Originally from European International Arbitration Review

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Introduction

The principle of party autonomy in international arbitration rests on the premise that individuals are rational maximizers of their own welfare.  It presupposes rational agents with the capacity to make informed choices.  Once these requirements are fulfilled, the invisible hand of the market allows parties to tailor the perfect dispute resolution mechanism that best suits their needs. In an ideal world, such dispute resolution mechanism would hardly need to be subject to any form of State control at all.  

However, our world is far from ideal. There are a number of actors who are neither rational agents nor endowed with the capacity to make informed choices. Depending on the individual circumstances of each concrete case, they suffer from imperfect information, from the absence of expertise to test information against their preferences, or from the lack of power to actually implement their choices in practice. Granting these “weak parties” an unfettered right to party autonomy  bears a significant risk of market failure: strong opportunistic actors may exploit the weakness of their counterparty for their own benefit.  In a worst-case scenario, this may result in undermining the weak party’s fundamental right of access to justice.