Originally from American Review of International Arbitration - ARIA

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This presentation considers the position of European States, beyond the
European Union (to include Switzerland for example), as to the scope and
standard of review of arbitral awards involving public policy issues, in particular
competition law.

In order to better understand the heated discussions on this subject, it first
must be mentioned that, as in the United States, it took time before the courts in
European countries even accepted that arbitral tribunals could apply rules putting
into effect important public policies, such as rules protecting free competition.
Until the mid-eighties, the position was that arbitral tribunals did not have
jurisdiction to apply such rules. In the event that a defendant raised a claim of
nullity of the contract which the claimant sought to enforce, based on an alleged
infringement of competition law, the arbitral tribunal had to stay the proceeding,
and wait until a court had decided whether the contract was valid or invalid. That
would of course constitute a good way for the defendant to delay the proceedings.
However, between the mid-eighties and the end of the nineties, there occurred
in most states a complete reversal of the situation. It is now well accepted that the
public policy character of a rule does not prevent an arbitral tribunal from
applying it. In France, for instance, the Paris Court of Appeal decided, in the
Labinal case in 1993,1 in which an issue of competition law was raised, that:
An arbitrator has the power to apply principles and rules of a public policy
character, and to sanction their possible violation, subject to the review that the
courts of the State must perform.

It thus appears that, at the same time that it widened the scope of the
arbitrators’ jurisdiction, this decision introduced the notion of a second look by
the court seized of a request to set aside the award. The same position had been
adopted, or was later adopted, by the courts of most other European countries.
There remained to be determined the extent to which the review would be
exercised. Naturally, a more liberal approach having been adopted, there was
pressure towards an increasingly liberal approach. In several countries, a
minimalist conception of the review has gradually become recognized. Other
countries resist, however, and still conduct an in-depth review. The
“minimalist”/“maximalist” distinction thus opposes the courts of the various
European countries against each other (Section I); this distinction can also be