'Communitarization' of International Arbitration: A New Spectre Haunting Europe?

Abstract

After the 2009 judgment of the European Court of Justice in the West Tankers case and the 2010 proposal of the European Commission for a reform of Regulation (EC) n. 44/2001 it has been highly debated whether, and to what extent, the law of the European Union can impact on the Member States' laws of international commercial arbitration. The position which has prevailed so far in the arbitral community is that to ‘communitarise’ international arbitration would be useless (since international multilateral treaties, such as the 1958 New York Convention and the 1961 Geneva Convention, deal already with the limited problems of coordination faced by the EU Member States in this area) and dangerous (since it would affect the right of each Member State to shape its arbitration laws as it deems proper so as to better meet the needs of the business community and attract arbitrations within its forum). This position, however, misses the fact that the EU has both an abstract competence, and an actual interest, to legislate in this area, and that for years EU law has already been influencing the content of the Member State' arbitration laws, though through a not entirely consistent pattern mixing elements of ‘favour’, ‘hostility’ and ‘indifference’. The legitimate concern that the EU may go too far and jeopardise the Member States' autonomy in enacting ‘arbitration-friendly’ legislation would be better addressed by considering certain constitutional principles of the EU legal system (conferral, subsidiarity, proportionality, respect of international law obligations) which mandate that any EU harmonization of domestic arbitration laws be carried out by providing for a correct ‘balance’ of the various EU, State and private interests involved. This means, in particular, that the scope and depth ofEU harmonization must vary depending on the link that any given arbitration has with the achievement of the objectives of the European integration. The ‘minimalist approach’ followed by the EU Commission in its recent proposal, which contemplates that the interface between arbitration and litigation be dealt with in Regulation (EC) n. 44/2001 solely through the insertion of a new provision on lis pendens, seems consistent with the balanced harmonization so suggested. Under the new Article 29, para. 4, in fact, the courts of the Member States of the seat of the arbitration or the arbitral tribunal sitting in such a State would be given precedence to adjudicate on the existence, validity or effects of an arbitration agreement when a claim of lack of jurisdiction is raised on such grounds before the courts of another Member State. If correctly interpreted, this provision would avoid the risks of fraudulent ‘torpedo’ actions, would leave to each Member State to decide whether or not to follow the Kompetenz-Kompetenz doctrine,and would not impinge on the circulation of arbitral awards as currently regulated by the New York and Geneva Conventions. This does not mean that there is no space left for further EU harmonisation of the Member States' laws of arbitration. With respect to arbitrations which are instrumental for the pursuance of the EU policy objectives or are otherwise related to the dynamics of the European integration, Directives or Regulations could be enacted to provide for common rules on issues such as subject-matter arbitrability, access to preliminary rulings' under art. 267 TFEU, jurisdiction on arbitral matters, related actions and recognition and enforcement of judgments and awards. However, in cases other than those where arbitration is contemplated by EU law as a means for the private enforcement of its public policies, such harmonisation would have to be minimal, leaving the Member States fee to compete amongst each other (and with non-member States) in the search for the ‘best’ arbitration law.