ICA: A Paradigmatic Change in Legal Interpretation?
Chapter 11
ICA: A Paradigmatic Change in Legal Interpretation?
International commercial arbitration is in many respects a unique legal phenomenon. Characterized among the historically most ancient forms of dispute resolution and preceding litigation, it remained scarcely used for centuries. Its revival in the twentieth century and its later, rapid expansion have been an object of increased attention from legal doctrine and its different theorizations. Arbitration has been characterized as a particularly efficient way of exercising party autonomy, increasingly endorsed by States along with loosening the girdle of judicial control. It has thus been approached as a fulfilment of the doctrine of States’ possible non-intervention into the commercial sphere in the context of the overall transnationalization trends of commercial law.1
Furthermore, its growing popularity and eventually its unprecedented elevation to the status of the default method of resolution of international business disputes led to the theorizing of arbitration as an area of emergence of a transnational adjudicatory system, largely undisturbed by constraints of national legal orders – an anational system of dispute resolution overcoming the traditional constraints of necessary connection between the law and the State and eroding positivist conceptualizations of law and judicial authority as an emanation of the State. Arbitration was argued to be functioning as an anational system of dispute resolution – and further considered as a procedural and institutional mechanism for applying and developing substantive ‘global law without a state’. Such representations opposed the traditional view, as expressed by Francis Mann:
[n]o one has ever or anywhere been able to point to any provision or legal principle which would permit individuals to act outside the confines of a system of municipal law; even the idea of the autonomy of the parties exists only by virtue of a given system of municipal law and in different systems may have different characteristics and effects. Similarly, every arbitration is necessarily subject to the law of a given State. No private person has the right or the power to act on any level other than that of municipal law.2
The opposing conceptualizations of monolocal arbitration, always legitimized by a specific national legal order, and its representation as an autonomous, transnational system of adjudication, have been supplemented by a third, pluralistic approach, offering a new, multicentric perspective. The focus in this representation is shifted from a view ‘from within’ a legal order of the place, defining the limits for undertaking arbitration, to an ‘international’ outlook, which sees the source of legitimization of ICA in the consent of all domestic legal orders potentially interested in the award.3 The advancing institutionalization of arbitration has further led some authors to offer its analysis from the perspective of consolidation of this sphere, including studies of its responsiveness to market mechanisms and competition. Institutional aspects of arbitration were also an object of interest of the critical stream in legal and social studies, approaching arbitration as an instrument of exercise of economic power on a regional and global scale.4
This array of diversified theoretical approaches, aimed at capturing the main features of modern commercial arbitration, reveals those functional aspects of ICA which are prominent in the context of legal discourse, and which at the same time escape complete categorization. One of them is the relationship between ICA and the State. Recognition that arbitration is viable due to original authorizations granted by particular States via their arbitration laws and through the accession to the New York Convention, manifested in a monolocal or pluralistic version, is consistent with the positivist theory of legitimization. At the same time, however, it does not expose the strong institutional network of ICA and its dominant position in the field of cross-border business disputes, which has lead to a large extent to the exclusion of domestic courts in this field. This specific position is observable in a high degree of procedural autonomy, anational character (with localization anchors under the New York Convention regime limited in practice to the recognition and enforcement considerations) and in the elimination of judicial control that would exceed those grounds. Even if the original legitimization of ICA stems from the States’ will, its operations have over the decades become more and more self-sustainable. Julian M. Lew observes that ‘international arbitration is emerging increasingly as a sui iuris institution, with its own character and standing, independent of a national legal system.’5 Does this specific status of ICA, accompanied by relevant, theoretical conceptualizations and self-consciousness of the arbitration community, further translate onto a paradigmatic change of legal interpretation? Or is legal interpretation in ICA merely a recycling of methods already well known from the domestic setting?
Another important factor influencing the legal discourse of arbitration is its present, relatively high level of saturation with formalized procedural standards. As discussed in Chapter 5, in some opinions, proceduralization of ICA is tantamount to abandoning its initial main advantage of being speedy, informal and easily adjustable to the needs of specific parties. Its coincidence with the ‘American wave’ in arbitration has also led some commentators to merge these two phenomena. While the increased participation of US parties, counsel and arbitrators in ICA proceedings might have served as a catalytic agent for some aspects of proceduralization, the ‘colonization of arbitration by litigation’ should not be – as argued in Chapter 5 – identified with its ‘Americanization’. It rather marks a stage in the development and consolidation of arbitration which aims at responding to mass needs, as well as at being able to accommodate large, procedurally complex cases – in which established, detailed standards are helpful. On the other hand, this phenomenon has also been explicated as a symbolic token of the autonomization of ICA, which no longer needs a pragmatic legitimization, rooted in arbitration’s contractual and amicable conceptualization. As proposed by Dezalay and Garth, ICA does not have to be presented as an informal, flexible alternative to litigation anymore; it can absorb and function in accordance with increased amounts of procedural standards, as it enjoys a sufficiently independent status already.
Present-day arbitration – emancipated, competition-driven, dispersed and polycentric – forms a dynamic structure with several dominant institutions of global or regional significance, a further, numerous set of smaller arbitral centres, and a kaleidoscopic landscape of ad hoc arbitrations. In all its diversity, it is also a flat structure, generally characterized by lack of appeal proceedings on the merits of the dispute (with all benefits and dangers connected with finality of awards in this regard6). As proposed above, it can be described as rhizomatic, in the sense offered by Deleuze and Guattari.7 According to their characterization of the rhizome-like forms of discourse,
Not every trait in a rhizome is necessarily linked to a linguistic feature: semiotic chains of every nature are connected to very diverse modes of coding (biological, political, economic, etc.) that bring into play not only different regimes of signs but also states of things of differing status … A semiotic chain is like a tuber agglomerating very diverse acts, not only linguistic … There is no ideal speaker-listener, any more than there is a homogenous linguistic community. Language is, in Weinreich’s words, ‘an essentially heterogeneous reality’. There is no mother tongue, only a power takeover by a dominant language within a political multiplicity. Language stabilizes around a parish, a bishopric, a capital. It forms a bulb.8
Arbitrators operate on a plan where both the language of the proceedings and the substantive applicable law are not obvious; they have to be determined. They are also frequently resolving cases in a language that is not their native tongue, and according to law systems in which they have not been primarily trained. The patchwork structure of applicable rules (with regard to the regime of the place of anticipated enforcement, to public international order, to transnational principles and international customs and usages) resembles Deleuze and Guattari’s characterization of heterogeneity and multiplicity as inherent features of a rhizomatic discourse. The imagery of an extremely efficiently driven, mobile war machine is contrasted by them with the linear, vertical logic of the State apparatus.9
The specific character of legal discourse in arbitration affects legal interpretation. The fast-aggregating, largely unpublished body of case law is nevertheless an object (and a tool) of cross-referencing and cross-fertilization of legal concepts, running – again, rhizomatically – across institutions. The awards rely largely on the application of domestic law to the merits of the dispute, but the rendition of proper law is exercised from a distanced, outsider perspective (even if arbitrators indeed apply their ‘own’ national law, this is not automatic, but an effect of relevant conflict of laws considerations, the rules of which have themselves to be established first; moreover, unlike domestic judges, arbitrators do not perform an official function as an adjudicatory arm of the State).