International Commercial Arbitration Guide

I. Introduction
II. Reasons for Choosing Arbitration
III. Institutional vs. Ad Hoc
IV. State vs. Private Parties
V. Specialized vs. General Purpose Institutions
VI. Major General Purpose Institutions
VII. Print Resources
VIII. Online Resources
IX. Lexis, Westlaw, and Subscription Database Resources
X. Arbitral Awards
XI. Arbitration Rules
XII. National Arbitration Statutes


I. Introduction

International commercial arbitration (ICA) is the binding resolution of the merits of business disputes between or among transnational actors through the use of one or more arbitrators rather than the courts. 

II. Reasons for Choosing Arbitration

The use of ICA has grown for several reasons. One or more parties may distrust a foreign legal system or wish to avoid long delays in the court systems. They may desire resolution of the dispute by someone with expertise in their business. They may wish to exercise more control by specifying the rules that will govern the dispute. They may also wish to avoid the current problem of the lack of internationally recognized standards on the enforceability of foreign judgments. There is a proposed Hague Convention on Jurisdiction, Recognition and Enforcement of Judgments in Civil and Commercial Matters, but a number of issues remain unresolved in negotiations. For the European Union member countries, this has been already addressed through Council Regulation (EC) No. 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.

III. Institutional vs. Ad Hoc

There are essentially two kinds of arbitration, ad hoc or institutional. Institutional arbitrations are entrusted to one of the major arbitration institutions to handle, while ad hoc arbitrations are conducted independently and without such an organization, according to the rules specified by the parties and their attorneys.  

IV. State vs. Private Parties

Arbitrations may also be differentiated by those that involve states as a party, and those that do not. Special institutions are available for arbitrations in which states are a party. The Permanent Court of Arbitration [Documents Website at Cornell ]in the Hague was formed to handle arbitrations exclusively involving states, but since 1992 has broadened its mandate to include disputes involving states and private parties, as well as disputes involving international organizations. The International Center for the Settlement of Investment Disputes (ICSID) is concerned with disputes between a state and its foreign investors.

V. Specialized vs. General Purpose Institutions

A number of arbitral mechanisms address arbitrations in a particular industry or concerning a particular topic. An example of industry-specific arbitration is the set of the special rules governing construction industry disputes by the American Arbitration Association . The World Intellectual Property Organization (WIPO) Arbitration and Mediation Center and the Court of Arbitration for Sport are examples of topic-specific dispute resolution.

VI. Major General Purpose Institutions

Major international commercial arbitration organizations with years of experience include the International Chamber of Commerce (ICC) in Paris, the London Court of International Arbitration (LCIA), and the American Arbitration Association (AAA). The Vienna International Arbitral Centre (VIAC) has gained a reputation for arbitrating disputes involving parties from Central Europe. Other organizations include the China International Economic and Trade Arbitration Commission (CIETAC), also known as the Arbitration Court of the China Chamber of International Commerce (CCOIC), the Iran-United States Claims Tribunal, and the Cairo Regional Centre for International Commercial Arbitration (CRCICA). Comprehensive listings of arbitration centers are available from Juris International and WWW Virtual Library Arbitration.

Countries may agree to enforce foreign arbitration awards in many ways. Some examples are bilateral agreements, multilateral agreements, and bilateral investment treaties (BITs). 

The widespread adoption of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958), which limits the grounds upon which arbitral awards may be attacked [FN1], has greatly facilitated the growth of arbitration. Most arbitration attorneys limit their clients' venues to states that are a party to the New York Convention. For more information about finding treaties, see the American Society of International Law (ASIL) Guide to Electronic Resources for International Law: Treaties Chapter.

Another important development in the spread of international arbitration was the adoption in 1976 of the United Nations Commission on International Trade Law (UNCITRAL)  arbitration rules, which were intended for parties wishing to arbitrate without the use of an international arbitral institution. The UNCITRAL model law, adopted in 2006, serves as the basis for many countries' arbitration legislation [FN2]. For more information on UNCITRAL, see the ASIL Guide to Electronic Resources for International Law: Private International Law. For more information about researching UN materials, including those of UNCITRAL, see the ASIL Guide to Electronic Resources for International Law: United Nations Chapter.

In another recent trend, many countries have adopted new arbitration laws or amended existing laws to remove impediments to the arbitration process in hopes of attracting more global business. For example, Belgium has a statute shielding international arbitrations decided in Belgium from all judicial interference. Most statutes since 1980 have also included "trade usage" as a permissible source of arbitration law, again in an effort to attract more global business.   

VII. Print Resources

Many valuable print resources exist for beginning ICA research. International Commercial Arbitration by Gary Born is a two-volume set comprising an extensive overview and introduction to ICA as well as containing arbitral awards, articles, and treaties. The Principles and Practice of International Commercial Arbitration by Margaret L. Moses provides ICA practice points such as drafting an arbitration agreement, requesting judicial assistance, and enforcing arbitration awards. The Handbook on International Arbitration and ADR, published by the American Arbitration Association, addresses various longstanding and contemporary ICA issues and covers a wide array of topics. International Commercial Arbitration is a looseleaf containing conventions, arbitral associations, and rules and enactments from selected countries. Several current event publications are available in print form, such as the ICC International Court of Arbitration Bulletin and Mealey's International Arbitration Report, which both regularly publish ICA updates and news. Books on specific aspects of ICA include Evaluation of Damages in International Arbitration, which addresses the difficulties parties face in assessing and calculating the amount of recoverable damages, and Private Dispute Resolution in International Business: Negotiation, Mediation, and Arbitration, a two-volume set putting the reader in the middle of various real-world arbitration disputes, and providing questions and answers for self-evaluation.

Other useful books are Comparison of International Arbitration Rules, which provides a detailed chart comparing the provisions of leading sets of ICA rules, and National Arbitration Laws, which allows a reader to tab a specific country, arbitration court, or institution, and read histories and descriptions of that entity.

VIII. Online Resources

Several valuable databases exist for beginning ICA research. One such Web site is the Electronic Information System for International Law (EISIL) page on International Commercial Arbitration (Dispute Settlement). EISIL includes links to most of the resources already mentioned in this guide in addition to links to several other documents and institutions. EISIL provides a tripartite guide to essential ICA resources: primary documents, Web sites, and research resources. Primary documents include the European Convention on International Commercial Arbitration, the Internataional Centre for Settlement of Investment Disputes (ICSID) Convention, Regulations and Rules, and the UNCITRAL Model Law on International Commercial Arbitration. The Web sites section includes links to case law on UNCITRAL texts, NAFTA documents, and the Permanent Court of Arbitration. EISIL's section on research resources consists of ASIL's Guide to Electronic Resources for International Law: International Commercial Arbitration, the ICSID Bibliography, and LLRX's guide International Commercial Arbitration: Locating the Resources-Revised.

Another excellent resource is the Kluwer Arbitration Blog. The blog provides news and information on ICA written by leading experts from law firms, academia, and ICA institutions. The blog focuses on current and upcoming events, trends, and major arbitration awards.

The Web site Translex.org from the Center for Transnational Law (CENTRAL) at the University of Cologne, Germany is another valuable resource for arbitration research. It contains transnational law principles, making reference to doctrinal writing, arbitral decisions, and national laws. Also, the law firm Mayer Brown offers issue-specific articles on international arbitration that can be searched by geographic region.

A Cornell Law Library Web site, InSITE, provides annotations and links to many free Web sites about ICA.

IX. Lexis, Westlaw, and Subscription Database Resources

Lexis and Westlaw can be extremely helpful in researching ICA. These sites contain many resources on the subject, ranging from directories and newsletters to law review articles and case law. Lexis' Mealey's International Arbitration Report provides in-depth analysis of cases and awards back to 1993 and is updated monthly. Westlaw includes databases of resources for the London Court of International Arbitration, the Chinese International Economic Trade and Arbitration Commission, the Stockholm Chamber of Commerce, and more. Westlaw also has an International Commercial Arbitration Legislation database that includes the arbitration laws of many countries.

To see a list of ICA resources in Lexis, search the Directory of Online Sources. You can also access Lexis' ICA resources by selecting the Legal tab, then Area of Law by Topic, and then International Arbitration.

To view a list of Westlaw's ICA resources, consult the Westlaw Directory and enter International Commercial Arbitration into the Search for a Database box. To access resources while logged into Westlaw, click on Directory, select Topic Practice Areas, then Alternative Dispute Resolution and select an ICA area to search. Alternatively, in Westlaw's Search for a Database box, enter the name of a country followed by the phrase International Arbitration, and Westlaw will retrieve a list of nation-specific databases where available.

A comprehensive list of resources in Lexis and Westlaw is included in Lyonnette Louis-Jacques's guide, International Commercial Arbitration: Resources in Print and Electronic Format, under Legal Databases.

Cornell Law Library's Online Legal Resources-Arbitration provides access to a number of ICA databases available to Cornell Law students, including Arbitration Law Online. Arbitration Law Online has over fifty texts about ICA. The user can compile a list of texts to research. The Cornell Law Library highlights particularly relevant texts on the Online Legal Resources-Arbitration page, such as the Handbook of International Commercial Arbitration, International Arbitration Court Decisions, and The Law and Practice of Arbitration.

Kluwer Arbitration is a subscription Web site available to the Cornell Law community that focuses solely on ICA. Unlike Lexis and Westlaw, Kluwer Arbitration does not force researchers to weed out legal resources on numerous other topics. The site offers a deep pool of resources, including practice tools, journals, and rules and conventions. Kluwer Arbitration also provides electronic access to many valuable print books, including Yearbook: Commercial Arbitration, which provides a comprehensive source of ICA information, and Gary Born's 2009 book, International Commercial Arbitration.

X. Arbitral Awards

Arbitral awards are sometimes available on the issuing institution's Web site, but not always. Several resources compile information about arbitral information. Yearbook: Commercial Arbitration, available in print and online subscription through Kluwer Arbitration, includes arbitral awards for the ICC, the German Arbitration Institute (DIS), and the Netherlands Arbitration Institute (NAI), as well as ad hoc partial awards rendered under UNCITRAL rules. ICC Arbitral Awards 2001-2007, available in print, contains awards already published in the Yearbook: Commercial Arbitration and the Journal du Droit International. Also available in print, Enforcement of Arbitral Awards Against Sovereigns is a practitioner's guide to recovering arbitral awards from sovereign states.

Some online resources provide awards information. Westlaw has a database entitled International Centre for Dispute Resolution-Arbitration Awards (ICDR-ARBAWARD). ICSID provides the full text of selected cases and awards, as well as lists of pending and concluded cases and awards, together with place of publication. Abstracts of awards and decisions concerning the UNCITRAL texts are available through the Case Law on UNCITRAL Texts (CLOUT) database. The index of CLOUT abstracts is a helpful tool that organizes cases according to the article of the Model Arbitration Law to which they pertain.

XI. Arbitration Rules

The following is a non-exhaustive list of ICA rules by institution.

ICSID Convention, Regulations and Rules

ICSID Additional Facility Rules

LCIA Arbitration Rules

ICC Dispute Resolution Rules

UNCITRAL Rules

Permanent Court of Arbitration Rules

AAA International Arbitration Rules

IBA Rules on the Taking of Evidence in International Commercial Arbitration

XII. National Arbitration Statutes

An important component to a successful arbitration is a statute receptive to arbitration in the country where the proceeding is seated. A distinction is often made in a nation's laws between domestic arbitrations, in which states tend to maintain a firmer hand through the court systems, and international arbitration, in which actors engaging in sophisticated commercial transactions are freer to agree upon their own rules. A listing of national arbitration laws is available on the Lex Mercatoria Web site.


by Charlotte L. Bynum
Revised November 2010 by Robert G. Cruz, J.D. '11

FOOTNOTES

FN1 - Under Article V, a court must recognize or enforce the award except in these situations: incapacity of the party; invalidity of the agreement; a party's lack of notice or other inability to present his or her case; an award outside the submission; an improperly constituted tribunal or a procedure which is illegal or outside the parties' agreement; a subject which cannot be arbitrated under national law; and a case in which recognition or enforcement would violate public policy.

FN2 - Australia, Azerbaijan, Bahrain, Belarus, Bermuda, Bulgaria, Canada, Croatia, Cyprus, Egypt, Germany, Greece, Guatemala, Hong Kong Special Administrative Region of China, Hungary, India, Iran, Ireland, Jordan, Kenya, Lithuania, Macao Special Administrative Region of China, Madagascar, Malta, Mexico, New Zealand, Nigeria, Oman, Peru, Republic of Korea, the Russian Federation, Scotland, Singapore, Sri Lanka, Tunisia, Ukraine, Zambia and Zimbabwe.