Chapter 38 - Precedent - Handbook on International Commercial Arbitration - Second Edition
It might be thought that this would be a short chapter both starting and concluding that there was no doctrine of precedent. Certainly, there is no formal doctrine of precedent with one arbitral tribunal obliged to follow decisions of other tribunals. This has sound underpinnings. The privacy and confidentiality of the arbitral process does not make ready access to previous decisions and the basis upon which those decisions were made, accessible. Furthermore, the benefit of international commercial arbitration is to assemble a tribunal from different jurisdictions for the very reason that they will bring with them expertise and wisdom based, in part, on their own backgrounds and experiences. Nevertheless, some decisions are widely reported and it is well known that there are regular seminars and symposia where views are exchanged and respected arbitrators discuss cases that they are involved with albeit on Chatham House rules. This leads to a commonality of approach or a distillation of good practice all of which has much to commend it.
In national courts, there are obligations to follow earlier cases. In common law jurisdictions, the doctrine of precedent is well-established and there is an intellectual comfort in relying upon tried and tested solutions. In civil law countries, the doctrine is less well-established. In Switzerland, the persuasive effect of earlier decisions depends upon the detail to which the prior court considered the issue, whether the decision is published, how the judgement is expressed, and the status of the judicial body that has previously applied it. In Spain, there must be two prior decisions with the same line of reasoning for a decision to be binding, and in Mexico, there must be five prior decisions. Rigid adherence to precedent can cause injustice and the Supreme Courts of both England and the U.S. can overturn their own previous decisions (as did the House of Lords in England prior to the coming into being of the Supreme Court which could also overturn its own decisions).