Originally from Czech and Central European Yearbook of Arbitration - 2012: Party Autonomy versus Autonomy of Arbitrators

This article deals with the legal and practical aspects of arbitrator autonomy in determining the law applicable to the merits of a case. It is based on Bulgarian legislation and practice as compared to some other states' legislation, to main international instruments, to the UNCITRAL Rules and Model Law and to the ICC Rules. Its thesis is that arbitrators enjoy broad freedom in determining the substantive law. This freedom is mainly limited by the public policy rules of the seat of arbitration, of the state under whose law the award has been rendered, and of the place of the award's eventual recognition and enforcement. Arbitrators are not bound to apply the conflict-of-law rules of the seat of arbitration. They must apply the law chosen by the parties. In the absence of the parties' choice arbitrators apply the law of their choosing. In this they may resort to conflict-oflaw rules or may directly choose the substantive rules. Without being obliged to give any guaranties arbitrators must render an award that is enforceable at law. When dealing with an international case, arbitrators should respect the mandatory rules of the seat while their regard for the foreign mandatory rules may be subject to certain conditions.