International Commercial Arbitration

Added on - 28 May 2020

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International Commercial ArbitrationName:Date:Institution:
IntroductionInternational commercial arbitration has become a common method of resolving disputesthat involve commercial entities. There are some of the biggest cases which have gone to thearbitration table for resolution. One of these cases includes Mitsubishi Motors Corp vs. SolerChrysler- Plymouth Inc. One of the major advantages of this method is that it eases the time inwhich awards are rendered. In a foreign jurisdiction, the debtor can have assets which can bedomiciled by the creditors. That ease has been partly due to the New York Convention a treaty of1958 which allowed countries to enforce awards arbitration from other independent jurisdictions.Parties entering into international commercial transactions find it very endearing to internationalarbitration. Parties to international contracts always have arbitration clauses that tend to protecttheir rights and eliminate uncertainties when a dispute arises.A court may however render a given dispute as non-arbitral. This is in rise to growing publicinterest and a highly conflicting policy concern. A court has higher authority and power than thecourts of arbitration. It can render a case or a conflict non-arbitral if it’s highly charged. TheFederal Arbitration Act (FAA) allows arbitration of international disputes under the UNconvention on foreign arbitral awards. The court may reject arbitration on the scope of publicPolicy Exception. In a recent landmark ruling, the US Supreme court ruled that in the case ofMitsubishi Motors Corp .v. Soler Chrysler- Plymouth Inc. those private antitrust claims arearbitral in transaction arising from international trade.In this case, the court ruled in five-to-three decisions that if a contract has a broad agreement ofarbitration, policy that favors arbitration overrides domestic public policy against antitrust
claims. They mentioned that arbitration claims need not be specifically mention a givenrequirement. Statutory provision and treaties in antitrust claim that arbitration can be overruledby a court of law. In Mitsubishi- Soler there was an alternative public policy concern whichmeans that arbitration could have contravened the public interest countervailing the holdingcompany. The agreement was enforceable.In order to comply with this rule, the ICSID arbitration rules require the arbitrators to sign adeclaration stating that there is no "reason why they should not serve in the Arbitration Court".While the absence of conflicts of interest is sought, a subjective suspicion about the referee doesnot disqualify himAs a consequence of the ethical principles of impartiality and independence that we haveanalyzed, certain ethical duties of the arbitrators arise, which have been specially included in theCodes of Ethics of both the International Bar Association (IBA) and the American ArbitrationAssociation (AAA), known as: disclosure duty; duty of communication, duty of care; and duty ofconfidentiality, which we will analyze.When it comes to the method of arbitration, most corporations fall into three categories. The firstcategory is those that are in favor of arbitration for a particular transaction whenever necessary,those that do not agree on arbitration unless they are given no other alternative or means ofsettling a dispute and those who have basically no policy and therefore will make ad hocdecisions on issues raised on a particular matter. Corporations that do not want arbitration do sooften because they have had bad experiences in the past. Arbitration awards are not appealed andtherefore due to limited grounds of appealing they prefer other methods which can be appealed.An appeal is paradoxical in cases of arbitration.
The lack of appeal in arbitration makes it too risky. The time and size of the commercial casewill be a determining factor in arbitration cases.Due to the relative privacy and consensual nature of the arbitration process, businessparticipants prefer commercial arbitration as a way of settling disputes. However, the role ofnational courts has been put on the spotlight because of the way some reverse arbitrationdecisions. This has highlighted the weaknesses of commercial arbitration as a way of settlingdisputes. Even though parties choose arbitrators, select substantial laws governing the merits ofthe case, design procedures etc. It is not uncommon for arbitral tribunal awards to be performedunder pressures. It is also possible that in some circumstances, parties would refuse to performarbitral wards, which has compelled arbitration to turn to existing power to enforce arbitralawards. This has prompted the involvement of national courts, which has shown one weaknessof the arbitration process. Commercial arbitration has developed from domestic to internationaland in this process it has created more chances of national courts intervention and restrictions oflex loci arbitri.According to Professor Goode international commercial arbitration has forced the pace of changein arbitration process. Delocalization movement started as a result of excessive judicialinterference with party autonomy. Although the delocalization process is still ongoing, it has ledto the freeing of commercial arbitration from the constraints of national laws.The delocalization theory attempts to create a delocalized arbitration that is free from lex lociarbitri. This theory suggests that national laws should not control international commercialarbitration. It however acknowledges that the laws of the place of enforcement shouldconditionally govern arbitral awards. However, Redfern and Hunter were skeptical of this theory
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