The Arbitrator's Mission and the Application of Law in International Commercial Arbitration - Chapter 04 - International Arbitration and the Courts
Author(s):
W. Laurence Craig
Page Count:
64 pages
Media Description:
1 PDF Download
Published:
September, 2015
Description:
Originally from International Arbitration and the Courts
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"Je suis oiseau : voyez mes ailes…
Je suis souris, vivent les rats."
Je suis souris, vivent les rats."
La Fontaine, La chauve-souris et les deux belettes
I. INTRODUCTION
It is a trite observation that arbitration is a hybrid institution. On the
one hand, its origin is contractually based on an agreement between the
parties to appoint a third party to resolve any potential dispute between
them. On the other hand, the law endows the arbitrator with jurisdictional
powers to give his decision the force of law and the attribute of
enforceability before the courts, both domestically and internationally.
Most often when discussing the role of law in arbitration,
commentators have focused their attention on the jurisdictional aspect of
arbitration where arbitration agreements, procedures and awards enter
the domain of the courts. Indeed, the leading authorities on the English
law of arbitration did not hesitate to define their subject as “the law of
private arbitration is concerned with the relationship between the courts
and the arbitral process.”2 To look at arbitration only in this fashion may
be justified if one considers the subject to be the role of national courts
acting in the exercise of their “control function”3 over arbitral awards and
proceedings as authorized by national law and subject to the limitations
of international convention (the New York Convention, for instance). It
is insufficiently broad if one wishes to examine how arbitral tribunals
function and are intended to function considering that probably the
primary motivation of the contracting parties in entering into an
international arbitration agreement is to avoid the possibility that a
contractual dispute will be decided by a national court and, more
precisely, the risk that in the absence of agreement a contractual dispute
might be presented to a court of the state of which the adversary party is
a national.
In fact the parties to an arbitration agreement have confided to an
arbitrator by contract the power to determine and decide the issues of fact
and law pertinent to the dispute dividing the parties.4 The role of law
will be determined in the first instance and, most frequently, in the last
instance by the arbitrator and depends on how he or she defines the
arbitral mission and how he or she envisages the role of law in the
performance of the contractual mission to determine a dispute between
the parties. It is therefore of more than a little interest to know how an
arbitrator endeavors to apply the law and why. If this is not the law of
international arbitration, it is its practice, which is of prime interest to the
users of international arbitration.5
In applying substantive rules of law to the relevant facts of the
dispute before him, how should the arbitrator treat his mission? Should
he attempt to imitate the decision which would be made by a national
judge of the state whose substantive law is applicable? Or may he take
into account the expectations of the parties more broadly? Are there
general principles arising from the international arbitral process which
affect the interpretation and application of national law? Will the
arbitrator’s choice and application of law or rules of law be subject to
judicial review by national courts and will this influence his or her
decisions? If there are limits to the discretion of the arbitrator in the
application of law, what are they?
II. THE NATURE OF ARBITRATION
A. Commerce and the Spirit of Arbitration
Arbitration, by its nature, does not prescribe how strictly the
arbitrator should treat the application of the law. Certainly it is agreed