Originally from Handbook on International Commercial Arbitration

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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.