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PART I DEFINITION AND SOURCES
CHAPTER I DEFINITION OF INTERNATIONAL COMMERCIAL ARBITRATION
(6 to 126)
Section I. - Definition of Arbitration (7 to 57) 9 §1. - The Arbitrators' Judicial Role (12 to 43) 12
A. - Arbitrators' Decisions Are Binding (15 to 29) 12 1° Arbitration, Conciliation and Mediation (16 to 21) 12 2° Arbitration and the Role ofthe Engineer
in FIDIC Contracts (22 to 24) 17 3° Arbitration cmd Expert Proceedings (25 to 29) 18
B. - Arbitrators' Decisions Resolve Disputes (30 to 43) 22 1° Amiable Composition (31) 23 2° Quality Arbitrations (32) 23 3° The Completion or Adaptation ofContracts (33 to 43) 24
a) In the Absence of a Hardship Clause (35 to 37) 25 b) Where the Contract Contains a Hardship Clause (38 to 43) 26
§2. - The Contractual Basis of Arbitration (44 to 57) 29 A. - Party Autonomy in International Arbitration (46 to 52) . . . . . . . . . . . . .. 3 I
1° The Choice ofa National Law to Govern the Procedure or the Merits ofa Dispute (47 to 50) 31
2° The Choice ofSubstantive Transnational Rules to Govern the Procedure or the Merits ofa Dispute (51 to 52) 32
B. - The Institutionalization of International Commercial Arbitration (53 to 57) 33
Section II. - The Meaning of "Commercial" (58 to 77) 35 §1. - Civil and Commercial Arbitration (60 to 68) 36
vi TABLE OF CONTENTS
A. - The UNCITRAL Model Law (61 to 63) 36 B. - Modem Legislation (64 to 65) 37 C. - International Conventions on Arbitration (66 to 68) 38
§2. - Public Law Arbitration and Commercial Arbitration (69 to 77) 40 A. - The Arbitration of State Contracts (70 to 74) 41 B. - Public International Law Arbitrations (75 to 77) 43
Section III. - The Meaning of "International" (78 to 126) 45 §1. - The International Nature of Arbitration and the Connection
of an Arbitration to a Specific Legal Order (81 to 97) . . . . . . . . . . . . . . . . . . . 45 A. - National Arbitration and Foreign Arbitration (83 to 94) 46 B. - National Arbitration and A-national Arbitration (95 to 97) 50
§2. - The International Nature of Arbitration and the Application of Specific Substantive Rules (98 to 126) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 51 A. - Treaty and Comparative Law (101 to 106) . . . . . . . . . . . . . . . . . . . . . . .. 51 B. - French Law (107 to 126) 55
1° Article 1492 ofthe New Code ofCivil Procedure (114 to 11 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
2° The Application ofArticle 1492 by the French Courts (119 to 126) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 58
CHAPTER II SOURCES OF INTERNATIONAL COMMERCIAL ARBITRATION
(127 to 384)
Section I. - Public Sources (129 to 302) 63 §1. - National Sources (130 to 189) 63
A. - French Law (131 to 151) 63 1° The 1980-1981 Reforms (136 to 147) 64 2° Developments Since the 1981 Reform (148 to 151) 68
B. - Other Legal Systems (152 to 189) 70 1° Analysis (155 to 174-6) 71
"a) Europe (156 to 167) 71 i) United Kingdom (157) 71 ii) Belgium (158) 73 iii) The Netherlands (159) 74 iv) Germany (160) 75 v) Portugal (161) 76 vi) Switzerland (162) 76 vii) Spain (163) 78 viii) Italy (164) 78 ix) Sweden (164-1) 79 x) Other countries of the European Union (165) 80 xi) Central and East European countries (166) 81
TABLE OF CONTENTS vii
xii) States of the former USSR (167) 83 b) Other Continents (168 to 174-6) 83
i) United States of America (169) 83 ii) Canada (170) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 85 iii) Latin America (171 to 172) 87 iv) Africa (173) 8~
v) The Middle East (173-1) 91 vi) Asia and the Pacific Rim (174 to 174-6) 92
2° Trends (175 to 189) 96 a) Diversity of Legislative Techniques (176 to 185) 96 b) Convergence of Legislative Objectives (186 to 189) . . . . . . . . .. 102
§2. - International Sources (190 to 302) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 103 A. - Optional Instruments (193 to 205) ~................... 104
1° Arbitration Rules (195 to 202) 104 2° The UNCITRAL Model Law (203 to 205) . . . . . . . . . . . . . . . . . . . .. 107
B. - Bilateral Agreements (206 to 238) 109 1° Bilateral Agreements Concerning Arbitration
Incidentally (208 to 235) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 110 a) Bilateral Treaties Governing Economic Relations
(209 to 215) ~ . . . . . . . . . . . . .. 110 b) Conventions on Judicial Assistance (216 to 235) 112
2° Conventions Primarily Concerning Arbitration (236 to 238) 114
C. - Multilateral Conventions (239 to 302) 116 1° The Early Conventions (240 to 246) 120
a) The Geneva Protocol of September 24, 1923 (241 to 243) 120
b) The Geneva Convention of September 26, 1927 (244 to 246) 121
2° The 1958 New York Convention (247 to 272) 122 a) Principal Characteristics (250 to 254) 124 b) The Scope of the Convention (255 to 272) 125
3° Regional Conventions (273 to 300) 138 a) The European Convention of April 21, 1961 (274 to 287) 138 b) The Paris Agreement of December 17,1962
(288 to 289) 143 c) The Strasbourg Convention of January 20, 1966
(290 to 291) 144 d) The Moscow Convention of May 26, 1972
(292 to 293) 145 e) Inter-American Conventions
(294 to 296) 146 t) Inter-Arab Conventions
(297 to 299) 148 g) The OHADA Treaty of October 17,1993 (300) 149
viii TABLE OF CONTENTS
4° The 1965 Washington Convention (301 to 302) 150
Section II. - Private Sources (303 to 384) 151 §1. - Model Arbitration Agreements (307 to 320) 153
A. - Model Arbitration Agreements Prepared by Individual Institutions (308 to 316) . . . . . . . . . . . . . . . . . . . . . . . . .. 153
B. - Inter-Institutional Agreements (317 to 320) 156 §2. - Arbitration Rules (321 to 370) 157
A. - The Diversity of Arbitration Rules (322 to 356) 158 1° Rules Prepared by Arbitral Institutions (323 to 350) 158
a) Classification of Arbitral Institutions (330 to 348) 160 b) The International Court of Arbitration of the
International Chamber of Commerce (349 to 350) 174 2° Rules ofOther Organizations (351 to 356) 177
a) Rules of Evidence (352 to 353) 177 b) Rules Governing Arbitrators' Ethics (354 to 356) 178
B. - The Authority of Private Arbitration Rules (357 to 370) 179 1° Basis ofthe Authority ofArbitration Rules (358 to 363) 179
a) The Contractual Value of Arbitration Rules (359 to 361) 179 b) Arbitration Rules as Usages or Principles of
International Arbitration (362 to 363) 180 2° The Status ofPrivate Arbitration Rules in International
Arbitration Law (364 to 370) 181 a) Arbitration Rules Take Priority
over Other Sources (365 to 368) 181 b) Arbitration Rules Are Generally Sufficient
to Regulate the Arbitration (369 to 370) 183 §3. - Arbitral Awards (371 to 384) " 183
A. - Autonomy of Arbitral Awards (375 to 378) 184 B. - Consistency of Arbitral Case Law (379 to 382) 187 C. - Publication of Arbitral Awards (383 to 384) 188
PART II THE ARBITRATION AGREEMENT
CHAPTER I THE AUTONOMY OF THE ARBITRATION AGREEMENT
(388 to 451)
Section I. - Autonomy of the Arbitration Agreement from the Main Contract (389 to 419) 198
§1.-Nature of the Rule (391 to 407) 198 A. - Recognition of the Principle in Leading Arbitration Rules
(393 to 397) 199
TABLE OF CONTENTS IX
B. - Recognition of the Principle in Arbitration Statutes (398 to 405) 202
C. - Recognition of the Principle in International Arbitral Case Law (406) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
D. - Recognition of the Principle by International Courts (406-1 to 407) : . . . . . . . . . . . . . . . . 209
§2. - Consequences of the Autonomy of the Arbitration Agreement /' (408t0419) 209 A. - Direct Consequences of the Principle
of Autonomy (409 to 414) 209 1° The Status ofthe Main Contract Does Not Affect
the Arbitration Agreement (410 to 411) 210 2° The Arbitration Agreement May Be Governed by a Law
Differentfrom that Governing the Main Contract (412 to 414) .... 212 B. - Indirect Consequences of the Principle
of Autonomy (415 to 419) 213 1° The Principle ofA utonomy and
"Competence-Competence" (416 to 417) 213 2° The Principle ofAutonomy, the Principle of Validity and the
Rejection ofthe Choice ofLaw Method (418 to 419) 214
Section II. - Autonomy of the Arbitration Agreement from all National Laws (420 to 451) 218
§1. - The Choice of Law Method (422 to 434) 218 A. - Legal Categories (423 to 425) 219
1° The Arbitration Agreement and Procedure (424) . . . . . . . . . . . . . . . 220 2° The Arbitration Agreement and the Main Contract (425) 222
B. - Connecting Factors (426 to 434) 224 1° The Place Where the Arbitration Agreement Was
Concluded (427) 224 2° Factors Specific to Certain Arbitration
Agreements (428) 225 3° The Seat ofArbitration (429 to 434) 225
§2. - The Substantive Rules Method (435 to 445) 228 A. - French Case Law Establishing the Substantive Rules
Method (436 to 437) 228 B. - Criticism of the Substantive Rules Method (438) 230 C. - Scope and Merit of the Substantive Rules Method
(439 to 445) 231 1° Application ofthe Substantive Rules Method by Courts
Reviewing Arbitral Awards (442) 232 2° Application ofthe Substantive Rules Method
by Arbitrators (443 to 445) 234 §3. - Combining In Favorem Validitatis Choice of Law Rules
and Substantive Rules (446 to 451) 236
x TABLE OF CONTENTS
A. - The Swiss Model (447 to 448) 237 B. - The Position in France (449 to 451) 238
CHAPTER II FORMATION OF THE ARBITRATION AGREEMENT
(452 to 623)
Section I. - Capacity and Power (453 to 470) 242 §1. - The Choice of Law Method (455 to 462) ~ 243
A. - The Law Governing the Capacity to Enter into an Agreement (456 to 460) 243 1° Natural Persons (457 to 458) 243 2° Juridical Persons (459 to 460) 245
B. - The Law Governing Powers (461 to 462) 246 §2. - The Substantive Rules Method (463 to 470) 247
A. - The Exclusive Use of Substantive Rules (464 to 469) 248 1° Capacity (465 to 467) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248 2° Powers (468 to 469) : 250
B. - The Corrective Use of Substantive Rules (470) 252
Section II. - Consent (471 to 531) 253 Subsection 1. - The Existence of Consent (472 to 524) 254
§ 1. - Interpreting the Parties' Consent (473 to 482) 254 A. - The Principle of Interpretation in Good Faith (477) 257 B. - The Principle of Effective Interpretation (478) 258 C. - The Principle of Interpretation Contra Proferentem (479) 258 D. - Rejection of the Principle of Strict Interpretation (480) 260 E. - Rejection of the Principle of Interpretation
In Favorem Validitatis (481 to 482) 261 §2. - The Degree of Certainty Required of the Parties' Consent
(483 to 496) 262 A. - Pathological Clauses (484 to 486) 262
1° Selecting an Institution Which Does Not Exist or Which Is Inadequately Defined (485) 264
2° "Blank Clauses" (486) 266 B. - Combined Clauses (487 to 490) " 268
1° Option to Choose Between Arbitration and the Courts (488) 268
2° The Courts as an Appeal Jurisdiction (489) 269 3° Conflict Between Arbitration and the Courts (490) 270
C. - Arbitration Clauses Incorporated by Reference (491 to 496) 272
TABLE OF CONTENTS Xl
1° Arbitration Clauses Incorporated by Reference and the Autonomy ofthe Arbitration Agreement (492) 272
2° Arbitration Clauses Incorporated by Reference and Requirements ofForm (493 to 495-1) 272
3° Arbitration Clauses Incorporated by Reference and the Interpretation ofthe Consent ofthe Parties (496) 278
§3. - Scope of the Parties' Consent (497 to 524) 280 A. - Which Parties Are Bound by the Consent
to Arbitrate? (498 to 511) : 280 1° Groups ofCompanies (500 to 506) 282
a) Arbitral Case Law (501) 284 b) French Case Law (502 to 506) 286
2° States and State-Owned Entities (507 to 511) 290 a) Extension of an Arbitration Agreement Signed
by a State-Owned Entity to the State (508 to 510) 292 b) Extension of an Arbitration Agreement Signed
by a State to a State-Owned Entity (511) . . . . . . . . . . . . . . . . . . . 296 B. - What Subject-Matter Is Covered by the Parties' Consent?
(512 to 524) 297 1° Diversity ofDisputes Arisingfrom a Single Contract
(513 to 517) 298 a) Omission of Disputes Concerning the Validity or
Interpretation of the Contract (514 to 516) 299 b) Submission to Arbitration of Disputes Concerning
only Interpretation (517) 300 2° Groups ofContracts (518 to 523) 301
a) Contracts with the Same Purpose (519 to 522) 301 b) Successive Contracts Between the Same Parties (523) 305
3° Extra-Contractual Disputes (524) 306
Subsection II. - Validity of the Parties' Consent (525 to 531) 307 §1. - Duress (529) _ 309 §2. - Misrepresentation (530) 310 §3. - Mistake (531) 310
Section III. - Arbitrability (532 to 589-1) 312 §1. - Subjective Arbitrability (534 to 558) 313
A. - The Choice of Law Method (536 to 540) 315 B. - Substantive Rules (541 to 558) 318
1° French Law (542 to 546) 318 2° General Principles ofInternational
Arbitration (547 to 558) 322 a) International Conventions (548) 322 b) Comparative Law (549) 323 c) International Arbitral Case Law (550 to 556) 325
Xll TABLE OF CONTENTS
d) Resolution of the Institute of International Law (557 to 558) 329
§2. - Objective Arbitrability (559 to 589-1) 330 A. - French Law (560 to 579) 330
1° Methodology (561 to 570) 331 a) Scope of Objective Non-Arbitrability (562 to 568) 331 b) Establishing Non-Arbitrability (569) 338
2° Specific Applications (571 to 579) 339 a) Matters Which Do Not Involve
an Economic Interest (572) 340 b) Inalienable Rights (573) 340 b) Other Sensitive Areas (574 to 579) 342
B. - International Arbitral Case Law (580 to 589-1) '1'48 1° Antitrust Law (581 to 582) 349 2° intellectual Property (583) 352 3° Corruption (584 to 586) 353 4° Bankruptcy Proceedings (587) 355 5° Exclusive Sales Concessions (588) 356 6° Embargoes (589) 358 7° Taxation Disputes (589-1) 359
Section IV. - Form and Proof (590 to 623) 360 §1. - French Law (592 to 610) 361
A. - Formal Validity and Autonomy of the Arbitration Agreement (593 to 598) 361 1° The Cassia Decision (594 to 595) 361 2° The Prevailing Position in French Law (596 to 598) 363
B. - Rules Governing the Formal Validity of an Arbitration Agreement (599 to 610) 364 JO The Choice ofLaw Method (600 to 604) 365 2° Substantive Rules (605 to 610) 369
§2. - International Conventions (611 to 623) 373 A. - The New York Convention (612 to 620) 373
1° The Relationship Between the Requirements ofForm ofthe New York Convention and Those of National Arbitration Laws (613 to 615) 373 a) Can National Laws Be More Liberal than the
New York Convention? (614) 374 b) In Order to Rely on the New York Convention, Is It
Necessary to Comply with All Its Terms? (615) 375 2° Provisions ofthe New York Convention Regarding the Form
ofthe Arbitration Agreement (616 to 620) 376 B. - The 1961 European Convention (621 to 623) 378
TABLE OF CONTENTS
(624 to 688)
Xlll
Section I. - Positive Effects of the Arbitration Agreement (625 to 660) 381 § 1. - The Parties' Obligation to Submit Disputes Covered by the
Arbitration Agreement to Arbitration (626 to 646) 381 A. - The Principle that Parties Are Obliged to Submit Disputes Covered
by Their Arbitration Agreement to Arbitration (627 to 630) 382 B. - The Obligation to Submit to Arbitration Disputes
Covered by the Arbitration Agreement Is Capable of Specific Performance (631 to 634) . . . . . . . . . . . . . . . . . . . . . . . . . . . 384
C. - The Obligation to Submit Disputes Covered by the Arbitration Agreement to Arbitration Prevails over Jurisdictional Privileges and Immunities (635 to 646) 387 1° Jurisdictional Privileges (636 to 640) 387 2° Jurisdictional Immunities (641 to 646) 390
§2. - The Arbitral Tribunal Has Jurisdiction to Resolve Disputes Covered by the Arbitration Agreement (647 to 660) 393 A. - The Extent of the Jurisdiction of
the Arbitral Tribunal (648 to 649) 394 B. - The Arbitral Tribunal's Jurisdiction to Rule on Its Own
Jurisdiction ("Competence-Competence") (650 to 660) 395 1° Recognition o/the Principle (653 to 656) 397 2° Basis o/the Principle (657 to 658) 399 3° Meaning o/the Principle (659 to 660) 400
Section II. - Negative Effects of the Arbitration Agreement (661 to 688) 402 §1. - The Principle that the Courts Have No Jurisdiction (662 to 667) 402
A. - International Conventions (663) 402 B. - Arbitration Legislation (664 to 667) 403
§2. - Implementation of the Principle that the Courts Have No Jurisdiction (668 to 682) 405 A. - The Courts Cannot Declare Ex Officio that They Have
No Jurisdiction as a Result of the Existence of an Arbitration Agreement (669 to 670) 405
B. - When Can the Courts Review the Existence and Validity of the Arbitration Agreement? (671 to 682) . . . . . . . . . . . . . . . . . . . . . . 406 1° The Position Adopted in Comparative Law (672 to 676) 407 2° Policy Considerations (677 to 682) 410
§3. - The Limits of the Courts' Lack of Jurisdiction (683 to 688) 413 A. - The Constitution of the Arbitral Tribunal (684) 413 B. - Provisional and Conservatory Measures (685) 414 C. - Review of the Award by the Courts (686 to 688) 414
,- I
ARBITRATION AGREEMENT (689 to 741)
Section I. - Assignment of the Arbitration Agreement (690 to 725) 417 §1. - The Choice of Law Method (693 to 703) 419
A. - The Law Governing Voluntary Assignments (694 to 700) 419 1° Determining the Applicable Law (695 to 697) 419
a) Contractual Assignment of the Arbitration Agreement (696) 419
b) Other Forms of Voluntary Assignment of the Arbitration Agreement (697) 421
2° Scope ofthe Applicable Law (698 to 700) 421 a) The Law Governing Formalities Aimed at Ensuring
Enforceability Against the Initial Co-Contractor (699) 422 b) International Mandatory Rules (700) .'. 422
B. - The Law Governing Statutory Assignments (701 to 703) 422 1° Determining the Applicable Law (702) 423 2° Scope ofthe Applicable Law (703) 423
§2. - Substantive Rules (704 to 725) 424 A. - Conditions Governing the Assignment of the
Arbitration Agreement (705 to 722) 424 1° Enforceability Against the Assignee ofthe Assignment
ofan Arbitration Agreement (706 to 715) 425 a) Voluntary Assignments (707 to 712) .' 425
1) The Assignee Must Consent to the Assignment (708 to 710) 425
2) Acceptance of the Assignment of the Main Contract Raises a Presumption of Acceptance of the Arbitration Agreement (711 to 712) 427
b) Other Means of Assigning the Arbitration Agreement (713 to 715) 429 1) Statutory Subrogation (714) 429 2) Universal Succession (715) 430
2° Conditions Governing the Enforceability ofthe Assignment ofthe Arbitration Agreement Against the Initial Co-Contractor (716 to 722) 430 a) The Presumption that the Initial Co-Contractor Accepts the
Assignability of the Arbitration Agreement (717 to 719) 431 1) Contractual Assignments (718) 431 2) Assignment by Subrogation (719) 432
b) Situations Where Express Acceptance by the Initial Co-Contractor Is Required for the Assignment of the Arbitration Agreement (720 to 722) 433
TABLE OF CONTENTS xv
1) lntuitus Personae Inferred from the Facts (721) 434 2) Intuitus Personae Expressly Provided
for by Contract (722) 434 B. - Consequences of the Assignment of the
Arbitration Agreement (723 to 725) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434 1° The Obligation to Submit Disputes to Arbitration (724) 435 2° The Effect ofan Assignment ofthe Arbitration Agreement
on the Composition ofthe Arbitral Tribunal (725) 436
Section II. - Expiration of the Arbitration Agreement (726 to 741) 437 §1. - Expiration of the Arbitration Agreement as a Result of the
Expiration of the Main Agreement? (727 to 733) 437 A. - Performance (728) 437 B. - Statute of Limitations (729) : 438 C. - Novation (730) 438 D. - Settlement (731) 439 E. - Rescission (732) 439 F. - Nullity (733) 440
§2. - Causes of Expiration Specific to the Arbitration . Agreement (734 to 741) 440 A. - Events Extinguishing the Arbitration Agreement (735 to 737) 440
1° Waiver (736) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441 2° Avoidance (737) 443
B. - Events Which Extinguish Submission Agreements but Do Not Affect Arbitration Clauses (738 to 741) 443 1° The Making ofa Final Award (738-1) 443 2° The Defaultofan Arbitrator (739) 444 3° Expiration ofthe Deadline for the Arbitrators' Award (740) 445 4° The Setting Aside ofan Award (741) 445
PART III THE ARBITRAL TRIBUNAL
CHAPTER I THE CONSTITUTION OF THE ARBITRAL TRIBUNAL
(745 to 1008)
Section I. - National and International Rules (748 to 950) 452 §1. - The Appointment of the Arbitrators (750 to 793) 452
A. - The Primacy of the Parties' Agreement (752 to 793) 452 1° The Meaning ofthe Primacy ofthe Parties' Agreement
(753 to 774) 453 a) Identity of the Arbitrators (761 to 769) 456 b) Number of Arbitrators (770 to 771) 459
XVI TABLE OF CONTENTS
c) Method of Appointing Arbitrators (772 to 774) 460 2° Consequences ofthe Primacy ofthe Parties' Agreement
(775 to 782) 461 3° Limits ofthe Primacy ofthe Parties' Agreement
(783 to 793) 464 B. - The Subsidiary Role of National Laws (794 to 807) 470
1° French Law (795 to 799) 470 2° Other Legal Systems and International Conventions
(800 to 807) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 473 C. - Recognition of the Role of Arbitral Institutions (808 to 827) 476
1° International Conventions (809 to 818) 476 a) The 1958 New York Convention (810 to 813) 477 b) The 1961 European Convention (814 to 817) 478 c) The 1965 Washington Convention (818) 480
2° Recent Arbitration Statutes (819) 480 3° French Law (820 to 827) 481
§2. - Difficulties in the Constitution of the Arbitral Tribunal (828 to 940) 484 A. - French Law (832 to 910) 485
1° Conditions Governing Judicial Intervention (836 to 855) 486 a) The International Jurisdiction of the French Courts
(837 to 846) 486 b) Non-Mandatory Character of French Courts' Jurisdiction
(847 to 850) 492 c) Validity and Content of the Arbitration Clause
(851 to 855) 494 2° The Purpose ofJudicial Intervention (~6 to 884) 496
a) Resolving Initial Difficulties Concerning the Constitution of the Arbitral Tribunal (857 to 864) 497 1) Difficulties Warranting Judicial Intervention
(858 to 860) 497 2) Difficulties Not Warranting Judicial Intervention
(861 to 864) 498 b) Resolving Subsequent Difficulties Affecting the
Constitution of the Arbitral Tribunal (865 to 884) . . . . . . . . . . .. 500 1) The Challenge of an Arbitrator (871 to 878) . . . . . . . . . . . . . . 502 2) The Replacement of an Arbitrator (879 to 884) 505
3° The Procedure for Judicial Intervention (885 to 910) 508 a) Relevant Jurisdiction (886 to 889) 508 b) Organization of the Proceedings (890 to 901) 510
l) Rules of Procedure (891 to 900) 510 2) Practice of the Court (901) 513
c) Finality of the Court's Decisions (902 to 910) 514 1) An Ordinary Appeal Is Inadmissible (903) 514 2) No Recourse to the Cour de cassation (904) 515
TABLE OF CONTENTS XVll
3) An Appeal on the Grounds that a Judge Has Ruled Ultra Vires Is Admissible in Exceptional Circumstances (905 to 906) . . . . . . . . . . . . . . . . . . . . . . . . . .. 516
4) Finality of the Decision when the Award Is Subsequently Reviewed by the Courts (907 to 910) 517
B. - Other Legal Systems (911 to 922) 519 C. - International Conventions (923 to 940) 523
1° The 1961 European Convention (924 to 935) 524 2° The 1965 Washington Convention (936 to 940) .. . . . . . . . . . . . . . . 528
§3. - Acceptance by the Arbitral Tribunal of Its Brief(941 to 950) 529 A. - Necessity for Acceptance by the Tribunal of Its Brief
(942 to 944) 529 B. - Form of Acceptance (945 to 946) 530 C. - Consequences of Acceptance (947 to 950) 531
Section II. - International Practice (951 to 1008) 532 §1. - Ad hoc Arbitration (956 to 973) 534
A. - Common Methods of Appointing Ad hoc Arbitrators (957 to 962) 535
B. - The Constitution of the Arbitral Tribunal Under the UNCITRAL Arbitration Rules (963 to 973) 537 1° The Appointment ofthe Arbitrators (967 to 971) 538 2° The Challenge and Replacement ofan Arbitrator
(972 to 973) 540· §2. - Institutional Arbitration (974 to 1008) 540
A. - The Rules of Arbitration of the International Court of Arbitration of the ICC (976 to 993) 541 1° Nature and Purpose ofthe International Court
ofArbitration (977 to 981) 542 2° The Appointment ofthe Arbitrators (982 to 989) 544 3° The Challenge and Replacement ofan Arbitrator
(990 to 992) , 548 4° The Seat ofthe Arbitration (993) 551
B. - Rules of Other Arbitral Institutions (994 to 1008) 552 1° The Initial Constitution ofthe Arbitral Tribunal
(995 to 1005) 552 2° Resolving Subsequent Difficulties (l006 to 1008) 554
CHAPTER II THE STATUS OF THE ARBITRATORS
(l009 to 1168)
Section I. - Arbitrators as Judges (l 0 18 to 1100) 560 §1. - Requirements Imposed on Arbitrators (lO 19 to 1073) 561
xviii TABLE OF CONTENTS
A. - Nature of the Requirements (1020 to 1053) 561 1° Independence and Impartiality (1021 to 1047) . . . . . . . . . . . . . . . . . 561
a) Universal Acceptance of the Principle (1022 to 1027) 561 b) Definition of Independence and Impartiality
(1028 to 1038) 564 c) Scope of the Requirement that Arbitrators Be
Independent and Impartial (1039 to 1047) 571 2° Special Conditions Imposed on Arbitrators (1048 to 1052) 576
B. - Implementation of the Requirements (1053 to 1073) 577 1° Preventative Measures (1054 to 1065) 577
a) Duty of Disclosure (1055 to 1061) 577 b) Powers of the Authority Appointing the Arbitrators
(1062 to 1065) 582 2° Punitive Measures (1066 to 1073) 583
a) Interrelation of the Two Procedures (1067 to 1069) 584 b) Challenging Arbitrators (1070 to 1071) 586 c) Actions to Set Aside or Prevent Enforcement
of the Award 0072 to 1073) 587 §2. - Protection of the Arbitrators (1074 to 1100) 588
A. - The Principle of Immunity (1077 to 1088-1) 589 1° French Law (1078 to 1084) 589 2° Other Legal Systems (1085 to 1088-1) 592
B. - The Limits of Arbitrator Immunity (1089 to 1100) 594 1° Liability for Failure to Comply with Duty
ofDisclosure (1090 to 1095) 594 2° Liability ofArbitrators for the Wilful Violation
ofTheir Obligations (1096 to 1100) 597
Section II. - Arbitrators as Service Providers (1101 to 1168) 599 §1. - The Contractual Nature of the Arbitrators' Status
(1102 to 1125) 599 A. - The Existence of a Contract Between the Arbitrators
and the Parties (1103 to 1112) 600 B. - The Characterization of the Contract Between the Arbitrators
and the Parties (1113 to 1125) 604 1° Agency (1115 to 1118) 605 2° A Contractfor the Provision ofServices (1119 to 1121) 606 3° A Sui Generis ContraC;(1122 to 1125) 607
§2. - The Arbitrators' Contractual Rights and Obligations (1126 to 1168) 609 A. - The Arbitrators' Obligations (1127 to 1156) 609
1° Determining the Arbitrators} Obligations (1128 to 1132) 609 2° Remedies for Non-Compliance with the
Arbitrators} Obligations (1133 to 1156) 613 a) Termination of the Arbitrators' Contract (1138 to 1141) 617
TABLE OF CONTENTS XIX
b) Arbitrators' Personal Liability (1142 to 1156) " 619 B. - Rights of the Arbitrators (1157 to 1168) 624
1° Arbitrators' Pecuniary Rights (1158 to 1162) 624 a) Detennining the Amount of Arbitrators' Fees (1160) 625 b) Methods of Payment (1161) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 626 c) Who Ultimately Bears the Costs
of an Arbitration? (1162) 626 2° Arbitrators' Moral Rights (1163 to 1168) 627
PART IV THE ARBITRAL PROCEDURE
CHAPTER I THE LAW GOVERNING THE PROCEDURE
(1171 to 1208)
Section I. - Autonomy of the Law Governing the Arbitral Procedure (1172 to 1195) 633
§1. - The Law Governing the Procedure and the Law Governing the Merits (1173 to 1177) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 634
§2. - The Procedural Law and the Law of the Seat (1178 to 1192) 635 A. - National Legislation (1179 to 1181) 636 B. - International Conventions (1182 to 1185) 638 C. - Arbitration Rules (1186 to 1189) 641 D. - Arbitral Case Law (1190 to 1192) 642
§3. - Procedural Law and the Law of the Country Where the Award Is Subject to Court Review (1193 to 1195) 644
Section II. - Determining the Law Governing the Arbitral Procedure (1196 to 1208) 646
§1. - Is It Necessary or Appropriate to Detennine the Procedural Law in Advance? (1197 to 1198) 647
§2. - Criteria for Detennining the Law Applicable to the Arbitral Procedure (1199 to 1204) 648 A. - Choice Made by the Parties (1200 to 1202) 648 B. - Choice Made by the Arbitrators (1203 to 1204) 649
§3. - The Consequences of the Detennination of the Law Governing the Arbitral Procedure (1205 to 1208) 651
xx TABLE OF CONTENTS
(1209 to 1301)
Section I. - Commencement of the Arbitral Proceedings (1210 to 1224) 655
§1. - Adversarial Proceedings (1211 to 1223) 656 A. - The Request for Arbitration (1212 to 1220) 656
1° Form and Content ofthe Request (1213) 656 2° Time Limits (1214 to 1216) 657 3° Receipt (1217) 658 4° Amending the Request (1218) 659 5° Who is the Claimant? (1219 to 1220) 659
B. - The Answer to the Request for Arbitration (1221 to 1223) 660 §2. - Default Proceedings (1224) 662
Section II. - Organization of the Arbitral Proceedings (1225 to 1256) 664 §1. - Terms of Reference (1228 to 1237) 665
A. - Utility of Terms of Reference (1229 to 1234) 666 B. - Nature of the Terms of Reference (1235 to 1237) 672
§2. - Issues Relating to the Organization of the Proceedings (1238 to 1256) 674 A. - Seat of the Arbitration (1239 to 1240) 674 B. - Representation of the Parties (1241 to 1242) 677 C. - Communications (1243) 678 D. - Language of the Arbitration (1244 to 1245) 678 E. - Deadlines (1246 to 1248) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 680 F. - Powers of the Chairman of the Arbitral Tribunal (1249) .. , 682 G. - Secretary of the Arbitral Tribunal (1250) 683 H. - Taking of Evidence (1251) 684 1. - Partial Awards (1252) 684 J. - Costs of the Arbitration (1253 to 1256) 684
Section III. - Pleadings and Evidence (1257 to 1301) 688 §1. - The Submission of Memorials and Evidence (1261 to 1276) 691
A. - Evidence to Be Submitted (1262 to 1266) 691 B. - Method of Presenting Evidence (1267 to 1271) 694 C. - Powers of the Arbitrators (1272 to 1276) 696
§2. - Witness Testimony (1277 to 1289) 698 A. - The Decision to Allow Witness Testimony (1277 to 1289) 698 B. - Who Can Be a Witness? (1280 to 1282) 699 C. - The Procedure for Hearing Witness Evidence (1283 to 1289) 701
"\
CHAPTER III PROVISIONAL AND CONSERVATORY_MEASURES IN THE COURSE OF THE ARBITRATION PROCEEDINGS
(1302 to 1345)
xxi
Section I. - Jurisdiction of the Arbitral Tribunal and the Courts (1305 to 1324) 710
§1. - The Principle of Concurrent Jurisdiction (1306 to 13 17) . . . . . . . . . . . . . . .. 711 A. - Jurisdiction ofthe Courts (1307 to 1309) 711 B. - No Waiver of the Arbitration Agreement (1310 to 1313) 715 C. - Jurisdiction of the Arbitrators (1314 to 13 17) 716
§2. - Limits to Concurrent Jurisdiction (1318 to 1324) 718 A. - Agreement Between the Parties (1319 to 1322) . . . . . . . . . . . . . . . . . .. 718 B. - The Courts Have Exclusive Jurisdiction in Matters
of Enforcement (1323 to 1324) 720
Section II. - Different Types of Provisional or Conservatory Measures (1325 to 1345) 721
§ 1. - Conservatory Measures (1326 to 1335) 721 A. - Conservatory Measures Intended to Prevent
Irreparable Harm (1327 to 1330) 721 B. - Conservatory Measures to Preserve Evidence (1331 to 1333) 724 C. - Conservatory Measures Designed to Facilitate the
Enforcement of the Award (1334 to 1335) 726 §2. - Measures Designed to Facilitate the Production of Evidence
(1336 to 1338) 727 §3. - The Refere-Provision Procedure (1339 to 1345) 728
A. - The Principle (1340 to 1342) 729 B. - Conditions for the Implementation ofthe Refere-Provision
(1343 to 1345) 731 10 The Arbitral Tribunal Must Not Be Constituted (1344) 731 2° Urgency (1345) 732
CHAPTER IV THE ARBITRAL AWARD
(1346 to 1419)
Section I. - Concept and Classification of Arbitral Awards (1348 to 1366) 735
§1. - The Concept of Arbitral Award (1349 to 1357) 735 §2. - Different Categories of Award (1358 to 1366) 740
A. - Final Awards and Interim Awards (1359) 740 B. - Partial Awards and Global Awards (1360 to 1362) 741
XXll TABLE OF CONTENTS
C. - Default Awards (1363) 744 D. - Consent Awards (1364 to 1366) 744
Section II. - The Making of the Award (1367 to 1412) . . . . . . . . . . . . . . . . . . . .. 746 §1. - Role of the Arbitrators (1368 to 1374) 746
A. - The Decision-Making Process (1371) 747 B. - Methods of Communication Between the Arbitrators (1372) 749 C. - Refusal of an Arbitrator to Participate in the
Deliberations (1373) 749 D. - Secrecy of Deliberations (1374) 750
§2. - Role of the Arbitral Institution (1375 to 1378) 751 §3. - Time-Limits for Making the Award (1379 to 1388) 753
A. - Where the Parties Have Specified No Time-Limit (1380 to 1384) 753 1° Where the Parties Have Chosen a Mechanism
for Fixing a Deadline (1381 to 1383) 753 2° Where the Parties Have Not Chosen a Mechanism
For Fixing a Deadline (1384) 753 B. - Where the Parties Have Specified a Time-Limit (1385 to 1388) 756
1° Extending the Deadline Fixed by the Parties (1387) 757 2° Breach ofthe Time-Limit Fixed by the Parties (1388) 759
Section III. - Form of the Award (1389 to 1412) 760 §1. - Language of the Award (1391) 760 §2. - Reasons for the Award (1392 to 1395) 761 §3. - Dissenting Opinions (1396 to 1405) 764
A. - Admissibility of Dissenting Opinions (1397 to 1398) 764 B. - Usefulness of Dissenting Opinions (1399 to 1402) 766 C. - The Legal Regime Governing Dissenting
Opinions (1403 to 1405) 768 §4. - Information Which Must Appear in the Award (1406 to 1410) 769
A. - Date of the Award (1408) 771 B. - Signature of the Arbitrators (1409) 771 C. - Place Where the Award is Made (1410) . . . . . . . . . . . . . . . . . . . . . . . .. 772
§5. - Recipients of the Award (1411 to 1412) 773
Section IV. - Immediate Effects of the Award (1413 to 1419) 775 §1. - Termination of the Arbitrators' Jurisdiction (1414 to 1429) 775
A. - Interpretation of the Award (1415) 776 B. - Correcting Clerical Errors (1416) 777 C. - Additional Awards (1417) 778 D. - Withdrawal of an Award Obtained by Fraud (1418) 779
§2. - Res Judicata (1419) 779
TABLE OF CONTENTS
PART V THE LAW APPLICABLE TO THE MERITS OF THE DISPUTE
CHAPTER I APPLICABLE LAW CHOSEN BY THE PARTIES
(1421 to 1536)
XXlll
Section I. - Formulation and Timing of the Parties' Choice of Law (1427 to 1430) 787
§ 1. - Formulation of the Parties' Choice of Law (1427 to 1429) 787 §2. - The Timing of the Parties' Choice of Law (1430) 790
Section II. - The Subject Matter of the Parties' Choice (1431 to 1508) 791 §1.-NationaILaws(1432to 1442) 791
A. - Choice of a Neutral Law (1435) 792 B. - Choice of Several Laws (Depec;age) (1436) 794 C. - Choice of a Stabilized Law (1437) 795 D. - Choice of a Law Which Renders the Contract Void (1439) . . . . . . . . .. 797 E. - Contracts with No Governing Law (1440 to 1442) 799
§2. - Transnational Rules (1443 to 1499) 801 A. - Validity of the Choice of Transnational Rules as
Governing Law (1444 to 1448) 802 B. - Critical Analysis of Transnational Rules (1449 to 1454) 808
1° Conceptual Criticism (1450) 808 2° Ideological Criticism (1451 to 1453) 809 3° Practical Criticism (1454) 811
C. - Method and Content of Transnational Rules (1455 to 1499) . . . . . . . .. 813 1° Method (1456 to 1458) 813 2° Content (1459 to 1499) 818
a) Principles Relating to the Validity of Contracts (1464 to 1468) 821
b) Principles Relating to the Interpretation of Contraots (1469 to 1477) 824
c) Principles Relating to the Performance of Contracts (1478 to 1499) 828
§3. -Amiable Composition (1500 to 1508) 835
Section III. - Limits on the Effectiveness of the Parties' Choice of Law (1509 to 1536) 841
§ 1. - Unsatisfactory Restrictions of the Effectiveness of the Parties' Choice of Governing Law (151 1 to 1528) 842 A. - The Theory of the Incompleteness of the Law Chosen
by the Parties (1512) 842 B. - The Extensive Interpretation of International Trade Usages
(1513 to 15 14) 844
XXiV TABLE OF CONTENTS
C. - The Theory of International Mandatory Rules (Lois de Police) (1515 to 1528) 847
§2. - Legitimate Restrictions of the Effectiveness of the Parties' Choice of Governing Law (1529 to 1536) 859 A. - Scope of the Law Chosen by the Parties (1530 to 1532) 859 B. - International Public Policy (1533 to 1536) 860
CHAPTER II APPLICABLE LAW CHOSEN BY THE ARBITRATORS
(1537 to 1557)
Section I. - The Method Used by Arbitrators in Selecting the Applicable Law (1538 to 1553) 865
§ 1. - Is a Method Imposed on the Arbitrators? (1540 to 1544) 867 A. - Ordinary Choice of Law Rules of the Seat of the
Arbitration (1541 to 1543) 867 B. - Choice of Law Rules of the Seat of the Arbitration Specifically
Designed for International Arbitration (1544) 869 §2. - The Different Methods Used by Arbitrators to Choose
the Applicable Law (1545 to 1553) 871 A. -- Application of a Choice of Law Rule (1546 to 1551) 871
1° The Cumulative Method (1547) 872 2° General Principles ofPrivate International Law
(1548 to 1549) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 873 3° The Free Selection ofaChoice ofLaw Rule (1550 to 1551) 875
B. - Direct Choice Method (1552 to 1553) 876
Section II. - The Subject Matter of the Arbitrators' Choice (1554 to 1556) 878
Section III. - Limits on the Effectiveness of the Arbitrators' Choice (1557) .... 881
PART VI COURT REVIEW OF ARBITRAL AWARDS
CHAPTER I FRENCH LAW (1560 to 1662)
Section I. - Procedure for the Review by the Courts (1564 to 1600) 888
§1. - Recognition and Enforcement (1566 to 1585) 889 A. - Recognition of Arbitral Awards (1567) 889
TABLE OF CONTENTS xxv
B. - Enforcement of Arbitral Awards (1568 to 1579) 891 1° Jurisdiction (1569 to 1571) 892
a) Subject-Matter Jurisdiction (1570) 892 b) Territorial Jurisdiction (1571) 893
2° Procedure (1572 to 1574) 894 3° Extent ofthe Review by the Court (1575 to 1579) 896
C. - Recourse Against an Order Refusing or Granting Recognition or Enforcement (1580 to 1585) 899 1° Appeal Against a Decision Refusing Recognition
or Enforcement (1581 to 1582) 899 2° Appeal Against a Decision Granting Recognition
or Enforcement (1583 to 1585) 901 §2. - Actions to Set Aside (1586 to 1595) 902
A. - Actions Before the French Courts to Set Awards Aside (1587 to 1591) 902 1° Awards Which Can Be the Subject ofan Action
to Set Aside in France (1588 to 1590) 902 2° Procedure Before the Court ofAppeals (1591) 906
B. - The Effect of Proceedings Pending Outside France to Set Aside an Award or of a Decision Setting It Aside (1592 to 1595) . . . . . . . . .. 908 1° Jurisdiction ofCourts Outside France
to Set Aside Awards (1593) 908 2° Grounds on Which an Award May Be Set Aside
Outside France (1594) 910 3° Consequences In France ofa Foreign Judgment Setting
Aside an Arbitral Award (1595) 913 §3. - Exclusivity of Recourse Against Arbitral Awards (1596 to 1600) 916
A. - No Appeal (1597) 917 B. - No Third Party Action (1598) 918 C. - No Action to Revise the Award for Fraud (1599) 919 D. - No Action to Have the Award Declared Non-Binding (1600) 921
Section II. - The Extent of the Review by the Courts (1601 to 1662) 922 §1. - Where the Arbitrators Have Reached Their Decision in the
Absence of an Arbitration Agreement or on the Basis of an Agreement Which Is Void or Has Expired (1608 to 1619) 930 A.-Method (1609 to 1611) 931 B. - Substance (1612 to 1619) 932
1° Absence ofan Arbitration Agreement (1613 to 1615) 933 2° Where the Arbitration Agreement Is Void (1616 to 1618) 934 3° Where the Arbitration Agreement Has Expired (1619) 935
§2. -- Irregular Composition of the Arbitral Tribunal (1620 to 1625) 935 §3. - Where the Arbitrators Have Failed to Comply with Their Brief
(1626 to 1637) 937
xxvi TABLE OF CONTENTS
A. - Failure to Observe the Limits of the Parties' Claims (1627 to 1631) 938 1° Infra Petita (1628 to 1630) 938 2° Ultra Petita (1631) 941
B. - Where the Arbitrators Have Failed to Act in Accordance with the Powers Conferred on Them by the Parties (1632 to 1637) . . . . . . . . . . . 942 1° Procedure (1633) 942 2° Merits (1634 to 1637) 943
§4. - Breach of Due Process (1638 to 1644) 947 §5. - Where Recognition or Enforcement Would Be Contrary to
International Public Policy (1645 to 1662) 953 A. - Method (1646 to 1650) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 953
1° The International Nature ofPublic Policy (1647 to 1648) 953 2° The Application In Concreto ofPublic Policy (1649) 955 3° The Evolving Character ofPublic Policy (1650) 956
B. - Content (1651 to 1662) 957 1° Public Policy Requirements Concerning the Arbitral
Procedure (1652 to 1660) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 957 2° Public Policy Requirements Concerning the Merits
ofthe Dispute (1661 to 1662) 960
CHAPTER III INTERNATIONAL CONVENTIONS
(1663 to 1716)
Section I. - The 1958 New York Convention (1666 to 1713) 966 §1. - Procedure for Recognition and Enforcement of Foreign Arbitral
Awards Under the New York Convention (1670 to 1692) 967 A. - Procedure in the Host Country (1671 to 1675) 967 B. - Interaction of Proceedings in the Host Country with
Proceedings in the Country of Origin (1676 to 1692) 971 1° Optional Nature ofProceedings in the Country ofOrigin
(1677 to 1684) 971 2° Possible Implications in the Host Country ofProceedings
in the Country ofOrigin (1685 to 1692) 977 a) Effect in the Host Country of a Decision Setting Aside or
Suspending an Award in the Country of Origin (1686 to 1690) 978 1) Effect ofa Decision to Set Aside (1687 to 1689) 978 2) Effect of a Suspension (1690) 980
b) Effect, in the Host Country, of Proceedings to Set Aside or Suspend the Award Pending in the Country of Origin (1691 to 1692) 981
TABLE OF CONTENTS XXVll
§2. - Substantive Conditions Governing Recognition and Enforcement of Foreign Arbitral Awards Under the New York Convention (1693 to 1713) 983 A. - Grounds Which Must Be Raised by the Party Resisting Recognition
or Enforcement (1694 to 1703) 983 1° Invalid Arbitration Agreements (1695) " 984 2° Breach ofDue Process (1696 to 1699) . . . . . . . . . . . . . . . . . . . . . .. 985 3° Non-Compliance with the Terms ofthe
Arbitration Agreement (1700) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 987 4° Irregularities Affecting the Composition ofthe Arbitral
Tribunal or the Arbitral Proceedings (1701 to 1703) 989 B. - Grounds Which Can Be Raised by the Courts on Their Own Motion
(1704 to 1713) 993 1° Non-Arbitrability ofthe Dispute (1705 to 1709) 994 2° Awards Contravening International Public Policy
(171 0 to 1713) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 996
Section II. - The 1961 European Convention (1714 to 1716) 998
ANNEXES
Annex I - France 1005 Annex II - Switzerland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 1021 Annex III - UNCITRAL Model Law 1027 Annex IV - 1958 New York Convention 1039 Annex V- 1961 European Convention 1049 Annex VI - 1975 Panama Convention 1061 Annex VII - AAA International Arbitration Rules 1067 Annex VIII - ICC Rules of Arbitration 1081 Annex IX - LCIA Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 1105 Annex X - UNCITRAL Arbitration Rules 1129
Bibliography 1145
Table of Arbitral Awards 1159 Table of Arbitration Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 1173 Table of International Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 1181 Table of Judicial Decisions 1187 Table of Legislation 1227
Alphabetical Index 1245
TABLE OF ABBREVIATIONS
AAA AFDI AJDA AlA Alb. L. Rev. All E.R. Am. J. Int'l L. Am. Rev. Int'l Arb. Ann. Inst. Dr. Int. Ann. suisse dr. intern. App. Cas. Arb. & Disp. Resol. L.J. Arb. Int'l Arb. J. Arb. Mat. ATF Arbitration
[Belg] Journ. Trib. BGB BGBI. BGH Brit. Y.B. Int'l L. Bull. ASA Bull. Civ.
Bull. Joly Brit. Y.B. Int'l L.
Cah. Jur. Fisc. Exp. CACNIQ
Cal. W. Int'l L.J. Can. Bus. L.J. C.A.
American Arbitration Association Annuaire franyais de droit international Actualite juridique - Droit administratif Italian Arbitration Association Albany Law Review All England Law Reports American Journal of International Law The American Review of International Arbitration Annuaire de l' Institut de droit international Annuaire suisse de droit international Appeal Cases The Arbitration and Resolution Dispute Law Journal Arbitration International The Arbitration Journal Arbitration Materials Arrets du Tribunal Federal Suisse Arbitration: The Journal of the Chartered Institute of Arbitrators
[Belgian] Journal des Tribunaux Burgerlisches Gesetzbuch Bundesgesetzblatt Bundesgerichtshof British Yearbook of International Law Bulletin de l' Association Suisse d' Arbitrage Bulletin des arrets de la Cour de cassation (chambres civiles) Bulletin Joly British Yearbook of International Law
Cahiers juridiques et fiscaux de l' exportation Quebec National and International Commercial Arbitration Centre California Western International Law Journal Canadian Business Law Journal Recueil de jurisprudence du Quebec, Cour d'appel
xxx
CEPANI Chron. Colum. 1. Transnat'l L. Compo L. Y.B. Int'l Bus.
Dalloz Aff. Dep't St. Bull. DIS Disp. Resol. J. D.L.R. Doct. D.P. DPCI Dr. mar. ff.
E.C.R.
F.2d F.3d F. Supp. FIDIC Fin. Times F.R.D.
GATT
IBA ICC ICCA ICC Bulletin Int'l & Compo L.Q. ICSID
ICSID Rep. ICSID Rev. - Foreign Inv. L.J. I.L.M. I.R. lnt'l Arb. Rep. lnt'l Bus. Law. Int'l Bus. LJ.
TABLE OF ABBREVIATIONS
Dalloz Affaires Department of State Bulletin Deutsche Institution flir Schiedsgerichtsbarkeit Dispute Resolution Journal Dominion Law Reports Doctrine (Gazette du Palais) Recueil periodique et critique Dalloz Droit et pratique du commerce international Droit maritime franyais
Report of Cases before the Court of Justice of the European Communities Edition Commerce et Industrie OCP) Edition Generale (JCP) European Treaty Series
Federal Reporter 2d Series Federal Reporter 3d Series Federal Supplement Federation Internationale des Ingenieurs-Conseils The Financial Times Federal Rules Decisions
General Agreement on Tariffs and Trade Gazette du Palais
International Bar Association International Chamber of Commerce International Council for Commercial Arbitration The ICC International Court of Arbitration Bulletin International and Comparative Law Quarterly International Centre for the Settlement of Investment Disputes ICSID Reports ICSID Review - Foreign Investment Law Journal International Legal Materials Informations Rapides (Recueil Dalloz) International Arbitration Report International Business Lawyer International Business Law Journal
TABLE OF ABBREVIATlONS xxxi
Int'l Constr. L. Rev. lnt'l Fin. L. Rev. lnt'l Law. Int'l L. Rep. IPrax Iran-U.S. Cl. Trib. Rep.
J. Bus. L. JCP J.-Cl. Comm. J.-Cl. Proc. Civ. J.-Cl. Dr. Int. J.D.l. J. Int'l Arb. J.O. Journ. not. avo Jur.
Law & Pol'y Int'l Bus. LCIA Leb. Rev. Arb.
Leg. Lloyd's Rep. LMAA L.N.T.S. L.Q. Rev.
McGill L.J. Mich. Y.B. Int'l Stud.
NAI NCPC NJW Nw. J. Int'l L. & Bus. N.Y.A.D. N.Y.L.J.
O.J. O.A.S.T.S.
Journal of Business Law Juris-Classeur Periodique (La Semaine Juridique) Juris-Classeur Commercial Juris-Classeur (Procedure civile) Juris-Classeur (Droit international) Journal du droit international Journal of International Arbitration Journal officiel Journal des notaires et des avocats Jurisprudence (Recueil Dalloz)
Law and Policy in International Business London Court of International Arbitration The Lebanese Review of Arab and International Arbitration Legislation (Dalloz) Lloyd's Law Reports London Maritime Arbitrators Association League of Nations Treaty Series The Law Quarterly Review
McGill Law Journal Michigan Yearbook of International Studies
Nederlands Arbitrage Instituut Nouveau Code de Procedure Civile Neue Juristische Wochenschrift Northwestern Journal of International Law and Business New York Appelate Division New York Law Journal
Official Journal of the European Communities Organization of American States Treaty Series
Pasycrisie
XXXII
Rev. arb. Rev. Barreau Rev. beIge dr. into Rev. Cor. Esp. Arb. Rev. crit. DIP Rev. der. Mercosur Rev. dr. com. beIge Rev. into dr. eco. Rev. dr. into dr. compo Rev. dr. into pr. et dr. pen. int.
Rev. suisse dr. into et dr. eur. Riv. dell' arb. Riv. dir. into e proc. RD McGill RGDIP RID compo RID eco RIW R.S.O. RTD civ. RTD com.
S.c. L. Rev. S.C.R. S. Ct. Sem. Jud. Somm. St. John's L. Rev. S.c.J. [Sw.] Journ. Trib. Sw. Rev. Int'l Antitrust L. SZ
Texas Int'l L.J. Tex. Rev. Civ. Stat. Ann. TGI T.I.A.S. Tul. L. Rev. Tul. Eur. & Civ. L.F.
TABLE OF ABBREVIATIONS
Revue de l' arbitrage Revue du Barreau Revue beIge de droit international Revista de la Corte Espanola de Arbitraje Revue critique de droit international prive Revista de Derecho del Mercosur Revue de droit commercial beIge Revue internationale de droit economique Revue de droit international et de droit compare Revue de droit international prive et de droit penal international Revue suisse de droit international et droit europeen Rivista dell' arbitrato Rivista di diritto internazionale e processuale Revue de droit McGill Revu generale de droit international public Revue internationale de droit compare Revue internationale de droit economique Recht der lnternationalen Wirtschaft Revised Statutes of Ontario Revue trimestrielle de droit civil Revue trimestrielle de droit commercial et de droit economique
South Carolina Law Review Supreme Court Reports Supreme Court Reporter La Semaine Judiciaire Sommaires (Gazette du Palais) St. John's Law Review Supreme Court Journal [Swiss] Journal des Tribunaux Swiss Review of International Antitrust Law Sammlung zivilrechtlicher Entscheidungen
Texas International Law Journal Texas Revised Civil Statutes Annotated Tribunal de Grande Instance Treaties and other International Acts Series Tulane Law Review Tulane European & Civil Law Forum
TABLE OF ABBREVIATIONS XXXlll
U. Miami Y.B. Int'l L. UNCITRAL UNIDROIT Uniform L. Rev. U.N.T.S. U.S.T.
Virgo J. Int'l L.
Y.B. Com. Arb.
ZPO
University of Miami Yearbook of International Law United Nations Commission on International Trade Law International Institute for the Unification of Private Law Uniform Law Review United Nations Treaty Series United States Treaties and Other International Agreements Virginia Journal of International Law
Westlaw Weekly Law Reports World Arbitration & Mediation Report
Yearbook Commercial Arbitration
ZivilprozeI3ordnung
FOREWORD
This treatise is based on the authors' Traite de l'Arbitrage Commercial International, published in 1996 in the French language by Litec, :paris. However, this is not simply an English version. It is more in the nature of a second and revised edition, particularly given the rapid evolution of the law of international arbitration over the past three years. Several new arbitration statutes have come into force (notably in England in 1997, in Germany and Belgium in 1998, and in Sweden in 1999); major institutional arbitration rules were revised (including the International Arbitration Rules of the AAA in 1997 and the Arbitration Rules of both the ICC and LCIA in 1998); there have also been important decisions of both the courts and arbitral tribunals. These recent developments are of course fully considered throughout this book.
The original French language text, although a collective work, was divided between the authors as follows:
Part I Part II
Part III Part IV Part V Part VI
Definition and Sources Philippe Fouchard The Arbitration Agreement. . . . . . . . . . . . . . . . . . .. Emmanuel Gaillard (on the basis of an early draft by Berthold Goldman) The Arbitral Tribunal Philippe Fouchard The Arbitral Procedure . . . . . . . . . . . . . . . . . . . . . .. Emmanuel Gaillard The Law Applicable to the Merits of the Dispute Emmanuel Gaillard Court Review of Arbitral Awards , Emmanuel Gaillard
This English version has been prepared and edited by Emmanuel Gaillard and John Savage, both of Shearman & Sterling, with Philippe Fouchard contributing to its updating. It would not have been possible without the contribution of a team of lawyers and legal assistants from Shearman & Sterling's international arbitration group. The team was headed by Nanou Leleu-Knobil, who also researched and edited all references. We are also very grateful to Andrew Butler for his translation work.
About the authors
Philippe Fouchard is the General Editor of the Revue de I'arbitrage, the leading French­ language arbitration journal. He is Professor of Law at the University of Paris II, where he teaches international business and arbitration law.
Emmanuel Gaillard is a partner in the Paris office of Shearman & Sterling, and heads the firm's international arbitration practice group. He is also Professor of Law at the University of Paris XII and was Visiting Professor at Harvard Law School in 1984.
* * * * * * * * * * * * * * * * *
John Savage, co-editor of this book with Emmanuel Gaillard, is an English solicitor and a member of the Paris Bar. He is a member of Shearman & Sterling's international arbitration practice group, and is based in the firm's Paris office.
INTRODUCTION
1. - International commercial arbitration has witnessed dramatic growth over the last twenty years. 1 Although this reflects to a certain degree the underlying development of international commerce, international arbitration has flourished for a number of other reasons: arbitration is often perceived, rightly or wrongly, as being cheaper and less time­ consuming than court proceedings, and is unquestionably more confidential; the resulting award is generally easier to enforce than a court decision, largely thanks to the New York Convention; more importantly, international arbitration is now acknowledged-because its international character reflects the nature of the disputes being resolved-to be a neutral method of settling commercial disputes between parties from different nations, allowing each of the parties to avoid the "home" courts of its co-contractors; finally, international arbitration gives the parties substantial liberty to design their own dispute resolution mechanism, largely free of the constraints of national law. This party autonomy is found at every stage of the arbitral process and, although not often fully exploited (with parties frequently preferring the plain application of institutional rules),z is perhaps the most fundamental difference between international commercial arbitration and the courts. Indeed, it will generally be when parties make effective use of their entitlement to tailor their own arbitration proceedings to their needs that international arbitration will provide cheaper and more satisfactory justice than any national court system.
It is for all these reasons that international arbitration has become the normal method of resolving disputes in international transactions. By contrast, in many legal systems domestic arbitration continues to be seen as an exception to the jurisdiction of local courts, even if the influence of international arbitration is now causing this perception to diminish.
2. - Over the same twenty-year period, there has been tremendous change in the law and practice of international arbitration. In the early 1980s, there was a marked contrast between a small number of arbitration-friendly jurisdictions with sound legislation and a developed body of case law, and a majority of legal systems which had yet to modernize their international arbitration regime or which were intentionally hostile to arbitration. Today, primarily through the influence of international instruments such as the 1985 UNCITRAL Model Law, there is much less to distinguish-at least at first glance-those legal systems which have traditionally favored arbitration from those which have only recently modernized their legislation. Likewise, the major institutional arbitration rules previously diverged on a number of key issues, but have now been revised and contain few significant differences.
1 See, for example, with respect to ICC arbitration, infra para. 349.
2 See infra para. 306.
2 INTRODUCTION
In particular, the 1997 AAA International Arbitration Rules, the 1998 ICC Arbitration Rules and the 1998 LCIA Rules are strikingly similar.3
This trend towards harmonization is nonetheless tempered in three respects. First, an identical rule found in different legal systems or arbitration rules may give rise to contrasting solutions in practice. One telling example is the extent to which document discovery is ordered by arbitrators sitting in different venues but applying the same rule granting them virtually unfettered discretion to determine how evidence is to be taken. In practice, although they now generally agree to hear live witness testimony, arbitrators with a civil law background will prove far more reluctant to order extensive discovery than common law arbitrators.4 Likewise, courts in different jurisdictions may adopt inconsistent interpretations of similar provisions of arbitration legislation. Second, despite the narrowing of the divergences as to the appropriate degree of liberalism to be afforded to international arbitration, recent legislation shows that significant differences remain. For example, although the principle of competence-competence is commonly perceived as being recognized worldwide, this is only really true of its positive effect (whereby arbitrators can decide their own jurisdiction when the validity of the arbitration agreement is challenged) and not of its negative effect (whereby the courts cannot rule on the existence of a valid arbitration agreement before an award has been issued by the arbitrators deciding their own jurisdiction).5 Similarly, while most legal systems now allow parties to choose to·have the merits of their disputes governed by "rules of law" (including transnational rules, rules common to certain legal systems and lex mercatoria), where the choice of governing law falls to the arbitrators there is no consensus as to whether they are entitled to apply anything other than the laws of one identified jurisdiction. 6 Other examples of subsisting divergence include the methodology to be followed by arbitrators examining the existence and validity of an arbitration agreement,7 the appointment of arbitrators where one of the parties defaults, 8 and the grounds available to challenge an award before the courts.9 Third, beyond traditional differences which have not---or not yet-been bridged, new ideas emerge which, at the outset, naturally find acceptance in only a minority of legal systems, thus creating fresh areas of divergence. This is the case of the recent Swiss, Tunisian, Belgian and Swedish statutes, which allow parties with no connection with those jurisdictions to waive actions to set aside before the courts ofthe seat of arbitration. 10 In the same way, the fact that parties are able to enforce in France and, possibly, in the United States awards which have been set aside at the seat of arbitration is a radical departure from the traditional position that awards annulled in their country of origin are unenforceable in other jurisdictions. I I
.1 See infra paras. 321 et seq.
4 See infra paras. 1272 and 1277 et seq.
5 See infra paras. 671 et seq.
(, See infra para. 1554.
8 See infra para. 792.
9 See infra para. 1594.
10 See infra para. 1594.
" See infra para. 1595.
INTRODUCTION 3
3. - In fact, many of these examples of divergence find their source in a more fundamental debate: that surrounding the role of the seat in international arbitration or, in more abstract terms, that surrounding the source of the binding effect of international arbitral awards. As such awards are made by private adjudicators on the basis of a contract-the private expression of the parties' intentions-their binding force must be sanctioned by national legal orders. For some, this legal order can only be that of the seat of the arbitration. Following this reasoning, arbitrators derive their powers from the law of the place where they perform their duties, in the same way as judges serving in local courts. For others, however, the binding effect of an award-and hence the source of the arbitrators' powers-derives from the community of legal orders which, under certain conditions, are prepared to recognize and enforce that award in their respective jurisdictions.
This fundamental difference of philosophy explains many of the specific controversies regarding a number of very practical issues: according to the first theory, the arbitral procedure should be governed, failing agreement of the parties, by the law of the seat; the choice of law rules of the seat should be used in determining the law applicable to the merits of the dispute; the mandatory rules to be applied by the arbitrators should be those of the seat; no waiver of an action to set aside can be tolerated without jeopardizing the whole arbitral process; and, lastly, when set aside, an award ceases to exist and cannot be enforced in any jurisdiction. In contrast, under the second theory the arbitrators enjoy extensive freedom to determine the applicable procedural rules; they are also free to select the rules applicable to the merits, which, in keeping with the source of their powers, may be transnational rules; the only overriding requirements to be applied by international arbitrators are those of truly international public policy; a waiver of any action to set aside the award in its country of origin is conceivable; and, conversely, an award set aside in the country of origin may still be enforced elsewhere.
As will be seen throughout this book, of these two fundamentally different conceptions of international commercial arbitration, it is the second which is gaining ground and which represents, in our view, the better approach. This movement towards international arbitration as a transnational institution reflects the needs and expectations of the "consumers" of international arbitration, as international business itself becomes increasingly global and less country-specific. In this context, a uniform, transnational mechanism for resolving disputes is clearly the way forward.
4. - We shall examine hereafter both the broader trends prevailing in international arbitration and the more specific issues arising in national legislation and arbitral practice. In order to do so, we will follow the chronology of a typical arbitration. Thus, after considering the definition of international commercial arbitration and the sources of international arbitration law (Part I), we will address in tum the arbitration agreement (Part II), the constitution of the arbitral tribunal (Part III), the arbitral procedure (Part IV), the law applicable to the merits of the dispute (Part V) and the court review of arbitral awards (Part VI).
PART ONE
5. - Before examining the substantive aspects of international arbitration law, two preliminary questions need to be addressed.
First, international commercial arbitration must be defined as precisely as possible. The definition of international commercial arbitration is therefore considered in Chapter 1.
Second, in light ofthe growing independence of international commercial arbitration from national laws, and especially from that of the seat of the arbitration, it is essential to analyze the various legal systems, international conventions and rules introduced by international practice which together contribute to the legal regime governing this method of dispute resolution. This analysis is set forth in Chapter II.
CHAPTER I DEFINITION OF INTERNATIONAL COMMERCIAL ARBITRATION
6. - The expression "international commercial arbitration" is found in the European Convention signed in Geneva on April 21, 1961 1 and in the Model Law adopted by the United Nations Commission on International Trade Law (UNCITRAL) on June 21,1985.2
It also forms part of the full title of both of these important international instruments. To properly understand the meaning of the expression, it is necessary to define what is meant by each of the words "arbitration" (Section I),"commercial" (Section II) and "international" (Section III).
SECTION I DEFINITION OF ARBITRATION
7. - In France, arbitration is traditionally defined along the following lines:
Arbitration is a device whereby the settlement of a question, which is of interest for two or more persons, is entrusted to one or more other persons-the arbitrator or arbitrators-who derive their powers from a private agreement, not from the authorities of a State, and who are to proceed and decide the case on the basis of such an agreement. 3
At first glance, there does not appear to be a serious divergence between French law and other legal systems as to the concept of arbitration. In Switzerland, for example, arbitration has been defined as:
I On this Convention, see infra para. 274.
2 See infra para. 203.
J RENE DAYID, ARBITRATION IN INTERNATIONAL TRADE 5 (1985). See also PHILIPPE FOUCHARD, L'ARBITRAGE COMMERCIAL INTERNATIONAL ~ 11 (1965); Eric Loquin, Arbitrage - Definition - Nature juridique ­ Distinction avec d'autres institutions - Avantages et inconvenients, J.-CL. PROC. ClV., Fasc. 1005, ~ 1 (1997); CHARLES JARROSSON, LA NOTION D'ARBlTRAGE ~ 785 (1987).
10 DEFINITION AND SOURCES
a private method of settling disputes, based on the agreement between the parties. Its main characteristic is that it involves submitting the dispute to individuals chosen, directly or indirectly, by the parties. In international arbitration, this definition is preferable to the negative definition found in domestic law, according to which the principal characteristic of arbitration is the fact that the dispute is removed from the jurisdiction of the courts.4
Common law authors have defined arbitration similarly, as involving:
two or more parties faced with a dispute which they cannot resolve themselves, agreeing that some private individual will resolve it for them and if the arbitration runs its full course ... it will not be settled by a compromise, but by a decision. 5
8. - Nevertheless, the difficulties encountered in certain domestic legal systems when defming arbitration and distinguishing it from similar institutions or mechanisms6 are further complicated in international arbitration, for two reasons. First, there are differences between national legal systems as to their respective definitions of arbitration. Second, there is an ever increasing tendency in international rather than domestic trade to find new methods of preventing or settling disputes.
9. - In private international law, issues of characterization are generally resolved by reference to the lex fori (the law of the forum). However, that approach is unsatisfactory in the case of arbitration. In most countries, the courts will only rarely intervene in international arbitration, and then generally only after the arbitration has taken place and a party seeks to have the arbitral award enforced or set aside. Even if the courts of just one country were to review an award after it was made-which will not necessarily be the case-by that stage it would be too late for the courts to query whether they really were dealing with an arbitral award. Yet they would only be able to apply their national laws governing the review of arbitral awards if they were convinced that the decision submitted to them was indeed an arbitral award, and they would of course look to their own law for an answer to that question.
However, the issue must first be resolved by the arbitrators. Which law should apply? Given the contractual basis of arbitration, one may take the view that it should be the law
BERNARD DUTOIT, FRAN<;OIS KNOEPFLER, PIERRE LALlVE, PIERRE MERCIER, REPERTOIRE DE DROIT INTERNATIONAL PRIVE SUISSE - VOL. 1 - LE CONTRAT INTERNATIONAL - LiARBITRAGE INTERNATIONAL 241 (1982).
ALAN REDFERN AND MARTIN M. HUNTER, LAW AND PRACTICE OF INTERNATIONAL COMMERCIAL ARBITRATION 3 (2d ed. 1991).
For all of these distinctions, see JARROSSON, supra note 3. On the concept of arbitration, its function as a dispute resolution mechanism and its attachment to a national or anational legal order, see BRUNO OPPETIT, THEORIE DE L' ARBITRAGE (1998).
DEFINITION 11
applicable to the agreement from which the arbitrators derive their powers.? In France, private international law traditionally favors this analysis, but it also recognizes the judicial nature of the arbitrator's role, which could conceivably cause the law of the seat of the arbitration to apply. The law of the seat is favored by those who traditionally think of arbitration as a judicial process to be assimilated with court litigation. 8 The weakness of such a position is that it is somewhat circular, but the law of the seat of the arbitration nevertheless has the advantage, in some cases, of being more predictable than the law governing the arbitration agreement.
10. - There are further differences between national legal systems concerning the arbitrators' powers to add to or modify contracts. 9 During the 1970s, this was a contentious issue among international arbitration practitioners,lo and when, in 1978, the International Chamber of Commerce adopted special rules concerning the adaptation of contracts, it provided for recourse to a "third person," without being more specific, rather than to an arbitrator as such. 11
11. - In our view, arbitration should be defined by reference to two constituent elements which commentators l2 and the courts almost unanimously recognize. First, the arbitrators' task is to resolve a dispute. Second, the source of this judicial role is a contract: the arbitrators' power to decide a dispute originates in the common intention of the parties. Thus, arbitration comprises both ajudicial (§ 1) and a contractual element (§ 2).
For the determination of this law, see infra para. 422.
See F.A. Mann, Lex Facit Arbitrum, in INTERNATIONAL ARBITRATION - UBER AMICORUM FOR MARTIN DOMKE 157 (P. Sanders ed., 1967), reprinted in 2 ARB. INT'L 241 (1986).
See Rene David, Le concept d'arbitrage priwJ et les conventions internationales, in ETUDES JURlDIQUES OFFERTES A LEON JULLIOT DE LA MORANDIERE PAR SES ELEVES ET AMIS 147 (1964).
10 See, in particular, the communications by the Fourth Working Party of the Fifth International Arbitration Congress, held in New Delhi, on January 7-10,1975, on the "Techniques for resolving problems in forming and performing long-term contracts", in FIFTH INTERNATIONAL ARBITRATION CONGRESS - NEW DELHI, 1975 - PROCEEDINGS, C. IV and D. 239 (1975); for a summary, see N. Krishnamurthi, Fifth International Arbitration Congress - New Delhi - January 1975, I Y.B. COM. ARB. 227 (1976); 1975 REV. ARB. 3-140.
II ADAPTATION OF CONTRACTS -RULES - STANDARD CLAUSES - ApPLICATION TO STANDING COMMITTEE (ICC Publication No. 326, 1978). Concerning these rules, which were withdrawn in 1994, see infra para. 40.
12 In French law, see JACQUELINE RUBELLIN-DEVICHI, L'ARBITRAGE - NATURE JURlDIQUE - DROIT INTERNE ET DROIT INTERNATIONAL PRlVE (1965); FOUCHARD, supra note 3, ~~ 11 et seq.; HENRl MOTULSKY, ECRlTS­ VOL. 2 - ETUDES ET NOTES SUR L'ARBITRAGE 5 et seq. (1974); Gerard Cornu, Le decret du 14 mai 1980 relatif al'arbitrage - Presentation de la rejorme, 1980 REV. ARB. 583, especially at 584 et seq. Without seeking to give a definition of arbitration that is too abstract and summary, common law authors also highlight certain significant features of the process of international commercial arbitration: the consent ofthe parties, and the binding nature of the arbitrators' award, which can be rendered enforceable by the courts; see REDFERN AND HUNTER, supra note 5, at 3; MICHAEL 1. MUSTILL, STEWART C. BOYD, COMMERCIAL ARBITRATION 41 et seq. (2d ed. 1989).
12 DEFINITION AND SOURCES
§ 1. - The Arbitrators' Judicial Role
12. - Arbitrators perform their judicial role by making an award. Thus, for example, Article 1496 of the French New Code of Civil Procedure, which states that "the arbitrator shall resolve the dispute," provides one indication that French law gives preference to this judicial aspect of the arbitrators' role. Other indications include references in the Code to the "arbitral tribunal" (Art. 1502) and, at Article 1476, to the fact that"[0]nce it is made, the arbitral award is res judicata in relation to the dispute it resolves." This domestic law provision applies to international arbitration, as is clear from Article 1500 of the same Code. Consequently, any arbitral award, whether made in France or not, is immediately deemed to be res judicata in France. 13
13. - The judicial character of arbitration allows it to be distinguished from similar mechanisms, such as conciliation, mediation, settlement and expert proceedings. 14
14. - There are two aspects to the arbitrators' judicial role: their decisions must be binding on the parties (A) and must resolve a dispute (B). These simple principles determine whether or not the proceedings in question in fact constitute an arbitration.
A. - ARBITRATORS' DECISIONS ARE BINDING
15. - An arbitral award will bind the parties to the arbitration. Arbitration can therefore be easily distinguished from other procedures where the intervention of a third party does not culminate in a binding decision. J5
1° Arbitration, Conciliation and Mediation
16. - From a theoretical standpoint, the distinction between arbitration, conciliation and mediation is straightforward. The conciliator and the mediator endeavor to bring together the parties to a dispute but, unlike the arbitrator, they do not have the power to impose a solution on the parties. A solution in the case of conciliation or mediation can only result from an agreement reached by the parties, which generally takes the form of a settlement.
I, On the consequences of this rule, see infra para. 1419.
14 See Loquin, supra note 3, ~~ 56 et seq.; JARROSSON, supra note 3, at 1I 1 et seq.; Bruno Oppetit, Arbitrage, mediation et conciliation, 1984 REV. ARB. 307; Bruno Oppetit, Sur Ie concept d'arbitrage, in LE DROIT DES
RELATIONS ECONOMIQUES INTERNATIONALES - ETUDES OFFERTES A BERTHOLD GOLDMAN 229 (I982).
15 See CHRlSTIAN BOHRlNG-UHLE, ARBITRATION AND MEDIATION IN INTERNATIONAL BUSINESS - DESIGNING PROCEDURES FOR EFFECTIVE CONFLICT MANAGEMENT (1998).
DEFINITION 13
Although the search for a settlement by direct negotiation between the parties is a common means of settling disputes in international trade, it is only where a third party (the conciliator or mediatorY6 is involved that there is some likeness to arbitration.
17. - Over the past few years, conciliation and mediation have attracted a high level of attention in many legal systems.17 This has been the case in France, 18 where various recent initiatives,19 such as encouraging settlements in public law disputes20 and allowing the courts to appoint mediators,21 will doubtless have an impact on international disputes. It has been suggested that this revival of interest may be due in part to the growing role of Far Eastern countries in international trade, as they are traditionally considered to prefer conciliation to litigation.22 More importantly, disillusion with the cumbersome, lengthy and costly nature of court and, to a certain extent, arbitral proceedings, particularly in the United States, have also contributed to this new-found enthusiasm for more flexible and less expensive methods of resolving disputes.
16 There is no difference in nature between conciliation and mediation. Some commentators consider that "the mediator is a particularly active conciliator" (JARROSSON, supra note 3, ~ 348).
17 See BOHRlNG-UHLE, supra note 15.
1M Gerard Blanc, La conciliation comme mode de reglement des differends dans les contrats internationaux, 1987 RTD COM. 173; Robert Guillaumond, Sur la conciliation interne et internationale, JCP, Ed. c.1., Pt. I, No. 14,021 (1983); MICHELE GUILLAUME-HOFNUNG, LA MEDIATION (1995); Gerold Herrmann, Conciliation as a new method ofdispute settlement, in ICCA CONGRESS SERlES No.1, NEW TRENDS IN THE DEVELOPMENT OF INTERNATIONAL COMMERCIAL ARBITRATION AND THE ROLE OF ARBITRAL AND OTHER INSTITUTIONS 145 (P. Sanders ed., 1983), and, for the French version, La conciliation, nouvelle methode de reglement des differends, 1985 REV. ARB. 343.
1~ These initiatives led one author to refer to the "blossoming of conciliators and other mediators" (LoIC Cadiet, Chronique de droit judiciaire prive, JCP, Ed. G., Pt. I, No. 3723, at 522 (1993».
20 See CONSEIL D'ETAT, SECTION DU RAPPORT ET DES ETUDES, REGLERAUTREMENT LES CONFLITS: CONCILIATION, TRANSACTION, ARBITRAGE EN MATIERE ADMINISTRATIVE (Work adopted by the General Assembly of the Conseil d'Etat on February 4, 1993, published by La documentation franc;aise (1993»; see alsoYves Gaudemet, Le "precontentieux" - Le reglement non juridictionnel des conflits dans les marches publics, in AJDA NUMERO SPECIAL, ACTUALITE DES MARCHES PUBLICS - TRANSPARENCE, FINANCEMENT, EXECUTION: UNITE ET DIVERSITE D'UN DROIT EN MUTATION 84 (July 20 /Aug 20, 1994); the French Prime Minister's circular of February 6, 1995 "regarding the development of recourse to settlement as a means of amicably resolving disputes," J.O., Feb. 15, 1995, p. 2518; Dalloz, Leg. 196 (1995).
21 Following a law of February 8, 1995 (Art. 21), the French courts are now expressly authorized, with the parties' agreement, to appoint a third party as mediator, at all stages of the proceedings (see Charles Jarrosson, Les dispositions sur la conciliation et la mediationjudiciaires de la loi du 8 fevrier 1995, 1995 REv. ARB. 219; Richard H. Kreindler, A New Impetus for ADR in France?: The New French Law on Mediation and Conciliation, 7 WORLD ARB. & MED. REp. 59 (1996». This law was implemented by Decree No. 96-652 of July 22, 1996 regarding conciliation and judicial mediation, J.O., July 23,1996, p. 11,125; JCP, Ed. G., Pt. III, No. 68,072 (1996). Generally, see Gerard Pluyette, Principes et applications recentes des decrets des 22 juillet et 13 decembre 1996 sur la conciliation et la mediationjuidiciaires, 1997 REV. ARB. 505.
22 On conciliation in Japan and in Asia, see, for example, Noboru Koyama and Ichiro Kitamura, La conciliation en matiere civile et commerciale au Japon, in RID COMP., SPECIAL ISSUE, VOL. 10, JOURNEES DE LA SOCIETE DE LEGISLATION COMPAREE - ANNEE 1988, at 255 (1989); Kazuo Iwasaki, ADR: Japanese Experience with Conciliation, 10 ARB. INT'L 91 (1994); Neil Kaplan, Mediation in Hong Kong, INSTITUTE OF INTERNATIONAL BUSINESS LAW AND PRACTICE NEWSLETTER No. 14, at 59 (1995).
14 DEFINITION AND SOURCES
18. - A significant development is the promotion, in American and English business and legal circles,23 of Alternative Dispute Resolution (ADR) methods and "mini-trials" in particular. 24 These techniques are not really new, but their proponents are attempting to revive and remodel them, to the point that some commentators also consider arbitration to be a method of ADR. 25 Yet, despite the exchange of written pleadings, the hearing of the parties and the presence of a "neutral advisor," a mini-trial is merely a conciliation (or mediation) procedure which will only bring about the end of a dispute if, following the hearing, the parties negotiate and sign a settlement agreement?6 Whatever the name given to them (mini-trial, mediation or conciliation), these ADR procedures are found increasingly frequently in international trade.27 However, they complement arbitration rather than compete with it. 28
19. - There are certainly strong links between arbitration and conciliation. Because the role of any arbitrator involves attempting to reconcile the parties,29 it is not uncommon in international arbitration for the proceedings to be suspended and subsequently brought to an end as a result of a settlement agreement reached by the parties and promoted or
D In the United States, the CPR Institute for Dispute Resolution (formerly the Center for Public Resources) is one of the many organizations successfully seeking to develop ADR; in England, the Centre for Dispute Resolution (CEDR) is active in this field.
24 See Bruno Oppetit, Les modes alternatifs de reglement des dif]erends de la vie economique, 1995 JUSTICES 53; the report of the Rencontres internationales de droit compare, held in Damascus on October 5-8, 1996, on alternative dispute resol ution methods, 49 RID COMP. 311-438 (1997); see especially the introductory report by Charles Jarrosson and the Canadian report by Nabil N. Antaki, published in LEB. REV. ARB., No.2, at 10 and 20 (1996); H.J. BROWN AND ARTHUR L. MARRlOTT, ADR: PRINCIPLES AND PRACTICE (1993); Matthieu de Boisseson, Reflexions sur l'avenir des solutions alternatives de reglement des difJerends (A.D.R.) en Europe, INSTITUTE OF INTERNATIONAL BUSINESS LAW AND PRACTICE NEWSLETTER No. 15, at 45 (1995); Hans van Houtte, A.D.R. Discussed - A summary ofan ICC Seminar on the Settlement ofInternational Commercial Disputes - Brussels, 24-25 October 1995, ICC BULLETIN, Vol. 7, No.1, at 76 (1996). For a comprehensive overview of these alternative dispute resolution methods (ADR), see Jean-Claude Goldsmith, Les modes de reglement amiable des difJerends (RAD)/Means ofAlternative Dispute Resolution (ADR), 1996 INT'L Bus. L.J. 22 I.
25 For this broad view, and for the sociological environment surrounding ADR methods, see THOMAS E. CARBONNEAU, ALTERNATIVE DISPUTE RESOLUTION - MELTING THE LANCES AND DISMOUNTING THE STEEDS (1989).
26 For a description of the concept of a mini-trial, and numerous references, see Douglas A. Henderson, Avoiding Litigation With the Mini-Trial: The Corporate Bottom Line as Dispute Resolution Technique, 46 S.c. L. REV. 237 (1995); Jean-Claude Najar, Le mini-trial: chimere ou panacee?, 1988 DPCI 45 I.
27 Robert Coulson, Will the Growth of Alternative Dispute Resolution (ADR) in America be Replicated in Europe?, 9 J. INT'LARB. 39 (Sept. 1992).
2K CLAUDE SAMSON AND JEREMY McBRIDE, SOLUTIONS DE RECHANGE AU REGLEMENT DES CONFLlTS ­ ALTERNATIVE DISPUTE RESOLUTION (1993); Bernard Hanotiau, Arbitrage, mediation, conciliation: approches d'Europe contintentale et de common law/Arbitration, Mediation, Conciliation: Continental and Common Law Approaches, 1996 INT'L Bus. L.J. 203.
29 According to the French New Code of Civil Procedure (Art. 2 I), the courts also share this role as conciliator.
DEFINITION 15
facilitated by the arbitrator.3o The International Chamber of Commerce's Arbitration Rules31
have long allowed for this possibility in a provision covering "awards by consent." Article 26 of the ICC Rules (Art. 17 of the previous Rules) provides as follows:
[i]f the parties reach a settlement after the file has been transmitted to the Arbitral Tribunal in accordance with Article 13, the settlement shall be recorded in the form of an Award made by consent of the parties if so requested by the parties and if the Arbitral Tribunal agrees to do so.
The concept of an "award by consent" has also been adopted in the UNCITRAL Rules and Model Law. 32 It is primarily a settlement agreement "recorded" by a third party, but it also constitutes a genuine arbitral award. As such, it must satisfy the rules concerning the form of the award and, in the case of ICC arbitration, will also be reviewed by the Court of Arbitration before being notified to the parties. 33 It will then be subject to the same enforcement rules as an arbitral award made without consent, rendering it more effective than an ordinary settlement agreement should further disputes arise between the parties.
20. - However, the trend at an international level is to draw a clear distinction between conciliation and arbitration. For example, UNCITRAL adopted arbitration rules in 1976, and only then began to draft conciliation rules, which were completed in 1980.34
Likewise, several international arbitral institutions decided to offer a conciliation procedure entirely separate from their existing arbitration rules. This is the case, in particular, with:
- the International Centre for Settlement of Investment Disputes (ICSID), set up by the W