General Report on Jura Novit Arbiter - Chapter 17 - Iura Novit Curia in International Arbitration
Originally from Iura Novit Curia in International Arbitration
It is widely recognized that the will of the parties plays a determinant role in international commercial arbitration. The aim of this book is to investigate to what extent the arbitral tribunal may nevertheless develop its own legal reasoning. An independent legal reasoning will not necessarily be based on the will of the parties as manifested in the terms of the contract, in the law chosen in the contract or in the legal arguments presented by the parties in the proceedings.
As an illustration of the questions that the book aims at answering, the following can be mentioned:
(i) Assume that an arbitral tribunal is called upon to decide whether a sales contract has been breached, and, if it ascertains that the contract was breached, to determine the amount of damages owed by the defaulting party. Assume that, during the proceeding, the claimant claims that the contract was breached because performance was late. Having heard the evidence, however, the arbitral tribunal decides that the contract was breached because the goods were not in conformity with the specifications. May the tribunal order reimbursement of damages (as requested), on a basis different from the basis that was pleaded (i.e., non-conformity instead of delay)?
(ii) Assume that the dispute regards the breach of a shares purchase agreement. The seller argues that its liability is limited to the circumstances described in the Representations and Warranties contained in the agreement. The circumstance invoked by the purchaser is not included in the Representations and Warranties. The purchaser claims that the seller has breached a duty to inform that, under the applicable law, is mandatory and cannot be restricted by contract terms. Therefore, the liability of the seller may not be limited to the list contained in the Representations and Warranties. May the tribunal rule that the seller is liable for having violated the mandatory information duty contained in the applicable law, even though the terms of the contract seemed to exclude that duty?