The Three Ages of International Commercial Arbitration, Mikaël Schinazi

INTRODUCTION A central question about the emerging system of international arbitration is whether we are likely to witness growing uniformity and convergence or increasing specialization and divergence. In addressing this question, I am going to focus on the growing divergence between commercial and investment arbitration, which I believe is occurring due to differences in the fields' substantive law and professional communities. In doing so, I will focus on two phases: where we have come from and where we are heading. WHERE WE HAVE COME FROM Investment treaty arbitration grafts public international law (as a matter of substance) onto international commercial arbitration (as a matter of procedure). It has also historically married two professional communities, one coming from the world of inter-state dispute resolution and the other from private contractual arbitration. The fact that investment and commercial arbitration involve similar, and sometimes identical, dispute resolution procedures has led many to see them as two sides of the same coin. But the influence of public international law qualifies this approach. First, investment and commercial arbitration differ in their applicable substantive law. Commercial arbitration is typically characterized by an emphasis on private law, private contracts, and private parties. Even when states take part in commercial arbitration, they are generally understood to be acting in their private capacity. Investment treaty arbitration, by contrast, involves public international law rather than private law, treaties in addition to or instead of contracts, and states acting in their public capacity as sovereigns (which enter into treaties) and regulators (which govern populations). These substantive differences have, in turn, led to procedural divergences between investment and commercial arbitration. As investment treaties typically have similar provisions and investment awards often become public, investment treaty arbitration has developed a robust system of quasi-precedents, with the citation to and analysis of previous awards becoming a routine feature of investment pleadings and awards. The public interest in investment treaty arbitration has also led to procedural tweaks, such as the publication of many awards and some pleadings, as well as the opening of certain hearings and the participation of amici. In terms of professional communities, many advocates and arbitrators cross-specialize in investment and commercial arbitration, while others cross-specialize in inter-state dispute resolution and investment arbitration. As the investment treaty field has undergone a process of professionalization, an increasing number of arbitrators have been drawn from private practice rather than from, for instance, the ranks of ex-judges from Western states. However, a significant minority has always come from academia and public international law, much more so than in commercial arbitration. The profile of arbitrators has important effects on how the investment treaty field is developed because people with different professional backgrounds often approach the system in different ways. While some arbitrators are truly bilingual in public international law and international commercial arbitration, most have a pronounced mother tongue. Although any analysis of the connection between one's background and one's approach involves stereotyping and will be subject to exceptions, some broad trends can be discerned: * Arbitrators with a background in public international law often focus on the interstate treaty basis of the system; the intention and wishes of the treaty parties; how the system is embedded within a broader framework of public international law; and the importance of individual decisions contributing to a growing body of jurisprudence. * Arbitrators with a background in international commercial arbitration, by contrast, often focus on the investor-state dispute resolution relationship; the equality and autonomy of the disputing parties; the significance of commercial expectations; and the importance of deciding the particular case rather than contributing to a broader system. …

India embraced the modern international arbitration regime towards the end of last century by reforming its arbitration law, mainly to attract foreign investment. However, the practice shows that Indian courts have been unfavourable to international commercial arbitration in contrast to the standards of international arbitration law. Against the backdrop of tremendous foreign investment commitments and a vast Bilateral Investment Treaty network by India, approach of the national judiciary towards international commercial arbitration rights of a foreign investor is highly significant. In this context, the article seeks to analyse how the investment treaty legal framework operates to make Indian courts accountable. Thus, it essentially addresses the question, whether international responsibility arising out of actions of the national courts would help disciplining the international commercial arbitration landscape in India? In response, the article claims that investment treaty arbitration regime has contributed to the reinforcement of international commercial arbitration in India. The article concludes by signalling at some of the pressing issues in the context of interplay between international investment and commercial arbitrations.

International commercial arbitration (ICA) in Australia is growing, albeit not geometrically. These developments are attributable in part to new legislation adapted by the federal, state and territory governments that make arbitration in Australia more attractive to domestic and foreign parties. These include the preservation of the autonomy of the parties to choose their preferred form of arbitration, whether institutional or not, the fact that Australian courts are firmly committed to the principles of the rule of law, and that ICA awards are enforced consistent with international standards and laws that are incorporated into Australian federal, state and territorial law. Australia has ratified both the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitration Awards and the ICSID Convention in its domestic law. Both are included in section 40 of the International Arbitration Act 1974 (Cth) (IAA). Australia’s accession to the New York Convention is without reservation and extends to all States and Territories within the country. Australia has an established record of recognizing international commercial arbitration. It was one of the first to adopt the 2006 amendments to the 1985 United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration (the Model Law). It has long endorsed the principles embodied in that Model Law, including protection of the autonomy of parties to arbitration, flexibility in the conduct of arbitration and greater uniformity in arbitration across national jurisdictions. These tenets of arbitration were incorporated into the IAA by the 2010 amendment, as a reflection of international best practice. In accordance with the 2010 amendments to the IAA, disputing parties can no longer choose to exclude the application of the Model Law insofar as it is incorporated into the IAA. The IAA affirms the finality of arbitration awards and limits the grounds for judicial review. It also builds on the authority of arbitrators to grant interim awards and creates a regime to ensure confidentiality. The core principles regarding commercial arbitration embodied in the 2010 amendment are also reflected in uniform legislation across all Australian jurisdictions. They affirm the legitimacy of arbitration as a mechanism for dispute resolution and the significance of Australia as a center for the resolution of disputes. However, ICA in Australia continues to face concern over what are sometimes perceived to be protracted arbitral proceedings that are both dilatory and costly. The author has responded to these criticisms in a co-authored article which argues that comprehensive proceedings are often necessary in deciding complex arbitrations and the allegedly ‘judicialisation’ of the arbitral process is often misconceived and over-stated. In addition, there has been a signifi cant increase in resort to institutional arbitration in ICA proceedings, notably with the adoption of new Arbitration Rules by the Australian Centre for International Commercial Arbitration (ACICA) and the establishment of the Australian International Dispute Centre (AIDC). There have also been increases in arbitrations since the revision of the IAA in June 2010 and recent amendments to domestic Commercial Arbitration Acts (CAAs). While Article 1(3) of the UNCITRAL Model Law stipulates that it only applies to international commercial arbitration, and not to domestic arbitration, the recently revised CAAs of states across Australia now replicate the Model Law with some variations. This chapter will focus on the Australian legal system and its role in arbitration. It will examine the development of ICA in Australia and the 2010 amendment to the IAA. It will consider the role of the Australian Centre of International Commercial Arbitration (ACICA) as an exemplary centre governing commercial arbitration. It will focus on Australia’s role in promoting arbitration within the Asia Pacific region, of which it is an integral part. It will explore Australia’s whole-hearted embrace of international arbitration as a viable alternative to court proceedings. Finally, it will support the conservative and formalist underpinnings of current arbitration reforms, including the need to elaborate on them, and render them more dynamic in operation.

During the past two decades, the study of new institutional economics (NIE), with a focus on international and domestic legal-economic institutions, has made a considerable contribution to the unde...

This article examines the potential for beneficial procedural cross-fertilization between internationalcommercial and investment arbitration from a functional perspective. The article argues that botharbitration regimes share a ‘private’ dispute resolution function of resolving specific disputes, butonly investment arbitral tribunals also exercise a ‘public’ law-making function of developing the lawapplicable to the resolution of disputes. The article considers two recent procedural developmentsin international arbitration rulesjoinder of third parties and publication of arbitral awardsin thelight of these private and public functions. It argues that joinder, as an efficiency-enhancingmeasure, can lead to beneficial cross-fertilization between commercial and investment arbitrationbecause it reinforces the ‘private’ dispute resolution function shared by both regimes. In contrast,the default publication of arbitral awards, to the extent that it is intended to be systematic and createinformal precedent, is appropriate in investment but not in commercial arbitration because onlyinvestment arbitral tribunals exercise a ‘public’ law-making function that justifies and stands tobenefit from this practice. In this regard, the article rejects three rationales for default publication ofinternational commercial arbitral awards: improving consistency/predictability, enhancingtransparency and developing transnational commercial law. The article concludes that crossfertilizationbetween investment and commercial arbitration can be valuable so long as it concernstheir shared private dispute resolution function. However, attempting to develop internationalcommercial arbitral practice in the shadow of the public law-making function of investment arbitraltribunals may result in counterproductive practices and undermine the proper functioning ofinternational commercial arbitration as a whole.

Climate change is the greatest global challenge that humankind has ever faced. It has changed the way in which communities, governments and businesses interact with each other, how they contract one with another and what legal disputes they face. National and international legal frameworks currently in place rarely provide the necessary mechanisms to resolve new kinds of disputes that have emerged and as a result, important gaps remain. International commercial arbitration is uniquely placed to respond to the transboundary nature of climate change. Its inherent flexibility, innovativeness, ability to deal with complex, cross-border issues and the possibility to choose a neutral adjudicator according to his/her expertise give commercial arbitration an important advantage over court litigation. However, some of its characteristics that are seen as welcome and desired in different contexts create important challenges for achieving climate justice. Therefore, innovation in this area will be necessary if commercial arbitration is to become an attractive option for resolving climate change-related disputes between businesses. The arbitration community should try to find constructive ways in which commercial arbitration can innovate itself so that it can complement other methods of dispute resolution traditionally used for climate change disputes. climate change, climate justice, ESG, international commercial arbitration, private finance, Paris Agreement, arbitration clause, expertise, transparency, Campaign for Greener Arbitrations, Chancery Lane Project, COP 26

Access to Court is a gobal principle, though the consequences of this principle are interpreted differently in the U.S. and Europe. Neither International Commercial Arbitration nor International Litigation can offer an effective access to court for cross-border commercial contracts. Whereas international commercial arbitration is often associated with the global enforceability of arbitral awards because of the New York Convention, International Litigation bears the risk that a court judgment might not be enforced abroad. Therefore, international commercial arbitration is often described as the standard dispute resolution mechanism for international commercial contracts.However, this paper shows that International Commercial Arbitration is often no real option in practice for small claims because its costs are too high for small claims. On the other hand, in some countries like e.g. Germany, it is cheaper to litigate smaller commercial claims than to arbitrate, but national courts are often not structured for the specifics of cross-border claims.Against this backdrop, the paper demonstrates how commercial litigation can learn from commercial arbitration and vice versa. First, it is defined what can be understood as the core of the access to court right worldwide (B.). Second (C. and D.), international litigation and arbitration are analyzed from an access to court perspective and it is asked if international commercial arbitration has to be considered as purely voluntarily or if the fact that international commercial arbitration is sometimes considered as “monopoly” excludes voluntariness. Third, is is outlined how the existing transnational access to court gap could be filled (E.).

IN ICSID Case No. ARB/05/7, Saipem v. Bangladesh , decision on the merits dated 30 June 2009, the tribunal (composed of Gabrielle Kaufmann Kohler, President, Christoph Schreuer and Sir Phill Otton) held Bangladesh liable under a bilateral investment treaty for unlawfully expropriating Saipem’s right to ICC arbitration through the interference of Bangladesh’s courts. The tribunal also found that Bangladesh violated the New York Convention and committed an abuse of rights under general principles of international law. The tribunal awarded Saipem the amount that the ICC tribunal had awarded, with simple interest. It refused to award Saipem legal costs. The Saipem award provides a rich platform for discussion of several contentious issues currently brewing in the international investment arbitration community. One of those issues is the line tribunals are drawing between contract rights and treaty rights. The question of whether purely contract-based, commercial arbitration claims are being ‘dressed up’ as investment treaty claims was the subject of discussion at the American Society of International Law Annual Meeting in 2009 at the roundtable panel on ‘Mapping the Future of Investment Treaty Arbitration’. The panel discussed, inter alia , the differences between international commercial arbitration and international investment treaty arbitration. One of the panelists warned that arbitrators must be wary of wearing a commercial arbitration ‘hat’ when determining distinct issues of international law and state responsibility under investment treaties.1 The Saipem award, without entering into a discussion of where a line should or should not be drawn between commercial and international investment treaty arbitration, nevertheless sheds some important light on the debate. The Saipem award focuses on the point at which a state’s behaviour during an international commercial arbitration dispute governed by the ICC Rules triggers new obligations under an investment treaty, the ICSID Convention, the New York Convention and under general …

The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards forms the foundation of the modern system of international commercial arbitration. However, it contains no dispute resolution procedure of its own that a wronged party might use to enforce its rights under an arbitration agreement or award. It is generally left to State parties, and particularly domestic courts, to interpret and apply the Convention's provisions competently and in good faith. This can give rise to politicisation and frustration for contractual parties in the pursuit of their international arbitration rights. A series of recent decisions – by investment arbitration tribunals and regional human rights courts – suggests that public international law has a substantial role to play in the protection of international commercial arbitration rights against interference by States and, in particular, their domestic courts. Those decisions demonstrate that international courts and tribunals are increasingly stepping in to ensure the recognition and enforcement of commercial arbitration rights. In doing so, those international courts and tribunals are resorting to principles and remedies that are well-established under public international law. This article analyses and compares a number of recent judgments and awards addressing the relationship between public international law and international commercial arbitration. It examines the approaches taken by some notable recent investment arbitration awards to the protection of commercial arbitration rights under investment treaties. The article also examines the expandingjurisprudence of the European Court of Human Rights in connection with the recognition and enforcement of commercial arbitration awards. The article concludes by observing that the recent jurisprudence demonstrates a growing symbiotic relationship between public international law and international commercial arbitration rights.

Australia has recently modernized its international and domestic commercial arbitration law to reflect (with some amendments) the 2006 version of the UNCITRAL Model Law on International Commercial Arbitration. As well as legislative reform, Australia has taken practical steps such as providing new dispute resolution facilities and specialist court arbitration lists to enhance Australia as an arbitral seat. Recent judgments by Australian courts have been supportive of international arbitration and have indicated a willingness to apply the international jurisprudence relating to the Model Law and the New York Convention. These improvements have increased Australia's attractiveness as an arbitral seat.

This chapter surveys the existing empirical literature on international arbitration. It seeks to be thorough but does not claim to be comprehensive. The chapter focuses on quantitative rather than qualitative empirical studies, and covers studies both of international commercial arbitration and international investment arbitration. Part I describes empirical research on the use of arbitration to resolve transnational disputes — in particular, the extent to which parties use arbitration clauses in international contracts, why they do so, and the frequency of international commercial and investment arbitration proceedings. Part II examines arbitral procedures, and Part III considers the applicable law in international commercial arbitration. Part IV looks at the demographics of international arbitrators, with emphasis on their diversity (or lack thereof), and arbitrator decisionmaking, in particular potential biases of party-appointed arbitrators, whether arbitrators make compromise awards, and the psychological aspects of arbitrator decisionmaking. Part V looks at the controversy over studies of outcomes in investment arbitrations. Finally, Part VI examines empirical studies of compliance with and enforcement of international arbitration awards, while Part VII considers their precedential effect, if any.

Islamic Finance in International Commercial Arbitration and International Investment Arbitration

Under the background of social change and the great development of "Belt and Road" policy, China's international commercial arbitration is facing a higher level of development needs. In order to solve the existing problems, draw on the experience of the world's advanced international arbitration centers, improve the concept of arbitration, and improve the level of arbitration services, China should take the goal of building a China international commercial arbitration center comparable to the world-class level, and constantly explore the development path of arbitration. This paper analyzes the present situation and trend of international commercial arbitration in China, discusses the connotation and value of China international commercial arbitration center, put forward from government relations, institutional development, system architecture, modernization can assign four aspects to improve the arbitration center construction scheme, and innovatively put forward the horizontal and vertical two lines and special assigned to the development of the framework. Accordingly, China's international commercial arbitration system should be continuously improved, the credibility and discourse power of China's international commercial arbitration should be enhanced, and China should build an international arbitration brand with Chinese characteristics.

The article examines the problematic issues of the grounds for litigation in international commercial arbitration. The urgency of this topic is due to the need for a lack of clear definition of the prerequisites for resolving disputes, as well as the procedure for their use in the practice of international commercial arbitration. In addition, the problematic aspects of dispute resolution in international commercial arbitration are analyzed and procedural measures for their resolution are identified. To achieve this goal, the material preconditions for dispute resolution in the ICA were studied and the procedure for resolving disputes was determined. The preconditions for transferring a dispute to international commercial arbitration, which are the advantages of arbitration compared to state courts, are, first of all, that it provides a more acceptable, accessible and simpler procedure for resolving disputes compared to state courts. In other words, it is a procedure established by the parties to the dispute, which in general can be adequate and adapted to make agreed decisions. Even when the parties turn to a permanent commercial arbitration, which has its own rules of procedure, they can provide for arbitration. The UNCITRAL Arbitration Rules of 2010 stipulate that when the parties decide to submit disputes to arbitration in accordance with these Rules, they shall be considered in accordance with these Rules. The study identified a number of major risks and difficulties faced by the party in applying to a state court: ignorance of the procedure required for a foreign state court; the obligation to conduct the proceedings in the language of the court’s location; the existence of several instances and the procedural formalism that occurs when applying to the general courts; judges do not always have the appropriate competence to deal with disputes arising from foreign trade; gathering evidence and evaluating it on the basis of the national legal system. The study concluded that the benefits of international commercial arbitration, in the presence of prerequisites for litigation, give much better benefits for litigation, which forms its authority among the relevant categories of legal entities and individual entrepreneurs.

### (a) The success of the Model Law The UNCITRAL Model Law on Arbitration was adopted by the United Nations on 11 December 1985 as a recommendation to the states that they take account of it when changing existing or enacting new legislation dealing with international commercial arbitration. Meanwhile, this recommendation has been followed by an increasing number of nations, including, e.g . Canada (‘Commercial Arbitration Act’ dated 17 June 1986), Australia (‘International Arbitration Amendment Act 1989, in force since 12 June 1989) and some US States.1 In Europe, the Model Law has been adopted as a pattern for modern arbitration acts only in a few countries: Bulgaria (‘Law on International Commercial Arbitration’, dated 29 July 1988), Cyprus (‘The International Commercial Arbitration Law’ of 1987), the Russian Federation (‘Law on International Commercial Arbitration’, dated 7 July 1993) and Scotland (‘Law Reform (Scotland) Act 1990, section 66, Schedule 7, in force since 1 January 1991). However, of those countries in which, traditionally, most of the arbitration proceedings take place, for example England and Switzerland, none has so far adopted the Model Law entirely or partially.2 Therefore, it is particularly interesting to note, that two states of Western Europe, Sweden and Germany, are considering following the recommendation given by the UN 10 years ago. ### (b) The Situation in Germany The law on arbitration in Germany is more than 100 years old. The provisions that regulate domestic and international arbitration are part of the Act on Civil Procedure (Zivilprozesordnung, ZPO) which was enacted in 1877 and amended in 1930 and 1986, but only with respect to some non-essential issues. The ratification of international treaties such as the 1958 New York Convention and the ongoing modification of the present act by case law of the Budesgerichtshof, makes if difficult and even impossible for foreign lawyers to get reliable knowledge of the German law on arbitration. …