EU law in international arbitration—the example of Switzerland

The European Union and international arbitration are two robust legal regimes that have managed to develop largely in accordance with their own respective ‘first principles’, and they have accordingly thrived. This article initially explains why that has been the case. But the era of parallelism between the regimes has ended, and rather suddenly. This article identifies the two principal fronts on which tensions between EU law and international arbitration law have emerged. Interestingly, both commercial and investment arbitration are implicated. A first front entails a conflict between the European Court of Justice's (ECJ's) expansive notions of EU public policy and two well-established axioms of international commercial arbitration law: first, that public policy must be construed narrowly when invoked as a ground for annulling an award or denying it recognition and enforcement; and second, that parties in arbitration are expected to raise all substantive arguments pertinent to their claims or defences in the course of the arbitral proceedings and not reserve them for post-award relief from a disappointing award. A second front finds EU Member States invoking their obligations under EU law as a defence – sometimes jurisdictional, sometimes substantive – in investor-State tribunals. The paradigm argument is that EU law mandates withdrawal of an illegal state aid in reliance on which an investor entered that market. This article examines two prevailing methodologies for addressing these tensions, in arbitral tribunals themselves as well as in reviewing courts. It concludes that many such tensions – particularly those along the first front – may be resolved through accommodation techniques well-established in other areas of the law. Others, particularly those arising in the investor-State context, resist resolution in that way and are requiring decision-makers to face the uncomfortable prospect of making one of these legal regimes cede ground to the other. The ECJ and investor-State tribunals are understandably inclined to prioritise the regimes differently, with the ultimate outcome falling to member state courts which owe allegiance to both regimes.

The advent and development of soft law in international arbitration is no new phenomenon. More than thirty years ago, a proposition was advanced that soft law has become nearly indispensable in international arbitral practice (Reisma nn, 1988). Today, while there are many who fully support this proposition, a growing number of actors in international arbitration generally take a critical stance regarding the non-consensual use of soft law in arbitral proceedings. The aim of this chapter is to analyse these two poles in order to examine the current state of soft law in international arbitration. This chapter first discusses the theoretical concepts of soft law in international arbitration. Then, the application of soft law in international arbitration is explored, by taking into account its relevance to commercial and investment arbitration. Finally, prominent soft law instruments pertaining to procedure, ethics and the merits of an arbitration case will be assessed briefly both in terms of reasons for their development and reception in practice. The chapter concludes with some reflections on the role of soft law in today’s arbitral practice and possible future developments.

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.

This article examines the impact of EU law in international commercial arbitration. EU law has become increasingly relevant in the world of commercial arbitration and while this may not at first seem to be a problem, this article argues that EU law has a distinctive nature which makes it fundamentally incompatible with the arbitral legal order. In effect, the EU legal order has developed on the basis of a direct trilateral relationship between disputes involving EU law, national courts and the European Court. When we are concerned with ordinary judicial proceedings, this relationship is classically supported by the ‘principle of effectiveness’ identified in the case-law of the European Court, which requires national procedures to enable individuals to bring claims based on EU law. Crucially, however, the procedural demands that could be made by the EU legal order are limited by the twin ‘principle of national procedural autonomy’, meaning the Court refrains from directly prescribing modalities for access to national courts and leaves discretion for States to set procedures. Contrasting with this analytical framework, it is here argued that once claims based on EU law fall within the sphere of arbitration, the principle of national procedural autonomy is inoperative and the EU legal order can dictate the terms of review. It is submitted that the effectiveness of EU law is assured not by the standard principle of effectiveness but by the principle of effective judicial protection, thus securing the procedural primacy of EU law in the arbitral legal order.

This chapter examines the nature of international commercial arbitration and its distinguishing features; the harmonisation of the law of international commercial arbitration; international arbitration and the conflict of laws; the review of arbitral awards; and the recognition and enforcement of arbitral awards. Consideration is given to the contribution made by the UNCITRAL Model law on International Commercial Arbitration and to the rules of various arbitral institutions (such as the ICC) to the harmonisation of arbitral law and practice. Also examined is the relationship between arbitration and national courts and national law, particularly in the context of the debate over delocalisation.

The arbitral tribunal in an international arbitration usually is accorded great freedom to assess and select the applicable substantive law when the parties themselves did not make a choice of law. The authors discuss what the effect hereof is on the role of the Unidroit Principles within the context of international commercial arbitration. Thereto, they explore the following issues. Firstly, they examine when the Unidroit Principles might serve as applicable law and they provide an overview of the different methods generally used by arbitrators for selecting the appropriate applicable law in an arbitration procedure. Secondly, they investigate the role of the Unidroit Principles in the interpretation and supplementation of national law. They then further examine the use of the Unidroit Principles for the interpretation and supplementation of international uniform law. In the margin of their research, the authors also touch upon the issues of the growing acceptance of the application of a-national law in international arbitration the scepticism of legal scholars as to the application of ‘lexmercatoria’; and the use of the Unidroit Principles as an instrument for interpretation and supplementation of the international uniform law, such as the CISG.

Volume I, covering International Arbitration Agreements, provides a comprehensive discussion of international commercial arbitration agreements. It includes chapters dealing with the legal framework for enforcing international arbitration agreements the separability presumption choice of law formation and validity nonarbitrability competence-competence and the allocation of jurisdictional competence the effects of arbitration agreements interpretation and non-signatory issues. Volume II, covering International Arbitration Procedures, provides a detailed discussion of international arbitral procedures. It includes chapters dealing with the legal framework for international arbitral proceedings the selection, challenge and replacement of arbitrators the rights and duties of international arbitrators selection of the arbitral seat arbitration procedures disclosure and discovery provisional measures consolidation, joinder and intervention choice of substantive law confidentiality and legal representation and standards of professional conduct. Volume III, dealing with International Arbitral Awards, provides a detailed discussion of the issues arising from international arbitration awards. It includes chapters covering the form and contents of awards the correction, interpretation and supplementation of awards the annulment and confirmation of awards the recognition and enforcement of arbitral awards and issues of preclusion, lis pendens and staredecisis.

The article deals with the phenomenon of abuse of law in international arbitration that seems to be an extremely relevant subject for study due to the development of transnational economic relations. At the same time, various types of abuse in arbitration make us think about developing a certain classification of all cases of abuse of law. The purpose of this article is to comprehensively consider the types of abuse of law in international arbitration and the prospects for countering such abuses, as well as to develop a theoretical basis for such countering based on world experience. In this study, the delay in the process, challenging the competence of arbitration, abuse of information disclosure and exchange of documents, the transfer of the assets of debtor to affiliates or third parties, a fraudulent application for bankruptcy of the debtor, as well as lies to arbitrators and fake evidence were considered. At the same time, the article notes the problem of the lack of mandatory ethical standards in international arbitration and the insufficient powers of arbitrators in the process. The authors conclude that it is necessary to continue work on ethical codes of conduct. In addition, it is concluded that it is necessary to apply liability measures and “procedural sanctions”. In this regard, we are ready for regulatory changes and the implementation of the “ethical review”, that is necessary for positive changes in arbitration.

This sixth edition of Redfern and Hunter on International Arbitration takes a fresh look at the law and practice of international arbitration in today’s world, against a background of constant change and evolution. Since the fifth edition of this book was published in 2009, there have been major changes in many national laws governing international arbitrations, as states seek to become ‘arbitration friendly’ by introducing new laws based on the United Nations Commission on International Trade Law (UNCITRAL) Model Law. There have been changes too in some of the best-known rules of arbitration, including new UNCITRAL Rules of Arbitration (2010), new International Chamber of Commerce (ICC) Rules of Arbitration (2012), and, in October 2014, new Rules from the London Court of International Arbitration (LCIA). There have also been important developments in the so-called soft law of international arbitration. In 2010, the International Bar Association (IBA) published a revised version of its Rules on the Taking of Evidence in International Arbitration, and followed this up in 2014 by publishing new and important Guidelines on Conflicts of Interest in International Arbitration. This sixth edition of Redfern and Hunter reviews the many changes that have taken, and are taking, place in the law and practice of international arbitration, and it places these changes in context as part of the constant evolution of a voluntary system of dispute resolution that is today recognised and established worldwide.

International arbitration law and practice has changed dramatically over last couple of decades and so are the attitudes of disputing parties. This paper will be comparing arbitration with other DRMs and explore its benefits in some detail that makes it the most suitable for the petroleum industry. We will be also looking in the mechanics of international arbitration practice and how does national and international laws relate to it. Even though international arbitration is classified between investment and commercial arbitration, besides ICSID, majority of international arbitral institutions are open to both arbitrations. This paper will also be examining some features of a few widely recognised international arbitral institutions. International Arbitration Law exists among other areas of international laws, its relation, interaction and conflicts are also discussed. However, the main focus of the study is to make the readers from petroleum industry aware of processes involved in international arbitration, the due diligence they need to conduct when entering into arbitration agreements and the most effective terms on which they can agree to make the best use of this wonderful dispute resolution forum.

This article presents a study of the validity of asymmetrical arbitration clauses, a clause that combines arbitration and a choice of court option, in international commercial contracts. These clauses designate a method of dispute settlement that gives a more favorable position for one of the parties to a contract, hence, creating a debate on its validity on an international level. Despite the convenience the trend has brought in business, this form of arbitration clause has been called into doubt by courts in numerous jurisdictions. Unfortunately, Indonesia itself has yet to have a firm legal standing on this matter as asymmetrical arbitration clauses are not explicitly regulated by the Indonesian arbitration law. This research is conducted by exploring the relation between theories and practices concerning asymmetrical arbitration clauses through analyzing case law and provisions of international arbitration law and the Indonesian arbitration law, and are also analyzed through principles of international and Indonesian contract law. This article aims to provide an analysis regarding the legal effects of having asymmetrical arbitration clauses in commercial contracts and commercial arbitration. Lastly, this study offers a method of interpretation towards such clauses that favors their validity under both international arbitration law and Indonesian arbitration law.

The subject. This informational article is devoted to the peculiarities of recognition and enforcement of international commercial arbitration awards according to different countries’ legislation and international legal regulation. The purpose of the article is to identify legal patterns of recognition and enforcement of international commercial arbitration awards in different countries. Methodology. The study is based on comparative law and formal law methods, analysis and synthesis. Results, scope of application. Enforcement of arbitral awards in countries is ensured and guaranteed by multilateral conventions, bilateral treaties and national legislation. The New York Convention 1958 in a certain way limits the scope of legal protection of arbitral awards and leaves the procedure for recognition and enforcement of arbitral awards for consideration of the state court. The author analyses of differentiation of the recognition and enforcement regime of so-called domestic and foreign solutions of international commercial arbitration in terms of doctrinal approaches and practice of countries. Special attention is given to the analysis of arbitral awards of recognition and enforcement procedures is given to a denial of recognition and enforcement of arbitral awards and their reasons. In spite of the explicit grounds for refusal of recognition and enforcement of arbitral awards in New York Convention 1958, some countries try to establish certain exceptions to the rule in the national legislation. Results may be applicable in improvement of international legal regulation. Conclusions. The courts of the countries – participants of the New York Convention 1958 cannot cancel the arbitral award or revise it substantially. The refutation of this award is possible only in the court of the state in whose territory the relevant arbitral award was made, and such court is not formally bound by the rules of the New York Convention 1958, when deciding whether to cancel or modify the award.

In contemporary times, the value of international commercial transactions in goods services has increased alongside globalisation and consequently translated on the flip side to increased prospects of commercial disputes. Although litigation through the court processes has hitherto been the default mechanism for the resolution of commercial disputes, it is manifestly clear that in the present era of globalisation and digital age, it is not always the most effective and efficient way of dealing with commercial disputes. In Africa, arbitration has gained traction and increasingly used to resolve international commercial disputes within and outside the continent. Regardless of its inherent strengths, international commercial arbitral awards are enforceable only through the domestic legal systems and to the extent that the arbitral awards are compatible with national laws and standards including public policy. In view of the foregoing, this work undertakes, from a comparative perspective, an in-depth analysis of the public policy exemption to the enforcement of arbitral awards in Nigeria. The significance of this research that concentrates on the public policy exception to the recognition and enforcement of foreign arbitral awards in Nigeria, as against other aspects of international commercial arbitration, is because the recognition and enforcement of foreign arbitral awards are the most important and crucial part of the whole process of international commercial arbitration. It also intends to analyse public policy defence as articulated in several enforcement conventions and laws, particularly the New York Convention on Recognition and Enforcement of Arbitral Award, the UNCITRAL Model Law on International Commercial Arbitration and the Nigerian Arbitration and Conciliation Act.

The article examines the key aspects of the impact of the law of the place of enforcement of the arbitral award on arbitration and directly on the recognition and enforcement of arbitral awards, given the study of doctrinal positions, regulations and relevant case law. It was found out that the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 refers to the procedural rules of the country of enforcement to settle matters inherent to the recognition and enforcement of foreign arbitral awards not governed by the Convention, establishing only basic and fairly simple formal requirements for the said procedure, which is one of the strong characteristics of the conventional regime of recognition and enforcement of arbitral awards. In light of this, it is concluded that such an approach is moderate and takes into account the impossibility and lack of practical necessity of unification at the international treaty level of procedural features of recognition and enforcement of arbitral awards, establishing only basic principles and requirements. It is substantiated that there are two components of the law of the place of enforcement of the arbitral award, which regulate the recognition and enforcement of arbitral awards within the relevant jurisdiction, namely substantive and procedural, which, however, are contained in single legal acts — mostly national arbitration laws. The author emphasizes the crucial role of the law of the place of enforcement of the arbitral award in the material and procedural aspects for the procedure of recognition and enforcement of arbitral awards within the relevant jurisdiction. It is concluded that the unification of material grounds for refusal of recognition and enforcement (in particular, non-arbitrability of the subject matter of the dispute and contradiction of the award to public policy as grounds that can be raised by the competent judicial authority at the place of enforcement ex officio, regardless of reference to them by opposing party), as well as the consolidation of basic procedural requirements and principles is carried out by the New York Convention of 1958, which leaves to the discretion of the national legislature, on the one hand, the settlement of minor aspects of the procedure, but, on the other hand, recognizes its full discretion in determining the limits of objective arbitrability, the content and specific filling of the category of international public policy applicable in the relevant jurisdiction. Keywords: arbitral award, international commercial arbitration, applicable law, arbitration process, public policy.

This chapter surveys the existing empirical literature on international arbitration. It focuses on quantitative rather than qualitative empirical studies, and covers studies both of international commercial arbitration and international investment arbitration. The chapter first describes empirical research on the use of arbitration to resolve transnational disputes—in particular, the extent to which parties use arbitration clauses in international contracts, why they do so, and the frequency of international commercial and investment arbitration proceedings. Empirical studies have also examined an array of topics about the procedures in international arbitration. The empirical evidence typically comes from surveys or observational studies of commercial and investment arbitration proceedings. The chapter then considers empirical insights on selected topics such as the cost and length of arbitration proceedings, the size of arbitral tribunals, interim measures, multi-party disputes, challenges to arbitrators, the role of tribunal secretaries, and the use of mediation. It also looks at empirical studies on the applicable law in international commercial arbitration; the demographics of international arbitrators; and compliance with and enforcement of international arbitration awards.