Choice of Law in International Commercial Arbitration - Essay Example

This trend is exemplified by Mitsubishi Motors Corp. v. Soler 1 in which the United States Supreme Court held that antitrust disputes arising from international contracts are arbitrable. The court reached this conclusion against the background of a long line of U.S. cases that considered antitrust law fundamental to the ideological and economic integrity of the United States. 2 Underlying the Supreme Court’s decision in Mitsubishi was the presumption that the arbitrators in the case would respect the imperative provisions of the U.S. Sherman Act (which embodies U.S. antitrust principles), despite the fact that the applicable law in the case was Swiss Law.

It thus seems that the increasing acceptance of international arbitration as a legitimate alternative to litigation implies an expectation on the part of States that arbitrators will, like judges, respect the basic notions of justice and inappropriate cases apply the mandatory provisions of relevant laws. It is one thing to grant parties the power to organize their dispute resolution process in a manner compatible with their objectives; it is a different matter to suggest that parties to international arbitration are entirely free from the demands of public policy and fundamental provisions of relevant laws.

3 The integrity of international arbitration and its endurance as a viable alternative to litigation would seem to rest on arbitrators’ continual respect for the public policy of States whose legitimate interests are implicated in arbitration disputes. Arbitrators, therefore, have to balance their respect for the autonomy of the parties’ will with the need to apply mandatory provisions of laws that are relevant to the dispute. In this chapter, we will examine the impact of mandatory rules in resolving the merits of a dispute before international arbitrators.
The problem posed by mandatory rules in international arbitration will be put in perspective by contrasting the position of international arbitrators with those of national judges called upon to enforce imperative laws. Thereafter, the discussion will focus on the discernible trends in the application of mandatory rules in international arbitration.