Originally from International Arbitration Law and Practice, Third Edition

NOTION AND ROLE OF ARBITRATION

2.1. The Notion of Arbitration

Arbitration is a proceeding for solving disputes that issues from an agreement made between parties. It has the scope to govern the dispute’s resolution, and therefore, produces procedural effects. Its origin goes back thousands of years and traces of the method are to be found in Greece, Rome,1 China and in the life of Prophet Mohamed.

In Fiona Trust,2 Lord Hoffman dealt at length with the implications of its consensual nature:

Arbitration is consensual. It depends upon the intention of the parties as expressed in their agreement. Only the agreement can tell you what kind of disputes they intended to submit to arbitration. But the meaning which parties intended to express by the words which they used will be affected by the commercial background and the reader’s understanding of the purpose for which the agreement was made. Businessmen in particular are assumed to have entered into agreements to achieve some rational commercial purpose and an understanding of this purpose will influence the way in which one interprets their language.

Its essence was defined by a noted scholar3 as having “les trois composantes, justice, caractère privé, origine contractuelle, [lesquelles] donnent ensemble sa physionomie à l’institution.”