Procedural Agreements and Party Autonomy - Chapter 16 - Handbook on International Commercial Arbitration
Peter Ashford is Solicitor of the Supreme Court and a Partner at Cripps Harries Hall LLP and is Head of the firm's Commercial Peter Ashford is a Partner and Head of commercial dispute resolution in the leading United Kingdom Firm of Cripps Harries Hall LLP, Tunbridge Wells, United Kingdom. Mr. Ashford advises on a wide range of commercial disputes with a particular emphasis on substantial commercial contract disputes, especially those involving an international aspect, partnership and LLP disputes, professional issues for solicitors and professional negligence. He is particularly experienced in complex, high value claims and acts for many international clients. He handles disputes in court, arbitration, mediation and disputes without any formal process. Mr. Ashford received his training in London and qualified in 1986. He joined Cripps Harries Hall LLP in 1987 and became a partner in 1991.
Originally from Handbook on International Commercial Arbitration
A cardinal principle in international commercial arbitration is party autonomy. Essentially, it is the right of self-determination—as Article 19(1) of the UNCITRAL Model Law provides: “Subject to the provisions of this Law, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings.”
Leaving to one side theoretical rather than practical problems, before a dispute has arisen the parties are generally free to agree on whatever dispute resolution system they wish. National laws may prohibit clearly one-sided agreements from surviving. For example, in England, §33 of the Arbitration Act 1996 provides that “The Tribunal shall . . . act fairly and impartially . . . giving each party a reasonable opportunity of putting his case and dealing with that of his opponent . . .” So if an arbitration clause purported to give only one side the opportunity of addressing the arbitrator, such provision would be invalid. The parties also cannot agree on something that is fundamentally inconsistent with the laws of the seat of the arbitration.
The more practical issue is the extent to which the parties can agree on something that is patently excessive or appears to the Arbitral Tribunal unreasonable or unnecessary. In considering this, the relationship between the Arbitral Tribunal and the parties needs to be considered. The proper analysis appears to be that “The arbitration agreement is a bilateral contract between the parties to the main contract. On appointment the arbitrator becomes a third party to that arbitration agreement, which becomes a trilateral contract. Under that trilateral contract, the arbitrator undertakes his quasi-judicial functions in consideration of the parties agreeing to pay him remuneration. By accepting appointment, the arbitrator assumes the status of a quasijudicial adjudicator, together with all the duties and disabilities inherent in that status.” Whilst perhaps correct, the point needs a little further explanation. It cannot be right that the Arbitral Tribunal becomes a party to the arbitration agreement for all purposes for, if there were a subsequent dispute, it could not be sensibly argued that the same Arbitral Tribunal must determine it.