Paying Attention to "CULTURE" in International Commercial Arbitration

By Slate, William K., II | Dispute Resolution Journal, August-October 2004 | Go to article overview

Paying Attention to "CULTURE" in International Commercial Arbitration

Slate, William K., II, Dispute Resolution Journal

This paper is adapted from remarks Mr. Slate delivered on May 18 , 2004, at the 17th ICCA conference in Beijing, China.

The subject of this address is "culture" and its impact on international commercial arbitration. We lawyers have often invoked "cultural differences" to mean a clash of legal processes-such as the different procedures used in civil and common law countries. More recently, "cultural differences" have been invoked by both civil and common-law practitioners to criticize-with some justification-the use by U.S. attorneys of litigation-style procedures in the arbitration forum that expand the time and costs of the arbitration process.

But another cultural development that has the pendulum swinging in the other direction seems to have gone virtually unnoticed. That is the growing impact of international norms on arbitration practices in the United States. The most recent example is the new American Bar Association/American Arbitration Association Code of Ethics for Commercial Arbitrators, which adopts the international neutrality standard for party-appointed arbitrators. Another example is the growing practice of U.S. companies of referring to the International Bar Association Rules of Evidence in the arbitration clause in their international contracts. These developments suggest that U.S. ADR practices are influenced by cultural elements in other parts of the world.

The trend toward a more uniform approach to international arbitration is also evidenced by the widespread enactment, in whole or in part, of the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration by countries throughout the world, and the recently approved UNCITRAL Model Law on International Conciliation, which a number of countries have enacted.

While differences in conflict resolution processes have historically been discussed under the banner of "cultural differences," we surely could all agree that "legal cultures" do not exist in an intellectual vacuum. Rather they are the products of the fundamental values of the society, based on history, language, and the perceptions of justice and social norms. Understanding these values has significant qualitative consequences for international arbitration, as the distinguished Mr. Ahmed El-Kosheri noted during the ICCA conference in Seoul in 1996. He went beyond the traditional legal perspective on "culture" to sound a salutary warning from the Arab world:

In general, the legal community throughout the Arab world is still manifesting its hostility to transnational arbitration .... the continuing attitude of certain western arbitrators being characterized by a lack of sensitivity towards the national laws of developing countries and their mandatory application, either due to the ignorance, carelessness, or to unjustified psychological superiority complexes, negatively affecting the legal environment required to promote the concept of arbitration in the field of international business relationships.

Mr. El-Kosheri's candid observations state in non-legal language how critically necessary it is to be culturally sensitive. Indeed, the importance of cultural sensitivity has not gone unnoticed in the research of psychologists, anthropologists and scholars in international diplomacy and business. Their research has led corporations to spend hundreds of millions of dollars learning about nuances in language, societal values and taboos in foreign nations in which they plan to launch business enterprises. Yet we in the international arbitration community have made little or no effort to be culturally sensitive to the parties to international commercial arbitration. At most, we may note civil and common law differences in the arbitration process. But we largely consider cultural differences in people to be unimportant, if we consider such differences at all. Then we cram the parties' dispute into the same conflict resolution machine. …

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