The Rule of Law Effects of Commercial Arbitration from a Socio-Legal Perspective

Abstract

Abstract This chapter presents a socio-legal perspective on international commercial arbitration (ICA) that is rooted in the empirical view of contract as developed in a long line of law and society scholarship most prominently associated with Steward Macaulay. As the key feature, such a socio-legal approach to ICA adopts a law-in-action rather than a law-in-books perspective. In this sense, individual actors and organizations do not simply follow the law, but may alter, reinforce, manipulate, or even ignore the law in their daily courses of action. Law is thus assumed to be a living institution embedded in societal structures, rather than an accumulation of formal rules. However, ICA is often misunderstood as a clear-cut, authoritative, and coercive legal mechanism that directly guides individual behavior in cross-border contractual relations without taking into account that the relation between legal institutions and human behavior are in fact much more diffused and shaped by various individual interests, non-legal institutions, and civil power. As a consequence of this naïve legal understanding, existing approaches on ICA tend to perpetuate a number of misleading images about ICA's role in global commerce.