Originally from American Review of International Arbitration - ARIA

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I. INTRODUCTION

There is uncertainty in the international world of arbitration about the role of mandatory rules in international commercial disputes.1 The following cases demonstrate, by way of selective example only, the divergence of decisions by arbitral tribunals in dealing with mandatory rules:

In 1981, a Belgian distributor and an Italian principal concluded a contract subject to Italian law. Some seven years after the conclusion of the contract, the principal gave notice of the termination of the con­tract. Notice was given three months before termination, as provided for in the contract. Based on Belgian mandatory rules of law, the Belgian distributors contested the validity of the arbitration clause and the contractual termination clause in the distribution contract. The arbitrator in Germany decided for the arbitrability of the issue and the non-applicability of the Belgian mandatory rules.