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Part I The Consensual Nature of Arbitration, 2 The Evolution of Arbitration and its Consensual Nature

From: Consent in International Arbitration

Andrea Marco Steingruber

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved. Subscriber: null; date: 06 June 2023

Subject(s):
Arbitral tribunals — Arbitral agreements — Jurisdiction — UNCITRAL Arbitration Rules

(p. 11) The Evolution of Arbitration and its Consensual Nature

2.01  This chapter describes the evolution of arbitration and its consensual nature. Consent is the controlling factor of jurisdiction in international arbitration. Consent not only establishes jurisdiction, but it also determines its extent. Therefore, not surprisingly, the consensual nature has been seen as one of the distinctive features of arbitration. However, with the growing acceptance of arbitration as a dispute resolution mechanism the concept and the consensual nature of arbitration have evolved over time. Nowadays the acceptance of the use of arbitration to resolve disputes finds expression in a number of instruments. Likewise, consent to arbitration can be expressed in different ways.

2.02  This chapter considers the classical characterization of arbitration (Section A), the historical evolution of the concept and the consensual nature of arbitration (Section B), and the framework of instruments where acceptance of the use of arbitration as a dispute resolution mechanism is embedded (Section C).

A.  The Classical Characterization of Arbitration

2.03  The classical characterization of the concept of arbitration is still influenced by the form of arbitration which is considered to have existed since the dawn of commerce,1 and which for (p. 12) many years has been the predominant one: commercial arbitration. It has been pointed out that there is no legal definition for arbitration.2 Indeed, as arbitration is a dynamic dispute resolution mechanism varying according to law and international practice, national laws do not attempt a final definition of it.3 At most, a definition can be inferred from the provisions defining the arbitration agreement contained in the various legislations.4 On the other hand, definitions of ‘arbitration’ have been provided by legal authors.5 Party autonomy is fundamental to arbitration—it is the primary source of jurisdiction.

1.  Party autonomy as the primary source of the arbitration jurisdiction

2.04  Party autonomy is the primary source of the arbitration jurisdiction and procedure.6 Indeed the first and foremost principle of law in commercial arbitration is that it is founded on the autonomy of the parties’ will.7 The crucial difference between arbitration and courts thus lies in the fact that the basis of the jurisdiction of an arbitral tribunal is the will of the parties, while courts owe their competence to the procedural norms of a State or of an international convention.8 Moreover national courts have a constitutional role.

2.05  Freedom of contract9 embraces two closely connected, but nonetheless distinct, concepts:

  • •  it indicates that contracts are based on mutual agreement;

  • •  it emphasizes that the creation of a contract is the result of a free choice, unhampered by external control such as government or legislative interference.10

2.06  In arbitration the freedom of contract, as the primary rule that governs the law, practice, and regulation of arbitration in the vast majority of national jurisdictions, allows the parties to write their own rules of arbitration—indeed, it permits them to have the agreement establish the law of arbitration for that particular transaction: the parties can customize the arbitral process to fit their needs, eliminate legal rules or trial techniques that might prove inconvenient or unsuitable, and maintain procedural elements they believe necessary to achieve fairness, finality, and functionality.11

2.07  While the freedom of the parties to shape the arbitral tribunal and the arbitral process is very wide, it is not unlimited. Some limits are imposed by mandatory procedural norms12 of particular countries and in a number of international conventions.13

2.  The elements of the classical characterization of the concept of arbitration

2.08  Arbitration can be characterized as a private and consensual alternative to (national courts) dispute resolution mechanism which leads to a final and binding determination of parties’ rights and obligations.14 Lalive has observed that a broad conception of arbitration is particularly (p. 13) justified in the international field, where arbitration is the only means of assuring an effective resolution of disputes.15

2.1  A private mechanism for dispute resolution

2.09  Arbitration is a mechanism for dispute resolution by private individuals. Arbitrators do not hold public office and are not vested with pre-existing jurisdictional powers, which they acquire only because of the parties’ consent.16 The parties may, within the limits of the relevant law, confer powers upon the arbitral tribunal directly or indirectly.17 They have the ultimate power to determine the form, structure, system and other details of the arbitration.18 However, while the jurisdictional function of the arbitrators is fundamentally analogous to that of judges,19 arbitrators have no capability to make use of the coercive powers over property and persons that are conferred by the State upon a national court when exercising their function.20 The reason for this is that the source of the jurisdictional authority of arbitral tribunals is strictly private.21

2.2  The consensual nature of arbitration

2.10  The principal characteristic of arbitration is that it is chosen by the parties22 by concluding an agreement to arbitrate. This is considered the foundation stone of international commercial arbitration, as it records the consent of the parties to submit to arbitration—a consent which is indispensable to any process of dispute resolution outside national courts.23 Such processes depend for their very existence upon the agreement of the parties. Hence this element of consent is essential, as without it there can be no valid arbitration.24

2.11  The contractual arrangement must be understood broadly, in the sense that the parties’ consent can be given in different ways and successively.25 Thus, while in investment arbitration often there is no arbitration agreement in the traditional sense, the arbitrators’ jurisdiction nevertheless stems from the initial consent of the State or public entity (expressed in a national investment law or an investment treaty) and the subsequent consent of the claimant, who accepts the arbitrator’s jurisdiction by starting the arbitration.26 Therefore, the contractual nature of arbitration does not mean that the arbitration agreement must be ‘reciprocal’, ie give the parties the same right to refer disputes to arbitration.27 Indeed, it is possible to confer upon one party the unilateral28 right to initiate an arbitration proceeding.29 Notwithstanding these particularities, in investment arbitration—like in commercial arbitration—the attempt to emancipate arbitration from a State justice system is clear and unavoidable.30

(p. 14) 2.12  It has also been observed31 that continental European jurists,32 in particular, attach great importance to the wishes of the parties—l’autonomie de la volonté.33 In so doing they appear to suggest that this consent, together with an appropriate set of rules, is sufficient to turn international arbitration into an autonomous, delocalized process that takes place independently of national law.34 Although for many this goes too far, as it attaches too much importance to the wishes of the parties and not enough to the framework of national laws within which the arbitral process must take place, the consent of the parties remains the essential basis of a voluntary system of international commercial arbitration.35 However, while on the one hand the (over-) emphasis of the autonomie de la volonté has led some scholars to consider compulsory arbitration as not true arbitration,36 on the other hand the consensual nature of arbitration has even been questioned with regard to fields of arbitration other than commercial arbitration—in the international context: investment arbitration and sports arbitration.37

2.3  An alternative to national courts

2.13  By agreeing to arbitration the parties remove their relationships and disputes from the jurisdiction of national courts altogether. In fact, the parties not only choose not to submit their disputes to the default national courts but, by refusing to conclude a jurisdiction agreement, they also choose not to submit the disputes to alternative national courts. However, this aspect of the characterization of arbitration has, with regard to international arbitration, been criticized as well. Lalive argued that to speak of removal of the dispute from ordinary State jurisdiction has no or, at least, another sense in international arbitration, where one of the essential scopes of the arbitration agreement is precisely to prevent the conflict of jurisdictions and to remedy the extreme incertitude which in general reigns with regard to the determination of this ‘ordinary judge’, ie the competent judge; but of which State?38 Moreover, it has been observed that while a forum selection clause is concerned with the rules that determine which forum may hear a dispute, the arbitration agreement is an act which vests jurisdictional power in a given jurisdiction in the first place (here, a specified arbitral tribunal).39 Therefore, arbitration agreements, contrarily to jurisdiction agreements which keep the dispute within the boundaries of the jurisdiction of national courts, take it to a different adjudicatory forum.40

2.14  The result of this difference in the nature of the arbitration agreement is that certain assumptions have been made regarding the parties’ presumed intent in including such a clause in their contractual relations.41 Indeed, because of the specific nature and far-reaching consequences of choosing an arbitration clause, there is a presumption that the level of intent—the volitional intensity—from parties who consent to insert such clauses is greater than the level of intent in selecting a mere forum selection clause.42

(p. 15) 2.4  The final and binding determination of parties’ rights and obligations

2.15  The final and binding determination of parties’ rights and obligations is the criterion of the jurisdictional mission of the arbitrator.43 Andreas Bucher, for example, emphasizes the power of arbitrators to render an award which becomes res judicata in the same way as a judgment.44 The procedures that have to be followed in order to arrive at a binding decision by way of arbitration may be described as judicial.45 An arbitral tribunal is bound to ‘act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent’.46 While the quotation is from the English Arbitration Act 1996,47 the obligation is one of general application.48

2.16  The modern conception of arbitration is not limited to resolving disputes in a traditional way, but it may equally do so by filling gaps in contracts, revising and adapting them—particularly where the law applicable to the main contract authorizes the judge to do so, or when the parties have vested the arbitrators with such powers.49 However, the final and binding determination of parties’ rights and obligations distinguishes arbitration from other forms of alternative dispute resolution.50

3.  The discontent with the classical characterization of arbitration, in particular with its consensual nature

2.17  Complex multiparty situations in commercial arbitration have led scholars to speak about the marginalization of consent51 or to pose the question of whether a modern approach to consent is perhaps emerging.52

2.18  Moreover the expansion of the use of arbitration in fields other than traditional commercial arbitration has also changed the perception of arbitration and, in particular, its consensual nature. The following passage reflects this changed view:

More and more, the classical concept of arbitration based on consent is being supplemented by other concepts of arbitration which largely ignore this requirement. This is so especially in the areas of sport, consumer transactions, and investment arbitrations based on treaties or national statutes. This is only natural, as arbitration becomes the most common method for settling international disputes. One may choose to cling to the dogma of consent and when no true and meaningful consent exists, rely on a fiction of consent. But if we merely preserve the appearance of consent, this justification for arbitration is no longer compelling. Indeed, it may be more accurate and intellectually honest to simply admit that arbitration without consent exists. Having made that admission, one can then investigate the requirements that have come to replace consent.53

(p. 16) 2.19  With regard to consent, five issues in particular can be observed:

  1. 1.  The substantive validity of the arbitration agreement: in several new fields of arbitration there is growing concern about the substantive validity of arbitration agreements, because it is perceived that the contracting parties do not have the same contractual bargaining power. Moreover in these new fields the way in which mutual consent is reached is often different than the one of traditional bilateral arbitration agreements which are found in commercial arbitration.

  2. 2.  The real choice of ousting national courts: this issue is sometimes related to the one on the substantive validity of the arbitration agreement. Important questions about it arise particularly in relation to investment arbitration, because one of the disputing parties is a State.

  3. 3.  The subjective reach of arbitration agreements: in multiparty situations the issue often arises as to which parties have consented to arbitration. Moreover in these situations consent to arbitration is expressed in a different way than in the classical bilateral arbitration constellation.

  4. 4.  The relationship in investment arbitration between host State and foreign investor: this relationship is difficult to explain with the classical arbitration agreement. Therefore investment arbitration has, on the one hand, been defined as arbitration without a contractual relationship between the parties to the dispute54 or arbitration without privity,55 and, on the other hand, it has been sustained that while in investment arbitration there is no arbitration agreement in the traditional sense, the resolution of a dispute by private judges without the parties’ consent would not be arbitration.56

  5. 5.  The influence of public international law aspects: investment arbitration is distinct compared to commercial arbitration, because jurisdictional requirements play a fundamental role. Furthermore, most-favoured-nation (MFN) clauses and umbrella clauses may be of importance in relation to consent to arbitration. And, finally, public international law may also be of relevance with regard to the interpretation of arbitration agreements—especially when the host State expresses its consent to arbitration through an investment treaty—and to questions related to the irrevocability of the host State’s consent to arbitrate.

B.  The Historical Evolution of the Concept and the Consensual Nature of Arbitration

2.20  Although the concept of arbitration might change from country to country depending on the applicable law (geographical viewpoint),57 in this section the focus will be on the relativity and variability of the notion of ‘arbitration’ in a historical context. In fact, as other concepts have, the notion of arbitration has evolved and changed over time.58 However, it must be noted that there are recognizable traits of arbitration present today that were already present in the past.

2.21  Arbitration as a mechanism for the resolution of disputes preceded the courts59 and must have existed since the dawn of commerce.60 For centuries arbitration has been accepted by the (p. 17) commercial community as the preferred, or at least suitable, system of dispute resolution for international trade disputes.61 Yet shortly after the appearance of courts, arbitration assumed the position of the younger (and weaker) brother and was reduced to the exception—the limits and functioning of which have been firmly controlled by the courts themselves.62 Not too long ago (in 1995), the domain of international trade was still seen as the only area in which arbitration was the dominant method of settling disputes,63 soon after (in 2001)—in particular considering the developments in the fields of investment and sport arbitrations—arbitration developed into the most commonly used method for settling international disputes.64

2.22  In the course of arbitration’s evolution the areas where it has been used as a dispute resolution mechanism have expanded, and the consensual character of arbitration has also undergone a transformation.

1.  The traditional concept of arbitration

2.23  Originally any decision to make recourse to arbitration was taken by the parties after the dispute had broken out (compromis arbitral). Arbitration had, therefore, a purely consensual character with a peace restoration function.65

2.24  Arbitration was known in Mesopotamia, both in relation to what nowadays would be classified as ‘public international law’ and ‘private law’ disputes.66 Several examples of conflicts between States were resolved by mediation or arbitration by a third power.67 Moreover, Assyrian merchants of the 19th and 18th centuries BC frequently resorted to arbitration, but arbitral procedure was also used in certain areas of family law and, in particular, succession.68 Pre-Islamic Arabia knew arbitration69 and the institution was later developed in the Islamic world.70 From the beginning, arbitration was employed in different areas and in different cultures and the issue of differentiating arbitration from similar institutes71 was not unknown.

2.25  Not surprisingly, arbitration also made its appearance in ancient Greece, even though it was not always easy to distinguish from similar practices such as ‘amiable composition’ and conciliation.72 The concern with re-establishing peace and security in human relations, and the Greek cities’ hermetic approach to jurisdictional questions, allowed both private and interstate arbitration to develop into a particularly appreciated and widespread practice which found its apogee with the restoration of democracy around 400 BC, when the Athenians enacted a law73 on private arbitration.74 In particular, Greek cities gave access to the law to persons and property which were on the margins, or outside the scope of the application of the law and thereby protection from the civil courts.75 Therefore, the tendency to extend the scope of (p. 18) application of the law and of protection by giving the possibility of recourse to a neutral dispute resolution forum already existed.

2.26  Yet arbitration’s major development came under the Roman Empire.76 From a technical point of view Roman arbitration77 was based on two agreements:

  • •  the receptum arbitri, the agreement between the disputing parties and the arbitrator by which the latter accepted and assumed the obligation to resolve the dispute and the formers accepted his decision;

  • •  the compromissum, the agreement by which the parties on dispute agreed to submit the dispute to an arbitrator chosen by them conjunctly and to follow the decision which he rendered.78

The arbitral award was definitive and there was no means of reformation appeal (ex sententia arbitri ex compromisso… appellari non posse).79 However, the nature of arbitration was strictly contractual and respect of the arbitral award could only be assured indirectly by providing the compromissum with a penal clause permitting, if necessary, recourse to the actio ex stipulatu for the winning party.80

2.27  While Byzantine arbitration was based on the Roman model for this institution, in the context of the centralizing organization characteristic of the Byzantine system of administration of justice, Justinian attempted to transform the non-judicial resolution of private disputes into an institution controlled by State-run jurisdictions.81 However, the legislative measures which he introduced for these purposes did not produce the expected result, because of the importance of the implication of members of the Church acting as arbitrators, and the development of parallel arbitration within Canon law82—the rules for such arbitration were different from legislative rules.83 This tendency towards emancipation of arbitration from a dispute resolution system controlled by the State therefore also existed in the past.

2.  The modern concept of arbitration

2.28  With the advent of the modern State justice system, arbitration underwent a transformation.84 While the history of arbitration is built on the position of States and their jurisdictions with regard to the acceptance of this alternative mechanism for solving disputes,85 the exclusive exercise of public power on which State justice is based does not necessarily enter into conflict with arbitration, whose origin is purely consensual.86 Indeed in medieval England, where recourse to arbitration was common, there was a healthy and continuous working relationship between judges and arbitrators, where judges in all the King’s courts often acted as arbitrators, both informally and formally.87 However the relationship between the courts and the arbitral process was much closer under the English system than was the case in continental Europe, where there was the tendency to favour what, in current jargon, would be called ‘institutional’ arbitration.88 Three broad categories of ‘institutional’ arbitration, each involving a standing (p. 19) body which formed a pseudo-court, functioning in parallel with the State legal system, have been distinguished:

  • •  the bodies which regulated disputes in a particular trade;89

  • •  developed special courts, or arbitral tribunals, dealing with more diverse trade disputes;90

  • •  the regulatory bodies which governed the affairs of the components of a particular religious community,91 rather than a particular trade or group of trades.92

2.29  Different legal traditions have, therefore, influenced, and still do influence, different perceptions of arbitration. Although these various tribunals did not exercise the fierce remedies available to the civil power, they had sanctions enough—ie the merchant who quarrelled with his guild was finished, and in other contexts a failure to honour a decision could have severe social or business consequences.93 The link here between consent to the use of arbitration as a dispute resolution mechanism and its social acceptance94 can already be observed.

2.30  Later, the struggle that many legal orders went through to establish a monopoly of the administration of justice in the central political authority left a residual government antagonism towards—and a related tendency to suspect—private tribunals.95 During this period there was significant national court intervention in the arbitration process, including reviewing the substantive decisions of the arbitrators. At the same time, there was no international regulation of arbitration.96 Nevertheless, in time States have begun to develop judicial control of the awards and to recognize that decisions taken by individuals may, under certain conditions, have the same effects as judgments taken by its own tribunals: it is the consecration of the jurisdictional function of arbitration.97

2.31  In the late 19th century and early 20th century the development of modern international arbitration practice began—and was essentially based on national laws.98 Then, with the expansion of world trade, the need to create a mechanism for international recognition and enforcement of both arbitration agreements and awards in relation to international commercial agreements became of paramount importance.99 The aftermath of the First World War saw the rise of idealistic internationalism, which provided fertile soil for the growth of an international100 In particular, two features should be mentioned in this context:

  • •  The world’s business community established the International Chamber of Commerce (ICC) in 1919, which has been and remains the voice of the international business community.101 In 1923 the ICC then created its Court of International Arbitration to provide the framework for an independent and neutral arbitration system for the (p. 20) determination of commercial disputes between parties from different countries.102 The rule of law in trans-border arbitration has been substantially influenced by private arbitration institutions,103 particularly the ICC.

  • •  There has been an emergence of a network of international instruments pertaining to international commercial arbitration,104 as a result of which arbitration agreements have become reliable, whereas arbitral awards have become more efficient (more readily enforceable) than court decisions on the international scene.105 It has been observed that the 1958 New York Convention106 was the beginning of internationalism in arbitration.107

2.32  In commercial arbitration today the parties mainly agree to make recourse to arbitration before the dispute has broken out (generally by inserting an arbitration clause into the main contract), thereby reducing the pure consensual character of arbitration.108 Indeed, the acceptance of, and recourse to, arbitration are often a necessary pre-condition to entry into the international marketplace.109

2.33  Essentially, the New York Convention established three fundamental principles which are the cornerstone of modern international arbitration: the arbitration must conform with or come within the terms of the arbitration agreement; the parties must be treated fairly and with equality (ie international due process); and the award must respect international public policy, both with respect to its content and its subject matter.110 These three principles, which are also the grounds which may allow a national court to refuse to enforce an award made outside its jurisdiction, have been incorporated into most national arbitration laws and are fundamental to autonomous international arbitration.111

2.34  The UNCITRAL Model Law’s progressive and modern arbitration regime has had considerable influence on national arbitration laws, both through direct adoption and more indirectly.112 It has been designed to provide States with a highly advanced statutory framework of arbitration law—in effect to make it possible, especially for developing States, to become instantly supportive of arbitration and thereby able to participate in trans-border commerce.113 The UNCITRAL Model Law provided a reduced role for local court supervision over international arbitrations and permitted the parties to choose and tailor the arbitration system they wanted.114

2.35  The tendency toward acceptance and facilitation of arbitration as an essentially party-designed and controlled dispute resolution mechanism, in full flow as the 1980s began, has continued unabated.115 In the described development two doctrines, apparently linked, but in fact almost entirely distinct, have come up:

  • (p. 21) •  the concept of a ‘transnational’ procedural law; and

  • •  the concept of ‘the new lex mercatoria116 which is concerned with substantive, not procedural, law.117

2.36  The need for emancipation from the State justice system, per definitionem national, has, however, not only been of extreme importance in the context of international trade, but even more in the domain of international economic relations with the involvement of national States themselves as economic actors, where neutrality is essential. The role of the State has changed over time. While in the past there was a contraposition between the private sphere and State, with the rapid development of investment arbitration the State not only permits the use of arbitration as a dispute resolution mechanism, but the State agrees itself to use arbitration for resolving disputes in which the State is a disputing party. The relationship between arbitration and State is therefore twofold: emancipation as well as involvement. In the context of investment arbitration the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (‘the ICSID Convention’), which entered into force on 14 October 1966, has been fundamental.

2.37  However, nowadays there is not only major involvement by the State, but also a general acceptance of arbitration as a mechanism for resolving disputes. Indeed, in a national context the need for the efficient and speedy resolution of disputes has led to arbitration being considered as an appropriate means to solve, for instance, labour and consumer disputes.118 In an international context the same reasons, and the need to have the most possible uniform decisions, have made arbitration the privileged dispute resolution mechanism in the field of sport.

3.  Expansion of arbitration into new fields: increasing acceptance of arbitration, but perceived reduction of its consensual nature

2.38  In the 1990s, arbitration was increasingly used to resolve disputes in new fields. While in a domestic context this has, in the US in particular, happened in labour disputes and consumer transactions, in the international context investment arbitration has experienced an exponential growth. Another field where, internationally, the advantages of arbitration have been particularly felt is sports arbitration.

2.39  Although it is commonplace to say that arbitration is consensual,119 it has been asserted that in these new fields of arbitration there is, to a certain extent, a decline in the consensual character of arbitration.120 On the other hand, there is a general growing consensus with respect to the choice and use of arbitration as the most common method for settling international disputes.121 Moreover, with regard to investment arbitration the view of a non-contractual, but nevertheless consensual, type of jurisdiction was recently sustained.122

2.40  Arbitration with a reduced consensual character in general, but with a major focus in respect to sports arbitration, and the area of investment arbitration, where a decrease of the consensual nature has also often been perceived, will be discussed below. While in investment arbitration the issue is primarily that parties’ consent to arbitration is not normally expressed in an arbitration agreement in the classic sense, the situation in what will be called arbitration with forced (p. 22) consent is rather opposite in the sense that the issue of the substantive validity (consent) of the arbitration agreement arises above all. Finally, in mandatory arbitration, arbitration is not based on an arbitration agreement between the parties, but on a legislative act.

3.1  Arbitration with a reduced consensual character

2.41  Arbitration with a reduced consensual character can be subdivided into arbitration with forced consent, and mandatory arbitration. While the former is still founded on an arbitration agreement, the latter is based on a legislative act.

Arbitration with forced consent123

2.42  The doctrine has often raised the question: is it still considered arbitration when a party has certainly concluded an arbitration agreement, but did not really have a choice other than to do so?124 The issue, which in the commercial domain has been traditionally raised with regard to the arbitral tribunals of the Chambers of Commerce of those nations that were part of the former Eastern Bloc125 and cases relating to the People’s Republic of China,126 is also of relevance in the domain of sports arbitration127 as well as in consumer transactions or labour contracts arbitrations. In all these domains a cutback in the consensual nature of arbitration can be perceived.

2.43  In relation to sports arbitration it has, for instance, been observed that when one examines the circumstances of the purported consent to arbitration, it often appears to have been entirely fictional.128 However, it is not only the consensual basis129 of arbitration which has been questioned. Indeed, considering that the procedures devised by most sports federations appear to be so connected to the organization that no outsider has the remotest chance of standing on an equal footing with his adversary—which is of course the federation itself—it has been argued that speaking of a consensual process seems an abuse of language.130

2.44  Arbitration can also result from the acceptance of pre-existing articles of association of legal entity, or from a set of rules governing joint ownership that contain an agreement to arbitrate.131 Such arbitration should, however, not be confused with decisions taken by the bodies of a legal entity, in particular by sports or professional associations.132 A typical example of arbitration based on an agreement contained in articles of association is arbitration before the Court of Arbitration for Sport (CAS).133 Indeed, the articles of association of the sport federations often provide for appeal to the CAS134 against their decisions.135

(p. 23) 2.45  In reality the problem of arbitration before the CAS is less the circumstance that arbitration is based on an agreement contained in articles of association, but rather the fact that the athletes who wish to participate in sport competitions, especially at a professional level, will not have any other choice than to adhere to the articles of association of a particular sport federation.136 In other words, it is the problem of what here is called ‘arbitration with forced consent’.137

2.46  In the Cañas case,138 where the validity of a waiver of appeal was at stake, the Swiss Federal Tribunal observed that ‘competitive sports are characterized by a very hierarchical structure, both at the international as well as the national level. Established on a vertical axis, the relationships between athletes and the organizations of the different sports disciplines are in this way different from the horizontal relations which bind the parties of a contractual relationship’.139 According to the Swiss Federal Tribunal:

the structural difference between the two types of relationships is not without influence on the consensual process leading to the formation of any agreement. While in principle, two parties are treated equally, each expressing its will without being subject to the will of the other in international commercial arbitration, the situation is quite different in the field of sports . . . An athlete wishing to participate in competitions organized under the control of a federation that stipulates rules governing recourse to arbitration has no choice but to accept the arbitration clause, namely by adhering to the by-laws of such sports federation where the clause is inserted. This is even more applicable to a professional athlete who is confronted with the following dilemma: to consent to arbitration or practice sports as an amateur.140

2.47  As a result, the Swiss Federal Tribunal observed that an athlete had no other choice than to accept arbitration nolens volens.141 The Swiss Federal Tribunal then held it evident for the same reasons that ‘the waiver of appeal against an arbitral award will generally not be the expression of free consent when coming from the athlete. The agreement by the will so manifested as well as the will expressed by the interested sports organization is therefore affected ab ovo due to the compulsory consent by one of the parties’.142 To speak of compulsory consent is clearly an oxymoron, but it illustrates well the issue at stake: the question of the substantive validity of the agreement.

Mandatory arbitration

2.48  While mandatory arbitration was known in the past,143 there is a growing tendency toward compulsory arbitration forms and the use of the word ‘arbitration’ to label dispute resolution mechanisms which are not based on parties’ consent.144

2.49  In the domain of mandatory or compulsory arbitration, consent to arbitration becomes completely irrelevant. In fact, it is the State itself that decides that some disputes have to be compulsorily submitted to arbitration. This type of arbitration is not based on an arbitration agreement between the parties, but on a legislative act imposing upon them that the dispute has to be resolved through arbitration, even if arbitration law is applied to them.145 (p. 24) Therefore compulsory arbitration is closely linked to the domestic provisions of each individual legal system.146

2.50  A ‘new field’ where this evolution can be seen is sports arbitration.147 Indeed, the trend of creating arbitration mechanisms through legislative acts for resolving sport disputes seems to become the norm. Although the arbitration here is not based on parties’ consent, there is no doubt that the jurisdictions of the States, whose law imposes recourse to arbitration in the field of sport, will consider these proceedings true arbitrations.148

2.51  In the United States, according to the Ted Stevens Olympic and Amateur Sports Act, the United States Olympic Committee has to provide for the swift and equitable resolution of disputes involving amateur athletes, coaches, trainers, managers, administrators or officials with regard to participation in protected competitions.149 Amateur sports organizations are only eligible to be recognized, or to continue to be recognized, as a national governing body if they agree to submit to binding arbitration in any controversy involving the opportunity of any US athlete to participate in the Olympic Games, World Championships or other international competition where the athletes represent the United States.150

2.52  While it has been observed that compulsory arbitration is rather the exception in the international field,151 sports arbitration remains an important field with the World Anti-Doping Code (WADA-Code)152—more than 570 sport organizations have already adopted the WADA-Code.153 Furthermore, governments committed to the WADA-Code by signing the Copenhagen Declaration on Anti-Doping in Sport of 3 March 2003,154 and later by ratifying, accepting, approving or acceding to the UNESCO International Convention against Doping in Sport of 19 October 2005.155 The WADA-Code designates the Court of Arbitration for Sport (CAS) as the exclusive competent body to hear appeals in cases relating to doping arising from competition in an international event or in cases involving international-level athletes.156 With the transposition of this provision into different national legislations, arbitration before the CAS is de facto compulsorily provided for by the law.157

3.2  Investment arbitration

2.53  With the choice of arbitration the parties oust national courts. Therefore, traditionally, there is a certain area of conflict between States and party autonomy; party autonomy which is however permitted by the States themselves. Although States and State-owned entities are major participants in national and international business transactions and enter into contracts for the purchase or the supply of goods or services, just as any other private entity would do,158 and (p. 25) thus also participate in commercial arbitration, in investment arbitration there has been a quantum leap in the States’ position vis-à-vis arbitration.

2.54  The resolution of international investment disputes has been seen as ‘new territory for international arbitration’.159 Indeed, in the many international treaties, the best known of which are the North American Free Trade Agreement (NAFTA) and the International Centre for the Settlement of Investment Disputes (ICSID), the preferred dispute resolution mechanism is arbitration, whether institutional arbitration160 or ad hoc arbitration.161 The same is true for national investment laws. Although during the first 40 years of its existence, ICSID was a ‘Sleeping Beauty’, with an average of one or two cases being registered each year, it is with the widespread development of bilateral and multilateral investment treaties that the activities of ICSID have fully awakened.162 To date, over 140 States have ratified the ICSID Convention and around 350 disputes163 have been referred to ICSID arbitration.164 Of those disputes, 159 ICSID cases were administered by the Centre during the fiscal year 2011.165 Thousands of bilateral investment treaties (BITs)166 offer dispute settlement under the ICSID Convention to investors from their respective countries, and a number of multilateral treaties have also been concluded that offer ICSID settlement to investors.167 In this way a significant number of worldwide private foreign investments are protected through the ICSID Convention’s mechanisms.168

2.55  Investment disputes differ in several respects from ordinary commercial disputes,169 and it has been observed that investment arbitration has widened the reach of arbitration’s scope of application to include disputes of a mixed political and commercial character.170 However, the greatest difference to commercial arbitrations is the source of the tribunal’s power.171 While commercial arbitrations require an arbitration agreement between the parties, investment arbitration may be possible without such an arbitration agreement in the ordinary sense.172

2.56  An impressive number of investment laws, BITs,173 and multilateral investment treaties or instruments (MITIs)174 implement a process which allows private complainants direct access to arbitration against a State and public authorities, irrespective of the existence of a contractual agreement to that effect.175 It was noticed that through this new type of investment convention we have entered the era of arbitration without a contractual relationship between (p. 26) the parties to the dispute176—or arbitration without privity.177 This has been perceived as being nothing short of a revolution in (traditional) arbitration theory, which postulates that arbitration is the product of a contract: either an arbitration clause for future disputes or an arbitration agreement for existing disputes.178 In investment arbitration there is—possibly—not only no privity,179 but in most cases a dissociation in the timing when consent to arbitration is expressed by the State party and the investor. The host State usually gives its consent before the dispute has arisen, whereas the investor expresses its consent after the dispute has broken out.180

2.57  In an overwhelming majority of the investment treaties the provisions set forth the consent of each State to the submission of such disputes to one or more forms of arbitration specified in the treaty, and, in the event of a dispute with the State, the investor concerned may resort to the appropriate form of arbitration on the strength of the State’s consent in the treaty.181 The expression ‘on the strength of the State’s consent’ denotes the concept of ‘advance consent’182 contained in thousands of BITs by which States offer their consent to investors to refer future investment disputes to arbitration.183

2.58  The provisions provided in investment laws or treaties by which a State generally agrees to arbitrate investment disputes have regularly been seen as unilateral standing offers to arbitrate with any party fulfilling the requirements.184 The State gives its consent to arbitrate. The offer is accepted by the foreign investor, who therefore consents to arbitrate, when it initiates arbitration proceedings against the host State.185 While there is no arbitration agreement in the traditional sense, the resolution of a dispute by private judges without the parties’ consent would not be arbitration.186 Moreover, in investment arbitration a clear and unavoidable attempt to emancipate arbitration from a State justice system is given.187 It has also been said, about this technique, that it implies consent more than it requires an express and specific manifestation of it.188 Furthermore, the vast majority of these instruments have one common feature: the dispute-settlement provisions require the consent of the State party, before the investor is able to avail itself of one form of arbitration or the other.189 There is, therefore, an asymmetry in investment arbitration between the consent of foreign investors and the advance consent of host States.190

2.59  In investment arbitration we do not only assist a phenomenon of ‘verticalization’ of arbitration with different subjects involved (on the one side States and on the other private investors), but also the declining importance of the classic ‘mirror arbitration’ scheme. Whereas the classic theory—with its origin in commercial arbitration—postulates the equal situation of both contracting parties, in which each of them can initiate arbitration proceedings and each of them, if a defendant, can counterclaim, under the new generation of investment conventions, (p. 27) it is not necessarily so: often only the aggrieved investor can bring a claim,191 and how far the defending State can bring counterclaims is not always clear.192 This new reality, under which the traditional understanding of arbitration is challenged, has steadily expanded, resulting in a parallel and autonomous international arbitration framework giving unprecedented power to individual complainants against States.193

2.60  However, Judge Schwebel recently remarked that

Placed in context, the BIT arbitral process is not asymmetrical … the government of a State has many means, legal and not, for bringing pressure to bear upon the foreign investor. The government has not only the police power; it has the police. It can bring the weight of its bureaucracy to bear. It can prescribe, delay, enjoin, renegotiate, renege, decree, tax, incite, strangle. For the foreign investor to be able to require international arbitration of disputes goes only some way to right a balance that often—not always but often—inclines in favor of the host government.194

Indeed, while the arbitration proceeding itself has departed from the classic ‘mirror arbitration’ scheme, the context in which arbitration is employed, ie the functioning of investment treaties considered as a whole construct, is not per se asymmetrical.

C.  The Framework of Instruments Where Acceptance of the Use of Arbitration as a Dispute Resolution Mechanism is Embedded

2.61  The acceptance of the use of arbitration as a dispute resolution mechanism is closely linked to the evolution of arbitration195 and the issue of arbitrability.196 This acceptance is reflected in the regulatory framework for arbitration at a national (national laws) and international (international conventions and investment treaties) level, but also sometimes by the acceptance in a particular social context. The regulatory framework must give effect to the agreement to arbitrate, the organization of the arbitration process, and the finality and enforceability of the arbitral award.197 The first function—give effect to the agreement to arbitrate—is particularly closely related to the issue of consent to arbitration.198 The acceptance of the use of arbitration then influences the readiness to consider an arbitration agreement as (substantively) valid.199

1.  International conventions and investment treaties

2.62  The acceptance to use arbitration as a dispute resolution mechanism is reflected in international conventions. Of utmost importance in the field of commercial arbitration is the New York Convention, and in the field of investment arbitration the ICSID Convention.

2.63  As world trade expanded, the need to create a mechanism for international recognition and enforcement of both arbitration agreements and awards in relation to international commercial agreements was of paramount importance.200 The most effective method of creating an international system of law governing international arbitration has been through international (p. 28) conventions; international conventions have helped to link national systems of law into a network of laws which, although they may differ in their wording, have as their common objective the international enforcement of both arbitration agreements and arbitral awards.201

2.64  Although there had been several such international treaties or conventions on arbitration before,202 the major catalyst for the development of international arbitration was the adoption of the New York Convention.203 With regard to the New York Convention an eminent scholar observed that:

Adherence constitutes, in essence, a sign or signal to the world that the State accepts international standards and that it joins the global network of States which enforce, within very narrow and justified limits, arbitral awards and, equally important, respect the parties’ agreement to arbitrate.204

2.65  The New York Convention205 is considered to be the cornerstone of international commercial arbitration for three reasons:

  • •  first, the wide international acceptance of the Convention which is reflected by the number of States which are party to the Convention;206

  • •  secondly, for the purpose of interpreting and applying the New York Convention it is now common for the courts of one country to compare decisions of other foreign national courts;

  • •  thirdly, it is now generally accepted that agreements to arbitrate and arbitral awards will be enforced by the courts of most countries which are party to the New York Convention.207 Indeed, reached mutual consent to arbitration could be useless if arbitration agreements and the outcomes of the proceedings (arbitral awards) are not enforceable.

2.66  The acceptance of the use of arbitration as a dispute resolution mechanism is confirmed by the interpretation of the provisions of the New York Convention by national courts:

The general trend in the court decisions is that the courts adopt a rather favourable attitude towards international arbitration in general and the New York Convention in particular.208

2.67  In investment arbitration the role of the International Centre for the Settlement of Investment Disputes, which was established under the 1965 ICSID Convention, has been pivotal.209 The goal of the ICSID Convention, prepared under the auspices of the World Bank, was to provide a special forum for the settlement of investment disputes in order to encourage foreign investment and world development.210 In 1978 ICSID created the ‘Additional Facility’ to cover cases which fall outside the ambit of the ICSID Convention, in particular where one of the parties is not from a contracting State.211

(p. 29) 2.68  The main characteristic of ICSID arbitration is the mixed nature of the dispute, with its limitation to cases arising between a State and a foreign national.212 While legal disputes between individuals or corporations are normally settled before domestic courts, and States may settle their legal disputes before the International Court of Justice. In mixed disputes, especially arising from international investment relationships, no appropriate forum was seen to exist.213 ICSID arbitration is an example of delocalized arbitration proceedings governed only by international rules and not submitted to the provisions of any one national arbitration law.214 In particular, ICSID awards are not submitted to the scrutiny of national courts for annulment or enforcement.215

2.69  Due to the vast network of investment treaties providing for ICSID arbitration and the exponential growth of cases referred to ICSID arbitration,216 a significant number of worldwide private foreign investments are protected through the ICSID Convention’s mechanisms.217 Moreover, in investment treaties, alternatives to ICSID arbitration are regularly provided for.218

2.70  The ICSID Convention reflects—like the extended network of investment treaties—a strong acceptance of arbitration as a dispute resolution mechanism. ICSID arbitration, by definition, involves a State party. For this reason the rules are based on the assumption that no State can invoke its sovereign immunity in order to challenge the jurisdiction of the tribunal. Submission to ICSID arbitration is considered a waiver of sovereign immunity for questions of jurisdiction, including exequatur proceedings.219

2.71  The acceptance of arbitration as a dispute resolution mechanism is, however, still not considered consent to arbitration by a State. Indeed, while ICSID arbitrations require that all parties concerned have agreed to submit to ICSID arbitration, the mere ratification of the ICSID Convention is not in itself consent to arbitration by a State.220 As was made clear in the Preamble to the ICSID Convention, the State never consents to arbitration by simply ratifying the ICSID Convention.221 Ratification therefore only serves to make the State party to the ICSID Convention—it does not grant jurisdiction to an ICSID tribunal.222

2.  National laws

2.72  In the past arbitration was mistrusted. For centuries arbitration has been accepted by the commercial world as a preferred—or at least an appropriate—system for dispute resolution of international trade disputes, but the law has lagged behind in recognizing and giving effect to the decisions of arbitrators.223 The law and the courts were reluctant to recognize that the (p. 30) commercial world was agreeing to arbitration as part of their business decisions, because arbitration was considered an exception to, and erosion of, national courts’ jurisdiction.224

2.73  Nowadays, things are different. Modern arbitration laws follow a minimalist approach to international commercial arbitration, ie they seek to provide support for the arbitration process whilst refusing to intervene or interfere in the process itself, as opposed to strict supervision of the arbitration process.225 The minimalist approach to international commercial arbitration recognizes the fundamental influence of party autonomy in international arbitration,226 which effectively requires very limited interference with a party’s will.227 The acceptance of arbitration as a dispute resolution mechanism is therefore reflected in modern arbitration laws. Moreover, many countries have adopted investment laws. Developing countries typically have special legislation designed to encourage foreign investment. National investment laws frequently provide for arbitration as a means to settle investment disputes.228

3.  The social context

2.74  Nowadays a particularly pronounced acceptance by the business community, ie in the social context, of the use of arbitration can be perceived in the areas of commodity trade—with only one arbitration for a string or chain contract—or maritime arbitration.229

2.75  Acceptance by the community can also be found in the field of sports arbitration, where there has always been a marked tendency to resolve any kind of dispute by excluding the ordinary courts. With regard to sports arbitration it has been underlined that:

The strongest argument in favour of arbitration derives from the fundamental principles in sports, namely fairness and equal opportunity. Same rule violations must be treated and sanctioned alike. In international sports, this can only be achieved through an arbitration instead of different national or even local court decisions … there is probably no other area in life where arbitration is equally accepted. Athletes and officials are familiar with the idea of resolving disputes by arbitration.230

2.76  The fact that there is at least a certain presumption in favour of arbitration as the preferred method of dispute resolution in sports has to be remembered when the validity of an arbitration agreement, especially one by reference, has to be determined.231

2.77  A scholar—Rigozzi—argued that in the field of sport the issue of consent to arbitration has to be seen without ignoring the social context in which arbitration is used. Indeed, in sports arbitration consent to arbitration is necessarily mediated and not direct. Basing his view on the theoretical approach of legal pluralism he sustained the idea that the athlete’s consent to arbitration is expressed in a social contract (also binding the other members of the sports organization to which he adheres)—a social contract which is at the origin of the sport’s juridical order.232 Therefore, according to him arbitration has still to be seen as consensual.233

Footnotes:

5  See, eg the comparative overview given by Poudret and Besson, para 2.

7  Schmitthoff, cited by Várady, Barceló, and von Mehren, p. 39.

9  Which has not always been accepted as a legal principle—far from it, as it is also captured in Sir Henry Maine’s famous phrase: ‘the movement of the progressive societies has hitherto been a movement from Status to Contract’ (Zweigert and Kölz, p 325).

10  Atiyah cited in Black’s Law Dictionary, p 5.

12  On mandatory rules in international arbitration see, eg Bermann and Mistelis (eds).

14  See Lalive, Poudret, and Reymond, No 2 at Art 176 of the Swiss PIL, p 291; Lew, Mistelis, and Kröll, paras 1–7 et seq.

17  Indirectly: according to rules of arbitration, whether institutional or ad hoc.

19  See Clay, pp 103 et seq.

24  See also ibid, para 1–09.

28  On unilateral arbitration see, eg Prujiner.

32  Especially the French ones.

34  Redfern, Hunter, Blackaby, and Partasides, para 3–01. On this development, followed, in particular, by the French courts, see paras 5.97 et seq.

35  ibid.

42  ibid. For a critical view, see Brekoulakis, Notion.

46  ibid.

47  English Arbitration Act 1996, s 33(1)(a).

48  See, eg UNCITRAL Model Law, Art 18. Redfern, Hunter, Blackaby, and Partasides, para 1–17.

49  Lalive, Poudret, and Reymond, p 292. Because of the fact that arbitrators, like judges, are not always required to decide a dispute and sometimes only have to supplement or complete the agreement between the parties, Oppetit, Arbitrage, casts doubt on the jurisdictional character of arbitration.

50  On these other alternative dispute resolution mechanisms see, eg Lew, Mistelis, and Kröll, paras 1–32 et seq.

53  Kaufmann-Kohler and Peter, p 186. Emphasis added.

57  See, eg Schlosser, para 1.

59  The thesis was also developed that arbitration stays at the origin of State justice. This view is the one of B Matthias, M Wlassak, and their followers (eg R Monier and, more recently, A Magdelain).

62  Várady, Barceló, and von Mehren, p 38, where an excerpt of an article of Várady, pp 351–352 is reproduced.

63  ibid.

66  See Lafont, p 557.

67  ibid.

71  See, eg also Gaurier, pp 189–223, on the question of whether the private dispute resolution in imperial China was arbitration or mediation.

73  Preserved by Demosthenes 21.94.

75  See ibid, pp 9–10.

77  On Roman arbitration, see, eg de Loynes de Fumichon and Humbert.

78  See Kaser, p 214.

79  C. 2,55(56),1 (Caracalla 213).

82  On arbitration in Canon law see, eg Lefebvre-Teillard.

88  See Mustill, History, pp 44 et seq.

89  Eg the guild tribunals, prominent first of all in Italy, or, later, specialized maritime courts which emerged along the shores of the Mediterranean.

90  Coming to prominence first in Italy, in the shape of the officium mercanziale and then spreading to Southern France.

91  Eg the Rabbinical courts.

93  ibid, p 45.

94  See paras 2.74 et seq.

99  ibid, para 2–9. To facilitate arbitration, two Hague Conventions were concluded in 1899 and in 1907, both entitled The Hague Convention for the Pacific Settlement of International Disputes. These Conventions created the Permanent Court of Arbitration which still exists and functions today.

102  ibid.

103  Carbonneau, Arbitration, p 27. See also, eg the London Court of International Arbitration (LCIA).

104  Most importantly, the 1927 Geneva Convention, the 1958 New York Convention, and the 1961 European Convention on International Commercial Arbitration, and, with regard to investment arbitration, the 1965 ICSID Convention. On these and further conventions see, eg Lew, Mistelis, and Kröll, paras 2–11 et seq.

106  On the New York Convention see, eg Gaillard and Di Pietro (eds).

110  Lew, Dream, pp 189 et seq.

111  ibid.

118  On arbitration of consumer disputes see, eg Brafford.

122  This is the view of Diallo. See paras 4.58 et seq.

123  The expression ‘arbitration with forced consent’ and not ‘forced arbitration’ is used, because some French authors employ the French diction ‘arbitrages forcés’ rather for ‘mandatory arbitration’ (see, eg Jarrosson, Frontières, p 20). On the other hand, Rigozzi also seems to use the diction ‘arbitrage forcé’ for what in this book is called ‘arbitration with forced consent’.

126  Originally, arbitration commissions which were allowed to handle foreign-related cases were established under the auspices of the China Council for the Promotion of International Trade (CCPIT), a governmental body. However, gradually, the legal status of the CCPIT was transformed from a government institution into a non-governmental organisation; the CCPIT also began to use the name ‘China Chamber of International Commerce’ (Tao, CIETAC, p 513). Yet the China International Economic and Trade Arbitration Commission (CIETAC) remains the largest arbitration institution of China and it is regularly insisted upon by Chinese contracting parties. With regard to arbitration in China see in particular Tao, China.

129  See the expression used by Paulsson, ibid.

130  ibid, p 361.

132  ibid.

133  See also Rigozzi, para 473. On arbitration clauses in articles of association, see paras 8.44 et seq.

134  On the appeal arbitration procedure before the CAS, see Arts R47 et seq of the CAS Code.

136  See also Rigozzi, para 474.

137  ibid. Rigozzi speaks of ‘arbitrage forcé ’. See footnote 123 of this chapter.

138  DFT 133 III 235. On the Cañas case see, eg Baddeley, Cañas; Brunner; Netzle, Cañas, Steingruber, Cañas; and ASA Bulletin 3/2007, p 592.

139  See DFT 133 III 235, consid 4.3.2.2., citing DFT 129 III 445, consid 3.3.3.2. (translation by author).

140  DFT 133 III 235, consid 4.3.2.2., making reference on the question of ‘forced’ arbitration to Rigozzi, paras 475 et seq and 811 et seq (translation by author) (emphasis added).

141  See DFT 133 III 235, consid 4.3.2.2.

142  ibid (translation by author) (emphasis added).

143  Compulsory arbitration was, eg already very developed during the French Revolution (see Huys and Keutgen, No 7, pp 5–6 with references).

147  See, eg in the United States the Ted Stevens Olympic and Amateur Sports Act, in particular its s 220509 of the United States Code.

149  See s 220509(a) of the United States Code.

150  See s 220522(a)(4) of the United States Code.

152  The World Anti-Doping Code is mandatory for the whole Olympic Movement (see Rule 43 of the Olympic Charter (2011)).

153  For lists of sports organizations see http://www.wada-ama.org (under the section ‘Anti-Doping Community’).

154  More than 190 governments have signed the Copenhagen Declaration, see the list of countries at http://www.wada-ama.org (under the sections ‘World Anti-Doping Program’/‘Governments’/‘Copenhagen Declaration’).

155  See preamble to Art 22 of the WADA-Code.

156  See Art 13.2.1 of the WADA-Code.

160  For example, arbitration under the auspices of the ICSID, under the ICC Rules or under the SCC Rules.

161  For example, arbitration under the UNCITRAL Arbitration Rules. See Lalonde, p 191.

163  See the ICSID Annual Report 2011. A list of the cases filed can be found at http://icsid.worldbank.org (under the section ‘Cases’).

165  ICSID Annual Report 2011, p 25.

166  At the end of 2008 2,676.

168  ibid.

172  ibid.

173  BITs have proliferated over the last three decades. At the end of 2008 there were 2,676 BITs (see UNCTAD). Recent developments in international investment agreements (2008–June 2009), IIA Monitor No 3 (2009), available at http://www.unctad.org/iia/series.

174  See, eg the NAFTA or the ECT. For further examples of MITIs see, eg Lalonde, pp 190–191, and Cremades, Public Offer, pp 160–161.

179  The view that in investment arbitration there is no privity will however later be questioned. See paras 5.58 et seq.

180  See on this also Diallo, pp 198 et seq.

183  Teitelbaum, p 226. See also Parra, ICSID.

185  ibid.

187  ibid.

190  Teitelbaum, p 226. See paras 11.88 et seq.

191  However, this has not always necessarily been the case. See, eg Art 8(3) of the UK Model BIT (2005), preferred version. On this provision see para 5.29.

192  Werner, Trade Explosion, p 6. On counterclaims in investment arbitration see Section B of Chapter 14.

195  See Section B of Chapter 2.

196  See Sections B and C of Chapter 3.

198  On the multiple facets of consent to arbitration see Chapter 5.

199  With regard to the substantive side of the arbitration agreement see Section C of Chapter 5.

202  See, eg the Montevideo Convention, the Geneva Protocol of 1923, and the Geneva Convention of 1927. On these international conventions see, eg ibid, paras 1–213 et seq.

205  On the New York Convention see, eg Gaillard and Di Pietro (eds) or Kronke, Nacimiento, Otto, and Port (eds).

206  Over 140 countries are party to the New York Convention.

211  ibid. See also Cremades, Public Offer, pp 154 et seq.

213  ibid.

215  ibid. The situation is different in non-ICSID investment arbitration cases. See, eg Republic of Ecuador v Occidental Exploration and Production Co [2005] EWCA Civ 1116; Czech Republic v Saluka case, DFT 4P.114/2006, 7 September 2006, ASA Bull 1/2007, p 123.

216  See para 2.54.

218  Eg arbitrations conducted in accordance to the UNCITRAL Rules or the SCC Rules.

219  Delaume, Immunity, p 32; Arnoldt, p 170. However, Art 55 of the ICSID Convention makes clear that such waiver does not extend to issues of execution where the national rules are relevant and are not affected by the ICSID rules.

222  For the required ‘double consent’ to the ICSID Convention and the arbitration agreement, see Cremades, Public Offer, pp 152 et seq. (Lew, Mistelis, and Kröll, para 28–46).

224  ibid, paras 2–6 et seq.

226  On party autonomy see paras 2.04 et seq.

229  Lew, Mistelis, and Kröll, para 16–84. On string arbitrations see para 10.71.

230  Netzle, Jurisdiction, p 47. See also citation by Diallo, p 129.

233  See Punzi, p 243. See also Napolitano, p 1159.