Professional Documents
Culture Documents
Delocalisation
There should not be two legal
systems supervising the arbitration
First at the place of arbitration
Then at the place of enforcement
It is argued that only the law of
enforcement should be considered to
be relevant.
Is delocalisation desirable
Should Arbitration be controlled by
the local law of the place where the
arbitration is heard
Should a state interfere in the
business of citizens who are not
necessarily their subjects
Arguments against
delocalisation
Arbitration should conform to the
standards of the territory in which
the arbitration takes place
A country has the right to make law
which governs all aspect of
behaviour in its territory
Countries where it is not possible to
set aside an arbitral decision have
not been popular places to hold an
arbitration.
Delocalisation
Partial failure and partial success
Andrew Tweedledale and Karen
Tweedledale
Having run into the ground Alan
Redfern and Martin Hunter et al Law
and practice of commercial
arbitration.
Partially delocalised
Margaret Moses points out that
Sports arbitration is partially
delocalised (see Margaret L Moses
Principals and Practices of
International Arbitration p58 para2)
Uncertainty.
Are there legal principles that are
generally followed by the
international commercial
community?
Are rules are uncertain and vague?
When drafting an arbitration clause
there may be some reluctance to
include such a clause
Lex Mercatoria
if no specific is law is identified then
Lex Mercatoria can apply
On the grounds that an arbitration
clause is legally independent of the
main contract
Dalico(1993) Cour de Cassation, Dec
1993 (France)
Equity Clauses
UNCITRAL The model law
The Arbitral Tribunal shall decide ex
aequo et bono or as amiable
compositeur only if the parties have
expressly authorised it do so
Equity clauses
The difficulty in the Harbour case is that both
parties would have to ask the arbitrator to
decide the dispute on some other law, other
than the 1996 Arbitration Act. Which should
be possible and in line with section 46(1) (b)
Unless it could be said that this is not in the
public interest in accordance with s1(b) but
this would not then seem in line with the DAC
Report that the intentions of the parties are
paramount.
Equity clauses
If the parties had invoked s46 (1) (b) of the Arbitration
Act 1996 S46 if the parties so agree, in accordance with
such other considerations are agreed by them or
determined by the criteria, it should be possible for
them to agree that the arbitrator acts in the spirit of fair
dealing between the parties, and have total jurisdiction
over all matters.
Arbitrator S46 (1) (b) is intended to cover arbitration ex
aequo et bono. It may be argued that other
considerations is wide enough to allow the arbitrators
to apply any rule, as he thinks fit .
Equity clauses
Merkin states s46 (1) (b) authorises equity
clauses of all types and however widely cast.
This approach would reflect the primary
objective of the act; to give parties involved in
the dispute, party autonomy.
Russell points out that There must be no
Alsatia in England where the Kings writ does
not run no longer applies to English Arbitration
Law. Party autonomy has been formally
enshrined in the Arbitration Act. 1996.
Equity clauses
Merkin states that when equitable
clauses have come before the courts
any attempt to oust substantive rules of
law threaten the certainty of the clause
and possibly the entire contract for
ousting the jurisdiction of the courts.
Equitable arbitration authorises the
arbitrator to disregard express words
within a contract wording or rules of
construction.
Equity clauses
If this approach is taken and the arbitrator produced a result
that neither party though was fair, the parities may be
putting themselves in a position whereby they have
delegated their party autonomy to the arbitrator.
If this approach is taken and the arbitrator produced a
result that neither party though was unfair, if arbitrators are
given total control, they cannot then complain if the
arbitrator adopts a legal process or law which produces an
outcome, with which they are less than happy.
Parties have the ability in line with section 46(1) b to specify
which rules or law they wish to apply, if they do not exercise
that option, to complain at a later date may be difficult.
Equity clauses
The DAC reports stated the parties
can only escape from their Arbitral
bargain if events arise which can, in
effect, clearly be said to fall outside
that bargain but it has also been
applied in practice.
Equity clauses
Professor Pierre Mayor States that
companies seek certainly which will
only result in arbitrators applying the
law
therefore they are reluctant to allow
ex aequo et bono clauses
An Award can be challenged if an
Arbitrator exceeds their power.