Originally from Limits to Party Autonomy in International Commercial Arbitration

INTRODUCTION

Arbitration – and even more clearly international arbitration – is known as the legal field in which party autonomy reaches its highest expression. Indeed, the parties to a legal relationship not only decide voluntarily upon the selection of arbitration as the mechanism to settle their disputes, but they also agree on the functioning details of such mechanism. In this sense, they may define the subject matters submitted to arbitration, the concrete type of arbitration under which those disputes will be solved (ad hoc or institutional), the procedure to appoint arbitrators (and, of course, the arbitrators themselves), the seat of arbitration, the language of the proceedings, the law applicable to the merits of the case, and other procedural details. In other words, they set the framework and build their own dispute resolution process. In this sense, when it comes to arbitration, party autonomy does not end with the mere choice of one of the diverse available dispute settlement mechanisms; instead the parties’ will spreads – directly or indirectly – over every single element of the procedure. In sum, we find here a propitious area for the exercise of party autonomy. 

Nevertheless, broad as it is, such party autonomy is not absolute even in this field  and, like any other right, it has some limitations.  

Obviously, the better-known limits to party autonomy are those imposed by public powers based on policy reasons (contained in the applicable law). The most obvious expression of such limits consists in the definition of the matters for which arbitration is forbidden (arbitrability). Paradoxically, the will of the parties may occasionally find some limits without even leaving its own field. This is because there are other limits voluntarily established by the parties themselves, either expressly or implicitly. For instance, when the parties opt for institutional arbitration, they confine their party autonomy within the framework of the concrete rules of the selected institution (or at least those from which the parties cannot derogate). Therefore, we find here a clear area of limitations expressly or implicitly imposed to party autonomy. 

Then, the picture shows a panorama with a clear and large party autonomy on the one side and several clear limits – implicitly or expressly established – on the other side. However, if we zoom in, we can also find a grey area located in-between the borders of both sides; here is where party autonomy and arbitrator’s power collide. This paper deals with possible problematic situations concerning procedural issues that may be encountered in such grey area; basically, where all the parties agree upon procedural issues in a manner the arbitrators find unreasonable, inappropriate or inefficient.

In order to analyze said situation, the present paper will describe the whole scenario, by explaining the exercise of procedural party autonomy (and its limits), explaining the arbitrator’s procedural role (including their duties, powers and limitations), as well as some other relevant factors (e.g. the different moments when party autonomy is exercised, the factual and legal framework). It will also present some potentially problematic situations and trigger some questions about how to resolve them. The core question is whether in the conduct of the proceedings arbitrators must always follow the parties’ wishes or they can impose their own criteria for the sake of the proceedings. Then, the paper will explore different perspectives on how to answer such questions, to finally reach some conclusions, aiming at shedding some light on the topic and fostering further discussion.