Arbitration: framing the unframed

The fundamental idea of arbitration is that of a binding solution of disputes accepted with serenity by those who bear with consequences because of their special trust in chosen decision-makers. It is obviously difficult for courts to achieve this kind of acceptance, that is public justice tends to be distant and impersonal. The idea of arbitration is freedom reconciled with law. Acceptance of arbitration is a distinctive feature of free society but obviously rejected by a totalitarian society. The judicial machinery of an institutionally mature State may be the most reliable regulator of behaviour intended to conform to a rational determination of aggregate needs and legitimate political choices. The word “arbitrament” although having the meaning of (i) power to decide for other (ii) decision of an arbitrator has a primary sense (iii) capacity to decide for oneself or to stand or fall free is detrimental in today’s society and complete freedom is to act in accordance with one’s “libre arbitre”.

We want freedom and law as well. We assuredly do not want all individuals to be little sovereigns. We are gaining up some of our freedom and have a bargain that we accept criminal law to apply to us so that we can be protected from the same law. So we accept what we call the rule of law. Our attachment to the law varies as we see or do not see our reflection in it. We do not cherish the law of the warlord or that of the bureaucrat. We want and need the rule of law but not rule by law. We also want our law and thus is borne in the idea of arbitration. It is about liberty and not only efficiency.

The argument of arbitration begins with respect to private arguments. People do not always act wisely and efficiently and efficiency may be achieved in many ways other than opting for arbitration. Lawyers in the courtroom may come to mind or why not go for the whole way and flip coins. The arbitral process would be transformed and rejected.

So arbitration is about a political philosophy and social engineering. The philosophical premix is that people are free to arrange their affairs as they see fit, provided they do not offend public policy or mandatory law.

The restriction on arbitration is not only those intended to prevent the parties from harming the public interest but also that which purports to save parties from them. It is a matter of public policy. We expect that no binding effect will be given to a purported agreement among the members of a cartel that’s their illegal price fixing scheme be controllable on by an arbitrator and not by court but we fail to see why a party should not be free to agree a sales contract that contain an arbitration clause with a buyer.

It is hard to recoil from law when we see it is as the projection of faceless officials who wish to control our lives in accordance with their vision of general order. Those who impose the law arrogate to themselves the power to decide what degree of individual injustice is acceptable in the supposed collective interest. The ideology of arbitration is made more diffuse by the complexities of modern life. We are unlikely to recapture the perfect laboratory of an ancient village, a tiny population perpetuating the attitudes, beliefs and expectations of endless generations, travelling nowhere beyond a day’s march and knowing very little about the outside world, could more naturally identify, address and obey the arbitrator, “the Panchayat”.

It is for sure that the idea of arbitration is more transformed as we distanced ourselves from the isolation of the simple ancestral environment where we might imagine it took birth. Arbitration serves an important function without law. We need to encompass on it before we talk on the law of arbitration which is only part of the picture.

Arbitration will grow in a global setting. Business is increasingly global and cross border. It is obviously attractive to businessmen to provide for settlement of disputes in a neutral venue with independent arbitrators with relevant expertise, applying a system of law that is certain and respected. International arbitration should grow in tandem with the globalization of trade and national economies.

It is a privilege to be an arbitrator. The role of an arbitrator is a professional not a business role. It is elementary that an arbitrator must show independence, integrity, impartiality and expertise. It is important to remember that any award will affect businesses and people. Arbitration must serve the users. I suggest that whether our interest is as arbitrators, advocates, advisers or users, we should try and give something back to arbitration. The world of mediation is too fragmented and the world of arbitration should not drift in this direction.

Users expect speed, efficiency, cost-effectiveness and certainty. Users want advisers who understand and have full regard to the users’ needs and who give realistic advice. Arbitrators, advisers, institutions and cities/countries that understand and focus on delivering the needs of users will flourish in the future.