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ARBITRATION IN THREE DIMENSIONS

Published online by Cambridge University Press:  12 May 2011

Jan Paulsson
Affiliation:
Centennial Professor, London School of Economics; Michael Klein Distinguished Chair, University of Miami. The theme was initially given expression in a public lecture at the London School of Economics and Political Science on 24 November 2009.

Abstract

The law applicable to arbitration is not the law applicable in arbitration. The latter determines arbitrators' decisions. The former refers to the source of their authority: the legal order that governs arbitration. According to the territorialist thesis, an arbitration can have no foundation other than that of the legal order of the particular State in which the arbitration takes place. This outdated conception is disproved by the simple factual observation that a plurality of legal orders may give effect to arbitration. Some French scholars promote the notion of an autonomous arbitral order. Inasmuch as they ultimately seek to establish this order by positing its recognition by the very State orders from which they claim autonomy, their idea is circular and in effect no more than a dressed-up variant of ordinary horizontal pluralism. But the model of horizontal pluralism fails to account for important orderings of arbitral activity. Arbitration in modern society is accurately perceived as a complex, three-dimensional form of pluralism, in which legal orders (i) are not exclusively those of States and (ii) frequently overlap.

Type
Article
Copyright
Copyright © 2011 British Institute of International and Comparative Law

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References

1 Endless metaphorical possibilities for visualizing legal pluralism are suggested in a section called ‘Mapping Law’ of William Twining's General Jurisprudence (CUP, Cambridge, 2009) 67–68. He evokes the difficulty of conceiving the continually changing Bengal archipelago, where sandbanks wax and wane, and the fluid water itself has many dimensions, such as depths and shallows, currents and rivulets; ‘navigation requires considerable local knowledge and of changing conditions so that visitors would normally rely on local boat people ….’ (68). Other scholars speak of ‘networks’ or ‘levels’, eg F Ost and M Van de Kerchove, De la pyramide au réseau: vers un nouveau mode de production de droit? (Facultés Universitaire Saint-Louis, Brussels, 2000); and M Goodale and S Merry, The Practice of Human Rights: Tracking Law Between the Global and the Local (CUP, Cambridge, 2007) 17–18. Metaphors are tricky; comparaison n'est pas raison. ‘Levels’ may wrongly suggest hierarchy; ‘networks’ may wrongly suggest design. The metaphorical enterprise will not be pursued here beyond the simple refutation of the vision of law as a horizontal (two-dimensional) patchwork.

2 In P Sanders (ed), International Arbitration: Liber Amicorum for Martin Domke (Martinus Nijhoff, The Hague, 1967) 159.

3 ibid 161.

4 ibid 167.

5 See eg J-F Poudret and S Besson, Droit comparé de l'arbitrage international (2002) published in English as Comparative Law of International Arbitration (Sweet & Maxwell, London 2007), a book which in many ways be deemed the Francophone antidote to the French doctrine as presented by E Gaillard, Aspects philosophiques du droit de l'arbitrage international (2008); and Goode, R, ‘The Role of the Lex Loci Arbitri in International Commercial Arbitration’ [2001] Arb Int 19CrossRefGoogle Scholar.

6 Art 190(2), 1995 Private International Law Act.

7 Arts III and IV, 330 UNTS No. 4739.

8 Park, WW, ‘The Lex Loci Arbitri and International Commercial Arbitration’ (1983), 32 ICLQ 21CrossRefGoogle Scholar and the references therein.

9 Paulsson, J, ‘Delocalisation of International Commercial Arbitration: When and Where It Matters’ (1983) 32 ICLQ 53CrossRefGoogle Scholar and the references therein.

10 Cass. civ. Ire (23 March 1994) Société Hilmarton Ltd v Société Omnium de traitement et de valorisation (OTV) [1994] JDI 701

11 Termorio SA v. Electralanta SA ESP, 487 F. 3d 928 (D.C. Cir. 2007).

12 See Paulsson, J, ‘Arbitration Unbound’ (1981) 30 ICLQ 358CrossRefGoogle Scholar.

13 MO Hudson, International Tribunals Past and Future (Questia, 1944).

14 For a prominent example among a multitude, see US v Salvador (El Triunfo), award of 8 May 1902, XV UNRIAA 467.

15 92 LNTS 302 (1929); see AJ van den Berg, The New York Convention of 1958, 6–7, 113–118 (1981).

16 Van den Berg ibid 7.

17 See (n 7).

18 An English translation appeared in 2010, entitled Philosophical Aspects of the Law of English Arbitration. (Martinus Nijhoff, Leiden, 2010). The present article refers to the original text.

19 Gaillard (n 5) 58–60.

20 International Chamber of Commerce Rules of Arbitration, Art. 35 (1999); London Court of International Arbitration Rules, Art. 32.2 (1999).

21 Gaillard (n 5) 60 ff.

22 ibid 84.

23 ibid 91.

24 ibid 77.

25 ibid.

26 For example, see Cass. civ. Ire (23 March 1994) Société Hilmarton Ltd. v. Société Omnium de traitement et de valorisation (OTV) [1994] JDI 701, Cour d'appel of Paris (14 January 1997) République Arabe d'Egypte v. Société Chromalloy Aero Services, [1998] JDI 750, Cour d'appel of Paris (10 June 2004) Société Bargues Agro Industries v. Société Young Pecan Company, [2006] Rev arb 154.

27 Cass. civ. Ire (29 June 2007) PT Putrabali Adyamulia v Rena Holding et al [2007] Rev arb 507.

28 ibid 514, quoted in Gaillard, op. cit. 96.

29 Including Bruno Oppetit, Pierre Mayer, Henri Motulsky, and Thomas Clay.

30 Dallah Real Estate and Tourism Holding Company v The Ministry of Religious Affairs, Government of Pakistan [2010] UKSC 46; Dallah Real Estate and Tourism Holding Company v The Ministry of Religious Affairs, Government of Pakistan [2009] EWCA Civ 755; Dallah Real Estate and Tourism Holding Company v The Ministry of Religious Affairs, Government of Pakistan [2008] EWHC 1901 (Comm).

31 All aspects of the ICC award referred to herein appear in the High Court judgment cited in note 30.

32 This rather un-English formulation was produced by a tribunal which included Lord Mustill.

33 See (n 30) 30.

34 See (n 30).

35 s 103(2)(b).

36 Dallah Real Estate & Tourism Holding Company v Government of Pakistan [2009] EWCA Cir 755; [2009] 30 EG 67 (CS), para 75.

37 ibid 75.

38 Poudret and Besson (n 5) para 180.

39 [2010] UKSC 46, para 16.

40 Poudret and Besson (n 5) para 181.

41 [2010] UKSC 46, para 115.

42 For a recapitulation in English of France's unique contribution as it could be assessed already two decades ago, see von Mehren, A, ‘International Commercial Arbitration: the Contribution of by French Jurisprudence’ (1986) 46 Louisiana L Rev 1045Google Scholar.

43 The book was updated in 1945 to respond to critiques. The references here, due to my linguistic limitations, are to the second edition of the French translation: by L François and P Gothot, L'ordre juridique (Dalloz, Paris, 2002).

44 There is a vital difference between enforcing a leader's command ‘because he wants your coat’ and ‘because we depend on discipline’. The former is an arbitrary and personal exercise of power; the latter has to do with the group's self-regard as an enduring normative ordering, however primitive (in this case little more than a rule of recognition of authority). Max Weber was saying as much when he distinguished between enforcement of conduct ‘because of considerations of expediency or the other material circumstances’ and enforcement of ‘conformity to a norm as such, i.e. because of its being formally accepted as binding’, on pp 12–13 of the familiar Shils/Rheinstein translation of portions of the 2nd edn of Wirtschaft und Gesellschaft (1925), published in 1954 by Harvard University Press under the title Max Weber on Law in Economy and Society (Max Rheinstein, ed).

45 François and Gothot (n 43) 138.

46 HLA Hart, The Concept of Law (2nd edn, Clarendon, Oxford, 1994). 150, 152, 153. Hilary Mantel imagines that Thomas Cromwell said it better in an interior monologue, as chief minister of Henry VIII drafting the Act of Restraint of Appeals in 1533 (by which Rome's legal dominion over England was severed): ‘When you are writing laws you are testing words to find their utmost power. Like spells, they have to make things happen in the real world, and like spells, they only work if people believe in them.’ H Mantel, Wolf Hall (Fourth Estate, London, 2009) 574.

47 Hart ibid 110 (emphasis added).

48 Preface to the second French translation of L'ordre juridique (p 7).

49 ibid 9. Le plus étrange n'est-il pas finalement cet acharnement à exclure jusqu'à la moindre parcelle de réalité vivante de la définition d'un phénomène qui caractérise, malgré tout, la vie de l'homme en société?

50 J Hellman and D Kaufmann (2003), available at zunia.org/uploads/media/knowledge/0308005.pdf.

51 D Kaufmann, ‘Misrule of Law: Does the Evidence Challenge Conventions in Judiciary and Legal Reforms? (2001), available at http://siteresources.worldbank.org/INTWBIGOVANTCOR/Resources/misruleoflaw.pdf.

52 R Rajan, (2004) 40 Finance and Development (quarterly publication of the IMF), 57.

53 L'ordre juridique (n 43) 15.

54 See eg G Teuber, ‘global Bukowina: Legal Pluralism in World Society’ in G Teuber, (ed), Global Law Without a State (Dartmouth, Hanover, 1997); Cooter, R, ‘Decentralized Law for a Complex Economy: The Structural Approach in Adjudicating the New Law Merchant’ (1996)144 U Pa L Rev 1643CrossRefGoogle Scholar; Drahozal, CR, ‘Private Ordering and International Commercial Arbitration’ (2009) 113 Penn St L Rev 1031Google Scholar.

55 ICC Rules of Conciliation and Arbitration, Brochure No 2, page 2, quoted in GL Ridgeway, Merchants of Peace (Columbia University Press, New York, 1938) 322 (emphasis added).

56 For an example of unmatched hostility, see Kronstein, H, ‘Business Arbitration—Instrument of Private Government’ (1944) 54 Yale L J 36CrossRefGoogle Scholar.

57 UN A/40/17, annex 1.

58 See eg, M Mustill and S Boyd, Commercial Arbitration (3rd edn, Butterworths, London, 2008).

59 Internet Corporation for Assigned Names and Numbers, http://www.icann.org website, page ‘Documents’.

60 ibid, pages ‘Articles of Incorporation’ and ‘Bylaws’.

61 Froomkin, A Michael, ‘Form and Substance in Cyberspace’ [2002] Small & Emerging Business Law 96Google Scholar.

62 See the ICANN/Government Advisory Committee website: http://www.icann.org/about-gac/.

63 Bylaws IV.3; Articles, Art 4.

64 The mechanism is described in the Declaration dated 19 February 2010 in the matter of ICM v ICANN, the outcome of the first Independent Review Process, posted at http://www.icann.org/en/irp/icm-v-icann.htm.

65 See IS Blackshaw et al, (eds), The Court of Arbitration for Sport 1984–2004 (CUP, Cambridge, 2006).

66 CAS awards are published (in most cases) and available on the archival list of jurisprudence.tas-cas.org/sites.

67 Club Atlético Mineiro et al v Club Sinergía Deportiva (Tigres) Award (2 May 2005), ibid.

68 On more than one occasion Brazilian athletes and teams have benefited from the international regime in circumstances where it is doubtful that national proceedings could have been effective, for example the award by which the Ittihad Club of Saudi Arabia was ordered to pay nearly US$2.8 million to the Brazilian club Vitória de Bahia (7 August 2007; application for annulment rejected by the Swiss Federal Tribunal, 4 April 2008, 4A_528 /2007). The international system would doubtless break down in the absence of reciprocal benefits.

69 19 December 2006.

70 Both men taught at the University of Vienna, but Ehrlich's home was in the Austro-Hungarian province of Bukovina, where he was struck by the co-existence of Austrian law and resistant local normative traditions.

71 Ehrlich's rationale is reflected in the following passage, which is resonant of Romano's thinking:

The law does not consist of legal propositions, but of legal institutions. In order to be able to state the sources of the law one must be able to tell how the state, the Church, the commune, the family, the contract, the inheritance, came into being, how they change and develop.

Fundamental Principles of the Sociology of Law 84 (1913; WL.Moll trans 1936) 83.

72 M Weber, Law in Economy and Society M Rheinstein (ed), (Harvard University Press, Cambridge, 1954) 16–17.

73 Apart from L'ordinamento giuridico, his two main works concerned administrative and constitutional law. His career was essentially that of a law professor, but one of sufficient eminence to have led to a Senate seat and the presidency of the Council of State.

74 See Mayer (n 47) 5.

75 A basic problem with Kelsen was put this way by J Stone, in The Province and Function of Law (Stevens, London, 1947) 108: ‘It is difficult to see what the pure theory of law can contribute to a system which it assumes to be law, but which it derives from a basic law which it cannot find.’ Harald Laski was blunter when he observed that Kelsen's ‘pure science of law’ is ‘an exercise in logic and not in life’, H Laski, A Grammar of Politics (3rd edn, Allen and Unwin, London, 1958) vi.

76 B de Sousa Santos, Toward a New Common Sense: Law, Science and Politics in Paradigmatic Transition (London, Routledge, 1995) 429.

77 Roberts, S, ‘After Government? On Representing Law Without the State’ (2005) 68 Modern Law ReviewCrossRefGoogle Scholar.

78 ibid 24.

79 N MacCormick, Institution of Law (OUP, Oxford, 2007) chs 1 and 2. (MacCormick nowhere mentions Romano.)

80 Coincidentally, the queue is precisely one of the phenomena—along with ‘looking, staring and glaring’—subjected to sustained analysis by Michael Reisman in Law in Brief Encounters (Yale University Press, New Haven, 1999). Reisman took the matter of informal norms as far as one could, revealing it, one might say, as a form of sophisticated and instructive entertainment which could be replicated endlessly following—or refining—his model. But there are diminishing returns; good entertainment knows when to stop.