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The ‘Judicialization’ of International Commercial Arbitration: Pitfall or Virtue?

Published online by Cambridge University Press:  28 February 2017

Abstract

This article critiques the global concern that international commercial arbitration (ICA) is becoming increasingly ‘judicialized’, addressing the growing sentiment in ICA that arbitral proceedings are too lengthy, expensive, and complex. Assuming a contrarian perspective, it argues that attempts to address the cost and length of arbitration proceedings ought not to undermine the value of finely reasoned arbitral decisions grounded in law and justice. It also argues for a contextual assessment of ICA that extends beyond the debate over ‘judicialization’.

Using global illustrations and ICA developments in Australia as an initial guide, this article suggests that balancing party autonomy, accountability, efficiency, and fairness in ICA can help resolve these growing criticisms of ‘judicialization’. Ultimately, the reform of international arbitration should take place within a framework of ‘international best practice’ that is both analytical in nature and functional in operation. As such, ICA should not only be affordable and expeditious, it should serve as a legitimate and effective method of resolving international commercial disputes. In addition, it should balance the virtue of transparent proceedings against the need to respect the confidences of the parties.

Type
INTERNATIONAL LAW AND PRACTICE
Copyright
Copyright © Foundation of the Leiden Journal of International Law 2017 

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References

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2 See Justice C. Croft, ‘Commercial Arbitration in Australia: The Past, The Present and the Future’, (2011) Research Discussion Paper: Chartered Institute of Arbitrators, at 28, available at www.austlii.edu.au/au/journals/vicjschol/2011/59.pdf. See also L. Trakman, ‘International Commercial Arbitration: An Australian Perspective’, in A. Rayes and W. Gu (eds.), International Commercial Arbitration in Asia (2016); see R. Ge, ‘Australia and International Arbitration: Rising to the Challenge of Improving Regional Competitiveness’, (2014) CIArb Australia Essay Competition, at 1, available at www.ciarb.net.au/wp-content/uploads/resources/essay.pdf.

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6 Ibid., at 247.

7 Ibid., at 247.

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14 Ibid.

16 See generally www.hkiac.org/arbitration. Art. 13.5 of the HKIAC Administered Arbitration Rules 2013 likewise stipulates that the, ‘arbitral tribunal and the parties shall do everything necessary to ensure the fair and efficient conduct of the arbitration’; see also www.hkiac.org/images/stories/arbitration/2013_hkiac_rules.pdf. The Singapore International Arbitration Centre stipulates, in rule 16.3, that arbitration will involve a preliminary case management meeting so as to ensure what procedures ‘will be most appropriate and efficient for the case’, see also www.siac.org.sg/our-rules/rules/siac-rules-2013.

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19 Justice Croft likewise invokes the ‘goal of efficient, effective and appropriate dispute resolution’. See Justice C. Croft, ‘Arbitration Law Reform and the Arbitration List of the Supreme Court of Victoria’, (2010) Discussion Paper: Building Dispute Practitioners’ Society and Business Law Section of the Law Council of Australia, at 25.

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22 Whilst Australia was quick in adopting the UNCITRAL Model Law, there still remain concerns that continued, ongoing legislative and policy reforms are needed. For example, Justice Croft recommends frequent, rolling reviews of the ‘UNCITRAL Rules’ governing ICA. See Croft, Justice C., ‘The Revised UNCITRAL Arbitration Rules of 2010: A Commentary’ (2010) 29 (1) The Arbitrator & Mediator 17 Google Scholar, at 28. Importantly, Nottage likewise urges rolling reviews of the International Arbitration Act and all related legislations that could influence ICA in Australia. See Nottage, L., ‘International Commercial Arbitration in Australia: What's New and What's Next?’ in Perram, N. (ed.), International Commercial Law and Arbitration: Perspectives (2013), 287 Google Scholar at 313. This view can be contrasted to the perspective of Solicitor-General Justin Gleeson, who focuses further on the power of case law to incrementally improve the effectiveness of ICA.

23 Supra, note 21.

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25 See Croft, supra note 2, at 4

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27 Ibid.

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29 Ibid., at 8.

30 Ibid., at 5.

31 Ibid., at 3–4.

32 Ibid., at 2–3.

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42 Ibid.

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48 Ibid.

49 Ibid., at 14; see also Garnett and Nottage, supra note 17, at 215.

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55 Ibid.

56 Monichino, A., ‘Arbitration Reform in Australia: Striving for International Best Practice’, (2010) 29 (1) The Arbitrator & Mediator 29 Google Scholar, at 31.

57 Ibid., at 46.

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64 Ibid.; Queen Mary University of London and School of International Arbitration, 2015 International Arbitration Survey: Improvements and Innovations in International Arbitration (2015) www.arbitration.qmul.ac.uk/docs/164761.pdf.

65 Lord P. Goldsmith, ‘CIArb Centenary Celebrations: 3rd International Arbitration Conference Keynote Address’, CIARB Australia News: December 2015 (2015), at 17.

67 K. Tan, ‘Rate Your Experience – HKIAC Launches Arbitration Evaluation System’, HKIAC, 23 July 2014, available at globalarbitrationnews.com/hkiac-and-icc-take-steps-to-tackle-costs-and-delay-in-international-arbitration-2016-03-14/.

68 Ibid.

69 Welser and De Berti, supra note 62.

70 Schultz, T. and Kovacs, R., ‘The Rise of a Third Generation of Arbitrators? Fifteen Years After Dezalay and Garth’, (2012) 28 (2) Arbitration International 171 CrossRefGoogle Scholar, at 172. Case management is also important in the work of Fortese and Hemmi, who likewise see case management as an increasingly important aspect of offering effective ICA, see Fortese, F. and Hemmi, L., ‘Procedural Fairness and Efficiency in International Arbitration’, (2015) 3 (1) International Arbitration and Procedure 110 Google Scholar, at 118.

71 Ibid., at 166, 169.

72 L. Trakman and D. Musaleyan, ‘The Repudiation of Investor-State Arbitration and Subsequent Treaty Practice: The Resurgence of Qualified Investor-State Arbitration’, ISCID Law Review (2015); L. Trakman, ‘Deciding Investor States Disputes: Australia's Distinctive Approach’, Journal of World Investment and Trade (2013) 15(1) 1, available at papers.ssrn.com/sol3/papers.cfm?abstract_id=2331790. See also Trakman, L., ‘Rejecting Investor-State Arbitration in Favor of Domestic Courts: The Australian Example’, (2011) 46 (1) Journal of World Trade 83 Google Scholar.

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77 Ibid.

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83 Justice C. Croft, ‘How to Minimise Disruption and Delay in Arbitral Proceedings’ (speech delivered at the Arbitrators’ and Mediators’ Institute of New Zealand, Auckland, 16 November 2009), available at www.austlii.edu.au/au/journals/VicJSchol/2009/34.pdf.

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87 Ibid., at 695.

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89 Ibid.

90 ICC, ‘ICC Court Announces New Policies to Foster Transparency and Ensure Greater Efficiency’, 5 January 2016, available at www.iccwbo.org/News/Articles/2016/ICC-Court-announces-new-policies-to-foster-transparency-and-ensure-greater-efficiency/.

91 Simson, supra note 88.

92 Justice Croft, for example, warns of the UNCITRAL ‘Arbitration Rules’ becoming overly prescriptive. See Croft, supra note 19, at 27.

93 Stephen Ware notes the possible problems associated with the emergence of privatized law, but notes above all that, as an alternative method of dispute resolution, ‘arbitration deserve[s] to flourish’. See Ware, S.J., ‘Arbitration and Assimilation’, (1999) 77 (4) Washington University Law Review 1053 Google Scholar, at 1063.

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97 Croft, supra note 2, at 18. See also J. Allsop, ‘International Commercial Arbitration: the Courts and the Rule of Law in the Asia Pacific Region’ (2014) 22 Federal Judicial Scholarship, available at www.austlii.edu.au/au/journals/FedJSchol/2014/22.html. See generally M. Warren, ‘Australia: A Vital Commercial Hub in the Asia Pacific Region; Victoria: A Commercial Hub’ (2015), available at www.supremecourt.vic.gov.au/home/contact+us/speeches/australia+a+vital+commercial+hub+in+the+asia+pacific+region+victoria+a+commercial+hub.

98 Welser and De Berti, supra note 62.

99 Ibid., at 95.

100 L. Trakman, supra note 12.

101 Justice Croft suggests ‘Australian courts, broadly, recognize the necessity for arbitration, particularly in the context of the desirability of increased prospects for global enforcement under the New York Convention’, see Croft, supra note 2, at 5

102 Croft, supra note 34, at 1

103 K. Sanger and Y. Shek, ‘Hong Kong’, [2016] The Asia-Pacific Arbitration Review 38, at 42.

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105 Ibid., at 83.

110 Ibid. See specifically Art. 9.15(5).

111 Supra, note 109, Annex 9-A.

112 The agreement is ambiguous as to who constitutes the standing panel. According to it, the Joint Committee on Investment establishes and maintains a roster. However, it appears that the words ‘establish’ and ‘maintain’ do not include appointment of arbitrators to the roster. Art. 9.15(6) provides that the state parties to the Treaty select five arbitrators each, while 10 additional arbitrators who are not nationals of either party are chosen jointly. Thus, while the Joint Committee has oversight over the standing panel, China and Australia each intend to retain a high degree of control over the appointment of arbitrators. See L. Trakman, ‘Standing Panels in Investor-State Arbitration: A Step Forward’, in J. Chaisse (ed.), China's Three-Prong Investment Strategy: Bilateral, Regional, and Global Tracks (forthcoming 2018).

113 See Trakman, L. and Musayelyan, D., ‘The Repudiation of Investor–State Arbitration and Subsequent Treaty Practice: The Resurgence of Qualified Investor–State Arbitration’, (2016) 43 (1) ICSID Review Foreign Investment Law Journal 194 CrossRefGoogle Scholar.

114 Monichino, supra note 56, at 46.

115 D. McKimmie, ‘Western Australia: The Case for an Arbitration Centre in Perth’, Norton Rose Fulbright, November 2013, available at www.nortonrosefulbright.com/knowledge/publications/108982/western-australia-the-case-for-an-arbitration-centre-in-perth.

116 A. Walt, P. Wiese and D. Jasmat, ‘Clayton Utz Insights: Will Australia's First Dedicated Energy and Resources Arbitration Centre Meet the Needs of Industry?’, Clayton Utz, 19 March 2015, available at www.claytonutz.com/publications/edition/19_march_2015/20150319/will_australias_first_dedicated_energy_and_resources_arbitration_centre_meet_the_needs_of_industry.page.

117 pcera.org/; Nathan, supra note 61.

118 ACICA rules, supra note 79.

119 Monichino, supra note 56, at 46.

120 Ibid., at 118.

121 Ibid.

122 Croft, supra note 2, at 2.

123 M. Shaw and C. Yap, ‘Singapore launches International Commercial Court’, DLA Piper, 30 March 2015, available at www.dlapiper.com/en/hongkong/insights/publications/2015/03/international-arbitration-newsletter-q1-2015/singapore-launches-international-commercial-court/.

124 Ibid.

125 B. Giaretta, K. McMenamin, ‘Singapore: A Global Dispute Resolution Centre?’, Ashurst, June 2014, available at www.ashurst.com/doc.aspx?id_Content=10506.

126 Southwell, R., ‘A Specialist Commercial Court in Singapore’, (1990) 2 (2) Singapore Academy of Law Journal 274 Google Scholar, at 275.

127 Ibid.

128 For an Australian perspective on International Commercial Courts, see A. Stephenson, L. Hogan and J. Smith, ‘Is an International Commercial Court for Australia a Viable Option’, 21 June 2016, available at www.corrs.com.au/thinking/insights/is-an-international-commercial-court-for-australia-a-viable-option/.

131 Ibid.

136 Ibid.

137 Strong, S.I., ‘Reasoned Awards in International Commercial Arbitration: Embracing and Exceeding the Common Law-Civil Law Dichotomy’ (2015) 37 (1) Michigan International Law Journal 1 Google Scholar, at 3.

138 See generally, ibid.

139 Ibid., at 110.

140 Fortese and Hemmi, supra note 70, at 116.

141 Croft, supra note 2, at 7.

142 Ibid., at 4.