Set-Off Defences in International Commercial Arbitration - A Comparative Analysis by Christiana Fountoulakis

Abstract

Set-Off Defences in International Commercial Arbitration – A Comparative Analysis by Christiana Fountoulakis Published by Hart Publishing, Oxford and Portland, Oregon (2011, pages xxvi and 257 pp.), Hardcover, Price EUR 73.99. ISBN 978-1-84946-032-3. An arbitrator confronted with a declaration of set-off in a cross-border case would normally first ascertain whether she has jurisdiction to deal with the cross-claim. This book, Set-off Defences in International Commercial Arbitration , takes a different approach. It discusses the jurisdictional issue briefly1 and concludes that there is ‘continued acceptance of the view that the question of whether a set-off should be heard will primarily depend on the parties’ arbitration agreement'. In the absence of an unequivocal agreement to the contrary, the arbitrator should hear a cross-claim even if it is outside the scope of the arbitration clause.2 This rather terse treatment of jurisdictional issues emphasizes the central theme of the book: Set-off is a substantive rather than procedural issue. While set-off appears as a simple and straightforward device from a commercial point of view, it presents the arbitrator with intricate issues because at least two obligations are to be cleared by a declaration of set-off. These may be of differing origin and subject to different laws. Therefore, the book examines which rules the arbitrator should apply to assess set-off in cross-border cases: Should a common set of national set-off rules be determined or should conflicts-of-law rules be used to determine a specific national law? The book concludes that the answer is found neither in a common set of national set-off rules nor in the choice-of-law rules. Rather, a uniform, a-national set of rules should govern the operation, the requirements – such as reciprocity, similarity, liquidity and connectivity of claims – and the effects of a declaration of set-off.3 The author specifically addresses the international arbitration …