Originially from: World Arbitration and Mediation Review (WAMR)

Cultural Predictability in International Arbitration
by
Lawrence W. Newman and David Zaslowsky
Partners, Litigation Department, Baker & McKenzie (New York City)
(Originally published in the May 2004 issue of the New York Law Journal;
Reprinted with permission)
In today’s world it is probably fair to say that a majority of
important international contracts —whether they are for joint ventures,
concession agreements, major projects or major investments —have
clauses providing for [the] resolution of disputes through arbitration.
These provisions ordinarily bind the parties to arbitrate in accordance with
the rules of such well-known international arbitral institutions as the
International Chamber of Commerce or the International Centre for
Dispute Resolution of the American Arbitration Association.
International arbitration gives business[] [managers] peace of mind
in that parties from faraway countries will not be able to drag them into
courts where procedures are alien and where impartiality is frequently
uncertain, especially for outsiders. Likewise, an agreement to arbitrate
avoids the risk of having the parties race to their favorite courthouse.
These benefits of arbitration stem, in so small measure, from the
widespread acceptance, in over 140 [sic] countries, of the United Nations
Convention on the Recognition and Enforcement of Foreign Arbitral
Awards (the U.N. Convention). The Convention requires signatory
countries to refer disputes covered by arbitration clauses to arbitration in
accordance with the parties’ agreement.
(i) Procedural Predictability
Are the business[] [managers] obtaining the kind of predictability
of dispute resolution that they think they are? The answer is, frequently,
only to a limited extent, especially if the parties and the arbitrators are
from different legal cultures. One of the reasons is that, although the rules
of the international arbitral institutions provide certainty in some areas, in
other areas they are not specific about the ways in which arbitral
proceedings are to be conducted. One example relates to the extent of
discovery that will be permitted. More subtle examples are the emphasis
that will be placed in the hearings on oral testimony, cross-examination[,]
and the maintenance of a verbatim transcript of proceedings.