And/Or: The Problem of Qualification in International Arbitration

Abstract

The problem of qualification is one of the classic problems of conflict of laws and indeed has been characterised by leading scholars as the ‘fundamental’ problem. In short, it is about how a particular legal relation should be conceptualized or, more specifically, whether it should be qualified as a relationship of law and fact or rather as a conflict of laws. While the problem has attracted only limited attention among international arbitration scholars and practitioners, it provides an interesting perspective to conflict of laws in international arbitration. In classic conflict of laws, the problem of qualification was associated with the question of the relationship between legal categories (contract, tort, procedure, etc.) and a connecting factor (place of performance, place of tort, forum, etc.) In international arbitration, the relationship between the arbitration proceedings and the seat of arbitration, and other relevant connecting factors, raises similar issues of qualification. Measured by the relevant connecting factors such as the seat of arbitration, the nationality or domicile of the partus, the place of performance of the contract, and the subject matter of the dispute, an international arbitration may be more or less ‘international’ – or perhaps more accurately, ‘transnational.’ The less transnational the arbitration is in terms of the relevant connecting factors, the more appropriate it arguably is to resolve any conflict of laws issues that may arise on the basis of the standards of the seat. The more transnational the arbitration is in terms of such connecting factors, the more appropriate it arguably is to resolve any conflict issues by reference to transnational standards. In other words, the transnationality of international arbitration is a sliding scale, or a difference in degree, and as such a matter of policy. While qualification may or may not be the ‘fundamental’ problem of international arbitration, depending on one’s intellectual viewpoint, it does provide an instructive framework for developing an understanding of conflict of laws issues in international arbitration. Although true conflicts of laws remain rare, they may arise, and when they do arise, they tend to raise sensitive issues of public policy, precisely because an arbitral tribunal is not necessarily bound by the public policies of the seat.