The first draft I saw of the program for today’s discussion contained a
misprint. It read “Arbitration and the Rule of Law” and immediately I

panicked. “What have I let myself in for?” I asked myself, though without

waiting for an answer I began to think that, maybe, it could be interesting

to speculate whether arbitrators are or should be concerned with the wider

principles of justice and human rights and matters of that sort. However,

the misunderstanding was removed, and I am asked to address “Arbitration

and the Role of Law” which, as will appear, I would prefer to paraphrase as

“Arbitration and the Role of National Courts.”

 

One preliminary – all that I or anyone else can say is conditioned by

our personal experience, whether as arbitrators or judges or, as I have

been fortunate to be, as both. Whilst acknowledging this, I shall try to

speak of institutions rather than individuals, and of the relationship

between two essentially different processes of dispute resolution,

between arbitration and proceedings in national courts.

 

I appreciate that the background to any discussion of this topic is a

widespread feeling, or wish, among some practitioners, that international

commercial arbitration (which will be my primary concern) has now

achieved some transnational or independent status which makes it wholly

independent both of national courts and of national systems of law. I am

not qualified and I do not intend to venture into that jurisprudential

debate. My object is to describe things as I see them and I leave it to

others – and to you – to decide whether international arbitration has

achieved the total independence that is sometimes claimed for it.

 

So I begin with some basic propositions that may or may not be

challenged, though I hope not. These are:

 

a. National Courts are the judicial arm of the State – and only the

State has power, through its executive arm, to enforce judgments

made by Courts and awards made by arbitrators against persons

within its jurisdiction. (Note there are limited forms of self-help in

the commercial context, including for example rights of set-off and

to exercise liens and to settle accounts through a third party; and it

is probably correct that in the great majority of commercial

arbitrations, certainly those conducted under the auspices of

arbitration institutions, awards are settled voluntarily so the need for

enforcement does not arise.)

 

b. An arbitrator’s jurisdiction is consensual i.e. it is derived from the

arbitration agreement, which must be enforceable as a contract

between them. (Note this is true, I believe, of all international

commercial arbitration, though not of course of arbitrations which

have a statutory basis under a national law.)

 

c. The parties’ agreement to arbitrate is a contract that, ultimately,

can only be enforced by a national court. By definition, they have

agreed to a process of arbitration and that the resultant award of

the arbitration tribunal will bind them as the resolution of their

dispute.