Influence of the Arbitral Seat in the Outcome of an International Commercial Arbitration

• Author: Gonzalo Vial
• Position: Gonzalo Vial is senior associate at Bulnes, Urrutia & Bustamante and teaches Civil Procedure at Universidad Cato´ lica de Chile and Adolfo Iba´n? ez University. He recently worked as visiting scholar at the University of Sydney and in the Australian Centre for International Commercial Arbitration. He holds a Master's Degree from Stanford Law ...
• Pages: 329-346

Influence of the Arbitral Seat in the Outcome of

an International Commercial Arbitration

G

ONZALO

V

IAL

*

I. Introduction: Increasing Use of International Arbitration

There are different types of international arbitrations.

1

Categories of

international arbitrations include disputes between nations regarding issues

of international public law, investment arbitrations confronting states with

private investors, and commercial arbitrations between foreign companies.

2

International commercial arbitration applies to conflicts of private law.

3

It is

an “alternative method of resolving disputes arising out of commercial

transactions between private parties across national borders that allows the

parties to avoid litigation in national courts.”

4

Different systems of law are expected to apply to different types of

international arbitration.

5

For example, the 1899 and 1907 Conventions for

the Pacific Settlement of International Disputes include provisions for the

administration of state-to-state arbitrations,

6

while the Convention on the

Settlement of Investment Disputes between States and Nationals of Other

States of 1965

7

provides a popular mechanism and forum for investment

disputes between a contracting state and nationals of another signatory

state.

8

The cornerstone of international commercial arbitration is the

* Gonzalo Vial is senior associate at Bulnes, Urrutia & Bustamante and teaches Civil

Procedure at Universidad Cat´olica de Chile and Adolfo Ib´a˜nez University. He recently worked

as visiting scholar at the University of Sydney and in the Australian Centre for International

Commercial Arbitration. He holds a Master’s Degree from Stanford Law School and was

awarded a Fulbright Scholarship.

1. Dyal´a Jimenez Figueres, El Sistema de Arbitraje de la Corte Internacional de Arbitraje de la

C´amara de Comercio Internacional [The System of Arbitration of the International Court of Arbitration

of the International Chamber of Commerce], in E

STUDIOS DE

A

RBITRAJE

: L

IBRO HOMENAJE AL

PROFESOR

P

ATRICIO

A

YLWIN

A

Z´

OCAR

, 519, 519-20 (Editorial Jur´ıdica de Chile, 2007).

2. Id. at 520-21.

3. Luis Malpica de Lamadrid, El arbitraje internacional y el derecho maritime [International

Arbitration and Maritime Law], in P

ANORAMA

D

EL

A

RBITRAJE

C

OMERCIAL

I

NTERNACIONAL

(S

ELECCI ´

ON DE LECTURAS

) 413, 414 (Serie 1. Estudios De Derecho Econ´omico, n´um. 9, 1983).

4. Georgetown Law Library, International Commercial Arbitration Research Guide, http://

guides.ll.georgetown.edu/InternationalCommercialArbitration (last updated Sept. 14, 2016).

5. Jimenez Figueres, supra note 1, at 520-21.

6. G

ARY

B. B

ORN

, I

NTERNATIONAL

A

RBITRATION

: C

ASES AND

M

ATERIALS

28 (2d ed. 2015).

7. International Centre for Settlement of Investment Disputes, Convention on the

Settlement of Investment Disputes between States and Nationals of Other States, ratified Mar.

18, 1965, 17 U.S.T. 1270, 575 U.N.T.S. 159 (entered into force Oct. 14, 1966).

8. B

ORN

, supra note 6, at 41. As stated by the same author, the commented convention has

unusual features for the field of international arbitration because “ICSID awards are subject to

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330 THE INTERNATIONAL LAWYER [VOL. 50, NO. 2

Convention on the Recognition and Enforcement of Foreign Arbitral

Awards of 1958 (New York Convention),

9

which “amounts to a universal

constitutional charter for the international arbitral process.”

10

The New

York Convention sought to increase the efficiency of arbitration as an

international dispute resolution method.

11

For that purpose, the provisions

focus on the recognition and enforcement of arbitral agreements and

arbitration awards.

12

The success of the New York Convention came gradually, but ultimately

it has “promoted arbitration as a mode of settlement of international

commercial disputes by means of increasing confidence in recognition and

enforcement of the arbitral awards in foreign countries.”

13

This growth in

arbitration contrasts with challenges national court decisions face, such as

recognition and enforcement aboard.

14

As a matter of fact, international commercial arbitration has grown in

popularity over the last twenty years and shows no signs of slowing down.

15

A 2015 report prepared by the International Bar Association (IBA) shows the

use of arbitration increased in countries around the world, “even those

where it has long been established,” such as the United States.

16

Moreover,

according to the same report, “‘growth in international arbitration is

anticipated’ in regions where litigation before national courts is currently

more prevalent than alternative resolution methods.”

17

immediate recognition and enforcement in the courts of Contracting States without setting

aside proceedings or any other form of other review in national courts.” Id. Additionally,

“ICSID awards are subject to a specialized internal annulment procedure, in which ad hoc

committees selected by ICSID are mandated, in limited circumstances, to annul awards for

jurisdictional or grave procedural violations.” Id.

9. Id. at 32.

10. Id.

11. Joseph T. McLaughlin & Laurie Genevro, Enforcement of Arbitral Awards Under the New

York Convention – Practice in U.S. Courts, 3 B

ERKELEY

J.

OF

I

NT

’

L

L. 249, 251 (1986).

12. As noted by the same author, the United States Supreme Court stated the following in this

regard: “The goal of the Convention, and the principal purpose underlying American adoption

and implementation of it, was to encourage the recognition and enforcement of commercial

arbitration agreements in international contracts and to unify the standards by which

agreements to arbitrate are observed and arbitral awards are enforced in the signatory

countries.” Id. n.8 (citing Scherk v. Alberto-Culver, 417 U.S. 506, 520 n.15 (1973)).

13. Tetiana Bersheda Vucurovic, 50th Anniversary of the New York Convention: Any Progress in

Recognition and Enforcement of Foreign Arbitral Awards in Ukraine?, 11 I

NT

’

L

A

RB

. L. R

EV

. 165,

165 (2008).

14. Id.

15. Mark Bezant, James Nicholson & Howard Rosen, Trends in International Arbitration: A

New World Order, FTI J. 1, 5 (Feb. 2015), http://www.fticonsulting.com/~/media/Files/us-files/

insights/journal-articles/fti-journal-trends-in-international-arbitration.pdf.

16. IBA Arb. 40 Subcomm., The Current State and Future of International Arbitration: Regional

Perspectives, I

NT

’

L

B

AR

A

SS

’

N

, 9 (2015), http://www.ibanet.org/Document/Default.aspx?Docu

mentUid=2102ca46-3d4a-48e5-aa20-3f784be214ca.

17. Id.

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