The Applicable Law in International Arbitration Under the New English Arbitration Act 1996

Abstract

FOR OVER the past 50 years there has been a discernible movement both in public and private international law away from dependence on states. The multiplication of accredited actors in international law and recognized sources of international norms, the increasing autonomy of international law vis-a-vis its authors, together with the diminishing importance of sovereignty and a new appreciation of legal pluralism broadening nationalist definitions of what counts as ‘law’, all mark the decline of the role of the state. This modern trend has been evident in international commercial arbitration where legal phenomena such as the evolution of a new lex mercatoria , the use of principles of general application derived from techniques of comparative law, delocalization and the growing recognition of the specificity of international transactions as distinct from purely domestic contracts, can be seen as responses to the limitations of statist conceptions of the definition, sources and interpretation of law in the resolution of international disputes. Following these developments, the new English Arbitration Act 1996 freed commercial parties from national constraints of procedural law with the result that fundamental English rules no longer necessarily apply in arbitral proceedings in England: discovery, hearsay, parol evidence and rules excluding evidence of pre-contractual negotiations. All the more so in international proceedings involving parties from different legal cultures. The object of these reforms has been, of course, in the words of Lord Saville, ‘to reflect generally accepted international views on the proper conduct of the arbitral process’.1 The new law affords a very high degree of accommodation to the parties' choice of institutional or foreign procedural rules. Apart from a few mandatory provisions,2 parties are free to exclude large parts of the Arbitration Act itself in order to adopt procedures they are more familiar with, or which they believe are best …