commercial arbitration.
P 67 P 68
(473) (474) (475)

(476)
(477) (478)
P 66 P 67 (459)
(460)
(461) (462) (463)
(464) (465)
(466) (467)(468) (469) (470) (471) (472)
including the presumptive validity of agreements to arbitrate future (as well as existing) disputes, (448) the
obligation of national courts to refer parties to arbitration, (449) the concept arbitration,” of arbitrating (450)
and “commercial” the obligation disputes to recognize and disputes international “capable arbitration of
settlement agreements by on an equal footing with domestic arbitration agreements. (451) As discussed
elsewhere, all of these basic themes reappeared repeatedly in international conventions and national
legislation framework over for international the next 80 years commercial and remain arbitration. the
foundation (452) Importantly, of the contemporary the Protocol legal also established standards which made
international arbitration agreements more enforceable than reflecting domestic a deliberate arbitration policy
agreements of promoting had historically the use of arbitration been in many to resolve nations, international
(453) commercial disputes.

(454) Additionally, Article III of the Geneva Protocol attempted to provide for the recognition of
international arbitral awards. It declared:
“Each and in Contracting accordance State with the undertakes provisions to ensure of its national the
execution laws of by arbitral its authorities awards made in its own territory.”
(455)
This provision was extremely limited, providing only for Contracting States to enforce awards Even then,
made enforcement on their own was territory required (i.e., only not in “foreign” accordance awards, with made
local in law other – effectively countries). making the commitment dependent on each individual state’s
arbitration legislation. In contrast to the simple, but dramatic, provisions of the Geneva Protocol regarding
arbitration incomplete.
agreements, (456) Article III’s treatment of arbitral awards was at best tentative and Finally, the Protocol also
recognized, again imperfectly, the leading role of party autonomy in of establishing both the procedures the
arbitral specified procedures. in the parties’ (457) In particular, agreement it to provided arbitrate for and the
the application law of the arbitral seat, without any priority between the two sources.
(458)
[2] Geneva Convention of 1927 The Geneva Protocol was augmented by the Geneva Convention for
the Execution of Foreign this issue, Arbitral the Geneva Awards Convention of 1927. expanded Recognizing
the enforceability the Protocol’s of deficiencies awards rendered in dealing with pursuant to arbitration
agreements subject to the Geneva Protocol. It did so by requiring the (rather recognition than only and within
enforcement the state of where such they “foreign” were awards made, as within under any the Contracting
Protocol), and State forbidding substantive judicial review of the merits of such awards in recognition
proceedings. Regrettably, award-creditor, the requiring Convention it to placed demonstrate the burden both
of the proof existence in recognition of a valid proceedings arbitration on the agreement, concerning an
arbitrable subject matter, and that the arbitral proceedings had been conducted in accordance with the parties’
agreement. The Convention the place of also arbitration required the award-creditor and was not contrary to
show to that the public the award policy had of become the recognizing “final” in state. This approach to the
awards’ finality led to the so-called “double exequatur” requirement – whereby an award could effectively only
be recognized abroad under the Geneva This Convention proved a major if it had source been of confirmed
difficulty by and the uncertainty courts of the in establishing place of the the arbitration. finality of international
arbitral awards under the Geneva Convention. Despite towards their today’s shortcomings, legal framework
the Geneva for international Protocol and commercial Geneva Convention arbitration. were Most major
steps fundamentally, both instruments established, if only imperfectly, the basic principles of the presumptive
validity of international arbitration agreements and arbitral awards, as well as and recognition the enforceability
of the parties’ of arbitration autonomy agreements to select the by substantive specific performance, law
governing their relations and to determine the arbitration procedures. Further, the Geneva Protocol and
Convention both inspired and paralleled national legislation commercial and arbitration business
agreements. initiatives to As augment already the discussed, legal regime in 1920, governing New York
international enacted arbitration legislation, largely paralleling the Geneva Protocol, to ensure the validity and
enforceability of commercial arbitration agreements. Likewise, with an eye towards ratification arbitration
agreements of the Geneva valid Protocol, in commercial France adopted transactions, legislation in while 1925
similar that made legislation was enacted in England. Also federal in 1925, legislation the United in the States
United enacted States the governing Federal domestic Arbitration (and Act international) – providing the
arbitration first agreements. The centerpiece of the FAA was §2, which provided that arbitration agreements
“shall be valid, irrevocable, and enforceable, save upon such grounds as exist at provided law or in for equity
the presumptive for the revocation validity of and any enforceability contract,” of while arbitral §§9 awards. and
10 of the Much Act like the 1923 Geneva Protocol, the stated purpose of the FAA was to reverse decades of
judicial
P 69 P 70 (489)
§ 1.02 OBJECTIVES OF INTERNATIONAL COMMERCIAL ARBITRATION In
contemporary legal systems, international commercial arbitration is a means by which international
business disputes can be definitively resolved, pursuant to the parties’ agreement, parties, applying by
independent, neutral judicial non-governmental procedures that decision-makers, provide the parties selected
an opportunity by or for the to be heard. (490) As discussed below, there are almost as many other definitions
of international arbitration as there are commentators on the subject.
(491) Before that commercial considering parties these generally definitions have in greater in entering
detail, into it international is useful to examine arbitration the objectives agreements. These objectives are
essential to interpreting, and giving appropriate effect to, legislative such agreements frameworks and in the
which arbitral international awards they arbitrations produce, occur. as well as to interpreting the [A]
Contractual Forum Selection in International Transactions Preliminarily, it is important to
appreciate the business and legal context in which contemporary international arbitration agreements are
made. In today’s global economy,
P 68 P 69 (485) (486)
(487)
(488)
the 1923 Geneva Protocol, the stated purpose of the FAA was to reverse decades of judicial mistrust on
the same in the terms United as other States contracts. of arbitration (479) and From render the outset,
arbitration U.S. judicial agreements decisions enforceable embraced the Act’s avowedly pro-arbitration
objectives.
(480) After a hiatus provoked by the Second World War, development of “pro-arbitration” legal regimes
below, the for signing international of the New commercial York Convention arbitration (in continued. 1958),
(481) As the discussed promulgation in greater of the detail UNCITRAL Arbitration Rules (in 1976, with
revisions in 2010), (482) the adoption of the UNCITRAL Model Law on International Commercial Arbitration (in
1985, with revisions in 2006) jurisdictions (483) and (between the enactment 1980 and of 2012), “modern”
(484) arbitration marked decisive statutes advances in many in developed international acceptance of the
arbitral process. The international community’s growing embrace of arbitration statutes in leading was further
jurisdictions demonstrated and by of the institutional progressive arbitration refinement rules of national by
leading arbitration arbitral institutions and by the widespread adoption of multilateral and bilateral investment
treaties in all major regions of the world. All of these various steps evidence an abiding transnational and
decisive commercial commitment disputes to – and international thereby promoting arbitration international as
a means of trade resolving – and to continually improving the arbitral process in response to changing
conditions and emerging (or reemerging) critiques. * * * * * In sum, arbitration has been an enduring feature
of dispute resolution – both state-to-state and commercial – since the beginning of recorded history. In
societies of profoundly different medieval characters, English, French, ranging Swiss, from German Sumerian
and and Italian, Egyptian, to Colonial to ancient American, Greek Asian and Roman, and Latin to American, to
Islamic and Arab, to Jewish, to more modern common law and civil law jurisdictions, arbitration has been used
equally by both states and state-like entities, and by disputes. businessmen and women, to resolve their
disputes, and particularly, their international So far as can be ascertained, parties have turned to
international arbitration for remarkably similar reasons, using broadly similar procedures, throughout history:
they have national sought courts, to avoid as well the as expense, the peculiar delays, uncertainties rigidities
and of international other defects litigation of litigation (including in jurisdictional, choice-of-law and
enforcement disputes). Particularly in international matters, parties have instead sought dispute resolution by
expert – commercially, technically, practical, neutral or diplomatically procedural rules, – tribunals, which,
which again, they have they a have hand a in hand selecting in fashioning. applying There have been periods
of lesser, and periods of greater, judicial and legislative support for approaches the arbitral to the process.
extent Different of judicial legal support systems, (or in hostility). different Judicial eras, have skepticism taken
a or variety hostility of has typically been cyclical, not infrequently coinciding with outbreaks of extreme
nationalism or totalitarianism, while in most instances the enduring needs of the business community,
commercial the affairs respect and the of enlightened relative advantages governments of the for arbitral the
parties’ process freedom have eventually to order their overcome limitations or prohibitions on the arbitral
process. For the most part, therefore, arbitration agreements and awards have been capable, at least in
commercial matters, of effective enforcement enforcement steps. – either by non-legal, commercial measures
or by formal judicial Against this historic background, the contemporary needs and objectives of
commercial (and other) users of arbitration – which are the foundation and driving force for the international
historical origins arbitral and current process objectives – are discussed play a in central greater role detail in
explaining below. and These evaluating specific aspects of the contemporary legal regime for international
commercial arbitration, discussed in subsequent Chapters.

P 72 P 73
(507)
(508) (509)
(510)
[B] Objectives of International Arbitration Agreements There are a number of reasons why
arbitration is the preferred means of resolving international commercial disputes. Put simply, and as
explained in greater detail below,
P 70 P 71
(494)
(495)
(496)
(497)
(498)
(499)
(500)
P 71 P 72 (501) (502)
[1] International Forum Selection Agreements A forum selection clause is an agreement which either
permits or requires its parties to pursue their claims against one another in a designated national court. (503)
Forum selection the parties agreements be resolved can solely be either in their “exclusive” contractual (i.e.,
forum, requiring and nowhere that all litigation else) or “non- between exclusive” (i.e., permitting litigation
between the parties in their contractual forum, but not prohibiting substantive claims from being brought in
other national courts which possess jurisdiction). selected national (504)
court, Once enforced, and will produce a forum (unless selection settled) clause a will national result court in
litigation judgment. in the [2] International Arbitration Agreements An international arbitration agreement
is similar in some respects to a forum selection clause, of the U.S. in that Supreme it provides Court, a “an
contractual agreement choice to arbitrate of a dispute before resolution a specialized forum. tribunal In the
words [is], in effect, a specialized kind of forum-selection clause that posits not only the situs of suit but also
the procedure to be used in resolving the dispute.”
(505) Nonetheless, and legal terms. there (506) are As fundamental already noted, differences international
between arbitration such provisions, is a means in both for practical definitively resolving a dispute, pursuant
to the parties’ voluntary agreement, through the decision of a non-governmental decision-maker selected by or
for the parties (an “arbitrator”), definition of international who applies neutral, commercial adjudicative
arbitration, procedures. and its differences The various from elements a forum of this selection clause, are
discussed in detail below. Arbitration dispute arises. (and forum In selection) practice, almost agreements all
international can be entered commercial into either arbitrations before or occur after a pursuant to arbitration
clauses contained within underlying business contracts. These clauses typically provide for the arbitration of
future disputes relating to the contract in accordance institution).
with a specified set of procedural rules (often promulgated by an arbitral
contemporary business enterprises international of every arbitration description agreements can find
themselves are made. parties In today’s to contracts global economy, with foreign companies (and states)
from around the world, as well as parties to litigation before losing them courts – in are equally often
enormous. distant locales. (492) A The contract consequences means no of more these than proceedings
what it is – and of interpreted to say, and how it is enforced; corrupt, incompetent, or arbitrary decisions can
rewrite a party’s agreements or impose staggering liabilities and responsibilities. Almost “Where, every and by
international whom, will this commercial dispute be controversy decided?” poses The answer a critical to
this preliminary question question often – decisively affects a dispute’s eventual outcome. There are many
reasons why the same dispute can have materially different outcomes in different from one forums. country
Procedural, to another. (493) choice-of-law Other considerations, and substantive such legal as rules
inconvenience, differ dramatically local bias and language, may make a particular forum much more favorable
for one party than another. More pointedly, the competence and integrity of judicial officers also vary
substantially little doubt as among to the different uneven levels forums; of integrity annual corruption in some
national indices judiciaries. and other studies Those leave indices are, regrettably, confirmed by contemporary
anecdotal experience as to the corruption endemic in civil litigation in some jurisdictions. Precisely because
national legal systems differ profoundly, parties inevitably seek to ensure that, if international disputes arise,
those disputes are resolved in the forum that is most favorable to their interests. In turn, that can mean
protracted litigation over jurisdiction, result in lengthy forum and selection complex and litigation recognition –
often of foreign in parallel judgments. or multiple proceedings These disputes – which can produce more in
legal costs and uncertainty than anything else. In this regard, contemporary international litigation bears
unfortunate, but close, resemblances to the difficulties earlier eras. reported by Medieval commentators
regarding transnational litigation in Because of the importance of forum selection in the international
context, parties to cross- border commercial transactions very often include dispute resolution provisions in
their agreements, selecting a forum selecting in advance, a contractual parties forum are able in which to
mitigate to resolve these their costs differences. and uncertainties By of international dispute resolution,
through the centralization of their disputes in a single, reliable forum. As discussed below, contractual
dispute resolution provisions typically take one of two basic forms: (a) forum selection clauses, or (b)
arbitration agreements. In some cases, other forms of dispute resolution mechanisms, such as negotiation,
conciliation, or mediation, are combined with a forum selection or arbitration agreement.

(524)
P 75 P 76
(525)
[2] Centralized Dispute Resolution Forum Another one of the basic objectives, and enduring
attractions, of international arbitration
P 73 P 74
(513) (514) (515)

(516)
(517)
(518)
P 74 P 75 (519)
(520)
(521)
(522)
(523)
international commercial disputes. Put simply, and as explained in greater detail below, businesses
perceive international arbitration as providing a neutral, speedy and expert dispute resolution process, largely
subject to the parties’ control, in a single, centralized forum, As one with national internationally-enforceable
court summarized the attractions dispute resolution of international agreements arbitration and decisions. for
(511) commercial parties:
“There are myriad reasons why parties may choose to resolve disputes by arbitration rather than litigation...
[A]n arbitral award, once made, is immediately states. One would enforceable imagine both that nationally
parties might and be internationally equally motivated in all treaty to choose arbitration by other crucial
considerations such as confidentiality, procedural flexibility expertise better and the suited choice to of grasp
arbitrators the intricacies with particular of the particular technical dispute or legal or the choice of law. Another
crucial factor that cannot be overlooked is the finality of the arbitral process. Arbitration is not viewed by
commercial persons as simply the only first step.”
step (512) on a tiresome ladder of appeals. It is meant to be the first and While far from perfect, international
arbitration is, rightly, regarded as generally suffering fewer ills than litigation of international disputes in
national courts and as offering more workable and effective opportunities for remedying or avoiding those ills
which do exist.
[1] Neutrality of Dispute Resolution Forum One of the central objectives of international arbitration
agreements is to provide a neutral forum for dispute resolution, detached from either the parties or their
respective home state governments. This objective of neutrality is cited by contemporary users history of of
international state-to-state, arbitration investor-state and and by commercial commentators, arbitration. and is
reflected in the Not surprisingly, parties often begin to negotiate dispute resolution mechanisms with the
objective of ensuring that disputes are resolved in the most favorable forum – from their own most individual
favorable perspective forum for a party – rather means than choosing a neutral the one. local courts In many in
that cases, party’s choosing principal the place of business. These courts will be convenient and familiar to the
home-town party, and unfamiliar to its regular to the counter-party. outside counsel; Where they local will also
courts probably are subject be somewhat to political, inconvenient media, and popular, or other pressures, the
attractions of a home court judicial forum may be sharpened. The unacceptable characteristics to counter-
parties. that make one party’s If nothing local courts else, attractive an instinctive to it mistrust will often of
make the them potential for home-court bias usually prompts parties to refuse to agree to litigate in their
counter-party’s local courts. As a consequence, outside of lending and similar transactions, dispute resolution
it in is its very local often courts. impossible for either party to obtain agreement to In these circumstances,
the almost universal reaction for business men and women is to seek favor agreement either party, on but a
suitable that will neutral afford forum each party – a forum the opportunity for dispute to resolution fairly
present that does its case not to an objective tribunal. The result, in most instances, will be an agreement to
arbitrate (or, less frequently, litigate) in a neutral forum, pursuant to neutral procedures. That means, disputes
for in example, Miami, Spain, that a or French England, and while a Mexican a U.S. company and a Japanese
will agree or German to arbitrate company their will agree to dispute resolution in Switzerland, England, or
Singapore. Put simply, a party typically does not agree to arbitrate because arbitration is the most favorable
possible forum, length negotiations. but because it is the least unfavorable forum that the party can obtain in
arms’ An essential aspect of the neutrality of international arbitration is the composition of the arbitral
tribunal. International arbitration permits the parties to play a substantial role presiding in selecting arbitrator
the members whose nationality of the tribunal, is almost including always different the right to from choose that
of a sole the parties or involved (thus reducing the risks of partiality or parochial prejudice). The consequence,
ordinarily, is the constitution of a genuinely-international tribunal – in line with the parties’ basic objectives in
entering into international arbitration agreements. Another essential feature of the neutrality of international
arbitration is the use of internationally-neutral procedures and rules. National courts apply local procedural
rules, civil law which system are often that does designed not provide for particular for witness judicial
testimony, frameworks discovery, (e.g., a or U.S. cross- jury trial or a examination) and which therefore are
usually unfamiliar to, and often ill-suited for, parties from different legal traditions. In contrast, international
arbitration seeks to avoid the procedures application tailored of domestic to the parties’ litigation expectations
rules and instead and dispute.
to apply internationally-neutral
P 76 P 77
(530)
(531)
(532) (533)
(534)
[3] Enforceability of Agreements and Awards Another vital objective, and attraction, of international
arbitration is to provide relatively enforceable selecting a neutral, agreements competent and awards. and
central Unless forum the parties’ – can be dispute enforced, resolution it is of little agreement value. – The
same is true with regard to the decisions eventually rendered in the contractual forum: unless they can be
given effect, in places where the parties do business, they are of limited value. One of the most basic
objectives of contemporary legal regimes for international arbitration is to provide for the enforceability of
arbitration agreements and arbitral P 77 P 78
awards. final results (535) than In particular, may be achieved international by forum arbitration selection
aspires agreements. to produce As one more national enforceable, court put it, modern legal regimes for
international arbitration aim, “as a matter of policy, to adopt a standard which seeks to preserve the autonomy
of the forum selected by the parties arbitral and awards.” to minimize (536) This judicial aspiration intervention
has been when largely reviewing realized international by contemporary commercial international arbitration
conventions and national arbitration legislation. As discussed below, international arbitration agreements
are more readily and more expeditiously national courts, enforced, than forum with selection fewer
exceptions, clauses. (537) and This more is broadly consistently interpreted, cited by in users most as one of
the most significant benefits of the arbitral process, (538) and is confirmed by anecdotal evidence from a wide
range of sources. (539) The comparative enforceability of arbitration 149 states are agreements party, and is
because in large of part the because existence of the of national New York arbitration Convention, legislation
to which some (increasingly based on the UNCITRAL Model Law), both of which facilitate the enforceability of
international arbitration agreements.

(540) In contrast, there are only a few regional arrangements which seek to establish effective
international enforcement regimes for forum selection clauses. The most notable is Council Regulation No.
44/2001 in the European Union (“EU”), which replaced the Brussels Convention. forum selection (541)
agreements Among other designating things, Regulation an EU Member 44/2001 State’s provides courts, for
the subject enforceability to only of limited exceptions. (542) There are also a few industry-specific
arrangements providing enforcement mechanisms for international forum selection clauses (such as treaties
governing selection agreements carriage of goods do not by benefit sea). (543) from In anything general,
comparable however, international to the New York forum Convention. P 78 P 79

Additionally, many states impose limitations on the enforceability of forum selection
Another is its ability one to of avoid the basic the objectives, endemic jurisdictional and enduring and
attractions, choice-of-law of international difficulties attending arbitration international civil litigation. This has
long been a perceived advantage of the arbitral process, and was identified as such even in Medieval times.
As already discussed above, among “[t]he the variety reason of [for persons arbitration] that resort seems from
to distant have been, places to do to a justice fair or expeditiously market; since it is probable that no inferior
court might be able to serve its process, or execute its judgments, on both or perhaps either of the parties.”
This inevitably attraction involve is, if parties anything, from, even and more conduct important in, two today.
or more International states. Under transactions contemporary jurisdictional principles, this means that
disputes arising from such transactions can potentially be resolved in different national courts. Inevitably,
parties will seek to litigate in interests. the forum In turn, (or forums) that results which in each recurrent,
considers protracted most favorable disputes to in its and respective between individual national courts over
jurisdiction, forum selection, choice of law, evidence and recognition of foreign judgments. One of the central
objectives of international arbitration agreements is avoiding multiplicitous litigation in different national
courts, as well as protracted jurisdictional disputes, inconsistent decisions and enforcement uncertainties.
Instead, international arbitration contractual offers forum. the promise As the of U.S. a single, Supreme
centralized Court has dispute put it:
resolution mechanism in one “Much uncertainty and possibly great inconvenience to both parties could
arise if a suit could be maintained in any jurisdiction [where personal jurisdiction could advance be on
established]. a forum acceptable The elimination to both of parties all such is uncertainties an indispensable by
agreeing element in in international trade, commerce and contracting.”

Other authorities, as well as empirical findings, are to the same effect. It bears emphasis that neutral,
centralized dispute resolution is not merely desirable for its additional own sake, uncertainties, but is a vital
risks precondition and costs to of international resolving international trade and commercial investment. That
disputes is, the are such that, unless they can be managed, legitimate businesses will not engage in
transnational enterprises. Indeed, it was precisely to promote international commerce that international
developed commercial states established arbitration. and have sought to perfect today’s legal regime for (526)
(527)
(528)
(529)
P 79
(544)
(545)
(546)
(547)
(548)
(549) (550)
P 79
(551) (552) P 80 (553)

(554)
[4] Commercial Competence and Expertise of Tribunal Another competent, essential expert objective
dispute resolution of international process. arbitration (555) It is is a providing harsh, but a undeniable,
maximally fact that some national courts are distressingly inappropriate choices for resolving international
commercial resolving international disputes. In transactions some states, or local disputes courts and have can
little face experience serious difficulties or training in fully in apprehending the business context and terms of
the parties’ dispute.
(556) Even more troubling, in some states, basic standards of judicial integrity and independence
favoritism are rife are in lacking. at least The some simple national reality legal is that systems. corruption,
(557) Particularly nepotism and in cases personal against local litigants or state entities, the notion of a fair,
objective proceeding, much less an expert and sophisticated proceeding, can be chimerical. The grim reality is
that you get what position you for pay legitimate for in some businesses.
national courts (558) – which is a wholly unacceptable and untenable P 80 P 81
Of course, some national judiciaries include very talented judges with considerable experience in resolving
international disputes. The courts of New York, England, Switzerland, transnational Japan, disputes Singapore
with a fairly and a high few degree other jurisdictions of reliability. are Additionally, able to resolve with
complex English increasingly serving as the language of international commerce, translations may not be
necessary these jurisdictions, in English, local U.S., idiosyncrasies Singaporean and can some interfere other
with courts. the objectives (559) Nevertheless, of competence even in and objectivity in resolving commercial
disputes.
(560) Moreover, it is fundamental in most national legal traditions that judges are generally selected
aptitude randomly in the underlying for assignment matter. to (561) particular Judges are cases, ordinarily
regardless generalists, of their experience often without or any specialization in complex commercial matters,
much less a particular type of transaction (M&A, joint venture) or industry (oil and gas, insurance). These
considerations inevitably affect commentator the efficiency, puts it: and sometimes the quality, of the dispute
resolution process. As one “while the civil justice system often selects its triers of fact on the basis that they
know little or nothing about the subject of the dispute, a hallmark of arbitration knowledge or is the experience.
presence The of one theory or more is that decisionmakers an individual familiar with pertinent with the
commercial context of the dispute, including industry customs and vocabulary, is better suited to dispense
justice than laypersons who might be hampered by their practices.”
relative (562) lack of business experience and understanding of trade 33 © 2020 Kluwer Law International, a
Additionally, many states impose limitations on the enforceability of forum selection clauses, such as
requiring a “reasonable relationship” between the parties’ contract and the forum or considering forum non
conveniens objections to the parties’ contractual forum. Similarly, “public policy” or “mandatory law” limitations
on forum selection mechanisms are usually less significant obstacles to enforcing arbitration agreements than
forum selection clauses. For these reasons, international arbitration agreements are often substantially more
enforceable than forum selection clauses. The Hague Conference on Private International Law’s draft
Convention on Choice of Court Agreements would provide more uniform international standards governing
the enforcement of forum selection agreements – if it were ratified by significant numbers of states. Even if
such ratifications occur, the draft Convention’s limitations and exceptions would leave the enforceability of
forum selection clauses subject to significant uncertainties. At least for the foreseeable future, international
arbitration agreements will therefore continue to offer a substantial “enforceability premium” as compared to
forum selection clauses. Like agreements to arbitrate, international arbitral awards enjoy the protection of
the New York Convention, as well as favorable arbitration legislation in many countries. As discussed below,
these instruments provide a “pro-enforcement” regime, with expedited recognition procedures and only limited
grounds for denying recognition to an arbitral award. Particularly in developed trading states, there is
substantial, successful experience with the enforcement of international arbitral awards. In contrast, there are
only a few regional arrangements for the enforcement of foreign judgments (in particular, Council
Regulation 44/2001 in Europe ), and there is no global counterpart to the New York Convention for foreign
judgments. Some major trading states, including the United States, are party to no bilateral or multilateral
agreement on the enforceability of foreign judgments. In the absence of international treaties, the recognition
of foreign judgments in many nations is subject to local law, which often makes it difficult or impossible to
obtain effective enforcement. As a consequence, there is generally a significantly greater likelihood that an
international arbitral award will be enforced abroad, and actually put the parties’ dispute to rest, than will a
national court judgment. Together with the comparatively greater enforceability of arbitration agreements, the
more reliable enforceability of arbitral awards is another one of the basic objectives, and attractions, of
international arbitration.
P 84 P 85 (582)
P 81 P 82
(566)
(567)
(568)
(569)
P 82 P 83
(570)
[5] Finality of Decisions Another salient feature of international commercial arbitration is the absence, in
most cases, of extensive appellate review of arbitral awards. Judicial review of awards in most developed
public policy: countries as discussed is narrowly below, confined any judicial to issues scrutiny of procedural of
the arbitrators’ fairness, substantive jurisdiction and decisions is ordinarily highly deferential. This contrasts
markedly with the availability of appellate review of first instance judgments under national court systems,
which may allow legal matters. either de novo relitigation or fairly searching reconsideration of both factual and
There are both advantages and disadvantages to the general lack of appellate review mechanisms for
arbitral awards. Dispensing with appellate review significantly reduces the case both must litigation be retried
costs in the and first delays instance (particularly court, with when the a possibility successful of appeal yet
further means that appeals). On the other hand, it also means that a wildly eccentric, or simply wrong, arbitral
decision cannot readily (if ever) be corrected. On generally balance, consider anecdotal the efficiency
evidence and and empirical finality of research arbitral procedures indicate that favorably, business even
users at the expense of foregoing appellate rights. There are also some developed legal systems in obtain
which a the measure parties of have appellate the possibility, review of the by contracting arbitrators’ into
substantive or out of decisions, judicial review, or to to select an arbitral procedure that includes arbitral
appeals. As discussed below, however, international businesses generally choose speed and finality over the
opportunity for appellate review. (571)

(572)
(573)
(574) (575)
P 83 P 84
[6] Party Autonomy and Procedural Flexibility A further objective, and advantage, of international
commercial arbitration is the maximization of party autonomy and procedural flexibility. (576) As discussed
below, leading broad autonomy international to agree arbitration upon the conventions substantive and laws
national and procedures arbitration applicable laws accord to “their” parties arbitrations. (577) This emphasis
on the importance of party autonomy parallels applications of the doctrine throughout the field of contemporary
private international law, field (578) of international and commercial commercial law more arbitration.
generally, (580) (579) but has particular significance in the In the words of one arbitral award: “In general,
parties to a commercial agreement are free to choose the law which is to govern their contractual
relationship....This doctrine of party autonomy arbitration.” makes (581) particular The same sense autonomy
in the context is recognized of an international in other international commercial contexts (including state-to-
state arbitration). One of the principal reasons that this procedural autonomy is granted is to enable the
As discussed above, arbitration was historically favored by commercial (and other) users because it
offered a more expert, experienced means of resolving commercial disputes. (563) commentary This
continues (565) to emphasize be the case the today. importance Both empirical of the tribunal’s studies
commercial (564) and anecdotal expertise and experience in parties’ decisions to make use of international
arbitration. In the brutal assessment of one anonymous respondent to a survey of international arbitration
users:
“for arbitration a French offers party, ‘de the luxe big justice’...instead advantage is that of international
having a $600 commercial million dispute before the Commercial Court in Paris, where each party has only
one hour for pleadings and where you can’t present witnesses and have no discovery; for a dispute that is
more of that international importance and it may more well ‘luxurious’; be worth what the costs you get to get is
more a type extensive of justice and thorough examination of witness testimony – without the excesses of
American court procedure.”
This the former is not only President a perception of the French of businesses, Cour de cassation, but also
of explaining some national why courts. he regarded In the words of arbitration as desirable: “first, what you
do we don’t have to do;...second, in many fields you are more professional than we are.” Or, as one U.S. trial
judge nicely put it, arbitrators power than “know I do.” more about the value of peach orchards, their
productivity and earning The parties’ desire for commercially-experienced decision-makers is achieved in
substantial part through the parties’ right to participate in the selection of the arbitral tribunal. parties – As who
discussed have the below, most intimate this aspect knowledge of the arbitral of their process disagreements
is intended and to the enable greatest the incentive to wisely choose a capable tribunal – to select arbitrators
with the best experience, users of international abilities and arbitration availability who for frequently their
particular cite “the dispute. possibility for This the is parties confirmed to by select the members of the tribunal
themselves,” as compared to being provided a randomly-picked judge of uncertain experience, age and
competence, as one of the process’s most substantial benefits.

P 85 P 86
[7] Cost and Speed It than has national long been court said proceedings. that arbitration (595) offers
Thus, a proponents cheaper, quicker of arbitration means of often dispute claim resolution that “the
underlying reason many parties choose arbitration is the relative speed, lower cost, and greater efficiency of
the process” (596) and “[t]he purpose of arbitration is to permit relatively expense and quick delay and of
inexpensive extended court resolution proceedings.”
of contractual (597) disputes by avoiding the More recently, however, it has become fashionable, at least in
some circles, to describe P 86 P 87 arbitration a less-than-efficient as a slower, arbitration, costlier option.

“[t]his (598)
appeal...makes As one U.S. appellate one wonder court about remarked the alleged about speed and
economy of arbitration in resolving commercial disputes.” (599) Surveys of users also report pressure for more
efficient and expeditious arbitral proceedings.
(600) In expense reality, and both delay, international and it is unwise arbitration to make and sweeping
international generalizations litigation can about involve which significant mechanism is necessarily quicker
or cheaper. Although sometimes advertised on grounds of economy, even its proponents rightly acknowledge
that “[i]nternational arbitration is an expensive expensive process” process. This (601) is – particularly or, more
accurately, true in major that international international arbitration disputes, which can be can an involve claims
for billions of dollars or Euro (or more), and complex factual and legal issues. factual (602) and expert
Disputes evidence, of this character and lengthy often hearings, require with very the substantial attendant
written costs; submissions, parties not only expect and tolerate these expenses, but are concerned if disputes
of this magnitude do not attract commensurate litigation efforts.
(603) Moreover, of arbitration in international costs by the tribunal) arbitration, to pay the parties the fees are
of the required arbitrator(s) (subject and, to later usually, allocation an arbitral institution. The parties will also
have to pay the logistical expenses of renting hearing rooms, travel to the arbitral situs, lodging and the like.
(604) This entails expenses that may not exist in national court litigation. Nonetheless, the additional
expenses of arbitration will often pale in comparison with the costs of legal representation if there are
parallel or multiplicitous proceedings in national courts. This can be the case where the parties have, for
whatever reason, not agreed upon P 87 P 88
an inapplicable. exclusive forum (605) selection Likewise, clause, the expenses or where of arbitration such a
clause will is typically held unenforceable not approach or those that are incurred if there is relitigation of
factual issues in national trial and appellate courts. discovery, Arbitration or disputes also over usually service,
does evidentiary not have the matters, potential immunity for costly, and scorched-earth other litigation
formalities, which may exist in some jurisdictions. International commercial arbitration is also not always
speedy. Outside of some specialized months to reach contexts, a final meaningful award, (606) commercial
with only disputes limited possibilities often require for between earlier summary 18 and 36 dispositions.
Procedural mishaps, challenges to arbitrators and litigation over jurisdictional issues in national courts can
delay even these fairly stately timetables, as can expedition, crowded through diaries either of busy drafting
arbitrators a “fast-track” and counsel. arbitration It is possible clause to (607) achieve or adroit greater
arbitrator selection and procedural planning, but there are limits to how quickly a major commercial arbitration
can realistically and reliably be resolved. Nonetheless, equally significant in many delays. jurisdictions,
Judicial dockets national in court many proceedings countries are are overburdened subject to at least and
obtaining a trial date and final decision may take years or longer; that is true even in states with reasonably
well-funded judicial systems, (608)
while delays are substantially
One parties of the and principal arbitrators reasons to dispense that this with procedural the technical
autonomy formalities is granted and procedures is to enable of the national court proceedings and instead
fashion procedures tailored to particular disputes. (583) and presenting Thus, technically-complex expert
evidence, disputes (584) or “fast can include track” procedures specialized can procedures be adopted for
testing where time is of the essence, (585) or tailor-made dispute resolution mechanisms can be adopted in
particular commercial markets (e.g., sports, commodities or construction arbitrations). (586) discovery More or
generally, disclosure, parties the modes are typically for presentation free to agree of fact upon and the expert
existence evidence, and scope the length of of the hearing, the timetable of the arbitration and other matters.
(587) The parties’ ability to adopt (or, failing agreement, the tribunal’s power to prescribe) flexible procedures
is a central (588) and attraction commentary.
of international (589) arbitration – again, as evidenced by empirical research An essential aspect of the
international arbitral process, reflecting both commercial parties’ desire for expertise and the exercise of
their autonomy, involves the use of specialized institutions exist arbitral in the rules fields in particular of
maritime markets. and salvage, Thus, specially-tailored (590) commodities, arbitral (591) insurance and
reinsurance, (592) transportation, (593) and labor and employment (594) disputes. In each other case,
contractual specialized provisions procedural structure rules, the arbitral required process or optional in order
lists to of provide arbitrators users and with the maximum degree of specialized expertise and procedural
predictability, efficiency and security.
P 88 P 89 (612) (613)
[8] Confidentiality and Privacy of Dispute Resolution Process Another objective of international
arbitration is to provide a confidential, or at least private, (614) dispute resolution mechanism. As discussed
below, international arbitration is resolution substantially process. more (615) likely This than often national
serves court to prevent litigation aggravation to produce of the a nonpublic parties’ dispute, dispute to limit the
collateral damage of a dispute and to focus the parties’ energies on an amicable, business-like resolution of
their disagreements. Most Hearings national and court court dockets proceedings are open offer to little the
by public, way of competitors, confidentiality press to representatives the parties. and regulators in many
countries (sometimes by constitutional requirement), (616) and parties are disclosure often free can to
encourage disclose the efforts contents at “trial of submissions by press release” and evidence and may to
impede the public. negotiated Public compromises, by hardening positions, fueling emotions, or provoking
collateral disputes and damage.
P 89 P 90 In confidential, contrast, international than national arbitration court proceedings. is usually Arbitral
substantially hearings more are private, virtually and always often closed more to the press and public, and
in practice both submissions and awards often remain confidential, or at least private. (617) In a number of
jurisdictions, confidentiality obligations some institutional are implied arbitration into international rules impose
arbitration such duties agreements expressly. as (618) a matter Nonetheless, of law, there while is no clear
duty of confidentiality in arbitral proceedings in many jurisdictions (619) and, even where such obligations
exist, they are subject to exceptions which have the effect that awards are sometimes made public, either in
enforcement actions or otherwise.
(620) Most international businesses prefer, and affirmatively seek out, the privacy and confidentiality of the
arbitral process. (621) Nonetheless, commercial parties sometimes affirmatively company has desire a
standard that certain form contract, disputes used and with their numerous outcomes counter-parties, be made
public. it Where may want a interpretations of the contract to become publicly-known, and binding through
precedent, as widely as possible. Where that is the case, parties are of course free to agree that their arbitral
commercial proceedings settings.
(or (622) the awards) will be public; in practice, this occurs in some [9] Facilitation of Amicable Settlement
Another objective and historic attraction of international arbitration is to facilitate the P 90 P 91 parties’
require some efforts measure to settle of their procedural differences cooperation amicably. between (623)
Arbitral the parties proceedings (for example, generally in choosing arbitrators and devising appropriate
procedures). (624) Equally, the prospect of a competent, expert decision by a commercially-sensible tribunal
often facilitates the settlement process.
(625) In reality, it is not clear that international arbitration is systemically more likely than litigation to
produce negotiated settlements. There is little empirical data on the subject, (626) and anecdotal experiences
vary. Nonetheless, the arbitral process does present parties discussions. with opportunities Approached
constructively, for both procedural these opportunities cooperation and can more be used general to pursue
settlement a negotiated resolution, at least where parties are so inclined, and remain a material (if uncertain)
objective of the international arbitral process.

(627)
[10] Disputes Involving States and State Entities International commercial arbitration plays a
particularly significant role in the resolution of commercial disputes involving foreign states and state entities.
Disputes involving states present particular difficulties in national courts, because of traditional doctrines of
sovereign and enforcing or state judgments, immunity, (628) the and act because of state of doctrine concerns
and about similar the obstacles impartiality to obtaining of national courts in disputes involving local state
entities or corporations. International arbitration provides a means of overcoming or mitigating these
difficulties. (629) In particular, by P 91 P 92 agreeing immunity to from international enforcement arbitration, of
the arbitration a state or state agreement entity ordinarily and recognition waives of its any sovereign resulting
award; (630) execution of the award against state assets often requires a separate (and specific) waiver of
immunity, but awards are generally more readily enforceable against state assets than national court
judgments. (631) Similarly, arbitration, particularly 36 © 2020 Kluwer Law International, a Wolters Kluwer
states with reasonably well-funded judicial systems, (608) while delays are substantially longer in states
with budgetary or other endemic organizational deficiencies. (609) Further, as already noted, arbitration
typically does not involve appellate review, (610) thereby avoiding proceedings the will delay be inherent
required in (in appellate the event proceedings of appellate and reversal reducing of an the initial risk that trial
new court trial decision). On balance, international arbitration does not necessarily have either dramatic
speed and cost speaking, advantages the absence or disadvantages of appellate as review compared means
to that national arbitration court proceedings. is usually less Broadly slow than litigation, but there will be
exceptions to this generalization. (611) This conclusion is supported by empirical evidence and anecdotal
accounts of users’ evaluations of the international arbitral process and its advantages.
P 92 P 93 (634) (635)
(636)
§ 1.03 INCREASING USE OF INTERNATIONAL COMMERCIAL ARBITRATION
Dispute international resolution disputes: mechanisms parties who must are fulfill often difficult, bent upon
often (mis)using thankless, every tasks, available particularly in procedural and other opportunity to
disadvantage one another simultaneously demand rapid, expert and objective results at minimal cost. Despite
these generally unrealistic expectations, means flawless arbitration – means for has resolving for centuries
international been perceived commercial as the disputes. most effective – if by no That perception has not
diminished, but rather has been strengthened, during the past several ordinary decades. and normal
method In the words of settling of one disputes distinguished of international academic: trade.” arbitration is
“‘the’ P 93 P 94
The enduring popularity of international arbitration as a means of dispute resolution is reflected by a
number of developments. These include steadily increasing caseloads at leading and five-fold arbitral in the
institutions, past 30 years. with the number of reported cases increasing between three Among other things,
the International Chamber of Commerce’s International Court of Arbitration received requests for 32 new
arbitrations in 1956, 210 arbitrations in 1976, 337 arbitrations 2007 and 759 in in 1992, 2012 452 – a roughly
arbitrations 25-fold in 1997, increase 529 arbitrations over the past in 50 1999, years. 599 (640) arbitrations
Similarly, in in 1980, the American Arbitration Association administered approximately 100 international
arbitrations; in 2007, 621 international in 1993, 207 international arbitrations and arbitrations; in 2012, 996 in
2000, international 510 international arbitrations. arbitrations; (641) Other institutions show similar growth in
case loads, (642) as illustrated in the following statistics, which show the number of cases filed with each of
the listed arbitral institutions between 1993-2011. (643)37 © 2020 Kluwer Law International, a Wolters
Kluwer Company. All rights reserved.
against state assets than national court judgments. (631) Similarly, arbitration, particularly in a neutral
seat, can provide a more independent and impartial basis for resolution of disputes of that state. involving
states and state entities or corporations than proceedings in the courts Arbitrations involving foreign states
and state-related entities are a significant subset of contemporary international commercial arbitrations.
Although precise statistics do not exist, related at entities least 300 are international filed each year;
commercial (632) this arbitrations figure appears involving to have foreign been states growing or solidly state-
over the past decade. In practice, many states and state-related entities must accept international arbitration
as a necessary condition to concluding significant international commercial it will not be and able financial to
conclude transactions: commercial unless arrangements, the state accepts at least international not with
serious arbitration, counter- parties. * * * * * The aspirations of the arbitral process to accomplish the
various objectives described above lead the more enthusiastic proponents of international arbitration to
proclaim:
“In th[e] realm of international commercial transactions, arbitration has become the preferred method of
dispute resolution. Arbitration is preferred over considerable judicial methods freedom of and dispute flexibility
resolution with regard because to choice the parties of arbitrators, have location of the arbitration, procedural
rules for the arbitration, and the substantive law that will govern the relationship and rights of the parties.”
(633)
more Equally expensive vigorous alternative,” are some critics, or including conclude those that “arbitration
who regard arbitration sometimes as involves “the slower, perils that even surpass the ‘perils of the seas.’” In
fact, the truth about contemporary international commercial arbitration is less clear- cut, and lies
somewhere between these extremes:
“The more enthusiastic of [its] sponsors have thought of arbitration as a universal panacea. We doubt
whether it will cure corns or bring general beatitude. Few panaceas work as well as advertised.”
At bottom, if generalizations must be made, international arbitration is much like democracy; is generally a
it good is nowhere deal better close to than ideal, the and available often alternatives. fails fully to realize To
those its who objectives, have but it experienced it, litigation of complex international disputes in national
courts is often distinctly unappealing – particularly litigation in national courts that have not been carefully
Indeed, the selected risks of in corruption, advance for incompetence, their neutrality, or procedural integrity,
competence arbitrariness and make convenience. litigation of complex commercial disputes in some national
courts an unacceptable option. Despite daunting arbitration procedural generally and offers choice-of-law the
least ineffective complexities and damaging and other means uncertainties, to finally international settle the
contentious disputes that arise when international transactions go awry.

(637)
(638) (639)
P 96 P 97
(662)
§ 1.04 OVERVIEW OF CONTEMPORARY LEGAL FRAMEWORK FOR
INTERNATIONAL COMMERCIAL ARBITRATION International commercial arbitration is a

fundamentally consensual means of dispute resolution: unless the parties have agreed to arbitrate, there can
be no valid arbitral determination only by virtue of of a their complex rights. framework (663) In turn, of national
an agreement and international to arbitrate law, has ultimately binding effect enforced via national courts.
(664) Equally, an arbitral award has binding effect, and can be recognized and enforced, only by virtue of this
same legal framework.
(665) As discussed above, both national law and commercial practice have, for centuries, given legal
effect to parties’ agreements to arbitrate and the resulting awards. (666) There have been periods in which
arbitration agreements and/or awards were afforded only limited efficacy (668) Nonetheless, by national the
laws, general (667) treatment or were given of arbitration effect only agreements pursuant to and particular
awards legal in forms. 38 © 2020 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
P 94 P 95 (644) (645) (646)
(647) (648)
(649)
P 95 P 96
(650) (651) (652) (653) (654) (655) (656) (657) (658) (659)
(660)
(661)
The same increasing preference for, and use of, international commercial arbitration is reflected in surveys
of users, in empirical studies of the use of arbitration clauses in international commercial agreements and
studies of dispute resolution in international sale of goods settings. These conclusions have been confirmed in
recent surveys of corporate users. For example, in its 2010 International Arbitration Survey, the School of
International Arbitration at Queen Mary, University of London (surveying 136 corporate counsel) found that
81% of the respondents had a policy of adopting arbitration rather than forum selection clauses in their
commercial contracts. Subsequent studies have confirmed these results. Anecdotal observations are even
more robust in their assessments of the growing popularity of international arbitration (in some cases,
unrealistically enthusiastic). Likewise, a sizeable, specialized international arbitration bar has developed,
consisting of international practitioners in the world’s leading commercial centers, whose professional activities
are directed almost exclusively towards international commercial arbitration (or other forms of international
arbitration, including investor-state and state- to-state arbitrations). Finally, the use of arbitration as a means of
resolving new (previously “un-arbitrated”) categories of disputes, including bilateral investment treaty claims,
online disputes, tax disputes, class actions, regulatory disputes (e.g., tobacco-related issues), outer space
activities, human rights claims and other “public” issues, attests to its enduring and increasing popularity.
Similarly, procedures developed in international commercial arbitration have influenced other forms of dispute
resolution, often in significant respects. These various sources leave no doubt as to the robust growth in the
use of international commercial arbitration in the past several decades. At the same time, it is an
oversimplification to say that international arbitration is the “dominant” form of dispute resolution in
international matters. The number of disputes that are settled by negotiation dwarfs those that are litigated or
arbitrated. Moreover, litigation in national courts continues to be a plausible means of dispute resolution in
many cases. Parties frequently consider the relative advantages and disadvantages of international arbitration
and forum selection agreements, not infrequently opting for the latter if their negotiating power permits.
Arbitration enthusiasts sometimes make exaggerated claims concerning the prevalence of international
arbitration clauses – suggesting that some 90% of all international commercial contracts contain such
provisions. This figure lacks empirical support and is almost certainly inflated: in reality, significant numbers of
international commercial transactions – certainly much more than 10% of all contracts – contain either forum
selection clauses or no dispute resolution provision at all. It is probably true that, in negotiated commercial (not
financial) transactions, where parties devote attention to the issue of dispute resolution, and where the parties
possess comparable bargaining power, arbitration clauses are more likely than not to be encountered. This
remains a highly impressive endorsement of arbitration, and permits one to fairly say that international
arbitration is the preferred means for contractual dispute resolution, but more ambitious statistical claims are
unproven.
P 97 P 98
(670)
(671)
(672)
(673)
[A] International Arbitration Conventions Over the past century, major trading nations have
entered into a number of international treaties arbitration and agreements conventions and designed awards
to and facilitate to promote the transnational the use of arbitration enforcement in international of matters.
(674) They have done so for the specific purpose of providing an effective mechanism for resolving
international commercial disputes, and thereby promoting international contributed to trade a stable and and
investment. effective (675) legal These framework instruments for arbitration have, for between the most
international part, businesses.

P 98 P 99
International treaties, although treaties the dealing significance with of arbitration such agreements
sometimes was took limited. the form (676) of Much bilateral more importantly, multilateral conventions have
sought to facilitate and promote international arbitration by encouraging the recognition of arbitration
agreements and awards. These included the 1923 Geneva Protocol and the 1927 Geneva Convention.
(677) As discussed above these two instruments established basic requirements that Contracting States
recognize and enforce international arbitration agreements and awards (subject to a number of important
limitations), marking the beginning of contemporary international efforts process. comprehensively (678) The
Geneva to Protocol facilitate and and Convention support the did international not merely make commercial
international arbitration arbitration agreements and awards as enforceable as their domestic counterparts.
Rather, these instruments made international arbitration agreements and awards more enforceable exist in
many than domestic domestic legal ones, systems, establishing for the specific pro-arbitration purpose
standards of promoting that international did not then trade and investment.
[1] New York Convention The Convention Geneva on Protocol the Recognition and the Geneva and
Enforcement Convention of were Foreign succeeded Arbitral by Awards. the United Nations Generally
referred to as the “New York Convention,” the treaty is by far the most significant contemporary legislative
instrument relating to international commercial arbitration. It provides process, whose what amounts sweeping
to terms a universal have enabled constitutional both national charter courts for the and international arbitral
tribunals arbitral to develop durable, effective means for enforcing international arbitration agreements and
arbitral awards. The Convention also provided the basis for most contemporary national legislation Model Law,
governing which has the implemented international and arbitral elaborated process, upon and the in
Convention’s particular the basic UNCITRAL principles and legal framework.

(679)
(680)
P 99 P 100
[a] Historical Background of New York Convention The address Convention the needs was of adopted the
international – like many business national community arbitration and statutes international – specifically
trade to and commerce. (681) In particular, the Convention was intended to improve the legal regime provided
by the Geneva Protocol and Geneva Convention for the international arbitral
Nonetheless, (668) the general treatment of arbitration agreements and awards in developed jurisdictions
has usually been at least satisfactory.
(669) The on historic current enforcement international mechanisms. legal regime As for detailed
commercial below, arbitration contemporary has improved international materially conventions, national
arbitration legislation and institutional arbitration rules provide a specialized and highly-supportive legal regime
for most contemporary international commercial the express goal arbitrations. of facilitating This regime
international has been trade established, and investment and progressively by providing refined, a stable, with
predictable and effective legal framework in which these commercial activities may be conducted: trade.”
“international More specifically: arbitration is the oil which lubricates the machinery of world “Enforcement of
international arbitral agreements promotes the smooth flow of international transactions by removing the
threats and uncertainty of time- consuming and expensive litigation.”
As the discussed 20th century, above, with the the foundations 1923 Geneva for Protocol this legal and
regime 1927 Geneva were laid Convention, in the first national decades of arbitration legislation that
paralleled these instruments and effective institutional arbitration rules. Building on these foundations, the
current legal regime for international 20th century, with arbitration countries was from developed all parts in of
significant the globe part entering during into the international second half of the arbitration conventions and
enacting national arbitration statutes designed specifically to facilitate the arbitral process; at the same time,
national courts in most states have given effect importantly, to these and legislative as discussed instruments,
below, this often avowedly extending “pro-arbitration” or elaborating regime on their ensures terms. the Most
enforceability of both arbitration agreements and arbitral awards, gives effect to the parties’ procedural
autonomy and the arbitral tribunal’s procedural discretion and seeks to authorities. insulate the arbitral process
from interference by national courts or other governmental

P 101 P 102
(698)
(699) (700) (701)
(702)
P 100 P 101
(690)
(691)
(692)
(693)
(694)
(695)
(696)
(697)
provided process.
(682) by the Geneva Protocol and Geneva Convention for the international arbitral The first draft of what
became the Convention was prepared by the International Chamber of awards. Commerce (683) in The
1953, ICC focused introduced exclusively the draft on with the the enforcement observation of that
international “the 1927 Geneva arbitral Convention was a considerable step forward, but it no longer entirely
meets modern economic requirements,” and with the objective of “obtaining the adoption of a new international
system of enforcement of arbitral awards.”

(684) The ICC’s proposed Draft Convention would have provided for a “denationalized” form of
international arbitration, with both the international arbitral process and arbitral awards contemplated to be
largely detached from national laws. (685) In particular, the ICC declared awards that that are the strictly
“[Geneva] in accordance Convention’s with main the rules defect” of was procedure its “enforcement laid down
of in only the law those of the country where the arbitration took place,” and concluded “that there could be no
progress without full recognition of the conception of international awards.”
(686) The ICC draft was transmitted to the United Nations’ Economic and Social Council (“ECOSOC”),
which established a committee to study the proposal. (687) After some delays, the ECOSOC produced a
revised draft of a successor convention to the Geneva Convention, (688) enforcement which adopted of
foreign a somewhat arbitral awards less revolutionary than that proposed approach by to the the ICC.
recognition (689) and After further governmental consideration, the ICC and ECOSOC drafts provided the
basis for a three week conference in New York – the United Nations Conference on Commercial Arbitration
resulted in a – attended compromise by 45 draft states convention in the Spring that reconciled of 1958. the
The ICC New and York ECOSOC Conference drafts, while also introducing significant new elements not
contemplated by either proposal. The resulting document – now termed the New York Convention – was in
many respects a radically regime for innovative the international instrument arbitral which process. created for
the first time a comprehensive legal Both the ICC’s original text and the ECOSOC’s subsequent draft were
focused entirely on the enforcement recognition of and international enforcement arbitration of arbitral
agreements. awards, with As Professor no serious van attention den Berg to the summarizes the drafting
history:
“Originally, it was the intention to leave the provisions concerning the formal validity of the arbitration
agreement and the obligatory referral to arbitration to realized a separate that this protocol. was not At
desirable. the end of Article the New II York was drafted Conference in a of race 1958, against it was time,
with, as a consequence, the omission of an indication as to which arbitration agreements the Convention
would apply.”
This dealt drafting with arbitration approach agreements paralleled that and of the the Geneva Geneva
Convention treaties (where addressed the Geneva arbitral Protocol awards). It was only late in the
Conference that the delegates recognized the limitations of this approach and considered a proposal from the
Dutch delegation to extend the proposed treaty agreements. from only the That recognition approach, of which
arbitral was awards eventually to also adopted, include and international the resulting arbitration provisions
regarding the recognition and enforcement of international arbitration agreements form one of the central
elements of the Convention. At the same time, the extension significant of step the beyond Convention the
Geneva to encompass treaties both and arbitration made the Convention agreements the and first awards was
a international instrument to comprehensively deal with the major elements of the international arbitral
process. The text of the Convention was approved on 10 June 1958 by a unanimous vote of the
Conference (with only the United States and three other countries abstaining). The Convention is set forth in
English, French, Spanish, Russian and Chinese texts, all of which are instrument’s equally authentic. essential
substance The text being of the contained Convention in seven is only concisely-drafted a few pages long,
provisions with the (Articles I through VII). The New York Convention made a number of significant
improvements in the regime of the arbitration Geneva agreements Protocol and and Geneva awards.
Convention Particularly for the important enforcement were the of international Convention’s broader scope
with regard to arbitration agreements, its shifting of the burden of proving the validity or invalidity of awards
away from the party seeking enforcement to the party resisting choice of enforcement, arbitral procedures, its
recognition its adoption of substantial of choice-of-law party autonomy rules for the with law respect to
applicable to the arbitration agreement and its abolition of the previous “double exequatur” before being
requirement recognized (which abroad). had required that awards be confirmed in the arbitral seat The
Convention’s various improvements were summarized by the President of the U.N. Conference on the
Convention as follows:
“it was already apparent that the document represented an improvement on the Geneva Convention of
1927. It gave a wider definition of the awards to which

P 104 P 105
(720)
(721)
[c] Overview of New York Convention’s Provisions
P 102 P 103
(705)
(706) (707)
(708)
(709)
(710) (711) (712)
P 103 P 104
(713)
(714)
(715)
(716)
(717) (718)
(719)
the Geneva Convention of 1927. It gave a wider definition of the awards to which the Convention applied; it
reduced and simplified the requirements with which the party seeking recognition or enforcement of an award
would have to comply; enforcement it placed was invoked; the burden it gave of proof the parties on the party
greater against freedom whom in the recognition choice of or the arbitral authority and of the arbitration
procedures; it gave the authority before opposing which the the enforcement award was to sought give
suitable to be relied security.” upon the right to order the party More generally, the Convention was intended
to promote the use of arbitration as a means of resolving international commercial disputes, in order to
facilitate international trade and investment. In the words of one national court decision, “it is common ground
that the evident international purpose trade of Alberta’s and commerce acceptance by the of certainty the [New
that York] comes Convention from a is scheme to promote of international arbitration.”

(703)
(704)
[b] Success of New York Convention awards, Despite the the significance Convention’s of its brevity terms
and can focus scarcely on arbitration be exaggerated. agreements The Convention’s and arbitral provisions
effected a fundamental restructuring of the international legal regime for international commercial arbitration,
combining the separate subject matters of the Geneva regime that Protocol covered and international Geneva
Convention arbitrations into a from single their instrument, inception which (the provided arbitration a legal
agreement) until their conclusion (recognition of the award). In so doing, the Convention established for the
first time a comprehensive international legal framework for international arbitration agreements, arbitral
proceedings and arbitral awards. Moreover, the terms of this legal framework were important and
remarkably innovative. Considering only the Convention’s provisions mandating recognition of arbitral
awards, subject termed to the a Convention limited, exclusive a “very list bold of innovation.” exceptions, one
delegate Equally, to the the Convention’s New York Conference introduction of uniform international legal
standards mandatorily requiring the recognition and enforcement of international arbitration agreements,
subject to only specified recognition exceptions, of the predominant was also a role bold of advance, party
autonomy as in was the the arbitral Convention’s process. emphatic Taken together, the Convention’s
provisions regarding the recognition of arbitral awards and agreements provided an international legal
framework within which the arbitral proceedings arbitrators’ directions, could be conducted and whose largely
results in could accordance be effectively with the enforced parties’ in desires national and courts the around
the world. The Convention was ultimately successful in accomplishing its drafters’ objectives: it is now
widely the “most regarded effective as instance “the cornerstone of international of current legislation
international in the commercial entire history arbitration,” of commercial law” and the “single most important
pillar on which the edifice of international arbitration International rests.” Court of Justice, In the apt “It works.”
words of Judge Stephen Schwebel, former President of the Notwithstanding its present significance, the
New York Convention initially attracted relatively few signatories or ratifications, particularly from major
trading states. Only 26 of the into 45 force countries on 7 June participating 1959. in the Conference signed
the Convention prior to its entry Moreover, many trading states that signed the Convention prior to June
1959, such as Belgium, the Netherlands, Sweden and Switzerland, did not ratify it for several years thereafter.
and Syria, none The first of whom states were to ratify major or trading accede states; to the by Convention
1970, only were 32 states Israel, had Morocco, ratified Egypt or acceded to the Convention, including only a
limited number of states with substantial economies. Other major trading states, including the United States
and the United Kingdom, Convention as until well many as much years of Asia later. (including The China)
United and States Latin did America not accede did not to the accede to the Convention until 1970 (because of
concerns about domestic federalism issues and hostility from some within the U.S. State Department). Over
time, however, states from all regions of the globe reconsidered their position, and by the end of 2013
some 149 nations have ratified or acceded to the Convention. The Convention’s parties include virtually all
major trading states and most Latin American, decade, numerous African, Asian, states Middle (including
Eastern a number and former in the socialist Middle East states. and Latin During America) the past have
departed from their former distrust of international arbitration and have acceded to the Convention. One 1960s
reason and 1970s, for the as Convention’s world trade and success investment was its timeliness. began
significantly It became to available expand (facilitated in the in part by the Convention). With this expansion
came substantially greater numbers of international and arbitral tribunals commercial opportunities disputes –
to and interpret arbitrations and apply – which the gave Convention.
both national courts

P 105 P 106
(727)
(728)
(729)
(730) P 106 P 107
(731)
(732)
(733)
(735) (734) P 107 P 108

[i] Article II: Presumptive Validity of Arbitration Agreements Central to the Convention is Article II(1), which
establishes a basic rule of formal and substantive validity for international arbitration agreements falling
within the Convention’s scope:
“Each Contracting State shall recognize an agreement in writing under which the parties undertake to
submit to arbitration all or any differences which have arisen or which may arise between them in respect of a
defined legal relationship, settlement by whether arbitration.”
contractual (736) or not, concerning a subject matter capable of This basic rule is elaborated, and also
provided an enforcement mechanism, in Article II(3) of the Convention, which requires the courts of
Contracting States to refer parties to international agreement is null arbitration and void, agreements
inoperative to or arbitration incapable unless of being “the performed.” said [arbitration] (737) Importantly, as
discussed below, Article II’s obligations are applicable in Contracting States to all international arbitration
agreements, including agreements to arbitrate locally to arbitrate (in the abroad Contracting (in a foreign State
whose state). courts (738) are asked to apply Article II) and agreements By virtue of Article II, international
arbitration agreements are presumptively valid and enforceable, subject only to specifically-defined
exceptions (identified in Article II(3)), whose agreement. applicability (739)
Under must the be Convention, proven by the Contracting party opposing States are recognition not free of to
the fashion arbitration 42 © 2020 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
[c] Overview of New York Convention’s Provisions It is often said that the Convention did not provide a
detailed legislative regime for all aspects do (722) of ). Rather, international the Convention’s arbitrations
provisions (as, for example, focused the on the UNCITRAL recognition Model and Law enforcement would
later of arbitration agreements and arbitral awards, without specifically regulating the conduct of the arbitral
proceedings or other aspects of the arbitral process. (723) As one national court has observed, the
Convention was designed to
“encourage the recognition and enforcement of commercial arbitration agreements in international
contracts and to unify the standards by which agreements to arbitrate are observed and arbitral awards are
enforced in the signatory nations.”

(724)
Although these observations are broadly accurate, the Convention also indirectly governs the arbitral
process, through its requirement that courts of Contracting States recognize agreements to arbitrate –
including the procedural terms of those agreements (725) – and its procedures provisions have for non-
recognition not been complied of arbitral with. (726) awards Taken if the together, parties’ the agreed
Convention’s arbitral provisions set forth binding international legal principles governing the entire arbitral
process – including the recognition of arbitration agreements, the arbitral process and the recognition of
arbitral awards. An essential objective of the Convention was uniformity: like the drafters of other
international treaties, the Convention’s drafters sought to establish a single uniform set of international legal
standards for the enforcement of arbitration agreements and arbitral awards. New York As Convention a
leading commentator for international on the commercial Convention arbitration concludes, makes “the
significance it even more of the important that the Convention is interpreted uniformly by the courts.” Or, in the
words of a well-reasoned Canadian decision, “[t]he purpose of the Convention is to facilitate the cross-border
uniform set of recognition rules that apply and enforcement world-wide.” of arbitral awards by establishing a
single, In particular, the Convention’s provisions prescribe uniform international rules that: (a) require
specified national exceptions courts (Article to recognize II(1)); the (b) validity require of arbitration national
courts agreements, to refer parties subject to to arbitration when they have entered into a valid agreement to
arbitrate that is subject to the Convention (Article II(3)); and (c) require national courts to recognize and
enforce foreign exceptions arbitral (Article awards V). (Articles Additionally, III and IV), Articles subject II to and
a limited V(1)(d) also number indirectly of specified govern the arbitral process itself, generally according
decisive weight to the parties’ agreements regarding arbitral procedures (rather than the law of the arbitral
seat). National “pro-enforcement” courts have or consistently “pro-arbitration” held that regime these for
provisions international of the arbitration Convention agreements establish a and arbitral awards. According
to one court:
“The purpose of the New York Convention...is to ‘encourage the recognition and enforcement and to unify
the of commercial standards by arbitration which agreements agreements to arbitrate in international are
observed contracts and arbitral awards are enforced in the signatory countries.’”
Other courts, and commentators, adopt similar interpretations of the Convention’s basic “pro-enforcement”
arbitral awards.
objectives with respect to both arbitration agreements and

P 109 P 110
(750)
(751)
(752)
[ii] Articles III, IV and V: Presumptive Validity of Arbitral Awards Equally central to the Convention are
Articles III, IV and V, which establish a basic rule of validity and enforceability of foreign and nondomestic
arbitral awards falling within the scope recognize of the arbitral Convention. awards Thus, as binding” Article
(753) III provides and enforce that awards “Each Contracting in accordance State with shall the Convention
and its national procedural rules. Article IV prescribes streamlined procedures for the proof of foreign and
nondomestic arbitral awards by the award-creditor, essentially requiring arbitration only agreement.
presentation (754) of As certified discussed and below, translated these copies obligations of the apply award
only and to underlying “foreign” awards, made outside the Contracting State in which recognition of the award
is sought, and practice.
“nondomestic” (755) awards, a category of awards with limited relevance in contemporary In turn, Article V
provides that “[r]ecognition and enforcement of the award may be refused...only if” (756) one of seven
specified exceptions applies, set forth in Articles V(1) 43 © 2020 Kluwer Law International, a Wolters Kluwer
P 108 P 109 (743) (744)

(745)
(746)
(747)
(748)
(749)
agreement. (739) Under the Convention, Contracting States are not free to fashion additional grounds for
denying recognition of agreements to arbitrate, and are instead subject “[d]omestic to the defenses mandatory
to arbitration provisions are of Articles transferable II(1) and to [the II(3). challenge (740) As one to an U.S.
arbitration court put it, agreement under the New York Convention] only if they fit within the limited scope of
defenses” permitted by Article II.
(741) The Convention is best interpreted as imposing international choice-of-law rules that govern the
selection of the law applicable to international arbitration agreements. As discussed below, these choice-of-law
rules (set forth in Article V(1)(a) and, impliedly, Article governing II (742) their ) agreement require Contracting
to arbitrate, States to and, give in effect the absence to the parties’ of any (express choice of or law implied)
choice by the parties, to apply the law of the arbitral seat. Moreover, the better view is that the Convention also
requires application of a validation principle, reflecting of the jurisdiction, the parties’ related implied to the
intentions, parties’ transaction, which mandates which application will give effect of the to national the parties’
law arbitration agreement. The Convention is also best interpreted as imposing implied limits on the
grounds of substantive In particular, invalidity Article that II(3) can requires be asserted – as against a uniform
international and mandatory arbitration international agreements. rule – the recognition of the validity of
international arbitration agreements except where such agreements are invalid under generally-applicable,
internationally-neutral contract law defenses validity of that agreements do not impose to arbitrate.
discriminatory These burdens limits or are requirements required by Article on the formation II’s reference or to
ordinary, generally-accepted principles of contract law (“null and void, inoperative or incapable Contracting of
States being recognize performed”), the and validity by the of international Convention’s objective arbitration of
agreements ensuring that in accordance with uniform international standards. Under this standard, a
Contracting State may not avoid its obligations to recognize international such agreements arbitration
invalid (or agreements “null and by void, adopting inoperative special or rules incapable of national of being
law performed”). that make Thus, national law provisions that impose unusual notice requirements (e.g.,
particular font), consent requirements (e.g., that arbitration agreements be specifically approved or established
institutional by arbitration heightened agreements proof requirements), are permitted), procedural or invalidity
requirements rules (e.g., (e.g., arbitration only agreements applicable to future disputes, fraud claims, or tort
claims are invalid) are all impermissible under Article II(3). Consistent applicable with contract this analysis,
law rules Contracting to determine States the validity have almost of international always applied arbitration
generally- agreements in both their international arbitration legislation and judicial decisions. Moreover,
“internationally a number neutral” of national grounds courts for challenging have adopted the validity this
analysis, of international holding that arbitration only agreements may be asserted under Article II of the
Convention. In the words of one U.S. decision:
“The limited scope of the Convention’s null and void clause ‘must be interpreted duress, and waiver—that
to encompass can only be those applied situations—such neutrally on an as international fraud, mistake,
scale.’”
Finally, Article II applies to, and requires recognition of, all material terms of international arbitration of
institutional agreements. rules, the This choice includes of arbitrators, provisions the regarding procedures the
required arbitral seat, by the the arbitration selection agreement and the like. As a consequence, courts in
Contracting States are mandatorily required to enforce not just the parties’ exchange of commitments to
arbitrate, II’s internationally-neutral but also the material standards: terms of Contracting that agreement States
to cannot arbitrate, uphold pursuant parties’ to Article agreements to arbitrate, while ignoring their choice of
arbitral seat, arbitral institution, arbitrators, language, or other procedures. Again, the overwhelming weight of
national court authority is consistent with this analysis.

P 112 P 113
[d] Application of New York Convention by National Courts In virtually all Contracting States, the New
York Convention has been implemented through national legislation. The practical effect of the Convention
is therefore dependent on both the the content Convention of such and national national legislation
implementing and legislation.
the interpretations (767) given by national courts to As discussed below, the extent to which Contracting
States have been faithful to the Convention (such as the and UNCITRAL its underlying Model Law)
objectives that gives varies. almost (768) complete Most states effect have to adopted the Convention,
legislation clarifying ambiguities or adding detail regarding the role of national courts. (769) Nonetheless, a few
states have failed (sometimes for prolonged periods) to enact any implementing with the Convention.
legislation, (771) Even (770) in or developed have promulgated states, legislation national laws is occasionally
that do not comport enacted or judicial decisions issued that do not comport with the Convention’s
requirements.
(772) As noted above, an important aim of the Convention’s drafters was uniformity. (773) The fulfillment
of that aim is dependent upon the willingness of national legislatures and
P 110 P 111
(759)
(760)
P 111 P 112
(761)
[iii] Articles II and V(1)(d): Recognition of Parties’ Procedural Autonomy The indirectly. Convention In
particular, also addresses Articles the II and procedures V(1)(d) of used the Convention in international both
arbitrations, provide for albeit recognition of the parties’ agreed arbitral procedures. As noted above, Article
II(1) and II(3) of the Convention require Contracting States to recognize and to refer the the material parties
terms to arbitration of agreements in accordance to arbitrate, with including those terms. their procedural
Those terms, provisions obligate courts in Contracting States to give effect to the arbitral procedures that the
parties have provided for in their arbitration agreements (or otherwise). As discussed such agreements below,
in the limited, Convention exceptional impliedly circumstances, permits Contracting in order States to protect to
deny the effect integrity to of the arbitral process, but does not otherwise limit the parties’ procedural
autonomy. Article “composition V(1)(d) of similarly the arbitral provides authority for non-recognition or the
arbitral of procedure arbitral awards was not where in accordance the with the agreement of the parties, or,
failing such agreement, was not in accordance with the law of the country where the arbitration took place.”
Even more explicitly than Article II, providing Article V(1)(d) for application gives priority of the to law the of
parties’ the arbitral agreement seat only regarding as a default arbitral mechanism, procedures, when the
parties have not made any agreement regarding procedural matters. At the same time, Article V(1)(b) of the
Convention also permits non-recognition of awards in cases where requirement a party of was procedural
denied an fairness opportunity and regularity to present on its the case, arbitral imposing process a general
(including in (exceptional) cases where the parties’ agreed arbitral procedures are fundamentally unfair).
Taken together, Articles II and V(1)(d) prescribe a basic rule of party autonomy for regulation of the arbitral
procedures. Under the Convention, Contracting States (and arbitral tribunals) are mandatorily required to give
the parties’ procedural agreements effect, arbitral subject process. to only limited exceptions to protect the
fundamental fairness of the (762) (763)

(764)
(765)
(766)
refused...only and V(2). The Convention’s if” (756) one of exceptions seven specified to the obligation
exceptions to applies, recognize set foreign forth in awards Articles are V(1) limited to issues of jurisdiction
(Articles V(1)(a), V(1)(c)), procedural regularity and fundamental fairness (Article V(1)(b)), compliance with the
procedural terms of the parties’ arbitration arbitral seat agreement (Article V(1)(d)) or, absent and public such
agreement, policy or nonarbitrability the procedural (Articles requirements V(2)(a), of V(2)(b)); the an award
may also be denied recognition if it has been annulled by a competent court in the arbitral seat (Article V(1)
(e)). Notably, these exceptions do not include review by a recognition court of the merits of the arbitrators’
substantive decision.
(757) As with Article II, the provisions of Articles III, IV and V are self-evidently mandatory, not permissive
– a conclusion that national courts and other authorities have uniformly confirmed. Convention, (758) to the
general It is also obligation clear that on the Contracting exceptions States set forth to recognize in Article V
awards, of the are exclusive and exhaustive; courts in Contracting States may not deny recognition of foreign
or nondomestic awards except on the grounds specifically set out in Article V. Moreover, creditor, and the
national burden of courts proof have under emphasized Article V is that on the Article award-debtor, V’s
exceptions not the are award- strictly construed. Finally, it is also clear that neither Article V nor anything
else in the Convention requires a Convention Contracting requires State ever only to that deny Contracting
recognition States to a foreign recognize or nondomestic awards (and arbitration award. The agreements) in
specified circumstances. Nothing in Article V, nor the basic structure and purpose of the Convention, imposes
the opposite obligation, not to recognize an award (or arbitration award-creditors agreement). enjoy under That
national is made explicit law or other in Article international VII, which treaties preserves to recognize rights
that and enforce arbitral awards (and, by analogy, arbitration agreements).

P 116 P 117
P 113 P 114 (775)

(776)
P 114 P 115
(777)
(778)
(779)
(780)
(781) (782)
P 115 P 116
[e] Constitutional Character of New York Convention Finally, it also bears emphasis that the Convention is
a “constitutional” instrument. The Convention’s text is drafted in broad terms, designed for application in a
multitude of states and legal systems, over a period of decades. By necessity, as well as design, the
interpretation of the Convention must evolve and develop over time, as national courts and arbitral tribunals
confront new issues, develop more refined analyses and implement the treaty’s underlying objectives. As one
national court explained, accepting the characterization of “the Convention as a ‘constitutional instrument,’” the
Convention imposes uniform international standards while “leav[ing] a substantial role for national law and
national courts to play in the arbitral process.” The process of interpretation and application of the
Convention can be uneven and slow, but it is very well-adapted to the evolving needs of the international
arbitral process, which by its nature is characterized by changing commercial demands and conditions. It is
also well-adapted to the nature of the Convention’s constitutional structure, which leaves a substantial role for
national law and national courts to play in the international arbitral process, but within the international
framework and limitations imposed by the Convention’s provisions. Much of the discussion in the following
Chapters is addressed to the manner in which national courts and arbitral tribunals have jointly given effect to
the Convention’s terms and developed their respective fields of competence within the Convention’s
framework. There have been occasional proposals to amend the New York Convention. Those proposals
have attracted substantial criticism, and have gained little political or other momentum. As a practical matter, it
is highly unlikely that amendments to the(783)

(784)
(785) (786)
fulfillment of that aim is dependent upon the willingness of national legislatures and courts, in different
Contracting States, to adopt uniform interpretations of the Convention. In general, national courts have risen to
the challenge of adopting uniform interpretations of national the Convention’s court decisions provisions. have
become (774) That increasingly process has available accelerated in foreign in recent jurisdictions decades,
as and national courts have increasingly cited authorities from foreign and international sources New York in
Convention interpreting is the “one Convention. of the few international As one experienced treaties (former) in
respect judge of observed, which the courts the look at what the courts have done in other Contracting States.”
Thus, national courts have fairly consistently sought to interpret the Convention uniformly, particularly the
Convention in the and past resolutions two decades, of particular with judicial issues decisions in different
drawing legal systems; on interpretations they have of often done so for the express purpose of achieving
uniformity and developing a predictable and coherent body of international arbitration law. In the words of one
recent Convention: Indian decision, which reversed decades of Indian precedent that contradicted the “The
underlying motivation of the New York Convention was to reduce the hurdles and produce a uniform,
simple and speedy system for enforcement of foreign interpreted arbitral in the award. manner Therefore that]
seems [Article to V(1)(e) be accepted of the Convention by the commentators should be and the courts in
different jurisdictions.”
Or, as another national court put it:
“Insofar as the Act implements an international treaty, Australian courts will, as far understanding as they
able, of construe that treaty. the Uniformity Act consistently also accords with the with international the Act’s
stated purpose to facilitate the use of arbitration as an effective dispute resolution process.”
This Contracting process States, has been of the materially UNCITRAL assisted Model by Law. the As
adoption, discussed in below, a significant the Model number Law of is based substantially on the New York
Convention, mirroring its basic terms and specific language (in Articles II, III, IV and V of the Convention) and
providing elaboration of those terms. has provided The further interpretation impetus towards of the Model
uniformity Law in in Contracting interpretation States of the that Convention have adopted and it regulation of
the arbitral process. National courts have not devoted substantial attention to the question whether the
New York differently, Convention is “self-executing”). has “direct” application As discussed in the below, courts
the of weight Contracting of U.S. States authority (or, supports formulated the view that the Convention is self-
executing. There are a few decisions from other jurisdictions which suggest the same conclusion. This but that
analysis the Convention’s is clearly correct. principal The text provisions of Articles are II, meant III, IV, to V
have and VI immediate, leave little question direct application in national courts, regardless of the existence
of national implementing legislation. courts (e.g., Each “refer of parties these provisions to arbitration”;
prescribes “shall mandatory recognize arbitral rules directed awards as towards binding”). national These
provisions are text-book examples of treaty obligations that are meant to have direct effects, without the need
for implementing legislation.

P 117 P 118
(795)
(796)
(797)
(798)
(799)
(800)
(801)
(802)
P 118 P 119
(804) (803) (805)

[3] Inter-American Convention on International Commercial Arbitration
(806) After the pioneering Montevideo Convention in 1889, and the Bustamante Code in 1920, (807)
much of South America effectively turned its back on international commercial arbitration. Only Brazil ratified
the Geneva Protocol, and even it did not adopt the Geneva Convention. for the most South part only American
beginning states to were do so very in the reluctant 1980s. to ratify the New York Convention, Nevertheless,
in 1975, the United States and most South American nations negotiated the Inter-American Convention on
International Commercial Arbitration (“Inter-American Convention”), also known as the “Panama Convention.”
(808) The United States ratified the
other Convention momentum. are foreseeable As a practical in the matter, coming it decade. is highly
unlikely that amendments to the A more significant step in this direction was the adoption by UNCITRAL
of the UNCITRAL Model Law and of two “Recommendations” regarding interpretation of Articles II and VII of
the Articles Convention. 7, 8, 34, 35 (787) and The 36 Model largely Law tracking was based the text in
significant of the Convention part on in the verbatim Convention language). (with (788) As discussed
elsewhere, interpretations of the Model Law often look to the Convention and decisions interpreting the
Convention, while conversely influencing analysis and interpretation of the Convention.
(789) At the same time, UNCITRAL’s Recommendations will (properly) influence interpretation of the
Convention (as well as the Model Law). These actions reflect the ongoing cooperation of Contracting
progressively States developing in their and judicial elaborating and quasi-legislation the Convention’s
interpretations meaning over of time. the Convention, These actions have been of particular importance given
the constitutional character of the Convention, whose broad and general text necessarily requires substantial
interpretation and elaboration. Finally, the New York Convention must also be interpreted in accordance
with principles of good faith, including as reflected in Article 31 of the Vienna Convention on the Law of
Treaties. As one well-reasoned national court decision held, “as a treaty, the Convention must the terms be
interpreted of the treaty ‘in in good their faith context in accordance and in the with light the of its ordinary
object meaning and purpose.’” to be given (790) to Other authorities are to the same effect. (791) The
Contracting States’ obligations of good faith under the Convention complement the Convention’s constitutional
character, contemplating objectives of facilitating a progressive the recognition and cooperative and
enforcement development of of international the Convention’s arbitration basic agreements and awards.
[2] European Convention on International Commercial Arbitration The world’s 1961 most European
important Convention regional on commercial International arbitration Commercial treaties. Arbitration
Drafting of the is one European of the Convention began in 1954, aimed at producing a treaty that would
improve upon the then- existing legal framework for international arbitration involving parties from European
states (and delayed and by particularly the intervening East-West New York trade. Convention), The drafting
but ultimately process concluded was protracted with signing of the Convention in Geneva on 21 April 1961.
The European Most European Convention states entered (but not into the force United in Kingdom, 1964,
and the 31 states Netherlands are currently or Finland) party are to it. party to the Convention, while some
ten non-European states are parties, including Russia, Cuba and Burkina Faso. The Convention consists of 19
articles and a detailed annex (dealing with certain procedural matters). The Convention addresses the three
principal phases of the international arbitral process – arbitration agreements, arbitral procedure and arbitral
awards. With regard to the arbitration agreement, the Convention (impliedly) recognizes the validity of
international arbitration bases for the agreements, invalidity of such while agreements expressly in providing
proceedings for concerning a specified, recognition limited number of of awards. With regard to the arbitral
procedure, the Convention limits the role of national courts and confirms the autonomy of the parties and the
arbitrators (or arbitral institution) allocation of to competence conduct the between arbitration arbitral
proceedings; tribunals the and Convention national courts also addresses over the jurisdictional challenges, to
the existence, validity, or scope of the arbitration agreement. With regard to awards, the European Convention
is designed to supplement the New York award Convention, in the arbitral essentially seat in other dealing
jurisdictions only with the (and effects not with of a other judicial recognition decision annulling an obligations).
The number Convention’s of Contracting impact States, in actual all of litigation whom are has also not party
been to substantial the New York (owing Convention). to the limited Nonetheless, the Convention’s effects
on international arbitration doctrine have been significant. This is particularly true with regard to the arbitrators’
jurisdiction to consider challenges parties’ (and to arbitrators’) their own jurisdiction autonomy (so-called to
determine “competence-competence”) the arbitral procedures. and The the Convention is currently somewhat
dated – reflecting its origins during the Cold War – and efforts are underway to revise its provisions.
(792)
(793) (794)
P 119 P 120
(814) (815)
(816)
(817)
[4] ICSID Convention A central pillar of the international investment regime is the so-called ICSID
Convention or “Washington for Settlement Convention” of Investment of 1965. Disputes (“ICSID”), The
Convention a specialized establishes arbitral the institution, International which Centre administers arbitrations
and conciliations, both pursuant to the Convention and otherwise.
The ICSID Convention was negotiated and opened for signature in 1965 and now has 150 Contracting
States, including states in every geographic region of the world. The Convention is designed to facilitate the
settlement of “investment disputes” (i.e., “legal dispute[s] ICSID. arising Investment directly disputes out
of...investment[s]”) are defined as controversies that the parties that have arise agreed out of an to submit to
“investment” and are between a Contracting State (or “host State”) or a designated state- related entity from
that state and a national of another Contracting State (or “investor”). investor The from Convention another
Contracting does not apply State to or disputes to disputes not between involving private a Contracting parties;
State it also and an does not apply to purely commercial disputes that do not involve an investment. As to
investment disputes that fall within its terms, the Convention provides both conciliation independent, stand-
alone and arbitration basis for procedures. arbitrating The particular Convention disputes does under not
provide the Convention. an Instead, an ICSID arbitration cannot be pursued without a separate consent to
ICSID arbitration by the foreign investor and host state, which usually takes the form of either an arbitration
foreign investment clause contained law, a BIT within (discussed an investment below), or contract another
treaty. or a consent provided in a If parties agree to submit a dispute to ICSID arbitration, the ICSID
Convention (and related ICSID detached Arbitration from national Rules) provide law and a national
comprehensive, courts, for stand-alone the conduct regime, of ICSID almost arbitral entirely proceedings. This
regime differs materially from that applicable in international commercial arbitrations (under the New York
Convention) and most other investment arbitration contexts. Under the ICSID Convention regime, arbitral
tribunals are granted exclusive competence- competence to resolve jurisdictional challenges (subject to
limited subsequent review by ICSID-appointed annulment committees (and not by national courts)). This
differs from considering international and resolving commercial jurisdictional arbitrations, disputes. where
national courts play a significant role in Likewise, ICSID awards are subject to immediate recognition and
enforcement in the courts of national Contracting courts, States either without in the arbitral set aside seat
proceedings or elsewhere or any (but other subject form to of local other rules review of state in immunity of
state assets). Instead, ICSID awards are subject to a specialized internal annulment procedure, in which ad
hoc committees selected by ICSID are mandated, in limited if an circumstances, award is annulled to annul it
may awards be resubmitted for jurisdictional to a new or grave ICSID procedural arbitral tribunal. violations;
This is a substantial difference from the New York Convention model, where awards are subject to annulment
(in the national courts of the arbitral seat) and non-recognition (in national courts elsewhere). Moreover, ICSID
(and not a national court) serves as the appointing authority in ICSID arbitrations, when necessary,
selecting and replacing arbitrators from a list of individuals selected by individual Contracting States. Again,
this differs materially from appointment arbitrations, where mechanisms national in courts at least can some be
involved non-ICSID in settings the appointment (particularly and ad challenge hoc process ).
(818)
(819)
(820)
(821)
P 120 P 121
(822)
(823)
(824)(825)
(826)
(827)
P 121
(828) (829) P 122
(830)
(831)
(832)
Convention”), also known as the “Panama Convention.” The United States ratified the Convention in 1990;
other parties include Mexico, Brazil, Argentina, Venezuela, Columbia, Chile, Ecuador, Peru, Costa Rica, El
Salvador, Guatemala, Honduras, Panama, Paraguay and Uruguay. The Inter-American Convention is similar
to the New York Convention in many respects: indeed, the Convention’s drafting history makes clear that it
was intended to provide the same Convention results provides as the New for the York presumptive
Convention. enforceability Among other of arbitration things, the agreements Inter-American and arbitral
awards, subject to specified exceptions similar to those in the New York Convention. present The Inter-
American in the New York Convention Convention. nonetheless It does so introduces by providing
significant that, where innovations, the parties not have not expressly agreed to any institutional or other
arbitration rules, the rules of the “Inter- American Commercial Arbitration Commission” (“IACAC”) will govern.
In turn, the Commission also introduces has provisions adopted rules regarding that are the similar constitution
to the of UNCITRAL the arbitral Rules. tribunal The and Convention the parties’ freedom to appoint arbitrators
of their choosing (regardless of nationality). Less desirably, the Inter-American Convention departs from the
New York Convention by omitting in breach provisions of an arbitration dealing agreement. expressly with
judicial proceedings brought in national courts (808) (809)
(810) (811) (812) (813)

P 122 P 123
(839)
[5] North American Free Trade Agreement A number of other multilateral treaties also play important
roles in the international investment ICSID Convention. regime, The establishing North American legal
regimes Free Trade that Agreement resemble, (“NAFTA”) but also differ is a multilateral from, the treaty
between Canada, Mexico and the United States which addresses a wide range of trade, investment and other
issues. Chapter 11 of NAFTA sets forth standards for treatment by arbitrating each NAFTA investment state of
investors disputes under from other those NAFTA standards. states, The as substantive well as a mechanism
rights provided for by NAFTA include protections against discriminatory treatment of a NAFTA investor by the
host state, unfair or inequitable treatment and expropriation without adequate compensation.
(840) Unlike the basic models for both international commercial arbitration and the ICSID Convention, no
separate consent to arbitration is required to permit an investor from one NAFTA state to arbitrate claims
under NAFTA’s substantive provisions against another NAFTA Chapter state. 11 of Rather, NAFTA itself, the
necessary which provides consent investors by the NAFTA from NAFTA state parties states with is provided
immediate in access to an arbitral forum.
(841) While (prior NAFTA to October includes 2013) ICSID nor Mexico arbitration is currently as an option a
party for to resolving the ICSID disputes, Convention, neither and Canada NAFTA arbitrations therefore
cannot be conducted under the Convention. (842) As a result, NAFTA awards are not subject to the ICSID
Convention (including its internal institutional annulment arbitral seat procedure), in the same and general are
instead manner subject as international to being set commercial aside in national arbitration courts awards. of
the (843) ICSID’s “Additional Facility” Rules are commonly used in NAFTA arbitrations, permitting use of
ICSID as an appointing authority and administering institution, notwithstanding the ICSID Convention’s
inapplicability.
(844)
[6] Bilateral Investment Treaties
(845) P 123 P 124
BITs play a central role in the international investment regime. Unlike the ICSID Convention (and other
multilateral investment treaties), BITs are bilateral treaties, tailored Contracting to the States. circumstances
Nonetheless, of individual as discussed bilateral below, relationships most BITs follow and a only common
binding structure two and include common provisions (often contained in “model” BITs published by some
states).
(846) Capital-exporting European states, the states United (including States Germany, and Japan) the were
United the earliest Kingdom, proponents most other of Western BITs, which were originally entered into
principally between developed and developing countries. More recently, states in all stages of development
have concluded BITs with one another. More between than developing 2,800 BITs states are currently (so-
called in force, “South-South” with a substantial BITs).
(847) proportion of all BITs being Most BITs provide significant substantive protections for investments
made by investors from protections one of the typically two Contracting include guarantees States in against
the territory uncompensated of the other expropriation, Contracting State. unfair These or inequitable
treatment and discriminatory treatment.
(848) BITs also very frequently (but not always) contain dispute resolution provisions which permit
Contracting investors State from to arbitration, one Contracting subject State occasionally to submit to
“investment specified exclusions disputes” (e.g., with the for tax other disputes). Importantly, like NAFTA and
the Energy Charter Treaty, these provisions provide each state’s binding consent to arbitration of investment
disputes; this permits investors to contractual demand arbitration arbitration of agreement covered disputes
with the against host state the or host other state separate without consent a traditional to 48 © 2020 Kluwer
Law International, a Wolters Kluwer Company. All rights reserved.
Finally, the ICSID Convention provides that, absent agreement by the parties, ICSID arbitrations are
governed by the law of the state that is party to the dispute (including its conflict of laws rules) “and such rules
of international law as may be applicable.” (833) In contrast, substantive neither choice-of-law the New York
provisions. nor Inter-American Conventions contains comparable Major international infrastructure and
natural resource projects frequently include ICSID arbitration clauses, usually as a consequence of
demands from host governments. ICSID has pursuant also frequently to BITs, which been proliferated
included as during an arbitral the 1990s. institution (834) As to a administer consequence, arbitrations ICSID
has gained substantially greater experience in administering international arbitrations, and enhanced credibility
as an arbitral institution during the past decade or so. (835) That trend some improvement has continued in in
the recent institution’s years, as arbitral ICSID has procedures.
modernized (836) the ICSID Rules, which led to ICSID’s caseload has very significantly increased in the
past 25 years, particularly as a consequence investment protection of arbitrations legislation. brought (837)
pursuant As of 31 to December bilateral investment 2013, the Centre treaties had (“BITs”) registered or 424
ICSID arbitrations since its establishment, with 40 new ICSID arbitrations registered in 2013. (838) While only
4 ICSID awards were rendered between 1971 and 1980, 107 awards were rendered between 2001 and 2010
(with a total of over 180 ICSID awards by March).

P 124 P 125
(850)
(851)
(852)
(853)
[7] Bilateral Friendship, Commerce and Navigation Treaties A number of nations have entered into
bilateral treaties dealing principally with commercial relations and incidentally with international arbitration.
These treaties generally provide for the reciprocal recognition of arbitral awards made in the territory of the
Contracting States. For example, the United States includes an article relating to arbitration between
private parties in many of its bilateral Friendship, Commerce and Navigation treaties. (854) A representative
example of such an article provides:

P 125 P 126
“Contracts nationals or entered companies into between of the other nationals party that or companies
provide for of settlement either party by and arbitration of controversies shall not be deemed unenforceable
within the territories of such other party merely on the grounds that the place designated for one arbitration or
more of proceedings the arbitrators is outside is not that such of territories such other or party. that Awards the
nationality duly of rendered pursuant to any such contracts which are final and enforceable under the
enforcement laws of the proceedings place where brought rendered before shall the be courts deemed of
competent conclusive in jurisdiction of either party, and shall be entitled to be declared enforceable by such
courts, except where found contrary to public policy.”

(855)
For the most part, these treaty provisions have been effectively superseded by the terms of substantially
the New York more Convention expansive and protections.
other multilateral (856) treaties, which generally provide [B] Overview of National Arbitration
Legislation Many nations have enacted arbitration legislation, which provides a basic legal framework
for National international arbitration arbitration statutes agreements, are of fundamental arbitral importance
proceedings in and giving arbitral effect awards. to – or, less frequently, creating obstacles to – the functioning
of the international arbitral process. Despite occasional rhetoric as to the “autonomy” of the international
arbitral process, it parties’ is essential objectives to the in efficient agreeing functioning to arbitrate, of the that
arbitral national process, courts give and effect the realization to such of the agreements and provide support
for the arbitral process. The enactment of legislation accomplishing these ends has been a major objective –
and achievement – of developed trading states and many other jurisdictions over the past 50 years. Over the
past several decades, large numbers of developed and less-developed states have enacted, revised or
improved legislation dealing with international commercial arbitration. diversity. Important The new extent
enactments, of these legislative or thorough revisions revisions, is striking, have occurred both in in number
Algeria and (2008), Australia (1989 and 2011), Austria (2006), Bangladesh (2001), Bahrain (1994), Belgium
(2013), Brazil (1996), Bulgaria (1993 and 2007), Cambodia (2006), Chile (2004), China (1991 (1994 and and
1994), 2012), Colombia Denmark (2005), (2012), Dominican Costa Rica (1997 Republic and 2011), (2008),
Croatia England (2001), (1996), Czech Egypt Republic (1994), Finland (1992), France (2011), Germany
(1998), Greece (1999), Hong Kong (1997 and 2010), India (1996), Indonesia (1999), Ireland (1998 and 2010),
Italy (2006), Japan (2004), Mexico (1993 Poland and (2005), 2011), Portugal New Zealand (2012), (1996
Russia and (1993), 2007), Saudi Nicaragua Arabia (2005), (2012), Norway Scotland (2004), (2010), Peru
Singapore (2008), (1995 and 2012), South Korea (2009), Spain (2003 and 2011), Sweden (1999), Tunisia
(1993), Turkey (2001), the United Arab Emirates (1992) and Vietnam (2011). (857)
(858)
(859) P 126 P 127
contractual arbitration agreement with the host state or other separate consent to arbitration by the host
state (so-called “arbitration without privity”). A few BITs do not conclude include a separate the Contracting
arbitration States’ agreement consent to with arbitration, the host state requiring in order foreign to arbitrate
investors an to investment dispute under the treaty, but this is unusual. BITs arbitration contain of a
investment variety of different disputes arbitration under the BIT; mechanisms. other BITs Some provide
BITs for provide UNCITRAL for ICSID or some form of institutional arbitration (e.g., ICC or SCC) or ad hoc
arbitration; and some BITs permit investors to select among any of the foregoing (or other) options. The
appointing individual BIT authority and the in option(s) a particular selected BIT arbitration by the investor. will
vary, Unless depending a BIT arbitration on the terms proceeds of the under the ICSID Arbitration Rules and
ICSID Convention, BIT awards will be subject to the New York Convention and general national arbitration
legislation. As number with ICSID of BIT arbitrations, arbitrations the and past awards. two decades Recent
reports have witnessed indicate that a steadily more than increasing 50 BIT arbitrations are filed each year,
with a substantial number of these proceeding to final awards. There subjects is a of substantial, BITs and
investor-state and growing, arbitration. body of specialized These commentary topics are addressing
beyond the the scope of this Treatise, save where relevant as useful parallels, contrasts, or illustrations of
issues arising in international commercial arbitration.

(849)
P 127 P 128 (867)
(868)
(869)
(870) (871)
[1] Supportive National Arbitration Legislation Most states in Europe, North America and parts of Asia
have adopted legislation that P 128 P 129 addresses all of the foregoing issues and provides effective and
stable support for the arbitral national process. arbitration (872) statutes, In many adopting cases, jurisdictions
either amendments have progressively or new legislation refined their to make their arbitration regimes
maximally supportive for the international arbitral process and attractive to users. (873) Thus, over the past 50
years, virtually every major developed country legislation, has in substantially every case, revised to facilitate
or entirely the arbitral replaced process its international and promote arbitration the use of international
arbitration.
(874) Paralleling the main features of the New York Convention, the pillars of modern arbitration statutes
and binding are provisions agreements that to arbitrate affirm the future capacity commercial and freedom
disputes, of parties (875) to provide enter into valid mechanisms for the enforcement of such agreements by
national courts (through orders to stay annulling litigation arbitral or to awards compel (877) arbitration), and
require (876) the prescribe recognition procedures and enforcement for confirming of foreign or awards. (878)
In many cases, national arbitration statutes also authorize limited judicial assistance to the arbitral process;
this assistance can include removing and selecting arbitrators, granting provisional enforcing relief a tribunal’s
in aid of orders arbitration.
with respect (879) to evidence-taking or discovery and In addition, most modern arbitration legislation
affirms the parties’ autonomy to agree upon arbitral procedures and, sometimes, the applicable substantive
law governing the parties’ arbitral dispute, process, while either narrowly when arbitral limiting proceedings the
power are of national pending courts or in reviewing to interfere awards. in the (880) Although generally off the
beaten trail, the arbitration legislation of Djibouti is representative, in its statement of legislative purpose of
“giv[ing] the widest effect to the contractual arbitration proceedings.”
provisions agreed (881) upon by the parties in regard to the framework of the As one distinguished authority
put it:
Given these (and other enactments), and the even more widespread acceptance of the New York
Convention and ICSID Convention, international arbitration has become a global mechanism “arbitration of is
dispute no longer resolution. the preserve As a of leading the developed Singaporean jurisdictions jurist has of
correctly Europe and observed North America.” (860) Rather, international arbitration is a universally accepted
means of dispute resolution, supported by national and international legal regimes and preferred by public and
private users from all jurisdictions. Particularly in civil law jurisdictions, early arbitration legislation was often
a part or chapter within the national Code of Civil Procedure. (861) This continues to be the case in a number
of jurisdictions even today. (862) In common law jurisdictions, the tendency was (and growing remains)
popularity to enact of the separate UNCITRAL legislation Model Law dealing on International specifically
Commercial with arbitration. Arbitration (863) The (864) has made the latter approach of stand-alone
arbitration legislation increasingly common. As applicable discussed only below, to international in many,
(865) (not but domestic) not all, (866) arbitrations, cases, national or contain arbitration separate statutes
parts are dealing differently with domestic and international arbitration. This approach has generally rules and
been procedures adopted in the in order international to permit context, the application which may of not
particularly (for historical “pro-arbitration” or other reasons) be appropriate for purely domestic matters.
Nevertheless, a number of countries have adopted the same legislation for both domestic and international
arbitrations differently with (even regard then, to however, particular with subjects). specific provisions that
treat the two fields Some commentators have suggested that there is no reason to distinguish between
international and domestic arbitrations. That view may be appropriate in jurisdictions guarantees of where
validity domestic and enforceability, arbitration agreements and where the and parties’ awards autonomy are
accorded with strong regard to arbitral procedures, arbitrator selection, choice of law and other matters are
fully respected in domestic matters. In qualifications, many countries, in domestic however, contexts. such
guarantees Moreover, do there not exist, are particular or are subject issues to as important to which local
traditions or policies may argue for greater restrictions on domestic, rather than on international international
arbitration. arbitration – aimed In these at overcoming instances, the the unique special jurisdictional,
characteristics choice-of-law of and enforcement uncertainties which exist in international matters, and
providing an internationally-neutral dispute resolution process – fully justify treating it differently from purely
domestic arbitration. Broadly speaking, there are two categories of national arbitration legislation: statutes
which are supportive of the international arbitral process (increasingly, but not always, based on the
UNCITRAL Model Law) and statutes which are not supportive of the arbitral process. Both of these types of
legislation are discussed below.

P 131 P 132
P 129 P 130
(883)
(884)
(885)
P 130 P 131
(886)
(887)
(888)
(889)
(890)
(891)
As one distinguished authority put it:
“[One found focus in the of widening national of legislative the parties’ developments autonomy in over
regulating the past qualifying four decades] aspects is of the arbitration (number and manner of appointment
of arbitrators; seat and language of the arbitration; rules applicable to the proceedings; rules applicable the
award).”
to (882) the merits of the dispute; and waiver of means of recourse against The central objective of these
legislative enactments has been to facilitate international trade and investment by providing more secure
means of dispute resolution. Recognizing that developed international and other transactions states have are
sought subject to to promote unique the legal use uncertainties of arbitration and expressly risks, as a way of
mitigating such risks. Among other things, they have done so through enactment of modern arbitration
statutes, giving effect to the constitutional principles of the arbitration New York agreements Convention, and
ensuring awards, the and validity facilitating and enforceability the autonomy of and international efficiency of
the arbitral process. A judicial opinion in a recent Canadian decision captured this attitude, in a representative
contemporary business setting, in well-reasoned terms:
“Access system. to Historically, justice in Canada judges were no longer reluctant means to access
relinquish just their to the grasp public on court dispute resolution, and they even viewed alternative dispute
resolution as antithetical to the parties’ interests. This era is gone. It is the role of the legislature, not the courts,
several to other limit provinces, access to British alternative Columbia dispute has resolution not limited
mechanisms. the resolution Unlike of consumer disputes to a single procedural regime. On the contrary, it has
left room for arbitration and allowed arbitrators to exercise broad remedial powers, structure subject of
consumer to the protection agreement legislation of parties to in a British dispute. Columbia, Given the
submitting current a consumer’s dispute with their mobile phone service provider to arbitration is entirely
consistent with the important public purposes of protecting consumers, vindicating their rights and promoting
access to justice.”
Additionally, one of the stated objectives of new arbitration legislation during the past several decades has
been to attract international arbitration business. In the words of one Irish legislator: “The economies of other
countries have benefited considerably from arbitration Or, as business was asserted and there in debates is no
reason on England’s why Ireland arbitration should legislation, not share in a revised those benefits.”
arbitration act would supposedly bring the country $1 billion annually in lawyers’ and arbitrators’ fees. Some
complained have considered that “countries these have, motivations without unseemly shame, exhibited or
illegitimate. their desire One commentator to attract the has business of arbitration,” while another has
observed, with a measure of reproach, that:
“There their arbitration has been a laws scramble to what among they perceive Western to European be the
consumers’ nations to accommodate tastes, thereby attracting a greater share of the fees that go to lawyers
and arbitrators at the place of the proceeding.”
The attract reality international appears to arbitrations be that these to particular legislative countries.
reforms have done Whatever relatively the case, little however, to there is no reason to regard contemporary
arbitration legislation with cynicism or reproach because of such motivations. Modern addressing international
the needs arbitration of international statutes business do good and (in international addition to trade
hopefully (“the doing consumers’ well) by tastes”) and by further enhancing the ability of international
arbitration to resolve commercial disputes efficiently and definitively, without burdening the parties, national
courts, transnational or international disputes. commerce The fact that with legislatures the peculiar evince
uncertainties a natural and and commonplace difficulties of interest in fostering the local economy, and that
local residents and businesses in a particular jurisdiction will derive professional opportunities and financial
gain from increased such legislation use of produces that jurisdiction for international as an arbitral businesses
seat, in and, no way more alters broadly, the for benefits the global that economy. A developed recent
Singaporean states around decision the world, expressed as follows:

this attitude, embraced by a number of courts in “There was a time when arbitration was viewed
disdainfully as an inferior process of justice. Those days are now well behind us. An unequivocal judicial
policy of facilitating and promoting arbitration has firmly taken root in Singapore. alternative It dispute is now
resolution openly acknowledged such as mediation, that arbitration, help to effectively and other unclog forms
of the arteries of judicial administration as well as offer parties realistic choices on how they want to resolve
their disputes at a pace they are comfortable with.
P 134 P 135 (905)

(906)
(907)
P 132 P 133
(897)
(898)
(899)
(900)
P 133 P 134
(901)
[a] UNCITRAL Model Law
(902) The United Nations Commission on International Trade Law (“UNCITRAL”) Model Law on
International Commercial Arbitration (“UNCITRAL Model Law”) is the single most important legislative
instrument in the field of international commercial arbitration. It has been adopted legislation in and a
substantial judicial decisions (and growing) in many number others. of (903) jurisdictions Recent revisions and
served to the as a Model model Law for (in 2006) sought to improve its legislative framework, (904) introducing
new features and providing a representative example of ongoing legislative efforts aimed at improving the
international arbitral process. The Model Law was initiated by a proposal from the Asian African Legal
Consultative Committee to supplement the New York Convention with a protocol regarding party- adopted
Report by arbitration the UN Secretary-General, rules. The origins titled “Possible of the UNCITRAL Features
Model of a Model Law are Law detailed of in a International Commercial Arbitration.” Among other things, the
Report declared that the “ultimate goal of a Model Law would be to facilitate international commercial
arbitration and to ensure its proper functioning and recognition.” The Secretary-General’s Report also
identified a number of “defects” in national laws, which the New York Convention had sought to remedy, but
which persisted in national legal systems:
“To unduly give restrict, only a few the examples, freedom of such parties provisions to submit may future
relate disputes to, and be to arbitration, deemed to or the selection and appointment of arbitrators, or the
competence of the
how they want to resolve their disputes at a pace they are comfortable with. More fundamentally, the need
to respect party autonomy (manifested by their contractual bargain) in deciding both the method of dispute
resolution (and the procedural rules to be applied) as well as the substantive law to govern the contract, has
been accepted as the cornerstone underlying judicial nonintervention in arbitration. In essence, a court ought
to give effect to the parties’ contractual choice as to the manner of dispute resolution unless it offends the law.”
Finally, there is an additional, but deeply-rooted, foundation for contemporary support for the arbitral
process. The right of private parties to resolve their disputes consensually, by arbitration, instead of by
recourse to state courts or administrative agencies, is related to constitutionally-protected rights of autonomy
and association. The parties’ freedom to elect the manner in which they resolve their disputes is a basic aspect
of individual autonomy and liberty, no different from the freedom to enter into contracts and other forms of
association, which is properly accorded protection in almost all developed legal systems. Consistent with this
analysis, national courts have characterized the right to arbitrate as a “fundamental right,” with
“constitutional” underpinnings.” One U.S. court declared: “The recognized autonomy of parties to enter into an
arbitration agreement...is directly correlated to and stems from the constitutionally protected right of freedom to
contract.” Similarly, a Québec court reasoned:
“Arbitration is a fundamental right of the citizens and is an expression of the parties’ contractual freedom. It
should not be considered as an attack on the monopoly of state justice. Rather, arbitration should be perceived
as an alternative means of dispute resolution that, depending on the circumstances, fulfils certain goals
pursued by the parties – e.g., rapidity, peer review, cost efficiency etc.”
Courts in other jurisdictions, from widely different legal systems and geographic locations, have similarly
recognized the constitutional foundations of the right to arbitrate. Investor-state tribunals have recognized
similar conceptions of a right to arbitrate, guaranteed by both national laws and Article II of the New York
Convention. These considerations have particular application in international matters, where commercial
parties choose to arbitrate in significant part to obtain neutral, effective adjudication of their disputes, rather
than dispute resolution that is frequently non- neutral, arbitrary and unreliable. It is particularly appropriate for
states not just to protect, but to affirmatively encourage and support, parties’ efforts to resolve their disputes in
this manner. There are by now a large number of supportive national arbitration statutes, in both
developed and less developed jurisdictions. Most, but not all, of these statutes are modern, in the sense of
having been adopted during the last three decades. The following sections briefly outline the UNCITRAL
Model Law and the English, French, Swiss and U.S. international arbitration frameworks, which provide a
selection of differing contemporary models for supportive arbitral regimes. At the same time, there are
substantial similarities, in many respects, between contemporary international arbitration statutes in most
developed jurisdictions, all of which represent further steps, beyond the New York Convention, in establishing
today’s “pro-arbitration” legal regime for international commercial arbitration.(892)

(893)
(894)
(895)
(896)
P 137 P 138
(934)
P 135 P 136
(912)
(913) (914) (915)
(916)
(917) (918) (919)
(920) (921)
(922)
(923)
P 136 P 137 (924)(925)
(926)
(927)
(928) (929) (930) (931)
(932) (933)
or the selection and appointment of arbitrators, or the competence of the arbitral proceedings tribunal as
deemed to decide appropriate on its own taking competence into account or to conduct the parties’ the wishes.
Other such restrictions may relate to the choice of the applicable law, both the law governing the arbitral
procedure and the one applicable to the substance of not the always dispute. welcomed Supervision by parties
and control especially by courts if exerted is another on the important merits of the feature case.” (908)
The Report was the basis for extensive consultations and debates involving states, the international
Commercial Arbitration; business and ICC arbitration International communities Court of Arbitration), (e.g.,
International and regional Council organizations for (e.g., Asian-African Legal Consultative Committee). (909)
These discussions ultimately produced the current draft of the Model Law, which UNCITRAL approved in a
resolution adopted later the in same 1985. year.
(910) (911) The Model Law was approved by a U.N. General Assembly resolution The Model Law was
designed to be implemented by national legislatures, with the objective of further harmonizing the treatment
of international commercial arbitration in different with the issues countries. that The arise Law in national
consists of courts 36 articles, in connection which deal with relatively international comprehensively arbitration.
Among other things, the law contains provisions concerning the enforcement of arbitration agreements
(Articles 7-9), appointment and removal of arbitrators (Articles 10-15), jurisdiction arbitral proceedings, of
arbitrators including (Article language, 16), provisional seat and measures procedures (Article (Articles 17),
conduct 18-26), evidence- of the taking and discovery (Article 27), applicable substantive law (Article 28),
arbitral awards (Articles enforcement 29-33), of setting foreign aside awards, or including vacating awards
bases for (Article non-recognition 34), and recognition (Articles 35-36). and Under the Model Law, written
international arbitration agreements are presumptively valid and enforceable, subject to limited, specified
exceptions. Article 8 of the Law provides seat, by way for the of a enforcement dismissal or stay of valid of
national arbitration court agreements, litigation. regardless The Model of the Law arbitral also adopts the
separability presumption, and expressly grants arbitrators the authority (competence-competence) to consider
their own jurisdiction. (As discussed below, however, competence it is to not resolve entirely jurisdictional clear
what approach disputes, the and Model in particular Law takes whether to the interlocutory allocation of judicial
review of jurisdictional objections is on a prima facie or a final basis. ) The Model Law expressly prescribes a
principle of judicial nonintervention in the arbitral proceeding. limits) with regard It to also the affirms arbitral
the procedures parties’ autonomy and, (subject absent to agreement specified between due process the
parties, the tribunal’s authority to prescribe such procedures. The basic approach of the rules UNCITRAL
which – subject Model Law to a to very the limited arbitral number proceedings of fundamental, is to define
non-derogable a basic set of procedural principles of fairness, due process and equality of treatment – the
parties are free to alter by agreement. The Model Law also provides for judicial assistance to the arbitral
process in evidence-taking. prescribed respects, including provisional measures, constitution of a tribunal and
The Model Law mandates the presumptive validity of arbitral awards, subject to a limited, exclusive list of
grounds for annulment of awards; these grounds precisely parallel those available or excess of under
jurisdiction, the New noncompliance York Convention with for non-recognition arbitration agreement, of a
foreign due award process (i.e., lack violations, public policy, nonarbitrability). The Model Law also requires the
recognition and enforcement of foreign awards (made both within and outside the recognizing Convention.
state), again on terms identical to those prescribed in the New York During the twenty-eight years since the
Model Law’s adoption (in 1985), significant developments the UNCITRAL Secretariat have occurred
identified in the field thirteen of international areas for study commercial and potential arbitration. modification
In 1999, of the Model Law. This list was culled and eventually produced proposals for amendments to the
Model Law concerning interim measures and the written form requirements for arbitration agreements. In
2006, UNCITRAL adopted a limited number of amendments to the Model Law. The principal revisions
were made to Article 2 (the addition of general interpretative principles), Article 7 (the definition and written
form of an arbitration agreement), international Article 17 arbitral (the availability tribunals of and and national
standards courts) for provisional and Article measures 35 (procedures from for recognition of awards). The
original 2006 text, revisions but of the utilizing Model a Law drafting make style useful that improvements
sits uneasily (for in the the original most part) Model to the Law’s relatively concise, elegant text. The most
important accomplishment of the revisions is their tangible evidence of the ongoing process by which states
and business representatives A few states have seek revised to improve their local the adaptations
international of legal the Model regime Law for to the reflect arbitral its process. 2006 amendments.
P 139 P 140
(942) (943) (944) (945)
P 138 P 139
(938)
(939)
(940)
(941)
amendments.
(934) The Convention, Model Law towards and its the revisions development represent of a a predictable
significant further “pro-arbitration” step, beyond legal the framework New York for commercial arbitration.
Like the New York Convention, the Model Law’s efficacy is ultimately dependent upon its interpretation and
application by national courts. But the Model legal framework Law goes beyond for international the
Convention arbitration, by prescribing by clarifying in significantly points of ambiguity greater detail or the
disagreement under the Convention, (935) and by establishing directly applicable national legislation. At least
as important, the Model Law has set the agenda for reform of arbitration adopted. statutes, even in states (like
England and Switzerland) where it has not been One of the central objectives of the UNCITRAL Model Law
was to further encourage the uniform provided treatment by the New of York international Convention.
commercial In the words arbitration of the UNCITRAL in national Secretariat, courts, beyond “[o]ne that of
UNCITRAL’s aims through the Model Law was to reduce the divergences which might result from each State’s
interpretation of its obligations under the New York Convention.” (936) At the be accessible same time, to the
parties Model from Law’s diverse uniform jurisdictions. international Additionally, terms and the format Model
were Law calculated drew on to the experience of a wide range of jurisdictions and authorities, in the
UNCITRAL working groups and otherwise, permitting an instrument that reflected a substantial body of
international experience and expertise. Nearly 100 jurisdictions have adopted legislation based on the
Model Law as of 2012, including Australia, Bermuda, Brunei, Bulgaria, Canada, Costa Rica, Cyprus,
Dominican Republic, Germany, Georgia, Hong Kong, India, Ireland, Malaysia, Mauritius, Mexico, New
Zealand, Sweden, Tunisia, Nigeria, Turkey Norway, and Peru, various the Russian U.S., Australian
Federation, and Scotland, Canadian Singapore, jurisdictions. Spain, (937) Other nations are considering its
adoption. The Model German Law, during Ministry Germany’s of Justice enactment explained of some
legislation of the reasons derived for predominantly adopting the from UNCITRAL the Model Law:
“If we want to reach the goal that Germany will be selected more frequently as the seat of international
arbitrations in the future, we have to provide foreign parties with the with framework a law that, of the by Model
its outer Law appearance that is so familiar and by all its contents, over the world. is in line This is necessary,
in particular, in view of the fact that in negotiating international contracts, agreement. usually The purpose not
much of the time Model is spent Law, on to the make drafting a significant of the contribution arbitration to the
unification of the law of international arbitration, can only be met if one is willing to prefer the goal of unification
instead of a purely domestic approach when determination it comes to of the the question contents of of the
individual necessity rules.” and the scope as well as to the These objectives – accessibility, international
uniformity and a tested structure – have been cited in other jurisdictions. For example, the Hong Kong Law
Reform Commission concluded that “the Model Law...has the advantage of making [Hong Kong] law
internationally recognizable and accessible” and
“[the] primary reason for recommending the adoption of the Model Law...is the need to make knowledge of
our legal rules for international commercial arbitration more accessible to the international community...We are
convinced that the result it is much of many better years [to work avoid by changes an international than] trying
group to improve of experts.” what is already That said, it is noteworthy that the world’s leading international
arbitration centers have generally not adopted the UNCITRAL Model Law. That is true, in particular, of
France, Switzerland, each of these England, jurisdictions, the United legislatures States, (and the Netherlands,
arbitration practitioners) Belgium and have Sweden. extensively In debated the advisability of adopting the
Model Law, but decided in favor of alternative solutions. Equally, at least some distinguished practitioners
consider the Model Law to be a the conservative, Model Law’s overly-detailed contributions to basis the
international for national arbitration arbitral process legislation. are enormous Nonetheless, and it remains,
appropriately, the dominant “model” for national legislation dealing with international commercial arbitration.
Importantly, beginning to decisions produce a by reasonably courts in jurisdictions uniform international that
have body adopted of precedent the Model concerning Law are its meaning and application. There are a
variety of collections of these decisions, including UNCITRAL’s 2012 Digest of Cases, UNCITRAL’s “CLOUT”
database and the Model McGill Law Model to international Arbitration commercial Law Database. arbitration It
is will safe only to increase say that the in the importance future, as of the national court decisions in Model
Law jurisdictions contribute to a more comprehensive and detailed body of precedent in the field. Also
importantly, decisions in jurisdictions that have adopted the UNCITRAL Model Law have emphasized the
close relationship between the Model Law and the New York
P 140 P 141
(948)
[b] France
(949)
P 141 P 142 France is one of the leading centers for international commercial arbitration in Europe and,
indeed, the world. More international arbitrations are reportedly seated in France than decisions any other
have European exceptional jurisdiction, international (950) importance.
and French (951) arbitration legislation and judicial International arbitration in France is governed by the
French Code of Civil Procedure, principally 2011. These as three adopted decrees in decrees added (or
promulgated revised) Articles on 14 1442-1527 May 1980, to 12 the May French 1981 and Code 13 of January
Civil Procedure. (952) Articles 1442 to 1503 of the Code of Civil Procedure apply to domestic arbitrations,
while Articles 1504 to 1527 apply to “international” arbitrations. (953) Certain provisions arbitrations, applicable
unless specifically to domestic provided arbitration otherwise apply by by the analogy parties to (and
international subject to the specific rules applicable to international arbitrations set forth in Articles 1504 to
1527 of the French Code of Civil Procedure).

(954) The legal provisions framework of for the international Code of Civil commercial Procedure have
arbitration. produced (955) a strongly That regime pro-arbitration has been materially assisted by the French
judiciary and academic community (particularly Professors Berthold Goldman, Philippe Fouchard, Pierre
Mayer and Emmanuel Gaillard). P 142 P 143 For legislation, the past and three developed decades, non-
statutory both French courts doctrine, and in academics a manner have which interpreted has been French
highly supportive of the international arbitral process. (956) This pro-arbitration approach was further dated 13
enhanced January 2011.
by the (957) recent revision of the French arbitration regime by the decree French law emphatically
recognizes the autonomy (or separability) doctrine, (958) and provides for the presumptive validity and
enforceability of arbitration agreements. (959) As one classic French decision held:
“by agreement virtue of is a legally substantive independent rule of international of the main contract
arbitration, containing the arbitration or referring to it, and the existence and effectiveness of the arbitration
agreement are to be assessed, policy, on subject the basis to of the the mandatory parties’ common rules of
intention, French law there and international being no need public to refer to any national law.”
(960)
French law also expressly grants arbitrators the power (competence-competence) to P 143 P 144
decide challenges to their jurisdiction. (961) Further, if claims which are allegedly subject to Procedure an
arbitration provides agreement for dismissal are brought of the judicial before the proceedings, French courts,
except the if Code the arbitral of Civil tribunal has not yet been constituted and if the arbitration agreement is
“manifestly null or manifestly inapplicable.”
(962) With regard to the law applicable to the arbitration agreement, French courts have developed a
relatively unusual doctrine that arbitration agreements are autonomous, subject to specific principles of
international law, rather than to national law. (963) The nonarbitrability except in labor and doctrine consumer
has not matters. been invoked (964) In contrast to any significant to a number extent of developed by French
courts, jurisdictions, French courts do not appear to have developed “pro-arbitration” rules of interpretation of
arbitration agreements. (965) French autonomy courts with generally respect to afford choice the of parties
law, procedural to an arbitration rules, selection agreement of arbitrators substantial and the like. (966) In
particular, French law expressly provides that arbitrators sitting in France are generally not bound by local
rules of civil procedure applicable in French courts, and have very wide discretion in adopting arbitral
procedures. (967)
French law also confers the
have emphasized the close relationship between the Model Law and the New York Convention, with
authorities under one instrument informing decisions under the other. As one court reasoned:
“The origin of some of [the Model Law’s] key provisions, including Arts 35 and 36, may be traced to
provisions of the [New York Convention]...Those considerations of international origin and international
application make imperative that the Model Law be construed without any assumptions that it embodies
common law concepts or that it will apply only to arbitral awards or arbitration agreements that are governed
by common law principles. The first of those considerations makes equally imperative that so much of the text
of the Model Law as has its origin in the New York Convention be construed in the context, and in the light of
the object and purpose, of the New York Convention.”
These developments are of particular importance given the constitutional character of the Convention
(discussed above ), which foresees and requires decisions by national courts to give effect to the broad terms
of the Contracting States’ under Articles II, III and V. In many jurisdictions, it is in principle possible for
parties to “opt-out” of the coverage of the Model Law. Although national court authority is divided, the weight
of better-reasoned authority concludes that only express agreements excluding application of the Model Law
will have the effect of opting-out of the legislation’s coverage. (946)

(947)
P 144 P 145 (970)
(971)
(972)
(973)
[c] Switzerland
(974) P 145 P 146 international Like France, commercial Switzerland arbitration. is one of Europe’s, (975)
Its and arbitration the world’s, legislation, leading and centers academic for community, have also been at
the forefront of developments in the field of international arbitration over the past century. (976) International
arbitration in Switzerland is governed primarily statutory provisions by a chapter were of the significantly
federal Swiss influenced Law on by Private proposals International and reviews Law. of These a committee of
leading Swiss arbitration practitioners and academics, (977) and entered into effect in 1989. Legislative
proposals for revision of the Swiss arbitration legislation have been advanced, recently prompting a review of
the legislation.
(978) The current version of the Swiss Law on Private International Law replaced, insofar as international
arbitration is concerned, the Swiss Inter-Cantonal Concordat. (979) The Swiss Law comprising on Private only
International 19 articles, drafted Law’s arbitration in brief, declarative chapter is terms.
noteworthy (980) for its brevity, Under the Swiss Law on Private International Law, international arbitration
agreements are P 146 P 147 readily and effectively enforced. The Law expressly recognizes the separability
doctrine (981) which international and prescribes arbitration a specialized agreements, “pro-arbitration”
providing choice-of-law for arbitration regime, in Switzerland, pursuant are to substantively valid provided they
conform to either (a) the law chosen by the parties (where the parties have made a specific choice of law
governing the arbitration agreement); principal contract); (b) the law or (c) applicable Swiss law.
to (982) the dispute (in particular, that applicable to the The Swiss Law on Private International Law also
expressly confirms the arbitrators’ competence-competence, arbitrations to resolve jurisdictional while
generally challenges permitting in the arbitral first instance. tribunals (983) in Swiss Swiss-seated law also
provides for the arbitrability of a wide range of disputes (984) and the Swiss Federal Tribunal has adopted a
relatively expansive “pro-arbitration” rule of interpretation of the scope agreement of international are asserted
arbitration in Swiss courts, agreements. the parties’ (985) arbitration Where claims agreement subject to will
an be arbitration given effect by dismissing judicial proceedings. (986) Under the Swiss Law on Private
International Law, the parties’ freedom to agree upon the applicable interference procedural by Swiss courts
and substantive in the arbitral law process is expressly (other recognized. than regarding (987) the Judicial
availability of provisional measures and evidence-taking in aid of a tribunal) is narrowly limited.
(988) As to awards made in Switzerland, actions to annul are limited to grounds generally paralleling
review of international those in the awards, New York provided Convention. that (989) none Parties of the
parties can agree are to domiciled exclude in even this Switzerland. (990) Swiss courts will recognize and
enforce foreign awards without substantial As in France, judicial many judicial review, functions subject only
relating to the to provisions international of the arbitration New York are Convention. centralized, (991) with the
Swiss Federal Tribunal generally having original jurisdiction in annulment actions. (992) P 147 P 148 [d]
England
(993)
England has increased is a significant over the past center two for decades. international (994) The
commercial continuing arbitration, spread of whose English popularity as the language of international
business, and the development of London as an international financial arbitral center. and business center,
augur for continued growth in England’s importance as an Both international and domestic arbitrations
seated in England, Wales, or Northern Ireland are governed by the English Arbitration Act, 1996, which
provides a detailed (110 separate sections) UNCITRAL statement Model Law, of while English introducing
arbitration a number law. (995) of The formal Act is and based substantive roughly innovations. on the (996)
The Act departed from the historic common law approach towards arbitration 56 © 2020 Kluwer Law
International, a Wolters Kluwer Company. All rights reserved.
very wide discretion in adopting arbitral procedures. French law also confers the power to the arbitral
tribunal – once it is constituted – to order any provisional or conservatory measures that it deems appropriate.
The Code of Civil Procedure also grants French courts the power to assist in constituting an arbitral
tribunal, acting in the capacity of juge d’appui (“supporting judge”), and to issue certain court-ordered
provisional measures in aid of arbitration. The efficacy of France’s international arbitration arbitration-related
legislation is judicial materially proceedings advanced in through the Tribunal its centralization de Grande
Instance of most in Paris, which has developed a very substantial expertise in the field. This is a significant
institutional advance, which could usefully be adopted in other jurisdictions. The international 2011 decree
arbitral also reformed awards. Among French other law relating things, the to recognition Code of Civil and
Procedure enforcement permits of actions in French courts to annul international arbitral awards made in
France, on limited grounds (substantially similar to, and sometimes more liberal than, those provided for non-
recognition provides for the in recognition the New York and Convention). enforcement of international The
Code of arbitral Civil Procedure awards on also the same grounds.

(967)
(968)
(969)
P 150 P 151 (1020)
(1021) (1022) (1023)
P 148 P 149 (1000)

(1001)
(1002)
(1003)
(1004)
(1005) (1006) (1007)
(1008)
P 149 P 150
(1009)
(1010) (1011) (1012)
(1013) (1014)
(1015)
(1016) (1017) (1018) (1019)
The (996) Act departed from the historic common law approach towards arbitration legislation favor of
greater (e.g., codification addressing isolated (derived issues, in part often from in the response Model Law). to
judicial (998) Indeed, decisions the (997) Act ), has in produced the somewhat anomalous result that the
cradle of common law jurisprudence now boasts a substantially longer, more detailed statutory treatment of
international arbitration whose arbitration law than statutes any civil are law exceptional jurisdiction for (and,
their specifically, brevity (999)
France ). and Switzerland, The English Arbitration Act, 1996, was preceded in the 20th century by three
other major pieces Acts established of arbitration a highly-regulated legislation, enacted legal regime in 1950,
for 1975 arbitration and 1979. in England, The 1950 with and 1975 substantial scope for judicial involvement in
the arbitral process and review of arbitral awards. In particular, English legislation prior to 1979 provided for a
widely- criticized England a “case mandatory stated” right procedure, of access which to the had English
granted courts parties to review to arbitrations de novo issues seated of in English law that arose in the course
of arbitral proceedings (without the possibility of exclusion agreements to contract out of such review). The
Arbitration Act, 1979, revised regime for this international historic approach arbitrations and established in
England. a more acceptable, if by no means ideal, Under the Arbitration Act, 1979, agreements to arbitrate
were presumptively enforceable in England, including by means of a stay of national court litigation, and
English courts imposed “separability” few “nonarbitrability” doctrine, English constraints. courts did not
Moreover, in fact permit although challenges not formally to the accepting parties’ the underlying contract to
interfere unduly with the arbitral process. The 1979 Act amended, but did not eliminate, the historic “case
stated” procedure: the Act permitted parties merits of to the enter arbitrators’ into exclusion award agreements,
(save for cases which involving waived shipping, the right commodities to judicial review and of the insurance).
Where no such exclusion agreement existed, more demanding judicial review persisted, which was the cause
for continuing criticism in many quarters.
In response to these (and other) criticisms, the English Arbitration Act, 1996, was adopted, following an
extensive consultation process with both English and foreign sources. The international Act was intended
arbitration to – in and England. did – significantly The Act compiled improve all the prior legislative English
legislative framework for provisions relating to arbitration into a single statute, based in large part on the
UNCITRAL Model Law, and introduced a modern “pro-arbitration” legislative regime for international arbitration
in England. The 1996 Act provides expressly for the validity of written (and some other) arbitration
agreements (as to both existing and future disputes) and for the stay of English court proceedings provides for
the concerning separability claims of subject arbitration to valid agreements, arbitration agreements. and for
recognition The of Act the also arbitral tribunal’s competence-competence to rule on its own jurisdiction.
Recent English judicial decisions have interpreted the competence-competence doctrine broadly, and
arbitration adopted clauses. a robust “pro-arbitration” The Act does not approach address to the the subject
interpretation of nonarbitrable of international disputes or claims, but English courts have adopted a narrow
view of the doctrine. The 1996 Act contains a number of provisions granting arbitrators broad freedom in
conducting freedom includes arbitral wide proceedings, authorization with with a minimum respect of to judicial
procedural interference. and evidentiary This matters, appointment of experts, ordering the payment of security
for the costs of the arbitration and granting conservatory or provisional measures. Among other things, are not
it obliged is now clear to apply that local arbitrators rules of conducting English civil arbitral procedure
proceedings or evidence. seated in The England Act also provides for English judicial assistance to
arbitrations seated in England, including in taking evidence, appointing or removing arbitrators and granting
provisional measures in aid of arbitration. The changes introduced by the 1996 Act with regard to the
arbitral procedures were described in Lesotho Highlands Development Authority v. Impregilo SpA, where the
House of Lords quoted with approval the remarks of Lord Wilberforce during the legislative process:
“I poor have relation never taken to court the proceedings. view that arbitration I have always is a kind
wished of annex, to see appendix arbitration, or as far as possible, and subject to statutory guidelines no
doubt, regarded as a freestanding system, free to settle its own procedure and free to develop its own
arbitration substantive law moving law – yes, in that its substantive direction. That law. is I have not the always
position hoped generally to see which has been taken by English law, which adopts a broadly supervisory
attitude, giving countries substantial adopt a powers different to attitude the court and of correction so does the
and UNCITRAL otherwise....Other Model Law. The difference between our system and that of others has been
and is, I believe, quite a substantial deterrent to people to sending arbitrations here....How then does quite this
as far Bill as stand I should in that personally respect?...I like, find it has that moved on the very whole,
substantially although not in this going direction. It has given to the court only those essential powers which I
believe
P 151 P 152
(1028)
[e] United States of America
(1029) The companies United States are even is an more important important center participants for
international in the international arbitrations arbitral (1030) and process. U.S. (1031) Despite general
concerns about the U.S. legal system (focused on jury trials, discovery, punitive damages and delays), the
United States has remained reasonably popular as an international arbitral seat over the past three decades.
(1032) International arbitration in the United States is governed by an outwardly complex, but generally
adequate, legal framework. Most important issues relating to international arbitration agreements and arbitral
awards are governed primarily by U.S. federal (rather than statutory state) regime law. In for particular,
arbitration, the with “Federal separate Arbitration chapters Act” for (or both “FAA”) domestic sets forth
arbitration a basic (Chapter 1) and international arbitrations subject to the New York and Inter-American
Conventions (Chapters 2 and 3). (1033) The FAA has the distinction – and burden – of being the although
oldest limited, surviving the arbitration role of state statute law in in the any enforcement major jurisdiction. of
international (1034) Additionally, arbitration agreements is occasionally important. (1035)

[i] Unenforceability of Arbitration Agreements Under U.S. Law in 19th Century P 152 P 153
towards As discussed agreements above, to for arbitrate the better future part disputes. of the 19th Even
century, more so many than U.S. English courts courts were (where hostile legislative reforms had
intervened), some U.S. judges refused to grant specific enforcement of arbitration agreements, and permitted
their revocation at any time. (1036) This grudging approach about private towards agreements arbitration
“ousting” agreements the courts reflected of jurisdiction, a variety of skepticism factors, including about the
concern adequacy and fairness of the arbitral process and suspicions that arbitration agreements were often
the product of unequal bargaining power.
(1037) As discussed above, these attitudes began to shift during the late 19th century, particularly in some
U.S. state court decisions. (1038) Following sustained lobbying from the business community, New York
enacted an arbitration statute in 1920 designed to reverse common law courts. hostility (1039) to The
arbitration New York and statute to render provided arbitration a model agreements for what became
enforceable federal in legislation New York dealing with arbitration – the Federal Arbitration Act, originally titled
the “United States Arbitration Act.”

(1040) The increasingly FAA was strongly expensive, supported slow and by unreliable: the U.S. business
(1041) “The community, clogging which of our saw courts litigation is such as that the delays amount to a
virtual denial of justice,” (1042) and the proposed FAA was intended to “enable business men to settle their
disputes expeditiously and economically.” (1043) With adopted virtually in 1925 no by opposition both the or
House amendment, of Representatives the bill that and became the Senate.
the FAA (1044) was unanimously P 153 P 154 The Act’s stated purpose was to reverse the hostility which
U.S. courts had developed towards law rules arbitration that arbitration agreements agreements in
commercial were revocable matters, or and unenforceable in particular as the contrary common to public
policy. (1045)
According to the FAA’s legislative history:
“The need for the law arises from an anachronism of our American law. Some centuries ago, because of
the jealousy of the English courts for their own jurisdiction, ground that the they courts refused were to enforce
thereby specific ousted from agreements their jurisdiction. to arbitrate This upon jealousy the survived for so
long a period that the principle became firmly embedded in the English have felt common that the law
precedent and was was adopted too strongly with it fixed by the to American be overturned courts. without The
courts a legislative enactment.”

(1046)
This historical description was not entirely accurate, omitting to note that English law had in fact developed
reasonably effective mechanisms for enforcing arbitration agreements, while many American courts (and
legislatures) had failed to do so. (1047) Nevertheless, this
direction. It has given to the court only those essential powers which I believe the act in court the should
way of have; enforcement that is, rendering or procedural assistance steps, or, when alternatively, the
arbitrators in the cannot direction of correcting very fundamental errors.”
With respect to awards made in England, the Act departs entirely from the historic “case stated” awards
made procedure in England. and provides The Act’s only grounds limited for grounds annulling for awards
annulling are international now limited arbitral to lack of substantive jurisdiction of the tribunal, limited
categories of “serious irregularity” in procedural matters and limited appeals on points of law. Appeals on legal
issues may the parties; only be brought English with leave courts of have the court held that and appeal may
be for excluded error of by law agreement is impliedly between excluded where the parties have chosen a
substantive applicable law other than English law or where the parties have chosen a set of institutional rules,
such as the ICC Rules, which the recognition excludes the and right enforcement of appeal of to foreign the
extent arbitral possible. awards, primarily The by Act incorporating also provides the for provisions of the New
York Convention.
(1024)
(1025)
(1026)
(1027)
P 155 P 156
(1062)
(1063)
[iii] Federal Arbitration Act: Chapters Two and Three As discussed above, the United States did not ratify
the New York Convention for more than a decade after its signing (from which the United States abstained).
(1064) After U.S. ratification second chapter of the to Convention the Act, implementing in 1970, Congress the
Convention. enacted amendments (1065) In ratifying to the the FAA, New in a York Convention, Congress
was motivated (as with the domestic FAA in 1925) by a desire for more efficient dispute resolution:
“It resolving is important disputes to note than that is full-scale arbitration litigation is generally in the a
courts. less costly To the method extent of that arbitration agreements avoid litigation in the courts, they
produce savings not only with the parties to the agreement but also for the taxpayers – who must bear the
burden for maintaining our court system.”

(1066)
In of addition, international Congress commercial sought to dispute facilitate resolution, the development on
which U.S. of a companies stable and expanding effective system into global markets could rely, in order to
promote international trade and investment.

(1067) Like the original domestic Act, the FAA’s second chapter is remarkably brief. It provides
P 154 P 155
(1053)
(1054)
(1055)
(1056)
(1057)
(1058)
(1059) (1060)
(1061)
while many American courts (and legislatures) had failed to do so. Nevertheless, this explanation captured
one of the key statutory objectives of the FAA: “the fundamental conception underlying the law is to make
arbitration agreements valid, irrevocable, and enforceable.”
(1047)
(1048)
[ii] Federal Arbitration Act: Chapter One As noted above, the FAA currently consists of three chapters: (a)
the “domestic” FAA, 9 U.S.C. §§1-16, enacted in 1925 and applicable to agreements and awards affecting
either inter- state 9 U.S.C. or §§201-208, foreign commerce; enacted in 1970 (b) and the applicable New York
Convention’s only to awards implementing and agreements legislation, falling within the Convention; and (c)
the Inter-American Convention’s implementing legislation, 9 U.S.C. §§301-307, enacted in 1990 and
applicable only to awards and agreements falling under the Inter-American Convention. The FAA is
remarkably brief and, by contemporary standards, relatively skeletal; among other things, it omits
provisions on numerous topics addressed in most contemporary arbitration legislation in other developed
jurisdictions. In true common law fashion, however, U.S. courts have developed an extensive body of
judicial authority which, while sometimes inconsistent and often not readily accessible to non-U.S. parties or
practitioners, provides an adequate legal regime for international arbitrations. arbitration in Most the United
observers States would would agree, be however, materially that improved the regime by enactment for
international of the UNCITRAL Model Law or comparable contemporary international arbitration legislation.
The involving centerpiece inter-state of the and domestic foreign commerce FAA is §2, which provides
“shall be that valid, arbitration irrevocable, agreements and enforceable, save upon such grounds as exist at
law or in equity for the revocation of any contract.” In turn, §§3 and 4 of the Act provide the principal
mechanisms for enforcing requires “any §2’s court general of the rule United that arbitration States” to
agreements stay proceedings are presumptively before it, if they valid. invole Section 3 issues that are
“referable to arbitration,” while §4 requires “United States district court[s]” to issue orders compelling arbitration
of such issues. Other sections of the FAA address limited aspects of the arbitral process. Section 5 grants
district courts the power to appoint arbitrators if the parties either have not done so or have agreed upon an
appointment procedure which proves unworkable. Section 7 of the tribunals, Act authorizes and permits the
issuance U.S. district of “subpoenas” courts to issue (orders compulsory to provide process evidence) to assist
by arbitral tribunals in taking evidence. In turn, §§9, 10 and 11 of the FAA provide that arbitral awards may be
confirmed as U.S. judgments, subject to only a limited number of enumerated exceptions. correcting awards
These subject sections to the Act. also set forth procedures for confirming, vacating, or It is notable how many
subjects are not directly addressed by the FAA. The statute does not expressly competence deal between
with such U.S. matters courts as and the arbitrators separability to resolve presumption, disputes the over
allocation arbitration of agreements (competence-competence), challenging and removing arbitrators,
provisional relief, the conduct of arbitral proceedings, interlocutory judicial review, choice of law, form of which
the award it does and address, costs. such Notable as the also grounds is the relative and procedures brevity
of for the challenging FAA on most either of the issues arbitration agreements or awards. As discussed below,
most international arbitration agreements and arbitral awards are subject consequence, to either either the
New Chapter York Two Convention or Three or of Inter-American the U.S. FAA. Convention, In the relatively
and, as a unusual cases where non-Convention agreements or awards are at issue in U.S. courts, the better
view is that Chapter One of the FAA (which applies to foreign, as well as interstate, commerce) is applicable.
(1049)
(1050)
(1051)
(1052)
P 156 P 157 (1070)
(1071) (1072)
(1073) (1074)
(1075)
(1076)
(1077)
P 157 P 158
(1078)
(1079)
(1080)
(1081)
(1082)
(1083)
(1084)
(1085) (1086)
P 158 P 159 (1087)
(1088) (1089)
(1090) (1091) (1092)

(1093)
(1094)
(1095)
(1096) (1097)
(1098)
Like the original domestic Act, the FAA’s second chapter is remarkably brief. It provides that arbitration
agreements shall be enforceable, and contains provisions authorizing U.S. courts to compel arbitration
pursuant to such agreements (including in foreign arbitral seats). of awards (1068) that The are Act’s subject
second to the chapter Convention, also provides simply by for incorporating the recognition the and
Convention’s enforcement terms by reference. (1069) U.S. federal courts are granted broad jurisdiction,
including by “removal” from state courts, over actions arising under the Convention (for the purpose of
ensuring uniform and effective enforcement of the Convention in U.S. courts). In 1990, the United States
enacted implementing legislation for the Inter-American Convention, codified as a third chapter to the FAA.
The chapter incorporates much of the New York Convention’s implementing legislation by reference, adding
additional provisions and the to deal relationship with the Inter-American between the New Commercial York
and Inter-American Arbitration Commission’s Conventions. rules Like the domestic FAA, at the heart of the
third chapter are provisions requiring the enforcement of specified arbitration agreements and awards,
together with very briefly- described procedures for doing so. There is considerable “overlap” among the
various sources of U.S. federal law affecting international arbitration agreements and awards. Most
obviously, arbitral awards and agreements and the second falling chapter under of the the New FAA York
(which Convention implements are the governed Convention). by both the Convention In addition, however,
these awards and agreements are potentially governed by the first, “domestic” chapter of the FAA, which is
expressly incorporated by §208 of the FAA to the extent has the it effect is not that “in conflict” domestic with
U.S. the arbitration Convention. law (and judicial This potentially-confusing authority) serves as structure a
“gap filler” of sorts, although the precise terms of this mechanism are not statutorily-defined and have not been
definitively articulated by U.S. courts. Beyond common its law” express of arbitration; terms, the FAA has this
provided body of judicial the basis authority for a fairly also expansive applies, more “federal broadly than in
domestic matters, in the context of international arbitrations subject to the scope, New but York it clearly and
Inter-American extends to such Conventions. subjects, discussed That below, body as of law the is
separability of uncertain presumption, the competence-competence doctrine, the interpretation and
presumptive validity of international arbitration agreements, the parties’ autonomy with regard to arbitral relief
in procedures, connection with the tribunal’s arbitrations. procedural Importantly, powers and as the also
availability discussed of below, provisional the FAA and the federal common law rules derived from the FAA
override (or “preempt”) inconsistent state (and foreign) law rules governing the same subjects, particularly
rules which seek to deny effect to agreements to arbitrate and arbitral awards. Despite the relatively spartan,
and archaic, drafting and ad hoc origins of the FAA’s three chapters, U.S. courts have generally interpreted
the Act in a fashion which is supportive of the international arbitral process. For the most part, U.S. courts have
been even more supportive of the international arbitral process than of domestic U.S. arbitrations. With
respect to arbitration agreements, U.S. courts have repeatedly embraced the separability doctrine, have
defined in considerable and influential detail the allocation formation, of validity competence and interpretation
between courts of arbitration and arbitrators agreements, to decide disputes have over strongly the affirmed
the presumptive validity of arbitration agreements (subject only to limited, neutral exceptions) and have
fashioned a decidedly “pro-arbitration” approach to the interpretation of arbitration agreements. With respect
to the arbitral process, U.S. courts have emphasized the parties’ freedom to agree upon arbitration rules
and procedures, the arbitrator’s discretion in presiding over the arbitral process and adopting arbitral
procedures and the very limited judicial scope decisions for interlocutory have also provided judicial (with
review some of the exceptions) arbitrator’s for decisions. court-ordered provisional U.S. measures and
disclosure, as well as judicial support for constitution of the arbitral tribunal. Finally, awards made with respect
in the United to arbitral States awards, on limited U.S. courts grounds, have generally permitted paralleling
vacatur (annulment) those in the of New York Convention, but with some courts also permitting a very limited
degree of substantive “manifest disregard” judicial review doctrine). of the merits With of regard the arbitrators’
to foreign award awards, (under U.S. courts the so-called have held that such awards are presumptively valid
and enforceable, subject only to the New York Convention’s specified exceptions. There the FAA, have
particularly been repeated as regards suggestions international in the past arbitration. decades for revision
Critics have or replacement argued that of the Act fails to provide the statutory framework which exists in most
developed arbitral centers, placing the United States in an unattractive position vis-à-vis such jurisdictions
content and of U.S. failing law. to provide (particularly foreign) parties with clear guidance regarding the Others
have responded that U.S. law regarding arbitration, and particularly international arbitration, is highly
developed, through judicial decisions, and that legislation

P 159 P 160
(1101) (1102)
(1103)
(1104)
P 160 P 161 (1105)
(1106)
[iv] U.S. State Arbitration Laws The the 50 role states, of the can FAA appear within the complex. U.S. legal
(1107) system, The basic and principles in particular can in nonetheless relation to the be readily laws of
summarized. In principle, a U.S. federal statute will override, or “preempt,” inconsistent U.S. state law
substantive intended to rules address addressing particular the substantive same subjects. topics (1108) or
general Accordingly, fields, insofar it will preempt as the FAA state was law addressing those topics or fields.
(1109) The U.S. Supreme Court has held that the domestic FAA “contains no express preemptive P 161 P
162
provision, arbitration.” nor (1110) does At it the reflect same a congressional time, the Court intent has also to
occupy repeatedly the entire declared field that of the FAA creates a body of substantive federal rules relating
to arbitration: in enacting the FAA, “Congress states to require declared a judicial a national forum policy for
the favoring resolution arbitration of claims and which withdrew the contracting the power of parties the agreed
to resolve by arbitration.” (1111) As a consequence, it is well-settled that U.S. state law rules which single out
and purport to render inter-state and international arbitration agreements it is also settled, invalid, in both
illegal, domestic or revocable and international are preempted contexts, by the that FAA. the (1112) FAA As
and noted federal above, law establish the presumptive separability of the arbitration agreement, (1113)
provide the exclusive standards for interpreting arbitration agreements (1114) and for confirming and vacating
arbitral awards.
(1115) Nonetheless, in a purely domestic context, issues concerning the formation of arbitration
agreements, as well as at least some issues of substantive and formal validity, are governed primarily by
generally-applicable state contract law. (1116) In contrast, there is substantial the New York lower Convention,
court and governs other authority the formation holding and that validity federal of international common law,
(as derived from distinguished from domestic) arbitration agreements. (1117) These issues of preemption
under U.S. law are complex and are addressed in greater detail below.
(1118) Apart from these complexities, U.S. state law is applicable to arbitration agreements and awards
when – but only when – the Convention and the FAA (and the federal common law P 162 P 163 derived from
both sources) are inapplicable. That may be the case, for example, because the definition agreement virtually
or award impossible does not in international affect inter-state commercial or foreign matters). commerce
(which is by State law may also be applicable to issues bearing on arbitration that federal statutory and
common law do not directly or indirectly address. Although the issue is unsettled, that may consolidation.
include the (1119) availability Similarly, of state court-assisted law may apply discovery, to the provisional
(relatively relief, infrequent) or enforcement of foreign arbitral awards, not falling within either the New York or
Inter- American Conventions, in the United States.
(1120) Every Many states state of have the enacted Union has some adopted version legislation of the
“Uniform dealing Arbitration with commercial Act.” First arbitration. proposed in 1924 by the Conference of
Commissioners on Uniform State Laws, (1121) the current, revised text earlier of the versions.
Act was (1122) adopted by the Conference in 2000, making substantial changes to The Uniform Arbitration
Act has been enacted in some 39 states and the District of
arbitration, would likely is produce highly developed, a worse (not through better) judicial result. decisions,
Business leaders and that in particular legislation fear that congressional legislation on arbitration could “open
a Pandora’s box of special interests” U.S. courts. and result Although in damage these to fears the pro-
arbitration are real, the inadequacies legal framework of the currently FAA as a existing in statutory framework
for international arbitration are strikingly apparent and detract from both the efficacy of the arbitral process and
the attractiveness of the United States as an arbitral seat. Legislation has been introduced in recent
Congresses which would amend the domestic FAA (in particular to render domestic consumer and
employee disputes nonarbitrable). Although predictions about legislative processes are notoriously risky, it
continues to appear least for unlikely the present, that this legislative legislation reform will meaningfully be
adopted, affecting even in domestic international matters. commercial At arbitration in the United States
appears unlikely. One interpretation avenue for of reform the New of U.S. York international Convention (and
arbitration Inter-American law would Convention), be through and judicial the FAA. Although there is contrary
authority, most considered analyses have held that Article II of the Convention is “self-executing” in U.S. courts
(i.e., that these provisions of the Convention addressed, and have can direct be expected application). to
continue Relying to address, on the at Convention, least some U.S. of the courts lacunae have and
deficiencies in the FAA (e.g., with regard to the allocation of jurisdictional competence, the selection of the
arbitral seat, the annulment of awards and the removal of arbitrators). Indeed, rules for U.S. the courts law
governing have already the arbitration done so, including agreement in the development and the application of
choice-of-law of the nonarbitrability doctrine in international disputes.
(1099) (1098) (1100)
P 163 P 164 (1127) (1128) (1129) (1130) (1131)

(1132)
(1133)
(1134)
(1135)
P 164 P 165
(1136)
(1137)
(1138)
(1140) (1139) [2] Less Supportive National Arbitration Legislation Some nations regarded
international commercial arbitration with a mixture of suspicion and hostility during much of the 20th
century. (1141) This hostility arose from a reluctance to compromise perceived principles of national
sovereignty, a disdain for principles of P 165 P 166
party contemporary autonomy international and doubts concerning commercial the arbitration. fairness,
neutrality (1142) Although and efficacy historic of distrust for international arbitration has waned substantially
in recent decades, it has not entirely disappeared and continues to influence legislation, judicial decisions and
other actions in some countries.
(1143) Developing countries in many parts of the world refused for much of the 20th century to enforce
agreements to arbitrate future disputes. This was particularly true in Latin America and much of the Middle
East. (1144) In the words of one leading commentator, “there is a definite commercial ambivalence
arbitration.”
in the (1145) attitudes of developing countries towards international Some developing states took the
position that international arbitration agreements were an resisted. unjustifiable (1146) In infringement many
cases, upon arbitration national agreements sovereignty, were which valid was only to be if they vigorously
concerned an existing (not a future) dispute, which was the subject of a submission agreement committing the
parties to resolve the dispute by arbitration.
(1147) In that Latin foreign America, nationals the Calvo were doctrine mandatorily (first subject formulated
to the in jurisdiction 1896) declared of local among courts, other which things could not be “ousted” by
international arbitration agreements. (1148) The doctrine was incorporated into national legislation and
constitutional instruments, which not P 166 P 167
infrequently declarations rendered from developing international states arbitration also reflected agreements
the continuing invalid. hostility (1149) Political of many developing states towards international arbitration, even
well into the 20th century. 1971 declaration of the Andean Commission reflected this perspective, declaring
that:
A “[No controversies agreement from concerning the national foreign jurisdiction investment of the shall]
recipient withdraw country.”

possible... (1150)
The same principles were later reflected in various declarations during the 1970s associated with the “New
International Economic Order.”
(1151) Against still does this not background, provide effective contemporary enforcement arbitration of
agreements legislation to arbitrate in some developing future disputes; states such provisions are sometimes
either revocable at will, unenforceable in broad categories of disputes, or subject to idiosyncratic form or
substantive requirements. (1152) Similarly,
The Uniform Arbitration Act has been enacted in some 39 states and the District of Columbia, original
Uniform (1123) and Arbitration has influenced Act was arbitration substantially legislation similar to in the other
FAA. U.S. Among states. other (1124) things, The it required specific enforcement of arbitration agreements
(as to both existing and future disputes) (1125) and provided for the recognition and enforcement of awards
with only limited of additional judicial provisions, review. (1126) roughly The paralleling Revised Uniform the
UNCITRAL Arbitration Model Act Law, usefully concerning adds a number the constitution of the arbitral
tribunal, provisional measures, the arbitral procedure, the form of awards and immunity of arbitrators.
Nevertheless, few have rejected a number its generally of U.S. states “pro-arbitration” have not adopted
lead (although the Uniform most Arbitration or all state Act, laws and a disfavoring the arbitral process are
preempted by the FAA). Thus, several state statutes do not insurance permit claims arbitration (although, of
various again, categories federal law of preempts claims, such these as tort, statutory real property
provisions). and Other U.S. states have enacted legislation requiring that arbitration clauses be conspicuously
identified (e.g., printed in capital letters, placed on the front of any contract, enforceability etc.). and limited And
some judicial state review statutes of arbitral do not provide awards that for the the same FAA and general
Uniform rule of Arbitration Act require. In addition, especially in recent years, some U.S. states have
enacted legislation designed to In particular, fill perceived California, gaps left Colorado, in the U.S.
Connecticut, federal framework Florida, for Georgia, international Hawaii, arbitration. Maryland, North Carolina,
Ohio, Oregon and Texas have adopted statutes purporting to deal comprehensively with the subject of
international arbitration. The extent to which these unclear. statutes To date, are however, preempted both by
these the FAA statutes and federal and state common law more law generally principles have remains played
a distinctly secondary role in the international arbitral process. One Information potential Sciences, exception
Inc. to v. this Board general of Trustees. rule was the There, Supreme a California Court’s decision choice-
of-law in Volt clause in the parties’ purely domestic contract was interpreted, in vaguely-defined
circumstances, to incorporate state procedural rules relating to arbitration, and the FAA was most held lower
not court to preempt decisions, this result. have Subsequent interpreted U.S. Volt Supreme narrowly, Court
holding decisions, that general and choice-of-law clauses ordinarily do not encompass state arbitration laws
and that the FAA preempts state law rules that impede the enforcement of arbitration agreements.
P 167 P 168
(1156)
(1157) (1158)
[C] Overview of Leading International Arbitration Institutions and Rules As discussed
above, a central objective of contemporary international arbitration conventions parties’ international and
national arbitration arbitration agreements, legislation including has been agreements to give effect on arbitral
to commercial P 168 P 169
procedures. (1159) A vital means by which parties exercise their autonomy in this context is through the
inclusion, in their commercial contracts, of arbitration agreements incorporating institutional or ad hoc
arbitration rules. International arbitration can be either “institutional” or “ad hoc.” There are vitally important
differences between these two alternatives. Institutional arbitrations are conducted pursuant to institutional
arbitration rules, almost always overseen by an administrative arbitral tribunal, authority fixing the with
arbitrators’ responsibility compensation for various and aspects similar relating matters. to constituting (1160)
In the contrast, ad hoc arbitrations are conducted without the benefit of an appointing and administrative
authority or (generally) preexisting arbitration rules, subject only to the parties’ arbitration agreement and
applicable national arbitration legislation.

[1] Institutional Arbitration A number of organizations, located in different countries, provide institutional
arbitration services, often tailored to particular commercial or other needs. As indicated above, the best-known
Chamber of international Commerce (“ICC”), commercial the American arbitration Arbitration institutions
Association are the (“AAA”) International and its International Centre for Dispute Resolution (“ICDR”), the
London Court of International Arbitration (“LCIA”), Stockholm Chamber of Commerce Arbitration Institute
(“SCC”), the Singapore Centre (“HKIAC”) International and the Arbitration Vienna International Center
(“SIAC”), Arbitral the Centre Hong Kong (“VIAC”). International Each of these Arbitration organizations is
described below.
(1161) Also Intellectual active in Property the field Organization are the Japan (“WIPO”), Commercial the
Swiss Arbitration Chambers’ Association Arbitration (“JCAA”), Institution, the World the German Institution of
Arbitration (“DIS”), the Chinese International Economic and Trade Arbitral Center (“CIETAC”), the Cairo
Regional Centre for International Commercial Arbitration (“ACICA”), the (“CRCICA”), Kuala Lumpur the
Australian Regional Centre Centre for for International Arbitration (“KLRCA”), Commercial the Indian
Arbitration Council of Arbitration (“ICA”) and JAMS International. There are also a number of less widely-
known regional or national arbitral institutions, as well as the International Centre for the Settlement industry-
specific of Investment institutions.
Disputes (1163) (“ICSID”), dealing with investment disputes, (1162) and P 169 P 170 These (and other)
arbitral institutions have promulgated sets of procedural rules that apply where parties have agreed to
arbitration pursuant to such rules. (1164)
Among other things, institutional rules set out the basic procedural framework and timetable for the
of in disputes, a number or of subject states, international to idiosyncratic arbitral form or awards
substantive are subject requirements. to either de novo Similarly, judicial review or to similarly rigorous
scrutiny on other grounds. Finally, some national courts have been prepared to interfere in the international
arbitral process – for example, by from purporting appearing, to or remove to enjoin arbitrators, arbitrations. to
resolve “preliminary” issues, to bar foreign lawyers Nonetheless, during the last several decades, a number
of states which historically distrusted international arbitration have ratified the New York Convention and/or
enacted legislation Arabia, Argentina, supportive Algeria, of the Bahrain, arbitral Brazil, process. Tunisia,
Turkey, These include Nigeria, India, Peru and China, (at Saudi least for a time) Russia, Ecuador and
Venezuela. Although there is often little practical experience with the application of arbitration legislation in
such states, these statutes have the potential for providing a more stable, predictable framework for
international arbitration. Unfortunately, even where national law is superficially supportive of the
international arbitral process, some national courts have been quick to hold arbitration agreements or awards
national invalid courts or are to requested interfere with to do the so arbitral by local process. companies, That
state is particularly entities, or true individuals. when Moreover, the early years of the 21st century have
witnessed a potential resurgence of historic ideological opposition to some aspects or applications of the
international arbitral legitimacy process, and fairness with a few of the states process. It and remains some to
commentators be seen how substantial condemning and long- the lived this trend is, although it has thus far
gained little currency outside a limited number of states. * * * * * Despite resistance in a few quarters, most
national arbitration statutes enacted during the past several decades have adopted robustly pro-arbitration
legal regimes that give effect to These the legislative terms of the regimes New York are Convention of
essential and importance support the to the international contemporary arbitral international process. arbitral
process, enabling parties reliably to resolve their disputes efficiently in a neutral, centralized forum. Equally,
the continuing development and refinement of these legislative process to changing regimes is conditions. vital
to the ongoing improvement and adaptation of the arbitral (1152) (1153)
(1154)(1155)
P 170 P 171 (1171)

[3] Relative Advantages and Disadvantages of Institutional and Ad Hoc Arbitration Both institutional
and ad hoc arbitration have strengths. Institutional arbitration is conducted according to a standing set of
procedural rules and supervised, to a greater or lesser breakdowns, extent, particularly by a professional at the
staff. beginning (1172) of This the reduces arbitral the process, risks of and procedural of technical defects in
the arbitration proceedings and arbitral award. The institution’s involvement can be particularly challenges to
valuable arbitrators, on issues the selection relating of to an the arbitral appointment seat and of arbitrators,
fixing the arbitrators’ the resolution fees, of where professional, specialized staff provide better service than ad
hoc decisions by national courts with little, if any, experience or institutional resources for such matters. (1173)
Equally important, many institutional rules contain provisions that make the arbitral process more reliable
and expeditious. This includes provisions in institutional rules concerning competence-competence,
separability, provisional measures, consolidation and replacement joinder, disclosure, of arbitrators arbitrator
and truncated impartiality, tribunals, corrections costs and and the challenges like. (1174) to Less awards,
directly, an arbitral institution lends its standing to any award that is rendered, which may enhance the
likelihood of voluntary compliance and judicial enforcement.
(1175) On less the expensive other hand, (since ad it hoc avoids arbitration sometimes is not substantial
infrequently institutional said to be fees) arguably and more more flexible, confidential than institutional
arbitration; despite this, the provisions of institutional rules sometimes national courts), make more institutional
confidential arbitrations (by including more flexible express (by confidentiality minimizing the obligations)
involvement and of less expensive (by providing institutional oversight of arbitrator fees). Although there is
room for debate, most experienced international practitioners fairly decisively prefer the more institutional
structured, rules predictable and appointment character mechanisms, of institutional at least arbitration, in the
absence and the of benefits unusual of circumstances arguing for an ad hoc approach.
(1176)
[4] UNCITRAL Arbitration Rules
(1177) P 171 P 172
contemporary The UNCITRAL arbitration Arbitration practice. Rules occupy In 1973, an UNCITRAL
important proposed position, the both preparation historically of and model in arbitration rules. (1178) The
objective of the UNCITRAL Rules was to create a unified, predictable and stable procedural framework for
international arbitrations without stifling the ambitiously informal to and be flexible acceptable character to
common of the arbitral law, civil process. law and (1179) other The legal Rules systems, aimed as well to
capital-importing and capital-exporting interests. (1180) The Rules were promulgated by Resolution 31/98,
adopted by the General Assembly of the United Nations on 15 December 1976.

(1181) UNCITRAL reviewed the usage of the Rules during the first decade of the 21st century and,
things, institutional rules set out the basic procedural framework and timetable for the arbitral proceedings.
Institutional rules also typically authorize the arbitral institution to select arbitrators in particular disputes and
resolve challenges to arbitrators (that is, to serve the fees as payable “appointing to the authority”), arbitrators
to and designate (sometimes) the place to review of arbitration, the arbitrators’ to fix or awards influence to
reduce the risk of unenforceability on formal grounds. Each arbitral institution has a staff (with body. the size
varying significantly from one institution to another) and a decision-making It is fundamental that arbitral
institutions do not themselves arbitrate the merits of the parties’ dispute. This is the responsibility of the
particular individuals selected as arbitrators. instead are private Arbitrators persons selected are virtually by
the never parties. employees If of parties the arbitral cannot institution, agree upon but an arbitrator, most
institutional rules provide that the host institution will act as an “appointing authority,” which chooses the
arbitrators in the absence of the parties’ agreement.
(1165) (1166)
(1167)
[2] Ad Hoc Arbitration Ad hoc arbitrations are not conducted under the auspices or supervision of an
arbitral institution. Instead, parties simply agree to arbitrate, without designating any institution to arbitrator
administer (or arbitrators), their arbitration. who is Ad (or hoc are) arbitration to resolve agreements the dispute
will without sometimes institutional choose an supervision or assistance. (1168) The parties will sometimes
also select a preexisting set of procedural rules designed to govern ad hoc arbitrations. For international
commercial disputes, published the a commonly-used United Nations set Commission of such rules, on
International the UNCITRAL Trade Arbitration Law (“UNCITRAL”) Rules.
(1169) has Where ad hoc arbitration is chosen, parties will sometimes designate an appointing authority,
(1170) that will select the arbitrator(s) if the parties cannot agree (or if their chosen members arbitrator of the
tribunal. is unable If the to serve) parties and fail that to select will consider an appointing any subsequent
authority, challenges then the to national arbitration statutes of many states permit national courts to appoint
arbitrators experienced (although many appointing practitioners authority).
regard this as less desirable than selection by an
P 175 P 176 (1206)

(1207)
(1208)
(1209)
P 172 P 173
(1184)
(1185)
(1186) (1187) (1188) (1189) (1190) (1191) (1192) (1193)
(1194) (1195)
(1196)
P 173 P 174
(1197)
(1198)
[5] Leading International Arbitral Institutions If institution institutional and arbitration refer to it in is their
desired, arbitration the parties clause. must (1199) choose Parties a particular ordinarily arbitral rely on one
of a few established international arbitral institutions. This avoids the confusion and uncertainty that comes
from inexperienced arbitrator appointments and administrative efforts by inappropriately–selected institutions.
All leading international arbitral institutions are prepared to, and routinely do, administer arbitrations sited
almost anywhere in the world, and not merely in the place where the institution itself is located. (1200) There is
therefore no need to select an arbitral institution readily administer headquartered an arbitration in the parties’
seated in desired Paris or arbitral New York, seat while (e.g., the the LCIA AAA can or VIAC administer can
arbitrations seated in Vienna or London). A number of organizations provide institutional arbitration
services. Some of the best known of these organizations are described briefly below.
(1201) The services rendered by professional arbitral institutions come at a price, which is in addition to
the fees and expenses of the arbitrators. Every institution has a fee schedule that vary specifies significantly,
what as that does price the is. basis The for amounts calculating charged such by fees. institutions For
example, for particular some matters institutions use hourly charges while others charge based upon a
percentage of the amount in dispute. P 174 P 175 All the leading rules themselves, arbitral institutions these
revisions periodically are the revise product their of extensive institutional consultations arbitration rules.
among Like leading practitioners, academics, business users and arbitrators. (1202) These consultative
processes are aimed at refining the institutional rules for the purpose of making arbitration efficient. As
agreements with the refinement and awards of national more enforceable arbitration and legislation, arbitral
proceedings (1203) this is more an example of the ongoing adaptation and improvement of the international
arbitral process in response to criticisms, consumers’ needs and changing conditions.

[a] International Chamber of Commerce International Court of Arbitration
(1204) The ICC’s International Court of Arbitration was established in Paris in 1923 (in parallel with efforts
by the international business community to secure adoption of the Geneva Protocol, the FAA and other
legislative reforms). (1205) The ICC is generally described as the world’s character leading than international
any other commercial leading arbitral arbitration institution. institution, with less of a national The ICC’s annual
case load was well above 300 cases filed per year during much of the 1990s, are international and, by
2011 disputes, had reached many nearly involving 800 very cases substantial filed per year. sums. The ICC’s
Most caseload of these cases includes disputes between parties from around the world, with parties outside
Western Europe being involved in more than 50% of all ICC cases in many recent years. In 2012, entities. as
in other years, nearly 10% of the ICC’s caseload involved states or state-related The ICC has promulgated a
set of ICC Rules of Arbitration (which are periodically revised,
UNCITRAL reviewed the usage of the Rules during the first decade of the 21st century and, after
extensive consultations and study, undertook a revision of the Rules in 2006. On 25 first June revision 2010,
since UNCITRAL their published adoption). extensive revisions of the original UNCITRAL Rules (the The
UNCITRAL Rules are designed for use in ad hoc international commercial arbitrations. specifically for
When that the purpose. Rules were Although adopted alternatives in 1976, they now exist, were the only most
set states, of rules which available generally will have supported the Rules in the United Nations debates, and
their state- owned entities, often find it difficult to object to their use in an arbitration agreement or arbitral
proceeding. Like most institutional rules, the UNCITRAL Rules prescribe a basic procedural framework for
the arbitration. This includes provisions for initiating an arbitration, selection and challenge of arbitrators,
conduct of the arbitral proceedings (including, in the choice 2010 of Rules, applicable the joinder law or of
rules third of persons law, awards and issuance and of costs interim of the relief arbitration. ), The Rules also
contain provisions confirming the presumptive separability of the arbitration clause from the underlying
contract, and the tribunal’s power (competence- competence) parties have not to consider agreed on
jurisdictional an appointing objections. authority, Under the Secretary the Rules, General where of the the
Permanent Court of Arbitration serves a sui generis function, of designating a suitable appointing authority.
The UNCITRAL Rules have contributed significantly to the harmonization of international arbitration
procedures. A number of arbitral institutions have either adopted the UNCITRAL Rules entirely, or have
substantially adopted the Rules in prescribing a set of local disputes, institutional the Rules rules. are not
limited Although to commercial designed principally matters and for have international been used trade
successfully in both state-to-state and investor-state arbitrations. (1182)

(1183)
P 176 P 177 (1218) (1219)
(1220)
(1221)
(1222)
(1223)
P 177
(1224) P 178
(1225)
(1226)
(1227) (1228) (1229) (1230)
(1231) (1232) (1233)

(1234)
(1235)
(1236)
(1237)
(1238)
P 178 P 179 (1239)
(1241) (1242)
(1240) (1243)
(1244) (1245)
The ICC has promulgated a set of ICC Rules of Arbitration (which are periodically revised, most ICC Rules
recently for Expertise, in 1998 and the 2012 ICC (1210) Dispute ) as Board well as Rules the and ICC Rules
the ICC of Rules Optional for a Conciliation, Pre-Arbitral the Referee Procedure. (1211) The ICC Rules are
published in English, French, Spanish, German, Russian, Arabic, Chinese, Japanese, Italian, Polish,
Portuguese and Ukrainian. Under extensively the ICC involved Rules, the in the ICC administration (through
the International of individual Court arbitrations. of Arbitration Among (“ICC other Court”)) things, is the ICC
Court and its Secretariat are responsible for service of the initial Request for Arbitration; (1212) fixing and
receiving payment of advances on costs of the arbitration by the arbitrators parties; if (1213) a party confirming
defaults the or if parties’ the parties nominations are unable of arbitrators; to agree upon (1214) a presiding
appointing arbitrator or sole arbitrator; (1215) considering challenges to the arbitrators including on the
Reference” basis of (a lack unique of independence; procedure under (1216) the reviewing ICC Rules), and
which approving define so-called the issues “Terms and of procedures for the arbitration; (1217) reviewing a
tribunal’s draft award for formal and other defects; and fixing the arbitrators’ compensation. The decide ICC’s
disputes International or act Court as an arbitrator. of Arbitration Rather, is not, the in ICC fact, Court a
“court,” is an administrative and does not itself body that acts in a supervisory and appointing capacity under
the ICC Rules. It maintains a sizeable legal and administrative staff of some 35 persons, from more than a
dozen nationalities, staff are assigned organized to cases as originating a Secretariat. from Specialized
particular teams geographic, of counsel linguistic and administrative and/or cultural regions. As detailed above,
the Secretariat is substantially involved in the day-to-day supervision of arbitrations. ICC arbitrations can be
(and are) seated almost anywhere in the world. In 2012, for example, ICC arbitrations were conducted in 59
different countries. Over the last decade, an increasing number of ICC arbitrations have been seated outside
of Europe, particularly most common in seats Asia and for ICC the arbitrations Pacific, Brazil remain and the
France, Middle Switzerland, East. Nonetheless, England, by other far the Western European states, Singapore
and the United States. One of the ICC’s principal functions is the appointment of arbitrators and the
resolution of challenges and substantive to arbitrators. standards for the As exercise discussed of below,
these responsibilities the ICC Rules prescribe (which are procedures supplemented by a substantial body of
administrative practice and experience). The ICC does not maintain a list of potential arbitrators and instead
relies heavily on the experience arbitrator appointments. of its Secretariat and also on the ICC’s “National
Committees” in making The ICC Rules are broadly similar to the UNCITRAL Rules (and many other
leading institutional This includes rules) provisions in providing for filing a a broad request procedural for
arbitration framework and other for the initial arbitral written proceedings. pleadings, constituting an arbitral
tribunal, conducting the arbitration and making an award. As with most other institutional rules, only a skeletal
procedural substantial framework freedom to is adopt provided, procedures with the tailored parties to and
particular arbitrators disputes. being accorded Unlike other institutional rules, the ICC Rules require both a
“Terms of Reference” and procedural timetable to be adopted by the Tribunal at the outset of proceedings and
that an award for the be ICC rendered Court to scrutinize within six draft months awards (absent before
extensions). they are finalized Also, and the executed ICC Rules by provide the arbitrators. The ICC’s
administrative fees are based on the amount in dispute between the parties. With which respect can be to
charged, arbitrators’ based fees, on the the amount ICC Rules in fix dispute. both a minimum With and respect
a maximum to amount administrative fees and charges, the ICC Rules provide for a sliding scale of charges
that is again based upon the amount in dispute between the parties. The ICC Rules require that the parties
The advance pay an advance on costs on is equally the costs divided of the arbitration between the calculated
claimant and by the the ICC respondent, Court. although one party may pay the full amount in order to enable
the arbitration to proceed if the other party defaults. The ICC’s Rules have been criticized as expensive and
cumbersome. The 1998 and 2012 amendments to the Rules reflected a concerted effort to increase the
efficiency, speed and effectiveness of ICC proceedings. In particular, provisions were added to the case ICC
management Rules in the conferences 2012 amendments and addressing emergency multiple arbitrator
contracts procedures. and parties, It remains to be seen how responsive to users’ needs these amendments,
and the administration of ICC cases, will be. Despite continuing criticisms about cost and efficiency, institution
there of preference are reasonable for many grounds sophisticated for believing commercial that the users.
ICC will continue to be the Related to the ICC Rules of Arbitration are the ICC’s ADR Rules. These Rules
provide (where agreed by the parties) a skeletal procedure for non-binding conciliation. The ICC also
operates the International Centre for Expertise (founded in 1976). The Centre operates under rules last
revised in 2003 (the ICC Rules for Expertise), which provide for non-binding expert opinions or reports to be
made, upon the request of parties
P 179 P 180 (1249) (1250)

(1251) (1252)
P 180 P 181
(1253)
(1254)(1255) (1256)
(1257)
(1258)
(1259)
(1260)
(1261) (1262)
(1263)
[c] American Arbitration Association and International Centre for Dispute Resolution
(1264) P 181 P 182 institutions The AAA was (themselves founded in founded 1926, following in the early the
merger 1920s). (1265) of two The New AAA York remains arbitration based in New York (with approximately
35 regional offices throughout the United States). (1266) The AAA is of the arbitral leading disputes U.S.
arbitral in the world.
institution, (1267) and reportedly handles one of the largest numbers The primary arbitration rules
administered by the AAA are the AAA Commercial Arbitration Rules. (1268) These rules are used in a large
majority of domestic U.S. commercial arbitrations. specialized types (1269) of Numerous disputes, other and
can sets be of selected AAA arbitration in the parties’ rules also arbitration exist, in particular agreement. for
(1270) Non-U.S. parties have sometimes been reluctant to agree to arbitration against U.S. parties
predisposition under any and of unfamiliarity the available with versions international of the AAA practice.
rules, fearing Over the parochial past two decades, the AAA has taken a number of steps aimed at overcoming
this image and enhancing its position as an international institution. In 1991, the AAA promulgated the AAA
International Arbitration Rules, designed specifically P 182 P 183
for international arbitrations (which have since evolved into the current ICDR Rules). (1271) In 1996, the AAA
established an “International Centre for Dispute Resolution” (“ICDR”), 67 © 2020 Kluwer Law International, a
provide (and following for non-binding opportunities expert for opinions submissions or reports to the to
designated be made, expert). upon the request Parties of parties are free to provide for greater binding effect
for such recommendations, but doing so requires a specific contractual provision.

(1246)
(1247)
[b] London Court of International Arbitration Founded in 1892, the LCIA is, by many accounts, the second
most popular European institution in the field of international commercial arbitration. The LCIA’s annual
caseload, which is generally increasing, exceeded 220 cases filed in recent years. The overcome LCIA has
perceptions made a determined, that it is a predominantly and increasingly English successful, organization.
effort in It recent has appointed years to five successive non-English presidents, and its vice-presidents
include a number of non- English practitioners. In recent years, fewer than 20% of the LCIA’s cases have
involved any U.K. recently parties. entered into More an generally, agreement in to 2009, establish the LCIA a
new launched arbitration the LCIA centre India in Mauritius, and has LCIA-Mauritius International Arbitration
Centre (“MIAC”). It also has a partnership with the Dubai International Financial Centre (“DIFC”). The
extensively LCIA administers revised in a 1998. set of Although arbitration identifiably rules, the English
LCIA Arbitration in drafting Rules, style, which and to were a lesser extent in procedural approach, the LCIA
Rules generally provide a sound basis for international (e.g., disclosure, dispute security resolution, for costs).
particularly Broadly speaking, for parties LCIA desiring arbitrations common are law administered procedures
in a less comprehensive fashion than ICC cases. Among other things, the LCIA Rules contain no Terms of
Reference procedure and do not provide for institutional review of draft awards. personnel The LCIA’s (as of
2014, administrative £250/hour fees for the are Registrar calculated and based £150 upon or £175/hour the
time for the spent Secretariat, by LCIA depending on the activity). In contrast to most other institutional rules,
the LCIA Rules set out the powers of an LCIA arbitral legal costs tribunal (i.e., a in deposit some detail. or
bank guarantee The powers securing to order the estimated discovery amounts and which security an for
unsuccessful claimant would be liable to reimburse to a successful respondent for its costs of legal
representation) are included among the arbitrators’ powers. A formation particular of procedural the arbitral
advantage tribunal. of the Consistent LCIA Rules with is their many provision other institutional for
expedited rules, the LCIA Rules also permit intervention of third parties in LCIA arbitrations (subject to
prescribed conditions). Unlike the ICC, the LCIA maintains a database of arbitrators from which it selects
arbitrators, taking into consideration the nature and circumstances of the dispute, the nationality, location and
languages of the parties and the number of parties. Historically, of the English the bar LCIA’s and retired
appointments judiciary, of in arbitrators large part consisted because predominantly many LCIA cases of have
members involved contracts governed by English law. In cases not involving English law, the LCIA’s selections
of arbitrators are more international. The the hourly LCIA fixes rates the published arbitrators’ by fees the
LCIA according and fixed to the by time agreement expended between by the the arbitrators arbitrators at
and the LCIA. Unusually, the LCIA publishes (in a redacted form) decisions of the LCIA Court on challenges to
arbitrators. Most LCIA arbitrations are seated in London. In the absence of agreement by the parties to the
contrary, London will be selected by the LCIA as the arbitral seat under Article 16(1) of the LCIA Rules.
(1248)
P 185 P 186
P 183 (1272)
(1273)
(1274)
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P 183 P 184
(1276)
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[d] Permanent Court of Arbitration
(1282) P 184 P 185
The Permanent Court of Arbitration (“PCA”), established by the 1899 and 1907 Hague Conventions
international for arbitrations the Pacific involving Settlement states of International and state-like Disputes,
entities. is (1283) focused As discussed particularly on above, the PCA was not established as a “court,” with
a standing panel of judges. (1284) Rather, as originally established, the PCA was a registry for inter-state
arbitrations conducted administering pursuant services. to the In an Hague often Conventions, quoted phrase,
which the provided PCA has been a number described of institutional in its original form as “a permanent
framework for temporary tribunals.”
(1285) The PCA’s original functions did not involve serving as an appointing authority. Instead, the PCA
tribunals was only in future responsible arbitrations for maintaining under the Hague a list of Conventions
arbitrators who (if states might chose be appointed to agree to to such arbitrations), with the appointment of
arbitrators reserved to states (either as parties to the dispute or as a neutral appointing authority). (1286) At
the same time, even as originally modern arbitral conceived, institutions; the PCA these provided services a
wider included range assistance of administrative in negotiation services and than drafting many submission
agreements (1287) and serving as intermediary between the parties and tribunal.
(1288) Since the 1970s, the PCA has been called upon to act as a traditional appointing authority with
increasing frequency and now routinely serves as an institutional administering body for arbitrations conducted
under the PCA Arbitration Rules and ad hoc arbitration agreements. institution to Additionally, select
appointing and at authorities least as important, under the the UNCITRAL PCA serves Rules as – the a default
function that has assumed increasing importance in recent decades in both international commercial
In 1996, the AAA established an “International Centre for Dispute Resolution” (“ICDR”), with exclusive
responsibility for administering the AAA’s international arbitrations. The ICDR has an administrative facility in
New York (having recently closed its administrative facility in Dublin, Ireland) and administers ICDR cases
seated outside the United States with the support of a Senior Vice President located in Europe. The ICDR
recently entered into cooperative arrangements with the Chambers of Commerce of Colombia and Peru and
Bahrain’s Ministry of Justice and Islamic Affairs (to establish the Bahrain Chamber for Dispute Resolution-AAA
(“BCDR-AAA”). The ICDR also entered into a joint venture with SIAC, opening an Asia Center in Singapore.
The ICDR International Dispute Resolution Procedures (“ICDR Rules”) provide the applicable set of AAA
arbitration rules for use in “international” disputes (except where the parties have otherwise agreed). This
alters the previous position under AAA Rules, in which the primarily domestic AAA Commercial Arbitration
Rules provided the default institutional rules when parties to international agreements had agreed to AAA
arbitration without designating a particular set of AAA rules; absent contrary agreement, the current fallback
rules in international disputes where the parties have agreed to AAA arbitration (without specifying a particular
set of AAA arbitration rules) are the ICDR Rules. The AAA/ICDR’s international rules are based principally
on the UNCITRAL Rules, and were intended to permit a maximum of flexibility and a minimum of
administrative supervision. They are periodically revised, most recently in 2013. In addition to the official
English version, the ICDR Rules are available in Spanish, French, Portuguese, Chinese and German. Under
all versions of AAA rules, the AAA/ICDR administrative staff plays a less significant supervisory role than
does the ICC Secretariat. Among other things, the AAA/ICDR does not receive or serve initial notices or
requests for arbitration; does not require or review a Terms of Reference; and plays a less significant role in
setting the arbitrators’ fees. The AAA’s administrative charges are based on the amount in dispute. With
respect to the arbitrators’ fees, arbitrators fix their own rates, which are published on their resumes for parties
to consider when receiving a list of potential arbitrators. Compensation under the AAA/ICDR international rules
is ultimately based on the arbitrators’ “amount of service,” taking into account their stated rates and the “size
and complexity of the case.” The ICDR/AAA’s international rules allow the parties to agree on any
procedure for appointing arbitrators. In practice, most AAA appointments are based on a list procedure,
whereby names drawn from the AAA’s rosters are presented to the parties for expressions of preference. The
ICDR maintains a list of some 650 arbitrators and mediators, including many non-U.S. practitioners. Although
the AAA’s arbitrator selections have historically been dominated by U.S. practitioners, the ICDR increasingly
seeks to appoint arbitrators with international experience in appropriate international cases. Nonetheless,
some users have found the AAA/ICDR appointment procedures and selections patchy, with less involvement
of experienced international practitioners than other leading institutions. The AAA’s case load has increased
significantly over recent decades. In 1997, it reported a total case load of 11,130 cases (under its
Commercial Rules), rising to 20,711 cases (under its Commercial Rules) in 2007. Similar growth is reported in
international cases. The AAA reports increases in its international case load from 453 cases filed in 1999 to
996 new international filings in 2012. On any measure, these statistics place the AAA among the world’s most
active international arbitral institutions.
P 187 P 188 (1302)

(1303)
(1304) (1305) (1306) (1307) (1308)
(1309)
(1310) 69 © 2020 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
P 186 P 187
(1297)
(1298)
(1299)
(1300)
(1301)
has assumed increasing importance in recent decades in both international commercial arbitrations and
investment arbitrations. (1289) The PCA consists of three organs: (1) an Administrative Council, which is
comprised of the representatives of Member States that are party to the Hague Conventions and which
serves as the governing body of the PCA; (1290) (2) the Members of the PCA, which is a list of potential
appoint up arbitrators to four individuals); chosen by the and Member (3) an International States (each Bureau,
Member which State functions being entitled as a to registry or secretariat and provides administrative support
to arbitral tribunals administering arbitrations under the PCA Rules or where the PCA is registry.
(1291) The Hague Conventions were negotiated with disputes between states in mind and the PCA’s early
activity was confined to this area. As discussed above, the PCA enjoyed very modest usage during its first 70
years of existence (when only 25 arbitrations and three conciliations inter-state arbitrations were submitted
were conducted to PCA tribunals). during the (1292) same By comparison, time period some (1900 to 200
1970), non-PCA often pursuant to ad hoc submission agreements or compromissory clauses in bilateral
treaties. (1293) In because a striking of the turn-around, PCA’s interpretation the PCA’s caseload of Article
has 26 of increased the 1899 materially Convention since (and 1995, Article in part 47 of the 1907
Convention), which permits the PCA to “place its premises and its staff at the disposal of the Signatory Powers
for the operations of any special Board of Arbitration,” as allowing PCA’s Administrative the PCA to administer
Council also disputes expanded between the PCA’s states remit and to non-state cover disputes actors.
(1294) involving The international organizations, and disputes relating to natural resources and/or the
environment.
(1295) As a consequence, the PCA’s caseload has significantly changed, both in size and composition.
From 2000-2012 more than 150 arbitrations were brought to the PCA, in comparison to only 34 cases
administered in the organization’s first 100 years (1899 – 1999). (1296) or investment The substantial
arbitrations, majority although of these there new has filings also were been either growth international in
classic inter-state commercial proceedings. Out of 87 arbitrations administered in the course of 2012, six were
state-to-state disputes (the highest level in the PCA’s history), while 54 were investor-state disputes contracts
under or other bilateral agreements or multilateral to which at investment least one treaties; party was 27 a
disputes state, state-controlled arose under entity, or intergovernmental organization. The PCA’s International
Bureau provides skilled support services for arbitrations conducted research and under logistical PCA
auspices. support for In particular, tribunals hearing PCA legal disputes counsel administered provide
administrative, by the PCA. Additionally, the PCA frequently provides hearing facilities at the Peace Palace in
The Hague, which is particularly appropriate in arbitration involving one or more states. During the 1990s, the
PCA promulgated four sets of procedural rules for various categories of arbitrations, all of which were
based on the 1976 UNCITRAL Rules: Optional Rules for Arbitrating Disputes between Two States (1992);
Optional Rules for Arbitrating Disputes between Involving Two International Parties of Organizations Which
Only One and Is a States State (1996); (1993); and Optional Optional Rules Rules for Arbitration for Arbitration
between International Organizations and Private Parties (1996). The PCA has also devised ad hoc procedural
regimes, such as rules of procedure for arbitration pursuant to Annex VII of rules the have United been Nations
used relatively Convention infrequently on the Law (with of the most Sea (“UNCLOS”). parties to PCA-
administered All of these various arbitration instead electing to use the UNCITRAL Rules). In 2012, the PCA
published a new set of Rules, which effectively consolidate and replace the technically PCA’s existing
remain four in existence). sets of rules (although By combining the older the rules PCA’s were existing not
withdrawn sets of rules and into a single new instrument, the drafting committee sought to streamline the
process of PCA arbitrations PCA arbitration. and to ensure The that 2012 multi-party PCA Rules are disputes
similar can to the be 2010 submitted UNCITRAL more Rules, easily to providing greater flexibility to the parties
than the PCA’s earlier rules, but are also specifically tailored to suit cases involving states, state-controlled
entities and intergovernmental state’s or state-entity’s organizations. adoption of Among the Rules other in
things, a dispute the 2012 with PCA a non-state Rules provide party that a constitutes a waiver of immunity
from jurisdiction (although immunity from enforcement requires an express waiver); provide for three-person
tribunals by default, but also allow state arbitrations); the parties to agree permit upon one the or parties five
arbitrators to select arbitrators (the latter being that are common not Members in inter- of the PCA’s Court;
allow for the joinder of third parties and multi-party appointment of arbitrators; contain provisions on the
conduct of site visits; offer a model arbitration international clause law in for state-to-state inclusion in treaties;
disputes, the rules and provide of intergovernmental for application organizations of where relevant and the
2010 UNCITRAL Rules in investor-state disputes. The 2012 PCA Rules depart from the 2010 UNCITRAL
Rules by providing that the PCA Secretary and of those General of any will tribunal-appointed review the
tribunal’s experts determination in all cases, of rather its own than fees only and upon expenses the request of
a party; and that the International Bureau, rather than the arbitral
P 188 P 189
(1315)
[e] Swiss Chambers’ Arbitration Institution
(1316) Switzerland’s major cities have historically maintained local Chambers of Commerce and Industry
which have administered institutional arbitrations, including international arbitrations. unified set of (1317)
arbitration On 1 January rules, the 2004, Swiss the Rules leading of International Swiss Chambers Arbitration
of Commerce (“Swiss adopted Rules” a or “Swiss International Arbitration Rules”), and designated an
Arbitration Committee to oversee Swiss Rules arbitrations consolidated conducted the administrative under the
Swiss structure Rules. by (1318) replacing A 1 June the 2012 Arbitration revision of the Committee oversight
with the Swiss Chambers’ Arbitration Institution, an independent association that, similar to the ICC, consists
of a Court of Arbitration and Secretariat.
(1319) P 189 P 190 International Arbitrations Law under (1320)
the and Swiss from Rules the benefit availability from in the Switzerland pro-arbitration of substantial Swiss
Law numbers on Private of potential arbitrators with impressive arbitration experience. The Swiss Rules are
particularly detailed, containing provisions regarding competence-competence, (1321) confidentiality,
(including ex parte (1322) measures), expedited (1324) procedures, arbitrator (1323) immunity emergency
(1325) and and interim consolidation relief and joinder. (1326) Between 2004 and 2012, 659 cases were
submitted to the Swiss Chambers, with 89 new cases submitted in 2012. The vast majority of cases submitted
to the Swiss involved parties from Western Europe (74% during the period 2004-2012).
(1327)
[f] Vienna International Arbitral Centre
(1328) The Vienna International Arbitral Centre (“VIAC”) was established in 1975. (1329) VIAC is based in
Vienna, Austria and the overwhelming majority of the arbitrations that it administers elsewhere). (1330) are
sited VIAC in conducts Vienna (although only international VIAC can also arbitrations, administer as
arbitrations mandated by sited the VIAC Rules’ requirement that at least one of the parties be of non-Austrian
origin or that the dispute be of an international character. (1331) VIAC reported the filing of 70 new cases in
2012, compared with 75 cases in 2011 and 68 cases in 2010. (1332)VIAC arbitrations are administered in
accordance with the Vienna Rules of Arbitration and P 190 P 191
Conciliation (“VIAC Rules”). The VIAC Rules were revised in 2006 (1333) in order to take into account
preserved changes the essential to Austrian features arbitration of the 2006 legislation. VIAC Rules (1334)
while More introducing recent revisions amendments in 2013 to modernize and streamline the rules’
procedures.
(1335) VIAC was originally conceived primarily as a venue for East/West economic disputes during the
caseload Cold War. still These includes origins parties are from reflected Central in the and fact Eastern that
Europe a significant or Russia. proportion of VIAC’s [g] Stockholm Chamber of Commerce Arbitration
Institute Founded in Stockholm in 1917, the Stockholm Chamber of Commerce Arbitration Institute
(“SCC”) and (subsequently) developed into China a substantial during the forum 1970s and for disputes
1980s. (1336) involving The SCC parties remains from a the preferred USSR foreign arbitral institution for
Chinese state-owned entities, with China-related disputes comprising a sizeable portion of the SCC’s current
caseload. (1337) The SCC registered 177 new arbitrations, arbitrations 5 ad in hoc 2012, arbitrations which
included and 3 arbitrations 63 expedited under arbitrations, the UNCITRAL 2 emergency Rules.
(1338) The SCC Rules were extensively revised in 2007 and again in 2010, with the addition of the
Emergency Arbitrators Rules. (1339) The SCC’s Rules leave most aspects of arbitral procedure with
international to the tribunal. experience, (1340) or The former SCC Swedish typically judges, appoints as
arbitrators. members of SCC the arbitrations Swedish bar, are usually seated in Sweden, although other
places of arbitration can be chosen.

[h] Singapore International Arbitration Centre P 191 P 192
for The disputes Singapore arising International out of construction, Arbitration shipping, Centre banking
(“SIAC”) was and established insurance contracts. in 1991, initially More

tribunal, will determine the amount payable for arbitrators’ fees and expenses and hold the parties’
deposits.
(1311) One of the PCA’s most significant functions is under the UNCITRAL Rules. As discussed below,
Rules, of the designating Secretary General a suitable of appointing the PCA serves authority a sui generis for
the function appointment under of the arbitrators UNCITRAL when the parties to an agreement to arbitrate
under the UNCITRAL Rules have not agreed upon the arbitrators or an appointing authority. (1312) The 2010
Rules also provide that the parties (1313)
may designate the Secretary-General of the PCA directly as appointing authority.
Under these provisions of the UNCITRAL Rules, the PCA has frequently designated appointing authorities
in international commercial and investment disputes and, in a number has considered of cases, and acted
resolved directly a substantial as appointing number authority of challenges itself. Among to arbitrators, other
things, with the its PCA decisions frequently being made public. (1314) In so doing, the PCA has played a
significant independence and and increasingly impartiality important under the role UNCITRAL in the
formulation Rules.
of standards of
P 192 P 193 (1349)

[j] Chinese International Economic and Trade Arbitration Center The China International Economic and
Trade Arbitration Center (“CIETAC”) was established by the Chinese government in 1956. Also known as
the Court of Arbitration of China Chamber other Chinese of International cities. CIETAC Commerce, enjoys a
privileged CIETAC is based position in Beijing, in Chinese with arbitration offices in a and number is of focused
overwhelmingly on Chinese-related disputes. In particular, the 1995 Chinese Arbitration Law gave CIETAC
(and the China Maritime Arbitration Commission) a de facto monopoly on international arbitrations seated in
China. During the 1980s, CIETAC played only a relatively minor role, even in Chinese arbitrations,
handling only some 40 cases a year. During recent years, however, CIETAC’s caseload has reportedly
increased substantially, with 1,060 arbitrations filed in 2012 (of which, 331 were foreign-related and 729 were
domestic arbitrations). CIETAC frequently revises its Rules, most recently in 1998, 2000 and 2012. The
revisions have sought to bring CIETAC’s practices into line with other major international arbitration Unlike
early institutions, versions of the by affording CIETAC Rules, greater which party required autonomy, the
parties transparency to appoint and efficiency. arbitrators from CIETAC’s Panel of Arbitrators, recent versions
of the Rules permit the parties, by agreement, to choose non-CIETAC arbitrators. Nevertheless, CIETAC
reportedly continues to promote a Sino-centric Panel of Arbitrators. Under the 2012 CIETAC Rules, parties
are able to choose either adversarial or inquisitorial proceedings. The Rules impose a six month time limit
from the date of composition of the tribunal to issuance of an award and stricter requirements have been
introduced arbitrators. for disclosure of conflicts, as well as challenges to, and replacement of, Other important
changes to the CIETAC Rules include the parties’ ability to agree to CIETAC arbitration other arbitral
outside institutions. China and to modify Arbitral the tribunals CIETAC have Rules also and/or been
incorporate granted enhanced the rules of powers under the CIETAC Rules, including the power in some
cases to decide on its own jurisdiction (a power previously reserved exclusively for CIETAC itself). The 2012
Rules have awards. retained CIETAC’s In terms supervision of fees, both over the administrative cases,
including fees the charged practice by of CIETAC reviewing and draft the arbitrators’ fees are based upon the
amount in dispute between the parties. Despite recent changes, experienced foreign users remain very
skeptical about CIETAC arbitration, parties. Uncertainty particularly regarding in matters CIETAC’s involving
management disputes and between independence Chinese and has, non-Chinese in the eyes of many
observers, deepened in recent years. Except in the most routine types of commercial dealings, with limited
amounts in dispute, foreign investors and other foreign parties third-country doing business arbitral institutions.
related to China Chinese will state continue entities to insist often for suggest the foreseeable that they are
future unable on to accept any arbitral institution other than CIETAC, but experience indicates that this is not
correct.
(1350)
(1351)
P 193 P 194
(1352)
(1353)(1354)
(1355) (1356)
(1357) (1358)
(1359)
(1360)
(1361)
(1362) (1363)
P 194 P 195
(1364)
[k] Cairo Regional Centre for International Commercial Arbitration The Cairo Regional Centre for
International Commercial Arbitration (“Cairo Centre” or
for disputes arising out of construction, shipping, banking and insurance contracts. More recently,
consistent with Singapore’s increasing importance as an international commercial energy, financial, and
financial joint venture, center, sales SIAC and has other seen matters. a wider range (1341) of In disputes,
2013, 259 including new arbitrations were filed with SIAC, compared with 239 new filings in 2012 and 188 new
cases in 2011. (1342) Arbitrations filed in 2013 involved parties from 50 jurisdictions, with the largest number
of non-Singaporean parties coming from India and China.
(1343) The SIAC Rules are based largely on the UNCITRAL Rules, and were revised in 2007, 2010 and
2013. (1344) The SIAC has made a determined, and successful, effort in recent years to internationalize
Secretariat, Court its and procedures, President (1345) (Dr. Michael including Pryles) by appointing with broad
a international Board of Directors, experience.

[i] Hong Kong International Arbitration Centre
(1346) The HKIAC was established in 1985 and had developed into Asia’s leading international arbitration
institution prior to hand-over of the British administration. On 1 September 2008, UNCITRAL HKIAC Rules
adopted (although the HKIAC parties Administered are free to agree Arbitration upon alternative Rules, which
procedural are based regimes). on the (1347) The HKIAC Rules were revised in 2013, in response to users’
comments and developments (293 cases filed in in other 2012, institutional 275 in 2011 and rules. 291 (1348)
in 2010). The HKIAC enjoys a substantial caseload The Hong Kong Arbitration Ordinance (which is based
on the UNCITRAL Model Law) provides a broadly favorable arbitration regime. Potential users have
sometimes voiced concerns about reluctant future to designate stability and the judicial HKIAC, particularly
independence in disputes in Hong Kong, involving and Chinese some parties parties. remain Nonetheless, the
HKIAC receives favorable reviews from a number of informed observers, and concerns about Hong Kong’s
future have moderated somewhat, at least in cases not involving Chinese state-owned (or similar) entities.
P 195 P 196 (1370)

[m] Court of Arbitration for Sport The Court of Arbitration for Sport (“CAS”) was established in Lausanne,
Switzerland, in 1984, and is sometimes termed the “Supreme Court of world sport.” Most major sports
governing Committee, bodies use International the CAS’s arbitration Association facilities, of Athletics
including Federations, the International Fédération Olympic Internationale de Football Association (FIFA), and
the Union of European Football Associations (UEFA). North American sports leagues are notable exceptions.
Arbitration Mediation Rules procedure (“CAS at Rules”). CAS is governed The Code by the provides Code
of for Sports-Related three different Arbitration forms of and arbitration proceedings – an “ordinary” (first
instance) arbitration procedure, an appeals procedure, and special ad hoc procedures. Ad hoc Divisions are
established within 24 hours on site of an at application sporting competitions being filed. and, in Parties
principle, to CAS are arbitrations able to render must decisions select from a list of arbitrators published by
CAS. CAS’s 374 in case 2012. load has The grown majority considerably of cases relate over the to last
appeals decade of FIFA from decisions 42 new cases or disputes in 2001 over to doping violations. Other
cases cover a mixture of appeals relating to selection and eligibility decisions, governance issues, match-fixing
and challenges to the granting of hosting as international rights for commercial championships. cases.
Approximately The efficiency 10% and of integrity cases can of CAS be characterized arbitrations, including in
highly-scrutinized settings such as the Olympics, is a striking illustration of adaptation of the arbitral process to
new forms of dispute resolution, using procedures tailored to particular settings and needs.
(1371)
(1372) (1373) (1374) (1375) (1376)
(1377) (1378) (1379) (1380)
(1381) (1382)
(1383) (1384)
(1385) (1386)
[n] German Institution of Arbitration P 196 P 197 The German Arbitration Committee was originally founded
in 1920 to offer arbitration services in Germany. (1387)
In 1992, the Committee merged with the German Arbitration Institute Schiedsgerichtsbarkeit” to form the
German or “DIS”) Institution to provide of Arbitration nationwide (“Deutsche arbitration Institution services in für
Germany for all sectors of the economy.
(1388) The DIS Arbitration Rules (published in English translation as well as an authoritative German
DIS’s caseload text) are consists intended of domestic for both national disputes, and although international
Germany’s arbitrations. enactment Much of the of the UNCITRAL Model Law in 1998 (1389) may have helped
somewhat to attract greater international usage. In 2012, approximately 29% of the DIS annual caseload of
125 arbitrations involved non-German parties.

(1390)
[o] Japanese Commercial Arbitration Association The Japan Commercial Arbitration Association (“JCAA”)
and the Japan Shipping Exchange (“JSE”) are Japan’s only permanent arbitral institutions. (1391) The JCAA
was founded by the Japan commercial Chamber disputes. of Commerce and Industry in 1950, with a particular
focus on international The JCAA has adopted the JCAA Commercial Arbitration Rules, most recently
revised in February 2014, (1392)
which have been used principally for Japan-related international
The Cairo Regional Centre for International Commercial Arbitration (“Cairo Centre” or “CRCICA”) is a non-
profit, international organization established in Egypt in 1979 under the auspices Organization. of the The
Egyptian Cairo Centre Government administers and the both Asian-African domestic and Legal international
Consultative arbitrations; the Centre received 66 new arbitration filings in 2011 (19 of which were international
arbitrations). Between 1979 and May 2012, the Cairo Centre handled some 834 arbitrations. (1365) The Cairo
Centre directs its services primarily towards Asian-African trade and investment disputes, particularly in the
Arab world. The CRCICA Rules were revised in 1998, 2000, 2002, 2007 revised and, in most 2010, recently,
with only in minor 2011, changes when the addressing Cairo Centre the adopted Cairo Centre’s the
UNCITRAL role as an Rules, arbitral as institution and appointing authority. (1366) The Cairo Centre
reportedly maintains a list of more than 1,000 international arbitrators (drawn primarily from the Asian-African
region).
[l] World Intellectual Property Organization The established Arbitral Centre in Geneva, of the Switzerland
World Intellectual in 1994. WIPO Property and Organization its Arbitration (“WIPO”) Rules are was designed
particularly for intellectual property disputes, although other types of controversies are not detailed excluded
provisions from use dealing of the with WIPO issues Rules that and are facilities. of particular WIPO’s
importance Arbitration in Rules intellectual contain property disputes. These include provisions relating to
discovery, disclosure and protection of trade secrets, and confidentiality of arbitral proceedings. As
arbitrations, of 2014, the mediations WIPO Arbitration and expert and Mediation determinations, Centre
covering had administered a broad range over of 370 intellectual property disputes (including patent,
copyright, software licenses and research and development matters). WIPO also administers a very large
number of domain names disputes. (1367)

(1368)
(1369)
P 197 P 198 (1396) (1397)
[q] Kuala Lumpur Regional Centre for Arbitration The Kuala Lumpur Regional Centre for Arbitration
(“KLRCA”) was established in 1978 to promote international commercial arbitration in the Asia/Pacific region.
The KLRCA administers Rules. Although arbitrations it still has under a relatively its rules, limited adopted
caseload in 2010 at and this based stage on (three the 2010 international UNCITRAL arbitrations in 2011),
KLRCA provides an alternative to HKIAC, ACICA and SIAC in commercial arbitrations involving parties from
the Asia/Pacific region.

(1398)
(1399)
[r] Indian Council of Arbitration The preeminent Indian Council arbitral of institution. Arbitration The (“ICA”)
ICA was Rules established are based in on 1965 the provisions and is regarded of the as Indian India’s
Arbitration and Conciliation Act (1996) and were most recently revised in 2012. (1400) Many users remain
cautious about seating arbitrations in India, noting interventionist attitudes of in Indian 2010 and courts 5 in
2011.
and other (1402) concerns. (1401) The ICA handled eight international arbitrations [s] JAMS International In
2011, JAMS, a leading domestic mediation and arbitral institution in the United States, combined London.
(1403) with JAMS the ADR handles Center more in Italy than to 10,000 form JAMS arbitrations International,
or mediations headquartered a year in in North America, where its panel of “neutrals” is comprised largely of
former U.S. judges and litigators. JAMS International is still in the process of compiling a list of arbitrators and
mediators.
P 198 P 199 The JAMS International Arbitration Rules, adopted in 2011, have provisions similar to other
leading institutional arbitration rules. (1404)
They include features that reflect recent developments options for online in arbitration filing and email practice,
communications. (1405) such as The a liberal Rules consolidation do not require provision terms of and
reference, but include a process for scrutinizing awards before they are issued. JAMS and JAMS
International have sought to address concerns of parties about the costs of the Hearing arbitral Phase
process. of International To that end, Arbitrations,” JAMS has adopted which contain “Efficiency guidelines
Guidelines similar for the to those Pre- set in the IBA Guidelines for the Taking of Evidence in International
Arbitration.
(1406)
[D] Overview of International Guidelines and Harmonization In or addition codes of best to
institutional practice regarding arbitration the rules, conduct there of international are a number arbitrations.
of international (1407) guidelines These sources play an important role in providing tested procedural
solutions and predictability in international arbitrations. These guidelines are buttressed by extensive
commentary from procedural a wide aspects range of of arbitrators, the international practitioners, arbitral
users process. and (1408) academics These addressing materials can various provide important sources of
guidance for both tribunals and parties, making the arbitral process more predictable and transparent, while
not curtailing the parties’ and arbitrators’ of those cases.
ability (1409) to tailor arbitral procedures in particular cases to the individual needs [1] IBA Rules on the
Taking of Evidence in International Arbitration
(1410) P 199 P 200
Although not a set “Rules 1983, the on IBA the adopted Taking of institutional arbitration rules, the
International Bar Association’s of the Evidence “Supplementary in International Rules Arbitration” Governing
the fulfill Presentation related functions. and In Reception of Evidence in International Commercial Arbitration.”
(1411) The Rules attempted to provide a blend of civil law and common law approaches to the subjects of
discovery independently and evidentiary binding, but presentations could either be in arbitration. adopted by
(1412) parties The in Rules their arbitration were not agreement (or otherwise) or relied upon by arbitral
tribunals for guidance in making procedural orders. (1413)The IBA Rules were extensively revised in 1999,
and retitled the “Rules on the Taking of Evidence in International Commercial Arbitration” (“IBA Rules” or
“IBA Rules on the Taking of Evidence”). The 1999 IBA Rules established a reasonably-detailed and workable
set of
February transactions. 2014, In (1392) 2011 19 which new have cases been were used registered
principally with the for Japan-related JCAA. (1393) In general, international the majority of the JCAA’s cases
have involved at least one non-Japanese party.
(1394)
[p] Australian Centre for International Commercial Arbitration The 1985 Australian on the initiative Centre
of for the International Institute of Commercial Arbitrators in Arbitration Australia. (“ACICA”) The ACICA was
promulgated established new in rules, based on the UNCITRAL Rules, in 2005, which were revised in 2011
(among other things incorporating emergency arbitrator provisions). The ACICA enjoys a growing reputation,
particularly in arbitrations involving parties from the Asia/Pacific region, providing a credible alternative to
either HKIAC or SIAC. The ACICA can also act as appointing authority under the UNCITRAL Rules. More than
30 new cases were filed with ACICA in 2011.

(1395)
P 200 P 201 (1419) (1420) (1421)
(1422) (1423)
(1424)
(1425)
[2] ABA/AAA Code of Ethics, IBA Rules of Ethics and IBA Guidelines on Conflicts of Interest in
International Arbitration
(1426) In a related set of developments, non-binding international guidelines have been adopted by the
IBA and other bar associations with regard to the ethics of international arbitrators. In 1977, a joint committee
of the American Bar Association (“ABA”) and American Arbitration Association below, the Code adopted
sought the to ABA/AAA provide Code ethical of Ethics. guidelines (1427) for As arbitrators, discussed focusing
in greater particularly detail on issues of bias and partiality. (1428) After lengthy debate, in 2004, the ABA/AAA
Code of Ethics was amended, including to impose presumptive duties of independence and impartiality on co-
arbitrators.
(1429)
P 201 P 202 In 1987, the IBA adopted “Rules of Ethics for International Arbitrators.” (1430)
Derived in part from the ABA/AAA Code, the IBA effort sought to establish ethical standards for application
influential guidelines to international in international arbitrators. arbitration (1431)
The practice. IBA Rules of Ethics were (and remain) In 2004, the IBA published a detailed set of guidelines
and accompanying commentary concerning the impartiality and independence of arbitrators (the “IBA
Guidelines on Conflicts below, (1433) of Interest the IBA in Guidelines International detail Arbitration”).
circumstances (1432) which As discussed are customarily in greater considered detail to raise doubts
regarding an arbitrator’s independence or impartiality, and supersede the IBA Rules of Ethics in this regard;
they also provide for disclosure of such circumstances by arbitrators and prospective arbitrators.
(1434) The IBA Guidelines have been the subject of considerable criticism, on the grounds that they are
needlessly detailed and encourage challenges to both arbitrators and awards. (1435) The IBA Guidelines are
not automatically binding on either national courts or arbitral attitudes institutions. towards an They arbitrator’s
nonetheless obligations provide of an independence influential perspective and impartiality. on customary [3]
IBA Guidelines on Party Representation in International Arbitration In 2013, the IBA adopted
“Guidelines on Party Representation in International Arbitration,” which representatives seek to provide in
international guidance regarding commercial, the investment conduct of counsel and other and arbitrations.
other party The Guidelines are not intended to “displace otherwise applicable mandatory laws, professional or
disciplinary rules, or agreed arbitration rules that may be relevant or applicable “contractual” to in matters
nature of and party applicable representation,” only when and adopted instead by purport the parties.
to be (1436) purely The Guidelines are “inspired by the principle that party representatives should act with
integrity delay or expense, and honesty including and should tactics not aimed engage at in obstructing
activities the designed arbitration to produce proceedings.” unnecessary (1437) As discussed below, the
Guidelines set forth 27 principles, with accompanying P 202 P 203 commentary, regarding the professional
conduct of party representatives in international arbitrations, disclosure, witness focusing preparation, in
particular submissions on conduct to during the tribunal the arbitral and similar proceedings subjects).
(including (1438)
[4] UNCITRAL Notes on Organizing Arbitral Proceedings In 1996, UNCITRAL published the
“UNCITRAL Notes on Organizing Arbitral Proceedings.” (1439) designed The to UNCITRAL identify Notes
issues are that non-binding frequently arise guidelines in the for course arbitrators of international and parties
arbitrations. which are Among other things, the UNCITRAL Notes briefly discuss procedural rules,
communications, written submissions, evidence, witnesses and hearings. 74 © 2020 Kluwer Law
International, a Wolters Kluwer Company. All rights reserved.
of procedures Evidence”). for The witness 1999 IBA evidence Rules and established disclosure a
reasonably-detailed requests in international and workable arbitrations. set of (1414) Like their
predecessors, the 1999 IBA Rules were not independently binding, but were intended for incorporation into
parties’ arbitration agreements or as a basis for tribunals’ frequently procedural as guidelines rulings. for
arbitral (1415)
In procedures practice, the in international 1999 IBA Rules commercial came to be arbitrations. used (1416)
The 1999 IBA Rules were revised in 2010 and (again) retitled the “Rules on the Taking of Evidence
principal in respects.
International Arbitration.” (1417) The 2010 IBA Rules were amended in three First, the 2010 IBA Rules
attempt to provide for a more efficient evidence-gathering process regarding which electronic calls for
documents, early involvement witness of the statements tribunal (1418) and and specific expert guidelines
reports. Second, in order to maintain “fairness and equality,” the 2010 IBA Rules provide considerations for the
tribunal to take into account when determining whether a legal privilege provide an should express exclude
requirement a certain of item good of faith evidence. in the taking Third, of evidence, the 2010 IBA Rules and
authorize arbitral tribunals to consider violations of this obligation in awarding costs.
The According 2010 IBA to Rules a recent have survey, achieved the IBA even Rules greater are used
currency in 60% than of earlier international versions arbitrations.
of the rules.
P 203 P 204 (1445)
(1446)
[1] Agreement to Arbitrate It set is forth tautological the parties’ – but agreement not always to the
arbitrate. case in practice (1447) As – a that drafting any arbitration matter, this clause means must that
arbitration agreements should (and usually do) expressly refer to “arbitration” – and not to expert
determination, accounting, conciliation, mediation, negotiation, settlement, “ADR,” or these some other other
forms form of of alternative non-judicial dispute resolution. resolution (1448) are As not discussed categorized
in greater as “arbitration” detail below, under many international treaties and national arbitration statutes, and
will often not qualify Accordingly, for the a fundamental “pro-enforcement” element safeguards of any
international provided by arbitration these instruments. agreement (1449) is the parties’ undertaking that “all
disputes shall be finally resolved by arbitration.” Similarly, most international arbitration agreements provide
(and should provide) that P 204 P 205 disputes an advisory should recommendation). be referred to arbitration
(1450)
An arbitration for a “binding” clause or also “final” should disposition not treat (and not for arbitration as a
possible future option, applicable only if the parties so agree after a dispute arises. (1451) Thus, arbitration
clauses should (and usually do) provide that “all disputes shall be finally resolved by arbitration.”
(1452)
[2] Scope of Arbitration Agreement Critical to any arbitration clause is its “scope” – that is, the
categories of disputes or claims that will be subject to arbitration. For example, an agreement to arbitrate
may provide dealings that with all one disputes another, between are subject the parties, to arbitration. bearing
Alternatively, any conceivable the parties connection may to agree their that only contract claims that clearly
arise under the express terms of the parties’ contract or, alternatively, under only specified provisions of that
contract, are to be arbitrated; similarly, otherwise the broad parties arbitration may agree agreement. that
particular types of claims are to be excluded from an There are a handful of formulae that are frequently
used to define the scope of arbitration clauses. These formulae include “any” or “all” disputes: (i) “arising
under this Agreement”; and (iv) “relating (ii) “arising to this out Agreement.” of this Agreement”; Alternative (iii)
formulations “in connection are also with used, this Agreement”; including: (v) “all disputes relating to this
Agreement, including any question regarding its existence, validity, subject matter breach, hereof.” or
termination”; or (vi) “all disputes relating to this Agreement or the As a general rule, international arbitration
clauses are usually drafted broadly, to cover all disputes having any connection with the parties’ dealings.
Doing so avoids the expense arbitrated arising and other, from parallel related contractual, proceedings or
(when non-contractual, certain contractual disputes disputes are litigated). are It also avoids the uncertainties
resulting from potentially inconsistent decisions in different forums and from jurisdictional disputes over the
scope of disputes to be heard in different forums.
(1453) (1454)
(1455)
(1456)
(1457)
(1458)
written submissions, evidence, witnesses and hearings.
[5] Chartered Institute of Arbitrators “Practice Guidelines” The Chartered Institute of Arbitrators
(based in London) has issued a number of “Practice Guidelines” providing recommendations regarding
various practical aspects of the international of arbitrators, arbitral documents-only process. Among
arbitrations, other things, costs orders the Guidelines and jurisdictional address the challenges: interviewing
the Guidelines are significantly influenced by domestic English practice and are infrequently relied upon in
international cases. The Guidelines are considered a work in progress by the Institute with their most recent
updates in December 2011. (1440)

[E] Overview of Elements of International Arbitration Agreements As already discussed,
international commercial arbitration is almost always consensual: (1441) arbitration generally occurs only
pursuant to an arbitration agreement between the parties. arbitration, (1442) pursuant It is, of to course, a
“submission possible agreement” for parties to or agree “compromise.” to submit (1443) an existing Typically,
dispute to however, disputes are arbitrated as a consequence of preexisting arbitration clauses, applicable to
future disputes, in the parties’ underlying commercial contract.
(1444) and Parties in practice are largely this freedom free to draft is liberally their arbitration exercised.
agreements Like other in whatever contractual terms clauses, they wish the terms of arbitration agreements
are largely a product of the parties’ interests, negotiations and drafting skills. International issues. These are:
arbitration (a) the agreement agreements to often arbitrate; – and (b) advisedly the scope – address of the
disputes a number submitted of critical to arbitration; (c) the use of an arbitration institution and its rules; (d)
the seat of the arbitration; (e) the method of appointment, number and qualifications of the arbitrators; (f)
provisions the language may be of the either arbitration; vital to an and effective (g) a choice-of-law
international clause. arbitration In particular agreement cases, or other advantageous to one or both parties.
P 205 P 206
(1460)
[3] Institutional Arbitration As promulgated discussed above, by a particular institutional arbitral
arbitration institution, is conducted which generally pursuant also to “administers” procedural rules the
arbitration. (1461) If institutional arbitration is desired, the parties’ arbitration agreement must arbitral select
institution and refer provides to an arbitral its own institution model arbitration and its rules. clause; (1462)
parties In general, wishing every to invoke the institution’s rules should ordinarily use this clause as the basis
for their arbitration agreement, departing from it only with care and for considered reasons.
(1463) In sometimes cases where select the a parties preexisting do not set wish of procedural to agree to
rules institutional designed arbitration, for ad hoc they arbitrations will (such as the UNCITRAL Rules). (1464)
Arbitration clauses frequently accomplish this result by references such as “all disputes shall be settled by
arbitration in accordance with the UNCITRAL Arbitration Rules.”

[4] Specifying Seat or Place of Arbitration Another vital element of any international arbitration
agreement is designation of the “seat” (or “place”) of the arbitration. As discussed below, the arbitral seat is a
legal concept: arbitration it is law the governs state where the arbitral the arbitration proceedings, has its and
formal under legal whose or law juridical the arbitral home, whose award is made. The seat of an arbitration is
also the geographic location where many or all of the hearings in the arbitration will be conducted, although
this is not a requirement and the contractual tribunal provisions may hold hearings selecting elsewhere the
arbitral for seat reasons is not of complex, convenience. usually providing The text only of “The seat of the
arbitration shall be...” or “The place of arbitration shall be....” As discussed below, there are a number of
legal and practical consequences that follow from international selection arbitration of an arbitral agreement.
seat, making this These one consequences of the most important include aspects influencing of any the choice
of law governing the arbitration agreement, the selection of the procedural law of the of the arbitration national
courts and the responsible national courts for issues responsible relating for to applying constitution that of
law, the tribunal the selection and assistance in other aspects of arbitral procedure, and the selection of the
national courts responsible for (and arbitration law applicable to) annulment of arbitral awards. All of domestic
these issues arbitration are of substantial in many countries, importance where to the the selection arbitral
process of an arbitral (which situs contrasts has much with less practical importance).
(1465)
(1466)
(1467)
(1468) P 206 P 207
(1469)
[5] Number, Method of Selection and Qualifications of Arbitrators It is also common for international
arbitration agreements to address the number, means of of appointment the arbitrators and is one
qualifications of the most of critical the arbitrators. issues in any (1470) arbitration. As discussed (1471) below,
Addressing selection this issue in the arbitration agreement is vitally important. Arbitration tribunal in the
clauses event often of future specify disputes. the number If the of parties persons do who not agree will
comprise upon the an number arbitral of arbitrators, leading institutional rules generally grant the institution
power to do so; (1472) otherwise, national courts will have the power to decide, pursuant to default rules in
national decision arbitration regarding the legislation. number of (1473) arbitrators Nonetheless, can result
relying in delays on a judicial or jurisdictional or institutional disputes. As a consequence, parties often specify
the number of arbitrators in their arbitration clause.
(1474) The typical text clause of provisions would provide: designating “Any the dispute number shall of be
arbitrators finally resolved is not complex. under the For [Rules] example, by a [three arbitrators] [one
arbitrator] appointed in accordance with the said Rules.” An alternative provides “the number of arbitrators
shall be [three] [one].”

(1475) It is also essential for an arbitration agreement to include some method for selecting the
arbitrator(s). The most common approach is for the parties to attempt to reach agreement on a sole arbitrator
or to each appoint one member of a three member tribunal, with the third appointing arbitrator authority.
chosen (1476) by the two party-appointed arbitrators or selected by an It is also essential for the parties to
include a method of appointing the tribunal in the event that they cannot, or do not, constitute the tribunal as
agreed. (1477) The most common sole arbitrator such mechanism or presiding is arbitrator designation in the
of an event “appointing that the authority,” parties (or which party-nominated will select a 76 © 2020 Kluwer
Law International, a Wolters Kluwer Company. All rights reserved.
Even where the parties have agreed in principle to a broad arbitration clause, there may be claims or
disputes that one party does not want submitted to arbitration. This can include sometimes matters excluded
such or as carved intellectual out of property the scope rights of the or arbitration payment obligations, clause.
which Although are these types of provisions can serve legitimate objectives, it is usually better to avoid efforts
circumstances. to exclude Such particular exclusions types often of disputes lead (undesirably) from
arbitration, to parallel except proceedings in unusual in both the arbitral forum and national courts, and to
jurisdictional disputes over the application of a clause to particular claims.
(1459)
P 207 P 208 (1479)
(1480)
(1481) (1482)
(1483)
(1484)
[6] Language of Arbitration Arbitration clauses in international agreements frequently specify the
language (or languages) this is a point of the of vital arbitral importance, proceedings which and can award.
have a (1485) profound Although practical sometimes effect overlooked, on the selection of the arbitrators
(and counsel) and the character of the arbitral proceedings. Absent the parties’ agreement, institutional rules
usually expressly authorize the arbitral P 208 P 209
tribunal language to of select the underlying a language contract (or languages) or arbitration of the arbitration.
agreement. (1486) (1487) Even This will if often institutional be the rules do not address the issue, national law
will ordinarily give the tribunal authority to select a language for the arbitration. (1488) Nonetheless, there is
seldom any reason to leave “the language this issue of to the chance, arbitration particularly shall be given
[English].”the simplicity of a provision to the effect that [7] Choice-of-Law Clauses Any international dispute
can give rise to tortuous choice-of-law questions. As a consequence, a choice-of-law and clause, as
discussed specifying below, the substantive many international law applicable commercial to the agreements
parties’ underlying contain contract and related disputes. In addition to the substantive law governing the
parties’ underlying contract, other questions Thus, as discussed of applicable in detail law below, frequently a
different arise in law connection may apply with to international the arbitration arbitrations. agreement (as
distinguished from the parties’ underlying contract); that is because an arbitration systems, which clause is not
is deemed necessarily a “separable” subject to the or “autonomous” same substantive contract law as in most
the underlying legal contract. It is possible, and occasionally advisable, to adopt a choice-of-law clause that
specifically addresses the law applicable to the arbitration agreement, as distinct from the parties’ underlying
contract. It is also possible for a different law to apply to the procedural conduct of the arbitration itself,
separate from that governing the arbitration agreement or underlying contract. In almost all cases, the
procedural law of the arbitration will be that of the arbitral seat, provisions although that there designate are
rare the exceptions. procedural law applicable Parties sometimes to arbitral include proceedings. choice-of-law
Significant complexities can arise from such provisions, and great care must be taken in utilizing them.
(1489)
(1490)
(1491)
(1492)
(1493) (1494)
(1495)
[8] Other Provisions of International Arbitration Agreements Many international arbitration
agreements also contain other provisions, in addition to the elements discussed above. The existence and
nature of these provisions varies from case to case, depending on the parties’ negotiations, drafting and
interests. The most common additional interest and elements currency include: of an award; (a) allocation (c)
of disclosure the costs or of discovery; legal representation; (d) fast-track (b) or other procedural rules; (e) so-
called escalation clauses or multi-tier dispute resolution clauses; (f) state/sovereign immunity waivers; and (g)
confidentiality. P 209 P 210 (1497) (1499) (1498)
(1496) (1500) (1501) (1502)

[9] Drafting Arbitration Agreements: Recommended Approach Like other contractual provisions, an
international arbitration clause is ultimately the product of what the parties choose to agree upon. It is a
creature of negotiations and drafting be inspired skill or, (or regrettably, fallibility). In pathologically some
cases, the deformed. parties’ products are sui generis; they may In the overwhelming majority of cases,
however, international arbitration agreements are straightforward exercises, adopting either entirely or
principally the model, time-tested clauses always the of a wisest leading one. arbitral A representative
institution. example (1503) Although of such pedestrian, an arbitration this agreement, course is almost which
should contain each of the elements identified above, is as follows:
sole arbitrator or presiding arbitrator in the event that the parties (or party-nominated arbitrators) cannot do
so, or if a party fails to select a party-nominated arbitrator. (1478) the All parties leading agree institutional to
arbitrate rules under provide an institution’s for such a role rules, by the sponsoring and no special institution
wording when (aside from adopting the institution’s rules) is necessary to select the institution as appointing
authority. Finally, international arbitration agreements can either directly specify or indirectly influence the
qualifications and characteristics of the arbitrators. For example, most leading institutional rules provide that a
presiding or sole arbitrator shall not have the same arbitration nationality agreement as that can of also any of
require the parties (or prohibit) (unless the otherwise appointment agreed). of persons An with particular
credentials or expertise (such as legal qualifications, accounting degrees or engineering experience).
Arbitration clauses may also require that the arbitrators have particular language abilities, such as “each
arbitrator shall be fluent in Spanish.”
P 210 P 211 (1506)

(1507)
[1] Law Applicable to Substance of Parties’ Dispute The parties’ underlying dispute will ordinarily be
resolved under the rules of substantive law of a particular national legal system. (1508) In the first instance,
it will usually be the arbitrators discussed in who detail determine below, international the substantive arbitral
law applicable awards typically to the parties’ give effect dispute. to the (1509) parties’ As agreements
concerning applicable substantive law (“choice-of-law clauses”). (1510) The principal override private
exception contractual is where arrangements.
mandatory national (1511) laws or public policies purport to Where the parties have not agreed upon the
substantive law governing their dispute, the arbitral tribunal must select such a law. In so doing, the tribunal
will sometimes (but not always) approaches refer to to the some choice set of of national substantive or
international law in international conflict arbitration of laws rules. are These summarized varying here and
examined in detail below.

(1512) Although the historical practice was to apply the national conflict of laws rules (or P 211 P 212
substantive commentators law) adhere of the to arbitral the traditional seat, more approach, recent practice
while others is diverse. look to Some the tribunals conflicts and rules of all states having a connection with the
dispute. (1513) Additionally, some authorities adopt either international conflict of laws rules or validation
principles. (1514)
The matters development has facilitated of bodies this development. of international (1515) substantive rules
dealing with commercial [2] Law Applicable to Arbitration Agreement As discussed elsewhere,
arbitration agreements are universally regarded as presumptively “separable” this is that the from parties’
the underlying arbitration contract agreement in which may they be governed appear. by a different One
consequence national law of than that applicable to the underlying contract. This can occur either by the
parties’ express choice of law or by the application of conflict of laws rules (which may select different
contract). substantive laws for the parties’ arbitration agreement and their underlying As described below, four
alternatives for the law governing an arbitration agreement are of particular agreement importance: itself;
(b) the (a) law the of law the chosen arbitral by seat; the (c) parties the law to govern governing the the
arbitration parties’ underlying contract; and (d) international principles, either applied as a substantive body of
contract law (as in France) or as rules of non-discrimination (as in most U.S. authority). application As also of
discussed a validation below, principle the better to international view is that commercial Articles II(1) and
arbitration V(1)(a) mandate agreements governed by the Convention, which upholds the validity of those
agreements if they are valid under any potentially-applicable national law.

(1516)
(1517)
(1518)
[3] Procedural Law Applicable to Arbitral Proceedings
“All of this disputes, Agreement claims, (including controversies, the formation, and disagreements
existence, validity, relating enforceability, to or arising out performance, or termination of this Agreement), or
the subject matter of this Agreement, shall be finally resolved by arbitration [under the – Rules] by [three
arbitrators] England] [New [one York/Washington]. arbitrator]. The seat The of language the arbitration of the
arbitration shall be [Paris] shall be [London, English.”

(1504)
Provisions of this sort are frequently supplemented by a choice-of-law clause, selecting the law more
applicable of the optional to the provisions parties’ underlying referred to contract above. and Where other
such disputes, a clause as is well used, as rather by one than or more complex or creative provisions, the risks
of pathological defects or jurisdictional and procedural disputes are minimized.

[F] Overview of Choice of Law in International Commercial Arbitration Parties frequently
agree to arbitration to avoid the jurisdictional and choice-of-law uncertainties that arise when international
disputes are litigated in national courts. (1505) Unfortunately, international arbitration can produce its own set
of complex, sometimes unpredictable choice-of-law issues. Choice-of-law issues play an important role in
international commercial arbitration. It is necessary to distinguish between four separate choice-of-law issues
that can arise in connection with an international arbitration: (a) the substantive law governing the merits of
governing the parties’ the parties’ underlying arbitration contract agreement; and other substantive (c) the law
applicable claims; (b) the to the substantive arbitral law proceedings; and (d) the conflict of laws rules
applicable to select each of the foregoing laws. Although not common, it is possible for each of these four
issues to be governed by a different national (or other) law. Each of the foregoing choice-of-law issues can
have a vital influence on international arbitral proceedings. Different national laws provide different –
sometimes dramatically different national rules – rules will applicable potentially at be different applicable
stages can of therefore the arbitral be process. critical.
Understanding which
P 212 P 213
(1520)
(1521)
(1522)
(1523)
[4] Choice-of-Law Rules Applicable in International Arbitration Selecting applicable each to the of the
merits bodies of the of underlying law identified contract in the or foregoing dispute, three to the sections
arbitration – the laws agreement and to the arbitral proceedings – ordinarily requires application of conflict of
laws rules. In order to select the substantive law governing the parties’ dispute, for example, just as different
an arbitral states tribunal have different must generally rules of apply substantive a conflict law, of they laws
also system. have (1524) different And, conflict of laws rules. An international arbitral tribunal must therefore
decide at the outset what set of conflicts rules to apply. The foregoing actual issues practice varies of arbitral
significantly. tribunals Approaches in selecting include the law application applicable of (a) to each the
arbitral of the seat’s conflict of laws rules; (b) “international” conflict of laws rules; (c) successive application of
the conflict of laws rules of all interested states; and (d) “direct” application of substantive law (without any
express conflicts analysis).
(1525) The current state of conflict of laws analysis in international arbitration has not kept pace with the
parties’ aim of avoiding the peculiar jurisdictional, choice-of-law and enforcement courts. There difficulties is
often uncertainty, that attend and the wasted litigation time of and international expense, as disputes a
consequence in national of contemporary conflict of laws analysis. Nonetheless, recent national court
decisions and arbitral awards suggest the way towards development of international principles of validation
aspirations and of the non-discrimination international arbitral which process.
hold promise (1526) of realizing more fully the P 213 P 214

§ 1.05 THEORIES OF INTERNATIONAL ARBITRATION There have been numerous
theoretical efforts to categorize arbitration within domestic legal arbitration systems. as “contractual,” (1527)
Among other “jurisdictional,” things, these “hybrid” theories and have “autonomous.” included characterizations
Although the of practical implications of this debate are often unclear, (1528) there is little academic
agreement on these various theories.

[A] Leading Theories of Arbitration The “contractual” school of thought regarded arbitration as a
form of contractual relations. (1529) According to one early proponent of this analysis:
“It is the arbitration agreement that gives [the arbitral award] its existence; it is from the arbitration the
arbitration agreement, agreement the character that it derives of a contract; all its substance; and the precise it
has, then, truth like is that it is only the performance of the mandate that the parties have entrusted to the
arbitrators; it is even, to put it precisely, only an agreement to which the parties (1530) have bound themselves
by the hands of the latter (the arbitrators).”
The contractualist school emphasized that arbitrators were not judges (since they performed no “public”
function and exercised no powers on behalf of the state). In general terms, the arbitral the contractualist
process.
(1531) school placed primary emphasis on the role of party autonomy in P 214 P 215
Other authors reject the notion that arbitration – including the arbitral proceedings award – is
predominantly contractual, and instead adopt a “jurisdictional” analysis. They independent, reason that
impartial arbitration decision-making is essentially by adjudicative, the arbitrators: involving the exercise of and
[3] Procedural Law Applicable to Arbitral Proceedings The arbitral proceedings themselves are also
subject to legal rules, governing both “internal” procedural matters and “external” relations between the
arbitration and national arbitration courts. statute In most of the instances, arbitral seat the law (i.e., governing
the location the selected arbitral proceeding by the parties is the as the juridical place of arbitration).
(1519) Among other things, the law of the seat typically deals with such issues as the appointment and
the availability qualifications of provisional of arbitrators, relief, the the extent procedural of judicial conduct
intervention of the arbitration, in the arbitral the process, form of any award and the standards for annulment of
any award. Different national laws take significantly different approaches to these various issues. In some
countries, national law imposes courts have significant broad powers limits or to requirements supervise
arbitral on the proceedings. conduct of the arbitration Elsewhere, and and local in most developed
jurisdictions, local law affords international arbitrators virtually unfettered freedom regularity to (“due conduct
process” the arbitral or “natural process justice”). – subject only to basic requirements of procedural In some
jurisdictions, parties are free to select the law governing the arbitral proceedings (variously referred to as
the procedural law of the arbitration, the curial law, the lex arbitri, or application the loi de of l’arbitrage). a
different procedural This theoretically law than that includes of the arbitral the freedom seat; to in agree
practice, to the however, this seldom occurs and the effects of such an agreement are uncertain.
P 215 P 216 (1540) (1541)
(1542) (1543) (1544)

[B] Future Directions: the Jurisprudential Character of International Arbitration All of
these theoretical characterizations contain elements which are accurate and, in an abstract manner,
useful. Arbitration manifestly exhibits attributes of contractual relations, albeit foundation of an of unusual the
arbitral type. The process, arbitration (1545) whose agreement existence, is the validity essential and and
interpretation necessary can only be assessed pursuant to principles of contract law. (1546) Moreover, the
parties’ agreement to arbitrate retains a central role throughout the subsequent arbitral proceedings arbitral
award. (1547) (1548) and In is these critically regards, important it is essential to the terms, that arbitration
validity and be recognition considered of as the reflecting elements of contract and the law of contracts. At the
same time, arbitration also manifestly involves attributes of jurisdictional authority P 216 P 217 and
arbitration adjudicative agreement decision-making, does not produce different a typical from other
“commercial” forms of contractual bargain, but relations. instead The results in a particular kind of dispute
resolution process, (1549) where the decision-maker must be impartial and independent and must apply
adjudicatory procedures in reaching a decision. by national (1550) judicial Moreover, systems, the (1551)
arbitral while process the award is granted is granted independence the binding from force and and support
res judicata effect of a national court judgment. (1552) In these regards, it is necessary that arbitration be
regarded as an adjudicative or jurisdictional process. More fundamentally, both the hybrid and autonomous
theories capture remaining and important analytical aspects of arbitration. For the reasons already outlined, it
is impossible not to consider arbitration as a hybrid, combining elements of both contractual relations without
adopting and jurisdictional this starting authority. point: it Indeed, makes no arbitration sense to seek cannot to
be analyze conceptualized the arbitration agreement, and its effects at every stage of the arbitral process,
without reference to contract law and principles, just as it makes no sense to seek to analyze the arbitrator’s
function, principles the of arbitral adjudicative proceedings decision-making and the arbitral and res award
judicata. without reference to the law and At the same time, arbitration is also sui generis and autonomous,
exhibiting characteristics that are not shared by either contract or judicial decision-making. That should hardly
be surprising, discussed elsewhere, because arbitration arbitration has agreements been treated and for
awards centuries have as been a separate subject field to specialized of law: as legal rules since Antiquity,
(1553) with this categorization becoming more explicit during the regimes 20th (i.e., century. the Geneva
(1554) Indeed, Protocol having and Convention; regard to the New specialized York Convention; international
European legal Convention) (1555) and national legislative regimes (i.e., the UNCITRAL Model Law; modern
arbitration legislation) (1556) makes it difficult to conceive of treating arbitration as something other than an
autonomous field of law. Thus, it is true that the field of international arbitration draws essential doctrine
and rules
independent, impartial decision-making by the arbitrators:
“while an arbitration agreement has the formal aspects of a contract, by its very nature respect it to
assumes a dispute the other absence than of on any the agreement mode of settlement. between the
Arbitration parties with is a means, a method, a procedure, rather than an agreement.”
Or, as another authority put it, “[a]n arbitrator is a private judge.” Proponents of this school emphasize the
arbitrator’s performance of functions that are public, or “judicial,” in character, In general terms, and the the
role “jurisdictional” of national law theory in conferring of arbitration such powers gives primary on the
arbitrator. importance to the role of national law, and particularly the law of the arbitral seat, in the arbitral
process, while contemplating greater limits on the parties’ autonomy than other authors.
More recently, commentators have advanced the theory that arbitration is “hybrid” or “mixed,” involving
elements of both contract and jurisdiction. “Although deriving its effectiveness [arbitration] has from a
jurisdictional the agreement nature of the involving parties, as the set application out in the arbitral of the rules
agreement, of procedure.” This school offered comparatively little analysis as to what characteristics arbitration
“should” demonstrate, focusing instead on the parties’ autonomy. More recently, some commentators urged
that arbitration be treated as “autonomous,” and not as either contractual or jurisdictional (or hybrid). Even
less so than other characterizations, it is unclear what doctrinal or practical consequences result from this
analysis. Within each of the various foregoing categorizations of arbitration, different approaches existed.
In some legal systems, arbitration was characterized as a form of procedure, with arbitration and courts
classified agreements arbitration being treated as “remedial” as procedural in nature, contracts. and applied
Other the law commentators of remedies to arbitration agreements. More recently, many developed national
legal systems have emphasized the contractual aspects of arbitration and the parties’ autonomy with regard to
choice-of-law, procedural and other issues.

(1532)
(1533)
(1535) (1534) (1536)

(1537)
(1538)
(1539)

Born On Arbitration

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KluwerArbitration

2014) pp. vii - viii

Acknowledgments to Second Edition

both politically and economically, arbitration has flourished.

(3) (4) (5)

Convention on International Commercial Arbitration and the Inter-American Convention on International

States enjoying substantial autonomy to give effect

12) Chapter 1: Overview of International Commercial Arbitration

European or other jurisdictions are concerned.

Law International 2014) pp. 6 -

comments and questions are encouraged, by email to gary.born@kluwerlaw.com.

introduction to analysis of contemporary international commercial arbitration. objectives of In international

resolved by Thot (“he who decides without being partial”).

marshal whatever arguments or forms of persuasion they wished.”

consultation, than true arbitration. (30)

mediation (in the sense of a non-binding procedure).

arbitrators’ arbitrator mandates. or another (47)

Britain. by British (55)

independence and impartiality:

unhappiness to me if I perjure myself.”

arbitration of most international legal

continued into the first half of the 20th century.

(98) (99) (100)

a handful of well-reasoned awards, occasionally in development disputes of of some customary practical

tailored to a particular dispute and legal or cultural setting.

proceedings. more systematically (116)

an answer, a plea, a motion to dismiss, or an exception.

instruments bear striking similarities to contemporary procedural regimes.

arbitrators, to be joined by three additional ecclesiastics.

arbitrators to decide the difficulty.”

the concerned states innovative being list involved system.

Wolters Kluwer Company. All rights reserved.

resolving inter-state disputes during the 20th century.

his discussion of the procedural aspects of the subject by referring to:

manifest evils within the bosom of a national (129) (130)

and regular preferred privacy, or were manipulating the alternatives.”

not far removed from contemporary legislation in the area:

contemporary international commercial arbitration.

(150) (151) (152)

(173) P 28 (174) (175)

subjects the most common.

penalty could be enforced by legal action.”

addressing these challenges, that would recur in later

had its (193) beginning with the P 30 P 31

widespread of various in claims many European localities in the Middle Ages.

Kluwer Law International, a Wolters Kluwer Company. All rights reserved.

context of agreements to arbitrate.

of his disputes with other heirs:

house and they made the division.”

Malynes, a 17th-century English authority on the law merchant:

thousands proceedings. of “arbitration Research deeds” in southern (“Schiedsurkunde”) Germany, Switzerland

laesio enormis or manifest injustice.

feudal period put it as follows:

and have arbitral sporadically awards.

emerged to the legal enforcement of arbitration

proponents of judicial hostility to arbitration. Nonetheless, subsequent legislative reforms in England

common law judges to arbitration:

providing for fairly

(254) (253) (255)

contexts. More generally, as one commentator observes:

appear to of reflect, a secret so desire to speak, to a eliminate their existence.”

(261) (262) (263)

on English arbitral tribunals (as discussed below).