A Case of Motivated Cultural Cognition: China's Normative Arbitration of International Business Disputes

• Author: Pat K. Chew
• Position: Sullivan & Cromwell Visiting Professor of Law, Harvard Law School, spring 2018; Judge J. Quint Salmon & Ann Salmon Chaired Professor of Law, University of Pittsburgh School of Law.
• Pages: 469-496

A Case of Motivated Cultural Cognition: China’s

Normative Arbitration of International

Business Disputes

P

AT

K. C

HEW

*

I. Introduction

A formalist model imagines that judges and arbitrators resolve disputes in

a wholly deliberative and rationale way.

1

The assumption is that they

identify the appropriate legal principles, objectively apply them, and

ultimately reach predictable results. This model of decision-making as

highly predictable and objective, however, is illusory.

2

Judges and

arbitrators instead are more human and less mechanical—they pour more of

themselves into their cognitive processing. As Kahan indicates, they

unwittingly shape outcomes consistent with their own innate preferences.

3

* Sullivan & Cromwell Visiting Professor of Law, Harvard Law School, spring 2018; Judge

J. Quint Salmon & Ann Salmon Chaired Professor of Law, University of Pittsburgh School of

Law. I appreciate the support of Deans William Carter, Amy Wildermuth, John Manning, and

Martha Minnow. Daniel Chow, Christopher Drahozal, Kevin Kim, Robert Kelley, Lauren

Kelley-Chew, Jacqueline Nolan-Haley, Jennifer Robbennolt, Catherine Rogers, Nancy Welsh,

Margaret Woo, Mark Wu, and Don Zheng offered valuable suggestions on my research. My

research team included Jingjing Xia, Serene Lueng, James Li, and Biwei Xa. Jingjing Xia was

instrumental in acquiring the original CIETAC materials and in meticulously supervising the

data compilation process. Scott Beach and Janet Schlarb from the University Center for Social

and Urban Research and Caiyan Zhang of the College Board consulted in the research design

and statistical analyses. I am also grateful for the opportunities to share this research at the

American Bar Association Annual Conference on Dispute Resolution, the Conference of Asian

and Pacific Island Law Faculty, Harvard Law School, and Southern Methodist University Law

School. Any errors or omissions are mine alone.

1.

B

RIAN

Z. T

AMANAHA

, B

EYOND THE

F

ORMALIST

-R

EALIST

D

IVIDE

: T

HE

R

OLE OF

P

OLITICS IN

J

UDGING

1 (2010); Brian Leiter, Legal Formalism and Legal Realism: What is the

Issue? 16

L

EGAL

T

HEORY

111 (2010).

2. See e.g., Chris Guthrie et al., Blinking on the Bench: How Judges Decide Cases, 93

C

ORNELL

L. R

EV

.

1, 19–29 (2007); Tracey E. George & Taylor Grace Weaver, The Role of Personal

Attributes and Social Backgrounds on Judging, in

T

HE

O

XFORD

H

ANDBOOK OF

U.S. J

UDICIAL

B

EHAVIOR

286–298 (2017); Kahan et al., infra note 3, at 356–368; Holger Spamann & Lars

Klein, Justice is Less Blind and Less Legalistic Than We Thought: Evidence from an Experiment with

Real Judges, 45

J. L

EGAL

S

TUD

.

255, 255–259, 268–277 (2016); Dan M. Kahan, Culture,

Cognition, and Consent: Who Perceives What, and Why, in Acquaintance-Rape Cases, 158

U. PA. L.

R

EV

.

729, 731–761, 793–807 (2010) (research exploring humanness of judicial decision-

making).

3. Dan M. Kahan et al., “Ideology” or “Situation Sense”?: An Experimental Investigation of

Motivated Reasoning and Professional Judgment, 164

U. PA. L. R

EV

.

349, 356 (2016).

THE INTERNATIONAL LAWYER

A TRIANNUAL PUBLICATION OF THE ABA/SECTION OF INTERNATIONAL LAW

PUBLISHED IN COOPERATION WITH

SMU DEDMAN SCHOOL OF LAW

470 THE INTERNATIONAL LAWYER [VOL. 51, NO. 3

“Motivated cognition” theory is an emerging model for explaining how

legal decision makers process information (such as laws and facts) and reach

their conclusions (case outcomes).

4

Provocative research on judges and

motivated cognition exists;

5

research on arbitrators and motivated cognition

is scarce. The model debunks the assumption that legal decision-makers are

either intentionally biased or absolutely neutral, arguing instead that this

binary framework does not adequately explain what is happening. Motivated

cognition instead conceives legal decision-making as being affected by the

fertile environmental and psychological context within which it occurs.

This article extends the motivated cognition model to the global

economic stage, probing arbitration of international business disputes of two

world powers: The United States and China. Through a first-of-its-kind

empirical study of Chinese arbitration of international business disputes, it

further develops the model by focusing on a particular kind of motivated

cognition, motivated cultural cognition.

6

Motivated cultural cognition

analyzes how culture affects motivated cognition and the decision-maker’s

model of justice. When applied to decision-makers with vastly different

cultures—and with mega-corporations at stake—the implications can be

massive.

Indeed, a better understanding of the international business arbitration

process is important because so many disputes between businesses of

different countries are resolved in international arbitration rather than the

courts.

7

International arbitration is the “traffic cop” for the worldwide

economy and the trillions of dollars at stake. Within that ecosystem, China

is one of the biggest players in international trade and direct foreign

investment. Since the late 1980s, China has been a world star in foreign

trade and direct foreign activity.

8

In 2015, for instance, China was the

largest recipient of direct foreign investment in the world.

9

Disputes

between Chinese and foreign parties are inevitable with all of this business

activity, and each party’s resolutions are critical to ongoing trade and

investment functioning.

10

4. Avani Mehta Sood, Motivated Cognition in Legal Judgments—An Analytic Review, 9

A

NN

.

R

EV

. L. & S

OC

. S

CI

.

307, 307 (2013).

5. See id. at 318–19.

6. See id. at 314–15.

7. See Pat K. Chew, Opening the Red Door to Chinese Arbitrations: An Empirical Analysis of

CIETAC Cases 1990-2000, 22

H

ARV

. N

EGOT

. L. R

EV

.

241, 245–46 (2017); see also

C

HINESE

J

USTICE

: C

IVIL

D

ISPUTE

R

ESOLUTION IN

C

ONTEMPORARY

C

HINA

1 (Margaret Y.K. Woo &

Mary E. Gallagher eds., 2011) (exploring the limitations and concerns of China’s judicial

system).

8. Chew, supra note 7.

9. See e.g., China Overtakes U.S. for Foreign Direct Investment,

BBC N

EWS

(Jan. 30, 2015),

http://www.bbc.com/news/business-31052566.

10. See

D

ANIEL

C. K. C

HOW

,

A P

RIMER ON

F

OREIGN

I

NVESTMENT

E

NTERPRISES AND

P

ROTECTION OF

I

NTELLECTUAL

P

ROPERTY IN

C

HINA

9–11 (1st ed. 2002) (describing range of

issues and resulting conflicts of direct foreign investment enterprises).

THE INTERNATIONAL LAWYER

A TRIANNUAL PUBLICATION OF THE ABA/SECTION OF INTERNATIONAL LAW

PUBLISHED IN COOPERATION WITH

SMU DEDMAN SCHOOL OF LAW