Rules Applicable to the Merits of the Dispute - Article 3 - Chamber of Arbitration of Milan Rules: A Commentary

ARTICLE 3 – RULES APPLICABLE TO THE MERITS
OF THE DISPUTE
1. The Arbitral Tribunal shall decide on the merits of the
dispute in accordance with the rules of law unless the
parties expressly provided that the Tribunal decide ex
aequo et bono.
2. The Arbitral Tribunal shall decide in accordance with the
rules chosen by the parties.
3. In the absence of any agreement pursuant to paragraph 2,
the Arbitral Tribunal shall apply the rules it determines to
be appropriate, taking into account the nature of the
relationship, the qualities of the parties and any other
relevant circumstance.
4. In any case, the Arbitral Tribunal shall take into account
trade usages.

1. The general recognition of the party autonomy.

1.1. The first sentence of art. 3.1 unequivocally establishes that “the
Arbitral Tribunal shall decide, in principle, in accordance with the rules
of law”. To this purpose, art. 3 endorses the most advanced solutions
adopted within the international framework of commercial and civil
arbitration, according to which the highest level of freedom to choose the
substantive rules applicable to the dispute is provided to the parties or, ifthey have not made such a choice, to the Arbitral Tribunal, through the
most flexible techniques of private international law.1
In particular, according to art. 3.2 the Arbitral Tribunal has, first of
all, to determine if the parties have chosen a specific set of rules to
govern their relationship and the disputes related thereto. So if the parties
have reached an agreement on such an issue in occasion of the
conclusion, or execution, of their transaction or even in occasion of, or
during, the arbitration procedure, the Arbitral Tribunal should abide by
such determination of the parties’ autonomy and hold to the choice
expressed by them.

Table of Contents:

SUMMARY:
1. The general recognition of the party autonomy.
2. The tacit choice and the exclusion of the “renvoi”.
3. The depeçage and thenotion of rules of law.
4. The applicability of the lex mercatoria and public international law.
5. The application of overriding mandatory rules of the lex causae and of third States.
6. The most appropriate rules of law in absence of a specific choice by the parties. –
7. The various reasons to justify the appropriate rule applicable to the case.
8.Substantive and procedural law: their extension to extra-contractual claims related to the dispute.
9. Arbitration ex aequo et bono and as “amiable compositeur”.
10. Arbitration ex aequo et bono: its relationship with the terms of the contract.
11. The role attributed to the “trade usages”.
12.The trade usages incorporated in the contract.
13. Trade usages as supplementary means of integration of the contract.

Author Detail:

SERGIO M. CARBONE is Professor of Law (International Law,
European Union and Admiralty Law) – University of Genoa; since 1979
Director of the Institute of International and Maritime Law – University of Genoa. Member of CMI, of the Italian Association of Comparative Law, SIOI, INLA, AIDA, IACL, ILA and member of the Unidroit Board of Directors. Director of the following journals: Rivista di diritto internazionale privato e processuale; Diritto del commercio internazionale; Diritto marittimo. Rapporteur in several meetings, both national and xii THE CHAMBER OF ARBITRATION OF MILAN RULES international, on international law, contract law, maritime law, transport law, private international law and European Union law. Lawyer and legal expert in judicial and arbitral proceedings involving both public and private industrial groups and public authorities.
Chairman, sole arbitrator or member of the arbitral tribunal in domestic and international arbitration.