Originally from World Arbitration And Mediation Review (WAMR)

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PARTY AUTONOMY AND ITS DISCONTENTS:

THE LIMITS IMPOSED BY ARBITRATORS AND
MANDATORY LAWS
J. William Rowley and Robert Wisner*

I. INTRODUCTION

The paramount nature of party autonomy – the foundation of
all arbitration – is increasingly being questioned. In terms of
process, there are growing calls for arbitrators to assert control,
sometimes in spite of the parties’ agreements, so as to reduce the
mounting costs of arbitral proceedings. In terms of substance,
there is widespread recognition of the need to apply mandatory
laws that may differ from the parties’ choice of law.

On closer inspection, however, these questions are best
answered by resort to a different conception of party autonomy
that encompasses the possibility of arbitrators’ honoring
mandatory rules while concurrently giving effect to the parties’
choices in running the arbitration, a solution that avoids the risks
involved in a top-down limitation of party autonomy. Ultimately,
arbitrators should remain servants of the parties, but should
work hard with the parties to achieve an approach to procedural
and substantive matters which is consistent with best practice
and acceptable both to the parties and the arbitral tribunal.

II. THE ARBITRAL TRIBUNAL’S “SOFT POWER”

A. It’s Your Party and You Can Cry If You Want to

A simple example that tests the limits of party autonomy with
respect to procedure illustrates the problem. Suppose that both
parties to an international arbitration of modest size under
institutional rules are represented by their usual United States