DOCSLIB.ORG

Lex Loci Arbitri and Annulment of Foreign Arbitral Awards in U.S

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Lex Loci Arbitri and Annulment of Foreign Arbitral Awards in U.S American University International Law Review Volume 20 | Issue 5 Article 7 2005 Lex Loci Arbitri and Annulment of Foreign Arbitral Awards in U.S. Courts Catherine A. Giambatiani Follow this and additional works at: http://digitalcommons.wcl.american.edu/auilr Part of the International Law Commons Recommended Citation Giambastiani, Catherine A. "Lex Loci Arbitri and Annulment of Foreign Arbitral Awards in U.S. Courts." American University International Law Review 20, no. 5 (2005): 1101-1112. This Article is brought to you for free and open access by the Washington College of Law Journals & Law Reviews at Digital Commons @ American University Washington College of Law. It has been accepted for inclusion in American University International Law Review by an authorized administrator of Digital Commons @ American University Washington College of Law. For more information, please contact [email protected]. RECENT DEVELOPMENT: LEXLOCIARBITRI AND ANNULMENT OF FOREIGN ARBITRAL AWARDS IN U.S. COURTS CATHERINE A. GIAMBASTIANI* IN TR O D U C TIO N ......................................................................... 1101 I. BACKGROUND TO THE KARAHA BODAS DECISION ....... 1102 II. KARAHA BODAS v. PER TAMINA ........................................... 1103 III. KARAHA BODAS, CORTEZ BYRD, AND TRADITIONAL NOTIONS OF LEXLOCIARBITRI ................................... 1105 C O N C LU SIO N ............................................................................. 1112 INTRODUCTION In a recent decision out of the Fifth Circuit, the court ruled that under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("New York Convention"),1 only courts in countries with primary jurisdiction may effectively vacate an arbitral award.2 Primary jurisdiction is limited to the country that serves as the situs of the arbitration and possibly the home of the applicable procedural law, if different than the situs of the arbitration.' Further, the Fifth Circuit held that courts with secondary jurisdiction may only decide whether arbitral awards B.A. University of Virginia (2002), J.D. American University, Washington College of Law (2005). The author served as the Senior Critical Essays Editor of the American University International Law Review from 2004-05. 1. See Convention on the Recognition and Enforcement of Foreign Arbitral Awards [hereinafter New York Convention], June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38 (mandating reciprocal enforcement for all signatory countries). 2. See Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274, 287 (5th Cir. 2004). 3. See discussion infra Part III (addressing the New York Convention's provisions regarding annulments and construction of such provisions). 1101 1102 AM. U. INT'L L. REv. [20:1101 will be enforced within that country.4 Secondary jurisdictions are countries subject to the New York Convention outside of those with primary jurisdiction.' Parties obtaining annulments in secondary jurisdictions may not attempt to use such annulments as a defense to enforcement in other jurisdictions pursuant to the New York Convention.6 Thus, annulment decisions by courts in countries with secondary jurisdiction should not prevent enforcement elsewhere. 7 I. BACKGROUND TO THE KARAHA BODAS DECISION Several years before the Fifth Circuit holding, the U.S. Supreme Court had already decided Cortez Byrd Chips, Inc. v. Bill Harbert Construction Co., in which the Court held that the venue provisions of the Federal Arbitration Act8 ("FAA") are permissive.' In Cortez Byrd, the Court held that the FAA allowed venues outside of the place of the award to effectively vacate arbitral awards as long as the jurisdiction was appropriate under the general venue statute. 10 Accordingly, a Mississippi court was permitted to vacate an Alabama arbitral award." 4. Karaha Bodas Co., 364 F.3d at 287. 5. See discussion infra Part III (describing the differences between primary and secondary jurisdictions). 6. Karaha Bodas Co., 364 F.3d at 287. 7. Id. 8. 9 U.S.C. § 201-208 (2000) (implementing the New York Convention as the Federal Arbitration Act). 9. Cortez Byrd Chips, Inc. v. Bill Harbert Construction Co., 529 U.S. 193 (2000) (resolving the split between the U.S. Courts of Appeals as to whether the FAA's venue provision are permissive or mandatory). 10. Id. at204. 11. See id. (overturning the Eleventh Circuit, which had held that venue was limited to the Northern District of Alabama). The arbitration arose pursuant to a contract dispute between Cortez Byrd Chips, Inc. and Bill Harbert Construction Company regarding Harbert's construction of a wood chip mill for Cortez Byrd in Mississippi. Id. at 195. After the arbitration panel issued an award in favor of Harbert, Cortez Byrd filed a motion to vacate or modify the award in the United States District Court for the Southern District of Mississippi. Id. at 196. In response, Harbert filed a motion to confirm the award in the Northern District of Alabama. Id. Cortez Byrd then sought to dismiss, transfer, or stay the Alabama action. Id. The Alabama court denied the motion and held that Alabama was the 2005] ANNULMENT OF FOREIGNARBITRAL A WARDS 1103 Despite the potential benefits of allowing permissive construction of venue provisions for vacatur in the domestic context,1 2 the Cortez Byrd Court also inferred that similar reasoning should apply when considering foreign arbitral awards.13 Such reasoning should be analyzed and compared with the recent finding by the Fifth Circuit in Karaha Bodas and with traditional notions of lex loci arbitri. II. KARAHA BODAS V. PERTAMINA In 1994, Karaha Bodas Co. ("KBC") entered into two contracts with Indonesia's national gas and oil company, Perusahaan Pertambangan Minyak Dan Gas Bumi Negara ("Pertamina"), to build and operate a geothermal electricity development facility in Indonesia. 14 A contract dispute led to arbitration in Switzerland pursuant to the United Nations Commission on International Trade Law Arbitration Rules.15 The contract stipulated Indonesian law as the applicable substantive law. 16 The arbitral tribunal held Pertamina liable and awarded KBC damages for expenses and lost profits.' only proper venue for motions to confirm, vacate, or modify the award. Id. The Alabama court thereafter entered judgment in favor of Harbert. Id. 12. See Karyn A. Doi, Recent Development, Cortez Byrd Chips, Inc. v. Bill Harbert Construction Co., 16 OHIO ST. J. ON DisP. RESOL. 409, 418 (2001) (discussing the positive arbitration policies reinforced by Cortez Byrd). 13. See infra notes 32-38 and accompanying text (describing the Cortez Byrd decision and its discussion of international arbitration and concerns regarding actions to vacate or modify awards rendered in non-signatory states). 14. See Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274, 282 (5th Cir. 2004) (discussing the relevant contracts at issue, which gave KBC the right to develop energy sources in Indonesia with Pertamina's management and to sell electrical energy to an electric utility owned by the Indonesian government). 15. See id. at 282-83 (explaining the Indonesian government's suspension of the energy project due to the country's financial problems, which in turn led to the contract dispute between KBC and Pertamina). 16. See id. at 290-91 (referring to the relevant provisions in the contracts between KBC and Pertamina, which explicitly state that they are governed by the substantive laws of Indonesia). 17. See id. at 284-85 (awarding $261.1 million in damages to KBC). 1104 AM. U. INT'L L. RE V. [20:1101 After receiving the favorable award, KBC filed suit in federal district court in Texas to enforce the arbitral award.18 As the enforcement action in the U.S. court was pending, Pertamina sought and was denied annulment of the award in Swiss courts.19 The Texas district court enforced the arbitral award20 and Pertamina thereafter sought annulment in Indonesia.21 In 2002, Indonesian courts vacated the arbitral award and attempted to prevent its enforcement elsewhere. 2 In 2004, the Fifth Circuit rejected the argument that the Indonesian annulment provided a defense to enforcement under the New York Convention and held that the Indonesian annulment did not prevent U.S. courts from enforcing the arbitral award.23 Noah Rubins has pointed out the failures of the Indonesian judiciary in denying enforcement of foreign arbitral awards and failing to promote the values of the New York Convention, most recently highlighted by its attempted annulment in Karaha Bodas.24 Despite the internal failings within Indonesia represented by the annulment in Karaha Bodas,25 the question raised by the case and its 18. Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Bumi Negara, 190 F. Supp. 2d 936 (S.D. Tex. 2001), aff'd, 364 F.3d 274 (5th Cir. 2004). 19. See Karaha Bodas Co., 364 F.3d at 285 (describing how the Texas district court slowed the proceedings to await the Swiss court's decision). 20. KarahaBodas Co., 190 F. Supp. 2d at 957. 21. Perusahaan Pertambangan Minyak Dan Bumi Negara v. Karaha Bodas Co., Case No. 86/PDT.G/2002/PN.JKT.PST, Preliminary Award (Central Jakarta State Court 2002) (unofficial translation), available at http://www.lfip.org/lawe506/ documents/sessionl4/e506kbjakartadctprelim.doc (last visited July 12, 2005). 22. Id. 23. See Karaha Bodas Co., 364 F.3d at 310 ("Under the New York Convention, the parties' arbitration agreement, and this record, Switzerland had primary jurisdiction over the Award.") The court held that Indonesia did not have primary jurisdiction and the court therefore affirmed the district court's decision that the Indonesian annulment could not be used as a proper defense to enforcement in the United States under the New York Convention. Id. 24. See Noah Rubins, The Enforcement and Annulment of International Arbitration Awards in Indonesia, 20 AM. U. INT'L L. REV. 359 (2005) (describing the Indonesian court's decision to annul the arbitration award). Mr. Rubins argues that the Indonesian annulment was based on "unpredictable and unprincipled grounds," contrary to the spirit and standards of the New York Convention.
Load more

Recommended publications
  • The Application of the 2014 LCIA Rules to Arbitral Proceedings Seated in Italy
    Italy The Application of the 2014 LCIA Rules to Arbitral Proceedings Seated in Italy Ferdinando Emanuele and Milo Molfa Cleary Gottlieb Steen & Hamilton LLP On 25 July 2014, the London Court of International Arbitration • the appointment of a temporary sole arbitrator to con- (LCIA) announced the adoption of its new arbitration rules duct emergency proceedings pending the formation or the (2014 Rules). The 2014 Rules, which replace the 1998 LCIA expedited formation of the arbitral tribunal (emergency rules (1998 Rules), apply to arbitration proceedings instituted arbitrator);14 on or after 1 October 2014, unless the parties agree otherwise. • the expedited appointment of a replacement arbitrator;15 The 2014 Rules preserve all the key features of LCIA arbi- • the revocation of any arbitrator’s appointment;16 tration, including with respect to the role of the LCIA in the • the approval of a truncated tribunal’s decision to continue the appointment of the arbitral tribunal,1 the expedited formation arbitration, including the making of any award;17 of the tribunal,2 the conduct of multiparty proceedings3 and the • up until the constitution of the arbitral tribunal, if the arbi- confidentiality of the arbitration.4 At the same time, several sig- tration agreement is written in more than one language of nificant changes have been made, including with respect to the equal standing and the parties have not agreed otherwise, the form of, and the law governing, the arbitration agreement,5 the determination of the language of the proceedings;18 and conduct of the proceedings,6 and the granting of interim relief • the determination of the arbitration costs19 and of any pay- prior to the constitution of the tribunal.7 ments to be made by the parties on account thereof.20 This paper provides an overview of the 2014 Rules and con- siders their application to arbitration proceedings seated in Italy.
    [Show full text]
  • LAW GOVERNING INVESTMENT TREATY ARBITRATION Veijo Heiskanen*
    FORBIDDING DÉPEÇAGE: LAW GOVERNING INVESTMENT TREATY ARBITRATION Veijo Heiskanen* 1. INTRODUCTION The law governing international arbitration has been a field of considerable conceptual controversy. The debate goes back to the 1960's and 1970's, when distinguished scholars such as F .A. Mann, Berthold Goldman, Philippe Fouchard and others argued whether international arbitration should be considered an autonomous system of law, a new lex mercatoria, or whether it ultimately remained subject to the applicable local legal sys- tem. i As is well known, the former view was shared by many * Partner, LALIVE, Geneva. 1 would like to thank David Bonifacio of LALIVE for effective and efficient research assistance. 1. For an overview of this discussion see, e.g., Berthold Goldman, Les conflits de lois dans l'arbitrage international de droit privé, 109 bk. II RECUEIL DES COÙRS 347 (1964) (hereinafter Goldman, Les conflits de lois); Berthold Goldman, Frontières du droit et lex mercatoria, 9 ARCHIVES DE PHILOSOPHIE DU DROIT 177 (1964) (hereinaf- ter Goldman, Frontières du droit et lex mercatoria); PHILIPPE FOUCHARD, L'ARBITRAGE COMMERCIAL INTERNATIONAL 351-457 (1965); F.A. Mann, Lex Facit Arbitrum, in INTERNATIONAL ARBITRATION LIBER AMICORUM FOR MARTIN DOMKE 157 (Pieter Sanders ed., 1967); Pierre Lalive, Problèmes rélatifs à l'arbitrage interna- tional commercial, 120 bk. 1 RECUEIL DES COURS 569, 597-663 (1968); Pieter Sanders, Trends in the Field of International Commercial Arbitration, 145 bk. II RECUEIL DES COURS 205, 238-65 (1976); Pierre Lalive, Les règles de conflit de lois appliquées au fond du litige par l'arbitre international siègeant en Suisse, 145 RECUEIL DES COURS 2 (1976) (hereinafter Lalive, Les règles de conflit de lois appliquées); Harold J.
    [Show full text]
  • In Polish: “Prawo Prywatne Mi Ędzynarodowe” ) Is a Legal Discipline Defined by Polish Scholars Either in a Narrow Or a Wider Sense
    Mateusz Pilich, Ph.D. CONCISE INTRODUCTION TO POLISH PRIVATE INTERNATIONAL LAW Private international law (in Polish: “prawo prywatne mi ędzynarodowe” ) is a legal discipline defined by Polish scholars either in a narrow or a wider sense. I. Narrowly defined (definition by method) The branch of law responsible for designating the law applicable to certain relationships, cases and situations with a private law dimension (e.g. marriages, contracts, torts/delicts, adoptions and successions) not confined to the competence of just one State (otherwise called ‘international’ or ‘cross-border’ private-law situations). Its only function is designating the law, so it brings, theoretically, no substantive decisions with it, merely pointing at the competent law to remove any potential conflict, whether positive or negative (German: Verweisungsrecht, Kollisionsrecht; English: the law of conflict of laws, conflicts law ); it contains only indirect rules of law ( conflicts rules ). In Poland, the latter are codified (see below). II. Widerly defined (definition by function) The branch of law responsible for regulating any ‘international’ or cross-border private law relationships, whatever the method applied. It contains both the rules of the PIL in the narrow sense (conflicts rules) and the provisions of civil and commercial law (substantive law rules) specifically governing cross-border situations, e.g. contracts for the international sale and transport of goods; international cheques, bills of exchange and promissory notes; and international successions. The latter are usually generated by international legislation such as, for instance, the UN Convention on Contracts for the International Sale of Goods, signed in Vienna on 30 April 1980 (abbreviated as: CISG ); however, local law rules of this type can also exist ( law of aliens).
    [Show full text]
  • International Commercial Arbitration in Europe: Subsidiary and Supremacy in Light of the De- Localization Debate Theodore C
    Case Western Reserve Journal of International Law Volume 31 | Issue 2 1999 International Commercial Arbitration in Europe: Subsidiary and Supremacy in Light of the De- Localization Debate Theodore C. Theofrastous Follow this and additional works at: https://scholarlycommons.law.case.edu/jil Part of the International Law Commons Recommended Citation Theodore C. Theofrastous, International Commercial Arbitration in Europe: Subsidiary and Supremacy in Light of the De-Localization Debate, 31 Case W. Res. J. Int'l L. 455 (1999) Available at: https://scholarlycommons.law.case.edu/jil/vol31/iss2/6 This Note is brought to you for free and open access by the Student Journals at Case Western Reserve University School of Law Scholarly Commons. It has been accepted for inclusion in Case Western Reserve Journal of International Law by an authorized administrator of Case Western Reserve University School of Law Scholarly Commons. NOTE INTERNATIONAL COMMERCIAL ARBITRATION IN EUROPE: SUBSIDIARITY AND SUPREMACY IN LIGHT OF THE DE-LOCALIZATION DEBATE Theodore C. Theofrastous" I. DOES/SHOULD THE SITE OF ARBITRAL PROCEEDINGS M ATTER? ................................................................................... 456 II. THE DE-LOCALIZATION DEBATE - WHEN DOES NATIONAL LAW M ATTER? .......................................................................... 457 A. W hy Localize? .......................................... .. .. .. .. .. 461 1. Enter National Laws Governing Arbitration ............................... 462 2. Historic Localization ...............................................................
    [Show full text]
  • Binding Force of International Arbitral Awards, 23 VA
    DATE DOWNLOADED: Tue Sep 28 14:30:07 2021 SOURCE: Content Downloaded from HeinOnline Citations: Bluebook 21st ed. William W. Park & Jan Paulsson, The Binding Force of International Arbitral Awards, 23 VA. J. INT'l L. 253 (1983). ALWD 6th ed. Park, W. W.; Paulsson, J. ., The binding force of international arbitral awards, 23(2) Va. J. Int'l L. 253 (1983). APA 7th ed. Park, W. W., & Paulsson, J. (1983). The binding force of international arbitral awards. Virginia Journal of International Law, 23(2), 253-286. Chicago 17th ed. William W. Park; Jan Paulsson, "The Binding Force of International Arbitral Awards," Virginia Journal of International Law 23, no. 2 (Winter 1983): 253-286 McGill Guide 9th ed. William W Park & Jan Paulsson, "The Binding Force of International Arbitral Awards" (1983) 23:2 Va J Int'l L 253. AGLC 4th ed. William W Park and Jan Paulsson, 'The Binding Force of International Arbitral Awards' (1983) 23(2) Virginia Journal of International Law 253. MLA 8th ed. Park, William W., and Jan Paulsson. "The Binding Force of International Arbitral Awards." Virginia Journal of International Law, vol. 23, no. 2, Winter 1983, p. 253-286. HeinOnline. OSCOLA 4th ed. William W Park and Jan Paulsson, 'The Binding Force of International Arbitral Awards' (1983) 23 Va J Int'l L 253 -- Your use of this HeinOnline PDF indicates your acceptance of HeinOnline's Terms and Conditions of the license agreement available at https://heinonline.org/HOL/License -- The search text of this PDF is generated from uncorrected OCR text. -- To obtain permission to use this article beyond the scope of your license, please use: Copyright Information The Binding Force of International Arbitral Awardst WILLILM W.
    [Show full text]
  • LEX ARBITRI, PROCEDURAL LAW and the SEAT of ARBITRATION Unravelling the Laws of the Arbitration Process
    886 Singapore Academy of Law Journal (2014) 26 SAcLJ LEX ARBITRI, PROCEDURAL LAW AND THE SEAT OF ARBITRATION Unravelling the Laws of the Arbitration Process Distinct from the substantive laws that guide a tribunal’s decision on the merits, the procedural laws of arbitration regulate the “internal” processes of the arbitration and the “external” relationship (supportive and supervisory) between the arbitration and the courts. This article discusses the meaning, scope and sources of procedural law and lex arbitri; the rights of parties to opt out and create their own procedural framework, and the limits on that freedom; and the process for determining the seat of arbitration (as the primary source of the lex arbitri) in the absence of agreement by the parties. Alastair HENDERSON* MA (Oxford); FSIArb, MCIArb; Solicitor (England & Wales); Partner, Head of International Arbitration Practice in Southeast Asia, Herbert Smith Freehills LLP, Singapore. I. Introduction 1 This article discusses the laws that regulate and support the procedural aspects of arbitration, as opposed to the laws that govern the substantive rights of the parties in dispute. Principally, these are the laws which regulate the “internal” processes of the arbitration and the “external” relationship (supportive and supervisory) between the arbitration and the courts. This matrix of procedural and other laws is clearly distinct from the law which the tribunal must apply in order to reach its decision on the merits. 2 The article begins with a short discussion of the meaning and scope of lex arbitri and procedural law. Having clarified terms, we look at the source of the lex arbitri, principally in the national laws of the seat of arbitration but with a diversion into an alternative vision of arbitration as a delocalised process that floats free from the parochial restraints of national laws.
    [Show full text]
  • Regulations of Determining Law Governing to Arbitrability La Regulación Sobre La Ley Que Rige El Arbitraje
    Revista de Derecho. Vol. 7 (2018), pp. 145-166. ISSN: 1390-440X — eISSN: 1390-7794 Recepción: 28-10-2017. Aceptación: 29-11-2017. Publicación electrónica: 6-5-2018 https://doi.org/10.31207/ih.v7i0.189 REGULATIONS OF DETERMINING LAW GOVERNING TO ARBITRABILITY LA REGULACIÓN SOBRE LA LEY QUE RIGE EL ARBITRAJE Ardalan Haghpanah* Nejad Ali Almasi** Abstract: Determining the law applicable to arbitrability is of paramount importance because the procedures taken by the legal system are very different. In this way, some systems principally recognize any disputes eligible for referral to arbitration, while some other legal systems have put an emphasis on the general inapplicability of arbitrability to the disputes and only accepts it in a few exceptional cases. The remainder of legal systems have taken a position in the middle of these two theories. Therefore, it is clear that determining the applicable and governing law can also pinpoint the ultimate arbitrability (or not) of the case. The main challenge of this research is to examine the law governing the practice of arbitration and how proceeds the arbitrability at the courts of arbitration. At the end of this study, it will be known that there are several criteria for determining the law governing arbitrability, including the lex fori, the law of the parties’ agreement, the law of the place of enforcement of the award, and the law of one or both of the parties. By the way, today transnational law principles seems to gain more importance. Each of these criteria has its own advantages and disadvantages. Moreover, the norms of human rights have also led to developments in the recognition and enforcement of foreign arbitration awards, in such a way that the tenets of human rights (in the domain of the recognition and enforcement of foreign arbitration awards) have also led governments to recognize acquired rights in foreign countries.
    [Show full text]
  • International Commercial Arbitration and the Transformation of the Conflict of Laws Theory
    View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Michigan State University College of Law: Digital Commons INTERNATIONAL COMMERCIAL ARBITRATION AND THE TRANSFORMATION OF THE CONFLICT OF LAWS THEORY Markus A. Petsche* INTRODUCTION .......................................................................................... 454 I. DEFICIENCIES OF THE CONFLICT OF LAWS IN THE CONTEXT OF INTERNATIONAL COMMERCIAL RELATIONS .................................... 458 A. Unpredictability of the Conflict of Laws ................................. 458 1. Unpredictability and Functional and Methodological Complexity of the Conflict of Laws ................................. 459 2. Unpredictability and Court Practice: The Problem of Lex Forism ....................................................................... 463 3. Unpredictability and Lack of International Uniformity of Conflict Rules .............................................................. 464 4. Unpredictability and Party Autonomy ............................. 465 B. Unfairness of the Conflict of Laws .......................................... 466 C. Substantive Inadequacy of Domestic Laws ............................. 469 1. The Existence of Specific Normative Needs of International Commercial Relationships......................... 469 2. The Conceptualization of the Specific Needs of International Commerce .................................................. 471 3. The Inability of Domestic Laws to Respond to the Specific Needs of International Commerce
    [Show full text]
  • Court Intervention Vis-À-Vis Competence of Arbitral Tribunal Jayanth Balakrishna LL.M
    NJA – Session 5, 15.12.18 Jurisdictional Issues: Court Intervention vis-à-vis Competence of Arbitral Tribunal Jayanth Balakrishna LL.M. (International Arbitration, Global Energy and Environmental Law) U.S.A., LL.B. (Hons.) U.K., M.C.E. (Water Resources and Environmental Engg.) U.S.A., B.E. (Civil Engg.) Bangalore, formerly licensed as Professional Engineer (P.E.) U.S.A. 1 Conflict of Laws International commercial arbitration (ICA) involves more than one system of law or legal rules. They may include The law governing the agreement to arbitrate and its performance: • may be set out in the arbitration agreement (to settle future disputes) or in a purpose made submission agreement (to settle existing disputes). When seat or place of arbitration is India and the arbitration is not an ICA, the tribunal is required to apply Indian law in deciding the dispute. In the case of an ICA the rules of law designated by the parties is applied as applicable to the substance of the dispute. • Courts have held that the proper law of the arbitration agreement is the same as the proper law of the contract – or could also be the same as the law of the seat • the ‘separability’ presumption postulates 2 separate agreements which could be governed by 2 separate set of laws. • A valid agreement must be in writing; a defined legal relationship contractual or otherwise - may be governed by principles of tort liability rather than contract; whether the dispute is a subject matter capable of arbitration (arbitrability); affected by both NY Convention and national law, …The lex arbitri is not necessarily only procedural governing the matters internal to the arbitration such as appointment of arbitrators, but also the external relationship between the arbitration and the courts, and also the broader external relationship between arbitration and the public policy of that place including matters of arbitrability.
    [Show full text]
  • Determining the Lex Arbitri in International Commercial Arbitration for Purposes of the Validity of an Arbitral Award
    DETERMINING THE LEX ARBITRI IN INTERNATIONAL COMMERCIAL ARBITRATION FOR PURPOSES OF THE VALIDITY OF AN ARBITRAL AWARD by Aniekan Iboro Ukpe 1. Introduction The mix of several systems of laws in international commercial arbitration1 often makes it difficult to maintain the fine distinction between the rules of procedure as adopted by the parties and the tribunal on the one hand and the law of the place of arbitration, that is the lex loci arbitri on the other hand. The latter refers to the system of law that gives effect to procedural rules and is commonly equated to the law governing the arbitral process itself, the lex arbitri, in effect blurring the intellectually tasking and yet crucial distinction between the two.2 This paper is basically an attempt at delimiting the distinction between the lex loci arbitri and the lex arbitri. Although the paper bases on the premise that the lex arbitri must always be determined with deference to the proper situs of arbitration, yet it argues that except the lex loci arbitri is defined in such a manner that de-emphasizes the sanctity of the designated place or seat of arbitration to include a de facto situs well outside the intent and contemplation of the parties, the lex arbitri would have no real connection with the lex loci arbitri.3 Section 2 attempts a delimitative description of lex arbitri. Section 3 sets out to determine the 1 See Redfern, A and Hunter, M, et al, Law and Practice of International Commercial Arbitration (4th Edition) (London, United Kingdom: Sweet & Maxwell, 2004).
    [Show full text]
  • Law Applicable to Merits of the Arbitration Dispute (An Overview of the English, Swiss and French Arbitration Laws)
    Munich Personal RePEc Archive Law applicable to merits of the arbitration dispute (an overview of the English, Swiss and French arbitration laws) Athanasakis, Dimitrios 1 September 2008 Online at https://mpra.ub.uni-muenchen.de/10334/ MPRA Paper No. 10334, posted 09 Sep 2008 00:51 UTC Law applicable to the merits of the arbitration dispute (an overview of the English, Swiss and French arbitration laws) Dimitrios Athanasakis, LLB, LLM, Advocate (Thessaloniki) Due to the plethora of international elements of a contract to arbitrate, i.e. nationalities of the parties, nature of the transaction and the legal background of the arbitrator, questions of law applicable to the substance of the dispute are always at stake. In the course of arbitral proceedings, issues of law applicable to the arbitral dispute are raised after a concise examination of the law applicable to the arbitration agreement, namely whether the parties have consented to arbitrate the subject-matter in issue and the law applicable to the arbitral procedure. The present study draws upon the principle of party autonomy, in both theoretical and practical aspects in the context of the freedom of contract principle. It further considers the restrictive role of mandatory rules upon the above principle. Light shall also be shed on the current trends of international mandatory rules and public policy as discussed in ICC awards by experienced arbitrators and solely developed within the ambit of international commercial arbitration. Furthermore, a consistent examination of possible choices of law and rules of law such as a-national rules i.e. lex mercatoria and general trade usages will sketch the existing variety of possibilities in choice of law both on the parties and lawyers leading arbitrations.
    [Show full text]
  • 2006/Vol. 17 No. 2
    "#$ %&$R()%* R$+($, -. (*"$R*%"(-*%/ %R0("R%"(-* !""#$%ol( *+ o( ARTICLES REALITY TEST: CURRENT STATE OF AFFAIRS IN THEORY AND PRACTICE RELATING TO “LEX ARBITRI” Loukas Mistelis∗ I. INTRODUCTION The law and rules governing international arbitration procedure (also referred to as “lex arbitri”) is the focus of this article. The references to realism are effectively references to Karl Popper and his work on verification or disproval of theories.1 The article examines in particular whether the existing dominant definition of “lex arbitri” in English law2 can be verified or disproved on the basis ∗ Clive M. Schmitthoff Professor of Transnational Commercial Law and Arbitration; Director, School of International Arbitration, Centre for Commercial Law Studies, Queen Mary University of London. I am grateful to Dr. Stefan Kröll and Professor Julian Lew QC who shared their comments and criticism on earlier drafts of this paper. Mr. Stavros Brekoulakis read critically at the final stage of the manuscript. Errors of fact, judgment, and taste are, of course, mine. A shorter version of this paper was submitted to the Festschrift Norbert Horn. 1 KARL POPPER, LOGIK DER FORSCHUNG (1994). See, in particular, pp. 199 and 223: Zwar geben wir zu: Wir wissen nicht, sondern wir raten. Und unser Raten ist geleitet von dem unwissenschaftlichen, metaphysischen (aber biologisch erklärbaren) Glauben, daß es Gesetzmäßigkeiten gibt, die wir entschleiern, entdecken können. (We have to admit: we know nothing, simply we guess. And our guess is guided by the unscientific, metaphysical (but biologically explainable) belief, that there is some regularity (norm) that we can decode and discover.) (Translation by author). 2 ALAN REDFERN & MARTIN HUNTER WITH NIGEL BLACKABY & CONSTANTINE PARTASIDES, LAW AND PRACTICE OF INTERNATIONAL COMMERCIAL ARBITRATION, para.
    [Show full text]