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Judicial respect for international commercial arbitration agreements in Canadian courts under the New… Barbour, Alan Norman 1996

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JUDICIAL RESPECT FOR INTERNATIONAL COMMERCIAL ARBITRATION AGREEMENTS IN CANADIAN COURTS UNDER THE NEW YORK CONVENTION AND UNCITRAL MODEL LAW by ALAN NORMAN BARBOUR B.A.Sc. (1973), U n i v e r s i t y of B r i t i s h Columbia LL.B. (1976), U n i v e r s i t y of B r i t i s h Columbia  A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS OF THE DEGREE OF MASTER OF LAWS in THE FACULTY OF GRADUATE STUDIES ( F a c u l t y of Law) We accept t h i s t h e s i s as conforming to the r e q u i r e d standard  THE UNIVERSITY OF BRITISH COLUMBIA March 1996 @  A l a n Norman Barbour, 1996  In  presenting this  degree at the  thesis in  University of  partial  fulfilment  of  of  department  this thesis for or  publication of  by  his  or  her  representatives.  The University of British Columbia Vancouver, Canada  Date  DE-6 (2/88)  It  this thesis for financial gain shall not  FCLCCiljy  0~f L#  for  an advanced  Library shall make it  agree that permission for extensive  scholarly purposes may be granted  permission.  • Department -of  requirements  British Columbia, I agree that the  freely available for reference and study. I further copying  the  is  by the  understood  that  head of copying  my or  be allowed without my written  ABSTRACT In Europe of the Middle Ages, t h e r e e x i s t e d an autonomous regime of t r u l y p r i v a t e i n t e r n a t i o n a l business law based upon the customs and  usages of merchants, the  tribunals.  Law  Merchant, a d m i n i s t e r e d  i n lay  The c o u r t s and l e g i s l a t o r s usurped the j u r i s d i c t i o n of  the l a y t r i b u n a l s , and subverted the Law Merchant t o m u n i c i p a l A r b i t r a t i o n was  s i m i l a r l y subverted to m u n i c i p a l c o u r t s and  legal controls.  The c o u r t s continued to guard t h e i r  law.  strict  jurisdiction  j e a l o u s l y i n t o the 20th century, when n a t i o n s came t o r e a l i z e inadequacy of n a t i o n a l l e g a l  systems f o r i n t e r n a t i o n a l  problems, and  the d e s i r e of business  concerns  municipal  and  courts.  the  business  t o escape p a r o c h i a l l e g a l  Canada  adopted  the  New  York  Convention and UNCITRAL Model Law i n 1986, which maximize p a r t y and a r b i t r a l autonomy and r e s t r i c t c o u r t i n t e r f e r e n c e w i t h a r b i t r a t i o n . These  new  regime  laws would  of  divorced  permit  international from  cooperate.  thesis  r e s u r r e c t i o n of  commercial  n a t i o n a l law  This  the  and  i s the  dispute  court first  an  autonomous  settlement  controls,  largely  i f the  comprehensive,  courts  up-to-date  study (of which I am aware) of Canadian case law on a r b i t r a t i o n i n the  context  resolution  of  the  from  the  history  of  autonomous  i t s z e n i t h i n the  commercial  Middle  n a d i r , to i t s present attempted r e s u r r e c t i o n . that  the  c o u r t s of Canada continue  jealously, justify courts  finding  the  their refusal have ignored  means  to guard  i n o l d notions  to cede j u r i s d i c t i o n  the  policies  continued to apply notions and precedents ii  and  through  its  T h i s t h e s i s shows their and  jurisdiction precedents  to a r b i t r a t o r s .  u n d e r l y i n g the  f a i l e d t o apply i n t e r n a t i o n a l precedents  arbitration.  Ages  dispute  new  laws,  standards,  and  to The have have  from an e r a h o s t i l e to  TABLE OF CONTENTS. ABSTRACT  i i  TABLE OF CONTENTS  i i i  ACKNOWLEDGMENT  v i i  I. INTRODUCTION  1  I I . SOURCES OF UNIFORMITY IN INTERNATIONAL COMMERCIAL ARBITRATION LAW  24  1. THE NEW YORK CONVENTION  24  2. ENFORCEABILITY OF AN ARBITRATION AGREEMENT UNDER THE NEW YORK CONVENTION  26  3. THE LAW APPLICABLE TO "NULL AND VOID, INOPERATIVE, OR INCAPABLE OF BEING PERFORMED"  27  4. STAYING LITIGATION UNDER THE NEW YORK CONVENTION  29  5. PARTY AUTONOMY UNDER THE NEW YORK CONVENTION  29  6. REVIEW OF AWARDS  31  7. THE UNCITRAL MODEL LAW  32  8. CHOICE OF LAW UNDER THE MODEL LAW  35  I I I . INTERNATIONAL LAW TO DOMESTIC LAW, FROM LAY TRIBUNAL TO LITIGATION, THE TRIUMPH OF THE COMMON LAW OVER ARBITRATION AND THE LAW MERCHANT  40  1. INTRODUCTION  40  2. THE ORIGINS OF ENGLISH MARITIME AND MERCHANT LAW  41  3. THE LAWS OF OLERON  41  4. THE ORIGIN AND A BRIEF HISTORY OF THE COURTS OF ADMIRALTY  43  5. MERCHANT FAIRS, PIEPOWDER COURTS, AND THE LAW MERCHANT  46 iii  6. THE DECLINE AND FALL OF THE LAW MERCHANT AND FAIR COURTS IN ENGLAND  51  7. THE DEFEAT OF THE COURTS OF ADMIRALTY BY THE COMMON LAW COURTS  58  8. EFFECTS OF THE VICTORY OF THE COURTS OF COMMON LAW ON COMMERCIAL AND ADMIRALTY LAW 9. THE LEGACY OF SIR EDWARD COKE IV. THE TROUBLED HISTORY OF ARBITRATION IN ENGLAND 1. THE EARLY HISTORY OF ARBITRATION  63 64 66 69  2. THE PUBLIC POLICY PROHIBITION OF CONTRACTS PURPORTING TO OUST THE JURISDICTION OF THE COURTS 3. RESTRICTIONS ON AWARDS  88 89  V. STATUTORY REFORM BEGINS  92  1. THE COMMON LAW PROCEDURE ACT, 1854  96  2. THE ARBITRATION ACT, 1889  98  3. THE ARBITRATION ACT, 1979  109  4. THE UNCITRAL MODEL LAW IN ENGLAND  116  VI. A SHORT HISTORY OF ARBITRATION IN FRANCE  119  1. THE COMMON FATE OF THE LAW MERCHANT IN CIVIL AND COMMON LAW SYSTEMS  123  V I I . RESPECT FOR ARBITRATION AGREEMENTS IN CANADIAN COURTS 1. THE GOOD OLD DAYS (PRE-1986)  124 124  2. THE EXCHEQUER COURT OF CANADA AND FEDERAL COURT OF CANADA, BEFORE 1986  128  3. ADOPTION OF THE UNCITRAL MODEL LAW AND NEW YORK CONVENTION  IN CANADA  135  4. ARTICLE 8 AND MANDATORY REFERRALS TO ARBITRATION iv  144  5.  THE  INTERPLAY  OF A R T I C L E S  5,  8,  16,  34,  SHOULD COURTS A P P R O A C H A P P L I C A T I O N S 6.  THE CRUCIAL  IMPORTANCE  7.  THE  IDEAL  8.  K O M P E T E N Z - K O M P E T E N Z AND S E P A R A B I L I T Y  9.  GUIDANCE  10.  POSITED  36  -  HOW  TO S T A Y ?  147  OF J U D I C I A L A T T I T U D E  152 153 157  A V A I L A B L E FROM I N T E R N A T I O N A L  T H E MANDATORY  AND  AUTHORITIES  NATURE OF T H E R E F E R R A L OR  STAY  REQUIREMENT 11.  NULL  AND  170  VOID,  INPERATIVE,  PERFORMED AS D E F I N E D  IN  AND  ENGLISH  INCAPABLE  LAW UNDER  OF  EXISTENCE  13.  LEADERSHIP  170  OF D I S P U T E S FROM T H E  174  SUPREME COURT OF T H E  UNITED  STATES 14. VIII.  OTHER  175  INTERNATIONAL  PRECEDENTS  T H E MODEL LAW AS A P P L I E D 1.  T H E MANDATORY OVER  185  BY T H E COURTS OF CANADA  NATURE OF A R T I C L E  " R E F E R " AND  8,  AND  2.  "STAY"  192  COLUMBIA  AUTONOMY  UNDER A R T I C L E FROM T H E  8  APPOINTMENT  212 AROCHEM I N T E R N A T I O N A L  OF A R B I T R A T O R S  AS P R E R E Q U I S I T E S  D E F I N I T I O N OF D I S P U T E S  210  BRITISH  COURT OF A P P E A L  G U L F CANADA R E S O U R C E S V .  DISPUTES  208  FIRST APPLICATION  S U P P O R T FOR A R B I T R A L  192  CONFUSION  EARLY LOTUSLAND EXPERIENCE ONTARIO'S  BEING  THE  NEW YORK C O N V E N T I O N 12.  166  AND D E F I N I T I O N TO A R T I C L E  8  214  OF 222 226  3.  THE  INTER-RELATION  OF T H E MODEL LAW AND  NEW YORK C O N V E N T I O N , IN  ARTICLE  8(1)  4.  ARTICLE  5.  TORTS,  8(1)  1(2)  OF T H E A R T I C L E  THE  SUBSTANTIVE  7.  THE A R B I T R A B I L I T Y  8.  INCONSISTENT  9.  S C O P E OF A R B I T R A T I O N  7:  AND T H E  245 S C O P E OF 259 OF LAW  270  OF S T A T U T O R Y C L A I M S  272 ISSUES  274  C L A U S E S AND FRAUD A L L E G A T I O N S  276  PRECEDENTS  276  COURT D E C I S I O N S  278  IN  INCOPORATION LEGISLATIVE  XI.  236  T R E A T M E N T OF L I M I T A T I O N S  WRITING SIGNED  INCORPORATION  X.  IN  8(1)  E F F E C T S OF C H O I C E  INTERNATIONAL  ARTICLE  LIMITATION  AGREEMENTS  6.  10.  231  OF T H E MODEL LAW  ARBITRATION  IX.  OF T H E T I M E  ARBITRABILITY,  CANADIAN  LIMITATION  O F T H E MODEL LAW  THE A P P L I C A T I O N ARTICLE  AND T H E T I M E  THE  BY T H E  OF A R B I T R A T I O N  PARTIES,  AND  C L A U S E S BY R E F E R E N C E  BY R E F E R E N C E REFORM OF A R T I C L E  282 285  7?  M O T I V E FOR I N V O K I N G A R B I T R A T I O N  295  11.  IMPROPER  12.  T H E R E S U R R E C T I O N OF OLD COMMON LAW D O C T R I N E S  299  13.  THE REFOCUSSED ATTENTION  304  14.  C A N T H E MODEL LAW OVERCOME J U D I C I A L C O N S E R V A T I S M ?  306  15.  KUDOS AMONG T H E B R I C K B A T S  309  THE QUEBEC RESPONSE  OF T H E COURTS  295  312  CONCLUSIONS SUGGESTIONS  AGREEMENT  315 FOR REFORM  319  BIBLIOGRAPHY  323  vi  ACKNOWLEDGEMENT  I  wish  to  thank  h a v e made b y In  K.  Special the  of  in  Of  Faculty  to  final  help  program.  I Wong,  the  head  reader, before  of  thesis  of  the  Faculty  Joost on v e r y  and  Law  Blom,  who  short  notice, for  Professor  and  so  who  stimulating.  Studies  guidance  deadline  of  supervisor,  Graduate  their  the  the  so p l e a s a n t  my  for  Professor  days  Staff  thank  Potter,  Program, patience.  kindly  took  within  a  submission  on  very  of  the  form.  staff,  Peggy M i c h e l l ,  cheerful  Francis  go  of  thesis  Bryant,  B.  and  sabbatical"  to  and  secondary  number  the  wish  Pitman  thanks  task  short  I  Paterson,  Professor  Faculty  "educational  particular,  Robert  the  I wish  to  Michelle  give  particular  Hopkins,  and L i l l i a n  i n coping with the administrative also  wish  to  thank  Mary M i t c h e l l ,  the  and A l a n  research.  vii  thanks  to  Ong,  Gillian  for  requirements  Library  staff,  Soroka,  for  their of  the  particularly  their  help  in  my  I.  INTRODUCTION  International resolution  commercial  means  International by  which  engaged  a  in  dispute  by t h e from the  is by  agreement  the  of  more  law,  of  is  the  held.  must  State.  apply  as  pursuant  the  laws  and  its the  extent legal of  as  or  mutual  any  to  the  arbitral  of  which  the the  relationship, State  parties  legal  or  rights  and  with  tribunal)  entered  jurisdiction law  process  more  judicially  t o an agreement  derives  The  (the  dispute1  two  their  persons  parties 3  to  the  businesspersons .  may b e d e f i n e d  and d e t e r m i n e d  laws which govern t h e i r  tribunal to  or  The t r i b u n a l  2  arbitration  State  one  become  between  commerce, to  has  international  difference,  referred  by a c o u r t  parties.  the  choose the  of  or  for  arbitration  international  effect  instead  choice  commercial  and l i a b i l i t i e s , binding  of  arbitration  and  powers  place parties and  State,  into  where may  whether  vary  from  4  Many a u t h o r s h a v e e x p r e s s e d t h i s , e . g . , The Hon. Justice K e r r , " I n t e r n a t i o n a l A r b i t r a t i o n v . L i t i g a t i o n " (1980) J o . B u s . L. 1 6 4 ; R e d f e r n & H u n t e r 1 9 ; M. G a r a v a g l i a , " I n S e a r c h o f t h e P r o p e r L a w i n T r a n s n a t i o n a l C o m m e r c i a l D i s p u t e s " [ 1 9 9 1 ] 12 N . Y . S . S c h . J . I n t ' l & Comp. L. 2 9 , 30 ( h e r e i n a f t e r c i t e d a s " G a r a v a g l i a " ) ; W. Hancock, "Corporate Counsel's Guide to Commercial Arbitration" Alternative Dispute Resolution 2.001 (1989); Rene David, Arbitration in International Trade 10 (1985); T. Carbonneau, " A r b i t r a l A d j u d i c a t i o n : A Comparative Assessment of Its Remedial and S u b s t a n t i v e S t a t u s i n T r a n s n a t i o n a l Commerce" (1984) Vol.19 N o . 3 T e x a s I n t ' l L . J . 3 3 , 34 ( h e r e i n a f t e r c i t e d a s "Carbonneau 1984"). 1  See, g e n e r a l l y , Mustill & B o y d , T h e Law a n d P r a c t i c e of Commercial A r b i t r a t i o n i n England, (1982); Redfern & Hunter, Law and P r a c t i c e o f I n t e r n a t i o n a l Commercial A r b i t r a t i o n , ( 1 9 8 6 ) ; Rene David, Arbitration in International Trade, 1985. 2  3  4  Id. Id.  1  International the  parties  to  resolution  of  an  the  its  to  contract  structure,  rules  relations,  of  the  their  procedure,  exclusion  to  choose  and t h e  law  courts  and  of  of  laws  universally  philosophy:  their  private  the  the  increasing those  weak states  as  the  the of  bargaining  contract in 7  should  to  State  role  have  a serious  to constitute  With  6  unbridled  extent  individuals  regulatory  with  of  of  of  State?  nationalism, freedom  what  decisions  courts  relationships within  to  It raises  agreement,  legally-binding  Such  5  welcomed.  legal  divest  rules .  their of  growth the  state  power,  moved away their  legal  from  domestic  applied  to  systems to  choice  their  is  not  persons,  tribunal  rights,  and  jurisdiction  in  and  of  pursuant  allow  a private  in  be  place  domestic  party  a State  of  dispute-  the  to  allowing  problem of p o l i t i c a l  their  engaged  their  arbitrators,  law w h i c h o t h e r w i s e w o u l d be a p p l i e d b y c o u r t s  conflict  of  international  forum,  arbitration, their  commercial a r b i t r a t i o n holds the prospect of  the  the  growth  and  legal  state,  the  protection of  laissez-faire  laws,  to  activities  welfare  ensuring  by  issue  thus  over  commercial the  to  and  have  economic  notions created  of a  R e d f e r n and H u n t e r , c h . 2 ( 1 9 8 6 ) ; M o r r i s , C o n f l i c t o f Laws 133 ( 4 t h e d . , 1 9 9 3 , D. M c C l e a n , E d . ) ; G . D e l a u m e , Transnational C o n t r a c t s - A p p l i c a b l e Law a n d S e t t l e m e n t o f D i s p u t e s c h . l (1989); 0 . L a n d o , " T h e Law A p p l i c a b l e t o t h e M e r i t s o f t h e D i s p u t e " [1986] 2 A r b . I n t ' l 104, 105; Carbonneau 1984, 35-6. 5  Rene D a v i d , A r b i t r a t i o n i n I n t e r n a t i o n a l ( 1 9 8 5 ) , ( c i t e d h e r e i n as " D a v i d " ) . 6  Trade,  p.55  para.59  Laissez-faire i s a d o c t r i n e t h a t the economic a f f a i r s of s o c i e t y a r e b e s t g u i d e d by the d e c i s i o n s of i n d i v i d u a l s to the v i r t u a l e x c l u s i o n of c o l l e c t i v e a u t h o r i t y . The i d e a has i t s b a s i s i n t h e w r i t i n g s o f t h e P h y s i o c r a t s (an 1 8 t h - c e n t u r y F r e n c h s c h o o l c r i t i c a l o f m e r c a n t i l i s m and of i n d i r e c t t a x a t i o n of l a n d ) and i n the works of Adam S m i t h and the Classical school.The MIT Dictionary of Modern Economics, 3rd. ed.; Treitel, T h e Law of 7  2  maze  of  rules  behaviour.  8  The  stage presents for  the  interests  governing  or  each  rules  and  nation of  to  certainty,  international are  unique,  potential  unsophisticated.  a neutral,  a common b o d y o f predictability,  of  a c o n f u s i n g morass  unwary seek  laws  domestic  legal  the  to  world  entanglements  adjudicative  avoid such entanglements, and s t a b i l i t y  so  International  9  supranational  commercial  business  process  and t o  international  with  provide business  Contract 3-5, (3rd e d . , 1970); In the laissez-faire model of international trade, t h e r e w o u l d be no g o v e r n m e n t a l c o n t r o l or r e g u l a t i o n of t r a d e , t h e r o l e of n a t i o n s would be l i m i t e d t o t h e development of a l e g a l and economic i n f r a s t r u c t u r e for a world market i n t e n d e d t o f a c i l i t a t e t r a d e by p r i v a t e p a r t i e s . Merchants w o u l d be a b l e t o do b u s i n e s s a c r o s s i n t e r n a t i o n a l b o r d e r s within an open c o m p e t i t i v e framework, f r e e of government i n t e r f e r e n c e w i t h their contractual arrangements. - Chachioliades, International Economics c . 8 , (1990); Vagts, Transnational Business Problems 3, (1986). Sornarajah, I n t e r n a t i o n a l Commercial A r b i t r a t i o n , 106-116 (1990) ( h e r e i n a f t e r c i t e d as " S o r n a r a j a h . " ) ; V a g t s , Transnational Business Problems (1986); Raworth, Legal Guide to International Business Transactions (1991); Lookofsky T r a n s n a t i o n a l Litigation and Commercial A r b i t r a t i o n (1992). I t i s an e s s e n t i a l t r i b u t e of s o v e r e i g n t y t h a t S t a t e s have competence t o p r e s c r i b e t h e laws t h a t a p p l y t o r e s o u r c e s , e v e n t s , a n d p e r s o n s w i t h i n t h e i r own t e r r i t o r y . Not c o n t e n t t o r e s t r i c t the a p p l i c a t i o n of r e g u l a t o r y regimes to t h e domestic s p h e r e , n a t i o n s have sought r e p e a t e d l y t o g i v e their laws extra-territorial reach. Other nations, alarmed at such e x t r a - t e r r i t o r i a l laws, have enacted " b l o c k i n g s t a t u t e s " designed t o c o u n t e r - a c t such e x t r a - t e r r i t o r i a l l a w s . See E x t r a - T e r r i t o r i a l Application of Laws and Responses Thereto, C. Olmstead, Ed., (1984). 8  T . Carbonneau, "American and O t h e r N a t i o n a l V a r i a t i o n s on t h e Theme o f I n t e r n a t i o n a l C o m m e r c i a l A r b i t r a t i o n " ( 1 9 8 8 ) 1 8 : 2 Ga J. Int'l & Comp. L . 143, 143-151. ( c i t e d h e r e i n as "Carbonneau 1988"); Lookofsky, Transnational Litigation and Commercial A r b i t r a t i o n (1992); Raworth, Legal Guide to I n t e r n a t i o n a l Business T r a n s a c t i o n s ( 1 9 9 1 ) ; V a g t s , T r a n s n a t i o n a l B u s i n e s s P r o b l e m s (1986 ) . 9  3  relations. context  However,  1 0  of  evolution  international  nation-states,  of  legal  systems  and  states  over  positivist  other  views  hand)  of  domestically  and  (one t h e  national  is  international  commercial  for  party  ascendant  autonomy  commercial  arbitration  the  of  from  status and  an  supranational  law  autonomous  largely  released  legal  at  system  in  where  the  of  such law  control .  the  autonomy  allowing  1 3  has  and c o n t i n u e s  regime  be  wary  no  the  of  the  control.  and economic  present  from  to  in  1 1  dreams of b u s i n e s s p e r s o n s  arbitral is  operates  have  legislatures,  relations,  and  they  one hand)  internationally,  laissez-faire  tend  which  The t e n s i o n between the l a i s s e z - f a i r e the  commerce  The  of  views  been  (on  played  today. arena  of  and p r o c e d u r e ,  present  out  private respect  international  arbitration  national  the  However,  1 2  increasing in  and  to  assume  distinct  law-makers; situation  a is  Carbonneau 1988, 214; Garavaglia, 30-33, 40-42, International Council for Commercial Arbitration, UNCITRAL's P r o j e c t f o r a M o d e l Law o n I n t e r n a t i o n a l C o m m e r c i a l A r b i t r a t i o n 3 3 , 35 ( 1 9 8 4 ) ; F o u c h a r d , L ' A r b i t r a g e C o m m e r c i a l I n t e r n a t i o n a l 1-48. 1 0  S o r n a r a j a h , 106-116; R e d f e r n & H u n t e r 42: "An u n d e r s t a n d i n g of the inter-change between the a r b i t r a l process and national systems of law is fundamental to a proper appreciation of international commercial arbitration." States, when a s k e d to assist the international commercial a r b i t r a t i o n process and to recognize and enforce awards, require some control over the arbitration process, to ensure that domestic notions of minimum standards of j u s t i c e are met.- I d . , 42-43. 1 1  See P a r t V, "The M u l t i n a t i o n a l C o r p o r a t i o n and W o r l d T r a d e " in I n t e r n a t i o n a l Economics and I n t e r n a t i o n a l Economic P o l i c y : A Reader, 219 (P. K i n g , Ed., 1990); C h a c h i o l i a d e s , International E c o n o m i c s , 14, 168-244; 1 2  UNCITRAL M o d e l Law A r t . 2 8 enshrines party and arbitral autonomy i n c h o i c e of law, g e n e r a l l y s u b j e c t o n l y t o b a s i c n o t i o n s o f a r b i t r a b i l i t y a n d p u b l i c p o l i c y i n A r t s . 34 & 3 5 . A r g u a b l y , its 1 3  4  reminiscent or  lex  of  medieval  mercatoria,  a  times  truly  in  Europe,  international  in  which and  a  applied  by  market  tribunals  rendered the d e c i s i o n s . under Royal c h a r t e r s ,  in  which  merchants  These market t r i b u n a l s  outside  merchant  anational  commerce b a s e d upon t h e c u s t o m and u s a g e o f m e r c h a n t s was  law  and  law  of  mariners,  and  operated in  mariners England  of and l a r g e l y beyond t h e c o n t r o l  of,  use of the term " r u l e s of law" i n d i c a t e s t h a t the c h o i c e of law i n c l u d e s l e x m e r c a t o r i a - De L y , I n t e r n a t i o n a l B u s i n e s s Law a n d L e x M e r c a t o r i a , 2 5 3 , and Y . D e r a i n s , " P o s s i b l e C o n f l i c t o f Laws R u l e s and the Rules A p p l i c a b l e t o the D i s p u t e " i n UNCITRAL's P r o j e c t for a M o d e l Law i n I n t e r n a t i o n a l C o m m e r c i a l A r b i t r a t i o n , 169, 191-2; Lex M e r c a t o r i a and A r b i t r a t i o n 33,34 (T. C a r b o n n e a u , E d . , 1990); R u b i n o - S a m m a r t a n o , I n t e r n a t i o n a l A r b i t r a t i o n Law C h . 1 3 ( 1 9 9 0 ) ; S . 3 of the English A r b i t r a t i o n Act, 1979 p r o v i d e s that parties to a r b i t r a t i o n a g r e e m e n t s may e x c l u d e j u d i c i a l r e v i e w o f arbitration awards i n c e r t a i n i n s t a n c e s i f n e i t h e r p a r t y i s a n a t i o n a l o r a r e s i d e n t o f E n g l a n d ; T h e S w i s s A c t o f D e c . 1 8 , 1987 o n C o n f l i c t of L a w s p r o v i d e s t h a t t h e p a r t i e s may e x c l u d e j u d i c i a l r e v i e w i f at l e a s t one p a r t y i s n e i t h e r a r e s i d e n t nor a n a t i o n a l ; t h e B e l g i a n Act of March 27, 1985 e x c l u d e s setting aside of international a r b i t r a l a w a r d s i n B e l g i a n c o u r t s i f no p a r t y i s a B e l g i a n r e s i d e n t o r n a t i o n a l . - D e L y , I n t e r n a t i o n a l B u s i n e s s Law a n d L e x M e r c a t o r i a 26 ( 1992); Portuguese Law n o . 3 1 / 8 6 of Aug. 29, 1986 excludes j u d i c i a l r e v i e w o f i n t e r n a t i o n a l a w a r d s , b u t t h e p a r t i e s may a g r e e o t h e r w i s e . - U . D r o b n i g , " A s s e s s i n g A r b i t r a l Autonomy i n European Statutory Law," in Lex Mercatoria and Arbitration 164 (T. Carbonneau, E d . , 1990). Case law i n F r a n c e and t h e U n i t e d S t a t e s shows e x a m p l e s o f c o u r t s e x e m p t i n g i n t e r n a t i o n a l t r a n s a c t i o n s f r o m domestic law imperatives, creating "transnational substantive r u l e s . " - I d . , 293-297. F r a n c e : G o s s e t , F r e n c h S u p r e m e C o u r t , May 7, 1963, J . C . P . , 1963, 13405; G a l a k i s , F r e n c h Supreme c o u r t , May 2, 1966, R.C.D.I.P., 1967, 533. United States: The Bremen v. Zapata Offshore C o . . 407 U . S . I (1972); Scherk v. Alberto-Culver Co., 417 U.S. 506 (1974); Mitsubishi Motors Corp. v. Soler C h r y s l e r - P l y m o u t h I n c . , 105 S . C t . 3 3 4 6 ( 1 9 8 5 ) ; "(T)he internationalist tenor of the r u l i n g s [of the U.S. Supreme C o u r t ] in Scherk and M i t s u b i s h i give [sic] additional j u d i c i a l s u p p o r t t o t h e c o n c e p t of an autonomous and " a n a t i o n a l " i n t e r n a t i o n a l commercial a r b i t r a t i o n process, a process that is d i s t a n c i n g i t s e l f from any r e f e r e n c e t o m u n i c i p a l l e g a l authority and o p e r a t e s f r e e of a l l n a t i o n a l l e g a l p r o v i s i o n s but t h o s e t h a t specifically regulate private international law matters." Carbonneau 1988, 214. 5  Royal  courts  1 4  .  P h i l l i p p e F o u c h a r d and o t h e r argued  that  the  complete  arbitration  from  authorities  is  and  in  argue  dependence  only  largely  "delocalized" upon  "nationality," domestic  law  detachment  system  now n o t  positive that  any  any are  courts.  1 5  (mostly Continental)  of  municipal  place  place  and  position  is  and  of  and  from  These  but  awards,  gaining  have  commercial all is  authors  arbitration  are in  law  possible  accomplished.  arbitrations  taking  international  theoretically  specified  This  of  commentators  state  in  further  divorced and  fact  from  having  recognition  contradistinction  to  no in the  These merchant t r i b u n a l s were g e n e r a l l y c a l l e d "piepowder courts." 1 Holdsworth, A History of English Law, ch.7 (hereinafter c i t e d as "Holdsworth"), (7th e d . , 1956); Kiralfy, Potter's Historical Introduction to English Law and Its I n s t i t u t i o n s , c h . 7 ( 4 t h e d . 1958, h e r e i n a f t e r c i t e d as " P o t t e r ' s " ) ; T e t l e y , M a r i t i m e L i e n s and C l a i m s ( h e r e i n a f t e r c i t e d as " T e t l e y " ) ; G a r a v a g l i a ; S e l d e n S o c , 1 S e l e c t P l e a s i n M a n o r i a l and S e i g n i o r i a l C o u r t s i - x x v i (1889, F.W. M a i t l a n d , Ed.). 1 4  Fouchard, II L ' A r b i t r a g e Commercial I n t e r n a t i o n a l Sns. 385 0 ; B. G o l d m a n , " T h e A p p l i c a b l e Law: G e n e r a l P r i n c i p l e s o f Law the Lex M e r c a t o r i a " in Contemporary Problems in International A r b i t r a t i o n 1 1 3 , 116 ( J . L e w , E d . 1 9 8 6 ) ; B . G o l d m a n , "L'Arbitre, Les Conflits de Lois et la Lex Mercatoria" and A. Kassis, "L'Arbitre, Les Conflits de Lois et la Lex Mercatoria" in Proceedings of the 1st International Commercial Arbitration C o n f e r e n c e , 13 a n d 1 3 4 , r e s p e c t i v e l y ( N . A n t a k i . a n d A . Prujiner, E d s . , 1985); Redfern & Hunter, 55-64. P r o f e s s o r Goldman r e l i e s on three p r i n c i p a l sources for the p r i n c i p l e s of the lex mercatoria: g e n e r a l p r i n c i p l e s of law, t r a d e usages, and a r b i t r a l awards which a r e based upon such p r i n c i p l e s and u s a g e s . He a l s o r e l i e s u p o n t h e instances i n which national courts have u p h e l d such awards, in p a r t i c u l a r t h e c a s e o f N o r s o l o r ( 1 9 8 2 ) 109 J . D . I . 2 3 1 i n w h i c h t h e A u s t r i a n Supreme C o u r t u p h e l d an award b a s e d upon l e x m e r c a t o r i a . Sornarajah, 145-6. See a l s o t h e d i s c u s s i o n o f t h e T e x a c o , A r a m c o , S a p p h i r e a n d BP a r b i t r a t i o n s i n R e d f e r n & H u n t e r 5 8 - 6 2 . These a l l i n v o l v e d investment d i s p u t e s between a s o v e r e i g n and a private i n v e s t o r , t y p i c a l l y i n v o l v i n g a c o n t r a c t made i n t h e t e r r i t o r y o f t h e s o v e r e i g n u n d e r whose law t h e i n v e s t o r had been d i v e s t e d o f i t s property. Thus t h e s e a r e h a r d l y t y p i c a l of p r i v a t e international 1 5  6  "seat"  theory  arbitration award, concept and  are of  of  (the  arbitration "curial  determined nationality  enforcement  law  by of  under  1 6  by  which  "),  and  the  place  awards  is  the  New  York  of  the  law  the  nationality  the  crucial  governing  to  of  arbitration. their  Convention.  1 8  1 7  the the The  recognition The  UNCITRAL  commercial c o n t r a c t s . - Id. The f i r s t t h r e e o f t h e s e a r b i t r a t i o n s p r o v i d e examples of awards not based upon any system o f national l a w s , and i n p a r t i c u l a r not based upon t h e l e x l o c i a r b i t r i , in o t h e r words t h e y were d e c i d e d independent from the law of t h e p l a c e of the a r b i t r a t i o n , i.e. t h e y were " d e l o c a l i z e d . " However, the e n f o r c e a b i l i t y o f a " d e l o c a l i z e d " a w a r d i s s u s p e c t , - t h e New Y o r k C o n v e n t i o n a p p l i e s t o awards upon the b a s i s of t h e i r l o c a l i t y - t h e d e l o c a l i s a t i o n o f t h e Texaco and Aramco awards d i d n o t m a t t e r s i n c e they were not awards in the usual sense of binding awards e n f o r c e a b l e i n c o u r t s , but were a d v i s o r y o p i n i o n s o n l y - R e d f e r n & Hunter, 58-62. T h e t r i b u n a l i n BP r e f u s e d t o a p p l y l a w o t h e r than national law out of concern that an award based upon international law and thus lacking nationality would lack enforceability. - Lagergren, J . , i n B r i t i s h Petroleum Co. (Libya) L t d . v . The Government o f t h e L i b y a n A r a b R e p u b l i c (1980) V Y . C . A . 143, 147; and s e e , g e n e r a l l y , Lex M e r c a t o r i a and A r b i t r a t i o n , (T. Carbonneau E d . , 1990.). The " c u r i a l l a w , " o r "law g o v e r n i n g the a r b i t r a t i o n , " i s t o be d i s t i n g u i s h e d from t h e " p r o p e r law o f t h e c o n t r a c t " or "law a p p l i c a b l e t o the m e r i t s of the d i s p u t e " ( a l s o r e f e r r e d t o as the l e x causae) and from t h e " p r o p e r law of t h e a r b i t r a t i o n a g r e e m e n t . " per Lord Diplock in Compaqnie d'Armement Maritime S.A. v. Compaqnie T u n i s i e n n e de N a v i g a t i o n S . A . [1971] A . C . 572, 604; James M i l l e r & Partners L t d . v. Whitworth S t r e e t Estates (Manchester) Ltd. [ 1 9 7 0 ] A . C . 5 8 3 . 6 0 8 ; R u s s e l l o n A r b i t r a t i o n 60 ( 2 0 t h e d . , 1982) . 1 6  1 7  Redfern  & Hunter,  62.  United Nations Convention on the Recognition and E n f o r c e m e n t o f F o r e i g n A r b i t r a t i o n A w a r d s , d o n e a t New Y o r k J u n e , 1 0 , 1 9 5 8 , 330 U . N . T . S . 38 21 U . S . T . 2 5 1 7 , T . I . A . S . N o . 6 9 9 7 . The C o n v e n t i o n a p p l i e s t o " f o r e i g n " a w a r d s , i . e . a w a r d s made i n a S t a t e o t h e r t h a n t h a t i n which enforcement i s s o u g h t , o r awards w h i c h a r e "not considered as domestic." Art.1(1). Thus, under the C o n v e n t i o n , an award has a n a t i o n a l i t y , d e r i v e d from t h e p l a c e o f a r b i t r a t i o n o r f r o m some o t h e r e l e m e n t w h i c h d i s t i n g u i s h e s i t f r o m domestic awards. - Redfern & Hunter 64. The e n t i t l e m e n t o f an award t o e n f o r c e m e n t i s t e s t e d on t h e b a s i s o f : ( i ) t h e law c h o s e n by t h e p a r t i e s as t h e law a p p l i c a b l e t o t h e a r b i t r a t i o n agreement; 1 8  7  Model  Law  "seat"  adopted  theory.  the  operate  without  without  their  arbitral  "strict  territorial  doctrine"  reflecting  the  1 9  Notwithstanding  domestic  a  the  support  courts awards  is 2 0  .  "derealization tolerance -  the  necessary The  of  theory, national  coercive to enforce  elevation  of  force  arbitration legal of  systems,  domestic  arbitration  cannot nor  law  and  agreements  and  international  commercial  and ( i i ) the c o m p o s i t i o n of the t r i b u n a l b e i n g i n a c c o r d w i t h the agreement of the p a r t i e s , but i n the absence of p a r t y c h o i c e of these, the law of the place of. a r b i t r a t i o n is controlling. Art.V(l)(a) & (d). T h e C o n v e n t i o n r e c o g n i z e s t h a t a n a w a r d may b e s e t a s i d e by "a competent a u t h o r i t y of the c o u n t r y i n w h i c h , or u n d e r t h e l a w o f w h i c h , t h a t a w a r d was m a d e . " - A r t . V ( i ) ( e ) .  R e p o r t o f t h e U n i t e d N a t i o n s Commission on International T r a d e Law o n t h e w o r k o f i t s e i g h t e e n t h s e s s i o n , 3 - 2 1 J u n e , 1985, G e n e r a l A s s e m b l y O f f i c i a l R e c o r d s : F o r t i e t h S e s s i o n , S u p p . N o . 17 (A/40/17) ( c i t e d h e r e i n as "Commission R e p o r t " ) , paras.70-81. 1 9  Redfern & Hunter 52-64; "Like a contract, an a r b i t r a t i o n does not e x i s t i n a legal vacuum. It is itself r e g u l a t e d not o n l y by the wishes of the p a r t i e s ( l ' a u t o n o m i e de l a v o l o n t e ) b u t by a g o v e r n i n g l a w , often r e f e r r e d t o as the l e x a r b i t r i . " - I d . , 53; "(S)ome l i n k w i t h t h e l o c a l law i s n e c e s s a r y t o g i v e efficacy t o the a r b i t r a l p r o c e e d i n g s and t o the a w a r d . " - I d . , 63; "The use of a r b i t r a t i o n t o s e t t l e i n t e r n a t i o n a l commercial disputes resulted largely from the dynamic interplay between t w e n t i e t h c e n t u r y commercial p r a c t i c e and n a t i o n a l l e g a l systems. Faced w i t h complex and i n t e r n a t i o n a l commercial d i s p u t e s , national legal systems enacted l e g i s l a t i o n and t h e i r courts h a n d e d down s u p p o r t i n g d e c i s i o n a l l a w , c o n f i r m i n g what had a l r e a d y become a commercial reality. Furthermore, they provided indispensable s u p p o r t f o r t h e e m e r g i n g p r o c e s s , w h i c h c o u l d have e a s i l y become frustrated by parochial domestic attitudes. The fundamental p r a c t i c a l i t y o f a r b i t r a t i o n , w h i c h g a v e i t a f a v o u r e d s t a t u s among i n t e r n a t i o n a l merchants, would have been i n e f f e c t i v e w i t h o u t this e q u a l l y p r a g m a t i c a t t i t u d e on t h e p a r t o f n a t i o n a l l e g i s l a t u r e s and c o u r t s . " - Carbonneau 1984, 37; " S t a t e law w i l l n e v e r be t o t a l l y a b s e n t when a r b i t r a t i o n is c o n c e r n e d . " - R e n e D a v i d , A r b i t r a t i o n i n I n t e r n a t i o n a l T r a d e 63 2 0  8  arbitration the  to  supranational  cooperation  In  particular,  or  "private  by  which  contract, legal  it  national is  a  domestic  but 2 2  these .  The  law"  court rules notion  law a p p l i c a b l e  would  not  legislatures  noteworthy  international  system  domestic  of  status  that rules  can  that  to their  and  provide  parties  "conflict a  which  invariably can  contractual  possible  national  domestic  decide  almost  be  without courts. of  decisional laws  point choose  relations  a  the is  laws" regime  apply  to  2 1  to  a  national system  of  generally  (1985) . 21 " T h i s a l i v e l y academic debate r e g a r d i n g whether the i n t e r n a t i o n a l a r b i t r a t i o n process i s t r u l y s e p a r a b l e from n a t i o n a l legal processes. The c o n t r o v e r s y i s a n c h o r e d i n a p o s i t i v e law thesis that argues f o r the need t o ground l e g a l r e g u l a t i o n and p r o c e s s e s i n an a u t h o r i z i n g n a t i o n a l s o v e r e i g n s o u r c e . Mirroring the English attitude on international commercial arbitration, proponents of this view hold that the e f f o r t of international merchants to create their own a d j u d i c a t o r y system cannot be e f f e c t i v e w i t h o u t t h e i n i t i a l and c o n t i n u i n g a p p r o v a l of national legal systems. The r e s p o n s i b i l i t y and a u t h o r i t y for creating legitimate legal norms lie exclusively within the province of municipal authority. The e x p e r i e n c e w i t h the t w i n American f e d e r a l i z a t i o n of a r b i t r a t i o n law b e l i e s t h i s i n t e r p r e t a t i o n of the development of i n t e r n a t i o n a l commercial a r b i t r a t i o n . The m u n i c i p a l endorsement o f a r b i t r a t i o n domestic or international - manifests a systemic w i l l i n g n e s s to a c c e p t a r b i t r a t i o n as a p a r a l l e l a d j u d i c a t o r y p r o c e s s . It further e v i d e n c e s a s i m i l a r w i l l i n g n e s s t o a l l o w the mechanism t o d e v e l o p a s a p r o c e s s a n d t o f o r m u l a t e i t s own r u l e s a n d m o d u s v i v e n d i . " C a r b o n n e a u 1988, 218; See a l s o : R e d f e r n & H u n t e r , 42; S o r n a r a j a h , 120 ( 1 9 9 0 ) . e  r  e  S o r n a r a j a h , 115 ( 1 9 9 0 ) ; De L y , I n t e r n a t i o n a l B u s i n e s s L a w a n d L e x M e r c a t o r i a , 22 ( 1 9 9 2 ) ; L o r d J u s t i c e M u s t i l l , " T h e New L e x M e r c a t o r i a : T h e F i r s t T w e n t y - f i v e Y e a r s " i n M. B o s a n d I . Brownlie ( E d s . ) L i b e r A m i c o r u m f o r L o r d W i l b e r f o r c e 149 a t 1 5 4 ; M a n n , C a s e s a n d Comments on C a s e s i n I n t e r n a t i o n a l Law, C o m m e r c i a l L a w , and Arbitration 21-26 (1992) (hereinafter cited as "Mann"); Amin R a s h e e d S h i p p i n g C o r p . v . K u w a i t I n s u r a n c e C o . [ 1 9 8 3 ] 3 WLR 2 4 1 . 2 2  9  respected  among d o m e s t i c  parties  should  such  the  of  as  equity  except as  in  be  modern  to  lex  and f a i r n e s s  challenges  2 6  is  choose  without  to  et  or  to  strict  bono  concepts  rooted  in  the  of  2 3  ,  but  apply  the  an  apply  rules  or  as  of  notion  general  public  conflict of  of  the  system  principles  to any r u l e s  amiable  concept  that  "anational"  adherence  fundamental  aeguo  traditional  notion  autonomy  ex  systems  mercatoria  those representing arbitration  latter  free  legal  of  policy,  law such  compositeurs laws  2 5  .  unlimited  2 4  ,  This party  .  "So f a r as t h e law of c o n t r a c t i s c o n c e r n e d , t h e r e i s a p r i n c i p l e of law which i s g e n e r a l l y a c c e p t e d , and w h i c h directs i n t e r n a t i o n a l commercial a r b i t r a t o r s to the c o r r e c t choice of the law a p p l i c a b l e t o an i n t e r n a t i o n a l c o m m e r c i a l c o n t r a c t . This is t h e p r i n c i p l e of t h e autonomy of the p a r t i e s . By t h i s i s meant t h e freedom of t h e p a r t i e s t o choose f o r t h e m s e l v e s t h e law a p p l i c a b l e t o t h e i r c o n t r a c t . " - R e d f e r n & H u n t e r , 72 ( e m p h a s i s a d d e d ) . This principle is a c c e p t e d i n common l a w , civil law, and socialist c o u n t r i e s . - I d . ; L e w , A p p l i c a b l e Law i n I n t e r n a t i o n a l Commercial A r b i t r a t i o n 75 ( 1 9 7 8 ) . See t h e d i s c u s s i o n o f p a r t y autonomy in fn.36, i n f r a , and t h e d i s c u s s i o n of t h e i n t e r p l a y between p a r t y a u t o n o m y a n d n a t i o n a l c h o i c e o f l a w r e g i m e s i n f n s . 3 7 , 43 & 4 4 , infra. 2 3  Grigera Naon, Choice-of-Law Problems in International C o m m e r c i a l A r b i t r a t i o n , 9 , 1 0 ( 1 9 9 2 ) ; Mann, N o t e s a n d Comments o n C a s e s i n I n t e r n a t i o n a l Law, C o m m e r c i a l Law, and A r b i t r a t i o n 16, 2 1 , 2 6 , 2 7 ; Amin Rasheed S h i p p i n g C o r p . v . Kuwait I n s u r a n c e Co. [1983] 3 WLR 2 4 1 ( H . L . ) . 2 4  Id.; " P a r t y autonomy i s a l o g i c a l o u t g r o w t h o f a p e r i o d i n which c o n t r a c t u a l freedomwas the a r b i t e r of economic r e l a t i o n s h i p s in western s o c i e t i e s . With the growth of the w e l f a r e s t a t e and the i n c r e a s i n g r e g u l a t o r y r o l e of the s t a t e i n e n s u r i n g the p r o t e c t i o n o f t h o s e w i t h weak b a r g a i n i n g p o w e r , t h e n o t i o n o f p a r t y a u t o n o m y has undergone s i g n i f i c a n t decline. Even at its height, it was d o u b t f u l w h e t h e r t h e doctrine p e r m i t t e d an u n l i m i t e d c h o i c e . It is clear, in all conflicts s y s t e m s , t h a t m a n d a t o r y p r o v i s i o n s o f t h e law c a n n o t be e v a d e d by an e x p r e s s c h o i c e of a p r o p e r l a w . " S o r n a r a j a h , 106. 2 5  2 6  Sornarajah,  115. 10  The p o s t - W o r l d shift  from  represents efforts of  2 8  2 7  War I I  proliferation  national ,  to  conflicts  has  led  promote of  economies  laws,  the  to  of  to  public  evolution  procedural  of  rules  international a and  global  economy  private  universally  trade  the  that  it  international  applicable  and s u b s t a n t i v e  w h i c h c a n be a p p l i e d t o t h e a r b i t r a t i o n o f  and  international  norms  principles, commercial  "The f r a c t u r e d n a t u r e of the contemporary w o r l d ' s political and l e g a l organization sharply contrasts with the increasingly t r a n s n a t i o n a l c h a r a c t e r of i t s economy." - G a r v a g l i a , supra, 32 fn.8. 2 7  28 " T h e e s t a b l i s h m e n t o f t h e I n t e r n a t i o n a l I n s t i t u t e f o r t h e Unification of Private Law (UNIDROIT) and the United Nations Commission on International Trade Law (UNCITRAL) were early manifestations of the i n t e r n a t i o n a l r e s o l v e for enacting uniform laws of commerce." - G a r a v a g l i a , 40. The U n i t e d N a t i o n s General A s s e m b l y p a s s e d a r e s o l u t i o n i n 1965 ( G . A . R e s . 2 1 0 2 ) i n s u p p o r t o f " t h e e f f o r t s made b y t h e U . N . a n d i t s s p e c i a l i z e d a g e n c i e s , a n d by i n t e r - g o v e r n m e n t a l and non-governmental a g e n c i e s , toward the progressive unification and harmonization of the law of international t r a d e by promoting the a d o p t i o n of international conventions, uniform or model legislation, standard contract provisions, general conditions of sale, and other measures." UNCITRAL and v a r i o u s o r g a n i z a t i o n s i n v o l v e d i n t h e p r o m o t i o n of i n t e r n a t i o n a l commercial a r b i t r a t i o n have a l s o been a c t i v e i n t h e promotion of u n i f o r m laws of a r b i t r a t i o n . For example, see the r e p o r t of the I n t e r n a t i o n a l Council for Commercial Arbitration: UNCITRAL's Project f o r a M o d e l Law o n I n t e r n a t i o n a l Commercial Arbitration (1984). The work o f international unification and h a r m o n i z a t i o n i s done p r i m a r i l y by t h e Hague C o n f e r e n c e on P r i v a t e International Law, UNIDROIT, UNCITRAL, and t h e O r g a n i z a t i o n of American States. Common features among these include: (i) e x c l u s i v e c o n c e r n w i t h u n i f i c a t i o n and h a r m o n i z a t i o n o f private l a w , and ( i i ) a p r i m a r y f o c u s on d e v e l o p m e n t o f i n t e r n a t i o n a l t r a d e o r o t h e r t r a n s a c t i o n s made d i f f i c u l t b y d i f f e r e n t n a t i o n a l l a w s a n d procedures. P. Pfund, "United States Participation in T r a n s n a t i o n a l Lawmaking," Lex M e r c a t o r i a and A r b i t r a t i o n 169-70, (T. Carbonneau E d . , 1990). Much u s e f u l work i n t h e s t a n d a r d i z a t i o n of t r a d e terms has been done by p r i v a t e o r g a n i z a t i o n s s u c h as t r a d e a s s o c i a t i o n s who p r o d u c e s t a n d a r d f o r m c o n t r a c t s w h i c h a r e i n w i d e i n t e r n a t i o n a l u s e , and by t h e I n t e r n a t i o n a l Chamber o f Commerce ( " I C C " ) . - D a y & G r i f f i n , T h e Law o f I n t e r n a t i o n a l T r a d e 5 , 6 (2nd ed., 1993). The ICC p u b l i s h e s "INCOTERMS", a w i d e l y - u s e d s e t o f i n t e r n a t i o n a l r u l e s f o r the i n t e r p r e t a t i o n of t h e most commonly u s e d t r a d e terms i n f o r e i g n t r a d e , such as " F O B , " " C I F , " etc. 11  disputes.  Faced  2 9  international  with  competition,  friendly  to  international  benefits  of  arbitration  showing  the  themselves  hoping  trade,  activity  willing  new  to  economic to  reality  portray  and h o p i n g t o within abrogate  their much  their obtain  related  2 9  dispute-resolution  the  borders, of  activities.  3 0  fierce  countries  as  economic  nations  their  c o n t r o l over domestic aspects of i n t e r n a t i o n a l economic and  of  are  sovereign activities,  The  almost  Id.  This may t a k e the form of respect for choice-of-forum clauses, whether in favour of arbitration or in favour of litigation in a foreign court (an example of t h e l a t t e r is the d e c i s i o n o f t h e U . S . Supreme C o u r t i n The Bremen v . Z a p a t a O f f s h o r e 407 U . S . I (1972)). I t may a l s o t a k e t h e f o r m o f r e s p e c t f o r a choice of applicable law c l a u s e which e x c l u d e s t h e laws o f the forum s t a t e which would o t h e r w i s e be a p p l i c a b l e , i . e . r e s p e c t for the p r i n c i p l e of p a r t y autonomy. F u r t h e r , i t may t a k e t h e f o r m o f a doctrine that subject matter which is not arbitrable in a domestic context i s nonetheless a r b i t r a b l e i n the international c o m m e r c i a l a r b i t r a t i o n c o n t e x t ( U . S . Supreme C t . i n M i t s u b i s h i v . Soler Chrysler-Plymouth 105 S.C. 3346 (1985), or that an a r b i t r a t i o n agreement v o i d i n d o m e s t i c law i s n o n e t h e l e s s v a l i d f o r i n t e r n a t i o n a l c o m m e r c i a l a r b i t r a t i o n ( e . g . T h e S w i s s F e d e r a l Law o n P r i v a t e I n t e r n a t i o n a l Law o f D e c . 1 8 , 1 9 8 7 , A r t . 1 7 7 ( 2 ) a n d t h e F r e n c h Nou. Code C i v . P r o c . A r t . 1 4 8 4 ( 2 ) . T h e UNCITRAL M o d e l Law bucks this t r e n d by r e t a i n i n g inarbitrability as a ground for judicial review. - U. D r o b n i g , "Assessing A r b i t r a l Autonomy in E u r o p e a n S t a t u t o r y Law, Lex M e r c a t o r i a and A r b i t r a t i o n 165,166.). I t may t a k e t h e f o r m o f a l i m i t a t i o n o n c o u r t r e v i e w o f awards g r a n t e d i n t h e c o u n t r y ( B e l g i a n A c t o f M a r c h 2 7 , 1 9 8 5 ; S w i s s Law of Dec. 18, 1987; E n g l i s h A r b i t r a t i o n A c t , 1979) - S e e De Ly, International Business Law a n d L e x Mercatoria (1992) 26, and Sornarajah, 120-21. The U n i t e d S t a t e s and c e r t a i n E u r o p e a n n a t i o n s a r e a t t h e f o r e f r o n t o f t h i s movement, b u t o t h e r s , n o t a b l y E n g l a n d , are l e s s e n t h u s i a s t i c about the r e l e a s e of i n t e r n a t i o n a l commercial arbitration taking place within their borders, and the i n t e r n a t i o n a l c o m m e r c i a l a r b i t r a t i o n a w a r d s made t h e r e , f r o m r e v i e w by t h e i r courts. Section 3 the English A r b i t r a t i o n Act, 1979 permits parties to a "non-domestic" pre-dispute arbitration agreement t o e x c l u d e c o u r t r e v i e w of an a r b i t r a l award f o r e r r o r s of law but not i f the s u b j e c t matter i s a q u e s t i o n o r c l a i m w i t h i n the Admiralty j u r i s d i c t i o n of the court, a dispute a r i s i n g out of a c o n t r a c t of i n s u r a n c e , o r a commodity c o n t r a c t ( S e c t i o n 4 ( 1 ) ( a ) ) . See a l s o f n . 1 3 s u p r a . 3 0  12  universally-accepted for  international  New Y o r k  commercial  enforcement of i n t e r n a t i o n a l awards,  by  the  However,  the  New Y o r k  of of  arbitration  courts  law,  international  Convention  of  arbitration,  States  a n d much o f  does  party not  to  is  framework for  and of  the  provide  the procedural  arbitration  the  providing  a r b i t r a t i o n agreements,  Convention  commercial  provides  3 1  the foreign  Convention  a complete  and s u b s t a n t i v e left  to  the  3 2  .  code law  varied  United Nations Convention on the Recognition and E n f o r c e m e n t o f A r b i t r a l A w a r d s , d o n e a t New Y o r k J u n e 1 0 , 1 9 5 8 , 21 U . S . T . 2 5 1 7 ( c i t e d h e r e i n a s t h e "New Y o r k C o n v e n t i o n " ) . 3 1  v a n d e n B e r g , T h e New Y o r k C o n v e n t i o n o f 1958 1 ( 1 9 8 1 ) . The C o n v e n t i o n has been d e s c r i b e d a s : " t o d a t e , t h e most i m p o r t a n t international treaty relating to international commercial arbitration. I n d e e d , i t s g e n e r a l l e v e l o f s u c c e s s may b e r e g a r d e d as one of the factors responsible for the development of a r b i t r a t i o n a s a means o f r e s o l v i n g i n t e r n a t i o n a l t r a d e disputes i n r e c e n t d e c a d e s . " -Redfern & Hunter, 46. The League of N a t i o n s p r o d u c e d two t r e a t i e s on i n t e r n a t i o n a l c o m m e r c i a l a r b i t r a t i o n : t h e Geneva P r o t o c o l on A r b i t r a t i o n C l a u s e s , 1923, (27 L . N . T . S . 158 (1924), which established the international recognition and e n f o r c e a b i l i t y of a r b i t r a t i o n agreements, and t h e Geneva C o n v e n t i o n o n t h e E x e c u t i o n o f F o r e i g n A w a r d s , 1927 (92 L . N . T . S . 302 ( 1 9 2 9 30)), which regulated the i n t e r n a t i o n a l enforcement of awards. The r e s t r i c t e d scope of these t r e a t i e s ( a p p l y i n g o n l y t o a w a r d s made in the country of a Contracting Party, and requiring court h o m o l o g a t i o n i n t h e p l a c e of making and t h e p l a c e o f enforcement ( " d o u b l e e x e q u a t u r " ) , and f a i l i n g t o g a i n a c c e s s i o n of t h e U n i t e d States) l e d t o t h e d e v e l o p m e n t o f t h e New Y o r k C o n v e n t i o n , which eschews "double exequatur".van den Berg, 6. The New York C o n v e n t i o n a t t r a c t e d 131 S t a t e s P a r t i e s b y M a y 3 1 , 1 9 9 5 . (1995) 20 Y . C . A . 6 0 3 . I t p r o v i d e s s i m p l i f i e d m e a n s o f e n f o r c i n g awards, and applies primarily to the enforcement of awards, Art.V e x h a u s t i v e l y l i s t s t h e g r o u n d s u p o n w h i c h a n a w a r d may b e r e f u s e d enforcement. Art.II(3) provides that a court of a Contracting S t a t e , when s e i z e d o f an a c t i o n i n a m a t t e r i n r e s p e c t o f w h i c h t h e p a r t i e s h a v e made a n a r b i t r a t i o n a g r e e m e n t , s h a l l , a t t h e r e q u e s t o f one o f t h e p a r t i e s , r e f e r the parties to a r b i t r a t i o n . The Convention provides an almost universal framework for the e n f o r c e m e n t o f a r b i t r a l a w a r d s among t h e t r a d i n g n a t i o n s o f the w o r l d ; t h e r e i s no s u c h u n i v e r s a l f r a m e w o r k f o r t h e e n f o r c e m e n t o f judgments. -Raworth, Legal Guide to International Business T r a n s a c t i o n s , 40 ( 1 9 9 1 ) . 3 2  13  municipal  laws  interpretation countries  led  Law  creation  is  not  3 3  the  a  3 5  of  The  resulting  of  the  Convention  but  by  The Model  of  the  Arbitration,  treaty,  party  .  development  commercial .  3 3  application  uniformity  international  principles  and  parties  Commercial  of  legislatures  state  to  International Model  of  was  its  concluded  as  arbitration Law r e p r e s e n t s  autonomy  3 6  UNCITRAL  intended  use  and  variability  a  as  in  a  adopted  arbitral  different  Model 1985  Law 3 4  vehicle  model  a blend  in  of  of  .  on The  for  the  for  laws  on  by  national  laissez-faire  autonomy  3 7  with  Id.  I. Szasz, " I n t r o d u c t i o n t o t h e M o d e l Law o f UNCITRAL o n I n t e r n a t i o n a l Commercial A r b i t r a t i o n , " UNCITRAL's P r o j e c t for a M o d e l Law o n I n t e r n a t i o n a l C o m m e r c i a l A r b i t r a t i o n , 3 1 , 3 3 , 35 ( P . Sanders, E d . , 1984); Redfern & Hunter, 387. F o r comments on t h e desirability of uniform interpretation of international C o n v e n t i o n s , see Lex M e r c a t o r i a and A r b i t r a t i o n 154, 175. 3 4  I n t r o d u c t o r y Address of P r o f e s s o r Kazuaki Sono, Secretary of the United Nations Commission on International Trade Law, UNCITRAL's Project f o r a M o d e l Law o n I n t e r n a t i o n a l Commercial A r b i t r a t i o n . 28 ( 1 9 8 4 ) . 3 5  36 " p t y autonomy" i s u s e d h e r e , i n i t s w i d e s t s e n s e , a s t h e rights of parties to contracts: (1) to designate an arbitral t r i b u n a l as the o n l y t r i b u n a l w i t h j u r i s d i c t i o n t o i s s u e binding settlements of disputes arising from the r e l a t i o n s between the p a r t i e s ; (2) t o c h o o s e t h e s t r u c t u r e o f t h e a r b i t r a l t r i b u n a l ; (3) to specify what disputes are within the jurisdiction of the a r b i t r a l t r i b u n a l a n d t h e r e m e d i e s w h i c h t h e a r b i t r a t o r s may o r must provide; and (4) to choose (or to empower the arbitral tribunal to choose): (a) the arbitrators; (b) the place of a r b i t r a t i o n ; (c) t h e r u l e s of p r o c e d u r e by which t h e t r i b u n a l w i l l act; (d) t h e r u l e s o f law ( u s u a l l y , b u t n o t n e c e s s a r i l y , t h e l a w s of a n a t i o n or s t a t e ) : (i) a p p l i c a b l e to the a r b i t r a t i o n agreement (the " p r o p e r law of the a r b i t r a t i o n agreement"); ( i i ) t o be a p p l i e d by r e l e v a n t c o u r t s as t h e " c u r i a l law" o r t h e s y s t e m o f law w h i c h g o v e r n s t h e p r o c e d u r e by w h i c h d i s p u t e s a r e t o be r e s o l v e d (also r e f e r r e d t o as t h e " l e x a r b i t r i " ) ; and ( i i i ) the rules of law a p p l i c a b l e to the m e r i t s of the d i s p u t e (the "proper law of the merits," "proper law of the (underlying) contract," or "lex causae."). See R e d f e r n & Hunter; Mustill & Boyd, T h e Law and a  r  14  positivist  principles  of  mandatory  public policy restrictions, and  concurrent  court  process.  It  maximizing  court  left  to  the  seeks  and  minimize  assistance  courts,  law  domestic r e s t r i c t i o n s  supervision to  curial  however,  for to  control  interpret  and  on over  interference arbitration  rules,  by  domestic  arbitrability, the  arbitral  courts  proceedings. apply  the  while It  Model  is Law  P r a c t i c e of Commercial A r b i t r a t i o n i n England (1982); and M o r r i s , T h e C o n f l i c t o f Laws 1 3 2 , 1 3 3 ( 4 t h e d . 1 9 9 3 ) . " P a r t y autonomy" in i t s more r e s t r i c t i v e s e n s e r e f e r s t o t h e r i g h t o f t h e p a r t i e s to choose t h e law a p p l i c a b l e t o the m e r i t s of the d i s p u t e . Even i n t h i s r e s t r i c t i v e s e n s e , p a r t y autonomy i s n o t w i t h o u t limitations. - See S o r n a r a j a h , 102-122. As t o t h e i n t e r p l a y between party autonomy and n a t i o n a l c h o i c e of law r e g i m e s , see t h e d i s c u s s i o n i n fn.43, infra. Arbitral autonomy includes the exclusive right of the a r b i t r a l t r i b u n a l , i n the absence of p a r t y c h o i c e : (i) to choose rules of procedure and applicable choice of law rules (if n e c e s s a r y ) ; ( i i ) t o choose t h e law a p p l i c a b l e t o t h e m e r i t s o f t h e dispute; ( i i i ) to construe the a r b i t r a l agreement t o determine the l i m i t s o f i t s j u r i s d i c t i o n ; and ( i v ) t o c o n s t r u e t h e c o n t r a c t of the parties. This power of the t r i b u n a l to rule on i t s own j u r i s d i c t i o n i s g e n e r a l l y a c c e p t e d by n a t i o n a l laws and i s r e f e r r e d t o as " c o m p e t e n c e - c o m p e t e n c e " ("Kompetenz-Kompetenz" i n German and "Competence de la Competence" in French). This principle is g e n e r a l l y accepted i n c o n t i n e n t a l Europe, but i s s t e r n l y resisted i n England. - Dr. h a b i l . Tadeusz S z u r s k i , " A r b i t r a t i o n Agreement and Competence of the A r b i t r a l T r i b u n a l " i n UNCITRAL's P r o j e c t for a M o d e l Law o n I n t e r n a t i o n a l C o m m e r c i a l A r b i t r a t i o n 53, 74 (P. S a n d e r s , e d . , 1984); V. D r o b n i g , " A s s e s s i n g A r b i t r a l Autonomy in E u r o p e a n S t a t u t o r y L a w " i n L e x M e r c a t o r i a a n d A r b i t r a t i o n 161 ( T . Carbonneau, Ed., 1990); Moonchul Chang The Autonomy of I n t e r n a t i o n a l Commercial and M a r i t i m e A r b i t r a t i o n : International, Canadian, and Far Eastern Perspective (1989); Russell on A r b i t r a t i o n 91-92, f n . 7 1 . (20th e d . , 1982). A r t . 16 o f t h e M o d e l Law p r o v i d e s f o r K o m p e t e n z - K o m p e t e n z . Kompetenz-Kompetenz i s not d e a l t w i t h s p e c i f i c a l l y i n t h e New Y o r k C o n v e n t i o n o r t h e InterAmerican Convention, but i s in Art. V(3) of the 1961 European C o n v e n t i o n and A r t . 4(1) of t h e ICSID C o n v e n t i o n - J . Siqueiros, "Arbitral Autonomy and National Sovereign Authority in Latin A m e r i c a " Lex M e r c a t o r i a and A r b i t r a t i o n 189. 3 7  15  as  adopted  The  by  their  UNCITRAL  potential, intended  legislatures.  Model  Law,  can be seen t o  to  allow,  autonomous,  and  if  if  allowed  represent  not  to  supranational  to  develop  the adoption  of  foster,  the  dispute  settlement  to  a legal  creation  of  a  the  on a b a s i s  UNCITRAL  only  to  entirely  Model  basic  Law  notions  procedural  fairness,  be  the  seen  as  "piepowder"  their to  in  disputes regime  which  the  laws.  own in  from  the  exertion  back  toward  a  disputes  or  public  the  of  of  policy.  the  endorsement  the  Charter  by  sovereign  or  businesspersons  contract  rules  of  rules,  procedure, trade,  and  in  the  under  enabled  by  of  sovereignty  when  there  was  and  relatively  Law  of  a  adjudicative  that  the  process.  P.J. Davidson, "International C a n a d a " , ( 1 9 9 1 ) 1 2 : 8 6 I n t ' l Law & B u s . 3 8  16  lex The  loci  can  of  free  and  or  modern  medieval to  apply  usages,  and  adjudication  the  auspices  uniform  powers, little  a  of  a  a  retreat movement  interference  be a p p l i e d  UNCITRAL  of  municipal  commercial d i s p u t e r e s o l u t i o n p r o c e s s by  insistence  of  a market  represents  positive  of  matter,  of  are  customs,  which  subject  Model  Royal a  i.e.  subject  Thus  in  provisions  Convention,  t h e UNCITRAL M o d e l Law t h u s  time  and l i t t l e  mandatory  arbitrability  promulgated  i n the i n t e r n a t i o n a l courts,  but  New Y o r k  international  tribunals  Adoption of  all  regime  contractual  forum a k i n to the merchant t r i b u n a l s  law  their  of  the  international  arising  of  of  and of  court:  own c h o s e n  choose  and  modern v e r s i o n  dispute-settlement times,  free  full  private,  regime  i n t e r n a t i o n a l b u s i n e s s can r e s o l v e d i s p u t e s and e n f o r c e terms  its  Model  state  to  such  Law  Commercial A r b i t r a t i o n 97, 105-107.  is  in  a  step  toward  subordination  of  the  reversal  arbitration  to  of  5  strict  centuries legal  of  control  increasing  in  common  law  i n C a n a d a a d o p t e d t h e New Y o r k C o n v e n t i o n  and  regimes.  All  the  jurisdictions  t h e U N C I T R A L M o d e l Law i n The i n t e n t  of  of  presenting  nations  the l e g i s l a t o r s  arbitration  history  hostility  to  jurisdictions  in  of  the  tradition over of  of  disputes  insisting  law and t h e  extreme to  3 9  .  that control  arbitration Canada  judicial  the  the 4 0  .  derive  be  courts.  regime  for  courts  of  England, their  jealousy  tribunals,  arbitration of  legal  However,  arbitral  on t h e  was t o b r i n g C a n a d a i n t o  a hospitable  commercial of  1 9 8 6 , w i t h some v a r i a t i o n s  and  a  subjected England,  the  international  from  to  which  this  a  most has  a  jurisdiction  strong  firmly  have  culture,  ceding  very  vanguard  Canada  legal  over  latter.  to  the  day,  tradition rule will  of not  P.J. Davidson, "International Commercial A r b i t r a t i o n in Canada," (1991) 1 2 : 8 6 I n t ' l Law & B u s . 97, 106; R.K. Paterson, " C a n a d i a n Developments i n I n t e r n a t i o n a l A r b i t r a t i o n Law: A S t e p Beyond Mauro Rubino-Sammartano's I n t e r n a t i o n a l A r b i t r a t i o n Law," (1991) 2 7 : 3 W i l l . L. Rev. 573. 3 9  Nine of the ten provinces of Canada inherited their a r b i t r a t i o n law from E n g l a n d . T h e common l a w j u d g e s o f England were h o s t i l e t o a r b i t r a t i o n and d e v e l o p e d s t r o n g r e s t r i c t i o n s on it. Agreements t o a r b i t r a t e f u t u r e d i s p u t e s were r u l e d i l l e g a l as attempts t o oust c o u r t s of t h e i r j u r i s d i c t i o n and of t h e i r r o l e as safeguards of the p u b l i c interest and of t h e r u l e of law. It appears t h a t the judges were m o t i v a t e d l a r g e l y by t h e i r purses, s i n c e t h e i r e a r n i n g s were b a s e d upon t h e number o f c a s e s f i l e d in t h e i r c o u r t s , a n d some o f t h o s e a l s o a c t e d a s a r b i t r a t o r s ; Chief J u s t i c e Dyer i s a p a r t i c u l a r l y apt example. See t h e discussion i n f r a on t h e h i s t o r y of a r b i t r a t i o n i n E n g l i s h law. The c o u r t s o f Quebec, w i t h t h e i r c i v i l law h e r i t a g e , were s i m i l a r l y restrictive i n t h e i r r e f u s a l to enforce a r b i t r a t i o n agreements p r o v i d i n g for the a r b i t r a t i o n of future disputes. See t h e d i s c u s s i o n o f the Quebec e x p e r i e n c e infra. 4 0  17  tolerate or  "delocalized"  arbitration  how  willing  will  traditions entirely  This  and  new  freeing  of  and  the  is  in defiance in  parties' Canadian which  from  Law a s party  of  have  autonomy  of and of  arbitration  agreements.  require  relations  be  municipal  law  international  that  failed  -  that  to  to  court  Canadian  standards,  and  courts hence  with the  the  to  promise  refer to  their  international  have  failed tended  the  chosen  and  of  the  that  the  attitudes commercial  strict to  of  commenced  terms  posits  to  what  parties  traditional  and  to  agreements The  the  the  author  have  the  UNCITRAL  see  stay Actions  according  control  an  supports  autonomy.  and t o  and  embrace  arbitration  to  The  their  courts?  arbitral courts  tradition,  and  Arbitration,  eschew  arbitration  subjugated  the  bono,  relinquish  which  fulfilled  agreements  arbitration  have  by  enforcing  to  courts  philosophy  Commercial  a means  arbitration  dispute  to  the Canadian experience  the w i l l i n g n e s s  of  be  this  arbitration  control  courts  ex aequo e t  Given  4 1  Canada  legal  International  Model  of  against  different  Canadian  that  issues  judges  investigates  upholding  test  the  arbitration  compositeurs.  prejudices  and  M o d e l Law f o r  UNCITRAL  amiable  arbitration  thesis  extent  by  arbitrations,  rules  meet to  be  of  liberal overly  C z a r n i k o w v . R o t h S c h m i d t & C o . , [ 1 9 2 2 ] 2 K . B . 478 ( C . A . ) ; B . T . P . T i o x i d e L t d . v . P i o n e e r S h i p p i n g , The Nema, [ 1 9 8 1 ] 2 L l o y d ' s R e p . 239 ( H . L . ) ; D e u t e r i u m o f C a n a d a L t d . v . B u r n s & R o e , Inc., ( 1974) D . L . R . (3d) 693, per L a s k i n J . at 710: "In the face of a r b i t r a t i o n s t a t u t e s w h i c h , l i k e t h a t i n Nova S c o t i a and o t h e r s elsewhere i n Canada, a r e d e s i g n e d t o p l a c e p r i v a t e a r b i t r a t i o n on a r e g u l a t e d f o o t i n g , I am n o t p r e p a r e d a t t h i s d a t e t o r e v e r t to a common law policy of jealous reaction to the attempted supersession of the o r i g i n a l j u r i s d i c t i o n of the o r d i n a r y C o u r t s . " 4 1  18  restrictive into  the  of  Model  T h e means o f of the  investigation  context  of  of  intentions  Canadian  as  their  the of  preparatoires  agreements  and  of  the  freedoms  built  Law.  Canadian courts  analysis  of  arbitration  they  success  of as  UNCITRAL;  courts  have  with  (i)  applied  traditional  UNCITRAL of  includes:  disclosed  those  (iii) of  to  the  decisions  courts by  the  courts  Law,  arbitration; in  fulfilling  published  comparison  the  of  t h e UNCITRAL M o d e l  hostility  Canadian  and  analysis  of  of  the  in (ii) the  travaux rationales  selected  foreign  jurisdictions.  The above a n a l y s e s of  the  "mixed"  or  are approached from the v i e w p o i n t "hybrid"  theory  4 2  of  the  basis  of  a  proponent  of  arbitral  There are four main t h e o r i e s of the nature of the b a s i s of a r b i t r a l a u t h o r i t y to a d j u d i c a t e , each of which seeks to explain t h e i n t e r r e l a t i o n of a r b i t r a t i o n and n a t i o n a l l e g a l s y s t e m s . The first is the "jurisdictional" theory, essentially socialist in o r i e n t a t i o n , i n which the a r b i t r a l p r o c e s s i s seen as i n e x t r i c a b l y linked to and an e x t e n s i o n of the State's authority. Lew, Applicable Law in International Commercial Arbitration 52-62 (1978). The second i s the " c o n t r a c t u a l i s t " t h e o r y i n which p a r t y autonomy i s paramount, and i n which any S t a t e i n t e r f e r e n c e i s seen as u n n e c e s s a r y and anomalous - F o u c h a r d , L ' A r b i t r a g e International Commercial Sn.44 (1965). The t h i r d i s t h e "mixed" o r "hybrid" theory which attempts to reconcile the jurisdictional and contractual theories by r e c o g n i z i n g the c r u c i a l role played by State authority in upholding the arbitral process, but also r e c o g n i z e s t h a t once t h e a r b i t r a t i o n i s commenced, t h e c o n t r o l o f the State over the process i s d i m i n i s h e d by the p a r t y autonomy p r i n c i p l e . - Lew, s u p r a , 5 7 - 5 8 . The f o u r t h t h e o r y i s t h a t seeing i n t e r n a t i o n a l a r b i t r a t i o n as " s u p r a n a t i o n a l , " o r " a n a t i o n a l , " an autonomous process divorced from national legal systems. F o u c h a r d , s u p r a , S . 2 9 ; Carbonneau, Lex M e r c a t o r i a and A r b i t r a t i o n (1990); Carbonneau, 1984, 1; C a r b o n n e a u 1988 2 1 4 ; contra: Lord Justice Mustill, " T h e New L e x M e r c a t o r i a : T h e F i r s t Twenty-five Years" in Liber Amicorum F o r L o r d W i l b e r f o r c e (M. Bos and I. Brownlee Eds. 1987) 4 2  19  authority  with  a  "universalist"  or  "internationalist"  Courts faced with disputes involving international c o n t r a c t s have t o d e c i d e : ( i ) w h e t h e r t o assume j u r i s d i c t i o n o v e r t h e c o n t r a c t d i s p u t e , and on what b a s i s ; and ( i i ) w h i c h s y s t e m o f laws t o a p p l y i n c o n s t r u i n g the c o n t r a c t . If the p a r t i e s i n t h e i r c o n t r a c t have s p e c i f i e d a c h o i c e of a p p l i c a b l e law, t h a t choice will receive differing interpretations in various municipal systems. A l t h o u g h c h o i c e - o f law c l a u s e s a r e g e n e r a l l y r e s p e c t e d , i n some c a s e s a c o u r t w i l l r e f u s e t o a p p l y a l a w s e e n a s c o n t r a r y t o i t s n o t i o n s o f p u b l i c p o l i c y o r " o r d r e p u b l i c " . - See C h e s h i r e a n N o r t h ' s P r i v a t e I n t e r n a t i o n a l Law 1 1 3 , ( P . N o r t h a n d J . F a w c e t t , E d s . , 12th e d . 1992.) Some j u r i s d i c t i o n s m a i n t a i n t h a t e v e n w h e r e t h e r e i s a c h o i c e o f law c l a u s e , t h e y must s t i l l a p p l y t h e i r c h o i c e of law rules to test the validity of the clause. These j u r i s d i c t i o n s c o n s i d e r u n l i m i t e d p a r t y autonomy i n c h o i c e o f law to be the usurpation of a legislative function by private i n d i v i d u a l s - S e e C h e s h i r e , P r i v a t e I n t e r n a t i o n a l Law 216 ( 5 t h e d . , 1957). As a g e n e r a l r u l e , i n t h e absence o f a c h o i c e o f l a w , the p r o p e r law o f t h e c o n t r a c t i s t h e law o f t h e c o u n t r y w i t h w h i c h t h e c o n t r a c t has t h e " c l o s e s t c o n n e c t i o n . " T h i s approach presumes t h a t a c o n t r a c t i n v o l v i n g s e v e r a l n a t i o n s must be most c l o s e l y c o n n e c t e d w i t h one o f them. Courts g e n e r a l l y proceed from a territorial d o c t r i n e , u s i n g an a p p r o a c h i n which t h e y a t t e m p t t o e s t a b l i s h t h e "locality" of the contract. This "localization" is performed p u r s u a n t t o the " p r i v a t e i n t e r n a t i o n a l law" or " c o n f l i c t s of laws" r u l e s of the forum c o u r t , which r u l e s are p e c u l i a r t o t h a t forum, w i t h many v a r i a t i o n s f o u n d among n a t i o n s - S e e C h e s h i r e a n d N o r t h , s u p r a ; C h e s h i r e , P r i v a t e I n t e r n a t i o n a l Law 38 ( 5 t h e d . , 1 9 5 7 ) . The c l a s s i c a l p e r s p e c t i v e h o l d s t h a t : ( i ) p r i v a t e i n t e r n a t i o n a l law o r c o n f l i c t s of laws r u l e s a r e p a r t of m u n i c i p a l law, d e r i v e d from and deriving authority from a n a t i o n a l legal system; and (ii) the primary f u n c t i o n of these r u l e s i s to designate the appropriate m u n i c i p a l law g o v e r n i n g t h e c o n t r a c t . The o p p o s i n g universalist school argues that neither national law n o r international law provides a s u f f i c i e n t j u r i d i c a l basis for transnational commercial r e l a t i o n s h i p s , and t h a t t h e t r a d i t i o n a l c o n f l i c t s of laws a p p r o a c h , i n w h i c h c o m p l e x c o n t r a c t s i n v o l v i n g p a r t i e s f r o m many n a t i o n s a n d numerous l o c a l e s of n e g o t i a t i o n and p e r f o r m a n c e a r e s u b j e c t e d t o t h e t e r r i t o r i a l a u t h o r i t y and p e c u l i a r l e g a l r e q u i r e m e n t s o f o n l y one nation, is neither appropriate nor desirable. The u n i v e r s a l i s t s a r g u e f o r t h e f a s h i o n i n g o f a new l e g a l o r d e r w h i c h r e c o g n i z e s the c o m p l e x i t y of i n t e r n a t i o n a l commercial r e l a t i o n s and which abandons the f a c i l e d i c h o t o m i z a t i o n of law between n a t i o n a l and p r i v a t e i n t e r n a t i o n a l law. T h i s new l e g a l o r d e r , t h e y a r g u e , i s a l r e a d y e v o l v e d t o some e x t e n t a n d i s e s s e n t i a l l y f o u n d e d o n a p a r a l l e l i s m o f a c t i o n i n the v a r i o u s l e g a l s y s t e m s , i n an a r e a i n which the sovereign l e g a l state is not e s s e n t i a l l y interested. Some p r o p o u n d a t r u l y t r a n s n a t i o n a l l a w o f i n t e r n a t i o n a l c o m m e r c i a l r e l a t i o n s , o r l e x m e r c a t o r i a , f r e e of the r e s t r i c t i o n s and c o n t r o l o f a n y n a t i o n a l s y s t e m o f l a w , a n d some g o s o f a r a s t o m a i n t a i n 4 3  20  perspective whose  on  views  arbitration national  the are  law  of  transnational  tempered  by  a  w o u l d be i n e f f e c t u a l  legal  systems  4 4  pragmatic  without  and t h a t  the  commercial  transactions,  realization  the enforcement  best  that  can be  that  powers  of  achieved  in  t h a t a t r u e l e x m e r c a t o r i a now e x i s t s a s a s y s t e m o f universallyrecognized legal principles suited to international commercial contracts.See R e d f e r n & Hunter, 52-97; De L y , International B u s i n e s s Law a n d L e x M e r c a t o r i a ( 1 9 9 2 ) ; M a n n , N o t e s a n d C o m m e n t s on C a s e s i n I n t e r n a t i o n a l Law, C o m m e r c i a l Law, and A r b i t r a t i o n c h . 6 ( 1 9 9 2 ) ; 0 . L a n d o , " T h e Law A p p l i c a b l e t o t h e M e r i t s o f t h e D i s p u t e " (1986) 2 Arb. Int'l 104; Goldman, "Lex M e r c a t o r i a " ( 1983) No.3 Forum Internationale 1; Lord Justice Mustill, "The New Lex M e r c a t o r i a : T h e F i r s t T w e n t y - f i v e Y e a r s " i n M. B o s a n d I. Brownlie ( E d s . ) L i b e r Amicorum F o r L o r d W i l b e r f o r c e (1987), 149; Goldman, Berthold, " L e x M e r c a t o r i a , " 3 F o r u m I n t e r n a t i o n a l e 1, (November, 1983); Garavaglia, 33-55. A truly internationalist law of arbitration would provide an autonomous and "anational" i n t e r n a t i o n a l commercial a r b i t r a t i o n process, independent of all m u n i c i p a l l e g a l a u t h o r i t y and p r o v i s i o n s e x c e p t t h o s e s p e c i f i c a l l y r e g u l a t i n g p r i v a t e i n t e r n a t i o n a l law m a t t e r s . -See Carbonneau 1988, 214; and F o u c h a r d , II L ' A r b i t r a g e Commercial I n t e r n a t i o n a l Sns. 537, 538 (1965). Critics maintain that the lex mercatoria is illusionary, that such a system of universally-recognized p r i n c i p l e s o f commercial law does not e x i s t , or at least is too fragmentary t o be c o n s i d e r e d a true system of law. -See Lord M u s t i l l , s u p r a , S o r n a r a j a h , 115-122 ( 1 9 9 0 ) ; R e d f e r n & H u n t e r , 89. English law does not r e c o g n i z e lex mercatoria as a legitimate c h o i c e of law. - Mann, s u p r a , 25; Amin Rasheed S h i p p i n g C o r p . v. K u w a i t I n s u r a n c e C o . [ 1 9 8 3 ] 3 WLR 2 4 1 ( H . L . ) . Some m a i n t a i n t h a t a r b i t r a t i o n i s s o c l o s e l y t i e d t o a n d dependent upon national legal systems that even the term " i n t e r n a t i o n a l commercial a r b i t r a t i o n " i s a misnomer. Mann w r i t e s : "In the legal sense, no international commercial arbitration e x i s t s . . . . every a r b i t r a t i o n is a national a r b i t r a t i o n , that i s to say, subject to a s p e c i f i c system of n a t i o n a l l a w . . . . E v e r y right o r power a p r i v a t e p e r s o n e n j o y s i s i n e x o r a b l y c o n f e r r e d by or derived from a system of municipal law." Mann, "Lex Facit A r b i t r u m , " i n I n t e r n a t i o n a l A r b i t r a t i o n L i b e r Amicorum f o r M a r t i n Domke 1 5 9 - 6 0 ( P . S a n d e r s e d . , 1 9 6 7 ) . In the t r a d i t i o n a l English v i e w , a system of p r o c e d u r a l o r s u b s t a n t i v e law can e x i s t o n l y by virtue of sovereign authority. Carbonneau and Firestone, "Transnational Law-Making: Assessing the Impact of the Vienna C o n v e n t i o n and t h e V i a b i l i t y of A r b i t r a l A d j u d i c a t i o n " 1 Emory J . Int'l Dis. Res. 51, 53. Generally speaking, a r b i t r a l tribunals h a v e n o a u t h o r i t y o f t h e i r own t o c o m p e l p a r t i e s a n d w i t n e s s e s t o participate in the a r b i t r a l process, to compel compliance with 4 4  21  the  present  action  in  world  system  support  Legislators  are  of  not  of  arbitration  bound  to  the nature of a r b i t r a t i o n , regulation (in  a  they  federal  obligations. significant awards or  as  Rene  see  -  However,  are  they  private  David  as  an  as  having  institution  sounder  a  parallelism  of  to  any  to  theory  arbitration to  their  example),  particular  legislative  and  subject  of  whatever  competence to  treaty  t h e c h a r a c t e r i z a t i o n o f a r b i t r a t i o n may h a v e  when  it  comes  be t r e a t e d  that of  is  .  ascribe  subject for  contracts?  states  a  to  4 5  states  t h e y may s u b j e c t  fit,  State,  effects  sovereign  the  enforcement  judgments  of  foreign  to  regard  of  foreign  tribunals,  4 6  the  the  as  to  present  law  of  trend  is  contract.  theoretical  foundation  This than  view  arbitration is  others,  not but  seen is  r u l e s of p r o c e d u r e , or t o compel compliance w i t h awards. The laws of t h e forum s t a t e (perhaps p u r s u a n t t o an i n t e r n a t i o n a l c o n v e n t i o n adopted by that state) may supply rules of procedure, the substantive law of the forum or t h a t of some o t h e r state will p r o b a b l y g o v e r n t h e a r b i t r a t i o n agreement and t h e m e r i t s o f the dispute, t h e v a l i d i t y o f an award w i l l be g o v e r n e d by m u n i c i p a l law, and e n f o r c e m e n t of an award w i l l depend upon m u n i c i p a l l a w . Redfern & Hunter. " P a r a l l e l i s m of a c t i o n " i s used here i n the sense of the a d o p t i o n o f u n i f o r m laws on i n t e r n a t i o n a l c o m m e r c i a l a r b i t r a t i o n , f i r s t l y by i n t e r n a t i o n a l c o n v e n t i o n s s u c h as t h e U n i t e d Nations C o n v e n t i o n on R e c o g n i t i o n and Enforcement of A r b i t r a l Awards, done a t New Y o r k , 1958 ( c i t e d h e r e i n a s t h e "New Y o r k Convention"), s e c o n d l y b y t h e a d o p t i o n o f u n i f o r m model laws s u c h as t h e UNCITRAL M o d e l Law o f I n t e r n a t i o n a l C o m m e r c i a l A r b i t r a t i o n , 1 9 8 5 ( t h e " M o d e l L a w " ) , and t h i r d l y by u n i f o r m j u d i c i a l r e s p e c t f o r international c o m m e r c i a l a r b i t r a t i o n as an autonomous regime f o r t h e a d j u d i c a t i o n of disputes. 4 5  4 6  David,  77. 22  based  upon  likely  to  contract.  a  pragmatic  consideration  that  be m a x i m i z e d by c l a s s i f y i n g  municipal  is  context  either  relation,  it  is  a court.  which of  the  law,  law,  to  in  of  they  view  the  historical  that  upon  be  said  intervene or  to  are  David,  80.  boni  viri  to  case  there  is  and  distinctions of  which  the  a new  life  judicial on  arbitration  no  than  5 0  fn.42. 81. 23  from  there  to  merely  must  rules is  serve a  of  little Rene  4 8  a  in  rule  contractual  longer  that  merum  adjudication.  an o b s t a c l e  arbitration,  specified  the  a  contractual  arbitrator  that  an  of  recognized  the  no d o u b t  the  when  in nature  any  and a p p l y  drawn  now n o m o r e of  observe  in  procedure  arbitration  accidents.  77.  bound  4 9  in  frame  in  that  may b e d r a w n b e t w e e n a r b i t r i u m  of  phenomenon  David,  to  a dispute  not  rules  theories  David,  See  is  latter  between  purpose,  cannot  theories  artificial,  exercising a function different  the  jurisdictional  of  settle  arbitrium  argues  It  called  arbitrator  difference David  is  specified  but  more  a creature  and j u r i s d i c t i o n a l  increasingly  least.  A distinction  and  observe  becoming  at  tribunal  contract,  of  as  is  4 7  arbitration,  arbitral  autonomy  arbitration  The d i s t i n c t i o n between t h e c o n t r a c t u a l of  party  and  useful  comprehensive  the  product  of  The a d j u d i c a t i o n less  closely  than  in  it the is  is  case  to  of  context.  neutral  to  arising  disputes  in  the  in  international  administration  The p l a c e  Thus  trend  the  territory,  dispute. a  disputes  linked  the  municipal  of  arising of  no  with  parties  or  from  of  view the  of  the  free  will  I I . SOURCES LAW While trade in  of  this  and  the  The  Convention  of  a  State  enforcement  of  have  NEW YORK  international  parties.  uniform  form  of  and  UNCITRAL  the  in  there laws,  agreement  as  laws,  conduct  and  product  ARBITRATION  practices  on t h e i r  and  effect  concentrate  Model  the  affreightment,  standardizing will  because  interest  COMMERCIAL  contracts,  contracting  thesis  the  5 1  imposing codes  some  in  national  dispute  IN INTERNATIONAL  standard  ,  5 2  in  terms  all  terms  Convention  an  conventions,  organizations  INCOTERMS,  THE  the  international  promulgating  trade  in  OF U N I F O R M I T Y  standardized  1.  award  is  State  arbitration,  s t r e s s i n g the paramount importance of the a r b i t r a t i o n the  a  may b e c h o s e n  commercial  the  in  adjudicated  connection  international of  justice  and  arbitration  having  freeing  in  of  contracts  on  on  only  in  of  members, preparing  such  as  the  international the  New  York  Law.  CONVENTION applies  other of  than  such  See  fns.  See  fn.28,  to  13,  "arbitral the  awards  20,  30,  State are  36,  and  supra. 24  awards  made  in  the  territory  where  the  recognition  sought"  and  to  37;  David  81.  awards  and "not  considered two  as  criteria  application is  are  of  rendered,  the  Each  is  or  which  are  awards not  the  enforcing  cumulative.  upon  the  The  left  Contracting  arbitral  in  Thus  an  forum  to  the  in  Contracting  reservation,  of  the  definition  State made  basis  under  laws  is any  of  of each  obligated other  States, Article  (Article  award  the C o n v e n t i o n upon the b a s i s  arbitration.  domestic,"  the  domestic"  of  may  international not  Contracting  to  unless  the  1(3),that  the  it  award of  considered  as  State  and  including first  for  character  recognize  country,  The  qualify  the place  "awards  I).  .  enforce countries  State  will  5 3  has  made  apply  the  See van den B e r g , supra, p.22; Berqeson V. Muller 710 F e d e r a l R e p o r t e r 2 d . , 928; and 9 U . S . C . S e c t i o n 202. P o i n t i n g , i n t e r a l i a , t o : (a) c i v i l code d e f i n i t i o n s o f " d o m e s t i c " a s i n c l u d i n g a l l a w a r d s made u n d e r t h e l a w s o f a s t a t e , e v e n t h o s e r e n d e r e d o u t s i d e i t s t e r r i t o r y ; and (b) t h e r e s e r v a t i o n i n A r t i c l e 1 ( 3 ) made b y 2/3 o f a l l C o n t r a c t i n g S t a t e s t h a t t h e y w i l l "apply t h e C o n v e n t i o n t o t h e r e c o g n i t i o n a n d e n f o r c e m e n t o f a w a r d s made o n l y i n the t e r r i t o r y of another C o n t r a c t i n g S t a t e , " van den Berg a r g u e d i n 1981 t h a t t h e s e c o n d g r o u n d f o r q u a l i f i c a t i o n o f a n a w a r d f o r a p p l i c a t i o n of the C o n v e n t i o n , the "not c o n s i d e r e d as d o m e s t i c " g r o u n d , s h o u l d be c o n s i d e r e d as a "dead l e t t e r " , u n w o r t h y o f u s e ( p . 2 8 ) , and p o i n t i n g w i t h a p p r o v a l t o t h e U n i t e d S t a t e s C o u r t of Appeals (2nd. C i r . ) d e c i s i o n o f May 2 4 , 1974 i n N a t i o n a l Metal Containers Inc. v. I/S S t r a s b o r g (U.S. No.2) w i t h the words "A U n i t e d S t a t e s C o u r t o f A p p e a l s c o r r e c t l y d i d n o t a p p l y t h e New Y o r k C o n v e n t i o n t o a n a w a r d made i n New Y o r k b e t w e e n a U n i t e d States c o r p o r a t i o n and a Norwegian shipowner i n v o l v i n g an international transaction." However, the U.S. Court of A p p e a l s , i n B e r q e s o n , in c o n s i d e r i n g the S t r a s b o r g d e c i s i o n , s t a t e d "Whether the C o n v e n t i o n a p p l i e s t o a commercial a r b i t r a t i o n award r e n d e r e d i n t h e U n i t e d States i s a question p r e v i o u s l y posed but l e f t unresolved i n t h i s Court." I n B e r g e s e n . t h e C o u r t w e n t o n t o h o l d "We a d o p t t h e v i e w t h a t awards ' n o t c o n s i d e r e d as d o m e s t i c ' d e n o t e s awards w h i c h a r e s u b j e c t t o t h e C o n v e n t i o n n o t b e c a u s e made a b r o a d , b u t b e c a u s e made w i t h i n t h e l e g a l framework of a n o t h e r c o u n t r y , e . g . , pronounced i n accordance with foreign law o r involving parties domiciled or having t h e i r p r i n c i p a l place of business outside the enforcing jurisdiction." This decision is in accord with the present trend toward generous a p p l i c a t i o n of the t r e a t y by n a t i o n a l courts. 5 3  25  Convention  to  Contracting  State.  which  had  awards  5 4  .  relationships  state.  None  the  The U n i t e d  all  has  enforce relate court  of  arbitration is the  the  being  a  1995,  also  in  "commercial"  or  "matter  agreement  131  83  had  made  1.3,  arising the  5 5  5 6  (1995) van  den  legal  of  the  reservation.  the  "reciprocity" reservation.  the United  national  Kingdom  the  laws  AN A R B I T R A T I O N  AGREEMENT  obligates  future  the  evidenced disputes.  Party  in  writing,  Article  term  of  the  of  an  action by  an a r b i t r a t i o n  agreement,  "unless  and  void,  20 Y e a r b o o k Berg,  Commercial  416.  Id. 26  NEW  Parties  to  it  or  Arbitration,  to they  requires  any  refer  arbitration"  inoperative  YORK  whether  11(3)  settlement  null  THE  Contracting  of  is  capable  seized  UNDER  finds  to  if  it that  incapable  performed."  5 4  from  Unfortunately, the  this  permits  laws  "commercial"  in  states  .  agreements,  of  the  under  while  another  Of  Article  made  5 5  definitions  of  "commercial"  jurisdictions  reservation.  Contracting  subject  said  5 6  OF  existing a  by  h a v e made t h e  Convention  arbitral to  as  varying  States  York  territory  common.  made b o t h r e s e r v a t i o n s ,  2. ENFORCEABILITY CONVENTION New  is  b u t Q u e b e c made t h e  "reciprocity"  Contracting  the  Convention  reservation,  Canadian but  "commercial"  The  the  47 S t a t e s  States  the  in  reservation  considered  reservation,  only  of the Convention to d i f f e r e n c e s  reserving of  to  Another  the r e s t r i c t i o n  made  This  adhered  reservation  made  603  of  3 . T H E LAW A P P L I C A B L E OF B E I N G PERFORMED"  The C o n v e n t i o n  does  not  determining  whether  arbitration,  or  void, are 198 1  that  5 8  abroad,  all  the  and  all  exclusively the  in  point.  their  which  is  of  the  the  cases  law.  Jan to  was  to  to  the  law  applicable  parties,  or  place  the  law  of  of  a  in  the  place  of  of  of it  would  to  the  is  choice  to  mainly  with  upon  be  of  the  in  5 8  van  den B e r g ,  The  New Y o r k  153. 5 9  A r t s . V ( 1) ( a )  and  (d). 27  Arbitration  place  the  or  the  of  I  by  the  of  the  apply  the  a  of  the  uniform  (which  their  that  5 9  validity of  to  relating  law  to  law  was  chosen  A . v a n d e n B e r g , "New Y o r k C o n v e n t i o n o f 1 9 5 8 Commentary Cases Reported i n Volumes XVII(1992) ( 1 9 9 4 ) XX Y e a r b o o k C o m m e r c i a l A r b i t r a t i o n , 4 7 5 , 5 3 5 . 5 7  take  awards  favour  Articles place  dealt  place  of  the  in  had  account  be  courts  arbitrability  that  to  and  reported  to  seem i n c o n s i s t e n t  question  II  and t h e  in by  null  provisions  is  Van den Berg argued  Article  awards  such  into  its  apply  is  of  taking  in  to  settlement  or  enforcement  arbitration  absence  agreement.  interpretation recognition  the  arbitration,  different  arbitration  to  and  took  INCAPABLE  which  question  None  is  Berg  place  arbitration  recognition  den  taking  Since the Convention states the  van  time  the  OR  agreement  that  take place. defences  of  being performed,  decided  own  court  capable  whether  arbitration  courts  INOPERATIVE,  law t h e  Albert  5 7  reported  the  which  matter  incapable  involved  under  place  the  or  this  II  specify  determining  on  with A r t i c l e  of  in  inoperative,  divided  TO " N U L L AND V O I D ,  bases  making)  and  Consolidated XIX(1994)",  Convention  of  1958,  V(l)(a).  By a n a l o g y ,  6 0  Article  V(l)(a)  Article  II.  as  "the  than breaks for  of  German  courts to  conflict  rule,  will  made",  be  Art.II,  the  the  6 2  in  law)  governing  6 0  of  the  parties  so  the  case  the  the  den  Article  V(l)(a) be  called  upon  II  not  will  to  read  rather  the  designated  of  under  t o be  made"  Further, not  rule  agreement  will  6 1  have  consistently  apply  agreements as  agreement  "the it  analogy a  place  enforce  the  necessarily  pp.57,  the  Art.II,  know  Court  rule  reading  the p l a c e where t h e  questions  agreements of  formal  (found that  of  to  Swiss  Appeal  of  be  the  under  validity  governed  l a w was t h e Genoa,  in  award  g o v e r n e d by German law)  specified  The  conflict  arbitration  agreement  contract 6 3  law o f  to  the  under  (found to  arbitration  Berg,  conflict  made.  splitting  contract.  award  made."  court  applying  where t h e  van  under be  uniform  an a r b i t r a l  the  "was  by a n a l o g y ,  one  of  where  arbitration  in  of  of  now  arbitration  scope  Swiss  wording  award w i l l  the  would r e q u i r e A r t i c l e  country  agreement  Art.V(l)(a)  of  this  arbitration,  the  apply  enforcement  down c o m p l e t e l y  arbitration  The  the  actual  the  where  the  However,  law  its  to  he w o u l d  and by law  Italy,  126-7.  v a n d e n B e r g n o t e s two c a s e s , one i n A u s t r i a i n 1 9 7 1 , an done i n H e i d e l b e r g i n 1972, i n which c o u r t s a p p l i e d t h e conflict r u l e s of A r t i c l e V ( l ) ( a ) t o A r t i c l e I I , by a n a l o g y , t h e H e i d e l b e r g c o u r t e x p r e s s l y r e a d i n g A r t i c l e V ( l ) ( a ) as i m p o r t i n g " t h e law o f t h e c o u n t r y i n w h i c h t h e award w i l l be m a d e . - v a n den B e r g , p p . 1 2 7 128. 6 1  6 2  6 3  Consolidated Id.,  citing  Commentary FR G e r m a n y  (1994) No. 37, 28  19 Y . C . A . 17  Y.C.A.  535.  has  also  this  used  the  approach,  "analogy"  applying  U.S.  Federal Arbitration Act, of  arbitration  4.  STAYING  LITIGATION  If  a valid  arbitration  stay  of  the  subject the  with  no  federal  law,  as  it  States  eschews  appears  in  of the b i n d i n g  the  effect  6 5  UNDER T H E clause  NEW YORK  is  found,  proceedings  to the a r b i t r a t i o n  court  The U n i t e d  6 4  to the determination  agreements.  court  principle.  and  relating  agreement,  discretion.  As  CONVENTION a party  to  a  applies  dispute  which  the words of A r t i c l e  stated  by  Rene  for  II  a is  leave  David:  "The C o u r t s , i n E n g l a n d and t h e U . S . A . , have c o n s i d e r e d t h a t the words at the end of Art. II, para. 3 were to be i n t e r p r e t e d v e r y s t r i c t l y a n d t h a t , w h e n t h e New Y o r k C o n v e n t i o n was a p p l i c a b l e , t h e y l o s t a l l d i s c r e t i o n a r y p o w e r a n d were bound t o s t a y the p r o c e e d i n g s brought b e f o r e them." 6 6  5.  PARTY  Under  AUTONOMY UNDER T H E  Article  applicable law  of  the  to  have  law  the  question Berg  of  notes  64  6 5  (1982) 66  the  place  parties of  V(l)(a),  of  parties  to  provide  where  validity this  the of  CONVENTION  are  free  agreement,  arbitration.  country  that  the  arbitration  failed  the  NEW YORK  It "any  only  is  "has  in  made  arbitration been  designate  the  indication  award  the  provision  is  to  to  the  law  of  the  which  the  that  the  to  the  Van  den  exclusion  cases  in  thereon," is  applied  agreement.  hailed  by  other  authors  Id. C o n s o l i d a t e d Commentary, 555 F . S u p p . 482. Rene D a v i d ,  Arbitration  535;  in  29  Rhone M e d i t e r r a n e e  International  Trade,  v.  216  Lauro,  (1985).  as  the  supremacy  territorial  The  for  concept  public  V(2)(b) a  is  policy  As  state  is  hearing. New Y o r k forum  likely  refer  in  to  it  principle  arbitration.  the  for  of  refusal  recognition Redfern its  put  by  and  of  to the Convention's  of  and t h e  and  due  most  "The  of  District  sanctions process.'"  the  of  The bias",  violate  the  forum  states'  basis most  only basic  of  ground arbitral  the  "where notions  New Y o r k  went  forum a  fair  ,  the  of  the  6 8  on  and h e l d t h a t  award  this  an  Court  of  on  the  Article  application  p o l i c y d e f e n c e s h o u l d be c o n s t r u e d n a r r o w l y , denied  in  what c o n s t i t u t e s Court  "pro-enforcement  of  court  public an  over  fertile  enforcement  own c o n c e p t the  autonomy  enforcement  Hunter:  'essentially  standards  party  1 1 6 7  least-defined;  have  was  Convention  state's  of  against  noted  As  the  ground  perhaps  defence  award.  of  and  the  enforcement  enforcement of  to  would  morality  and  van den Berg, s u p r a , p.282. T h e M o d e l Law d o e s n o t c o n t a i n any express c h o i c e - o f - l a w p r o v i s i o n i n s t r u c t i n g the a r b i t r a l p a n e l which law t o a p p l y i n d e t e r m i n i n g the v a l i d i t y of t h e arbitration agreement. However, A r t i c l e s 3 4 ( 2 ) ( a ) ( i ) and ( i v ) p r o v i d e t h a t i n setting-aside actions, i n the absence of a c h o i c e of law by t h e p a r t i e s t h e law of t h e S t a t e i n which t h e a r b i t r a t i o n i s taking place applies. The l a t t e r A r t i c l e p r o v i d e s t h a t mandatory rules of law of the p l a c e of a r b i t r a t i o n o v e r - r i d e the p a r t i e s ' agreement on c o m p o s i t i o n of the tribunal and p r o c e d u r e . -Holtzmann and Neuhaus, A Guide to the UNCITRAL Model Law o n International Commercial Arbitration, Legislative History and Commentary 480 (1989). These p r o v i s i o n s help to solve the problem, but are of little use i f it is not c l e a r where t h e a r b i t r a t i o n w i l l take place. 6 7  6 8  Societe (Second  Quoting from Parsons Whittemore G e n e r a l e de L ' I n d u s t r i e du P a p i e r C i r c u i t Court of Appeals), 1974. 30  Overseas (RAKTA),  Co., Inc. 508 F. 2 d .  v. 969  justice." the  6 9  enforcement  accept  an  stricter  the  when  is  a  consistent  decisions  international domestic  the basic of  There  elements  special  principle  and  (d),  order  of  domestic  party  submission  the  agreement  6. The of  R E V I E W OF only awards  or  jurisdiction  is  from  "requires  enforcing  reflected  the  procedure  they the only  absence  State  applies  Articles  V(l)(c)  7 0  in  and e n f o r c e m e n t jurisdiction  arbitration,  parties.  that  in  or  are  if  the  not  in  of  an  award  g r a n t e d by  the  composition accordance  of  with  7 1  AWARDS  provision is  to  arbitral  the  the  decisions."  t h e award exceeds  the  of  which  order  found  not d i s t u r b e d by the  that recognition  parties  tribunal  process  international  autonomy  if  the  different  p l a y and i s  its  be  due  of  fair  to  Parties,  The  may b e r e f u s e d  the  of  reported  Contracting  order.  which provide  in  the  embellishments  reviewing  The  of  pattern  in  in  the  Art.V(1)(e)  of n a t i o n a l  New Y o r k 7 2  .  Convention  Such r e v i e w  courts,  is  relating strictly  based upon t h e i r  to  review  within  jurisdiction  the over  Id. , 974; R e d f e r n and H u n t e r , 348; and see E. Kurth, " A d j u d i c a t i v e R e s o l u t i o n of Commercial D i s p u t e s Between N a t i o n a l s o f t h e U n i t e d S t a t e s a n d M e x i c o " , ( 1 9 8 3 ) 14 S t . M a r y ' s L . J o . , 5 9 7 , 620 ( c i t e d h e r e i n a s " K u r t h " ) ; a n d G a r a v a g l i a , 100. 6 9  7 0  7 1  Kurth,  Redfern  620.  and H u n t e r ,  327.  A r t . V ( l ) ( e ) p r o v i d e s t h a t r e c o g n i t i o n and e n f o r c e m e n t o f an a w a r d may b e r e f u s e d i f : "The award has n o t y e t become b i n d i n g on the p a r t i e s , o r has been s e t a s i d e o r suspended by a competent a u t h o r i t y of the c o u n t r y i n w h i c h , o r under t h e law of w h i c h , t h a t a w a r d was m a d e . " 7 2  31  the  arbitral  arbitration  is  that  the  that  country  7.  proceedings,  occurring within  arbitration 7 3  either  is  being  upon  their or  territory,  was  MODEL  1985.  of  domestic  arbitration  among  arbitration  laws  with  the  Arbitration  Rules  of  1975.  and  enforcement conscious the  courts. of  of  foreign  The Model  enforcing carrying  the out  van  to  basis  laws  and  It  maximize  while  the  of  349,  the 7 5  .  it  to  the  UNCITRAL the  same  recognition  and  and  Law  exhibits  discretion  the  and the courts  constituting  enforcing  domestic  interference  autonomy  access  commercial  employ  The  from  the  Law  modernization  and  to  independence  party  and  the  was  Trade  harmonize  sought  awards  agreement,  process,  to  for  insulate  maintaining  arbitration  Berg,  also  domestic  for  Convention  grounds  and t o  Arbitration  international  also  York  Law m a x i m i z e s  the  den  .  on  and  New 7 4  Commercial  as a model  laws  nations,  substantive  tribunal  arbitrators,  7 3  all  attempt  arbitral  the  Commission on I n t e r n a t i o n a l  I t was i n t e n d e d  harmonization  mechanism  under  the  LAW  adopted by t h e U n i t e d N a t i o n s  and  that  o r upon t h e  conducted  T h e U N C I T R A L M o d e l Law o n I n t e r n a t i o n a l  21,  basis  .  THE UNCITRAL  on June  the  by  a of the  authority for  the  award  7 6  aid  in  panel, .  Key  350.  H o l t z m a n n a n d N e u h a u s , A G u i d e t o t h e UNCITRAL M o d e l Law o n International Commercial Arbitration' Legislative History and Commentary ( 1 9 8 9 ) . 7 4  7 5  Id.,  1060.  Paul J . Davidson, "International C a n a d a " , ( 1 9 9 1 ) 12 I n t ' l L . & B . , 97, 7 6  in  32  Commercial A r b i t r a t i o n a t 105.  Law  provisions  are as  intervention  follows.  with  imperative  governed  by  this  law,  provided  in  this  Law".  referral matter goes a  to  so  far  the  as  mandatory  cannot on  own  existence also  to  enshrine  limit  or  the  agreement  independent  so  of the to  the  null  makes  the  grounds  Article  34,  an  award  (Article refusing 36 for  are  a  right  The  to  the  virtually of  the  court  aside  an  refuse  for  recognition  is,  are and  480. 33  the  agreement  7 7  it  Art.16(1)  are  the  the  once  that  if  response  the  finding.  process is  is  the  made,  in  and enforcement  of  through an  identical  enforcement  the  that  that  award  court  and  of an award i n A r t i c l e s  almost  as  invalidity  in  it  the  seen  provide  review  the  which  jurisdiction  aside  .  rule  to  tribunal  16(3)  sought  to  as  by  jure  over  parties  tribunal  objections  may  setting  and enforcement same a n d  That  award,  is  a  as  recognition  which  in  Kompetenz-Kompetenz  ipso  has  mandatory  16  13 a n d  court  so  Article  arbitral  of  matters  brought  agreement;  containing  not e n t a i l  the  of  grounds  recognition  Id.,  by  court  where  a  action  "separability"  contract  the  for  arbitral any  Articles  setting  of  the  of  party,  any  arbitration  the  enforcement  36).  refusal  and  control  for  and the  the  the  clause."  only  limited  of  including  "A d e c i s i o n  by  to  "In  except  provides  16(1).  a preliminary.finding  challenge  Otherwise,  Article  and v o i d s h a l l  arbitration  panel a  that  8(1)  arbitration  power  of  stating:  intervene  principle  doctrine  arbitration  is  in the  validity  shall  parties  an  the  jurisdiction,  imports  contract  the  of  t h e M o d e l Law l i m i t s  language,  court  of  subject  to  5 of  Article  provision,  agree  its  no  arbitration  which  Article  in  to  the  the  34  for and  grounds  New  York  Convention, a  stated  of  law  case  or  Article  party The  procedure,  finding  conduct  simply: shall  Model  tribunal  be  to  matters,  decided  these  determine  of  which  is  are  evidence;  8 1  82  8 2  and  conflict  basis  parties  in  of  of  of  laws  law,  if  of  interim decide  rules the  law.  governing  presenting  order  error  of  to A r t i c l e  discretion  for  18  the  which  and  his  the  each  case." arbitral  measures  of  evidentiary  which  parties  are  then  have  not  in  the  7 8  7 9  under  the  to  interim  and r u l i n g s  and  the  of the a r b i t r a t i o n ,  an  the  staying  Model of  8 1  on c h a l l e n g e s  (4)  A r t . 8. A r t . 9. Art.27 34  court  arbitration  protection;  19-28.  A r t s . 11(3)  no p r o v i s i o n  on q u e s t i o n s  subject  matters,  available  of  the  on  is  be t r e a t e d w i t h e q u a l i t y  applicable  subject  taking  of  power  arbitrators;  orders  A r t s . 17,  the  the  matters.  of  8 0  the  choose  appeals  opportunity  procedural  granting  7 9  shall  There  aside  arbitration,  full  maximizes  assistance  of  a  for  autonomy  the  given  to  to  matters  the  setting  nor  choose the s i t u s  applied  7 8  fact,  of  decide  and  appointment  for  "The p a r t i e s  Law  protection,  Court  of  19 e n s h r i n e s  procedural states  from which t h e y were t a k e n .  Law  actions  agreement assistance to  the  on  ;  the  in  the  8 0  appointment  of  an  arbitrator,  arbitrator.  8.  CHOICE 28  Article  28  8 3  8 4  8 5  ability,  or  delay  by  the  8 3  is  central  (1)  renvoi  8 6  .  fns.25  Article  to  allows The  A r t s . 13 a n d See  arbitrator's  OF LAW UNDER T H E MODEL LAW  Article  without  the  28  party  direct use  of  autonomy party  "rules  8 4  under  choice of  law"  of  the  Model  "rules  instead  of  of  Law.  8 5  law,"  "law"  was  14. &  36.  provides:  (1) The arbitral tribunal shall decide the dispute in a c c o r d a n c e w i t h such r u l e s of law as a r e c h o s e n by t h e p a r t i e s as a p p l i c a b l e to the substance of the d i s p u t e . Any d e s i g n a t i o n o f t h e law o r l e g a l s y s t e m o f a g i v e n S t a t e s h a l l be c o n s t r u e d , unless o t h e r w i s e e x p r e s s e d , as d i r e c t l y r e f e r r i n g t o t h e s u b s t a n t i v e law of t h a t S t a t e and not t o i t s c o n f l i c t of laws r u l e s . (2) Failing any d e s i g n a t i o n by the p a r t i e s , the arbitral t r i b u n a l s h a l l a p p l y t h e law d e t e r m i n e d by t h e c o n f l i c t o f laws rules which i t considers applicable. (3) The a r b i t r a l t r i b u n a l s h a l l d e c i d e ex aequo e t bono o r as a m i a b l e c o m p o s i t e u r o n l y i f the p a r t i e s have e x p r e s s l y authorized i t t o do s o . (4) In a l l cases, the arbitral tribunal shall decide in accordance w i t h the terms of the c o n t r a c t and s h a l l take into account the usages of trade a p p l i c a b l e to the t r a n s a c t i o n . T h e r e was w i d e s u p p o r t among t h e C o m m i s s i o n f o r i n c l u s i o n o f a choice-of-law provision, s i n c e i t was f e l t that "the model law w o u l d be i n c o m p l e t e w i t h o u t a p r o v i s i o n on r u l e s a p p l i c a b l e t o t h e substance of d i s p u t e s , p a r t i c u l a r l y i n view of the f a c t that the model law d e a l t w i t h i n t e r n a t i o n a l commercial a r b i t r a t i o n where a l a c k o f r u l e s on t h a t i s s u e would g i v e r i s e t o u n c e r t a i n t y . " C o m m i s s i o n R e p o r t A / 4 0 / 1 7 p a r a . 238 ( A u g . 2 1 , 1985). T h e r e was l i t t l e d i s s e n t o n t h e p r i n c i p l e t h a t t h e p a r t i e s should have c o m p l e t e autonomy t o choose t h e r u l e s t o g o v e r n t h e s u b s t a n c e of any d i s p u t e s . - Holtzmann & Neuhaus, 765. J . Blom, "Conflict o f Laws A s p e c t s o f T h e International Commercial Arbitration Act," i n UNCITRAL A r b i t r a t i o n Model in C a n a d a , R. P a t e r s o n & B . T h o m p s o n , E d s . , 1 3 0 . Art.28(1) provides, in part, that: "Any d e s i g n a t i o n of t h e law o r l e g a l s y s t e m o f a g i v e n S t a t e s h a l l be c o n s t r u e d , unless otherwise expressed, as 8 6  35  controversial,  with  two  in  drafts,  The  use  various  having  of  the  to  intended  have  the  to  parties'  choose  in  force.  of  only  The  intending  to  principles  revealed  dispute.  If  the  is  to choose  States  or  that law  allow  use  8 8  State:  the  or  part  of  the  law."  parties  the  are  laws  even  the if  arbitral led  awards  the  parts  of  latter  are  tribunal  the  drafters  principles as  be  the  of  the an not  able  away  of the  of  rules  8 7  from  parties  of  different  or  general  by a r b i t r a t i o n  between  "rules the  all  ),  law,  readily of  on  free  govern  the  forth  h a v i n g no c o n n e c t i o n w i t h  to  model  applicable the  choose  laws  to  one  ("depecage"  concern  the  to  including  different  ascertain  the  law  freedom  and  settling  intended  convention  8 9  finally  back  is  relationship  international  going  term  the  one o r more S t a t e s , matter,  drafters until  latter  choose  to  the  to from  law  law a p p l i c a b l e  or to  9 0  parties  do n o t  choose  an a p p r o p r i a t e  the  applicable  system of  law,  conflict  of  then  the  tribunal  laws by which  the  d i r e c t l y r e f e r r i n g t o t h e s u b s t a n t i v e laws of t h a t S t a t e and not t o i t s c o n f l i c t of laws r u l e s . " The i n t e r p r e t a t i o n o f an e x p r e s s c h o i c e of l e g a l system as a r e f e r e n c e t o t h e c o n f l i c t of laws r u l e s of that legal system i s the "merry-go-round" known a s renvoi. Art.28(2) o f t h e M o d e l Law e l i m i n a t e s r e n v o i " f o r a l l practical purposes" - Blom, supra, 130. Holtzmann & Neuhaus, 764-807. The c o n c e r n s o v e r t h e u s e o f " r u l e s o f l a w " i n c l u d e d : t h a t i t was " n o v e l a n d a m b i g u o u s " , that it would lead to difficulties in practice or to "extravagant c h o i c e s , " a n d t h a t i t was u n n e c e s s a r y i n m o s t l e g a l s y s t e m s . - I d . , 767 . 8 7  8 8  8 9  9 0  Id. ,  767 .  Id. ,  766-7,  Id.,  766,  805.  768. 36  applicable allow  law  the  to  Also,  its  of  choice  28(3)  as  is  direct  to  the  of  the  choice  to  that  laws  drafters  parties  right  intended  conflict  amiable  not  both,  the  decided  of  might  the  tribunal  and hence  not  applicable  which  choose  system,  were  awards,  9 3  9 4  a  acting  the  in  Id., Id.,  only  are  roughly  legal  for  arise  if law  reasons  its  to  law,  applicable give  this to seek  mandatory  9 3  The  for  choice  domestic  use  of of  the  Hence  9 2  in  all  to  ensure of  or of  place  as  of  arbitration  770. 771.  770. 37  at  that  bono  their  drafters  legal  so use  used  systems.  should  include  enforceability  of  law,  but  drafting  an  of  the  mandate  of  amiable  Art.28(3) of  et  expressly but  the  paragraph  arbitration  Id. Id. ,  parties  definition bono  ex aequo  equivalent,  rules  inclusion  importance the  et  decide  the  treatment  that  aequo  if  systems.  tribunals  ex  to  but  comprehensive  recognizes  recognized  tribunal  equivalent  unmanageable.  28(3)  9 2  all  observe  giving  de-emphasize  terms  expressed  to  arbitrators  9 1  in  requiring  and  article  two  ensure  provisions  arbitral  compositeur,  consistent to  proved  the  These  Concerns  as  given  it  allows  authorize. is  a  The  9 1  Art. or  make  surprises  were  directly.  determined.  to  avoid  tribunal  law.  be  tribunal  intending the  will  is  compositeurs intended  arbitration, practices same  place.  not 9 4  to  insofar always  Of  particular  requires  that,  accordance "the  or  with  the  terms  of  trade  chosen  compositeur. since  the  usages truly  of  lex  allowing  consideration allow  the  of  of  is  law of of  this  contract" to  ex  the  aequo  particular old,  the  and  private "rules  market  whether p r e s e n t l y  is  and  to  take  et  bono  mariners,  and  commercial  custom  into  to  law,"  and  identified  as this  author  was b o r n  28(4)  the a  Articles requiring  of  or developed  of  into  and t r a d e u s a g e s , rules  not,  amiable  relations.  the  rule  law o r  developed  and  "in  account  This  or  interest  28(4)  decide  applicable  Law M e r c h a n t ,  of  Article  transaction."  the terms of the c o n t r a c t of  paper,  tribunal  have chosen the  of of  of  the  the  merchants  choice  adoption  associations,  of  arbitration  mercatoria  trade  cases,  applicable  This  9 5  purposes  the p a r t i e s  international  28(1)  the  all  whether  have  for  in  usages  applies  note  should  business in  future,  I d . , 772. T h i s p r o v i s i o n was i n c l u d e d i n t h e f i r s t draft o f A r t i c l e 2 8 , a n d was d r o p p e d a f t e r t h e W o r k i n g G r o u p e x p r e s s e d concerns t h a t the r e f e r e n c e t o c o n t r a c t terms had the p o t e n t i a l t o c o n f l i c t w i t h mandatory p r o v i s i o n s of law, and t h a t r e f e r e n c e to t r a d e u s a g e s w a s r e d u n d a n t i n some s y s t e m s a n d d a n g e r o u s i n o t h e r s s i n c e the e f f e c t t o be g i v e n t o t r a d e usages v a r i e d i n different systems. T h e p r o v i s i o n was r e s t o r e d b y t h e C o m m i s s i o n a t the b e h e s t o f t h e U n i t e d S t a t e s , i t b e i n g n o t e d t h a t t h i s p r o v i s i o n was c o n s i s t e n t w i t h A r t . 3 3 ( 3 ) o f t h e UNCITRAL A r b i t r a t i o n R u l e s , w h i c h had been adopted by the U n i t e d N a t i o n s G e n e r a l Assembly as s u i t a b l e f o r c o u n t r i e s w i t h d i f f e r e n t l e g a l , s o c i a l , and economic s y s t e m s , a n d was c o n s i s t e n t w i t h t h e E u r o p e a n C o n v e n t i o n o n International C o m m e r c i a l A r b i t r a t i o n , 484 U . N . T . S . 349 ( 1 9 6 1 G e n e v a C o n v e n t i o n ) . I t was a l s o n o t e d t h a t t h e i n c l u s i o n o f s u c h a p r o v i s i o n "may e v e n be a s t i m u l a n t f o r i n s e r t i o n o f an a r b i t r a t i o n c l a u s e i n t o the c o n t r a c t as t h e p a r t i e s , not w i t h o u t good r e a s o n s , e x p e c t from t h e a r b i t r a t o r s t h a t t h e y w i l l above a l l base t h e i r d e c i s i o n s on the w o r d i n g and h i s t o r y of t h e c o n t r a c t and t h e usages o f t r a d e . " Sixth Secretariat Note (Analytical Compilation of Government Comments) A / C N . 9 / 2 6 3 , para.12. 9 5  38  as the of  the  rules  Model  governing  Law h a s  autonomous  Articles  34  the  36  of  the  award  refusing  Setting  for aside  may  set  its  own a w a r d  Model  aside  was  that  the  award,  grounds  of  Article  34(2)  refusal  of  private  court  and t h e  or  part  the  pains  for  provides: if  grounds the  permit  9 8  "  are  first  In  review  injustice.  grounds  an  aside  an  aside,  may  the  not  court  substitute  s h o u l d be  be  of  no  the d r a f t e r s ' should  an  award.  The d r a f t e r s  there  award  are  four  which  and  of  a w a r d may b e s e t  The  recognition  panel.  that  exhaustive. grounds,  but  use  providing,  setting  setting  and  the  court  intention limited  to  9 7  "An a r b i t r a l  certain  a  Rather, of  for,  Thus  9 6  relations.  by  enforcement  thereof,  ensure  development  international  grounds  arbitral  to  the  relations.  interference  and  an a p p e a l .  of  procedural  court...only  proving  great  contractual  recognition  the  that  of  limit  of,  unlike  for  to  award on t h e m e r i t s .  the  matters  these  means  is  Law t o o k  review of  rules  further  exhaustively, and  parties'  potential  systems  and  the  proved.  applicant are  enforcement  of  the an  In bears same award  aside other the as  by  words, onus  those set  the  out  of for in  S e v e r a l governments noted t h e i r u n d e r s t a n d i n g t h a t "rules of law" i n c l u d e d t r a d e usages and " t h e r u l e s of b u s i n e s s m e n and business associations." Sixth Secretariat Note A/CN.9/263, A r t . 2 8 , p a r a . 4 ; a n d Summary R e c o r d , A / C N . 9 / S R . 3 2 6 , p a r a . 2 0 . ; and s e e t h e d i s c u s s i o n o f t h e Law M e r c h a n t , i n f r a . The t e r m " r u l e s o f l a w " i s c o n s i d e r e d b y some a u t h o r s t o i n c l u d e l e x m e r c a t o r i a . - S e e R e d f e r n & H u n t e r 9 0 , 9 1 ; R u b i n o Sammartano c h . 1 3 ; and L e x M e r c a t o r i a and A r b i t r a t i o n , 33-35. 9 6  9 7  9 8  Holtzmann Emphasis  & Neuhaus,  933,  added. 39  998.  Articles minor the  V(l)  (a)  to  modifications".  last  two  grounds  same a r b i t r a b i l i t y of  the  are  New  York  respect  alignment refusing promote  of  The for  These  to  the  setting  same  refusal  New  court,  and p u b l i c  of  unification  policy  with  own  may  motion,  which  of  are  recognition  and of  awards  enforcement this  are  found law  apply  in Article  by  the  mirrored and  only  basically  in  the V(2)  arbitrator Article  enforcement.  from l o c a l  awards  in  system of  were  1 0 1  and  intended  particularities,  or  law,  was  legal  accepted bases  cases."  recognition  sought,  awards  of  a w a r d s w h e t h e r made i n  enforcement  of  area  transnational  and  Convention,  grounds  grounds  arbitral  international  its  Errors  1 0 0  internationally  a single  of  aside,  C o n v e n t i o n embodies  that  York  t h e M o d e l Law w i t h t h e New Y o r k C o n v e n t i o n g r o u n d s  recognition  international  of  Convention.  irrelevant.  with  (d)  1 0 2  The  "to  for  elsewhere.  for to  the  overturning intended  would apply  the c o u n t r y where  The  insulate  because  drafters  and enforcement  36,  to  recognition  1 0 3  III. INTERNATIONAL LAW TO D O M E S T I C LAW, FROM L A Y T R I B U N A L TO L I T I G A T I O N , T H E T R I U M P H OF T H E COMMON LAW OVER A R B I T R A T I O N AND T H E LAW MERCHANT 1.  INTRODUCTION  9 9  1 0 0  1 0 1  1 0 2  1 0 3  Holtzmann  & Neuhaus,  911.  Id. Holtzmann  & Neuhaus,  1057.  Holtzmann  & Neuhaus,  1056.  Id. 40  This  paper  inherited origins hands  2.  THE  by  of  of  now  Canada  the  the  turns  to from  a  consideration  England  law merchant  common  ORIGINS  OF  law  and  courts  and  of  France,  arbitration of  the  first  the  earliest  and  time,  intimate  an  and commercial (domestic of  commercial  AND MERCHANT  and  Both  Both a p p l i e d  were  laws  grew  customs,  differed  from  distinct  the  common  (approximately  500  to  they  to  continued  maritima terms  3.  which  related  THE  LAWS OF  was to  the  a class  in  and  right  codified wine  an  the  trade.  the  in  international to  modern  Roles  of  class  from the  by  the  maritime  observances  dominated  had  From  the merchant  courts.  both  comprised  between  distinct  customary  down  in  to  times  codes.  existed  quite  from o r d i n a r y law,  at  LAW  modern  tribunals  1450 A . D . )  possess  of  peculiarly  from the  administered  and t h e i r  law  relationship  and i n t e r n a t i o n a l ) ,  society.  class,  law.  fate  the  England.  ENGLISH MARITIME  maritime  culture  tracing  and t h e i r  H o l d s w o r t h w r o t e t h a t t h e Law M e r c h a n t o f p r i m i t i v e both  legal  rest  of  this  merchants  In England,  both  the  Ages  Middle  character  times.  Oleron,  1 0 4  which  This  along  lex with  1 0 5  OLERON  H o l d s w o r t h , A H i s t o r y o f E n g l i s h Law V o l . 1 , revised, 1956, o r i g i n a l l y p u b l i s h e d 1903), [cited Holdsworth"1. 1 0 4  526, (7th e d . h e r e i n as "1  T e t l e y , 6; P o t t e r ' s H i s t o r i c a l I n t r o d u c t i o n t o E n g l i s h Law and I t s Institutions 4th Ed. (1958), 185-186 [cited herein as "Potter's"]. 1 0 5  41  From t h e an  9th to  oral  lex  mercatoria, to  Flanders  found  to  distinct  practised  on  and  tide"  1135)  and  this  in  along  with  there  is  primarily  related  of  with  the  the  ship,  owners,  voyage  1 0 7  modern  .  The  the in  laws  law The  1 0 8  foundation the  of  maritime  jurisdictions.  of  Blacke  of  Book  of  the  was  coast  lex  of  deals  merchants Oleron in of  both Oleron  European the  are  in  King  John  in  the  Roles  Besides  1 0 6  with  port  masters, the  first  have  maritime of  the  the  I  of  (1100-  Roles,  England,  of  the  Roles  deal  seamen of  the  source civil of  and the  after  were  It  Oleron,  the  and  and  the  (1201).  distinction  codes,  been  between  problems  and  Spain  before  recorded  law  lex  have  judgments  before  common  Admiralty  of  While  ships,  our  from  Henry  of  Oleron.  primarily  of  sea,  the  cases  haste,  reign  trade.  of  in  "in  a collection  sea  Europe  the  of  References  the  reign  wine  of  at  in  part  maritima  codified  the  island  Laws  all  of  Oleron,  Customary and  the  a custom of  forming  Scotland.  tide"  to  arrangements  merchants, the  which  Customary  court  to  second year  terms  but  Atlantic and  was  E n g l a n d and S c o t l a n d  "from t i d e  the  there  from  applying  maritima  the  the  England  courts  and  lex  mayor's  in  and seamen i n  third  is  12th c e n t u r i e s ,  maritima,  local  merchants  the  of law  being  included  probably  first  T e t l e y , 6; P o t t e r ' s H i s t o r i c a l I n t r o d u c t i o n t o E n g l i s h Law and I t s institutions 4th Ed. (1958), 185-186 [cited herein as "Potter's"] . 1 0 6  1 0 7  1 0 8  Tetley,  9.  Tetley,  6. 42  assembled maritime  in  the  law  Holdsworth  of  period  England  of for  1332-1357 use  by  the  as  a  compilation  court  of  of  Admiralty  1 0 9  the  .  wrote:  "The laws of O l e r o n thus p r o v i d e d a s e t of r u l e s which were no d o u b t g e n e r a l l y s u f f i c i e n t t o e n a b l e j u r i e s o f m e r c h a n t s and m a r i n e r s t o s e t t l e most o f t h e problems o f m a r i t i m e law which arose in the sea-port towns in the early medieval period. " 1 1 0  4.  THE  O R I G I N AND A  The  first  the  period  Admiral  references 1340  and  the  to  his  "civilians," in  i.e.  common  law  the  procedural  models  common-law presentment  O.N.S. 1 1 0  1 1 1  112  to  the  1357,  they of  new  during and  court  1 1 2  of  i n the c i v i l , of  the  in  the  the  .  COURTS  Court  in  The  of  reign  later  trained  England  request  OF T H E  English  were  features and  HISTORY  deputies,  indicates  1 0 9  BRIEF  of  Edward  Admiralty  Black  or  Book  of  first  criminal  in  civil  matters  1 1 4  come III.  1 1 1  judges,  "civil"  n o t t h e common l a w , jury  ADMIRALTY.  Admiralty  Roman  Admiralty  OF  the  looked  law,  Tetley,  were not  for  its  but adopted  the  matters  and  1 1 3  .  21;  123.  Maritime  Potter's,  The  Admiralty  1 Holdsworth, 545; 5 Holdsworth, 125-127; Tetley, Paper v . C h a r t w e l l S h i p p i n g [1989] 2 S . C . R . a t 717. 5 Holdsworth,  from  Liens  and  Claims,  20  ( 1985).  35.  I n t h o s e t i m e s , a j u r y was n o t a g r o u p o f disinterested persons assembled to judge the case on t h e b a s i s of evidence p r e s e n t e d by w i t n e s s e s . R a t h e r , t h e t h e o r y o f t h e j u r y was t h a t t h e y were t o be assembled from the p l a c e i n which the cause of a c t i o n a r o s e and were t o s u p p l y knowledge of t h e m a t t e r s i n i s s u e . In o t h e r words, they were, i n t h e o r y at l e a s t , the witnesses as w e l l as t h e f i n d e r s of f a c t and a p p l i e r s of l a w . - P o t t e r ' s , 205. 1 1 3  1 1 4  5 Holdsworth,  126. 43  Holdsworth Admirals  wrote  Cases  including  wreck,  acquired  and d r o i t s  and  maritime  namely,  basis,  the  of  the  In  England,  law  protection centuries  for had  Within  these,  king's  protection a  personal  safety  strictures,  in  the  his  as  show t h a t  had  to  and  "special  fro,  prohibited  that by  their need times  the  or  to  trial.  On  jurisdiction,  towns  the  "port"  against  9th  548.  The F r a n c h i s e  at  any  Potter's,  193. 44  part  and of  theft.  .  trade. the  other to  stolen,  By  be  1 1 6  10th  risks  have been  will  had  special  place  entailed  courts  as  enjoyed  market towns were e s t a b l i s h e d and f l o u r i s h e d .  1 Holdsworth,  which  franchises  centres  participants Buying  of for  provide  of  the goods might laws  court  Council  for  Royal  establish  peace."  "borough")  port  to  Admiralty  the  Privy  the  related  that  deputy  the  the  to  wide  criminal,  in maritime matters  to  lawless  infra. 1 1 6  and  matters  King's  of  justice  pursuant  and the r i s k  was  way  or  franchises  legislators  (later  civil  appears  the  continent,  and coming  "burh"  often  the  or  civil  assumed a w i d e - r a n g i n g c i v i l  and  the  in  same  to  several  j u r i s d i c t i o n was  (1377-1399)  It  the  were  1 1 5  II  the Admiral  the  traders led  crown.  disputes  administered  on  Their  Richard  much  to  merchant as  of  there  over matters  petitions  upon  some c e n t u r i e s  1 1 5  that  the Admirals  encroaching  than  century  commerce.  in  were d e l e g a t e d  for  and  of  hearing  jurisdiction  Chancery, justice  14th  jurisdiction  were by then  seafaring  thus  the  from the r e g n a l years  Admirals  this  in  and s e v e r a l A d m i r a l t y c o u r t s .  and vague, prize,  that  these  However,  discussed  the  king  the  expected  merchants  markets port  courts,  were  and  with  such  After  be  to  tolls  market  commercial  courts  repeated  being  of  the  Admiral  sued  1389  1 1 8  1 1 9  for  of  the  of  common  Writs  further  Act  in  maintained  The e x t e n t  of  period  revealed  1 1 7  1 1 8  the  13  Edw.I,  the  by  the  103;  Acts  heard  provided  Potter's,  their  by t h e by  such  1 1 7  own  right  to  .  of  Acts  the  the  Jurisdiction that  have  a  some  of  those  right  of  settlement  and the  courts  jurisdiction  Prohibition.  exercised  cases  the  the Admiralty,  and  to  encroachments:  should  of  the  so  hold  their  a series  effected  observance  Certiorari,  on  which  1 2 0  courts  of  had  franchise  ports,  an A c t  1400  courts  jurisdiction  5 Holdsworth,  by  to  Franchise  towns  of  given,  right  jurisdiction,  grant  These  1 2 1  the  The  port  Franchise  Admiralty  damages  protections  the Admiralty's  ,  Supersedeas,  is  by the  1391  of  These  the  in  jurisdiction  of  of  to l i m i t  the  the  tolls.  maritime  followed  double  law  and  ,  in  pay  fairs.  complaints  wrongfully  action  to  for  was g r a n t e d b y R o y a l  part  were p a s s e d i n attempts Act  compensated  required  and t o c o l l e c t  towns  hold  to  by  1 2 2  court  in  court;  the  Tudor  they  were  187.  ch.5.  A n A c t o n t h e J u r i s d i c t i o n o f t h e A d m i r a l , 1 3 9 1 , 15 R i c h a r d I I , c h . 3. T h i s A c t e x p r e s s l y p r e s e r v e d t h e F r a n c h i s e r i g h t s and l i b e r t i e s o f t h e L o r d s , b o r o u g h s , and towns. 1 1 9  1 2 0  Act  on t h e  Jurisdiction  of  c. II. 1 2 1  1 2 2  1 Holdsworth, 1 Holdsworth  548-9. 553. 45  the  Admiral,  1400,  2 Henry  IV.  almost court  exclusively was  Merchant.  5.  also  FAIRS,  notes  travelling sale  in  regarded  and  as  a  shipping  recognized  PIEPOWDER  that  from  the  medieval  country  great  least  to  principles desirable  the of  that  the  convenience  and  for  merchants  not  disputes  1 2 4  1 2 5  law this of  taking  their  markets  1 2 7  of  the  Law  1 2 7  were  Their  reasons  upon  in  Potter's,  De Id;  the  De L y ,  for  Ly,  civilized  speedy  to  courts  was  countries  of  transient  to  adjudications  by the  parties, transport,  settle was  for  recognized,  self-regulation  and slow  1 2 4  the  It  requirements  such  for  character  1 2 5  authorities  legal  law  all  by  world.  universality  same i n  local  that  ordinary  need  merchandise  transactions.  encouraged,  The  1 2 6  peculiar  1 Holdsworth,  Id.;  and  a  i n a p e r i o d of poor communications wait  .  tax  the  and  their  law be g e n e r a l l y parties,  of  on b u s i n e s s  l e n t an i n t e r n a t i o n a l  fairs  met  their by  the  552.  183. International  15. 1 2 6  Admiralty  MERCHANT  country,  governing  and  LAW  carried  important  the  AND T H E often  and  merchants.  also  particularly  1 2 3  more  economic  international  could  The  tribunal  merchants  to  fairs  COURTS,  T h i s method of t r a n s a c t i n g b u s i n e s s at  cases.  1 2 3  MERCHANT  Potter  mercantile  16.  1 Holdsworth,  535. 46  Business  Law a n d  Lex  Mercatoria  courts A  of  the  franchise  and  such  courts  sat  the  English courts  a  Fair  Boroughs,  carried  became  and a l t h o u g h in  the  fair  courts  similar  England  franchise  or  the  right  to  was  the  who  took not, hold  Law  that  Merchant,  the  Staple.  right  to  hold  a  "piepowder fairs,  mayor,  the  they  fairs of  were  held  the  of  not  the  1 3 0  of  fact  .  The the  law  of  summary  the  type 1 3 1  trade law  a  records  whether  The  These  of  same  of  court,  steward  Europe.  that,  a centre  common  judges  over  1 3 2  or  to  1 2 8  "  1 2 9  applying  the  all  piepowder.  courts.  bailiffs,  fairs  a b o r o u g h w h i c h was court  of  14th c e n t u r i e s  merchant  a  courts  the  the  local  attended  account  the  it  as  during  the  show  or  with  known  13th and  merchants  of  and  continuously  courts,  were  of  of  courts  procedure, the  Fairs  it  held court  of  the  as  the  The  law  had  might be  England.  a  have  applied This  is  The S t a p l e towns were towns g r a n t e d e x c l u s i v e r i g h t s to trade in the more important article of commerce, or "staple commodities", s u c h as w o o l , w o o l f e l l s , leather, tin, lead, etc. The S t a p l e system d a t e s from Edward I . ' s r e i g n . "To be a S t a p l e t o w n was a p r i v i l e g e h i g h l y p r i z e d ; f o r a s C o k e s a y s ' r i c h e s follow t h e S t a p l e . ' " - 1 Holdsworth 543, f n . 3 ; P o t t e r ' s 190. The E n g l i s h Carta Mercatoria of 1303 assured foreign merchants of speedy d i s p u t e s e t t l e m e n t s a n d t h e a p p l i c a t i o n o f Law M e r c h a n t t o their d i s p u t e s , and t h e S t a t u t e of t h e S t a p l e s i m i l a r l y p r o v i d e d f o r t h e a p p l i c a t i o n o f t h e Law M e r c h a n t i n s t e a d o f E n g l i s h common l a w . De L y , 16. 1 2 8  129 >'»Th t e r m ' p i e p o w d e r ' ( p i e p o u d r e s , p e d e p u l v e r o s i ) , ' says Gross, 'was n o t a p p l i e d t o t h i s t r i b u n a l , as S i r Edward Coke and v a r i o u s o t h e r w r i t e r s b e l i e v e d , b e c a u s e j u s t i c e was administered as s p e e d i l y as t h e d u s t c o u l d f a l l o r be removed from t h e f e e t o f t h e l i t i g a n t s , b u t b e c a u s e t h e c o u r t was f r e q u e n t e d b y c h a p m e n w i t h d u s t y f e e t , who w a n d e r e d f r o m m a r t t o m a r t . ' T h e name w a s p e r h a p s o r i g i n a l l y a n i c k n a m e b u t was a d o p t e d i n t h e o f f i c i a l s t y l e o f t h e c o u r t . " - 1 H o l d s w o r t h , 536; P o t t e r ' s 185. e  1 3 0  1 3 1  1 3 2  1 Holdsworth  536-7;  1 Holdsworth,  536;  1 Holdsworth,  538.  Potter's  185.  5 Holdsworth,  47  91-93,  106-112.  illustrated  by  stated  "pleas  that  merchant  in  different  the  from  Edward  I  in  Carta  the  Ill's  a  the  town  touching  national  "shall  in  1 3 5  1 3 6  1303  early  and  Statute  ruled and  of  by  not  of  as  by  in  part  this  be  all  common  covenant, place  law  and in  by  to of  law  1 3 5  the  all  things  the  land,"  trespass.  its  1 3 3  Edward  coming to  as  be  Books.  1353.  merchants  law  to  national  taken  of  1 3 4  law merchant the  the  v i e w was  Staple  Year  which by  admitted  the  of  1268,  decided  l a w was  cases  the  the  debt,  Statute  under  The of  the  the  business  1 3 7  Thus  the  the  Law  system to  commercial  value  demands  regulation  the  of  of  period,  not  Staple,  27  regime  of  international  mandatory  law  was  dictated  by  merchants upon  the  depended  static  legal  rendered trade  upon  the  commands.  1 3 8  184. of  Potter's,  the  Edw.  3,  st.  2  (1353).  184.  Id.  Trakman, (1983). 1 3 8  of  times,  to  Potter's  1 3 7  16  that,  dynamics  1 3 4  be  actions  medieval  environment.  1 3 3  in  This  to  in  1 3 6  subservient  trade  law  granted  wont  fairs."  Law M e r c h a n t  the  Staple  Trakman w r i t e s in  are  law had a c c o r d e d a s p e c i a l  Merchant.  III,  the Staple provided that  the  especially  the  in  Henry  and  common  Mercatoria  of  of  merchandise  boroughs  Parliament  Staple  of  recognized  The S t a t u t e  trade  Charter  T h e Law M e r c h a n t :  Id. 48  The E v o l u t i o n  of  Commercial  Law  The law of easily  to  little  to  the Royal adjust the  medieval  courts,  to  changing  development  Law  Merchant  conventional  systems  merchants  to  regulate  framework  of  a  founded i n  the  than  must  Merchant trade,  did  but  Holdsworth market  not  merely  role  common l a w ,  139  1 4 0  17  the  there  a  the  large and  and the  Continent of  Law M e r c h a n t .  legislature  had begun t o  1 4 2  1 4 3  1 4 4  Law  international norms.  the  administered  Royal  which  The  1 4 2  independence,  the  the  merchants  Europe,  of  was  rather  laws  anational  of  1 4 4  By  courts  interfere  1 4 3  large  allowing to  play  a  contrast, and  with  their purely  Id. Trakman,  ™*  T.aw M e r e s t . T h e  Evolution  (1983). 1 4 1  of  they  to  of  of  broad  Merchant  process.  law  access  the  national  growth  uniform,  within  merchants,  the  development ready  unlike  The  1 3 9  ability  The customs  the  measure  Law  of  enactment to  the  "within  The  customs law.  the  created  on  courts  was  of  contributed  Merchant.  shows  1 4 1  unable  innovation  affairs  dictated, of  It  order."  contribute  that  enjoyed  large  England  and  application  mercantile  in  practices  rigors  their  in  legal  Law  for  1 4 0  business  enumerated r u l e s  reports  towns  law.  and e q u i t a b l e  the  its  trade  model  and thus  practice,  medieval  a  their  informal  as b u s i n e s s  undergo  the  was  of  f i x e d and s t a t i c  commercial  of  suppletive  in strictly  evolved  being  Id. Garavaglia,  38.  Id. 1 Holdsworth  538,  5 Holdsworth 49  151.  of  Commercial  Law  mercantile noted  above,  national  Staple  1 4 7  in  Carta  as  of  towns,  in  constables there  with  cases  granted their  Edward  the  Parliament  1  (1272-1307).  Law M e r c h a n t ( 13 0 3)  1 4 6  in  1353  to  as  and  in  part  this  the  1 4 5  with  provision  ensure  Thus  1 4 9  of  the  trade lead,  up  the  to  assistance  for  foreign  Royal  of  and  the  view  was  of  access  and  and  matters  in  England  dealing  foreigners  1 4 8  1 4 9  Potters ' ,  184 .  27  st.2  Edw.3,  542,  1 Holdsworth  542.  fn.3;  see  50  also  and than  Rather,  they  foreign trade.  The  in  administering  (1353) .  1 Holdsworth  were  more  period.  far  two  merchants,  privileges  were  not  excluded and  juries  of  i n p r o m o t i n g and r e g u l a t i n g courts  mayor  on  each  merchants  was  foreign  security  in this  In  Law M e r c h a n t ,  Other  Parliament  staple  1 H o l d s w o r t h 5 3 9 , f n . l , c i t e s 3 Edw. 1 c . 2 3 ( l i a b i l i t y d e b t s o f f e l l o w b u r g e s s e x t i n g u i s h e d ) , 11 E d w . 1 a n d 13 E d w . 1 3 ( S t a t u t e s Merchant and S t a p l e ) .  1 4 7  the  apart  such  with  The two  set  tin.  courts  merchants  merchants.  Crown  merchant  in  deal  freehold.  the  easy  the  set  of  or  in mercantile role  were  foreign  the  for  1 4 8  1 4 5  1 4 6  As  of  Statute  reign  l a w a p p l i e d was t h e  felony  involving  an a c t i v e  activities  of  l's  leather,  jurisdiction  presided  wares.  courts The  Edward  centres  woolfells,  The  cases  was  from  exclusive  matters.  mere b y s t a n d e r s took  of  Mercatoria  dating  special  common l a w .  except  Ill's  wool,  and m e r c a n t i l e  and  the  system,  towns  these  the  reign  .  commodities of  the  1 recognized  by Edward  Staple  certain  in  Edward  law  continued  The  matters  fn.128,  supra.  the  for St.  Law  Merchant  contributed  M e r c h a n t was t o  lose  and  law  the  common  decline,  its  of  the  its  creation.  of  independence  status  courts,  and m e r c a n t i l e  stranglehold  to  the  fair  and  of  common  courts  ended up  law,  the  Law  f r o m t h e common  Staple  law and a r b i t r a t i o n  courts  However,  1 5 0  as  went  firmly  will  law  be  into  in  the  discussed  below.  6 . THE D E C L I N E ENGLAND  The  rising  courts statute within  England  the  fair  the  16th  and  1.  The  rise  in  of  1477  2.  The  power, a  1 5 3  1 5 1  of  the  AND  FAIR  business  century  courts  during  fall  MERCHANT  to  fair.  among  led  to  matters  IN  the  Royal  the  1477  originating  1 5 2  t h e Law M e r c h a n t a n d t h e  centuries  COURTS  fair  courts  to:  among t h e  commercial  various  cases,  courts  resulting  of in  common the  law  Statute  ;  rise  of  England  stronger  1 5 0  over  15th  fair  competition  jurisdiction  LAW  commercial  the  the  the  17th  THE  for  grounds,  credits  in  OF  in  restricting  Garavaglia  for  FALL  competition  of 1 5 1  AND  nationalism sought  voice  in  1 Holdsworth 17  Edw.  4,  throughout  greater the  influence  shaping  of  the  Europe. over laws  As  a  economic  major affairs  governing  seaand  commerce.  543.  ch.2  ( 1477) .  This contrasts with e a r l i e r p r a c t i c e of the f a i r courts to h e a r c a s e s which had a r i s e n o u t s i d e t h e l i m i t s o f t h e f a i r - 1 Holdsworth 536. 1 5 2  1 5 3  Statute  of  1477.  17  Edw.  4, 51  c.2  ( 1477).  An  autonomous,  themselves 3.  By  was  the  4.  hardly  late  sedentary, rather  anational  at  robbing  current began  to  Merchant,  competitors,  of  Champagne;  Royal  ordinances  local  practice  changes 17th  for  the  1 5 5  1 5 7  statute direct  shipping,  instead  a n d common connection  Garavaglia  and  says,  for  law, with  merchants  negotiation  variations  usages  perceived  non-merchant  had a g r e a t e r  practice.  the  Statute  1477  of  of  the  or  trade,  with  the  Law  at  the  foreign  discrimination influences  by  such  as  on change  in  1 5 6  and  piepowder  against  influence  mercantile  in  developed  discrimination to  and  local  did  38,  by  more  economic  courts  which  the  in  and the  fairs  social  16th  and  and  fair  The E v o l u t i o n o f C o m m e r c i a l  Law,  39.  Id.  Trakman, (1983). 1 5 6  often  Internal  Garavaglia,  into and  customs  parochial  breakdown 1 5 7  home  becoming  and  result,  retaliation  which  than  bases,  including:  tribunals;  credits  centuries.  1 5 4  in  purposes;  their  opting  distinct  often  merchants  1 5 5  factors,  as  the  were  flexibility a  by  merchants  fairs;  courts,  disputes.  other  of  from  As  1 5 4  created  England's  t h e Law M e r c h a n t its  the  merchant  Holdsworth  trade  custom.  such  Fairs  foreign  of  shun  Trakman adds  Great  it  for  century,  international  trade  arbitration  19  17th  The subsumption of  thus  merchant  suitable  conducting  than  law  T h e Law M e r c h a n t :  1 Holdsworth  540. 52  courts  had become p r i n c i p a l l y  towns  and  courts  international to  be  ruled  courts 16th  a  rigidly  century  internal common  the  law,  by  special  fairs of  and  had  trade,  governed  separate  by  in  Germany, use  legal  and  Italy  English By  1 5 9  gradually the  a  the  by t h e  Beawes.  the  of  down,  London  entry  and  exit  which  factors,  contributed  1 6 0  had  courts come  under  some  Staple  principally  with  practically  and  The  by  had become  of  Law M e r c h a n t .  was  in  the  ceased  common  law  end of  the  decadent.  the  regulation  the  rules  to  16th  the  and  of  primary main  commercial combined the  commercial companies  with  the  1 6 0  569.  1 Holdsworth  569,  1 Holdsworth  570.  the  570.  53  of  The  of  the  the  Law  practice  to  of  for  Molloy,  and  Merchant  was  Law  law.  At the  same  towns  had  the  centre, craft  main  the  time, broken  port  Guilds  guilds,  factors  discussed  of  older  the  law  France,  this  as  be  adapted  Marius,  Staple  and  time  mercantile  centuries  importance  extinguishment  1 Holdsworth  17th  English  through  longer  body  century,  the general  the  a  as M a l y n e s ,  17th  trade  The  and  by such w r i t e r s of  for  and m e r c a n t i l e  the  assumed  into  continued  literature  end  had  down  1 5 9  their  the  courts.  jurisdiction,  however,  foreign  broken  1 5 8  special  borrowed  absorbed into  system  courts.  had  to  1 5 8  International  extant  century,  or  their  (in contrast  concerned  16th  law  England  which  were  the  confined  trade  Merchant.  which  trade) by  concerned  all  of had of  above,  mercantile  The demise law,  or  of  of  the merchant  equity  international the  common  were  claimed  or law  including:  the  English  substantive courts  facts juries  and  could  be  custom  administered  by  court to  to  where  the  by  understood  closer  civil  law;  the  security  the  civil  in or  the  true  with respect  of  juries  of  the  the  offenses  past  committed  many  c o u l d be  knowledgeable  found were o f t e n  ignorant  merchants; custom  (i.e.  that  foreigners  could  the  international the  effective  571. 54  of  the  a  sought to  ship,  and thus  it;  if  contracts  available  to  assist  law  law;  merchant  civil  common l a w ;  for  the  often  accustomed  of  and  process  arrest  in respect  civilians  the  law  merchants, law,  parties  were  the  of  "civil")  were c i v i l i a n s ;  t h a n was  such  maritime  the  Roman  no  the  or  of  was  common of  but  international  was  l a w was  the  merchants,  t o a d m i t t i n g e v i d e n c e when a w i t n e s s  1 Holdsworth  in  transaction,  formalities;  l a w was much m o r e  not  the  were o n l y  law merchant  preference  commerce;  for claims  private  or  over  international  Admiralty  fulfilling  Admiralty  procedural  recognized  tide;  and  to  and  next  were drawn a b r o a d t h e r e  gentium  court  the  giving effective  jus  by  had  of  However,  1 6 1  merchants'  courts  practices  necessary of  the  the  courts  developed  Admiralty  much s p e e d i e r ,  leave  drafting  the  the  had not  with as  to  arbitration.  made  and so  place  juries  the  law  means  deal  and  and lawyers was  by  from the  found  for  contracts  counties,  and such  supplemented  common  over  cases  summoned  trade  judges  the  to  preferred  reasons  law t o d e a l w i t h  heard  occurrences, of  The  merchants  or  and m a r i n e r s  courts.  jurisdiction  outside  drove  accountings,  merchants  law  many,  for  courts  in the  much  process  of  particularly  was a b s e n t  (under  civil was a  law,  admissible,  copy  the  evidence  of  the  generally failing  practices  law  ignorant  of  to  recognize  medieval  1 6 2  and  common  arcane.  Contracts unless  and  promise"  were  not  jealous and  of  the  seeking  to  international  Law  as  reduced  increased obtain trade  to by  claims  the and  of  as w i t n e s s e s  while  common  the  was  practice,  promises.  under  mutual  law  Law M e r c h a n t  exceedingly  1 6 3  as The  primitive  and  seal  not  or  were  "obligation,"  promises  to  perform,  1 6 4  t h e common l a w  jurisdiction  commerce  of  under  mutual  (1558-1603),  economic  production law);  consideration  of  or  mercantile  writing  and  witnesses  evidence  common  the  and  upon  consideration.  I  the  concepts  was  perform,  Elizabeth  absent  without  and  Merchant  contracts  to  by  not;  based  accompanied  recognized  During the r e i g n of  on  proof  were competent  such standard  not  enforceable "mere  the  as  were  contracts  law  used  permitted  they  from  c o u l d be p r o v e d by o r a l  be  not  commission  themselves  common  negotiability  a  could  law the p a r t i e s  under  by  and a c o n t r a c t  a document  original,  civil  obtained  benefits seen  in  of  of the  the  the  courts,  Admiralty, increase  16th  and  in 17th  P o t t e r ' s , 49, 185, 199; H o l d s w o r t h r e p o r t s t h a t t h e r e c o r d s o f t h e E n g l i s h f a i r c o u r t s o f t h e 1 3 t h c e n t u r y show t h a t a w r i t i n g o b l i g a t o r y p a y a b l e t o b e a r e r was t h e n known among t h e m e r c h a n t s , but t h e f i r s t r e p o r t e d c a s e upon a n e g o t i a b l e i n s t r u m e n t i n the common l a w c o u r t s w a s h e a r d i n 1 6 0 3 ( M a r t i n v . B o u r e , C r o . J a c . 68) - 1 H o l d s w o r t h 5 4 3 ; 1 6 2  Pollock reissued  1 6 3  1898,  & Maitland, 1968).  2 History  of  E n g l i s h Law c h . 5  (2nd  ed.,  164 T r e i t e l , T h e Law o f C o n t r a c t c . 3 ( 1 9 7 0 ) , C o h e n , C o m m e r c i a l A r b i t r a t i o n a n d t h e Law 94 ( 1 9 1 8 ) ; V v n i o r ' s C a s e 8 C o . R e p . 8 0 a ; Y . B . 6 J a m e s 1, T r i n . 7 J a c . R o t . 2 6 2 9 ; 77 E . R . 595 ( 1 6 0 9 ) . 55  centuries, confining II.  began it  Supersedeas of  to  The  1 6 5  other  The  was  courts  their  and  against  most  courts  law  the  the  of  Writ  common  own c o n c e p t o f  was  law  had  their  common  courts  had  held  the  place  upon  the  their  cause  own  knowledge,  fortnight  so  the  parties  to  specifically  the  1 6 5  1 6 6  1 6 7  Fleta  arose.  it  an  by  was  where  548,  1 Holdsworth  553.  1 Holdsworth  534,  they  had  issue  inform were  the  of  Writs  Writs  of  causes  in  writs  against  jurisdiction, the  been  common  law  to  early  jury they  required  1308  to  alleged  the  over  a  jury  from  decided  the  case  did  have  adjourn  a  by  matters  jurisdiction  themselves  events  as  summoning  the if  constrained  limited to  As no  by  case,  customary  could  Writs  maritime  as b e i n g  England.  the  Richard  issuing  weapon o f  time  Initially  of  1 Holdsworth  this  operated  action  place  of  that  they  jurors  1 Holdsworth 65,66.  1 6 8  ;  knowledge  requisite  The  1 6 7  to  of  and by i s s u i n g  upon to  Acts  by  1 6 6  jurisdiction  counties  abroad  suits  business  seeking  back  reluctant  up  the  made  fought  Prohibition.  within  contract  by  often-used  transacted law  the  found i n favour of A d m i r a l t y  and most of  in  acted  brought  Chancery  effective  out  court's  from the Chancery,  who  and o f t e n  Admiralty  set  Admiralty  those  The  the  courts  and C e r t i o r a r i  courts.  the  away  jurisdiction  common  the Admiralty, so  wrest  the  Prohibition,  Contempt  to  not  the of  case  the  for  the  a  facts.  designate in  the  1 6 8  very  pleadings  553.  fn.6;  332-337;  Potter's  Potter's  56  205-6.  242-4;  Selden  Society,  III  happened, jury  who  This the  since  the  would  caused  English  sheriff  know  or  could  considerable  doing  jurisdiction "local" were  to  (i.e.  of  the  or  (and  had t o  in  the  proper  If  his  defence  traverse  allege  was  traverse  and  to  and  otherwise  the  to  the  venue  of  The  lawyers  common took  the  place  place  actions  court  lay  laid  situs  within  5 Holdsworth Potter's,  the a  the  the  quick  outside  most  by  of  were  in  torts  to  1 Holdsworth, 57  could  not  hear  cases  the  person  action  and "to  and was by  then  pleading  in  former, "local" was  to  laid plea. not  actions to  goods  could a  alleging  the  a  not  false  unassailable.  this  wit  554.  thus  in  could  or  Defendant  case  (e.g.  the  Defendant  the  117.  191;  venue  were  as  a  the  the  exploit  -  plead  Most defences  of  their  the  the  that  Plaintiff,  realm,  county  to  to  cause  process  such  In  1 6 9  courts  pleas of  a  when  "transitory"  goods).  however,  for  the  county,  to  prove  the  century,  foundation  wishing  strictly  Therefore  allegation  foreign  Defendant  case.  enlarged  unless  the  or  15th  the  T h e common l a w  county  person  of  courts  opposed  "transitory",  transitory.  which  the  summoned  but d i d not have a  within  as  the  law  upon as  have  facts  France.  any  place  land)  the  county,  from  a  to  in  the venue l a i d by the P l a i n t i f f .  contracts  were  to  in  common  relied  to  trespass  Plaintiff  defence)  cases  tied  the  from abroad,  the  facts  trespass  contract,  on  hear  peculiarly  case  the  Later,  1 7 0  otherwise  discover  K i n g had p o s s e s s i o n s  so.  not  inconvenience  were p r e p a r e d t o hear cases for  could  an  that  parish  of  act this St.  Mary at  le  Bow  in  Cheaps i d e  really alive  to  the  of  was  of  contract  when  the  The c o u r t s  jurisdiction,  as  basis  the  of  was  made  contract  was  of  common  were  their  law,  content  to  territorial  1 7 4  .  proceeded devices  Writs  the  and  However,  and  OF A D M I R A L T Y  the in  of  BY T H E COMMON LAW  Prohibition to  counties so g r e a t  in  confining of  by  the  and  common  after in  Admiralty  England.  However,  1575 a n d t h e  great  to  respect  1606 w h e n C o k e w a s  1613  attack  law  of  to the  Kings common  ferocity.  such as w r i t s  Bench,  1 7 5  law  The  of P r o h i b i t i o n  COURTS  time  of to the  Admiralty's  a n a g r e e m e n t was r e a c h e d t h a t y e a r  Admiralty  disregarded  used various  ,  a  expanded  became  Common P l e a s ,  Admiralty  1 7 2  that  land.  restricted  within  so g r e a t t h a t  jurisdictions  Exchange  of  generally  arising  courts  at  issuance  prohibitions  complaints  Bench  fiction  OF T H E COURTS  was  not  of  or  1 7 1  .  the  Elizabeth  Cheap."  in a foreign  on  1 7 3  of  Royal  advantages  Originally  weight  the  sea or  THE DEFEAT  matters  Ward  the  jurisdiction  the  or  made a t  proceed  7.  the  between  each  other's  raised the  the  agreement  courts  common  to  upon  law  to r e s t r a i n  the  courts other  5 Holdsworth 118,119; 140,141. The d a t e a t w h i c h this p r a c t i c e began c a n n o t be f i x e d w i t h p r e c i s i o n , b u t i t a p p e a r s to have been w e l l e s t a b l i s h e d i n the c o u r t s of London i n the latter h a l f of the 16th c e n t u r y . In D o w d a l e ' s Case (1606) 6 C o . Rep. 46b, i t s l e g a l i t y w a s f i n a l l y u p h e l d a n d t h e c a s e s o f 1586 a n d 1 5 8 9 i n which i t had been used were a p p r o v e d . - I d . 1 7 1  1 7 2  1 7 3  1 7 4  1 7 5  Carter, Id.;  269.  5 Holdsworth,  Potter's,  199;  1 Holdsworth  118.  1 Holdsworth  553. 58  553.  courts,  and the  suitors  at  suits  or  process  common  of  competition  the in  the  ,  Star  numerous which  1 7 7  Privy  other  competition  7  8  9  10  1  force  law  them  courts.  but  without  after  to  1 8 0  of  ,  and  The  included  motivations  423.  5 Holdsworth  438.  As  supra. 508.  1 Holdsworth  509.  5 Holdsworth  610.  t h o s e who w o u l d e x e c u t e  the  ,  Tudors  the  of  from the  differences  1 Holdsworth  their  of  in  secular Royal of  kept  of  war  philosophy,  with with  1 8 1  ,  1 7 9  ,  and  ecclesiastical,  prerogative the  the  Requests  Commission and  this  1,  sometimes waged  Court  High  had  Elizabeth  Parliament, 1 7 8  imprisoning law  passing  of  tribunals,  5 Holdsworth  discussed  aid  Court  authority  1 8 2  the  or  common  The  1 7 6  Admiralty  the  courts  abandon  T h e common l a w c o u r t s ,  the  Court  their  Council.  6  check,  the  responded by e n j o i n i n g  and by t h r e a t e n i n g  common  Chamber  drew  to  b l o s s o m e d anew.  sometimes  Chancery  courts  law  judgments,  competition  and  other  judges the  through in desire  the this for  1 Holdsworth 508-516, 5 Holdsworth 426-440. The main c o u r t s i n t h e l a t e 16th and e a r l y 17th c e n t u r i e s were as follows: 1. T h e common l a w c o u r t s (at Westminster H a l l ) - King's Bench, Common P l e a s , a n d t h e E x c h e q u e r ; 2 . T h e c o u r t s o f e q u i t y - C h a n c e r y and R e q u e s t s ; 3. The c o u r t s of Royal P r e r o g a t i v e - S t a r Chamber, t h e C o u n c i l s of Wales and t h e N o r t h , and t h e P r i v y C o u n c i l i n its j u d i c i a l c a p a c i t y ; 4. The e c c l e s i a s t i c a l c o u r t s - H i g h Commission and p r o b a t e c o u r t s , e t c . ; and 5. A d m i r a l t y . - A y l m e r , H i s t o r y o f 1 7 t h C e n t u r y E n g l a n d : 1 6 0 3 - 1 6 8 9 44 ( 1 9 6 3 ) . 1 8 2  59  power  and  prestige,  There  soon  followed  Parliamentarians, Charles Charles*  1 by  the  and  the  desire  the  civil  1642-1649, Parliamentary  execution  in  1649.  war  to  fatten  between  which forces  the  resulted led  their  by  own  purses.  Royalists in  Oliver  1 8 3  and  the  defeat  of  Cromwell,  and  the  1 8 4  The c h i e f j u s t i c e of a c o u r t r e c e i v e d a f e e f o r each w r i t i s s u e d out of h i s c o u r t . - S e l d e n S o c i e t y , 1 R e p o r t s From t h e L o s t N o t e b o o k s o f S i r James D y e r x x v i ( 1 9 9 4 ) . D y e r was t h e c h i e f justice o f Common P l e a s f r o m 1559 t o 1 5 8 2 . " D y e r was n o t o p p o s e d t o t h e p r o f i t a b l e i n f l u x of business. T h e j u r i s d i c t i o n o f h i s c o u r t was seen as an inheritance to be defended, and it was thought d i s h o n o u r a b l e i n 1569 f o r t h e j u d g e s t o a r g u e p u b l i c l y a g a i n s t a n e x t e n s i o n , e v e n when i t was u n w a r r a n t e d . " - I d . See t h e comments o f L o r d C a m p b e l l i n S c o t t v . A v e r y 25 L . J . E x c h . 308 a t 3 1 2 , in w h i c h h e s c a t h i n g l y r e f e r s t o t h e common l a w j u d g e s c o m p e t i n g f o r l i t i g a t i o n business, t h e i r jealousy of a r b i t r a t i o n which the judges saw a s r o b b i n g t h e j u d g e s o f b u s i n e s s a n d h e n c e d e p r i v i n g t h e m o f i n c o m e , a n d t h e c o m p e t i t i o n among t h e common l a w c o u r t s o f Common P l e a s , K i n g ' s Bench, and Exchequer, f o r the d i v i s i o n o f t h e s p o i l s . 1 8 3  The s t a f f o f t h e C o u r t s were more t h a n d i s i n t e r e s t e d spectators. T h e r e was no c l e a r distinction in medieval common l a w between "office" and " p r o p e r t y " ; a n d many o f t h e o f f i c e s of the court o f f i c i a l s were c o n s i d e r e d f r e e h o l d p r o p e r t y which c o u l d be l i c e n s e d t o o t h e r s o r even bequeathed by W i l l [See Robotham v . T r e v o r , 2 Brownl. & Golds. 12 ( H i l a r y , 1610, 8 J a c o b i , K i n g ' s B e n c h ) ] , and i n a l l cases e x p l o i t e d for the personal b e n e f i t of the h o l d e r . The law had v e r y l i t t l e u n d e r s t a n d i n g of t h e c o n c e p t of c o n t r a c t , but a very well-developed feudal notion of property, so it is u n d e r s t a n d a b l e t h a t a p p o i n t m e n t t o o f f i c e was s e e n a s a g r a n t o f p r o p e r t y w i t h p r i v i l e g e s and s u b j e c t t o t h e p e r f o r m a n c e o f c e r t a i n duties. T h i s n o t i o n l a s t e d i n t o modern t i m e s ; B l a c k s t o n e [Comm. i i 36] w r o t e o f t h e law i n t h e 1 8 t h c e n t u r y : " o f f i c e s , which are a r i g h t t o e x e r c i s e a p u b l i c or p r i v a t e employment, and the fees and emoluments t h e r e u n t o b e l o n g i n g , a r e i n c o r p o r e a l h e r e d i t a m e n t s . " 1 Holdsworth, 247,248. The s t a f f were e n t i t l e d t o fees for v a r i o u s p r o c e d u r e s , a n d s h a r e d i n damage a w a r d s ["Damages Cleer" was t h e i r share], but a l s o extorted g r a f t from l i t i g a n t s . - 1 Holdsworth 255,256. The judges shared in the spoils. 1 Holdsworth 258. 1 8 4  Aylmer,  144. 60  The r e s u l t common  of  all  law  and  prerogative  had  of  the  Privy  body. as  The  they  courts  had  lawyers  and  of  was  to  law  solidify  courts.  disappeared,  to  reappear  were never  before.  Law  yourselves  as  The  1 8 5  the  The  position  courts  although  eventually active  the as  after  jurisdiction  was  reduced  to  a  Merchant  was  clearly  in  the  equity.  In  jurisdiction well,  to  1698  in  draw  Holt  this  a  said  realm;  thing  out  an  very  of  the  side  Civil  Wars  Admiralty low  hands  "The  and  Royal  appellate  the  matters  1 8 7  of  the  legal  the  of  of  ebb. of  common  you  ought  1 8 6  the law to  jurisdiction  1 8 8  Professor being  the  overruling  it."  was  commercial  common  of  common  courts  been  over  entitle  events  effectively  church  over  the  the  Council  Control  is  these  Holdsworth  not  only  merchants.  He  is  extremely  unjustifiable  critical  in  law  of  but  Coke's  also  actions,  detrimental  as to  wrote:  "Coke, as B u l l e r , J . , once s a i d 'seems t o have entertained not only a jealousy of, but an enmity against that jurisdiction. ' He d e n i e d t h a t the court was a c o u r t of r e c o r d [ s o t h a t i t c o u l d n o t p u n i s h f o r c o n t e m p t t h o s e who pursued Admiralty actions in other c o u r t s ] . He d e n i e d i t t h e necessary p o w e r t o make s t i p u l a t i o n s for appearance, and p e r f o r m a n c e o f t h e a c t s a n d j u d g m e n t s o f t h e c o u r t . He d e n i e d that it had any j u r i s d i c t i o n over c o n t r a c t s made o n land, e i t h e r i n t h i s c o u n t r y o r a b r o a d , w h e t h e r o r no t h e y w e r e t o be p e r f o r m e d a t s e a ; and s i m i l a r l y he d e n i e d i t s jurisdiction o v e r o f f e n s e s c o m m i t t e d on l a n d , e i t h e r i n t h i s c o u n t r y or abroad. I n s u p p o r t o f h i s p o s i t i o n s he d i d n o t h e s i t a t e to  Aylmer, 5  173.  Holdsworth  Id;  153.  1 Holdsworth  Shermoulin  v.  570.  Sands,  (1698) 61  I  Ld.  Raym.  272.  c i t e p r e c e d e n t s w h i c h were f a r from d e c i d i n g what he s t a t e d that they did decide. It is f a i r l y c e r t a i n that the earlier prohibitions were all founded upon the exercise by the Admiralty of j u r i s d i c t i o n w i t h i n the bodies of c o u n t i e s . The common l a w h a d n o t i n the past claimed jurisdiction over c o n t r a c t s made a n d o f f e n s e s c o m m i t t e d i n p o r t s i n t r a fluxum et refluxum maris. S u c h j u r i s d i c t i o n w a s now c o v e t e d . By s u p p o s i n g t h e s e c o n t r a c t s o r o f f e n s e s t o h a v e b e e n made o r committed in England the common law courts assumed j u r i s d i c t i o n , a n d t h u s b y a 'new p o e t i c a l f i c t i o n ' a n d b y t h e help of 'imaginary signposts i n Cheapside' they endeavoured to capture j u r i s d i c t i o n over the growing commercial business of the country. T h e o t h e r common l a w j u d g e s f o l l o w e d C o k e ' s  And  later, " I t i s c l e a r t h a t t h e c o u r t o f A d m i r a l t y had on i t s s i d e not only h i s t o r i c a l t r u t h but a l s o s u b s t a n t i a l c o n v e n i e n c e . . . It is clear, too, t h a t t h e o p p o s i t i o n o f C o k e a n d t h e common l a w y e r s was u n s c r u p u l o u s . " 1 9 0  It  is  difficult  actions  to  and motives  Holdsworth  went  imagine of  a  more  scathing  denunciation  of  the  Coke.  on:  "The merchants k e e n l y f e l t the i l l e f f e c t s of t h e s e attacks made by the common law courts; and the delays in the a d m i n i s t r a t i o n of j u s t i c e sometimes gave r i s e t o diplomatic d i f f i c u l t i e s , " c i t i n g a c o m p l a i n t by t h e S p a n i s h Ambassador over the delays in the Admiralty caused by prohibitions. Unscrupulous l i t i g a n t s found the c o n f l i c t over jurisdiction to t h e i r advantage. Foreign merchants found i t d i f f i c u l t to prove their cases at common law, and if they sued in Admiralty, the defendant could obtain a w r i t of Prohibition as a m a t t e r of c o u r s e . 1 9 1  1 Holdsworth 1 Holdsworth, 1 Holdsworth  553-4. 558. 552-7;  Potter's 62  200.  Holdsworth to  deal  maintained  with  the  that  the  jurisdiction  common l a w they  courts  claimed.  were  incompetent  1 9 2  8 . E F F E C T S OF T H E V I C T O R Y OF T H E COURTS OF COMMON LAW ON C O M M E R C I A L AND A D M I R A L T Y LAW England had  was  little  by  involving  the  international  direction  sometimes  l a w comes  1 9 4  in  the  of  O l e r o n were its  bulk  of  1 9 2  1 9 3  1 9 4  1 9 5  1 9 6  of  bulk  the  the  .  law All  and  basis  of  5 Holdsworth  113.  102.  Id. ,  129.  or  the  the  the the  was  carried  out  heard  few  of  the  cases  principles  trade  often  doctrines  the  primarily century,  1 9 6  of  The  in  413-420  to  maritime into  Council,  legislation. through the  the  Laws  of  England,  on  removal  Admiralty  were  or  received  and t h r o u g h  sides.  5 Holdsworth  and  through  Law M e r c h a n t  under  and  Admiralty  commercial  16th  courts  63  had  Chancellor,  of  received  maritime  It  and hence were r e t a i n e d  centuries  of  Ages.  foreign  Continental  were  Middle  little  English  through  554-5;  Id. ,  knew  courts  17th  the  courts  involving  modern  1 Holdsworth  116.  it  c o u r t s o f common l a w ,  jurisdiction  Id.,  and  Council  and  principal  mercantile  State  the  of  maritime 1 9 5  what  diplomacy  Privy  16th  Admiralty  and  Cases  to  Admiralty,  Principles  both  the  The  trade,  from the adoption of  Chancery,  of  of  throughout  Its  .  1 9 3  referred  arbitration.  court  law  considerations  England  trade  foreigners.  commercial  involved  backward  international  primarily  of  commercially  of  removed  the the  commercial  a n d much o f  in  the  usage  of  As  the  result  the  maritime  merchants  of  the  and  in  supremacy  Merchant,  by the  courts  of  common l a w  and  ceased  to  exist,  Admiralty,  its  and  jurisdiction.  the merchant land.  In  Roles  of  courts,  law,  but  developments for  was  settlement  with  law  the  The as  a  ceased jus  older  be  no  longer  of  drive  cited  their  disputes  1 9 8  of  the  Law  by  the  courts  had  be  character  became  and  which  as  of  a  in  to  topic  law  the  truly  law.  effect  more  of  law of  effect  One  most  the  English  good  more  to  lost  the general  its  to  ,  had  roots  1 9 7  courts,  mercantile  binding.  merchants  law  ceasing  and  its  procedure.  above,  was  have  from  had been absorbed  noted  gentium,  s t i l l  are to  to  and  common  17th c e n t u r y ,  equity.  England  The  English of  these  arbitration  will  be  dealt  below.  THE  LEGACY  C o k e was  merit. of  OF  SIR  EDWARD  such a towering  overwhelming  Laws  of  Law M e r c h a n t  it  may  they  civil  of  a n d was b e c o m i n g p a r t  England,  Oleron  the  The  class,  international  9.  end o f  law  His  England  statements jurisdiction  figure  importance Reports  of 1 9 9  ,  and  were  and his  four  common spite  1 Holdsworth 1 Holdsworth,  that  his  respect,  accorded  the in  COKE  of  decisions perhaps  volumes  of  far  the  enormous  respect  law  England  of  criticisms  of  have been beyond  Institutes as  their of  the  authoritative  and  their  given  of  court  accuracy  by  559. 559;  5 Holdsworth,  " S i r Edward C o k e . " E n c a r t a 64  570,  571.  ( 1994); 5 Holdsworth 461-5,  471.  contemporaries lawyers.  The  often  for  availability  times  should  woefully  notes.  Case  2 0 1  the  misspelled,  there  so  of  than  appear  to  of  of  availability  2 0 0  2 0 1  [cited 2 0 2  2 0 3  2 0 4  2 0 5  by  historians  of  exist,  of  and  they  are  118.  Cohen,  122.  Cohen,  119.  students  common l a w  was  often  of  law  obiter missing  Where  in  private  of  rules  2 0 4  the  conflict.  was v i r t u a l l y  Cohen  125,  Arbitration  65  regular  unknown.  126, and  or  in and or  multiple The  2 0 5  o f c a s e r e p o r t s was o v e r w h e l m i n g l y and  are  rules  between  are  often  than  intricate  substantive  early  Books  down b y  with which the  unreliable.  Id. Cohen,  and  and  Year  more  taken  litigants  are  471-493;  Cohen, Commercial h e r e i n as " C o h e n " ] .  been  the  no  distinction  individuals,  precedents  5 Holdsworth  the  medieval  in  being  arcane  action,  no  in  reports  have  the  was  names  private  to  record  citations  cases  The  frequently  p u b l i c a t i o n and d i s t r i b u t i o n effort  criticisms  precedents  noted.  forms  The  2 0 3  case  studying  the  Often  decisions.  be  of  rather  2 0 2  of  reports  and of  obsessed,  records  recent  inadequate,  purpose  pleading  issue.  more  2 0 0  poor  modern  and  the  widespread  Precedents  were  131-141.  the  Law,  119  (1918)  easily  lost  precedent  While  on  or  was  subject  the  arbitration  misunderstood.  Bench  restrictive  one  of  the  is  The  THE  ruled  of  of  sat 2 0 8  the  as  a  .  Res  commercial  2 0 7  2 0 8  2 0 9  2 1 0  common  Pleas,  is  used  the  presiding  of  to  to  the  Writs  Staple  jury  the were  common imposed  118-121.  122.  1 Holdsworth,  539.  1 Holdsworth,  571.  1 Holdsworth,  568  et  seq.  IN  the  so t h a t no  of  ever  the in  decision  on the  produced,  and  common  Vynior's  law  Case,  the  on but  state  of  ENGLAND Prohibition  The fair the  longer  local law,  on  case  decision.  of  at  of  much o f  investigate  courts.  could  effects  a  and e f f e c t i v e n e s s  officials  judicata of  of  decision  decision-makers,  form  rendered  agreements  OF A R B I T R A T I O N  law  and  Coke  necessary prior  use  2 0 7  decisions 1609  the  as t h e w a t e r s h e d o f  the j u r i s d i c t i o n  disputes,  Id.,  it  England  rules  Cohen,  the  HISTORY  be t h e  Substantive  2 0 6  was  piepowder  that  makers  in  to r e s t r i c t  would a l s o who  law  courts  courts  error.  on a r b i t r a t i o n  important  This  TROUBLED  devices  Common  reviewed,  arbitration  IV.  law  most  arbitration. it  at  egregious  agreements which stands  most  before  to  Accordingly,  2 0 6  the  panels act  courts however Law  of  common and  and the  other local  law  judges  market  courts  of  merchants  as were  decisiondenied  ill-suited  Merchant  2 1 0  .  2 0 9  .  to  These  and  other  considerations  arbitration,  Powell  Holdsworth  reports  that  extra-judicial  the  Europe  Powell  arbitration  (styled  as  settlement  in  from  curia suit in  regis  rolls  legales  the  plea  Arbitration primary  homines  2 1 1  2 1 2  2 1 3  there  secular  that  at in  ex u t r a q u e  there rolls  is  2 1 3  is  )  ample  and  and  the  least  the  17th  both  remained sides."  5 Holdsworth Powell,  24.  Powell,  22.  2 1 6  Books  2 1 5  of of  disputes ,  The  that  the  2 1 4  compromiserunt  In the  to  late  to  litigation  achievement  However,  pleaded  references  or  13th  and  arbitration  .  alternative the  forms  century.  "ipsi  electos."  through  evidence  and e c c l e s i a s t i c a l  stream of  Year  to  medieval  other  1206 a d e f e n d a n t  parte  a steady  was a much s a f e r  to  that  until  more  mediation,  throughout  been d e c i d e d by a r b i t r a t i o n :  function  acceptable  13th  and  disputes  negotiation,  common-place  both  more  resolving  "lovedays"  in  record  had a l r e a d y  14th c e n t u r y in  the  of  direct  was  stated  compromise England  by  merchants  2 1 1  practice  compromise,  arbitration,  .  the  states.  third-party 2 1 2  drove  Powell  of  writes  a  because  its  compromise  that  in  cases  571.  P o w e l l , Edward, "Settlement of D i s p u t e s by A r b i t r a t i o n in F i f t e e n t h - C e n t u r y E n g l a n d , " [ 1 9 8 4 ] 2 N o . l , Law a n d H i s t o r y R e v i e w , 21. 2 1 4  2 1 5  2 1 6  Powell,  25.  Powell,  39. 67  involving  great  corporations, proceedings.  spiritual  arbitration Such  2 1 7  or  under  Chancellor.  In  such  enter  Thus  into  it  a  appears  paper that in  use of  of  that  from the  than  to  judge.  litigation of  2 1 8  2 1 9  powerful  resemblance  took  place of  with  a  judge  for  the  to  observe  the  award.  "arbitrations"  aimed  2 2 0  This  to  the  From t h e  Powell,  37.  Powell,  37,38.  conclusion  at  in  end of  1995  2 2 1  is ,  in  arbitrations  to  were  true  such  arbitrations  were  late  Middle  as  Ages,  to  2 1 9  compromise  Ages,  under  he  to our  by  the  states  arbitration  reconcile  rather  alternatives  essentially  society  as the  parties  which  meant  legal  or  reinforced  the Middle  process  to  judges  common  published  "Loveday"  2 2 2  or  was  bond  conciliatory  ("lawdays"),  mediation.  2 1 7  Yarn  a  often  it  or  terms.  Dark Ages  was  a much c l o s e r  supervision  cases  the  lords,  a r e more p r o p e r l y t e r m e d " m e d i a t i o n s "  these  Douglas  England  the  recognizance  which Powell r e f e r s modern  bore  temporal  arbitrations  arbitrators, 2 1 8  or  became  to  forms more  Id.  220 "Arbitration," as used in this thesis, involves the a p p o i n t m e n t o f a t h i r d p a r t y empowered t o i s s u e an award b i n d i n g upon t h e p a r t i e s and e n f o r c e a b l e i n c o u r t s of law. The a r b i t r a t o r has j u d i c i a l power. "Mediation" is a process i n which a third party attempts to persuade the p a r t i e s to reach a settlement, but t h e m e d i a t o r h a s no power t o i s s u e a n a w a r d o r d i c t a t e t h e t e r m s o f a s e t t l e m e n t b i n d i n g upon the p a r t i e s . The m e d i a t o r ' s powers are persuasive only. - Carbonneau, A l t e r n a t i v e Dispute Resolution (1989). 2 2 1  1698)" 2 2 2  Yarn, D.Y., "Commercial A r b i t r a t i o n J a n . 1995 D i s . R e s . J o . 68. Yarn,  68. 68  in  Olde  England  (602-  adjudicative, litigation device, chose in  arbitration  had more l e g i t i m a c y  the  courts  arbitration  imitation  ad j u d i c a t i v e  were  as  of  the  form  merchant  law.  and  arbitration  disfavoured  of  were  1.  courts  THE  the  courts  and  of  civic  HISTORY  found of  follow.  authorities  2 2 3  2 2 4  2 2 5  2 2 6  thus  also  turned  courts  were  more  use  the  to  such the  As  removed  pseudo-  to  enforce  arbitrations  as  it  2 2 5  needs  lost  of  of its  However,  if  merchants,  adjudicative,  noted for  a  development  a r c a n e and e l a b o r a t e 2 2 6  arbitration  while  the  procedures  and  above,  the  courts  merchants,  but  commercial  from the  Admiralty  courts  of  by  law.  OF  ARBITRATION  numerous  instances,  commercial In  but  arbitration. meet  Disputants  bonds  community,  to  the  and  Italian  in  the  maritime  late  medieval  disputes.  city-states  in  the  r e f e r r e d many c o m m e r c i a l d i s p u t e s  Id. Id. Id. Yarn,  of  theory  adjudicative  2 2 3  rise  prompted  to  suitable  effectively  common  arbitration  examples  The  commercial  expertise.  much  was  of  EARLY  Holdsworth  litigation,  w o u l d have t o become p r i m a r i l y  jurisdiction the  practice.  giving  arbitration.  The  2 2 4  commercial  Admiralty  for  thus  c o u r t s would have t o shed t h e i r provide  in  in  as an  s u b m i s s i o n and award b r o u g h t  tribunals,  arbitration  Although  than a r b i t r a t i o n  a substitute  of  scrutiny  arbitration  reshaped.  litigation,  compliance with the under  was  69. 69  period,  Some  early  14th  century,  to the  Officium  Mercanziae, consules in  an  amalgamation  mercatorium,  England  from  1549  to  partnership  accounts,  stated,  the  "In  before be  the  usually civil law,  and  Germany  help  in  the  English  court  the  were  carefully called  principle  2 2 8  2 2 9  2 3 0  courts  resorted  of  consent  of  tribunals,  the  the  disputes,  parties.  and Maine  t h e demeanour of  there  to  were  of  the  Roman  merchants  arbitration.  of  came  were  had r e c e i v e d  courts,  traces  settling  they  procedures  which  to  payable,  which  arbitrators  complicated  in  2 2 9  t i m e when and  resort  selfto  a  At  this  time,  stated,  "the  magistrate  a private  in of  laws of the Romano-Germanic Roman  freedom  were r e c o g n i z e d ,  2 2 7  the  the  cases  Holdsworth  cases that  or  arbitrator  the  casually  2 3 0  The a r b i t r a t i o n originated  among  merchant-dominated  means  arbitral  simulated  in."  and  of  freight  and a c c o u n t ,  a direction  usually  a n d Roman l a w r e t a i n e d  the  on  is  century  natural  cases  guilds,  a number  and m a r i t i m e  avoid  the  16th  required  courts  To  merchant  Citing  2 2 7  and a v e r a g e ,  new l a w y e r - d o m i n a t e d  displaced  in  was  2 2 8  of  mercantile  arbitration;  merchants."  law  Early  by  heads  including  freight  there  the  arbitration.  1593,  numerous  Council  settled  for  of  5 Holdsworth 5 Holdsworth, by  of  Roman  contract.  law  never  Only  recognized  certain  types  not i n c l u d i n g a r b i t r a t i o n agreements.  5 Holdsworth,  Cited  law.  (i.e. "civil" )  69. 130. 95.  Holdsworth,  vol.14, 70  187.  countries a  of  general contract  Arbitration  agreements pursuant  w e r e known t o  be made,  t o them had any l e g a l  but  neither  effect.  However,  b e o v e r c o m e b y a m u t u a l p r o m i s e made b e f o r e t o w h i c h a t e r m was a d d e d the other a penalty and honour in  the  the  (stipulatio)  (poena)  award.  if  of  a compromissium  (i.e.  the  promise  to  pay the  in  was  no d u t y  in  Roman l a w  to  In a n c i e n t in to  a  was  an  was boni  imposed  on  viri),  arbitrator arbitration  2 3 1  2 3 2  2 3 3  arrangement  it to  in  Roman  separate  was  agreement,by  84,85.  David,  23,  David,  85.  to  arbitration law  was,  compromissio),  to  unless  comply, the  there  loser  between an a r b i t e r ,  had  called  whose f u n c t i o n  by d e t e r m i n i n g the  law  in  that,  were  binding  while  not  was  price  in  Under  their an  for  such the  contract.  arbiter  85.  Ii  ex  a  law  if  made  duty of  submission  parties 2 3 3  arbitration  recognized  i n which a p a r t i c u l a r  possible  complete  David,  award  (e.g.  contracts  parties.  was  would pay  by the  ex  failure  could  2 3 2  contract" the  the  of  and an a r b i t r a t o r ,  arbitration  a "consensual  case  honour  dispute,  exception  to  problem  one p a r t y  arbitration  made  (compromissium)  recognized  was a d i s t i n c t i o n  sale.)  made a s  submission  of  of  awards  2 3 1  a contractual  agreements a  a legal  contract  There  penalty  award.  Rome t h e r e  settle  to perfect in  the  this  a judge  that  promise  case  assented  nor  he d i d n o t s u b m i t t o t h e  The o n l y  to  they  In  to both  compromissio  in  as  law,  a  good  term faith  (arbitrium appoint types and  by  an of an  arbitrator  in  arbitri  as  the  power  having  because, in the  the  in  the  second  In  the  Royal  of  or  in  judges  in  application came  of  to  be  binding  Canon  observe to  act  power,  involving Canonists  a  developed  sunt  by  paramount  equity  4  David,  of  the  Roman  consensual of  good  and t h a t of  all good  and c h a r i t y ,  introduced,  85. 72  actions.  2 3 4  empowered as  as  by  arbitral  to  choice  of  court  proceedings,  was  an  positive  which  view had  in  be  sworn  allowed  promises  contracts  power  found  of  to  oath  in to  arbitrator  to  were e q u a l l y  the  the  regarded  Middle  type Ages,  be  of  practice  kept  governed  Canonists  considerations  of  of  special  deserved  (fides).  the  support an  an a  the  By  element  came t o  contracts  leading  contract,  these  This  thus  In  law.  awards  faith  of  by  local  faith,  all  bound  not  parties  law  and  contract.  domain  leeway  the  arbitral  binding  be  regarded  were to  to  courts,  arbitration  part  where  principle  were  applied  the view that  servanda)  certain  enforcement.  duty  advocated c o n c i l i a t i o n and  had  Thus  under  special  (Pacta the  i.e.  Unlike  only  frequently  were  their  legal  regarded  a penalty,  agreed  the  of  not  awards  of  piepowder  were  that  courts.  award.  validly  and  "arbitration"  particularly  the  a part  procedure  was  invited  had  within  rules  and d e s e r v i n g  law,  parties  forming  parties  term  Rather,  solely  thought  Royally-endorsed as  of  the  the  jurisdictional  as  Charters,  which  the  Continental  the  arbitrator  non-compliance  developed  Ages,  which  and  case,  law  the  command.  decision  feudal  viri.  because  the  Middle  courts,  it  case,  arbitration  independent  to  first  arbitrator's  Rome,  boni  also  harmony of  an  arbitrator a  acting  compromise  came  to  easily of  be  of  as  an a m i c a b i l i s  a dispute.  regarded  as  assumed  was  purely  contractual.  for  errors  of  contrary by  to  amiable  Yarn  two  the  courts  pending cases by  making  case,  was  used  arbitral  impose  a  born  the  not  to  be  The while  the  appeal,  form  of  and  gave  that  disputes  2 3 5  2 3 6  2 3 7  2 3 8  2 3 9  immediate  the over  Statute the  cases  from  voluntary  the  13th  a  and  submissions  extension of the  award  effect of  quality  David,  85-86.  David,  87.  David,  88.  was  latter  form  former  but  overruled  modern  effect  compositor  decision,  aspect,  subject  would  to  amicabilis  ex c o m p r o m i s s i o .  were  in  if  only merely  arbitration  2 3 8  "as a d i r e c t  the  called  judgment  14th to  centuries  in  arbitration  in  judicial  of  the  process  court."  merely In  2 3 9  t h e d i s p u t e was r e f e r r e d t o a r b i t r a t i o n b y m e r c h a n t s ,  courts note  English  Both  awards  Thus  to  the  jurisdictional  2 3 6  composition.  notes  which  2 3 7  arbiter a  equity,  law.  Gradually,  empowered  confused with the  arbitration  2 3 5  compositor,  to  the  the  Staple  or  packing  awards.  2 4 0  Yarn  provided  that  of  the  wool,  goes in  each  and  the  on  to  cases  of  award  of  six  Id. Yarn,  70.  Yarn, 70, c i t i n g Honesti v. C h a r t r e s (1291), Selden S o c , 2 S e l e c t C a s e s C o n c e r n i n g t h e Law M e r c h a n t 5 3 - 6 2 , 148-150 (Hall e d . , N o . 4 6 , 1930); and C o s t a c e v . F o r t e n e y e (1389) C o u r t o f the Chamber o f G u i l d h a l l o f L o n d o n , London C o r p o r a t i o n R e c o r d s , Plea a n d M e m o r a n d a R o l l , r e f . A 2 9 , m. 1 1 , r e p r i n t e d i n K i r a l f y , A S o u r c e B o o k o f E n g l i s h Law 2 4 1 ( 1 9 5 7 ) . 2 4 0  73  assessors  was  to  of  arbitration  or  wage  skill,  was  issues, the  brought cases  in  in  to  in  ( 15 4 0 )  would  arbitration the courts  2 4 5  to  to  ,  and  courts  arbitration  a  2 4 2  was  Yarn,  70.  Yarn,  71.  Select Pleas 1527-1545, 90.  2 4 5  2 4 6  Id.,  v.  more  Yarn  are  to enter pursuant  in  the  cases  Yarn  involving  involving  or  Yarn  2 4 2  the  ( 15 3 9 ) notes  cites  and  that  commercial  skill  would  award  2 4 3  use  nautical  experts  entered  Payne  the  two  as  the  Frebarne  the  Council  disputes  disputes  these courts  be  came  to  before  made i t  their  2 4 6  noteworthy  in  that  they  show  the  judgment on an award s u m m a r i l y ,  when  to  This  a  reference  treatment  or  cases  commercial  of  arbitration  Court  101.  5 Holdsworth Yarn,  court  arbitration.  submission  2 4 3  2 4 4  the  international  sharply with the  private  2 4 1  by  Admiralty,  compositeurs."  Holdsworth,  as  in  arbitrator,  Handcocke  that  In  2 4 1  some  S t a r Chamber and C h a n c e r y ,  cited of  as  which  Like  encourage  willingness  contrasts  .  In  "amiable  refer  of  cases  the  2 4 4  court.  particularly  act  court;  often  practice  would  Admiralty  v.  the  insurance.  as  the  on  common,  act  of  Pelvn  final  or  judge  judgment  The  be  130.  70. 74  of  out  of  court.  an award r e n d e r e d agreement,  Admiralty  A.D.  such  pursuant an  award  1390-1404  and  could bond  be  enforced  for  its  Holdsworth  they  writes was  asked  opportunity the By  modes the  England more  of  that  impose  was  becoming  of  the  and the  the  enforce  of  uncertain  2 4 8  to  medieval  arbitral  medieval very  an  14 H o l d s w o r t h  193.  14  187.  Holdsworth  the  period,  over  pleading  award  their  on t h e  and  could  show  award  or  upon  at be  the  conduct  and  recourse  But  2 4 8  the  courts  validity  the  the  that  jurisdiction  awards,  technical  elaborate  that  the  England.  diminished  them,  of  upon  Yearbooks  conditions  law  suit  a  2 4 7  in  enforcing  technical  2 4 7  common  end  complexity more  to  bringing  that  any p r a c t i c e  were  by  performance.  arbitration disliked  only  law  of of  of  law  enforced.  and had  awards,  when ample as  to  arbitrators.  unreasonable.  common  courts  arbitration  centuries.  to  2 5 0  made  It The it  2 4 9  in  became growing  more  and  2 5 1  Id.; This is i n k e e p i n g w i t h t h e common l a w s y s t e m of j u s t i c e , i n w h i c h t h e s u p e r i o r c o u r t s s u p e r v i s e numerous inferior t r i b u n a l s which a r e o f t e n s t a f f e d by n o n - l a w y e r s . In t h i s system, t h e r e i s no p h i l o s o p h i c a l o b j e c t i o n t o a r b i t r a t i o n , a s l o n g as no a t t e m p t i s made t o e x c l u d e t h e o v e r r i d i n g r i g h t o f t h e c o u r t s to supervise the a r b i t r a l t r i b u n a l s to ensure that proper procedure i s f o l l o w e d and t h e law i s a p p l i e d - l i t i g a n t s c a n n o t " o u s t the j u r i s d i c t i o n of t h e c o u r t s . " - D a v i d , 57, S c o t t v . A v e r y (1856) 1 H . & C . 7 2 , 5 H . L . C . 8 1 1 , 2 D i g e s t 3 5 5 , 2 9 0 , 31 L . J . E x . 3 9 8 , 7 L . T . 127, Czarnikow v . Roth, Schmidt & Co. (1922) 12 L I . L . R e p . 195, [1922] 2 K . B . 478. 2 4 9  2 5 0  2 5 1  Id. Id. 75  An  agreement  M i d d l e Ages made not  by  deed  have  founded the  in  or  under  the  common  dispute  contract  damage  a  2 5 3  for  the  for  its  actionable  early  an agreement  Although  parties  to  we  an  common between  now  further  .  By  the  i.e.  end  breach was  not  breach  of  of  which  to  refer  an a r b i t r a t o r ,  specifically would  be  were  in  that  make  century,  a  a  an  existing  was  regarded  recoverable. 2 5 5  ,  amount  was r e m e d i e d b y e a c h o f t h e c o n t r a c t i n g p a r t i e s  14 H o l d s w o r t h  parties,  can  enforceable  nominal  did  unenforceable  17th  damages  law  consideration  the  an agreement  the  unless  recognize  agreement  without  in  and l a t e r  was a m e r e nudum p a c t u m a n d  arbitration,  submission  award  fault  2 5 2  law  as  an agreement  seals  not  The  2 5 2  coupled with the appointment of  However,  This  to  the  was  w a s made b y d e e d ,  consent.  of  such of  it  a contract  mutual  contract,  submission  arbitration  consideration.  of  promises  formality  a  with  their  mutual  to  England unless  or the  as  refer  a concept on  binding  to  and  2 5 4  any  only.  2 5 6  entering  189.  " e x nudum p a c t u m n o n o r i t u r a c t i o " , s e e V y n i o r ' s C a s e , 1609 C o . R e p . 8 0 a , 77 E . R . 5 9 5 ; P o l l o c k & M a i t l a n d , H i s t o r y o f English Law 185, 194, 202, 213 (2nd e d . 1898, reissued 1968); Cohen, C o m m e r c i a l A r b i t r a t i o n a n d t h e Law ( 1 9 1 8 ) a t 145 s t a t e d : " A t t h e t i m e of 7 J a c . [1609] t h e C o u r t s were c o n c e r n e d w i t h s u c h m a t t e r s as s e i s i n , f e o f f m e n t , s e a l and t h e l i k e , and w h i l e deeds and bonds and d e b e n t u r e s had v a l u e , e x e c u t o r y c o n t r a c t s r e s t i n g on mutual c o n s e n t were t r e a t e d as ex nuda p a c t a . " 2 5 3  2 5 4  Id.  2 S t o r y , Commentaries on E q u i t y J u r i s p r u d e n c e A d m i n i s t e r e d i n E n g l a n d a n d A m e r i c a 833 ( 1 8 5 7 ) . ( c i t e d h e r e i n a s " S t o r y ' s E q u i t y Jurisprudence." 2 5 5  Id.; Street v. Rigbv [1802] Ves. Jr. 814; Russell, A T r e a t i s e on t h e Power and D u t y o f an A r b i t r a t o r , a n d t h e Law o f S u b m i s s i o n s a n d A w a r d s 65 ( 1 8 5 6 ) ; D o l e m a n v . O s s e t t C o r p . [1912] 3 K.B. 268. 2 5 6  76  into  a  bond  payable  arbitration. debt, with  from the  generally  seems  which  were  in  1609,  a  penalty  fulfil, and  bond  later  Wilde  out  of  the  In  seal,  which  did  of  Rugge  he was  Vynior  law  Wm.  his  decided  2 5 7  80a;  77 2 5 8  arbitrator three  2 5 9  .  The  of  the  an  Vynior  out  case,  Esq.  legal that  as  the  The  arbitration.  one  the ,  2 5 8  of  bond 2 5 7  the  effectiveness  decided  by  and  that  Coke  both  Wilde  observe,  duty  Wilde  would  sentence,  on  the  since  no  and r e v o k e d t h e in  a  the  bond,  award  no a w a r d h a d b e e n  reported  By  revoked  debt  had  perform,  had  rendered  appointment  Coke's  Reports,  points:  R u s s e l l on Awards 6 5 - 6 ; V v n i o r ' s Case (1610) 8 C o . Rep. E.R. 5 9 5 ; P o w e l l , 3 3 ; P o l l o c k & M a i t l a n d 214 f n . l , 225. Vynior's  Case,  (1610)  8 Co.  Rep.  81 b ;  4 Coke  302;  77  595. 2 5 9  more  arbitrator..."  in  of  arbitration  arbitrament,  award, sued  the  complied  bond.  abide,  judgment,  no  the  stipulated  because Wilde had breached the c o n t r a c t of  terms  she  arbitration  to,  rendered  pointed  on  Rugge,  under  or  Case  in  acknowledgment  impairing  bond  order,  an  rendered  Vvnior's  "stand  cooperate  he  in  Coke  to  if  with  agreed  arbitrator.  that  been r e n d e r e d .  not  the r u l e ,  The  that  common  of  released  compliance  under he  form  conditions  had  the  replied  was  Wilde  before  of  the  and  if  failed  bond.  as  upon  determination  deed,  authority  the  agreements.  and keep,  final  in  coincidental  Vynior  a  party  obligor  void  decisions  arbitration  that was  in  set  became  of  pay  the  hardly  infamous  signed  bond  conditions  agreement  It  The  if  Rene  David,  Arbitration  in 77  International  Trade,  109.  E.R.  1.  That  notice  Vynior of  implicit was 2.  the in  ineffective That  Wilde  required  terms  of  That  was  that  in  and  the  although  of  plead that  authority  revocation,  of  the  broken  countermand  Vynior.  since  bond  to  the  terms  or  in  and,  more was  received  Notice  law  in  bond  for  to  of  the  himself  importantly  bound  stand  revoke  he had d i s a b l e d  Wilde  by  Rugge had  was  revocation  notification;  had  since  bond;  his  breach  he  he n o t  of  plea  without  since  arbitrator,  specifically  revocation  Vynior's  arbitrament  3.  need not  and  the  abide  bond  appointment from  our  the  which of  the  fulfilling  the  purposes,  to:  "stand to, abide, observe, etc. the r u l e , e t c . arbitrament, e t c . , y e t he m i g h t c o u n t e r m a n d i t ; f o r a man c a n n o t b y h i s act make such authority, power, or warrant not c o u n t e r m a n d a b l e , w h i c h i s b y t h e l a w a n d o f i t s own n a t u r e c o u n t e r m a n d a b l e . . . a l t h o u g h t h e s e a r e made b y e x p r e s s words i r r e v o c a b l e , o r t h a t I g r a n t o r am b o u n d t h a t a l l t h e s e s h a l l s t a n d i r r e v o c a b l y , y e t t h e y may b e r e v o k e d . . . " Coke l i k e n e d the p o s i t i o n whose  authority  Abridgement, obligation"  is  he  of  an a r b i t r a t o r  revocable  at  will.  differentiated  from those  "with  to that  Relying  between  obligation,"  of  a mere on  Brooke's  agreements ruling  agent,  "without  that:  " A n d t h e r e f o r e ( w h e r e i t w a s s a i d i n 5 E d . 4 3b i f I am b o u n d t o s t a n d t o t h e award which I . S . s h a l l make, I could not discharge that arbitrament, b e c a u s e I am b o u n d t o s t a n d to h i s a w a r d , b u t i f i t be w i t h o u t o b l i g a t i o n i t i s otherwise) i t was t h e r e r e s o l v e d , t h a t i n b o t h c a s e s t h e a u t h o r i t y of t h e a r b i t r a t o r may b e r e v o k e d ; b u t t h e n i n t h e o n e c a s e h e shall forfeit his bond, and in the other he shall lose n o t h i n g ; f o r , ex nuda s u b m i s s i o n e non o r i t u r actio."  In o t h e r words,  according to Coke's  interpretation  of  the  effect  revocable,  that: the  the (i)  case  Reports,  reported  even though the  appointment  of  an  78  in  the  Coke a c c e p t e d Year  arbitration  arbitrator  was  Book  Brooke's  5 Ed.  4 3b  a g r e e m e n t was always  to not  revocable  [and  the  revocation  subsequent given  a  award  bond  could  be h e l d  (i.e.  no  to  of  void  2 6 0  stand  liable  the  ];  and  to,  (ii)  abide,  i n debt  "obligation,")  arbitrator's  any  breach  had  the  party  etc.  the  arbitration,  bond,  but  the  revoking  if  in  made  if  on t h e  then  authority  there  party  then  was  no  escaped  he  bond  with  no  loss.  This  last  two  common  1.  That  part law  a  of  Coke's  not  t o be i n a c c o r d  by  consideration,  is  not  here,  deed  (i.e.  actionable. it  Ex  would  under nuda  seem,  seal),  or  pactum non  since  both  supported  oritur  Vynior  executed the a r b i t r a t i o n agreement under s e a l .  However,  i n w h i c h t h e c a s e was p r e s e n t e d t o t h e  in  early  common  Maitland in  the  the  ,  Barn.  law  notion  wherein  form of  agreement  2 6 0  5  2 6 1  of  agreements  a confession was  court  agreements  of  enforcement  were debt, of  the  is  and  the  debt  by  and the  by  created  of  for by  is  manner the  Pollock  means  remedy  by  Wilde  keeping with  discussed  enforced  actio  the  2 P o l l o c k & M a i t l a n d , H i s t o r y o f E n g l i s h Law 2 0 7 , 225 ( 2 n d e d . , 1 8 9 8 , r e i s s u e d 1 9 6 8 ) .  a  &  bond  breach  C h a r n l e v v . W i n s t a n l e v (1804) 7 E a s t 266; M a r s h v . & A i d . 5 0 7 , 1 Dow. & R y l . 1 0 6 , 2 C h i t . 317.  2 6 1  216,  with  rules:  contract  applicable  reasoning appears  bond  of 2 6 2  ,  Bulteel  214  fn.l,  C o h e n , 8 8 : " A t t h i s p e r i o d i n o u r Common L a w o n e c o n c e p t a t l e a s t had become f i r m l y f i x e d , n a m e l y , t h a t a bond solemnly g i v e n u n d e r s e a l must be e n f o r c e d , u n l e s s t h e o b l i g o r w e r e r e l e a s e d by t h e h a p p e n i n g o f one o r more o r t h e c o n d i t i o n s e n d o r s e d on t h e bond. I n t o t h i s d o c t r i n e o f l a w , as e a r l y u n d e r s t o o d , e n t e r e d no consideration of principles of contract law, no d i s c u s s i o n of executed or executory contract. The b o n d , by v i r t u e o f t h e s e a l , a t t a i n e d a s a n c t i t y a l l i t s own. Like the grant i n a deed, it vested i n the obligee certain rights defeasible o n l y upon the happening of c e r t a i n d e f i n i t e contingencies." 2 6 2  79  not  a  remedy  agreement. sued  in  2 6 3  debt  arbitration was  then  for  not  damages  It  is  on  the  agreement  for  breach  consistent bond, 2 6 4  available.  or  with  not for  of  for its  the  underlying  this  practice  damages specific  for  arbitration that  breach  performance,  Vynior of  the which  2 6 5  Street v. Riabv [ 1802] Ves. Jr. 815, 820: "Kill v. H o l l i s t e r h o w e v e r s h o w s , t h a t C o u r t s o f Law a r e r e a d y e n o u g h t o say, the agreement of the parties shall not oust their jurisdiction; though they permit i t to oust the j u r i s d i c t i o n of Courts of Equity. But they e n f o r c e the agreement, not as an agreement, but bv g r a n t i n g an a t t a c h m e n t f o r b r e a c h of t h e r u l e . " (emphasis added). 2 6 3  C o h e n c h . 6 ; P o w e l l 3 3 , 2 P o l l o c k & M a i t l a n d 214 f n . l , 2 2 5 . P o l l o c k & M a i t l a n d s t a t e t h a t t h e e a r l y common l a w h a d n o g e n e r a l theory of contract law, and no c o n c e p t of a contract as an agreement based upon mutual c o n s e n t . Nor d i d i t have any c o n c e p t o f an e x e c u t o r y c o n t r a c t , s i n c e e a r l y agreements were b a s e d upon simultaneous exchanges of property. Gratuitous grants were a c c o m p a n i e d b y t h e r e t u r n o f some t o k e n i n o r d e r t o f u l f i l the n e c e s s i t y t h a t t h e r e be m u t u a l e x c h a n g e . E a r l y c r e d i t arrangements took the form of the g i v i n g of hostages or the p l e d g i n g of p r o p e r t y o f v a l u e e q u a l t o t h e d e b t , b u t t h e d e b t was n o t s e e n a s a p e r s o n a l obligation. I f t h e d e b t was p a i d , t h e d e b t o r c o u l d c l a i m b a c k t h e p l e d g e d p r o p e r t y (on t h e b a s i s t h a t t h e d e b t o r s t i l l owned i t ) , if i t was n o t p a i d , t h e c r e d i t o r r e t a i n e d t h e p l e d g e . A practice arose whereby, before funds or credit were advanced to the borrower, the l e n d e r would sue the borrower in order to get a c o n f e s s i o n of debt or a " r e c o g n i z a n c e " upon which t h e s h e r i f f would levy execution against the borrower's lands and goods if the b o r r o w e r d i d n o t p a y up w i t h i n a s p e c i f i e d t i m e . 2 6 4  S t r e e t v . R i g b v [1802] V e s . J r . 815, 818; G o u r l a v v . The Duke o f S o m e r s e t [1815] V e s . J r . 4 2 9 , 4 3 0 : "A B i l l s e e k i n g t h a t , would be p r o t a n t o a B i l l t o e n f o r c e t h e s p e c i f i c p e r f o r m a n c e of an agreement t o r e f e r t o a r b i t r a t i o n : a s p e c i e s of b i l l , t h a t has never been entertained."; 2 Story's Equity Jurisprudence 833 ( 1857) : " C o u r t s o f E q u i t y w i l l n o t e n f o r c e t h e s p e c i f i c p e r f o r m a n c e of an agreement t o r e f e r a m a t t e r i n c o n t r o v e r s y between a d v e r s e parties, deeming i t against public policy to exclude from the a p p r o p r i a t e j u d i c i a l t r i b u n a l s of t h e S t a t e any p e r s o n s , who, in the o r d i n a r y c o u r s e of t h i n g s , have a r i g h t t o sue t h e r e . Neither will they, f o r t h e same r e a s o n , compel a r b i t r a t o r s t o make an award..." 2 6 5  80  2.  That  an agreement  revoked The  only  report  Brownlow  entered  by a f u r t h e r  of  and  the  case  into  b y two p a r t i e s  agreement  under  Goldesborough s 1  the  of  the  style  Reports  under  seal  two p a r t i e s  of  "  Wilde  supports  this:  may  under  v.  be  seal.  Vinor"  in  "My L o r d C o k e h e l d , t h a t t h e p o w e r w a s c o u n t e r m a n d a b l e , if t h e S u b m i s s i o n be by w r i t i n g , t h e countermand must be by writing, i f b y w o r d I may c o u n t e r m a n d b y w o r d : I f t w o b i n d themselves, one c a n n o t countermand a l o n e . If Obligor, or O b l i g e e d i s a b l e b y t h e i r own a c t t o make t h e C o n d i t i o n v o i d , t h e Bond i s single." 2 6 6  That  there  is  agreement published  no  under about  right seal  to is  unilaterally supported  by  abrogate  an  Statham's  arbitration Abridgement,  1470:  " I f t h e p a r t i e s put t h e m s e l v e s i n t o an a r b i t r a t i o n agreement without a deed, they can discharge the a r b i t r a t o r s without a deed b e f o r e the day, e t c . , or they can put o f f the day by the consent of both without a deed. But i f t h e s u b m i s s i o n be by deed i t i s o t h e r w i s e . . . f o r he s h o u l d be d i s c h a r g e d by b o t h p a r t i e s by deed. R e p o r t e d i n Y . B . H i l a r y , 49 E d . I l l p . 8 p i . 14 [ 1 3 7 6 ] . S e e a l s o F i t z h . A r b i t r e m e n t 22 . 1 , 2 6 7  Julius rule  H e n r y C o h e n d e v o t e d much o f  that  arbitration  Vynior's  Case  Brooke's  Abridgement  that  they  points  did  out  agreements  upon which  not that  his  the  and t h e  stand  for  Coke's  were  rule  was  cases the  words  1918 t e x t revocable founded.  cited  therein  propositions on  to questioning before His led  asserted  revocability  of  award  research him to  the and into  assert  by Coke.  He  arbitration  Q u o t e d b y C o h e n a t 97 ( e m p h a s i s a d d e d ) . In o t h e r words, t h e o b l i g a t i o n o r bond i s s u b j e c t t o t h e c o n d i t i o n t h a t i t becomes unenforceable if the obligor "stands to" and "abides" the arbitrament. If the o b l i g o r repudiates, or f a i l s to f u l f i l , the c o n d i t i o n , t h e c o n d i t i o n i s then v o i d and t h e bond i s enforceable ("single"). - P o l l o c k & M a i t l a n d 225. 2 6 6  S t a t h a m ' s A b r i d g e m e n t t r a n s l a t e d b y M. K l i n g e l s m i t h , C o h e n a t 108 ( e m p h a s i s a d d e d ) . 2 6 7  by  81  quoted  agreements 1.  The  are purely obiter d i c t a ,  liability  appointment necessary in  the  of  but  plea  otherwise,  on  the  the  since  matures  arbitrator;  need not that  bond  be  the  and  sued  if  pleaded  the  obligor  Notice  revoked.  on  decidendi  the  2.  separately  defendant  Vynior  the r a t i o  since This  2 6 8  bond,  of  not  is  revokes  revocation it  is  could  on  twofold:  the  his is  implicit hardly  be  arbitration  agreement.  Cohen argues agent did at  A of  whose  not  that  authority  have  that  time,  review  of  the  neither  2 6 8  2 6 9  2 7 0  same  C o k e was w r o n g t o could  be  a well-defined which  the case  contains  2 7 2  ,  the  Cohen,  98.  Cohen,  95.  Cohen,  94.  Book on  revoked  notion  of  have  led  may w e l l  Year  equate  5  Ed.  which  statement  4  Coke that  3b  at  an a r b i t r a t o r will.  agency, Coke  2 7 1  2 5 9  power,  into  and  purported "he s h a l l  The  to  rely,  lose  a  common  and  error.  Brooke's  to  mere law  contract  2 7 0  Abridgement shows  nothing  that  because  T h e n o t e a t Y . B . 5 E d . 4 3 b r e a d s , i n t o t a l : " I f I am b o u n d t o a b i d e by t h e award which J . S . s h a l l r e n d e r , I c a n n o t d i s c h a r g e t h e a r b i t r a m e n t b e c a u s e I am b o u n d t o a b i d e b y h i s a w a r d , b u t if i t i s w i t h o u t bond i t i s o t h e r w i s e . " - Cohen, 107. This is exactly how C o k e q u o t e d t h e c a s e , a s s h o w n i n 8 C o k e ' s R e p o r t s 8 2 b , 77 E . R . 600. 2 7 1  " N o t e : W h e r e a man i s b o u n d t o a b i d e b y t h e a r b i t r a m e n t o f J . N . , he c a n n o t d i s c h a r g e t h e a r b i t r a t o r . C o n t r a r y i f he was n o t bound t o a b i d e by h i s a r b i t r a m e n t tamen v i d e t c l e a r l y t h a t he c a n d i s c h a r g e t h e a r b i t r a t o r i n t h e one c a s e and i n t h e o t h e r b u t he s h a l l f o r f e i t h i s b o n d . " - Cohen 107. 2 7 2  82  ex  nuda  that  submissione  the  latter  arbitration  comment  common l a w ,  claim  could  rigid  and  technical  mutual  mere  "nudum  bond  conditioned on  the  met.  An  referred way t o there  the  obtain was  2 7 3  2 7 4  if  (a  until tort  Cohen,  was  of  the  based the  by  lawyers  strictly  unless  the  action  and  the  there  was  unenforceable,  being  expedients the  by  obligor  an a c t i o n so  which  provide  for  that  performance  debt)  the  debt  was  "obligation" There  might  not was  be  no  itself,  and  usually  developed  the  use  to  enforce  speaking  2 7 8  )  of  107.  194,  197.  Pollock 80a.  & Maitland  203,  207,  Cohen,  the  107.  & Maitland  2 7 8  In  based  or  agreement  Pollock  2 7 7  bond  to  contract  in  of  only  2 7 4  which  agreement,  a  & Maitland,  2 7 6  in  obligation."  common  of  appears  apply  obtained  have  enforce  on t h e  action,  early  it  seal).  binding  was  condition  "with  be  and a  to  the  accompanied  remedy  ,  of  the  enforceable  due  2 7 5  to  under  forms  agreement  Pollock  2 7 5  Rep.  a  limited  of  fact,  intended  could  concept  In  2 7 3  not  pleading  One  an agreement  not,  Cohen  of  performance  became  as  the  parol  2 7 6  (i.e.  common l a w w o u l d  agreement to  assumpsit  pactum."  on t h e  bond  2 7 7  a  been  no r e m e d y  modern  w a s made  (which  parol  rules  the  actio."  have  within  promises,  an agreement a  of  by  which  fitted  recognition  upon a  be  in  oritur must  agreements  early  no  non  196;  Cohen,  63. 83  62.  214-16;  Vvnior's  Case  8  Co.  contracts. by  the  bond.  contract  Thus  However,  2 7 9  it  But  resting  action  that  melange  inapplicable  of  old  agency  rendering  of  an award,  always  revoked  can  recover  an  on  would  in  principles  arbitrator  bond,  but  for  the  breach  debt  of  an  created executory  2 8 0  regarding  to  invent always  (ii)  award.  enforce  gratuitous  can  and hence  before the  lie  his  principles,  of  could  promises.  Coke,  appointment  be  obligee  on p a r o l  appears  confused  no  the  dicta,  parol a  be  rule  there  cannot  is  and  that:  (i)  the  before  the  revoked  a  agreement  bond,  enforce  a  agreements  an a r b i t r a t i o n  If  produced  the  the  can  obligee  arbitration  agreement.  It  is  the  noteworthy that strange  consideration, promise.  2 8 1  t h e Law M e r c h a n t  notions and  Carter  of  the  the  refusal  and C h a n c e r y d i d not  common to  give  law effect  as  to to  a  harbour  seals  and  contractual  wrote:  "Neither Chancellor not merchant set any store on consideration or seal. There is no evidence that the d o c t r i n e o f c o n s i d e r a t i o n came f r o m C h a n c e r y ; t h e e v i d e n c e i s the other way. In s p i t e of Lord Mansfield, as w i l l be r e m e m b e r e d , t h e C o u r t s o f Common Law f o r c e d o n t h e c u s t o m o f m e r c h a n t s , w h i c h knew n o t h i n g o f i t , our p u r e l y indigenous doctrine of consideration. T h i s view need not s u r p r i s e us, if we remember that the civil law has very little  P o l l o c k & M a i t l a n d 196; C o h e n , 6 3 - 6 5 ; Newgate v . Degelder (1666) 2 K e b . 10.20.24. S.C. 1 S i d 281, h e l d t h a t an a c t i o n of assumpsit would l i e f o r the r e v o c a t i o n of a submission, although t h e s u b m i s s i o n was n o t u n d e r s e a l . 2 7 9  2 8 0  109,  147.  Carter, History 1906); Cohen, 80.  2 8 1  ed.,  Cohen,  of  English  84  Legal  Institutions,  275  (3rd  corresponding the contract; made."  to our d o c t r i n e of c o n s i d e r a t i o n ; i t was d i s h o n o u r a b l e t o b r e a k a  consent promise  made once  17th-century  work  2 8 2  Carter  quoted  of  John  Sir  from  Concerning  Impositions,  the  Davis:  "Whereas at Common Law n o m a n ' s writing can be pleaded a g a i n s t h i m a s h i s a c t a n d d e e d u n l e s s t h e same b e s e a l e d a n d d e l i v e r e d , i n a s u i t between merchants, B i l l s of L a d i n g and B i l l s of Exchange, being but t i c k e t s without s e a l s , letters of a d v i c e and c r e d e n c e , p o l i c i e s of a s s u r a n c e , assignations o f d e b t , a l l o f w h i c h a r e o f n o f o r c e a t t h e Common L a w , a r e o f g o o d c r e d i t a n d f o r c e b y t h e Law M e r c h a n t . 2 8 3  Holdsworth wrote that the r u l e of  the  appointment  of  an  i n V y n i o r ' s Case on t h e  revocability  arbitrator  "had helped to g i v e e f f e c t to the j e a l o u s y f e l t by the c o u r t s f o r r i v a l j u r i s d i c t i o n s - a j e a l o u s y shown b y t h e strictness w i t h which t h e y had from the f i r s t c o n t r o l l e d arbitrations, and in the rule, recognized in the Year Books, that a s u b m i s s i o n t o a r b i t r a t i o n c o u l d not put a s t o p t o an a c t i o n already begun." 2 8 4  The  effect  revoke  the  arbitral a  of  the  appointment  provided  that  efficacy  of  2 8 3  2 8 4  2 8 5  2 8 6  in  of  Vvnior's  his  a w a r d was r e n d e r e d ,  significant  2 8 2  dicta  bond,  penalty this  Carter,  275.  Carter,  276.  14  but  Holdsworth,  8, 9 Rene  arbitrator  Statute  clauses  were  without  Although  Cohen,  148-151  190.  Wm.III. David,  109;  at  any  Against  .  2 8 6  allowing  85  Fines, effect,  the  a  time  c o u l d be c o u n t e r - a c t e d  the  device  Case,  by  party  before  the  stipulating  16 9 7  2 8 5  ,  which  impaired  common  to  law  the later  developed damages  general  for  recovered  breach for  i n the  seal,  assumpsit  of  differed in  enforceable  the  latter  to  the  court to  to  2 9 1  in  of  an  at  of  lie  it  first  2 8 8  enshrined  the  if  law, a  17th  was  a  remedy  in  could  be  damages  agreement.  Two  2 8 7  later  a s u b m i s s i o n were not  once  century  in  rule  contempt  by  of  make  1670  procedure arbitration  of  under  enforceability  a w a r d was made i t poenae  or  not.  a method a r o s e  a  to  point  the  stipulatio  reluctant  the  nominal  on t h e  submission  this of  only  provide  .  was  established  revocation  yet  to  arbitration  English  a  came  ruled that  there  make  follow  was  A c t , 1698 However,  half  were  practice  that  and  f r o m Roman l a w  whether  In  judges  would  law  contract,  17th c e n t u r y  an award  failure  of  breach  cases  Common l a w  contract  2 9 0  ,  for  of  the  the  of  applying  orders,  and  the  merchants  so  order.  such  agreement  2 8 9  court,  court  was  that The  but  the  Arbitration and  before  traders. award  was  S t r e e t v . R i g b v , (1802) V e s . J r . 815, 817, 8 1 9 : " n e i t h e r o f them c o u l d r e c o v e r more t h a n 1 s h i l l i n g a t l a w " ; Doleman & s o n s v . Ossett C o r p . , L.R. [1912] 3 K . B . D . 257, 268: " I t w i l l be e v i d e n t , h o w e v e r , t h a t t h e remedy i n damages must be an i n e f f e c t i v e remedy where t h e a r b i t r a t i o n had not a c t u a l l y e n t e r e d i n t o , f o r i t would seem d i f f i c u l t t o p r o v e any damages o t h e r t h a n n o m i n a l . " ; C o h e n , 151. 2 8 7  14 H o l d s w o r t h , 189 f n . 4 : " i n t h e s e v e n t e e n t h c e n t u r y i f it w e r e made b y p a r o l a s s u m p s i t w o u l d l i e . " c i t i n g N e w g a t e v . D e g e l d e r (1666) 2 K e b . 1 0 , 2 0 , 2 4 ; and N o b l e v . H a r r i s (1678) 3 K e b . 745. 2 8 8  2 8 9  2 9 0  2 9 1  Wm.  Ill  Rene  David,  Arbitration  14 H o l d s w o r t h , An A c t c.15.  for  189,  in  citing  determining  International Hide v.  differences  86  Petit, by  Trade, 1 Ch.  109.  Cases,  arbitration,  185.  9 & 10  s t i l l the  effective submission  revocation. court,  The  but  evil  root  the  contrary Browne  was  court  of  in  award,  background  order  2 9 4  as the  1620  1685  be  award,  court  held  in  in  2 9 3  ,  its  contempt  of  to  Case  in  of  spite  decision  of  of  if  before  Vvnior's  decision  even  performance  arbitrators  spawned  the  the  specific  the  cases  a valid  of  could  order  later  of  rule  party  revocability  followed  a  not  nor  and  2 9 5  rendering  made  could  Downing  Mascall  the  defaulting  such  v.  when C o k e  been  authority  In Browne v . an  had  agreement  seed  and  prevent  The  arbitration  v.  to  of  the  render  took  an  firm  intervening  King's  Bench  Chancery  in  in  Norton  .  Downing,  the in was  court  an a c t i o n on t h e c a s e was  mercantile sacked  in  led  by  law, 1616.  Sir  Henry  in assumpsit Montague,  had succeeded The  Court  Coke  as  to  who,  enforce with  Chief  his  Justice  held:  " t h a t m u t u a l p r o m i s e s t o a b i d e b y t h e a w a r d o f c e r t a i n men a r e good enough t o b i n d them t o a b i d e by t h e agreement and t h a t t h o u g h n o m o n e y was d u e a t t h e t i m e o f t h e p r o m i s e . "  2 9 2  Jr.  Cohen,  157-158,  citing  Mitchell  v.  Harris,  ( 1793)  3  Ves.  131.  H i d e v . P e t i t 1 C h . C a s . 185 ( 1 6 7 0 ) ; C h a r n l e y v . W i n s t a n l e y 7 E a s t 266 ( 1 8 0 4 ) ; A s h t o n ( A s t o n ) v . G e o r g e 2 B a r n . & A i d . 395, S . C . i C h i t t y 2 0 0 ( 1 8 2 1 ? ) ; M i l n e v . G r e a t r i x ( G r a t r i x ) 7 E a s t 607 ( 1 8 0 6 ) ; Clapham v . Higham, 1 Bingham 89; G o u r l a y v . The Duke o f Somerset [1815] V e s . J r . 429; Marsh v . B u l t e l l ( B u l t e e l ) 2 C h i t t y 316 ( 1 8 2 2 ) . 2 9 3  2 9 4  2 9 5  Browne  v.  Downing,2  Norton  v.  Mascall,  Rolle 2 Rep.  134. 87  194 of  (1620); Cas.  in  Cohen Ch.304  143. (1685);  Cohen  The  report  of  this  case  was  discovered  by  Cohen:  "quite by accident... in the quaint original French in 2 Rolle's Reports, at p.194...March does not refer to it; n e i t h e r V i n e r n o r R o l l e a b r i d g e s i t , n o r i s i t t o be f o u n d i n any o f t h e t e x t w r i t e r s upon the s u b j e c t . But i n p o i n t of l e g a l v a l u e - V y n i o r w a s a t Common P l e a s a n d w a s e a r l i e r in date - it is superior as a b i n d i n g p r e c e d e n t to Vynior' s Case. 1 , 2 9 6  In Norton of  v.  Mascall  2 9 7  an award a p p a r e n t l y  deed  or  ,  Lord  Justice  these  developments  in  based upon an a r b i t r a t i o n  far  enlightened  the  future,  were  2. THE PUBLIC POLICY PROHIBITION T H E J U R I S D I C T I O N OF T H E COURTS  No c o n c e r n  18th  the  the  stated  the r u l e  2 9 6  2 9 7  2 9 8  of  this  excluded the  agreement  of  purportedly  jurisdiction By  in Vynior's  jurisdiction  developed  policy. it  is  century,  courts  specific  performance  agreement  without  bond.  Unfortunately,  ousting  ordered  could  the  rule:  court (i)  no  jurisdiction not  Cohen,  143.  2 Rep.  of  Cohen,  143.  be  Cas.  authority  void  Ch.  as  304  a  bar  88  and an  cases.  TO  Vynior's  the  Case,  the  to  against to  an  Action.  OUST  of  purported  (ii)  2 9 8  agreements  middle  allowed  of  oust  public  stand  if  arbitration In  17 4 6  2 9 9  ( 1685).  Kill v. Hollister, (1746) 1 H o l d s w o r t h 190, f n . 7 . ; Cohen, p.153. 2 9 9  the  being  was  to  later  PURPORTING  that  as  submission  in  in of  any c o n t r a c t was  prescient  arbitration  yet  of the courts;  pleaded  in  CONTRACTS  courts,  the  that  overlooked  Case about  the  on  OF  decisions,  Wils.  129.,  cited  at  14  this  rule  was  stated  as  settled  law w i t h o u t  authority,  although Lord Hardwicke  such  rule  in  1856  in  clause until  17 4 3  Scott  in  a  v.  dispute  rendered.  By t h i s  Czarnikow  of Appeal require  of  law,  3.  v.  to  rules  Year  if  it  did  could  be  rules  that  submitted  the  & Co.  be s t a t e d  not  an  [1922]  of  the  3 0 4  3 0 2  court,  sometimes  Lords  cause  in  of  tribunal was  of any  rule  in a  action  arose  and  award  The r u l e  1922,  of  approved  arbitration  .  matters  cover for  all  an  reappeared  when  the  Court  agreement  upon any  not  question  unenforceable  must  were  v.  Avery,  2 K.B.  (1856)  478,  5 Holdsworth  3 0 4  .  (1743)  5 H.L.C.,  92 L . J . K . B . 8 1 ,  191. 89  as  as  shown  being  The  an  award  courts  and  2  127  570,  the  unduly  was  wholly  -  matter  no  applied  certain  Atk.  811,  by  sometimes  simultaneously  reasonable  191.  14 H o l d s w o r t h ,  award,  referred,  decision be  an  strict,  the matters  later  award  of  unduly  797 . 3 0 3  to  by the  Wellington v. Mackintosh H o l d s w o r t h , 190, fn.6.  3 0 2  no  this  i n an a r b i t r a t i o n  enforceability  several  reserved  Scott  Law  t h e r u l e was e v a d e d .  3 0 0  3 0 1  that  existence  approved  the  citation  policy.  were  If  3 0 3  which  provided  Lords  or  ON AWARDS  to  Books,  subtle. bad  as  in  ,  an u n d e r t a k i n g to  public  of  Schmidt  opinion  RESTRICTIONS  The  device  had d e n i e d t h e  House  been  Roth.  the  3 0 1  that  had  any case  for  contrary  Avery  ruled that  to  The  contract  the  in  .  3 0 0  reasons  with  cited  the such  at  14  837. L.T.  824,  38  T.L.R.  strictness  as  a w a r d s was  so s t r i c t  of  the  remarked  refer  the  In  medieval  of  the  the  award  the  an  of  of  judgment,  was  for  form  century  the  of  when  liable  on  bond  instances  as  it  14  use  the  This I  to  proved. was  was  was held  that  a party  quasi-contract  of  until  the  uncertain, which  the  common and  the  pay first  law  strictness  192.  14 H o l d s w o r t h ,  192. 192. 90  performance  an  action  another  to  compel  one  on  award,  not  it,  on  thus  the to  of  noted the  of  the  the  17th  being  end  of  perform Awards the  18th  pleading that  bond  law  was  rules  of  Any  the an  17th award  were  not  century.  made  there  a  the  enforceable.  damages. half  or  of  failing  of  accord  to  until  rules  Holdsworth  Holdsworth,  5 Holdsworth  to  an  bar  state  unenforceable,  as  unless  the  were  3 0 7  good  action  awards  relaxed  a  But  This  was  court  of  awarded.  money  the  end  matters  only  of  the  against  by  power  one  By  remedies  only  least  operate  an a c t i o n  performance  at  strictness  of  intention  that  ( 1603-1625).  seen  to  interpretation  result  mutual  enforced  in  and  The  the underlying  the  to  .  .  3 0 5  to  James  performance.  complexities the  of  3 0 6  no b a r  pleaded  award  in  futile  a n a w a r d was  enforceable  its  specifically The  reign  and thus  had  with  arbitration  the  was  unsatisfactory other  was  period,  parties  given  allowed,  it  to  injustice  no r e f e r e n c e  award w i t h o u t  execution  was  was  satisfaction,  century if  end  great  that  that  parties  toward  and  cause  arbitrators  jurist to  to  action  were  many  pleading  prevented  the  doing  of  substantial  by contempt proceedings met  initially  by  discretionary,  Holdsworth award  to  either the  and  party  give  other." was  the  were  enforced, intended  rule  to  the by  of  two  an  umpire  called  often  upon  deadlocked.  3 0 8  3 0 9  3 1 0  3 1 1  3 1 2  14  to  were  IV s  reign  This  reasonable  rule  one  party  gradually  be  mutual,  and was  3 1 2  acts  some void  of for  jurisdiction  14 H o l d s w o r t h ,  193.  14 H o l d s w o r t h ,  192.  14  194.  Holdsworth,  .  that  an  advantage  of  perverted "if  all  the  acts  want  of  that  did  to  the  was  parties could the  into  it  equivalent  by both  left which  not  be  mutuality  the standard panel  appointing  the  arbitrators.  the  193.  3 0 9  remained  held  the  was  until  party  by  Holdsworth,  to  were  .  (each  unless  was  without  relaxed  an award r e q u i r e d  award  remedy  b y w h i c h a n a w a r d was v o i d  system of a r b i t r a t i o n ,  act  it  enforce  attachments,  elaborate  not  to  nominated  The  it  the  to  the court  grant  However,  if  arbitrators  to  manifestly  arbitrator  Under the B r i t i s h up  was  whole  the  .  courts  was  mutuality,"  that  intended  Edward  that 3 1 0  the  for  Attempts  3 0 8  made a n o r d e r o f  gave way.  in  advantage  This  rule  void  of  an  3 1 1  that  was  by  proceedings  something  "doctrine  not  gradually  wrote  do  a reference  reluctance  which reluctance  justice.  two  arbitrators  to decide  Id.  91  the  one  arbitrator)  The  umpire  admit  case  is  then  that  made and  is  not  they  are  falls  wholly  to  the  the  umpire.  standard  party  and  decision to  is  is  third  were  to and  rules  were  three by  for  such  the  intended could  to  not  an  nominate  that  if  not  the  disagreed,  longer  to  time  could  not  much  amusement  be  by  from  these  rules  since  REFORM  to  no  of  mandate  that their  having Another  3 1 4  been  doubt  rules  until  the  provided  in  to  an  act  award  we may the  a  take  parties  inconveniences. as  meaningless  effect.  (2nd e d . ,  5 H o l d s w o r t h 195, c i t i n g C o p p i n v . 12 K y d T r e a t i s e o n t h e Law o f A w a r d s 14 H o l d s w o r t h ,  Viscount  H u r n a r d ( 1669) 47-48 (1791).  Halsham  2  Saund.  195.  1 H a l s b u r y ' s L a w s o f E n g l a n d , 665 ( 2 n d e d . ) . a l l e v i a t e d by the A r b i t r a t i o n A c t , 1889. 3 1 6  held  expiry  While  serious  these  1 H a l s b u r y ' s L a w s o f E n g l a n d 622 1931); 5 H o l d s w o r t h 195.  3 1 5  was  BEGINS  3 1 4  was  real  be  the  error  3 1 6  to  that  he h a d no power  award.  them t o  respect  ability  appointed not  the  process it  technical  the  with  all  umpire.  had  each  defy  their  be  by  with  the  which  which  the  an  to  umpire  Any  dismiss had  time,  arbitrators, 3 1 5  of  the  until  absurdities,  found  they  of  appoint  and v o i d e d these  rules  example,  not  in  arbitrators,  distinctions  that  model  appointed  The e a r l y  an umpire  the  void.  3 1 3  129,  the  For  was  if  one  efficacy  at  than the was  impossible  STATUTORY  Ed.,  of  fine  validly  and  corrected  technicalities  V.  decide  appointment  but  umpire  arbitrators  Canadian  a celebration  advance.  award,  rule  entangled  represent  frustrate  giving  was  as  entirely  could  is  agreement  in  they  It  the  arbitrators,  themselves  expired,  his  unlike  indulge  arbitrators  and  very  b e i n g made b y t h e m a j o r i t y .  logic  time  panel  the  umpires  judges  This  3 1 3  This  problem  The  first  1698 of to  3 1 8  .  the  In court  limit  be  at  reform  addition  to  allowing  by the  consent  interference  arbitration, should  attempt  providing  subject  to  of  by that  was  3 1 7  a  the  the a  process  parties, court  party  for  was  was s h o w n t h a t obtained  obtained  3 1 7  3 1 8  was  by  corruption  deemed v o i d  5 Holdsworth Arbitration  and  or to  Arbitration to  the  disobeying  court  b e made  the Act  in  contempt,  the a r b i t r a t o r s  the  submission  t o be s t o p p e d o r d e l a y e d by any o t h e r it  in  be  undue  set  of  process  was  law o r e q u i t y  means.  aside.  the  arbitration  had misbehaved and t h a t  other  order  attempted  conduct  which of  an  also  such  Act,  Any  the  not  unless award  award  so  3 1 9  196. Act.  1698.  9,  10 Wm I I I  c.15.  An a c t f o r d e t e r m i n i n g d i f f e r e n c e s by a r b i t r a t i o n . 9&10 Wm. I l l , c.15 (1698). It stated, in part, "it f h a l l a n d may b e l a w f u l f o r a l l merchants and t r a d e r s , and o t h e r s d e f i r i n g t o end any c o n t r o v e r f y , f u i t or q u a r r e l , c o n t r o v e r f i e s , f u i t s or q u a r r e l s , f o r w h i c h t h e r e i s no o t h e r remedy b u t b y p e r s o n a l a c t i o n o r fuit i n e q u i t y , by a r b i t r a t i o n , t o agree t h a t t h e i r f u b m i f f i o n of t h e i r f u i t t o t h e award o r umpirage of any p e r f o n o r p e r f o n s f h o u l d be made a r u l e o f a n y o f h i s M a j e s t y ' s c o u r t s o f r e c o r d , w h i c h t h e p a r t i e s f h a l l c h o o f e , and t o i n f e r t f u c h t h e i r agreement i n t h e i r f u b m i f f i o n , o r the c o n d i t i o n of the bond or p r o m i f e , whereby t h e y o b l i g e t h e m s e l v e s r e f p e c t i v e l y t o fubmit t o the award o r u m p i r a g e , of any p e r f o n or perfons, which agreement being so made and inferted in their fubmiffion or promife, or c o n d i t i o n of their r e f p e c t i v e b o n d s . . . and i n c a f e of d i f o b e d i e n c e t o f u c h a r b i t r a t i o n or umpirage, the party neglecting or refuting to perform and exevute t h e fame, o r any p a r t t h e r e o f , s h a l l be s u b j e c t t o all p e n a l t i e s o f c o n t e m n i n g a r u l e o f t h e c o u r t . . . t h e c o u r t on m o t i o n f h a l l i f f u e p r o c e f f a c c o r d i n g l y , w h i c h p r o c e f s f h a l l n o t be f t o p p e d or delayed in its execution, by any o r d e r , rule, command, or p r o c e f s of any o t h e r c o u r t , e i t h e r a t law o r e q u i t y , unlefs it s h a l l b e made t o a p p e a r o n o a t h t o f u c h c o u r t , t h a t t h e a r b i t r a t o r s o r umpire m i f b e h a v e d t h e m f e l v e s , and t h a t f u c h award, arbitration o r u m p i r a g e was p r o c u r e d b y c o r r u p t i o n , o r o t h e r u n d u e m e a n s . And be i t f u r t h e r e n a c t e d . . . T h a t any a r b i t r a t i o n o r umpirage p r o c u r e d by c o r r u p t i o n , o r undue means, f h a l l be j u d g e d and e f t e e m e d v o i d and o f none e f f e c t , and a c c o r d i n g l y be f e t a f i d e by any c o u r t o f law o r e q u i t y . . ." I t must be n o t e d t h a t what a p p e a r s t o t h e r e a d e r 3 1 9  93  Reading  the  incredibly the  Act,  run-on  enactment,  which made  a  party  an  order  arbitration intent  is  what  sentences  which might of  of  incorrect.  for  misconduct  to  be  1698,  that,  the  up w i t h t h e i r mistakes of  the  of  a  award,  or  of  kept  interest  his the  century  often  proceedings arbitrators fact  to 3 2 1  or  law  adopted  by  Holdsworth  the  took  Such  Williams  Thus  an  of  court  having  aside  by  would  on  courts a kindly  the of  3 2 0  .  error  for  could  not,  and  face  set of  common  view of  the  aside  the law  1698 A c t ,  could in  the  These 19th  3 2 0  3 2 1  3 2 2  14  Holdsworth,  200.  14 H o l d s w o r t h ,  200,201.  14  200.  Holdsworth,  94  late  18th  to  stay  by  the  errors rules  of  were  century.  nonetheless,  t o be t h e u s e o f t h e l e t t e r " f " i n p l a c e o f t h e l e t t e r i n f a c t an "f" but a d i f f e r e n t l e t t e r v e r y s i m i l a r i n "f " .  not  intervene  the  for  of  had  misconduct  awards  face  position  injunctions  award. in  a  on t h e  arbitrator  law  also  appeared  from an award,  in  of  award  put  equity  grounds  the  must  of  granted  liberal  an  they  was a p p a r e n t  the  the  until  reasoning  courts  on t h e  of  The  arbitrator  upon  for  aside  judges,  of  arbitration  set  The  or  to  not  their  provided  awards  grounds  impression  could  an  valid,  awards,  Equity  the  the  in  nature  agreements  t h e r e was no a p p e a l  award  common  liberal  submit  an  written  pointed out t h a t ,  chosen  unless  was  to  approve  arbitrators  apparent the  to  of  enforce  .  and  and  severely  agreement  law  secret.  set  limit  eye,  apparently  common  interest  courts  to  an  Serjeant  law,  and  modern  the  disputes.  defects.  fact  the  is  court,  parties  conflict  where  avoid  future  of  -  appears  the  statute the  strikes  3 2 2  noting  "s" i s not form t o an  that,  "The  defects  in  the  being  so  effective  as  it  Notwithstanding revocation of  of  court,  the  In  on  the  a  1833,  under  the  Act  court,  that  could  compel  of  1698  the  and  1833 A c t  not  3 2 3  14  a  rule  that could  been  Arbitration of  the  was  not  be  an  swear  prevent the  Holdsworth,  of  Act,  1698  was  contempt  and t h a t  were  any  award  in  the  court  leave  and  of  the  their  revocation  of  the  oath.  and  production  such  to  Aston  of  f o r making an award  witnesses  In  a  that  submissions  without  witnesses  court.  from  3 2 4  revoked  arbitrator  1698  ."  a s u b m i s s i o n made a r u l e  attendance  of  void.  of  3 2 3  court  that  could extend the time  that  could  made  have  maintained  submission  arbitrations  being  the  statute  the making o f an award t h e r e o n ,  the court  did  the  otherwise  in  still  was e n a c t e d  documents,  might  rule  courts  revoked  it  prevented  a s u b m i s s i o n made a r u l e  revocable before given  law  of  court-ordered 3 2 5  However,  submission  prior  v.  Abbot,  George,  the to  it  C.J.  196.  1 H a l s b u r y ' s 633-634 (2nd e d . 1931); Clapham v . Hiqham, 1 B i n g . 8 7 , 2 D i g e s t 3 9 8 ( 1 8 2 2 ) ; M i l n e v . G r a t r i x , 7 E a s t 607 ( 1 8 0 6 ) : " [ I ] t i s . . . c l e a r that before the s t a t u t e of W i l l i a m [Arbitration A c t , 1698] s u b m i s s i o n t o a r b i t r a t i o n might be r e v o k e d b e f o r e it was e x e c u t e d , and t h e r e i s nothing in that s t a t u t e t o make it irrevocable while it continues executory....Then if before any a w a r d i s made o n e o f t h e p a r t i e s h a v e r e v o k e d t h e a u t h o r i t y o f t h e arbitrators, t h e y c a n n o t make a n y a w a r d t o b i n d h i m . . . . t h e award i t s e l f i s a n u l l i t y and c o u l d n o t be e n f o r c e d . " 3 2 4  a  3 2 5  3,4,  Wm.IV,  c.42. 95  stated:  "when  nothing  In  a  which  text  the can  submission be  published  made  in  a  has  rule  1845,  been  of  the  Samuel  revoked, court."  Warren  there  remains  3 2 6  wrote:  " T h e C o u r t s o f Common Law e n t e r t a i n a s a l u t a r y j e a l o u s y on the subject of interference with their jurisdiction. 'Nothing,' said Lord Mansfield, ' b u t E X P R E S S N E G A T I V E WORDS [ i n a s t a t u t e ] s h a l l t a k e away t h e j u r i s d i c t i o n o f t h e C o u r t s o f Common L a w . . . . N o r w i l l t h e c o u r t s o f e i t h e r L a w o r E q u i t y a l l o w t h e m s e l v e s t o be o u s t e d o f t h e i r j u r i s d i c t i o n , by any agreement of the parties to refer a disputed matter to arbitration. A Court of Equity w i l l not enforce performance of s u c h an agreement, n o r a C o u r t o f Law a l l o w it to be p l e a d e d i n b a r o f an a c t i o n . Courts of J u s t i c e are presumed t o be b e t t e r c a p a b l e of a d m i n i s t e r i n g and e n f o r c i n g t h e r e a l r i g h t s o f t h e p a r t i e s , t h a n any mere p r i v a t e a r b i t r a t o r s , as w e l l f r o m t h e i r s u p e r i o r k n o w l e d g e , as t h e i r s u p e r i o r means of s i f t i n g the controversy to the very bottom." 3 2 7  Rene of  David making  impractical court  1. A  since  important  ,  which  defiance  3 2 6  the  it 3 2 8  system,  of  a  Aston  necessitated  agreements  frustrated  orders  the p a r t i e s '  by  of  Vynior's the  intention  Case,  court of  was  avoiding  .  COMMON LAW PROCEDURE  more 3 2 9  that  arbitration  proceedings  THE  18 5 4  wrote  reform  allowed  (Ashton)  was  the  submission  v.  ACT,  or  1854.  the  court in  Common to  stay  defiance  George  2 B.&  of  Aid.  Law an  Procedure action  Act  of  brought  in  an agreement  395  (1819);  to  submit  Cohen  126.  Samuel Warren, A P o p u l a r a n d P r a c t i c a l I n t r o d u c t i o n t o Law S t u d i e s e t c . , 2nd, e d . , ( 1 8 4 5 ) , 519, 520, c i t i n g The K i n g v . A b b o t t , 2 Doug. 555(n); Street v. Rigby, 6 Ves. 815-8; Thompson v. Charnock, 8 T.R.139; Cleworth v. Pickford, 7 M.& W. 3 2 1 ; a n d 1 Stor. Eq. Jur. 547. 3 2 7  3 2 8  herein 3 2 9  Rene D a v i d , A r b i t r a t i o n as " D a v i d " ] . The  Common Law P r o c e d u r e  in  International  Act, 96  1854,  17  Trade,110  & 18 V i c t ,  [cited  c.125.  future  disputes  appoint to to  to  arbitration  arbitrators  do s o , act  or  if  the  (s.12).  account  to  and  (s.ll).  umpires  arbitrators  The  Act  arbitration  if or  the  parties  was e m p o w e r e d failed  judges  However,  to  the  refer Act  c o n t i n u i n g t h e movement t o p u t  firmly  of  court  could direct  fact  to  be  decided  arbitrations, arbitrator of the  court  of  case  to  arbitration grant  "if  could  a stated  a  that  by  state  order  a  agreement stay;  a case  it  for  the  the courts. be s t a t e d  the  judge  is  not  his  award  the  of  left stay  or  jury  any  or of  to  any the  action  part court  of  conditional  of  the  law  or all  contrary,"  the  (s.5). in  the  In  thereof  upon  of  account,  in The  the  the  form  power  defiance  the court w i t h wide d i s c r e t i o n was  unable  arbitration  (s.4).  the  brought  or  matters  on any q u e s t i o n  provided  opinion  stay  In matters  to  refused  introduced  "stated case" procedure, under the c o n t r o l  or  umpire were u n w i l l i n g  empowered  (s.3).  The c o u r t  to  as t o  of an the  court  " b e i n g s a t i s f i e d t h a t no s u f f i c i e n t r e a s o n e x i s t s why s u c h m a t t e r s cannot o r ought not t o be r e f e r r e d t o arbitration a c c o r d i n g t o s u c h a g r e e m e n t . . . and t h a t t h e d e f e n d a n t was a t the time of b r i n g i n g the a c t i o n or s u i t and s t i l l is ready and w i l l i n g t o j o i n and c o n c u r i n a l l acts necessary and proper for causing such matters to be decided by arbitration...[the c o u r t m a y ] make a r u l e o r o r d e r staying a l l p r o c e e d i n g s . . . on s u c h terms as t o c o s t s o r o t h e r w i s e as t o s u c h c o u r t o r j u d g e may s e e m f i t . " (s.ll) 3 3 0  As w i l l  be d i s c u s s e d  opportunity upon  below,  this  language  p r o v i d e d more t h a n  f o r the c o u r t s to r e f u s e to honour a r b i t r a t i o n  unconvincing  ample  clauses,  grounds.  T h e Common Law P r o c e d u r e A c t , 1 8 5 4 , 17 & 18 V i c t , c.125. I m u s t comment t h a t t h e l a n g u a g e o f t h e 1698 A c t i s a m o d e l of c l a r i t y c o m p a r e d t o t h e V i c t o r i a n c i r c u m l o c u t i o n w h i c h i s t h e 1854 Act. 3 3 0  97  Ever  since  have  celebrated  in  favour  the  of  1854 Common Law P r o c e d u r e A c t , their  powers  arbitration  will  be  shown  by  the  law  from  1889  to  1979.  2.  THE ARBITRATION  The by  common l a w any  18 8 9  3 3 1  1889  party  .  The  Act.  arbitrator  Acts  could  require  court  to  did  award of  the  reasons,  and  in if  away  on A r b i t r a t i o n  own v o l i t i o n  procedure  arbitrator  England  over  stays  of  Actions  of  of  of by  the  were was  state  a  case,  on any p o i n t  of  law  arising  inherent error  England  power of  has  parties  thus  so  the  court  to  law  on  its  face.  been  to  present  an  reasons,  to  3 3 3  Act, in  the  that  and  the  the court  enabling  on t h e  of  request  agreements  Arbitration  expanded  (s.19),  the  as  arbitration  consolidated  so  of  clauses,  arbitration  do  the  forum  English  to  ground  arbitrators  swept  of  the  impair  revocation  case  his  of  choice  discussion  stated  adjudicate  not on  allowing  earlier The  and  judges  1889.  finally  could  It  clauses  was  3 3 2  discretion  following  ACT,  rule  of  the  the  reference.  set The award  aside  an  response without  provide  them  Arbitration Act 1889, "An Act for amending and c o n s o l i d a t i n g the Enactments r e l a t i n g to A r b i t r a t i o n , " 52 & 53 Vict. c.49. S e c t i o n 1 p r o v i d e d : "A s u b m i s s i o n , u n l e s s a c o n t r a r y i n t e n t i o n i s e x p r e s s e d t h e r e i n , s h a l l be i r r e v o c a b l e , e x c e p t w i t h l e a v e o f t h e C o u r t o r a j u d g e , a n d s h a l l h a v e t h e same e f f e c t in a l l r e s p e c t s a s i f i t h a d b e e n made a n o r d e r o f Court." 3 3 1  Arbitration Act, 1889, "An Act for amending c o n s o l i d a t i n g the Enactments r e l a t i n g to A r b i t r a t i o n " , 52 V i c t , c.49 (1889). 3 3 2  &  and 53  L o r d P a r k e r o f Waddington, The H i s t o r y and Development o f Commercial A r b i t r a t i o n , Recent Developments in the Supervisory Powers o f t h e C o u r t s Over I n f e r i o r T r i b u n a l s , (1959), 19,20. 3 3 3  98  separately part  The  of  the  1889  court  from the  The  the  any  but  Court  special  action  Act,  of  Appeal  case  -  arbitration  to  in  party,  not  Act  1889 Act,  lay  as  completed  court  just  the  of  to  the  supervision.  of  an  apply  the  right  of  a  Supreme  from  legislative  as  the  stay.  Court  any  order  3 3 5  of  an a p p e a l  to  on  subordination  Holdsworth  the  arbitration  for  that  form  3 3 4  Defendant,  which provided  matter  do n o t  discretion  the  with  they  practice.  defiance  perhaps  1894, a  to  stipulated,  -  that  this  as  brought  any  (Procedure)  tolerate  provision  Procedure  Arbitration  a stipulation  courts  the  allowed  Common L a w  Judicature  The  continued  stay  agreement, 1854  award.  Act  to  award w i t h  a of  wrote:  "the s t a t u t o r y reforms i n the law of a r b i t r a t i o n , and the e x t e n s i o n of the system of a r b i t r a t i o n , have r e s u l t e d i n the c r e a t i o n and e x e r c i s e of a j u d i c i a l c o n t r o l over a r b i t r a t o r s and a r b i t r a t i o n s , w h i c h , t h o u g h n o t q u i t e t h e same a s , is analogous t o the c o n t r o l the c o u r t s have, from the earliest days of the common law, exercised over all subordinate jurisdictions." 3 3 6  In  1978,  the  released.  Commercial  Court  Committee  Report  reported,  inter  alia,  most  It  the philosophy accept  its  been the  that the p a r t i e s ,  decisions  approach  David,  of  all  the  law of  Act,  1889,  systems  having chosen t h e i r  its  faults,  England  or  but of  that some  of  law  tribunal, this  has  systems  111.  Arbitration 14  with  that  on A r b i t r a t i o n  Holdsworth,  52  198. 99  & 53 V i c t o r i a  c.49,  s.4.  was  adopt must never  derived  from  English  namely by  a  the  law  motion  reference  stated case. aside  any  from  3 3 7  .  English  to  to  set  the  documents  High  the  law  agreement order  that  case  -  to  discretion, its  1889  3 3 7  3 3 8  This  the  not  an  his  Schmidt  award have  fact  or  in  the  statutory  & Co.  form  the It  to  the  to  set  itself  or  noted  arbitration  to  obtain  form of be  a  even  allowed  the  in  cases  discussed  parties  to  jurisdiction  involving  an  stated  1 9 7 9 , d i d away w i t h t h e s t a t e d c a s e and  a  arbitrator  an  will  and of  further  right  As  3 3 8  face  award  law.  in  review,  its  the  that  parties  award  on  of  jurisdiction  from  ousting the c o u r t ' s  not  forms  error  award  permit  their  state  Roth,  discretion under to  S.ll  as of  to the  arbitration  interpreted  admiralty,  whether  Common Law  agreements  the  to  grant  ever  provision  decision  is  [1922]  in  contrary 2 K.B. v.  Joplin  v.  to  law as  478,  the  a  and  enter  to  give  commodity  stay  Procedure since  as  and were v e r y m i s e r l y w i t h s t a y s .  Joplin 629.  3 3 9  but  for  appears  in  two  insurance.  vexed p a r t i e s courts  it  of  agreements  or  court's  N.S.,  out  appeals,  appeal,  proceedings  in  v.  limited  contracts,  The  does  arbitrator  exclusion  leave  if  the A r b i t r a t i o n Act,  severely  The  contract  the  of  c o n c l u s i o n of  England  Czarnikow  later,  into  to  an award  Court  incorporated  of  provides  law the c o u r t s  award,  r e a c h e d some e r r o n e o u s that  aside  Under E n g l i s h  arbitral  law  Act, it  The C o u r t 3 3 9  ,  court  1854  was  giving  Postlethwaite  of  has  enacted.  unfettered of  dealt  found and d i s c u s s e d ,  Appeal, with  an  supra.  (CA. ) .  Postlethwaite,  100  ( 1890)  The  Law  Times,  Vol.61,  application winding basis  to  up  of  that  a  the  differences  dissolved." opinion,  to  adding:  a very  staying  the  great  "By  all  that  not  referred  to  Thus  be  the  in  court  11  there  is  to  is  cases  in  "even form  of  the  of  the  the  an a c t i o n , . . . i t  must,  any  one  of  displayed  arbitration,  numerous a  stay  virtually  identical  Walmsley  v.  3 4 0  3 4 1  3 4 2  White  of  a  strong  matters the  facts, 3 4 2  ,  p.632,  c o l . 1.  Id.,  p.632,  col.2.  v.  I  bias  in  action the  White,  against  issue would  Court  [1892] 101  of  doubt  for  the  should  be  of  the  same Act  of  in  regard  He t h e n  quoted  makes  in  each  an  order  case,  be  ought  1 1 3 4 1  emphasizing  Id.,  Walmsley  does,  no s u c h m a t t e r t o be d e t e r m i n e d w h i c h arbitration.  to  issue  court  court  all  almost  Procedure  present."  the apparently u n f e t t e r e d d i s c r e t i o n of r e f u s a l , if  the  as  upon t h e  before  the  that  tribunal  Common L a w  on  clause  it  himself  the  referred  partnership  conferred like  if  and  made  be  whether  the  "Therefore  proceedings  but  good  to  arbitration  expressed  discretion  satisfied  a  was  provided  were  doubted  whether  sect.  and added:  he  be  accounting  application  the  clause,  L.J.  proceedings  section,  staying  the  would  Bowen  3 4 0  final  partnership  treated  that  determining  a  partnership  L.J.,  came w i t h i n  of  the  the  stating  for  which  of  to  arbitration  purpose  1854  partnership,  Cotton,  dissolution  action  articles  contempt,  whether  an  related  arbitration. with  stay  67  of the  L.T.  was be  stays,  and i n d i c a t e d  not  seen  refused.  Appeal  indicating  as In  upheld  discretionary  433.  a  that  fit  for  1892,  on  stay  in  (if  not  capricious) to  the  nature  of  grant  of  a  An a g r e e m e n t  to  submit  constitute Act,  18 5 4  the  a  same  applications  have of  For  some  of  Appeal  dealt  with  as  according  to  to  difference  the  court  documents contract  its  of  permit  parties...  it  agreement." of  the  their  kind,  it,  to  discretion  but  Arbitration of  in  of  Cap  Bill  Lading  the  were  of  Germany  that  "In  must  the  & Co.  forum c l a u s e s  to  as  be  the  if  law  was  England,  commercial  terms  of  the  agreement  of  the  of  the  and  plaintiffs  to  their  Gruban,  Eve,  J . ,  often  any  Hamburg  there  of  to  Court  that in  with the  forum  The  whether  dealing  given,  ,  stated  intention  v. are  and  to  appeared  decided  into  Thus  3 4 4  applied  3 4 5  to  Procedure  foreign  Blanco  be  held  1889 .  clause  which  inquiring  obvious  hold  The  was  court  favour  In  law  Act,  the  courts. of  court  Common L a w  forum  effect  Kirchner  the  discretion  ruled  to  of  foreign  the  In  foreign  the  Without  right  a foreign  s.ll  interpretation  is  consideration,  of  these  a  roundly  this  to  proceedings  between  quite  of  and  German l a w .  any  under  years,  approval  disputes  disputes  s.4  stay  the  choice  all  under  to  exercise  stay.  considerations  clauses.  courts'  "submission" and  3 4 3  the  entered  part  stated  into without  that due  nonetheless,  "prima f a c i e it i s an agreement by which the p a r t i e s are b o u n d a n d u p o n w h i c h t h e C o u r t m u s t a c t , u n l e s s f o r some g o o d c a u s e t h e r e i s r e a s o n t o t h i n k t h a t t h e m a t t e r o u g h t t o be determined otherwise than by the tribunal to which the  3 4 3  3 4 4  Society, 3 4 5  Law  v.  Garrett,  (1878)  8 Ch.  D.,  A u s t r i a n L l o y d Steamship Co. v. L t d . , [ 1 9 0 3 ] 1 K . B . 249 ( C . A . ) . The  Cap  Blanco,  [1913]  P. 102  130.  26. Gresham  Life  Assurance  parties have differences. "  deliberately  agreed  to  submit  high  water  their  3 4 6  The  era  court  The  these  respect  jealousy  itself a  of  for  of  of  court  clause  Appeal  Bristol  v.  grounds  in  of  the  favour  for  of  contract.  A  allow  the  as  witness,  in  the  facts  Kirchner Bristol The  and  held  & Co. v.  v.  Aird,  Athenee,  and  had  upheld reasons  and  done  and  ruling  that  of the  the  of  parties  [1913] LI.  [1909]  A . C , L. 103  to  and  the  would  241.  Rep.  earlier  1 Ch.  6.  bargain  413  S.4 on  of the  at  owing  amounts  refusal of  be  arbitrator  their  stay  amounts  a  stay  would To  decisions in  of  improper  own c e r t i f i c a t i o n s .  contract  Gruban.  [1922]  his  the  arbitrator  granting  it  to  stay  courts'  the  ,  construction  over  lower  from  foreign  to  the  the  t o p r o c e e d where the judge  for  advantage.  the  to  3 4 7  a  court  since  arisen  that  Aird  pursuant  resisted  the  v.  the  clause,  work  language  juridical  to  parties  certify  dispute  their  wording  which  the  to  mark  reasserted  overrode  3 4 8  arbitrator,  of  Lords  arbitration  clear  Athenee  application  the  matter,  counsel,  The  Bristol  The P l a i n t i f f  duty  to  similar  an  Adopting  case,  convenience  one  of  jurisdiction  cases.  an a r b i t r a t i o n  bias  emphasising  their  later  case  of  1889.  The House  over  1922  the  clauses.  arbitration  of  Act,  marks  forum  the  basis  discretionary  around  in  who h a d t h e  certified. stay,  of  Courts  the  apparent  the  perhaps  involved  engineer  contract, under  in  on t h e  the A r b i t r a t i o n  a  the  Aird  litigation  was  choice  construction  Court  a  cases  w i t h a vengeance  domestic  was  two  spite  419.  act get on of  what  we  House  would  of  Lords  disingenuous of  the  judicial parties the  today  in  as  Bristol  fiction:  parties'  that  gross v.  Aird  by  contract,  conflicts  introduced  failing  the  of  to  court  a  follow  was  interest  ,  the  convenient  but  the  plain  upholding  3 4 9  wording  it.  This  s l e i g h t - o f - h a n d was a c c o m p l i s h e d b y t h e r e a s o n i n g t h a t must  court  Moulton  see  have  the  understood  discretion  stated  the  that  to  English  over-ride  law would  their  apply  contract.  the  to  give  As  Lord  proposition:  " . . . i t must be remembered t h a t t h e s e a r b i t r a t i o n c l a u s e s must be taken to have been inserted with due regard to the existing law of the land, and the law of the land as applicable t o them i s , as I have s a i d , that it does not p r e v e n t the p a r t i e s coming to the C o u r t , but o n l y g i v e s the C o u r t t h e power t o r e f u s e i t s assistance in proper cases. T h e r e f o r e t o s a y t h a t i f we r e f u s e t o s t a y a n a c t i o n we a r e not c a r r y i n g out the b a r g a i n between the p a r t i e s does not f a i r l y d e s c r i b e t h e p o s i t i o n . We a r e c a r r y i n g o u t t h e b a r g a i n between the p a r t i e s , because t h a t b a r g a i n to s u b s t i t u t e for t h e C o u r t s o f t h e l a n d a d o m e s t i c t r i b u n a l was a b a r g a i n i n t o w h i c h was w r i t t e n , b v r e a s o n o f t h e e x i s t i n g l e g i s l a t i o n , the c o n d i t i o n t h a t s h o u l d o n l y be e n f o r c e d i f t h e C o u r t thought i t a p r o p e r case f o r i t s b e i n g so e n f o r c e d . 3 5 0  Thus  the  House  of  clauses,  stating  contract  should  holding  the  Lords in  be  evinced  effect stood  parties  to  a  that on  the  its  their  clear  bias  against  parties'  head.  It  bargain  arbitration  agreement was  unless  not some  a  in  their  matter  of  over-riding  14 H o l d s w o r t h , 2 0 0 : " t i l l t h e s t a t u t e o f 1 6 9 8 , a common l a w court could not set aside an award f o r the misconduct of the arbitrators. The r e a s o n f o r t h i s r e f u s a l o f t h e c o u r t s t o g i v e a r e m e d y i n s u c h a c a s e was seems t o h a v e b e e n t h a t , a s t h e p a r t i e s c h o s e t h e i r j u d g e s , t h e y must p u t up w i t h t h e i r d e f e c t s . - M o r r i s v . R e y n o l d s ( 1 7 0 3 ) 2 L d . R a y m . 857 p e r H o l t , C . J . - . . . a n a w a r d b y an a r b i t r a t o r i n t e r e s t e d i n t h e r e s u l t o f t h e a w a r d was valid, p r o v i d e d he had n o t k e p t h i s i n t e r e s t s e c r e t . " (emphasis added) Matthew v . O l l e r t o n (1694) 4 Mod. 226, E a r l v . S t o c k e r (1691) 2 V e r n . 2 5 1 ; Kemp v . R o s e ( 1 8 5 8 ) 1 G i f f . 264-5 p e r S t u a r t V . - C . 3 4 9  3 5 0  Lord  Moulton,  [1913]  A.C. 104  257  (emphasis  added).  requirement unjust  to  bargain: to  of  enforce  or  the  public  contract,  policy the  could  gives  advantage  the  of  cases."  before Court  the  An  the  Courts  the  power t o  full  arbitration  Court  thought  House  thus  made  prima  facie  the  Court  had  to  it  a a  clause  proper  case  persuaded  that  A s t o a l l o w i n g some i s s u e s litigated,  Lord  Parker  arbitrations  matters  fact,  questions  of  the  while  the  its  law  in  "should  only  be  being  so  shift  to  it  to  be  the  from  upheld  should  the  be  bias  of  mere m a t t e r s  removing  construction  of  make  the of  assistance  process  its  of  Courts)  to  from  land  (i.e. in  the  proper if  the The  position  one  in  courts  account  arbitral  contracts,  the  that  which  the  upheld.  the of  the  enforced."  the  it  parties  enforced  t o be r e f e r r e d t o a r b i t r a t i o n  evinced  restricting of  refuse  for  deserved  shown t o  the access  England,  none-too-subtle  bargain  be  of  litigation  be  l a w w a s now s h a d e d a g a i n s t  such a b a r g a i n does not d i m i n i s h  litigation  "only  justice  in and  and  others  favour  of  technical  jurisdiction  all  stating:  " E v e r y b o d y knows t h a t w i t h r e g a r d t o t h e c o n s t r u c t i o n o f a n agreement it is absolutely useless to stay the action, b e c a u s e i t w i l l o n l y come b a c k t o t h e C o u r t a s a c a s e s t a t e d ; t h e r e f o r e i t i s more c o n v e n i e n t on a q u e s t i o n o f c o n s t r u c t i o n t o a l l o w t h e a c t i o n t o p r o c e e d ; a n d a t t h e same t i m e with regard to accounts and matters of detail to allow the a r b i t r a t i o n to proceed." 3 5 1  Predictably, language for  of  one m i g h t s a y , Lord  arbitration  1  Lord  later  Moulton  in  clauses  was  Parker  of  decisions  Bristol shown  Waddington, 105  v.  p i c k e d up on t h e  Aird  often  [1913]  in  and the  A.C.  judicial breach.  262.  florid respect -  The  Athenee grafted defeat  3 5 2  ,  The  Fehmarn  on more of  a  3 5 3  .  Eleftheria  and more q u a l i f i c a t i o n s  foreign  jurisdiction  i n The E l e f t h e r i a ,  Brandon,  the  follows:  principles  The  as  J . ,  or  3 5 4  ,  etc.-  which  could  arbitration  The  courts  result  clause.  reviewed the a u t h o r i t i e s  In and  in  the  1970, listed  "(1) Where Plaintiffs sue in England in breach of an agreement to refer disputes to a foreign court, and the Defendants apply for a stay, the E n g l i s h c o u r t , assuming the c l a i m t o be o t h e r w i s e w i t h i n i t s j u r i s d i c t i o n , i s not bound t o g r a n t a s t a y b u t has a d i s c r e t i o n w h e t h e r t o do so o r n o t . (2) The d i s c r e t i o n s h o u l d be e x e r c i s e d b y g r a n t i n g a stay unless strong cause for not doing so i s shown. (3) The burden of proving such strong cause i s for the Plaintiff. (4) I n e x e r c i s i n g i t s d i s c r e t i o n t h e c o u r t s h o u l d t a k e into account a l l the circumstances of the p a r t i c u l a r c a s e . (5) In particular, but without prejudice to (4), the following m a t t e r s , w h e r e t h e y a r i s e , may p r o p e r l y b e r e g a r d e d : (a) In what c o u n t r y t h e e v i d e n c e on t h e i s s u e s o f f a c t i s situated, o r more r e a d i l y available, and t h e e f f e c t of that on the relative convenience and expense of trial as between the English and f o r e i g n courts. (b) Whether the law of the foreign court applies, and i f so, whether i t d i f f e r s from E n g l i s h law i n any m a t e r i a l r e s p e c t s . (c) W i t h what c o u n t r y e i t h e r p a r t y i s c o n n e c t e d , a n d how c l o s e l y . (d) W h e t h e r t h e Defendants genuinely desire t r i a l i n the foreign country, or are only seeking procedural advantages. (e) Whether the Plaintiffs would be prejudiced by having to sue in the f o r e i g n c o u r t b e c a u s e t h e y w o u l d : ( i ) be d e p r i v e d o f s e c u r i t y for their claim; (ii) be u n a b l e to enforce any judgment obtained; (iii) be f a c e d w i t h a t i m e - b a r n o t a p p l i c a b l e in England: or (iv) for p o l i t i c a l , racial, religious or other r e a s o n s be u n l i k e l y t o g e t a f a i r t r i a l " 3  Later,  the  judge  [1922]  stated:  Ll.L.R.  6.  The  Fehmarn.  The  Eleftheria.  [1970]  P.  94,  [1958]  at  Ll.L.R.  [1970]  P.94.  99. 106  551.  5  5  "I t h i n k t h a t i t i s e s s e n t i a l t h a t the c o u r t s h o u l d g i v e full weight to the prima f a c i e d e s i r a b i l i t y of h o l d i n g Plaintiffs to their agreement." 3 5 6  And  s t i l l  later:  "...in general, and o t h e r things being equal, it is more s a t i s f a c t o r y f o r t h e law of a f o r e i g n c o u n t r y t o be d e c i d e d by the c o u r t s of t h a t country." 3 5 7  There is  is  a strong bias  placed  upon  Plaintiff, regard  who  is  e v i d e n c e d by the above  the is  had t o  advantages  in  the  breach  of  or  to uphold the bargain.  shown  the  other bias is  at  is  no  assumption  exists  least  the  requirement other  Michael  Sturley,  Bill in  of  1992,  Lading stated  court.  conclusion  356  3 5 7  of  that  than  The E l e f t h e r i a the  in England, equal  England  giving choice that  the of  the  show t h a t  the  Id.,  103.  Id.,  105.  Plaintiff to  results  cases  in  have  any  should  ,  3 5 8  the  measure can  study  of just  be  in  of  107  no  chauvinism or  there  world.  There  connection  with  barristers.  into  case  article  discretion easily  conducted  in  law  on  published set  out  in  remains  for  produce  the  England  Michael F. Sturley, "Bill of Lading Choice of C l a u s e s : Comparisons Between U n i t e d S t a t e s and E n g l i s h Law," 2 L.M.C.L.Q. 248. 3 5 8  the  Defendant  justice  principles  as  to  religious,  the  English  a  clauses  balancing  litigation  else  of  emphasis  almost  the  a strong  cultural,  hire  applying  a large  of  the q u a l i t y  anywhere  forum  also  legal,  and t h a t  a willingness  while  disadvantages is  Great  disadvantages  agreement,  There no  that the  Discretionary that  that  and  the  advantages  who s e e k s in  of  list.  as  Forum [1992]  that  the  Vishna the  choice  Prabha  3 5 9  f o r u m was  sole  motive  payment  of  of ,  the  the  in the  forum  should  one  factor  court's  raising  honoured.  against  subjective  the  claim.  be  He  choice  For  the  belief  of  example,  choice that  forum  of  the  clause  in  The  India  as  defendant's  was  to  delay  states:  "Thus the t r i a l c o u r t can u s u a l l y j u s t i f y w h i c h e v e r result it prefers. A s e a c h c a s e t u r n s o n i t s own f a c t s , a n d a s t h e general p r i n c i p l e s leave considerable d i s c r e t i o n to the t r i a l judge, it is hardly surprising that there is little consistency in this area. The r e p o r t e d c a s e s s u g g e s t t h a t an E n g l i s h c o u r t i s about as l i k e l y t o r e t a i n t h e c a s e as to g i v e e f f e c t t o the c h o i c e of forum c l a u s e . " The p r i n c i p l e s to  set  applications  court  clauses  out  to  or  i n The E l e f t h e r i a  stay,  on  the  whether basis  on t h e  of  E n g l a n d was s t u n g b y c r i t i c i s m o f English courts procedure, the  Court  errors  of  resulting  3 5 9  by of  in arbitration appeals  Appeal  fact  or  delays  [ 1979]  and  law and  (often the  2 Ll.L.R.  286  basis  of  arbitration  all  the  House on  of  b y way o f  Lords), face in  by of  what  generally of  of  the stated  the  trial  setting the  is  foreign  3 6 0  interference  way t h r o u g h  the  incurred  choice  clauses.  the excessive  proceedings  apparent expense  were a p p l i c a b l e  intended  case  court,  aside  award,  the  and to  for the be  a  (Q.B.).  Law v . G a r r e t t ( 1 8 7 8 ) 8 C h . D. 2 6 ; A u s t r i a n L l o y d S t e a m s h i p Co. v. Gresham L i f e A s s u r a n c e S o c i e t y L t d . [ 1903] 1 K.B. 249; K i r c h n e r v . G r u b a n [1909] 1 C h . 4 1 3 , 4 1 9 ; The Cap B l a n c o [1913] P. 130; The Athenee [1922] Ll.L.L.Rep. 6; The Fehmarn [1957] 2 Ll.L.L.Rep. 5 5 1 ; Where t h e r e i s a w r i t t e n a g r e e m e n t t o s u b m i t a dispute to a foreign court, "the d i s c r e t i o n to stay i s exercised o n t h e same l i n e s as where t h e r e i s an a r b i t r a t i o n c l a u s e . " R u s s e l l o n t h e Law o f A r b i t r a t i o n 184 ( 2 0 t h e d . , 1982). 3 6 0  108  procedure also  for  noted  settling  that  these  business  in  England,  in  to  be  1978  writer it  has  be  arbitration or  which  in  on  Act  set  parties leave  or  by  unless  substantially  s.2  course  of  to  of  of  the  remit  leave it  the  some  to  the  award.  the  the that  the  loss  national  per  It  was  arbitration estimated  year  .  3 6 2  One  practitioners  a stated  to  case  for  an  that  conduct  procedure,  error  of  law  3 6 3  the  Committee  Arbitration  case procedure, for  errors  right  court, the  of  to but  of  the  one  (s.l).  fact  The points  arbitration  upon  with  law  more court of the  not  to  concerned of  the  has  law  3 6 4  .  jurisdiction  consent  is  on  1979  law on t h e  court  of  or  or  Report  Act,  and the  appeal  question  preliminary to  Court  C o m m e r c i a l C o u r t Committee R e p o r t on D o n a l d s o n C o m m i t t e e R e p o r t " ) 6 , 7 , Cmnd.  362  of  negligence  aside  .  3 6 1  economy  Pounds  for  set  in  rights  agreement."  references  the  American  Commercial  a limited  determine  privately  1979  awards  of  be  3 6 1  ("The  to  professional  stated  finds  affect  arbitration  under  of  awards  ACT,  these with  or  of  to  and  Million  implemented  abolished  replacing  the  face  were  aside  opinion  for  recommendations  This  500  led  a forum which p r o v i d e d  the  Arbitration  losses as  act  THE ARBITRATION  The  to  high  an  quickly  problems  with  the  provided  apparent 3.  as  noted  would  disputes  face, of  all  grant "could  parties  to  jurisdiction  arising  application  Arbitration, 7284.  in  the of  a  1978,  Id.  W i l l i a m T. Graham, " I n t e r n a t i o n a l Commercial A r b i t r a t i o n : The D e v e l o p i n g C a n a d i a n P r o f i l e " , i n U n c i t r a l A r b i t r a t i o n Model i n C a n a d a , ( 1 9 8 7 ) , R o b e r t K. P a t e r s o n a n d B o n i t a J . T h o m p s o n , E d s . 3 6 3  364  U.K.  Statutes,  1979,  c.42. 109  party,  but  consent finds  only with the  arbitrator  that  the  determination  in  right  to  leave  of  general  substantial appeal the  3  excludes the  agreements with  commodity  the  of  agreement  in  unless  it  other  than  grounds  a  the  English  advanced  the of  to  provides of  Welsh  justify  exclusion  Wales.  or to  was the  be  have  been  is  or  governed  bv  an  exclusion  ineffective,  provision, severely  or  award  governed by a system of This  that  entered  it  3 6 5  and  However,  of  is  an  insurance,  Thus  Lading  into  arbitrations  agreement  expressed or  to  of  reason."  provides  of  arbitration,  one  Bill  law.  it,  respect  contracts  England  that  s.4  with  appeal  s.2.  to  limited  is  enter of  Court  only  special  under  community, with  the  or  law  A  law  rights  the  likely  but  to  by  High  is  of  arbitration  a contract  of  s.2(3),  all  if  parties.  question  of  the  law  "some o t h e r  effect  charterparty  expressly  an  claims,  to  law  is  or,  if  of  the  by  excludes  no  unless  to  the  commercial  have  relates  than  to  only  question  questions  commencement  law  other  the  if  there  parties,  alone,  provided  which  maritime  contracts,  after  question  of  or  the  costs  only  of  all  the  in  parties  agreement"  concerned  law  the  misfortune  of  is  and  determinations  exclusion  a  Court  of  umpire  savings  importance  allows  "exclusion  or  therefrom  High  public  Section  into  consent  of  result  to  the  and  law the  criticised  3 6 6  D i c e y & M o r r i s , T h e C o n f l i c t o f Laws 550 ( 1 1 t h e d . , 1987, L . C o l l i n s , E d . ) . T h i s seems t o be b o r n o f t h e r a t h e r positivist E n g l i s h n o t i o n , r e f l e c t e d i n the Report of the Commercial Court Committee on A r b i t r a t i o n ("The Donaldson Committee R e p o r t " ) Cmnd. 7284, t h a