Originally from the ICDR Handbook on International Arbitration & ADR - Third Edition

Preview Page

I.    Introduction

The WTO is the institutionalized umbrella of the multilateral trading system (MTS) succeeding the earlier diplomacy based General Agreement on Tariffs and Trade (GATT). Moreover, it is a semi autonomous regime that promulgated its own administrative, legislative and judicial procedures and so illustrates a certain degree of self sufficiency. Arbitration is often preferred to traditional court proceedings because it can offer the prospect of reaching a relatively economical final solution by specialist arbitrators through a quick and often less formal procedure. The discrete character of arbitral proceedings can add to its attractiveness, particularly when trade secrets are involved. Furthermore, arbitral awards are quite easily enforced both in the country of origin and abroad. It can be said that the two basic principles underlying arbitration are that of party autonomy and that of limited judicial review of arbitral awards. The principle of party autonomy is reflected in the consensual nature of the parties’ choice to have their claims arising out of their contractual relationship submitted to arbitration; in the selection of the arbitral tribunal; and the applicable law and the autonomy afforded to the parties in structuring the proceedings. The control by courts of arbitral awards takes the form of a review of final awards on limited grounds. The arbitration will be subject to the law chosen by the parties, unless the arbitrators have been authorized by the parties to decide the dispute ex aequo et bono.

Additionally, an important feature of arbitration is the res judicata, the binding effect of arbitral decisions that lead to a total or partial settlement of a dispute. The moment when, and the circumstances under which, an award assumes its res judicata effect are determined by national arbitration law. Finally, the procedure for setting aside an award is an exception to the general rule of the finality of arbitral awards.