Arbitral fraud and the power of arbitrators in the Nigeria v P&ID case: all that glitters is not gold

This article provides a theoretical foundation with potential for direct practical implementation on the use of arbitral powers within international tax dispute resolution for the benefit of arbitrators and competent authorities. First, it introduces the notion of inherent and implied powers as a means to show how the characteristics of panels and interpretation can be used for the purposes of achieving faster the “right” solution to a dispute. Second, it shows how value created by disputes should be measured – through returns on investment of the dispute. The work shows that the measure can be used to compare the possible impact on the creation of value of different decisions of competent authorities in terms of drafting the legal framework of the dispute and arbitrators. Third, it gives an example on how arbitral powers can be used, making a case for the use of bifurcation within the context of international tax dispute resolution showing how further analysis of panel power is useful to enhance the system as is, without further reform. The work therefore raises awareness on how the current system can benefit from a broader discretion of arbitrators in managing international tax disputes especially if competent authorities expressly allow it and shows how such benefits can be measured. The article concludes with a practical example on the use of bifurcation to limit costs of a dispute and consequently enhance value.

THE SEARCH for the power of international arbitrators to fill gaps and revise contracts is of extreme practical relevance. It also belongs to the most controversial issues of arbitral doctrine of the past three decades.1 Two of the greatest comparative lawyers of the last century, Rene David and Clive Schmitthoff, have inspired this discussion in the late 1970s and early 1980s. David's contribution to the Tenth International Congress of Comparative Law in Budapest in 19782 and Schmitthoff's groundbreaking article on ‘Hardship and Intervener Clauses’ in the 1980 Journal of Business Law 3 have set the stakes for a discussion that is still continuing today. In fact, their views of and approaches to this intricate problem are more up to date than ever.4 The following arguments are intended to shed some light on the current state and the future prospects of the search for the international arbitrators' power to fill gaps and revise contracts. The main reason why this search has lasted so long without generating a satisfactory solution lies in the fact that this discussion is centred around a seemingly clear cut dogma: the procedural character of arbitration is said to be incompatible with the contractual nature of adaptation and gap-filling. This dogma has two aspects. The first is of a contractual, the second of a procedural nature. ### (a) The Contractual Perspective The contractual perspective relates to the natural weakness of complex long-term ‘relational’ contracts. The time factor makes these contracts vulnerable to the change of technological, political or economic circumstances or the omission of certain contractual provisions. Given the significance of long-term contracts, these problems are ‘a fact of life’5 and arbitrators as the natural judges of international trade and commerce should be able to cope with them. However, their resolution requires a balancing of two antagonistic classical principles …

ARBITRATORS AS THE CENTER OF A HETERARCHICAL SYSTEM International arbitration is a particularly good example of confronting complexity in modern international law and dispute settlement. One-off arbitral tribunals, constituted under different arbitral rules and without a uniform supervisory mechanism, resolve individual cases based on different national and international standards and thus create a tremendous risk of inconsistent decisions. This leaves many observers with the perception that international arbitration resembles a chaos of unconnected episodes of dispute settlement rather than a structured system. This perception reflects the absence of hierarchical ordering structures usually associated with systems of dispute settlement in the domestic context where a supreme court ensures convergence and unity. International arbitration, by contrast, operates in predominantly heterarchical structures. In them, the system's unity cannot be forged through hierarchy but requires auto-convergence of independent actors. For once, elements of convergence exist in the wide adherence of states to important international conventions and due to the harmonizing effect of model laws. Yet every arbitral tribunal remains king in its own empire. Still, one can observe considerable convergence, and hence order, in the practice of arbitral decisionmaking. Convergence is reflected less in legal sources but crystallizes in the sociological structures and linguistic practices of international arbitration. Just as one requires highly elaborate methods of fractal geometry to uncover ordering structures in Jackson Pollock's seemingly chaotic drip paintings, (1) one can uncover order in international arbitration by analyzing the discourse in and about international arbitration rather than concentrating on formal sources. To understand arbitration as a system thus means understanding the importance and power of arbitrators. They are the center that can forge international arbitration into a system or dissolve it in infinite fragmentation. Similar to courts in the domestic context, arbitrators as a group are the key institution for the emergence, persistence, transformation, and hence existence, of international arbitration as a system. (2) After all, uniform substantive and procedural rules only translate into a system if arbitrators apply them accordingly; likewise, arbitrators can even forge divergent legal rules into a convergent and structured whole. Arbitrators therefore determine the gestalt of international arbitration. INTERNATIONAL ARBITRATION AS GLOBAL GOVERNANCE The idea that arbitrators determine whether international arbitration constitutes a proper system is closely linked to understanding the function of arbitration not only as a mechanism to settle individual disputes, but as an instrument of global governance. (3) After all, the concept of a system implies that there is an overarching structure connecting individual instances of dispute settlement. This overarching structure develops chiefly on the basis of arbitral precedent. (4) Building on the increasingly widespread publication of arbitral awards, in investment treaty but also in commercial arbitrations, both the decisionmaking of international arbitrators and the argumentation of parties appearing before them are highly precedent-driven. Although it is non-binding, arbitral precedent becomes the primary sources for guiding the resolution of international disputes. It is the use of, and reference to, arbitral precedent that lets arbitrators transform international arbitration into an independent system. Not all arbitrators, however, accept that they operate in a system of governance. They stress that arbitration is a party-controlled and party-owned process in which arbitrators function as agents of the parties. (5) Such a position, however, is not particularly convincing, considering how crucial arbitral precedent has become in forging normative expectations of actual and future parties about how international disputes should be resolved and how parties to international transactions should conduct themselves in the shadow of rulings of arbitral tribunals on matters of substantive and procedural law. …

The publication of an English translation of this important decision of the Bundesgerichtshof, together with Professor Dr Schlosser's contemporary analysis, is to be welcomed by non-German speaking lawyers.1 It will be of general interest for two reasons. First, for the light that the decision throws on the problem which arises whenever an arbitrator is asked to decide on his own jurisdiction. Second, for the principles of construction which the decision lays down for the interpretation of arbitration clauses, where a parallel is to be found with more recent English authority. The case before the German courts did not in fact arise from a decision by the arbitrator on his own jurisdiction. It arose from what in England would have been an application to stay proceedings on the ground that the dispute was within the scope of the arbitration agreement. The German Supreme Court's actual decision was that the arbitration agreement was not rendered invalid by the nullity of the main contract, but that the arbitrator had, under the terms of the arbitration agreement, jurisdiction to decide questions as to the consequences of the invalidity of the contract. If the situation had been the other way round, with the defendant challenging before the arbitrator the validity of an arbitration begun by the plaintiff, it seems legitimate to assume that the result would have been the same. The case would then have raised a familiar question as to the arbitrator's power to proceed with the reference, and indeed to make decisions concerning his own jurisdiction, when the validity of the underlying contract is put in issue. The question is essentially this: If one starts from the assumption that an arbitration clause in a contract depends for its validity on the validity of the contract itself, how can an arbitrator make a …

The article analyses the first public award rendered on the basis of an arbitration agreement contained in merger control commitments to the European Commission. It addresses first the nature and general features of the arbitration of merger control commitments, concluding that it is an ordinary commercial arbitration, whose main peculiarity is that it is without privity, being available to all the beneficiaries of the commitments (the customers and competitors of the merged entity). It is not a form of “regulatory” arbitration, nor an instrument for the “monitoring” of merger control commitments and the Commission has no power to intervene in the procedure or to influence the decision. The article then discusses the RTI v. Sky Italia award's analysis on jurisdiction and on the merits. The Arbitral Tribunal's decision on the jurisdictional objection is particularly interesting because it clearly distinguishes the roles of the European Commission and of the arbitrators. While the former is competent for the public enforcement of the commitments, the function of the arbitrators is to settle the disputes between the merging entity and the beneficiaries of the commitments, which would otherwise fall under the jurisdiction of national courts. The award adopts a broad and constructive approach to the identification of the disputes that can be brought under this type of arbitration agreement. On the merits the award identifies the scope of the arbitrator's power to enforce the commitments, in particular in relation to the Commission's concerns in the decision clearing the merger, deciding that the arbitrators cannot modify the commitments. The article concludes that this first arbitration under merger control commitments confirms the effectiveness of the introduction of arbitration clauses in such commitments.

Arbitration and Award. Death of a Party to a Common-Law Submission Agreement Revokes the Arbitrator's Power to Make an Award

This study examined the role of ordinary bonds in proofs and showed that they have legal validity when a requirement exists: writing or signature; however, this authenticity is described as temporary authenticity. invalidity", whereby such validity would be waived if his validity was challenged by express denial or falsification. If the ordinary bond is valid, that authenticity reverts to the bond, His legal strength has become stronger than before, and he has addressed the scope of the authenticity of ordinary bonds between his parties and others when challenging his validity by denial or forgery, set out the arbitrator's power to assess the validity of the ordinary bond when challenged by denial or forgery. This study also discussed the authenticity of ordinary bond images in proof. This study found that the normal bond is only an argument for others if the date. Is fixed: The ordinary document should have no authority to prove except in certain cases, in which it has the same authenticity.

This revised text provides a practical guide to the law relating to all aspects of costs in arbitration proceedings. The Arbitration Act 1996, has made significant changes to the law on arbitration costs. These have, among other things, made arbitrators responsible for the cost-effective management of cases, and given them new powers to help them achieve this. In its second edition, "Costs in Arbitration Proceedings" has been updated to include sections on: agreements as to costs; the arbitrator's power to limit costs; and forms and precedents. It sets out the law of costs for the parties and of the parties, the arbitrators' fees, taxation of costs, and security for costs, costs implications of offers of settlement and application to the court in repect of costs. It is suitable for professional arbitration lawyers and also for the new or lay arbitrator.

Arbitral power in the People's Republic of China : reality and reform

The present work deals with the jurisdictional power of the arbitrators. After the emergence of the prima facie test in the enforcement of the arbitration agreement, we are now assisting the creation of a new arbitral power, i.e., the power to render an enforceable decision attesting the invalidity or inapplicability of the arbitration agreement (the so-called negative jurisdictional ruling). These trends imply a shift in the theory of international arbitration: from a private system originating from the will of the parties, to a distinct legal order operating side by side with national legal systems.

An excerpt from the introductory paragraphs of the article: “The American law of arbitration has for some reason been replete with what we have become accustomed to call ‘trilogies’—and the last two terms of the U.S. Supreme Court have curiously continued that pattern. Once again the Court has handed us three leading cases on closely related themes—and these decisions have turned out in fact to be in many ways the most interesting of the lot [referring to Stolt-Nielsen, Rent-A-Center, and Conception]. All three amount to extended riffs on the Question of Questions, the scope of arbitral power: And so the Court has continued to dip its finger into this rich mixture—compounded of notions of judicial review, ‘arbitrability,’ ‘separability,’ competence/competence, and the preemption of state law—all of our hard-earned lore and learning is there. Undoubtedly for the moment the greatest salience will be with respect to arbitration clauses in contracts of adhesion entered into by consumers and employees—and yet this recent jurisprudence has the potential of sweeping far more broadly. It seems reasonably clear that these cases will continue to generate endless discussion. Things now seem curiously muddled: If our law of arbitration now no longer seems to have any clear unifying theme, any fil conducteur, this suggests that private adjudication—rather than presenting us as it once did with a coherent and self-contained body of doctrine—has become a hostage to a game played out on a larger stage, a pawn of wider, systemic “political” concerns. And so—yet another untoward result — these cases will require the reevaluation of what seemed, for a while, to constitute comfortably settled certainties. Here is at least one step in that direction.”

Closing the Enforcement Gap: Third Party Discovery under the FAA and the Federal Rules of Civil Procedure

This laboratory experiment examined the differing effects of anticipating a mediator versus an arbitrator upon the negotiating behavior of group spokesmen who represented actual constituencies. In addition, the reputation (attractiveness) of the third party was also manipulated. It was hypothesized, based upon previous research, that representatives facing high-power third parties (arbitrators) would have more difficulty in negotiations. This, in fact, was found. Representatives facing a third party with arbitration power took more time to reach an agreement, used more bargaining dyads and had more deadlocks than did representatives who faced a low-power third party. Contrary to expectations, no main effect was found for third-party reputation. In concluding, the importance of replicating this study's findings was emphasized.

Two significant opinions on mediation confidentiality from opposite coasts emerged this summer. Alternatives' editor Russ Bleemer, and Timothy Klimpl, of New York, analyze the result in the closely watched California Supreme Court Simmons v. Ghaderi case, which provides strong support for the state's mediation protection statutes. Confidentiality is on shakier ground in the hands of New York's top court, with details provided about the Court's affirmance of a subpoena for a mediator's testimony and records. Jillian Lee Hunt, of New York, looks at another California Supreme Court case on the limits of arbitrator power, and there is a report on a United Kingdom survey revealing an insufficient use of employment mediation.

With the ICANN domain name dispute resolution regime in place for just over a year, practitioner Robert Badgley critiques its operation and identifies a number of early problems which have permitted different arbitration panels to reach contrary conclusions on the same issue. Badgley then offers ten steps that ICANN should undertake to cure these problems, with the overriding theme being to eliminate ambiguity and facilitate establishment of a uniform body of ICANN "precedent" for cybersquatting disputes. Establishing the context for his analysis, the author first examines the ICANN "statute" governing cybersquatting disputes and the ICANN rules of procedure governing the arbitration system. The analysis defines "cybersquatting" and describes the power and function of ICANN arbitrators. Next, Badgley identifies and suggests resolutions for five procedural problems involving issues, such as, what should be the consequence of the failure to respond to a complaint, and what sanctions should be available for a complainant who engages in reverse domain name highjacking. Finally, the author surveys substantive problems with the ICANN "statute. " He identifies and recommends solutions to problems, such as, the need to clarify the analysis of the "identical or confusingly similar" element of an ICANN claim, how that analysis should be applied to "gripe sites," and the inherent problem of proving a negative under the "rights or legitimate interests" element.