The development in the practice of international commercial arbitration, it appears, is such that a convergence is emerging in terms of procedural similarities, practice of arbitral tribunals, and judicial approaches in setting aside and enforcing cases, irrespective of the legal seat. This has in turn molded the expectations of users and hence the revision and updating of institutional arbitration rules and national laws to meet these expectations.
At the risk of stating the obvious, there are two universal and overarching principles that underpin the legality and efficacy of international commercial arbitration--parties' consent and the New York Convention, which may be aptly described as the constitutional framework of international arbitrations, for without them, the system of international commercial arbitration would not exist nor would its use be on the ascent.
The other factor that gives international commercial arbitration its efficacy is the practice generally adopted by the experienced arbitrators in dealing with procedural, jurisdictional, or substantive (where awards are published) issues. This practices does not in any way form binding precedents or have formal jurisprudential weight, but decisions have strong persuasive effects in shaping subsequent decisions on similar issues by others, and some may argue that they will eventually form a system of "customary laws." Through exchanges in international forums and discussions, experiences are shared (on an anonymous basis, needless to say) and the practice adopted can be criticized, enhanced, and gradually formulated systematically into "norms." These norms have, it is submitted, two further far-reaching effects. First, they create an expectation in the users about how issues would generally be dealt with, and in turn reinforces the adoption of such norms. Second, they create the basis on which institutional arbitration rules are updated and national arbitration laws revised.
The third important element to the institution of international arbitration is the legal seat itself. The importance of the choice of seat in relation to the process of arbitration itself is perhaps somewhat overstated. The convergence of arbitration laws (manifested generally through the adoption of the UNCITRAL model law), and institutional rules and practice of tribunals in international arbitrations have rendered the differences in the arbitration process in different seats less significant. Yet the distinction in the national laws on recourse against awards and judicial approaches to the same remains significant, and it is that which, it is submitted, ought to be the consideration for the choice of the seat.
There are generally three types of approaches in respect of recourse against awards: UNCITRAL model law jurisdictions such as Hong Kong where the only recourse is to set aside on basis of procedural defects; England and Wales where, apart from setting aside on procedural defects, the court also retains a right to confirm, set aside, or vary an award if it contains an error of law, irrespective whether it is a domestic or international award; and jurisdictions which make a distinction between domestic and international arbitrations, such as in mainland China and Singapore, where international awards can only be set aside on procedural grounds, and domestic awards can be reviewed by a national court on errors of law. The choice of seat may therefore depend on whether a party prefers the preservation of the correctness of the substantive law and its jurisprudential development by the national courts of the seat, or simply prefers finality of awards.
The factors identified above interact to enhance and reinforce the convergence of the system of international arbitrations. Some examples and comments are set out below. In Plakito Inv. Ltd. v. Klockner East Asia Ltd., (1) the CIETAC tribunal received a tribunal's expert report and relied on it to render an award without giving the parties an opportunity to view or comment on it. …