Is the Arbitral Tribunal Bound by the Parties' Factual and Legal Pleadings? - SIAR 2006-3
Giuditta Cordero Moss, Dr. juris (Oslo), PhD (Moscow), is Professor at the Department
for Private Law, University of Oslo (in charge of International Commercial Law,
Comparative Private Law and Private International Law), and Principal Research Fellow and
Honorary Lecturer at the Centre for Energy, Petroleum and Mineral Law and Policy,
University of Dundee, Scotland (in charge of Regulation of International Commerce). An
originally Italian lawyer, she practiced the law of international contracts for nearly 20 years
primarily within commercial and industrial cooperation, financing, project financing,
international litigation and transactions in Russia and the former Soviet Union. Since she in
2003 joined the Oslo University full time, she has been acting as a legal advisor within her
fields of specialization and as an arbitrator.
Originally from: Stockholm International Arbitration Review
IS THE ARBITRAL TRIBUNAL BOUND BY THE PARTIES' FACTUAL AND LEGAL PLEADINGS?
Giuditta Cordero Moss
As known, the scope of the arbitral tribunal's authority is determined by the parties. The primary source establishing the arbitral jurisdiction and the scope of the dispute is the arbitration agreement. In their statements of claim or of defence and their request for relief, the parties introduce the facts that are in dispute, the evidence that shall prove them, the legal sources and the legal arguments that shall be basis for the award. The parties' pleadings determine, therefore, the borders of the dispute upon which the tribunal is called on to decide. The arbitral tribunal is supposed not to exceed these limits.
In certain situations, however, an arbitral tribunal may be forced to render the award without having received sufficient instructions or arguments by one or even all of the parties. If one of the parties does not participate in the proceeding, it deprives the process of the contribution of its factual and legal arguments. Even if both parties participate in the proceeding, the arguments presented by one or both of them may be not convincing or not sufficiently developed. In these cases of insufficient instructions or pleadings by the parties, how shall the tribunal decide? Shall it assume the role of an umpire that passively listens to the presented arguments and decides which of the opposed arguments deserves to win? Shall this umpire role be taken to its utter consequences, so that, in case of failure by one party to participate in the proceedings, the other party automatically wins, even if its arguments are not convincing?
Or shall the arbitral tribunal take an active role, investigate the relevance and correctness of the produced evidence and develop arguments that were not presented by the parties? Shall this active role go so far as to deciding on the basis of legal sources that were not at all pleaded by the parties, shall it permit to grant relief that the parties have not requested?
We will analyse these questions below. Two levels of regulation are relevant in this context: rules on the conduct of the arbitral tribunal and rules on the validity and enforceability of the award. As we will see, the tribunal is bound in respect of the factual scope of the dispute but enjoys considerable freedom in respect of the inferences that it draws from the evidence and in respect of the legal consequences of the proven facts.