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Choice of Law in International Commercial Arbitration

By: Okezie Chukwumerije | Book details

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Page 194
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the arbitral process does not imply that the process could be used to circumvent the application of basic concepts of morality and justice.


CONCLUSION

Mandatory rules are one of the ways in which the doctrine of party autonomy is adapted to the legitimate interests of States in ensuring that the arbitral process affirms the basic elements of contractual morality. Of course, arbitrators are not expected to apply each and every mandatory rule that is pleaded as relevant to the case. Their mission in this regard is to examine the nature and purpose of relevant mandatory rules and ascertain whether the enacting State's connection with the parties' transaction warrants the application of such rules. Where the connection is limited or merely speculative, the arbitrator should decline to apply such rules. 74

Arbitrators should also ensure that disputes before them conform to the requirements of truly transnational public policy.

The enforcement of appropriate mandatory rules by arbitrators would send a signal to prospective arbitrating parties that the arbitral process is certainly not a device for circumventing imperative laws of States with which their transaction is substantially connected. This attitude will justify the confidence of those States that believe arbitrators are well suited to adjudicate claims involving sensitive matters of State policy.


NOTES
1.
105 S. Ct 3346; 444 U.S. 614.
2.
See United States v. Aluminum Co. of America (Alcoa) 148 F.2d 416. Indeed the court in American Safety Equipment Corp. v. J.P. Maguire and Co., 391 F. 2d 821 at 827-828, held that antitrust disputes were nonarbitrable in view of "the pervasive public interest in enforcement of the antitrust laws."
3.
A. Bucher and P. Tschanz remind us that

States that favour international arbitration as a means of resolving international commercial disputes do not by the same token forego compliance with principles and rules which are fundamental for the economic and social system. The fact that arbitral tribunals are allowed to adjudicate disputes instead of courts does not mean that arbitration can enerve the legislative power of States.

International Arbitration in Switzerland ( Basel: Helbing and Lichtenhahn, 1989) at 103.

4.
As A. Maniruzzaman puts it: "Although the parties' freedom of choice (autonomy of will) is a general principle of private international law and is to be respected in principle, it should operate within the limits imposed by such other equally important general principles of law or subject to any restraints of public policy." International Arbitrator and Mandatory Public Law Rules in the Context of State Contracts: An Overview ( 1990) 7:3 J. Int'l Arb. 53 at 63.
5.
See Award of 27 May 1991, reported in ( 1992) 17 Y. Comm. Arb. 11 at 27-29.

-194-

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