Originally from Limits to Party Autonomy in International Commercial Arbitration

INTRODUCTION

Party autonomy is often said to be one of the cornerstones of international commercial arbitration.   The previous chapters of this book discuss the fundamental principle of party autonomy—as well as its limits—throughout the arbitral procedure, including regarding the composition of the arbitral tribunal, the choice of arbitration rules, the arbitrators’ powers, their Kompetenz-Kompetenz to decide on jurisdictional issues and the rules governing the merits of the dispute.  Although limits exist, it is safe to assume that party autonomy is an overriding principle throughout the arbitral process.  This chapter discusses whether the same is true once the award has been rendered.  It assesses the role of, and limits to, party autonomy at the post-award stage.  More specifically, it examines whether, and to what extent, the parties can influence the review of the award made by national courts at the seat of the arbitration. 

Parties dissatisfied with the award may start proceedings at the seat of the arbitration asking the court to vacate or set aside the award.   Set-aside proceedings are governed by the law of the seat, including the grounds for a set-aside, and thus vary from jurisdiction to jurisdiction.   Based on the principle of party autonomy, parties may try to influence the regime of set-aside proceedings in one of two ways.  They may want to restrict review, either partially or fully excluding review by the courts at the seat.  Alternatively, they may want to agree on more expansive review by adding to the existing grounds of review, possibly even providing for full review of the merits of the award.   

The chapter examines the effects of parties’ agreements to expand or restrict the review of the award by national courts in set-aside proceedings.  Section II gives an overview of the different solutions adopted in a number of jurisdictions around the world.  In most of these countries, statutory provisions address the question of whether the parties may agree on a restricted review.  Such agreements are enforceable under certain conditions in some jurisdictions, but are unenforceable in others.  In addition, this section analyzes case law developed in some countries that have addressed the converse question whether, and to what extent, parties are free to agree on an expanded review.

Following the overview of these different positions around the world in Section II, Section III examines the situation in the United States.  In 2008, the U.S. Supreme Court in Hall Street denied the parties’ freedom to agree on an expanded review at the set-aside stage in a domestic arbitration case, but the decision has triggered more questions than answers.  The paper discusses the implications of Hall Street, including whether the same rationale applies to cases that fall within the New York or Panama Conventions or applies to cases where the parties have invoked U.S. state law to govern the arbitration.

Finally, Section IV surveys the relevant policy considerations for deciding whether or not the parties’ agreement to expand or restrict the review by national courts should be held enforceable and analyzes the policies that appear to have influenced the current solutions, and discusses which of those are the most relevant and thus—from a normative point of view—should influence the correct approach to be adopted.