Abstract
This article is written to evaluate the practical significance of punitive damages in the field of arbitration concerning international commercial disputes and franchise disputes. It finds that punitive damages awards are frequent in domestic arbitrations in the United States but not internationally common. This article discusses the severity of the punitive damages awards to explain why such decisions are not frequent in international trade disputes; it still has a significant influence that concerns the contracting parties, making them exclude punitive damages in their agreements. This article also explains the reasons for limiting the use of these punitive damages. The first one is the limitation of punitive damages applied to arbitration. Indeed, punitive damages are only recognised under a handful of domestic arbitration laws in a number of countries, especially the ones associated with contract claims. Secondly, the enforceability of such awards is internationally limited due to public policy. Therefore, this difficulty caused the arbitral tribunal to refuse to award such damages. Finally, the statistics on punitive damages award in international commercial arbitration are scarce, so the article refers to provide and analyse the cases that are not international-thereby discussing and evaluating the suitability of punitive damages in the context of international commercial arbitration
Highlights
Punitive damages themselves have been a subject of controversy for a very long time
Punitive damages are only recognised under a handful of domestic arbitration laws in a number of countries, especially the ones associated with contract claims
Punitive damages in international commercial arbitration still remain as a theoretical issue
Summary
In recent years, punitive damages in international commercial arbitration have been a subject of fierce discussion. The effects of punitive damages are increasingly going beyond the jurisdictions where they are awarded This process raises the question of whether arbitrator(s) should apply punitive damages when hearing international commercial disputes. Can arbitration be used as a method to prevent punitive damages in resolving international commercial disputes? In some places, arbitrators were given the authority to award punitive damages, which should only belong to the national court. As mentioned, this practice is not common and even considered contrary to public orders in many countries. If punitive damages are recognised wider in the arbitration and especially in the international arbitration institutions, it will significantly affect the contractual parties (franchise parties) representing the countries where punitive damages do not exist or are forbidden
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
