In International arbitration, one of the major considerations is how the procedural aspect of a case is to be handled. Generally, it is assumed that the law of a state or presiding arbitration institution will determine a dispute. This fact is often evident in domestic arbitration and can be assumed correct in the early times of international arbitration.
However, in recent times, the independence of international arbitration and those of the disputing parties have become more apparent, which has led to a more complex interpretation of state laws.
This piece will highlight the current state of common and civil laws in international commercial arbitration procedures.
No Mutual Exclusiveness of Both Laws
If there is one thing that has become very apparent in the procedural approach to international commercial arbitration currently, it is the non-existent mutual exclusiveness of civil and common laws. Both laws are overarching in most states, and in international arbitration, one of the two will generally be the most prevalent.
Civil law, in general, requires written evidence of contracts and the apparent power of the courts or presiding powers to gather all needed evidence for settling a dispute. In civil law, disputing parties have very limited power to discover the type of evidence being used for making a decision.
In common law, the collation of evidence is majorly carried out by the disputing parties. Each can try to counter and cross-examine their respective evidence before a decision is made. The job of the presiding power is to consider all presented evidence and make a convincing decision.
In international arbitration, the arbitrators and institution law background have often played a deep role in collating evidence and issuing awards. A presiding arbitral seat whose state practices common law will likely bend towards the same procedural practice when presiding over an international dispute.
However, there is no full adherence to any law, as recent judgements and procedures have shown. The divergence and differences in both laws are, to an extent, insignificant when it comes to evidence collation, disclosure and third-party funding.
In a situation where civil law seems to be the overarching law, disputing parties are still allowed a level of freedom to compile evidence, as that is one of the major foundations of international commercial arbitration. Also, while common law allows disputing parties to handle all the evidence collation, the arbitrators also have the right to determine certain important factors if the arbitral clause allows it.
Civil Law Is Significantly Affected in International Arbitration Procedure
When it comes to the overlapping of common law and civil law in international commercial arbitration, the latter seems to benefit more from the overlap. Firstly, International commercial arbitration gives people the chance to actually gather their evidence and every exhibit that can give them the edge.
Clearly, there is a level of restriction in carrying out such in civil law. However, international commercial arbitration and institutions that enforce awards are highly independent, so it is difficult for civil law to be followed purely. It will be a direct infringement on the autonomy of the international commercial arbitration process, making its power as a power non-litigation dispute resolution insignificant.
Common law is also affected when it comes to international commercial arbitration as well. International arbitration becomes very difficult to validate when the clause is not written. Issued arbitral awards based on Oral contracts can be easily challenged so practicing common law to its full strength in international arbitration can be very counterproductive for any party. In most instances, international commercial arbitration dilutes the supremacy of civil and common laws.
Civil Law and Common Laws Give Disputing Parties the Power to Choose their Procedural Laws
The most significant feature of international commercial arbitration in common law and civil law countries is that it is allowed a high level of independence. The most significant part is the ability to dispute parties to choose the procedural law they want to guide the arbitral process and eventual judgment.
Civil law for most countries actually provides this independence in most countries. The Swiss Law Article 182 on international private law allows disputing parties to determine their arbitral rules in reference to the available arbitration rules on which the clause is based. The French civil law in article 1509 also states that the ‘arbitration clause may give parties the power to define the procedure and pattern it should follow during dispute resolution.
Civil law is generally the most conservative of the two general laws, and even it recognizes the power of parties to choose the procedural law as long as their contract outlines such. This reason is why most contracts have spelled out rules on procedural rules and laws to guide their dispute resolution process.
International commercial arbitration procedural rules are, in simple terms, balanced. There is no extreme or polarized end. In recent years, arbitral tribunals and disputing parties have acknowledged the need for compromise and the supremacy of stated clauses over common law, civil law, and other laws.
It is, however, important for an arbitration clause to be expertly drafted for the best impact; this is where top arbitrators come in. With the right arbitration firms, potential contracting parties can be assured of getting well-drafted contracts that put the procedural law choice in their favor.
Rättsakuten is one of the best firms to get expert arbitrators with unrivaled experience in drafting favorable contracts that give their clients the edge. You can reach the company for all your inquiries and professional counsel.
Rättsakuten is a leading law firm focused on Commercial Arbitration and Dispute Resolution. Based in Sweden, Rättsakuten handles dispute resolution and Arbitration matters before the SCC (Swedish Chamber of Commerce), ICC, HKIAC and several other Arbitration tribunals.
About Frederik V