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The Contractual Relationship between the Institution and Arbitrator
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Abstract
The legal nature of the relationship between an arbitral institution and an arbitrator during arbitral proceedings is an overlooked topic in contemporary jurisprudence.
The prevailing understanding of arbitration as a private process places party autonomy at a pedestal, and portrays affiliated legal relationships (e.g. the relationships between disputing parties and arbitrators or between the disputing parties and arbitral institutions) as dependent entirely upon the initial arbitration agreement between the disputing parties.
The common assumption among users of international arbitration is that the arbitrator and arbitral institution do not have any uniquely enforceable legal relationship with each other, and that they only interact with each other because they have their own respective contractual arrangements with the disputing parties, which coincidentally happen to foist upon them certain mutual expectations and obligations of cooperation.
However, several factors undermine this common assumption, such as instances where unique dynamics in the institution-arbitrator relationship cannot be accounted for by a descriptive model where the disputing parties constitute the fulcrum of every relationship in the arbitral process. For example, the infamous Getma v. Guinea case in the Common Court of Justice and Arbitration (CCJA) of OHADA demonstrates an instance where the above-mentioned descriptive model of arbitral relationships broke down, as the arbitral institution and the arbitrators found themselves embroiled in a unique legal controversy concerning fee arrangements that the unanimous consent of the disputing parties could not resolve.
Undertaking an examination from the principles of English Common Law, I challenge the common descriptive model of arbitral relationships and establish that the legal relationship between an arbitrator and arbitral institution can be best described as a sui generis, implicit contractual agreement. This agreement exists independently of any contract involving the disputing parties and binds its signatories (i.e. the institution and arbitrator), irrespective of whether they acknowledge or realize its existence.
I employ analytical methods to prove that the construction of an institution-arbitrator contract conforms to the rules of common law contracts. I also explore what the general substantive content of such implicit contracts is. Furthermore, I establish the pragmatic importance of acknowledging and formalizing these contractual relationships on modern-day arbitration practice, emphasizing in particular the contemporary tension between arbitrators and arbitral institutions and how the development of standardized contracting practices can help circumvent conflicts between the two, whether such conflicts are a repeat of the Getma fiasco or other controversial issues like the use of opaque “arbitrator blacklists” that arbitral institutions employ to reject the appointment of party-nominated arbitrators.
Although some scholars in the past have surmised about the possibility of an Institution-Arbitrator contract existing, their contemplations were presented in a largely speculative, unqualified manner. My paper is, to my knowledge, the first thorough investigation of the question, invoking established contract law principles to demonstrate conclusively that every institutional arbitration involves an independent contract between an arbitral institution and an arbitrator.
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Against a backdrop of the increasing activity and prominence of African arbitration institutions, this case note takes a detailed look at a recent high-profile case concerning one of the major African arbitration bodies, the OHADA Common Court of Justice and Arbitration (CCJA), and looks at what lessons may be drawn for African arbitration.
In Getma International v Republic of Guinea, a US court refused to confirm and enforce an arbitration award in favour of French company Getma International, which was subsequently annulled by the CCJA. The CCJA annulled the arbitral award after it was found that the arbitrators had breached their mandate and the rules of the court by negotiating directly with the parties to secure an increase in their fee, in breach of the CCJA’s fee scale. A particular feature of this long running saga was the unusual step the arbitrators took in publicly criticizing the CCJA in an open letter to the international arbitration community, spurring extensive comment and discussion.
This piece goes further than just commenting on the US court decision and considers some of the wider questions and implications for African arbitration more generally.
International Commercial and Marine Arbitration analyses and compares commercial-martime arbitration in a number of different legal systems including the US, the UK, Greece and Belgium. The book examines the role of the courts in arbitration in each of these countries, making reference to the latest case law, and also makes extensive reference to French, German, Italian, Austrian, Swiss and Netherlands law. Tracing the historical emergence of the modern system of commercial arbitration Georgios Zekos then goes on to present ways in which the current process of arbitration can be developed in order to make them more effective.
Since the first comprehensive work in sociology of international arbitration in 1996 by Dezalay and Garth, international arbitration has changed considerably. This article considers those changes, through the prism of sociology. Although the essential players (parties and arbitrators) remain the same, arbitration nowadays includes a host of new actors: the numerous service providers, including the ‘merchants of recognition’ that distribute legitimacy within the field of international arbitration; and the value providers who provide guidance as to the way international arbitration should develop and how arbitral social actors should behave. This article also describes the main rituals in international arbitration that structure the manner in which social actors are expected to behave, as well as the manner in which actors interact in the field of international arbitration. In particular, it shows how international arbitration, as a social field, has evolved from a solidaristic to a polarized model in which a variety of actors share different sets of values and beliefs. After drawing a distinction between functions and roles and its impact on the assessment of conflicts of interest, the author explores how norms are generated in a polarized field.
OVER THE past 20 years, the well-established arbitral institutions worldwide have all experienced significant growth in their activity. This growth has brought with it new challenges which each institution has had to address in its own way. In many instances, this experience has brought to light improvements which could be made in each institution's arbitration rules in order to achieve better and more effective administration of justice. The major arbitral institutions have responded well to this challenge, adapting their rules to suit the ever-evolving needs of international commerce. For example, the International Chamber of Commerce (the ICC), the American Arbitration Association (the AAA), the London Court of International Arbitration (the LCIA) and the China International Economic and Trade Arbitration Commission (CIETAC) have each amended their arbitration rules within the last three years.1 Given that the requirements of businesses – and thus potential litigants – are the same the world over, it is perhaps unsurprising that, with each successive modification, the arbitration rules of each of these institutions have become increasingly harmonized. Paradoxically, the steady harmonization of these institutional rules has not done away wim the need to consider which of them to adopt in a particular contract. Although the rules of the above institutions are now broadly similar, important differences remain. Parties must still consider whether, in light of their particular needs, one institution offers more suitable services than another.
The recent amendments to the rules of the ICC, the AAA, the LCIA and CIETAC could be broadly characterized as having the following objectives: (i) promoting the effective institutional oversight of the arbitration; (ii) accelerating arbitral proceedings; (iii) emphasizing the autonomy of the parties; and (iv) recognizing the transnational character of international arbitration. The major developments with respect to each of these objectives are discussed in turn infra. Where …
The Problem Recently I was involved in an ICC case where an interesting question arose concerning party autonomy and the freedom of the parties to designate time limits. The arbitration in question had been proceeding for some time. After drawing up the Terms of Reference, the arbitral tribunal, after consultation with the parties, had prepared a Procedural Timetable. This specified the various procedural steps to be followed in the arbitration including the provision of submissions, the lodging of witness statements, requests for documents and a hearing. Dates were ascribed for each of these steps. Unfortunately there was considerable slippage in the adherence to the due dates and it became necessary to set new dates for the remaining steps in the arbitral procedure. The parties had already provided their major submissions (memorials) and the remaining submissions comprised a Reply and a Rejoinder. The arbitral tribunal, conscious of its obligation to proceed with reasonable expedition and also bearing in mind that the arbitration was proceeding much slower than anticipated, considered that the remaining two submissions should be provided within a short time. However the parties had conferred and had agreed that nine months should be allowed for the Reply and a further nine months for the Rejoinder. The question for the arbitral tribunal was whether it was obliged to accept the parties' agreement as to these new dates or whether, assuming it was not so obliged, it should accept them nonetheless.
The fundamental law of contract formation has retained the formalistic character of classical contract law. The offer-andacceptance paradigm fits poorly with modern contracting practice, and it obscures and complicates contract doctrine. More importantly, extending it threatens to produce undesirable results. Instead of the offer-and-acceptance paradigm, this Essay proposes that contract formation be analyzed using the same general interpretive inquiry that governs other questions concerning the intent of contracting parties. Analyzing the processes of contract formation in this manner points the way toward a further-reaching reconsideration of the purposes of contract-formation law in the first place. In particular, this Essay proposes a reevaluation of the rule that parties cannot unilaterally rescind a contract immediately after the law deems it to be formed. Such a rule, too, is largely formalistic. In its place, the Essay offers a rule of contract formation that is more closely tied to the moral and instrumental purposes of contract remedies.
We show how award ceremony rituals influence organizational field evolution through four critical processes: distributing prestige in "situated" performances; en- acting a highly charged ceremonial form designed to attract the collective attention of a field; serving as a medium for surfacing and resolving conflicts about the legitimacy of field participants; and tightening horizontal linkages within the field. Using the Grammy Awards as a case study, we present a mixed-method, longitudinal analysis of these processes operating in tandem. In this article, we use perspectives from ritual theory to show how award ceremonies are an im- portant institutional mechanism for shaping organ- izational fields. The idea of field is central to insti- tutional theory. Because institutional theorists are concerned with the seepage of social context into organizations (Meyer & Rowan, 1977), field serves as a cogent location in which to situate the inter- play of institutional and organizational forces. Con- ceptually, field is broader than industry, which usually refers to a set of equivalent firms that pro- duce a similar product or service (Kenis & Knoke, 2002).1 DiMaggio and Powell defined a field as "those organizations that, in the aggregate, consti- tute a recognized area of institutional life: key sup- pliers, resource and product consumers, regulatory agencies, and other organizations that produce sim- ilar service or products" (1983: 148). One of the more intriguing and unresolved puzzles in institu-
This article explores the evolution of civil law and common law towards convergence, briefly addressing the history of the theoretical and philosophical perspectives that contributed to shape evolution and change within these two systems. The article analyses general features of the central aspects of contract theory in civil law and common law jurisdictions. As an example of convergence in the commercial contract realm, the article focuses on the analysis of the structure, characteristics and main clauses of the commercial space launch services agreements in both systems, stressing their similarities in structure, treatment and consequences.
OHADA CCJA court annuls €38 million arbitral award against Guinea
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The more [institutions] put in place fully transparent, rule-based systems, and follow these scrupulously, the less susceptible they will be to encroachments by national courts seeking to remedy real or perceived procedural weaknesses
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Weber-stecher U, "Principles of Good Governance and Organisation of Arbitral
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AT & T Corp & Anor v Saudi Cable Co EWCA [2000] Civ 154 (CA)
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Blackpool and Fylde Aero Club Limited v Blackpool Borough Council [1990] 1 W.L.R. 1195