Soft Law and the Principle of Fair and Equitable Decision Making in International Contract Arbitration

Abstract

This article provides a survey of the special relationship between international commercial arbitration and soft law instruments. It briefly traces the historical roots of the lex mercatoria to its present enunciations in the Convention on Contracts for the International Sale of Goods (CISG) and the International Institute for the Unification of Private Law’s Principles of International Commercial Contracts. It discusses the characteristic of the hardness and softness of laws in an international commercial law context. The CISG is studied not only as a hard law but also as an example of soft law. The affinity between soft law and international commercial arbitration is explored as well as the reasons why soft laws possess normative power. It also examines the importance of the use of multiple interpretive methodologies, including the use of soft law, by arbitrators in order to reach fair and reasonable decisions. Finally, it recognizes fair and equitable decision making as the unifying principle that binds international commercial arbitration and soft law.