The Culture of International Arbitration and the Evolution of Contract Law.

AuthorD'Silva, Magdalene
PositionBook review

Joshua Karton The Culture of International Arbitration and the Evolution of Contract Law (Oxford University Press, 2013), ISBN 978-0199658008, 296 pages

Introduction

Joshua Karton's The Culture of International Arbitration and the Evolution of Contract Taw offers a key to the one of the world's most elusive and lucrative areas of legal practice; international commercial arbitration. International commercial arbitration is a private and confidential dispute resolution method for contract disputes between international parties whose national jurisdictions are signatories to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. (1) Although myriad international arbitration practitioner treatises and scholarly articles already exist on the theory and practice of international commercial arbitration, Joshua Karton's treatise, The Culture of International Arbitration and the Evolution of Contract Taw, is one of the first comprehensive interdisciplinary works of research in this field since Dezalay and Garth's pioneering 1996 study of international arbitrators, Dealing in Virtue. (2) However both Karton's treatise and that by Dezalay and Garth do not purport to elucidate upon trends and developments in the related realm of investment treaty-based forms of international arbitration.

In The Culture of International Arbitration and the Evolution of Contract Law, Karton undertakes a careful socio-legal study of the way in which international arbitrators approach their task of hearing, interpreting and determining private international commercial contract disputes. Karton does this in order to devise a theory for the evolution of a distinct cultural trend in contract law interpretation, which he argues is discernibly emerging in international commercial arbitration. What makes this theory important and provocative is that it suggests that a distinct cultural trend in contract law is emerging and evolving through arbitrator awards, which is divergent from the contract law jurisprudence of national judiciaries. In the absence of a doctrine of stare decisis under precedent in international commercial arbitration arbitral awards, Karton argues cogently that an observable trend is nevertheless discernible in an identifiable cultural approach to decision-making being adopted by international arbitrators presiding over arbitral disputes. If Karton's argument is valid, it has significant implications for the entire field of international commercial arbitration, particularly for commercial party users who try to control the process through the selection and nomination of preferred arbitrators, as well as for lawyers who represent international parties in contract disputes.

As international commercial arbitration is a highly private and confidential method of dispute resolution, where the public cannot watch proceedings and arbitral awards are unpublished (or redacted and edited by international arbitral institutions when published), if distinct cultural decision-making trends are emerging and continuing to evolve in this field, they affect international commercial arbitration's reputation for predictability and certainty. This is because Karton's theory effectively challenges the utility of the international arbitration community's ongoing preoccupation with the selection and appointment of a small pool of international arbitrators based on a perceived, but perhaps imagined, desire for a 'safe pair of hands' in the perpetual pursuit of predictability and certainty of an arbitral dispute's final award and outcome. (3)

Readership and Impact

Karton's treatise is a monograph which he originally completed as a doctoral thesis at the University of Cambridge in 2010. The treatise has utility for ongoing further academic research in international arbitration while being a practical aid for international arbitrators, external legal counsel and in-house counsel presently working in the field. The readership that will perhaps find this treatise the most illuminating and therefore useful includes research academics, students, and legal practitioners who are presently outside the field of international arbitration but who wish better to understand its inner sanctum in order to access it. Karton's treatise thus offers important insights for scholars in academic disciplines beyond international arbitration such as: legal history, legal ethics, sociology, economics and business.

With regard to the disciplines of history and sociology as examples, the treatise's utility lies in its engagement of concepts of social norms and sociological research theory to understand the way in which international arbitration emerged and developed as a dispute resolution method in merchant history. Although Karton's discussion of international arbitration's history is not comprehensive, as Hale (4) rightly acknowledges, apart from the few scholarly arbitration history works by scholars such as Roebuck, (5) there is presently no comprehensive historical account of international arbitration.

The economics and business research value of Karton's treatise lies in its use of the empirical research method of Grounded Theory to analyse critically those few published international arbitral awards which have been published, to show how commercial market factors directly impact upon the selection, nomination and appointment of international arbitrators. The main commercial factor is the market competition that occurs between arbitrators, who effectively compete for appointments by cultivating symbolic capital through generating reputations of 'virtue' (referring back to Dezalay and Garth's seminal study). Such reputations are fostered and promulgated by writing text books, presenting conference papers, publishing articles or gaining lectureship positions on law faculties while frequenting the international arbitration social circuit. The unique contribution that Karton's analysis makes on this point, however, is that these commercial factors are an integral part of international arbitration's culture which directly impacts upon and thereby influences the way in which arbitrators think, manage the arbitral process and decide awards.

The argument that non-legal cultural factors influence arbitrator behaviour also has implications for the convention of party autonomy in international arbitration, regarding the level of certainty and predictability that commercial parties seek to achieve through choice of law clauses in commercial contracts. This same argument has implications for the convention of party autonomy pertaining to the certainty and predictability parties try to achieve through arbitrator selection, nomination and appointment. Despite purported preferences for international arbitration over all other international dispute resolution methods, (6) Karton points out that international commercial arbitration can still be 'a gamble'. (7) Although not couched in terms of 'legal ethics,' Karton's treatise here potentially offers the first source for legal ethics research in international arbitration that emanates from arbitral jurisprudence itself--rather than from the adversarial procedural paradigm of legal professional conduct. Howarth has rightly identified that legal professional discourse has room for evolution, as much of it is still rooted in the paradigm of lawyers as litigation adversaries in courts. (8) Howarth has explained that a more up-to-date paradigm for what most lawyers really do today can be sustained by comparing the lawyer function with that of engineers who create solutions to problems. This potentially changes the entire scope of legal ethics, if the work of lawyers is compared to the work of engineers. (9) Howarth's view arguably supports an argument for a lacuna in legal ethics scholarship in international arbitration which is predominantly engaged in critiques of the behaviour and regulation of legal counsel and arbitrator conduct in different settings in the arbitral process. (10)

Karton's treatise begins to address this gap by focusing on the way in which cultural norms affect how international arbitrators think and deliberate. In other words, The Culture of International Arbitration and the Evolution of Contract Law is effectively a clear statement on the legal ethics of international arbitrators, bearing in mind their function is a largely commercial activity of devising solutions for the problems of international commercial contract disputes. This treatise does this by highlighting how cross-cultural influences impact on international arbitrators whose normative allegiance to the convention of party-autonomy in international commercial arbitration motivates them to let the disputing parties decide what external factors ought to be introduced into and used in an arbitration to interpret the contract in dispute. (11) This is because while aspects of objective common law interpretation do occur in international commercial arbitration, the cultural predominance of arbitrator deference to party autonomy tends to allow the parties subjectively to develop and control what facts and evidence of the dispute are brought before an arbitral tribunal, thus indicating the potential dominance of a civil law-oriented international commercial arbitration culture because 'subjective interpretation follows as a near-inevitable consequence'. (12)

Karton's treatise also responds to a significant critical analysis gap in private international commercial arbitration scholarship. As Roberts has identified, although much research literature exists and persists in the paradigm of public investment treaty arbitration, far more attention...

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