The Use of Inherent Powers by Arbitrators to Protect the Public at Large - European International Arbitration Review (EIAR) - Volume 6 - Issue 2
Originally from European International Arbitration Review
The fundamental express source of arbitrator authority in commercial arbitration is the agreement between the parties to submit their dispute to arbitration. Such an agreement may refer to applicable institutional rules which deal with the authority of arbitrators to take certain actions. In addition, the lex arbitri, or governing law or rules of the arbitration, may expressly confer powers on arbitrators. Investment arbitration is also a consent-based process. The parties’ elections afford a tribunal its jurisdiction and delineate the boundaries of that jurisdiction. Where powers are not expressly granted, gaps may form. These gaps are filled by non-enumerated powers, including inherent powers. Arbitrators are increasingly invoking inherent powers in international arbitration to deal with unanticipated situations. The intention of this article is to look at the ways in which these powers are invoked to protect the public at large. By examining different situations in which powers might be used in this regard, the article highlights both the importance and the nuances of this source of arbitral authority. What emerges is not just a singular notion of inherent powers, but a flexible category of authority which can be invoked in different ways and to different extents depending on the factors at play.
Part II of this article sets out a framework for understanding inherent powers. It suggests a definition of inherent powers as compared with other non-enumerated powers (part II (A)). It then examines the functional justification for inherent powers (part II (B)), before explaining how the growing public function of arbitration justifies a broad construction of the ways in which inherent powers are invoked to protect the public at large (part II (C)). It finally provides a brief overview of the limits of inherent powers, in particular, the tension between the arbitrators’ mandate to protect the integrity of the arbitral process whilst still fulfilling their duty to deliver an enforceable award (part II (D)).