The Changing Relation of National Courts and International Commercial Arbitration - ARIA Vol. 21 No. 1-4 2010
W. Michael Reisman is a McDougal Professor of International Law, Yale Law School.
Heide Iravan is an Associate at Cleary Gottlieb Steen & Hamilton’s New York office. J.D. Yale LawSchool. Member of the New York Bar.
Originally from American Review of International Arbitration - ARIA
Advocates of arbitration often assume that it is a free-standing procedure, conceptually quite independent of the apparatus of the state. Thus, the American Law Institute’s Tentative Draft Number 1 of the Restatement of the U.S. Law of International Commercial Arbitration defines arbitration as “a dispute-resolution method in which the disputing parties empower an arbitral tribunal to decide in a final and binding manner a dispute with respect to a defined subject matter.”1 It is curiously laconic with respect to the role of courts, especially given that the words “final and binding” already import an indispensable role for state power; curious also in that the rest of the impressive Tentative Draft is concerned minutely and exclusively with the legal relationships between national courts and arbitral tribunals.
The point of emphasis is that international commercial arbitration, no less than arbitration within nation-states, while conducted in the sphere of private law, is a public legal creation whose operation and effectiveness is inextricably linked to prescribed actions by national courts. Anarchic or libertarian impulses may lead some to look nostalgically back at phenomena like private dispute settlement arrangements in medieval merchant associations and “Pie Powder” courts at the medieval fairs.2 Those who wish to think of arbitration without any role for government can say that these medival arbitrations were truly independent of the state; they may also point to the felicitous fact that most contemporary international arbitration awards win voluntary compliance. But how much voluntary compliance with large adverse awards would occur if there were no courts in the background poised to enforce them? Arbitration and national courts are inextricably joined. The law of arbitration, whether domestic or international, is all about that relationship, which is essentially a control system.