Abstract
The arbitrator dealing with an international commercial dispute has important powers. He need not follow the procedure laid down for actions in a court of law, provided that the procedure followed does not lead to unfairness between the parties. He has power to order pleadings and particulars, to fix dates for hearings, to grant postponements, to proceed with a hearing in the absence of a party duly notified, to order discovery, to order inspection of documents, property and premises, to order security for costs, to appoint experts, to delegate duties to secretaries, to refer costs to be taxed and consult with other persons and adopt their views as his own (after having formed his own judgment).
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Russell on The Law of Arbitration, 19th Edition, London, at 233.
J Gillis Wetter, The International Arbitral Process, Public and Private, New York 1979, Vol II, 288.
The New York Convention includes an exchange of letters or telegrams as made ‘in writing’.
Mustill and Boyd, The Law and Practice of Commercial Arbitration in England, London 1982, at 75.
Mustill and Boyd, The Law and Practice of Commercial Arbitration in England, London 1982, at 102.
Mustill and Boyd, The Law and Practice of Commercial Arbitration in England, London 1982, at 77.
Rules for the ICC Court of Arbitration, version 1975. ICC Publication No 291.
Article 7 reads: ‘Where there is no prima facie agreement between the parties to arbitrate... and if the Defendant does not file an answer within 30 days or refuses arbitration by the International Chamber of Commerce,... the arbitration cannot proceed’.
Article 12, second paragraph, of the Internal Rules of the Court stipulates: ‘This decision is of an administrative nature. If the Court decides that the arbitration solicited by the Claimant cannot proceed, the parties retain the right to ask the competent jurisdiction whether or not they are bound by an arbitration agreement in the light of the law applicable.’
Article 12, third paragraph of the Internal Rules of the Court stipulates: ‘If the Court of Arbitration considers “prima facie” that the proceedings may take place, the arbitrator appointed has the duty to decide as to his own jurisdiction and, where such jurisdiction exists, as to the merits of the dispute’.
The case has been published in VIII Yearbook: Commercial Arbitration 204 (1983) — the prima facie decision of the ICC Court, and IX Yearbook: Commercial Arbitration 138 (1984) — the arbitrator’s decision.
Dow Chemical et al v Isover Saint-Gobain, IX Yearbook: Commercial Arbitration 131 (1984).
With respect to English law, see Mustill and Boyd, op cit, at 89.
In ICC Case 4131, IX Yearbook: Commercial Arbitration 131 (1984) the arbitrators held that ‘the sources of law applicable to determine the scope and the effects of an arbitration clause providing for international arbitration do not necessarily coincide with the law applicable to the merits of a dispute submitted to such arbitration. Although this law or these rules of law may in certain cases concern the merits of the dispute as well as the arbitration agreement, it is perfectly possible that in other cases, the latter, because of its autonomy, is governed — not only as to its scope, but also as to its effects — by its own specific sources of law, distinct from those that govern the merits of the dispute. This is particularly the case — — unless the parties have expressly agreed otherwise — with respect to an arbitration clause referring to the ICC Rules’ (at 133). The Court of Appeal in Paris approved this observation by the arbitrators (at 132).
110 Clunet 907 (1983).
New York Convention, Article V 1(a).
Resolution 31/98 adopted by the UN General Assembly on December 15, 1976. The UNCITRAL Arbitration Rules themselves do not contain the restriction to commercial disputes, since Section 1: Scope of Application, Article 1, stipulates: ‘Where the parties to a contract have agreed in writing that disputes in relation to that contract shall be referred to arbitration under the UNCITRAL Arbitration Rules, then such disputes shall be settled in accordance with these rules subject to such modification as the parties may agree in writing’.
Article 1 of the Internal Rules of the ICC Court of Arbitration provides however that the Court may accept jurisdiction over business disputes not of an international nature, if it has jurisdiction by reason of an arbitration agreement. The restriction to business disputes remains and, eg, labour disputes, family affairs, liability out of medical malpractice, traffic accidents, would not fall within the ICC jurisdiction.
Mustill and Boyd, op cit, at 86–8, cite a variety of examples such as ‘claims, differences, disputes, in connection with, in relation to, in respect of, with regard to, arising out of, under, during the execution of’.
Craig, Park and Paulsson, International Chamber of Commerce Arbitration, New York 1984, No 61.01.
Article 11 of the Rules provides: The rules governing the proceedings before the arbitrator shall be those resulting from these rules and, where these rules are silent, any rules which the parties (or, failing them, the arbitrator) may settle, and whether or not reference is thereby made to a municipal procedural law to be applied to the arbitration.’
Emphasis added by the author in these extracts.
S Saleh, Commercial Arbitration in the Arab Middle East, London 1984, at 25.
Neither the UNCITRAL Arbitration Rules nor other well-known rules — ad hoc or institutional — have this requirement. In the UNCITRAL systems parties state their claim and defence (Articles 18, 19) and the arbitrator decides to what extent a party subsequently may amend its claim or defence (Article 20).
The ICC Commission on International Arbitration has set up a working party with the task of drafting such multi-party arbitration clauses. A draft was presented at the Commission’s meeting in November 1984, Doc No 420/263, which is still being worked on and has not been adopted by the Commission.
See, ICCA, Yearbook: Commercial Arbitration, since 1976; ICC, Arbitration Throughout the World, ICC Publication No 353, concerning Western Europe; a further issue will cover the Far East and the Pacific countries.
See Lew, ‘Determination of Arbitrators’ Jurisdiction and the Public Policy Limitations on that Jurisdiction’, Chapter 7, infra, at 73.
UNCITRAL Arbitration Rules, Article 16.
ICC Arbitration Rules, Article 12.
See Lando, The Law Applicable to the Merits of the Dispute’, Chapter 9, infra, at 104.
Mustill and Boyd, op cit, at 59, 249.
Ibid, at 249.
Case No 1434, 103 Clunet 982 (1976).
Case No 3410, unpublished.
Case No 3896, 110 Clunet 914 (1983).
Case No 3410, unpublished.
French original: ‘Dans sa libre appreciation des preuves, l’Arbitre international peut fonder son jugement sur des indices ou prendre en consideration même des faits non allegues s’ils sont notoires ou generalement connus et s’appuyer sur les donnees de l’experience’.
See, ICC as appointing authority under the UNCITRAL Arbitration Rules, ICC publications No 409.
UNCITRAL Arbitration Rules, Article 7.
Appendix III to the Rules for the ICC Court of Arbitration, Artide 4.
Gillis Wetter, ‘Salient Features of Swedish Arbitration Clauses’, in [1983] Yearbook of the Arbitration Institute of the Stockholm Chamber of Commerce 34; Craig, Park and Paulsson, op cit, No 5.04.
In international arbitrations where three arbitrators are appointed both parties will normally appoint one of them, the third being appointed by agreement, by the institution or by the appointing authority.
Concordat suisse, Article 9.
New York Convention, Article V(2)(a).
See, Article 26 which provides: ‘In all matters not expressly provided for in these rules, the arbitrator shall make every effort to make sure that the award is enforceable at law.’
Julian DM Lew, Applicable Law in International Commercial Arbitration, New York, 1978, at 532.
For example, the rules against restraint of competition, Treaty of Rome, Articles 85 and 86.
New York Convention, Article V, 1(e) and 2(b).
New York Convention, Article V, 2(b).
Craig, Park and Paulsson, op cit, No 5.07.
417 US 506 (1974).
In ICC Case No 4219 (unpublished) the defendant had undertaken to provide structures, elements and other material for the construction of a hotel in Egypt. The plaintiff alleged that the defendant was in breach of contract and claimed damages. The defendant argued that the arbitration proceedings should be dismissed on two principal grounds: (i) that the Claimant’s conduct in connection with the procurement and performance of the contract was fatally poisoned and permeated throughout by moral corruption, extortion and criminality, and violated the ICC’s own ‘Rules of Conduct to Combat Extortion and Bribery’ governing international commercial dealings and that this corrupt conduct offends basic United State’s public policy and that the United States courts would refuse to enforce any award, and (ii) that the ICC Court of Arbitration has no jurisdiction over subject-matters involving crirninality. The allegation behind the conduct complained of was that commissions had been paid. The arbitrators (two French with an English Chairman) considered the enforceability of any final award, which ‘in any event, (was) a duty imposed upon it by Article 26 of the ICC Rules of Arbitration’. The Tribunal was satisfied that the substantive matter in dispute was subject to an arbitration clause which was valid. It went on: ‘The Tribunal is satisfied that it is in a position to make an enforceable award. It is fortified in this view by its consideration of leading cases which have been before the United States Supreme Court and other United States courts. These United States decisions reflect the international nature of international arbitration agreements and indicate and reflect the reluctance of national courts generally to set aside arbitration awards made in accordance with the contractual arrangements, agreements and obligations entered into between commercial parties. This recognition of the special considerations arising in regard to international contracts is reflected in the leading United States Supreme Court case of Fritz Sherk v Alberto-Culver Co (June 17, 1974: US No 4). The Tribunal has considered the extent to which its jurisdiction may be affected by the defendant’s allegations as to the conduct of the claimant in connection with the procurement and performance of the contract. The Tribunal is of the opinion that matters relating to criminal conduct may involve penal action elsewhere but do not affect the Tribunal’s duty to determine issues of civil liability. The unanimous decision of the Tribunal is accordingly, that it does have jurisdiction to continue to adjudicate upon the substantive matters at issue between the parties.’
Lew, op cit, at 540.
See ICC Cases Nos 2730, 3913, 3916 in 111 Clunet 914, 920, 930 (1984).
For the situation in Switzerland see Jacques-Michel Grossen, ‘Arbitrage et droit la concurrence’, in Receuil de travaux suisses sur l-arbitrage international, Zurich 1984, 38.
See, eg, B Goldman, The Complementary Roles of Judges and Arbitrators in Ensuring that International Commercial Arbitration is Effective’, Sixty Years of ICC Arbitration, Paris 1984, at 271.
See, eg, B Goldman, The Complementary Roles of Judges and Arbitrators in Ensuring that International Commercial Arbitration is Effective’, Sixty Years of ICC Arbitration, Paris 1984, at 42.
ICC Report dated 1984–04–06 ‘Arbitration and Competition’, Doc No 420/259.
Arbitrators are bound to respect public policy since they do not want to risk their awards being nullified. A notification procedure would not help since the arbitrator’s award is final, binding and the matter res judicata whatever the EEC Commission, when notified, might think about its compatability with its competition policy. The fact that an award has been notified would not stop it from becoming binding since the EEC Commission has no jurisdictional powers with regard to setting aside an arbitral award.
See, Official Journal, L 219. Commission Regulation (EEC) No 2349/84 of July 23, 1984 on the Application of Article 85(3) of the Treaty to certain categories of Patent Licensing Agreement.
Nordsee Deutsche Hochseefischerei Nordstern GmbH v Reederei Mond Hochseefischerei Nordstern AG & Co [1982] ECR 1095. Also reported in [1983] Revue de l’Arbitrage 389.
Mitsubishi Motors Corp v Soler Chrysler-Plymouth Inc 24 ILM 1064 (1985), United States Supreme Court. When sued by Mitsubishi for breach of contract (non-payment for ordered vehicles), Soler counter-claimed asserting the dealership agreement violated US and Puerto Rican statutes and the Sherman Act by dividing the markets and therefore preventing himself (Soler) from shipping to Chrysler dealers in the continental United States. The District Court ordered arbitration of Mitsubishi’s claims and Soler’s counter-claims except the Sherman Act counter-claim because arbitration of anti-trust claims arising in international commercial disputes involving products sold in the US would unacceptably weaken US anti-trust enforcement. In amicus curiae briefs the American Arbitration Association and the ICC argued that the anti-trust question is capable of being decided by arbitrators in accordance with the parties agreement. (AAA brief dated December 17, 1984, ICC brief dated December 17, 1984.) This decision was overturned by the Court of Appeals but reinstated by the Supreme Court.
The French Code of Civil Procedure, Article 1774 provides: The arbitrator shall decide the case in conformity with rules of law, unless the parties have given him the power to decide as amiable compositeur’.
Mustill and Boyd, op cit, at 605.
Ibid, at 246.
Widely used arbitral rules do not have one either; see UNCITRAL Arbitration Rules, Article 33.2, where reference to the power of amiable compositeur is made, and the Rules of the ICC Court of Arbitration, Article 13.4. Eric Loquin states in L’amiable composition en droit compare et international, Paris 1980, at 341–2: ‘Amiable composition has just been described as a clause permitting the privileged application of the lex mercatoria. This institution authorises a different approach to litigation. Arbitration by amiable composition is then a technique trying to rival the law: “it is not in the service of the law,” M David has written, “it constitutes an alternative to the law”. The arbitrator resolves the dispute using extra-legal criteria. The terminological assimilation of amiable composition with judgment in equity or ex aequo et bono reveals this reality: The duty of the amiable compositeur is no longer that of reaching the solution of the case by applying rules of law, regardless of their origin, but of re-establishing harmony in commercial dealings. This desire to heal relations is demonstrated by the parties abandoning their own subjective laws. The parties in agreeing to submit themselves to an arbitration by amiable composition, give up certain of their rights accorded under the law, in order to allow the arbitrator to provide for them the most reconciliatory solution. The stipulation of an amiable composition clause is already in itself clear and above board. The clause has a preventive function. The agreement of the parties over its choice is the sign of good faith which should permeate their future relations. It indicates that contracting parties are prepared to abandon certain of their rights to facilitate their working together. Arbitration, in this perspective, responds differently than in a classic contentious procedure. It is characterised by a weakening of the juridical character of litigation and by the predominance of its technical, psychological and commercial aspects. The amiable composition clause gives to the arbitrator the means of reducing the influence of the law over the case in favour of other factors and allows him to extract from the facts what, in a healthy commercial environment, merits different treatment from the application of strict rules.’ (Editor’s translation.) In one ICC case the arbitrator stated: ‘Equity consists of the ability to deviate from and modify the rigour of summum ius, by taking into account elements, circumstances, and particular situations which are not brought into consideration which do not have any influence according to the law. This does not stop the arbitrator being able to apply the strict law when that coincides in the actual rights of the case. In effect, positive law and equity are two juridical sets of rules which coexist and sometimes coincide, the latter being the greater and includes the former.’ (Editor’s translation.)
Craig, Park and Paulsson, op cit, No 18.02.
Sigvard Jarvin, ‘Commercial Arbitration in East-West Relations: The Experience of the ICC Arbitration Court with Regard to Choice of Law, Number of Arbitrators and Seat of Arbitration’, 10 International Trade, Law and Practice, 117 (1984).
Comments to ICC Case No 3267, 107 Clunet 969 (1980), by Derains.
ICC Case No 3938, 111 Clunet 926 (1984).
ICC Case No 4206, published in Affarsratt, No 3, 1984. Article 13.4 and 13.5 of the ICC Rules stipulates: The arbitrator shall assume the powers of an amiable compositeur if the parties are agreed to give him such powers. In all cases the arbitrator shall take account of the provisions of the Contract and the relevant trade usages.’
Comments to ICC Case No 3327, in 109 Clunet 976 (1982), by Derains.
ICC Case No 4095 (unpublished).
See ICC Case No 3938, 111 Clunet 926 (1984).
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 1987 Springer Science+Business Media Dordrecht
About this chapter
Cite this chapter
Jarvin, S. (1987). The sources and limits of the arbitrator’s powers. In: Lew, J.D.M. (eds) Contemporary Problems in International Arbitration. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-1156-2_7
Download citation
DOI: https://doi.org/10.1007/978-94-017-1156-2_7
Publisher Name: Springer, Dordrecht
Print ISBN: 978-0-89838-926-5
Online ISBN: 978-94-017-1156-2
eBook Packages: Springer Book Archive