Originally from European International Arbitration Review

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Introduction

The relationship between the arbitration agreement and the parties’ pleadings on one hand and, on the other hand, the powers of the arbitral tribunal, reveals mutual limitations. These, in turn, reflect the tension between the centrality of the will of the parties in arbitration, and the necessity to act within the framework set by national laws and international conventions, if the enforceability of the arbitral award is to be preserved. The parties may have chosen a certain law in the contract, may have made a certain legal argument or invoked a certain fact in their pleadings, and yet the award may end up being based on another law, another legal theory, another fact. This is not only interesting from a theoretical point of view, but also has significance in practice, as the anecdotal experience mentioned below may illustrate. 

When I started acting as an arbitrator, back at the beginning of the millennium, I sometimes had to act in disputes where the respondent did not appear. I was well aware of the central role that party autonomy plays in arbitration: the parties’ pleadings set the foundation and the limits for the arbitral powers. The arbitrator has to follow the parties’ instructions and may not exceed the scope of power granted to it by the parties. Excess of power exposes the risk of the award being set aside by the courts of origin or refused enforcement by the courts of enforcement. However, the respondent’s failure to participate deprived the proceeding of that party’s point of view, and I did not have the benefit of counterarguments regarding the facts or the legal arguments invoked by the claimant. This raised a question: if the will of the parties is the only foundation upon which an arbitrator may act, does it mean that the arbitrator’s role is to choose between the claimant’s and the respondent’s arguments? Does this in turn mean that, when no counterarguments are submitted, the arbitrator has to accept the claimant’s arguments?