International arbitration
International arbitration is arbitration between companies or individuals in different states, usually by including a provision for future disputes in a contract.[1]
Not to be confused with Investor-state dispute settlement.
Arbitration agreements and arbitral awards are enforced under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the "New York Convention").[2] The International Centre for the Settlement of Investment Disputes (ICSID) also handles arbitration, but it is limited to investor-state dispute settlement.
The New York Convention was drafted under the auspices of the United Nations and has been ratified by more than 150 countries, including most major countries involved in significant international trade and economic transactions.[3] The New York Convention requires the states that have ratified it to recognize and enforce international arbitration agreements and foreign arbitral awards issued in other contracting states, subject to certain limited exceptions.[4] These provisions of the New York Convention, together with the large number of contracting states, have created an international legal regime that significantly favors the enforcement of international arbitration agreements and awards.[5] It was preceded by the 1927 Convention on the Execution of Foreign Arbitral Awards in Geneva.
Cases and statistics[edit]
Public information on overall and specific arbitration cases is quite limited as there is no need to involve the courts at all unless there is a dispute, and in most cases the loser pays voluntarily.[16] In China, a review of disputed cases in China found that from 2000 to 2011, in 17 cases the Supreme People's Court upheld the refusal to enforce the arbitration agreement due to a provision in Article V; China has an automatic appeal system to the highest court, so this includes all such refusals.[17]
Agreement details[edit]
A number of essential elements should be included in almost all international arbitration agreements, with model language available.[18] These include the agreement to arbitrate, a definition of the scope of disputes subject to arbitration, the means for selecting the arbitrator(s), a choice of the arbitral seat, and the adoption of institutional or ad hoc arbitration rules.[19] A number of other provisions can also be included in international arbitration clauses, including the language for the conduct of the arbitration, choice of applicable law, arbitrator qualifications, interim relief, costs, and procedural matters.
In order to bridge the gap when parties to an international agreement have difficulty in agreeing upon an arbitral institution, some international arbitration specialists recommend using an arbitration clause that authorizes two arbitral institutions in the same city. Those clauses generally empower the party commencing the arbitration to select the arbitral institution.[20]
A mnemonic device, "BLINC LLC", reflects some of the most important clauses: broad, law, institutional, number, costs, location, language, and carve-out.[21]
Research and other organizations[edit]
The International Arbitration Institute, until recently headed by the late Emmanuel Gaillard, was created in 2001, under the auspices of the Comité français de l’arbitrage (CFA), to promote exchanges and transparency in the international commercial arbitration community. The Association for International Arbitration is a non-profit organisation founded in Paris in 2001 by Johan Billiet which provides information, training and educational activities but does not appoint arbitrators.
ASA - Swiss Arbitration Association, a non-profit association since 1974, together with ASA Below 40, has over 1’200 members, practitioners and academics engaged and/or interested in domestic and international arbitration, from Switzerland and abroad. ASA contributes to the development of arbitration law and practice through regular conferences and workshops, including the Annual Conference; the Arbitration Practice Seminar; ASA Local Group meetings; ASA below 40 events for young practitioners, and the publication of the ASA Bulletin, an arbitration quarterly, and of the ASA Special Series.
Interstate arbitration[edit]
Arbitration has been used for centuries, including in antiquity, for the resolution of disputes between states and state-like entities.[28] After a period of relative disuse, Jay's Treaty between the United States and Great Britain revived international arbitration as a means of resolving interstate disputes. The 1899 and 1907 Hague Conferences addressed arbitration as a mechanism for resolving state-to-state disputes, leading to the adoption of the Hague Conventions for the Pacific Settlement of International Disputes. The Conventions established the Permanent Court of Arbitration and a rudimentary institutional framework for international arbitration of interstate disputes.[29] In recent years, international arbitration has been used to resolve a number of disputes between states or state-like entities, including Eritrea v. Yemen,[30] the Abyei Arbitration,[31] the OSPAR Arbitration,[32] and the Iron Rhine Arbitration.[33]