Vous êtes sur la page 1sur 419

Westlaw Delivery Summary Report for CANTORIAS,MARYJU

Your Search: "international commercial arbitration and culture"


Date/Time of Request: Saturday, September 18, 2010 00:28 Central
Client Identifier: MARY JUDE CANTORIAS
Database: USER-DEFINED-MB
Lines: 26363
Documents: 20
Images: 0

The material accompanying this summary is subject to copyright. Usage is governed by contract with Thomson Reuters, West
and their affiliates.
9 ILSAJICL 57 Page 1
9 ILSA J. Int'l & Comp. L. 57

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


9 ILSAJICL 57 Page 2
9 ILSA J. Int'l & Comp. L. 57

ILSA Journal of International and Comparative Law


Fall, 2002

Article & Essay

*57 CROSS--CULTURAL ARBITRATION: DO THE DIFFERENCES BETWEEN CULTURES STILL


INFLUENCE INTERNATIONAL COMMERCIAL ARBITRATION DESPITE HARMONIZATION?

Lara M. Pair J.D.

Copyright (c) 2002 International Law Students Association; Lara M. Pair J.D.

I. Introduction

Imagine an International Commercial Arbitration hearing. Imagine how the procedure of your International
Commercial Arbitration works. Maybe you are already savvy and know of some international rules or you have
looked up the UNCITRAL Model Law on International Commercial Arbitration to get a picture. [FN1] You are,
for example, an Anglo-American plaintiff's lawyer. Now imagine the other party to this International Commercial
Arbitration. Where are they from? Let us say they are East Asian. So you assume the other party has read the same
rules since you have agreed to the use of the UNCITRAL Model Law on International Commercial Arbitration.
The arbitrator is French and *58 knows the rules quite well, mainly because she is the arbitrator. Now, as a
plaintiff's lawyer you want to start the show, when the French arbitrator tells you to limit your witness
examination to 20 minutes each. Perplexed you protest, because this is not what you are used to, but the arbitrator
will hear nothing.

What has happened? Differing expectations. In International Commercial Arbitration more than just the
legal issues are issues. Whether procedure is agreed upon ad hoc, or institutional rules are used, expectations of the
process may well differ from participant to participant. [FN2] Why? Divergence in cultural backgrounds. This
paper argues that despite harmonization of procedural rules in International Commercial Arbitration,
expectations of the process differ based on cultural background of parties or arbitrators. In order to overcome
cultural barriers of this and other sorts, one should understand the differences and use them creatively. [FN3] This
paper is intended to shed light on some of the differences and thereby advocate understanding.

There are two caveats for this text. First, it must be clarified that the lawyers may well be better informed than
the parties and the expectations may differ with increased experience and knowledge of background of other
participants. [FN4] Second, my analysis applies to both ad hoc and institutional arbitrations. The extent of the
cultural influence on the process may differ. Institutional arbitrations usually have more clearly defined rules of
procedure and tend to adopt a common approach for arbitrations, instead of a case-by-case determination.

Every person operates in his or her own private world perceptual field. [FN5] Culture is part of what creates
this field. This paper discusses how the differences in culture influence the arbitral process. Notwithstanding the
actual norms prevailing in the International Commercial Arbitration process, participants who may not know enough
about this process (and who are basing their expectations on experience gathered within their own legal culture) are
*59 bound to face surprise. This cannot be an exhaustive treatment of the matter and will be a mere sample. To this
end I will set a framework of reference based on Harris and Moran's definition of culture and introduce three
different levels of the concept culture. Then this text will go on to show procedural differences in the main legal

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


9 ILSAJICL 57 Page 3
9 ILSA J. Int'l & Comp. L. 57

cultures (Common Law and Civil Law) and how these differences came about. Regionally based distinctions within
these main systems follow. This analysis will not include differences in substantive law.

II. What is Culture Anyway?

This section will identify what makes culture and create a working definition. Some definitions, which can be
found in dictionaries or sociologists' writings define culture as the total pattern of human behavior and its products
embodied in thought, speech, action, and artifacts and dependant of man's capacity for learning and transmitting
knowledge to succeeding generations through the use of tools, language, and systems of abstract thought. [FN6]
Others define culture as a complex of typical behavior and standardized social forms particular to one social group,
or an atmosphere of social beliefs, preferences, expectations, and common principles. [FN7]

I will adopt Phillip Harris' and Robert Moran's definition. Culture gives people a sense of who they are, of
belonging, of how they should behave, and what they should be doing. [FN8] It implies values and patterns that
influence attitudes and actions. [FN9] In short, it is that which makes one function on a very subconscious level.
[FN10]

Culture can be separated into different subcategories. There are three analytical levels, which group together
certain aspects of culture. The first level is called technical and is the unemotional, easily transferable part of culture,
such as grammar of a language. [FN11] The second, so-called formal aspect refers to rituals both obvious and
hidden, [FN12] such as taking off one's hat when entering a room. [FN13] These rituals are learned by trial and
error. [FN14] Obviously, the hidden ones are not easily learned and one of differing culture will not easily admit to
*60 their effect. This level is prone to misunderstandings and is emotionally charged. The third level is the informal
level. [FN15] It describes automatic and almost unconscious responses. [FN16] This level is also highly emotional
and is only learned through modeling, e.g., how males and females interact. These levels form the basis of culture.
[FN17]

Culture influences many aspects of life, attitude, social organization, thought patterns, space requirements, body
language, and time sense. [FN18] Thought patterns bear effect on the process of reasoning, be it legal or otherwise.
What is perfectly logical, self-evident and reasonable for one culture may be offensive, illogical, and unreasonable
for the other. Cultural background strongly influences the legal systems and understandings. [FN19] International
Commercial Arbitration being an alternative legal instrument will be expected to be similar in goals and procedure
to the legal system the participant is used to. Persons always expect what they are used to, to be the norm. Therefore,
cultural backgrounds, by birth or education, also influences how people approach arbitration and what they expect of
it in substance as well as in procedure and formalities. This expectation will in many instances be based on repeated
experience in the person's cultural context.

While the substantive outcome in International Commercial Arbitration is not usually based on cultural
expectation, procedure is. Substantive law and even basic norms will differ not only from culture to culture but also
from country to country. [FN20] Laws are specific and while the expectation is that the decision is at least based on
some legal principle, there is no expectation of one concrete and certain outcome. [FN21] Procedure however, in its
most basic form is expected to be the same based on continuous, substantially identical reoccurrence in one's own
culture. Participants expect procedure as a part of the formal aspect of culture. A common law, Anglo-American
Lawyer will most likely expect a highly adversarial approach, while a civil law East Asian will expect that an
inquisitorial and conciliatory approach be taken by the arbitral panel and all parties involved. This basic difference
plays out in the timing and ease of introduction of evidence, record keeping, and other examples further discussed
below. *61 Expectancy of a certain procedure is worth analyzing in light of the predominant legal systems. The
arbitrator may be of a culture that expects the proceeding to be conducted in one way, while the parties may be
prepared for another, their own way. What the main differences are and how exactly they can play out will be
discussed below.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


9 ILSAJICL 57 Page 4
9 ILSA J. Int'l & Comp. L. 57

III. Differences in Legal Culture

Two legal systems or cultures are predominant in the world today: Common Law and Civil Law. Within these
main legal systems, different regionally based sub-cultures exist, which maintain their own special traditions.
[FN22] This section will discuss the attributes of first Common and Civil Law, and then continue to describe local
distinctions. [FN23] This paper will briefly sketch infra how these differences and distinctions arose and what
purposes they serve in their respective environments.

Recent doctrinal writings indicate an increasing trend toward harmonization of international arbitral procedure.
[FN24] For example, it is generally accepted that a person who has served as mediator or conciliator between the
parties to the current dispute shall not serve as umpire. [FN25] Domestic legislation and procedures of international
organizations concerning International Commercial Arbitration evidence this assessment further. [FN26] This text
will focus on the remaining differences. Nevertheless, cultural differences are far from irrelevant today, because
neither ad hoc nor institutional rules adopted by the parties answer all procedural questions. [FN27]

A. Common Law & Civil Law

While rules, which have been agreed upon by the parties, give some guidelines for the procedure, the individual
preference of theparticipants plays an important role. This preference relates to the cultural background of each *62
participant and influences all aspects of the International Commercial Arbitration, for example, choice of
International Commercial Arbitration rules, arbitrators, location for the International Commercial Arbitration, and
expectations in process and outcome. [FN28]

Methodology of the approach makes the first difference, which impacts expectations, apparent. A Common Law
lawyer expects an adversarial approach, [FN29] where the judge or arbitrator has a limited role. The adversarial
approach manifests itself in all stages of the proceeding: notification, identification of facts, responsibilities of the
parties, and so forth. [FN30] This system was created because of mistrust of judges, the smaller the roles of judges
in the proceedings the easier for the parties to believe in the justice and fairness of the outcome. [FN31] The Civil
Law expects an active judge and an inquisitorial system. [FN32] This distinction appears logical, based on the
assumption that not a jury but the judge decides the case and hence needs to make sure he has all the information.
InCivil Law countries, judges were not mistrusted. Their education made them experts in assessing a case correctly,
while the juror, potentially a neighbor, was considered more concerned with his or her own interests and not trained
to deal with important legal issues. [FN33]

The second distinction between Common Law and Civil Law is that there is no clear division of interlocutory
proceeding and hearing in Civil Law. [FN34] Common Law admits information of the pre-hearing stage only in
exceptional circumstances. This separation can be explained by reference to the mistrust of judges and the jury
system in Common Law countries once again. Where, as in Civil Law, the judge is also the fact-finder, he will get to
know everything about the case regardless. There is no practical reason for a divorce of hearing and pre-hearing
phase. In Common Law, the jurymen do not receive any information before the proceeding. [FN35] Therefore, all
the information needs to be introduced to the jury again. Lawyers have to select and properly present information,
because the jury is composed of laypersons, which might consider irrelevant evidence or fail to understand anything
too complicated.

*63 To illustrate the cultural impact at all stages of the proceeding, this paper will discuss the UNCITRAL
Model Law on International Commercial Arbitration [FN36] in light of some specific expectations in the
proceedings, differing between Common Law and Civil Law. This paper will treat only the UNCITRAL rules for
this purpose due to their representativeness and their wide use. [FN37] These rules provide for great discretion in
determination of procedure. [FN38]

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


9 ILSAJICL 57 Page 5
9 ILSA J. Int'l & Comp. L. 57

Most commonly cited differences that influence the expectations are:

a) Whether the proceedings are oral or in writing;


b) Discovery and pre-hearing procedure;
c) Treatment of other witnesses, specifically parties and cross-examination; and
d) Record keeping.

1. Oral or Written Proceedings

The UNCITRAL rule 24(1) leaves the decision whether to hold a hearing to the arbitral tribunal, unless parties
agree otherwise. A hearing shall be held if a party so requests. [FN39] It is not stated which weight will be given to
such pleadings and how much detail will be good practice depends on any given arbitrator's preference.

Under the Common Law, pleadings have little value, because the oral hearing is of most importance. [FN40]
The fact finder has to be convinced during the show, the proceeding of whatever nature. [FN41] This can largely
be explained by the need for persuasion of a jury of laypersons. Paper tends to be less persuasive than emotions and
live testimony. In Civil Law all information has to be identified and provided in writing and often in excessive detail
as soon as possible. This is evidenced by e.g., the German Code of Civil Procedure 296. A judge is not (should not
be as easily) moved by emotion and a judge could extract the relevant facts more quickly from paper than from
lengthy witness testimony and cross-examination. [FN42] The Civil Law lawyer expects the documents provided to
amply support the point of view, and the Common Law *64 lawyer is perplexed because of the lack of weight given
to his advocacy by the Civil Law arbitrator. [FN43]

2. Discovery and Pre-Hearing Procedures

The secondly impacted area of arbitral procedure is the pre-hearing stage, including discovery. The UNCITRAL
rules provide in article 23(1) that parties should support their claims and defenses with all relevant documents, but
are also allowed to use references to evidence to be submitted later only, unless otherwise agreed. [FN44] In other
words, information must be provided, but the point in time is up to the party, so long as a reference to this evidence
exists. In article 24(3), UNCITRAL requires all material submitted to the panel to be submitted to the other party as
well. [FN45] This is the extent to which pre-hearing procedure is discussed in the Model Law.

Due to this freedom of procedure, culture has room to create expectations. In Common Law, discovery and pre-
hearing procedure are considered one of the most important tools in dispute resolution (either judicial or through
ADR). [FN46] Pre-hearing discovery is necessary in Common Law. The evidence needs to be neatly presented for
the reasons discussed supra, which is impossible if the hearing is the first time the evidence is encountered by the
parties. Thus, while attempting to receive as much information as possible before the hearing, the Common Law
advocate will seek to delay rendering information to obtain a strategic benefit. With these considerations in mind,
the advocate will submit evidence late and potentially upset the Civil Law arbitrator, who seeks prompt disclosure of
all relevant information.

In Civil Law the obligation to disclose every relevant piece of information as soon as possible renders extensive
Common Law discovery (partially) unnecessary. [FN47] For many Civil Law jurisdictions, such as Germany,
discovery is also connected with privacy concerns. [FN48] In Civil Law there is no need to present the evidence the
neat Common Law way. Evidence is presented over time and is reviewed by the judge regardless of when it
becomes known. If any information appears to be missing, the arbitrator or judge will request it. Also depositions
take on varying degrees of importance for Common Lawyer and Civil Lawyer. If the hearing is approached with the
expectation of a deposition not being primary evidence, the conduct at the deposition (if they take place at all) is
going to be different from the expectation of it being *65 equivalent to a witness statement on the stand. Preparation

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


9 ILSAJICL 57 Page 6
9 ILSA J. Int'l & Comp. L. 57

needs to be adapted, the lawyer has to take into account that the entire material will be reviewed and that
withholding of information harms the case rather than helping it. In addition, a Civil Law arbitrator may even prefer
a written statement to an oral one for reasons of efficiency, [FN49] as mentioned above.

3. Treatment of Witnesses

Treatment of witnesses is another area where cultural difference is most visible. [FN50] The UNCITRAL is
silent on the matter. Several issues are implicated in the treatment of witnesses:

1) Whether a party can be a witness;


2) Whether the statements can be written;
3) Whether written statements are preferable over directly examined witnesses; and
4) Whether cross-examination should take place.
In Common Law a party may be called as witness, while the Civil Law does generally not allow parties to be
witnesses. [FN51] In Civil Law, the expectation is that the position of parties will be amply reproduced through
other documents. In Civil Law, managers of a company are considered parties. Although the question whether a
party can be a witness remains a distinction between Common and Civil Law, in International Commercial
Arbitration it is a distinction without a difference. Practice has settled toward the Common Law approach. [FN52]

Whether written witness statements are admissible depends on the procedure chosen, but largely, as in the
UNCITRAL. [FN53] The inference drawn from a written statement depends on the legal culture of the arbitrator. In
Common Law countries, due to the importance of the actual hearing and the separation of information gained before
the hearing from information presented at the hearing, cross-examination remains the best tool to test witness
credibility [FN54] and to bring out facts not otherwise presentable. [FN55] In Civil Law countries, the judge
examines witnesses as to contentious issues. He, as the *66 fact-finder and a professional, is deemed to assess the
witness credibility by himself and only with reference to statements he deems important. [FN56] Although a
difference between the two traditions, this point adds little to the point made supra concerning pretrial procedure.

The distinction in treatment for unwilling witnesses depends less on culture and more on country, the
procedure what one needs to compel the witness differs. [FN57] These issues are related much more to
substantive law and does not relate as strongly to culture. Hence, it exceeds the scope of this paper and will
not be treated in more detail. [FN58]

4. Record Keeping

The UNCITRAL does not mention record keeping. In the Common Law tradition, a reporter records the
proceeding verbatim. [FN59] In the Civil Law system, the chairman usually takes notes of the witness statement in
the manner in which he sees fit. The parties discuss these notes and supplement them to prepare a written summary.
[FN60] A summary makes sense where the evidence is mostlydocumentary and witnesses are heard for specific
information only. This method obviously reduces the impact of cross-examination in case it is conducted and can be
the source of great dismay on Common Law lawyers, who rely on every word that the witness utters.

Although the above-mentioned differences in legal cultures factor into the proceedings, they are not the only
issues to be considered. Within the predominant legal systems, further subdivisions exist.

The Common Law and Civil Law concepts and the respective conceptions of International Commercial
Arbitration and legal culture have radiated throughout the world. [FN61] The concepts are largely colonial
remainders and can *67 be traced in individual tradition to the respective colonial powers and their legal systems.
[FN62]

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


9 ILSAJICL 57 Page 7
9 ILSA J. Int'l & Comp. L. 57

B. Regional Cultures

Today, either Civil or Common Law influence most nations; nevertheless differences lay in the regional
applications. This section discusses each culture and its distinction and the impact on the International
Commercial Arbitration. The main cultures this paper refers to are Non-Arab African Countries, Latin American
Countries, East Asian, and Arab Countries; e.g., Belgium for the former Congo, the Netherlands for Indonesia.
[FN63]

1. Non-Arab Africa

This section excludes Arab countries like the Sudan, because cultural differences in Arab Countries are
considered together, due to the shared feature of Shari'a law.

There is currently no African distinctiveness in the procedural rules. [FN64] This however, does not prejudice
certain culturally based expectations. In non-Arab Africa, a common dislike of arbitration is based on the perceived
potential for the bigger bargaining power to abuse the freedom of contract and thus oppress the other party. [FN65]
Countries in Africa are particularly well known for their dispute settlement processes that are conciliatory in nature.
[FN66] African social values in conjunction with strong family units fostered this conciliatory environment rather
than the (in comparison) more adversarial arbitration process. [FN67] Before colonialization every region in Africa
had these conciliatory methods of dispute resolution, which were suppressed but not destroyed during the
colonialization period. [FN68]

In the francophone areas of Africa, International Commercial Arbitration was largely suppressed. [FN69] This
might also explain the current lack of significant participation of African arbitrators in International Commercial
Arbitration. As *68 Africa consists mostly of developing countries, International Commercial Arbitration is viewed
with skepticism. [FN70]

In traditional African alternative dispute resolution, little procedural uniformity can be found. Much of African
tradition ADR is based on custom and thus, widely varies and is highly informal. [FN71] There is for example no
formal requirement of writing or record keeping in traditional African dispute resolution [FN72] and a written
agreement to arbitrate is today almost unknown. [FN73]

This results, usually in much control of courts over procedure. Lawyers may have to get leave from a court for
many things they would usually expect to be handled by the arbitral panel. In fact, the courts form an essential
element of procedure and process in arbitration in Africa. Arbitral functions required under a law or treaty in Africa
could, for the sake of efficiency, specialization and centralization be conferred to a court. [FN74]

2. East Asia

Asia has a very distinct cultural approach to International Commercial Arbitration. Two important differences
dominate the picture. First, the conception of Western Common Law and Civil Law (which form the basis of Asian
legal systems as well) has certain assumption for the role of codes and contracts that are not shared in most of Asia.
[FN75] The conceptions of the contractual or institutional rules for International Commercial Arbitration are thus
approached (like any other contract or code) with different understandings of their meanings, although the terms
may be clear. East Asian culture prefers non-confrontational methods of conflict resolution. [FN76] A typical
example is Japan. Under a stable feudal regime, which lasted for more than 250 years until 1868 (Tokugawa period),
the practice of law was not allowed. There was a strong communal system to promote amicable settlement of
disputes and to suppress litigation. Litigation was condemned as a moral wrongdoing tothe society and to the other
party. A good judge was not supposed to give a judgment but to try to bring about a good conciliation. This tradition
was deeply embedded in the people's mind and formed the dispute resolution culture in Japan, [FN77] as well as

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


9 ILSAJICL 57 Page 8
9 ILSA J. Int'l & Comp. L. 57

other East Asian Countries. The legal basis for modern *69 arbitration procedure was first established in Japan in
1890, with the enactment of the Code of Civil Procedure (Law No. 29, 1890), which substantially followed the
German Code of Civil Procedure of 1877 as a model. [FN78] But even though Japan has modernized its arbitral
practice, the mistrust of arbitration can still be felt in e.g., the requirement of specificity of the arbitral agreement.
[FN79] Another aspect of Japanese arbitration is the remaining tendency to structure an arbitration in a conciliatory
fashion, e.g., the default number of arbitrators is two, an even number as opposed to the otherwise chosen odd
numbers. [FN80]

And will approach International Commercial Arbitration with the same culturally based attitude. [FN81]

More than 120 years ago, von Jhering wrote about Der Kampf ums Recht (the fight for the right).
Litigation is an arena where such a fight takes place. It is a moral wrong not to assert one's right. What I call
the conciliation culture, on the other hand, is based on a diametrically opposed ideology. It stems from a deep
mistrust in any pre-set rules of law and the concept of right as an absolute entitlement. [FN82]
When a Western culture and a East Asian culture join for International Commercial Arbitration, the approach of
the lawyers have to be adapted to the culturally based preference of the arbitrator. Overly confrontational behavior
may lead an East Asian arbitrator to draw different inferences from a non-East Asian arbitrator. [FN83]

The second important difference of culture influencing the arbitral procedure is confidentiality. International
Commercial Arbitration is a loss of face for the East Asian party. [FN84] While Western culture prefers open
proceedings, the East Asian party will prefer to keep it proceedings and most information confidential. These
differences in preference will also influence how the proceeding will be conducted despite general and very loose
norms about it in institutional rules and most International Commercial Arbitration contracts. [FN85]

*70 In CIETAC (China International Economic and Trade Arbitration Commission) for example, rules for
arbitration are structured very differently from common western arbitration rules. The rules provide for no appellate
process, which is usually common for international commercial arbitration institutions. Another difference, again
showing the preference for conciliation is that the arbitral tribunal may conciliate if they so choose. [FN86] The last
important difference in the Cietac procedure is the availability of a summary procedure for amounts below RMB
500.000 Yuan. [FN87] Many western lawyers find the CIETAC rules oppressive and unworkable.

3. Latin America

Latin America has a slowly disappearing hostile attitude toward International Commercial Arbitration. [FN88]
Traditionally, Latin American countries developed theories such as the Calvo and Drago doctrines to prevent
complete freedom of contract concerning international commercial arbitration. [FN89] A number of Latin American
countries have modernized their arbitration laws or are in the process of doing so, mainly to attract international
arbitration business. [FN90] Some countries modernizing their laws base their new arbitration legislation on the
Model Law of UNCITRAL. This is the case in Brazil, Guatemala, Mexico, and Peru. [FN91] Where International
Commercial Arbitration is conducted, the arbitral panels have an even stronger stand during the proceeding than
even ordinary Civil Law arbitrators would take. They act mostly without judicial assistance. [FN92] A Latin
American participant would thus expect strong control during the proceeding itself from the arbitrator. Latin
American participants in International Commercial Arbitration would expect rather inflexible rules and may thus be
surprised at International Commercial Arbitration, where the rules are so amendable toward party autonomy. [FN93]
Nevertheless, Latin American courts maintain strong supervisory powers over *71 the arbitral process. [FN94] Party
autonomy is not paramount like in the traditional Western World.

4. Arab World

Arbitration has an important role in the mentality, history, and customs of Arab Nations. [FN95] In contrast to

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


9 ILSAJICL 57 Page 9
9 ILSA J. Int'l & Comp. L. 57

other regional structures, the concept of International Commercial Arbitration in the Arab world is truly culturally
based, (the basis is the Muslim faith.) because both Civil Law and Common Law have influenced different Arab
countries. [FN96]

The predominantly impacting factor is the Shari'a, the religious law for Muslims. [FN97] In Moslem Law the
very concept of International Commercial Arbitration was disputed. There are two views on this topic: the first holds
that International Commercial Arbitration is a form of amiable composition, conciliation. [FN98] According to this
view, the number of arbitrators is even and a decision requires unanimity. The other sees it as judicial action with an
odd number of arbitrators. [FN99] The Ottoman Empire adopted the conciliation approach. [FN100]

In the Arab World, much like in Asia, International Commercial Arbitration is more similar to conciliation,
[FN101] because the focus is on the spiritual and the relationships not on an allocation of blame. A very important
distinction is that it is expected that the Shari'a and its procedural requirements apply regardless of what the contract
states. [FN102] This is especially true for International Commercial International Commercial Arbitration
because the Shari'a law has an element of international law. It applies regardless of the jurisdiction the Muslim is
in, based on religion, transcending national boundaries. [FN103]

Expectations of Muslim arbitrators and participants in specific parts of the arbitral procedure vary distinctly
from Western approaches. The UNCITRAL provides for party autonomy, but in absence of an agreement, the
number of *72 arbitrators is three, not one. [FN104] A Muslim Lawyer from a traditionally religious country will
expect that only one arbitrator is chosen. The Shari'a permits exceptions to the one arbitrator rule, but if an
exception is permitted, the decision of the panel has to be unanimous. [FN105] In non-Arab cultures, the majority
rule applies. This leads to different expectations in the choice of arbitrators and if there is more than one
arbitrator a different expectation in the outcome (ay a close case has 5 arbitrators). The Arabic parties may well
expect that at least one sees the other side, thus avoiding any result of the arbitration and encouraging a settlement.

Shari'a also limits the expectations of who can be an umpire. An Arab party will expect, in accordance with the
Shari'a, that the arbitrator must be a male and familiar with the Shari'a, [FN106] while other cultures will not
expect such limitations. UNCITRAL article 11 does not provide for qualifications or gender, but contains complete
party autonomy. The Shari'a law, however, provides for much procedural freedom. The only requirements for
Arbitration procedure are that the award must specify that the arbitrator heard the parties' arguments and that the
proceedings took place in his presence. [FN107]

The influence of Shari'a on International Commercial International Commercial Arbitration is however


declining, since it does not apply where e.g., international conventions supercede. [FN108]

I will address these modern developments by contrasting the examples of Egyptian and Tunisian treatment of
International Commercial Arbitration with what has been described so far. The Egyptian arbitration laws are
inspired by the UNCITRAL rather than Shari'a, as it is the case in Saudi Arabia. [FN109] In the new Egyptian
Legislation enacted in 1994 for example the application of the act is limited by territory, unlike earlier arbitral acts
that were applied extraterritorially like in Shari'a. Arbitrators needed to be appointed in the instrument already under
older legislation, the new legislation provides for party autonomy. [FN110]

In Tunisia, prior to 1993 only domestic arbitration was regulated. Again, the act is modeled on the UNCITRAL
model law. The number of arbitrators needs to be uneven and the majority rule applies unlike prescribed in Shari'a
*73 Law, where unanimity is the norm. [FN111] Nevertheless, an inexperienced lawyer or layperson may still
expect some of the commands of the Shari'a law to be universal, or at least the norm.

IV. Using this Information

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


9 ILSAJICL 57 Page 10
9 ILSA J. Int'l & Comp. L. 57

Knowing the distinctions this paper has shown is helpful in every International Commercial Arbitration.
However, knowledge is only the key, not the solution. Depending on the stage of the process, the solution is one of
two things: either the choice of the right arbitrator or an initial conference.

The participants to International Commercial Arbitration should select an arbitrator according to his experience
(both life and legal) and cultural background (not just nationality) to obtain a strategic benefit. What the best bet
concerning background and experience is depends on what the parties want to achieve.

An initial conference should take place regardless, to clear any misunderstandings before any further steps after
the arbitrators are chosen. During the initial conference, not only should applicable law and location of the
proceeding be discussed, but also the weight of specific forms of evidence, the treatment of witnesses, and the role
of the arbitrator (whether he should be attempting conciliatory techniques where he sees the possibility, or whether
such techniques would be regarded by the parties as bias). Depending on the cultures and backgrounds of the
participants, the list of what should be discussed varies. This paper gives a useful set of possible considerations for
each culture.

V. Conclusion

There are problems that rules do not solve. [FN112] Neither ad hoc nor institutional rules contain answers for all
procedural questions that may arise in International Commercial Arbitration. On the contrary, as seen on the
example of the UNCITRAL rules, these rules are often deliberately vague to avoid prejudicing the arbitral
tribunal's discretion. [FN113] There is a recognizable influence of culture even in the experienced lawyer or
arbitrator. Despite harmonization of rules governing International Commercial Arbitration, increased
globalization and perforation of information about other legal systems, this paper showed that culture continues to
play a role.

*74 This paper was intended to serve a guide for the unwary to begin to research what to expect and what
strategy may be more successful with which culture. It is also intended to advocate initial conferences with all
participants about their expectations to avoid embarrassing moments in the course of the International
Commercial Arbitration. As stated in the introduction, this text attempted to create a new understanding and
respect for the other cultures, an understanding that avoids judging others by one's own standards, because at one
point the other's standards might be there to judge you. Preparation, insight, and respect are very helpful tools to
avoid problems in cross-cultural International Commercial Arbitration.

[FN1]. Kavass & Livak, Model Law of International Commercial Arbitration: A Documentory History (William
S. Hein Company 1985); UNCITRAL Model Law on International Commercial Arbitration, U. N. Commission
on International Trade Law (1976), available at http://www.unicatral.org/english/texts/ arbitration/ml-arb.htm
(last visited August 27, 2002) (hereinafter UNCITRAL).

[FN2]. Participant in this paper is used to describe both parties and arbitrators.

[FN3]. Phillip Harris & Robert Moran, Managing Cultural Differences 27 (1991).

[FN4]. With increased experience, the participants will schedule conferences in advance and discuss issues of
preference and procedure in more detail, so that initial expectations based on one's own, or the other participant's
cultures doesn't get the better of the proceeding. These issues often influence the choice of arbitrators. Malkom
Wilkey, The Practicalities of Cross-Cultural Arbitration, in Conflicting Legal Cultures in Commercial
Arbitration 79, 80 (Stefan Frommel & Barry Rider eds., 1999). The location of the arbitration can also be
influenced by culture. For example, due to their cultural background Switzerland has arbitration rules
advantageous for litigation against a foreign sovereign. Sigvard Jarvin, Leading Arbitration Seats - A (Mostly

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


9 ILSAJICL 57 Page 11
9 ILSA J. Int'l & Comp. L. 57

European) Comparative View, in Conflicting Legal Cultures in Commercial Arbitration 39, 52 (Stefan Frommel
& Barry Rider eds., 1999); see also Cbernado Cermades, Overcoming the Clash of Legal Cultures: The Role of
Interactive Arbitration, in Conflicting Legal Cultures in Commercial Arbitration 147, 165ff (Stefan Frommel &
Barry Rider eds., 1999).

[FN5]. See Harris & Moran, supra note 3, at 29.

[FN6]. Webster's Third New International Dictionary, A-K 552 culture 5(a) (3rd ed. 1966).

[FN7]. Horatio Grigera Naon, Latin American Arbitration Culture and the ICC Arbitration System, in Conflicting
Legal Cultures in Commercial Arbitration 79, 117 (Stefan Frommel & Barry Rider eds., 1999).

[FN8]. See Harris & Moran, supra note 3, at 12.

[FN9]. Id.

[FN10]. Insights into the workings of culture have been discovered by the behavioral sciences, i.e. sociology,
psychology and anthropology.

[FN11]. See Harris & Moran, supra note 3, at 39.

[FN12]. Id. at 39, 40.

[FN13]. This is a western cultural habit.

[FN14]. See Harris & Moran, supra note 3, at 39, 40.

[FN15]. Id.

[FN16]. Id.

[FN17]. See generally the works of E.T. Hall, the Silent Language; The Hidden Dimension: Beyond Culture; and
the Dance of Life.

[FN18]. See Harris & Moran, supra note 3, at 40-42.

[FN19]. See generally Pieter Sanders, Quo Vadis Arbitration (1999).

[FN20]. Even the two common law countries, the United Kingdom and United States, differ widely on how much
discovery is allowed.

[FN21]. This is not to mean that participants cannot be completely surprised by an outcome. Often a different legal
principal was applied than expected.

[FN22]. See generally Sanders, supra note 19.

[FN23]. These attributes will be directed at procedure only.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


9 ILSAJICL 57 Page 12
9 ILSA J. Int'l & Comp. L. 57

[FN24]. See e.g., Sanders, supra note 19, at 55; see also Lucy Reed & Jonathan Sutcliffe, The Americanization of
International Arbitration?, 16(4) Mealey's Int'l Arb. Rep. 37,(2001).

[FN25]. Bernardo M. Cremades, Overcoming the Clash of Legal Cultures: The Role of Interactive Arbitration, in
Conflicting Legal Cultures in Commercial Arbitration (Stefan Frommel & Barry Rider eds., 1999). He limits this
statement by saying that parties can still nominate the person if so desired.

[FN26]. Most modern international arbitration conventions such as the PCA rules on arbitration of
environmental disputes, as well as the increasing adoption of the UNCITRAL model law into domestic law (or its
use as guiding light), are only examples of increased harmonization of rules for arbitration. This is true for both
institutional and ad hoc arbitrations, as discussed before.

[FN27]. See Christian Borris, The Reconciliation Between Common Law and Civil Law Principles in the
Arbitration Process, in Conflicting Legal Cultures in Commercial Arbitration 1, 4 (Stefan Frommel & Barry
Rider eds., 1999).

[FN28]. Richard Garnett et al., A practical Guide to International Commercial Arbitration 52 (1999).

[FN29]. See Reed & Sutcliffe, supra note 24.

[FN30]. See Garnett et al., supra note 27, at 53.

[FN31]. See Borris, supra note 27, at 6. In the U.S. judges were English and were disliked and the United States
mistrusted authority, mainly because of the age of their democracy.

[FN32]. See Borris, Common Law and Civil Law: Fundamental differences and their impact on arbitration, 78
(1994); see also Lucy Reed & Jonathan Sutcliffe, supra note 24.

[FN33]. See Borris, supra note 32, at 178.

[FN34]. See Garnett et al., supra note 28, at 54.

[FN35]. They are not yet selected.

[FN36]. See UNCITRAL supra note 1.

[FN37]. There are regional arbitration rules precisely because there are differences in culture. See Sanders, supra
note 3, at 13.

[FN38]. UNCITRAL, supra note 1, at 19.

[FN39]. UNCITRAL, supra note 1, at 24(1).

[FN40]. See Borris, supra note 27, at 6.

[FN41]. See Patouchi and Ian L. Meakin, Procedure and Taking of Evidence in International Commercial
Arbitration, RDAI/IBLJ 88 (1996).

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


9 ILSAJICL 57 Page 13
9 ILSA J. Int'l & Comp. L. 57

[FN42]. The judge can ask a witness everything he needs to know when documents are not sufficient. Often this will
be unavailable. Thus, the Civil Law judge prefers paper as a general matter.

[FN43]. Compare Lucy Reed & Jonathan Sutcliffe, supra note 24, at II.

[FN44]. UNCITRAL, supra note 1, at 23(1).

[FN45]. UNCITRAL, supra note 1, at 24(3).

[FN46]. See Christian Borris, supra note 27, at 10.

[FN47]. Id. at 10ff.

[FN48]. Id. at 11.

[FN49]. See Reed & Sutcliffe, supra note 24, at III.

[FN50]. Id. at IV.

[FN51]. See Borris, supra note 28, at 15; see also Reed & Sutcliffe, supra note 24, at IV.

[FN52]. Id.

[FN53]. See Reed & Sutcliffe, supra note 24, at IV.

[FN54]. See Lawrence Newman, International Arbitration Hearings: Showdown or Denoument, 5 Tul.J.Int'l &
Comp.L. 393, 395 (1997).

[FN55]. See Christian Borris, supra note 27, at 13.

[FN56]. Id.

[FN57]. In the United States, arbitrators can subpoena witnesses. In England, only the court may do so. In Denmark,
the arbitral tribunal has to make a request to the court to subpoena, while in Belgium, the parties can ask a court
themselves. See Sanders, supra note 3 at 256f.

[FN58]. For an American case illustrating this point see In Re: Application of Technostroy Export, 853 F.Supp. 695
(S.D.N.Y. 1994). In this case arbitration took place in Sweden. The Russian party to the arbitration proceedings
sought discovery in New York in connection with the arbitration. The American party objected on grounds that
discovery in the place or arbitration was not available without the ruling of the arbitrator and that discovery must, if
at all, be mutual. The court agreed on this basis. While this case shows differences from country to country, it is not
truly culturally based. The Russian party was well aware of the differences and sought to use them in their favor.

[FN59]. See Newman, supra note 54, at 84.

[FN60]. Id.

[FN61]. Id.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


9 ILSAJICL 57 Page 14
9 ILSA J. Int'l & Comp. L. 57

[FN62]. For example, Belgium for the former Congo, and the Netherlands for Indonesia. See Phillip
McConnaughay, The Risks and Virtues of Lawlessness: A Second Look at International Commercial Arbitration,
93 Nw.U.L.Rev. 453, at ch. II. intro. (1999).

[FN63]. Id.

[FN64]. Roland Amoussou-Guenou, Part IV - Francophone Africa, in Arbitration in Africa 269, 276, 277 (Cotran et
al. eds., 1996).

[FN65]. See AmazuA.Asouzu, InternationalCommerical Arbitraton and African States, 14 (Cambridge University
Press 2001).

[FN66]. Id. at 15.

[FN67]. Id. at 16.

[FN68]. Id. at 115.

[FN69]. See Sanders, supra note 19, at chap. II intro.

[FN70]. This skepticism is slowly declining. See David Butler & Eyvind Finsen, Southern Africa, in Arbitration in
Africa 193, 198 (Cotran et al. eds., 1996).

[FN71]. See Asouzu, supra note 65, at 118.

[FN72]. Id. at 119.

[FN73]. Id. at 141.

[FN74]. Id. at 172.

[FN75]. See McConnaughay, supra note 62, at 458.

[FN76]. Id.

[FN77]. See Yasuhei Taniguchi, Is There a Growing International Arbitration Culture? An Observation from Asia,
chapter I (Albert Jan van den Berg ed. 1998).

[FN78]. See Prof. Teruo Doi, Japan, in ICCA Handbook chap. I (1)(1996).

[FN79]. Id. at chap. I.

[FN80]. Id. at chap. I(3).

[FN81]. See Sanders, supra note 19, at 64.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


9 ILSAJICL 57 Page 15
9 ILSA J. Int'l & Comp. L. 57

[FN82]. See taniguchi supra note 77, at section (III).

[FN83]. See Urs Martin Lauchli, Cross Cultural Negotiations with a Special Focus on ADR with the Chinese, 26
Wm. Mitchell L. Rev. 1045, 1076 (2000). Promotion of long-term relations and the preference for conciliation will
always the guide the Chinese mediator.

[FN84]. See McConnaughay, supra note 62, at 459.

[FN85]. The UNCITRAL is silent on the matter.

[FN86]. Arbitration Rules, China International Economic and Trade Arbitration Commission 46 (1998), at
http://web.signet.com.sg/~ arbiter/cietac2.html (last visited September 5, 2002).

[FN87]. Arbitration Rules, China International Economic and Trade Arbitration Commission 64ff (1998), at
http://web.signet.com.sg/~ arbiter/cietac3.html (last visited September 5, 2002).

[FN88]. See Sanders, supra note 19, at 39; see also Fernando Mantilla-Serrano, Major Trends in International
Commercial Arbitration in Latin America, 17(1) J. Int'l Arb. 139 (2000).

[FN89]. See Asouzu, supra note 65, at 413.

[FN90]. See Arthur D. Harverd, The Concept of Arbitration and its Role in Society, the Commercial Way to Justice
(Geoffrey M. Beresford ed., 1997).

[FN91]. See Charles Robert Norberg, Inter-American Commercial Arbitration-General Introduction to Inter-
American Commercial Arbitration, in ICCA Handbook chapter 2 (1996).

[FN92]. See Mantilla-Serrano, supra note 88, at 141.

[FN93]. Id.

[FN94]. See e.g., Prof. Marco Gerardo Monroy Cabra, Colombia, in ICCA Handbook.

[FN95]. See Abdul Hamid El-Ahdab, General Introduction on Arbitration in Arab Countries, in I ICCA Handbook
chap. 1.

[FN96]. See Sanders, supra note 19, at 50. Common Law for Iraq, Jordan, Sudan and Civil Law for Algeria,
Lebanon and Libya.

[FN97]. Although it contains only few references to arbitration.

[FN98]. See El-Ahdab, supra note 95, at chapter II.

[FN99]. Id.

[FN100]. Id.

[FN101]. Id. at 133.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


9 ILSAJICL 57 Page 16
9 ILSA J. Int'l & Comp. L. 57

[FN102]. It is further applicable extraterritorially.

[FN103]. See Austin Amissah, Ghana, in Arbitration in Africa 113, 128 (Cotran et al. eds., 1996).

[FN104]. UNCITRAL, supra note 1, at 10.

[FN105]. See Sanders, supra note 19, at 51.

[FN106]. See generally Afchar, The Muslim conception of Law, in International Encyclopedia of Comparative Law,
vol 2 ch. I (1975); see also Sanders, Quo Vadis Arbitration 51 (1999).

[FN107]. See Abdul Hamid El-Ahdab, General Introduction on Arbitration in Arab Countries, in I ICCA Handbook,
chapter 2(4)(1996).

[FN108]. See Amissah, supra note 103, at 130.

[FN109]. AbdulHamadel-Ahdab,Arbiration with the Arab Countries 155 (2nd ed. 1999).

[FN110]. Id. at 173.

[FN111]. See Habib Malouche, Tunesia, in VI ICCA Handbook, 2 (1996).

[FN112]. Lawrence W. Newman, Pre-hearing Conferences - Cross Cultural Conflicts, Address at Seminar at Baker
& MacKenzie New York (November 25, 1996), in 8 World Arb. & Mediation Rep. 82, 87 (1997).

[FN113]. See Garnett supra note 28, at 4.

9 ILSA J. Int'l & Comp. L. 57

END OF DOCUMENT

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 1
23 Mich. J. Int'l L. 341

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 2
23 Mich. J. Int'l L. 341

Michigan Journal of International Law


Winter 2002

Article

*341 FIT AND FUNCTION IN LEGAL ETHICS: DEVELOPING A CODE OF CONDUCT FOR INTERNATIONAL
ARBITRATION

Catherine A. Rogers [FNa1]

Copyright 2002 University of Michigan Law School; Catherine A. Rogers

I. The Need for Enforceable Ethical 348


Normsin International Arbitration

A. The Reformulation of International 350


Arbitration

1. The Judicialization of International 350


Arbitration

2. The International Legal Profession 354

B. The Degree of Divergence Among 357


NationalEthical Norms

1. Truthfulness 358

2. Fairness 362

3. Independence 365

4. Loyalty 368

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 3
23 Mich. J. Int'l L. 341

5. Confidentiality 371

C. Divergent Ethical Obligations in


InternationalArbitration Proceedings373

D. Conclusion 378

II. Deriving the Content of 379


InternationalEthical Norms

A. The Theoretical Underpinnings 380


ofthe Functional Approach

B. The Functional Approach in 387


Comparative Perspective

C. The Implausibility of Methods 395


Other Thanthe Functional Approach

1. Negotiated Compromise 395

2. The Most Restrictive Approach 399

3. Law and Economics Approach 400

4. The Choice of Laws or Conflict-of- 402


Laws Approach

D. Conclusion 406

III. The FUNCTIONAL APPROACH 406


as a Prescriptive Tool

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 4
23 Mich. J. Int'l L. 341

A. The Functional Approach in 407


PrototypicalInternational Arbitration

1. The Predicates for Applying the 407


FunctionalApproach to International
Arbitration

2. The Normative Goals of 408


International Arbitration

3. Procedural Arrangements 412


inInternational Arbitration

4. Applying the Functional Approach 414


toInternational Arbitration

B. Differentiating Among Arbitral 419


Regimes

Conclusion 422

*342 International arbitration dwells in an ethical no-man's land. Often by design, arbitration is set in a jurisdiction
where neither party's counsel is licensed. [FN1] The extraterritorial effect of national ethical codes is usually murky, as is the
application of national ethical rules in a nonjudicial forum such as arbitration. [FN2] There is no supranational authority to
oversee attorney conduct in this setting, [FN3] and local bar associations rarely if ever extend their reach so far. [FN4]
Arbitral tribunals have no legitimate power to sanction attorneys, [FN5] and specialized ethical norms [FN6] for attorneys in
*343 international arbitration are nowhere recorded. [FN7] Where ethical regulation should be, there is only an abyss. I
propose in this and a companion article how that ethical void can be filled.

In this Article, I develop a methodology for prescribing the normative content of a code of ethics for international
arbitration, [FN8] and in a forthcoming companion article, I propose integrated mechanisms for making those norms both
binding and enforceable. [FN9] In making these proposals, I reject the classical conception of legal ethics as a purely
deontological product derived from first principles. [FN10] I argue, instead, *344 that ethics derive from the interrelational
functional role of advocates in an adjudicatory system, and that ethical regulation must correlate with the structural
operations of the system. The fit between ethics and function, I will demonstrate, not only illuminates at a descriptive level
the reasons why the different nations of the world have adopted different ethical regimes; it also guides at a prescriptive level
for developing new ethics for other systems, [FN11] such as international arbitration. [FN12]

This Article begins in Part I by exposing the alarming absence of any ethical regulation in international arbitration. When
the international legal profession and the international arbitration community were small, implicit understandings and

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 5
23 Mich. J. Int'l L. 341

informal peer pressure effectively substituted for formal regulation. With the recent expansion of the international
professional and arbitration communities, however, informal regulation has proven inadequate. The deep divergences
between national ethical obligations are manifesting themselves in disruptive collisions. A German attorney could be
criminally punished for communicating with a witness before a hearing, while an American attorney would be ethically
compelled to engage in the same manner of pre-testimonial communication. [FN13] A Brazilian attorney may be ethically
compelled to disclose to the tribunal information that an American attorney is ethically compelled to maintain as confidential.
An American attorney may be ethically impelled to present a creative and unorthodox *345 construction of the law that an
Algerian attorney could be castigated, if not punished, for making. [FN14]

As a result of these and other conflicts, Michael Reisman recognized long ago that international attorneys must be
regulated at an international level. [FN15] As the number of international lawyers has multiplied, scholars and practitioners
have increasingly echoed Professor Reisman's call for an international code of ethics. [FN16] Despite the significant outcry,
however, proposed solutions have been both rare and incomplete, [FN17] particularly with respect to international arbitration.
[FN18] As a result, international *346 attorneys remain subject to often conflicting professional obligations. [FN19] In the
context of international arbitration, if attorneys for different parties abide by different ethical obligations, disruption is
inevitable. A code [FN20] is needed to get all participants playing by the same rules, and to guide and measure attorney
conduct in arbitral proceedings.

Having established the need for a code of ethics for international arbitration, Part II turns to the methodology for
developing the normative content of the code. I propose adoption of what I call a functional approach to understanding
national professional ethics and to prescribing new ethical norms for international arbitration. This approach focuses on the
relationship between morality and role, demonstrating that professional ethical norms are designed to fit the functional role
served by the advocate-lawyer in relation to other actors within a particular legal system. [FN21] Notwithstanding certain
shared fundamental precepts, the nations of the world have divergent views about the purposes and goals of adjudication and
the role of advocates in their legal systems. [FN22] National *347 ethical regimes impose on lawyers professional obligations
that promote and prescribe conduct consistent with the functions those systems have assigned to advocates. [FN23]

To demonstrate the functional approach, I construct a comparative proof, which explains the underlying reasons for
differences among national ethical regimes. Based on these findings, I expose the inability of possible approaches--from a
Law-and-Economics efficiency-based approach, to a choice-of-laws approach--to work successfully in developing
international ethical norms. The problem with all of these approaches is that they treat ethical norms as autonomous
principles, which can be mixed and matched between systems until some form of consensus is attained. The functional
approach demonstrates that ethical regimes must be tethered to the values of the systems in which they operate, as those
values are expressed in the interrelational roles assigned to the actors in that system. [FN24]

Based on these observations, I argue that the content of norms for international arbitration must be developed--not from
national norms or abstract ideas about the purpose of ethical norms--but from the defining features of international arbitration
and the role of the advocate in that setting. In Part III, I use the functional approach to recommend ethical norms for
international arbitration based on the most typical procedural arrangements used in modern international arbitration. In
practice, however, international arbitration is not a monolithic institution, but instead a type of dispute resolution that is
administered by a range of different *348 arbitral institutions. [FN25] In these various institutions, the interrelational roles
assigned to attorneys, parties, and arbitrators, can vary dramatically from the standard format I use to explicate arbitral ethical
norms. I argue in my companion article that these variations in the nature of international arbitration institutions will require
adjustments in the ethical rules that will govern attorney conduct in various proceedings, [FN26] and I explore in the final
Section of Part III some variations in ethical rules that will be necessary to adapt them to the needs of particular institutions.

I. The Need for Enforceable Ethical Normsin International Arbitration

The primacy and legitimacy of arbitration as a forum for international disputes is a relatively recent phenomenon.
Despite its ancient history, [FN27] through the mid-nineteenth century in Europe and the United States arbitration was

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 6
23 Mich. J. Int'l L. 341

regarded as a bastard remedy and arbitrators as *349 caricatures of their judicial siblings. [FN28] Prior to the twentieth
century arbitration agreements were routinely voided [FN29] and arbitral awards were subject to intense judicial scrutiny,
sometimes even rewriting. [FN30] Only by virtue of domestic courts' respect for principles of international comity were
arbitral awards enforced at all. [FN31]

Today, the scene has changed. International arbitration holds an exalted status [FN32] and is commonly revered as vital
to world trade. [FN33] The importance and success of this system can hardly be overstated. Arbitration is considered the
normal way to resolve international business disputes, and virtually all international agreements contain arbitration clauses.
[FN34] Any nation interested in participating in the global economy *350 must adjust its laws to accommodate the demands
of international arbitration. [FN35] International arbitration has transformed itself from a bastard remedy into the crown
prince of international dispute resolution. In its new status, international arbitration needs articulated ethical norms to guide
and regulate participating attorneys.

The transformation of the international arbitration system and the related expansion in the ranks of international lawyers,
both of which are described in greater detail in Section A, provide the backdrop against which the vast divergences among
national ethical rules, described in Section B, must be evaluated. In Section C, I examine the problems that ensue in the
international arbitration context.

A. The Reformulation of International Arbitration

The ascendance of international arbitration to its lofty status is perhaps most directly tied, as a factual matter, to dramatic
increases in international trade and a related recognition that international arbitration provides the only viable means of
resolving trade disputes. Coincident with this flourishing, the international arbitration community has grown in ranks and the
newcomers have asserted pressures and demands on the system that have and will cause the system to evolve further.

1. The Judicialization of International Arbitration

Until about twenty years ago, international arbitration was an ad hoc compromise-oriented process characterized by its
informality and emphasis on fairness. [FN36] Arbitral decisions were not revered so much for their *351 legal accuracy or
precision as much as for their sense of fairness and practical wisdom. The arbitrator of yesteryear was often an expert from
the same industry as the parties, [FN37] who exercised a sort of paternalistic (there were no women, and still are few) [FN38]
authority. The arbitrator was expected to render a just and equitable result, even if that sometimes meant disregarding the
express terms of the contract or the clear provisions of chosen law. These modes of decisionmaking are sometimes described
in terms of formal doctrines, such as amiable compositeur and ex aequo et bono, [FN39] which expressly authorize
arbitrators to disregard the strictures of so-called auxiliary rules, such as statutes of limitation, in order to do justice.
[FN40]

Another key attribute of arbitration in this era was the popular use of lex mercatoria. This unwritten law of merchants
[FN41] was developed by academics, who were also actively involved in arbitrations, [FN42] as a means to permit arbitrators
to tailor decisions to customary trade usages and a *352 gentile interpretation of the principles guiding international trade
law. [FN43] The hallmark of lex mercatoria is its insistence on the notion that a duty of good faith informs all contract
interpretation and performance. [FN44] In applying the lex mercatoria's requirement of good faith, arbitrators could imply
terms to achieve a more equitable result, such as a requirement that ample notice of termination be given, even if the
contract included no such term. [FN45]

These noble visions of business relations and dispute resolution were the inspiration of an elite group of continental
lawyers who are largely responsible for founding international arbitration in its modern version. [FN46] Perhaps one of the
ultimate testaments to the intimacy of the early international arbitration community, and the altruism that it bore, is that in
this period it was not anticipated that there would be any need for judicial enforcement of arbitral awards. [FN47] Instead, as
the 1923 version of the ICC Arbitral Rules provided, it was believed that parties were honor bound to comply with the

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 7
23 Mich. J. Int'l L. 341

award and that they would indeed do so. [FN48]

Over the past twenty years, international business has increased in both competitiveness and diversity. As a consequence,
the notion of international arbitration as an informal and largely equitable means of resolving disputes now seems quixotic.
[FN49] The modern international business environment has forced international arbitration to become a more formalized and
legalized dispute resolution process. [FN50] In its final incarnation, international arbitration is less recognizable as a form of
*353 alternative dispute resolution [FN51] than as a type of offshore litigation. [FN52] This transformation has been both
celebrated and decried as the judicialization of arbitration. [FN53]

Under current practices, parties hardly ever empower arbitrators to decide the matter as amiable compositeur or ex aequo
et bono, [FN54]and instead have insisted on measures to make the arbitration process more transparent and more
accountable. Arbitral procedure, which traditionally had been open textured and subject to improvisation, has become more
definite and precise, both in content and form. While arbitral procedural rules once left vast discretion to the arbitrator,
modern rules have generally shifted more control to parties in the presentation of evidence and regulate arbitrator evaluation
of evidence through formal rules. [FN55] Arbitral awards are being published with greater frequency and are even making an
appearance as persuasive authority *354 cited to and by other arbitration panels. [FN56] Selection of lex mercatoria by the
parties is now extremely rare. [FN57] Instead, choice-of-law clauses are used to increase predictability in international
transactions and avoid application of law that is not well developed. [FN58] In sum, international arbitration has become a
sophisticated and formal method for resolving international disputes. [FN59]

Given its preeminent status in resolving international disputes, and its new-found formalism and sophistication, the
aspiration of international arbitration cannot be simply to provide ad hoc remedial relief in individual cases. [FN60] It must
develop into, as it is already moving toward being, a fully operational transnational adjudicatory process. [FN61] Effectively
guiding and regulating the conduct of attorneys who participate in the process is an essential part of that goal.

2. The International Legal Profession

The shift to more formal control mechanisms in the international arbitration system is mirrored by the growing need for
more formal regulation of the international legal profession more generally. Before the recent influx of new lawyers to the
international community, the nascent international legal profession was much like the early years of the American legal
profession. In both instances, [t]here [were] only a few persons in the profession and they knew what they [were] supposed
to *355 do. In the rare case that somebody [was] tempted to lapse from grace, the prospect of disapproval by one's peers
[was] deterrence enough. [FN62] As the field of international lawyers has expanded in both numbers and cultural
vicissitudes, [FN63] however, informal control mechanisms are no longer sufficient. [FN64]

Regulation of the legal profession remains local in both scope and administration, often providing little guidance.
[FN65] The phenomenon can be imagined as contrasting world maps: Ethical regulation is tied to the geographic boundaries
drawn on a political map of the world, but the practice of law and movement of lawyers more closely resemble constantly
moving radar images of world weather patterns. [FN66] In cross-border practice, where professional activities are performed
in one jurisdiction by an attorney licensed in another, problems arise because two sovereigns (one in the attorney's home
jurisdiction and one in the host jurisdiction) have an interest in regulating the same attorney. [FN67] In the context of attorney
solicitation, for example, even though an attorney's home jurisdiction may permit advertisement, another jurisdiction in *356
which the advertisement occurs has a competing interest in applying its rule prohibiting such advertisement. [FN68] With
regulation of cross-border practice, therefore, the problem is that the home and host jurisdictions compete to regulate the
attorney.

In international arbitration, by contrast, there is no regulatory competition. International arbitration occurs in an a-


national space internationally disassociated with any sovereign. [FN69] While arbitration physically takes place within the
geographic boundaries of one nation, the so-called host state is constrained by design and agnostic by choice. [FN70]
Consequently, there is no host state regulation. [FN71] Meanwhile, most so-called home state ethical rules do not purport

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 8
23 Mich. J. Int'l L. 341

to govern attorney conduct in nonjudicial fora such as arbitration. [FN72] Even if home state ethical regulations did reach
into arbitration, however, they would not be binding on opposing foreign lawyers or on non-lawyer representatives (who are
permitted in most jurisdictions to represent parties in arbitration). [FN73] *357 The primary problem for ethical regulation in
international arbitration, therefore, is not competition among regulators, but an absence of regulation.

In the absence of authoritative ethical guidance at the international level, attorneys show up believing that they are still
bound by the ethical obligations imposed by their home jurisdictions, or at least they come with advocacy techniques and
professional habits formed by practicing in accordance with those rules. The problem, of course, is that the ethical regulations
of various countries are often significantly different, and when attorneys adhering to these different rules are thrust into the
same proceedings, attorneys for one party may feel compelled to do what the attorneys for the opposing party feel prohibited
from doing. [FN74] Whereas differences were mute when international arbitration was run by a small group of insiders,
newcomers have arrived with a sense that their participation in arbitration is an entrepreneurial venture. They are thus less
constrained by established traditions or an inherent sense of obligation to the system held by its founders, [FN75] who
regarded their service in arbitration as a duty not a career. [FN76] As social norms break down, there is nothing to take their
place. The next Section examines the extent of differences among national ethics and the final Section of this Part appraises
the potential problems these differences can cause in international arbitration proceedings.

B. The Degree of Divergence Among National Ethical Norms

Roughly speaking, all the nations of the world agree on certain universal norms that inform all legal ethics. For our
purposes, these *358 universal norms can be distilled down to truthfulness, fairness, independence, loyalty, and
confidentiality. While all systems appear committed to these five ideals, I demonstrate in this Section that the apparent
consensus is merely acoustic agreement, [FN77] which conceals the radically different obligations imposed on attorneys by
different systems. [FN78]

1. Truthfulness

By most accounts, the primary if not sole purpose of adjudication is to discern truth. [FN79] Truth is universally
acknowledged as the intended product of adjudication, but also as an essential element in the process. The importance of truth
in the adjudicatory process is manifested in time-honored ethical prohibitions against perjury, [FN80] against attorney
assistance*359 in perjury [FN81] and against attorney misrepresentations to the tribunal. [FN82] Apart from these extreme
instances of misconduct, however, legal systems have developed different interpretations of what the demands of truth
require from counsel. [FN83]

The paradigmatic example of these differences, which will guide the discussion throughout this Article, is the treatment
of pre-testimonial communication between counsel and witnesses. [FN84] To take the example of an arbitration involving
German and American parties, with counsel from their respective countries, the German attorneys will show up believing that
they are prohibited from communicating with witnesses about facts of the case or upcoming testimony, and that such
misconduct might be punishable by serious criminal penalties for witness *360 tampering. [FN85] The U.S. attorneys, on
the other hand, will arrive on the scene with the view that preparing a witness to testify is not only standard practice, [FN86]
but also necessary to avoid committing malpractice, if not an ethical breach. [FN87]

Similarly, systems impose very different obligations on attorneys with regard to client testimony. Even in the United
States, there is relatively little agreement about the scope of attorney confidentiality *361 obligations in the face of client
perjury or the threat of client perjury. [FN88] Most European ethical codes include no obligation that an attorney disclose
client intentions to commit perjury, even though European attorneys are generally required to disclose unlawful conduct or
potentially unlawful conduct by a client. [FN89]

In addition to diverging on the subject of attorney complicity in perjury, systems set very different boundaries for what
constitutes truthful conduct by attorneys. In making arguments to a court, American attorneys are permitted to urge any

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 9
23 Mich. J. Int'l L. 341

possible construction of the law favorable to his client, without regard to his professional opinion as to the likelihood that the
construction will ultimately prevail. [FN90] This room for creativity is bounded only by strategic considerations and the
stricture against wholly frivolous arguments. [FN91] In Continental systems, by contrast, creative arguments that are not, in
the attorney's professional opinion, likely to prevail, would be considered professionally irresponsible, if not sanctionable.
[FN92] Thus, while all systems are in theory *362 committed to truth and imposing ethical obligations on counsel
accordingly, those obligations are widely divergent among various systems.

2. Fairness

Another fundamental and universal principle of adjudication is fairness. Fairness in adjudication is premised on the
impartiality of the tribunal, [FN93] a concept that has been embraced by all societies, from modern European nations to
traditional African tribes and ancient Indian civilizations. [FN94] Impartiality is an attribute of adjudicators that in turn
demands audi alteram partem, or equality of the parties. [FN95] For an adjudication to be fair, the tribunal must approach the
case from an unbiased perspective and the parties must have equal opportunities to present their case and persuade the
decisionmaker. [FN96] These principles require prohibitions against obvious transgressions, such as bribing adjudicators to
secure victory [FN97] or otherwise providing them with a direct stake in the outcome of the case. [FN98] Outside of these
obvious prohibitions, however, the concept of fairness, and even the more particular requirement of an impartial
decisionmaker, is subject to varying interpretations, which again result in divergent ethical requirements. [FN99]

*363 Some systems tolerate--even celebrate--behavior that other systems find incompatible with notions of fairness.
[FN100] This divergence is manifest in variations regarding the permissibility of ex parte communication between judges and
parties (or their counsel). In China, it is not only permissible but also probable that a judge will act as a mediator in the same
case in which she presides as ultimate arbiter. [FN101] The Chinese judge-turned-mediator elicits information from the
parties in what--from an American perspective--are ex parte conversations. [FN102] The substance of these ex parte
conversations may be (but is not necessarily) communicated to other parties. [FN103] Similarly, many Continental systems
permit ex parte communications and do not presuppose that all parties will always be in the courtroom during fact-finding
proceedings. Many national ethical rules expressly permit some contacts. [FN104] In the United States, by contrast, fairness
and impartiality are understood to entail *364 almost absolute restrictions against ex parte communications, except in certain
rare procedural contexts. [FN105] It is highly unusual for an adjudicating judge to meet separately with the parties to extract
confidential information about the case that might be relied on in making a decision, but need not be disclosed to the
opposing party. [FN106] Thus, while all systems require fairness in the process, they differ in how they translate this ideal
into regulations regarding communications between parties and judges.

In an interesting twist, notwithstanding the stringent U.S. rules prohibiting ex parte communications, domestic U.S.
arbitration rules permit parties to communicate throughout arbitral proceedings with their party-appointed arbitrators, even
about crucial issues involving strategy. [FN107] While Chinese and Continental systems tolerate some ex parte
communication in adjudication, the approach adopted by U.S. domestic arbitration extends well beyond that level. [FN108]
Ex parte communication with arbitrators, because of its obvious potential to disrupt proceedings and taint results, is one area
that has attracted a great deal of attention to the lack of ethical regulation for lawyers in international arbitration. [FN109]

*365 3. Independence

Attorneys the world over have been assigned a duty to maintain professional independence. The universality of this
obligation is demonstrated in some interesting historical anomalies, such as eighteenth-century Prussia's failure, despite
significant efforts, to absorb advocates completely into the civil service machinery. [FN110] Similarly, even while insisting
on communist market control of most industries, including professional enterprises, the former Soviet Union made unique
allowances for attorneys to work as self-employed professionals in cooperative colleges. [FN111] Independence is
undoubtedly an essential feature of attorney ethics, but particularly in this area, the wrinkled nuances of language can be
misleading. [FN112]

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 10
23 Mich. J. Int'l L. 341

The texts of both the U.S. and European code of professional responsibility appear to be similarly committed to the
principle of attorney independence. [FN113] However, the apparently similar linguistic commitment to attorney
independence masks deeply divergent views about what this duty requires. In Europe, professional independence refers
primarily to attorneys' relationships with their clients and other attorneys. [FN114] The need for attorneys to be independent
from their clients is the *366 justification for treating attorneys employed as in-house counsel as non-lawyers [FN115] and
against accepting clients on a contingency fee basis. [FN116] In an extreme example, English barristers are, [FN117] and
(until recently) attorneys in some civil law countries were, [FN118] forbidden from forming law firms. The purpose of these
bans was to prevent, in the event of a disagreement about a client's interests, one partner's independent professional judgment
from being stifled by having to accede to the judgment of another. [FN119] Similarly, many civil law countries used to
prohibit lawyers from being employees of a law firm to prevent obligations in the master-servant relationship from
interfering with the attorney's professional judgment. [FN120] While mandating that attorneys operate independent from their
clients and other attorneys, many civil law systems regard attorneys as quasi-governmental agents with intimate ties to
government functions. [FN121]

*367 In the United States, by contrast, independence generally connotes separation of the legal profession from the
government, which will be administering or, in the criminal context, actively participating as an adversary in, legal
proceedings. Professional self-regulation is seen as a way to position attorneys to act as a bulwark against government
tyranny and to enable them to represent unpopular causes. [FN122] Some individual ethical rules nod toward the notion of
attorney independence from client interests, [FN123] but the larger structure of U.S. codes contemplate that lawyers will have
virtually total loyalty to the client and the client's interests. [FN124] Some sectors of the U.S. academic and judicial
community urge more circumspection by attorneys, [FN125] but it would be implausible even for reform-minded individuals
to call for the same degree of independence envisioned for European attorneys. Indeed, the notion of attorney independence
is a point of divergence so profound, that one scholar has concluded that the competing national visions are completely
irreconcilable. [FN126]

*368 4. Loyalty

Loyalty is implicit in representation. This principle is self-evident and reaches back into early sources of our social
morality [FN127] and the origins of advocacy. [FN128] The occupation of the advocate grew out of the practice of parties
invoking the assistance of a friend, whose loyalty was presumed, to bring special skills to bear on a client's cause. [FN129] At
its most basic level, loyalty precludes an attorney from representing opposing sides in a single case. Although simultaneous
representation of opposing clients is universally prohibited, and has been since at least the eleventh century, [FN130] there is
little agreement about what constitutes appropriate attorney conduct in this area.

The United States takes the most stringent view of client loyalty. U.S. codes regulate a range of activities that might give
rise to a conflict of interest, such as accepting client gifts, [FN131] engaging in business dealings *369 with clients, [FN132]
and receiving payment for services from another party. [FN133] European codes appear to be silent on such matters, limiting
their regulation of conflicts of interest to situations involving dual representation. [FN134] This omission is likely related to
the fact that much attorney regulation in Europe, particularly with regard to conflicts of interest, remains informal. [FN135]
These different standards for evaluating conflicts of interest manifest themselves in international arbitration in differing
attitudes between European and American parties about what types of information must be disclosed by an arbitrator.
[FN136] For example, under American standards relationships between an arbitrator and a party's counsel should be
disclosed while under European standards, the same relationship can legitimately be withheld. [FN137]

Another important area in relation to attorneys' duty of loyalty is the degree to which attorneys are ethically required to
defer to their clients' decisions. [FN138] The U.S. Model Rules instruct attorneys to abide by a client's decisions concerning
the objectives of representation . . . and [to] *370 consult with the client as to the means by which they are to be pursued.
[FN139] Under this formula, U.S. attorneys are obliged, subject only to their right to withdraw, to defer to client decisions
regarding matters that substantially affect the client's rights, and they are also required to consult with clients on other
important matters of strategy. [FN140] This provision requires attorney loyalty not only to the client's cause, but also to the
client's decisions on important matters. The CCBE Code, [FN141] on the other hand, appears to emphasize more that

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 11
23 Mich. J. Int'l L. 341

attorneys protect clients' interests than that they abide by client instructions. [FN142] This difference is manifested in CCBE
Rule 4.3, which requires that an attorney defend the interests of his client honorably and in a way which [ the lawyer]
considers will be to the client's best advantage within the limits of the law. [FN143] This provision reflects an attorney
prerogative over the client's case, instead of an obligation to honor client decisions. [FN144] In some countries, this attorney
prerogative appears to extend so far that it permits substitution of counsel without either the knowledge or consent of the
client. [FN145] Thus, while the duty of loyalty is universally acknowledged, the general principle has not been consistently
translated in national contexts.

*371 5. Confidentiality

Concomitant with the obligation of loyalty is the duty of confidentiality. It is universally acknowledged that lawyers are
obliged to preserve client confidences. [FN146] The purpose of confidentiality obligations is to ensure privacy for
communications between lawyers and clients, thus generating mutual trust and maximum disclosure, which will, in turn,
enhance representation. [FN147] Once again, while there is general agreement about the goals of the duty of confidentiality,
legal systems take rather different views about how extensive an attorney's obligations must be to fulfill these goals. In civil
law countries (except France), the concept of professional secret protects only information communicated by a client to an
attorney [FN148] and attorneys are not obliged to maintain as secret information they communicate to clients, [FN149] or
communications they had with other attorneys. [FN150] By contrast, the common law notion of confidentiality, closely tied
to the attorney-client privilege, is much broader and incorporates both communications from an attorney to a client and from
a client to an attorney. [FN151] Under Islamic law, the principles of shari'a arguably impose an even higher duty of
confidentiality, requiring protection not only of communications between attorneys and clients but also protection of all
information relating to representation. [FN152] Thus, the term confidentiality does not come with a readily definable
content.

Systems also diverge in how they demarcate the obligation of confidentiality when client wrongdoing or potential
wrongdoing is involved. Even among the ethical codes of the fifty United States, there is significant disagreement about the
extent of confidentiality obligations when a client has committed or is planning to commit criminal wrongdoing. [FN153] At
*372 an international level, the level of disagreement in this area has been described as the most significant threat to orderly
transnational legal practice. [FN154] In making the CCBE Code, European regulators have identified the problem, but not
made any real progress toward resolving the profound and difficult differences among systems in the area of confidentiality.
[FN155] The CCBE Code fails to even acknowledge that there is a tension between obligations to disclose wrongdoing and
obligations to maintain client secrets, let alone to acknowledge that systems resolve the tension differently. [FN156]

National ethical regimes also vary significantly in the extent to which they provide post-representation protection for
client confidences. In the United States, lawyers are disqualified from accepting employment of a new client whenever the
interests of the new client and an existing or former client are materially adverse and the matters involved are
substantially related. [FN157] These blanket, objectively defined categories leave little discretion to attorneys in evaluating
the relative severity of a potential conflict. Instead, that discretion is placed in the hands of clients, who can waive a potential
conflict through written consent. [FN158] In Europe, the realm of protection for clients is more circumscribed and the
discretion to evaluate conflicts is apparently left to the lawyer. Under the CCBE Code, an attorney is forbidden from
accepting*373 a new client only if there would be a risk of breach of the former client's confidences or if the lawyer's
knowledge of the former client would give an unfair advantage to the new client. [FN159] This formulation appears to
leave substantial discretion to the attorney to determine whether confidences can be maintained and or whether an advantage
to a new client would be unfair. [FN160] It is easy to imagine that a European attorney could decide that even if two
matters are related and adverse, the risk of a breach of confidence and unfairness is low.

In addition to the duty to maintain client confidences, many systems impose on attorneys other confidentiality
requirements. In continental systems, such as the Italian, French, and Portuguese systems, communications between lawyers,
including opposing counsel, can be regarded as confidential. [FN161] Upon receiving a communication marked
confidential, or in French sous la foi du Palais, the receiving attorney must maintain the communication as confidential
and is even prohibited from sending copies to her own client. [FN162] In the United States, as well as other common law

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 12
23 Mich. J. Int'l L. 341

systems such as Ireland and the United Kingdom, such an obligation to treat as confidential communications from opposing
counsel could conflict with an attorney's obligations to keep clients informed, particularly if the communication involved
refers to a potential settlement. [FN163] In sum, the area of attorneys' duty of confidentiality once again demonstrates that the
differences between and among national ethical regimes are vast.

C. Divergent Ethical Obligations in InternationalArbitration Proceedings

Knowing the divergences between national ethical obligations, sketched in Section B, it is easy to understand that they
cannot peacefully co-exist in a single arbitral proceeding. They will be forced *374 into reckless collisions because, in the
absence of a code of ethics that applies in international arbitration, attorneys have no justification for disregarding the ethical
strictures of their home jurisdictions, even if they conflict with those of their opponents. The ensuing problems are easy to
predict. How can a proceeding be fair if only one party is preparing witnesses while the other is studiously avoiding such
contact? How can a proceeding be neutral if one party is meeting with its appointed arbitrator to strategize, while the other is
not? How can a proceeding be just if one attorney is required to disclose information that the opposing counsel is obliged to
maintain as secret? As yet, no empirical research has been done to measure the full extent to which ethics conflict in
international arbitration, but there are anecdotal reports that national ethics are colliding in arbitral proceedings with greater
frequency and that these clashes are producing greater concern among participants. [FN164]

The visibility of these clashes is being obscured, however, by a range of factors. The most significant factor is that
arbitration is a private process. Most arbitral awards are complied with voluntarily [FN165] and public reports on these cases
are not generally available. [FN166] Of those cases that *375 do end up being contested at the enforcement stage, ethical
misconduct can only be raised if it was so disruptive of the proceedings that it could be characterized under one of the narrow
exceptions permitted by the New York Convention. [FN167] The lack of formal reporting is highlighted by the fact that,
notwithstanding anecdotal reports, a review of all U.S. cases reveals none in which challenges based on conflicting ethics
were raised. [FN168]

It is also probable that ethics collide under the surface of proceedings, hidden even from the plain view of the
participants. New practices and procedures might obscure the breakdown of implicit understandings about ethical conduct.
For example, under discovery procedures that have been newly introduced into arbitration, an attorney can legitimately
withhold from discovery information that is otherwise relevant if that information is confidential. When the parties have
different understandings of what confidential means, one party may be producing materials that the other party is
maintaining as confidential. [FN169] In an adversarial proceeding, an American party asserting a more expansive definition
of confidentiality is unlikely to inquire whether production by the other side of apparently confidential materials is
inadvertent. Meanwhile, the European party is unlikely to detect the American party's expansive approach to withholding,
and is even less likely to detect inappropriate withholding, because the European party is not accustomed to discovery.
[FN170] Similarly, it might be difficult for participants to detect that opposing parties and counsel are talking to witnesses or
communicating with a party-appointed arbitrator. It is also *376 likely that counsel and arbitrators might have strong
incentives to conceal from the parties certain types of conflicts of interest that might impede their participation in future
arbitrations. [FN171]

Another major factor masking the full impact of conflicting ethical norms in arbitration is the clandestine techniques by
which arbitrators undoubtedly regulate proceedings before them. In the absence of articulated norms and express enforcement
mechanisms, arbitrators likely assess the conduct of attorneys based on private--and untested--standards informed by the
arbitrators' legal and cultural backgrounds. For example, a Continental arbitrator faced with creative arguments by an
American attorney may conclude that the American attorney is inherently untrustworthy and may discount or disregard
arguments by that attorney. [FN172] Meanwhile, an American arbitrator may perceive restrained arguments from Continental
counsel as either poor lawyering or a fundamental lack of conviction about the strength of the client's case. Similarly, an
arbitrator from a civil law system may discount testimony by a witness, or discredit a party's case entirely, upon discovering
that the witness discussed the case with counsel prior to testifying. [FN173] An American arbitrator may have the opposite
reaction if a witness flounders during routine cross-examination on questions for which an American witness would normally
have been primed.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 13
23 Mich. J. Int'l L. 341

Even if they remain unspoken, such perceptions of apparent misconduct (or ineptitude) inevitably affect arbitrators'
decisions on the merits, computations of damage awards, and assessments of costs and fees. [FN174] Under older notions of
international arbitration as a sort of rough justice,*377 [FN175] these informal constraints may have been sufficient to
instill a sense of justice in the proceedings. They are, however, inconsistent with international arbitration's modern role as a
transnational adjudicatory system. These informal sanctions violate the most fundamental notions of procedural fairness by
imposing punishments for violations of unknown rules and without any opportunity to be heard. [FN176] Such reactions to
perceived attorney misconduct might also be sanctioning an innocent party. Clients pay substantive awards, costs, and fees,
but the misconduct may belong wholly to the attorney.

Particularly given the extent of differences, collisions between ethical norms cannot effectively be resolved on an ad hoc
basis during proceedings. An arbitral tribunal attempting to do so will likely disrupt the expectations with which one or both
of the parties prepared for arbitration or conducted pre-arbitration negotiations. Examples will help illustrate. The duty of
confidentiality creates not only an obligation on attorneys to maintain client confidences, but also an expectation in clients
that their confidences will be maintained. [FN177] Because confidentiality obligations differ from jurisdiction to jurisdiction,
[FN178] however, arbitrators may be called on to choose a single rule to govern *378 proceedings. [FN179] One obvious
example is communications with an in-house attorney in preparation for litigation, which the in-house attorney would clearly
have a duty to maintain as confidential under U.S. rules, but not under most European regimes. [FN180] A decision by an
arbitrator that an American in-house counsel's communications must be disclosed could be devastating to the U.S. party,
while a decision that such communications are to be maintained as confidential would leave the European side (which had
likely already made unnecessary disclosures) vulnerable, even if such a ruling rendered that information inadmissible. An
established code of ethics will resolve these and other conflicts up front, [FN181] sharpen parties' ability to understand the
consequences of their choice to arbitrate, and permit them to direct the procedures for the resolution of their disputes.

D. Conclusion

The professional status of international lawyers is in part what confers legitimacy, real and perceived, on the international
arbitration system. The rituals and formalities that signal the existence of State power behind national adjudicatory processes
[FN182] are generally eschewed in arbitration. Instead, the legitimacy of international arbitration derives primarily from
party consent, which is orchestrated by international lawyers.*379 [FN183] It is the international lawyer who selects the
rules, laws, sites, and arbitrators on behalf of the client. [FN184] Considering that international lawyers wield dramatically
more power in the international arbitration system than their counterparts do in domestic litigation, it is particularly alarming
that there is no express regulation of their conduct. [FN185]

Instead, ethical conduct in international arbitration is a jurisprudence confidentielle, a confidential or secret theory and
practice of law, known to a few key lawyers who sometimes perform legal functions in accord with it. [FN186] Until now,
the absence of express guidance and mechanisms for regulating attorney conduct has been masked by the implicit consensus
among practitioners, information deficiencies, and the pragmatic techniques arbitrators undoubtedly employ. However, the
size of the gulf between inconsistent ethical obligations is foreboding and the consequent threat to arbitral neutrality is
unmistakable, even if as yet difficult to detect. Articulated ethical norms can help not only to get all participants in arbitration
playing by the same rules, but also to provide an independent yardstick by which attorney conduct can be assessed and by
which members of the arbitration community can understand the consequences of their decision to arbitrate. [FN187]

II. Deriving the Content of International Ethical Norms

With the need for a code of ethical norms for international arbitration established, this Part turns to the question of how
the substantive content of those norms should be derived. There is a range of possible approaches. A code of international
ethical norms could be developed through negotiated compromise or a neutral methodology that chooses from among the
competing national norms. It is also possible that parties could be allowed to select ethical norms using the same methods by
which substantive law for arbitration is selected. The common element in these approaches is that they view ethical norms as

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 14
23 Mich. J. Int'l L. 341

freestanding precepts, which are independently modifiable and interchangeable.

*380 Instead of these approaches, I propose a theory I call the functional approach to legal ethics. [FN188] Section A of
this Part constructs a model of the functional approach, which is premised on the link between morality and role. This
functional approach illuminates, in Section B, why different national systems have adopted conflicting ethical norms
identified in Part I-- those systems have assigned to attorneys different functional roles. Based on the reasons why national
systems differ, I describe in Section C why none of the alternative solutions for developing international norms would yield
satisfactory norms for use in international arbitration.

A. The Theoretical Underpinnings of the Functional Approach

The nature of legal ethics seems to defy precise definition. A review of the vast body of U.S. scholarship on the subject
reveals two predominant and competing definitions. The first treats legal ethics as the law of lawyers, while the second
treats ethics as ethics. [FN189] Under the first approach, legal ethics are simply a variety of law. Ethical codes are unique,
according to this view, only by virtue of the fact that they are promulgated by the profession (as opposed to legislatures) and
enforced through judicial agencies or bar associations (as opposed to prosecutors). [FN190] Proponents of this view argue
that in following ethical rules, lawyers are not making ethical decisions. [FN191] They are simply complying with the law
that governs their particular professional conduct. In their differentiated professional role, attorneys can pursue their clients'
objectives without regard to their personal moral views or countervailing social interests, and mere compliance with the code
deems their conduct ethical. In the most strident articulations of this approach, lawyers' work is described as intentionally
amoral. [FN192]

*381 The second approach rejects the ethics-as-law view, arguing that moral behavior in any capacity (including that of
the professional lawyer) necessarily includes personal judgments about competing interests. [FN193] Proponents of this
second approach argue that lawyers should make these sorts of personal judgments and be held accountable for them no less
so than other members of society. [FN194] They should not be permitted to avoid moral condemnation on the ground that, as
lawyers, they need only comply with the minimum requirements of ethical codes. The ethics-as-ethics approach rejects role
differentiation as an unsavory justification for behavior by attorneys that (arguably) would be morally objectionable to an
ordinary person. [FN195]

Both of these approaches err in their understanding of the relationship between role and ethical decisionmaking. The
ethics-as-law approach suggests that the role of lawyer obviates completely the need for legal professionals to engage in
ethical decisionmaking, while the ethics-as-ethics approach denies that the role of the lawyer as professional advocate should
affect ethical decisionmaking at all. Both of these approaches overlook the basic premise that no one is ever an abstract moral
agent. [FN196] [M]oral agency is embodied in roles assigned *382 to actors, who are mutually inter-defined in terms of
relationship. [FN197] Situation-specific obligations cannot be analyzed outside the context of a specific role. For example,
in determining whether a person has a moral obligation to feed a certain child, it matters whether the person is the child's
parent, neighbor, babysitter, or a complete stranger (and even then perhaps whether the child is on the street in front of the
person's house or in a far-off land). [FN198] The ethical obligations of individuals in each of these situations differ because
they perform different functions in their roles in relation to the child. Role, therefore, far from being a set of ethical blinders,
is essential to ethical decisionmaking.

On the other hand, role cannot, in most instances, distill complex ethical quandaries down to a single undeniable and
controlling rule or algorithm, such that compliance with the rule would obviate the need for any personal ethical reflection.
The functions performed by a moral agent establish a particular range of choices that would further fulfillment of that
person's role and help identify the factors to be taken into account in making ethical decisions. [FN199] In professional
contexts, ethical codes crystallize a critical fraction of that range into a mandatory framework. Resolution of the other issues,
which occupy what remains of that range after the mandatory rules are carved out, is left to the personal judgment of the
professional. Ethics-as-law proponents are therefore misguided when they suggest that existence of a code wholly obviates
the need for individual ethical decisionmaking. [FN200] Codes simply make certain choices impermissible and frame the

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 15
23 Mich. J. Int'l L. 341

inquiry for other choices.

*383 These observations lead to an important distinction: Ethical codes do not establish the role of a professional.
[FN201] They guide and facilitate performance of an already-established professional role. The starting point for any ethical
regime, therefore, is to define the role of the agent. In the case of lawyers, the role of the advocate rests on an inherent
contradiction. [FN202] On the one hand, advocates occupy a quasi-official role as agents in the process of justice. This role
imposes on them certain obligations to courts, the legal profession, and the public at large. On the other hand, they are
retained by one party to ensure victory over the other. [FN203] In this capacity, advocates owe to their clients duties that may
well be at odds with their other obligations to courts, the profession, and the public. [FN204]

*384 The interrelationship between these competing obligations can be conceptualized as a Venn diagram, composed of
two overlapping circular zones. Each sphere is composed of the various particular ethical obligations that were taken up in
Part I--obligations relating to fairness and truthfulness are in the one sphere, and those relating to loyalty and confidentiality
are in the other. [FN205] In the center of each sphere are the universally accepted ethical rules, such as those against bribing
judges [FN206] or representing opposing sides in a single dispute. [FN207] The overlap between the two spheres represents
those areas in which the obligations are in tension or directly conflict with each other. Thus, for example, the collision
between the obligation to maintain client confidences, on the one hand, and the obligation to avoid participation in clients'
perjury, on the other hand, is located in the shaded area in the middle of Figure 1.

Figure 1

TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE


The systems of the world agree on the general structure of the Venn diagram, and the core principles of legal ethics in the
center spheres, because these features derive from the universal features of the advocate's *385 role. [FN208] An advocate
may be defined as a representative of a party who is retained to bring professional expertise to aid in the party's presentation
of its case before a neutral tribunal. [FN209] This definition necessarily implies basic commitments to truthfulness, fairness,
confidentiality, and loyalty, but it also recognizes, at least implicitly, that as these competing obligations expand, they will
collide, as represented in the shaded area in the middle.

Figure 1 is helpful to illustrate the basic structure underlying legal ethics as it applies to a generic advocate, but national
systems assign unique functional roles to advocates. Outside of the fundamental features inherent in the definition of an
advocate, and contrary to popular belief, the professional advocates of the world perform very different functions in relation
to other actors (judges, opposing counsel, clients, and witnesses) in their respective adjudicatory systems. [FN210] As a
consequence of these different roles assigned to advocates, outside of the nucleic centers of the ethical obligations
represented in the Venn diagram, national systems diverge on how expansively they construct the diameter of each
surrounding sphere, and in how they engineer the overlap between them. If a system envisions the lawyer's role as primarily
that of agent to the client, that system will cast an expansive sphere of obligation to the client, which overshadows the
attorney's obligations to *386 the court and society. Other systems may conceive of the attorney as principally an instrument
of the state, and thus construct almost the reverse relationship between the spheres, [FN211] while still others may treat
attorneys as occupying a role between instrument of the state and instrument of the client, and draw the spheres as roughly
equivalent. [FN212]

The blueprints for the role of the legal advocate in the decision-making structure and in relation to other actors are the
procedural arrangements of a legal system. [FN213] While all advocates represent their clients in courtroom proceedings,
procedural rules, along with rules of evidence, dictate the specific activities through which the lawyer will perform that
obligation. It is through these procedural rules that specific roles, in relation to other actors in a legal system, are determined.

Procedures, in turn, are chosen to reflect and promote the values that underlie the larger legal culture of a society. They
emerge out of the culture of a society, meaning those beliefs about how to properly relate to each other that are deeply
held, widely shared, and persistent over time. [FN214] Institutions for dispute resolution, and the roles assigned to actors in

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 16
23 Mich. J. Int'l L. 341

those institutions, are both an expression of a culture's values and a mechanism for maintaining those values. [FN215] As
Professor Damaska explains:

[D]ominant ideas about the role of government inform views on the purpose of justice, and the latter are relevant
to the choice of many procedural arrangements. Because only some forms of justice*387 fit specific purposes, only
certain forms can be justified in terms of the prevailing ideology. [FN216] Procedures, then, are integrally linked to the
values or goals of the system for which they were designed.
If cultural values motivate procedural choices, which in turn determine the advocate's role in adjudication, and an
advocate's role shapes the boundaries of ethical norms, then national ethical regimes can ultimately be understood as
reflecting procedurally-determined and culturally-bound differences in the values of national legal systems.

B. The Functional Approach in Comparative Perspective

This Section presents a comparative proof of the theory laid out in the last Section in order to illuminate the seemingly
enigmatic reasons for the differences among national ethical regimes (discussed in Part I) and to illustrate the explanatory
potential of the functional approach. The thesis of the functional approach is that ethical regimes are tied to the interrelational
roles performed by actors (judges, advocates, witnesses and parties) in different systems. Consequently, a comparative proof
must begin with an inquiry into the roles established by various national adjudicatory systems. [FN217]

In any adjudicatory apparatus, the judge [FN218] is the primary determinant from which counsel, witnesses, and parties
are cast in their respective *388 roles. [FN219] In Continental systems, such as those in Germany and Italy, the judge can be
described as the engine of the adjudication machine. The judge is the one who schedules, sets the agenda for, and presides
over a series of hearings, any one of which may ultimately decide the case. [FN220] During the episodic hearings that
characterize civilian proceedings, it is the judge, acting on recommendations from the parties, who decides which witnesses
and documents will be presented, and the order of such proof. [FN221] Most strikingly to common-law trained lawyers, the
civilian judge conducts the actual interrogation of witnesses. In the ordinary civil law case, there is little or no questioning by
the parties through their lawyers. [FN222] The judge is expected to take an active role in both clarifying the issues and
encouraging settlement. To this end, the civil law judge expresses views as to the merits of the case as it proceeds and moves
from an initial position of impartiality to one that favors one party over the other. [FN223]

While Continental judges have broad managerial powers, they are expected to apply the law in an almost mechanical
way, remaining a controlled instrument of the legislature. [FN224] At least according to the internal folklore, judicial
interpretation of [civil] codes does not involve the *389 judges in a process of law creation. [FN225] This perception of
judges as the appliers (rather than makers) of law is both evidenced and reinforced by the formulaic, bureaucratic style of
civil law judicial opinions, which never include dissents and usually take the form of a string of phrases sounding in a
detached tone and connected by whereas's. [FN226] A judicial opinion, with its rhythmic recitals and studied detachment,
is the voice of a judicial institution obedient to legislative commands, not the personal judgment of an individual adjudicator.

In relation to a judge who is gathering facts, shaping issues, and dutifully applying the law, the role of the civil law
attorney is primarily that of guide to the court. [FN227] The role of guide is, in many respects, collaborative. Some nations
make this collaborative role explicit. Sometimes, this semi-official status is made explicit, such as in Germany where
attorneys are considered part of a concept called ffentliche Rechtspflege (administration of law) [FN228] and in Greece the
Lawyers' Code characterizes lawyers as unsalaried Public Servants. [FN229]

Advocates' collaborative role is also recognized and reinforced through a range of traditions, such as a host of rights and
privileges enjoyed by Greek attorneys, including special access to public service or administrative offices at times closed to
the lay public. [FN230] This link to the government is reinforced in many civil law countries by regulations that fix fee
schedules, which prescribe particular fees for particular services. Microregulation of attorney fees by the government implies
that attorneys are performing state-coordinated functions, not personal services in a predominantly private arrangement.
[FN231] Similarly, geographic restrictions in Germany and France, which until recently admitted a lawyer only to a particular

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 17
23 Mich. J. Int'l L. 341

bar and a single court (for example, the trial court in the bar of Paris or the first appellate level in Hamburg), [FN232] seemed
aimed *390 at ensuring that courts have as regular a roster of attorneys as they do of judicial personnel. Even the requirement
that civilian lawyers appear in court wearing a robe can be understood as a symbolic reflection of their quasi-official role.
[FN233]

In contrast to these continental arrangements, the American system is built on a model of party contest before a judicial
tabula rasa. [FN234] The American judge (or jury) is supposed to obtain only through the party dialectic all evidence that
must be evaluated and legal arguments that must be analyzed, [FN235] and they are expected to remain completely neutral
until it is time to render the final judgment. [FN236] As a consequence of the relatively passive role of decisionmakers, the
attorneys are given an active role in managing the proceedings. The attorney in U.S. litigation gathers evidence, shapes the
issues for trial, and presents evidence at trial, including examining and cross-examining witnesses. Because the judge only
rules on pre-trial motions that are brought by the parties, attorneys act not as guides, but primarily as clients' strategists,
evaluating and advising when and how various procedural tactics should be used.

While U.S. judges (and juries) are comparatively passive in their fact-finding role, it is readily acknowledged that U.S.
judges make law. [FN237] Parties go to court, therefore, not only seeking resolution of an individual dispute, but potentially
changes in the law. [FN238] When judges have the power to make law, the role of the advocate expands from that of
strategist who can represent the client's cause under existing law, to that of lobbyist, who can urge potential changes in the
law.

Through understanding the different roles that the two systems have assigned to advocates in relation to courts and their
clients, the seemingly opaque reasons for the divergences in their ethical regimes become clear. When attorneys are cast in
the role of guide to the court, the sphere comprised of obligations relating to fairness and truth must expand, protruding*391
over a shrunken sphere of obligation to the client. Attorney independence from the client becomes necessary to keep
attorneys focused on their role as guide. [FN239] In the U.S. system, meanwhile, where attorneys are cast as strategists and
lobbyists for their clients, the sphere of obligation to clients must be more imposing to accommodate the expansion of this
role. Consequently, the obligations to the State and the system are partially overshadowed, [FN240] and independence shifts
to become a mechanism primarily aimed at maintaining distance from the State.

These models are the frameworks in which the specific content of national ethical rules is located. Beginning with the
rule about pre-testimonial communication, if witnesses are presented by one party as part of its case, [FN241] it seems
perfectly reasonable, subject to certain limitations, to permit attorneys to discuss the case with witnesses before they testify.
In fact, it is really necessary in order for the litigants to be able to prepare their case. [FN242] On the other hand, the reason
why Continental systems preclude attorneys from speaking to witnesses is that the court is assigned the role of fact gathering
and the advocate's function is primarily to guide the court in that process. [FN243] In that context, an attorney would be
intruding on the province of the court if the attorney tried to discuss with the witness the facts of the case. [FN244] Finally,
civil law jurisdictions' *392 willingness to vest attorneys with discretion on delicate issues involving their own conflicts may
reflect confidence in the professional independence that attorneys are expected to maintain from their clients, which, prior to
the adoption of the CCBE Code, was considered sufficient to leave conflicts of interest solely as a matter of an attorney's
personal relationship with the client. [FN245]

The U.S. system's prohibition against ex parte communications is framed in more absolute terms because the
decisionmaker is expected to be a blank slate on which the parties, in heated contest, draw their dispute. The system permits
no stray renderings by one party that might unfairly alter the tableau. On the other hand, when advocates act as guide to the
court, as in civil law systems, there is less concern that extrajudicial information will endanger the validity of the result, and
hence more relaxed ethical standards regarding ex parte communication in civil law systems. [FN246] Under similar
reasoning, toleration of ex parte communication in the domestic U.S. arbitration may reflect an acknowledgement that so-
called party arbitrators are not expected to be completely impartial, but were in fact chosen because of their supposed
predisposition toward one party. [FN247] If party arbitrators are expected to be predisposed in favor of the selecting party
and to act more akin to a party's advocate on the tribunal than a neutral umpire, the prospect of party communication with the
party arbitrator is not terribly objectionable.*393 [FN248] Such communication may even be regarded as necessary to ensure

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 18
23 Mich. J. Int'l L. 341

that the party arbitrator fulfills her assigned role. [FN249]

To be an appropriate guide to a continental judge, civilian lawyers must maintain a certain degree of independence
from their clients so that their professional judgment remains unclouded by the client's objectives. [FN250] In-house
representation and attorneys compensated through contingency fees, whose livelihood is tied to the client's success, are
incompatible with this requirement of professional detachment from the client's cause. On the other hand, an attorney who
acts independently of the client need not be as strictly regulated with regard to conflicts of interest. If the lawyer's role is
limited to aiding the court in finding legislatively determined answers, obligations of disclosure to the court take on a greater
importance and stricter restraints on creative arguments are inevitable. Additionally, when assigned a collaborative role with
the court, opposing counsel become attenuated co-collaborators. Confidential information exchanges between co-
collaborators may require some protection, while the need to protect information or advice disseminated from the quasi-
official attorney to the client is less obvious. [FN251] Moreover, if questions of confidentiality come up only infrequently in
civil law *394 proceedings, and primarily in response to questions from a judge, [FN252] there is less concern in leaving
attorneys with discretion about when information can be disclosed. [FN253]

By contrast, when advocates are cast in the role of strategist and lobbyist for the client, it is less plausible and less
desirable for them to maintain a detached independence from the client. Instead, client confidences take on a new level of
importance and necessarily heightened loyalty obligations make even attenuated conflicts of interest impermissible, at least in
the absence of client consent. Communication with the client is essential and withholding important communications from an
opposing party would interfere with representation. In their role as lobbyist, creative argumentation is not only permissible
but necessary, and their independence from state institutions, including the courts, becomes all the more important.

Ultimately, these differing roles assigned to attorneys reflect the larger cultural values of the societies that produced
them. Using very broad brushstrokes to render the opposing scenes, it has been argued that the greater authority of civil law
judges reflects in German society a greater acceptance of authority and less tolerance for uncertainty. [FN254] Meanwhile,
the expanded control of parties in U.S. proceedings, and the consequent role of the U.S. attorney as strategist and lobbyist,
are said to be linked to the American commitment to individualism and an exaltation of due process over efficiency and even
fact-finding accuracy. [FN255] Thus, while legal ethics are often regarded as universal by virtue of their intimate relationship
to moral philosophy, they are in fact vitally linked to the cultural values of the systems that produced them. [FN256]

*395 C. The Implausibility of Methods OtherThan the Functional Approach

With an understanding of the relationship between ethics, procedure and systemic cultural values, it becomes apparent
why other proposed or possible methods for deriving ethical norms for international arbitration are unlikely to succeed. A
code of ethics for international arbitration must be linked to the values of the international arbitration system and the
procedures that reflect those values. Other approaches treat ethical norms as autonomous principles, independent from the
procedural arrangements and cultural values of the systems from which they derive.

1. Negotiated Compromise

The most common method for deriving international legal rules is negotiated compromise aimed at harmonizing national
rules. Increasingly, however, it has been recognized that these processes can be ineffectual. In areas that implicate value
choices (such as human rights and, as explained above, attorney ethics) these formal negotiation processes breakdown
because it is not possible to reason which system's values are better. On questions of values, reason is silent; conflict
between rival values cannot be rationally settled. [FN257] Instead, when delegates with competing values bargain over
whose rule or what hybridized rule should control, the norms produced frequently reflect the relative power of the negotiators
or the anomalies of compromise. [FN258] When development of international norms is left to the lawyer-bureaucrat,
attached to the policy-making machinery such norms are no longer mediated through the development of a conceptual
framework [that] is in tune with the changes of international reality. [FN259] The result of these struggles is often a resort to
the lowest common denominator or compromise at the level of individual norms that undermines the rationality of the whole.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 19
23 Mich. J. Int'l L. 341

[FN260]

*396 We do not need to speculate whether this problem could manifest itself in the context of negotiated international
ethical norms because we have direct historical examples. In 1956, the International Bar Association (IBA) adopted the IBA
International Code of Legal Ethics (IBA Code). [FN261] While called a Code and referring to Rules, the IBA Code is
more accurately characterized as an aspirational statement of professional culture. [FN262] For example, on the subject of
conflicts of interest, lawyers are admonished only to preserve independence in the discharge of their professional duty.
[FN263] In this norm, the IBA Code does not attempt to resolve, or even acknowledge, that systems have distinctly different
notions of what constitutes a conflict of interest or that they have different definitions of the term independence. [FN264]
There were similar problems with the successor to the IBA Code, the 1977 Declaration of Perugia on the Principles of
Professional Conduct of the Bars and Law Societies of the European Community. [FN265] The Perugia Principles contained
only eight brief ethical pronouncements, which were essentially an obscure discourse on the function of a lawyer in
society and the nature of the rules of professional conduct. [FN266] Again, they did not even acknowledge or attempt to
resolve the difficult conflicts between national ethical norms.

The CCBE Code is in many ways a horse of a different color. Unlike its predecessors, it contains more specifics and it
grapples with many difficult areas of conflict between national ethical regimes. While undoubtedly a laudable
accomplishment, the idea of replicating the CCBE Code on an international scale is ominous. Even though the CCBE applies
to only a relatively homogeneous group of European countries, [FN267] *397 and even though it was effectively the third
effort at an international code of ethics, it took more than eight years of work to complete. [FN268]

Looking to its substance, the CCBE still ducks some of the most difficult questions that continue to plague regulation of
cross-border practice, but which must be definitively resolved by any code of ethics for international arbitration. [FN269]
Because the CCBE Code regulates cross-border practice, [FN270] as opposed to practice before international tribunals, in
many instances when its drafters found harmonization of ethical norms impossible, they relied, although not always
successfully, on choice-of-law provisions. [FN271] In one telling example, the CCBE Code attempted to harmonize
conflicting rules about whether an attorney who receives a communication from opposing counsel marked confidential has
an obligation to withhold it as confidential or an obligation to communicate the information to her client. [FN272] Instead of
adopting a definitive rule resolving the conflicting approaches, Rule 5.3 of the CCBE Code simply instructs that if an
attorney wants correspondence handled confidentially, she should clearly state such. If the addressee is not able to withhold
the correspondence from the client, she must return it without revealing its contents. [FN273]

*398 Other examples of unresolved conflicts, such as in the area of confidentiality in the face of client wrongdoing, are
less obvious. Rule 2.3 of the CCBE Codes states in absolute terms that attorneys are obliged to maintain client confidences,
even though Rule 4.4 of the Code seems to suggest an exception in its prohibition against attorneys presenting misleading
information to a court. [FN274] The CCBE Code simply ignores the vast disagreement that exists regarding the limits on the
duty of confidentiality, presumably because agreement was improbable. [FN275]

In contrast to some of the shortcuts that the CCBE Code took, either successfully or not, [FN276] any ethical code
drafted for international arbitration must directly confront and resolve areas of conflict. [FN277] These areas will
undoubtedly be magnified when radically contrasting systems, such as Zimbabwe, [FN278] the United States, [FN279]
China, [FN280] and Saudi Arabia [FN281] get *399 thrown into the mix. No matter how profound the differences, however,
a code of ethics for international arbitration will only be useful if it ensures that all participants in an arbitration proceeding
are abiding by the same rules. To devise these international rules, negotiation and compromise will of course be necessary.
The functional approach will focus such negotiations on the relationship between role and legal ethics, instead of letting the
negotiations remain an unacknowledged contest between competing adjudicatory values.

2. The Most Restrictive Approach

An alternative approach, proposed by a very accomplished scholar in the area of international ethics, is that the most

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 20
23 Mich. J. Int'l L. 341

restrictive national ethical norm be chosen as the benchmark norm for an international code of ethics. [FN282] The theory of
the approach is that if the most restrictive norm is adopted, then compliance with international norms would not offend any
nation's domestic ethical norms. This approach suggests--to take the example of pre-testimony communication with
witnesses--that we could draw a scale and mark as zero as the point at which perjury is perfectly tolerated and ten as the point
representing a complete ban on any pre-testimonial communication. On such a scale, the U.S. rule would presumably be
located somewhere near the four while the German rule would be somewhere near the nine. The international norm,
according to this view, should be set at nine or above, so that in complying with the international norm, all systems' rules
would be satisfied.

Despite its apparent appeal, the most restrictive approach is flawed in its conception and unworkable in application.
The approach necessarily begins from the erroneous premise that professional obligations are the product of bipolar choices
between more and less permissive alternatives. In pictorial terms, it conceives of each ethical norm as existing on its own
linear scale, independent from other norms and from the larger system in which it operates. The functional approach
demonstrates that this conception is inaccurate. The apparently more lackadaisical U.S. approach to pre-testimonial
communication with witnesses does not indicate a greater tolerance for perjurious activities. Instead, it reflects the role of the
attorney as gatherer of facts and presenter of evidence and the related need to conduct extrajudicial investigations, including
speaking with potential witnesses. Similarly, *400 the apparently more relaxed European approach to ex parte
communication does not reflect lack of concern about the possibility that parties might exercise unfair influence on the
decisionmaker. It reflects, instead, the attorney's role as guide to the court, in which ex parte communications are less of a
threat and may in fact aid the judge in more efficient decisionmaking. While the most restrictive approach has an implicit
allure, [FN283] the simplicity of this methodology comes only by ignoring, at great peril, the complexity of ethical norms
and their relationship to the larger systems of adjudication in which they operate.

3. Law and Economics Approach

Legal ethics has recently been receiving a great deal of attention from the Law and Economics community in the United
States. [FN284] Moreover, economic concerns have motivated drafting of the CCBE Code and current focus on international
ethical norms as it has become apparent that professional licensing can be a barrier to international trade and the free
movement of persons and services. [FN285] Based on the undeniable link between ethics and economic concerns, Law-and-
Economics scholars might propose that the best approach to developing an international code of ethics is to identify the
most efficient rule. [FN286]

*401 Notwithstanding correlative economic issues in attorney regulation, using efficiency as the normative ideal
against which to measure competing ethical rules would not obviate the difficult and substantive questions that confront
drafters of an international code of ethics. In commercial contexts, efficiency describes the rule that would promote
productivity, reduce transaction costs, increase acceptance in the marketplace, and as a consequence (at least theoretically),
produce increased prosperity for all. [FN287] Outside of regulation of the commercial aspects of the legal services market,
however, the object of efficiency is not self-evident. [FN288] Before determining whether a rule is more or less efficient,
the scholar must operationally define the term: More or less efficient at what? This question can be difficult to answer in a
cross-cultural context because of the conflicting goals of different adjudicatory systems. For example, in evaluating rules
regarding pre-testimonial communication with witnesses, to determine whether the American or German approach is more or
less efficient, the scholar must adopt normative objectives to define efficiency, such as more accurate fact-finding or
more accommodating to party participation in proceedings. [FN289] Once down this road, however, the scholar is in the
position of examining what values ethical norms should advance. A Law-and-Economics approach might be useful at some
level, but only after the value choices for ethics in international arbitration have already been identified through the
functional approach.

*402 4. The Choice of Laws or Conflict-of-Laws Approach

Another possibility, which might be considered as an alternative to developing a new code of ethics for international

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 21
23 Mich. J. Int'l L. 341

arbitration, is to treat ethics as a matter to be resolved either by conflict-of-laws rules or by a choice of law decision to be
made by the parties. These approaches have some notable forerunners within the international arbitration system itself.
Parties usually select the substantive national law that will govern their dispute. [FN290] In the absence of such a choice by
the parties, arbitrators employ a conflict-of-laws analysis or the doctrine of lex loci arbitri [FN291] to select one nation's laws
to govern. Moreover, conflict-of-laws techniques are used in the U.S. Model Rule 8.5 [FN292] and the CCBE Code [FN293]
to resolve multijurisdictional conflicts in cross-border practice. These methods are appealing because they facilitate
identification of a single controlling rule through selection of a national ethical regime in its entirety. The need to haggle or
brood over the content of rules is avoided by simply transplanting those of a national system. Like other potential approaches,
however, the appeal of a conflict- or choice-of-laws approach is illusory.

Given the unique features of international arbitration, certain national ethical norms may be particularly inapt if
transplanted. For example, national rules that place communications from an attorney to a client outside the realm of
confidentiality protections may be pernicious in proceedings that follow an American litigation model with aggressive
discovery, particularly since the discovery of such documents would make attorneys more likely to be called as witnesses.
[FN294] To avoid such problems, the rules chosen must, according to the functional approach, *403 reflect and facilitate
performance of the interrelational roles assigned to actors in an adjudicatory setting.

The importance of the fit between ethical norms and functions assigned to advocates is implicitly acknowledged by the
Model Rules and the CCBE Code. Both codes instruct that, with questions pertaining to conduct before a court in a foreign
jurisdiction, the rules of the applicable tribunal govern. [FN295] Even though it is unlikely that these rules were intended to
apply to international arbitration, [FN296] they are premised on an assumption that adjudicatory tribunals do have (or should
have) their own ethical norms and that attorneys appearing before them should be bound by them. [FN297]

Particularly staunch advocates of party choice may insist that the participants in arbitration are able to undertake the
analysis necessary to match the ethical rules with the procedures they have chosen. Parties in arbitration are repeat players
who presumably have the resources to investigate and select the national ethical norms that they want to govern their arbitral
proceedings. [FN298] The sophisticated character of these parties has led some scholars to speculate that elaborate
negotiations produce sophisticated arbitration agreements that are designed to circumnavigate onerous national laws and map
out customized adjudicatory procedures. [FN299] In spite of significant literature that predicts that repeat players will bargain
for procedures that optimize their strategic positions, such opportunism in drafting has not, at least yet, become the practice in
drafting arbitration agreements. Often, arbitration agreements *404 are an afterthought thrown into a contract by corporate
attorneys who have little experience with arbitration and are hoping that the possibility of a dispute is distant and improbable.
[FN300]

National ethical rules are also unable to be an adequate substitute for specialized rules for arbitration because national
rules do not address all areas of conduct raised in international arbitration. [FN301] For example, because parties do not
choose judges, national ethical codes do not contain any provisions governing what types of questions are permissible in
interviewing candidates to act as party-appointed arbitrators. Moreover, because arbitrators are most often drawn from the
ranks of large law firms or corporations, arbitral arrangements present unique opportunities for potential conflicts of interests
between decisionmakers and lawyers that are not present in traditional litigation settings, in which judges are isolated
government employees. [FN302]

Even if it were assumed that the inadequacy of national ethical rules was simply their failure to address a few discreet
areas where regulation is unique to arbitration, [FN303] it is not plausible that these gaps could be filled by rules specially
negotiated at the time when the parties choose national rules. The time-cost of negotiating individual rules to circumnavigate
the limitations of national ethical rules is prohibitive. By way of analogy, arbitration agreements almost never include
provisions regarding*405 procedure, because it is simply too difficult to negotiate procedural rules during negotiation of the
underlying contract. [FN304] Parties are even less likely to negotiate more particularized provisions regardingethics. [FN305]

With regard to rules of procedure and evidence, this problem has been solved by the IBA Supplemental Rules Governing

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 22
23 Mich. J. Int'l L. 341

the Presentation and Reception of Evidence in International Commercial Arbitration. [FN306] The IBA Supplemental Rules
are a prefabricated set of default rules that parties can easily incorporate into their contract. [FN307] For the same reasons
that party autonomy is served better by the IBA Supplemental Rules than it is by the opportunity to adopt a national system's
or negotiate individual rules of procedure and evidence, [FN308] a prefabricated code specially tailored to international
arbitration will serve parties' interests better than permission to choose one nation's law. [FN309] The functional approach is
a coherent methodology that can identify and shape norms for such a code.

*406 D. Conclusion

In addition to the substantive insights it holds into the nature of legal ethics, the functional approach also demonstrates
the overwhelming importance of comparative analysis to the development of international legal rules. [FN310] The process
of comparing reveals not only the true extent of similarities and differences among systems, but also the reasons for those
differences. In the absence of comparison, the link between procedure, adjudicatory values, and professional legal ethics
would remain obscured by the myopia of our limited cultural perspective. [FN311] Discerning the anatomy, not just the
external form, of legal rules will facilitate the production of international norms that not only appear at a superficial level to
resolve conflicts, but that actually serve the needs of the international arbitration community and other international
adjudicatory systems.

III. The FUNCTIONAL APPROACH as a Prescriptive Tool

Until this point, this Article has used the functional approach to examine the link between ethics and role and the
consequent differences among national ethical regimes. The functional approach can also be a prescriptive tool for
developing ethical norms for international arbitration. The actual drafting of ethical codes and even of precise rules is beyond
the scope of this Article and, in a companion article, I argue that this task is better undertaken by the various arbitral
institutions. [FN312] This Part illustrates the methodology to be used by arbitral institutions in undertaking the task of
drafting those codes, and provides a brief sketch of what its application will portend.

*407 A. The Functional Approach in Prototypical International Arbitration

As a prescriptive methodology, the aim of the functional approach is not to resolve conflicts between different national
ethical norms, but to develop norms that are suited to the international arbitration system. To that end, the functional approach
requires identification of the interrelational functional roles of actors in the international arbitration system, [FN313] meaning
those roles that are assigned by the procedural arrangements of international arbitration and that reflect the underlying
cultural values of the international arbitration system.

1. The Predicates for Applying the Functional Approach to International Arbitration

The dictates of the functional approach, which are premised on procedural arrangements and cultural values, seem
difficult to apply in the international arbitration system. Instead of established procedural arrangements, institutional arbitral
rules only provide skeletal procedures for commencing arbitration and selecting arbitrators. [FN314] Beyond these basics,
arbitral rules are generally silent with regard to the actual proceedings, including such fundamentals as whether hearings will
be held. [FN315] How can these sketchy outlines of procedural rules guide us in understanding the role of attorneys in
arbitration and the ethical obligations that are consistent with that role?

It is similarly perplexing to contemplate how to ascertain the cultural values [FN316] of the international arbitration
community. International arbitration exists between cultural boundaries and is intended to fuse multiple, diverse legal
traditions. It is a system of dispute resolution without geographic borders or a discernible citizenry. Indeed, the dynamic
increase in the ranks of participants is one of the major sources of pressure for development of an established ethical regime.
[FN317] How can the cultural values of this amorphous system inform development of ethical norms?

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 23
23 Mich. J. Int'l L. 341

*408 Notwithstanding the open texture of the international arbitration system, there is in fact substantial guidance for
formulating ethical norms. The questions posed above can be answered by identifying in the international arbitration system
analogues to the national cultural values and rules of civil procedure that inform development of national ethical rules.

2. The Normative Goals of International Arbitration

While the international arbitration system does not have cultural values, as that term is defined in reference to national
contexts, it does have distinctive normative goals. For our purposes, these goals can be distilled down to: neutrality,
effectiveness, and party autonomy. Just as with national cultural values, [FN318] it will be shown that the normative goals of
the international arbitration system, described in this subsection, undergird and reflect the structure of procedural
arrangements in international arbitration, described in the following subsection.

The primary accomplishment of international arbitration, and the primary reason why parties choose international
arbitration, is that it ensures neutrality. [FN319] Parties presume, rightly or wrongly, that the national courts of the opposing
party would be biased against them. Significant threats of bias come not only, as is often mistakenly supposed, from the
courts of developing nations because of their presumed lack of judicial independence or their vulnerability to corruption. Bias
against foreign defendants is alive and well in all countries, including the United States. This unfortunate reality was
recognized during the drafting of the U.S. Constitution and led to the diversity clause, which extends the jurisdiction of
presumably less-biased federal courts to matters between *409 American citizens and foreign nationals. [FN320]
Notwithstanding this effort by the Founders, recurring surges of nativism and xenophobia have plagued this nation's history
and suggest the potential for unfair treatment of noncitizens in the courts. Bias against noncitizens unfortunately remains to
this day. [FN321]

To avoid the potentially biased national courts of their opponents, international businesspersons enter into agreements
that prevent national courts from deciding the case and instead place decision-making power in the hands of an arbitral
tribunal of their choice. [FN322] By transferring substantive decisionmaking from national courts to a private arbitral
tribunal, parties obtain a uniquely neutral forum for resolving their disputes. [FN323]

Another important goal of international arbitration is to ensure that disputes will be resolved effectively. Because the
exercise of judicial jurisdiction over foreign nationals is an exercise of coercive power, and it reaches into the boundaries of a
foreign sovereign, [FN324] national court litigation of international private disputes often implicates issues of foreign
national sovereignty and international comity. [FN325] As a consequence, many otherwise routine procedural matters, such
as *410 service of process and production of discovery, must be conducted pursuant to international conventions. [FN326] In
addition to sidestepping the procedural complications inherent in international litigation, arbitration permits parties to
determine where their dispute will be resolved, which is no small accomplishment when the all-too-likely alternative of
litigating simultaneously on multiple fronts is considered. [FN327] Finally, international arbitration ensures effectiveness by
offering a final award that is enforceable. Given the radically different standards for adjudication in national courts, judicial
judgments are often viewed with suspicion or rejected outright as unenforceable by foreign courts. [FN328]

To achieve the first two goals, neutrality and effectiveness, the modern international arbitration system strikes an
exceedingly fine balance between arbitral autonomy and minimum competence for national judicial review. [FN329] When
the role of national courts is reduced to ensuring that minimal procedural requirements are observed, the necessary by-
product is that under the New York Convention there is no appeal from the substantive errors arbitrators may make. Instead,
awards must be enforced by national courts unless they offend what might be considered the most basic notions of morality
and justice. [FN330] *411 The extraordinary effect of the first two goals mandates the third normative goal of international
arbitration--party autonomy. [FN331]

To compensate for their lack of a right to appeal the substance of arbitral awards, parties are given ex ante control over
the arbitral process. [FN332] The parties create arbitral jurisdiction, [FN333] select the arbitral tribunal, [FN334] and
determine the powers of the tribunal. [FN335] Parties also have the opportunity to require that the tribunal follow certain

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 24
23 Mich. J. Int'l L. 341

procedures, which is the other touchstone for applying the functional approach. The interplay between these three goals, like
the legal culture of *412 national systems, is the background against which procedural arrangements should be modulated
and a new ethical regime should be developed.

3. Procedural Arrangements in International Arbitration

The rules of arbitral institutions are left intentionally sparse to allow parties the opportunity to set the procedures to be
followed by the tribunal. [FN336] In practice, however, parties rarely exercise this power during the drafting of arbitration
agreements, [FN337] and agreement after a dispute has arisen is difficult, although some notable exceptions exist. [FN338]
Since there are few mandatory procedures, the gap in procedures has until recently been filled by shared assumptions
premised on a civil law style of adjudication, with the arbitrator assuming an active role and enjoying broad discretion and
powers similar to those of a civil law judge. [FN339]

As part of the judicialization of international arbitration, however, hybridized procedures have emerged, which are
routinely adopted by parties. [FN340] These procedures have become popular to the point of being commonplace, [FN341]
both because they make proceedings more formal and predictable, and because they effectively neutralize the sharp edges of
national procedural practices. [FN342] Under these hybridized procedures, *413 oral hearings are routinely held. [FN343] In
these hearings, most often direct examination is submitted by the parties in the form of witness statements or declarations,
[FN344] which gives parties substantial control over what testimonial evidence will be presented in support of their case.
Cross-examination of witnesses who submit statements is generally accepted as a legitimate fact-finding technique, but it is
practiced with less vigor than in U.S. courtrooms. [FN345] During cross-examinations, arbitrators routinely interject with
questions of witnesses, but more for the purpose of clarifying and filling in gaps in *414 testimony, than developing the
initial content of testimony. [FN346] Limited discovery is usually allowed, including depositions, [FN347] and evidentiary
objections are making an appearance in many arbitrations. [FN348]

As noted above, [FN349] these hybridized procedural practices have recently been synthesized into specific rules by the
International Bar Association, which can be incorporated into the parties' contract. [FN350] These procedures are not
mandatory, but I will demonstrate below that they reflect a balance of power between parties and arbitrators that serves the
tri-partite goals of arbitration. The balance in power relations established by the hybrid procedures can be the essential
touchstone for application of the functional approach to derive ethical norms for the international arbitration system.

4. Applying the Functional Approach to International Arbitration

Just as the role of the judge was the starting point in analyzing national systems, the role of the arbitral tribunal is the
starting point for analyzing the roles of players in the international arbitration system. The most striking feature of arbitrators
is that, as a consequence of the balance struck by the New York Convention, they are vested with what amounts to broad,
virtually unreviewable decision-making power. [FN351] *415 This power is striking in contrast to their judicial counterparts.
[FN352] Even clear mistakes of law in arbitral awards are virtually immune from appellate review. [FN353] Arbitrator
decisions cannot draw legislative responses that, in national systems, are used to counterbalance judicial activism. [FN354]
Other types of indirect controls that constrain national judges--such as pre-established rules of evidence and procedure--were
often, under traditional procedure, left to the arbitrators to decide. Finally, unlike judicial decisions, there are no minimum
requirements for the form of arbitral awards, which means awards are also insulated from the constraining force of public
scrutiny. [FN355] Arbitrators are vested with this extensive, uncontrolled power to ensure that their decisions are neutral and
effective.

Moreover, under traditional procedures, the ability of parties to control proceedings has significant practical and temporal
limits. Since party control must be exercised through unanimous decision with other parties, as a practical matter the
opportunity for such control almost ends once a dispute arises because, in the midst of a dispute, coordinated efforts among
parties is difficult to attain. [FN356] Inevitably, one party regards extensive discovery as a means to develop evidence
bolstering its case, *416 while another regards such discovery as potentially exposing its vulnerabilities. One party sees

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 25
23 Mich. J. Int'l L. 341

witness testimony as an important source of evidence, while the other can mount a better case if the decision is made only on
documentary evidence.

Because of the improbability of agreement, after parties have a clear sense of the advantages of particular litigation
strategies, party control over arbitration procedure virtually ends. Under traditional procedures that were applied in the
absence of party agreement, after a dispute arose, arbitrators were entrusted with virtually complete control over all fact-
finding, including decisions about whether and which witnesses to call, how they should be questioned, and which documents
would be requested from the parties. [FN357] Ironically, party control may effectively end when the dispute commences, but
that is precisely when parties' interest in exercising control is most intense. Parties may draft arbitration agreements in the
hope that no dispute will arise and without any notion about what a potential dispute would be about, [FN358] but by the
time a genuine dispute arises, they are keenly interested in exerting as much influence as they can to win a favorable result.
[FN359]

The changes brought by the judicialization of the international arbitration system are effecting some curtailment of this
expansive arbitrator power. For example, the new-found interest in reasoned and published arbitral awards will subject
arbitrator decisions to public scrutiny, [FN360] while the existence of prefabricated procedural rules limits arbitrator
discretion in determining how proceedings will progress and how evidence will be received. Even more importantly, the
hybridized procedures that have evolved [FN361] shift primary control over fact-finding during the proceedings from the
arbitrator to the parties. [FN362] The hybridized*417 procedures vest the parties and their counsel (not arbitrators) with
substantial control over the fact-finding process during the arbitration, [FN363] including deciding which witnesses to
present and controlling their direct testimony (or statements), as well as their cross-examination. Parties also have more
opportunity than traditionally allowed to investigate the case, through discovery and interviews with potential witnesses,
which permits them to develop their own theory of the case and present it to the arbitrator.

The net result of these hybrid procedures is that the power of parties and their counsel is expanded in the proceedings to
counterbalance the vast power arbitrators have in the final decision. By expanding party control in the proceedings, the
hybridized procedures create interrelational roles for parties, their attorneys, and arbitrators that reflect and reinforce the tri-
partite normative values of the international arbitration system. Neutrality and effectiveness are preserved, but the immense
discretion that used to exist for arbitrators is curtailed. These interrelational roles, established by the hybrid procedures and
reinforced by the structural goals of the international arbitration system, in turn suggest the contours of the Venn diagram that
represents the competing obligations on attorneys in international arbitration. [FN364]

The considerably expanded discretion an arbitrator has in applying the law suggests that parties through their counsel
must appeal to that discretion. On the other hand, international arbitrators are at once presumed to have more specialized
industry knowledge than judges (though less than industry arbitrators) [FN365] and less experience and support resources (in
the form of clerks, libraries and formal legal training, particularly if they were trained in a system different from the law they
are being asked to apply). [FN366] Moreover, while the open texture of arbitration suggests that attorneys will need to
actively guide parties so that they can make intelligent decisions, it also means that international attorneys have much more
power and influence in the system than they do in domestic litigation.

*418 Together, these features suggest that the attorney's sphere of obligation to the client must be expanded over that of
the classic civil law system, but not nearly to the dimensions of the U.S. system. As a consequence of augmenting the sphere
of obligations to the client over those of the typical civil law system, the importance of attorney-client communications is
expanded and the logic of confidential communications between opposing counsel is less compelling. When attorneys are
engaging in lobbying and strategizing, instead of acting in a more collaborative role, ex parte communications are less
tolerable. [FN367] On the other hand, given the limits of post-award review and the probability that arbitrators are not trained
in the specific law being applied, efforts to lobby must be more tightly constrained than they are in the United States. To this
end, it has been suggested that attorneys in arbitration should have a higher duty of disclosure to the arbitral tribunal than is
required in the U.S. litigation system. [FN368] In the specific example of pre-testimonial communication, written witness
statements necessarily imply that counsel are piecing together their clients' case and the availability of cross-examination
requires some minimum degree of witness preparation, such as informing the witness about likely challenges to her

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 26
23 Mich. J. Int'l L. 341

credibility. [FN369] Any ethical norm regarding attorney contact with witnesses must therefore accommodate some
communication.

This overview provides the general contours of a code of ethics for international arbitration. The fashioning of particular
rules will require nuanced calibration to the particular needs and features of arbitral institutions and players. In addition,
ultimately, the code will also need to take account of national ethical norms that will be displaced. In a companion article,
[FN370] I propose that this study be undertaken by arbitral *419 institutions so that, as discussed in the following Section,
that drafting process can take account of the various forms of international arbitration and the differing roles and normative
goals present in those forms.

B. Differentiating Among Arbitral Regimes

While it is possible to discuss generally the elemental goals of arbitration, they are not always adopted, or adopted in the
same combination as the prototypical arbitration discussed so far. While highly unpopular, it is possible and occasionally it
still happens, that parties agree to have the arbitrator act as amiable compositeur or ex aequo bono. [FN371] To address the
needs of modern international arbitration, a code of ethics cannot be a single, static set of rules. This Section discusses some
institutional examples that demonstrate the need for multiple codes of ethics and that foreshadow the implementation and
enforcement regime I propose in a companion article. [FN372]

Some arbitral institutions, particularly trade arbitration institutions, have adjusted the balance between the roles of the
arbitrators and parties and their counsel to suit their unique clientele. One good example is the arbitration regime adopted by
the Liverpool Cotton Association (LCA). [FN373] The LCA provides expedited adjudication of a narrowly defined range of
disputes that arise out of contracts for the sale and delivery of cotton, most frequently involving disagreements over the
quality of cotton delivered. [FN374] In proceedings under the LCA Rules, an institutional board (not the parties) appoints two
arbitrators who are knowledgeable about the industry to inspect the cotton in question. If the two fail to agree, the third
arbitrator acts as an umpire. In addition, LCA arbitrators deal with largely standardized transactions, which permits them to
develop a level of further expertise, [FN375] and given the relatively small dollar amounts involved, efficiency becomes a
more important goal.

As a consequence of these features, the role of the parties in LCA arbitration is usually marginal--often limited to
submitting samples of *420 the cotton in dispute--and the control of arbitrators expansive. The arbitral regime includes in its
structure a nine-member Official Appeal Committee, which provides some control over arbitrators. [FN376] This appellate
body avoids resort to national courts relied on in standard international arbitration. This system of intentionally diminished
party control, augmented arbitrator fact-finding power, and increased need for efficiency, requires that the Venn diagram be
redrawn. The relative spheres of obligation in these types of arbitration might bear more similarity to civil law systems, with
a decreased sphere of obligation to the client to reflect the diminished role of attorneys in presenting the client's case. Some
resulting rules might include, for example, a code of ethics for attorneys participating in LCA arbitration that would likely
restrict attorneys from communicating with potential witnesses. The duty of candor would be augmented and the tolerance
for creative argumentation diminished.

In a contrasting example, in international arbitration under the auspices of the International Convention for the
Settlement of Investment Disputes (ICSID), party autonomy and control arguably receive a higher priority than in standard
commercial arbitration. ICSID arbitration developed under the aegis of the World Bank, to provide recourse for the
settlement of investment disputes between investors and host states. The ICSID Convention, in turn, established the
International Center for the Settlement of Investment Dispute, which implements the provisions of the ICSID Convention.
[FN377] The unique feature of the ICSID system is that it is designed to accommodate nation-states as parties. [FN378] This
emphasis, in turn, creates a unique need for deference to parties that are sovereign *421 nations, and corresponding
limitations in the role of the arbitrator. [FN379] ICSID arbitration rules emphasize the independence of arbitrators, while
clearly regulating their exercise of power, and party control is enhanced. The augmented control for parties is in part what
makes ICSID arbitration palatable for developing nations, [FN380] although its reputation is not untarnished. [FN381]

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 27
23 Mich. J. Int'l L. 341

For example, under ICSID rules, arbitrators' power to choose the applicable law is guided and limited. [FN382] Under
recent and somewhat questionable precedents, ICSID rules require automatic reversal by the ICSID appellate panel any time
there has been any minor technical defect in the award. [FN383] Rule 1(4) of the ICSID procedural rules disqualifies anyone
who has previously served as a mediator in the same dispute from acting as an arbitrator. In the ICSID arbitration system, the
role of the advocate is weighted much more heavily with client interests than obligations to the tribunal, perhaps suggesting
that the Venn diagram illustrating ethical obligations in this system should be closer to the American model than that of
traditional, civil law style international arbitration.

As a consequence of redrawing an expanded sphere of client obligation, conflicts of interest would become less tolerable
and the need to protect client confidences would become acute. The need for parties to prepare and present their case implies
the related need for attorneys to be able to communicate with witnesses and potential witnesses. Given that the parties are
nation-states, and the heightened loyalty they are likely to demand from their attorneys, the duty of candor and restrictions on
creative argumentation should be relaxed. [FN384] In addition to being compatible *422 with the procedural structure and
power relations in ICSID arbitration, an ethical regime that emphasizes client loyalty might also have the effect of providing
developing nations that participate in ICSID arbitration with a greater sense that their interests are well protected in
arbitration, which will in turn strengthen their confidence in the process. [FN385]

These and other specialized applications in international arbitration highlight the need for flexibility in any regime for
ethical regulation in the international arbitration context. If a code of ethics cannot accommodate the changing and varied
forms of international arbitration, the value of a specialized code is diminished. The project of my companion article is to
describe a regime that can accommodate these shifting needs, while still providing clear guidance. Before any enforcement
regime can be established, however, there must be a clearly defined code of ethics that is tailored to the special needs of the
various forms of international arbitration.

Conclusion

International arbitration has emerged as the only viable means for resolving international business disputes. It functions
to promote the rule of law at an international level when national systems are inadequate to the task. [FN386] As a
consequence of its new role and the increased competitiveness of the international business climate, international arbitration
has transformed itself into a more judicialized system. The transformation, however, is incomplete. The principle challenge
for arbitration is to increase predictability and accountability in the conduct and administration of arbitral proceedings.
[FN387] Without articulated, enforceable ethical norms, this goal cannot be attained. [FN388]

The task of developing an ethical code for international settings is daunting. The CCBE Code represents a dramatic
improvement over past attempts, but it was still unable to address, let alone resolve, several of the most critical issues. The
one arbitral institution that has grappled *423 with the issue abandoned its efforts, at least temporarily, because of the
difficulties. [FN389] It is universally recognized, however, that international ethical norms must be developed to guide and
regulate attorneys operating in various international contexts. The missing link in accomplishing this goal has been the lack
of a theoretical framework or a feasible methodology.

The functional approach provides the missing link. By exposing the critical fit between the functional role of the
advocate and the normative content of a governing ethical regime, the functional approach illuminates the reasons why
different national legal systems have developed different ethical rules to govern their attorneys. It also provides theoretical
guidance and a clear methodology for developing new ethical codes for international arbitration, in all its incarnations, as
well as for other international adjudicatory settings. [FN390]

[FNa1]. Assistant Professor of Law, Paul M. Hebert Law Center, Louisiana State University; Long-Term Visiting Associate
Professor, Universit Commerciale Luigi Bocconi, Milan, Italy (croger6@lsu.edu). This Article began as part of my work in
the master of laws program at Yale Law School, and is therefore indebted primarily to my sister Elizabeth, whose generous

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 28
23 Mich. J. Int'l L. 341

sacrifices made the year of study possible. I also owe a tremendous debt to my mentor at Yale, Michael Reisman, who gave
his guidance and support long before they were deserved. I am grateful for the encouragement and helpful comments I
received from Jim Bowers, Henry Brown, Jules Coleman, John Costonis, Mirjan Damaska, Bill Dodge, David Faigman,
Bryant Garth, Mary Kay Kane, Lars Kirchoff, Jason Kilborn, Alain Levasseur, Ted Schneyer, Michael Van Alstine, and David
Wilkins. This Article was presented to various faculties during the AALS recruitment process and at the Stanford-Yale Junior
Faculty Forum, where it received helpful insights, particularly from Thomas Heller, Michael Trebilcock, Keith Hylton,
Thomas Joo, and Judith Resnik. My work was supported by generous research grants from LSU and the Howard M.
Holzmann Fellowship Program, and the excellent assistance of Mark Ladd and Christina Hood. This Article is dedicated to
Marco Ventoruzzo for transforming my inquiries about comparative law into a living project.

[FN1]. See William W. Park, Review Article, National Legal Systems and Private Dispute Resolution, 82 Am. J. Int'l L. 616,
628 (1988) (describing how the arbitral seat ... rarely coincides with the parties citizenship or residence); Ronald A. Brand,
Professional Responsibility in a Transnational Transactions Practice, 17 J.L. & Comm. 301, 334-35 (1998) (reviewing
caselaw that affirms ability to represent clients in arbitrations in foreign jurisdictions where counsel is not licensed).

[FN2]. See infra notes 69-74 and accompanying text.

[FN3]. The only possible candidate is the International Bar Association (IBA), which, despite its name, cannot accurately be
understood as a supranational regulatory authority. The IBA is a federation of national bar associations and law societies, not
a licensing body that could impose any penalties for noncompliance. See infra notes 261-64 and accompanying text.

[FN4]. See Ivo G. Caytas, Transnational Legal Practice: Conflicts in Professional Responsibility 3 (1992) ([I]t is fairly rare
that misconduct abroad results in all too serious consequences at home (examples notwithstanding) .... [S]anctions remain
essentially local.).

[FN5]. Although the matter remains open to debate, the current consensus is that arbitrators do not have the power to impose
sanctions on parties or counsel appearing before them. For an in-depth discussion of the debate, and a proposal to empower
arbitrators to sanction parties, see Catherine A. Rogers, Context and Institutional Structure in Attorney Regulation:
Constructing an Enforcement Regime for International Arbitration, 39 Stan. J. Int'l L. (forthcoming 2002).

[FN6]. In its comparative analyses, this Article uses the term ethical norms to include not only those ethical principles that
have been reduced to professional codes of ethics, but also those norms that are incorporated into procedural rules (such as
Federal Rule of Civil Procedure 11), other legal rules (criminal and malpractice), as well as customary norms that define
lawyers' ethical behavior. See Fred C. Zacharias, Reconceptualizing Ethical Roles, 65 Geo. Wash. L. Rev. 169, 205 (1997).
This broad approach is necessary for accurate comparison. In the United States virtually all ethical norms (wherever else they
exist) have also been codified, but the same is not true in other nations. See Mary C. Daly, The Dichotomy Between
Standards and Rules: A New Way of Understanding the Differences in Perceptions of Lawyer Codes of Conduct by U.S. and
Foreign Lawyers, 32 Vand. J. Transnat'l L. 1117, 1154 & n.184 (1999). Moreover, some systems treat particular conduct as
implicating ethical considerations, while others may treat the same conduct as solely a matter of procedure or discretionary
strategy. In referring to ethical norms that have been codified, I use the term rules. A more precise definition of the term
ethics is bound up in the thesis of this Article. See infra Section A.1.

[FN7]. As discussed elsewhere in this Article, there are some sources for ethical guidance in international cross-border
practice, see infra notes 62-65, but those sources are limited in scope and utility when applied to international arbitration. See
Peter C. Thomas, Disqualifying Lawyers in Arbitrations: Do the Arbitrators Play Any Proper Role?, 1 Am. Rev. Int'l Arb.
562, 563 (1990) (noting that despite the fact that issues relating to ethics in arbitration are complex and intriguing, the area
has not received a significant amount of attention from either scholars or regulators).

[FN8]. International arbitration provides a unique incubator for development of international law and consequently may
provide insights that can be used to fashion similar advances in other public fora for international adjudication. See Andreas

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 29
23 Mich. J. Int'l L. 341

F. Lowenfeld, Introduction: The Elements Of Procedure: Are They Separately Portable?, 45 Am. J. Comp. L. 649, 654-55
(1997) (arguing that lessons learned in international arbitration can aid in refining national and international adjudicatory
techniques and procedures). Cf. Christopher R. Drahozal, Commercial Norms, Commercial Codes, and International
Commercial Arbitration, 33 Vand. J. Transnat'l L. 79, 95 n.83 (2000) (arguing that, as a highly competitive business,
international commercial arbitration is a valuable source for evaluating commercial norms). While this Article develops a
methodology for application to the particular context of ethics in international arbitration, the methodology, particularly its
reliance on comparative testing, holds more general insights about methods of international law making.

[FN9]. See Rogers, supra note 5.

[FN10]. See, e.g., Edward J. Eberle, Toward Moral Responsibility in Lawyering: Further Thoughts on the Deontological
Model of Legal Ethics, 64 St. John's L. Rev. 1 (1989) (explaining the deontological roots of legal ethics); Alan Strudler,
Belief and Betrayal: Confidentiality in Criminal Defense Practice, 69 U. Cin. L. Rev. 245 (2000) (describing and rejecting the
Dominant View of confidentiality in the criminal context based on deontological moral basis of confidentiality rights). The
relationship between legal ethics and deontology is demonstrated by the use in many civil law systems of the Greek root for
deontology to describe legal ethics. See Detlev F. Vagts, Professional Responsibility in Transborder Practice: Conflict
and Resolution, 13 Geo. J. Legal Ethics 677, 678 (2000) (citing the French term deontologie).

[FN11]. My focus is international arbitration, but the methodology of this Article can be used in a range of other international
adjudicatory contexts that are similarly in need of guidance in developing international ethical rules. See Daly, supra note 6,
at 1154 & n.184 (describing ethical conflicts in the Yugoslav War Crimes Tribunal); Detlev F. Vagts, The International Legal
Profession: A Need for More Governance?, 90 Am. J. Int'l L. 250, 250 (1996) (describing problems in Iran Claims Tribunal
caused by lack of ethical consensus among attorneys).

[FN12]. Extended debate exists about whether there is any such thing as an international legal system. Compare H.L.A.
Hart, The Concept of Law 79-99 (2d ed. 1994) (contending that international law lacks secondary rules of recognition,
adjudication, and change necessary to constitute a legal system), with Pierre-Marie Dupuy, The Danger of Fragmentation or
Unification of the International Legal System and the International Court of Justice, 31 N.Y.U. J. Int'l L. & Pol. 791, 793
(1999) (concluding that there is an international legal system and challenging Hart's analysis to the contrary); see also Joseph
Raz, The Concept of a Legal System (2d ed. 1980). For the purposes of developing international ethical norms, it is not
necessary to weigh in on this debate, or to contemplate whether international commercial arbitration might constitute a sub-
system, its own legal system, or multiple legal systems. To avoid confusion with this debate, I use the term system, rather
than legal system, to refer to the intricate network of governmental, intergovernmental, and private institutions, along with
the national laws and international agreements that facilitate the practice of international commercial arbitration. See W.
Michael Reisman, Systems of Control in International Adjudication and Arbitration: Breakdown and Repair 6 (1992).

[FN13]. For a more detailed description of these contrasting rules, see infra notes 84-87 and accompanying text.

[FN14]. For a discussion of the different limitations on attorneys' arguments, see infra notes 90-92 and accompanying text.

[FN15]. See W. Michael Reisman, Nullity and Revision: The Review and Enforcement of International Judgments and
Awards 116-17 (1971).

[FN16]. See, e.g., Vagts, supra note 11, at 250; Malini Majumdar, Ethics in the International Arena: The Need for
Clarification, 8 Geo. J. Legal Ethics 439, 451-52 (1995); Hans Smit, The Future of International Commercial Arbitration: A
Single Transnational Institution?, 25 Colum. J. Transnat'l L. 9, 29 (1986); John Toulmin, A Worldwide Common Code of
Professional Ethics?, 15 Fordham Int'l L.J. 673, 685 (1992); Robert M. Jarvis, Cross-Border Legal Practice and Ethics Rule
4-8.5: Why Greater Guidance Is Needed, 72 Fla. B.J. 59 (1998); see also Martin Hunter, Ethics of the International Arbitrator,
53 Arb. 219, 220 (1987) (concluding that the world of commercial arbitration is no longer a club of gentlemen, but one that
needs explicit guidelines for conduct).

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 30
23 Mich. J. Int'l L. 341

[FN17]. See, e.g., Laurel S. Terry, A Case Study of the Hybrid Model for Facilitating Cross-Border Legal Practice: The
Agreement Between the American Bar Association and the Brussels Bars, 21 Fordham Int'l L.J. 1382, 1384 (1998)
([D]espite the increase in scholarly writing on this topic, the development of cross-border practice throughout the world has
vastly outpaced the theory of whether and how such practice should be regulated ....); Justin Castillo (Reporter),
International Law Practice in the 1990s: Issues of Law, Policy and Professional Ethics, 86 Am. Soc'y Int'l L. Proc. 272, 282
(1992) ( International ... ethics is an area where there is little solid information available.). Of particular interest are some
recent conferences, including a conference co-sponsored by the Council of the Bars and Law Societies of the European
Community (CCBE) and the Stein Institute of Law and Ethics, the results of which were published in a book under the
editorial supervision of Professors Mary C. Daly and Roger J. Goebel of Fordham Law School. See Rights, Liability, and
Ethics in International Legal Practice (Mary C. Daly & Roger J. Goebel eds., 1995). The results of another more recent
conference, the Paris Forum on Transnational Practice for the Legal Profession in 1998, were published under the direction of
Laurel Terry in the Dickinson Journal of International Law. See generally Symposium: Paris Forum on Transnational Practice
for the Legal Profession, 18 Dickinson J. Int'l L. 1 (1999). One of the only truly prescriptive pieces in this area is by
Professor Richard Abel, whose earlier works on the sociology of lawyers will undoubtedly aid in all future discussion in this
area. See Richard L. Abel, Transnational Law Practice, 44 Case W. Res. L. Rev. 737, 762-63 (1994) (offering proposals of
how lawyers, professional organizations, and governments can regulate transnational law practice).

[FN18]. The limited scholarly work that has been done aims primarily at promoting awareness of the problem and the sole
legislative effort focused exclusively on the distinct but related problems facing cross-border practice within the limited
geographic area of the European Union. See infra notes 131-39 and accompanying text (regarding the European code of
ethics). There is only one brief article addressing attorney ethics in international arbitration, which aims more at raising
questions than resolving them, and a few essays addressing particular problems. See Mark P. Zimmett, Ethics in
International Commercial Litigation and Arbitration, in Litigation and Administrative Practice Course Series Handbook
No. 626, at 361 (Practicing Law Institute 2000); Nicolas C. Ulmer, Ethics and Effectiveness: Doing Well by Doing Good, in
The Commercial Way to Justice: The 1996 International Conference of the Chartered Institute of Arbitrators 167, 171 &
n.8 (Geoffrey M. Beresford Hartwell ed., 1997) [hereinafter The Commercial Way to Justice]; Bernardo M. Cremades,
Overcoming the Clash of Legal Cultures: The Role of Interactive Arbitration, in Conflicting Legal Cultures in
Commercial Arbitration: Old Issues and New Trends 147, 161 (Stefan N. Frommel & Barry A.K. Rider eds., 1999)
[hereinafter Conflicting Legal Cultures in Commercial Arbitration]. Cf. Thomas, supra note 7 (addressing related
procedural issues of attorney disqualification in arbitration proceedings, but expressly disclaiming any attempt to
encompass ethical regulation issues). Most work regarding ethics in international arbitration has addressed the ethical
obligations of arbitrators. See, e.g., Chiara Giovannucci Orlandi, Ethics for International Arbitrators, 67 UMKC L. Rev.
93 (1998); Tom Arnold, The Unacceptable Common Partiality of Neutral Party Appointed Arbitrators, in The
Commercial Way to Justice, supra, at 151-66. My purpose in this Article is primarily to address attorney ethics, not
arbitrator ethics. Inevitably, however, some of the issues overlap (such as the issue of ex parte contact), and the
methodology proposed in this Article will aid in addressing remaining problems of arbitrator ethics. See infra notes 234-35
and accompanying text.

[FN19]. See Vagts, supra note 10, at 677-78 (noting the increasing problems because attorneys are subject to different bar
authorities [which] lay down quite different rules within their jurisdictions).

[FN20]. Because the thesis of my companion article is that ethical norms should be developed through arbitral institutions, I
am actually advocating that there be multiple codes. For the sake of simplicity, however, I will refer to a code of ethics for
arbitration in the singular form.

[FN21]. In reality, even within one system, lawyers act in many different roles, and consequently will face unique ethical
problems in relation to these roles. See Fred C. Zacharias, Fact and Fiction in the Restatement of the Law Governing
Lawyers: Should the Confidentiality Provisions Restate the Law?, 6 Geo. J. Legal Ethics 903, 930-31 (1993) (suggesting that
practice-specific codes be drafted to guide attorneys in specialized fields).

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 31
23 Mich. J. Int'l L. 341

[FN22]. This Article focuses primarily on those areas of ethical regulation that are necessary to guide lawyers when they are
acting in their capacity as advocates before international arbitration tribunals. Such a code can be narrower in scope than a
code governing all cross-border practice, because it need not address certain areas of ethical regulation that are not directly
implicated in advocacy in this setting. Moreover, because international arbitration is detached from national settings, its code
of ethics need not address certain other issues that can remain subject to national or cross-border regulation, such as attorney
advertising, maintenance of client funds and contingency fees. The code I propose will regulate attorneys' participation in
arbitral proceedings, but must be coordinated with national regulation in other areas of professional responsibility. For further
discussion on this point, see Rogers, supra note 5, at Section III.C.

[FN23]. See Philip S.C. Lewis, Comparison and Change in the Study of Legal Professions, in Lawyers in Society, Volume
Three: Comparative Theories 27, 32 (Richard L. Abel & Philip S.C. Lewis eds., 1989) [hereinafter Lawyers in Society,
Volume Three] (Every legal system will have theories of the legal profession, which usually can be deduced from their rules
governing lawyers or describing proper representation.); John C. Reitz, Why We Probably Cannot Adopt the German
Advantage in Civil Procedure, 75 Iowa L. Rev. 987, 994 (1990) ([T]he dutiful attorney is obviously a culturally specific
standard.); see also Roger J. Goebel, Professional Qualification and Educational Requirements for Law Practice in a Foreign
Country: Bridging the Cultural Gap, 63 Tul. L. Rev. 443, 520-22 (1989).

[FN24]. See Judith Resnik, Tiers, 57 S. Cal. L. Rev. 837, 840 (1984) ( Procedure is a mechanism for expressing political and
social relationships ....).

[FN25]. Arbitration is a form of adjudication by which parties confer, through private agreement, decision-making power
on a non-governmental tribunal whose decision is made binding and enforceable through delimited involvement of national
courts. See Park, supra note 1, at 631 (elaborating on the theory advanced in Ren David, L'Arbitrage dans le Commerce
International 9 (1982)); see also Gary B. Born, International Commercial Arbitration in the United States: Commentary &
Materials 1 (1994). Notwithstanding the relative ease with which arbitration can be defined at a practical level, there remains
substantial debate about the nature of arbitration. Is it a contractual arrangement, akin to settlement? Or is it better
understood, as the Supreme Court likes to describe it, as an alternative adjudicatory forum? Compare Allen Rau, Arbitration
as Contract: One More Word About First Options v. Kaplan, Mealey's Int'l Arb. Rep. No. 12-3, at 21 (1997) (arguing that
arbitration is above all a matter of private ordering); with Thomas E. Carbonneau, Le Tournoi of Academic Commentary on
Kaplan: A Reply to Professor Rau, Mealey's Int'l Arb. Rep. No. 12-4, at 35 (1997) (rejecting the private ordering notion of
arbitration in favor of an approach that recognizes the public interest in adjudication). Putting aside the theoretical differences
about the nature of arbitration, there are also often dramatic differences in how arbitration is administered. See infra Section
III.B.

[FN26]. . See Rogers, supra note 5.

[FN27]. [P]rivate dispute resolution among commercial men is as old as commerce itself. W. Lawrence Craig, Some
Trends and Developments in the Laws and Practice of International Commercial Arbitration, 30 Tex. Int'l L.J. 1, 5 (1995).
For a more detailed description of the ancient history of arbitration, see Thomas J. Stipanowich, Punitive Damages in
Arbitration: Garrity v. Lyle Stuart, Inc. Reconsidered, 66 B.U. L. Rev. 954, 954 n.3 (1986) (citing Frances Kellor, American
Arbitration 3 (1948)) (dating commercial arbitration back to the time when Phoenician and Greek traders roamed the ancient
world and to the desert caravans of Marco Polo); Will Durant, The Story of Civilization: Our Common Heritage 127, 361
(1935) (The ancient Sumerians, Persians, Egyptians, Greeks, and Romans all had a tradition of arbitration.). The
development of a formal system of private dispute resolution is attributable to the medieval English courts of fairs and
boroughs, which could adjudicate disputes between merchants and traders at markets and fairs. For an expanded history of
international arbitration, see Craig, supra, at 2-11 (tracing the important milestones in the development of modern
international arbitration).

[FN28]. See Thomas E. Carbonneau, Arbitral Justice: The Demise of Due Process in American Law, 70 Tul. L. Rev. 1945,

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 32
23 Mich. J. Int'l L. 341

1947 (1996). The precise reasons for the common law hostility toward arbitration are unknown, but some scholars surmise
that they trace back to the English judges' almost complete reliance on fees from cases for their income, which meant that
arbitrators were unwelcome competitors. See John R. Allison, Arbitration Agreements and Antitrust Claims: The Need for
Enhanced Accommodations of Conflicting Public Policies, 64 N.C. L. Rev. 219, 224 (1986). A second possible reason is the
centuries-long struggle by the early courts for jurisdiction and their consequent unwillingness to surrender it. Id.; see also
Kulukundis Shipping Co. v. Amtorg Trading Corp., 126 F.2d 978, 983 & n.14 (2d Cir. 1942).

[FN29]. Throughout the nineteenth century, courts in the United States and England frequently invoked the doctrine of
ouster to void contractual arbitration clauses which they viewed as unlawful circumventions of judicial jurisdiction and as
denials of judicial justice. Philip J. McConnaughay, The Risks and Virtues of Lawlessness: A Second Look at International
Commercial Arbitration, 93 Nw. U. L. Rev. 453, 462 (1999) (citing Thomas E. Carbonneau, Arbitral Adjudication: A
Comparative Assessment of Its Remedial and Substantive Status in Transnational Commerce, 19 Tex. Int'l L.J. 33, 39 n.12
(1984)); see also Edward Chukwuemeke Okeke, Judicial Review of Foreign Arbitral Awards: Bane, Boon or Boondoggle?,
10 N.Y. Int'l L. Rev. 29, 32 n.13 (1997).

[FN30]. For example, in England, courts were permitted to and routinely did revise legal determinations made by arbitrators.
See Thomas E. Carbonneau, supra note 28, at 1948.

[FN31]. See Leonard V. Quigley, Accession by the United States to the United Nations Convention on the Recognition and
Enforcement of Foreign Arbitral Awards, 70 Yale L.J. 1049, 1049-55 (1961).

[FN32]. See Stephen T. Ostrowski & Yuval Shany, Chromalloy: United States Law and International Arbitration at the
Crossroads, 73 N.Y.U. L. Rev. 1650, 1650 (1998). Judicial critics of arbitration remain, although the focus of modern
criticisms is more on the protection of parties' procedural rights and arbitrator adherence to the rule of law. See, e.g., Bowles
Fin. Group, Inc. v. Stifel Nicolaus & Co., 22 F.3d 1010, 1011 (10th Cir. 1994) (Arbitration provides neither the procedural
protections nor the assurance of the proper application of substantive law offered by the judicial system.); Stroh Container
Co. v. Delphi Indus., 783 F.2d 743, 751 n.12 (8th Cir. 1986) ([T]he arbitration system is an inferior system of justice,
structured without due process, rules of evidence, accountability of judgment and rules of law.).

[FN33]. Nearly thirty years ago, the U.S. Supreme Court acknowledged that international arbitration is vital to the global
economy and U.S. participation in world trade. See Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972); Scherk v. Alberto-
Culver Co., 417 U.S. 506 (1974).

[FN34]. See Klaus Peter Berger, International Economic Arbitration 8 n.62 (1993) (citing Albert Jan Van den Berg et al.,
Aritragerecht 134 (1988) (estimating that 90% of all international agreements contain arbitration clauses)).

[FN35]. See, e.g., William W. Park, National Law and Commercial Justice: Safeguarding Procedural Integrity in International
Arbitration, 63 Tul. L. Rev. 647, 680 (1989) (documenting a scramble among Western European nations to compete for
international arbitration business); Sir Michael J. Mustill, Arbitration: History and Background, 6 J. Int'l Arb. 43, 53 (1989)
([O]ne must take note of the efforts made by individual nations to make their arbitration laws ... more attractive.). This
trend extends to developing countries, such as Mauritius, Estonia, Latvia, Lithuania, and many Latin American countries,
which in recent years have made legal commitments to support international arbitration as part of an effort to facilitate trade
with foreign investors and business interests. See Arthur D. Harverd, The Concept of Arbitration and Its Role in Society, in
The Commercial Way to Justice, supra note 18, at 17, 20; Donald Francis Donovan, International Commercial Arbitration and
Public Policy, 27 N.Y.U. J. Int'l L & Pol. 645, 650-51 (1995); see also 10 World Arb. & Mediation Rep. 209 (1999) (The
Turkish parliament's decision to approve a constitutional amendment allowing for international arbitration in investment
disputes should attract foreign investors to the multi-billion dollar energy projects currently awaiting funding.); David L.
Gregory, The Internationalization of Employment Dispute Mediation, 14 N.Y. Int'l L. Rev. 2 (2001) (discussing potential for
China in developing more reliable international arbitration enforcement record).

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 33
23 Mich. J. Int'l L. 341

[FN36]. See Yves Dezalay & Bryant Garth, Fussing About the Forum: Categories and Definitions as Stakes in Professional
Competition, 21 Law & Soc. Inquiry 285, 295 (1996).

[FN37]. See Craig, supra note 27, at 6 (Many arbitration clauses, or rules of trade associations, specifically required that
arbitrators be commercial men.).

[FN38]. See Yves Dezalay & Bryant Garth, Dealing in Virtue: International Arbitration and the Construction of a
Transnational Legal Order 34-38 (1996); Louise Barrington, Arbitral Women: A Study of Women in International
Commercial Arbitration, in The Commercial Way to Justice, supra note 18, at 229, 229-41 (surveying the limited
participation of, systematic discrimination against, and recent progress for, women in international arbitration); K.V.S.K.
Nathan, Well, Why Did You Not Get the Right Arbitrator?, Mealey's Int'l Arb. No. 15-7, at 24 (July 2000) (noting that [t]he
majority in a multi-member international arbitral tribunal is always white and interpreting a British arbitrator's commentary
as suggesting that arbitrators from the developing countries and women simply do not or cannot satisfy the selection
criteria for arbitrators).

[FN39]. See John Beechey, International Commercial Arbitration: A Process Under Review and Change, Disp. Resol. J.,
Aug.-Oct. 2000, at 32. The doctrine of amiable compositeur, which is often translated to mean author of friendly
compromise, has been described as:
allow[ing] arbitrators to decide cases in accordance with customary principles of equity and international
commerce. This power permits arbitrators to arrive at an award that is fair in light of all circumstances, rather than in strict
conformity with legal rules[, but] ... generally [they] may not disregard mandatory provisions of substantive law or the public
policy of the forum state.
S. I. Strong, Intervention and Joinder as of Right in International Arbitration: Infringement of Individual Contract Rights or a
Proper Equitable Measure?, 31 Vand. J. Transnat'l L. 915, 932 (1998); see also W. Lawrence Craig et al., International
Chamber of Commerce Arbitration 8.05, at 137 (2d ed. 1990). The doctrine of ex aequo et bono is very similar to amiable
compositeur, except that the powers of arbitrators are slightly broader, enabling them to disregard even mandatory provisions
of substantive law in order to reach an equitable outcome. See Strong, supra, at 23.
[FN40]. See Christine Lecuyer-Thieffry & Patrick Thieffry, Negotiating Settlement of Dispute Provisions in International
Business Contracts: Recent Developments in Arbitration and Other Processes, 45 Bus. Law. 577 (1990).

[FN41]. For an exploration of lex mercatoria in its multi-faceted connotations, see Lex Mercatoria and Arbitration (rev. ed.,
Thomas E. Carbonneau ed., 1998).

[FN42]. Dezalay & Garth, supra note 36, at 295.

[FN43]. These principles are sometimes referred to as the new lex mercatoria, because they are a modern reincarnation of
the substantive law of merchants that was developed by medieval English mercantile courts. See Craig, supra note 27, at 6.

[FN44]. See id.

[FN45]. See ICC Partial Award in Case No. 5073 of 1986, 13 Y.B. Com. Arb. 53, 65 (1988), cited in Drahozal, supra note 8,
at 127 n.224.

[FN46]. See generally, Dezalay & Garth, supra note 38 (offering a provocative description of the international arbitration
field and the professionals who constructed it).

[FN47]. See Craig, supra note 27, at 7.

[FN48]. It was expected that moral norms and the force that businessmen of a country can bring to bear upon a recalcitrant

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 34
23 Mich. J. Int'l L. 341

neighbor' would be sufficient to ensure respect for arbitral awards. Id.

[FN49]. See Edward Brunet, Replacing Folklore Arbitration with a Contract Model of Arbitration, 74 Tul. L. Rev. 39, 62
(1999) (documenting in the domestic U.S. context evidence that businesses now seek more formal judicialized arbitration,
instead of speedy fact-based awards entered by expert arbitrators after little prehearing process); but see Thomas J.
Stipanowich, Future Lies Down a Number of Divergent Paths, 3 Disp. Resol. Mag. 16, 16 (2000) (arguing that many
business persons bemoan the increasing judicialization of arbitration).

[FN50]. This trend is, as demonstrated by the insightful work of Dezalay and Garth, also likely attributable to competition
among the lawyers who participate in arbitration. See Dezalay & Garth, supra note 38.

[FN51]. The term alternative dispute resolution is often used to connote a kinder, gentler way of resolving disputes as
compared to litigation. This connotation may be less true of modern international arbitration in its more legalized form. To
the extent that the term is also used to imply the existence of some other, primary means to resolve disputes, it is inaccurate.
Given the overwhelming practical problems that complicate the prosecution of international cases in national courts and
enforcement of their judgments, international litigation is an unreliable option and international arbitration has become the
primary means for resolving international disputes. See Christian Bhring-Uhle, Arbitration and Mediation in International
Business 17-36 (Klower Law International 1996); Nicholas B. Katzenbach, Business Executives and Lawyers in International
Trade, in Sixty Years of ICC Arbitration: A Look at the Future 67, 68 (ICC Pub. S.A. 1984) (explaining that while arbitration
might be a choice for domestic disputes because there exists in national courts a reliable alternative, the unpredictability and
risks of failure in domestic litigation of international business disputes makes international arbitration the only real option).

[FN52]. Dezalay & Garth, supra note 36, at 299. In the words of Dezalay and Garth:
The legitimacy of international commercial arbitration is no longer built on the fact that arbitration is informal and
close to the needs of business; rather legitimacy now comes more from a recognition that arbitration is formal and close to
the kind of resolution that would be produced through litigation-- more precisely, through the negotiation that takes place in
the context of U.S.-style litigation.
Id.
[FN53]. See generally International Arbitration in the 21st Century: Towards Judicialization and Uniformity (Richard B.
Lillich & Charles N. Brower eds., 1993) (critiquing the need for balance between flexibility and certainty).

[FN54]. Stephen Bond's study of 500 arbitration clauses from 1987 to 1989 revealed that only three percent of clauses
empowered the arbitrators to decide under these doctrines. See Drahozal, supra note 8, at 129 & n.233.

[FN55]. This trend is also reflected in the growing preference for institutional arbitration. See Detlev Vagts & W. Michael
Reisman, International Chamber of Commerce Arbitration, 80 Am. J. Int'l L. 268 (1986) (book review) (suggesting that ad
hoc arbitration has declined in popularity because parties have traded off the maximum suppleness offered by ad hoc
arbitration for the predictability of institutionalized arbitration). For a detailed discussion of the commonly chosen arbitral
procedures, and their reduction to a prefabricated set of default rules, see infra Section I.C.1.

[FN56]. Comparative Analysis of International Dispute Resolution Institutions, 85 Am. Soc. Int'l L. Proc. 64 (1991).

[FN57]. Bond's study revealed that only a handful of clauses selected general principles and none expressly selected lex
mercatoria. See Drahozal, supra note 8, at 129. In addition to the apparent obsolescence of lex mercatoria's underlying tenets,
the definition of custom among ever-expanding trade usages is harder to identify and it cannot provide adequate guidance
for a range of statutory and so-called mandatory law claims and defenses that are now asserted in modern business
disputes. For a description of the increase in mandatory law claims that can arise in arbitration, see Rogers, supra note 5.

[FN58]. See Ryan E. Bull, Note, Operation of the New Article 9 Choice of Law Regime in an International Context, 78 Tex.
L. Rev. 679, 706 (2000); see also Reisman, supra note 12, at 111-13 (arguing against application of lex mercatoria when it

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 35
23 Mich. J. Int'l L. 341

would disrupt expectations of the parties).

[FN59]. While the trend is important to recognize, the goal of formality should not be overstated. For many, flexibility
remains an important feature of international arbitration.

[FN60]. Charles N. Brower, a former judge on the Iran-United States Claims Tribunal, has in the context of evidentiary
standards identified the perils that await when arbitrators apply complex rules for arbitral proceedings in an ad hoc fashion. In
Brower's experience, the requirements imposed by arbitrators are often not clearly communicated to the parties (perhaps
because they are evolving during the proceedings) and parties unwittingly assume that their evidentiary submissions are
sufficient. See Charles N. Brower, Evidence Before International Tribunals: The Need for Some Standard Rules, 28 Int'l Law.
47, 58 (1994).

[FN61]. See Thomas E. Carbonneau, Rendering Arbitral Awards with Reasons: The Elaboration of a Common Law of
International Transactions, 23 Colum. J. Transnat'l L. 579, 580 (1985).

[FN62]. Vagts, supra note 11, at 250. For the seminal exploration of how informal controls are adequate to regulate small
social groups, see Robert C. Ellickson, Order Without Law: How Neighbors Settle Disputes 130-32 (1991).

[FN63]. The ranks of international lawyers now also include small firms and solo practitioners. See Mary C. Daly, Practicing
Across Borders: Ethical Reflections for Small-Firm and Solo Practitioners, Prof. Law., June 1995, at 123.

[FN64]. See Karl Carstens, Preface to Caytas, supra note 4 (noting that with the globalization of legal services, lawyers must
become more aware that [w]hat is appropriate, even mandatory under one regime may not be, and may indeed be even
reprehensible, under another); Vagts, The International Legal Profession, supra note 11, at 250 (As the activities of
international law agencies, both public and private, involve more countries and more cultures, disputes about standards of
behavior can be expected to multiply.); see also Reisman, supra note 12, at 6 (noting more generally that in international
arbitration, informal control mechanisms are inadequate in the context of modern transnational arbitration [which has]
increased as a function of the expansion of transnational activity).

[FN65]. Brand, supra note 1, at 302. The obscurity surrounding ethical regulation of international practice is best
demonstrated by U.S. Model Rule 8.5, which regulates cross-border practice, but expressly disavows any application in the
international context: The choice of law provision [in Rule 8.5] is not intended to apply to transnational practice. Choice of
law in this context should be the subject of agreements between jurisdictions or of appropriate international law. Id. at 306
(quoting Model Rules of Prof'l Conduct R. 8.5, cmt.6 (1996)). The problem is that there do not appear to be any such
international law or agreements. See Vagts, supra note 11, at 251.

[FN66]. This image is borrowed from Bernard L. Greer, Jr., Professional Regulation and Globalization: Toward a Better
Balance, in Global Practice of Law 170 (J. Ross Harper ed., 1997).

[FN67]. The preeminent basis for prescriptive jurisdiction in the area of legal ethics is territoriality, meaning a State can
regulate persons who appear in their courts, maintain offices, or conduct other transactions within its territory. Vagts, supra
note 10, at 689. The second most prevalent basis for jurisdiction is nationality of the attorneys, or in the case of bar
organizations, membership. See id. at 689-90 (citing Restatement (Third) Foreign Relations Law of the United States
402(2) (1987)).

[FN68]. See Louise L. Hill, Lawyer Publicity in the European Union: Bans Are Removed but Barriers Remain, 29 Geo.
Wash. J. Int'l L. & Econ. 381, 442-48 (1995).

[FN69]. See Dezalay & Garth, supra note 38, at 17. In most international arbitrations, the situs for arbitration is chosen

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 36
23 Mich. J. Int'l L. 341

either by happenstance, for reasons of logistics and convenience, or because of its neutrality in relation to the dispute and to
the parties. Id.; see also Thomas E. Carbonneau, The Remaking of Arbitration: Design and Destiny, in Lex Mercatoria and
Arbitration 11, 27 (Thomas E. Carbonneau ed., 1998).

[FN70]. The New York Convention generally permits the nation where arbitration takes place to exercise an expanded role in
reviewing arbitral awards and regulatory proceedings. In an effort to attract more international arbitration, however, many
nations have declined this opportunity and have instead legislated to constrain court interference with arbitrations taking
place within their boundaries. The most prominent examples are Belgium (which prohibits national courts completely from
overturning any international arbitral award even in the instance of arbitrator fraud) and Switzerland (which permits parties to
elect such prohibition by agreement). See Park, supra note 35, at 649.

[FN71]. See Brand, supra note 1, at 334-35 (noting that notwithstanding applicability of State ethical rules to State-licensed
attorneys, a bar opinion permits parties to international arbitration to be represented by non-State-licensed attorneys); Toby S.
Myerson, The Japanese System, in Rights, Liability, and Ethics in International Legal Practice 69 (Mary C. Daly & Roger J.
Goebel eds., 1994) (noting that even traditionally restrictive Japanese law changed recently to permit non-Japanese-licensed
attorneys to engage in international arbitrations in Japan). Most other countries permit foreign attorneys to act as arbitrators
or counsel in international arbitrations. See, e.g., Arbitration Act, No. 53 (1952) (Malay.), in International Handbook on
Commercial Arbitration Malaysia-1, Annex I (Pieter Sanders & Albert Jan van den Berg eds., 2000 & 2001 Supp.).

[FN72]. In the United States, only a few states have attempted to make their ethical rules directly applicable in arbitration.
See, e.g., N.Y. Judiciary Law 90 (McKinney 2002) (containing a single statement in the appendix to the effect that rules
apply in ADR settings as well).

[FN73]. Notwithstanding attempts to shoehorn ethical rules into the arbitration context, drafters of ethical norms simply did
not directly address the extension of their application into the arbitration context. See Carrie Menkel-Meadow, Ancillary
Practice and Conflicts of Interests: When Lawyer Ethics Rules Are Not Enough, 13 Alternatives to High Cost Litig. 15, 15
(1996) ([T]he ABA Model Rules of Professional Conduct were not drafted with ADR in mind and efforts to fit ADR practice
into the rules of more conventional advocacy will not always work.); see also Detlev Vagts, International Legal Ethics and
Professional Responsibility, 92 Am. Soc. Int'l L. Proc. 378, 378 (1998) (noting that it is unclear whether the Model Rules
apply in arbitration proceedings). In the setting of international arbitration, debate about the nature and extent to which
national ethical norms apply is even more open-ended. See Thomas, supra note 7, at 563 (When an English barrister
suggested a couple of years ago that an advocate in a private commercial arbitration was not bound by the same duties owed
by counsel to a court, the immediate (near unanimous) response was shock and indignation.).

[FN74]. See Caytas, supra note 4, at 3 (noting that transnational practice is most threatened by conflicting mandatory norms
requesting or prohibiting with equal authority and determination disclosure of client-related and therefore presumably
confidential information).

[FN75]. Informal control mechanisms had been particularly effective among lawyers involved in international arbitration
because they were an intimate group of European practitioners who shared a tacit understanding of what constituted proper
behavior. See Dezalay & Garth, supra note 38, at 34-36 (describing the grand old men who played a central role in the
emergence and recognition of arbitration).

[FN76]. As Dezalay and Garth describe, there is a generational warfare between the grand old men and the new entrants
regarding the future direction of international commercial arbitration. See id. at 34-35, 36-38.

[FN77]. In comparative studies, it is easy to mistakenly assume that apparent similarities represent deeper correspondence
between different systems. See Comparative Law: Cases-Text-Materials 481 (Rudolf B. Schlesinger et al. eds., 5th ed. 1988)
[hereinafter Comparative Law: Cases--Text-Materials] (using the term acoustic agreement to describe the readily apparent,
but superficial commonalties between systems). Indeed, when less was known about foreign ethics, superficial resemblances

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 37
23 Mich. J. Int'l L. 341

were mistaken for fundamental similarities. See Thomas Lund, Professional Ethics 18 (1970) ( Despite differences in legal
systems, legal practices and procedures and legal customs, lawyers in many countries throughout the world have laid down
for themselves substantially the same standards of legal ethics ...); see also David Luban, The Sources of Legal Ethics, 48
Rabels Zeitschrift fr Auslndisches und Internationales Privatrecht 246, 264-67 (1984) (concluding that German and
American ethical rules are essentially similar). It is now recognized that national ethical rules diverge dramatically. See Vagts,
supra note 11, at 250.

[FN78]. See Vagts, supra note 73, at 378 (National rules on professional ethics differ in critical ways, leaving confusion
about how they should apply internationally.). It is not necessary (or even possible) in this Article to offer a precise
measurement of the extent of divergence between national ethical norms. The primary purpose of this comparison is to
demonstrate that the differences are significant enough to require development of a code of ethics for international
arbitration. To the extent that a more precise assessment of the differences becomes necessary or desirable, the project will
inevitably involve extensive systematic research, such as used by Ugo Mattei to evaluate the similarities and differences in
private law. See Mauro Bassani & Ugo Mattei, The Common Core Approach to European Private Law, 3 Colum. J. Eur. L.
338 (1998).

[FN79]. See Mirjan Damaska, Truth in Adjudication, 49 Hastings L.J. 289, 289 (1998). The perception that truth is the all-
important goal of adjudication is not always accurate. It is argued that some systems, such as the United States, prioritize
justice over truth in adjudication. But see John Thibaut & Laurens Walker, A Theory of Procedure, 66 Cal. L. Rev. 541
(1978) (challenging the view that the fundamental objective of the U.S. legal process is the discovery of truth).

[FN80]. Prohibitions against perjury transcend both time and cultures. See Richard H. Underwood, Perjury: An Anthology, 13
Ariz. J. Int'l & Comp. L. 307 (1996) [hereinafter Underwood, Perjury] (explaining the ancient Roman laws against perjury
and punishments meted out for violations) (citing James Stachen-Davidson, Problems of the Roman Criminal Law 41-42
(1969)); see also Richard H. Underwood, False Witness: A Lawyer's History of the Law of Perjury, 10 Ariz. J. Int'l & Comp.
L. 215 (1993) [hereinafter Underwood, False Witness](surveying laws against perjury in ancient Egypt, Mesopotamia,
ancient India, Greece, the Ashanti society in Africa, medieval Europe and early America).

[FN81]. The historical evidence of formal prohibitions against lawyers encouraging perjury is ample, although not as
extensive as those directly against perjury. Ninth century Roman law punished with seven years of penance he who leads
another in ignorance to commit perjury, Mesopotamian law punished with death anyone who threatened a witness, and
ancient Indian laws prohibited coaching witnesses. See Underwood, False Witness, supra note 80. Today, all legal systems
prohibit, either through criminal laws or professional ethics, lawyers from abetting or encouraging perjurous testimony.

[FN82]. See, e.g., Charles F. Wolfram, Modern Legal Ethics 12.3.3, at 641 (1986).

[FN83]. This divergence should not be surprising when it is considered that the meaning of truth in relation to adjudicatory
decisionmaking is variable from culture to culture and has, even within particular cultures, evolved dramatically over time.
See, e.g., J.S. Ghandi, Past and Present: A Sociological Portrait of the Indian Legal Profession, in Lawyers in Society, Volume
One: The Common Law World 369 (Richard L. Abel & Phillip S.C. Lewis eds., 1988) (describing the transition in India from
precolonial notions that only the king or judge had the power and technical knowledge to find truth, to the modern notion of
legal representation, which regards truth as the product of negotiation and participation by lawyers). In a more proximate
example, the civil jury's role in medieval England was not so much to pass on our modern understanding of the truth of the
events that transpired, even though they took an oath to that effect. Instead, juries of the thirteenth and fourteenth centuries
acted as quasi-witnesses, ministering what we would consider justice rather than discerning what we would consider
truth. For fascinating expositions on this history, see Mirjan Damaska, Rational and Irrational Proof Revisited, 5 Cardozo J.
Int'l & Comp. L. 25, 29 (1997) and Trisha Olson, Of Enchantment: The Passing of the Ordeals and the Rise of the Jury Trial,
50 Syracuse L. Rev. 109, 181-82 (2000).

[FN84]. See Wolfram, supra note 82, 12.4.3, at 647-48; 3 John Henry Wigmore, Evidence 788 (J. Chadbourne rev. 1970).

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 38
23 Mich. J. Int'l L. 341

As this example demonstrates, much of the contest between national ethical norms is bound up in the language chosen to
frame the issues. Characterizing the conduct as a practice of witness preparation makes the German perspective seem
reactionary, while characterizing it as witness tampering makes the American perspective seem lawless. For a more full
discussion of the way language affects comparative analysis and related problems, see Catherine A. Rogers, Review Essay,
Gulliver's Troubled Travels, or The Conundrum of Comparative Law, 67 Geo. Wash. L. Rev. 149, 171 n.110 (1998) . This
problem is exacerbated in the context of discussing a subject such as professional ethics, where there exists substantial debate
even within a particular legal community about the meaning of the value-laden terms that shape the dialogue. See Orlandi,
supra note 18, at 94; David B. Wilkins, Who Should Regulate Lawyers, 105 Harv. L. Rev. 799, 853-54 (1992).

[FN85]. See Mirjan Damaska, Presentation of Evidence and Factfinding Precision, 123 U. Pa. L. Rev. 1083, 1088-89 (1975)
(Coaching witnesses [in inquisitorial systems] comes dangerously close to various criminal offenses of interfering with the
administration of justice as well as being contrary to professional canons of ethics); John H. Langbein, The German
Advantage in Civil Procedure, 52 U. Chi. L. Rev. 823, 834 (1985) [hereinafter Langbein, German Advantage in Civil
Procedure](The German lawyer virtually never [has] out-of-court contact with a witness, because, under the German rules
of ethics, a lawyer may interview witnesses out of court only when it is justified by special circumstances. He has to avoid
even the appearance of influencing the witness and is, in principle, not allowed to take written statements.); see also John H.
Langbein, Trashing The German Advantage, 82 Nw. U. L. Rev. 763, 767 (1988) [hereinafter Langbein, Trashing The
German Advantage](noting that the prohibition is not absolute and communication with witnesses is permitted in cases of
unusual necessity). While it may not be likely that communication with a witness in an arbitration will expose the attorney
to the possibility of discipline at home (since national ethical rules are not generally applicable in arbitration), attorneys
incorporate their national ethical constraints into their habitual decisionmaking and are consequently likely to continue a
practice until presented with a countervailing and controlling rule.

[FN86]. See Hamdi & Ibrahim Mango Co. v. Fire Ass'n of Phila., 20 F.R.D. 181 (S.D.N.Y. 1957) (acknowledging that it is a
usual and legitimate practice for ethical and diligent counsel, in preparing their witnesses for either deposition or trial
testimony, to confer with each witness before testimony is given). Similarly, in England barristers routinely interview client
and expert witnesses, and solicitors interview fact witnesses as well as review potentially difficult questions that may come
up on cross-examination. See Wolfram, supra note 82, 12.4.3, at 648, 648 n.92 (1986) (citing H. Cecil, Brief to Counsel 102
(2d ed. 1972)). To be sure, the Anglo-American rule does not permit all manner of contact with witnesses. Limitations exist,
and overly suggestive witness preparation could cross the line into subornation of perjury. See id. at 648; Joseph D.
Piorkowski, Jr., Note, Professional Conduct and the Preparation of Witnesses for Trial: Defining the Acceptable Limitations
of Coaching, 1 Geo. J. Legal Ethics 389, 390-91 (1987) (describing an attorney's goals during witness preparation as to aid
the witness telling the truth and organizing the facts, to introduce the witness to the legal process, to instill the witness with
self-confidence, to eliminate opinion and conjecture from the testimony, to make the witness understand the importance of his
or her testimony, and to teach the witness to fight anxiety against cross-examination). Because of perceived dangers, some
courts prohibit lawyers from speaking to non-client witnesses during recesses in testimony. See Wolfram, supra note 82,
12.4.3, at 648-49.

[FN87]. Although not defined in U.S. codes as a formal ethical obligation, several courts have treated failure to prepare a
witness as a breach of the duty of competent representation. See, e.g., In re Stratosphere Corp. Sec. Litig., 182 F.R.D. 614 (D.
Nev. 1998) (characterizing witness preparation as an ethical obligation incumbent on attorneys); District of Columbia Bar,
Code of Professional Responsibility and Opinions of the District of Columbia Bar Legal Ethics Committee 138, 139 (1991)
(stating that an attorney who had the opportunity to prepare a witness, but failed to do so, would not be properly fulfilling her
professional obligations); Hall v. Clifton Precision, 150 F.R.D. 525, 528 (E.D. Pa. 1993) (implying that an attorney has the
right and the duty to prepare a client for deposition).

[FN88]. See Philip J. Grib, A Lawyer's Ethically Justified Cooperation in Client Perjury, 18 J. Legal Prof. 145 (1993)
(explaining and critiquing various positions on the ethical responsibilities in the context of client perjury).

[FN89]. See Laurel S. Terry, An Introduction to the European Community's Legal Ethics Part 1: An Analysis of the CCBE
Code of Conduct, 7 Geo. J. Legal Ethics 1, 36-37 (1993) (suggesting there is a trend toward requiring disclosure). To the

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 39
23 Mich. J. Int'l L. 341

casual observer, this apparent exception for client perjury seems to be something of an anomaly even within Continental
systems. Before demystifying this point, I will add further intrigue by noting that perjury by a party in a civil action was not
even a crime until relatively recently and, even now, false testimony by a party is only a criminal offense in extraordinary
circumstances (such as false accusation of an innocent party). See Mirjan R. Damaska, The Faces of Justice and State
Authority: A Comparative Approach to the Legal Process 130 & n.60 (1986). For an explanation of how this apparent lack of
concern over attorney complicity in perjury is in fact a by-product of protections against perjury, see infra note 244.

[FN90]. Model Code of Prof'l Responsibility EC 7-4 (1980).

[FN91]. Federal Rule of Civil Procedure 11 provides that the signature of a lawyer warrants that a document filed with the
court is well grounded in fact or law or, if arguing for a change in the law, that it is not interposed to harass or delay
proceedings or for any improper purpose. Fed. R. Civ. P. 11; see also Victor H. Kramer, Viewing Rule 11 as a Tool to
Improve Professional Responsibility, 75 Minn. L. Rev. 793, 793 (1991); Neal H. Klausner, Note, The Dynamics of Rule 11:
Preventing Frivolous Litigation by Demanding Professional Responsibility, 61 N.Y.U. L Rev. 300, 301 (1986).

[FN92]. Lawyers in civil law systems are expected to present only a faithful and precise interpretation of the applicable law
and not to argue by use of precedent, as is common in American courts. See Olga M. Pina, Systems of Ethical Regulation: An
International Comparison, 1 Geo. J. Legal Ethics 797, 798 (1988); Lauren R. Frank, Note, Ethical Responsibilities and the
International Lawyer: Mind the Gaps, 2000 U. Ill. L. Rev. 957, 966 (2000). In this respect, British barristers are regulated
more like Continental attorneys than American attorneys. See Code of Conduct of the Bar of England and Wales para. 610(b)
(1993), reprinted in Rules of Conduct for Counsel and Judges: A Panel Discussion on English and American Practices, 7 Geo.
J. Legal Ethics 865 app. at 892 (1994) (prohibiting barristers from asserting personal opinions about the facts or law). In
addition to formal constraints, European fee-shifting statutes create significant financial disincentives, which also
undoubtedly deter creative argument by counsel. See Werner Pfennigstorf, The European Experience with Attorney Fee-
Shifting, 47 Law & Contemp. Probs. 37, 45-59 (1984).

[FN93]. Impartiality is part of the definition of a good judge. Arthur T. Vanderbilt, Judges and Jurors 19 (1956). The U.S.
symbol of justice, Justicia, is blindfolded to avoid the pitfalls of favoritism and demonstrate her impartiality. See Dennis E.
Curtis & Judith Resnik, Images of Justice, 96 Yale L.J. 1727, 1727-28 (1987).

[FN94]. See V.S. Mani, International Adjudication: Procedural Aspects 16-17 (Martinus Nijhoff Publishers 1980) (1980). As
told in the Sanskrit play Mrichchakatika, as far back as 485 B.C., courts in India honored this principle by not allowing the
fact that a complainant was the king's brother-in-law to influence the court's integrity. See id. at 17.

[FN95]. See id. at 16-17.

[FN96]. For instance, in the United States, Model Rule 3.5, pertaining to Impartiality and Decorum of the Tribunal,
provides that [a] lawyer shall not: (a) seek to influence a judge, juror, prospective juror or other official by means prohibited
by law; [or] (b) communicate ex parte with such a person except as permitted by law. Model Rules of Prof'l Conduct R.
3.5(a)-(b) (2001).

[FN97]. In addition to being a violation of ethical codes, most countries have criminalized the payment of bribes to judges.
Bribery of judges will also likely soon be the subject of an international convention. See Convention on Combating Bribery
of Foreign Public Officials in International Business Transactions, done Dec. 18, 1997, Organization for Economic
Coordination and Development (OECD), reprinted in 37 I.L.M. 1 (1998) (committing signatories to treat bribery of judges as
a criminal offense).

[FN98]. See Wolfram, supra note 82, 11.3, at 603-06. In the United States, the principle has been held to preclude an old
practice under which judges derived their income based on the number of convictions they presided over. See Tumey v. Ohio,
273 U.S. 510 (1927) (concluding that under this arrangement, the judge would have a direct, personal, substantial, pecuniary

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 40
23 Mich. J. Int'l L. 341

interest in the outcome of the case).

[FN99]. See Damaska, supra note 89, at 1 ([A]ll states subscribe to the view that judges should be independent ... but the
unanimity begins to break down as soon as one considers the implications of these views and their operational meaning in the
administration of justice in various countries.).

[FN100]. In the context of international arbitrations, these contrasting notions of impartiality may lead to different notions
about the proper nature and extent of questions posed by arbitrators to witnesses. See Matter of Arbitration between Cole
Publ'g Co., Inc. v. John Wiley & Sons, Inc., No. 93 Civ. 3641, 1994 WL 532898, at *2 (S.D.N.Y. Sept. 29, 1994) (ruling on
challenge to arbitral award that alleged arbitrator bias was evidenced by aggressive questioning of some witnesses and
attempts to rehabilitate others, and that argued arbitrator acted more as an advocate than an impartial moderator); see also
Damaska, supra note 89, at 120 (noting that when a judge grills a witness testifying in favor of one disputant, the other may
think that the official is assisting his adversary).

[FN101]. Jun Ge, Mediation, Arbitration and Litigation: Dispute Resolution in the People's Republic of China, 15 UCLA Pac.
Basin L.J. 122, 127 (1996) (noting that the Chinese Civil Procedure Law requires judges to conduct mediation if the parties
do not object). This approach translates into arbitration rules in China and other Asian countries. See, e.g., China
International Economic and Trade Arbitration Committee Arbitration Rules, arts. 46, 47 (1994); Japan Commercial
Arbitration Association Commercial Arbitration Rules, Rule 39 (1992); Hong Kong Arbitration Ordinance 2(A), 2(B), ch.
341, Laws of Hong Kong (H.K.), cited in Philip J. McConnaughay, Rethinking the Role of Law and Contracts in East-West
Commercial Relationships, 41 Va. J. Int'l L. 427 n.102 (2001).

[FN102]. In China, courts are given an aggressive role in the fact-finding process, permitting them to find their own fact and
expert witnesses. See Roderick W. Macneil, Contract in China: Law, Practice, and Dispute Resolution, 38 Stan. L. Rev. 303,
327-33 (1986); James T. Peter, Med-Arb in International Arbitration, 8 Am. Rev. Int'l Arb. 83, 107 (1997).

[FN103]. See Ge, supra note 101, at 127.

[FN104]. See, e.g., Code of Conduct--Germany 8.3 (A lawyer may contact or submit documents or exhibits to a judge
without the knowledge of the lawyer(s) or the opposing client(s) in the case.), cited in Terry, supra note 89, at 36 n.159; see
id. at 37-38 & n.158 (noting that in many European countries ex parte contact with the court on non-fundamental issues is
not prohibited). The CCBE Explanatory Memorandum states with regard to Rule 4.2, [t]his provision applies the general
principle that in adversarial proceedings a lawyer must not attempt to take unfair advantage of his opponent, in particular by
unilateral communications with the judge. An exception however is made for any steps permitted under the relevant rules of
the court in question. Under the CCBE Code, therefore, the rules of the court govern the extent to which ex parte
communications are permitted.

[FN105]. The most common exceptions to the rule against ex parte communications are special proceedings for extraordinary
relief (such as temporary restraining orders), in camera inspections, and similar unusual procedural settings. See Wolfram,
supra note 82, 11.3.3, at 605-06.

[FN106]. In a modern trend, many federal U.S. judges have departed from this strictly disinterested posture and adopted what
Judith Resnik terms managerial judging. See Judith Resnik, Managerial Judges, 96 Harv. L. Rev. 374, 390, 425-27 (1982)
(demonstrating and criticizing this trend).

[FN107]. Compare Alan Redfern & Martin Hunter, Law and Practice of International Commercial Arbitration 225-26
(1991) (noting that it is not unusual for there to be discussions with just one of the parties in respect of procedural matters
such as availability for future hearings), and Code of Ethics for Arbitrators in Commercial Disputes Canons III(B)(1)
(American Arbitration Ass'n 1977) (permitting ex parte communications with any member of the arbitral tribunal
concerning such matters as setting the time and place of hearings or making other arrangements for the conduct of the

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 41
23 Mich. J. Int'l L. 341

proceedings), and id. Canon VII (permitting ex parte communications by party-appointed arbitrators as long as general
disclosure is made), with Rules of Ethics R. 5.3 ( International Bar Ass'n 2001) (prohibiting any unilateral communications
regarding the case). For extended discussion of these rules, see W. Lawrence Craig et al., International Chamber of
Commerce Arbitration 13.07 (2d ed. 1990); M. Scott Donahey, The Independence and Neutrality of Arbitrators, 9(4) J.
Int'l Arb. 31, 41-42 (1992).

[FN108]. See, e.g., Lifecare Int'l, Inc. v. CD Med., Inc., 68 F.3d 429 (11th Cir. 1995); Sunkist Soft Drinks, Inc. v. Sunkist
Growers, Inc., 10 F.3d 753 (11th Cir. 1993) (finding no misconduct despite finding that party arbitrator met with
representatives and witnesses of appointing party before arbitration to plan strategy). These cases involved domestic U.S.
arbitrations, which means that these objections did not arise because of conflicting cultural perspectives on ex parte
communication, but were challenges to the inherent fairness of proceedings when parties are communicating with
arbitrators.

[FN109]. See Vagts, supra note 73, at 379 (reporting a panel discussion of a hypothetical case involving European and
American lawyers in an arbitration in Geneva that was governed by Swiss law); Ambassador Malcolm Wilkey, The
Practicalities of Cross-Cultural Arbitration, in Conflicting Legal Cultures in Commercial Arbitration, supra note 18, at
79, 86 (describing differing approaches to ex parte communication as a problem in international arbitration that must be
overcome).

[FN110]. See Dietrich Rueschemeyer, Comparing Legal Professions Cross-Nationally: From a Professions-Centered to a
State-Centered Approach, 1986 Am. B. Found. Res. J. 415, 445.

[FN111]. See Lawrence M. Friedman & Zigurds L. Zile, Soviet Legal Profession: Recent Developments in Law and Practice,
1964 Wis. L. Rev. 32. There are of course anomalous counter-examples of authoritarian regimes, such as Nazi Germany,
under which attorneys were little more than tools of the government, actively involved--under threat of sanction or torture--in
helping the government to obtain convictions. Wilkins, supra note 84, at 860 & n.270.

[FN112]. As Professor Merryman explains:


[T]here is a very important sense in which a focus on rules is superficial because rules literally lie on the surface of
legal systems whose true dimensions are found elsewhere; misleading because we are led to assume that if rules are made to
resemble each other something significant by way of rapprochement has been accomplished.
John H. Merryman, On the Convergence (and Divergence) of the Civil Law and the Common Law, in New Perspectives for a
Common Law Of Europe 222, 225 (Mauro Cappelletti ed., 1978); see also Ugo Mattei, Three Patterns of Law: Taxonomy
and Change in the World's Legal Systems, 45 Am. J. Comp. L. 5, 5 (1997) (demonstrating how legal rules exist in the larger
intellectual framework or legal taxonomy of the system); W. Michael Reisman, Autonomy, Interdependence and
Responsibility, 103 Yale L.J. 401, 403 (1993) (observing how culturally defined perspectives make cross-cultural observation
difficult).
[FN113]. Compare CCBE Code of Conduct R. 2.1.1 (1998), reprinted in Terry, supra note 89, at 66, with Model Rules of
Prof'l Conduct R.R. 5.4, 5.5 (1983) and Model Rules of Prof'l Conduct, pmbl.

[FN114]. See Terry, supra note 89, at 46-48.

[FN115]. Four of the EC Member States--Italy, France, Belgium and Luxembourg--do not even allow in-house attorneys to
be members of the bar. Sally R. Weaver, Client Confidences in Disputes Between In-House Attorneys and Their Employer-
Clients: Much Ado About Nothing--Or Something?, 30 U.C. Davis L. Rev. 483, 527 (1997). This vision of in-house counsel
also explains why in many European countries, there is no such concept as corporate confidentiality. See Carol M.
Langford, Reflections on Confidentiality: A Practitioner's Response to Spalding v. Zimmerman, 2 J. Inst. Study Legal Ethics
183, 185 (1999); see also Terry, supra note 89, at 48.

[FN116]. From a European perspective, the percentage contingency fee is regarded as promoting excessive litigation and

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 42
23 Mich. J. Int'l L. 341

reducing the attorney's independence and judgment. See generally Virginia G. Maurer et al., Attorney Fee Arrangements: The
U.S. and Western European Perspectives, 19 Nw. J. Int'l L. & Bus. 272, 320 (1999). While interesting for illustrative
purposes, contingency fees need not be addressed in a code for international arbitration. See supra note 22. Contingency fees
are a phenomenon designed primarily to help individuals with limited financial resources afford the costs of litigating
predominantly in the tort and employment contexts. See Dennis E. Curtis & Judith Resnik, Contingency Fees in Mass Torts:
Access, Risk, and the Provision of Legal Services When Layers of Lawyers Work for Individuals and Collectives of Clients,
47 DePaul L. Rev. 425 (1998); Bradley L. Smith, Note, Three Attorney Fee-Shifting Rules and Contingency Fees: Their
Impact on Settlement Incentives, 90 Mich. L. Rev. 2154, 2163 (1992). For this reason, as a practical matter, contingency fees
are not currently used to fund international arbitrations, although the potential is there. See Ted Schneyer, Legal Process
Constraints on the Regulation of Lawyers' Contingent Fee Contracts, 47 DePaul L. Rev. 371 (1998) (noting the increasing
use of contingency fees in business litigation, including defense work).

[FN117]. See Ted Schneyer, Multidisciplinary Practice, Professional Regulation, and the Anti-Interference Principle in Legal
Ethics, 84 Minn. L. Rev. 1469, 1493 (2000).

[FN118]. Such regulations had been adopted in some civil law countries such as France. See id. (citing John Henry
Merryman, The Civil Law Tradition 113 (1969)); Daly, supra note 6, at 1149.

[FN119]. As Professor Schneyer correctly points out, the benefits from such extreme protection against interference with an
attorney's professional judgment by other lawyers is as likely to enhance as diminish the quality of a lawyer's work. See
Schneyer, supra note 117, at 1494.

[FN120]. See Terry, supra note 89, at 15.

[FN121]. For an analysis of national rules that treat lawyers as quasi-governmental agents, see infra notes 228-33 and
accompanying text.

[FN122]. See Model Rules of Prof'l Conduct, pmbl. P 10 (2000) (stating that self-regulation helps maintain the legal
profession's independence from government domination and is an important force in preserving government under law, for
abuse of authority is more readily challenged by a profession whose members are not dependent on government for the right
to practice.); but see Wilkins, supra note 84, at 853-63 (noting that in the United States there are multiple connotations
attributed to the concept of lawyer independence and its underlying purposes).

[FN123]. There are some U.S. ethical rules that do aim at encouraging some attorney independence from the client's
objectives, such as Rule 1.5(d), which prohibits contingency fees in criminal and domestic relations cases; Rule 1.8(e), which
prohibits lawyers from providing financial assistance in litigation; and Rule 1.8(j), which prohibits an attorney from acquiring
a proprietary interest in a cause of action or the subject matter of litigation. See George M. Cohen, When Law and Economics
Met Professional Responsibility, 67 Fordham L. Rev. 273, 287 & n.72 (1998).

[FN124]. See Wolfram, supra note 82, 4.1, at 146 (describing how the entrenched lawyerly conception is that the client-
lawyer relationship is the embodiment of centuries of established and stable traditions). In the most strident articulation, the
lawyer is charged with carrying out the client's directions regardless of the immorality of the client's objectives or means.
See id. 4.3, at 154. Although useful for illustrative purposes, these statements ignore interests asserted even in the United
States of having lawyers exercise their professional independent judgment to assess both their client's true (as opposed to
merely articulated) interests and the public purposes underlying relevant legal restrictions. Wilkins, supra note 84, at 862.

[FN125]. See William H. Simon, Ethical Discretion in Lawyering, 101 Harv. L. Rev. 1083, 1083-84 (1988) (arguing that
lawyers should independently assess their clients' claims and the purposes underlying applicable legal rules in order to
determine what actions will likely produce a legally correct result). Others argue that the abdication of professional
independence in favor of complete loyalty to the client is a more modern event. See Robert W. Gordon, The Independence of

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 43
23 Mich. J. Int'l L. 341

Lawyers, 68 B.U. L. Rev. 1, 11-17 (1988) (arguing that the ideal of lawyers exercising independence from their clients has
real historical content); L. Ray Patterson, Legal Ethics and the Lawyer's Duty of Loyalty, 29 Emory L.J. 909, 910 (1980).

[FN126]. See Terry, supra note 89, at 45-46. Even within the U.S. system, as Professor David Wilkins explains, No word in
the lexicon of professionalism is more commonly invoked--and less commonly defined--than independence. Wilkins, supra
note 84, at 853. Moreover, the ways in which American lawyers and regulators define attorney independence is quite
different from the independence problems facing lawyers in other countries, such as China. See Lawyers Comm. on Human
Rights, Lawyers in China: Obstacles to Independence and the Defense of Rights (1998).

[FN127]. Matthew 6:24 (King James) (No man can serve two masters: for either he will hate the one, and love the other; or
else he will hold to the one, and despise the other.), quoted in Steven H. Goldberg, The Former Client's Disqualification
Gambit: A Bad Move in Pursuit of an Ethical Anomaly, 72 Minn. L. Rev. 227, 232 (1987).

[FN128]. Third-party advocacy developed out of a system of patronage in ancient Rome. Patricians were obliged to fulfill
their civic duty by providing a host of services as patronus causarum for their plebeian cliens, including delivering speeches
in legal disputes. See Roscoe Pound, The Lawyer from Antiquity to Modern Times 44-46 (1953). In this ancient form,
dedication to clients was tied more to a sense of noblesse oblige inherent in the patrician's social status than to a sense of
ethical obligation to the person of the client. See J.A. Crook, Legal Advocacy in the Roman World 32 (1995).

[FN129]. See Pound, supra note 128, at 33; Damas>ka, supra note 89, at 141; Mark M. Orkin, Legal Ethics: A Study of
Professional Conduct 3 (1957); Jonathan Rose, The Legal Profession in Medieval England: A History of Regulation, 48
Syracuse L. Rev. 1, 9 (1998).

[FN130]. See Herman Cohen, History of the English Bar and Attornatus to 1450, 234 (1929) (citing 1280 ordinance
prohibiting lawyers' conflicts of interest). In comparing the texts of the two codes, it is difficult to say with regard to conflicts
between current clients, whether the Model Rules or the CCBE Code is more restrictive. In the United States, attorneys are
prohibited under the Model Rules from engaging in a simultaneous representation if representation would be directly
adverse or materially limited by the lawyer's other interests or responsibilities. Model Rules of Prof'l Conduct 1.7(b)
(2000). The CCBE Code prohibits a lawyer from advising, representing or acting on behalf of two of more clients if there is a
conflict or a significant risk of a conflict between their interests. Comparing the language of these two provisions might
be futile, but empirical research might allow comparison of the factual circumstances in which each rule is applied. For a
description of how a law-in-action or social scientific approach can aid comparative analysis of seemingly identical rules, see
Rogers, supra note 84, at 171-73.

[FN131]. While not a model of clarity, Model Rule 1.8 views client gifts with extreme suspicion, reflecting the long-standing
skepticism in Anglo-American law of client gifts to attorneys. See Wolfram, supra note 82, 8.12.2, at 486.

[FN132]. The Disciplinary Rules prohibit lawyers from entering into business transactions with clients in which they have
differing interests, unless the client consents after full disclosure. See id. 8.11.2, at 480. Courts have expanded application
of the rule to apply even when the lawyer was not performing legal services for the client and to require that the attorney
advise the client to seek independent legal advice on the matter. See id. 8.11.2, at 480 & n.80.

[FN133]. Disciplinary Rule 5-107(A) prohibits a lawyer from accepting compensation or anything else of value from a
person other than the client for representing a client unless the client gives informed consent. Id. 8.8.2, at 443.

[FN134]. A particularly interesting example is in the contrasting U.S. and European regulation of contingency fee
arrangements. Both systems view contingency fees as a potential menace to ethical conduct, but for radically different
reasons. In the United States, ethical rules aim at ameliorating potential conflicts of interest between an attorney and client
that may arise when they have a contingency fee arrangement. See Wolfram, supra note 82, 4.5, at 164. In Europe
contingency fees are almost completely prohibited, but not so much, as in the United States, to protect clients against

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 44
23 Mich. J. Int'l L. 341

potential conflicts. European systems prohibit contingency fees to avoid an arrangement that might undermine lawyers'
professional independence from their clients. See Maurer et al., supra note 116, at 280.

[FN135]. Daly, supra note 6, at 1150 (noting that in some countries, professional ethics are handed down as an oral tradition,
whose strictures address only the most obvious conflicts of interest).

[FN136]. While arbitrator ethics is beyond the scope of this Article, it is clear that since many arbitrators are attorneys who
bring to their decision-making role assumptions formed in their advocacy practice, resolving the conflict between national
attorney ethical rules will provide residual benefits for resolving the troubled area of arbitrator ethics. See W. Michael
Reisman & Catherine A. Rogers, Evaluating the Conduct of International Arbitrators (forthcoming).

[FN137]. See Lucy Reed & Jonathan Sutcliffe, The Americanization of International Arbitration?, Mealey's Int'l Arb. Rep.,
No. 16-4, at 37 & n.44 (Apr. 2001).

[FN138]. Another aspect of the duty of loyalty is the duty of professional competence. For reasons explained elsewhere, see
supra note 22, this pillar of professional ethics need not be addressed in a code of ethics for international arbitration, but
instead can be left to national or cross-border regulation, although internationally developed standards of conduct will
inevitably inform national evaluation of attorney competence.

[FN139]. Model Rules of Prof'l Conduct R. 1.2 (2000).

[FN140]. This obligation to consult requires that attorneys explain matters well enough that clients can participate
intelligently in decisions about both the means and the objective of representation. See Wolfram, supra note 82, 4.5, at 165
(citing comment to Model Rule 1.4(a)).

[FN141]. The Council of the Bars and Law Societies of the European Community, commonly known as the CCBE, has
recently enacted the CCBE Code, which is a code of professional conduct that governs the conduct of attorneys in the
European Community. See Terry, supra note 89, at 15. Because the CCBE Code represents a compromise among
predominantly civil law countries, and because most Member States in the European Union have adopted it to govern cross-
border practice, it provides an important touchstone for any comparative discussion of ethics. For further discussion on the
history and role of the CCBE see infra notes 267-72 and accompanying text.

[FN142]. The CCBE Code does speak of the client's instructions, for example in Rule 3.1, where it states that a lawyer can
only handle a case for a client on his instruction. In context, however, the term instruction appears to be idiomatic for
retention, and not a reference to interim decisionmaking by the client. The title of the subsection, for example, is
Acceptance and Termination of Instructions and appears to use matters and instructions interchangeably when
discussing requirements that an attorney have time and be competent before undertaking representation of a client. See Code
of Conduct for Lawyers in the European Union, Council of the Bars and Law Societies of the European Union, R. 3.1,
available at http:// www.ccbe.org/documents/EN/codeuk/pdf.

[FN143]. See Terry, supra note 89, at 36 (emphasis added).

[FN144]. See id. at 30 & n.114 (citing Austrian legal sources and anecdotal evidence from an Austrian attorney).

[FN145]. See id. at 47.

[FN146]. See Geoffrey C. Hazard, Jr., An Historical Perspective on the Attorney-Client Privilege, 66 Cal. L. Rev. 1061
(1978).

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 45
23 Mich. J. Int'l L. 341

[FN147]. In the Anglo-Saxon legal tradition, this justification dates back to Wigmore. See Alison M. Hill, A Problem of
Privilege: In-House Counsel and the Attorney-Client Privilege in the United States and the European Community, 27 Case W.
Res. J. Int'l L. 145, 172 (1995).

[FN148]. One exception, noted above, is that in-house counsel cannot be members of the bar and communications with them
are not subject to professional confidentiality obligations. See Terry, supra note 89, at 37; see also Linda S. Spedding,
Transnational Legal Practice in the EEC and the United States 131 (1987).

[FN149]. Spedding, supra note 148, at 127-28. The civil law professional secret derives from a penal law that prohibits
disclosing the secrets of another. See id. at 127.

[FN150]. See id. at 128.

[FN151]. See Wolfram, supra note 82, at 258-64. Notably, a few U.S. jurisdictions have adopted a rule similar to the civil
law's, refusing to apply confidentiality protections to communications from a lawyer to a client. Id. at 258.

[FN152]. Mark McCary, Note, Bridging Ethical Borders: International Legal Ethics with an Islamic Perspective, 35 Tex. Int'l
L.J. 289, 313-14 (2000). In practice, these heightened confidentiality requirements may not be any different from U.S. loyalty
obligations.

[FN153]. Take, for example, a lawyer who is licensed in both New Jersey and the District of Columbia and who discovers
that a client has committed or intends to commit fraud. See Malini Majumdar, Ethics in the International Arena: The Need for
Clarification, 8 Geo. J. Legal Ethics 439, 440 (1995). Under the rules of the District of Columbia, our hapless attorney is
required to remain silent, while the rules of New Jersey compel her to reveal the client's fraud. Model Rule 8.5 attempts to
resolve the problem with a conflict-of-laws rule. Ultimately, however, Model Rule 8.5's answer is unsatisfactory and has
prompted calls for national ethical rules that will apply in all jurisdictions. See Mary C. Daly, Resolving Ethical Conflicts in
Multinational Practice--Is Model Rule 8.5 the Answer, an Answer or No Answer at All?, 36 S. Tex. L. Rev. 715, 720 (1995).

[FN154]. See Caytas, supra note 4, at 3 (characterizing conflicting rules regarding confidentiality as the greatest threat to
international practice).

[FN155]. After years of studying the differences between national ethical codes, the Consultative Committee of Council of
the Bars and Law Societies of the European Community, which drafted the predecessor code to the CCBE Code, summarized
the problem as follows:
While there can be no doubt as to the essential principle of the duty of confidentiality, the Consultative Committee
has found that there are significant differences between member countries as to the precise extent of lawyer's rights and
duties. These differences are sometimes very subtle in character especially concerning the rights and duties of a lawyer vis--
vis his client, the courts in criminal cases and administrative authorities in fiscal cases.
See The Declaration on the Principles of Professional Conduct of the Bars and Law Societies of the European Community 1
(1977).
[FN156]. See Terry, supra note 89, at 28-29 (noting that the CCBE Code imposes seemingly inconsistent provisions, which
suggest without expressly acknowledging that, although phrased in absolute terms, the obligation of confidentiality may have
limits).

[FN157]. Wolfram, supra note 82, 7.4.3, at 366.

[FN158]. See id.

[FN159]. See Terry, supra note 89, at 43. The strictures of U.S. rules may also be more demanding with respect to vicarious

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 46
23 Mich. J. Int'l L. 341

conflicts. Under the Model Rules, a lawyer in a firm is barred from representing a new client who has interests that conflict
with a former client of another attorney in the firm, even if the former representation by another attorney occurred at a
different firm. See Ted Schneyer, Legal Process Scholarship and the Regulation of Lawyers, 65 Fordham L. Rev. 33, 45
(1996).

[FN160]. See id. at 55; Mary C. Daly, The Ethical Implications of the Globalization of the Legal Profession: A Challenge to
the Teaching of Professional Responsibility in the Twenty-First Century, 21 Fordham Int'l L.J. 1239, 1290 (1998). Notably,
the CCBE Code does not permit party consent to potential conflicts, which in the United States is an important source of
party autonomy in choosing to assume certain risks. See Terry, supra note 89, at 85.

[FN161]. See Terry, supra note 89, at 85. In Ireland and the United Kingdom, ethical codes refer only to an attorney's
obligation to keep a client informed. See id.

[FN162]. See id.

[FN163]. For a discussion of U.S. attorneys' obligation to keep clients informed, see supra notes 139-43 and accompanying
text.

[FN164]. For example, former presidents of the ICC Court of Arbitration have confirmed that the problem sometimes
arises that one party is communicating with the party arbitrator, while the other is not. See Wilkey, supra note 109, at 86; see
also Reed & Sutcliffe, supra note 137, at 37 (suggesting that while some consensus has emerged about the possibility of
preliminary communication with witnesses, there remains conflict as to the extent it is permitted); Cremades, supra note 18,
at 161 (suggesting that arbitrators must distinguish the cultural background of parties in order to effectively preside over
proceedings to which parties come with differing approaches to pre-testimonial communication with witnesses); Ulmer, supra
note 18, at 171 n.8 (noting that it is not [an] uncommon practice for an arbitrator to be communicating with the appointing
party). In one celebrated case in the public law arena different ethical standards led to failure of an arbitration over a
boundary dispute between the United Kingdom and Saudi Arabia, in part because the Saudi arbitrator engaged in intense
collaboration with the party that nominated him, including rehearsing testimony with witnesses. The Saudi arbitrator
acknowledged his collaboration without embarrassment, suggesting his belief that such behavior was not unethical, while the
arbitrator for the United Kingdom ended up resigning. Id. Given these anecdotes, it is possible that assessments by arbitration
insiders underestimate the scope of the problem since their livelihood depends on continued public confidence in arbitration
and criticisms of the system might erode that confidence.

[FN165]. For example, as of 1984, the ICC boasted a ninety percent voluntary compliance rate. See Carbonneau, supra note
61, at 606. This statistic may have already fallen victim to the new culture of international arbitration, in which informal
agreement is less likely to effectively bind the parties. See supra Section I.A.1.

[FN166]. Legal research regarding individual arbitration cases is limited because arbitration awards are rarely rendered with
reasoned opinions, let alone published. See Carbonneau, supra note 61, at 606. Some limited publication is done by the ICC
with the parties' names expunged and court review of arbitral awards provides a glimpse at a subset of awards. An accurate
assessment of the impact of conflicting national ethical norms in international arbitration would require investigation of not
only of those cases that reach the award stage, however, but also of the significant percentage of arbitral cases that settle
before award. Indeed, discovering midway through proceedings that one party has been communicating throughout with its
party arbitrator may inject enough uncertainty about enforceability and the possibility of retrial to produce higher rates of
settlement than would occur in untainted proceedings.

[FN167]. For a description of the grounds under the New York Convention for setting aside or refusing to enforce an arbitral
award, see infra Section III.A.1.a.

[FN168]. A review of U.S. cases found only one international case in which a court was presented with misconduct at the

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 47
23 Mich. J. Int'l L. 341

enforcement stage. Totem Marine Tug & Barge, Inc. v. N. Am. Towing, 607 F.2d 649, 652 (5th Cir. 1979) (vacating arbitral
award because arbitral tribunal based award on evidence received ex parte after the close of evidentiary hearings). Even if
limitations in reporting do not completely obscure ethical conflicts in arbitration proceedings, they slow down their
revelation. The problem of ethical conflicts is relatively new, caused by the recent expansion in the ranks of participants in
international arbitration. The absence of significant complaints may simply reflect the lag time while reporting catches up
with the current problems.

[FN169]. This problem demonstrates the intersection of ethical rules with evidence rules. The interconnectedness of rules of
civil procedure, evidence and ethics suggest that the enactment and enforcement of ethical norms for international arbitration
must coincide with the means by which procedural and evidentiary rules are made applicable in arbitral proceedings. See
Rogers, supra, note 5.

[FN170]. Because of similar differences in the parties' expectations and assumptions, one party's pre-testimonial
communication with witnesses or ongoing ex parte communication with a party arbitrator may go undetected. See supra note
169.

[FN171]. For example, it is plausible and, in my professional experience, not uncommon that, in one case, an attorney may
appear as counsel before an arbitrator who, in a second case, is counsel where the attorney from the first case is the arbitrator.
While the potential for harm to clients is obvious, a kind of guilty complicity may deter attorneys and arbitrators from
disclosing the existence of such relationships. The risk of these incestuous cross-representations, of course, is that an attorney
or arbitrator might orchestrate professional decisions, not in the client's best interests, but in an effort to curry favor with
someone who can influence their future arbitral employment.

[FN172]. This example has been identified as a recurring problem in international tribunals. See Vagts, supra note 11, at 260.

[FN173]. For example, German judges are given to marked and explicit doubts about the reliability of the testimony of
witnesses who previously have discussed the case with counsel. Benjamin Kaplan et al., Phases of German Civil Procedure
I, 71 Harv. L. Rev. 1193, 1201 (1958).

[FN174]. Most arbitral rules permit arbitrators to award or apportion costs and fees between the parties based on the
relative merit of their cases or their conduct during arbitral proceedings. See John Yukio Gotanda, Awarding Costs and
Attorneys' Fees in International Commercial Arbitrations, 21 Mich. J. Int'l L. 1 (1999). For further discussion of
arbitrator power to award costs and fees and its relationship to a sanction power, see Rogers, supra note 5.

[FN175]. See Stephen J. Ware, Default Rules from Mandatory Rules: Privatizing Law Through Arbitration, 83 Minn. L.
Rev. 703, 744-45 (1999) ( There is a long tradition of arbitrators deciding on the basis of their own sense of justice, rather
than any set of rules.); see also Carbonneau, supra note 29, at 39.

[FN176]. One scholar, in proposing solutions to the clash of legal cultures in international arbitration, has suggested that
the problem could be alleviated by heightened sensitivity on the part of arbitrators and increased communication during the
process. See Cremades, supra note 18, at 161 (suggesting that the arbitral tribunal must know how to distinguish different
cultural origins in the evaluation of their respective testimonies). Even if, under the best circumstances, arbitrator
sensitivity could ameliorate bias in the decision-making process, however, it cannot obviate the inequity of having parties
abide by differing rules during the presentation of evidence.

[FN177]. One example of the newly recognized need to protect party expectations of confidentiality in arbitration is a rule
introduced by the Venice Court of National and International Arbitration that requires that parties treat evidence in
arbitrations as confidential. See Venice Court of National and International Arbitration: Rules of Arbitration art. 37.1,
available at http://www.venca.it/rules.htm&number;37 ([E]vidence [in arbitrations] shall not be used or disclosed to any
third party for any purpose whatsoever by a Party whose access to that information arises exclusively as a result of its

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 48
23 Mich. J. Int'l L. 341

participation in the arbitration and such use or disclosure is permitted only by consent of the Parties or the order of a court
having jurisdiction.). While this provision represents an important new attentiveness to the need to protect confidential
information, it does not address consequences for unauthorized disclosures. Alexis C. Brown, Presumption Meets Reality: An
Exploration of the Confidentiality Obligation in International Commercial Arbitration, Am. U. Int'l L. Rev. 969, 992-98
(2001) (noting that arbitral institutions' rules are usually silent or inadequate in protecting confidentiality).

[FN178]. See supra Section I.A.4.

[FN179]. See Geoffrey C. Hazard, Ethics, Nat'L L.J., Mar. 30, 1992, at 13. The risk that an American party might be forced to
disclose information provided to an in-house counsel is somewhat diminished by the fact that European parties are less
accustomed to discovery and, as a consequence, less aggressive in their discovery requests.

[FN180]. See supra notes 146-51 and accompanying text.

[FN181]. Similar problems arise when a conflict-of-interest issue presents itself in an arbitration. Again using the example of
a U.S.-European arbitration, an arbitral tribunal might be asked to evaluate a motion to disqualify based on an alleged
conflict-of-interest that would be prima facie impermissible and waivable by client consent in the United States, but would be
considered under many European regimes as a purely private issue between an attorney and client. For a discussion of the
substantive differences in the European and American regulation of conflicts of interest, see supra notes 92-98 and
accompanying text. In choosing between these standards (again, assuming for the moment that arbitrators have the power),
arbitrators will likely disrupt the expectations of one of the parties. If the tribunal adopts the U.S. ethical standard and
disqualifies counsel, the Continental party who must find new counsel will regard the decision as disrupting their
representation and denying them their counsel of choice. Meanwhile, if the tribunal adopts the more European approach and
permits the allegedly conflicted counsel to remain, the complaining party will regard the proceedings as manifestly unfair.
See Bidermann Indus. Licensing, Inc. v. Avmar N.V., 570 N.Y.S.2d 33 (N.Y. App. Div. 1991). For commentary, see Thomas,
supra note 7, at 564; see also Image Technical Servs., Inc. v. Eastman Kodak Co., 820 F. Supp. 1212 (N.D. Cal. 1993)
(applying forum law as to the disqualification of counsel on account of their prior representation of a party to the litigation in
various countries).

[FN182]. See Resnik, supra note 24, at 850 (describing the importance of ritual and formality that pervade the adjudicatory
process and legitimate decisions rendered).

[FN183]. See supra Section I.C.

[FN184]. See id.

[FN185]. See id.

[FN186]. W. Michael Reisman, Folded Lies: Bribery, Crusades, and Reforms 12 (1979).

[FN187]. Cf. Edward Brunet, Questioning the Quality of ADR, 62 Tul. L. Rev. 1, 5 (1987) (commenting generally on the
function of articulated norms that allow disputants to assess the neutrality of arbitral decisions).

[FN188]. The functional approach is not intended to be a historical account of how ethical norms are actually derived, but
rather a conceptual analysis of the nature of legal ethics.

[FN189]. While many commentators have identified these two distinctive approaches, this particular characterization belongs
to Thomas Shaffer, a strong proponent of the ethics-as-ethics approach. See Thomas L. Shaffer, American Lawyers and Their
Communities: Ethics in the Legal Profession 14 (1991).

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 49
23 Mich. J. Int'l L. 341

[FN190]. See Steven Salbu, Law and Conformity, Ethics and Conflict: The Trouble with Law-Based Conceptions of Ethics,
68 Ind. L.J. 101, 104 (1992) (A code [of ethics] is law, and our codes ... establish particularized rules, regulations, and
standards that are legalistic in the rigidity of their application.). This position of course assumes away the all-important issue
of interpretation, which is necessarily predicate to deciding whether or not to abide by ethical rules and can, in the context of
ethical rules in particular, involve nuanced decisionmaking. For this insight, I am thankful to Ted Schneyer for his thoughtful
comments on an earlier draft.

[FN191]. See Salbu, supra note 190, at 105 (Confronted with a code, the individual has only one ethical choice: to abide or
not to abide.).

[FN192]. One of the most forceful defenders of this position is Stephen Pepper. See Stephen L. Pepper, The Lawyer's Amoral
Ethical Role: A Defense, A Problem, and Some Possibilities, 1986 Am. B. Found. Res. J. 600, 613. Pepper argues that the
amoral role of the advocate is morally justified by the societal values promoted by the advocacy system as a whole, which he
defines as autonomy, equality, and diversity. See id.

[FN193]. See Gerald Postema, Moral Responsibility in Professional Ethics, 55 N.Y.U. L. Rev. 63, 73 (1980), quoted in Ted
Schneyer, Moral Philosophy's Standard Misconception of Legal Ethics, 1984 Wis. L. Rev. 1529, 1534.

[FN194]. This view is primarily attributable to moral philosophers who have taken up the subject of attorney ethics. See, e.g.,
Alan Goldman, the Moral Foundations of Professional Ethics 90 (1980); David Luban, Lawyers and Justice: An Ethical
Study (1988) [hereinafter Luban, Lawyers and Justice]; William H. Simon, The Practice of Justice: A Theory of Lawyers'
Ethics 1 (1998); Rob Atkinson, Beyond the New Role Morality for Lawyers, 51 Md. L. Rev. 853 (1992); Michael Bayles,
Professionals, Clients and Others, in Profits and Professions: Essays in Business and Professional Ethics 65 (1983); David
Luban, The Adversary System Excuse, in The Good Lawyer: Lawyers' Roles and Lawyers' Ethics 83 (David Luban ed.,
1983) [hereinafter The Good Lawyer]; David Luban, Reason and Passion in Legal Ethics, 51 Stan. L. Rev. 873 (1999);
Richard Wasserstrom, Lawyers as Professionals: Some Moral Issues, 5 Human Rights Q. 1, 12 (1975) [hereinafter
Wasserstrom, Lawyers as Professionals]; Richard Wasserstrom, Roles and Morality, in The Good Lawyer 25, supra. For a
more recent exploration of these issues, see Arthur Isak Applebaum, Ethics for Adversaries: The Morality of Roles in Public
and Professional Life (1999).

[FN195]. See, e.g., Bayles, supra note 194, at 66; see also Wasserstrom, Lawyers as Professionals, supra note 194. Ted
Schneyer has already effectively demonstrated how many aspects of this criticism rest on empirical misconceptions and
intentional ignorance about the degree of discretion conferred on lawyers by ethics rules. See Schneyer, supra note 193, at
1534-43; Ted Schneyer, Some Sympathy for the Hired Gun, 41 J. Legal Educ. 11 (1991).

[FN196]. See Alasdair MacIntyre, What Has Ethics to Learn from Medical Ethics?, 2 Phil. Exchange 37, 46 (1978), cited in
Schneyer, supra note 116, at 35-36.

[FN197]. See id.

[FN198]. This example is borrowed from Ted Schneyer's provocative and insightful work in the field. See Schneyer, supra
note 193, at 1534; s ee also Vincent Luizzi, A Case for Legal Ethics (1993) (arguing that lawyers' norms are forged within a
social practice and derived from role conceptions (the lawyer as advocate, negotiator, advisor, etc.) rather than from vague
starting points such as John Rawls' original position); Ted Schneyer, My Kind of Philosopher: A Lawyer's Appreciation of
Joel Feinberg, 37 Ariz. L. Rev. 10 (1995).

[FN199]. The differences between the multiple jurisdictions of the United States suggest that a range of possible options are
presented even when procedural arrangements are substantially similar. Indeed, the diversity in ethical rules among the fifty
states might be more pronounced if most states had not derived their codes primarily from a model code. See Wolfram, supra

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 50
23 Mich. J. Int'l L. 341

note 82, at 69-70 (tracing history of state codes from original codes). It is also possible that a system could adopt a
dysfunctional rule, particularly if rulemaking becomes hostage to special interests.

[FN200]. See Maura Strassberg, Taking Ethics Seriously: Beyond Positivist Jurisprudence in Legal Ethics, 80 Iowa L. Rev.
901 (1995) (arguing that modern articulations of legal ethics cast them as positive law, which constrains choices and
strategies for avoiding morally undesirable consequences).

[FN201]. For this reason, criticisms by moral philosophers that legal ethics establish the Standard Conception of the role of
the lawyer are misguided. These criticisms are more appropriately understood either as an objection to the role that social and
political institutions have assigned to the lawyers, as an objection to the code drafters' selection of a particular rule within the
permissible ambit, or as an objection that the rule chosen is a dysfunctional rule. If critics are in fact complaining about the
role assigned to a professional through social and political institutions, such as rules of evidence and procedure, their call
must be to reform those institutions. Simply rewriting ethical codes will be futile and may even confuse matters if the
underlying roles are not reexamined.

[FN202]. See Eric E. Jorstad, Note, Litigation Ethics: A Niebuhrian View of the Adversarial Legal System, 99 Yale L.J. 1089,
1090 (1990) (characterizing the fundamental question underlying the ethics of advocacy as How does a litigator mediate
between the state's interest in the litigation and the private parties' struggle for power through the law?). This insight is given
its most potent expression by Professor Post, who postulates that lawyers are despised because they are our own dark
reflection. Robert C. Post, On the Popular Image of the Lawyer: Reflections in a Dark Glass, 75 Cal. L. Rev. 379, 386
(1987). We use lawyers both to express our longing for a common good, and to express our distaste for collective discipline.
When we recognize that the ambivalence is our own, and that the lawyer is merely our agent, we use the insight as yet
another club with which to beat the profession. Id.; see also Eugene R. Gaetke, Lawyers as Officers of the Court, 42 Vand.
L. Rev. 39, 40-41 (1989) (acknowledging the conflicting duality of an attorney's role); Patterson, supra note 125, at 969
(noting that attorneys have primary obligations to clients, but also obligations as officers of the court). Indeed, the most
strident debate in legal ethics today is whether (and how) lawyers' obligations to society and the legal system should be
enhanced, with a corresponding contraction in lawyers' obligations to clients. See Luban, Lawyers and Justice, supra note
194; Marvin E. Frankel, The Search for Truth: An Umpireal View, 123 U. Penn. L. Rev. 1031 (1975); H. Richard Uviller, The
Advocate, the Truth, and Judicial Hackles: A Reaction to Judge Frankel's Idea, 123 U. Penn. L. Rev. 1067 (1975)
(questioning both the plausibility and desirability of Judge Frankel's proposed expansion of lawyers' obligations to tribunal).

[FN203]. See Wilkins, supra note 84, at 815-18.

[FN204]. The contradictory role of the lawyer advocate is arguably responsible for much of the public anti-attorney animus
that has accompanied the profession in its march through the ages. For example, in a poll conducted by the National Law
Journal, forty-two percent of those surveyed disapproved of lawyers because either they manipulate the legal system without
any concern for right or wrong or they file too many unnecessary lawsuits. What America Really Thinks About Lawyers,
Nat'l L.J., Aug. 18, 1986, at S-3, cited in Post, supra note 202, at 380. Meanwhile, a combined total of sixty-nine percent of
those surveyed identified as the most positive aspects of lawyers either their ability to elevate their clients as their first
priority or their ability to cut through red tape. As Post observes, these statistics demonstrate that lawyers are applauded
for following their clients' wishes and bending the rules to satisfy those wishes ... [and] at the very same time condemned for
using the legal system to get what their clients want, rather than to uphold the right and denounce the wrong. See id.; see
also Marvin Mindes, The Lawyer as Trickster or Hero, 1982 Am. B. Found. Res. J. 177.

[FN205]. See supra Section I.A. For the moment, I will leave the obligation of independence to one side.

[FN206]. For a discussion of universal prohibitions against bribing judges, see supra notes 92-97 and accompanying text.

[FN207]. For a discussion of the universal understanding that attorneys cannot represent opposing sides in a single case, see
supra notes 129-30 and accompanying text.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 51
23 Mich. J. Int'l L. 341

[FN208]. Originally, with the rise of Greek and Roman civilizations, lawyers were not permitted in court and litigants were
left to rely on their own deftness in presenting their cases. See Mark M. Orkin, Legal Ethics: A Study of Professional Conduct
3 (1957); Frederic W. Maitland & Francis C. Montague, A Sketch of English Legal History 92-97 (James F. Colby ed., 1915).
Even then, however, litigants sought aid behind the scenes from professional orators, who would prepare speeches to enhance
litigants' presentation of their cases. See Pound, supra note 128, at 32-33 (describing Greek speechwriters, called
logographos, who for a fee would draw up a speech based on their knowledge of Athenian law and their understanding of the
passions and prejudices of Athenian juries). Eventually, because success belonged to the side who presented the better case,
trained experts were allowed in court proceedings and were employed by anyone who wanted to secure victory at trial. See
id. at 33; Damaska, supra note 89, at 141; see also Rose, supra note 129, at 7-8 (noting that most scholars point to the reign of
Edward I (1272-1307) as the time in which the legal profession was born).

[FN209]. The term advocate, and its counterparts in other Western European languages (i.e., the French avocat and avou,
the Italian avvocata, the Spanish abogado, the Swedish advokat, or the Polish adwocacka) have common historical origins.
See Spedding, supra note 148, at 88.

[FN210]. Notwithstanding the supposed universality, and the linguistic similarities among translations of the term
advocate, [t]he question who is a lawyer? is posed by efforts to make comparisons across categories not corresponding
to formal divisions on the national level. Philip S.C. Lewis, Comparison and Change in the Study of Legal Professions, in
Lawyers in Society, Volume Three, supra, note 23, at 27, 32; see also Kelly Crabb, Note, Providing Legal Services in Foreign
Countries: Making Room for the American Attorney, 83 Colum. L. Rev. 1767, 1770 & n.13, 1779-82 & nn.62-82 (1983)
(describing the various national designations for persons who perform legal functions).

[FN211]. Highly authoritarian and socialist regimes envision that lawyers, like all workers, are devoted primarily to the good
of society and only minimally to clients, since more vigorous advocacy on behalf of a client might conflict with the
collective good. See supra note 182 and accompanying text; see also Wolfram, supra note 82, 1.2, at 5 (describing the
diminished obligations lawyers in Soviet countries owed to their clients); Albert Hung-yee Chen, An Introduction to the
Legal System of the People's Republic of China 141 (1992) (noting that the criminal defense lawyer in China is not the
agent or spokesman for the defendant, but rather has an obligation to the state to assist in the defendant's moral reformation),
cited in R. Randall Kelso, A Post-Conference Reflection on the Lawyer's Duty to Promote the Common Good, 40 S. Tex. L.
Rev. 299, 301 (1999).

[FN212]. As will be explained in the following Section, this layout might describe the role assigned to lawyers in civil law
systems. See infra Section II.B.

[FN213]. See Resnik, supra note 24, at 839 (arguing that procedure has normative content reflected in the features of
procedural models and the structure of decisionmaking). Other factors that affect the role of the attorney are rules of evidence
and cultural traditions. For an insightful discussion of how modern trends in U.S. civil procedure, which diminishes the role
of judge in applying the substantive law to facts, may have contributed to excesses in attorney advocacy, see Jonathan T.
Molot, How Changes in the Legal Profession Reflect Changes in Civil Procedure, 84 Va. L. Rev. 955 (1998).

[FN214]. See Oscar G. Chase, Legal Processes and National Culture, 5 Cardozo J. Int'l & Comp. L. 1, 8 (1997) (citing Geert
Hofstede, Culture's Consequences 25 (1980)).

[FN215]. See id. at 9.

[FN216]. Damaska, supra note 89, at 11.

[FN217]. For pragmatic reasons, I have limited my comparative analysis to the distinctions between roles of the attorney in
the U.S. system on the one hand, and in Continental civil law systems on the other. While this focus undoubtedly poses some

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 52
23 Mich. J. Int'l L. 341

inherent limitations, these two prototypes or (in Max Weber's and Mirjian Damaska's parlance) ideal types are useful for
the purpose of demonstrating the ability of the functional approach to explicate the reasons behind different ethical regimes.
See Damaska, supra note 89, at 9. The limited focus of my comparative analysis reflects primarily limitations of my own
knowledge, not a judgment that norms for international arbitration need only consider European and American perspectives.
To the contrary, especially given the expanding role of arbitration in developing nations, it is particularly important that legal
systems outside of Europe and the United States be incorporated into the discussion. See generally John Beechey,
International Commercial Arbitration: A Process Under Review and Change, Disp. Resol. J., Aug.-Oct. 2000, at 32
(explaining that there remains a huge task to convince developing nations that they can expect a fair hearing before
international arbitration tribunals); Amr A. Shalakany, Arbitration and the Third World: A Plea for Reassessing Bias Under
the Specter of Neoliberalism, 41 Harv. Int'l L.J. 419 (2000) (investigating the disciplinary bias of international arbitration in
light of complaints by developing countries that it favors the economic interests of the North).

[FN218]. Although I will use the term judge, it is worth noting Professor Damaska's observation that, when comparing
adjudicatory regimes, the term judge can be misleading since it is not a term that is universally assigned to the
decisionmaker. The most obvious exception is the jury. See Damaska, supra note 89, at 54.

[FN219]. The contrasting role of the judge in civil and common law systems has been called the grand discriminant
between the two systems. See Langbein, German Advantage in Civil Procedure, supra note 85, at 830.

[FN220]. See id. at 831.

[FN221]. As John Langbein describes, in the German system:


The very concepts of plaintiff's case and defendant's case are unknown. In our system those concepts function
as traffic rules for the partisan presentation of evidence to a passive and ignorant trier. By contrast, in German procedure the
court ranges over the entire case, constantly looking for the jugular--for the issue of law or fact that might dispose of the case.
See Langbein, German Advantage in Civil Procedure, supra note 85, at 830. Although the German judge is obviously much
more active than the U.S. version, the inquisitorial role of the German judge in civil proceedings can be, and has been,
dramatically overstated. See Ronald J. Allen, Idealization and Caricature in Comparative Scholarship, 82 Nw. U. L. Rev. 785
(1988) (criticizing Langbein for overstating the role of the judge in German civil proceedings).
[FN222]. Conventional wisdom among German advocates is that a lawyer should be wary of putting more than three
questions to a witness because asking more risks implying that the judge did not do a satisfactory job in initial questioning.
See Chase, supra note 214, at 4-5. While the conventional wisdom is not always followed, it demonstrates the gravitational
force of the judge's power over fact-gathering process.

[FN223]. See Damaska, supra note 89, at 138 (noting that Continental decisionmakers are expected to conduct prehearing
review of the files and are not presumed to come to the case with a virgin mind); Langbein, German Advantage in Civil
Procedure, supra note 85, at 832 (noting that [a]s the case progresses the judge discusses it with the litigants, sometimes
indicating provisional views of the likely outcome ... and sometimes encouraging a litigant to abandon a case that is turning
out to be weak or hopeless, or to recommend settlement).

[FN224]. See John Henry Merryman, The Loneliness of the Comparative Lawyer--And Other Essays in Foreign and
Comparative Law 184 (1999).

[FN225]. See Jonathan E. Levitsky, The Europeanization of the British Legal Style, 42 Am. J. Comp. L. 347, 379 (1994); see
also Merryman, supra note 224, at 187 (The work of the judge is ... simple: he is presented with a body of principles built
into a carefully elaborated systematic structure, which he applies to a body of specific norms whose meaning is readily
understood and whose application is comparatively easy ... The applicable norms need only to be identified and applied ....).

[FN226]. See Ren David & John E.C. Brierly, Major Legal Systems in the World Today 142 (3d ed. 1985).

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 53
23 Mich. J. Int'l L. 341

[FN227]. See id.

[FN228]. See Rudolf du Mesnil de Rochemont, Federal Republic of Germany, in Transnational Legal Practice 127 (Dennis
Campbell ed., 1982).

[FN229]. See Costas K. Kyriakides & Anthony B. Hadjioannou, Greece, in Transnational Legal Practice, supra note 228, at
155.

[FN230]. See id.

[FN231]. See id.

[FN232]. Daly, supra note 6, at 1150-51. These geographic restrictions have recently been lifted under compulsion from the
European Union. Id.

[FN233]. See Olga Pina, Note, Systems of Ethical Regulation: An International Comparison, 1 Geo. J. Legal Ethics 797, 809
(1988).

[FN234]. See Damaska, supra note 89, at 138.

[FN235]. Professor Reitz characterizes the difference as that U.S. judges view themselves as umpires between the
contending parties, rather than [as German judges] government officials responsible for determining the truth of the
allegations. Reitz, supra note 23, at 992.

[FN236]. See id.

[FN237]. See Alexander M. Bickel, The Least Dangerous Branch: The Supreme Court at the Bar of Politics 16-23 (1962)
(arguing that judges make law even though they are not elected or constrained in the same way legislatures are).

[FN238]. See generally Guido Calabresi, A Common Law for the Age of Statutes (1982) (arguing that the structure of the
courts and the nature of the common law makes them better suited to resolve some policy issues than the legislature);
Thomas W. Merrill, Does Public Choice Theory Justify Judicial Activism After All?, 21 Harv. J.L. & Pub. Pol'y 219 (1997)
(suggesting that courts provide less expensive access to government than direct lobbying of the legislature).

[FN239]. Indeed, Professor Damaska argues that in the adversarial system, counsel's role as officer of the court is given an
exalted ethical dignity because it acts as an ethical stabilizer to prevent abuse of the role of zealous advocate. Damaska,
supra note 89, at 143. By contrast, in systems in which the court system is used as a forum for advancing governmental
policies, the professional ethic now counteracts pressures reflecting the idea that aggregate state interests must always
prevail over narrow individual interests of the client ... and the dignity of acting on behalf of a private individual enmeshed in
the machinery of justice is likely to be glorified. Id. at 143-44.

[FN240]. Daly, supra note 160, at 1262-63 (noting that the Preamble to the [U.S.] Model Rules emphasizes a lawyer's
obligation to the client in contrast to the Preamble to the CCBE Code ... [which] emphasizes a lawyer's obligation to
society.).

[FN241]. The U.S. system stops short of treating witnesses as classical Rome did, expecting them not only to describe facts
of the case, but also to express solidarity with, and advocate on behalf of, one party. See Damaska, supra note 83, at 28.
While U.S. witnesses do not technically belong to one party, U.S. attorneys approach litigation with a proprietary concept
of evidence. See Mirjan Damaska, The Uncertain Fate of Evidentiary Transplants: Anglo-American and Continental

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 54
23 Mich. J. Int'l L. 341

Experiments, 45 Am. J. Comp. L. 839, 845 (1997). The formal status of witnesses as neutral has little practical effect,
except that it is used as a basis for opposing efforts by parties to prevent their opposition from speaking to non-party
witnesses. See Wolfram, supra note 82, 12.4.3, at 647.

[FN242]. As noted above, several U.S. courts have recognized that failure to prepare a witness is a breach of an attorney's
ethical obligations. See supra note 87.

[FN243]. See Langbein, German Advantage in Civil Procedure, supra note 85, at 864; see also Reitz, supra note 23, at 994
(American courts could only adopt the German rule discouraging pretrial contact with witnesses by changing our cultural
definition of the lawyer's role.).

[FN244]. The reason why there is no apparent obligation for an attorney to report client perjury or intent to commit perjury is
that Continental systems distinguish sharply between the role of party and that of witness. Parties to an action are rarely
permitted to testify because that would force the dubious choice between testifying against their own interest and perjuring
themselves. See Damaska, supra note 241, at 842. The rarity of party testimony is probably responsible for the lack of
attention to attorney obligations regarding client perjury.

[FN245]. See International Law Practice in the 1990s: Issues of Law, Policy, and Professional Ethics, 86 Am. Soc'y Int'l L.
Proc. 272, 283 (1992). European lawyers may have added incentives to interpret these restrictions narrowly because they do
not have the opportunity to seek client waiver and their decision cannot be challenged by a motion for disqualification, as is
the American practice.

[FN246]. Compare Wolfram, supra note 82, 11.3.3, at 604-06 (purpose of prohibition against ex parte communications with
judge is to prevent communicating party from gaining unfair advantage), with Langbein, German Advantage in Civil
Procedure, supra note 85, at 830 (describing how under German procedure the judge is not expected to be simply an impartial
adjudicator, so there is little concern that improper influence will be exerted on or by the parties or that information
communicated ex parte will endanger the validity of the result).

[FN247]. In a case finding that ex parte contact was not improper, the Eleventh Circuit explained: An arbitrator appointed
by a party is a partisan only one step removed from the controversy and need not be impartial. Lorzano v. Md. Casualty Co.,
850 F.2d 1470, 1472 (11th Cir. 1988). The requirement of an impartial tribunal is assured by a tiebreaker arbitral chairperson,
although opinions differ about the desirability or propriety of predisposed party arbitrators. See Desiree A. Kennedy,
Predisposed with Integrity: The Elusive Quest for Justice in Tripartite Arbitrations, 8 Geo. J. Legal Ethics 749, 765 (1995)
(arguing against the legitimacy of ex parte contact with party arbitrators).

[FN248]. Some U.S. cases attempt to apply the notion of the decisionmaker as a blank slate in challenging arbitral awards
when arbitrators have attempted to gather facts on their own by, for example, visiting the site of a dispute. This standard of
complete ignorance is perhaps unrealistic in arbitration, where the decisionmakers are often chosen because of their
experience with or knowledge of a particular industry. See Carteret County v. United Contractors, 462 S.E.2d 816 (N.C. App.
1995) (holding that arbitrators are not considered biased simply because they are members of the same profession as one of
the parties).

[FN249]. Under this interpretation, objections to ex parte communications with arbitrators may be misdirected at the
symptom instead of the cause. Ex parte communications are tolerated because the arbitrator is presumed to be partial, it is not
the ex parte communications that cause partiality. Accordingly, the solution for those who object to arbitrator partiality must
include not only prohibitions against ex parte communications, but also strictures that apply during the selection process. See
Kennedy, supra note 247, at 789.

[FN250]. In European systems, this requirement of independence is elevated to the same level of importance as judicial
impartiality. Article 2.1.1 of the CCBE Code provides, Such independence is as necessary to trust in the process of justice as

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 55
23 Mich. J. Int'l L. 341

the impartiality of the judge. See Terry, supra note 89, at 15. Professional independence is sometimes touted as a core
value in American legal ethics, but the regulatory history of independent judgment is so thin that the value is dismissed in
some quarters as a professional shibboleth. Schneyer, supra note 117, at 1499-1502 (contrasting emphasis in Europe on
independence from clients and U.S. emphasis on preserving independence from third parties who would interfere with
lawyer's judgment on behalf of client).

[FN251]. Notably, in the Anglo-American tradition, the attorney-client privilege was originally thought to belong to the
barrister rather than the client. See Hazard, supra note 146, at 1071. A barrister was considered not merely an officer of the
court but a member of it .... It would be not only inconvenient for them to testify (as they were the persons charged with
presenting arguments and evidence in court), but also a violation similar to asking a modern judge to disclose matters learned
in camera. See id.

[FN252]. Comparatively few issues regarding the ethical duty of confidentiality are ever raised because the judges' oral
questioning and the affidavits are more circumscribed than lawyers' questioning of witnesses in the United States. Daly,
supra note 6, at 1154 n.184.

[FN253]. See supra Section II.A.2.

[FN254]. See Chase, supra note 214, at 19. This observation about German society and its relation to the civil law tradition
may not be generalizable. Anyone who has driven on the roads of Italy, another civil law system, inevitably noticed that
Italians appear to have an extraordinarily high tolerance for uncertainty--or even chaos!

[FN255]. By maximizing the role of partisans who have obvious incentives to distort the truth in favor of their personal
interests and by permitting parties to be witnesses on their own behalf, the U.S. litigation model arguably prioritizes litigants'
right to a day in court over the accuracy of the ultimate result. See Damaska, supra note 89, at 11; Chase, supra note 214, at
19 (arguing that legal culture in Germany is more comfortable with authority, while in the American system the legal culture
emphasizes party autonomy over the process as an expression of individualism and a commitment to due process); Jerold S.
Auerbach, Justice Without Law? 10 (1983) (arguing that the dominant ethic [of American Society] is competitive
individualism and linking that ethic to U.S. legal institutions and processes).

[FN256]. Notions of moral philosophy as universal are also flawed. [E]very moral philosophy offers explicitly or implicitly
at least a partial conceptual analysis of the relationship of an agent to his or her reasons, motives, intentions, and actions, and
in so doing generally presupposes some claim that these concepts are embodied or at least can be in the real social world.
Alasdair MacIntyre, After Virtue: A Study in Moral Theory 23 (2d ed. 1984).

[FN257]. See id. at 26.

[FN258]. Friedrich V. Kratochwil, Rules, Norms, and Decisions: On the Conditions of Practical and Legal Reasoning in
International Relations and Domestic Affairs 12 (1989).

[FN259]. See id. (criticizing international legal norms developed by the lawyer-bureaucrat, attached to the policy-making
machinery because such norms tend to be more informed by political expediencies than technical precision); see also
Nicholas Greenwood Onuf, Global Law-Making and Legal Thought, in Law-Making in the Global Community 1 (Nicholas
Greenwood Onuf ed., 1982) (discussing the impact of the shift in the development of international law from scholars to
bureaucrats).

[FN260]. See Kratochwil, supra note 258, at 12.

[FN261]. IBA International Code of Legal Ethics, reprinted in Law Without Frontiers: A Comparative Survey of the Rules of

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 56
23 Mich. J. Int'l L. 341

Professional Ethics Applicable to the Cross-Border Practice of Law 361-62 (Edwin Godfrey ed., 1995) [hereinafter IBA
Code].

[FN262]. Daly, supra note 6, at 1158-59.

[FN263]. See id.

[FN264]. See supra notes 81-93 and accompanying text. One notable accomplishment of the IBA Code, perhaps even directly
attributable to its vagaries, is that it received endorsements of representatives from legal traditions outside of those of Europe
and North America, such as Syria, Iraq, Iran, Egypt, Jordan, Israel, Lebanon, Pakistan, and Turkey, although admittedly these
endorsements may have been influenced by the post-colonialist forces. See McCary, supra note 152, at 294.

[FN265]. See The Declaration on the Principles of Professional Conduct of the Bars and Law Societies of the European
Community (1977) [hereinafter Declaration of Perugia].

[FN266]. See Daly, supra note 6, at 1159.

[FN267]. The following countries are Member States of the CCBE: Belgium, Denmark, France, Germany, Greece, Ireland,
Italy, Luxembourg, the Netherlands, Portugal, Spain, and the United Kingdom. See Terry, supra note 89, at 1 app. C. In
addition to the Member States, there are several observer countries: Austria, Cyprus, Finland, Norway, Sweden, Switzerland,
and the Czech Republic. See John Toulmin, A Worldwide Common Code of Professional Ethics?, 15 Fordham Int'l L.J. 673,
674 (1991-1992). All of the CCBE countries can be described as Western-style democracies, with free market economies,
strong industrial bases, high per capita income levels, and relatively well-educated populations. See Chase, supra note 214, at
7; see also Laurence R. Helfer & Anne-Marie Slaughter, Toward a Theory of Effective Supranational Adjudication, 107 Yale
L.J. 273, 276 (1997) (acknowledging that the nations of Western Europe share a common core of social, political and legal
values).

[FN268]. See Terry, supra note 89, at 5-9. An indication of the inherent difficulties in developing an international set of
ethical rules for international arbitration is a recent announcement by the Arbitration Institute of the Stockholm Chamber of
Commerce that, after years of work, it placed on hold its ethics project because the project encountered a lot of problems.
See Stockholm Institute's Ethics Project on Hold, Mealey's Int'l Arb. Rep. No. 9-12, at 12 (Dec. 1994).

[FN269]. See Terry, supra note 89, at 19, 25.

[FN270]. Although these rules have not been entirely satisfactory, it is not certain if the reason is the inherent nature of
conflict-of-laws rules in ethics, or because these particular rules are unclear. See id. at 78; see also Frank, supra note 92, at
963.

[FN271]. See Carsten R. Eggers & Tobias Trautner, An Exploration of the Difference Between the American Notion of
Attorney-Client Privilege and the Obligations of Professional Secrecy in Germany, 7 S.P.G. Int'l L. Practicum 23 (1994);
Terry, supra note 89, at 25-27. In the area of attorney advertising, even reaching agreement on a choice-of-law rule, as
opposed to a substantive provision, seems to have eluded the drafters of the CCBE. See Louise L. Hill, Lawyer Publicity in
the European Union: Bans Are Removed but Barriers Remain, 29 Geo. Wash. J. Int'l L. & Econ. 381, 400 (1995) (noting that
the CCBE's general principle on personal publicity does not designate which jurisdictional rule applies when inconsistencies
arise between the rules of the host state and the home state).

[FN272]. For a discussion of the contrasting national rules applying to attorney communications marked confidential, see
supra notes 114-15.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 57
23 Mich. J. Int'l L. 341

[FN273]. See Terry, supra note 89, at 40.

[FN274]. See id. at 27-28.

[FN275]. See id.

[FN276]. For regulation of cross-border practice, conflict-of-law rules may in fact be appropriate, as long as they are clear in
their application. For example, a conflict-of-laws rule regarding attorney solicitation of clients could state that the rules of the
jurisdiction where the would-be client resides govern if the solicitation would occur in that jurisdiction. Such a conflict-of-
laws rule simply resolves competing claims to prescriptive jurisdiction, in favor of the jurisdiction that has an interest in
protecting the prospective client and regulating activities occurring within its borders. Even this rule becomes more
complicated when Internet solicitation is considered, since it is difficult to categorize the place where solicitation occurs. See
Brian G. Gilpin, Attorney Advertising and Solicitation on the Internet: Complying with Ethics Regulations and Netiquette, 13
J. Marshall J. Comp. & Info. L. 697 (1995).

[FN277]. One possible alternative to drafting a code for international arbitration is to relegate the matter to the parties,
leaving them to choose applicable ethics as they choose substantive law. The pitfalls of this approach are taken up infra in
Section II.C.4.

[FN278]. See Shalakany, supra note 217, at 422-24 (describing special needs of developing countries in international
arbitration).

[FN279]. Even though the United States is considered part of the amorphous Western Legal Tradition, [t]he lawyer,
American style, is a unique phenomenon. Goebel, supra note 23, at 520-22 (quoting Henry P. deVries, Civil Law and the
Anglo-American Lawyer 7 (1976)); Wolfram, supra note 82, 1.2, at 4 ([T]he practices and philosophies of lawyers
practicing in other legal cultures very often bear little resemblance to those of lawyers in the United States.).

[FN280]. See Roderick W. Macneil, Contract in China: Law, Practice, and Dispute Resolution, 38 Stan. L. Rev. 303, 327
(1986); Randall Peerenboom, Lawyers in China: Obstacles to Independence and the Defense of Rights (Lawyers Comm. for
Human Rights 1998).

[FN281]. See generally McCary, supra note 152 (arguing that debate over cross-border legal practice must address the
cultural and legal concerns of systems in the Middle East and exploring the numerous clashes between Islamic teaching and
modern western legal practice); Azizah Y. al-Hibri, Faith and the Attorney-Client Relationship: A Muslim Perspective, 66
Fordham L. Rev. 1131 (1998) (arguing that integrated Muslim view of the world, which denies the severability of the divine
from the secular, limits Muslim lawyers' ability to pledge loyalty to client, and may restrict Muslim lawyers' ability to engage
in some types of representation); Ahmed Sadek El-Kosheri, Is There a Growing International Arbitration Culture in the Arab-
Islamic Juridical Culture?, in International Dispute Resolution: Towards an International Arbitration Culture 47, 48 (1998)
(noting that, despite the long history and current popularity of arbitration in Arab nations, the Arab legal community remains
hostile toward transnational arbitration because of biased treatment by Western arbitrators).

[FN282]. This proposal has been advanced by Professor Roger Goebel, not in the context of international arbitration per se,
but as a means for developing ethics for cross-border practice. See Goebel, supra note 23, at 520-22. The intuitive appeal of
this approach is undoubtedly linked to familiar calls for attorneys to adhere to the highest moral and ethical standards.

[FN283]. The inherent appeal of the most restrictive approach even captured the drafters of the Declaration of Perugia, who
attempted to resort to a most restrictive provision when dealing with the problematic tension between maintaining client
confidences and attorney obligations to disclose unlawful conduct by a client. See Declaration of Perugia, supra note 265,
IV, at 3. Notably, when instructing that an attorney should follow the strictest rule, the Consultative Committee had to go
on to explain that is, the rule that offers the best protection against breach of confidence because the meaning of the term

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 58
23 Mich. J. Int'l L. 341

strictest was not self-evident. See id. Notably, this approach was dropped from the CCBE Code, in part perhaps because
this strictest rule approach left attorneys with no protection should their adherence to the strictest rule get them in
professional or criminal trouble in another jurisdiction.

[FN284]. See, e.g., George M. Cohen, Legal Malpractice Insurance, Loss Prevention, and Professional Ethics, 4 Conn. Ins. L.
J. 305 (1997-1998) (presenting comparative economic institutional analysis of legal malpractice insurance); Richard A.
Epstein, The Legal Regulation of Lawyers' Conflicts of Interest, 60 Fordham L. Rev. 579 (1992) (presenting economic
analysis of conflict of interest rules); Jonathan R. Macey & Geoffrey P. Miller, Reflections on Professional Responsibility in
a Regulatory State, 63 Geo. Wash. L. Rev. 1105 (1995) (presenting economic analysis of rules of professional responsibility);
Charles Silver & Lynn A. Baker, Mass Lawsuits and the Aggregate Settlement Rule, 32 Wake Forest L. Rev. 733 (1997)
(presenting economic analysis of professional responsibility rules regarding aggregate settlements).

[FN285]. Some are concerned that the World Trade Organization may attack certain ethical rules as barriers to trade. See
Daly, supra note 6, at 1119-20.

[FN286]. At this point, I am examining what Law and Economics might have to say about the development of the content of
the substantive ethical rules. Enforcement is another area, which I examine in a companion article, that is likely to attract
interest from Law-and-Economics scholars. See Rogers, supra, note 5. Although I use legal process analysis, the enforcement
regime I propose has some tenets in common with Law-and-Economics work in the field because it is based on assessments
of comparative institutional competence and because it proposes default rules that are adopted into parties' contracts and are
subject to party modification. Compare Rogers, supra note 5, with Jeffrey L. Dunoff & Joel P. Trachtman, Economic Analysis
of International Law, 24 Yale J. Int'l Law 1, 45 (1999) (arguing that most U.S. Law-and-Economics analysis argues for the
abolition of most forms of government regulation of commercial activity and may be most helpful in the international context
for its institutional choice theories); Jonathan R. Macey & Geoffrey Miller, An Economic Analysis of Conflict of Interest
Regulation, 82 Iowa L. Rev. 965, 972 (1997) (arguing that, assuming an absence of significant externalities, the
government's role should ordinarily be to supply reasonable gap-filling or default terms that the parties would likely have
agreed to if they had bargained over the issue ex ante).

[FN287]. See Richard A. Epstein, Law and Economics: Its Glorious Past and Cloudy Future, 64 U. Chi. L. Rev. 1167, 1170
(1997). It is no accident that the economic analysis of American ethics has approached ethical issues through the lens of the
market for legal services. When Law and Economics first considered the problem of professional responsibility, its efforts
dealt only with private contracting mechanisms for reducing agency costs. See Cohen, supra note 123, at 274. Even when
Law and Economics turned to core legal rules of professional responsibility, its focus was relatively limited to particular
rules. See id. at 274-75.

[FN288]. Even within commercial contexts, the term efficiency suffers from inherent ambiguities that draw into question
the claims of its enthusiasts. See, e.g., George P. Fletcher, Basic Concepts of Legal Thought 156 (1996); Mark G. Kelman,
Misunderstanding Social Life: A Critique of the Core Premises of Law and Economics, 33 J. Legal Educ. 274 (1983).

[FN289]. See supra notes 254-55 and accompanying text.

[FN290]. See W. Michael Reisman et al., International Commercial Arbitration: Cases, Materials and Notes on the Resolution
of International Business Disputes 1215 (1997). Notably, however, business managers and their lawyers often compromise on
a governing law without giving a great deal of thought or investing much research into how the chosen legal system may
affect the outcome of possible controversies. See Park, supra note 35, at 659.

[FN291]. The lex loci arbitri is the law of the place where the arbitration occurs. See William W. Park, The Lex Loci Arbitri
and International Commercial Arbitration, 32 Int'l & Comp. L.Q. 21, 23 (1983).

[FN292]. See Daly, supra note 153, at 752-55. Model Rule 8.5 attempts to resolve the often prickly conflicts that a U.S.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 59
23 Mich. J. Int'l L. 341

attorney with a multijurisdictional practice may confront.

[FN293]. See Terry, supra note 89, at 35-36.

[FN294]. In a distinct but related area, arbitrators differ from judges in that they are not expected to be a blank slate, but are
in fact chosen for their substantive knowledge and in that they generally continue to practice as part of a firm. These features
of the arbitrator make simply transplanting judicial ethics regarding conflicts of interest untenable. See, e.g., Carrie Menkel-
Meadow, The Trouble with the Adversary System in a Post-Modern Multicultural World, 38 Wm. & Mary L. Rev. 5, 31 &
n.126 (1996) (discussing Poly Software Int'l Inc. v. Su, 880 F. Supp. 1487, 1492-95 (D. Utah 1995) and the complications of
applying conflicts rules when small groups of skilled lawyers--in this case, specializing in a relatively small area of the
computer industry--act as both litigators and mediators).

[FN295]. See Terry, supra note 89, at 19; Roger Goebel, The Liberalization of Interstate Legal Practice in the European
Union: Lessons for the United States?, 34 Int'l Law. 307 (2000).

[FN296]. It is not clear whether or how Model Rule 8.5 applies in arbitration and, as noted above, supra notes 71-73, Rule 8.5
expressly disavows application in the international context. Vagts, supra note 73, at 378. The CCBE Code purports to apply
certain rules, such as the obligation of candor to the court, to arbitration. See Code of Conduct for Lawyers in the European
Union 4.4-4.5 (1998) at http://www.ccbe.or/uk/publications.htm. The CCBE Code does not, however, instruct that other
obligations, such as confidentiality and conflicts of interest, apply with equal force in arbitration.

[FN297]. CCBE Rule 4.1, which requires lawyers who appear before a court or tribunal in a Member State to comply with
the rules of conduct applied in that court, is analogous to Model Rule 3.4(c), which prohibits knowing disobedience of rules
of a tribunal, except for an open refusal based on an assertion that no such obligation exists. See Terry, supra note 89, at 36-
37. Similarly, the CCBE Code permits the tribunal exercising jurisdiction to determine the level of ex parte communications
that are permissible, which implies an expectation that tribunals can and do regulate such aspects of attorney conduct.

[FN298]. See Marc Galanter, Why the Haves Come Out Ahead: Speculations on the Limits of Legal Change, 9 Law &
Soc'y Rev. 95, 125 fig.3 (1974).

[FN299]. See Andrew T. Guzman, Arbitrator Liability: Reconciling Arbitration and Mandatory Rules, 49 Duke L.J. 1279
(2000) (arguing that parties often agree to arbitrate for the specific purpose of avoiding mandatory national laws and that
arbitrators have incentives to disregard national law in favor of the parties' agreement).

[FN300]. See Park, supra note 35, at 659 (In the real world, business managers and their lawyers often compromise on a
governing law without a great deal of research on how the chosen legal system will affect the outcome in the spectrum of
possible controversies.). Another factor that inevitably keeps rampant opportunism in check may be that, unlike consumer or
employment arbitration in the United States, the parties are equally matched. Notwithstanding the sophistication of the
parties, though, their agreements have proven not only to fall short of being cunningly expert, they are often downright
incompetent. For numerous, often humorous, examples of poorly drafted arbitration clauses, see Craig et al., supra note 107,
at 422. While undoubtedly selected from a large sample pool, in my professional experience, even arbitration clauses drafted
by Fortune 100 companies often suffer from significant defects and could not accurately be described as anything
approaching a masterful orchestration of the elements of dispute resolution.

[FN301]. This omission is demonstrated by Professor Menkel-Meadow's persistent efforts to address special ethical
considerations that face attorneys involved in domestic U.S. arbitration settings. See, e.g., Carrie Menkel-Meadow, The
Silences of the Restatement on the Law Governing Lawyers: Lawyering as Only Adversary Practice, 10 Geo. J. Legal Ethics
631 (1997); Carrie Menkel-Meadow, Ethics in Alternative Dispute Resolution: New Ideas, No Answers from the Adversary
Conception of Lawyers' Responsibilities, 38 S. Tex. L. Rev. 407 (1997)[hereinafter Menkel-Meadow, Ethics in Alternative
Dispute Resolution].

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 60
23 Mich. J. Int'l L. 341

[FN302]. See Menkel-Meadow, Ethics in Alternative Dispute Resolution, supra note 301, at 432-41; see also Carrie Menkel-
Meadow, Ethics in ADR: The Many Cs of Professional Responsibility and Dispute Resolution, 28 Fordam Urb. L.J. 979
(2001) (describing the complex and unique conflict of interest issues that arise in ADR settings).

[FN303]. My thesis, under the functional approach, is that there are not simply a few discreet rules that are omitted from
national ethical codes, but that their entire orientation is based on nationally conceived interrelational roles, which differ at an
organic level from the role of the attorney in international arbitration.

[FN304]. See Howard M. Holtzmann, Balancing the Need for Certainty and Flexibility in International Arbitration
Procedures, in International Arbitration in the 21st Century: Towards Judicialization and Uniformity, supra note 53, at 3, 13
(citing study by Stephen Bond (former Secretary General of the ICC) of nearly 500 arbitration clauses submitted to the ICC,
in which only one referred to specific procedures).

[FN305]. Leaving selection of ethical rules to conflict-of-laws analysis has the added problem that, in the absence of express
choice by the parties, it would be left to the unpredictable and potentially detrimental choice-of-law rules:
The usual rule that the conflict of laws rules of the forum determine the applicable law may be of doubtful validity
when the place of arbitration bears no relationship to the parties or the subject of the dispute. Furthermore, arbitrators from
different nations and with different legal training and traditions may find it difficult to agree on the conflict of laws rules that
should be applied. That difficulty is compounded by the unsettled state of conflict of laws rules in many legal systems.
Smit, supra note 16, at 22-23.
[FN306]. See International Bar Association's Supplementary Rules Governing the Presentation and Reception of Evidence in
International Commercial Arbitration (1983), available at http://www.asser.nl/ica/iba.htm.

[FN307]. Id. For discussion of the substance of these rules, see infra notes 343-44 and accompanying text.

[FN308]. Indeed, the IBA Supplemental Rules indirectly address some ethical issues. For example, with regard to witnesses,
the IBA Supplemental Rules expressly permit pre-testimonial communication. See id. art. 5(8).

[FN309]. Even though under the functional approach ethical norms are linked to procedural rules, this approach does not
necessarily require that arbitration forego procedural flexibility by adopting specific procedural rules. Just as the IBA
Supplementary Rules are modifiable by the parties, I propose in a companion article that the rules be set as default ethical
rules, which fit with the fundamental aims of international commercial arbitration but can be modified by the parties. See
Rogers, supra note 5.

[FN310]. As Professor Carozza explains in the area of international human rights, comparative analysis can help forge
common understandings by giving specific content to the scope of broad, underdetermined international norms, but it can
also reveal the contingency and particularity of the political and moral choices inherent in the specification and expansion of
legal norms that are too easily assumed to be universal. See Paolo G. Carozza, Uses and Misuses of Comparative Law in
International Human Rights: Some Reflections on the Jurisprudence of the European Court of Human Rights, 73 Notre Dame
L. Rev. 1217, 1219 (1998). For further reading on the use of comparative law in international lawmaking, see David
Kennedy, New Approaches to Comparative Law: Comparativism and International Governance, 1997 Utah L. Rev. 545.

[FN311]. See Daly, supra note 6, at 1148-53; Terry, supra note 89, at 47.

[FN312]. See Rogers, supra note 5.

[FN313]. In using the functional approach as a descriptive tool, I began by analyzing the interrelational functional roles of
various actors in national judicial systems. See supra Section II.B.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 61
23 Mich. J. Int'l L. 341

[FN314]. See John M. Townsend, Overview and Comparison of International Arbitration Rules, in Litigation and
Administrative Practice Course Handbook Series 817 (Practicing Law Institute 2000).

[FN315]. See, e.g., UNCITRAL Arbitration Rules, art. 15(2) (1977) (permitting arbitrators to determine whether to hold
hearings in the absence of party request).

[FN316]. For a definition of cultural values, see supra note 214 and accompanying text.

[FN317]. See supra Section I.A.

[FN318]. See Tom R. Tyler et al., Cultural Values and Authority Relations: The Psychology of Conflict Resolution Across
Cultures, 6 Psychol. Pub. Pol'y & L. 1138 (2000) (describing the effect of values of a population on their relation to authority,
particularly individual reactions to conflict resolution either based on its substantive outcomes or on its treatment of them in
the process); Resnik, supra note 24, at 839 (elaborating the normative content of procedural rules in relation to the valued
features of U.S. culture).

[FN319]. See, e.g., Gerald Aksen, Arbitration and Other Means of Dispute Settlement, in International Joint Ventures: A
Practical Approach to Working with Foreign Investors in the U.S. and Abroad 287, 287 (David N. Goldsweig & Roger H.
Cummings eds., 2d ed. 1990) (citing distrust of opponent's national courts as primary motivation for resorting to arbitration).
A recent survey of participants in international arbitration bears this hypothesis out. Of those surveyed, seventy-two percent
identified neutrality and sixty-four percent identified enforceability as highly relevant to their decision to arbitrate. See
Bhring-Uhle, supra note 51, at 45, cited in Drahozal, Commercial Norms, supra note 8, at 95 n.83 (2000). Other popular
reasons were expertise available through arbitration (37%) and the unavailability of appeal (37%). See id.

[FN320]. See The Federalist No. 80 (Alexander Hamilton); 3 Jonathan Elliot, The Debates in the Several State Conventions
on the Adoption of the Federal Constitution 583 (Philadelphia, Lippincott 2d ed. 1876).

[FN321]. Kevin R. Johnson, Why Alienage Jurisdiction? Historical Foundations and Modern Justifications for Federal
Jurisdiction Over Disputes Involving Non-Citizens, 21 Yale J. Int'l L. 1, 35 (1996); but see Kevin M. Clermont & Theodore
Eisenberg, Xenophilia in American Courts, 109 Harv. L. Rev. 1120, 1143 (1996) (concluding, based on analysis of data of
federal court civil litigation involving foreign parties, that foreign parties fare better than their domestic counterparts).

[FN322]. Until recently, the standard conception was that arbitration clauses divested courts of jurisdiction. See, e.g.,
McConnaughay, supra note 29, at 473. More recently, this view has been called into question, particularly by the First
Circuit: The ... modern view [is] that arbitration agreements do not divest courts of jurisdiction, though they prevent courts
from resolving the merits of arbitrable disputes. DiMercurio v. Sphere Drake Ins., PCL, 202 F.3d 71, 77 (1st Cir. 2000); see
also Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 29 F.3d 727, 733 (lst Cir. 1994) ([A]n agreement to arbitrate
does not deprive a federal court of its jurisdiction over the underlying dispute.), aff'd, 515 U.S. 528 (1995); Morales Rivera
v. Sea Land of Puerto Rico, Inc., 418 F.2d 725, 726 (lst Cir. 1969) (holding that arbitration clauses are not destructive of
jurisdiction).

[FN323]. See William W. Park, Control Mechanisms in the Development of a Modern Lex Mercatoria, in Lex Mercatoria and
Arbitration 143 (Thomas E. Carbonneau ed., 1998).

[FN324]. In the words of Alexander Hamilton, An unjust sentence against a foreigner ... would ... be an aggression upon his
sovereign as well as one which violated stipulations in a treaty or the general laws of nations. The Federalist No. 80, at 476-
77 (Clinton Rossiter ed., 1961).

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 62
23 Mich. J. Int'l L. 341

[FN325]. See Joseph F. Weis, Jr., The Federal Rules and The Hague Conventions: Concerns of Conformity and Comity, 50 U.
Pitt. L. Rev. 903, 903 (1989) (analyzing the sovereignty issues that are implicated and pos[e] substantial problems in
transnational litigation).

[FN326]. For an extended description of the complicated procedures and uncertainties that are involved in national court
litigation of international cases, see Gary B. Born & David Westin, International Civil Litigation in United States Courts:
Commentary and Materials 439-97, 546-50 (1989); and Bhring-Uhle, supra note 51, at 31-40.

[FN327]. The power to decide where the dispute will be resolved also entails the power to ensure that claims will be brought
in a single forum, instead of the multiple fora that inevitably have concurrent jurisdiction in international cases. Indeed, it is
often the case that multiple national courts have concurrent jurisdiction over international transactions or events. See William
S. Dodge, Extraterritoriality and a Conflict-of-Laws Theory: An Argument for Judicial Unilateralism, 39 Harv. Int'l L.J. 101,
133 (1998). As a consequence, it is not only possible but probable that an international dispute will be raised in more than one
jurisdiction.

[FN328]. See Reisman et al., supra note 290, at 1215 ([A]rbitral awards as a whole enjoy a higher degree of transnational
certainty than judgments of national courts.); see also Saul Perloff, The Ties that Bind: The Limits of Autonomy and
Uniformity in International Commercial Arbitration, 13 U. Pa. Int'l Bus. J. 323, 325 n.11 (1992).

[FN329]. Reisman, supra note 12, at 111-13. This balance is established by the Convention on the Recognition and
Enforcement of Foreign Arbitral Awards. See Convention on the Recognition and Enforcement of Foreign Arbitral Awards,
June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38 [hereinafter the New York Convention or the Convention ].

[FN330]. Park, supra note 35, at 701. For a detailed discussion of the meaning and effect of these provisions, see Reisman,
supra note 12, at 111-13. Specifically, article V of the New York Convention provides:
Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, [if
there is] ... proof that:
The parties to the agreement ... were, under the law applicable to them, under some incapacity, or the said
agreement is not valid under the law to which the parties have subjected it or, failing some indication thereon, under the law
of the country where the award was made; or
The party against whom the award is involved was not given proper notice of the appointment of the arbitrator or of
the arbitration proceedings or was otherwise unable to present his case; or
The award deals with a difference not contemplated by or not falling within the terms of the submission to
arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the
decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which
contains decisions on matters submitted to arbitration may be recognized and enforced; or
The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the
parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or
The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority
of the country in which, or under the law of which, that award was made.
For a detailed discussion of the meaning and effect of these provisions, see Reisman, supra note 12, at 111-13.
[FN331]. Toby Landau, Composition and Establishment of the Tribunal, 9 Am. Rev. Int'l Arb. 45, 45 (1998) (It is often said
that one of the central advantages of arbitration over litigation is the ability to choose one's judge.)

[FN332]. Born, supra note 25, at 44 (describing party autonomy as [o]ne of the most fundamental characteristics of
international commercial arbitration).

[FN333]. See Robert B. von Mehren, Enforcement of Foreign Arbitral Awards in the United States, in Litigation and
Administrative Practice Course Series Handbook No. 579, at 147, 152 (Practicing Law Institute 1998).

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 63
23 Mich. J. Int'l L. 341

[FN334]. Most arbitral rules permit each party to select a party arbitrator, subject to objections by the opposing party about
conflicts of interest. Once selected, the two party arbitrators then select a third arbitrator who will act as the chairperson of
the tribunal. The power to select the arbiter of the dispute is one of the most distinguishing features of arbitration and
arguably the one that provides comfort enough for parties to relinquish their right to bring claims in their own courts. See
Reisman et al., supra note 290, at 541-72; see also Mani, supra note 94, at 16-17 (describing control over the composition of
the tribunal as the royal road that has lured sovereign nations into international adjudication).

[FN335]. Because the power of arbitrators derives from the arbitration agreement, arbitrators can only perform those powers
delegated to them in the arbitration agreement. See Reisman et al., supra note 290, at 1174-54.

[FN336]. For example under the ICC Rules, primacy is to be given to the will of the parties when agreement can be
reached with regard to procedural choices. See Craig et al., supra note 107, 8.08, at 146 & 16.01, at 269 (citing article 11
of the ICC Rules). Some institutions' rules grant arbitrators authority to formulate appropriate procedural rules. See, e.g.,
ICC Rules of Arbitration art. 11 (1998), reprinted in Craig et al., supra note 107, app. 2, at 7; see also, Smit, supra note 16,
at 23-24. Arbitrators may be empowered to fill gaps [in arbitration agreements] either by the parties themselves, or by the
properly applicable law. Park, supra note 35, at 653 (citing Fritz Nicklisch, Agreement to Arbitrate to Fill Contractual
Gaps, J. Int'l Arb., Sept. 1988, at 35).

[FN337]. See Holtzmann supra note 304, at 10.

[FN338]. See Richard J. Medalie, The Libyan Producers' Agreement Arbitration: Developing Innovative Procedures in a
Complex Multiparty Arbitration, J. Int'l Arb., June 1990, at 18-20.

[FN339]. See Craig et al., supra note 107, 24.01, at 387-88.

[FN340]. For a discussion of the judicialization of arbitration, see supra Section I.A.1.

[FN341]. See Serge Lazareff, International Arbitration: Towards a Common Procedural Approach, in Conflicting Legal
Cultures in Commercial Arbitration, supra note 18, at 31 (noting an increasing awareness among both arbitrators and
practitioners of an emerging harmonised procedural pattern in international arbitration); Alan Scott Rau & Edward F.
Sherman, Tradition and Innovation in International Arbitration Procedure, 30 Tex. Int'l L.J. 89, 90-91 & n.4 (1995);
Marianne Roth, False Testimony in International Commercial Arbitration: A Comparative View, 7 N.Y. Int'l L. Rev. 147,
151 (1994); Andreas F. Lowenfeld, The Two-Way Mirror: International Arbitration as Comparative Procedure, 7 Mich.
Y.B. Int'l Legal Stud. 163, 163 (1985).

[FN342]. For example, Continental parties are jarred by the prospect of being compelled by a U.S. court to give to an
opposing party documents containing secret research and development information, and of being subjected to the seeming
barbarism of cross-examination. See Patrick Thieffry, European Integration in Transnational Litigation, 13 B.C. Int'l &
Comp. L. Rev. 339, 356-57 (1990) (U.S.-style procedural rules, the absence of which U.S. litigants tend to criticize in
European courts, are precisely those considered to be the most outrageous by European litigants in U.S. courts.).
Meanwhile, U.S. parties are dismayed that under most Continental rules they cannot call on an opposing party to testify, even
about basic matters such as the parties' intent at the time of contracting. See Kurt Riechenberg, The Recognition of Foreign
Privileges in United States Discovery Proceedings, 9 N.W.J. Int'l L. & Bus. 80, 88 (1988); see also Damaska, supra note 241,
at 842. (In most continental jurisdictions, a litigant's statement is not a recognized means of proof of his allegations.).

[FN343]. For example, the 1977 version of the UNCITRAL Arbitration Rules treated the possibility of an oral hearing as
relatively remote, whereas the modern version assumes that there will be an oral hearing. See Andreas Lowenfeld,
International Arbitration as Omelette: What Goes into the Mix, in Conflicting Legal Cultures in Commercial Arbitration,
supra note 18, at 19-38. Although the UNCITRAL Rules, like most arbitral rules, permit parties to contractually agree not to

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 64
23 Mich. J. Int'l L. 341

have any oral hearings, as a matter of practice, parties virtually never do. Id. at 24.

[FN344]. See Berthold Goldman, The Application of Law: General Principles of Law--The Lex Mercatoria, in Contemporary
Problems in International Arbitration 124 (Julian D.M. Lew ed., 1986); see also Rau & Sherman, supra note 341, at 92
([I]nternational arbitration hearings are often something of an amalgam of the two traditions, with witness testimony
frequently presented in affidavit or summary-statement form, and, when live testimony is presented, with limited cross-
examination.) (footnotes omitted); Christian Borris, The Reconciliation of Conflicts Between Common Law and Civil Law
Principles in the Arbitration Process, in Conflicting Legal Cultures in Commercial Arbitration, supra note 18, at 1, 13-14.

[FN345]. Lowenfeld, supra note 8, at 654 (By now, cross-examination by counsel is pretty well accepted in international
arbitrations, and for the most part the continental lawyers have learned how to do it. Moreover, and almost as important,
arbitrators have learned how to administer cross-examination....); Julian D.M. Lew & Laurence Shore, International
Commercial Arbitration: Harmonizing Cultural Differences, 54 Disp. Resol. J., Aug. 1999, at 33, 34-35 (noting that when
cross-examination is permitted in arbitrations, attorneys are encouraged, through strict time limits, to focus their questioning
on the most important issues). Even with these accommodations, lawyers from different countries approach cross-
examination with different purposes and techniques. English barristers are accustomed to conducting a painstaking cross-
examination of the witnesses statement, and American attorneys cross-examine on materials from depositions and direct
testimony in an effort to undermine the witness's credibility. Id. at 34. By contrast, Continental practitioners focus more on
questions that might elicit new information, rather than on raising questions about the witness's credibility. Id.

[FN346]. See Rau & Sherman, supra note 341, at 96-97 (citing David Ren, Arbitration in International Trade 296 (1985));
Cremades, supra note 18, at 161; Wilkey, supra note 109, at 81.

[FN347]. Some countries have national laws that limit the nature of and manner in which discovery can be pursued in
arbitrations. For example, article 184 of the Swiss law on Private International Law requires that the arbitral tribunal itself
take evidence. Bundesgesetz uber das Internationale Privatrecht vom 18 Dezember 1987, BB1 1988 I 5 (Switz.). Similarly,
section 1036 of the German Civil Procedure Code forbids arbitrators from ordering parties to disclose information and
requires that they seek national court assistance in conducting discovery. See 1036 ZPO (F.R.G.). Foreign law in this note
derives from citations and translations in Charles S. Baldwin, IV, Protecting Confidential and Proprietary Commercial
Information in International Arbitration, 31 Tex. Int'l L.J. 451 (1996).

[FN348]. See Baldwin, supra note 347, at 103. In arbitration, like in bench or judge trials, evidentiary objections are less
important because there is no jury. See Andreas Bucher & Pierre Yves Tschianz, International Arbitration in Switzerland 92
(1989) (arguing that rules of evidence lose most of their meaning and importance in arbitration).

[FN349]. See supra note 301 and accompanying text.

[FN350]. The IBA Rules are part of a larger debate about the future of arbitration. Some believe that there will be, or should
be, more specified rules of procedure and evidence, while others urge commitment to flexibility. See Holtzmann, supra note
304. Notably, the move toward culturally harmonized procedural rules in arbitration mirrors a similar effort in domestic
litigation. Geoffrey Hazard, along with a host of expert advisors, head up an ALI project to develop transnational rules of
civil procedure, which national courts could use when adjudicating international disputes. See ALI/UNIDROIT Principles
and Rules of Transnational Civil Procedure (Discussion Draft No. 2, April 12, 2001).

[FN351]. Arbitrator discretion in applying the law takes both legitimate and illicit forms. Justifiably, a great deal of discretion
derives from ambiguities about the proper law to be applied, including the proper rules for choosing the proper law. See Park,
supra note 35, at 667. Indeed, arbitrators must walk something of a tightrope between applying the parties' chosen law and
avoiding offense to mandatory law of a jurisdiction that might be able to refuse enforcement. It is also possible for parties to
enhance arbitrator discretion, if the parties, instead of a body of national law, choose the flexible lex mercatoria or customary
merchant law, or an equitable doctrine such as amiable compositeur, which permits arbitrators to resolve the matter based

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 65
23 Mich. J. Int'l L. 341

on notions of fundamental fairness. Another form of discretion is a byproduct of the fact that arbitral decisions are not subject
to substantive review.

[FN352]. In Continental proceedings, judges enjoy significant fact-finding power, but they are significantly limited in their
decision-making powers. See Comparative Law: Cases-Text-Materials, supra note 77, at 456-70 (describing the appellate
processes in civil law countries). In the United States, lower court legal decisions are subject to de novo review on appeal and
factual determinations, while afforded significant deference, are also subject to appeal.

[FN353]. Comparison of the relative power of judges vis--vis arbitrators in this context can only be made within the
confines of a specific case because arbitrators are only appointed for a single case. At a more systematic level, the power of
arbitrators is more circumscribed than judges because their decisions are not binding in other cases and their jurisdiction is
dependent on the existence of national courts.

[FN354]. See John H. Ely, Democracy and Distrust: A Theory of Judicial Review (1980)

[FN355]. Public scrutiny of judicial opinions acts as a constraining force on judges. See Alexander M. Bickel, The Least
Dangerous Branch: The Supreme Court at the Bar of Politics, 69-70 (1962) (describing how courts are constrained by a range
of social and cultural factors, including public opinion); see also Gerald N. Rosenberg, The Hollow Hope: Can Courts Bring
About Social Change? (1991). Some arbitral institutions, such as the AAA, even recommend that arbitrators not provide the
parties with a reasoned award to avoid the possibility that it might provide a basis for future challenge.

[FN356]. See Lucy F. Reed, Drafting Arbitration Clauses, in Litigation and Administrative Practice Course Series Handbook
No. 648, at 607 (Practicing Law Institute 2001) Moreover in the absence of reasoned awards, it is more difficult for parties to
adjust their ex ante planning for future arbitrations since they cannot effectively attribute outcomes to particular causes.

[FN357]. Rau & Sherman, supra note 341, at 94.

[FN358]. Park, supra note 35, at 659; see also supra notes 295-98 and accompanying text.

[FN359]. This shift also likely reflects the fact that arbitration agreements are most often drafted by corporate attorneys
unfamiliar with adjudicatory strategies, while arbitration specialists take over after the dispute arises. See John D. Berchild,
Jr., Institution Disputes Involving Financial Institutions: Developing U.S. Experiences--A Prototype for NAFTA Cross-
Border Transactions?, 5 NAFTA L. & Bus. Rev. Am. 361, 367 (1999) (Simply incorporating boilerplate or standard
arbitration language can give an attorney and his or her client an unpleasant surprise ....).

[FN360]. See Carbonneau, supra note 61, at 581.

[FN361]. See supra notes 340-48 and accompanying text.

[FN362]. See supra Section I.B. As a historical matter, the hybrid practices commonly used in arbitration are probably
attributable to a range of forces. On the one hand, they may represent what experience has taught are the most effective
means of compromising between competing interests among participants, or the product of competitive pressures within the
market of international commercial arbitration, amplified by the entrance of American lawyers on the scene. See Dezalay &
Garth, supra note 38, at 23 (describing the Americanization of arbitral proceedings and attributing it to the symbolic
capital brought to the process by American attorneys). Whatever the historical source of these hybridized procedures, they
have the effect of creating a balance, which probably contributed to their universal acceptability. This need to counterbalance
arbitrator power is also evidenced in the general formalization of the international arbitral process, particularly the reduction
of the hybrid procedures to a formal, structured body of rules and the calls for publication of arbitral awards.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 66
23 Mich. J. Int'l L. 341

[FN363]. See supra Section I.B.3.

[FN364]. For an illustration of this Venn diagram as it exists in national legal systems, and the theories underlying the model,
see supra notes 208-10, accompanying text, and Figure 1.

[FN365]. See Drahozal, supra note 8, at 97.

[FN366]. See C. Thomas Mason III, Lawyers' Duties of Candor Toward the Arbitral Tribunal, in Securities Arbitration 1997,
at 59, 100-05 (PLI Corp. & Practice Course, Handbook Series No. 998, 1997).

[FN367]. As noted above, see supra notes 234-35 and accompanying text, the American tolerance for ex parte communication
with arbitrators may reflect not so much the role of attorneys, but the role of arbitrators as parties' advocates on U.S. arbitral
tribunals. Finalizing attorney ethical norms regarding ex parte contact will therefore also require examination and
clarification of the arbitrator's role. Certainly one factor to consider is that, even if the risk of taint from ex parte
communications is lower in international arbitration than in U.S. litigation, the non-appealability of arbitral awards makes the
potential consequences dire if that risk is realized.

[FN368]. See Mason, supra note 366, at 100-05; see also Deborah L. Rhode, Institutionalizing Ethics, Case W. Res. L. Rev.
665, 707-09 (1994) (arguing for higher disclosure obligations in U.S. litigation).

[FN369]. Damaska, supra note 241, at 847 (arguing that if civilian systems introduced cross-examination, fairness would
require at least some minimumal degree of witness preparation). Pre-testimonial communication is also necessary in
international arbitration because witnesses are often physically located far from the place of arbitration. Bringing them to
arbitration, if they could indeed be compelled, would be uneconomical and unrealistic unless there is some knowledge
beforehand about what they might be able to contribute to an understanding of the issues in dispute. See Ulmer, supra note
18, at 179.

[FN370]. See Rogers, supra note 5.

[FN371]. See supra notes 39-40.

[FN372]. See Rogers, supra note 5.

[FN373]. The Liverpool Cotton Association has a venerable history and is widely regarded as the institution that inspired
trade associations throughout England to establish arbitration mechanisms. See Julius Henry Cohen, Commercial Arbitration
and the Law 19-20 (1918). Lisa Bernstein's work surveys a host of other interesting examples, such as arbitration
administered by the National Grain and Feed Association. See Lisa Bernstein, Merchant Law in a Merchant Court:
Rethinking the Code's Search for Immanent Business Norms, 144 U. Penn. L. Rev. 1765 (1996).

[FN374]. See Stephen Craig Pirrong, The Efficient Scope of Private Transactions-Cost-Reducing Institutions: The Successes
and Failures of Commodity Exchanges, 24 J. Legal Stud. 229, 235 (1995).

[FN375]. See id.

[FN376]. The Liverpool Cotton Association, Bylaws and Rules, (2002), at http://www.lca.org.uk/publications.html (last
visited Mar. 18, 2002).

[FN377]. Under sponsorship of the World Bank, over eighty nations, including the United States, have adopted the 1965
International Convention on the Settlement of Investment Disputes Between States and Nationals of Other States. See

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 67
23 Mich. J. Int'l L. 341

Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, opened for signature
Mar. 18, 1965, 17 U.S.T. 1270, T.I.A.S. No. 159. ICSID was submitted for ratification in March 1965 and entered into force
on October 14, 1966, after ratification by 20 countries. See id. art. 68(2). It is the only arbitration convention that provides for
both adjudication and enforcement of its judgments. ICSID signatories waive sovereign immunity and, in federal systems,
ICSID judgments are enforceable in sub-federal courts at the discretion of the national government. See id. art. 54(1).

[FN378]. See Reisman, supra note 12, at 48-49. ICSID arbitration is becoming more important and prevalent, as
demonstrated by its growing caseload: From 1965 to 1996, ICSID had sponsored only thirty-eight arbitrations. During 1997,
ICSID registered ten new cases. At the end of 1997, the ICSID center had fourteen pending cases. ICSID Arbitration on the
Rise, 9 World Arb. & Mediation Rep. 150, 150 (1998) (citing Professor Emmanuel Gaillard, managing partner of Shearman
& Sterling's Paris office).

[FN379]. The other unique feature of ICSID arbitration is that it is an almost entirely self-contained system. Neither the
procedure nor the awards rendered are subject to challenge in the national courts of contracting states. Aron Broches,
Observations on the Finality of ICSID Awards, 6 ICSID Rev.: Foreign Investment L.J. 321, 322 (1991).

[FN380]. See Mani, supra note 94, at 16-17.

[FN381]. See Shalakany, supra note 217, at 422.

[FN382]. Unlike other arbitral rules, which permit arbitrators to choose the governing law in the absence of party agreement,
article 42(1) of the ICSID rules mandates that, in the absence of party agreement, the arbitrators apply the law of the
Contracting State party to the dispute (including its conflict-of-laws) and such rules of international law as may be
applicable. See Reisman et al., supra note 290, at 258.

[FN383]. The adoption of this hair-trigger rule appears to have been motivated, at least in part, by an effort to limit the
discretion involved in appellate review, but it arguably also aims at constraining the original arbitral tribunal. For a discussion
of the problems caused by this hair-trigger rule, and efforts to reform it, see Reisman, supra note 12, at 57-83.

[FN384]. This ethical relaxation would be consistent with the structure of the ICSID system, which forecloses appeal to
national courts even for fraud. See William W. Park, Arbitration and the FISC: NAFTA's Tax Veto, Mealey's Int'l Arb. Rep.,
May 2001, at 33. ICSID itself is expected to supply the arbitration's quality control under its ad hoc challenge procedure.
Id. at 34.

[FN385]. See id. at 42.

[FN386]. See Frederick Brown & Catherine A. Rogers, The Role of Arbitration in Resolving Transnational Disputes: A
Survey of Trends in The People's Republic of China, 15 Berkeley J. Int'l L. 329, 331 (1997) (explaining how arbitration can
implement a rule of law in the absence of state mechanisms).

[FN387]. See Martin Domke, Commercial Arbitration 14 (1965), cited in McConnaughay, supra note 29, at 458 & n.22.
Admittedly, this predilection for predictability and codification may be more appealing to Western interests. See id. at 458 &
n.22 (arguing that the goal of legal predictability is not shared in Asia and much of the developing world).

[FN388]. For an analysis of why methodologies for developing ethical norms cannot produce a code that will accommodate
the special needs of international commercial arbitration. See infra Section II.C.

[FN389]. See Stockholm Institute's Ethics Project on Hold, supra note 268, at 12.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


23 MIJIL 341 Page 68
23 Mich. J. Int'l L. 341

[FN390]. For a description of the need for ethical regulation in other international adjudicatory contexts, see supra note 11.

23 Mich. J. Int'l L. 341

END OF DOCUMENT

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 1
19 Ohio St. J. on Disp. Resol. 35

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 2
19 Ohio St. J. on Disp. Resol. 35

Ohio State Journal on Dispute Resolution


2003

Article

*35 INTERNATIONAL COMMERCIAL ARBITRATION: AMERICANIZED, CIVILIZED, OR


HARMONIZED?

Elena V. Helmer [FNa1]

Copyright (c) 2003 Ohio State Journal on Dispute Resolution; Elena V. Helmer

I. Has International Commercial Arbitration Become Americanized?

The term Americanization of [international commercial] arbitration was introduced in the mid-1980s,
allegedly by Stephen Bond, then Secretary General of the International Court of Arbitration of the International
Chamber of Commerce (ICC). [FN1] Ever since, an academic confrontation . . . between those trained in the
Anglo-Saxon legal profession and those having a Roman law orientation [FN2] continues to produce debates in
scholarly writings and at conferences as to how international commercial arbitrations are to be conducted and what
is the role of Anglo-American lawyers in the development of international arbitration in general.

Americanization may be viewed positively [FN3] or negatively, [FN4] and its understanding often depends on
the legal roots of a speaker or writer. For some U.S. lawyers, Americanization means converting European
arbitrators to the English language and to the usages of Anglo-Americans . . ., enlarg[ing] the club [of European
arbitrators] and . . . rationaliz[ing] the practice of arbitration such that it could become offshore-U.S.-style-
litigation. [FN5] On the Continent, Americanization or an American approach . . . is often a code word for an
unbridled and ungentlemanly aggressivity and excess in arbitration. It can involve a strategy of total *36 warfare,
the excesses of U.S.-style discovery, and distended briefs and document submissions. [FN6] In a more balanced
view (by the way, shared by a number of prominent U.S. practitioners in the field), Americanization implies
something of an excessive influence of Anglo-American or common law legal traditions on international arbitration,
originally a European/civil law phenomenon. [FN7] This excessive American influence involves, first of all, certain
practices followed in U.S. courts, especially the prehearing production of documents (i.e., discovery) and motion
practice, [FN8] at the expense of the speed, efficiency, and low cost of arbitral proceedings. [FN9]

Judicialization is a term frequently associated with Americanization. [FN10] Judicialization (legalisation or


processualisation in the words of Pierre Lalive) [FN11] is described as an effort to make arbitration become more
like litigation, [FN12] in order to increase its predictability, reliability, and equity. [FN13] The result of
judicialization in arbitration is formalism, judicial style, and diminished flexibility, [FN14] and eventually,
transformation of arbitration into offshore-U.S.-style-litigation. [FN15]

Whichever term we use, be it Americanization or judicialization, the meaning of the word remains the same:
[An] increasing tendency for the arbitration process to adopt or follow the formalism and technicalities of national
judicial process, in particular, the methods of American litigators, in international arbitration. [FN16]

*37 The whole debate of Americanization of international commercial arbitration springs from what has been
called the Common Law-Civil Law Divide. [FN17] The differences between the two legal systems are most

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 3
19 Ohio St. J. on Disp. Resol. 35

visible in the area of procedure, and, not surprisingly, the majority of publications discussing the Americanization of
international commercial arbitration concentrate on procedural issues. [FN18] However, the concept of the Great
Divide is not fully accepted in either legal tradition, [FN19] and a clash of legal cultures is at most a questionable
proposition. [FN20] For the purpose of this discussion, we will simply accept the existence of numerous differences
between the Anglo-Saxon and Continental legal systems without going into this issue any further.

Do the procedural tactics and techniques of U.S. litigators in international commercial arbitration mean that
arbitration has become Americanized? And if American influence on international commercial arbitration is
broader than the procedural element alone, does it amount to Americanization of arbitration?

This Article examines several aspects of what might constitute Americanization of international arbitration: (1)
the number of U.S. businesses participating in international arbitrations; (2) the growth in the number of American
lawyers and law firms offering their services in relation to international commercial arbitration; (3) the United States
as a forum for international arbitrations; (4) American influence on arbitral procedure; and (5) alternative dispute
resolution (ADR) techniques employed in relation to international arbitration.

The author believes that American influence on international arbitration is significant, but falls short of
Americanization. Rather, the current trends and developments in international commercial arbitration demonstrate
an ongoing process of harmonization in many areas of international arbitration. This includes national arbitration
laws, rules of major arbitration institutions, and arbitration practices, as demonstrated by the United Nations
Commission on International Trade Law (UNCITRAL) and International Bar Association *38 (IBA) documents as
well as procedures adopted by international arbitral tribunals.

A. Parties to International Arbitrations

With the growing popularity of arbitration as a means of dispute resolution in international business, [FN21]
contracts containing arbitration clauses are becoming commonplace, [FN22] and the number of arbitration
institutions on all continents is growing rapidly. [FN23] Accordingly, during the last few decades, the number of
arbitrations worldwide has increased dramatically. For example, between its founding in 1923 and 1976, the ICC
International Court of Arbitration received three thousand requests for arbitration. In 1998 the ICC received its ten-
thousandth case. Thus, more than two-thirds of all cases brought to ICC arbitration arose in the last 20 years of its
75-year existence. [FN24] The number of requests for arbitration filed with the ICC in 2002 reached 593 [FN25]-
up 31% from the 452 requests filed in 1997. [FN26] The international caseload of the American Arbitration
Association (AAA) reached 649 cases in 2001 (the last year for which statistics are available). [FN27] During the
2001-2002 period, the London Court of International Arbitration (LCIA) received 159 cases-an 8% increase over the
previous 24-month period. [FN28] Due to the nature of the process, there is no data available as to the *39 number
of ad hoc arbitrations being held in the world, but the same trend is observed there as well. [FN29]

Both the ICC and the AAA's International Centre for Dispute Resolution (ICDR) note the increase in the
number of non-traditional users of their arbitration services, in particular, from the United States. [FN30] In addition
to multinational corporations, who have long been the major participants in international arbitrations, medium and
small-sized businesses are now going international. [FN31] Electronic commerce also plays a significant role in this
movement. [FN32] As a result, arbitration has become widely recognized as the normal, rather than alternative, way
of settling international commercial disputes. [FN33]

It is clear, however, that American businesses (however numerous and influential in world economic relations)
are not the only participants in international arbitrations. Every dispute has at least two parties, and the other party
(or parties) practically always comes from a country other than the United States. [FN34] Therefore, as the number
of American companies participating in international arbitrations increases, so does the number of *40 foreign
companies. In 2002, parties to ICC arbitrations came from 126 countries. [FN35] In 2001, cases handled by the

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 4
19 Ohio St. J. on Disp. Resol. 35

AAA's ICDR involved arbitrators and parties from sixty-three nations (no statistics are available as to the
nationalities of the parties). [FN36] Companies from North America constituted 13% of 2002 LCIA arbitrations.
[FN37] The Arbitration Institute of the Stockholm Chamber of Commerce (SCC) reports that in 2002, parties in its
arbitrations represented thirty-five jurisdictions, with the United States and Canadian parties being involved in
only seven arbitrations (out of 120 total). [FN38]

As a result, we are witnessing the growth of international arbitration horizontally due to the multiplication of
new kinds of business transactions and new actors. [FN39] In this environment, as David Rivkin put it,
Americanization means that more American companies are involved in international arbitration, but nothing more.
[FN40]

B. Counsel and Arbitrators

The number of American law firms and lawyers offering arbitration services (either as counsel or, in the case of
individuals, also as arbitrators) is on the rise. In addition to a number of large law firms with a presence in the
international arbitration field since the 1970s and early 1980s, [FN41] the increase in non-traditional users of
arbitration services leads to the arrival in arbitration of a new group of lawyers representing this category of clients,
[FN42] and on occasion, serving as arbitrators. [FN43]

*41 Currently, many [FN44] American law firms offer their clients international arbitration as a part of a larger
package of dispute resolution services. [FN45] A number of law firms (including White & Case and Coudert
Brothers) have established separate international commercial arbitration departments; others provide arbitration-
related services from within their litigation departments (e.g., Baker & McKenzie and Mayer, Brown, Row & Maw).
With the worldwide presence of the U.S. multinationals of law, [FN46] it is not uncommon for both parties in
international commercial arbitration to be represented by U.S. law firms or their overseas branches. [FN47] And, the
increase in arbitration-related services transforms into an increase in profits. For example, according to Mayer,
Brown, Rowe & Maw in Chicago, revenues generated by their international arbitration practice during the last five
years increased tenfold. [FN48]

A number of highly regarded American specialists in international commercial arbitration have emerged, and
they also play a prominent role in international arbitration institutions worldwide. For example, three Secretary-
Generals of the ICC during the 1990s came from the United States: Stephen R. Bond, Eric A. Schwartz, and Anne-
Marie Whitesell.

No one would deny that U.S. law firms and lawyers are now major players in the international arbitration field.
Does this active involvement in the arbitration game transfer the United States itself into a leading arbitration center
of the world, akin to France or Switzerland?

C. The United States as a Forum for International Commercial Arbitrations

The answer to the above question is both yes and no. On the one hand, there are countless arbitrations taking
place in the United States every year, although exact statistics are lacking. The AAA works relentlessly on
promoting its services. [FN49] In 2001 the number of international cases filed with the AAA's ICDR reached 649,
which moved the AAA to first place, in terms of caseload, among the major international arbitration institutions in
the *42 world. [FN50] Forty-three percent of ICDR's cases involve amounts of one million dollars or more. [FN51]

On the other hand, most of the AAA's international cases involve an American party. According to the leading
authority in international arbitration, AAA's number of truly international cases (cases where both parties are non-
U.S.) is modest and cannot compete with the ICC numbers. [FN52]

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 5
19 Ohio St. J. on Disp. Resol. 35

It has been noted that the most significant arbitrations, the ones involving the largest amounts of money and
high political stakes, still take place outside the United States, [FN53] mostly in Europe. [FN54] Cases that are
arbitrated in the United States, in the words of an arbitration insider, are not the real big cases. [FN55] The really
big cases get to the AAA only when the American party's economic power is overwhelming. [FN56]

Indirect evidence of this relative inability to transform the United States into a center of international arbitration
equal to Switzerland or France is the establishment of the European office of the AAA's ICDR in 1999 in Dublin,
Ireland [FN57]-closer to where the action is and, perhaps, away from U.S. domestic law and practices.

So, what holds the United States back? One of the main reasons for major international commercial arbitrations
being held outside of the United States is the complexity of federal and state arbitration laws, which seem extremely
tricky, and even bizarre, to foreign parties and lawyers trained in different legal traditions.

U.S. international arbitration law is currently three-tiered and requires its users to try to decipher how the
Federal Arbitration Act (FAA), state international arbitration laws in selected jurisdictions, and basic (non-
uniform) domestic arbitration law in each state relate to one another and to find the cases that fill in the blanks
in the statutory structure. [FN58]
*43 Not every foreign lawyer is willing (and able) to undertake such a task and also impose the expenses of
hiring a local (American) counsel on his or her client.

For a long time, the United States was not a popular site for international arbitration because it did not ratify the
1958 New York Convention (Convention) until 1970. [FN59] The Convention now is part of the law of the land,
but other obstacles have emerged. The main arbitration law of the country, the Federal Arbitration Act of 1925,
[FN60] which governs both domestic and international arbitration, is a bare-bones statute directed primarily at
insuring that courts give effect to arbitration clauses and awards, and prescribes no significant procedural standards.
[FN61] The Act is now quite outdated. [FN62] Statutory gaps are being filled by judicial decisions that frequently
contradict each other. Most states have their own arbitration laws. Some states adopted separate statutes to regulate
international commercial arbitration. [FN63] Massive case law, both state and federal, complicates the issue even
more by promoting uncertainty; and this large body of case law may do more to discourage than attract
[international] arbitrations to the United States. [FN64]

The other reason why the United States may not be acceptable for foreign parties as the forum for international
commercial arbitration is the U.S. litigation style. It is very possible that parties who agreed to arbitrate their
disputes may nevertheless find themselves in a local court at the place of arbitration. It may happen, for example,
when judicial assistance is needed to compel arbitration or to appoint an arbitrator, a dispute on jurisdiction arises
(who decides who decides), or an award is challenged by the losing party. As the reputation of American civil
procedure among foreign lawyers has yet to improve, the possibility of Rambo-style litigation [FN65] (in the
words of a U.S. judge) does not help to attract arbitration business to the United States.

*44 In addition, the ICC, for example, notes an increase in legal interference of the local courts in ICC
arbitrations conducted in the United States. [FN66] After the 1995 United States Supreme Court decision in First
Options of Chicago, Inc. v. Kaplan, [FN67] the question of who decides jurisdictional questions-the court or the
arbitral tribunal-remains open.

Also, the United States may still lack the image of political neutrality akin to that of Switzerland or Sweden.
Neutrality of the forum is as important in international arbitration as modern arbitration laws and a non-
interventionist approach of the local courts. [FN68] A non-neutral forum may reduce the sense of fairness of the
entire proceedings, which is very important in international arbitration. [FN69] With U.S. business and political
interests extending worldwide, parties from other countries, especially less developed or economically weaker ones,
often do not trust that the United States can provide a truly neutral forum for resolution of their disputes with

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 6
19 Ohio St. J. on Disp. Resol. 35

American nationals. [FN70] This may not necessarily be true, and often is not true, as U.S. arbitrators, arbitral
institutions, and courts may very well be truly neutral, or even sympathetic to the non-American party. However,
unjustifiable concerns may nevertheless prevail over the logic of facts.

At the same time, positive attributes and developments are not lacking. The ICC notes an increase in the number
of its international arbitrations administered in the United States, particularly in California, Texas, and Florida.
[FN71] The selection of these locales is not a surprise because all of these states have adopted the UNCITRAL
Model Law on International Commercial Arbitration. The Federal Arbitration Act, at some point of time in the near
future, will be amended or replaced, although it seems unlikely that the United States will adopt the UNCITRAL
Model Law. [FN72] In addition, the knowledge and understanding of international commercial arbitration among
lawyers and business people is improving with more law schools offering this course to students and with the
educational and promotional *45 efforts of the AAA, ICC, ICSID, CPR Institute for Dispute Resolution, Institute for
American and International Law (formerly the Southwestern Legal Foundation), ABA, and other institutions and bar
associations. These collective efforts help improve the arbitration climate in the United States and make the country
more attractive as a forum for international arbitrations. [FN73] At present, the United States has a . . . reputation as
one of the more favorable sites in spite of its rather confusing laws. [FN74]

Do these developments, however, amount to Americanization of international commercial arbitration? Hardly


so, as the United States is currently one of the several major arbitration countries of the world, but not the only one,
and not even a dominating one like France or Switzerland. While it will always be an attractive forum for American
businesses and their lawyers, for a number of reasons (the perceived lack of neutrality being just one of them), the
United States will often lack attractiveness in the views of their counterparts from other countries.

D. Procedure

Although arbitration has long been used in the Anglo-American legal system, modern international commercial
arbitration was born and nourished in Continental Europe, in particular, within the Paris-based ICC, [FN75] which
established its International Court of Arbitration in 1923. Not surprisingly, arbitration has developed for a long time
within the Continental legal tradition. Moreover, arbitration proceedings were rather informal and dominated by a
narrow circle of primarily legal scholars. [FN76]

International commercial arbitration began experiencing strong American influence in the 1970s when the first
teams of U.S. lawyers arrived in Europe to represent their clients in the large petroleum arbitrations. [FN77] Almost
immediately, the American litigation style and trial techniques, which the U.S. lawyers brought with them, began
changing the way international commercial arbitrations were conducted in that they started looking more like
litigation. [FN78] Not surprisingly, arbitral procedure is the *46 single element of international arbitration that is
said to be most Americanized.

International commercial arbitration has traditionally been less formal, less legalistic, faster, and more final
than judicial proceedings. [FN79] It has also been less expensive than litigation in national courts. [FN80] With the
arrival of American law firms, arbitration turned into a sort of off-shore litigation. [FN81] Due to a greater use of
American trial methods, costs and delays in arbitral proceedings began to soar. Discovery, depositions, challenge of
arbitrators, simultaneous litigation proceedings in several fora, and tactical maneuvers have become commonplace
in international arbitration and a source of concern for European arbitrators and practitioners. [FN82] According to
Pierre Lalive, [i]nternational arbitration is therefore exposed to lose its well-known, or alleged, flexibility and its
traditional peaceful and conciliatory character [FN83] due to the role and methods of American litigators in
international arbitrations. [FN84]

During the last quarter of a century, major U.S. law firms active in the international arbitration arena have
become quite sophisticated in the arbitration game, be it Continental or Anglo-American style. [FN85] However, the

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 7
19 Ohio St. J. on Disp. Resol. 35

continuing flow of American newcomers into international arbitration necessarily means that they keep bringing
with them the familiar procedural techniques, court standards of minimum contacts between the arbitrators and the
parties (and their counsel), and other practices foreign to traditional international arbitration. [FN86] Thus, many
American attorneys still expect international arbitration to be but one kind of litigation, [FN87] simply in a
different forum, [FN88] and behave during arbitration hearings as if a jury was *47 there. [FN89] This
unfortunate trend leads to judicialization of international arbitration at the expense of its traditional virtues: speed
and economy.

The Anglo-American litigation tradition has a number of useful features, and lawyers trained in the United
States do possess some unique skills-procedural management being just one of them. In the words of a Swiss
practitioner, Common law lawyers have . . . often-demonstrated greater energy and training in obtaining, analyzing
and arguing the facts on which most arbitrations are won or lost. [FN90] The strength of American attorneys in
procedural management and litigation tactics may not be liked on the Continent, but it is well recognized there.

It is natural for lawyers to use the skills and methods they are trained in and accustomed to whenever they are
called on to provide their professional services. There is no problem if it happens within the context of domestic
arbitration as usually both parties come with the same expectations as to the procedure to be followed. However, in
international arbitration, parties usually come from different countries and, not infrequently, from countries that
belong to different legal traditions. In such a setting, imposition of procedural rules and methods of one of the
parties may denounce the sense of fairness of the entire proceeding and leave the other party (and possibly at least
one arbitrator) feeling disadvantaged and disappointed.

Not surprisingly, international arbitration has rapidly begun to develop ways to deal with the Great Divide in
arbitration procedure through the evolving practice of arbitral tribunals; changes in institutional and other arbitration
rules; numerous initiatives of various arbitration institutions; and the efforts of UNCITRAL, the International Bar
Association, and other organizations. As a result, the invasion, which has brought more rigor and increased
competition . . . into the European arbitral system, . . . has strengthened arbitration generally and . . . resulted in
better . . . awards. [FN91] We will discuss some of these improvements later.

E. Arbitration-related ADR

In no other area is the Americanization claim more justified than in the area of ADR. Since the 1990s, ADR
methods, although not necessarily of American origin [FN92] (they had been used in Asian and many other
countries of *48 the world long before making an entry into the U.S. dispute resolution field), are gaining popularity
in international commercial arbitration. [FN93]

ADR methods (e.g., conciliation, mediation, Med-Arb, MEDALOA, mini-trials, or the use of a third-party
referee) now constitute a part of dispute resolution services offered by various international arbitration centers
throughout the world. Practically all of the major arbitration institutions, including the ICC, AAA, LCIA, ICSID,
and SCC, have adopted their own ADR rules. [FN94] According to Stephen Gallagher, the AAA VP International,
the AAA offers mediation services to every applicant filing for arbitration, with an 85% success rate. [FN95] The
ICC also notes an increase in the number of two-tier dispute resolution clauses providing first for some form of ADR
proceedings and then for arbitration. [FN96]

Although ADR methods might be criticized as containing nothing new, [FN97] they are gaining popularity
among disputants. Ironically, American ADR methods have originated and are being used to deal with exactly the
same problems which, among other things, gave rise to the claim of Americanization of international arbitration:
costs, delays, procedural maneuvers, excessive judicialization of procedure, large teams of lawyers, and massive
document discovery. [FN98] Now, American ways of dealing with American litigation problems are being utilized to
fight Americanization in international commercial arbitration.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 8
19 Ohio St. J. on Disp. Resol. 35

*49 II. Harmonization in International Commercial Arbitration

Many prominent practitioners and academics in the field agree that the complex processes currently taking place
in international commercial arbitration can be best characterized as harmonization, [FN99] homogenization,
[FN100] convergence, [FN101] or a hybrid [FN102] of the two great legal traditions. [FN103] International
commercial arbitration practice is developing new ways of conducting arbitral proceedings in cross-cultural
arbitrations. The proceedings now combine the best of U.S. and Continental litigation practices [FN104] with some
new approaches, which neither of these legal systems can call their own, but which are hybrids of the both. In the
words of Bernardo Cremades, international arbitration is presently undergoing a process of harmonization in its
basic notions through a limitless combination of its different elements in order to achieve a pleasing effect: the
adaptation of legal systems throughout the world to a global economic market. [FN105]

Harmonization is also apparent when one compares the rules of the major arbitration institutions, as well as the
arbitration laws of various countries. The driving force behind the harmonization process has primarily been
UNCITRAL, which drafted and introduced numerous documents intended for use in cross-cultural arbitrations
around the world. Some of the important developments in the areas of procedure, governing arbitration rules, and
national and international legislation are discussed below.

*50 A. Harmonization of Procedure

A number of very informative articles have already discussed the various methods currently used in
international arbitration. [FN106] Therefore, we will briefly comment only on some areas where the American style
differs most significantly from the civil law approach and where the harmonization trend is therefore most visible
(viz., discovery, document submission and examination of witnesses and expert witnesses).

1. Discovery

Although discovery is traditionally considered a common law feature, there is no uniformity as to how it is
conducted between even the cousins-British and American civil procedures. When it comes to the Continent, the
word discovery rank[s] second only to punitive damages' in terms of its capacity to strike terror into the civil law
hearts, as noticed by a couple of insightful practitioners. [FN107] Continental lawyers are accustomed to a different
kind of discovery (or rather disclosure): lawyers for each side produce all relevant documents to support their
claim or defense, and the judge (or an arbitrator) may question witnesses, appoint experts, and, in a number of
countries, also order a party to produce relevant evidence. [FN108]

Discovery can be a very useful procedural device, especially in cases in which one of the parties does not have
access to the necessary evidence for reasons beyond its reasonable control. [FN109] Recognizing its usefulness,
many civil lawyers and arbitrators now accept this procedure as long as it is not called discovery and does not
allow fishing expeditions. [FN110] Instead of imposing U.S.-style mass discovery on the foreign party or
disposing of discovery completely, a middle ground has been found in international commercial arbitration-limited
discovery. [FN111]

The best example of this new practice of limited discovery is Article 3 of the Rules on the Taking of Evidence in
International Commercial Arbitration *51 adopted in 1999 by the International Bar Association. [FN112] Although
the word discovery is thoughtfully omitted from the IBA Rules of Evidence, Article 3 provides for submitting all
documents available to [the party] on which it relies, to the other party and the tribunal. [FN113] In addition, a
party may submit to the arbitral tribunal a Request to Produce, [FN114] which should contain:

(a) (i) a description of a requested document sufficient to identify it, or (ii) a description in sufficient

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 9
19 Ohio St. J. on Disp. Resol. 35

detail . . . of a narrow and specific requested category of documents that are reasonably believed to exist;
(b) a description of how the documents requested are relevant and material to the outcome of the case;
and
(c) a statement that the documents requested are not in the possession, custody or control of the
requesting Party, and of the reason why that Party assumes the documents requested to be in the possession,
custody or control of the other Party. [FN115]
It is obvious how this process differs from the one established by the Federal Rules of Civil Procedure, [FN116]
both in the scope of discovery and in the obligations imposed on a party requesting discovery. Fishing expeditions
are prevented, but reasonable disclosure of information necessary for the just resolution of the case is made possible.
This is a blend of the common law approach, because it includes the production of categories of relevant
documents as well as individual documents, and the civil law approach, because the documents (including the
categories of documents) must be identified with reasonable specificity. [FN117] Therefore, this kind of limited
discovery becomes acceptable to lawyers from both legal traditions.

At the same time, other components of U.S.-style discovery, such as depositions and interrogatories, have not
found a way into international arbitration. [FN118] The IBA Rules of Evidence, for example, are silent on those
practices. This silence does not mean that the parties may not use other components of U.S.-style discovery if they
so agree. It simply means that the document representing the growing consensus on how evidential matters are to be
handled in cross-cultural arbitrations, by the mere fact of omission of additional U.S. discovery practices, withdraws
its blessings from those *52 practices in order to preserve specificity of international arbitration, make it mutually
acceptable for parties from various legal traditions, keep it speedier, and control costs.

2. Document Submission and Examination of Witnesses

Traditionally, due to the presence of the jury, oral presentation of evidence and examination and cross-
examination of witnesses by the parties' counsel constitute a major part of a common law trial. [FN119] However, in
a Continental hearing, oral presentation of evidence, including witness examination, is less important as greater
weight is usually awarded to document evidence than witness statements and as the majority of evidence is already
in the dossier. [FN120] Most civil lawyers are not skilled in the art of cross-examination and view it with
abhorrence. [FN121] The trial concentrates on legal argument and is controlled by the judge or an arbitrator.
[FN122]

In conducting the hearing, international arbitrations usually follow the Continental model. The arbitral tribunal
exercises complete control over the process, [FN123] thus reducing the role of counsel. [FN124] Use of
comprehensive written submissions in international arbitration is also well established now. [FN125] Instead of a
short and plain statement of the claim, [FN126] typical for Anglo-American litigation, arbitration usually starts
with a detailed claim supported by all (or most) of the documents on which the claimant relies to prove his case.
[FN127] The parties also provide detailed witness statements [FN128] and expert reports. [FN129] Thus,
international arbitral proceedings are more *53 document-oriented (like the civil law tradition) than Anglo-American
civil procedure. [FN130]

At the same time, many lawyers with a civil law background now recognize that oral witness examination of
some type can be very useful, and lawyers and arbitrators from common law countries also soften their approach to
oral examination. [FN131] Harmonized practices have emerged. First of all, oral testimonies are shortened or not
used at all. [FN132] Instead, parties submit written witness statements in the course of the written phase of the
arbitral proceeding. [FN133]

Secondly, direct examination of witnesses is either dispensed with completely when parties and arbitrators rely
on the witnesses' written statements, or is limited to points which summarize their written statements. Both
arbitrators and counsel may ask questions, and the order of questioning is either established in advance by the parties

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 10
19 Ohio St. J. on Disp. Resol. 35

(often in the course of a pre-hearing conference) or determined by the arbitral tribunal. The harmonizing approach to
questioning involves counsel conducting examination (and cross-examination) of witnesses before the tribunal starts
asking their own questions. Thus, examination-in-chief and cross-examination are not separated into two phases as
in the common law tradition. [FN134] In such a case, both common law and civil law parties feel satisfied as their
procedural traditions have been followed in the arbitral proceedings. [FN135]

The scope of cross-examination in international arbitration differs from U.S. court practices as well. In the
United States, cross-examination is usually limited to the scope of direct examination. [FN136] In arbitration,
because direct examination is often shortened significantly, cross-examination covers all of the issues the witness
covers in his written statement. [FN137] And cross-examination is usually not as hostile as in the U.S. courts, which
makes it less objectionable to Continental lawyers. [FN138]

*54 The IBA Rules of Evidence provide for an innovative technique related to witness questioning in
arbitration: confrontation testimony (also called witness conferencing). [FN139] In confrontation testimony,
witnesses testify on the same issue together, not one after another. If the witnesses contradict each other, they can be
examined regarding their controversies on the spot. [FN140] Confrontation testimony is neither American nor
Continental and seems to fit international arbitration quite well to further extend the number of procedural options
acceptable to parties and counsel from different legal traditions.

Interestingly, the IBA Rules of Evidence allow the party or the party's officer to be heard as a witness, [FN141]
which is not allowed in the civil law trial where the party cannot be a witness in its own case. In international
arbitration, the harmonized approach is that the source of information does not matter. Arbitrators are the judges of
the admissibility, relevance, materiality, and weight of evidence. [FN142] As a result, international arbitration
hearings are often something of an amalgam of the two traditions, with witness testimony frequently presented in
affidavit or summary-statement form, and, when live testimony is presented, with limited cross-examination.
[FN143]

3. Expert Witnesses

In Anglo-American procedure, it is typical for the parties to present their own experts who are specialized
form[s] of witnesses. [FN144] In the Continental legal system, experts are usually neutral and appointed by the
court or the arbitral tribunal itself. [FN145]

In international arbitration, both party-appointed and tribunal-appointed experts are now common, [FN146] and
their reports are provided in writing and may be heard during the hearing. [FN147] Both parties and the tribunal may
also question the experts at the hearing. [FN148] This is a blend of common and civil law practices-a good example
of harmonization in arbitral proceedings.

*55 Moreover, the IBA Rules of Evidence provide for an English procedure called muting of experts. Experts
for both parties meet without counsel and try to eliminate extremes in their opinions. Then the experts come to the
tribunal with a joint statement on as many points as possible. [FN149] The remaining controversies go to trial. This
process helps reduce the costs and time associated with examination and cross-examination of expert witnesses,
which are so typical in Anglo-American civil litigation.

The several examples from the procedural area of arbitration mentioned above demonstrate the development of
a harmonizing approach as to how the arbitral proceedings are to be conducted. As Pierre Lalive stated, there is a
definite evolution towards the internationalisation of general principles of procedure, and it is no longer possible
to oppose . . . common law and civil law types of arbitration. [FN150] Arbitration departed from the extremes of
both legal traditions in favor of more settled, middle ground practices which are acceptable to parties coming from
different countries and different legal systems. American influence on arbitral procedure remains significant, but so

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 11
19 Ohio St. J. on Disp. Resol. 35

does Continental influence. The future is somewhere in the middle, with the best of both styles being used to the
advantage of the parties and in the interest of the fair and speedy resolution of a dispute.

B. Harmonization of Arbitration Rules

1. Rules of the Major Arbitration Institutions

The current rules of the major arbitration institutions rarely reflect the characteristic features of the legal
systems of the countries where such institutions are located. To the contrary, the Rules of the ICC (Paris), LCIA
(London), SCC (Stockholm), and AAA (New York) have much more in common than one would expect taking into
account their locations and the legal traditions of the host countries. All of these Rules provide for flexibility of
procedure, allow arbitrators to have greater control over the arbitral process, and avoid references to their respective
domestic legal customs. None of the Rules prescribes how the hearing is to be conducted or how witnesses are to be
examined (unlike, for example, the AAA domestic arbitration rules). [FN151] It is up to the parties and arbitrators to
agree upon the procedure and all of its aspects. This way, modern arbitration rules smooth *56 the sharp edges of
both Anglo-American and civil law approaches to the conduct of arbitration in order to attract arbitration business.

The rules of major arbitration institutions provide that it is the responsibility of the arbitrators to conduct the
proceedings in the most efficient way. For example, the ICC Rules of Arbitration leave the parties and the tribunal
considerable freedom as to how to establish the facts of the case: The Arbitral Tribunal shall proceed within as
short a time as possible to establish the facts of the case by all appropriate means. [FN152] To counter the civil law
tradition of only producing evidence that is favorable to a party's case, the ICC Rules allow the tribunal to summon
any party to provide additional evidence. [FN153] This means that the ICC tribunal may order discovery, but the
extent of it is to be determined by the tribunal itself (unless the parties agreed otherwise on such procedures). As we
see, the ICC Rules leave the parties and the tribunal enough flexibility to determine how the proceedings are to be
conducted and the evidence will be produced.

The AAA International Arbitration Rules [FN154] also provide for flexibility and mixed procedures and do not
much deviate from the European rules. [FN155] The AAA Rules award the tribunal with the right to conduct
arbitration in whatever manner it considers appropriate. [FN156] Witnesses' written statements are specifically
mentioned, [FN157] and the tribunal may appoint independent experts. [FN158] While [e]ach party shall have
the burden of proving the facts relied on to support its claim or defense, [FN159] the tribunal may order parties to
produce other documents, exhibits or other evidence it deems necessary or appropriate. [FN160] Thus, the core
American arbitration institution got away from the American rules of wide-range discovery.

The Rules of the London Court of International Arbitration [FN161] are, perhaps, more influenced by common
law (and more detailed) than any other major set of arbitration rules. For example, unless the parties agreed
otherwise, the arbitral tribunal may order any party to produce . . . any *57 documents or classes of documents in
their possession, custody or power which the Arbitral Tribunal determines to be relevant. [FN162] However, the
parties may counter such discovery measures as they must be allowed a reasonable opportunity to state their views
before discovery is ordered. [FN163] On the other hand, the LCIA Rules include a number of non-common law
practices, such as widest discretion of the tribunal to conduct proceedings, [FN164] written statements by
witnesses, [FN165] tribunal-appointed experts, [FN166] and questioning of witnesses by the tribunal. [FN167]

In constantly reshaping their rules, institutions consult widely with users of the rules so that the rules as
promulgated do best to meet the needs of their customers. [FN168] These efforts bear fruit as the major institutional
rules have parted with domestic litigation practices in favor of harmonized solutions in order to become more
acceptable for parties from around the world. As rules of at least the major arbitration institutions become very
similar, and more and more ad hoc arbitrations refer to, or borrow from, the UNCITRAL Arbitration Rules, the
common growing experience in the practice of international arbitration will further contribute towards a greater

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 12
19 Ohio St. J. on Disp. Resol. 35

harmonization. [FN169]

*58 2. The 1976 UNCITRAL Arbitration Rules

Numerous ad hoc arbitrations are conducted every year under the 1976 UNCITRAL Arbitration Rules, [FN170]
which have become the most widely accepted set of procedures for . . . ad hoc arbitration proceedings. [FN171]
This UNCITRAL project was a pioneer in the movement towards harmonization in international arbitration, and the
Rules achieved tremendous acceptance. [FN172] The drafters clearly envisioned a potential conflict between
different legal traditions in arbitration and attempted to soften it by providing a culturally-neutral [FN173]
procedural regime that is flexible enough to make parties to the dispute relatively comfortable by eliminating the
sharp edges of both procedural styles. [FN174]

According to the UNCITRAL Rules, the arbitral tribunal may conduct the arbitration in such manner as it
considers appropriate. [FN175] This wide discretion is limited only by the agreement of the parties and the
mandatory requirement that each party is treated with equality and awarded an opportunity to be heard. [FN176] The
tribunal may order limited discovery of the documents, [FN177] consider written witness statements instead of oral
presentations, [FN178] appoint expert witnesses, [FN179] and determine the manner in which witnesses may be
examined. [FN180] These flexible provisions allow for tailoring of the proceedings to the needs of a specific dispute
without imposing on the parties particularities of either Continental or Anglo-Saxon procedure.

*59 The UNCITRAL Rules are being used not only in ad hoc arbitration; they have also influenced the rules of
a number of arbitration institutions [FN181] and even various national laws. [FN182] The major test for the
UNCITRAL Rules was their adoption to the proceedings by the Iran-United States Claims Tribunal [FN183] where
the Rules were successfully used to bridge the gap between common law and Islamic and civil law traditions in a
complex situation involving two governmental parties and hundreds of separate individual arbitrating parties with
private claims against Iran. [FN184] The UNCITRAL Rules are applied by such diverse arbitration institutions as
the Inter-American Commercial Arbitration Commission; Regional Centers of the Asian-African Legal Consultative
Commission in Kuala Lumpur, Cairo and Nigeria; the Australian Arbitration Commission; the Hong Kong
International Arbitration Center; and the Singapore International Arbitration Center. [FN185] As a result, the
UNCITRAL Rules have gained even wider acceptance as a model procedural code for conducting international
arbitrations [FN186] and contributed to harmonization of arbitration rules in general. [FN187]

3. The IBA Rules of Evidence

The great flexibility provided for in the major arbitration rules makes it necessary to prevent flexibility from
degenerating into chaos. [FN188] In order to help the tribunals and counsel deal with evidentiary and other
complicated matters of arbitral procedure, the International Bar Association adopted, in 1983, the Supplementary
Rules Governing the Preparation and Reception of Evidence in International Commercial Arbitration. In 1999 that
document *60 was replaced with the IBA Rules on the Taking of Evidence in International Arbitration Proceedings.
[FN189]

The IBA Rules of Evidence, which have already been mentioned several times, have been drafted by
practitioners and academics from various countries of the world (the chair of the drafting committee was David
Rivkin, a partner at the New York office of Debevoise & Plimpton) and truly represent the tendency of
harmonization in international arbitration. The IBA Rules eliminate the extremes which can be found in both legal
systems and provide for the middle ground, acceptable to both sides. [FN190] Although there is no available data on
how often the Rules are being used in international arbitration, the Rules are viewed as a significant unifying force
in the conduct of international arbitration across the various legal regimes. [FN191]

4. UNCITRAL Notes on Organizing Arbitral Proceedings

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 13
19 Ohio St. J. on Disp. Resol. 35

In order to help parties and arbitrators, especially if arbitrators are not experienced enough and/or if parties and
arbitrators do not share the same expectations and the same cultural and legal tradition[s] [FN192] to deal with the
complexities of cross-cultural arbitrations, [FN193] Judge Howard Holtzmann proposed, in 1993, the idea of
developing guidelines on conducting prehearing conferences. [FN194] Judge Holtzmann noted that if not dealt with
early, [f]lexibility can lead to unpredictability, and unpredictability can result in surprise in both the written and oral
phases of the arbitration, [FN195] especially when parties and their counsel come from different legal traditions.

The pre-hearing (or pre-trial) conference is an Anglo-American tradition. [FN196] With the oral hearing being
the center stage of the court proceedings, the judge and counsel for the parties meet in advance to discuss the issues
related to discovery and the trial. Due to the piecemeal nature of the Continental trial and the availability of the
written dossier, pre-hearing conferences are rarely used in the civil law system, and when they are used, such
conferences have different content and function. [FN197] Not surprisingly, *61 although preparatory conference
was provided for under the AAA International Rules [FN198] (and in the ICSID Rules of Procedure where it was
called preliminary procedural consultation), [FN199] until recently, such conferences were largely unknown to
most other major arbitration rules [FN200] despite being widely used in practice. [FN201] For these reasons, a
number of prominent European arbitration practitioners and academics, including Pierre Lalive, objected to
developing such guidelines. [FN202]

In order to eliminate objections from civil lawyers, the drafting group dropped the words pre-hearing
conference and made numerous changes in the document. [FN203] The Notes on Organizing Arbitral Procedure
[FN204] were adopted by UNCITRAL in 1996 to assist arbitration practitioners by listing and briefly describing
questions on which an appropriately timed decision on organizing arbitral proceedings may be useful. [FN205]

In international arbitration, both institutional and ad hoc, pre-hearing conferences are now commonplace.
[FN206] The UNCITRAL Notes inevitably lead [] us from harmonization of rules to harmonization of practices.
[FN207] In this case, a useful Anglo-American procedural device is gaining wide acceptance in international
arbitration to benefit parties and arbitrators from both legal traditions.

5. IBA Rules of Ethics

Members of the same arbitral tribunal often come from three different countries. Therefore, they may very well
be accustomed to, and guided by, different rules of ethics. Ethical rules used in France or in Switzerland do not
necessarily reflect expectations of a lawyer from the State of New York. For example, Anglo-American
jurisdictions are accustomed to far more transparency . . . than are European, Latin American or especially some *62
Asian societies. [FN208] Differences may be quite substantial, from the duty of disclosure to confidentiality of
communications with a client.

The role of American attorneys in developing certain ethical standards in international commercial arbitration is
substantial. Americans, in particular, pushed for greater disclosure in the ICC arbitrations. The 1988 ICC Rules
introduced a requirement for a potential arbitrator to disclose relationships not only with the parties and other
arbitrators, but with the counsel to the parties as well. [FN209]

To balance the differences among ethical rules, the International Bar Association in 1986 adopted the Rules of
Ethics for International Arbitrators. [FN210]

The Rules reflect internationally acceptable guidelines developed by practicing lawyers from all continents.
[FN211] The main requirements of the Rules are impartiality, independence, competency, diligence, and
discreteness, [FN212] and they fit within both Continental and Anglo-American legal tradition. The Rules provide
for a greater level of disclosure than Continental arbitration, but, at the same time, they reject the judicial standard

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 14
19 Ohio St. J. on Disp. Resol. 35

of disclosure as it was pronounced in the 1968 U.S. Supreme Court decision Commonwealth Coatings Corp. v.
Cont'l Cas. Co. [FN213] Like the rules we discussed earlier, the IBA Rules of Ethics take the middle ground in an
effort to provide a harmonized approach to ethical problems in international commercial arbitration.

In fact, ethical rules is the area of international commercial arbitration that has been most harmonized. [FN214]
The IBA Rules of Ethics, provisions in national arbitration laws governing ethical obligations, and articles in *63
institutional and other arbitration rules concerning the ethics of arbitrators all correspond to each other.

For example, the duty of disclosure, a core ethical requirement for international arbitrators, is provided for in the
IBA Rules of Ethics (A prospective arbitrator should disclose all facts or circumstances that may give rise to
justifiable doubts as to his impartiality or independence); [FN215] in the UNCITRAL Model Law on International
Commercial Arbitration ([A]n arbitrator . . . shall disclose any circumstances likely to give rise to justifiable doubts
as to his impartiality or independence.); [FN216] in the ICC Rules of Arbitration ([A] prospective arbitrator shall
sign a statement of independence and disclose in writing . . . any facts or circumstances which might be of such
nature as to call into question the arbitrator's independence in the eyes of the parties.); [FN217] and in the recently
adopted UNCITRAL Model Law on International Commercial Conciliation ([A] conciliator . . . shall disclose any
circumstances likely to give rise to justifiable doubts as to his or her impartiality or independence.). [FN218] We,
therefore, already have a uniform structure of ethical rules around the world. [FN219]

C. Harmonization of Arbitration Legislation: The UNCITRAL Model Law on International Commercial Arbitration

Another major indicator of the harmonization movement in international commercial arbitration is the
widespread adoption of the UNCITRAL Model Law on International Commercial Arbitration (Model Law). Since
promulgation of this document in 1985, forty-four jurisdictions in the world have adopted the Model Law as their
national arbitration statute. [FN220] We find among them Canada (all provinces); New Zealand; India; several states
within the United States (including California, Connecticut, Florida and Texas), in short, representatives of the
Anglo-American tradition; and civil law countries like Germany, Mexico and Russia. In a number of other countries
which have chosen not to adopt the Model Law directly, the influence of the Model Law on their recently adopted
arbitration statutes is *64 nevertheless quite obvious. [FN221] Among those countries are such major arbitration
centers as England and Sweden. [FN222]

The UNCITRAL Model Law was prepared by a Working Group representing all thirty-six countries-members
of the UNCITRAL. [FN223] The Model Law was intended to represent a sort of international consensus [FN224]
as to regulation and conduct of international commercial arbitration. Major arbitration institutions also had a chance
to have their say during the work on the draft of the Model Law. [FN225] The goal was to offer a ready-made
package designed for adoption or adaptation to international commercial arbitration anywhere in the world.
[FN226] The record of the adoption of the Model Law clearly demonstrates that this goal has been reached.

The Model Law establish[es] a universal procedural format for the arbitral trial [FN227] while eliminating the
extremes of both Continental and Anglo-American legal traditions. It has even been noticed that by accepting the
Model Law, a number of common law jurisdictions used it as a tool to get away from their origins in this field.
[FN228] For this reason, we will not find in the Model Law strict rules regarding procedure, such as discovery,
cross-examination, or documentary evidence. Instead, the Model Law provides for flexibility of proceedings which
the parties or arbitrators can adjust to the needs of a particular dispute.

International arbitration law does not exist-there are only national arbitration laws. It is only through
developments in national laws that the *65 approaches to international arbitration [began] to converge. [FN229]
The success of the Model Law demonstrates the effectiveness of this approach, and the Model Law will continue to
greatly impact the future of international arbitration throughout the world [FN230] as a factor contributing to . . .
harmonization and convergence. [FN231]

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 15
19 Ohio St. J. on Disp. Resol. 35

D. The 1958 New York Convention

Any discussion of harmonization of arbitration laws would be incomplete without noting the role played in this
process by the 1958 United Nations Conventions on the Recognition and Enforcement of Foreign Arbitral Awards
(New York Convention), which to date, has been ratified by 133 countries. [FN232] It is perhaps the most effective
instance of international legislation in the entire history of commercial law. [FN233]

The role of the New York Convention in bringing about the uniform standard for the practice of international
arbitration [FN234] and the transformation of the judges' initial attitude towards arbitrators from one of
confrontation to one of cooperation [FN235] cannot be overestimated. The requirements of the New York
Convention, including the ones applicable to arbitration agreements and recognition and enforcement of foreign
arbitral awards, directly or indirectly, now constitute an indispensable part of arbitration law in all of the countries
that ratified it. [FN236]

This is particularly visible in the national laws based on the UNCITRAL Model Law, the text of which almost
literally repeats a number of provisions *66 in the New York Convention. [FN237] The growing number of
adoptions and adaptations of the Model Law leads to increasing predictability and uniformity in the application of
the New York Convention-the core document of the entire modern system of international commercial arbitration.
Hundreds of judicial decisions from all over the world, applying the New York Convention, also contribute to the
harmonizing effect of the Convention. [FN238] [A]ny national judge can consult [the International Council for
Commercial Arbitration's Yearbook on Arbitration] on how his colleagues apply the same treaty in other countries . .
. . The jurisprudence arising from the application of the New York Convention in local tribunals has unified the
interpretation of its different criteria. [FN239] In the words of such an authoritative writer as Pieter Sanders, We
are approaching a global system of arbitration. The main driving forces behind this development are the N[ew] Y
[ork] C[onvention] 1958 and the Model Law of UNCITRAL. [FN240]

III. Conclusion

There is a strong influence of the American legal tradition on international commercial arbitration. More and
more parties from the United States take part in international arbitration proceedings. There are more and more
American lawyers active in the arbitration field. The use of American trial techniques and procedures in
international arbitration is widespread. Nevertheless, international commercial arbitration has not become
Americanized; nor has it become Civilized. Arbitration is opting for the middle ground and tends to encompass
the best of both legal traditions.

In order to be an effective mechanism for resolving international economic disputes, arbitration cannot be
dominated by any particular legal tradition. Arbitration must maintain its flexibility and adaptability to the needs of
parties from various countries of the world.

There are, and always will be, disputes in which parties lean towards one or the other legal tradition. It can be
attributed to the parties' and their attorneys' backgrounds, the bargaining power of one of the parties, the
composition of the arbitral tribunal, or some other factors. Strong American influence, as well as strong Continental
influence, on arbitration will continue. Thanks to both of them, as well as other influences, arbitration is *67
moving ahead because positive development normally does not occur without struggle.

The transnational character of arbitration is one of its principal advantages in comparison to litigation before
national courts. If arbitration turns into U.S.-style off-shore litigation, the incentive to arbitrate international
disputes will diminish or even go away. In this increasingly globalized world, it is the international, not national,
approach that eventually wins.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 16
19 Ohio St. J. on Disp. Resol. 35

[FNa1]. Elena V. Helmer is an attorney in Columbus, Ohio and has taught international commercial arbitration at
the University of Michigan Law School and in St. Petersburg, Russia. LL.M, Yale Law School; J.D. with honors,
Kazakh State University Law School.

[FN1]. See Nicolas C. Ulmer, A Comment on The Americanization of International Arbitration?, 16 Mealey's
Int'l Arb. Rep. 24, 24 (2001).

[FN2]. Bernardo M. Cremades, Overcoming the Clash of Legal Cultures: The Role of Interactive Arbitration, 14
Arb. Int'l 157, 158 (1998).

[FN3]. See, e.g., Yves Dezalay & Bryant G. Garth, Dealing in Virtue: International Commercial Arbitration and
the Construction of a Transnational Legal Order 54-55 (1996).

[FN4]. Ulmer, supra note 1, at 24; see Pierre Lalive, The Internationalisation of International Arbitration: Some
Observations, in The Internationalisation of International Arbitration: The LCIA Centenary Conference 49, 54
(Martin Hunter et al. eds., 1993) [hereinafter The Internationalisation of International Arbitration].

[FN5]. Dezalay & Garth, supra note 3, at 53.

[FN6]. Ulmer, supra note 1, at 24.

[FN7]. See Lucy Reed & Jonathan Sutcliffe, The Americanization of International Arbitration?, 16 Mealey's
Int'l Arb. Rep. 37, 37 (2001).

[FN8]. See Delissa A. Ridgway, International Arbitration: The Next Growth Industry, Disp. Resol. J., Feb. 1999,
at 50, 51.

[FN9]. Edward R. Leahy & Carlos J. Bianchi, The Changing Face of International Arbitration, J. Int'l Arb., Aug.
2000, at 19, 51.

[FN10]. Lawrence W. Newman, International Arbitration-Unfinished Business, N.Y.L.J., Apr. 3, 2001, at 3; see
Dezalay & Garth, supra note 3, at 57-58 (discussing judicialization of arbitration). See generally International
Arbitration in the 21st Century: Towards Judicialization and Uniformity? (Richard B. Lillich & Charles N.
Brower eds., 1993) [hereinafter International Arbitration in the 21st Century].

[FN11]. See Lalive, supra note 4, at 54.

[FN12]. Leahy & Bianchi, supra note 9, at 51.

[FN13]. Id.

[FN14]. Arthur W. Rovine, Fast-Track Arbitration: A Step Away From Judicialization of International
Arbitration, in International Arbitration in the 21st Century, supra note 10, at 46.

[FN15]. Dezalay & Garth, supra note 3, at 53.

[FN16]. Lalive, supra note 4, at 54.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 17
19 Ohio St. J. on Disp. Resol. 35

[FN17]. See Siegfried H. Elsing & John M. Townsend, Bridging the Common Law-Civil Law Divide in
International Arbitration, 18 Arb. Int'l 59, 59 (2002).

[FN18]. See, e.g., Reed & Sutcliffe, supra note 7; Elsing & Townsend, supra note 17; Dr. Julian D.M. Lew &
Laurence Shore, International Commercial Arbitration Harmonizing Cultural Differences, Disp. Resol. J.,
August 1999, at 33; Efficient Organization of International Arbitrations, 8 World Arb. & Mediation Rep. 82
(1997).

[FN19]. See, e.g., D. Brian King & Lise Bosman, Rethinking Discovery in International Arbitration: Beyond the
Common Law/Civil Law Divide, ICC Int'l Ct. Arb. Bull., Spring 2001, at 24, 25; Efficient Organization of
International Arbitrations, supra note 18, at 87-88.

[FN20]. Cremades, supra note 2, at 159-60.

[FN21]. Hans Smit, The Future of International Commercial Arbitration: A Single Transnational Institution?, 25
Colum. J. Transnat'l L. 9, 9 (1986); see Fabien Gelinas, Arbitration and the Challenge of Globalization, J. Int'l
Arb., Aug. 2000, at 117, 117.

[FN22]. Peter Gottwald, International Arbitration: Current Positions and Comparative Trends, 6 Rivista dell'
Arbitrato 211, 211 (1996).

[FN23]. See Lalive, supra note 4, at 52-54 (expressing concern over the proliferation of arbitration centers that
have mushroomed throughout the world; Gelinas, supra note 21, at 118.

[FN24]. W. Laurence Craig et al., The International Chamber of Commerce Arbitration 2 (3rd ed. 2000).

[FN25]. See 2002 Statistical Report, ICC Int'l Ct. Arb. Bull., Spring 2003, at 7, available at
http://www.iccwbo.org/court/english/right_topics/stat_ 2002.asp.

[FN26]. See 1997 Statistical Report, ICC Int'l Ct. Arb. Bull., Spring 1998, at 6.

[FN27]. Press Release, International Centre for Dispute Resolution (ICDR), ICDR Becomes World's Largest
International Commercial Arbitral Institution 1 (May 16, 2002), at http://
www.adr.org/upload/LIVESITE/focusArea/ international/ICDRPR_pdfpdf.

[FN28]. LCIA Director-General's Review of 2002 (on file with author).

[FN29]. See, e.g., Gelinas, supra note 21, at 117; Alan Scott Rau & Edward F. Sherman, Tradition and Innovation in
International Arbitration Procedure, 30 Tex. Int'l L.J. 89, 94 (1995). T]he number of nonadministered
arbitrations has been on the rise since the adoption of the UNCITRAL Arbitration Rules in 1976.Id.

[FN30]. See Gelinas, supra note 21, at 118; Stephen Gallagher, Developments, Challenges, and Trends in
International Arbitration and ADR: What Does the Future Hold?, Presentation at the ABA 2002 Annual Meeting
(Aug. 12, 2002).

[FN31]. See Gelinas, supra note 21, at 118.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 18
19 Ohio St. J. on Disp. Resol. 35

[FN32]. Id.

[FN33]. See W. Laurence Craig, Some Trends and Developments in the Laws and Practice of International
Commercial Arbitration, 30 Tex. Int'l L.J. 1, 2 (1995) (citing Pierre Lalive, Transnational (or Truly International)
Public Policy and International Arbitration, in Comparative Arbitration Practice and Public Policy in Arbitration
257, 293 (Pieter Sanders ed., 1987)).

[FN34]. It is possible to have an international arbitration between companies from the same country. In the United
States, under the Federal Arbitration Act (FAA), a relationship which is entirely between citizens of the United
States may nevertheless fall under the New York Convention if it involves property located abroad, envisages
performance or enforcement abroad, or has some other reasonable relation with one or more foreign states. 9
U.S.C. 202 (2000); see, e.g., Fuller Co. v. Compagnie Des Bauxites De Guinee, 421 F. Supp. 938, 944 (W.D. Pa.
1976) (upholding application of the New York Convention to a dispute between a Pennsylvania company and a
Delaware company, as their contract had a reasonable relationship with Guinea and Switzerland, foreign
countries); Lander Co. v. MMP Invs., Inc., 107 F.3d 476 (7th Cir. 1997) (upholding application of the New York
Convention to an arbitral award made in the United States as between two domestic corporations but involving a
contract for the sale of consumer products in Poland).

[FN35]. 2002 Statistical Report, supra note 25, at 8.

[FN36]. ICDR, supra note 27, at 1.

[FN37]. LCIA Director-General's Review of 2002, supra note 28.

[FN38]. SCC Institute Annual Report (2002) (on file with author).

[FN39]. Gelinas, supra note 21, at 118.

[FN40]. David Rivkin, Developments, Challenges, and Trends in International Arbitration and ADR: What Does the
Future Hold?, Presentation at the ABA 2002 Annual Meeting, (Aug. 12, 2002).

[FN41]. Dezalay & Garth, supra note 3, at 52. The authors connect the entry of American law firms into the
European world of international arbitration with the first great arbitrations tied to the construction of large factories
in the oil-producing countries and the work of the Iran-United States Claims Tribunal. Id. According to the authors,
by the early 1980s all the major [law] firms had decided to get into this field (international commercial
arbitration). Id. at 104.

[FN42]. This phenomenon has been mentioned by Stephen Gallagher. Gallagher, supra note 30.

[FN43]. See Dezalay & Garth, supra note 3, at 47. Many new users are bound to nominate arbitrators-and a fortiori
lawyers-from their own legal settings. Id. This trend has also been mentioned by Stephen Gallagher. Gallagher,
supra note 30.

[FN44]. Newman, supra note 10, at 6 ([A]s international arbitration becomes more widespread . . . law firms not
theretofore practicing in the arbitration area become more active in the field.).

[FN45]. Dezalay & Garth, supra note 3, at 37-38, 55.

[FN46]. Id. at 44.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 19
19 Ohio St. J. on Disp. Resol. 35

[FN47]. See id. at 66, 66 n.3, 108. While the arbitration took place in Paris, the leading lawyers were litigators from
midtown Manhattan. Id. at 108.

[FN48]. Martha Neil, Small World, Big Business, A.B.A. J., Sept. 2002, at 28, 28.

[FN49]. See Smit, supra note 21, at 13.

[FN50]. ICDR, supra note 27, at 1.

[FN51]. Id.

[FN52]. Craig et al., supra note 24, at 3.

[FN53]. Dezalay & Garth, supra note 3, at 160; see id. at 152.

[FN54]. ICSID arbitrations, which usually take place in Washington, D.C., and NAFTA arbitrations are beyond the
scope of this Article due to the unique arbitration regimes of the ICSID and NAFTA, which combine public and
private international law features.

[FN55]. Dezalay & Garth, supra note 3, at 160.

[FN56]. Id.

[FN57]. AAA Opens First European Center, J. Disp. Resol., June 2001, at 6, 6.

[FN58]. James H. Carter, The International Commercial Arbitration Explosion: More Rules, More Laws, More
Books, So What?, 15 Mich. J. Int'l L. 785, 793 (1994) (footnotes omitted) (reviewing Isaak I. Dore, The
UNCITRAL Framework for Arbitration in Contemporary Perspective (1993)).

[FN59]. Craig, supra note 33, at 13.

[FN60]. 9 U.S.C. 1-16 (2000).

[FN61]. Rau & Sherman, supra note 29, at 90 n.3.

[FN62]. See Newman, supra note 10, at 3.

[FN63]. Included among these states are California, Colorado, Florida, Georgia, Ohio, and Texas, as well as others.

[FN64]. Dore, supra note 58, at 134.

[FN65]. Ridgway, supra note 8, at 51.

[FN66]. Lorraine Brennan, Developments, Challenges, and Trends in International Arbitration and ADR: What Does
the Future Hold?, Presentation at the ABA 2002 Annual Meeting (Aug. 12, 2002).

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 20
19 Ohio St. J. on Disp. Resol. 35

[FN67]. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995).

[FN68]. See Craig, supra note 33, at 12-13 (discussing the many sides of neutrality in international arbitration).

[FN69]. See Dr. Christian Borris, The Reconciliation of Conflicts Between Common Law and Civil Law Principles
in the Arbitration Process, in Conflicting Legal Cultures in Commercial Arbitration: Old Issues and New Trends
2-3 (Stefan N. Frommel & Barry A.K. Rider eds., 1999).

[FN70]. See Craig, supra note 33, at 13.

[FN71]. Brennan, supra note 66.

[FN72]. See Carter, supra note 58, at 795-96.

[FN73]. Laurence Craig notes that the United States is becoming more acceptable as a site for international
arbitrations than it used to be, particularly for disputes involving Asian parties. See Craig, supra note 33, at 56.

[FN74]. Carter, supra note 58, at 794.

[FN75]. See Dezalay & Garth, supra note 3, at 127.

[FN76]. See id. at 31.

[FN77]. Id. at 52.

[FN78]. Id. at 55.

[FN79]. Rau & Sherman, supra note 29, at 91 n.7.

[FN80]. See Smit, supra note 21, at 11.

[FN81]. See Dezalay & Garth, supra note 3, at 53.

[FN82]. See, e.g., Lalive, supra note 4, at 52 (criticizing the lack of international and comparative outlook of too
many practitioners, who merely transpose into international arbitration proceedings their traditional national recipes
and the aggressive tactics which they use in their own courts).

[FN83]. Id. at 54.

[FN84]. Id.

[FN85]. See Dezalay & Garth, supra note 3, at 42.

[FN86]. Gallagher, supra note 30.

[FN87]. Dezalay & Garth, supra note 3, at 55.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 21
19 Ohio St. J. on Disp. Resol. 35

[FN88]. Id.

[FN89]. Rau & Sherman, supra note 29, at 95 (quoting Dominic Egan, Splendid Isolation, Legal Bus., May 1994, at
67, 67).

[FN90]. Ulmer, supra note 1, at 24.

[FN91]. Id. at 25.

[FN92]. Leahy & Bianchi, supra note 9, at 60. Asian states have taught Western regimes the importance of
conciliation. Id.

[FN93]. Gelinas, supra note 21, at 120; see Martin Hunter, International Commercial Dispute Resolution: The
Challenge of the Twenty-First Century, 16 Arb. Int'l 379, 383 (2000).

[FN94]. ICC ADR R., at http://www.iccwbo.org/drs/english/adr/pdf_ documents/adr_rules.pdf (in force as from July
1, 2001); AAA Int'l Mediation R., at http://www.adr.org/index2.1.jsp?JSPssid=15747 (amended and effective July 1,
2003); LCIA Mediation P., at http://www.lcia-arbitration.com/med/index.htm (effective June 24, 2002); R.
Mediation Stockholm Mediation Inst., at http://www.sccinstitute.com/_upload/shared_ files/regler/mediation.pdf (in
force as of Apr. 1, 1999).

[FN95]. Gallagher, supra note 30.

[FN96]. Brennan, supra note 66.

[FN97]. See Lalive, supra note 4, at 54.

[FN98]. It would be a paradox . . . if Americans were to export into international arbitration the very procedural
excesses that have driven U.S. companies into the arms of domestic ADR. Ridgway, supra note 8, at 51; see also
Hunter, supra note 93, at 385. In the USA the low esteem in which the public holds contingency fee plaintiff
attorneys' has driven businessmen into the arms of the thriving ADR industry. Id.

[FN99]. Marc Blessing, Globalization (and Harmonization?) of Arbitration, J. Int'l Arb., Mar. 1992, at 79, 82; Lew
& Shore, supra note 18, at 34.

[FN100]. Reed & Sutcliffe, supra note 7, at 37.

[FN101]. Elsing & Townsend, supra note 17, at 59.

[FN102]. Efficient Organization of International Arbitrations, supra note 18, at 88 (Professor Hans Smit of
Columbia . . . has emphasized that international arbitral tribunals have evolved a system that's neither civil law nor
common law, but a hybrid that is drawn on both systems.).

[FN103]. Such was also the unanimous opinion of the nine-member panel of distinguished arbitration practitioners,
which included such an authority as Judge Howard M. Holtzmann, at the ABA Conference, Dispute Resolution by
the Rules: Opportunities in Mediation and Arbitration, Washington, D.C. (Sept. 12, 2003).

[FN104]. Reed & Sutcliffe, supra note 7, at 37.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 22
19 Ohio St. J. on Disp. Resol. 35

[FN105]. Cremades, supra note 2, at 157.

[FN106]. See Elsing & Townsend, supra note 17; Reed & Sutcliffe, supra note 7; King & Bosman, supra note 19, at
24; Lew & Shore, supra note 18, at 33; Efficient Organization of International Arbitrations, supra note 18; Rau &
Sherman, supra note 29.

[FN107]. King & Bosman, supra note 19, at 25.

[FN108]. Id. at 27; see, e.g., Reed & Sutcliffe, supra note 7, at 38-43.

[FN109]. King & Bosman, supra note 19, at 31.

[FN110]. Elsing & Townsend, supra note 17, at 61.

[FN111]. Rau & Sherman, supra note 29, at 103.

[FN112]. IBA R. Taking Evid. Int'l Com. Arb., at http:// www.ibanet.org/pdf/rules-of-evid-2.pdf (adopted June 1,
1999) [hereinafter IBA R. Evid.].

[FN113]. Id. art. 3.1.

[FN114]. Id. art. 3.2.

[FN115]. Id. art. 3.3

[FN116]. Fed. R. Civ. P. 26.

[FN117]. Reed & Sutcliffe, supra note 7, at 40.

[FN118]. See Rau & Sherman, supra note 29, at 103.

[FN119]. See generally Efficient Organization of International Arbitrations, supra note 18, at 84. For Anglo-
Americans, a hearing is not only the main event, it is the only event that matters. Statements made about the case
and documents presented preliminarily have to be presented and offered in evidence at the hearing . . . . [F]or
Americans, what trials are about, to a great extent, is cross-examination. Id.

[FN120]. Elsing & Townsend, supra note 17, at 62.

[FN121]. Howard M. Holtzmann, Balancing the Need for Certainty and Flexibility in International Arbitration
Procedures, in International Arbitration in the 21st Century, supra note 10, at 7.

[FN122]. Efficient Organization of International Arbitrations, supra note 18, at 83-84.

[FN123]. IBA R. Evid., supra note 111, art. 8.1.

[FN124]. Rau & Sherman, supra note 29, at 97.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 23
19 Ohio St. J. on Disp. Resol. 35

[FN125]. Lew & Shore, supra note 18, at 35.

[FN126]. Fed. R. Civ. P. 8(a).

[FN127]. Elsing & Townsend, supra note 17, at 60.

[FN128]. Id. at 63; e.g., Reed & Sutcliffe, supra note 7, at 41.

[FN129]. Elsing & Townsend, supra note 17, at 64.

[FN130]. Reed & Sutcliffe, supra note 7, at 44.

[FN131]. Peter R. Griffin, Recent Trends in the Conduct of International Arbitration: Discovery Procedures and
Witness Hearings, J. Int'l Arb., Apr. 2000, at 19, 26; e.g. Andreas F. Lowenfeld, The Two-Way Mirror: International
Arbitration as Comparative Procedure, in Mich. Y.B. Int'l Legal Stud. 176-77 (1985).

[FN132]. Elsing & Townsend, supra note 17, at 63.

[FN133]. Id.; see also IBA R. Evid., supra note 112, arts. 4.4 to 4.6.

[FN134]. Rene David, Arbitration in International Trade 296 (1985).

[FN135]. See Lew & Shore, supra note 18, at 35; Reed & Sutcliffe, supra note 7, at 41.

[FN136]. Griffin, supra note 131, at 28.

[FN137]. Id.

[FN138]. David, supra note 134, at 296.

[FN139]. See Wolfgang Peter, Witness Conferencing, 18 Arb. Int'l 47, 48 (2002).

[FN140]. IBA R. Evid., supra note 112, art. 8.2.

[FN141]. Id. art. 4.2.

[FN142]. Id. art. 9.1.

[FN143]. Rau & Sherman, supra note 29, at 92.

[FN144]. Efficient Organization of International Arbitrations, supra note 18, at 86.

[FN145]. Elsing & Townsend, supra note 17, at 63-64.

[FN146]. See IBA R. Evid., supra note 112, arts. 5-6.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 24
19 Ohio St. J. on Disp. Resol. 35

[FN147]. Elsing & Townsend, supra note 17, at 64.

[FN148]. Id.; IBA R. Evid., supra note 112, art. 6.6.

[FN149]. IBA R. Evid., supra note 112, art. 5.3.

[FN150]. Lalive, supra note 4, at 56.

[FN151]. AAA Com. Arb. R. & Mediation Proc. art. 30, at http:// www.adr.org/index2.1.jsp?JSPssid=15747
(amended and effective July 1, 2003).

[FN152]. ICC R. Arb. Art. 20. 1, at http:// www.iccwbo.org/court/English/arbitration/rules.asp (effective Jan. 1,


1998).

[FN153]. Id. art. 20.5.

[FN154]. AAA Int'l Arb. R., at http://www.adr.org/index2.1.jsp? JSPssid=15747 (as amended and effective July 1,
2003).

[FN155]. Rau & Sherman, supra note 29, at 91 n.6.

[FN156]. AAA Int'l Arb. R., supra note 154, art. 16.1.

[FN157]. Id. art. 20.5.

[FN158]. Id. art. 22.1.

[FN159]. Id. art. 19.1.

[FN160]. Id. art. 19.3.

[FN161]. LCIA Arb. R., at http://www.lcia-arbitration.com/arb/ (effective Jan. 1, 1998).

[FN162]. Id. art. 22.1(e).

[FN163]. Id. art. 22.1.

[FN164]. Id. art. 14.2.

[FN165]. Id. art. 20.3.

[FN166]. Id. art. 21.

[FN167]. Id. art. 20.5.

[FN168]. Christopher R. Drahozal, Commercial Norms, Commercial Codes, and International Commercial
Arbitration, 33 Vand. J. Transnat'l L. 79, 101 (2000) (citing Howard M. Holtzmann, Balancing the Need for

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 25
19 Ohio St. J. on Disp. Resol. 35

Certainty and Flexibility in International Arbitration Procedures, in International Arbitration in the 21st Century,
supra note 10, at 3, 7 n.10). AAA International Rules have undergone searching scrutiny by international
arbitrators, practitioners and arbitration administrators to ensure that they embody provisions which contemporary
practice calls for and with which both American and foreign attorneys are comfortable. Drahozal, supra, at 101
(quoting Michael F. Hoellering, How to Draft an AAA Arbitration Clause for International Business, Arb. J., Mar.
1992, at 45).

[FN169]. Karl-Heinz Bockstiegel, The Internationalisation of International Arbitration: Looking Ahead to the Next
Ten Years, in The Internationalisation of International Arbitration, supra note 4, at 78.

[FN170]. UNCITRAL Arb. R., at http://www.uncitral.org/en-index.htm (adopted Dec. 15, 1976).

[FN171]. Carter, supra note 58, at 787.

[FN172]. Alan Uzelac, UNCITRAL Notes on Organizing Arbitral Proceedings: A Regional View, 4 Croat. Arb. Y.B.
135, 136 (1997).

[FN173]. Rau & Sherman, supra note 29, at 94.

[FN174]. It is outside the purpose of this Article to discuss the many innovations of the UNCITRAL Rules. For
general information on these Rules, see Pieter Sanders, Commentary on the UNCITRAL Arbitration Rules, 2 Y.B.
Com. Arb. 172 (1977).

[FN175]. UNCITRAL Arb. R., supra note 170, art. 15.1.

[FN176]. Id.

[FN177]. Id. art. 24.3.

[FN178]. Id. art. 25.5.

[FN179]. Id. art. 27.1.

[FN180]. Id. art. 25.4.

[FN181]. Compare id. art. 21, with AAA Int'l Arb. R., supra note 154, art. 15; UNCITRAL Arb. R., supra note 170,
arts. 24-30, with AAA Int'l Arb. R., supra note 154, arts. 19-25.

[FN182]. See Howard M. Holtzmann, Balancing the Need for Certainty and Flexibility in International Arbitration
Procedures, in International Arbitration in the 21st Century, supra note 10, at 7; Carter, supra note 58, at 791;
Gottwald, supra note 22, at 212-13; Uzelac, supra note 172, at 136.

[FN183]. Charles N. Brower & Jason D. Brueschke, The Iran-United States Claims Tribunal 12 (1998).

[FN184]. Carter, supra note 58, at 790.

[FN185]. Pieter Sanders, Quo Vadis Arbitration? 13 (1999).

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 26
19 Ohio St. J. on Disp. Resol. 35

[FN186]. Brower & Brueschke, supra note 183, at 20.

[FN187]. Sanders, supra note 185, at 14.

[FN188]. Holtzmann, supra note 182, at 16.

[FN189]. See generally IBA R. Evid., supra note 112.

[FN190]. See supra Part II.A.1.

[FN191]. Leahy & Bianchi, supra note 9, at 28.

[FN192]. Uzelac, supra note 172, at 140.

[FN193]. Efficient Organization of International Arbitrations, supra note 18, at 86.

[FN194]. See Holtzmann, supra note 182, at 19.

[FN195]. Efficient Organization of International Arbitrations, supra note 18, at 87.

[FN196]. Fed. R. Civ. P. 16; Uzelac, supra note 172, at 140.

[FN197]. Uzelac, supra note 172, at 141.

[FN198]. AAA Int'l Arb. R., supra note 154, art. 16.2.

[FN199]. ICSID R. P. Arb. Proc. 20, at http:// www.worldbank.org/icsid/basicdoc-archive/63.htm (Jan. 1985).

[FN200]. The ICC Terms of Reference might serve as an approximate of a prehearing conference. E.g., Holtzmann,
supra note 182, at 18; see ICC R. Arb., supra note 152, art. 18.

[FN201]. See Holtzmann, supra note 182, at 17-18.

[FN202]. See Uzelac, supra note 172, at 142-44.

[FN203]. Id. at 144.

[FN204]. See UNCITRAL Notes on Organizing Arbitral Proceedings, at http:// www.uncitral.org/en-index.htm


(finalized June 14, 1996).

[FN205]. Id.

[FN206]. See Holtzmann, supra note 182, at 18.

[FN207]. Uzelac, supra note 172, at 154.

[FN208]. Ambassador Malcolm Wilkey, The Practicalities of Cross-Cultural Arbitration, in 4 Conflicting Legal

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 27
19 Ohio St. J. on Disp. Resol. 35

Cultures in Commercial Arbitration: Old Issues and New Trends 79, 88 (Stefan N. Frommel & Barry A.K. Rider
eds., 1999).

[FN209]. 1988 ICC R. Arb. art. 2.7, in W. Michael Reisman et al., International Commercial Arbitration: Cases,
Materials and Notes on the Resolution of International Business Disputes 453-54 (1997); see also Dezalay &
Garth, supra note 3, at 48-49.

[FN210]. For the text of the Rules, see Tibor S. Varady et al., International Commercial Arbitration: A
Transnational Perspective 298-02 (2d ed. 2003).

[FN211]. IBA R. Ethics, supra note 209, Introductory Note.

[FN212]. Id. arts. 3.1, 2.2, 7, 9.

[FN213]. Commonwealth Coatings Corp. v. Cont'l Cas. Co., 393 U.S. 145, 150 (1968).

[FN214]. Howard M. Holtzmann, Harmonizing the Law of International Dispute Resolution: Practice, Trends and
Theory, Remarks at the ABA Conference International Dispute Resolution by the Rules: Opportunities in Mediation
and Arbitration, Washington, D.C. (Sept. 12, 2003).

[FN215]. IBA R. Ethics, supra note 209, art. 4.1.

[FN216]. UNCITRAL Model Law on Int'l Com. Arb. art. 12.1, at http:// www.uncitral.org/en-index.htm (adopted
June 21, 1985).

[FN217]. ICC R. Arb., supra note 152, art. 7.2.

[FN218]. UNCITRAL Model Law on Int'l Com. Conciliation art. 5.5, at http:// www.uncitral.org/en-index.htm
(adopted on June 24, 2002).

[FN219]. Holtzmann, supra note 214.

[FN220]. For the text and status of the adoption of the UNCITRAL Model Law, see UNCITRAL Model Law on Int'l
Com. Arb., supra note 216.

[FN221]. Craig, supra note 33, at 27; J. Gillis Wetter, The Internationalization of International Arbitration, 11 Arb.
Int'l 117, 121 (1995).

[FN222]. Although England did not adopt the Model Law of UNCITRAL, many provisions of the [1996
Arbitration] Act show that the legislator has taken the Model Law into account. Sanders, supra note 185, at 31.

[FN223]. Howard M. Holtzmann & Joseph E. Neuhaus, A Guide to the UNCITRAL Model Law on International
Commercial Arbitration: Legislative History and Commentary 12-13 (1989).

[FN224]. Carter, supra note 58, at 788.

[FN225]. See Craig, supra note 33, at 25; Holtzmann & Neuhaus, supra note 222, at 9.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


19 OHSJDR 35 Page 28
19 Ohio St. J. on Disp. Resol. 35

[FN226]. The Rt. Hon. Lord Justice Kerr, Commercial Dispute Resolution: The Changing Scene, in Liber
Amicorum for the Rt. Hon. Lord Wilberforce, PC, CMG, OBE, QC 129 (Dr. Maarten Bos & Ian Brownlie eds.,
1987).

[FN227]. Thomas E. Carbonneau, National Law and the Judicialization of Arbitration: Manifest Destiny, Manifest
Disregard, or Manifest Error, in International Arbitration in the 21st Century, supra note 10, at 123.

[FN228]. Allan Philip, A Century of Internationalization of International Arbitration: An Overview, in The


Internationalisation of International Arbitration, supra note 4, at 29.

[FN229]. Craig, supra note 33, at 58.

[FN230]. Id. at 35.

[FN231]. Id. at 58.

[FN232]. For the text and the status of the New York Convention, see Convention on the Recognition and
Enforcement of Foreign Arbitral Awards, at http://www.uncitral.org/en-index.htm (in force as from June 7, 1959).

[FN233]. Michael John Mustill, Arbitration: History and Background, J. Int'l Arb., June 1989, at 43, 49.

[FN234]. Cremades, supra note 2, at 170 n.28.

[FN235]. Id. at 170.

[FN236]. For example, the United States included the requirements of the New York Convention in the Federal
Arbitration Act. See 9 U.S.C. 201-208 (2000). In Russia, according to Article 15.4 of the 1993 Constitution,
international treaties constitute an integral part of [the Russian] legal system and do not require implementing
legislation after their ratification by the parliament. Russ. Const. art. 15, 4. The New York Convention, therefore,
is being applied by the Russian courts directly.

[FN237]. See New York Convention, supra note 232, art. 5; Model Law, supra note 216, arts. 34, 36.

[FN238]. Sanders, supra note 185, at 70-71.

[FN239]. Cremades, supra note 2, at 170-71.

[FN240]. Sanders, supra note 185, at 66.

19 Ohio St. J. on Disp. Resol. 35

END OF DOCUMENT

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


15 TRNATLAW 43 Page 1
15 Transnat'l Law. 43

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


15 TRNATLAW 43 Page 2
15 Transnat'l Law. 43

Transnational Lawyer
Winter 2002

Symposium: Transnational Business Law in the Twenty-First Century

*43 CURRENT ISSUES IN INTERNATIONAL ARBITRATION

Michael P. Malloy, Ph.D. [FNa1]

Copyright (c) 2001 Michael P. Malloy, Ph.D.

I. Introduction

Arbitration is now one of the most important methods of dispute resolution in international commerce.
[FN1] Thus, in order to operate effectively in the field of international business and trade, attorneys must
understand how international arbitration works. An effective and credible method of dispute resolution is an
important, indeed critical, element in the negotiation of any international commercial transaction. Therefore, the
parties to such a transaction will best serve their interests by arriving at a clear understanding of dispute resolution.

If one theme could accurately depict the unifying element of the current issues occupying international
arbitration theory and practice, that theme is this: international commercial arbitration is an important feature of
the globalization phenomenon. To phrase the theme another way, one might observe that the process of
international commercial arbitration has been affected by the increasingly globalized nature of international
commercial activity.

This theme was illustrated quite dramatically by an event reported in the Business Times of Singapore on 4 May
2000. [FN2] The World Intellectual Property Organization (WIPO) [FN3] announced that it was in the process of
establishing an online global dispute resolution mechanism in order to settle disputes between application service
providers (like Microsoft, Oracle and IBM) and their customers. The software application business is relatively new,
but industry analysts expect expansion to multi-billion U.S. dollar annual sales in the next few years. [FN4]

The WIPO program, which came online fully at the end of 2000, is the second program of this kind sponsored
by the UN agency. WIPO already runs an online arbitration service for disputes over internet addresses; and more
than three hundred cases were filed in the first few months that the program was operating.

*44 What is the significance of the WIPO programs to the theme that we are following? It can be found in the
reported comments of Traver Gruen-Kennedy, Chairman of the ASP Industry Consortium [FN5] that is working on
the new program with WIPO: Internet companies and ASPs have huge challenges because they can face lawsuits in
many countries . . . The idea is, instead of having your contract fall under local law, it would fall under international
law. [FN6] Similarly, Francis Gurry, Director of WIPO's Arbitration and Mediation Center, has observed that [t]he
challenge is to establish a framework of legal security in which electronic commerce and the ASP model can deliver
software throughout the world. [FN7]

In other words, effective dispute avoidance, management, and resolution have the potential to instill confidence
in the business relationship. To the extent that this framework of legal security [FN8] ameliorates the risks of
trans-border business, it may lead to more robust business relationships.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


15 TRNATLAW 43 Page 3
15 Transnat'l Law. 43

II. Identifying Some Current Issues

In these remarks, I shall first identify certain current issues relating to the theory and practice of international
arbitration, and then offer some extended discussion of two issues that implicate contract negotiation and
interpretation. The issues that seem particularly current in international arbitration today include the following:

A. Significant Revision of Most Major Sets of International Arbitration Rules

Since 1996, the major independent arbitral organizations, including the International Chamber of Commerce
(ICC), the London Court of International Arbitration (LCIA), and the American Arbitration Association (AAA),
have all redrafted their international arbitration rules. Increasingly, they are being joined by specialized
institutions like WIPO in fashioning specialized regimes for arbitration in specific industries. With these
widespread changes, the use of international commercial arbitration is likely to increase. It is important to
consider how these arbitral regimes compare with each other, and what effect the revised regimes will have on
uniformity and predictability in the settlement of international commercial disputes. [FN9]

*45 The changes are taking place primarily in rules governing administered arbitrations, that is, arbitrations
under rules established by an institution which will manage or supervise the arbitration--to a greater or lesser
extent, depending upon the institution. This practice is in contrast to ad hoc arbitration, where the individual parties
operate the arbitration under procedures fashioned by individual negotiation and agreement on programs, or by
adoption of an established set of arbitration rules by agreement of the parties. In selecting an established set of
rules for their ad hoc arbitration, the parties might choose, for example, the UNCITRAL Model Rules (which are
not administered), or the parties might choose the rules of an arbitral institution without also choosing to have their
arbitration administered by the arbitral institution.

As a result, the arbitration rules of institutions like the ICC, the AAA, and the LCIA, have an influence beyond
the arbitrations that they administer because their rules may be borrowed by ad hoc arbitrations. More broadly,
they serve as significant models and sources of inspiration for other arbitral institutions and for individual parties
seeking draft language for contractual clauses concerning arbitration.

Many of the revisions to the ICC, AAA and LCIA rules appear to be modest technical changes to operational
provisions. However, seen in context, these changes represent the effects of the increasing globalization of
commerce. As Christopher Drahozal has pointed out: competition among countries to serve as arbitral sites has
accelerated. Increasingly, countries are adopting specialized international arbitration statutes to replace . . .
previous statutes that [were] . . . designed principally for domestic arbitrations. [FN10]

So also with the revisions to the arbitration rules, competition among arbitration institutions for the growing
number of international commercial arbitrations has moved their respective technical details closer to conformity.
While differences still remain among these rules, the differences tend to relate to variances in fundamental
institutional policy. For example, there remain differences in the degree to which each institution may actively
supervise individual arbitrations under its rules, with the ICC International Court of Arbitration still taking the most
active role among the three major institutions.

*46 B. Subsidiarity and Supremacy in the Context of Delocalization of Arbitral Practice

Whether or not, in principle, the situs of arbitration should make a difference to the legal principles applied or
the procedure followed, as a practical matter, situs is often significant in this regard. As international arbitration
continues to gain in popularity as a commercial dispute resolution device, the utility of such localization principles
as lex loci arbitri need to be examined. Localized public policy defenses against arbitration may include, for

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


15 TRNATLAW 43 Page 4
15 Transnat'l Law. 43

example, European Union (EU) industrial competition policy, community environmental standards, community
energy policy, transport policy, employment and social policy, internal market and economic policies, and the like.
In fact, many European nations have adopted or are in the process of adopting arbitration laws that tend to favor a
de-localized, autonomous approach to arbitral proceedings, without regard to such localized policy defenses. What
effects will de-localized arbitration have on subsidiarity and supremacy? [FN11]

As with the confrontation between national laws and EU harmonization and competition policies, the primary
question confronting delocalized arbitration within the EU is whether there are EU policy objectives--such as
competition policy--that will preempt the desire of many EU member states to respect complete party autonomy in
international commercial arbitration. Facing similar policy questions, the U.S. Supreme Court has definitively
vindicated delocalized arbitration despite public policy arguments based on antitrust or securities regulatory policy.
[FN12] Whether the Commission or the European Court of Justice (ECJ) would be willing to embrace a similar
position is unclear. [FN13] Thus, the ECJ has held that a national court reviewing an arbitral award must determine
whether the award would also be consistent with EU policy. [FN14]

C. Cross-Cultural Difficulties in Arbitral Practice

Cross-cultural differences that may affect arbitral proceedings remain, for example, in such areas as
examination of witnesses; the active or passive role of the tribunal; use of written pleadings and oral submissions;
use of expert evidence; and, proof and application of foreign law and transnational commercial law.

*47 Further harmonization may be useful, and common law and civil law arbitral practitioners would benefit
from study of competing legal traditions. [FN15]

III. Contract Drafting Issues in Contemporary Practice

I turn now to two current concerns about contract drafting issues in contemporary practice. These are: (1) choice
of law issues in international arbitration agreements; and, (2) the incorporation of trade norms in commercial
contracts and the application of such norms in the arbitration of disputes arising under such contracts.

Contracting drafting involving international arbitration is an area where making broad generalizations is
difficult because, of course, the individual language and specific commercial context of each contract gives it a
particularized quality that is difficult to apply broadly to other contracts in other contexts. Nevertheless, certain
generally applicable principles can be identified, and these principles will be useful in construing and applying the
language of specific contracts.

First, arbitration is itself essentially consensual in nature. That is, parties are compelled to arbitration only to the
extent that they have bound themselves in contract to do so. This is the principle of party autonomy. Second, under
most legal systems, this consensual characteristic extends itself, among other things, to the realm of choice of law.
Third, in applying contract analysis to commercial undertakings that include an obligation to arbitrate disputes, we
analyze that obligation as if it were an entirely separate obligation, distinct from any other contractual obligations
between the parties. This third principle is usually referred to as the separability doctrine. One consequence that is
related to this doctrine, and which is articulated in arbitration rules themselves, [FN16] is the so-called Kompetenz-
Kompetenz doctrine. [FN17] That is, once a determination is made that parties have undertaken an obligation to
arbitrate, a national court should respect the exclusive authority of the arbitral panel to determine the extent of its
own jurisdiction, as well as the merits of any claims based on the underlying contract between the parties.

*48 These principles, at one level, seem straightforward and almost unremarkable. Yet much ambiguity and
controversy result from the interplay of these three concepts. If arbitration is fundamentally consensual in nature,
does this mean that the parties completely control the choice of law, even to the extent of dictating the essential

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


15 TRNATLAW 43 Page 5
15 Transnat'l Law. 43

public policy of how and when a court should refer them to arbitration? Can consensual party autonomy control the
exercise of Kompetenz by the arbitral process that the parties have chosen? Two areas of controversy may illustrate
ways in which these principles interact. These areas share a common theme: sometimes, the complexity or
uncertainty of contract drafting itself creates ambiguity about the choices that the parties have actually made. This
ambiguity may then call into question the appropriate way in which these three principles should be applied in a
particular case.

A. Choice of Law in International Arbitration Agreements

The first area of controversy, which has haunted U.S. jurisprudence and practice, is choice-of-law determination
in international arbitration agreements. Parties to international transactions often include a choice of law clause as
part of their arbitration agreement. Does the law chosen by the parties to an international contract govern the
procedural rules of arbitration, or is it limited to the substantive contract rights of the parties? Recent international
arbitral practice favors inclusion of an express choice of law clause that establishes the law governing the parties'
contractual agreement as a whole. However, when the parties interpret this arbitration agreement differently, resort
to judicial assistance may be necessary to resolve the pre-arbitration dispute. If the parties have chosen a specific
law to govern their contractual agreement, a court is usually required to respect that decision. Proper enforcement by
U.S. courts of parties' express choice of law clauses continues to be a difficult and unsettled area within commercial
arbitration law. Should the choice of law provision be applied to govern procedural questions (e.g. arbitrability),
or is it limited to the interpretation of the substantive rights of the parties under the contract?

In Mastrobuono v. Shearson Lehman Hutton, [FN18] the U.S. Supreme Court adopted an approach that upholds
the autonomous decision of the parties to incorporate specific rules of arbitration procedure through the express
choice of law clause. The test applied by the Court is whether that choice can be objectively demonstrated from the
language of the agreement. This objective test determines the proper scope of express choice of law clause.

The historical approach, pre- Mastrobuono, was that choice of law was as to substance, but that national law
(i.e., the lex fori) went to questions of arbitrability or validity of the arbitral agreement. Thus, U.S. law, embodied in
the Federal *49 Arbitration Act (FAA) [FN19] was generally interpreted as favoring arbitration, so that arguments of
non-arbitrability due to public policy limitations were usually rejected in favor of arbitration.

For example, assume a contract with a general choice of law clause and a general arbitration clause. In the
course of a dispute, an argument arises that under the law chosen, certain issues in dispute are nonarbitrable. The
historical position, relying on the separability doctrine, dictated that the arbitration clause had to be analyzed as an
agreement separate from the substantive agreement between the parties. In light of the FAA, the general arbitration
clause would be interpreted as binding and enforceable. The parties would be required to present their arguments
with respect to arbitrability of the specific dispute to the arbitral panel, not the court.

However, in its 1989 decision in Volt Information Sciences, Inc. v. Board of Trustees, [FN20] the U.S. Supreme
Court readjusted this analysis, giving emphasis to the consensual nature of arbitration. Thus, the principle of party
autonomy, rather than the separability doctrine, became the key to analysis. In light of party autonomy, the parties
were free to choose a body of applicable law that excluded certain issues from arbitration as a matter of public
policy. Applying that law as the applicable choice of law of the arbitration clause increased the likelihood that the
dispute might be viewed by the court as nonarbitrable, and the dispute would never reach arbitration.

Volt was received with much criticism by courts and scholars alike. [FN21] It appeared to underrate the
significance of the federal policy favoring arbitration of disputes, and it threatened the effectiveness and credibility
of accepted dispute resolution mechanisms in international transactions. [FN22] Some courts tried to limit the effect
of Volt by saying that the choice of law provision should explicitly indicate that an ouster of federal law was
intended.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


15 TRNATLAW 43 Page 6
15 Transnat'l Law. 43

The issue came to a head over the arbitrability of punitive damages claims. For example, while New York law
will allow punitive damages in court actions, it appears to exclude punitive damages in arbitration awards. Assume a
contract with a New York choice of law and a general arbitration clause. Can an arbitral panel award punitive
damages? Based on Volt, some courts answered no, because *50 New York law applies. Others said that the choice
of law was merely as to the substantive law of the contract, not as to arbitrability, and so federal law governed.

In Mastrobuono, the United States Supreme Court returned to the issue and attempted to reconcile the principle
of party autonomy and the separability doctrine. The parties' contract wishes remain important, but the separability
doctrine requires separate examination of the arbitration clause. Unless the parties clearly objectified their wishes to
exclude punitive damages, that issue should be sent to arbitration.

The underlying problem in all of this is the failure of parties in contract negotiations to recognize the possible
applicability of dpeage [FN23] to the post hoc interpretation of their contract. That is to say, in part because of the
separability doctrine, there are actually four choice of law issues in drafting the contract language. These are: (1)
choice of the substantive law applicable to the underlying contract--the typical subject of a choice of law clause; (2)
choice of law applicable to the separable arbitration agreement or clause; (3) choice of lex arbitri, the law governing
the conduct of the arbitral proceedings; and, (4) the logically distinct choice of the conflict of law rules to be used in
determining the first three choices. [FN24]

Maintaining these distinctions can have significant effects on the outcome of an arbitration. For example, in
Preliminary Award in ICC Case No. 5505 of 1987, [FN25] the agreement at issue had chosen Switzerland as the
situs of the arbitration, and it included a choice of law clause specifying English law. The arbitrators decided that
Swiss law had been chosen by the parties as the law governing the arbitral procedure, by virtue of the situs
provision, and that English law had been chosen as the law of the contract. Similarly, in Final Award in ICC Case
No. 5946 of 1990, [FN26] the parties had included a general choice of law provision that stated: This Agreement is
made in New York, New York, and shall be construed in accordance with the laws of New York. [FN27]

In the course of arbitration, the respondent claimed punitive (or exemplary damages) for the extra-arbitral
conduct of the claimant, damages that it alleged would be permitted under the governing New York law. The
arbitrator refused to allow exemplary damages because these were not permitted as a matter of public policy in the
country that was the situs of arbitration. In addition, the arbitrator gratuitously asserted that, even if situs law had
allowed exemplary damages, in *51 his view, respondent had not proven that New York law would have allowed
such damages. Thus, while the parties had agreed upon a general choice of law, they had apparently not considered
the possibility that this choice did not resolve the more specialized choice of law issue concerning the law governing
the arbitration itself.

In this regard, where the resulting language of the contract is ambiguous (because, for example, it does not
make clear and distinct choices of law for all aspects of the arbitration), the established rule of contract interpretation
would construe ambiguous language against the interests of the drafting party [FN28]--assuming, of course, that that
party can be identified. An equally important principle of contract interpretation strongly favors a reading of the
contract that would give effect to all provisions and to render them consistent with one another. [FN29] In
Mastrobuono, this meant that the New York choice of law clause would not be read to limit the availability of
punitive damages under the separable arbitration clause. [FN30]

In applying these principles to international arbitration disputes, U.S. courts have usually refused to interpret a
general choice of law clause as an expression of the parties' intent to incorporate the local policy and arbitration
rules of the forum of the chosen law. [FN31] As a result, courts faced with international arbitration disputes have
tended, despite Volt, to resolve issues involving construction and validity of arbitration agreements in accordance
with federal law and not the parties' expressed choice of law. [FN32] Mastrobuono has continued to have a profound

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


15 TRNATLAW 43 Page 7
15 Transnat'l Law. 43

effect on the interpretive balance between the principle of party autonomy and the separability doctrine. [FN33]
Indeed, in its December 2000 decision *52 in Green Tree Financial Corp.-Alabama v. Randolph, [FN34] the
Supreme Court returned to the issue of federal arbitration policy, holding that despite claims under the Truth in
Lending Act [FN35] contract parties were compelled to arbitrate their dispute.

B. Incorporation of Trade Norms

Most commercial codes, including the Uniform Commercial Code (UCC), regard common business practices
(or trade usages) as important interpretive sources for courts to consider when resolving contract disputes. [FN36]
Yet some scholars criticize this incorporation strategy, arguing that reliance on commercial norms is often
inappropriate and may distort the true nature of the parties' agreement. [FN37] Reliance on commercial norms does
restrict the ability of contracting parties to allocate part of their agreement to extra-legal means of enforcement, but
the costs may be outweighed by the benefits of incorporating commercial norms into commercial codes.

In drafting contract provisions and obligations, considering to what extent trade usages should be consulted, and
whether the availability of this interpretive source should be expressly addressed in the contract is important.
Conversely, in the absence of express language, is it safe to assume that trade usages will be consulted and applied
in any subsequent dispute? Is it safe--or even practical--to ignore usage and try to draft party obligations
exhaustively? Likewise, is it safe or practical to identify relevant usage and explicitly try to pick and choose which
will apply?

*53 The UCC looks to trade usage as part of the agreement, unless clearly contradicted by prior dealings,
course of performance, of the express language of the contract. [FN38] There are parallels under the Convention on
the International Sale of Goods. Under article 9(1), parties are bound by usages to which may have agreed and by
practices established by them. [FN39] Under article 9(2), in addition to uses to which they have agreed, the parties
are considered . . . to have impliedly made applicable to their contract any usage that they knew or should have
known, and which is widely known and regularly observed by parties in the particular trade concerned. [FN40]

In the context of arbitration of a contract dispute, however, what is the relevance of trade usage? Under ICC
Rule 17(2), the arbitrators must take account of provisions of the contract and relevant trade usages. [FN41] By
contrast, AAA Rule 28(2) requires arbitrators to decide in accordance with terms of the contract and take into
account usages of trade applicable to the contract. [FN42] Similar language appears in UNCITRAL Rule 33(3).
The LCIA rules have no rule specifically dealing with this issue.

In a close case, where evidence of trade usage might make a critical difference to the construction of the
contract, the varied formulations of the pertinent arbitration rules could make a material difference to the outcome of
the dispute. The ICC rule appears to tip slightly more in favor of usage, but none of the rules bar reference to usage
completely.

However, the arbitration statute of the situs of the arbitration may further complicate the matter. The trend
seems to favor including some statutory reference to trade usage. For example, the UNCITRAL model law--the
principal model followed by national legislatures since 1985--adopts the in accordance with terms of the contract
and take into account usages formulation. [FN43] This approach has been followed by many countries in updating
their arbitration laws, including France and the Netherlands. The ICC's provisions of the contract and relevant trade
usages [FN44] formulation has been followed by a minority of states addressing this issue in the past two decades,
including Egypt and Italy.

*54 Consider a situation in which the language of the contract concerning delivery of goods is somewhat
uncertain, but is susceptible to an interpretation that is inconsistent with usage in the subject trade. Assume the
contract provides for ICC arbitration of disputes, with situs in France, and choice of New York law (and hence, the

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


15 TRNATLAW 43 Page 8
15 Transnat'l Law. 43

UCC) as the law governing the contract. Presumably, the UCC would seek an interpretation of the contract that
reconciled the express terms of the contract with the relevant usage. Such an approach would certainly be consistent
with the approach of ICC Rule 17(2), but is the approach consistent with the French-UNCITRAL law requiring
decision in accordance with the contract terms?

I would argue that this apparent conflict might be resolved by reference to the fact that the UCC does
hierarchize the interpretive sources so that, in principle at least, the interpretation of the contract must still focus
primarily on the express language of the contract. However, the parties might well be advised to address this issue
explicitly in the contract language, perhaps by explicitly including recognized trade usage as part of the law of the
contract.

IV. Conclusion

I would emphasize the following six general conclusions from this brief overview of international arbitral
process. First, with the recent revisions, international arbitral rules have become increasingly time-sensitive and
practical. Several now also provide explicitly for multiparty-arbitration. Second, the rules remain extremely flexible
and discretionary on such issues as conduct of proceedings, evidence, hearsay, and the like. Third, choice of law
remains an essential issue in international arbitration. If anything, it is becoming even more important as a result of
the trend towards de-localization. Fourth, use of trade norms, generally recognized by major commercial law and
arbitral rules, adds comprehensiveness and flexibility. However, it can also be the source of uncertainty and
ambiguity unless it is managed through the exercise of party autonomy. Fifth, the implications of party autonomy
and de-localization in relation to fundamental public policy, particularly in the EU, are still in process. They will
doubtless receive further attention from the European Commission and the ECJ. Sixth, all of these factors may
exacerbate cross-cultural differences in arbitration practice, but flexibility of procedures may also hold promise for
resolving these differences.

[FNa1]. An earlier version of this talk was presented as a Tagung at the Rechtsakademie of the
Rechtswissenschaftliche Fakultt, Universitt Salzburg in May 2000. J.D., University of Pennsylvania (1976); Ph.D.,
Georgetown University (1983).

[FN1]. See, e.g., Gary B. Born, International Commercial Arbitration 7 (2d ed. 2001) (noting increasing significance
of arbitration over past several decades).

[FN2]. D. Ravi Kanth, Soon: Settlement Body for E-Commerce Disputes, Bus. Times (Sing.), May 4, 2000, at 19,
available at 2000 WL 20284319.

[FN3]. For background information on WIPO, see ASP Industry Consortium, World Intellectual Property
Organization to Develop Global Contract Process for ASPs; Groups to Work Jointly on Dispute Avoidance,
Settlement Mechanism, M2 Presswire, May 3, 2000, available at 2000 WL 20191593.

[FN4]. Id.

[FN5]. For background information on the Consortium, see generally id.

[FN6]. Jack Rejtman, Application-Service Network, Others Create Global Mediation Center, Trib. Bus. News, May
3, 2000, available at 2000 WL 19319923.

[FN7]. Id.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


15 TRNATLAW 43 Page 9
15 Transnat'l Law. 43

[FN8]. Id.

[FN9]. For discussion of the effects of these recent revisions, see Allen Holt Gwyn & Benjamin O. Tayloe, Jr.,
Comparison of the Major International Arbitration Rules, 19 Construction Law. 23 (1999).

[FN10]. Christopher R. Drahozal, Commercial Norms, Commercial Codes, and


International Commercial Arbitration, 33 Vand. J. Transnat'l L. 79, 120 (2000).

[FN11]. For an interesting review of this question, see Theodore C. Theofrastous, Note,
International Commercial Arbitration in Europe: Subsidiarity and Supremacy in Light of the De-Localization
Debate, 31 Case W. Res. J. Int'l L. 455 (1999). Cf. Georgios I. Zekos, The Treatment of Arbitration under EU Law,
54 Disp. Resol. J. 9 (May 1999).

[FN12]. See, e.g., Scherk v. Alberto-Culver Co., 417 U.S. 506 (1973) (involving securities regulation); Mitsubishi
Motors Corp. v. Soler Chrysler-Plymouth Inc., 473 U.S. 614 (1985) (involving antitrust policy).

[FN13]. See generally Zekos, supra note 11 (discussing problem).

[FN14]. Eco Swiss China Time Ltd v. Benetton Int'l NV, 5 C.M.L.R. 816 (2000).

[FN15]. For a useful discussion of cross-cultural issues, see Julian D.M. Lew & Laurence Shore,
International Commercial Arbitration: Harmonizing Cultural Differences, 54 Disp. Resol. J. 33 (Aug. 1999).

[FN16]. See, e.g., AAA International Arbitration Rules, art. 15, P 1 (1997) (providing that the tribunal shall have
the power to rule on its own jurisdiction); ICC Rules of Arbitration art. 6, P 2 (1998) (establishing roles of
International Court of Arbitration and arbitral tribunal in deciding existence, validity or scope of arbitration
agreement); LCIA Rules, art. 23, P 23.1 (1998) (providing that Arbitral Tribunal shall have the power to rule on its
own jurisdiction); UNCITRAL Arbitration Rules, art. 21, P 1 (1976) (providing that arbitral tribunal shall have
the power to rule on objections that it has no jurisdiction).

[FN17]. For a useful discussion of the Kompetenz-Kompetenz doctrine, emphasizing its conceptual distinction from
the doctrine of separability, see William W. Park, Determining Arbitral Jurisdiction: Allocation of Tasks Between
Courts and Arbitrators, 8 Am. Rev. Int'l Arb. 133, 142-143 (1997).

[FN18]. 514 U.S. 52 (1995). See Doctor's Associates Inc. v. Cassarotto, 517 U.S. 681 (1996) (refusing to apply Volt,
infra note 20, and preempting application of Montana statutory requirement as to form of conspicuous notice of
arbitration in contract).

[FN19]. 9 U.S.C. 1-16, 201-10, 301-07 (2001).

[FN20]. 489 U.S. 468 (1989).

[FN21]. See, e.g., Booth v. Hume Publ'g Inc., 902 F.2d 925, 928-29 (11th Cir. 1990) (construing contract, despite
Georgia choice-of-law provision, as intending application of federal arbitration law); Merrill Lynch, Pierce, Fenner
& Smith v. Shaddock, 822 F. Supp. 125 (S.D.N.Y. 1993) (distinguishing Volt); see also Born, supra note 1, at 340
(characterizing Volt as a cryptic and unfortunate opinion that created uncertainty as to the respective roles of
federal and state law under the domestic FAA).

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


15 TRNATLAW 43 Page 10
15 Transnat'l Law. 43

[FN22]. While Volt itself involved a domestic contract dispute at most, subject to the domestic arbitration provisions
of the FAA, 9 U.S.C. 1-16, uncertainty remained as to its applicability to disputes involving international
contracts with arbitration clauses otherwise subject to the New York Convention on the Recognition and
Enforcement of Foreign Arbitral Awards and the implementing provisions of the FAA, 9 U.S.C. 201-210. See,
e.g., American Physicians Serv. Group, Inc. v. Port Lavaca Clinic Ass'n., 843 S.W.2d 675 (Tex. App. 1992)
(suggesting inapplicability of Volt to arbitration subject to FAA 201-210).

[FN23]. Dpeage (dismemberment) involves the severance of issues in order to apply different choices of law to
different aspects of the same factual situation. See Note, Article 7(1) of the European Contracts Convention:
Codifying the Practice of Applying Foreign Mandatory Rules, 114 Harv. L. Rev. 2462, 2467-69 (2001). For
extended discussion of the dpeage doctrine, see also Willis L. M. Reese, Dpeage: A Common Phenomenon in
Choice of Law, 73 Colum. L. Rev. 58 (1973).

[FN24]. Born, supra note 1, at 41-42.

[FN25]. 13 Y.B. Comm. Arb. 110 (1988).

[FN26]. 16 Y.B. Comm. Arb. 97 (1991).

[FN27]. Id.

[FN28]. Mastrobuono, 514 U.S. at 62.

[FN29]. Id. at 63.

[FN30]. Id. at 64.

[FN31]. Cf., e.g., American Physicians Service Group, Inc., 843 S.W.2d 675 (refusing to apply Volt to international
dispute, pre- Mastrobuono).

[FN32]. See, e.g., Kamaya Co., Ltd. v. American Property Consultants, Ltd., 959 P.2d 1140 (Wash. App. 1998)
(involving agreement with choice of Japanese law, which barred arbitrability of fraud in the inducement claims;
upholding arbitration under FAA); Westbrook Int'l., LLC v. Westbrook Techs., Inc., 17 F. Supp. 2d 681 (E.D.Mich.
1998) (involving international distributorship agreement with choice of law of Ontario, Canada, under which claims
allegedly not arbitrable; applying Mastrobuono and compelling arbitration).

[FN33]. Looking just at the past year, there have been between 30 and 40 cases pending at some stage of litigation
or appeal that directly raise Mastrobuono issues. See, e.g., Green Tree Financial Corp.-Alabama v. Randolph, 531
U.S. 79 (2000) (requiring arbitration despite claims under federal Truth in Lending Act); Stout v. J.D. Byrider, 228
F.3d 709 (6th Cir. 2000); Paul Revere Variable Annuity Ins. Co. v. Kirschhofer, 226 F.3d 15 (1st Cir. 2000);
Specialty Healthcare Mgmt., Inc. v. St. Mary Parish Hosp., 220 F.3d 650 (5th Cir. 2000); Smith Barney, Inc. v.
Critical Health Sys. of North Carolina, Inc., 212 F.3d 858 (4th Cir. 2000) (requiring arbitration and allowing punitive
damages award therein); Connecticut Gen. Life Ins. Co. v. Sun Life Assur. Co. of Can., 210 F.3d 771 (7th Cir. 2000);
Grigson v. Creative Artists Agency L.L.C., 210 F.3d 524 (5th Cir. 2000); Chiron Corp. v. Ortho Diagnostic Sys.,
Inc., 207 F.3d 1126 (9th Cir. 2000); Sentinel Prods. Corp. v. Scriptoria, N.V., 124 F. Supp. 2d 115 (D. Mass. 2000);
Nobles v. Rural Cmty. Ins. Servs., 122 F. Supp. 2d 1290 (M.D. Ala. 2000); Flint Warm Air Supply Co., Inc. v. York
Int'l. Corp., 115 F. Supp. 2d 820 (E.D. Mich. 2000); Higman Marine Servs., Inc. v. BP Amoco Chem. Co., 114 F.
Supp. 2d 593 (S.D. Tex. 2000); Lewis v. Haskell Co., Inc., 108 F. Supp. 2d 1288 (M.D. Ala. 2000); Marsh v. First
USA Bank, N.A., 103 F. Supp. 2d 909 (N.D. Tex. 2000); Polin v. Kellwood Co., 103 F. Supp. 2d 238 (S.D.N.Y.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


15 TRNATLAW 43 Page 11
15 Transnat'l Law. 43

2000); Bratt Enter., Inc. v. Noble Int'l., Ltd., 99 F. Supp. 2d 874 (S.D. Ohio 2000); In re Mercury Finance Co., 249
B.R. 490 (N.D. Ill. 2000); Wright v. SFX Entertainment Inc.,--F. Supp. 2d --, 2001 WL 103433 (S.D.N.Y., Feb. 7,
2001); Zimring v. Coinmach Corp.,--F. Supp. 2d --, 2000 WL 1855115 (S.D.N.Y. Dec. 19, 2000); BEM I, L.L.C. v.
Anthropologie, Inc.,--F. Supp. 2d --, 2000 WL 1849574 (N.D. Ill. Dec. 15, 2000); In re Managed Care Litigation,--F.
Supp. 2d --, 2000 WL 33180826 (S.D. Fla. Dec. 11, 2000); Goulart v. Snap-On Tools Corp.,--F. Supp. 2d --, 2000
WL 1863486 (M.D. Ala., Nov. 30, 2000); Coleman & Co. Sec., Inc.,--F. Supp. 2d --, 2000 WL 1683450 (S.D.N.Y.
Nov. 9, 2000); Spurlock v. Life Ins. Co. of Va.,--F. Supp. 2d --, 2000 WL 1785300 (M.D. Ala. Oct. 31, 2000);
Plastech Exterior Sys., Inc. v. Deere & Co.,--F. Supp. 2d --, 2000 WL 631329 (N.D. Ill. May 12, 2000) ; In re
RealNetworks, Inc.,--F. Supp. 2d --, 2000 WL 631341 (N.D. Ill. May 8, 2000); Floorcoverings, Int'l., Ltd. v. Swan,--
F. Supp. 2d --, 2000 WL 528480 (N.D. Ill. Apr. 25, 2000); Four B Development Corp. v. Cliff Realty Corp.,--F.
Supp. 2d. --, 2000 WL 760972 (D. Me. Apr. 13, 2000); Warren-Guthrie v. Health Net, 84 Cal.App.4th 804, 101 Cal.
Rptr. 2d 260 (Cal. App. 2000); Bishop v. We Care Hair Dev. Corp., 316 Ill. App. 3d 1182, 738 N.E.2d 610 (Ill. App.
2000); Quigley v. KPMG Peat Marwick, LLP, 330 N.J. Super. 252, 749 A.2d 405 (App. Div. 2000); Lian v. First
Asset Mgmt., Inc., 273 A.D.2d 163, 710 N.Y.S.2d 52 (App. Div. 2000); Berkley v. H & R Block E. Tax Servs., Inc.,
30 S.W.3d 341 (Tenn. Ct. App. 2000); In re Conseco Fin. Servicing Corp., 19 S.W.3d 562 (Tex. App. 2000).

[FN34]. 531 U.S. 79 (2000).

[FN35]. 15 U.S.C. 1601 et seq. (2001).

[FN36]. See, e.g., U.C.C. 1-205, 2-208 (permitting reference to usage of trade as extrinsic evidence).

[FN37]. For an excellent critique and analysis of the problem, see Drahozal, supra note 10.

[FN38]. U.C.C. 1-205, 2-208.

[FN39]. United Nations Convention on Contracts for the International Sale of Goods, Final Act, U.N. Doc. A/CONF.
97/18, art. 9(1) (1980); 52 Fed. Reg. 6264 (1987); 19 I.L.M. 668 (1980) [hereinafter CISG].

[FN40]. Id. art. 9(2).

[FN41]. International Chamber of Commerce Rules of Conciliation and Arbitration art. 17(2) (1998) [hereinafter
ICC]. Similar language appears in the European Convention on International Commercial Arbitration, art. 7(1), and
in the Inter-American Convention on the Law Applicable to International Contracts (ICLAIC). For discussion of the
European Convention, see Article 7(1) of the European Contracts Convention, supra note 23. For review and
analysis of the ICLAIC, see Susie A. Malloy, Note, The Inter-American Convention on the Law Applicable to
International Contracts: Another Piece of the Puzzle of the Law Applicable to International Contracts, 19 Fordham
Int'l L.J. 662 (1995).

[FN42]. International Arbitration Rules of the American Arbitration Association, art. 28(2) (1997).

[FN43]. UNCITRAL Model Law, art. 28(4).

[FN44]. ICC art. 17(2) (emphasis added).

15 Transnat'l Law. 43

END OF DOCUMENT

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


54-AUG DRJ 33 Page 1
54-AUG Disp. Resol. J. 33

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


54-AUG DRJ 33 Page 2
54-AUG Disp. Resol. J. 33

Dispute Resolution Journal


August, 1999

Feature

*33 INTERNATIONAL COMMERCIAL ARBITRATION: HARMONIZING CULTURAL DIFFERENCES

Julian D.M. Lew [FNa1]

Laurence Shore [FNaa1]

Copyright (c) 1999 by the American Arbitration Association Inc.; Julian D.M. Lew, Laurence Shore

*34 While a hybrid, if not harmonized, procedural pattern has already emerged in the practice of international
arbitration, common law and civil law arbitration lawyers may still benefit from continued study of each others'
traditions and attempts to merge approaches without sacrificing principles. This brief paper identifies and comments
on some of the areas where important cultural differences remainincluding differences between the common law
nationsand where further harmonization may be useful. We also indicate how some arbitral tribunals have dealt
with this task, which is crucial to the successful working of international commercial arbitration.

In particular, we consider the different cultural approaches towards:

examination of witnesses;

the inquisitorial tribunal;

written pleadings versus oral submissions;

expert evidence;

proof of foreign law;

application of transnational commercial law; and

costs.

Examination of Witnesses

In arbitration, cross-examination is perhaps the area of starkest contrast between the civil and common law
traditions. It is the area that civil lawyers invariably regard as causing them discomfort if English or American
approaches or techniques are adopted as part of the arbitral procedure.

Moreover, the English/American differences should not be underestimated: English lawyers are accustomed to
conducting a painstaking cross-examination of a witness's statement [FN1] in front of a judge, whereas American
lawyers are accustomed to preparing a cross-examination that draws from both the witness's discovery deposition

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


54-AUG DRJ 33 Page 3
54-AUG Disp. Resol. J. 33

and his or her direct oral examination and which must also appeal to a jury.

The differences within the common law, however, still do not approach the contrary experience of civil law
lawyers with common law cross-examination. The common law tradition places a great deal of significance on the
perceived character and reliability of a witness in the witness box and, for this reason, the lawyers' task therefore
often involves showing the witness in an unfavorable light. Rhetorical and argumentative questions are commonly
put to a witness solely for the purpose of discrediting him or her.

Civil law lawyers do not generally find much point in questioning that adds nothing to the information that is
already in statements or documents before the tribunal. It is often an unstated assumption that witness statements are
party-generated. Therefore the point of cross-examination is more to adduce additional facts from the witness, which
may assist the tribunal in understanding the contemporaneous documents and determining which of those documents
may be more reliable than others.

The effort to harmonize these differences should involve, and in the hands of many tribunals does involve, a
procedure whereby the cross-examiners are encouraged to make only their most important points by application of
strict time limits. Despite time constraints, a skillful common law lawyer can, if the aim is to challenge credibility,
expose the three or four significant problems in a witness statement that will cause a tribunal to treat that statement
with great *35 caution. Civil law lawyers may still see or conduct cross-examinations that are unfamiliar in their
national courts, but they will not suffer the disadvantage of feeling that they have been transported into an English or
American courtroom. Moreover, a well-sequenced why did you do that questionanathema to the common law
cross-examiner who seeks to ask leading questionsmay enable the civil law lawyer to accomplish a cross-
examination that a tribunal composed of mixed nationalities will find very effective.

The Inquisitorial Tribunal

It is a traditionally Continental European idea for a tribunal to itself take the initiative in directing the
ascertainment of the facts and the law. Litigation (and often arbitration) in the common-law countries is, on the other
hand, traditionally adversarial: the principle is that the parties arrive at the truth by each leading evidence and each
then testing the evidence led by the other through cross-examination of the relevant witnesses. But in Continental
European systems, the court has the responsibility of investigating the facts which have been alleged, for which
purpose it may conduct its own examination of the witnesses.

Doubts in England about the power of arbitrators to adopt an inquisitional procedure have now been swept
away. Section 34(2)(h) of the Arbitration Act 1996 provides that, among the procedural and evidential matters which
(in the absence of agreement) it is for the tribunal to decide is whether and to what extent the tribunal should itself
take the initiative in ascertaining the facts and the law.

Again, however, a word of warning. Even where an inquisitorial procedure is followed, it is important that the
matters which are to form the basis of the tribunal's decision should be made available for examination and critical
analysis by the parties. It is one thing for the tribunal to make use of its general experience and expertise in making
its decisions. That is no doubt desirable. But where the arbitrators are to rely on specific points, these should be put
to the parties for examination and comment.

The harmonizing approach would allow a tribunal to permit cross-examination (and any redirect examination)
to proceed before the tribunal members put their questions to a witness. This does not prevent a tribunal from, in
civil law fashion, exploring matters at length that one or both parties had not viewed as central to the arbitration. At
the same time, this sequence permits the parties to present the case that they think should be advanced, without
undue intervention from the tribunal. A difficult issue arises when a tribunal member's questioning could be
interpreted as an effort to rehabilitate a witness who may have performed poorly on cross-examination. Common

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


54-AUG DRJ 33 Page 4
54-AUG Disp. Resol. J. 33

law lawyers would find this type of activism too extreme, but as long as re-cross-examination is available following
the tribunal's questions, a safety mechanism would appear to exist in such harmonizing process.

Written Pleadings Versus Oral Submissions

The importance of comprehensive, written submissions in international arbitration has, by now, become a well-
established feature of the process. Common law lawyersespecially in Englandare more accustomed than civil law
lawyers to extensive oral argument. The idea that anything important must be fully explicated in writing is not one
that English lawyers, who commonly engage in several days (or even weeks) of oral appellate argument, are
particularly comfortable with.

In addition, English lawyers may tend to approach written submissions in the same way they would approach
pleadings in the High Court. Requests for arbitration are still produced by some English lawyers in almost bullet-
point form, with the intention that the detail necessary to understand their client's case will be provided later in
witness statements or revealed orally at the main hearing. Another common law habit is to make little more than a
compilation of specific responses to each and every allegation made by the other party. Arbitrators generally do not
favor these practices.

The common ground that has been achieved in relation to this matter is that the parties produce detailed factual
allegations supported by the documentation on which they intend to rely in order to prove their case. The parties can
then provide detailed witness statements, experts' reports, and further submissions on particular *36 issues. A
potential problem arises in that a party may decline to enter into the spirit of arbitration by not including with its
submissions all documents that are obviously relevant to the determination that the arbitrator must eventually reach
and documents to which the opposing party has no access.

Even more seriously, a party may refuse to produce documents on which its pleaded case or expert's report
relies. As common law discovery is, happily, not part of the common ground in most international commercial
arbitrations, it is unfortunately necessary for a tribunal to take steps to ensure that all relevant documents are
available so that the arbitration process will be meaningful. The hands-off approach that many tribunals adopt,
which merely provides that adverse inferences may be taken regarding unproduced documents, leaves open the
possibility that the process itself will be rendered ineffective.

Expert Evidence

The traditional manner of adducing expert evidence in English High Court proceedings is for each party to be
granted leave to produce a report from an appointed expert, for the experts to meet to attempt to agree to certain of
the outstanding issues (which rarely they may do), and then for the experts to be called for cross-examination by the
opposing party. The new civil procedure rules in England seek to encourage the use of single joint experts and to
foster the neutrality of experts. It is now clear in England that the duty of an expert to assist the court on matters
within his or her expertise overrides any obligation to the party from whom the expert has received instructions or
by whom the expert is being paid. In the U.S., however, there appear to be fewer constraints on the potential
partisanship of the party-appointed expert and less of an interest in encouraging the use of court-appointed experts.

Civil law lawyers are much more familiar with the principle and practice of the court-appointed or tribunal-
appointed expert. Here it would seem that there is already a narrowing of the English common law approach and the
Continental European tradition, with the American common law approach standing somewhat outside the circle.
There can be little argument that arbitral tribunals, especially in technical cases, should explore the possibility of
appointing an expert answerable only to the tribunal. An inclination to follow the adversarial common-law path of
party-appointed experts should be resisted unless the circumstances of a particular case justify such an inclination.
Of course, fairness requires that the parties be provided with the opportunity to comment on a report produced by an

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


54-AUG DRJ 33 Page 5
54-AUG Disp. Resol. J. 33

expert. However, neither fairness nor the dictates of any particular cultural tradition would seem to require that the
parties be consulted at every stage of the report process.

Proof of Substantive Law

It is not uncommon that the applicable substantive law in an arbitration will be foreign to the arbitrator(s) and
to the parties' lawyers. There are two basic national court approaches to proof of foreign law, which stem from the
law/fact distinction regarding foreign law: (a) research by the judge or submissions by counsel (the law side of
the dichotomy); and (b) expert reports or testimony by experts (the fact side of the dichotomy).

Within these basic approaches there is a spectrum of national court positions. For example, in countries such as
Germany, Austria, the Netherlands, Portugal, Sweden, Denmark, Norway and Italy, the general rule is that:

Foreign law is law,

The task of ascertaining foreign law lies with the court;

The court has discretion as to the means of ascertaining foreign law;

The court may ask the parties for assistance in ascertaining foreign law, but most commonly the
court will research the issue itself.

In France, the general rule is that foreign law is proved as fact. The usual method is proof by written opinion
of foreign lawyers, though the parties may request the court to conduct the necessary research. In England and Spain
on the other hand, although foreign law is to be proved as fact, expert's reports and oral evidence are the usual
methods.

In the United States, Fed. R. Civ. P. 44.1 provides as follows:

A party who intends to raise an issue concerning the law of a foreign country shall give notice by
pleadings or other reasonable written notice. The court, in determining foreign law, may consider any relevant
material or source, including testimony, whether or not submitted *37 by a party or admissible under the
Federal Rules of Evidence. The court's determination shall be treated as a ruling on a question of law.
Under most institutional or ad hoc arbitral rules, there is considerable flexibility of procedure for proving
substantive law. The unfortunate flip side to flexibility, however, is lack of guidance. The question remains, what
would an effective harmonized approach entail?

Oral testimony by legal experts may be problematic: cross-examination is not particularly useful in resolving
the problem of ascertaining foreign law. Moreover, it is only natural that arbitral tribunals will not be eager to choose
the testimony of one legal expert over that of another. Arbitral tribunals also will not be eager themselves to
undertake lengthy research into foreign law (and the practical considerations of expense may deter parties from
wanting tribunals to undertake such research). There would appear to be more benefits from entertaining ordinary
legal argument, i.e., written submissions (and perhaps oral submissions) by counsel from the jurisdiction of the
substantive law to be proved.

Although harmonizing the law/fact distinction may be an insuperable task and procedural flexibility may offer
the disadvantage of the lack of predictive character, it would appear that the U.S. approach as set out in Rule 44.1
achieves most of what can be achieved in this area. It is pragmatic, it leaves considerable discretion to the tribunal in
reaching its assessment, and it does not commit great violence against any particular national approach. Above all, it

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


54-AUG DRJ 33 Page 6
54-AUG Disp. Resol. J. 33

is an approach that lawyers from most jurisdictions can be comfortable with.

Application of Transnational Commercial Law

A pragmatic intent to avoid the constraints posed by national law and to resolve commercial disputes by
reference to general principles of commercial law has led many arbitral tribunals to apply, as substantive law, what
is variously termed transnational commercial law or lex mercatoria. There is an ever-burgeoning academic
literature on the content, sources and scope of this law. As one commentator [FN2] has recently observed, the
diversity of approaches tends to undermine the intention of applying a commercial law that is relatively universal
and under which international trade usage will control the determination of a dispute. It must be acknowledged that
it is probably more accurate to state that there are a variety of lex mercatoria systems rather than a universal system.
[FN3]

However, it is clear that the resolution of many issues would benefit from a tribunal's taking into account
recognized commercial principles, especially when the applicable substantive national law does not provide clear
guidance. Supplementing the applicable substantive law with the lex mercatoria is, of course, a much less difficult
choice on the part of a tribunal than seeking to displace the applicable law altogether, which would be an invitation
to an enforcement challenge. Where a conflicts rule permits the lex mercatoria to be applied as substantive law, a
tribunal may be encouraged to do so: for example, the English Court of Appeal has upheld an arbitral award (Swiss
law governed the agreement to arbitrate) where the arbitrators applied internationally accepted principles of law
governing contractual relations. [FN4]

*38 Costs

As a general rule, the legal costs of the prevailing party in the English High Court are paid by the losing party,
over and above any sum to be paid pursuant to the judgment on the merits. If not agreed, the amount of the costs is
normally determined in a taxation procedure (now termed detailed assessment under the new civil procedure
rules) following the judgment.

The principle that the losing party pays the prevailing party's legal costs is generally recognized in Europe. In
many countries, however, there is rarely a separate or specialist hearing relating to this matter. Instead, the question
of liability for legal costs is addressed together with the merits by the trial judge. The trial judge will estimate what
he or she believes the costs of the prevailing party should have amounted to, and, subject to the parties' arguments,
normally there will be no further adjudication on this matter.

The concept of loser pays is generally foreign to U.S. lawyers.

The harmonized practice that is developing in international arbitration in relation to costs is similar to the
position in many civil law jurisdictions, where recovery of costs is permitted under the applicable law or rules.
While the losing party is expected to bear the costs of the other party, there is no separate award relating to this
matter, and no taxation process. Instead, the tribunal will assess the legal costs incurred by the prevailing party
and make a provision for these costs in the final award.

In the context of costs, it is important to note the different approaches towards communications that are stated to
be without prejudice, or for settlement purposes only. This practice, which has developed to facilitate settlement
discussions, is common to most jurisdictions. However, whereas in the U.S. and in civil law jurisdictions these
communications may only be presented to a court in order to prove a settlement agreement, in England they have an
additional significance. Under the English rules of procedure, a without prejudice offer of settlement which has
not been accepted may have costs consequences for the receiving party. Where an offer is higher than the amount
ordered at trial, the receiving party is responsible for all of the offering party's costs after the offer was made. Where

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


54-AUG DRJ 33 Page 7
54-AUG Disp. Resol. J. 33

the offer is lower than the amount actually awarded, the offering party may be required to pay the claimant's costs
after the date of the offer and interest on the judgment for the period after the offer.

There is no such practice in the U.S. or in civil law jurisdictions. To the extent that an arbitral tribunal is willing
to review without prejudice offers in reaching a costs assessment, the mechanism of harmonization would require
at the very least a consideration of the full without prejudice history of communications between the parties.

Conclusion

Although practitioners are often strongly devoted to the procedures of their own legal systems (out of habit
alone or otherwise), the question should be asked whether the differencesat least as they relate to presenting cases
in international arbitrationsare really so significant. Furthermore, to the extent that the differences are substantial,
are lawyers always so keen on the application of the rules of their own system?

The approach of most experienced advocates and arbitrators is rather more case-driven than ideological.
Depending on the strength of a case or of a particular witness or of a single document, common law lawyers may
well be comfortable in seeking limited cross-examination, no discovery, and lengthy witness statements. Depending
on the nature of a particular case, civil law lawyers may seek a procedure in which oral submissions are extensive.

As long as pragmatism prevails, and the Western canon of literature is a staple of a lawyer's education, the
harmonization of cultural differences in international arbitral practice should proceed with relative ease. If the
bases for flexibility, tolerance, and persuasive argument disintegrate, procedural harmonization will be a lost cause.

[FNa1]. Dr. Julian D.M. Lew is a partner at Herbert Smith, London, and head of the School of International
Arbitration, Centre for Commercial Law Studies, Queen Mary and Westfield College, University of London.

[FNaa1]. Laurence Shore is a partner at Herbert Smith, London, and specializes in international arbitration and
litigation, with a focus on jurisdiction and arbitration contractual clauses, trans-Atlantic litigation matters in the
High Court, and U.S. litigation matters.

[FN1]. The English High Court's reliance, since the 1980s, on witness statements is an example of a national court's
borrowing a procedure from international commercial arbitration (which itself adopted the procedure from the
Continental tradition).

[FN2]. R. Goode, Usage and Its Reception in Transnational Commercial Law, 46 ICLO p. 35 (January 1997).

[FN3]. See the discussion in H. Van Houtte, The Law of International Trade, p. 28 (London, 1995).

[FN4]. Deutsche Schachtbau-und Tiefbohrgesellschaft mbH v. R'As al-Khaimah National Oil Co. 3 W.L.R. 1023,
1027-1036 (1987).

54-AUG Disp. Resol. J. 33

END OF DOCUMENT

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


62-JUL DRJ 82 Page 1
62-JUL Disp. Resol. J. 82

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


62-JUL DRJ 82 Page 2
62-JUL Disp. Resol. J. 82

Dispute Resolution Journal


May-July, 2007

Special Focus

International

*82 WRITTEN WITNESS STATEMENTS--A PRACTICAL BRIDGE OF THE CULTURAL DIVIDE

John A. Wolf [FNa1]

Kelly M. Preteroti [FNa2]

Copyright 2007 by the American Arbitration Association; John A. Wolf, Kelly M. Preteroti

How to use written witness statements effectively in international arbitration.

*84 Much has been written about the struggle arbitrators and parties face in blending civil and common law
traditions in international arbitrations. This article focuses on a highly valuable procedure used in high stakes
international arbitration proceedings to present fact and expert testimony to the arbitral tribunal. That
procedure--known as written witness statements-- takes the best from the common law and civil law systems in
order to allow parties from different cultural and legal backgrounds to present evidence fairly to international
arbitral tribunals. Among their many benefits, written witness statements prompt advocates to prepare their cases
well in advance of the arbitration hearings, making them better prepared overall.

This article explains how written witness statements originated and describes how to use them. It concludes
with suggestions for procedures to use written witness statements effectively in international arbitration disputes.

Civil and Common Law Differences In Presenting Evidence

It is the arbitral tribunal's duty to ensure that evidence is taken in an efficient and economical manner, while
also ensuring, equality of arms' between parties from vastly different legal traditions. [FN1] The benefit of
efficiency while blending the traditions of both common law and civil law procedures explains why written witness
statements have become favored tools of evidence presentation in international arbitration. To understand why
written statements meld these two traditions, it is necessary to understand the different methods common law and
civil law practitioners have used to present evidence to the finder of fact.

The Common Law Practice

One word best describes the common law practice of presenting evidence -- confrontational. The common law
advocate views the opponent as an adversary, someone with whom to do battle. The battle takes the form of a face-
to-face confrontation to test the opponent's presentation through cross-examination of its witnesses. It is the
witness's testimony that tells the story. The witness's demeanor and response to questioning allows the tribunal to
determine the credibility of the witness. By painting the facts presented by the opponent's witness in a negative light,
the common law advocate puts the witness's credibility in issue.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


62-JUL DRJ 82 Page 3
62-JUL Disp. Resol. J. 82

The right of confrontation has long been a bedrock principle in common law litigation. As a result, written
witness statements are generally considered inadmissible hearsay. [FN2]

The Civil Law Practice

Quite the opposite situation exists in civil law practice for both civil litigation and arbitration. Historically,
witnesses played a much lesser role in civil court proceedings and arbitration. In civil litigation witnesses were not
used very often to present evidence to the court. Similarly, in civil law arbitration witnesses were often called to
testify only when no written evidence was available. [FN3] This practice came about because documents were
believed to be more reliable than witnesses and questioning witnesses in a confrontational setting was not viewed as
adding anything to the documents already before the fact finder. [FN4]

The non-confrontational nature of civil law *85 tradition explains why civil law jurisdictions have frowned
upon direct cross-examination of witnesses, which the common law tradition deemed indispensable to finding the
truth. [FN5]

Indeed, civil law arbitration advocates often did not have the opportunity to question their own witness, or even
determine exactly the questions to ask because the tribunal is charged with investigating the facts and it asks the
questions. [FN6] Advocates could submit to the tribunal questions they would like to see put to the witnesses, but in
the end, the tribunal decided what questions would be asked. This virtually eliminated the element of confrontation.

With such vastly different methods of eliciting facts and convincing the fact finder of the truth of the party's
argument, advocates from common law and civil law jurisdictions obviously were at odds when both were involved
in the same dispute. Significant progress was made in bridging the cultural divide with regard to evidence
presentation with the compromise development of written witness statements, which are used subject to the right of
cross-examination.

Written witness statements replace direct oral testimony of the parties' witnesses. This allows the civil law
practitioner to rely on documentary evidence to present the facts of the case. But each party has the right to live
cross-examination of their opponent's witnesses. For this reason, witnesses must be present at the hearing for their
witness statements to be received by the tribunal. The right of cross-examination of witnesses reflects the common
law tradition of testing the witness's version of the facts and the witness's credibility through cross-examination.

Arbitration Procedures Authorize Witness Statements

Arbitrators have extensive power to craft the procedures that will be used in international arbitration so that
the process will be comfortable for both common law and civil law practitioners. The arbitrators' role in crafting
these procedures takes place after the parties have decided whether they wish to have their arbitration administered
under the rules of an arbitral institution, like the International Centre for Dispute Resolution (ICDR) or the
International Chamber of Commerce (ICC), or whether they wish to arbitrate under the rules of the United
Nations Commission on International Trade Law (UNCITRAL) or under self-created rules in a self-administered
(so-called ad hoc) arbitration.

The use of written witness statements as a substitute for the direct testimony of both fact and expert witnesses is
widely permitted by most rules used in international dispute resolution. For instance, the UNCITRAL Arbitration
Rules and the ICDR International Arbitration Rules state, Evidence of witnesses may also be presented in the
form of written witness statements signed by them. [FN7] Similarly, the ICC International Arbitration Rules
provide, The Arbitral Tribunal may decide the case solely on the documents submitted by the parties unless any of
the parties request a hearing. [FN8]

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


62-JUL DRJ 82 Page 4
62-JUL Disp. Resol. J. 82

The International Bar Association's (IBA) Rules on the Taking of Evidence in International Commercial
Arbitration specifically provide for written witness statements as a means to harmonize the way in which evidence
is presented to tribunals when parties from different legal traditions are involved in the same case. These rules state,
The Arbitral Tribunal may order each Party to submit within a specified time to the Arbitral Tribunal and to the
other Parties a written statement by each witness on whose testimony it relies .... [FN9]

Institutional arbitration rules as well as the IBA Rules exemplify the recognition that written witness
statements have received their place in the arbitral tribunal's arsenal of case management tools.

Next, we turn to the practical use of written witness statements for both fact and expert witnesses.

Fact Witness Statements

Written witness statements are prepared by the advocates after the arbitral tribunal issues the order authorizing
that procedure for those witnesses on whom the parties intend to rely at the hearing. [FN10] The process of drafting
the written witness statements uncovers the facts the witness is able to provide and that is what allows each party to
determine which witnesses to use. [FN11] After the initial drafts of fact witness statements have been completed, the
advocates for both sides have the salutary opportunity to review the presentation of their case on paper, a process
that can expose gaps in the evidence.

Fact witness statements are usually required to be exchanged between the parties and submitted to the tribunal
as early as reasonably possible, typically as soon as it is clear to both parties what the issues are and what facts need
to be proved. [FN12]

It has been said that witness statements are not an additional opportunity for the parties to submit new factual
allegations or to modify their prayers for relief, even if the witness statement is signed by a party representative.
[FN13] Nor are they a place to make legal arguments. This notion can be difficult for the common law practitioner
to *86 accept because lawyers from this tradition are used to arguing their case at every juncture. In international
arbitration, the common law practitioners must avoid the instinctive urge to use witness statements to brief the case
or make closing arguments.

Similarly, fact witness statements should not be treated by advocates as motions containing alleged facts and
legal arguments. They are a means of adducing evidence. [FN14]

When drafting statements for fact witnesses, counsel for both parties must be mindful of the tribunal's
instructions and use the governing procedural rules to determine what information is required. For example, the IBA
Rules say that each witness statement should contain the witness's name, relationship to the party for whom the
statement will be submitted, the witness's background and qualifications, the facts that support the witness's
testimony, an affirmation of truth of the statement and the witness's signature. [FN15]

Although confirmation of a witness statement is generally required, it is possible for both sides to agree that
confirmation of the witness statement, through a brief direct examination of the proponent witness where the witness
confirms the truth of the statement accompanied by an opportunity for cross-examination of the witness, is not
necessary. However, the advocate for the proponent of the witness should not lightly agree to this, the reason being
the tribunal could decide to give the witness statement less weight. Without confirmation by the witness of their
written statement and the opportunity for opposing counsel to cross-examine the witness, the tribunal may dismiss
the testimony because it was not given an opportunity to assess the credibility of the witness.

Expert Witness Statements

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


62-JUL DRJ 82 Page 5
62-JUL Disp. Resol. J. 82

Expert reports--the expert's version of the written witness statement--can be exchanged simultaneously or
consecutively and the scope or content of these reports can be limited by agreement of the parties or by the arbitral
tribunal in the terms of reference or in a procedural order. [FN16]

As in the case of fact witness statements, the IBA Rules detail the information that must be contained in expert
reports. [FN17] In addition to the information required from a fact witness, an expert report must also contain the
witness's expert opinions and conclusions. This includes a description of how the expert arrived at his conclusions.
[FN18]

The exchange of expert reports allows experts to read each other's opinions and determine whether they agree
on certain issues or at least identify the issues that they do not agree on and the reasons for disagreement. [FN19]
One practitioner has praised the use of these reports for such purposes, explaining:

This procedure removes the unfair element of surprise or deliberate ambush at the main hearing: it allows expert
witnesses to meet and exchange views before the hearing ... and since hearing time is money, it saves both time and
money by having everyone read these materials in advance of the main hearing without the need for direct testimony
recited aloud. [FN20]

In addition, exchanging expert reports can promote settlement discussions, with the parties refining issues that
are not in dispute.

Benefits And Drawbacks to Written Witness Statements

The benefits of written witness statements are obvious. Written witness statements and expert reports force the
parties to understand the pertinent issues at a relatively early stage in the arbitration. It has been said that the
written witness statement allows much of the factual brushwood to be cleared from the arbitral stage, leaving only
the critically important issues to be addressed orally at the main hearing .... [FN21] This naturally promotes
efficiency. Efficiency is also achieved by eliminating the need for direct oral testimony, with the exception of a brief
confirmation of the statement by the witness before cross-examination begins. Furthermore, the witness statement
procedure gives advance notice of the opposing witnesses' testimony and thereby assists counsel in preparing for the
hearing on the merits.

*87 Written witness statements have also been criticized on several grounds. A common criticism is that these
statements are not equivalent to live direct testimony and cannot help the tribunal assess credibility. Another
criticism is that witness statements are not what they purport to be--statements by witnesses--because they are
drafted by lawyers. As one commentator noted, Written witness statements can bear little relation to the
independent recollection of the factual witness, with draft after draft being crafted by the party's lawyer or the party
itself, with the witness's written evidence becoming nothing more than a special pleading, usually expressed at
considerable length. [FN22] Furthermore, because they are often prepared by lawyers, they come at considerable
expense.

These perceived shortcomings could be remedied by the tribunal invoking its power to control the use of
witness statements. For example, if there is a concern that the arbitrators will not have a sufficient opportunity to
assess the credibility of a particular witness, the arbitrator could order a brief direct examination. If there is a
concern that witness statements will be over-lawyered, the tribunal could make clear that little weight will be given
to witness statements engineered by counsel. [FN23] Counsel would be unlikely to disregard this warning, which
could lead to having his witness's testimony disregarded. If the tribunal is firm in this instruction and steadfast in
enforcing it, the witness statement procedure is quite worthwhile.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


62-JUL DRJ 82 Page 6
62-JUL Disp. Resol. J. 82

Crafting the Tribunal's Order

The tribunal's power to order the witness statement procedure is derived from the parties' agreement to arbitrate,
the rules the parties select to govern the arbitration, and acceptance of the panel. Accordingly, the parties' views and
suggestions regarding the manner and use of witness statements should be given due regard by the tribunal. Thus,
seeking the parties' agreement to the use of written statements is recommended as opposed to imposing the
procedure on the parties in an order.

Once there is agreement on the witness statement procedure, the tribunal can craft a procedural order. There is
no single model for this order but there are some things that the order should include. As a starting point, it should
reflect the fact that the parties have agreed to the witness statement procedure.

The rules to be followed by counsel should reflect the expectations of the arbitral tribunal. For example, if the
arbitral tribunal expects a witness statement from each witness summoned by the parties the order should say so.
The reason for this is that it encourages the parties to think carefully about the witnesses they intend to use. The
order should also make clear that each witness statement must be signed by the witness. This encourages more
accurate statements since a witness is unlikely to agree to sign a statement that contains incorrect information.

If the tribunal does not want over-lawyered witness statements, the order should convey the expectation that the
statement should be made by the witness, not counsel. It should also make clear the repercussions for not following
this direction, for example, that the statement would be given little or no weight.

The order should set out when witness statements and rebuttal statements (if any) are to be exchanged and
submitted to the tribunal. This should be coordinated with the discovery schedule.

The order should also make clear that the parties must summon their own witnesses and that the tribunal will
only give weight to witness statements that are confirmed by the witness at the hearing as being true and accurate
and subject to cross-examination, absent exceptional circumstances or agreement of the parties. To further the goal
of efficient management, the order could state how long the advocates will have for cross-examination (say 15-30
minutes per witness), which in any case should be limited to matters raised in the witness statement. It could also
state that brief re-direct examination will be allowed, limited to matters raised on cross-examination.

The order should make clear to the parties that the tribunal may question the witness at any time. It should also
state that the tribunal has the power to refuse to hear a witness (or receive a witness statement from that witness) if it
deems the facts to which the witness will testify repetitive, cumulative, or irrelevant. It also has the authority to limit
a party's questioning of a witness, as well as its ability to re-call a witness, subject to the party's right to a fair
hearing.

Conclusion

Witness statements provide a fair and efficient compromise to the conflicting cultural practices that arise in an
international arbitration. When used as intended, they are also quite helpful in preparing for arbitration,
especially for cross-examination, and they eliminate the possibility of unfair surprise at the hearing. In the end,
whether witness statements are used effectively in an international arbitration depends on the tribunal and its
ability to implement the use of this procedure to the benefit of all parties involved.

[FNa1]. John Anthony Wolf, chairman of Ober/Kaler, a law firm with offices in Baltimore, Virginia and
Washington, D.C., practices in the construction field, negotiating contracts, litigating and practicing ADR. His
practice involves power, industrial, public works and commercial projects in the U.S. and abroad.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


62-JUL DRJ 82 Page 7
62-JUL Disp. Resol. J. 82

[FNa2]. Kelly M. Preteroti, an associate at Ober/Kaler, focuses on civil litigation in the financial, construction,
admiralty, telecommunications and health care industries.

[FN1]. Antonias Dimolitsa, Giving Evidence: Some Reflections on Oral Evidence and on the Obligations and
Rights of the Witnesses, in Arbitration and Oral Evidence 11, 12 (Laurent Levy and V.V. Veeder eds., 2005).

[FN2]. Javier H. Rubinstein, International Commercial Arbitration: Reflections at the Crossroads of the
Common Law and Civil Law Traditions, 5 Chi. J. Int'l. L. 303, 308 (2004).

[FN3]. Hans van Houtte, Counsel-Witness Relations and Professional Misconduct in Civil Law Systems, in
Arbitration and Oral Evidence, supra n. 1, at 105, 106.

[FN4]. Julian D.M. Lew & Laurence Shore, International Commercial Arbitration: Harmonizing Cultural
Differences, 54(3) Disp. Resol. J. 32 (Aug. 1999).

[FN5]. Rubinstein, supra, n. 2, at 308.

[FN6]. Id.

[FN7]. UNCITRAL Arbitration Rules, G.A. Res. 31/98, U.N. GAOR, 31st Sess., Supp. No. 17, ch. V, C, U.N.
Doc. A/31/17 (1976) (the UNCITRAL Rules), art. 25.5, available at www.uncitral.org/uncitral/en/uncitral_ texts/
arbitration/1976Arbitration_rules.html; International Dispute Resolution Procedures (May 1, 2006) (ICDR
Rules), R-3 art. 20.5, available at www.adr.org/sp.asp?id=28144.

[FN8]. International Chamber of Commerce Rules of Arbitration (Jan. 1, 1998) (ICC Rules), art. 20.6, available
at www.iccwbo.org/court/english/ arbitration/rules.asp.

[FN9]. International Bar Association's Rules on the Taking of Evidence in International Commercial Arbitration
(June 1, 1999) (IBA Rules), art. 4.4, available at www.ibanet.orgimages/downloads/IBA%20rules%C20on%C20the
%C20taking%C20of%vidence.pdf.

[FN10]. Id.

[FN11]. Anne Vronique Schlaepfer, Witness Statements, in Arbitration and Oral Evidence, supra n. 1, at 65, 67.

[FN12]. Id. at 66.

[FN13]. Id. at 67.

[FN14]. Id.

[FN15]. IBA Rule 4.5 states: Each Witness Statement shall contain: (a) the full name and address of the witness, his
or her present and past relationship (if any) with any of the parties, and a description of his or her background,
qualifications, training and experience, if such a description may be relevant and material to the dispute or to the
contents of the statement; (b) a full and detailed description of the facts, and the source of the witness's information
as to those facts, sufficient to serve as that witness's evidence in the matter in dispute; (c) an affirmation of the truth
of the statement; and (d) the signature of the witness and its date and place.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


62-JUL DRJ 82 Page 8
62-JUL Disp. Resol. J. 82

[FN16]. Richard H. Kreindler, Benefiting from Oral Testimony of Expert Witnesses: Traditional and Emerging
Techniques, in Arbitration and Oral Evidence, supra n. 1, at 87, 96.

[FN17]. IBA Rule 5.2 states, The Expert Report shall contain: (a) the full name and address of the Party-Appointed
Expert, his or her present and past relationship (if any) with any of the Parties, and a description of his or her
background, qualifications, training and experience; (b) a statement of the facts on which he or she is basing his or
her expert opinions and conclusions; (c) his or her expert opinions or conclusions, including a description of the
method, evidence and information used in arriving at the conclusions; (d) an affirmation of the truth of the Expert
Report; and (e) the signature of the Party-Appointed Expert and its date and place.

[FN18]. Id.

[FN19]. V.V. Veeder, Introduction, in Arbitration and Oral Evidence, supra n. 16, at 7, 8.

[FN20]. V.V. Veeder, The 2001 Goff Lecture, 18(4) Arbitration Int'l, 431-51 (2001), reprinted in The Lawyer's
Duty to Arbitrate in Good Faith, in Arbitration and Oral Evidence, supra n. 1, at 115, 126; see also IBA Rule 5.3
which states, The Arbitral Tribunal in its discretion may order that any Party-Appointed Experts who have
submitted Expert Reports on the same or related issues meet and confer on such issues. At such meeting, the Party-
Appointed Experts shall attempt to reach agreement on those issues as to which they had differences of opinion in
their Expert Reports, and they shall record in writing any such issues on which they reach agreement.

[FN21]. Veeder, supra, n. 19, at 8.

[FN22]. Id. at 7.

[FN23]. David E. Wagoner, Managing International Arbitration: A Shared Responsibility of the Parties, the
Tribunal, and the Arbitral Institution, 54(2) Disp. Resol. J. 15 (May 1999).

62-JUL Disp. Resol. J. 82

END OF DOCUMENT

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


30 DENJILP 73 Page 1
30 Denv. J. Int'l L. & Pol'y 73

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


30 DENJILP 73 Page 2
30 Denv. J. Int'l L. & Pol'y 73

Denver Journal of International Law and Policy


Winter 2001

Articles

*73 MEDIATION FURTHERS THE PRINCIPLES OF TRANSPARENCY AND COOPERATION TO SOLVE


DISPUTES IN THE NAFTA FREE TRADE AREA [FNd1]

Luis Miguel Daz [FNa1]

Nancy A. Oretskin J.D. [FNaa1]

Copyright 2001 Denver Journal of International Law and Policy; Luis Miguel Daz; Nancy A. Oretskin

Introduction

The authors intend to introduce mediation as a legal tool to prevent and solve international business disputes
between private parties in the free trade area created in the North American Free Trade Agreement (NAFTA). [FN1]
We will demonstrate that the use of the principles of transparency and cooperation to solve international disputes in
the NAFTA area are key objectives, and that mediation furthers those principles concerning private disputes. [FN2]

The Transparency Principle and Consultations

The transparency principle guided the negotiators in their *74 deliberations throughout NAFTA negotiations and
permeates all aspects related or derived from NAFTA. [FN3] The purpose of the transparency principle is that all
measures advocated by all Parties must be crystal clear and should not cover objectives contrary to free trade. [FN4]

Therefore, it was agreed that any law, regulation, procedure, requirement or practice, [FN5] related or derived
from NAFTA, should be duly motivated, be congruent with free trade, and to the possible extent, announced and
explained to the other Parties in advance. [FN6]

The transparency principle was also considered as a principle for the prevention of disputes in the form of an
obligation for the governments to consult each other regarding measures and conflict prevention and conflict
solution. Consultations are obligatory under diverse circumstances. [FN7]

*75 The obligation to consult (the act of consulting, considering, having regard, conferring, deliberation) may
bring two very important benefits. The first is that it prevents disputes through an early identification and solution of
conflicting views. [FN8] The second is that it opens direct communication channels between the Parties for the
solution of an existing dispute. [FN9]

The word consultation as used in NAFTA means direct talks between the governments or the governments and a
private party to agree on a course of action to reach a goal or to find a solution to a problem. [FN10]

The Cooperation Principle and Consultations

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


30 DENJILP 73 Page 3
30 Denv. J. Int'l L. & Pol'y 73

The principle of cooperation between the NAFTA Parties (Canada, Mexico and the U.S.) is embodied as the
cornerstone of dispute settlement. It is also an expression of the principle of transparency regarding conflict
solution. The cooperation principle is presented in NAFTA as a legal obligation:

The Parties shall at all times endeavor to agree on the interpretation and application of this Agreement,
and shall make every attempt through cooperation and consultations to arrive at a mutually satisfactory
resolution of any matter that might affect its operation. [FN11]
However, if a matter is not solved through cooperation or consultations, a Party to NAFTA may make a request
for the intervention of the Commission to solve the matter. [FN12] The Commission may use good offices,
conciliation and mediation. [FN13] If the Commission has not solved the matter within a certain time period, a Party
may then request in writing an arbitral panel. [FN14]

Thus, prior to requesting an arbitral panel, Parties are obligated to engage in consultations and, in the absence of
an agreement the Parties then proceed to request assistance from the Commission. If the Parties do not reach an
agreement using these two processes, an arbitral panel decides the dispute between the Parties.

*76 Chapter Twenty establishes the recourse to dispute settlement procedures using an arbitral panel. [FN15]
This Chapter applies to disputes between Parties that address the interpretation or application of NAFTA,
specifically those disputes in which one Party considers an actual or proposed measure of another Party is or will be
inconsistent with the obligations of NAFTA or where an action by one Party causes nullification or impairment of an
existing NAFTA obligation. [FN16] Chapter Twenty does not apply to matters covered by Chapter Nineteen that
refer to Dispute Settlement in Antidumping and Countervailing Duty Matters. [FN17]

Conflict Solution Mechanisms for Public-Private Disputes

NAFTA introduced for the first time in a free trade agreement the novel concept of regulating the solution of
disputes that may exist between the Parties (governments) and private persons. NAFTA does so in matters
concerning investment, Chapter Eleven. This Chapter applies to measures adopted or maintained by a Party relating
to investors of another Party, to investments of investors of another Party in the territory of the Party and to certain
aspects of all investments in the territory of the Party. [FN18]

In this context, a NAFTA claim is a legal complaint submitted by a NAFTA Investor who alleges a loss by
reason of a breach of NAFTA. The claim is heard by an international panel, normally composed of three arbitrators
[FN19] appointed by the Investor and the NAFTA Party being sued. Panels are formed under the Investor's choice of
commercial arbitration rules laid out by either the World Bank (through its International Centre for the Settlement of
Investment Disputes - the ICSID) or by the United Nations Commission on International Trade Law (under the
UNCITRAL Rules). [FN20]

After hearing arguments from the Investor and the three NAFTA Parties (i.e. the government being sued for
breach of the NAFTA plus the other two governments - if they choose to intervene), the Panel issues an award, a
written decision. [FN21]

In disputes between a government authority and a private person concerning investment, NAFTA, consistent
with the principle of *77 transparency and the principle of cooperation, also obliges consultation and negotiations
between the disputing parties before establishing an arbitral panel. [FN22]

Conflict Solution Mechanisms for Private Disputes

NAFTA does not directly regulate the possible legal processes to solve business disputes between private
persons that might arise in the free trade area established in Article 101. [FN23] However NAFTA contains four key

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


30 DENJILP 73 Page 4
30 Denv. J. Int'l L. & Pol'y 73

provisions that impact on private disputes. [FN24]

First and from a procedural perspective, NAFTA excludes the granting of rights for private persons to sue under
a Party in a national court wherein the legal cause of action originates in NAFTA. [FN25]

Second, Chapter Seven creates an Advisory Committee on Private Commercial Disputes regarding Agricultural
Goods [FN26]. This Committee known as the 707 Committee has decided that the best approach to deal with quick
and effective dispute resolution for perishable goods and small businesses in the agricultural field was to create an
independent entity that would be financed privately. [FN27] The Fruit and Vegetable Dispute Resolution
Corporation (DRC) was formed and as of February 2000, over 500 members had joined with an expected 1500
members by the end of 2001. [FN28] Under this system, member firms from Canada, *78 Mexico and the US agree
to adhere to a common set of trade standards (practices), mediation and arbitration procedures and enforcement
provisions with respect to NAFTA trade regarding specified perishable agricultural products. [FN29]

Third, Article 2022 of NAFTA provides:

Each Party shall, to the maximum extent possible, encourage and facilitate the use of arbitration and
other means of alternative dispute resolution for the settlement of international commercial disputes
between private parties in the free trade area. (emphasis added) [FN30]
Fourth, Chapter Twenty, Institutional Arrangements and Dispute resolution procedures, Section C. Domestic
Proceedings and Private Commercial Dispute Settlement, establishes an Advisory Committee on Private
Commercial Disputes (2022 Committee). [FN31]

The 2022 Committee has prepared three documents: Alternative Dispute Resolution In International Contracts;
[FN32] Enforcing Agreements to Arbitrate and Arbitral Awards in the NAFTA Countries; [FN33] and What is
Mediation. [FN34] In 1999, the 2022 Committee organized a Conference on Alternative Dispute Resolution for
Judges and Businesses in Mexico City. [FN35]

*79 Mediation Responds to the Principles of Transparency and Cooperation

Based on the recognition in NAFTA for the use of alternative dispute resolution (ADR) for private commercial
dispute settlement, this manuscript suggests that using mediation to resolve international business disputes between
private parties, complies with the principle of transparency and the principle of cooperation as set out in
NAFTA. Why?

Mediation is a dispute resolution mechanism, which is gaining popularity and acceptance within the
international commercial world [FN36] since it is a process, which allows disputing parties to focus on solving a
problem rather than engaging in a complicated legal process. Mediation is a recognized ADR procedure and
therefore is included within the terms of reference of the NAFTA 2022 Committee. [FN37]

What is Mediation?

There is no universal definition of mediation in the international field. [FN38] Simply stated, mediation is a
facilitated negotiation. It is an informal process where an impartial facilitator(s) assists disputing parties to use direct
communication to solve a conflict. [FN39] Skilled *80 mediators are able to direct disputing parties to focus on
problem solving and interest based negotiation thereby creating a space for conflict solution. [FN40] Unlike
litigation and arbitration, in a mediation, a third party never orders a solution to the conflict, rather the disputing
parties agree to a negotiated settlement. Legal strategies related to tactics and maneuvers addressing such areas as
jurisdiction, evidence and enforcement are not relevant in a mediation proceeding.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


30 DENJILP 73 Page 5
30 Denv. J. Int'l L. & Pol'y 73

Disputing parties are allowed to resolve their problems using a business framework related more to business
strategies and communication than to a legal framework intertwined with mandatory rules and procedures. One key
aspect of mediation is that the process is confidential. [FN41] Allegedly, all communication including the exchange
of documents that occurs during the mediation is protected from disclosure in subsequent proceeding. [FN42] The
confidentiality protection is just another element of mediation, which encourages parties to engage in direct
communication. Mediation is a process, which incorporates the will of the Parties at every level; from selection of
the mediator to the resolution of the conflict. [FN43] Although disputants are never forced to participate in a
mediation where they don't either agree to or accept the mediator, the integrity and quality of a mediation is very
dependent on the mediator.

How Does One Select a Mediator?

Competent mediators possess great people skills and the ability to communicate either verbally or non-verbally
to influence disputing parties to assess their problems from a humanistic approach. [FN44] *81 Mediators use
language in ways that give them interactional power and the assumed right to influence and shape the final
outcome. [FN45] They must be trusty worthy, fair-minded and more committed to process than content.

It is not a requirement that a mediator is an attorney. [FN46] It is widely believed that a qualified mediator have
strong people skills, an analytical mind, have a presence that generates the trust of the parties in both competency
and integrity. [FN47] Experience and mentoring probably help, but the more personal qualities are the characteristics
that matter and these very often may develop in the absence of training and educational requirements. [FN48]

*82 Different forms and styles of mediation exist although all forms share the common feature that a third party
never acts as a decision maker. [FN49] Depending on the type of dispute, number of disputing parties and the
complexity of the issues, more than one mediator could be appropriate for the process. [FN50] With respect to
international disputes, co-mediation provides an excellent opportunity to offset potential power imbalances and quell
disputing parties concerns of country impartiality. Further, the specific gender, nationality, age and ethnicity of the
mediators also have the ability to affect the mediation process. [FN51]

How and When to Require Mediation

The most formal and legally recognized venue to request mediation is to include a pre-dispute clause in the
transactional agreement. [FN52] Mediation can be the only dispute resolution process requested or it can be
accompanied with a request for arbitration in the event the mediation fails. [FN53]

In the drafting of pre-dispute clauses, at a minimum, the parties should consider the following: whether
mediation is the only dispute resolution mechanism or if it should be integrated with other ADR processes such as
arbitration, the number of mediators, a process for selecting the mediators, whether the mediation is administered or
ad hoc, and the language and location of the mediation. [FN54]

In the absence of a contractual provision, disputing parties can agree to use mediation at any time. In this
situation, the parties may draft and sign a Submission Agreement [FN55] that evidences their will to *83 engage in a
mediation. [FN56] Other times, the parties merely verbally agree to participate and subsequently conduct the
mediation in the absence of any formal agreement to do so.

Like many things in life, timing is critical. Research in this area has shown that the sooner mediation is
requested and utilized the better success rate it has in settling the dispute. [FN57] Since one attribute of mediation is
its flexibility and informality, it can be requested, scheduled and completed within a very short time frame. On the
other hand, mediation can also be used and requested during either an arbitration and/or litigation. [FN58]

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


30 DENJILP 73 Page 6
30 Denv. J. Int'l L. & Pol'y 73

Mediation is a very versatile dispute resolution mechanism and technically can be utilized whenever the
disputants realize that it is better for them to directly communicate with each other rather than allow a third party to
mandate a resolution.

Fundamental details to consider when arranging the mediation *84 include cities in which to meet and
conditions that favor a pleasant and relaxing milieu. One should not underestimate the importance that the external
environment has in creating a favorable ambiance.

Stages of Mediation

Although each mediation in a sense follows its own pattern depending on the parties and the content, the general
practice of mediation does include some stages which are set out below. [FN59]

Pre-Mediation. During this stage, the parties learn that they previously agreed to use mediation, they agree on
the number of mediators and their identity, and determine the location of the mediation. [FN60] Parties also agree
that the person attending the mediation must possess decision-making authority to settle the case. [FN61]

Stage 1-Opening Statement. The Mediator initiates the process by giving a brief opening statement. [FN62]
Included in this statement is a concise explanation of the mediation process and a ratification that the parties agreed
to participate in the process and that they understand the role of the mediator. [FN63] This is the stage where most
mediators review the Ground Rules related to the process. [FN64] Some mediators may reiterate a conflict of
interest check. Others also require the parties to sign a confidentiality agreement. [FN65]

Stage 2- Identifying Issues. Some mediators allow each party a set time to present their case similar to an
opening statement given in court. [FN66] Other mediators let the parties start talking about whatever issue they
prefer. [FN67] Whichever style is used, in this stage the disputing parties identify or begin to identify the
controversial issues. During this phase, the mediator often restates and attempts to reframe issues. [FN68] *85
Parties are encouraged to change their approach from a positional frame to one focused more on interests. Often
emotions run high and venting is used in a controlled fashion to begin to de-escalate the emotional commitment to
the dispute. [FN69] A preliminary step to establishing common ground is initiated.

Stage 3- Dialogue. During this stage, the parties negotiate directly with each other.

Communication is the key. The type and style of communicate used by the parties relates directly to their
emotions. Mediators must use their skills here to manage the emotional climate and at the same time encourage the
parties to trust each other, to work together and to attempt to understand the others' views. [FN70] Again, the milieu
is decisive.

Very often, mediators use caucuses at this stage. [FN71] A caucus is a private, confidential meeting between the
mediator and one of the parties. [FN72] Caucuses allow the mediator to talk privately with each party. During these
sessions, negative negotiating behavior can be addressed, trust in the mediator and the process can be strengthened,
hidden agendas can be disclosed, emotions, attitudes and perceptions of one party can be shared privately and the
acceptability of various solutions and alternatives can be tested. [FN73]

Within the profession of mediation, there is quite a divergent view around the propriety of using caucuses. At
the center of this discourse is the ethical concern of trust. [FN74] When a mediator talks with one party separately,
paranoia and mistrust from the other parties naturally may develop. On the other hand, caucuses are very effective to
defuse tense anger, to provide an opportunity for one side to share something openly with the mediator that they are

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


30 DENJILP 73 Page 7
30 Denv. J. Int'l L. & Pol'y 73

fearful to disclose in the mediation, or that they don't feel appropriate to tell the other party face to face, or to help
parties save face in making concessions. [FN75]

Stage 4- Create Options for Mutual Gain. During this phase, the mediator assists the parties in brainstorming.
[FN76] This is a very useful tool in mediation. It is a process where the mediator works very hard to assist the
parties to spontaneously generate as many ideas as possible to solve the conflict. [FN77] In this stage, the mediator
encourages the parties to use their creativity to suggest viable alternatives that *86 would meet the needs of both
parties. [FN78] Parties are constrained to let the other talk and encouraged to trade-off each other's ideas and to try
to narrow differences. [FN79] It is in this stage that the parties collectively develop a plausible solution to their
dispute.

Stage 5- Develop an Agreement. The mediator assists the parties to memorialize their negotiated solution into a
written agreement where all parties willingly agree to sign. [FN80] Many times, the parties' legal staff may edit this
initial document. [FN81]

Often a mediation will move back and forth among stages, especially as new issues surface and are
considered. One learns very quickly that often the first issue presented is not necessarily the most important. A
mediation is a sequence of communication, and information flows depending on the parties' comfort level and trust
in the process. [FN82]

Styles of Mediators

Over the last decade, in the U.S., at least three different styles of mediation have emerged. [FN83] These styles
differ with respect to the level of intervention the mediator uses during the process.

The facilitative model assumes that the mediator is totally neutral and does not present personal views on the
merits of the case. [FN84] This mediator is the least interventionist. In some instances, the mediator may suggest a
possible alternative that may resolve the issue but only after it is clear that the parties cannot generate an option
themselves. [FN85] This type of mediator never comments on the settlement and is not apt to remedy a substantive
power imbalance between the parties. Although many mediators state publicly, and may feel, that this style is the
best, [FN86] in practice, especially if the situation is volatile, it may not be very useful. The facilitative model
represents the purest form of consensual decision- making by the parties. [FN87]

In the evaluative model, the mediator pushes for a settlement, often by presenting his or her own views on the
relative merits of the *87 case. [FN88] This mediator is quite interventionist and offers his or her own opinion
(either overtly or subtly) of options at all stages of the mediation. In this situation, the mediator may intervene
substantively in the dispute.

In the empowerment and recognition model, the mediator encourages the parties to choose independently
whether and how to resolve the dispute. [FN89] Great attention is placed on each party respecting the other. [FN90]
This model is rarely used in business conflicts and is more common for family and community dispute resolution.
[FN91]

Benefits of Using Mediation within the NAFTA Trading Area

The NAFTA free trade zone comprises three countries with different cultures and legal systems. [FN92] So,
from a cross-cultural perspective, mediation offers a venue for people from different cultural backgrounds, legal
systems and business training to sit down at the same table and discuss their problems without having to learn or
understand another country's laws and customs.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


30 DENJILP 73 Page 8
30 Denv. J. Int'l L. & Pol'y 73

Increased trade inevitably creates more business conflicts. [FN93] Mediation not only provides an effective way
to resolve these disputes, but also offers a number of benefits that the other dispute resolution mechanisms lack.

Mediation is the only dispute resolution mechanism that allows the disputing parties to preserve their underlying
business relationship at the same time and during the same process that is used to resolve the problem.This aspect is
very important for human emotions.

Often disputes arise based solely on miscommunication and misunderstanding. Mediation allows the disputing
parties to talk to each other in a safe and controlled environment. [FN94] Other dispute resolution mechanisms
prohibit the parties from direct communication. Litigation and arbitration, to some extent, are built on an adversarial
*88 model. [FN95] At the end of arbitration and litigation, disputing parties very often detest and loathe their
adversary. When a commercial trader is able to resolve a dispute and continue to transact business with the same
partner, a business asset is preserved and is considered a value. Businesses prefer to be engaged in commercial
activity rather than lawsuits and arbitrations. [FN96]

Research shows that parties who use mediation generally have very high customer satisfaction with the process.
[FN97] Mediation is seen as a cost effective and time saving mechanism. [FN98]

In mediation, possible conflicts of law issues are avoided as well as the costs and uncertainty of having to retain
legal counsel from a foreign jurisdiction. [FN99] Mediation, in a sense, offers the same type of environment that was
used to initiate the transaction in order to resolve the dispute: direct communication between the parties. [FN100]

From a business point of view, one critical benefit of using mediation is the shroud of confidentiality it provides.
[FN101] Businesses do not want their proprietary secrets made public. [FN102] Very often, disputes arise between
international trading partners when one fears the other *89 may divulge company secrets. [FN103] Many of the
legal tactics used in litigation and arbitration focus on protecting secrets. [FN104] Mediation allows the parties to
discuss the problem in a confidential setting. [FN105]

Conclusion

The modern international attorney today must be well qualified as a negotiator and conflict solver. Business
people must consider mediation as a first option. There is legal protection for all participants in mediation through
the confidentiality agreement. Recognizing the importance of transparency and cooperation to resolve international
commercial disputes will better prepare the attorney for work in the evolving multinational business marketplace.

[FNd1]. This paper was originally delivered at the Regional Conference of the American Society of International
Law: NAFTA-Unresolved Issues: Dispute Resolution, Environment, Labor and Transportation, organized by the
International Legal Studies Program, University of Denver College of Law, in the City of Denver, Colorado, March
30, 2001.

[FNa1]. Co-Director of the U.S.-Mexico Conflict Resolution Center in Las Cruces, N.M., U.S.A. Since 2001, he
coordinates the ILO-OEA Project to support the Inter-American Conference of Ministers of Labor. His experience in
international negotiations include: the United Nations Declaration on the Peaceful Settlement of International
Disputes (1977-80); the United Nations Conference on the Law of the Sea (1976-1980); the NAFTA and its labor
and environmental side agreements; the Border Environmental Cooperation Commission; and the North American
Development Bank (1991-93).

[FNaa1]. Associate Professor, New Mexico State University, College of Business Administration and Economics

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


30 DENJILP 73 Page 9
30 Denv. J. Int'l L. & Pol'y 73

and Co-Director of the U.S.-Mexico Conflict Resolution Center in Las Cruces, N.M., U.S.A. Recently, Ms. Oretskin
co-edited a book entitled Commercial Mediation and Arbitration in the NAFTA Countries.

[FN1]. The Parties to this Agreement, consistent with Article XXIV of the General Agreement on Tariffs and Trade,
hereby establish a free trade area. Can. - Mex.- U.S.: N. Am. Free Trade Agreement, Dec. 17, 1992, art. 101, 32
I.L.M. 289 [hereinafter NAFTA].

[FN2]. The objectives of this Agreement, as elaborated more specifically through its principles and rules, including
national treatment, most-favored-nation treatment and transparency, are to... NAFTA, supra note 1, at art. 102
(emphasis added).

[FN3]. This principle was explicitly an understanding among the NAFTA negotiators. Testimony of Dr. Diaz, who
was the Legal Advisor of the Mexican Foreign Affairs Department and one of the Mexican negotiators

[FN4]. Id.

[FN5]. The definition of the term measure includes any law, regulation, procedure, requirement or practice.
NAFTA, supra note 1, at art. 201.

[FN6]. See, e.g. Article 1411: Transparency.


1. In lieu of Article 1802(2) (Publication), each Party shall, to the extent practicable, provide in advance to
all interested persons any measure of general application that the Party proposes to adopt in order to allow an
opportunity for such persons to comment on the measure. Such measure shall be provided:
(a) by means of official publication;
(b) in other written form; or
(c) in such other form as permits an interested person to make informed comments on the proposed
measure.
2. Each Party's regulatory authorities shall make available to interested persons their requirements for
completing applications relating to the provision of financial services.
3. On the request of an applicant, the regulatory authority shall inform the applicant of the status of its
application. If such authority requires additional information from the applicant, it shall notify the applicant without
undue delay.
4. A regulatory authority shall make an administrative decision on a completed application of an investor in
a financial institution, a financial institution or a cross-border financial service provider of another Party relating to
the provision of a financial service within 120 days, and shall promptly notify the applicant of the decision. An
application shall not be considered complete until all relevant hearings are held and all necessary information is
received. Where it is not practicable for a decision to be made within 120 days, the regulatory authority shall notify
the applicant without undue delay and shall endeavor to make the decision within a reasonable time thereafter.

[FN7]. The term Consultations is used in Articles 316, Annex 300-B, 707, 722, 723, 801, 914, 1005, 1021, 1024,
Appendix 1001, 1113, 114, 1209, 1210, 1309, 1413, 1414, Annex 1404, Annex 1403, 1903, 1905, 1907, Annex
1901, 2003, 2006, 2007, 2015, 2104. Environmental Side Agreement, Articles 20 and 22. Labor Side Agreement,
Articles 21, 22 and 23.

[FN8]. See L.M. Diaz and A. Garza, Los Mecanismos para la solucin de controversias en el Tratado de Libre
Comercio de Amrica del Norte, Revista de Investigaciones Jurdicas, Escuela Libre de Derecho, Mxico, 1993, 72.

[FN9]. Id.

[FN10]. See supra note 7.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


30 DENJILP 73 Page 10
30 Denv. J. Int'l L. & Pol'y 73

[FN11]. NAFTA, supra note 1, at art. 2003.

[FN12]. See id., at art. 2001 (establishing the Free Trade Commission, which is comprised of cabinet-level
representatives of the Parties or their designees).

[FN13]. Id., at art. 2007 (5)(b).

[FN14]. Id., at art. 2008 (1).

[FN15]. Id.

[FN16]. NAFTA, supra note 1, at art. 2004.

[FN17]. Id.

[FN18]. See id., at art. 1101 (defining the scope and coverage of provisions regarding investment, services and
related matters and providing specifically for measures adopted with respect to arts. 1106 and 1114).

[FN19]. Id., at art. 1123.

[FN20]. See id., at art. 1125.

[FN21]. See id., at art. 1135.

[FN22]. The disputing parties should first attempt to settle a claim through consultation or negotiation. Id., at art.
1118. See generally http://www.cyberus.ca.~tweiler/nafataclaims.html (listing documents and comments of actual
cases under ch. eleven) (last visited Sept. 9, 2001).

[FN23]. See NAFTA, supra note 1, at art. 2004 (providing for dispute settlement between the Parties).

[FN24]. See infra text accompanying notes 25- 31.

[FN25]. No Party may provide for a right of action under its domestic law against any other Party on the ground
that a measure of another Party is inconsistent with this Agreement. NAFTA, supra note 1, at art. 2021.

[FN26]. NAFTA, supra note 1, at art. 707.


The Committee [on Agricultural Trade established in Article 706] shall establish an Advisory Committee
on Private Commercial Disputes regarding Agricultural Goods, comprising persons with expertise or experience in
the resolution of private commercial disputes in agricultural trade. The Advisory Committee shall report and
provide recommendations to the Committee for the development of systems in the territory of each Party to achieve
the prompt and effective resolution of such disputes, taking into account any special circumstance, including the
perishability of certain agricultural goods. Id.

[FN27]. This information was excerpted from the NAFTA Advisory Committee on Private Commercial Disputes
Meeting Notes from its Eight Meeting which was held in San Francisco, California November 18-19, 2000.

[FN28]. This information was excerpted from the Meeting Notes of the Ninth Meeting of the NAFTA Advisory

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


30 DENJILP 73 Page 11
30 Denv. J. Int'l L. & Pol'y 73

Committee on Private Commercial Disputes that was held in Calgary, Canada June 22-23, 2000. For more
information on the DRC, See; http://www.fvdrc.com./main-e.htm

[FN29]. Id.

[FN30]. NAFTA, supra note 1, at art. 2022 (1).

[FN31]. The [Advisory] Committee [on Private Commercial Disputes] shall report and provide recommendations
to the [NAFTA] Commission on general issues referred to it by the Commission respecting the availability, use and
effectiveness of arbitration and other procedures for the resolution of private international commercial disputes in
the free trade area. Id., at art. 2022(4).

[FN32]. NAFTA Advisory Comm. on Private Commercial Disputes, Alternative Dispute Resolution in
International Contracts, at http:// www.ita.doc.gov/legal/adr_k.htm (last visited Sept. 10, 2001).

[FN33]. NAFTA Advisory Comm. on Private Commercial Disputes, Enforcing Agreements to Arbitrate and
Arbitral Awards in the NAFTA Countries, at http:// www.ita.doc.gov/legal/adr_enf.htm (last visited Sept. 10, 2001).

[FN34]. NAFTA Advisory Comm. On Private Commercial Disputes, What is Mediation?, in Commercial
Mediation and Arbitration in the NAFTA Countries 357-69 (Luis Miguel Daz & Nancy A. Oretskin eds., 1999)
[hereinafter Commercial Mediation].

[FN35]. The NAFTA Advisory Comm. on Private Commercial Disputes and the U.S.-Mex. Conflict Res. Ctr.
organized a conference on Alternative Dispute Resolution for judges and businesses on June 3 and 4, 1999, in
Mexico City. More than 350 people attended the tri-national conference. Over 120 Mexican judges participated.
U.S. and Canadian judges, as well as business people, governmental officers and private lawyers representing the
three NAFTA countries also attended. The conference focused on two main themes: 1) the use of arbitration and 2)
mediation as an alternative to courts to resolve commercial conflicts in international law. In addition, the
relationship of arbitration and mediation to judicial dispute resolution in Can., Mex. and the U. S. was addressed.
See generally Commercial Mediation, supra note 34 (integrating articles submitted during the Conference including
the documents prepared by the Committee).

[FN36]. See, e.g., Report of the Working Group on Arbitration on the Work of its Thirty-Third Session (Vienna, 20
November - 1 December 2000), UNCITRAL, 34 rd Sess., at 28-9, U.N. Doc. A/CN.9/485 (2001), at
http://www.uncitral.org/en-index.htm (discussing model provisions on conciliation/mediation).

[FN37]. See NAFTA Advisory Comm. On Private Commercial Disputes, Terms of Reference, at
http://www.ita.doc.gov/legal/adr_term.htm (last visited Sept. 10, 2001).

[FN38]. Mediation and/or conciliation have been used as dispute resolution procedures internationally for a number
of years. In some countries mediation and conciliation are considered a similar process while in other countries
some perceive differences between the two. As a result, there is no international uniform definition of mediation. For
purposes of the work currently underway by the UNCITRAL Working Group, the term conciliation rather than
mediation is used and is defined as a broad notion encompassing various types of procedures in which parties in
dispute are assisted by an independent and impartial person to settle a dispute. . See Settlement of Commercial
Disputes, Possible Uniform Rules on Certain Issues Concerning Settlement of Commercial Disputes: Written Form
for Arbitration Agreement, Interim Measures of Protection, Conciliation, Report of the Secretary-General,
UNCITRAL Working Group on Arbitration, 33rd Sess., at 28, U.N. Doc. A/CN/WG.II/WP. 110 (2000), at http://
www.uncitral.org/en-index.htm. See also Alan Redfern & Martin Hunter, Law and Practice of International
Commercial Arbitration 27-8 (2d ed 1991); Walter A. Wright, Mediation of Private United States-Mexico

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


30 DENJILP 73 Page 12
30 Denv. J. Int'l L. & Pol'y 73

Commercial Disputes: Will it Work?, 26 N.M. L. Rev. 57, 59 (Winter 1996).

[FN39]. Currently in the U.S., there is a joint initiative between one of the American Bar Association's Drafting
Committees and the National Conference of Commissioners on Uniform State Laws (NCCSUL) to draft a Uniform
Mediation Act (UMA). In this document, mediation is defined as a process in which a mediator facilitates
communication and negotiation between parties to assist them in reaching a voluntary agreement regarding their
dispute. Uniform Mediation Act, 3(2) (draft of Aug. 17, 2001) [hereinafter UMA], at http:// www.nccusl.org. (In
August, the UMA was adopted by NCCUSL, The ABA House of Delegates is expected to vote up or down on
endorsing the ACT at its next meeting.) See generally What is Mediation?, supra note 34; Ann L. MacNaughton &
Geoffrey J. Brune, Mediating NAFTA Disputes: So, You've Never Seen a Mediation?, in Commercial Mediation,
supra note 34, at 267-83; L. M. Daz, Moralejas para Mediar y Negociar (1999) (discussing the understanding of
mediation in Spanish).

[FN40]. See, e.g., Roger Fisher & William Ury, Getting to Yes: Negotiating Agreement Without Giving In (Bruce
Patton ed., 2d ed. 1981) (discussing in detail interest-based negotiation); Mark Bennet & Michele Hermann, The Art
of Mediation (1996) (discussing problem solving techniques in mediation). See also Obtenga el S: El Arte de
Negociar sin Ceder (Gerardo de Alba Guerra trans., Mxico 1984) (translating into Spanish the book by Fisher &
Ury listed herein).

[FN41]. Preserving the notion of confidentiality in a mediation has been one of the most difficult tasks of the
drafting committee. See UMA, supra note 39, at 5 (providing legal protection against subsequent injuries deriving
from any communication during the mediation process).

[FN42]. Id.

[FN43]. See Model Standards of Practice for Mediators of the ABA, SPIDR and AAA, sec. I, at http://www.to-
agree.com/spidrstd.htm

[FN44]. See, e.g., Mediation Checklist at http://adrr.com/adr1/essayg.htm (listing criteria for the selction of a
mediator) (last visited Sept. 10, 2001). See also Using the Mediation Checklist at http:// adrr.com/adr1/essayf.htm
(supplementing the outline of the Mediation Checklist) (last visited Sept. 10, 2001). Over the last decade as
mediation has grown in popularity and use, many individual States in the United States as well as ADR Institutions
require and offer specific training in mediation. See generally http://www.adr.org (including the American
Arbitration Association's guide to mediation); http://www.iccwbo.org (including information on alternative dispute
resolution offered by the International Chamber of Commerce); http://www.texasadr.org (including the Texas
Mediation Trainer Roundtable Standards).

[FN45]. Karen Tracy & Anna Spradlin, Talking Like a Mediator, in New Directions in Mediation: Communication
Research and Perspectives, 110-11 (Jospeh P. Folger & Tricia S. Jones eds., 1994) [hereinafter New Directions].

[FN46]. This topic in itself has generated extensive debate. A mediator must possess excellent communication and
listening skills. The field of mediation is a cross-section of multidisciplinary areas and practicing mediators come
from a variety of professional backgrounds. See James H. Keil, Hybird ADR in the Construction Industry,54-AUG
Disp. Resol. J. 14, 20 Keil writes Good Mediators do not have to be attorneys, and, in fact, many times should not
be attorneys.; see also, the link to the UMA where there is no requirement mandating that only attorney's can be
mediators; or we could provide a link to ACR the newly created merged organization representing mediators
http://www.spidr.org/.)

[FN47]. David Grappo Questions Litigators Ask About Mediation, 55-May Disp. Resol. J. 32, 35

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


30 DENJILP 73 Page 13
30 Denv. J. Int'l L. & Pol'y 73

[FN48]. By analogy, a poetic style to present qualifications of a mediator may be compared to the qualifications that
Don Quixote described when discussing for him, the most noble of all professions, the errant knight. Quixote said
the following:
It is a science that comprises all or most of the sciences in the world, since he who professes it must be a
jurist and know the laws of justice concerning persons and property, so that he may give to everyone what is his own
and his due. He must be a theologian, so that he may give reasons for the Christian rule he professes, clearly and
distinctly, wherever he may be asked. He must be a physician, and especially a herbalist, so that he may recognize
in the midst of deserts and wildernesses those herbs which have the virtue of healing wounds,... He must be an
astronomer, to know by the stars how many hours of the night are passed, and in what part and climate of the world
he is. He must know mathematics,.. he must be chaste in his thoughts, straightforward in his words, valiant in his
deeds, patient in his afflictions, charitable towards the needy and in fact, a maintainer of truth, although its defense
may cost his life... In response Don Lorenzo replies: If that is so, I agree that this science is superior to any... I
doubt whether there are, or ever been knight errants with so many virtues.
Miguel de Cervantes Saavedra, The Adventures of Don Quixote (J. M. Cohen trans., Penguin Books 1950), 582,
583.
[FN49]. See, e.g., Tracy & Spradlin, supra note 45, at 110.

[FN50]. See, e.g., supra note 19.

[FN51]. See generally William A. Donohue & Mary I. Bresnahan, Communication Issues in Mediating Cultural
Conflict, in New Directions, supra note 45, at 135-58.

[FN52]. See, e.g., the U.S.-Mex. Conflict Res. Ctr. (CRC) website, which recommends the following mediation
clause. If a dispute arises out of or relating to this contract, or the breach thereof, the parties agree first to try in
good faith to settle the dispute by mediation administered by the CRC. In the event mediation fails, the following
arbitration clause is suggested. In case the mediation is unsuccessful, any unresolved controversy or claim arising
out of or relating to this contract or the breach thereof, shall be settled by arbitration filed with the...CRC and
administered by the CRC in accordance with the CRC's Arbitral Rules. A judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. This language is also available in Spanish at
http://crc.nmsu.edu (last visited Sept. 11, 2001). See also Phillip A. Robbins, Drafting Mediation Clauses for
International Transactions, in Commercial Mediation, supra note 34, at 255-62.

[FN53]. See Robbins, supra note 52, at 256-9.

[FN54]. Id. at 255.

[FN55]. An example of a Submission agreement advocated by the U.S-Mexico Conflict Resolution Center:
Whereas disputes or differences have arisen between the parties with respect to... [refer to transaction,
project or events giving rise to the disputes], and Whereas the parties wish to resolve all such disputes or differences
by mediation, it is agreed as follows: 1. The parties shall decide if one or more than one mediator shall be appointed
and in the absence of agreement by the parties on the selection of mediators, the [U.S.-Mexico Conflict Resolution
Center] will select the mediator(s). If more than one mediator is appointed, the mediators shall act
collectively. 2. The parties agree that the mediation will be administered by the U.S.-Mexico Conflict Resolution
Center]. 3. The procedural rules for any mediation shall be determined by [ the U.S.-Mexico Conflict Resolution
Center]. 4. In determining the procedures to be followed, the mediator shall observe the following provisions
agreed between the parties: (i) the language of the proceedings shall be . . . [language]. (ii) the place of the
mediation shall be . ... [place]. See generally Submission Agreement Proposed by the US-Mexico Conflict
Resolution Center located at New Mexico State University available at http://crc.nmsu.edu.

[FN56]. Also known by some as a compromis, this is a process where sovereign states refer an existing dispute more

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


30 DENJILP 73 Page 14
30 Denv. J. Int'l L. & Pol'y 73

traditionally to an arbitration tribunal but also the referral may be made to a process compared to mediation. For a
detailed discussion, see Douglas Yarn, Dictionary of Conflict Resolution, 96-97 (Jossey Bass Publishers) (1999).

[FN57]. For the most recent statistics on the use of mediation and its success rate, see the website of CPR, Institute
for Dispute Resolution, http:// www.cpradr.org and/or the website of the American Bar Association Section of
Dispute Resolution http://www.abanet.org/dispute/home.html. A 1997 Statistical Report published by CPR Institute
for Dispute Resolution in the Metropolitan Corporate Council (August 1997) stated that 89% of U.S. Corporations
surveyed indicated that they had used mediation in the last three years and 90% of the respondents stated they
viewed mediation as a cost-saving measure; http:// www.ilr.cornell.edu/ICR/NEW/execsum.html.

[FN58]. There are institutional arbitration clauses that provide for the use of mediation either prior to beginning the
arbitration or with agreement of the parties even during the arbitration. Many State and Federal Courts also have
adopted rules which mandate the use of mediation for certain cases, especially those dealing with domestic and
property issues. See the annotated reports of the UMA, supra note 37.

[FN59]. See Bennett & Hermann, supra note 38, at 25-70.

[FN60]. See id. at 36.

[FN61]. See Grappo, supra note 47, at 37.

[FN62]. See Bennett & Hermann, supra note 59, at 35.

[FN63]. See id. at 35.

[FN64]. See id. at 35.

[FN65]. It is critical during the mediator opening statement to explain the mediation process. Although many parties
may nod their heads when asked if they clearly understand this process, the most prudent practice is to clarify the
process and explain very slowly how a mediator differs from a decision maker, how the mediator will assist the
parties to reach (or not) a negotiated settlement. During this brief statement, the mediator may wish to review basic
rules of respect that each party must show toward the other and that only one party speaks at a time. Very often,
during this stage, mediators distribute a confidentiality agreement that explains the legal rules of confidentiality and
asks that each party sign this agreement. At a minimum, the notion of confidentiality should be discussed even if no
agreement is used. See id. at 40.

[FN66]. See id. at 44.

[FN67]. See id. at 44.

[FN68]. See id. at 48.

[FN69]. See id. at 44.

[FN70]. See id. at 41.

[FN71]. See Bennett & Hermann, supra note 59, at 59.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


30 DENJILP 73 Page 15
30 Denv. J. Int'l L. & Pol'y 73

[FN72]. See Yarn, supra note 56, at 69-70, for a definition and discussion on caucus.

[FN73]. See id. at 70.

[FN74]. See id. at 70-71.

[FN75]. See id. at 70.

[FN76]. See id. at 63-64. For a more thorough discussion on brainstorming, see Fisher, Ury & Patton, supra note 38,
at 58-67.

[FN77]. See Yarn, supra note 54, at 63-64.

[FN78]. See id. at 64.

[FN79]. See id.

[FN80]. See Bennett & Hermann, supra note 38, at 64.

[FN81]. See id. at 64.

[FN82]. See Bennett & Hermann, supra note 38, at 26.

[FN83]. However, other authors speak of four styles as Donohue & Bresnahan, supra note 51, at 149-154.

[FN84]. Yarn, supra note 56, at 272-284.

[FN85]. Id.

[FN86]. The authors' draw on their collective experience in this field and have determined this to be a common
opinion held by mediators.

[FN87]. Yarn, at 274.

[FN88]. Id.

[FN89]. Id.

[FN90]. Id at 281-282.

[FN91]. Id.

[FN92]. The legal system in the U.S. and Canada is a common law system and the legal system in Mexico is a civil
law system. Basic legal differences exist in the training of attorneys and judges as well as in the actual practice of
law.

[FN93]. Merchandise trade among the NAFTA partners neared $505 billion in 1998. See NAFTA Works for America

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


30 DENJILP 73 Page 16
30 Denv. J. Int'l L. & Pol'y 73

(5 Year Report-July 1999) at http:// www.ustr.gov/naftareport/intro.htm. Canada and Mexico rank first and second
respectively for overall trade with the U.S. For specific information detailing U.S. trade with its NAFTA partners,
see Center for the Study of Western Hemispheric Trade at http:// lanic.utexas.edu/cswht/tradeindex/About.html

[FN94]. The authors' draw on their collective experience in this field.

[FN95]. Steven K. Andersen, Mediation and the North American Free Trade Agreement, 55-may Disp.Resol. J. 56,
60. See generally, Walter G. Gans, Saving Time and Money in Cross-Border Commercial Disputes, 52-jan Disp.
Resol. J. 50 (1997).

[FN96]. Robert Coulson, Business Mediation-What you Need to Know, (1989) at 5-7.

[FN97]. See David Lipsky and Ronald L. Seeber, The Use Of ADR IN U.S. Corporations: Executive Summary, at
http:// www.ilr.cornell.edu/ICR/NEW/execsum.htm.

[FN98]. Id at 1-3.

[FN99]. This is both authors' experience in handling international mediations. See also Dr. Julian D. M. Lew and
Laurence Shore, International Commercial Arbitration Harmonizing Cultural Differences, 54-aug Disp. Resol.
J. 33,34.

[FN100]. When analyzing communication between two different cultures, it is useful to review some of the
empirical research in this area. Very often generalizations that one could draw from this research must be made very
cautiously since it is very difficult to put an entire culture in one group or another and conclusions could be more
destructive than constructive. For a detailed discussion on cultural differences between many countries, see Geert
Hofstede, Culture's Consequences, (SAGE) (1980). The core of Hofstede's research identified four main
dimensions on which cultures can be differentiated: power distance, uncertainty avoidance, individualism and
masculinity. This method of differentiating cultures is useful for mediators because it provides a language for
understanding cultural biases inherent in the mediation styles used. See Donohue & Bresnahan, supra note 49, at
146-49. For a specific discussion on this issue relating to cultural difference between Mexicans and Americans, see
Cristina Gabrielidis, Walter Stephan, Oscar Ybarra, Virginia Dos Santos Pearson & Lucia Villareal, Preferred Styles
of Conflict Resolution. Mexico and the United States, 28 J of Cross-Cultural Psychol. 6 (Nov. 1997); Walter A.
Wright, Mediation of Private United States-Mexico Commercial Disputes: Will it work?, 26 N.M. L. R. 57 (Winter
1996).

[FN101]. The core of the recently adopted UMA is to provide confidentiality protection. See supra note 39.

[FN102]. In the experience of both authors, protecting proprietary corporation secrets is a key element in deciding
whether or not to use mediation.

[FN103]. This is particularly acute in international business relationships where the parties are unclear to the degree
of protection granted by foreign laws.

[FN104]. Robert D. Benjamin, MSW, J.D., A Critique of Mediation-Challenging Misconceptions, Assessing Risks,
and Weighing The Advantages, at http:// www.mediate.com/articles/critiq.cfm?plain=t.

[FN105]. Donald Lee Rome, Resolving Business Disputes Fact-Finding and Impasse, 55-jan Disp. Resol. J. 8, 11-
12.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


30 DENJILP 73 Page 17
30 Denv. J. Int'l L. & Pol'y 73

30 Denv. J. Int'l L. & Pol'y 73

END OF DOCUMENT

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 1
1 No. 5 Pace Int'l L. Rev. Online Companion 1

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 2
1 No. 5 Pace Int'l L. Rev. Online Companion 1

Pace International Law Review Online Companion


December, 2009

THE NEW ADVENTURES OF THE COMMON LAW

Damien P. Horigan [FNa1]

Associate Professor of Business Administration American University in Dubai

dhorigan@aud.edu

Copyright 2009 Pace International Law Review Online Companion, Damien P. Horigan

Abstract:

One of the arguably unexpected legal developments during the first decade of this century has been the
emergence of new common law jurisdictions in a region with a very different legal heritage - the Arabian Peninsula.
These young jurisdictions have been created specifically to foster the growth of new hubs for banking and finance.
This article will examine these new adventures of the common law.

I. INTRODUCTION

The spread of English common law [FN1] from England [FN2] to Ireland by the Normans [FN3] has been
described as being the first adventure of the common law. [FN4] In other words, some eight centuries ago, Ireland
became the first overseas common law jurisdiction. [FN5] Of course, this first adventure of the common law was
really the result of English expansionism that ultimately came at the expense of the native Irish legal system known
as the Brehon laws. [FN6] Over time, the common law spread far beyond the British Isles to various parts of Africa,
the Americas, Asia, Australia, the Caribbean, and the Pacific mostly, albeit not entirely, due to formal colonialism.
[FN7] However, to varying degrees, the common law would adapt to local conditions in each place. [FN8]
Moreover, certain aspects of indigenous legal traditions manage to coexist alongside the common law. [FN9]

The first decade of the 21st century has witnessed an arguably unexpected legal development in the form of
voluntary borrowings of the common law by certain governments in a region with a very different legal heritage -
the Arabian Peninsula. These new adventures of the common law are the subject of this article.

Despite the spread of the common law to many countries, the Arab World [FN10] essentially remained outside
of the orbit of the common law. [FN11] Today, Arab jurisdictions can be generally described as mixed legal systems
[FN12] based on secular laws codified broadly in the civil law tradition of Continental Europe [FN13] and religious
laws [FN14] based on Islam. [FN15] Perhaps surprisingly, this pattern holds true even in those Arab countries that
were once under British control. [FN16]

As will be explained below, a few years ago the situation began to change with the creation of specialized
jurisdictions in a couple of the Gulf States [FN17] to support emerging financial hubs in the region. [FN18] The new
financial hubs have been designed as common law jurisdictions. As such, they can be viewed as being new
adventures of the common law set in exotic locales.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 3
1 No. 5 Pace Int'l L. Rev. Online Companion 1

II. UNITED ARAB EMIRATES

A. Dubai

Dubai [FN19] is one of the seven emirates that comprise the federation known as the United Arab Emirates
(UAE). [FN20] The UAE is a member of various international intergovernmental organizations including, but not
limited to, the United Nations (UN), [FN21] the World Trade Organization (WTO), [FN22] the Organization of
Petroleum Exporting Countries (OPEC), [FN23] and the Gulf Cooperation Council (GCC). [FN24]

Most of the UAE, including Dubai, is located along the southern shores of what is ultimately an extension of the
Indian Ocean known variously as the Persian Gulf, the Arabian Gulf, or simply The Gulf. The east coast of the UAE
lies on the Gulf of Oman, which is another extension of the Indian Ocean. [FN25] The climate of the UAE, like that
of much of the region, is subtropical with inland areas being arid, while costal areas can be humid, yet still
experience little annual rainfall. [FN26] Currently, Dubai is the second largest emirate in the UAE in terms of
territory after Abu Dhabi. [FN27]

The seven emirates are: Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, Ras Al Khamiah, and Fujairah.
[FN28] Each emirate [FN29] has its own government that retains considerable autonomy. [FN30] This is especially
true for Dubai and Ras Al Khaimah, which have both kept their own court systems. [FN31] By contrast, the courts
of the other five emirates have been integrated into a national judiciary. [FN32]

Dubai has had a significant history of being an entrepot. [FN33] Although oil revenues have helped fund the
development of Dubai's infrastructure, Dubai's economy has become increasingly diversified with various non-oil
sectors such as: tourism, information technology, media production, financial services, construction, and emerging
real estate. [FN34] The neighboring emirate of Abu Dhabi is the main oil producer in the UAE. [FN35]

B. Free Zones

In recent years, free zones [FN36] have been rapidly growing in popularity in Dubai, other parts of the UAE,
and elsewhere in the Middle East. [FN37] These zones, which typically enjoy a special legal status, have become
important primarily because they represent a more open environment for foreign investors than what is found in the
otherwise regular economy of the UAE.

Some of these zones are similar to the traditional free trade zones that can be found in the region and beyond.
[FN38] The industrial and logistical Jebel Ali Free Zone [hereinafter Jafza] is a good example. [FN39] Jafza
essentially began as a foreign trade zone based around a large artificial port that was constructed on the
southwestern edge of Dubai, near the border with Abu Dhabi. [FN40] Yet, free zones are no longer limited to
international trade in goods. The free zone concept has been expanded to include various types of economic activity
especially in the service sector; this is particularly true in the UAE. [FN41] For instance, Dubai Healthcare City
functions as a free zone for medical services. [FN42] Another example would be the Dubai Technology and Media
Free Zone [hereinafter TECOM], which is a free zone dedicated to information technology, media, education, and
related services. [FN43] Thus, a free zone dedicated to financial services would be a logical part of the overall
picture.

C. Dubai International Financial Centre

During 2003 and 2004, a legal framework was established for setting up the UAE's first financial free zone in
Dubai. [FN44] This free zone is the Dubai International Financial Centre [hereinafter DIFC]. [FN45] The DIFC
opened for business in 2004. [FN46]

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 4
1 No. 5 Pace Int'l L. Rev. Online Companion 1

Thus far, the DIFC has attracted hundreds of financial institutions and other businesses from around the world.
[FN47] The main areas of financial activity in the DIFC are: banking services, [FN48] capital markets, [FN49] asset
management and fund registration, [FN50] insurance and reinsurance, [FN51] Islamic finance, [FN52] business
process outsourcing, [FN53] and ancillary services. [FN54]

By setting up in the DIFC, financial institutions can operate in an open environment that is physically within the
UAE, but is not subject to some of the legal restrictions found elsewhere in the UAE. Benefits for foreign investors
operating in UAE free zones, like the DIFC, include complete (100%) foreign ownership, no (zero) corporate taxes
or income taxes for a guaranteed period of time, no foreign exchange controls, and a special regulatory framework.
[FN55] The issues of ownership and taxation are especially important. Currently, in the UAE, outside of the free
zones, there are restrictions on foreign majority ownership of businesses. [FN56] Although the UAE is generally a
low tax country, it is not entirely tax-free due to taxation methods outside of the free zones; most notably the
relatively high corporate taxes on both foreign oil companies and foreign banks. [FN57]

The DIFC has a President and a Governor. The President of the DIFC is His Highness Sheikh Maktoum Bin
Mohammed Bin Rashid Al Maktoum, who is also the Deputy Ruler of Dubai. [FN58] His Excellency Dr. Omar Bin
Sulaiman is the Governor of the DIFC. [FN59]

In addition, the DIFC has three independent bodies that serve different functions: the DIFC Authority
[hereinafter DIFCA]; [FN60] the Dubai Financial Services Authority [hereinafter DFSA]; [FN61] and the DIFC
Judicial Authority. [FN62] The DIFCA runs the zone as a whole, while the DFSA is the government regulator of
financial and related services provided in the zone.

In particular, the DIFCA is in charge of the zone's Registrar of Companies, which is the body responsible for the
incorporation or registration of companies operating within the DIFC. It is also worth mentioning that the DIFCA is
ultimately responsible for the zone's securities market, NASDAQ Dubai. [FN63] In this connection, NASDAQ
Dubai should not be confused with the Dubai Financial Market [hereinafter DFM]. [FN64] The DFM is Dubai's
original stock exchange, [FN65] and predates the NASDAQ Dubai. The DFM, however, is not technically a part of
the DIFC, despite the fact that it is located in a building close to the DIFC. [FN66] Nevertheless, NASDAQ Dubai
and the DFM are under the same government-backed holding company, Borse Dubai. [FN67]

The DFSA is an independent regulator of financial and ancillary services in the DIFC. [FN68] Businesses
outside of the zone are regulated by different governmental bodies such as the Central Bank of the UAE. [FN69]
The DFSA's aim is to have high standards based on international best practices. [FN70]

The DIFC has been designed as a common law jurisdiction. [FN71] Presently, a modest number of statutes have
been enacted, as DIFC laws are distinct from regular Dubai laws. [FN72] All DIFC laws have been enacted in
English rather than in Arabic. [FN73] Moreover, a number of DIFC laws have been based to some extent on UK
statutes. For example, certain provisions in the DIFC's Implied Terms in Contracts and Unfair Terms Law [FN74]
are either identical or very similar to the corresponding text in the UK's Unfair Contract Terms Act. [FN75] Other
DIFC laws codify general principles of the common law, like the body of tort law that forms a part of the DIFC's
Law of Obligations. [FN76] Additionally, certain American legal influence can be found as well. For example, the
proposed DIFC Electronic Transactions Law [FN77] is based upon the Uniform Electronic Transactions Act of
1999, which was developed in the United States by the National Conference of Commissioners on Uniform State
Laws. [FN78]

This is all in contrast to the rest of the emirate of Dubai, which is a mixed legal system based on civil law and
Islamic law, with Arabic being the official language. [FN79] Hence, Dubai may be said to have a high degree of
legal pluralism. [FN80] Furthermore, this represents a twist on the pattern found in other places like Louisiana,

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 5
1 No. 5 Pace Int'l L. Rev. Online Companion 1

Puerto Rico, or Scotland, where an essentially civil law jurisdiction is part of a larger legal system within the
common law tradition. [FN81] In other words, here a common law jurisdiction is found within a civil law/Islamic
law mixed legal system. [FN82]

The designation of the DIFC as a common law jurisdiction was visionary. Clearly, adopting a legal system that
would be essentially familiar to many foreign investors was a landmark meant to help the financial free zone to meet
its goal of being in the same league as more traditional financial hubs like New York, London, and Hong Kong.
[FN83] Furthermore, by being a common law jurisdiction with laws written in English, overseen by both an
independent judiciary and an independent regulatory body, the DIFC could be viewed as being world-class and, at
the same time, stand out from certain other financial hubs in the Middle East. [FN84]

D. DIFC Courts

To support the DIFC's legal status as a jurisdiction distinct from the rest of Dubai, a separate judiciary has been
set up for the free zone. [FN85] This judiciary is known as the DIFC Courts. [FN86]

It can be said that the DIFC Courts are based, with some variation, on the general pattern found in
England/Wales and other leading common law jurisdictions like New York, Hong Kong, and Singapore. More
precisely, the English Commercial Court provides a model. [FN87] In England, the Commercial Court is a part of
the Queen's Bench, which is, in turn, a division of the High Court. [FN88] Judges serving on the Commercial Court
typically have expertise in commercial, banking, and insurance matters. [FN89] The existence of the Commercial
Court is arguably one of the reasons behind London's role as a global business hub.

The DIFC Courts consist primarily of a trial court, known as the DIFC Court of First Instance, and an appellate
court, known as the DIFC Court of Appeal. [FN90] Hence, there are only two levels. By contrast, however, the
regular Dubai Courts [FN91] consists of three levels: the Dubai Court of First Instance, the Dubai Court of Appeals,
and the Dubai Court of Cassation. [FN92] Incidentally, a Small Claims Tribunal has been established in the DIFC
Courts for claims amounting to less than one hundred thousand UAE dirhams (AED 100,000). [FN93]

The Chief Justice of the DIFC Courts is British and a former High Court Judge while the Deputy Chief Justice
is a Senior Counsel from Singapore. [FN94] Both Justices have also had extensive experience as arbitrators. [FN95]
In 2008, six additional judges were appointed to the DIFC Courts including four foreign judges from various
common law jurisdictions and two local judges designated to sit on the DIFC Small Claims Tribunal. [FN96]

Unlike in the United States, there is no provision for a jury system in the DIFC Court of First Instance. The lack
of a jury system could be due to a number of factors including the lack of juries anywhere in the regular Dubai
Courts. [FN97] It should be noted, however, that even in England juries are rarely used for civil cases. [FN98]

Impressive modern courtroom facilities [FN99] have been opened in DIFC Building Number 4 in a part of the
DIFC known as the Gate District. [FN100] The DIFC Courts are supported by a Registrar's office. [FN101] The
DIFC Courts have established a registry for legal practitioners. [FN102] This registry, although clearly inspired by
legal profession in England, to some extent resembles the court bar systems of the various federal courts in the
United States. [FN103] Individual legal practitioners registered with the DIFC Courts consist of lawyers from
various jurisdictions including American attorneys. [FN104] However, English barristers and solicitors [FN105]
form a very large number of the registered legal practitioners. [FN106] Law firms can also be registered with
English firms having a significant presence. [FN107]

So far, the caseload of the DIFC Courts has been relatively light. [FN108] As of the date of this writing, only a
few cases have been decided by the DIFC Court of First Instance [FN109] and only one case has been decided by
the DIFC Court of Appeal. [FN110] Decisions of the DIFC Small Claims Tribunal are not reported. [FN111]

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 6
1 No. 5 Pace Int'l L. Rev. Online Companion 1

Therefore, it may be a bit premature to comment in detail on the overall jurisprudence of the DIFC Courts, but the
somewhat experimental setting could eventually result in a number of interesting opinions.

E. Arbitration and Mediation at the DIFC

Parties to a dispute related to the DIFC may choose arbitration or mediation over litigation in the DIFC Courts.
To facilitate alternative dispute resolution, the DIFC has its own legislation on arbitration. [FN112] The statute
presently in force replaces the earlier DIFC Arbitration Law. [FN113] The current DIFC Arbitration Law, like its
predecessor, has been influenced by the work of the United Nations Commission on International Trade Law
[hereinafter UNCITRAL]. Specifically, many of the provisions of the UNCITRAL Model Law on International
Commercial Arbitration of 1985 (as amended in 2006) have been incorporated with only slight modification of the
DIFC Arbitration Law. [FN114] This makes the DIFC Arbitration Law readably understandable for both
experienced arbitrators and lawyers representing parties in arbitration from various jurisdictions. [FN115]

It is worth noting that in 2006, the UAE joined the Convention on the Recognition and Enforcement of Foreign
Arbitral Awards, which is popularly known as the New York Convention. [FN116] Not only does this facilitate the
enforcement of foreign arbitral awards in the UAE, joining the New York Convention should make it easier for
parties with arbitral awards from the UAE to enforce those in the other contracting states in view of reciprocity.
[FN117]

In February 2008, the DIFC opened a new arbitral institution in Dubai in cooperation with the London Court of
International Arbitration [hereinafter LCIA [FN118] named the DIFC-LCIA Arbitration Centre. [FN119]
Although it is an arbitral institution, [FN120] the DIFC-LCIA can also provide mediation services. [FN121] This is
also true of the LCIA in London. [FN122] However, this joint venture should not be confused with an older body in
Dubai namely, the Dubai International Arbitration Centre (DIAC). [FN123] The DIAC is entirely separate from
either DIFC or the LCIA. [FN124]

The DIFC-LCIA Arbitration Centre has two potential advantages over other arbitral institutions in the region.
[FN125] One is the reputation of the LCIA itself, which has been involved in commercial arbitration for more than
a century. [FN126] Another advantage is the existence of the DIFC Courts. Specifically, the DIFC, as a separate
common law jurisdiction, could be chosen as the legal seat of the arbitration ( arbitral situs) rather than simply
Dubai. Under the DIFC Arbitration Law, the DIFC Courts can provide the functions of arbitration assistance and
supervision. [FN127] Having an English common law judiciary available for such functions is something that is
currently missing from other bodies in the region.

Despite having great potential, the DIFC-LCIA Arbitration Centre is still a very young institution. Although a
set of arbitration rules [FN128] and recommended arbitration clauses [FN129] are now available, due to their
sheer newness, they remain largely untested in terms of usage in actual disputes. Naturally, it will take some time
before lawyers and their clients become comfortable with the new body.

In this connection, it remains to be seen how awards would be enforced by courts in jurisdictions outside of the
DIFC and Dubai. [FN130] Even within the UAE there could possibly be some reluctance to enforce an award if
neither party is from the UAE. [FN131] Moreover, enforcing an award outside of the UAE might prove to be
problematic in actual practice, notwithstanding the New York Convention. [FN132]

III. QATAR

A. Doha

Doha is the capital [FN133] of the State of Qatar. [FN134] Qatar is an independent country [FN135] that

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 7
1 No. 5 Pace Int'l L. Rev. Online Companion 1

belongs to various international intergovernmental bodies such as the UN, [FN136] WTO, [FN137] OPEC, [FN138]
and the GCC. [FN139] Qatar is located on a peninsula off of the larger Arabian Peninsula. [FN140] In 2001, a rather
long-running border dispute between Qatar and Bahrain was finally decided by the International Court of Justice at
The Hague. [FN141]

While Qatar is an oil exporter, its main energy resource is natural gas. [FN142] In particular, Qatar has become
a key exporter of liquefied natural gas. [FN143] Nonetheless, like the UAE, Qatar has been diversifying its economy
away from too much reliance upon hydrocarbon wealth. [FN144] Financial services are part of Qatar's strategy.
[FN145]

B. Qatar Financial Centre

The Qatar Financial Centre [hereinafter QFC] in Doha was established in 2005 and after the DIFC. [FN146]
Like the DIFC, the QFC seeks to attract foreign direct investment by financial institutions. Fields for the QFC
include commercial banking, asset management, project finance, bond issuance, insurance and reinsurance, private
banking, and general business support services. [FN147]

Although similar to the DIFC in many respects, the QFC offers investors the chance to be physically based
anywhere in Doha, rather than in a particular district. [FN148] In a sense, the QFC is not necessarily a free zone
which might make the QFC somewhat more attractive to certain investors although a number of financial
institutions and related businesses would consider having a presence in both the DIFC and QFC regardless of such
differences. Nonetheless, the QFC has attracted a number of well-known financial institutions and related
businesses. [FN149]

Legally, the QFC was established by the QFC Law, [FN150] which was declared by His Highness Sheikh
Hamad Bin Khalifa Al-Thani, the Emir of Qatar, in March 2005. [FN151] The QFC has been structured similarly to
the DIFC in that the QFC is operated by the QFC Authority and regulated by the QFC Regulatory Authority,
[FN152] but this might change. [FN153] The regulations [FN154] and rules of the QFC are being modeled after
those of London and other major financial capitals. [FN155]

C. QFC Judiciary

Like the DIFC, the QFC has its own judiciary in the form of a trial court known as the QFC Civil and
Commercial Court [FN156] and an appellate court known as the QFC Regulatory Tribunal. [FN157] Currently,
seven foreign judges have been appointed to serve on the trial court while an additional three foreign judges, known
as members, have been appointed to serve on the appellate court. [FN158] The judges mostly come from England
and all appear to be very experienced individuals. [FN159]

The QFC's Civil and Commercial Court and the QFC Regulatory Tribunal are even younger than the DIFC
Courts. [FN160] The Civil and Commercial Court's first decision was recently published. [FN161] Thus, it is too
early to tell how exactly this new judiciary will function in practice. Perhaps the global recession will generate some
cases for the QFC judiciary. Be that as it may, the stated model for the QFC judiciary, just like with the DIFC
Courts, is that of the English Commercial Court. [FN162]

D. Arbitration at the QFC

The QFC has an arbitration law of its own, albeit in the form of the QFC Arbitration Regulations of 2005.
[FN163] The QFC can thus serve as the seat of arbitration. [FN164] The QFC Civil and Commercial Court would be
the supervising court. [FN165] Unlike DIFC, there does not appear to be a formal arbitral institution within the QFC
at this time. However, the Qatar Chamber of Commerce is developing a body called the Qatari International Center

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 8
1 No. 5 Pace Int'l L. Rev. Online Companion 1

for Arbitration. [FN166]

IV. OTHER DEVELOPMENTS

A. Ras Al Khaimah Financial City

In June 2007, it was announced that the UAE's northernmost emirate of Ras Al Khaimah [hereinafter RAK]
would be establishing its own financial free zone to be named RAK Financial City. [FN167] This planned financial
hub is a project of the RAK Investment Authority. [FN168] Presumably, RAK Financial City would complement the
existing Ras Al Khaimah Free Trade Zone [hereinafter RAK FTZ]. [FN169] RAK FTZ promotes itself as a low-
cost free zone [FN170] and aims to attract enterprises to the RAK FTZ from a wide range of sectors with its system
of three parks: the Business, Industrial, and Technology Parks. [FN171] This can be viewed as an example of the
subtle competition between the various emirates in the UAE. [FN172]

Assuming the project is actually realized, it is currently unclear as to what extent RAK's planned financial hub
would either complement or compete with similar entities in the region. Indeed, the GCC could face a glut of
financial hubs. Among other things, the recession has already had an impact on the Gulf economies. [FN173] Of
course, the crisis has also weakened many of the same banks and financial institutions that would otherwise invest in
the hubs. [FN174]

Also, at this point it is unclear as to what sort of dispute resolution system, if any, might operate in RAK
Financial City. Yet, it is worth recalling that RAK, like Dubai, has retained its own local courts separate from the
federal court system of the UAE. Thus, it is possible that a specialized judiciary might be established for RAK
Financial City along the lines of the DIFC Courts. Moreover, a dedicated arbitral institution might also be set up.
Alternatively, parties could presumably use the services of the new arbitral body being set up by the RAK Chamber
of Commerce and Industry. [FN175]

B. Projects in Saudi Arabia

Saudi Arabia has the largest economy in the GCC and, indeed, in the entire Arab World. [FN176] Outside of the
Middle East, Saudi Arabia is perhaps best known primarily as a major oil exporter, but even Saudi Arabia has been
trying to diversify its economy. [FN177] This drive towards diversification includes promoting financial services.
For example, a so-called Financial Island is planned for the massive King Abdullah Economic City [hereinafter
KAEC], which is a joint project between the Saudi Arabian General Investment Authority and Emaar, a property
developer based in Dubai. [FN178] The KAEC site is located on the shores of the Red Sea near Jeddah. [FN179]
Assuming the project does not fall victim to the recession, it is not yet clear whether there would be any separate
arbitration body or court system for either the Financial Island or KAEC as a whole. [FN180]

Another significant project in Saudi Arabia is the King Abdullah Financial District to be located in Riyadh.
[FN181] However, creating a special jurisdiction based largely on Western laws for any entity within a society as
traditional as Saudi Arabia appears rather unlikely at the present time. [FN182]

V. CONCLUSION

Over time, the common law has developed in response to new conditions and adapted to novel surroundings.
The recent rise of specialized common law jurisdictions in parts of the Arabian Peninsula is based upon voluntary
borrowings of English law as a pragmatic approach towards attracting foreign direct investment in the wholesale
financial services sector. As English law takes root in desert sands, we are witnessing a new chapter in the world
history of the common law.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 9
1 No. 5 Pace Int'l L. Rev. Online Companion 1

Aside from economic opportunity, a jurisdiction's legal framework is certainly a factor in either attracting or
inhibiting foreign direct investment. [FN183] The widespread use of the English language in a jurisdiction can also
encourage such investment because English has become the main language of international business. [FN184]
Therefore, having or establishing a new jurisdiction based on what would be familiar legal concepts for many and
also operating in a widely spoken language should help to attract foreign direct investment.

The decision to use not only English as the official language for the DIFC, but also the common law as the legal
basis for the DIFC has resulted in a new legal model of establishing a specialized common law jurisdiction in an
otherwise non-common law environment to quickly develop the wholesale financial sector. Already this model
seems to have inspired the QFC. Other planned financial hubs in the region like RAK Financial City may follow this
model during the next few years. Indeed, the model could even spread beyond the region to other emerging markets
although progress on this front might be slowed by current economic realities.

[FNa1]. Associate Professor of Business Administration, American University in Dubai (AUD). B.A., University of
Hawaii at Hilo, M.A., University of New Brunswick, J.D., University of Hawaii at Manoa, LL.M., National
University of Singapore. This article is partly based on two different papers written for the working paper series of
the School of Business Administration at AUD.

[FN1]. Here I use the term common law in a broad sense to refer to the English legal tradition as a whole. Hence,
in this article, I generally ignore technical distinctions between categories like case law versus statutory law or the
common law versus equity. For a similar usage of the term common law as representing a type of legal system or a
family of jurisdictions, see RENE DAVID & JOHN E.C. BRIERLEY, MAJOR LEGAL SYSTEMS IN THE
WORLD TODAY: AN INTRODUCTION TO THE COMPARATIVE STUDY OF LAW 307-08 (3d ed. 1985).

[FN2]. Today in the United Kingdom of Great Britain and Northern Ireland (UK), England and Wales, despite a
measure of constitutional devolution, together form essentially one common law jurisdiction. However, Northern
Ireland is a separate common law jurisdiction while Scotland has retained its own legal system with historical roots
in Roman law rather than English law. See, e.g., STANLEY DE SMITH, CONSTITUTIONAL AND
ADMINISTRATIVE LAW 60-67 (Harry Street & Rodney Brazier, eds., 5th ed. 1986) [hereinafter DE SMITH]. The
devolution of certain powers from London to Wales resulted in the creation of a Welsh Assembly originally brought
about by the Government of Wales Act 1998 (c. 38). Under devolution, Scotland has enjoyed an even greater degree
of local autonomy than Wales by gaining a tax-raising parliament rather than a mere assembly. Scotland Act 1998 (c.
46). Likewise, this wave of devolution also reached the troubled province of Northern Ireland. Northern Ireland Act,
1998, c. 47. The Channel Islands (bailiwicks of Jersey and Guernsey) along with the Isle of Man are dependencies
of the Crown and geographically parts of the British Isles, but legally they are not parts of the United Kingdom. DE
SMITH, supra, at 68-73.

[FN3]. Anglo-Saxon England had a localized legal system based on local customs that varied from place to place.
CLIVE R. NEWTON, GENERAL PRINCIPLES OF LAW 7 (3d ed. 1983). The very name common law points to
the centralization of the English legal system that slowly developed after the Norman Conquest of England in the
year 1066. Id.; see also PHILIP S. JAMES, INTRODUCTION TO ENGLISH LAW 15 (8th ed. 1972).

[FN4]. ALFRED GASTON DONALDSON, SOME COMPARATIVE ASPECTS OF IRISH LAW 3 (Duke
University Commonwealth-Studies Centre, Publication No. 3, 1957). This expression has been traced to W.J.
Johnson, a county court judge and later a judge of the High Court of the Irish Free State.

[FN5]. Although the Normans entered Ireland in 1170, English law only seems to have begun to have taken root
with the visit of King John in 1210, which was initially limited to English settlers in the Pale, namely the area in and
around Dublin. BRIAN DOOLAN, PRINCIPLES OF IRISH LAW 3 (5th ed. 1999) [hereinafter DOOLAN]. In

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 10
1 No. 5 Pace Int'l L. Rev. Online Companion 1

other words, much as the development of the common law in England was a gradual process, the reception of the
common law in Ireland was also slow as the English influence spread throughout the island.

[FN6]. DOOLAN, supra note 5, at 2.

[FN7]. DOOLAN, supra note 5, at 2. See also HELENA H.M. CHAN, THE LEGAL SYSTEM OF SINGAPORE 4
(1995). The Republic of Singapore is a good example of a former British colony that has retained the common law
as the basis for its legal system. Application of English Law Act, (1994) Cap. 7A, 3. (Sing.) Likewise, the former
British colony of Hong Kong, now a Special Administrative Region of the People's Republic of China, remains a
common law jurisdiction whereas Mainland China has a legal system based on elements of civil law and Socialist
law. Hong Kong Basic Law, (1990) Art. 8. However, an example of the common law spreading to a place that was
not under direct colonial control would be Hawaii, which was still an independent kingdom when reception took
place. HAW. REV. STAT. 1-1 (2009). See also L 1892, c 57, 5 (Haw.). A brief sketch of the old kingdom can be
found in a joint resolution regarding the 100 th Anniversary of the Overthrow of the Hawaiian Kingdom that was
passed by the United States Congress and signed by then President Bill Clinton, which is popularly known as the
Apology Resolution. S.J. Res. 19, 103rd Cong. (1993) (enacted); Pub. L. No. 103-150, 107 Stat. 1510. For a
theoretical examination of the phenomenon of legal borrowing, see Daniel Berkowitz, Katharina Pistor & Jean-
Francois Richard, The Transplant Effect, 51 AM. J. COMP. L. 163 (2003).

[FN8]. For instance, the common law underwent a transformation when it came to North America. See generally
WILLIAM E. NELSON, AMERICANIZATION OF THE COMMON LAW: THE IMPACT OF LEGAL CHANGE
ON MASSACHUSETTS SOCIETY, 1760-1830 (1975) (describing the development of Anglo-American common
law using the judiciary of Massachusetts as a case study in the decades before and after the American Revolution).
See also GRANT GILMORE, THE AGES OF AMERICAN LAW 8-11 (1977) (comparing American and English
approaches to the common law). From a British imperial perspective, the North American colonies were generally
viewed as being settled colonies implying that the common law was brought to them by English settlers. DE
SMITH, supra note 2, at 660. In this particular scheme, other territories were classified as having been conquered or
ceded (from another colonial power or an indigenous ruler) or else annexed without settlement, conquest, or cession.
Id. In those territories that were conquered from another colonial power, the pre-existing legal system often survived
as in the province of Quebec where French law was retained by the British. Id.

[FN9]. For example, Hawaiian usage is recognized as one of the various sources of law in Hawaii today. HAW.
REV. STAT. 1-1 (2009). Likewise, Islamic law and various customary laws along with English common law are all
found together in Malaysia. WAN ARFAH HAMZAH & RAMY BULAN, AN INTRODUCTION TO THE
MALAYSIAN LEGAL SYSTEM 6-7 (2003).

[FN10]. The Arab World can be subdivided into at least three different regions: the Arabic speaking countries of
North Africa, the Levant, and the Gulf States (Arabian Peninsula). AAMIR A. REHMAN, DUBAI & CO.:
GLOBAL STRATEGIES FOR DOING BUSINESS IN THE GULF STATES 19-35 (2008) [hereinafter REHMAN].

[FN11]. See generally GEORGE N. SFEIR, MODERNIZATION OF THE LAW IN ARAB STATES: AN
INVESTIGATION INTO CURRENT CIVIL CRIMINAL AND CONSTITUTIONAL LAW IN THE ARAB
WORLD (1998) (describing the mixed legal systems of the Arab World); and C.G. WEERAMANTRY, ISLAMIC
JURISPRUDENCE: AN INTERNATIONAL PERSPECTIVE (The Other Press 2001) (1988), for an overview of
Islamic law.

[FN12]. Kenneth G.C. Reid, The Idea of Mixed Legal Systems, 78 TUL. L. REV. 5 (2003) (discussing the concept of
mixed legal systems or jurisdictions). See also William Tetley, Nationalism in a Mixed Jurisdiction and the
Importance of Language, 78 TUL. L. REV. 175 (2003) (providing general characteristics of mixed jurisdictions).

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 11
1 No. 5 Pace Int'l L. Rev. Online Companion 1

[FN13]. This is what David and Brierley call the Romano-Germanic Family. DAVID & BRIERLEY, supra note 1,
at 33-154. See also JOHN HENRY MERRYMAN, THE CIVIL LAW TRADITION: AN INTRODUCTION TO
THE LEGAL SYSTEMS OF WESTERN EUROPE AND LATIN AMERICA (2d ed. 1985) (explains major
characteristics of civil law jurisdictions); and Julian D.M. Lew & Laurence Shore, International Commercial
Arbitration: Harmonizing Cultural Differences, in AMERICAN ARBITRATION ASSOCIATION HANDBOOK
ON INTERNATIONAL ARBITRATION & ADR 37-45 (Thomas E. Carbonneau & Jeanette A. Jaeggi eds., 2006)
(compares certain general features of European civil law and Anglo-American common law approaches to both
arbitration and litigation).

[FN14]. The Kingdom of Saudi Arabia is a special situation because religious law plays a greater role in its legal
system than in other parts of the Arab World. AHMED AL-SUWAIDI, FINANCE OF INTERNATIONAL TRADE
IN THE GULF 24-26 (1994).

[FN15]. DAVID & BRIERLEY, supra note 1, at 455-83; WILLIAM M. BALLANTYNE, ESSAYS AND
ADDRESS ON ARAB LAWS 210-19 (2000).

[FN16]. Before gaining political independence in the 1960s and 1970s, the Gulf States were generally British
protectorates rather than full-fledged crown colonies, and Saudi Arabia, which is by far the largest Gulf State by
population and territory, never came under direct British control. AL-SUWAIDI, supra note 14, at 8-9. Although
most of the Gulf States were once British protectorates, none of them are presently members of the Commonwealth.
Commonwealth Secretariat, Member States, http:// www.thecommonwealth.org/Internal/142227/members/ (last
visited July 26, 2009). During the time of the protectorates in the Gulf, the common law was applied only to a
limited extent on an extraterritorial basis to non-Muslims while Islamic law was applied to Muslims. AL-SUWAIDI,
supra note 14, at 24-25, 39. As the Gulf States became independent, British extraterritorial jurisdiction was naturally
removed, the common law was largely rejected partly due to the wave of Arab nationalism, and the new
governments turned towards the civil law which had developed in other Arab states such as Egypt whose codes were
ultimately inspired by the French Civil Code. AL-SUWAIDI, supra note 14, at 25, 39; ESSAM AL TAMIMI,
PRACTICAL GUIDE TO LITIGATION AND ARBITRATION IN THE UNITED ARAB EMIRATES 5 (Arab &
Islamic Law Series vol. 26, 2003) [hereinafter PRACTICAL GUIDE].

[FN17]. For a quick overview of the new hubs, see Syed Hussain, Desert Economics, GULF BUSINESS, Oct. 2008,
at 80. See also Chris Wright, Three Hubs to Serve a Thriving Market, EUROMONEY, Aug. 2008, at 11-12
(comparing the new common law hubs in Dubai and Doha with the older, non-common law hub in Bahrain)
[hereinafter Wright, Three Hubs]; A bouquet of desert flowers, ECONOMIST, Sept. 15, 2007, at 13.

[FN18]. What is happening in the Gulf is part of a larger trend in which New York has been losing much of its
dominance in global financial services to London as well as hubs in Asia and the Middle East. International
Financial Centres: Big Apple Turnover, BANKER, Nov. 1, 2007, at 4-6.

[FN19]. For a general introduction to Dubai from a business perspective, see JEFFREY SAMPLER & SAEB
EIGNER, SAND TO SILICON: ACHIEVING RAPID GROWTH LESSONS FROM DUBAI (2003). Among other
things, Sampler & Eigner's book contains comparisons of Dubai's approach to economic development with the
experiences of both Silicon Valley and Singapore. For a more recent view on Dubai's growth, see Edmund
O'Sullivan, Dubai: The Rise of the New Gulf, THE BANKER, Oct. 1, 2008, at 100-04.

[FN20]. U.A.E. CONST. pmbl., art. 1.

[FN21]. Press Release, United Nations Member States, U.N. Doc. Org/1469 (July 3, 2006), available at http://
www.un.org/News/Press/docs/2006/org1469.doc.htm.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 12
1 No. 5 Pace Int'l L. Rev. Online Companion 1

[FN22]. Understanding the WTO: The Organization, Members and Observers,


http://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm (last visited Oct. 4, 2009) [hereinafter Members
and Observers]. See also HASSAN ABOUTAHIR & S.P. PARASHAR, WTO AGREEMENTS ON FINANCIAL
SERVICES: IMPLICATIONS FOR UAE BANKS (2002) (examining the potential impact of the WTO on the
UAE's financial sector); VICTOR MURINDE & CILLIAN RYAN, GULF BANKING AND THE WTO'S
GENERAL AGREEMENT ON TRADE IN SERVICES (The Emirates Occasional Papers, No. 49, 2003) (similar
study but focuses on the entire GCC and not just the UAE).

[FN23]. United Arab Emirates Facts and Figures, ASB 2008, http:// www.opec.org/aboutus/member
%20countries/uae.htm (last visited Oct. 4, 2009).

[FN24]. See The Cooperation Council for the Arab States of the Gulf (GCC), http://www.gcc-sg.org/eng/index.php?
action=GCC (last visited July 26, 2009) [hereinafter GCC], for list of GCC member states. The other members are
the Kingdom of Saudi Arabia, the State of Kuwait, the Kingdom of Bahrain, the State of Qatar, and the Sultanate of
Oman. Id.

[FN25]. AL-SUWAIDI, supra note 14, at 6.

[FN26]. CROSS BORDER LEGAL PUBLISHING FZ LLC, UAE FREE ZONE INVESTMENT GUIDE 13 (2005)
[hereinafter INVESTMENT GUIDE].

[FN27]. Id. at 17.

[FN28]. U.A.E. CONST. pmbl., art. 1.

[FN29]. Each individual emirate is headed by a hereditary emir, but in the UAE, the emir of a particular emirate is
normally referred to in English as the Ruler rather than the emir. See, e.g., REAL PROPERTY LAW, DIFC Law
No. 4 of 2007, 2 (U.A.E.).

[FN30]. U.A.E. CONST. arts. 116-23.

[FN31]. AL-SUWAIDI, supra note 14, at 29-32; SABAH M.A. MAHMOUD, UAE COMPANY LAW AND
PRACTICE 2-3 (4th ed. 2008) [hereinafter MAHMOUD].

[FN32]. AL-SUWAIDI, supra note 14, at 29; MAHMOUD, supra note 31, at 3. The UAE lacks the sort of parallel
state and federal court system found in the United States.

[FN33]. Dubai has become a major re-export center along the lines of Hong Kong and Singapore. CONCEPT
MEDIA FZ LLC, INVEST & LIVE IN DUBAI 17 (2006) [hereinafter INVEST & LIVE IN DUBAI].

[FN34]. ESSAM AL TAMIMI, SETTING UP IN DUBAI 3 (4th ed. 2006) [hereinafter SETTING UP IN DUBAI];
UAE AT A GLANCE 2008, at 52 (Ibrahim Al Abed et al. eds., 2008). See also Stephen Timewell, UAE--Getting on
With the Neighbours, BANKER (London), Sept. 1, 2007, available at LEXIS (discusses economic diversification
away from a reliance upon oil and cooperation between Dubai and Abu Dhabi); Stephen Timewell, Gulf's New
Energy: Finance is Taking Over From Oil as the Fuel that Drives the Engine of Economic Growth in the Gulf
Region, BANKER (London), Nov. 1, 2007, available at LEXIS (discusses the impact of the recent oil boom and the
expansion of banking and finance in the region).

[FN35]. See generally ATEF SULEIMAN, THE PETROLEUM EXPERIENCE OF ABU DHABI (2007)

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 13
1 No. 5 Pace Int'l L. Rev. Online Companion 1

(describing legal, economic, and political aspects of Abu Dhabi's energy policy and the achievements of the
emirate's oil and gas industries). For a more personal account of the dramatic transformation brought about by
hydrocarbon wealth to Abu Dhabi and other parts of the UAE during the past few decades see MOHAMMED AL-
FAHIM, FROM RAGS TO RICHES: A STORY OF ABU DHABI (Makarem 2007) (1995).

[FN36]. The term free zone can cover export processing zones and special economic zones. See generally
THE GLOBAL NETWORK OF FREE ZONES IN THE 21ST CENTURY (Richard L. Bolin ed., 1998).

[FN37]. See, e.g., Gopal Bhattacharya, City Scope 2007: GCC Free Zones, GULF BUSINESS, July 1, 2007
(Magazine), at 82.

[FN38]. A free-trade zone is also known as a foreign trade zone or a free port. A traditional zone would be
located near a seaport or an airport. Legally, it is located within a country but outside the customs territory. See, e.g.,
BLACK'S LAW DICTIONARY 648, 665-66 (6th ed. 1990).

[FN39]. Jafza, Jebel Ali Free Zone, http://www.jafza.ae (last visited July 26, 2009).

[FN40]. INVEST & LIVE IN DUBAI, supra note 33, at 41, 97-98; INVESTMENT GUIDE, supra note 26, at 23-
40, 277-80; SETTING UP IN DUBAI, supra note 34, at 144-50.

[FN41]. See generally INVESTMENT GUIDE, supra note 26; SETTING UP IN DUBAI, supra note 34; INVEST
& LIVE IN DUBAI supra note 33.

[FN42]. Dubai Healthcare City, A Unique Healthcare Environment, http:// www.dhcc.ae/EN/Pages/Default.aspx


(last visited Jan. 9, 2010).

[FN43]. TECOM is further divided into Dubai Internet City, Dubai Media City, Dubai Knowledge Village, Dubai
Outsource Zone, Dubai Studio City, Dubai Biotechnology and Research Park, and the International Media
Production Zone. INVESTMENT GUIDE, supra note 26, at 67-116.

[FN44]. At the federal level, the framework includes an amendment to Article 121 of the UAE Constitution. Federal
Law No. 8 of 2004 (concerning financial free zones), Cabinet Resolution No. 28 of 2007 (supporting regulations),
and Federal Decrees No. 35 of 2004 (establishing the DIFC). At the emirate level, the framework includes the Law
of the Dubai International Financial Centre, Dubai Law No. 9 of 2004 and the Law of the Judicial Authority at the
Dubai International Financial Centre, Dubai Law No. 12 of 2004, translated at DIFC, DIFC Laws & Regulations,
http://difc.ae/laws_regulations/index.html (visited July 26, 2009).

[FN45]. AL TAMIMI & COMPANY, SETTING UP IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE 4-
5 (2d ed. 2008).

[FN46]. AL TAMIMI & COMPANY, supra note 45, at 5.

[FN47]. DIFC, Company Register, http:// difc.ae/registers/companies/index.html (last visited July 26, 2009).

[FN48]. This would include underwriting, advising on mergers and acquisitions, venture capital, private equity,
private banking, trade finance, and brokerage services. AL TAMIMI & COMPANY, supra note 45, at 20. However,
there are still restrictions on retail banking.

[FN49]. The DIFC has its own exchange in the form of NASDAQ Dubai, formerly known as The Dubai

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 14
1 No. 5 Pace Int'l L. Rev. Online Companion 1

International Financial Exchange (DIFX). NASDAQ Dubai, http://www.nasdaqdubai.com/home/home.html (last


visited July 26, 2009). NASDAQ Dubai is both a stock market and a bond market: it currently lists shares, Islamic
bonds (Sukuk), conventional bonds, and structured products. Id.

[FN50]. AL TAMIMI & COMPANY, supra note 45, at 21.

[FN51]. Id.

[FN52]. Id. Islamic finance remains something of a mystery to most lawyers in the West. See Theodore Karasik,
Frederic Wehrey, & Steven Storm, Islamic Finance in a Global Context: Opportunities and Challenges , 7 CHI. J.
INT'L L. 379 (2007), for a short overview. See MAHMOUD A. EL-GAMAL, ISLAMIC FINANCE: LAW,
ECONOMICS, AND PRACTICE (2006), for a longer introduction to the subject.

[FN53]. AL TAMIMI & COMPANY, supra note 45, at 21-22.

[FN54]. Id. at 22. This category includes law firms.

[FN55]. See generally INVESTMENT GUIDE, supra note 26; SOPHIA QASRAWI, FOREIGN DIRECT
INVESTMENT IN THE UAE: DETERMINANTS AND RECOMMENDATIONS 39-40 (The Emirates Occasional
Papers, Series No. 57, 2004) [hereinafter QASRAWI]; MINISTRY OF ECONOMY, UNITED ARAB EMIRATES,
INVESTOR'S GUIDE TO THE UAE 76 (2007).

[FN56]. For example, when it comes to limited liability companies, UAE nationals must hold at least 51% of the
shares. MOHAMMED A.J. AL FAHIM, THE GUIDE: HOW TO SET UP A SUCCESSFUL BUSINESS IN THE
UAE 22 (3d ed. 2007) (hereinafter THE GUIDE); MAHMOUD, supra note 31, at 72-73.

[FN57]. QASRAWI, supra note 55, at 45-52.

[FN58]. Dubai International Financial Centre: Statement from HE Dr Omar Bin Sulaiman, Governor of the DIFC,
http://difc.ae/press_ centre/archive/2009/662.html (posted June 2, 2009).

[FN59]. Dubai International Financial Centre: Statement from His Excellency Dr. Omar Bin Sulaiman, Governor of
the DIFC, http://difc.ae/about_ difc/structure/difc_governor/ (last visited July 26, 2009).

[FN60]. Dubai International Financial Centre: DIFC Authority, http:// difc.ae/about_difc/structure/difca/ (last visited
July 26, 2009).

[FN61]. Dubai Financial Services Authority, http:// www.dfsa.ae/Pages/default.aspx (last visited July 26, 2009).

[FN62]. Dubai International Financial Centre, DIFC Judicial Authority, http://difc.ae/about_difc/structure/courts/


(last visited July 26, 2009).

[FN63]. NASDAQ Dubai, Regulation - Overview, http:// www.nasdaqdubai.com/regulation/index.html (last visited


July 26, 2009).

[FN64]. Dubai Financial Market, http://www.dfm.co.ae (last visited July 26, 2009).

[FN65]. For the record, nearby Abu Dhabi has its own capital market in the form of the Abu Dhabi Securities

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 15
1 No. 5 Pace Int'l L. Rev. Online Companion 1

Exchange (ADX), which was formerly known as the Abu Dhabi Securities Market (ADSM). Abu Dhabi Securities
Exchange, http:// www.adx.ae/English/Pages/default.aspx (last visited July 26, 2009).

[FN66]. The DFM is located in the original office tower of the Dubai World Trade Centre. That is the building
shown on the back of the one hundred UAE dirham (AED 100) banknote. The same building also happens to be
home to the Consulate General of the United States in Dubai.

[FN67]. Borse Dubai, http://www.borsedubai.ae (last visited July 26, 2009).

[FN68]. The DFSA appears to have been loosely based on the UK's Financial Services Authority (FSA). See, e.g.,
Wright, Three Hubs, supra note 17. Financial Services Authority, http://www.fsa.gov.uk (last visited July 26, 2009).

[FN69]. Central Bank of the UAE, http://www.centralbank.ae/index.php (last visited July 26, 2009).

[FN70]. Dubai Financial Services Authority: Who We Are, http://


www.dfsa.ae/Pages/AboutUs/WhoWeAre/WhoWeAre.aspx (last visited July 26, 2009).

[FN71]. Dubai International Financial Centre: DIFC Laws and Regulations - Law on the Application of Civil and
Commercial Laws in the DIFC, DIFC Law No. 3, pt. 2, 8(2)(e) (2004) (referring to the laws of England and
Wales as a source of law for the DIFC), available at http:// difc.complinet.com/en/display/display_main.html?
rbid=2618&element_id=8586.

[FN72]. Dubai International Financial Centre: Enacted Laws, http://


difc.ae/laws_regulations/laws/enacted_laws.html (last visited July 26, 2009).

[FN73]. Dubai International Financial Centre, Disclaimer, http:// www.difc.ae/base/disclaimer_arabic/ (last visited
July 26, 2009).

[FN74]. Dubai International Financial Centre: DIFC Laws and Regulations - The Implied Terms in Contract and
Unfair Terms Law, DIFC Law No. 6 of 2005. http://difc.complinet.com/en/display/display_main.html?
rbid=2618&element_ id=8375.

[FN75]. Unfair Contract Terms Act of 1977, 1977, c. 50 (Eng.). To get a good sense of how close the two statutes
are, one can compare the provisions on negligence liability.

[FN76]. Dubai International Financial Centre: DIFC Laws and Regulations - Law of Obligations, DIFC Law No. 5
of 2005, available at http:// difc.complinet.com/en/display/display_main.html?rbid=2618&element_id=8176. By
way of illustration, examine the definition of the tort of passing off. The definition in Section 38 of the DIFC Law of
Obligations appears to draw upon the opinion of Lord Oliver in the English case of Reckitt & Coleman Prods. v.
Borden Inc., [1990] 1 All E.R. 873. In American law, passing off is often referred to as unfair competition. Singer
Mfg. Co. v. June Mfg. Co., 163 U.S. 169, 184 (1896).

[FN77]. At the time of writing, this proposed law was awaiting enactment.

[FN78]. Uniform Electronic Transaction Act, 1-21 (July 23-30, 1999), available at http://
www.law.upenn.edu/bll/archives/ulc/fnact99/1990s/ueta99.pdf.

[FN79]. SETTING UP IN DUBAI, supra note 34, at 21, 34.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 16
1 No. 5 Pace Int'l L. Rev. Online Companion 1

[FN80]. Even before the creation of the DIFC, there was some indirect common law influence on the practice of
commerce law in Dubai due to the large number of international contracts drafted by foreign lawyers trained in the
common law. Id. at 21.

[FN81]. A jurisdiction like Louisiana is still part of a broader legal system based on the common law because, of
course, the United States Constitution applies in Louisiana as it does in other states.

[FN82]. It should be noted that the DIFC Courts, which will discussed later, do not have any jurisdiction over
criminal cases. DIFC Courts, About the DIFC Courts, http://www.difccourts.ae/about_the_courts/ (last visited July
26, 2009). In other words, a crime committed within the DIFC would be prosecuted in the regular Dubai Courts.

[FN83]. These three hubs are specifically mentioned in the introductory section of the DIFC's website. Dubai
International Financial Centre Homepage, http://difc.ae/ (last visited July 26, 2009).

[FN84]. Bahrain is one such rival. REHMAN, supra note 10, at 120-22. Building upon its past experience as the
host of numerous offshore banking units, Bahrain has established an entity called the Bahrain Financial Harbour
(BFH) in Manama. Unlike the DIFC, the BFH is governed by the regular Bahraini legal system, which is a mixed
legal system of civil law and Islamic law with laws written in Arabic. AL TAMIMI & COMPANY, supra note 45, at
11; Welcome to the Bahrain Financial Harbour, http://www.bfharbour.com/html/index.php (last visited July 29,
2009). The regulator for the BFH is the Central Bank of Bahrain, formerly known as the Bahrain Monetary Agency.
Central Bank of Bahrain, http://www.cbb.gov.bh (last visited July 29, 2009). Nevertheless, Bahrain has generally
welcomed foreign direct investment especially in the financial sector. See, e.g., AL-SUWAIDI, supra note 14, at 11-
12, 28. See also KAMEL ABU SAQR, BRIDGING THE GULF: THE AUTHORITATIVE GUIDE TO AGENCY,
JOINT VENTURE & SPONSORSHIP IN THE ARABIAN GULF 109-11 (2000). Moreover, Bahrain and the
United States entered into a free trade agreement (FTA) that took effect in 2006. Office of the United States Trade
Representative, http:// www.ustr.gov/tradeagreements/free-trade-agreements (last visited July 26, 2009).

[FN85]. See The Law of the Judicial Authority at Dubai International Financial Centre, DIFC Law No. 10 (2004);
Court Law, DIFC Law No. 12 (2004), available at http://difc.ae/laws_regulations/laws/enacted_laws.html.

[FN86]. DIFC Courts, Independent Administration of Justice in the DIFC, http://www.difccourts.ae (last visited Feb.
9, 2008).

[FN87]. Sara Hamdan, DIFC Court Ready for Business, NATIONAL (Abu Dhabi), Oct. 9, 2008.

[FN88]. GARY SLAPPER & DAVID KELLY, THE ENGLISH LEGAL SYSTEM 99-100 (5th ed. 2001)
[hereinafter SLAPPER & KELLY]. See also Her Majesty's Courts Service, Commercial Court,
http://www.hmcourts-service.gov.uk/infoabout/admiralcomm/commercial_court.htm (last visited July 26, 2009).

[FN89]. SLAPPER & KELLY, supra note 88, at 107.

[FN90]. See The Law of the Judicial Authority at Dubai International Financial Centre, DIFC Law No. 12 (2004),
art. 1, available at http:// www.difc.ae/laws_regulations/laws/enacted_laws.html.

[FN91]. There is a bilingual (Arabic and English) website for the Dubai Courts. Government of Dubai, Dubai
Courts, http://www.dubaicourts.gov.ae/ (follow English hyperlink; then follow About Courts hyperlink) (last
visited July 26, 2009).

[FN92]. PRACTICAL GUIDE, supra note 16, at 10-17.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 17
1 No. 5 Pace Int'l L. Rev. Online Companion 1

[FN93]. DIFC Courts, Small Claims Tribunal, http:// www.difccourts.ae/index.html (follow Small Claims Tribunal
hyperlink) (last visited July 26, 2009).

[FN94]. DIFC Courts, About the Courts: Judges, http:// www.difccourts.ae/about_the_courts/structure/judges/ (last
visited July 26, 2009).

[FN95]. Id.

[FN96]. Id.

[FN97]. In the regular Dubai Courts, cases are heard either by a single judge or else by panels of either three or five
judges. SETTING UP IN DUBAI, supra note 34, at 26.

[FN98]. In England, juries are used more in criminal trials. SLAPPER & KELLY, supra note 88, at 462-67.

[FN99]. The courtroom is well equipped with flat screen TVs, video cameras, computers, and other similar
technologies.

[FN100]. DIFC Courts, Contact Us, http://www.difccourts.ae/base/contact/ (last visited July 26, 2009).

[FN101]. DIFC Courts, About the Courts: Officers of the Court, http://
www.difccourts.ae/about_the_courts/structure/officers/ (last visited July 26, 2009).

[FN102]. DIFC Courts, Attending Court: Registration of Practitioners,


http://www.difccourts.ae/about_the_courts/attending/ (last visited July 26, 2008).

[FN103]. Consider, for instance, the rule for admission to practice before the United States Court of International
Trade. CT. INT'L TRADE R. 74. That court is a specialized federal court based in New York. 28 U.S.C. 251-258
(West 2009). It is an Article III court being a court established by Congress. U.S. CONST. art. III.

[FN104]. DIFC Courts, About the Courts: Register of Practitioners, http://


www.difccourts.ae/about_the_courts/attending/register_practitioners/ (last visited July 26, 2009) [hereinafter
Register of Practitioners].

[FN105]. Although historically the English legal profession has been divided into barristers and solicitors, the lines
between the two branches have blurred in recent decades with barristers no longer having a monopoly on court
appearances. SLAPPER & KELLY, supra note 91, at 498-99.

[FN106]. Register of Practitioners, supra note 104.

[FN107]. Id.

[FN108]. The case load for the DIFC Courts is likely to increase over time due to various factors including the new
arbitration body that has been set up at the DIFC, which is discussed later in this article. Also, of course, the
economic downturn might generate some new cases for the DIFC Courts. Jonathan Ames, Registered for Action,
BRIEF: MIDDLE E.L. FOR BUS. PROF., Nov. 2008, at 46. There has also been some suggestion that eventually
disputes from the various other free zones in Dubai might be handled by the DIFC Courts. Id. See also Jonathan

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 18
1 No. 5 Pace Int'l L. Rev. Online Companion 1

Ames, Too Broke to Sue, BRIEF: MIDDLE E.L. FOR BUS. PROF., Feb. 2009, at 20. Arbitration, at least, is said to
be growing dramatically in Dubai as a whole with many of the disputes being related to construction and real estate.
Ryan Harris, Opening the Floodgates, BRIEF: MIDDLE E.L. FOR BUS. PROF., July 2009, at 33.

[FN109]. DIFC Courts, Legislation & Rules: Judgments, Orders & Decrees,
http://difccourts.complinet.com/en/display/display_main.html?rbid=2725&element_ id=3464 (last visited July 26,
2009) [hereinafter Judgments, Orders & Decrees].

[FN110]. Ithmar Capital Ltd. v 8 Investment, Inc., Jan. 31, 2008, (C.A.) (Dubai),
http://difccourts.complinet.com/en/display/display_main.html? rbid=2725&element_id =3467 (last visited Dec. 15,
2009).

[FN111]. Judgments, Orders & Decrees, supra note 109.

[FN112]. DIFC Law No. 1 (2008), available at http:// difc.complinet.com/en/display/display_viewall.html?


rbid=2618&element_ id=8998. This statute replaces the earlier DIFC Arbitration Law, DIFC Law No. 8 (2004). The
current DIFC Arbitration Law, like its predecessor, has been influenced by the work of the United Nations
Commission on International Trade Law (UNCITRAL) in creating suggested legislation in this field. Specifically,
many of the provisions of the UNCITRAL Model Law on International Commercial Arbitration of 1985 (as
amended in 2006) have been incorporated with slight modification into the DIFC Arbitration Law.

[FN113]. DIFC Law No. 8 (2004), available at http:// difc.complinet.com/en/display/display_main.html?


rbid=2618&element_id=9004.

[FN114]. For example, compare the grounds for challenge provisions in Article 12 of the UNCITRAL Model Law
with Section 18 of the DIFC Arbitration Law.

[FN115]. For a list of jurisdictions that have enacted legislation based on the UNCITRAL Model Law, see United
Nations Commission on International Trade Law, Status: 1985 - UNCITRAL Model Law on International
Commercial Arbitration, http://www.uncitral.org/uncitral/en/uncitral_texts/ arbitration/1985Model_
arbitration_status.html (last visited July 26, 2009).

[FN116]. United Nations Commission on International Trade Law, Status: 1958 - Convention on the Recognition
and Enforcement of Foreign Arbitral Awards, http://www.uncitral.org/uncitral/en/uncitral_ texts/
arbitration/NYConvention_status.html (last visited July 26, 2009).

[FN117]. At least that is how things should work in theory. Sometimes, however, serious difficulties arise when a
party attempts to actually enforce an arbitral award overseas even in a country that is a contracting state to the New
York Convention. See, e.g., Noah Rubins, The Enforcement and Annulment of International Arbitration Awards in
Indonesia, 20 AM. U. INT'L L. REV. 359 (2005). Somewhat similar problems have occurred in Saudi Arabia. Salah
Deeb, Kingdom of Saudi Arabia, in ESSAM AL TAMIMI, THE PRACTITIONER'S GUIDE TO ARBITRATION
IN THE MIDDLE EAST AND NORTH AFRICA 137-47 (2009).

[FN118]. London Court of International Arbitration, Arbitration and ADR Worldwide, http://www.lcia-
arbitration.com (last visited July 29, 2009) [hereinafter LCIA].

[FN119]. Dubai International Financial Centre, Press Centre: The Launch of the DIFC/LCIA Arbitration Centre,
Feb. 17, 2008, http://difc.ae/press_ centre/archive/2008/460.html.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 19
1 No. 5 Pace Int'l L. Rev. Online Companion 1

[FN120]. DIFC-LCIA Arbitration Centre, http://www.difcarbitration.com/ (last visited July 29, 2009).

[FN121]. The DIFC-LCIA has published a set of mediation rules, which are available on its website. Id.

[FN122]. The LCIA has its own mediation procedure that is described on its website. LCIA, supra note 118.

[FN123]. Dubai International Arbitration Centre, http://www.diac.ae/idias/ (last visited July 29, 2009). See also
ESSAM AL TAMIMI, THE PRACTITIONER'S GUIDE TO ARBITRATION IN THE MIDDLE EAST AND
NORTH AFRICA 183 (2009) [hereinafter PRACTITIONER'S GUIDE TO ARBITRATION].

[FN124]. The DIAC has a historic connection with the Dubai Chamber of Commerce and Industry, which is now
known simply as the Dubai Chamber. The DIAC is still located in the Dubai Chamber building alongside the Dubai
Creek. Yet another Dubai-based arbitral institution worth mentioning would be the International Islamic Centre
for Reconciliation and Arbitration (IICRA). Bilal Ahmad Khan, Reconciling under Shari'a, BRIEF: MIDDLE E.L.
FOR BUS. PROF., Dec. 2007, at 32; International Islamic Centre for Reconciliation and Arbitration (IICRA),
http://www.iicra.net/English/indexe.htm (last visited July 29, 2009).

[FN125]. The DIFC-LCIA Arbitration Centre has a number of rivals in the region. Most notably, less than a year
after the DIFC-LCIA Arbitration Centre was established, the Ministry of Justice & Islamic Affairs of the Kingdom
of Bahrain signed a Memorandum of Understanding with the American Arbitration Association (AAA) to establish
an entity to be called the Bahrain Chamber for Dispute Resolution-AAA. Press Release, Kingdom of Bahr. & Am.
Arbitration Ass'n Partner to Establish Domestic & Int'l Mediation & Arbitration Ctr. (Dec. 2, 2008), available at
http://www.adr.org/si.asp?id=5612. This body might prove to be especially attractive to American businesses
operating in the Middle East that already familiar with the AAA.

[FN126]. A brief history of the LCIA can be found on the organization's website. LCIA, supra note 118.

[FN127]. DIFC Law No. 1, sec. 11 (2008), available at http://


www.difc.ae/laws_regulations/laws/files/DIFC_Law_No_1_of_2008.pdf.

[FN128]. DIFC-LCIA Arbitration Rules. These rules are patterned after the LCIA rules. They can be found on the
DIFC-LCIA Arbitration Centre's website. DIFC-LCIA Arbitration Centre, supra note 120.

[FN129]. DIFC-LCIA Recommend Clauses can be found on the website. Id.

[FN130]. Press Release, Fulbright & Jaworski LLP, Launch of the DIFC LCIA Arbitration Centre in Dubai (Feb. 18,
2008), available at http:// www.fulbright.com (follow publications hyperlink). See also Habib Al Mulla,
Implications of all new DIFC Centre for Arbitration, GULF NEWS (Dubai), Nov. 20, 2008, at 52.

[FN131]. Id.

[FN132]. See generally Rubins, supra note 117.

[FN133]. QATAR CONST. art. 2.

[FN134]. For an overview of Qatar, see REHMAN, supra note 10, at 117-20.

[FN135]. QATAR CONST. art. 1.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 20
1 No. 5 Pace Int'l L. Rev. Online Companion 1

[FN136]. United Nations Member States, supra note 21.

[FN137]. Members and Observers, supra note 22.

[FN138]. Organization of Petroleum Exporting Countries, Qatar facts and figures,


http://www.opec.org/aboutus/member%20countries/qatar.htm (last visited July 26, 2009).

[FN139]. GCC, supra note 24.

[FN140]. Central Intelligence Agency, The World Factbook: Qatar, https:// www.cia.gov/library/publications/the-
world-factbook/geos/qa.html (last visited July 2, 2009).

[FN141]. Maritime Delimitation and Territorial Questions Between Qatar and Bahrain (Qatar v. Bahr.), 2001 I.C.J.
40 (Mar. 16). For an analysis of the decision, see GIOVANNI DISTEFANO, BORDER DISPUTES AND THEIR
RESOLUTION ACCORDING TO INTERNATIONAL LAW: THE QATAR-BAHRAIN CASE (Emirates Lecture
Series No. 59, 2005).

[FN142]. Sudip Roy, Qatar Seeks Diversification from Energy Wealth, EUROMONEY (Dec. 2007).

[FN143]. REHMAN, supra note 10, at 118.

[FN144]. Roy, supra note 142.

[FN145]. Id.

[FN146]. AL TAMIMI & CO., Qatar: Making the Rules, LAW UPDATE, Apr. 2006, at 6 (on file with author);
Sundip Roy, Qatar's Grand Ambitions, EUROMONEY, Apr. 2006; Insurers' New Favourite Destination,
REACTIONS (U.K.), Apr. 2007; Stephen Timewell, Qatar: Good Omens of Upheaval, BANKER, June 1, 2007. See
also Qatar Financial Centre, http://www.qfc.com.qa (last visited July 29, 2009).

[FN147]. AL TAMIMI & COMPANY, supra note 45, at 12.

[FN148]. Qatar Financial Centre (QFC) Authority, Why QFC, http:// www.qfc.com.qa/output/Why_QFC.aspx (last
visited Apr. 20, 2009). See also Philip Thorpe, Building Better Markets, TRENDS: INT'L MAG. ON ARAB AFF.,
Mar. 2008, at 146-50.

[FN149]. To search for licensed firms, see QFC, Public Register, http:// www.qfc.com.qa/output/public-register.aspx
(last visited July 26, 2009).

[FN150]. See Qatar Financial Centre (QFC), Law No. 7 (2005) (codified as amended at QFC Law No. 2 (2009)),
available at http://www.complinet.com/net_ file_store/new_rulebooks/q/f/QFC_Law-V3-Oct09.doc.pdf.

[FN151]. For an English version of this law, see QFC Legislation, http://
www.complinet.com/qfcra/display/display.html?rbid=1557&element_id=2 (last visited Oct. 19, 2009).

[FN152]. The QFC Regulatory Authority is separate from the QFC Authority. QFC, Regulatory Authority,
http://www.qfc.com.qa/output/regulatory-authority.aspx (last visited Apr. 20, 2009).

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 21
1 No. 5 Pace Int'l L. Rev. Online Companion 1

[FN153]. Media reports have suggested that Qatar might begin to consolidate its regulatory bodies into a single
regulator. Qatar to unify Financial Regulations, ARABIAN BANKING & FIN., Aug. 2007, at 12; Qatar: Good
Omens of Upheaval, BANKER, June 1, 2007; Doha Sets the Pace with Standard Reforms, BANKER, Sept. 1, 2008.

[FN154]. The term regulations is used rather than laws for the QFC. QFC, QFC Legislation,
http://www.complinet.com/qfcra/display/index.html (last visited July 26, 2009). The Fact's regulations occupy a
position similar to that of the DIFC's laws while the QFC's rules roughly correspond to the DIFC's regulations.
However, at this point in time, the QFC has a smaller amount of legislation than the DIFC.

[FN155]. QFC, About the QFC, supra note 148.

[FN156]. QFC Civil and Commercial Court, QFC Civil and Commercial Court, http://www.qfccourt.com/ (last
visited July 26, 2009).

[FN157]. QFC Regulatory Tribunal, QFC Regulatory Tribunal http:// www.qfctribunal.com/index.php (last visited
July 26, 2009). Previously, these bodies were called the QFC Tribunal and the Appeals Body, respectively. AL
TAMIMI & COMPANY, supra note 45, at 12; QFC Pushes on with New Legal System, EUROWEEK, May 26,
2006, at 16.

[FN158]. QFC Civil and Commercial Court, QFC Civil and Commercial Court Judges,
http://www.qfccourt.com/members.php (last visited July 26, 2009); QFC Regulatory Tribunal Members,
http://www.qfctribunal.com/members.php (last visited July 26, 2009).

[FN159]. Some have previously worked elsewhere as judges. Others are Queen's Counsels or appear to have
achieved a comparable level of distinction in their legal careers. The most famous would have to be the President of
the QFC Court, Lord Woolf, who served as Master of the Rolls and Lord Chief Justice of England and Wales. Id.

[FN160]. Richard Harding, Court Conundrum, BRIEF: MIDDLE E.L. FOR BUS. PROF., Aug. 2008, at 14; Kathryn
Young, The Rule of Law: Qatar Law Forum, BRIEF: MIDDLE E.L. FOR BUS. PROF., June 30, 2009, at 14.

[FN161]. Qatar Fin. Ctr. Auth. v. Silver Leaf Capital Partners L.L.C., June 1, 2009, No. 0001/2009 (Civ. Comm. Ct.
QFC), translation available at http://www.qfccourt.com/Judgement.php.

[FN162]. QFC Civil and Commercial Court, About the Qatar Financial Centre Civil and Commercial Court,
http://www.qfccourt.com/who.php (last visited July 26, 2009).

[FN163]. Arbitration Regulations 2005, QFC Regulation No. 8, available at


http://www.complinet.com/qfcra/display/display.html?rbid=1557&element_id=3.

[FN164]. Id.

[FN165]. Id.

[FN166]. Qatar Chamber of Commerce and Industry, Arbitration Center, http://


www.qcci.org/English/Qa_Int_Ar_En/Pages/default.aspx (last visited July 26, 2009). See also PRACTITIONER'S
GUIDE TO ARBITRATION, supra note 123, at 127.

[FN167]. Ras Al Khaimah launches Financial City, GULF BUS., July 2007, at 14.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 22
1 No. 5 Pace Int'l L. Rev. Online Companion 1

[FN168]. RAK Investment Authority, RAK sets up Financial City, http:// www.rakia.com/News.aspx?id=21 (last
visited July 26, 2009).

[FN169]. RAK FTZ, Ras Al Khaimah Free Trade Zone, http://www.rakftz.com/en (last visited July 26, 2009).

[FN170]. Id.

[FN171]. THE GUIDE, supra note 56, at 37-41.

[FN172]. For thoughts on this phenomenon, see REHMAN, supra note 10, at 110-11.

[FN173]. Global Financial Crisis Reaches the Gulf (Al Arabiya News Channel Nov. 21, 2008),
http://www.alarabiya.net/articles/2008/11/21/60501.html.

[FN174]. A number of the institutions impacted by the crisis already had a presence in the region. For example,
Lehman Brothers once had an office in the DIFC. DFSA Sees No Early Resolution to Lehman Fiasco (Sept. 16,
2008), http:// www.gulfnews.com/business/Banking_and_Finance/10245440.html.

[FN175]. AL TAMIMI & CO., RAK Sanctions Charter for Commercial Arbitration Centre, LAW UPDATE, Sept.
2008, at 10, available at http:// www.tamimi.com/files/law%20updates/lu-210sep08.pdf.

[FN176]. REHMAN, supra note 10, at 111-17.

[FN177]. Id.

[FN178]. Fadi Fahem, King Abdullah Economic City to be Largest Saudi Private Sector Investment, KHALEEJ
TIMES, Dec. 21, 2005, available at http:// www.khaleejtimes.com/DisplayArticle.asp?
xfile=data/business/2005/December/business_ December435.xml&section=business&col=. See also Khalil Hanware
& P.K. Ghafour, King Abdullah Opens Key KAEC Projects, ARAB NEWS, June 12, 2008, available at,
http://www.arabnews.com/?page=6&section=0&article=110828&d=12&m=6&y=2008.

[FN179]. KAEC, King Abdullah Economic City, http:// 207.5.46.159/en/Home/index.html (last visited July 26,
2009).

[FN180]. For instance, there is no relevant information on the English version of the project's official website. Id.

[FN181]. The King Abdullah Financial District, The King Abdullah Financial District,
http://www.kingabdullahfinancialdistrict.com/html/english/home_ en.aspx (last visited July 26, 2009). See also
Press Release, The King Abdullah Financial District, Saudi Arabia Approves Master Plan for Middle East's Biggest
Financial District (Mar. 7, 2007), available at http:// www.ameinfo.com/112946.html.

[FN182]. Saudi Arabia is more conservative than the UAE in general and Dubai in particular. The relatively more
tolerant social atmosphere in Dubai has helped attract tourists and foreign workers as well as investment. Moreover,
the larger role of religious law in Saudi Arabia could result in resistance towards any common law jurisdiction being
set up in the kingdom. AL-SUWAIDI, supra note 14, at 24-26.

[FN183]. QASRAWI, supra note 55, at 24-28.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


1 No. 5 PACEIOC 1 Page 23
1 No. 5 Pace Int'l L. Rev. Online Companion 1

[FN184]. Id. at 63.

1 No. 5 Pace Int'l L. Rev. Online Companion 1

END OF DOCUMENT

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 1
3 Marq. Sports L.J. 59

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 2
3 Marq. Sports L.J. 59

Marquette Sports Law Journal


Fall, 1992

The First Annual Sports Dollars & Sense Conference: A Symposium on Sports Industry Contracts and Negotiations

Article

*59 LEGAL ANALYSIS OF THE NHL PLAYER'S CONTRACT

Joseph M. Weiler [FNa1]

Copyright 1992 by Marquette University; Joseph M. Weiler

I. INTRODUCTION

If one were to scan the provisions of a National Hockey League (NHL) Standard Player's Contract ten years ago
and compare these clauses to the current terms of the Standard Player's Contract (see Attachment A) or the
Collective Bargaining Agreement, it would be difficult to discern any major alterations. However, anyone who reads
the morning sports page cannot help but be aware of the dramatic changes in the world of hockey resulting in a new
context in which these contractual provisions now operate. Consequently, when I sat down to write this article, I felt
that the best way to analyze a NHL Standard Player's Contract would be to review the recent major legal events in
the NHL. Understanding the impact of these developments is integral to appreciating that the terms of the new NHL
Standard Player's Contract are now being written by different people who comprise the labor-management
relationship in hockey, and that these contracts are interpreted by a new breed of arbitrators on behalf of a much
broader demographic spectrum of hockey players. In my view, each of these personality changes in the game has a
major effect on how player contracts are being negotiated and how they will be enforced.

These changes have not come without conflict. During the spring of 1992, the NHL experienced its first players'
strike. I believe this strike was not caused by the relative difficulty in the issues being negotiated. These issues are
familiar to any sports fan free agency, the entry and waiver drafts, endorsement revenue, and so forth. Rather, I
believe the strike was the result of a new relationship tested under fire between the NHL owners and the players, and
particularly between the owners, the NHL Players Association, and its new executive director, Bob Goodenow. The
resultant Collective Bargaining Agreement has provided the parties with an eighteen-month period to review and
hopefully to strengthen this relationship before they begin bargaining again next summer. My remarks will attempt
to trace the significant factors that the parties must continue to address in order to move to the next stage of their
relationship. How the terms of the next Standard Player's Contract and the Collective Bargaining Agreement *60
will operate in the real world, of course, depend on whether the parties can mend the wounds created by the strike
and set in motion the mechanisms needed to resolve their differences before they stand toe to toe next summer. Thus
far, reconciliation has been very slow.

I will focus on several features of the NHL that, in my view, will have a critical impact on the terms of player
contracts and their enforcement. I will explain these forces with reference to specific disputes as well as analyze
arbitration decisions and other processes of dispute resolution that help describe how the terms and conditions of
employment of NHL players are negotiated and enforced. These disputes describe the nature of:

(1) the emerging internationalization of the NHL;

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 3
3 Marq. Sports L.J. 59

(2) the impact of the form of restricted free agency in the NHL and how salary arbitration and
equalization arbitration operate;
(3) the lack of sharing of relevant information between the league and the NHLPA and how this
contributed to the recent strike and was the subject of the first major grievance arbitration decision in NHL
history; and finally,
(4) the failure of parties to work together to address player drug use and injury issues as a first step in the
creation of a new relationship that would be more conducive to achieving consensus on the terms of revenue
sharing and salary cap that they agreed in principle to pursue at the end of the players' strike.

II. THE INTERNATIONALIZATION OF THE NATIONAL HOCKEY LEAGUE

One need only glance at the roster of the Winnipeg Jets or look at the players taken in the first round of the
recent NHL entry draft to see that what used to be a game dominated by Canadian players and coaches has now
become a game of European and American as well as Canadian men. For example, the Jets' roster has three Russians
(Sergei Bautin, Evgeny Davydov and Alexei Zhamnov), two Finns (Teemu Selanne and Teppo Numminen), two
Swedes (Thomas Steen and Fredrik Olaussen), and three skilled Americans (Phil Housley, Ed Olczyk and Keith
Tkachuk). The Jets have a Finnish assistant coach (Alpo Suhonen) and a general manager (Mike Smith) who has a
Ph.D. in Political Science and has authored seven books.

The recent NHL entry draft included many first round picks from Europe and the United States. Rookie of the
Year honors will be contested by the likes of Teemu Selanne of the Jets, Viacheslav Kozlov of the Detroit Red
Wings, Dimitri Yushkevich of the Philadelphia Flyers, Alexei Kovalev of the New York Rangers, Roman Hamrlik of
the Tampa Bay Lightning (the first player picked in the 1992 draft), Darius Kasparaitis and Vladimir *61 Malakhov
of the New York Islanders, Vitali Prokhorov of the St. Louis Blues, Martin Straka of the Pittsburgh Penguins, Jozef
Stumpel of the Boston Bruins, and Alexei Zhitnik of the Los Angeles Kings.

The result of the influx of non-North American players into the NHL over the past decade is that the League is
beginning to look like the United Nations on ice. In 1967, Canadian born players made up nearly 97% of the NHL
rosters. By 1992, Canadian players comprised less than two-thirds of NHL rosters, U.S. born players 17% of NHL
rosters, Russia born 7%, Czech born 5%, Sweden born 3%, and Finland born 2%.

The addition of this much broader talent pool of players has helped to pave the way for expansion into five new
cities (San Jose, Tampa, Ottawa, Miami, and Anaheim) and ultimately will contribute to an increased international
approach to the way the game is played. Indeed, the introduction of these talented new players will also help pave
the way to expansion of League games, television coverage and merchandising opportunities, and even perhaps
franchise expansion into European and Asian markets.

The NHL owners and NHLPA recognized this potential in their settlement terms of the spring strike when they
agreed to add two League games in non-NHL cities and to work together on both domestic and international levels
to generate revenues and to embark on special projects and promotions for the good of the game. To date, no such
joint action has been attempted. In the medium term, however, it is anticipated that the parties will cooperate toward
expanding both the revenue base and the player pool that can be tapped from foreign markets.

The internationalization of the NHL has brought some early legal growing pains, particularly involving the
enforcement of transfer fee obligations to the Soviet Ice Hockey Federation and the adjudication of standard player
contract obligations involving players from the former Soviet Union. Two of these cases involve the Vancouver
Canucks and a former Central Red Army Hockey Club star, Vladimir Krutov. For the ease of reference, I will refer
to these cases as Krutov I (a case involving the transfer fee obligations of the Canucks to the Soviet Ice Hockey
Federation and the Central Red Army Club) and Krutov II (the case involving Krutov's claim for two years' back
pay). Krutov II is pending; Krutov I was adjudicated by arbitration last winter.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 4
3 Marq. Sports L.J. 59

Many details of these cases are shielded by confidentiality and shall remain so. I assisted the Canucks on both
matters. However, these cases are significant to sports lawyers generally because they illustrate that with the
internationalization of professional sports, the legal mechanisms applied to enforce contractual obligations will
likely involve international commercial *62 arbitration and cross-cultural problems arising from contract
negotiation, interpretation and dispute resolution between different legal systems.

Krutov I was heard by a Swedish arbitrator in Stockholm under the Uncitral Rules of International
Commercial Arbitration. The issue in the case was whether the Canucks were obligated to continue to pay transfer
fees to the Soviets for the second and third years of a three-year deal. The parties had entered into a transfer fee
agreement in September 1989 that referenced a clause in an Addendum to the Standard Player's Contract where the
parties agreed that Krutov could not be cut, traded or sent to the minor leagues. This clause was inserted at the
request of the Soviets, who did not want their star players coming under disrepute in North America. If the player
did not work out with the NHL club, the Soviets preferred that he return to his native Russia.

The Canucks pointed out that at the time the contract was signed such a clause would likely be turfed out by
the NHL Control Registry because it violated League rules. Sure enough, after Krutov commenced playing for the
Canucks, the contract was submitted for registration, and the NHL League office refused to register the contract on
the ground that it violated the League's Constitution, By-Laws and Collective Bargaining Agreement. Under League
rules, Krutov was ineligible to play unless he was under a contract registered with the league.

Krutov, like his former Red Army linemates, Igor Larionov and Sergei Makarov, was asked to sign a new
contract without the offending clause. Larinov and Makarov did so. Krutov would not. As a result, the Canucks
could not play Krutov in future League games and promptly cut off transfer fee payments to the Soviet Ice Hockey
Federation and salary payments to Krutov. The Soviets took the case to arbitration under a term of the transfer fee
agreement and were successful. The Canucks were required to pay the balance of the transfer fee despite the fact
that the player was ineligible to play in the NHL.

The relevant point of this case for sports lawyers is that the nature of the international commercial arbitration
process as conducted in Sweden is a far cry from what a Canadian or American lawyer is used to back home. In
order to adequately prepare for such a case, a lawyer must be aware of the Uncitral Rules of International
Commercial Arbitration, including how these rules are administered by Commercial Arbitration Centres (in this
case the Stockholm Chamber of Commerce), how the foreign and North American Arbitration statutes apply for
purposes of appeal and enforcement of the award, and the conflicts of law and choice of law questions that arise in
these types of cases. For example, in this case the contract was signed in Moscow. Under these circumstances, which
contract law applies *63 the Russian Civil Code or the Soviet Commercial Code? Krutov's player contract was
performed in British Columbia and other parts of North America. In these circumstances, would British Columbia
statutory or common law of contract apply?

The commercial arbitration process proved to be very expensive both in terms of time and money. Over the
protest of the Canucks, the hearing was scheduled by the arbitrator in mid-January, during the NHL season. The
key witness for the Canucks was Pat Quinn, the team's president, general manager, negotiator and coach. He was
forced to leave his coaching responsibilities and fly to Sweden for the case. The arbitrator appointed by the
Stockholm Chamber of Commerce knew nothing about professional hockey, or sports law or the unique legal regime
of the NHL. Rather, he was a distinguished Swedish lawyer familiar with Swedish law who was asked to adjudicate
a case involving Russian and Canadian law. What do you think the odds are that this task can be done well with a
marathon hearing on a long weekend in January?

Krutov II involves the player's claim for back pay for two years under his Standard Player's Contract (SPC). The
irony of this claim is that it seeks to enforce a claim under the terms of the SPC rejected for registration by the

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 5
3 Marq. Sports L.J. 59

League office because the particular term at issue (the no-cut, no-trade, no-farm clause) violated the Constitution,
By-Laws and Collective Bargaining Agreement of the League. As noted earlier, Krutov refused to sign a contract
that would be accepted by the League for registration.

Under the terms of the Standard Player's Contract (paragraph 19), any disputes between the player and his club
arising out of the interpretation and application of the contract are to be arbitrated by the President of the NHL.
Krutov's lawyers sought to enforce his claim under the SPC in an action brought in the Supreme Court of British
Columbia. However, the Court ruled that the fact that the Standard Player's Contract was not registerable with the
NHL does not void the arbitration procedures contemplated in the SPC. [FN1]

The Court refused to give effect to Krutov's argument that the involvement of the NHL in the earlier decision
concerning the legality of the SPC under League rules gave rise to an apprehension of bias that should preclude
arbitration. This decision is consistent with a long line of cases that have upheld the arbitral process under paragraph
19 of the SPC as not offending the rules of natural justice despite the fact that the adjudicator is the NHL President,
who is elected by the NHL member clubs and paid by *64 the owner-partners in the League. As with earlier cases
where players have objected to the role of the President as arbitrator under the Standard Player's Contract, the
Collective Bargaining Agreement, the By-Laws or the Constitution on the ground of apprehension of bias, the courts
have consistently refused to intervene. [FN2]

The role of the NHL President as arbitrator is quite unusual in other non-sport collective bargaining contexts
(which explains why Krutov would so object), but is not without some parallel in other professional sports.
Commentators describe this presidential role as reflective of the good relationship enjoyed by the NHL and the
NHLPA. [FN3]

On-ice officials, as well as the President of the NHL or his designate, have the authority to impose discipline on
a player for both on-ice and (in the case of the President alone) for off-ice behavior. These decisions addressing the
issue of whether a player has acted in a manner that is dishonorable or prejudicial to or against the welfare of the
League or the game of hockey can result in expulsion, suspension or a fine. [FN4] These disciplinary decisions are
reviewable by the Board of Governors on the grounds that the discipline imposed was unreasonable. These kinds of
disciplinary decisions are not subject to grievance arbitration under the Collective Bargaining Agreement.

The imposition of discipline by a club on a player is subject to grievance arbitration that may involve a two-part
process, depending on the nature of the discipline. If the grievance involves a disagreement about the facts, (such as
the propriety of the discipline) the interpretation of the Collective Bargaining Agreement or a club rule, the arbitrator
is an independent third party. [FN5] If the dispute concerns the severity of the penalty imposed, the interpretation of
the SPC, the NHL Constitution or the NHL By-Laws, then the NHL President is the arbitrator. If an independent
arbitrator is required to interpret a club rule, he or she is bound by the club's interpretation unless such interpretation
is arbitrary or capricious. [FN6]

Krutov II involves factual circumstances where the player may not have been in good physical condition
during training camp or at the outset of *65 the 1990-91 season. As such, he could be viewed as having been in
violation of his obligations to the Vancouver Hockey Club under paragraphs 2(a) and (b) of the SPC. To my
knowledge, there has been no arbitral jurisprudence in any professional sport on the meaning of a player's obligation
to be in good physical condition. There have been several decisions in Major League Baseball on the impact of
repeated drug use on a player's obligation to remain in good physical condition. Likewise, in the NBA there have
been several grievances on the issue of whether a player has adequately completed his drug rehabilitation program
and thus is fit to play. However, the Krutov case appears to be the only professional sports case where the issue is
one of simply being overweight and out of shape rather than being affected by drug usage which could also be the
subject of discipline per se. It will be interesting to see if this issue becomes the subject of arbitral comment in the
Krutov II case.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 6
3 Marq. Sports L.J. 59

The Krutov II case is remarkable because circumstances in the case may lead to various adjudicators each
having a different role to play in different stages of the process before the ultimate question of liability for back pay
can be resolved. For example, under the terms of paragraph 19 of the NHL Standard Player's Contract, it would
appear that the NHL President would render an interpretation of the meaning of the phrase in good physical
condition and decide whether a failure by the player to be in good physical condition would absolve the club from
its obligation to pay the player. An independent arbitrator would presumably have the obligation to determine if this
failure to pay was a form of discipline or not. If the decision was that the club's failure to pay the player was a form
of discipline, then the severity of the discipline would be a matter decided by the President. If the failure to pay the
player's salary was found to be a form of discipline pursuant to a club rule, then the independent arbitrator would be
bound by the club's interpretation of its rule unless such interpretation was arbitrary or capricious.

As you can see, the overlapping jurisdiction of the various decision-makers and arbitrators makes for a very
complex situation under the NHL legal regime. It is a wonder Justice Harvey stayed the claim by Krutov in his
court, and remitted the matter back to the parties to sort it out. One can appreciate why a foreign player with limited
English language skills would have difficulty understanding how this web of interlocking arbitral systems could be
unraveled.

III. FREE AGENCY, EQUALIZATION AND SALARY ARBITRATION

Under the new agency NHL Collective Bargaining Agreement and By-Law 9A, there are six categories of free
agency, three of which have been *66 added during the latest round of negotiations. The vast majority of players,
however, are covered by the previous three categories of free agency:

Group I - Players under the age of 24 who have not played five years of professional hockey.

Group III - Players 30 years of age or over.

Group II - All other players.

The three new categories of free agency negotiated in 1992 are:

(i) A player who has completed ten professional seasons and did not earn more than the average league salary in
his last contract year. The player can elect once in his career to become an unrestricted free agent at the end of his
contract (including his option year);

(ii) A player who is 25 years of age or older and has completed three professional seasons and has not played in
more than 80 NHL games can become an unrestricted free agent. The number of games played by a goaltender to
become eligible under this category is to be determined by the mediation committee;

(iii) A Defected Player. There are four categories of defected players. The old club has the right to match.

If the old club loses a Group I player, it may be entitled to compensation or equalization from the new club
signing the Group I free agent. Equalization may consist of players, draft picks and cash. The nature of
compensation, consisting of various draft picks, depends on the monetary value of the new contract offered by the
new club. In order to be entitled to compensation, the old club must make a qualifying offer of (a) $200,000, or (b)
an amount equal to the player's previous year's salary. The old club also has a right to match if it makes a qualifying
offer 15% over the player's salary of the previous year and the player chooses compensation rather than equalization.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 7
3 Marq. Sports L.J. 59

Group II free agents also have the right to choose compensation or equalization. To be entitled to compensation
or equalization, the old club must make a qualifying offer similar to that for a Group I free agent. The old club has
the right to match under either scenario. However, if a Group II free agent is 26 or older, and his old club's 15%
greater offer is less than $351,000, the old club will not have a right to match.

Group III free agents have the choice of being subject to Group I type of equalization or that the old club has the
right to match. The old club has the right to match only if it makes a qualifying offer 15% greater than the player's
previous year's salary and the offer exceeds $351,000.

This system of free agent compensation evolved in the NHL at various stages of the renewal of the Collective
Bargaining Agreement since 1975. The NHL free agency system combines certain elements of rules developed *67
in the National Football League (compensation based on salary), the National Basketball Association (the right to
match or right of first refusal), and Major League Baseball (protection of certain players from selection as
compensation). The legitimacy of the system of equalization for the loss of a free agent under U.S. antitrust laws
was upheld in the case of McCourt v. California Sports Inc. [FN7]

In McCourt, the NHL argued successfully that the compensation/equalization scheme in By-Law 9A was (as
noted in the evidence of President John Ziegler) essential to maintain the competitive balance among member
teams in the NHL [and] that the less affluent clubs and those clubs located in less desirable cities would not be able
to retain good hockey players without By-Law 9A. The opponents of By-Law 9A, of course, argued that it would
inhibit teams from signing free agents and would depress salaries more than if open competitive bidding were
allowed. The latter argument carried the day in U.S. District Court. However, the Court of Appeals for the Sixth
Circuit vacated the lower court injunction on the basis that the NHL's Collective Bargaining Agreement dovetailed
with By-Law 9A in exonerating the compensation/equalization scheme from antitrust challenge under the labor
exemption doctrine in American antitrust law.

When one examines the compensation or equalization that the old club would receive if a Group I or II player
signed with a new club, it is not surprising that very few NHL clubs bid on free agents and very few quality players
have moved to new clubs. This limited degree of player movement and the effect of the compensation/equalization
scheme in By-Law 9A was clearly evident during the 1980s when virtually no quality players exercised free agency
rights. The best example of the risk of a team signing free agents is the experience of the St. Louis Blues and Scott
Stevens in 1990-91.

Stevens, an all-star defenseman, played for the Washington Capitals in the late 1980s. In 1990, he played out his
option and signed a contract with St. Louis that more than doubled his salary with the Capitals. The Capitals were
entitled to match the Blues' offer to Stevens, who was a Group II player. The Capitals declined. Under the provisions
of By-Law 9A, the Capitals became entitled to five first-round draft picks as compensation for the loss of the rights
to Stevens.

In the summer of 1991, the St. Louis Blues again entered the free agent market to sign Brendan Shanahan, a
Group I player with the New Jersey *68 Devils. Under the provisions of By-Law 9A, the Devils were entitled to
equalization. Under By-Law 9A, the club acquiring the player must immediately notify the player's former club and
the NHL President of the signing. The two clubs then have three business days to agree on an equalization payment.
If no agreement is reached, the clubs have two more business days to submit their proposals concerning equalization
to a neutral third party (in this case, arbitrator Ed Houston). The arbitrator has two business days to reach a decision.
The arbitrator must choose one proposal, without any compromise, a process somewhat analogous to the final offer
salary arbitration process in Major League Baseball. [FN8]

The significant difference between final offer equalization arbitration in the NHL and final offer salary
arbitration in Major League Baseball is that in baseball, the criteria specified in Article VI, F (12) of the Basic

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 8
3 Marq. Sports L.J. 59

Agreement provide guidance to practitioners and the arbitrator so that they can decide which proposal is more
reasonable. These criteria in baseball include the length and consistency of the players's career contribution, the
record of the player's past compensation and comparative baseball salaries. The parties at salary arbitration
proceedings present statistical evidence of the player's performance and compare these with the achievements of
players in similar positions and their salaries.

Objective standards of player performance are not as easily utilized in equalization arbitrations in the National
Hockey League. The practical effect of equalization is a forced trade. Equalization to the old team may consist of
draft picks, players and cash. It is unlikely that a simple one-for-one player equalization decision could be made.
For example, it would be difficult for the Devils to find a player on the Blues' roster who had the same qualities as
Shanahan a forward who combined speed, size, youth, toughness and offensive qualities. After all, if such a
player existed, why would St. Louis have ventured into the competitive free agent market to sign Shanahan in the
first place?

The equalization arbitration process is further complicated by the fact that the compensation can take the form
of a combination of players (who may play different positions than the free agent), draft picks and cash. It is the
combined effect of these three components that form the proposal advanced by either party at the arbitration. Players
who play different positions may serve different team functions and are often evaluated on different scales (e.g.,
goaltenders in hockey, like pitchers in baseball, tend to be paid *69 the highest salaries on the team). Draft choices
represent unknown potential and thus are more difficult to quantify. In some years, the crop of draft age players is
thought to be more ripe than in others. Some players, like Brett Hull who was drafted 117th overall in 1984,
develop later in their careers. And finally, hockey teams are organic entities with a certain esprit de corps or
chemistry that contributes to their success. This feature, however, is difficult to quantify in an arbitration hearing.

In light of these complicating factors, Bijou suggests the following approach for counsel who represent the old
and new team. For the old team that is owed compensation, counsel must:

(i) prove the contributions of the free agent to his former team;
(ii) describe the impact of the loss of that player's services to the team; and
(iii) impress upon the adjudicator the insufficiency of the new team's proposal.
For counsel representing the new team that owes compensation, the task of counsel is:

(i) to downplay the potential contribution of the new player a task requiring considerable finesse
because of the presumably high salary offered by the club to attract the player in the free agent market;
(ii) describe the sufficiency of the compensation offered in terms of the player(s)' past performance and
potential to contribute to the club owed compensation; and
(iii) demonstrate that the compensation requested by the club losing the free agent is excessive, if not
punitive. [FN9]
The arbitrator's function in an equalization arbitration is to select one proposal as more reasonable. The
challenge for either club is that each side has only a few days to prepare for the case and neither side knows what the
other will offer until the hearing commences. Recognizing this logistical difficulty, By-Law 9A.9(c) provides a
safety valve. More specifically, while the arbitrator must render his judgment within two days, the parties, after
receiving the other team's proposal, have the opportunity to resume negotiations and reach an agreement. However,
the arbitrator must render his or her decision within two days unless he or she is notified by both sides that an
agreement about compensation has been reached. There is no appeal from the arbitrator's decision, unless, as in the
case of Dale McCourt, the entire process is challenged in court as a violation of antitrust law.

*70 How has this system worked? The awarding by Judge Houston of Scott Stevens as compensation for
Brendan Shanahan was highly criticized. Commentators railed that this was a trade that no one in their right mind
would make. A Hockey News writer suggested that the NHL honor Judge Houston as its Executive of the Year

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 9
3 Marq. Sports L.J. 59

because there aren't many guys in the business that could have pulled off that deal. These comments failed to
consider that the judge could not award what he thought was the best compensation. He could only award the more
reasonable of the two offers. The Blues' proposal of skater Rod Brind'Amour, substitute goalie Curtis Joseph and
future third-and fourth-round draft picks was considered less reasonable by Judge Houston than New Jersey's
proposal of Scott Stevens. In fact, the New Jersey Devils' written submission pointed out that the Blues' proposal at
arbitration paled in comparison to its final offer during pre-arbitration negotiations.

The predictable aftermath of the Stevens-Shanahan case was that the NHLPA was expected to seek changes in
the free agent compensation system during the next set of negotiations in 1991-92. The NHLPA was somewhat
successful in this endeavor. Under the new system, the Group I player has a choice whether his old club should be
compensated with draft picks (the nature of which depends on the new salary paid to the player) or whether he
would become subject to the system of equalization arbitration that provides for existing players as compensation. If
the latter system is used, there is an obvious need for the arbitrator to have intimate knowledge of the game, to be
familiar with its players and both the statistical and intangible contribution that players make to individual teams.
Perhaps a panel of arbitrators consisting of ex-players, coaches and general managers would be appropriate.
Otherwise, the perception that the equalization arbitration process is a crap shoot with no identifiable standards
may pose too great a downside risk for a NHL Club to enter the free agent market in order to strengthen their teams.
If this proved to be the case, then the already miniscule flow of free agents between NHL clubs may completely dry
up.

A. Salary Arbitration

The National Hockey League was the first professional sports league to insert salary arbitration by an
independent arbitrator into its collective bargaining arrangements with its players. This initiative was prompted by
the 1969 Report of the Task Force in Sports in Canada, which was highly critical of the anti-competitive effect of
the reserve clause found in paragraph 17 of the NHL Standard Player's Contract since 1958. The reserve clause
tied the player to his team in perpetuity in much the same way that analogous*71 clauses operated in baseball,
football and basketball. The SPC provided that any dispute about a player's salary could be submitted to the
President of the League for final disposition.

In 1969, the NHLPA and the League incorporated a new system of salary arbitration to be conducted initially by
two nominees appointed by the club and the player. If there was no agreement on an appropriate salary by the two
nominees, the salary would be set by a third party arbitrator. In 1971, this arbitration system was changed so that
subsequent disputes were to be resolved by a single salary arbitrator, Judge Edward Houston. Salary arbitration was
made available to any unsigned drafted player or any other player whose contract had expired and who could not
reach agreement with his club on terms of renewal.

Salary arbitration in the NHL differs from that in baseball in several significant aspects. First, access to salary
arbitration in the NHL is available to unsigned draftees as well as to any unsigned player. Baseball salary arbitration
is only available for players with at least two (or more likely three) years playing experience and with less than six
years playing experience. Thereafter, of course, players have relatively unrestrictive free agency rights in baseball.
In hockey, as described above, free agency is complicated by the compensation/equalization scheme in By-Law 9A
for players who have played professional hockey for less than 10 years or who are under the age of 31.

The second distinctive feature of salary arbitration in the NHL is that conventional adjudication procedures are
used rather than the final-offer selection process used in baseball. Similar to baseball, arbitrators in NHL salary
arbitrations may consider a variety of evidence in rendering their decisions about what is fair compensation,
including:

1. The overall performance of the player in the previous season including official statistics prepared by

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 10
3 Marq. Sports L.J. 59

the league (both offensive and defensive);


2. The number of games played by the player, his injuries or illnesses during the preceding season;
3. The length of service of the player in the league and/or with the disputant club;
4. The overall contribution of the player to the competitive success or failure of the club in the preceding
season; and
5. Any special qualities of leadership or public appeal not inconsistent with the fulfillment of his
responsibilities as a playing member of his team.
*72 6. The compensation of any player(s) who is alleged to be comparable to the player who is the
disputant. [FN10]
The third distinguishing feature of NHL salary arbitration is the procedure and timing of the arbitration process.
NHL salary arbitration involves the presentation of briefs by the club and by the representative of the player. These
briefs are usually exchanged immediately prior to the hearing or are simply submitted to the arbitrator at the hearing
itself. With a couple of notable exceptions, neither party has seen fit to use legal counsel at these hearings. Rather,
the player's representative and the general manager of the club will present their proposal and supporting argument
to the arbitrator.

The player may be present at the hearing but can be asked to leave the room by the club when it makes its
presentation as long as the player is represented by an agent or an attorney. [FN11] In baseball, the player has an
absolute right to be present during the hearing. The presence of the player at the hearing presumably would act as a
deterrent to management making its presentation to the extent that management seeks to question the player's value
to the club relative to the compensation comparison the player uses in support of his salary demands. The arbitrator
is instructed to report his decision to the parties and counsel, either orally or in writing, as soon as possible after the
close of the hearing, [FN12] and is specifically encouraged to render his decision before training camp.

The process of salary arbitration in the NHL seems to contemplate that the entire process, including the award
of the arbitrator, be completed before training camp opens. The actual practice is a far cry from this model. The
parties have not established a rigid timetable for this process as in baseball. While the player must file for arbitration
before August 10, the actual hearings may and have in fact occurred with increasing frequency well into the regular
season.

Last season (1991-92) a number of salary arbitration decisions (retroactive in their effect to September 1) were
rendered well into February or even March. For example, the salary arbitration between defenseman Larry Murphy
and the Pittsburgh Penguins was heard on February 12, 1992, and the decision was rendered by arbitrator K. Allan
Hinnegan on March 13, 1992, less than one month prior to the end of the regular season. One can imagine the
potential disruptive effect on player and team morale this could *73 have. Indeed, the process and decision involving
Doug Gilmour and the Calgary Flames had precisely this effect.

The award in the Gilmour case was rendered on November 13, 1991. Gilmour was unhappy with the decision.
He wanted $1.2 million for the 1991-92 season. The Flames offered $550,000. The arbitrator awarded $750,000.
Gilmour subsequently made a number of comments to the media designed to force the Flames to trade him.
Ultimately, he got his wish, and was traded to the Toronto Maple Leafs, who renegotiated his contract up to $1
million per year. The Calgary Flames, in the meantime, had a very unhappy marquee player for much of the season.
No doubt this contributed to the deterioration of the team's performance during the season (dropping from first to
fifth place in the Smythe Division).

The lesson to be learned from the Gilmour scenario was not lost on the League and the NHLPA when they
renegotiated the Collective Bargaining Agreement in March and April 1992. Part of the strike settlement was an
agreement to revamp the salary arbitration process. In particular, the parties agreed that salary arbitrations were to be
conducted prior to the start of training camp, if possible, but certainly before the start of the regular season.
Unfortunately, this has not been accomplished. At the date of this writing, the parties have been unable to agree on a
new panel of eight arbitrators from the National Academy of Arbitrators to sit in on these cases, as well as on the

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 11
3 Marq. Sports L.J. 59

fine-tuning of this process. The parties did agree that the arbitrator would be required to issue the award within 48 to
72 hours after the hearing, instead of the previous practice of three to four weeks.

The decision to retain the conventional adjudication model for salary arbitration rather than the final-offer
selection model indicates that there was no consensus between the parties that conventional adjudication has had a
chilling or narcotic effect on salary negotiations. The statistics seem to verify this conclusion. While one might
suspect that the final-offer selection process used in baseball would result in a much greater percentage of salary
dispute settlements prior to the hearing than with conventional adjudication that operates in hockey, the statistics do
not verify this assumption. For instance, of the players who filed for arbitration in baseball between 1974 and 1989,
approximately 76.3% settled prior to an award being issued. Likewise in the NHL in 1991, 77 of 100 players who
filed for salary arbitration settled prior to the hearing.

When one compares the impact of the salary arbitration on baseball and hockey negotiations, the major
distinction between the two sports appears to be in the delay and expense and the potential negative impact on team
morale that results from the slow operation of the salary arbitration system in hockey.

*74 With respect to the impact of the combination of salary arbitration and restricted free agency on the level of
player salaries in the NHL, the evidence is that following the merger between the NHL and WHA in 1979, salary
levels in the NHL fell in relative terms compared to those in baseball and basketball where free agency rights of
players were being expanded. The recent rapid escalation in NHL players' salaries over the last three years has
occurred despite the continuance of restricted free agency. The average salary in the NHL has risen from
approximately $200,000 to $500,000 in the last three years. Perhaps the major contributor to the rise in salaries was
the availability of salary information. Prior to 1989, this information was considered confidential pursuant to an
agreement between the League and the NHLPA. Salary figures could not be released to clubs or players despite the
fact that the contracts were registered with the League office. Under these circumstances, it would be quite difficult
to negotiate in an informed manner unless the player, agent or club general manager had effective contacts allowing
them to learn about relevant salary information through the grapevine. This picture changed, however, when the
League and the NHLPA agreed to release salary figures for players. Predictably, the length of salary arbitration
decisions and the subject areas of comparisons documented therein lengthened considerably.

The combination of players who moved between teams, whether as free agents or holdouts insisting on trades or
more generous teams, or who received offers from other clubs that their old club decided to match, or filed for salary
arbitration and ultimately settled or received an award, has resulted in a rapid escalation of salary levels in hockey
that has more than doubled the average NHL salary in the last two years. This rise in player costs has forced clubs to
look for new sources of revenue as well as to seek a revenue sharing/salary cap arrangement with their players.

To date, the NHL owners' efforts to cooperate with their players in a partnership manner in the shaping of the
League has not been rigorously pursued. Perhaps the best illustration of this is the failure of the League and the
NHLPA to share relevant information involving sources of revenues and costs during collective bargaining
negotiations in 1991-92. In my view, this was a major contributor to the NHL players' strike in April 1991 and will
continue to be a stumbling block to forging a cooperative approach to the operation of the League. This lack of
common vision about the relevant NHL financial picture is displayed in the recent grievance arbitration chaired by
Ted St. Antoine.

*75 B. The Average League Salary Arbitration

On August 14, 1992, arbitrator Theodore J. St. Antoine issued an award as a Voluntary Labor Arbitration
Tribunal in a matter of interpretation of the 1992 Collective Bargaining Agreement between the NHLPA and the
National Hockey League member clubs. This decision discusses the course of negotiations between the parties from
June 1991, to the conclusion of the Collective Bargaining Agreement on April 10, 1992, at the end of the players'

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 12
3 Marq. Sports L.J. 59

strike. The new Collective Bargaining Agreement included a provision creating a new category of unrestricted free
agent that was to apply to a Ten Year Pro. This free agent category would apply to a player who has completed
ten professional seasons or more (minor or NHL) and who in the last year of his contract did not earn more than the
average league salary. Such player could elect once in his career to become an unrestricted free agent at the end
of his contract.

After the dust settled following the strike and the Stanley Cup playoffs were completed, the parties became
aware that they were in disagreement concerning the meaning of average league salary. The NHL owners took the
position that this term encompassed all players who had played in NHL competition the previous year and who had
signed under the NHL Standard Player's Contract. The League calculated this average salary to be $236,000. The
NHLPA took the position that this average League salary applied only to the top twenty players (skaters and
goaltenders) on each club. Under this view, the average salary, including bonuses, would be $379,000. Both sides
agreed that during the course of their negotiations there was no specific discussion of any formula for calculating the
average salary nor any specific attempt to define what they meant by average salary.

The evidence alluded to in the award indicated that the parties during their negotiations did engage in a full
campaign of just plain propaganda using various calculations of average league salary in order to seek public
support for their bargaining. As President John Ziegler testified:

[Average salary] got to be kind of a joke between us. I referred to it as Bob [Goodenow] referred to it as
the propaganda. [The] Players Association had their average salary. And we had our average salary. And we
agreed to disagree.
At various times during the lengthy negotiations, the League announced that the average salary was $276,000
(June 13, 1991), $350,000 (mid-September 1991), and $379,000 (March 9, 1992). The NHLPA calculated the
average team salary at $263,866 (September 1991), $339,000, $340,000 and $350,000 (in March and April 1992).

Arbitrator St. Antoine appeared somewhat amused by the posturing of the parties during negotiations in
comparison with the positions they took *76 at arbitration. During negotiations, the League sought to continue to
restrict free agency because players' salaries were escalating quickly and had reached $379,000. The NHLPA was
claiming that salaries were low and that free agency should be expanded. Thus, we see the NHLPA alleging in
September 1991 that the average salary was $263,866. Neither side seemed to agree about the accuracy of the other's
figures.

After the parties agreed to create a new category of unrestricted free agency for 10-year veterans, they took
radically different positions when it became time to implement this agreement. Arbitrator St. Antoine commented
at page 7 of his award:

I am sure I need not dwell on the irony that each side is now insisting essentially or promoting the
meaning of average League salary that it stoutly resisted during the whole course of the 1990-91
negotiations (emphasis added).
The failure of the parties to come to a shared view about player salaries, however, had serious ramifications for
the individual players and clubs affected by the new category of free agency. Arbitrator St. Antoine continued:

But that irony cannot be ignored because it has substantive implications. Each party was keenly aware
that the other was calculating the average league salary by means of a quite different formula . Yet I find as a
fact that in striving mightily to reach agreement under the pressure of a strike and the loss of the 1992 Stanley
Cup playoffs, neither side made clear to the other the meaning it was attributing (if indeed there was any fixed
notion) to the crucial phrase, average League salary, in the free-agency provision at issue in this arbitration
(emphasis added).
Arbitrator St. Antoine recognized that the propaganda used by both sides during their negotiations was designed

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 13
3 Marq. Sports L.J. 59

for tactical and public relations purposes (page 7). He commented that such high jinks are no doubt part of
the grand tradition of collective bargaining. However, the parties created a problem of contractual interpretation for
themselves by transporting the identical terminology used in their public relations exchanges into the wording of the
new Collective Bargaining Agreement. In the case of the position now advanced at arbitration by the NHLPA, St.
Antoine noted that the NHLPA had persistently rejected the League's concept of an average salary during
negotiations. St. Antoine opined that the NHLPA cannot now have it both ways. By its silence regarding the same
phrase in the League's free agency counter purpose, the NHLPA should not be considered to have suddenly
embraced what it had long spurned.

*77 The flip-flopping of the parties in their interpretation of the phrase average league salary posed an
intriguing contractual interpretation problem for the arbitrator. The evidence disclosed that each party did indeed
have a different figure in mind when it agreed to this phraseology. The League wanted to include all players under
NHL contract; the NHLPA wanted only the top twenty players on each club. St. Antoine could have thrown up his
hands and said there was simply no meeting of the minds and therefore no contract reached on this issue. Rather
than take this tack, St. Antoine concluded that the parties clearly intended to reach an agreement having legal
consequences in this situation. In keeping with the modern objective theory of contract law, St. Antoine
determined that a reasonable meaning could be assigned to the language the parties chose as an expression of their
agreement. He concluded that a weighted average of all players who competed in NHL games during the previous
season, measured by the number of games actually played by each individual, would be the appropriate measure for
the average calculation of league salary.

St. Antoine's decision formed the basis for a subsequent calculation by the parties that the average League salary
for purposes of this new category of free agent would be $368,000. This salary figure included bonuses and deferred
compensation to players. Several veteran players have subsequently changed teams as a result of this new category
of free agency. For example, Ric Nattress moved from the Toronto Maple Leafs to the Philadelphia Flyers and Phil
Bourque moved from the Pittsburgh Penguins to the New York Rangers. Other players, such as the Hartford
Whalers' Steve Konroyd, reportedly were able to use this new category of free agency to achieve significantly higher
salaries with their current teams.

In my view, the larger significance of the Average League Salary Arbitration is that it illustrates the need for the
parties to share relevant financial information and to take greater care in negotiating new language into their
Collective Bargaining Agreement. Admittedly, the negotiations in 1991-92 were difficult. There was no established
relationship of trust between the NHL owners and the new leadership of the NHLPA. The eventual Collective
Bargaining Agreement was concluded during a tense work stoppage with the owners and their players facing the
horrible prospect of fan revolt if there was a cancellation of the balance of the season and the playoffs.

The parties now must enter into a sustained effort to seek common ground based on a shared view of the sport's
current and future financial prospects. Unfortunately, the summer of 1992 saw little progress in this regard.

*78 IV. THE PROSPECTS FOR FUTURE COOPERATION BETWEEN THE NHL PLAYERS AND OWNERS

At the conclusion of the players' strike in early April 1992, the parties to the NHL collective bargaining
relationship agreed to several joint initiatives whereby they would cooperate for their mutual benefit. For example,
they agreed concerning:

(1) FUTURE JOINT REVENUE

To jointly work together on both domestic and international levels to generate revenues and embark on
special projects and promotions for the good of the game.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 14
3 Marq. Sports L.J. 59

(2) HEALTH AND SAFETY

To establish a Safety and Health Committee with equal representation from the clubs and the NHLPA, to
discuss and resolve as promptly as reasonably practicable under the circumstances any health or safety
problems related to the players' employment by the clubs.

(3) HOCKEY ECONOMIC STUDY COMMITTEE

The NHL clubs offered to develop and submit to the NHLPA a proposal for restructuring with a salary
cap and revenue sharing concept along the lines of the NBA system. This restructuring will require good faith
bargaining by the parties if it is to be completed before the expiration of the CBA on September 15, 1993. To
facilitate the bargaining process, the parties agreed to establish a Hockey Economic Study Committee.
Each of these three initiatives should contribute to a shared sense of partnership in the development of the
National Hockey league so obviously lacking during the 1991-92 collective bargaining negotiations leading to the
players' strike. Unfortunately, the behavior of the parties since the strike does not indicate that they have
aggressively pursued these joint initiatives. There has been little progress in establishing any of these joint
committees. The parties have yet to appoint their new panel of salary or grievance arbitrators or to flesh out new
procedures for these dispute resolution forums.

During the month of August 1992, two significant events indicated how far the parties were still apart on
matters that would at first glance appear to be of mutual self-interest. John Kordic, a veteran journeyman player
known for his role as an enforcer, died of a cocaine overdose. The response of the League office was a suggestion
that it would sponsor seminars for the parents of entry-level draftees in order to educate the players' families about
the reality of life in the NHL fast lane, including the access of players to drugs. The NHLPA Executive Director's
response was one of surprise at this suggestion. He mused that he would have expected that the *79 League would
have talked to the NHLPA before embarking on this initiative. Unlike the situation between the National Basketball
Association and its players' association, in the NHL there is no joint League-NHLPA approach to drug education,
discipline or rehabilitation of drug users. Perhaps drug use and drug addiction should be a subject to refer to the new
Joint Safety and Health Committee.

In late August 1992, the NHL Board of Governors met in Tampa and agreed to change the rules relating to the
imposition of discipline for fighting and the use of sticks, as well as lifting the obligation on players to wear helmets
during league contests. It is reported that the NHLPA was not involved in any prior consultations about these
changes in League policies. To the extent that these changes are designed to protect players from injury (by
imposing stiffer penalties for instigating a fight and hitting a player with a stick above the waist), are these matters
that relate to player safety? Likewise, the lifting of the mandatory wearing of helmets rule can also be interpreted as
an initiative relating to the safety of the player. If these two moves were undertaken for marketing purposes, would
this come under the meaning of promotions for the good of the game and thereby be covered by the Special Joint
Venture initiative the League and the NHLPA agreed to pursue together? In view of the fact that these joint
committees have not yet been established, should these changes in League rules have been discussed at the Owner-
Player Council which has been in existence for many years?

These observations illustrate that the NHL clubs and the NHLPA continue to act as adversaries rather than
pursue the joint-management or strategic alliance approach to developing hockey. Hopefully, the parties will embark
on a more aggressive campaign to work together on these issues that have such critical impact on the financial
security of the League, on the health and safety of the players, and consequently, on the content of the Standard
Player's Contract. Otherwise, the relations between the NHL owners and players will more closely resemble Major
League Baseball and the National Football League rather than those in the National Basketball Association, the
model they agreed to pursue when they sheathed their swords on April 10 at the end of the players' strike. It is hard
to imagine that the NHL will be able to pursue its potentially exciting ventures into Europe and Japan if it cannot

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 15
3 Marq. Sports L.J. 59

sort out its problems at home. Stay tuned.

[FNa1]. Professor of Law, University of British Columbia; Associate Counsel, Heenan Blaikie, Vancouver, British
Columbia.

[FN1]. See Krutov v. Vancouver Hockey Club Ltd., Vancouver Court Registry No. C96447, Nov. 18, 1991.

[FN2]. See Brewer v. Maple Leaf Gardens Ltd. (unreported decision of the Supreme Court of Ontario, dated April
19, 1985).

[FN3]. John Chapman, National Hockey League Contract Negotiations, in LAW OF PROFESSIONAL AND
AMATEUR SPORTS 8-1, 8-23 (Gary A. Uberstine ed., 1991).

[FN4]. NHL BY-LAWS 17.3.

[FN5]. NATIONAL HOCKEY LEAGUE & NATIONAL HOCKEY LEAGUE PLAYER'S ASS'N, COLLECTIVE
BARGAINING AGREEMENT art. 4.02, 4.03, 4.04 (1988) [hereinafter Collective Bargaining Agreement].

[FN6]. Id. at art. 4.07(b).

[FN7]. 600 F.2d 1193 (6th Cir. 1979). For an in depth discussion of the validity of the NHL free agency provisions
in By-Law 9A, see Mark S. Miller, Comment, The National Hockey League's Faceoff with Antitrust: McCourt v.
California Sports Inc., 42 OHIO ST. L.J. 603 (1981).

[FN8]. For an analysis of how the NHL equalization system works from the perspective of an attorney who
participated in the Shanahan case, see Leon J. Bijou, Equalization Arbitrations in the National Hockey League, N.Y.
L.J., Apr. 2, 1992.

[FN9]. See id.

[FN10]. Collective Bargaining Agreement, supra note 5, at Exhibit 3.7, 7(b).

[FN11]. Id. at Exhibit 3, 5.

[FN12]. Id. at Exhibit 3, 12(a).


*80 ATTACHMENT A

IMPORTANT NOTICE TO PLAYER

Before signing this contract you should carefully examine is to be sure that all terms and conditions
agreed upon have been incorporated herein, and if any has been omitted, you should insist upon having it
inserted in the contract before you sign.

NATIONAL HOCKEY LEAGUE

STANDARD PLAYER'S CONTRACT

(1986 FORM; REVISED 1988)

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 16
3 Marq. Sports L.J. 59

BETWEEN: ____________________

hereinafter called the Club, a member of the National Hockey League, hereinafter called the League

AND ____________________

hereinafter called the Player of __________ in {Province State} of __________

In consideration of the respective obligations herein and hereby assumed, the parties to this contract
severally agree as follows:
1. The Club hereby employs the Player as a skilled Hockey Player for the term of __________ year(s)
commencing October 1st, 19 __________ and agrees, subject to the terms and conditions hereof, to pay the
Player a salary of ______________________________ Dollars ($__________).
Payment of such salary shall be in consecutive semi-monthly installments following the commencement
of the regular League Championship Schedule of games or following the dates of reporting, whichever is
later; provided, however, that if the Player is not in the employ of the Club for the whole period of the Club's
games in the National Hockey League Championship Schedule, then he shall receive only part of the salary in
the ratio of the number of days of actual employment to the number of days of the League Championship
Schedule of Games.
And it is further mutually agreed that if the Contract and rights to the services of the Player are assigned,
exchanged, loaned or otherwise transferred to a Club in another League, the Player shall only be paid at an
annual salary rate of
____________________ Dollars in the __________ League.
or ____________________ Dollars in the __________ League.
or ____________________ Dollars in the __________ League.
2. The Player agrees to give his services and to play hockey in all League Championship, All Star,
International, Exhibition, Play-Off and Stanley Cup games to the best of his ability under the direction and
control of the Club in accordance with the provisions hereof.
The Player further agrees,
(a) to report to the Club training camp at the time and place fixed by the Club, in good physical
condition,

(b) to keep himself in good physical condition at all times during the season,

(c) to give his best services to the Club and to play hockey only for the Club unless his contract is
released, assigned, exchanged or loaned by the Club,

(d) to co-operate with the Club and participate in any and all reasonable promotional activities of the
Club which will in the opinion of the Club promote the welfare of the Club and to cooperate in the promotion
of the League and professional hockey generally,

(e) to conduct himself on and off the rink according to the highest standards of honesty, morality, fair
play and sportsmanship, and to refrain from conduct detrimental to the best interest of the Club, the League or
professional hockey generally,

The Club agrees that in exhibition games played after the start of the regular schedule (except where the
proceeds are to go to charity, or where the player has agreed otherwise) the player shall receive his pro rata
share of the gate receipts after deduction of legitimate expenses of such game. This provision re exhibition
games is applicable in the National Hockey League only.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 17
3 Marq. Sports L.J. 59

3. In order that the Player shall be fit in proper condition for the performance of his duties as required by
this contract, the Player agrees to report for practice at such time and place as the Club may reasonably
designate and participate in such exhibition games as may be arranged by the Club.
*81 4. The Club may from time to time during the continuance of this contract establish reasonable rules
governing the conduct and conditioning of the Player, and such reasonable rules shall form part of this
contract as fully as if herein written. For violation of any such rules or for any conduct impairing the thorough
and faithful discharge of the duties incumbent upon the Player, the Club may impose a reasonable fine upon
the Player and deduct the amount thereof from any money due or to become due to the Player. The Club may
also suspend the Player for violation of any such rules. When the Player is fined or suspended, he shall be
given notice in writing stating the amount of the fine and/or the duration of the suspension and the reason
therefor. Copies of the rules referred to herein shall be filed at the main offices of the League and the National
Hockey League Players Association (NHLPA).
5. (a) Should the Player be disabled or unable to perform his duties under this contract he shall submit
himself for medical examination and treatment by a physician selected by the Club, and such examination and
treatment, when made at the request of the Club, shall be at its expense unless made necessary by some act or
conduct of the Player contrary to the terms and provisions of this contract or the rules established under
Section 4.
(b) If the Player, in the judgment of the Club's physician, is disabled or is not in good physical condition
at the commencement of the season or at any subsequent time during the season (unless such condition is the
direct result of any injury sustained during the course of his employment as a hockey player with the Club,
including travel with his team or on business requested by the Club) so as to render him unfit to play skilled
hockey, then it is mutually agreed that the Club shall have the right to suspend the Player for such period of
disability or unfitness, and no compensation shall be payable for that period under this contract. If upon joint
consultation between the Player, the Club's physician and the Club General Manager, they are unable to agree
upon the Player's disability or physical condition, the Player agrees to submit himself for examination by an
independent medical specialist and the Parties hereto agree to be bound by his decision.
(c) If the Player is injured during the course of his employment as a hockey player with the Club,
including travel with his team or on business requested by the Club, the Club will pay the Player's reasonable
hospitalization until discharged from the hospital, and his medical expenses and doctor's bills, provided that
the hospital and doctor are approved by the Club. This approval will not be unreasonably withheld.
(d) It is also agreed that if the Player, in the sole judgment of the Club's physician, is disabled and unable
to perform his duties as a hockey player by reason of an injury sustained during the course of his employment
as a hockey player, including travel with his team or on business requested by the Club, he shall be entitled to
receive his remaining salary due in accordance with the terms of this contract for the remaining stated term of
this contract as long as the said disability and inability to perform continue but in no event beyond the
expiration date of the fixed term of this contract, which fixed term shall in no event be deemed to include any
option period related to a playing season after the playing season in which the injury occurred. In
consideration of payment of such salary, as well as payments made by the Club to fund the Major Medical
Plan pursuant to Section 12.01 of the Collective Bargaining Agreement between the Member Clubs of League
and the NHLPA, payments made by the Club to provide Career Ending Disability Insurance pursuant to
Section 14.02 of such Agreement and other consideration, the Player does hereby covenant that in the event
he files a claim under such career Ending Disability Insurance (unless such claim is not paid), he personally
releases and will release the Club, the NHL, NHLPA, all other NHL clubs, and the servants, employees,
officers and agents of each of the above from any and every additional obligation, liability, claim or demand
whatsoever for such salary or arising out of such injury or the treatment thereof, including without limitation
liability in tort, and extending to all damages, whenever arising. Any disagreement as to disability or inability
to perform shall be determined conclusively by doctors of the Club and of the Player and, in the event said
doctors are unable to agree, by an independent doctor selected by said doctors. If the Player is declared to be
unfit for play, he shall continue to receive the full benefits of this Agreement. If the Player is declared to be
physically able to play and refuses to do so, he shall be liable to immediate suspension without pay.
(e) In connection with a disability which is not caused by an injury sustained during the course of his
employment as a hockey player including travel with his team or on business requested by his Club, if upon

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 18
3 Marq. Sports L.J. 59

joint consultation between the Player, the Club's physician and the Club General Manager, they are unable to
agree upon the Player's physical fitness to return to play, the Player agrees to submit himself for examination
by an independent medical specialist and the parties hereto agree to be bound by his decision. If the Player is
declared to be fit for play, he must perform his duties hereunder and shall be entitled to receive the full
benefits of this Agreement. If he is declared to be not physically able to play, he shall not be entitled to the
benefits of this Agreement until he has been declared to be physically fit to play by the independent medical
specialist.
6. The Player represents and agrees that he has exceptional and unique knowledge, skill and ability as a
hockey player, the loss of which cannot be estimated with certainty and cannot be fairly or adequately
compensated by damages. The Player therefore agrees that the Club shall have the right, in addition to any
other rights which the Club may possess, to enjoin him by appropriate injunctive proceedings without first
exhausting any other remedy which may be available to the Club, from playing hockey for any other team
and/or for any breach of any of the other provisions of this contract.
7. The Player and the Club recognize and agree that the Player's participation in other sports may impair
or destroy his ability and skill as a hockey player. Accordingly the Player agrees that he will not during the
period of this Contract or during any period when he is obligated under this Contract to enter into a further
contract with the Club engage or participate in football, baseball, softball, hockey, lacrosse, boxing, wrestling
or other athletic sport without the written consent of the Club, which consent will not be unreasonably
withheld.
8. (a) The Player hereby irrevocably grants to the Club during the period of this Contract and during any
period when he is obligated under this Contract to enter into a further contract with the Club the exclusive
right to permit or authorize any person, firm or corporation to take and make use of any still photograph,
motion pictures or television of himself, and agrees that all rights in such pictures and television shall belong
to the Club exclusively and may be used, reproduced, distributed or otherwise disseminated by the Club
directly or indirectly in any manner it desires, except as said grant may be modified from time to time
pursuant to the applicable provisions of any Collective Bargaining Agreement between the member clubs of
the League and the NHLPA.
(b) The Player further agrees that during the period of this Contract and during any period when he is
obligated under this Contract to enter into a further contract with the Club he will not make public
appearances, participate in radio or television programs, or permit his picture to be taken, or write or sponsor
newspaper or magazine articles, or sponsor commercial products without the written consent of the Club
which consent shall not be unreasonably withheld.
9. It is mutually agreed that the Club will not pay, and the Player will not accept from any person, any
bonus or anything of value for winning or otherwise attempting to affect the outcome of any particular game
or series of games except as authorized by the League By-Laws.
10. The Player agrees during the period of this Contract and during any period when he is obligated
under this Contract to enter into a further contract with the Club he will not tamper with or enter into
negotiations with any player under contract or reservation to any Club of the League for or regarding such
player's current or future services, without the written consent of the Club with which such player is
connected under penalty of a fine to be imposed by the President of the League.
11. It is mutually agreed that the Club shall have the right to sell, assign, exchange and transfer this
contract, and to loan the Player's services to any other professional hockey club, and the Player agrees to
accept and be bound by such sale, exchange, assignment, transfer or loan, and will faithfully perform and
carry out this contract with the same purpose and effect as if it had been entered into by the Player and such
other Club.
It is further mutually agreed that in the event that this Contract is assigned, or the Player's services are
loaned, to another Club, the Club shall, by notice in writing delivered personally to the Player or by mail to
the address set out below his signature hereto advise the Player of the name and address of the Club to which
he has been assigned or loaned, and specifying the time and place of reporting to such club. If the Player fails
to report to such other Club, he may be suspended by such other Club and no salary shall be payable to him
during the period of such suspension.
*82 12. The parties agree that if the Club shall default in the payments to the Player provided for in

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 19
3 Marq. Sports L.J. 59

Section 1 hereof or shall fail to perform any other obligation agreed by the Club hereunder, the Player may,
by notice in writing to the Club and to the League and the NHLPA, specify the nature of any and all defaults
and thereafter:
(a) if the Club shall fail to remedy the default within fourteen (14) days from receipt of such notice,
except as hereinafter provided in subsections (b) (c) and (d) of this Section 12, this Contract shall be
terminated, and upon the date of such termination all obligations of both parties shall cease, except the
obligation of the Club to pay the Player's compensation to that date, provided however, that;

(b) the Player hereby irrevocably offers to the League an option to cure said default within the seven
(7) days next succeeding the fourteen (14) days within which the Club may cure the default upon the
condition that, in the event the League may accept this offer, the League would then guarantee payment of
that portion of the Player's salary, as set forth in Section 1 hereof, as may become due for a period of twenty-
one (21) days from receipt by said League of any notice of default. The League may accept this offer by
notification to the Player and the NHLPA in writing of such acceptance and of its guarantee of said twenty-
one (21) day salary period as soon as possible following receipt of notice of default from Player but in no
event later than fourteen (14) days following receipt of such notice. This offer will be deemed rejected if not
accepted as set forth above;

(c) said option may be assigned by the League to any other member club and, upon such assignment,
the assignee club shall inure to all of the rights of and assume all obligations of the League under this Article
12; and

(d) the Player further agrees that, if the League has given due notice as set forth in subsection (b), he
will continue to perform all of his obligations under this Contract for the full twenty-one (21) day period and,
in the event the Club does not cure the default within the fourteen (14) day period, as set forth in subsection
(a), the League, or any member club to which its option has been assigned, may cure the default within the
seven (7) days following the first fourteen (14) days next succeeding receipt of notice of default; and

(e) the Club agrees if it does not cure the default within the fourteen (14) day period, as set forth in
subsection (a) above, and the League, or an assignee member club, cures said default in accordance with
subsections (b), (c) and (d) of this Section 12 then, in such event, all rights and obligations of the Club under
this Contract shall be transferred to the League, or such assignee club, provided, however, that no obligation
with respect to a default or defaults claimed to exist at the time of notice of default, as provided above, but
not specifically included and set forth in said notice, shall be assumed by the League or such assignee club
and the League or such assignee club shall have no liability with respect thereto.

13. The Club, in addition to other rights hereunder, at its option, by written notice delivered to the Player
in person or by mailing by certified mail to the Player's address set forth herein, may terminate this Contract
on the following conditions:
(a) The Club shall offer the Player on waivers, without right of recall, at a waiver price not in excess
of one hundred dollars ($100), either before or promptly after the notice of intention to exercise Buy-Out
option (herein called notice of termination) is given.

(b) Termination pursuant to this Section 13 shall be effective upon receipt by the Player of the notice
of termination.

(c) The notice of termination must have been given after the end of the regular playing season and
prior to the next following July 2nd (deadline shall be July 1), and is to be sent to Player by certified mail or
hand delivery. TWX notice received by NHL Central Registry or NHLPA office within deadline shall meet
deadline requirement.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 20
3 Marq. Sports L.J. 59

(d) If the Club elects to terminate this Contract pursuant to this Section 13, it shall be obligated to
pay to the Player, in equal monthly installments, beginning on the July 1st next following the date on which
the termination is effective, at the rate of $50,000 per year:

(i) if the Player is under 26 years of age at the time the termination is effective, an amount equal to 1/3
of, or
(ii) if the Player is 26 years of age or older at the time the termination is effective, an amount equal to
2/3 of the total fixed amount of the Player's league salary, as set forth in Section 1, for the unexpired fixed-
term and option year of this Contract, reduced by any advance payment of salary received by the Player prior
to the date the termination is effective.
(e) The Player may, within 10 days after the receipt of the notice of termination, elect in writing to be
paid a lump sum equal to the present value of the amount payable pursuant the subsection (d) above on the
date of termination in lieu of receiving monthly installments. Written notice of such election shall be
delivered to the Club or mailed by registered mail within the said 10-day period at its address set forth below.
The present value of the amount payable pursuant to subsection (d) shall be computed on the basis of an
interest rate equal to the prime rate of interest of the Chase Manhattan Bank, New York City, on the date of
termination.
(f) Upon receipt of the notice of termination the Player shall immediately be a free agent not subject
to equalization and shall no longer be obligated to perform under this Contract.

(g) Waiver claim of Player by another Club shall pre-empt and relinquish Club's Buy-Out obligation,
due to failure to clear waivers.

14. The Club may also terminate this Contract upon written notice to the Player (but only after obtaining
waivers from all other League clubs) if the Player shall at any time:
(a) fail, refuse or neglect to obey the Club's rules governing training and conduct of players, if such
failure, refusal or neglect should constitute a material breach of this contract.

(b) fail, refuse or neglect to render his services hereunder or in any other manner materially breach
this contract.

In the event of termination under subsection (a) or (b) the Player shall only be entitled to compensation
due to him to the earlier of the date such notice is delivered to him or the date of the mailing of such notice to
his address as set out below his signature hereto.
In the event this Contract is terminated by the Club while the Player is away with the Club for the
purpose of playing games the installment then falling due shall be paid on the first week-day after the return
home of the Club.
15. The Player further agrees that the Club may carry out and put into effect any order or ruling of the
League or its President for his suspension or expulsion and that in the event of suspension his salary shall
cease for the duration thereof and that in the event of expulsion this Contract shall terminate forthwith.
16. The Player further agrees that, in the event of his suspension without pay pursuant to any of the
provisions of this Contract, there shall be deducted from the salary stipulated in Section 1 hereof an amount
equal to the exact proportion of such salary as the number of days' suspension bears to the total number of
days of the League Championship Schedule of games.
17. If because of any condition arising from a state of war or other cause beyond the control of the
League or of the Club, it shall be deemed advisable by the League or the Club to suspend or cease or reduce
operations, then:
(a) in the event of suspension of operations, the Player shall be entitled only to the proportion of
salary due at the date of suspension,

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 21
3 Marq. Sports L.J. 59

(b) in the event of cessation of operations, the salary stipulated in Section 1 hereof shall be
automatically cancelled on the date of cessation, and

(c) in the event of reduction of operations, the salary stipulated in Section 1 hereof shall be replaced
by that mutually agreed upon between the Club and the Player, or, in the absence of mutual agreement, by
that determined by neutral arbitration.

18. (a) The Club may no later than June 1st of the final year of this Contract, tender the Player a Player's
Termination Contract and notify him that he has the choice of executing said Player's Termination Contract
and delivering it to the Club on or before June 30th of that year or automatically being unconditionally
released from any further obligation to provide services under this Contract as of July 1st of that year. A copy
of the offer must also be promptly delivered by the Club to the NHLPA. The Player's Termination Contract
shall be on the same terms and conditions, including any and all performance bonuses, as this Contract (as the
provisions of said contract may be modified from time to time pursuant to the applicable provisions of any
Collective Bargaining Agreement between the member clubs of the League and the NHLPA) except that it
shall be for only one additional season at the Player's previous year's salary and shall provide for the Player's
unconditional release from any further obligation to provide services under said Player's Termination Contract
effective upon conclusion of the following year's Stanley Cup playoffs.
*83 If Player wishes to accept the Player's Termination Contract which has been tendered in accordance
with the preceding paragraph, he must deliver notice of such acceptance to Club, which notice must be
received by Club on or before June 30. Failure to notify Club of acceptance by June 30 shall constitute a
rejection of the Club's tender of a Player's Termination Contract, and an election by the Player to become an
immediate Free Agent without compensation on July 1.
(b) If the Club does not take the action permitted under subsection (a), it shall no later than August 10th
of the final year of this Contract, tender the Player a new Standard Player's Contract upon the same terms and
conditions (including this Section 18) as this Standard Player's Contract (as the provisions of said contract
may be modified from time to time pursuant to the applicable provisions of any Collective Bargaining
Agreement between the member clubs of the League and the NHLPA except that salary and the number of
years of its fixed term may be different. If the Club fails to tender such a contract to the Player on or before
August 10th, then the player at his option, provided such option may not be exercised later than August 13th,
may elect to become a free agent, without any further obligation to provide services under this Contract and
as such will have the right to negotiate with any club in the League, or with any other club, without obligation
on the part of a club which might, under such circumstances, acquire his services to make an equalization
payment to the Club.
(c) Without regard to any action taken by the Club under subsections (a) and (b), the Player may notify
the Club no later than September 10th of the final year of this Contract that he wishes to sign a Player's
Option Contract. If the Player gives such notice, the Club shall no later than September 25th of that year
tender the Player a Player's Option Contract, and the Player shall forthwith enter into said contract. The
Player's Option Contract shall be on the same terms and conditions, including any and all performance
bonuses, as this Contract (as the provisions of said contract may be modified from time to time pursuant to
the applicable provisions of any Collective Bargaining Agreement between the member clubs of the League
and the NHLPA) except that it shall be for only one additional season at the Player's previous year's salary
and shall provide that effective the following July 1st the Player will be a free agent, without any further
obligation to provide services under said Player's Option Contract, and as such will have the right, as
provided by Section 9A of the League By-Laws, the text of which Section is printed on the reverse side
hereof, to negotiate and contract with any club in the League, or with any other club.
(d) If the Club has not taken the action permitted under subsection (a) and the Player has not exercised
the option provided by subsection (b) or has not given notice to the Club in accordance with subsection (c),
then the parties shall enter into a new Standard Player's Contract by mutual agreement or, failing such
agreement, the parties shall, no later than September 25th, enter into a new one-year Standard Player's

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 22
3 Marq. Sports L.J. 59

Contract for the succeeding season upon the same terms and conditions (including this Section 18) as this
Standard Player's Contract, except as to salary, which shall be determined by neutral arbitration under the
applicable collective bargaining agreement providing a mechanism for such arbitration, provided, however,
that if no such collective bargaining agreement is then in effect, the Player's salary shall be the same as his
salary, including any and all performance bonuses, for the previous year.
(e) As used in this Section 18, the phrase final year of this Contract does not include the option year.
(f) The Club's notice and tender obligations under this Section 18 shall be deemed fulfilled if the Club
delivers the required written notification and/or the proposed contract to the Player in person on or before the
applicable deadline date or mails same by registered mail postmarked no later than said deadline date to the
Player at the address set forth below his signature hereto. If the Club has elected to use the mail, the Club
shall notify the NHLPA of its action in writing, by sending a copy of the transmittal letter or otherwise, at the
time of mailing to the Player. The Player's notice and delivery obligations under this Section 18 shall be
deemed fulfilled if the Player hand delivers the required written notification or the executed contract on or
before the applicable deadline date or mails it by registered mail postmarked no later than said deadline date
to the Club at its address set forth below.
19. The Club and the Player severally and mutually promise and agree to be legally bound by the
Constitution and By-Laws of the League and by any Collective Bargaining Agreement that has been or may
be entered into between the member clubs of the League and the NHLPA, and by all of the terms and
provisions thereof, copies of which shall be open and available for inspection by Club, its directors and
officers, and the Player, at the main office of the League, the main office of the Club and the main office of
the NHLPA.
The Club and the Player further agree that in case of dispute between them, except as to the
compensation to be paid to the Player on a new contract, the dispute shall be referred within one year from
the date it arose to the President of the League, as an arbitrator and his decision shall be accepted as final by
both parties, unless, and to extent that, other arbitration procedures are provided in any Collective Bargaining
Agreement between the member clubs of the League and the NHLPA to cover such dispute.
The Club and the Player further agree that all fines imposed upon the Player under the Playing Rules, or
under the provisions of the League By-Laws, shall be deducted from the salary of the Player and be remitted
by the Club to the N.H.L. Players' Emergency Fund.
20. The parties agree that the rights provided in Section 18 and in any Addendum hereto and the promise
of the Player to play hockey only with the Club, or such other club as provided in Sections 2, 11 and 12, and
the Club's right to take pictures of and to televise the Player as provided in Section 8 have all been taken into
consideration in determining the salary payable to the Player under Section 1 hereof.
21. It is severally and mutually agreed that the only contracts recognized by the President of the League
are the Standard Player's Contracts, Player's Termination Contracts, Player's Option Contracts, Post-Option
Year Termination Contracts, Double-Eagle Contracts, Standard Contracts (Corporate), Standard Termination
Contracts (Corporate), Standard Option Contracts (Corporate), Post-Option Year Termination Contracts
(Corporate) and Double-Eagle Contracts (Corporate) which have been duly executed and filed in the League's
office and approved by him (or his designated representative), and that this Agreement contains the entire
agreement between the Parties and there are no oral or written inducements, promises or agreements except as
provided herein.
In Witness Thereof, the parties have signed this ____________________ day of
____________________ A.D. 19 ___
WITNESSES:
____________________

Club

Address of Club

By ____________________

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


3 MARQSLJ 59 Page 23
3 Marq. Sports L.J. 59

President

____________________

Player

____________________

Home Address of Player

I hereby certify that I have, at this date, received, examined and noted of record the within Contract, and that it
is in regular form.

Dated ____________________ 19 ___ ____________________

for the National Hockey League

Parties hereby state their expressed wish that this contract be drafted in English language.

3 Marq. Sports L.J. 59

END OF DOCUMENT

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


4 JINTCRJ 745 Page 1
4 J. Int'l Crim. Just. 745

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


4 JINTCRJ 745 Page 2
4 J. Int'l Crim. Just. 745

Journal of International Criminal Justice


September, 2006

Symposium

International Justice beyond Legal Parameters

*745 THE IMPACT OF CULTURAL DIVERSITY ON INTERNATIONAL CRIMINAL PROCEEDINGS

Jessica Almqvist [FNa1]

Copyright 2006 by Oxford University Press; Jessica Almqvist

Abstract

This article analyses the impact of cultural diversity on international criminal proceedings, and what may be
done to counter the unfortunate conditions -- limited (or lack of) understanding, alienation and disagreement --
resulting from this diversity. Each of these conditions, if ignored, seriously undermines not merely the efficacy of
international criminal tribunals, but also their worth from the standpoint of those who are supposed to benefit from
them, i.e. actual participants (accused, witnesses and victims) and affected populations. At present, international
criminal tribunals primarily understand the problem of cultural diversity as one of how to cope with linguistic
variations. However, a persistent focus on culture as language hides differences in terms of other culture-specific
components of equal relevance to their work, notably socio-cultural norms and convictions about justice. These
variations are especially difficult to tackle. In this context, the article examines whether national courts, which are
assumed to conduct their proceedings in more culturally homogenous settings, offer more appropriate fora of
adjudication of grave crimes under international law.

1. Introduction

The impact of cultural diversity on the prospects of successful international dispute resolution is not a novel
issue in the field of international law. [FN1] *746 Until now, however, not much has been done to advance our
understanding of the significance of cultural diversity in the context of international adjudication. The reality of
cultural differences between disputing parties and judicial authorities is more often understood as indicating the
need for alternative methods of dispute resolution (ADR) [FN2] besides adjudication. [FN3] Nevertheless, this
approach fails to appreciate the many recent initiatives of the international community to confer rights of access to
international justice on individual human beings in fields as diverse as human rights, criminal justice and regional
cooperation. [FN4] International adjudication is no longer mainly viewed as one option among others to resolve
international disputes, but as flowing from a human right of individuals to access justice regardless of location or
citizenship. It is also the result of a growing belief that the international community has some responsibility in
ensuring such access, especially in response to genocide, war crimes and crimes against humanity.

The emerging recognition of access to international criminal justice as a right of individuals makes it all the
more important to consider how to secure an effective and meaningful protection of this right. The prevalence of a
broad range of cultural differences between international criminal tribunals (on the one hand) and the main
categories of beneficiaries, i.e. actual participants (the accused, witnesses and victims) and affected populations (on
the other), poses a particular challenge in this respect. The unfortunate conditions associated with a culturally

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


4 JINTCRJ 745 Page 3
4 J. Int'l Crim. Just. 745

diverse environment -- limited (or lack of) understanding, alienation and disagreement -- if ignored, seriously
undermine the efforts of international criminal tribunals to deliver justice. [FN5]

*747 At present, however, international criminal tribunals mainly understand the problem of culture in terms
of how to cope with linguistic diversity. A more comprehensive account of culture reveals the existence of other
components of culture, such as socio-cultural norms and convictions about justice, of equal importance to the
prospects of successful international adjudication of grave crimes. The objective of this article is to offer such an
account, and to explore existing and possible responses to each of the cultural differences at stake. In this context, it
focuses on the extent to which national courts, which are assumed to conduct their work in more culturally
homogeneous settings, could offer more appropriate sites of adjudication.

2. Cultural Diversity: A Conceptual Framework

The notion of culture may best be understood as referring to: (1) language, skills, and tools ( cultural
equipment); (2) socio-cultural norms; and (3) culture-specific convictions about justice.

In general terms, both judicial institutions ( international or national) and their beneficiaries can be
characterized in terms of a certain culture. Though the particular contents of their cultures are not constant, but can
and do change over time, it is nevertheless possible, at any given moment, to identify the main cultural traits of
beneficiaries and judicial institutions, i.e. their particular cultural equipment, culture-specific norms and justice
convictions. The institution and its intended beneficiaries may approximate one another, culturally speaking:
however, their cultures might also differ, sometimes in a radical way. The absence of cultural proximity between
beneficiaries and judicial institutions undermines the conditions for effective and meaningful participation in
international criminal proceedings. More particularly, it implies the existence of opposing views on acceptable
rules of conduct, disagreement over the meaning and requirement of justice in the context of grave crimes, and
disruptions of fragile channels of communication.

A. Cultural Equipment

To begin with, whether an individual is capable of making effective use of international judicial institutions
depends on his actual cultural equipment. [FN6] This notion, originally introduced into sociological research to
explain the influence of culture on human action, and here applied to the field of international criminal justice,
directs attention to the importance of possessing language, skills, tools and know-how in order to make effective use
of one's rights and opportunities, whether to defend oneself, provide relevant *748 information, express one's
concerns or contribute to deliberations about international criminal law and justice.

All of us possess some cultural equipment, but each of them differs in content, depending on our particular
place of upbringing, education, possibility of travelling and attachment to particular communities (nations, religious
associations, etc.). While it is reasonable to assume that everyone has the basic cultural equipment to access the
judicial authorities in his place of birth and upbringing, it is doubtful that everyone is bestowed with basic
equipment suitable for an international criminal justice setting. [FN7] The widespread lack of such equipment
among the intended beneficiaries of international criminal tribunals becomes all the more evident if we consider that
the main languages of international criminal tribunals are English and French. [FN8] The extensive engagement of
the tribunals' in translation and interpretation reveals that few of the intended beneficiaries are capable of using
English or French. [FN9]

Although language is an essential aspect of cultural equipment, the notion also aims at capturing other culture-
specific components (skills, tools and know-how) of significance for individuals to make effective use of rights and
opportunities. The term skills' refers to more basic skills (such as reading and writing skills) as well as more refined
ones (e.g. computer skills or legal skills, including how to write a complaint, a motion or an amicus curiae brief).

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


4 JINTCRJ 745 Page 4
4 J. Int'l Crim. Just. 745

The development of practices of legal assistance, and radio broadcasting of hearings and judgments are
straightforward manifestations of the widespread lack of these kinds of skills among the intended beneficiaries of
international criminal justice. [FN10] Furthermore, the term tools' refers to man-made cultural materials and
products meant to facilitate the collection and dissemination of, and access to, relevant information (such as
computers, fax machines, typewriters and copy machines). Know-how, finally, is meant to capture certain
knowledge about how to make use of these cultural products and materials (e.g. computer literacy).

While the officials of international criminal tribunals commonly possess the skills, tools and know-how suitable
for their occupation (indeed, it is a requirement), it cannot reasonably be assumed that the intended beneficiaries are
in the same advantageous position. On the contrary, actual participants and affected populations tend to lack some of
the skills, tools and know-how *749 deemed essential to make effective use of their rights and opportunities to
access international criminal proceedings. Nevertheless, without at least the basic suitable equipment on hand, the
prospect of effective participation in international criminal proceedings is radically weakened. Such equipment is
required so as to be able to present one's claims, lines of argument, stories and concerns in a way that is readily
understood by the court officials.

In this context, cultural equipment is understood as having instrumental (as opposed to inherent) value. Thus, it
is assumed that all intended beneficiaries share an interest in possessing the equipment suitable to access
international criminal tribunals. [FN11] However, while it should be possible for anybody to learn or acquire such
equipment, this process is known to take time. Given that encounters with these tribunals tend to be rather sudden,
unexpected and not necessarily voluntary, it cannot reasonably be expected that the intended beneficiaries would
ever be given the opportunity to attain even the basic equipment deemed essential to access international criminal
tribunals. The widespread lack of suitable cultural equipment, therefore, must be seen as an inevitable circumstance
of international criminal justice that requires considerable efforts on the part of the tribunals to overcome.

B. Socio-cultural Norms

In broad terms, these norms inform and give meaning to the way in which the individuals of a place go about
their activities in social and public life (i.e. manners, habits and styles), [FN12] including on issues such as how to
marry, divorce, raise children, care for the elderly and sick, transmit knowledge about events, and how to punish
theft, murder or other violent acts. [FN13] The process of modernization entails an ongoing rationalization,
codification and revision of such norms. Still, although all of us adhere to some specific set of norms (whether in a
liberal or orthodox spirit), the norms by which we live are not the same. The process of multiculturalization implies
a heightened awareness of the prevalence of differences, sometimes radical, in terms of social and public practices
across places and peoples, and the specific norms underpinning and sustaining these practices.

The fact of extensive variations in the way we conduct our social and public affairs, including legal affairs, is
directly relevant to international criminal proceedings. It indicates the existence of a variety of norms regulating
*750 manners of questioning and interrogation, the provision of information (including inhibitions, codes and
taboos), the role of the judge, the style of presentation, the status of the victims and lines of defence. Some of the
norms are informal (e.g. style of presentation); however, others, such as the manner of examining witnesses (e.g.
cross-examination), are embodied in the rules of procedure and evidence of international criminal tribunals. When
these tribunals formulate their rules of procedure, they rarely start anew, but tend to draw upon the relevant norms
and rules embedded in national legal cultures. The adoption of rules of procedure of an international criminal
tribunal inevitably involves making a choice in favour of one particular set of rules and practices at the expense of
others -- a set that may not be agreeable or even familiar to those whose rights and interests are at stake. [FN14]

Differences in terms of socio-cultural norms can evoke strong emotions and feelings upon which the
participants in the proceedings judge one another's reliability, confidence, righteousness and excellence. The reliance
on particular socio-cultural norms to judge others is not necessarily confined to the accused, victims and witnesses,

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


4 JINTCRJ 745 Page 5
4 J. Int'l Crim. Just. 745

but extends to judges as well. [FN15] Thus, while, at first glance, it may seem irrelevant what rules (formal and
informal) are chosen to guide an international criminal proceeding, the actual choice has a significant impact on the
adequacy (or worth) of the proceeding from the standpoint of the intended beneficiaries. [FN16] For example, a
particular mode of interrogation can be perceived as humiliating and outright offensive if the person being
interrogated is not accustomed to that mode, and if his culture understands such a mode as precisely being intended
to humiliate and offend. Besides adequacy, diverse socio-cultural norms also endanger the accuracy of international
criminal proceedings, in particular, the assessment of witness statements. An interrogation might not yield any
accurate results unless the interrogator and the judges are familiar with the particular socio-cultural norms of the
witness guiding his provision of information. [FN17]

*751 C. Culture-specific Convictions about Justice

A third cultural variation with a direct impact on the prospects of successful international adjudication of grave
crimes is that of differing convictions about justice which, in this context, refers to differing views on what must be
done in response to a serious wrong. Such convictions are seen as cultural inasmuch as they refer to particular
settlements on the interpretation of general principles of justice interwoven with the historical and social conditions
of a people or a place. The settlements inform their subjects of the more specific meaning of their rights, obligations
and opportunities embodied in the law that applies to them. The most significant settlements are those embedded in
national public cultures although some religious communities also have their own bodies of law.

Even if we may agree about the importance of bringing perpetrators of serious wrongs to justice, there is no
specific agreement across these settlements on what any of this means in concrete terms. Indeed, it cannot be
assumed that even the subjects of the same national (or religious) settlement agree on these matters. [FN18] Still, the
reality of differing convictions about justice is more accentuated in the international domain. In fact, the intensive
international debates over whether, for example, rape, forced pregnancy or acts of aggression should be recognized
as graves crimes under international criminal law indicate that there may not even be a clear agreement on what
constitutes a serious wrong that gives rise to legitimate demands for international criminal justice. International
criminal tribunals must interpret and develop authoritative understandings of the more specific meaning of
international law in spite of disagreements. The progressive interpretation of the International Criminal Tribunal for
Rwanda (ICTR) to consider rape as a constituent act of genocide, [FN19] used in support of endorsing the gravity of
this crime in the Rome Statute, [FN20] indicates the significant influence of international criminal tribunals in
shaping the more specific understanding of international criminal law and justice.

At the same time, the existence of international criminal law and jurisprudence does not render disagreements
about justice irrelevant in the context of international criminal proceedings. Such disagreements continue to surface
in the interpretation and application of the relevant law by international criminal tribunals and affect their selection
of cases, offenders and victims, as well as their lines of reasoning and judgments. The reality and significance of
disagreements among international judges are evinced by the practice of publicizing separate or dissenting opinions.
However, also the intended beneficiaries disagree over justice. The disputes in international courtrooms are rarely
confined to points of evidence, but extend to matters *752 of principle. Obviously, it is the purpose of international
adjudication to settle such disputes in the form of final judgments. Nevertheless, unless these judgments are
perceived as acceptable to the parties and others whose rights and interests are at stake, the judgments may fail to
serve an important aspect of the purpose of justice, i.e. that intended beneficiaries perceive that justice has been
done.

One example of a deeply controversial issue is the use of the death penalty. [FN21] Although international
criminal law rules out the death penalty as a form of punishment, it continues to be used in places where grave
crimes have been committed. For example, it is seen as the correct form of punishment for genocide in Rwandan
courts. [FN22] Several members of the international community continue to push for the complete abolishment of
the death penalty. [FN23] However, in the meantime, the fact that those offenders who are tried in Arusha get away
with imprisonment while others who are tried in Rwanda face the death penalty could be seen by victims, witnesses

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


4 JINTCRJ 745 Page 6
4 J. Int'l Crim. Just. 745

and affected populations as unacceptable outcomes of the workings of international criminal justice.

3. Measures and Responses

If cultural diversity has a serious impact on the prospects of bringing justice with the help of international
criminal tribunals, what has been done in response?

A. Translation and Interpretation

Until now, most attention has been paid to the challenge posed by linguistic differences. While the official
language practices of the International Criminal Tribunal for the former Yugoslavia (ICTY) and the ICTR are shaped
by cultures that have dominated international relations for centuries, English and *753 French, the need to overcome
the reality of linguistic diversity in the chambers of these tribunals was felt as acute early on. The provision of
translation and interpretation is not necessarily solely a matter of expediency; it can also be a matter of human
rights. The ICTY and the ICTR recognize the right of the accused to use his or her language. [FN24] Also, persons
appearing before the two Tribunals, other than as counsels, and who do not have sufficient knowledge of English or
French may also use their own language. [FN25] Additionally, counsel for an accused may apply for leave to use a
language other than the two working ones, or the language of the accused. [FN26] The Registrars of the respective
Tribunals are charged with the task of making the necessary arrangements for interpretation and translation into and
from the official languages. [FN27] In both cases, the realization of these rights has required the establishment of
special language services sections. [FN28] *754 In a way similar to the ICTY, the challenge posed by linguistic
diversity for the ICTR is real and significant, and was noted already in its First Annual Report, submitted to the UN
General Assembly in 1996. [FN29]

Linguistic diversity has caused enormous delays of trial proceedings before the ICTR. [FN30] Indeed:

... the interpretation of trial proceedings into three languages, namely Kinyarwanda, French and English,
together with cultural and linguistic nuances and unique characteristics associated with understanding
questions in Kinyarwanda, cause trial proceedings to take three times longer than a trial conducted in one
language. [FN31]
The ICTR introduced simultaneous interpretation of Kinyarwanda into English and French in one of its Trial
Chambers only in 2001. [FN32] Arrangements are now being made to provide the service to the remaining Trial
Chambers in order to speed up the proceedings. Prior to this system of *755 translation, Kinyarwanda could only be
interpreted consecutively into English and French. [FN33]

An entire section of the judgment in Akayesu was devoted to an explanation of the enormous practical
difficulties involved in translation and interpretation, and how the ICTR seeks to resolve them. [FN34]

The accumulated experiences of the ICTR and the ICTY will be useful to the International Criminal Court
(ICC) in developing its language services section. [FN35] Unlike the ICTY and the ICTR, whose jurisdictions are
limited to specific conflicts, the ICC has a much more far-reaching competence and may be involved in a series of
conflict and post-conflict societies, each of which may possibly be composed of diverse linguistic populations.
Unlike the ICTY and the ICTR Statutes, the Rome Statute also recognizes a right of victims to participate in the
proceedings of the ICC. [FN36] Thus, unprecedented efforts will be required by the ICC to overcome linguistic
diversity in its day-to-day administration.

*756 Besides, in the context of investigations and trials, concerns about translation and interpretation are
present in the outreach programmes of the Tribunals.

B. Counselling and Assistance

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


4 JINTCRJ 745 Page 7
4 J. Int'l Crim. Just. 745

A consideration of differing cultural equipment is not limited to language issues, but extends to concerns about
discrepancies, sometimes vast, in the possession of skills, know-how and tools deemed essential to access,
participate or otherwise benefit from international criminal proceedings.

To the extent that attention has been paid to the obstacles created by lack of these kinds of cultural resources,
the main focus has been on legal skills. Indeed, the two ad hoc Tribunals accord the accused and, in the case of the
ICC, also victims and witnesses who appear before the Court a right to counsel and assistance. [FN37] Moreover,
one part of the work of the Victims and Witnesses Sections of the two ad hoc Tribunals and of the ICC is to inform
victims and witnesses of the proceedings and their reasonable expectations within those proceedings and maintain
close contact with them. [FN38]

Also worth mentioning in this context is the proliferation of local associations aimed at assisting victims,
witnesses and others in their preparation for participation, or else in their contributions of materials, evidence and
stories to the cause of international criminal justice.

C. Cultural Sensitization

In contrast with diverse cultural equipment, not least in terms of language, the reality of differing socio-cultural
norms and its impact on international criminal proceedings was noted only recently. The ICC is the first international
criminal tribunal to give some formal recognition of the immediate relevance of differing socio-cultural norms.
According to the ICC Rules of Procedure and Evidence, the Victims and Witnesses Unit is responsible for ensuring:

... training of its staff with respect to victims' and witnesses' security, integrity and dignity, including
matters related to gender and cultural sensitivity. [FN39]
*757 Moreover, the unit may include, as appropriate, persons with expertise in (e) gender and cultural
diversity. [FN40] However, no similar provision has been made to regulate the Defence Counsel's relationship with
the accused, victims and witnesses.

Notwithstanding the lack of attention to differing cultural norms in its Statute or Rules of Procedure, the ICTR
has come to experience difficulties. In particular, its witnesses have complained about the practice of cross-
examination -- a practice that is unfamiliar to the Rwandan people. As the spokesperson for the tribunal explains:

What ... [the witnesses] are complaining about is what you might call a clash of traditional cultures.
These witnesses, who are mostly witnesses for the prosecution, are not used to being robustly cross-examined
in a court of law. And they don't like that and sometimes they interpret that as mistreatment. [FN41]
The difficulties are highlighted in a report by the International Federation of Human Rights according to which
most witnesses are upset by the cross-examination conducted by defence lawyers. [FN42] Given that the subject of
sex is taboo in Rwanda, the witnesses are especially disturbed about the intimate questions asked about rape scenes
and about having to describe sexual acts, organs, etc. [FN43] As a result of cross-examination, witnesses feel that
they are treated with scorn, considered to be liars, cheats, mentally disturbed or fools and as themselves being
accused. [FN44] This effect may be unintended by a Defence Counsel with an Anglo-Saxon legal training and
accustomed to a certain mode of interrogating witnesses. However, for those who have no previous experience, and
have a different understanding of acceptable forms of interrogations, this effect is nevertheless deeply regrettable,
especially if we consider that many witnesses are actual victims of the Rwandan genocide. [FN45] From this
standpoint, the ignorance of differing socio-cultural norms has a detrimental impact on the worth of taking part in
international criminal proceedings.

*758 The fact of differing socio-cultural norms also affects the prospects of making accurate assessments of
witness statements. As noted in the Akayesu case:

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


4 JINTCRJ 745 Page 8
4 J. Int'l Crim. Just. 745

Most Rwandans live in an oral tradition in which facts are reported as they are perceived by the witness,
often irrespective of whether the facts were personally witnessed by the witnesses or recounted by someone
else. Since not many people are literate or own a radio, much of the information disseminated by the press in
1994 was transmitted to a larger number of secondary listeners by word of mouth, which inevitably carries
the hazard of distortion of the information each time it is passed on to a new listener. [FN46]
Moreover:

It is a particular feature of the Rwandan culture that people are not always direct in answering questions,
especially if the question is delicate. In such cases, the answer will very often have to be decoded in order to
be understood correctly .... For example, many witnesses when asked the ordinary meaning of the term
Inyenzi were reluctant or unwilling to state that the word meant cockroach, although it became clear to the
Chamber during the course of the proceedings that any Rwandan would know the ordinary meaning of the
word. Similar cultural constraints were evident in the difficulty to be specific as to dates, times, distances and
locations. The Chamber also noted the inexperience of witnesses with maps, film and graphic representations
of localities .... [FN47]
The need for cultural sensitization in relation to differing norms for the sake of accuracy cannot be
underestimated. Without understanding the local culture, i.e. the specific norms regulating the transmission and
dissemination of knowledge as well as culture-specific taboos and inhibitions, interrogators and international
judges face a serious risk of making erroneous assessments of points of evidence.

4. The Promise of Cultural Proximity

While international criminal tribunals seek to mitigate some of the problems related to cultural diversity, we
may hesitate about the likelihood of overcoming the difficulties involved in a satisfactory manner. The question
arises whether it is possible to avoid cultural diversity and achieve cultural proximity in the adjudication of grave
crimes under international criminal law.

It may seem like a paradox to explore the possibility of something like cultural proximity in the adjudication
of cases involving individual rights and obligations under international criminal law. The international nature of
these cases seems to render cultural diversity inevitable. However, not all disputes of international significance are
inherently diverse, but accrue in local settings and involve people with similar or neighbouring cultural
backgrounds and attachments. This may be especially true for disputes arising in *759 the context of genocide and
other grave crimes under international law. The possibility of cultural proximity is a reason for considering
whether national jurisdictions could offer a more appropriate site for adjudication compared to international ones.

A. Relocalizing International Justice Efforts

The idea of situating justice efforts in the place where the crimes were committed takes on particular relevance
in the light of the recent trend to reinforce a primacy of national jurisdictions in the context of genocide, war crimes
and crimes against humanity. The trend is manifested in the report of the UN Secretary-General concerning the rule
of law and transitional justice in conflict and post-conflict societies. [FN48] According to the Secretary-General, the
international community should not build international substitutes for national structures, but assist in the building of
domestic justice capacities. In giving such assistance, it is necessary to eschew the importation of foreign models,
and base international justice efforts on national assessments, national participation, and national needs and
aspirations. The most important role of the international community is to support domestic reform constituencies,
help build the capacity of national justice sector institutions, facilitate consultations on justice reform and
transitional justice, and help fill the rule of law vacuum that exists in so many post-conflict societies.

Also the completion strategies of the ICTY and the ICTR reflect this trend. Moreover, the recognition of the

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


4 JINTCRJ 745 Page 9
4 J. Int'l Crim. Just. 745

complementarity principle as defining the conditions for the ICC to exercise its jurisdiction strengthens a primacy of
national jurisdictions. [FN49]

B. The Primacy of National Jurisdictions

The ongoing process of reinforcing the role of national courts is motivated by practical considerations, such as
financial problems, and a strongly felt need of some states to reaffirm their sovereign status in the international
community; however, it is also the result of accumulated experience indicating that international peace-building
efforts, including a concern with transitional justice, require a more sustained focus on the rebuilding of national
judicial institutions. Though cultural concerns surface in support of this trend, no independent consideration has
been given to the question as to whether *760 the initiatives serve to reduce cultural diversity in the adjudication of
grave crimes.

A predominant understanding of culture as essentially referring to community and, above all, the nation
indicates the possibility of cultural proximity in adjudication. In fact, influential contemporary political and legal
philosophers assume that the members of a nation share a culture. [FN50] A shared understanding of justice enables
the national judicial authorities to deliberate and resolve disputes involving citizens in a way that is reasonable in the
eyes of all citizens (who are reasonable). From this standpoint, the adjudication of disputes among citizens in the
national courts serves to secure legitimacy in judgment in the eyes of the disputing parties and others whose rights or
interests are affected.

The open texture of international law allows for cultural accommodation of a range of differing national
interpretations of the more precise meaning of fair trial, reparation and punishment. From an international legal
standpoint, several of these differences are legitimate; indeed, the complementarity principle is believed to allow for
a broad margin of appreciation of differing sentencing traditions and cultures, also in relation to core crimes. [FN51]
The broad discretion given to states may legitimize various possibilities or methods of obtaining justice, not all of
which are retributive in outlook and spirit, but more forward-looking and restorative. These differences are
presumably acceptable, even warranted, from the standpoint of international criminal law and justice. In the words
of one group of commentators, it may simply exhibit the adjustability of international justice to differing post
conflict circumstances'. [FN52]

Besides promoting the use of national understandings of justice, the primacy of national courts implies the use
of national cultural equipment and national rules for social interaction as interpreted and applied in a judicial
context. While it cannot be expected that all citizens adhere to the same set of culture-specific norms in social and
public affairs, it is reasonable to assume that most are accustomed to the norms underpinning the public rules of
conduct in their territorial location. Moreover, although it cannot be expected that all citizens cherish the official
interpretation of how to bring justice in *761 case of grave crimes, it is reasonable to assume that all are at least
familiar with that interpretation.

C. The Limits to Proximity

Notwithstanding the claim about the possibility of cultural proximity in national settings, it may have limited
application with respect to the prosecution of grave crimes.

1. Inter-cultural Conflicts

A primacy given to national jurisdictions cannot mitigate the cultural diversity resulting from the adjudication of
disputes involving, for example, soldiers of an intervening power and civilian victims. Such disputes are inherently
multicultural in character. Neither may national courts be well suited to deal with disputes involving subjects of
differing national or cultural backgrounds and attachments, especially when those differences are at the root of their

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


4 JINTCRJ 745 Page 10
4 J. Int'l Crim. Just. 745

disputes. In the latter situations, there is a serious risk that prosecutors and judges of national courts make decisions
that constitute outright discrimination. A recent report of Human Rights Watch on war crimes trials in the former
Yugoslavia (Croatia, Bosnia and Herzegovina, and Serbia and Montenegro) attests to ethnic bias on the part of
national judges and prosecutors. [FN53]

2. Human Rights Concerns

One manifestation of the possibility of achieving cultural proximity in real-life adjudication of disputes arising
in the context of genocide could be the gacaca jurisdictions in Rwanda. [FN54] As one observer notes, the
proximity among the participants achieved by the gacaca jurisdictions renders the criminal process less adversarial,
less retributive and instead more forward-looking, more restorative and more individualized. Cultural proximity
creates the conditions *762 to enhance community participation, trust and solidarity. [FN55] The gacaca
jurisdictions are informal courts that operate parallel to the Rwandan state court system in the adjudication of crimes
against humanity, [FN56] and were established by the Rwandan government in response to the overall
dissatisfaction with the ICTR. In traditional gacaca proceedings, respected community figures served as judges' and
involved the entire community in a dispute resolution process. While the recent gacaca jurisdictions are based on
this traditional practice, their procedures have been adjusted to deal with the challenges posed by the adjudication of
crimes of severe magnitude, such as genocide and crimes of humanity.

Nonetheless, there is a risk that a concern with cultural proximity comes into conflict with basic human rights
guarantees in international law. This is a critique that was mounted against the Gacaca jurisdictions at an early stage.
[FN57] Amnesty International reports that there is a lack of legal protection in these proceedings. Suspects do not
have the right to a Defence Counsel and judges lack sufficient competence. [FN58] Whether the exclusion of
defence lawyers is the result of the lack of lawyers in Rwanda or whether it is an expression of its traditional culture
remains uncertain. [FN59] In any case, an overriding international interest in the need to secure at least a minimum
provision of respect for persons must prevail over considerations of cultural diversity.

3. The Continued Role of International Criminal Tribunals

Notwithstanding the recent trend to emphasize the importance of national courts, international criminal tribunals
continue to perform a critical function in delivering justice. For a start, although an essential component of the *763
completion strategies of the ICTY and the ICTR is to transfer cases to national courts, the two ad hoc Tribunals will
continue to prosecute high-level officials. Moreover, while the creation of the ICC was coupled with an affirmation
of the central role of national courts in the actual implementation of international criminal law, the ICC nevertheless
assumes a complementary role. [FN60] Furthermore, as in the case of Sudan, the Security Council may refer a
situation in which one or more such crimes appears to have been committed on the basis of Chapter VII of the UN
Charter. [FN61] Additionally, the submission of the report of the Commission to the Security Council, entailing a
call for the creation of an international criminal tribunal for Timor-Leste, is a further indication that not even ad hoc
international criminal tribunals may be outmoded. [FN62] Thus, the pronouncement of the ICTY in 1996 about the
importance of an international criminal tribunal continues to have validity. [FN63]

5. Conclusion

The challenge of cultural diversity facing international criminal tribunals is significant. These tribunals operate
in an environment characterized by a broad range of cultural differences, sometimes radical, not only in terms of
language, skills and tools, but also with respect to socio-cultural norms and *764 convictions about justice. Each of
the cultural differences, if ignored, seriously undermines their efforts of bringing justice to victims and others who
are affected by grave crimes. In creating a risk of mis- (or lack of) understanding, alienation and disagreement,
cultural diversity is particularly damning for the work of international criminal tribunals.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


4 JINTCRJ 745 Page 11
4 J. Int'l Crim. Just. 745

The Tribunals themselves have sought to redress some of the most urgent culture-specific concerns stemming
from a lack of common language and are engaged in extensive translations and interpretations. Furthermore, there is
an increasing awareness in the tribunals about the need for cultural sensitization in the conduct of their
investigations and proceedings, in their assistance programmes to victims and witnesses, and in their assessment of
evidence. However, the emerging debate on the way in which international criminal tribunals should (and can)
tackle the impact of cultural diversity is not near a close. In this light, the possibility of avoiding some of the cultural
differences facing international criminal tribunals by situating international criminal justice efforts in the location
where the crimes took place emerge as an alternative worthy of serious consideration. Indeed, unlike international
criminal tribunals, national courts are assumed to conduct their work in more culturally homogeneous settings --
settings that might secure something like an ideal of cultural proximity in adjudication.

Nevertheless, as this article has sought to demonstrate, the recent trend to reinforce a primacy of national
jurisdictions does not render the challenge of cultural diversity less significant; though this primacy might,
occasionally, secure cultural proximity between parties, affected populations and judicial authorities, the trend does
not take seriously the reality of multinational and multicultural states, the existence of national judicial authorities
that are unable or unwilling to bring justice, the lack of guarantees for a fair trial and the continued importance of
international criminal tribunals as a symbolic manifestation of the gravity of certain crimes, and as a complementary
safeguard. Given these realities, it will be necessary to engage in a more constructive debate on how to tackle the
problems posed by cultural diversity in the adjudication of grave crimes at the international level.

[FNa1]. Researcher in the Human Rights Section, FRIDE (Fundacin para las relaciones internacionales y el dilogo
exterior) Madrid and Adjunct Instructor, New School University, New York. An earlier version of this paper was
delivered at the 2003 Annual Meeting of the American Political Science Association, Philadelphia, 28-31 August
2003 while Research Associate at the Project on International Courts and Tribunals, Center on International
Cooperation, New York University, [jalmqvist@fride.org]

[FN1]. See, e.g. J. Lew and L. Shore, International Commercial Arbitration: Harmonizing Cultural
Differences', 54 Dispute Resolution Journal (1999) 33-38; A. Sagartz, Resolution of International Commercial
Disputes; Surmounting Barriers of Culture Without Going to Court. 13 Ohio State Journal of Dispute Resolution
(1997-98) 675-709; A. Stallard, Joining the Culture Club: Examining Cultural Context When Implementing
International Dispute Resolution, 17 Ohio State Journal of Dispute Resolution (2002) 463-486; and E. Waldman,
Identifying the Role of Social Norms in Mediation: A Multiple Model Approach, 48 Hastings Law Journal (1997)
703-769.

[FN2]. For the purpose of this article, the term ADR includes mediation, conciliation, and arbitration (although,
in a European context, arbitration is normally not included).

[FN3]. See, e.g. M. Arbaugh, Making Peace the Oldfashioned Way: Infusing Traditional Tribal Practices into
Modern ADR, 2 Pepperdine Dispute Resolution Law Journal (2002) 303-319; U.M. Lauchli, Cross-cultural
Negotiations, with a Special Focus on ADR with the Chinese, 26 William Mitchell Law Review (2000) 1045-1073;
and J.R. Tarpley, ADR, Jurisprudence and Myth, 17 Ohio State Journal of Dispute Resolution (2001) 113-144.

[FN4]. For the purposes of the present analysis, the notion of access to international justice is interpreted in broad
terms to include the rights and opportunities of the accused, witnesses and victims to take part in the international
judicial process.

[FN5]. For an account of the claim that the implementation of access to justice requires not merely a formal
recognition in law, but also a consideration of extra-legal conditions that inhibit the actual use of this right or
opportunity, see, e.g. C. Harlow, Access to Justice as a Human Right: The European Convention and the European
Union, in P. Alston (ed.), The EU and Human Rights (Oxford: OUP, 1999) 187-214, at 189; and M. Cappelletti and

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


4 JINTCRJ 745 Page 12
4 J. Int'l Crim. Just. 745

B. Garth, Access to Justice: The Newest Wave in the Worldwide Movement to Make Rights Effective, 27 Buffalo
Law Review (1978) 181-292. However, unlike conventional accounts of access to justice, which tend to focus on
the lack of sufficient economic resources and the subsequent need for legal aid, this article directs attention to
culture-specific obstacles and discusses how such obstacles might be redressed.

[FN6]. The notion of cultural equipment is borrowed from A. Swidler, Culture in Action: Symbols and Strategies',
51 American Sociological Review (1986) 273-286.

[FN7]. But see R.W. Cole and L. Maslow-Armand, The Role of Counsel and the Courts in Addressing Foreign
Language and Cultural Barriers at Different Stages of a Criminal Proceeding, 19 Western New England Law
Review (1997) 193-228. The article indicates that the problem of linguistic diversity clearly exists in the context of
national criminal proceedings as well.

[FN8]. The official languages of the ICTR and the ICTY are English and French (Rule 3(A) ICTY RPE and Rule
3(A) ICTR RPE). It should also be noted that while the newly established ICC has six official languages -- Arabic,
Chinese, English, French, Russian and Spanish -- its working languages are English and French (Art. 50(1) and (2)
ICCSt.).

[FN9]. See section 3(A) of this article.

[FN10]. See section 3(B) of this article.

[FN11]. Thus, it does not consider the possibility of particular minorities refusing to broaden their repertoires of
cultural knowledge to communicate effectively with the outside world.

[FN12]. See, e.g. J. Elster, Rationality and Social Norms', 32 Archives Europennes de Sociologie (1991) 109-129.

[FN13]. The latter issues belong to the realm of justice, and because of their special importance from the standpoint
of international criminal justice are dealt with separately in this article.

[FN14]. For an account of the uncertainties surrounding the precise cultural source of international rules of
procedure and evidence, see C. Romano, The Americanization of International Litigation. 19 Ohio State Journal
on Dispute Resolution (2003) 89-119.

[FN15]. S.N. Lawrence, Cultural (In)sensitivity: The Dangers of a Simplistic Approach to Culture in the
Courtroom. 13 Canadian Journal of Women and the Law (2001) 107-136.

[FN16]. The term worth (adequacy) is borrowed from John Rawls. Rawls affirms the existence of obstacles
(poverty, ignorance and lack of means) that amount to serious obstacles on the individual capacity to take advantage
of rights and opportunities. In his view, such obstacles affect the worth of rights and opportunities from the
standpoint of the individual. The worth of rights and opportunities is measured in terms of the individual capacity to
advance his ends. See J. Rawls, Theory of Justice (rev. edn. Cambridge, MA: Belknap Press of Harvard University
Press, 1999), 179ff; and J. Rawls, Political Liberalism (New York: Columbia University Press, 1995), 324ff. In this
context, the fact of differing socio-cultural norms is seen as amounting to an obstacle that undermines the capacity
of intended beneficiaries to make use of their rights and opportunities to take part in international criminal
proceedings.

[FN17]. See also section 3(C) of this article.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


4 JINTCRJ 745 Page 13
4 J. Int'l Crim. Just. 745

[FN18]. J. Waldron, Law and Disagreement (Oxford: Clarendon Press, 1999).

[FN19]. Judgment, Akayesu (ICTR-96-4-T). Chamber 1, 2 September 1998.

[FN20]. Article 7(1)(g) ICCSt.

[FN21]. See Amnesty International, Facts and Figures on the Death Penalty, available online at
http://web.amnesty.org/pages/deathpenalty-facts-eng (visited 26 October 2005), according to which 76 countries
retain and use the death penalty, although the number of countries which actually execute prisoners is much smaller.
24 countries can be seen as abolitionist in practice: they retain the death penalty in law but have not executed any
prisoner for the past 10 years or more and are seen to have a policy or established practice of not using the death
penalty.

[FN22]. For an account of the features of post-genocide justice in Rwanda, see, e.g. A. Habimana. What Does
International Justice Look Like in Post-Genocide Rwanda?. 2 Human Rights Dialogue: Promise and Perils
(Spring 2000), available online at http:// www.cceia.org/viewMedia.php/prmTemplateID/8/prmID/615 (visited 28
October 2005).

[FN23]. 85 countries have abolished the death penalty for all crimes. See Amnesty International, supra note 21.

[FN24]. Rule 3(B) ICTY RPE and Rule 3(B) ICTR RPE.

[FN25]. Rule 3(C) ICTY RPE and Rule 3(C) ICTR RPE.

[FN26]. Rule 3(D) ICTY RPE and Rule 3(D) ICTR RPE.

[FN27]. All documentation available at the Office of the Prosecutor of the two Tribunals, regardless of its relevance,
is translated so as to make evidence available to the defence in a language that the accused, Prosecutors and legal
counsels understand (Rule 3(E) ICTY RPE and Rule 3(E) ICTR RPE). In 2003, the ICTY Office of the Prosecutor
printed an average of 50,000 pages per week for disclosure. Since 2002, a General Service Unit of the office
translates prosecution material at a preliminary stage to ascertain whether the material would be required for court
proceedings. If the material is deemed to be required, the Tribunal translates the already translated prosecution
material again for the purpose of the proceedings. The second translation is provided by certified translators of the
Conference and Language Services Section (ICTY Report of the Board of Auditors to the General Assembly of the
United Nations, UN doc. A/59/5/Add.12, 10 August 2004, 49-51). In 1996, the ICTY Conference and Language
Services Section had more than 38 full-time staff members and called on the services of about 100 contractors
(Third Annual Report of the ICTY to the General Assembly and the Security Council of the United Nations, UN doc.
A/51/292-S/1996/665, 16 August 1996, 134). By now, it has increased its staff to about 150 interpreters and
translators. In January 2002, the English Translation Unit had a backlog of 13,161 pages (ICTY Report of the Board
of Auditors to the General Assembly of the United Nations, UN doc. A/57/5/Add. 12, 3 July 2004, 74). In 2004, its
annual output in translation was nearly 75,000 standard UN pages covering all ICTY language combinations
(Eleventh Annual Report of the ICTY to the General Assembly and the Security Council of the United Nations, UN
doc. A/59/215-S/2004/627, 13 August 2004, 368).

[FN28]. The ICTY Conference and Language Services Section is responsible for interpretation and translation
services for the Registry, the Office of the Prosecutor, the Chambers and Defence Counsel (Tenth Annual Report of
the ICTY to the General Assembly and the Security Council of the United Nations, UN doc. A/58/297-S/2003/829,
20 August 2003, 339). The need for an extensive interpretation and translation system was acknowledged already
in the First Annual Report of the ICTY to the General Assembly and the Security Council of the United Nations, UN
doc. A/49/342-S/1994/1007, 29 August 1994, 33. It provides simultaneous interpretation not only from and into

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


4 JINTCRJ 745 Page 14
4 J. Int'l Crim. Just. 745

English and French, but also from and into Bosnian/Croatian/Serbian, and, more recently, Albanian (Seventh Annual
Report of the ICTY to the General Assembly and the Security Council of the United Nations, UN doc. A/55/273-
S/2000/777, 7 August 2000, 243-245). Simultaneous interpretation of other languages is provided as required.
Additionally, the section sends interpreters into the field to work with the investigating teams on mission and hires
French and English court reporters who prepare transcripts for all sessions in court. It also translates all kinds of
written materials, including witness statements, official documents of the tribunal, as well as audio and videotapes
from and into the official languages of the Tribunal as well as from and into Bosnian/Croatian/Serbian, German.
Dutch and, occasionally, other languages.

[FN29]. First Annual Report of the ICTR to the General Assembly and the Security Council of the United Nations,
UN doc. A/51/399-S/1996/778, 24 September 1996, 64. Until 1996, the language services provided by the ICTR
had consisted mainly of support to the Office of the Prosecutor. However, the beginning of the trials rapidly
necessitated the establishment of a Language and Conference Services Section to offer interpretation and translation
services from and into English, French and Kinyarwanda to the Chambers, the Office of the Prosecutor and the
Defence Counsel in formal as well as informal settings (Second Annual Report of the ICTR to the General Assembly
and the Security Council of the United Nations, UN doc. A/52/582-S/1997/868, 13 November 1997, 73). Over the
years, the ICTR has also introduced English language classes for the detainees so as to facilitate communications
between them and the Tribunal in the two official languages (Fourth Annual Report of the ICTR to the General
Assembly and the Security Council of the United Nations, UN doc. A/54/315-S/1999/943, 7 September 1999, 92).
The Tribunal pays for these classes, training programmes in English for staff of the Witness and Victims Support
Section-Defence, as well as language courses for the entire staff (Sixth Annual Report of the ICTR to the General
Assembly and the Security Council of the United Nations, UN doc. A/56/351-S/2001/863, 2 July 2002, 180 and
207). Furthermore, it has organized in-house simultaneous interpretation training courses in Kinyarwanda (Ninth
Annual Report of the ICTR to the General Assembly and the Security Council of the United Nations, UN doc.
A/59/183-S/2004/601, 17 July 2004, 74). And, as part of the inter-Tribunal cooperation project, the ICTR receives
terminology support from the ICTY in the form of databases and glossaries (Tenth Annual Report of the ICTY to the
General Assembly and the Security Council of the United Nations, UN doc. A/58/297-S/2003/829, 20 August 2003,
338).

[FN30]. In April 2004, the ICTR faced a backlog of 2,400 pages requiring translation. See ICTR Report of the Board
of Auditors, UN doc. A/59/5/Add.11, 10 August 2004, 80.

[FN31]. Seventh Annual Report of the ICTR to the General Assembly and the Security Council of the United
Nations, UN doc. A/57/163-S/2002/733, 2 July 2002, 17.

[FN32]. Eighth Annual Report of the ICTR to the General Assembly and the Security Council of the United Nations,
UN doc. A/58/140-S/2003/707, 11 July 2003, 4. The introduction of simultaneous interpretation is an important
advancement as it takes about 25% less time than consecutive translation.

[FN33]. Seventh Annual Report of the ICTR to the General Assembly and the Security Council of the United
Nations, UN doc. A/57/163-S/2002/733. 2 July 2002, 111. It must also be noted that since there is no
translation/interpretation programme offering courses in the language combination French--Kinyarwanda on the
international market, the ICTR's language services section's Kinyarwanda translators, interpreters and revisers have
been trained in-house. See Budget for the ICTR for the biennium 2004-05, Report of the Secretary-General to the
General Assembly of the United Nations, UN doc. A/58/269, 12 August 2003, at 30.

[FN34]. The interpretation of oral testimony of witnesses from Kinyarwanda into French and English into one of the
official languages of the Tribunal has been a particularly great challenge due to the fact that the syntax and everyday
mode of expression in the Kinyarwanda language are complex and difficult to translate into French and English.
These difficulties affected the pre-trial interviews carried out by investigators in the field, as well as the

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


4 JINTCRJ 745 Page 15
4 J. Int'l Crim. Just. 745

interpretation of examination and cross-examination during proceedings in court. Most of the testimony of witnesses
at trial was given in the language, Kinyarwanda, first interpreted into French, and then from French into English.
This process entailed obvious risks of misunderstandings in the English version of words spoken in the source
language by the witness in Kinyarwanda. For this reason, in cases where the transcripts differ in English and French,
the Chamber has relied on the French transcript for accuracy. In some cases, where the words spoken are central to
the factual and legal findings of the Chamber, the words have been reproduced in the judgment in the original
Kinyarwanda (Judgment, Akayesu (ICTR-96-4-T), Chamber 1, 2 September 1998, 145. But see also 146-154,
in the same judgment which explain the specific meaning of various terms used in the judgment, and have been
reproduced in this judgment in the original Kinyarwanda). Moreover, efforts have been made to reduce the need for
translation of documents. For example, during trials, many motions have come to be dealt with orally -- a procedure
that reduces the need for translation as such decisions are interpreted in the court room (Budget for the ICTR for the
biennium 2004-05. supra note 33, 37).

[FN35]. A. Dieng, The International Criminal Court: Lessons from the International Criminal Tribunal for Rwanda
-- Potential Problems for the Registrar, paper presented at the conference Towards Global Justice: Accountability
and the International Court, at Wilton Park, Sussex. 4-8 February 2002, available online at http://
www.ictr.org/ENGLISH/speeches/adwiltonpark020202.htm (visited 31 July 2004).

[FN36]. Article 75 ICCSt.

[FN37]. Art. 18(3) ICTYSt., Art. 18(3) ICTRSt. and Art. 55(2)(c) ICCSt. (investigation and preparation of
indictment: right of suspect to counsel of his own choice, including the right to legal assistance without payment in
case of lack of insufficient means): Art. 21(4)(b) ICTYSt., Art. 21(4)(b) ICTRSt. and Art. 67(1)(b) ICCSt. (right of
the accused to communicate with counsel of his own choosing); Art. 21(4)(d) ICTYSt., Art. 21(4)(d) ICTRSt. and
Art. 67(1)(d) ICCSt. (right of the accused to defend himself in person or through legal assistance of his own
choosing); Arts 43(6) and 68(4) ICCSt. (appropriate counselling and assistance for victims and witnesses who
appear before the Court).

[FN38]. Rule 34(A)(ii) ICTY RPE: Rule 34(A)(ii) ICTR RPE: Rule 16 ICC RPE.

[FN39]. Rule 18(d) ICC RPE (emphasis added).

[FN40]. Rule 19(e) ICC RPE.

[FN41]. K. Salmon. Credibility of UN Tribunal in Rwanda Threatened: Report, Interpress Third World News
Agency 9 August 2002. available online at http://unnews.co.kr/technote/read.cgi?
board=human&y_number=265&nnew=1 (visited 26 October 2005).

[FN42]. International Federation for Human Rights, Victims in the Balance: Challenges Ahead for the International
Criminal Tribunal for Rwanda, Report no. 329/2 (November 2002).

[FN43]. Indeed, in Akayesu, the ICTR acknowledged the cultural sensitivities involved in public discussion of
intimate sexual matters and the inability of witnesses to disclose graphic anatomical details of the sexual violence
they endured. Judgment. Akayesu (ICTR-96-4-T), Chamber 1, 2 September 1998, 687.

[FN44]. International Federation for Human Rights, supra note 42, at 8.

[FN45]. See also ICTR Newsletter, June 2004, especially at 12-14 concerning the ICTR seminar on Gender
Sensitivity held on 14 May 2004.

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


4 JINTCRJ 745 Page 16
4 J. Int'l Crim. Just. 745

[FN46]. Judgment. Akayesu (ICTR-96-4-T). Chamber 1, 2 September 1998, 155.

[FN47]. Ibid., 156.

[FN48]. Report of the Secretary General on the Rule of Law and Transitional Justice in Conflict and Post-conflict
Societies, UN doc. S/2004/625, 23 August 2004.

[FN49]. See M.A. Newton. Comparative Complementarity: Domestic Jurisdiction Consistent with the Rome
Statute of the International Criminal Court, 167 Military Law Review (2001) 20-73, at 26.

[FN50]. But note the recognition of multinational states, i.e. states that host two or more nations. See, e.g. C. Taylor,
Examining the Politics of Recognition, in A. Gutmann (ed.), Multiculturalism. Examining the Politics of
Recognition (Princeton: Princeton University Press. 1994) 25-73; W. Kymlicka, Liberalism, Community and Culture
(Oxford: OUP, 1989); W. Kymlicka, Multicultural Citizenship (Oxford: OUP, 1995): A. Margalit and J. Raz,
National Self-determination, 87 The Journal of Philosophy (1990) 439-461; and Y. Tamir, Liberal Nationalism
(Princeton: Princeton University Press, 1993).

[FN51]. J.K. Kleffner, The Impact of Complementarity on National Implementation of Substantive International
Criminal Law, 1 Journal of International Criminal Justice (2003) 86-113, at 98.

[FN52]. R. Dixon. K.A.A. Khan and R. May (eds), Archbold International Criminal Courts: Practice, Procedure
and Evidence (London: Sweet & Maxwell, 2003), 2-42.

[FN53]. Human Rights Watch, Justice at Risk: War Crimes Trials in Croatia, Bosnia and Herzegovina, and Serbia
and Montenegro, Vol. 16, No. 7 (D), October 2004. Such bias is not significant in the war crimes trials in Bosnia and
Herzegovina, where multiethnic panels of judges try most war crimes, or in Serbia and Montenegro, where, in the
past three years, only Serb defendants have been prosecuted by Serb judges and prosecutors. However, war crimes
trials in Croatia demonstrate a direct correlation between conviction and acquittal (on the one hand) and the ethnicity
of the defendants (Serb affiliations) (on the other). The same problem pertains with respect to the prosecution. So
far, there are only a limited number of war crimes prosecutions against members of the dominant ethnic group in
Croatia and Republika Srpska.

[FN54]. The Gacaca courts began their operation on 10 March 2005.

[FN55]. This is not to say that gacaca jurisdictions, in fact, will achieve these objectives. See, e.g. C. Honeyman et
al., Gacaca Jurisdictions. Interim Report of Observations, June 10-August 8, 2002, Harvard University, available
online at http://www.fas.harvard.edu/~socstud/rwanda/index.html (visited 22 March 2005): and F. Sheikh, A Mixed
Verdict for Community Courts', Inter Press Service News Agency, 4 July 2005, available online at http://
www.ipsnews.net/africa/nota.asp?idnews=29347 (visited 29 July 2005).

[FN56]. Loi Organique No. 40/2000 du 26/01/2001 Portant Cration des Juridictions Gacaca et Organisation des
Poursuites des Infractions Constitutives du Crime de Gnocide ou de Crimes contre I'Humanit, Commises entre le
ler Octobre 1990 et le 31 Dcembre 1994 (Gacaca Law).

[FN57]. J. Sarkin, The Tension Between Justice and Reconciliation in Rwanda: Politics, Human Rights, Due
Process and the Role of the Gacaca Courts in Dealing with Genocide. 45 Journal of African Law (2001) 143-172.

[FN58]. Amnesty International, Rwanda: The Troubled Course of Justice, 26 April 2000, available online at http://

2010 Thomson Reuters. No Claim to Orig. US Gov. Works.


4 JINTCRJ 745 Page 17
4 J. Int'l Crim. Just. 745

www.web.amnesty.org/library/print/engafr470102000?open&%20of=eng-rwa (visited 22 March 2005).

[FN59]. According to the Norwegian Helsinki Committee, one of the reasons why Gacaca was chosen was precisely
because of the lack of defenders and judges. See The Norwegian Helsinki Committee, Prosecuting Genocide in
Rwanda. The Gacaca System and the International Criminal Tribunal for Rwanda, Rep. II/2002, at 15, available
online at http:// www.nhc.no/rapporter/landrapporter/rwandarap.PDF (visited 22 March 2005).

[FN60]. Article 17(1)(a) ICCSt.

[FN61]. Article 13(b) ICCSt. With respect to Sudan, see SC Res. 1593, 31 March 2005, and Report of the
Prosecutor of the International Criminal Court, Mr Luis Moreno Ocampo, to the Security Council pursuant to
UNSCR 1593 (2005), 29 June 2005.

[FN62]. Report to the Secretary-General of the Commission of Experts to Review the Prosecution of Serious
Violations of Human Rights in Timor-Leste (then East Timor) in 1999, Annex to Letter dated 24 June from the
Secretary-General addressed to the President of the Security Council, UN doc. S/2005/458, 15 July 2005.

[FN63]. In one of its first cases, the ICTY held that its primacy over national jurisdictions was urged as a result of a
deep mistrust towards the ability of the relevant national courts to bring justice: When an international tribunal,
such as the present one, is created, it must be endowed with primacy over national courts. Otherwise, human nature
being what it is, there would be a perennial danger to international crimes being characterized as ordinary crimes
or proceedings being designed to shield the accused or cases not being diligently prosecuted (Decision on the
Defence Motion for Interlocutory Appeal on Jurisdiction. Tadi (IT-94-I), Appeals Chamber, 2 October 1995, 58).
However, the primacy given to the ICTY (and the ICTR) was also motivated by the nature of the crimes involved:
The crimes that the ICTY has been called upon to try are not crimes of a purely domestic nature. They are really
crimes which are universal in