Robert Briner's contribution to the theory and practice of international arbitration has been outstanding. He has brought to new heights of utility and acceptance the organization he leads with such distinction.

The origins of international arbitration lie far back in time, antedating by millennia concepts of international courts and tribunals established by inter-State agreement. The fact that international arbitration survived the relatively recent advent of international adjudication, and continues to thrive, would seem to indicate the existence of basic differences between these two binding modes of dispute resolution. While making no claim to have discovered some fundamental difference between the concepts underlying the two modes, the present essay is a brief inquiry into what might constitute the 'essence' of arbitration, as a process distinct from adjudication; whether cultural differences influence the choice of arbitration over adjudication; and whether we may expect views on the 'essence' of the arbitral process eventually to converge and thereby foster the growth of an international arbitration culture that would enjoy the confidence of disputants in a globalizing world.

I. The 'true nature', 'essence' or 'spirit' of arbitration

A distinguished array of authors considers arbitration in international law as virtually indistinguishable from determination of a dispute by a court. Thus, Lauterpacht is critical of

the tendency to provide for recourse to arbitral tribunals on the vague but persistent assumption that arbitral tribunals, although bound to apply law, need not somehow apply strict law; that their function lies midway between the application of law and adjudication ex aequo et bono; and that, therefore, [Page619:]

the reference to these of disputes other than those concerning respective rights introduces the possibility of the law being changed in accordance with justice and political requirements. 1

He argues:

Even if arbitration within the State were wholly non-judicial this fact would be irrelevant for the determination of the true nature of international arbitration. For the function of arbitration is different in international and municipal law. In the latter it supplements-in a manner which is not essential to the life of the community-the rule of law by yet another legal institution; in international relations it lies at the very basis of the rule of law. Although voluntary in its origin, it fulfills the same function as normal judicial settlement within the State. 2

Lauterpacht concludes that 'the judicial character of international arbitration is a matter of historical fact and of positive international law'. 3 The difference between a court and an arbitral tribunal is thus to be seen as a difference of forum only, and not as implying a difference in the method of resolving a dispute.

What then is the 'true nature' of international arbitration, and is there a basis for the 'vague but persistent assumption' that arbitral tribunals, unlike courts, need not apply 'strict law'? The distinguishing characteristics of arbitration that are most frequently mentioned are its voluntary nature and, consequent thereupon, its flexibility.

'Voluntary nature' means that a State is free to decide whether or not to agree to submit a dispute to arbitration. This in turn implies that a State may choose whether or not another State is an acceptable party with which to engage in arbitration. That choice will often depend on whether or not the two States share common cultural values, including similar (or recognizably sound) legal traditions and a common language or at least common language roots. The decision to arbitrate or the choice of the other arbitrating party may, of course, be influenced by other factors, too, such as relative bargaining power or the relative strength of a case. [Page620:]

The essence of arbitration was a subject much discussed at the Hague Conference of 1907. Marschall von Bieberstein, for Germany, who regarded 'obligatory arbitration' as virtually a contradiction in terms, because it would preclude choice of one's opposite party, had this to say:

What constitutes the essence of arbitration? It is good understanding . . . Now, all good understanding results from a disposition of the mind and of the soul. This is true both in private life and in international life. This disposition is inseparable from the personality and from the individuality of the contracting States, of their relations, of the community of sentiments, of interests and of traditions. . . . To exclude the choice of one's contractants . . . would mean the destruction of the ideal principle which forms the center of arbitration and which we must guard and care for . . . 4

While the liberty to submit or not to submit to arbitration and to choose one's opponents might set arbitration apart from judicial proceedings in national courts, or from some ideal of an international court with comprehensive compulsory jurisdiction, it does not distinguish arbitration from past and present international courts whose jurisdiction is, and has been, based on consent. Although declarations made under provisions such as Article 36, paragraph 2, of the Statute of the International Court of Justice or Article 48 of the Hague Convention of 1907 might have the effect of limiting the choice of parties to some degree, there is no obligation to make such declarations in the first place, so that use of the mechanism remains essentially optional.

'Flexibility' refers to an institution's capacity to adapt to the requirements of a particular situation or context, the nature of the dispute, or the needs or wishes of the parties to the dispute. It is a corollary of the voluntary nature of arbitration: once the parties have made their initial decision to resort to arbitration, they then have the possibility of making various additional choices that will shape the structure and process of the arbitration. In this respect, arbitration differs from proceedings in both national and international courts, which are set up by society and are fixed in their composition and the way they function. They are therefore generally not open to variation by agreement of the parties, although the possibility of creating a separate chamber for a particular case with the parties' approval introduces an element of flexibility into the operation of International Court of Justice.5[Page621:]

At the 1907 Hague Conference, 'justice'-meaning court-was often contrasted with 'arbitration', as illustrated by the following remarks made by the Brazilian delegate Ruy Barbosa when rejecting the proposal of 'obligatory arbitration', to be administered by a court of fixed composition:

justice and arbitration are both indispensable. Both have their legitimacy, their function, and their character. But in what way do they differ from each other? First of all, as to the source whence they come. Next, as to the social element that nurtures them. And lastly, as to the juridical form which they assume.

The juridical form of justice is permanent and unalterable. It is the law that establishes it. With regard to arbitration, the juridical form is variable and casual. It is the agreement between the parties which decides that form. Justice emanates from sovereignty and imposes itself upon obedience. Its organs are created by power. The parties must submit to it. Arbitration, on the contrary, has its source in liberty. It is the work of a convention; it has no other authority except that admitted by the contractants, and its magistrates are those voluntarily chosen . . . 6

At the 1907 Conference, those in favour of a permanently constituted settlement mechanism, different from the Permanent Court of Arbitration, emphasized the fixed character of courts, which excludes the selection of judges by the parties, through such expressions as a 'really permanent tribunal', a 'veritable permanent court' (Marschall von Bieberstein) or, indeed, an 'International Court of Justice'

(J.B. Scott, for the United States of America). It was pointed out by Scott that the Permanent Court of Arbitration 'is not permanent because it is not composed of permanent judges' and 'it is not a court because it is not composed of judges', 7 as well as in Asser's mildly macabre comment in the same vein, that '[i]nstead of a permanent court, the Convention of 1899 gave but the phantom of a court, an impalpable specter, or to be more precise yet, it gave us a recorder with a list'. 8

A more recent authority, comparing the judge's mission with that of the arbitrator, has observed:

A judge's mission and obligations are clear: they consist in rendering justice,

i.e. in defining the respective rights of the parties as they result from the applicable law. This is all that the parties themselves expect of the judge. They do not expect him to upset the established order so as to impose, in breach of the law, what he subjectively considers as fair. [Page622:]

The position of an international arbitrator is very different. As discussed above, he owes no duty of obedience. His only obligations arise from what can be considered as the mission of an arbitrator. However, such mission itself remains rather vague, since it is not associated with specific obligations as is the case for a judge.

The first uncertainty concerns the standpoint that the arbitrator should adopt. He was not appointed by the state but by the parties. This could lead one to conclude that an arbitrator's mission is to do what the parties expect of him. However, an arbitrator has his own conception of his responsibility, his own moral standards, and they may lead him to consider as part of his mission other considerations, e.g. considerations related to public interest.

Even if the arbitrator were to take solely into account the parties' expectations, he would have to assess what they are. Do parties expect a strict application of the law, since they have not conferred upon the arbitrator the powers of amiable compositeur? Do they expect a more practical and tailored assessment of the fair solution, as this may characterize, in their mind, the arbitral process? Do they expect from the arbitrator a more careful consideration of the contract, of which they could consider him to be a component, a regulating mechanism?

The mission of an arbitrator is thus much more ambiguous than that of a judge. Conflicting considerations may play a role. More specifically, there may be a conflict between on the one hand the method consisting in implementing the legal syllogism on the basis of the applicable rule of law, and on the other hand two different concerns: the search for the most equitable solution, and the endeavour to favour the solution that conforms most closely with the true will of the parties.

In other words, we have two pairs of potentially conflicting notions: law and equity on the one hand, law and contract on the other. 9

Fali Nariman, when enquiring into l'esprit de l'arbitrage, 10 cites a response he received from Michel Gaudet, Honorary President of the ICC Court of International Arbitration. In words reminiscent of those of Marschall von Bieberstein a century before, Michel Gaudet replied: [Page623:]

The dominant feature of arbitration is mutual understanding so as to be able to solve the conflict that has occurred. The aim of arbitration is not to draw from the applicable law a decision against the parties involved but to clarify, together with the parties, what should be done in a given situation to achieve justice with co-operation. This is what I expect from arbitration, whether commercial or diplomatic, national or international. Achieving this process requires all along that all participants are inspired by 'l'esprit de l'arbitrage'.

Recalling that arbitration had been favoured by the mercantile community because it was a process that was fast, flexible, informal, private, relatively inexpensive and conducive to finality, Fali Nariman regrets that the spirit has gone out of international commercial arbitration, leaving it closely akin to adversarial court proceedings, and more expensive. For him, as for many of the other authorities referred to above, the 'spirit', 'essence' or 'true nature' of arbitration lies not in the mere task of defining the rights and obligations of disputants according to applicable law, but in the more complex responsibility of achieving justice with co-operation.

II. Does culture matter?

Do opinions regarding the 'essence', 'true nature' or 'spirit' of arbitration divide along cultural lines? It has been reported that early in the 1980s, when an Asian company was invited to send a speaker to a conference on international arbitration, the company responded that 'while the invitation was very much appreciated, Asia had a very old civilization which had over the centuries come to learn that negotiation and conciliation were the preferred means of resolving disputes, much better than the confrontation which would inevitably be entailed in arbitration', 11 and accordingly declined to participate in the conference. After examining the extent to which international commercial arbitration has been received in some countries in East Asia, a distinguished jurist from the region contrasted the Western concept of arbitration, described as 'legalistic and adversarial in nature', with the 'more flexible' Eastern approach, observing that in the East the arbitrator

cannot divorce himself from his primary role as conciliator and as an active promoter of dispute solving. In Japan, for example, the arbitrator is free to advise parties to settle; he participates actively in forming the terms of[Page624:]

settlement. This, of course, may not be acceptable to those who have been brought up on arbitration as understood by the West. There is thus a fundamental difference of approach between East and West in dispute resolution. 12

According to the Confucian tradition as it prevails in China,

there is a concept known as 'li', which concerns the social norms of behaviour within the five natural status relationships: emperor and subject, father and son, husband and wife, brother and brother, or friend and friend. Li is intended to be persuasive, not compulsive and legalistic, a concept that governs good conduct and is above legal concepts in societal importance. The governing legal concept 'fa', is compulsive and punitive. While having the advantage of legal enforceability, fa is below li in importance. The Chinese have always considered the resort to litigation as the last step, signifying that the relationship between the disputing parties can no longer be harmonized. Resort to litigation results in loss of face, and discussion and compromise are always to be preferred. Over time, the concepts of fa and li have become fused, and the concept of maintaining the relationship, and, therefore, face, has become part of the Chinese legal system. 13

Bernard Cremades would appear to distinguish three arbitration cultures. He notes (1) that lawyers educated in the common law system have left their imprint by seeking to conduct arbitration proceedings in the same manner as procedures in their domestic courts; (2) that although Continental Europe can be grouped together, approaches to conflict resolution differ between those areas with Germanic cultural roots and those within what he calls 'the Latin zone of cultural influence'; and (3) that 'East Asian, Arabic and Islamic societies are known for their emphasis on conciliation'. 14[Page625:]

Another commentator suggests a differentiation between litigation and conciliation cultures, the latter including negotiation and mediation:

The western world is traditionally characterized, to varying degrees, by the litigation culture, perhaps with the United States and Germany at the extreme end of the scale. Asia, especially East Asia, is known for its emphasis on conciliation. For centuries, a conciliation culture comprising a variety of forms has flourished there. 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 to the society and to the other party. A good judge was not supposed to give a judgement 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 of Japan. 15

Yet another authority has observed that

Arab and Islamic societies [were] characterized by the existence of a 'strong communal system to promote amicable settlement of disputes' through 'negotiation/mediation' as a first step that could lead ultimately at a later stage to 'conciliation/arbitration'.

According to results obtained through serious anthropological research studies, the region had been culturally pro-conciliation even before the appearance of Judeo-Christian and Islamic ideals of moral harmony and peaceful settlement of disputes within the community without confrontation through litigation. This characteristic survived until the mid-twentieth century where 80% of all disputes used to be amicably settled outside of State courts by recourse to an elder respected and popular person chosen for his wisdom and known integrity, either in the village rural community, among the heads of the nomadic tribes or among city merchant circles. Such a person . . . played the role of a semi-arbitrator keen to conciliate the conflicting interests in a no victory - no defeat manner, in other words, rendering a morally binding decision mainly based on fairness and justice without abiding by a specific rule of law or being obliged to conform with a system of judicial procedures. 16[Page626:]

It might be thought that references to culture are essentially anecdotal and remain to be confirmed by empirical study. However, the frequency with which commentators refer to cultural differences of the kind described and the existence of 'serious anthropological research studies' attest to the influence of a cultural factor and give cause to speculate on the origin of such cultural differences, their current impact and prospects of change. 17

III. Possible origins of differences between 'dispute resolution cultures'

Civilizations (in which 'cultures' are subsumed) may diverge in their approaches to political organization, and ultimately to law and dispute resolution, due to religious beliefs and the course of history. Northrop18 attributes this divergence to the differing ways in which populations have perceived their relationship to their environment. In what he describes as 'purely' Asian ways of thought, introduced by Aryan settlers and transmitted through Hindu, Buddhist, Confucian and, more recently, Gandhian philosophy, knowledge is derived inductively through direct observation. Thus, political organization has its moral basis in 'an intuitively felt continuum of immediacy or in the patriarchal family relationship or ethnological species given inductively by natural history science'. Rules are derived from 'warm-hearted intuition or the family, caste and tribal relations observed inductively'. The associated religious goal is non-dualistic: 'immediate immersion of oneself in the all-embracing formlessness which is the non-Aryan Brahman, Nirvana or the Confucian vastness'.

By contrast, the Western approach to political organization, he suggests, was influenced by Greek science, through which nature ceased to be described merely in terms of the way we feel it 'when, through naïve observation, we become aware of ourselves as immersed in its continuum of impressionistic aesthetic immediacy'. Instead, nature is conceived as something inferred from this naively felt and observed nature, but not immediately seen in it. The relationship of human beings to nature is not known by being directly sensed: it is the 'thesis of Greek science that any truly known thing or event is an instance of a theoretically conceived determinate law'. [Page627:]

Greek science, according to Northrop, was responsible for the creation of the Roman 'technically conceptualized science of law', which transformed Hebrew culture and religion into the form of Christianity that became the foundation of Western civilization. The new way of thinking was centred on free individuals who were nevertheless subject to a body of law, and it laid the foundation for the Western concept of 'the just State as a theoretically constructed constitutionalism valid for all men because of its universalism which gave to the diversity and pluralism which moral freedom generates . . . effective political unity, order and peace'. 19

The contrast between Northrop's 'purely Asian'and Western (Christian) approaches is well expressed in the following passage:

With the locus of the model of justice in theoretically conceived nature rather than in the intuitively felt continuum of immediacy or in the patriarchal family relationship and the ethnological species given inductively by natural history science, fathers were, as Jesus said, put against son, mother against daughter and daughter-in-law against mother-in-law. Forthwith belief in a determinately expressed doctrine rather than loyalty to one's parents, ancestors, caste or technological group determined the morally good and just men. And with respect to a particular determinate, theoretically expressed doctrine which is believed, father and son, daughter-in-law and mother-in-law, nation and nation, and even man-to-manness can differ without any moral sense of failure of loyalty to family or tribe or God. 20

We might be led to conclude that if the decision of a third party seized of a dispute were to go against a party with a Western (i.e. concept- and rule-based) approach to dispute settlement, the decision is likely to be accepted with good grace and complied with in due course; while if the decision were to go against the party with the postulated purely Asian mindset, it would probably not be taken in good part, may even be rejected, and in any event is likely to generate resentment born of a moral sense of failure reflecting adversely on the loser's dignity or reputation. However, it is doubtful that such a conclusion can be sustained. No disputant, whether Asian or Western, is likely to be enthusiastic about a decision that is perceived as adversely affecting its interests. And resentment caused by loss of face and a lingering sense of grievance are not peculiar to Asian losing parties. Whether or not a loser accepts and implements a decision is likely to depend on a variety of factors, including the quality of [Page628:]

the decision and the reasons on which it purports to be based, the importance of the dispute, the balance between the parties' respective political influence, and the relations prevailing between them.

In the sixteenth century, Western civilization entered a new phase, changing under the pressure of the new spirit of enterprise, which released long-suppressed human energies and sanctioned their use in the pursuit of material gain. Greed and the desire for power were recognized as important aspects of human nature and were thus not to be obstructed, but rather tempered or moderated by the gentle teachings of Christ. Correspondingly, primitive Christian beliefs were re-interpreted to accommodate the upward spiral of material progress based on buying cheap and selling dear, not to mention the gold, slaves, textiles and spices taken from the Indies.

This new vision of the world had far-reaching consequences for European law. In seventeenth century Europe a natural law emerged that was no longer rooted in theology or the will of God, but in reason. Under the influence of Grotius and Leibniz it was thought to be good sense not to do injury to your neighbour, and that any such injury should give rise to a right of redress. Justice was seen as the charity of the wise. It was bad business rather than bad morals to demand excessive interest for the use of money. 21 This view would lead to the separation of Church and State, religion and law. Following the dissolution of the Holy Roman Empire and the Peace of Westphalia, Pufendorf, Wolff and Vattel pioneered an international law, which saw nation-States as individual entities, sovereign and independent of each another, possessing equal rights to be exercised equally. In the event of conflict between the duty of a nation to itself and its distributive duties to other nations, the former-the raison d'état- would prevail, reflecting a bias towards the individual.

The individual was placed at the centre of social effort and allowed to engage almost unrestrained in the pursuit of profit. 22 The individual's liberty was circumscribed only by limits set by positive law, which would at the same time provide protection from the excessive demands or tyranny of the Prince. This [Page629:]

conception of the individual was consistent with the belief that each human being possesses a unique soul which retains its uniqueness even during transition to an after-life, when it would be redeemed or condemned for its conduct on earth.

After the first wave of European adventures in search of souls to be won for Christ (while not averse to reaping gold for an expectant patron), the imperial powers propagated in the colonies their world view founded on the spirit of enterprise and individualism. That view was reflected not only in their religious beliefs, but also in their laws, languages and literature, all of which were transplanted to the lands under their control. The effect on communities in which indigenous religion, government and law were inextricably mingled and whose social history had not been affected by the kind of thinking that had sparked Europe's economic progress, 23 was complex in the extreme and continues to be so even today, more than three centuries later. Where imperial conquest did not extinguish entire populations, Euro-Christianity and the spirit of enterprise and individualism that travelled with it encountered societies in which the prevailing religion, culture and moral code demanded that the welfare of the individual be subordinated to that of the community24 or reinforced customs and an ethic expressing the same belief. Euro-Christianity and its accompanying ethos were not introduced by the dominant power for the colony to accept or reject as it preferred, but represented an imposed doctrine, perceived as inconsistent with the mores that had prevailed in the country since time immemorial. That doctrine threatened to disrupt and overturn hallowed and familiar social concepts and structures and was imposed by a foreigner seeking dominance through a strategy of trade, often accomplished with the force of arms. In contrast to indigenous religions that saw the self as an impediment to spiritual development, as perpetuating a cycle of death and re-birth that needed to be broken to enable the false notion of self to dissolve and merge finally with the infinite, Euro-Christianity did not merely acknowledge the existence[Page630:]

of the self but gave it a permanent and central place. 25 Its introduction with the lure of material advancement, or through compulsion, together with the expropriation of land that accompanied colonial penetration, left wounds that are considered by some to portend a clash of civilizations in the future.

IV. Impact of imperialism

As the power of certain Western nations rose to its zenith in the nineteenth century, leading to further expansion into countries in Asia and Africa, it was inevitable that free enterprise and individualism should form the basis of the legal and administrative systems established in those countries. While those systems served the purposes of the foreign administering powers in whose realm they had evolved and whose agents were well acquainted with their use and potential, they were little understood by native populations where social norms had evolved differently. The impact of Western legal concepts and systems on indigenous dispute settlement processes could be said to lie essentially in the imposition of rules that treated each disputant as individual and separate from ancestors, clan, caste or guild. Henceforth, the social context of a dispute would not necessarily be relevant to its resolution. Only the facts of the case would be examined. This isolation, which had taken centuries to evolve in Europe, and had there become one of the parameters of an impersonal and impartial justice, had now to be accepted by disputants in the colonies, depriving them of important support from traditional loyalties.

For generations the new processes were treated with reserve, partly because disputants preferred the application of familiar indigenous religious and ethical norms with which the new systems seemed inconsistent; partly because the language of administration was foreign, making it difficult to understand the meaning and implications of the systems; partly due to unawareness of the[Page631:]

benefits those processes might bring in the long term; and partly due to pure prejudice. Thus, old informal methods of dispute settlement continued to exist side-by-side with the courts and other formal means introduced through colonial legislation.

The objective of colonial administrators familiar with either common law or civil law systems (both considerably influenced by Roman law) was to bring their own order and method, and a predictable uniformity, to the informal dispute settlement arrangements established by tradition, so that they themselves could comprehend and control them. In India, for example, which had a well-developed informal system for resolving local disputes, 26 extension of the British system of administering justice led to the establishment of a hierarchy of courts, the introduction of rules of evidence and procedure, and the instauration of a system of legal education. Regulations concerning arbitration were introduced in various parts of India as early as the eighteenth century, but it was in 1859, with the enactment of the first Code of Civil

Procedure, that a law to govern arbitration first became applicable throughout India. The first law to deal exclusively with arbitration was enacted in 1899, based on the English Arbitration Act of 1889, but was applied only in major metropolitan areas. The Arbitration Act of 1940 was intended to consolidate arbitration law in India, but it appears to have met with resistance from courts at the time. Partly for that reason, and partly on account of its intrinsic complexities, the Act failed to form an adequate basis for a satisfactory arbitration regime.

India's laws relating to international commercial arbitration were consolidated by the Arbitration (Protocol and Convention) Act of 1937, which enabled India to give effect to its undertakings as party to the 1923 Geneva Protocol on Arbitration Clauses and the 1927 Geneva Convention on Foreign Arbitral Awards. After independence, India became a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and in 1961 enacted the Foreign Awards (Recognition and Enforcement) Act implementing it. [Page632:]

The Arbitration and Conciliation Act of 1996, which is based on UNCITRAL's Model Law on International Commercial Arbitration (and gives statutory recognition to conciliation by incorporating the UNCITRAL Conciliation Rules) seems to have been welcomed by prospective arbitrating parties and practitioners alike. As one commentator has put it, 'Alternative Dispute Resolution in India has finally come of age'. 27 Covering, as it does, international commercial arbitration and conciliation, in addition to local arbitration, the new Act is likely to increase investor confidence and to fit in well with India's reforming policies concerning trade and foreign investment.

The systematic introduction of British dispute resolution processes, commencing very early in the colonial association, accompanied by the infusion of British, and generally European, legal doctrine through the legislature, courts and institutions for legal education, would appear to have resulted in their being more fully admitted in India than in some other jurisdictions in Asia. Today, India possesses a range of dispute settlement mechanisms encompassing courts, with a judiciary of exemplary competence, courage and independence, arbitration, conciliation and other forms of 'alternative' dispute resolution. The extent to which Western legal concepts and systems have been received in colonized territories varies widely depending on many factors too diverse and complex to be considered here. Suffice to say that they have become more firmly embedded in the Indian sub-continent and its immediate neighbours than in territories further east.

Resistance to some Western legal imports remains. The manner in which international arbitration has been developed in Asia, under pressure from capital-exporting countries, has been the subject of sharp criticism. The internationalization of State contracts with foreign investors and the undertaking to submit disputes to international arbitration rather than to the law and the courts of the host State is rejected by Somarajah, 28 who suggested three reasons for host State distrust of international arbitration: (1) The internationalization of State contracts[Page633:]

with foreign firms is tantamount to elevating the contract to the status of a treaty between sovereign States so as to place it beyond the reach of the national legal and judicial system of the host State. Somarajah found this transmutation unwarranted, without precedent and contrary to the principles of international law recognized by the Permanent Court of International Justice, according to which it is proper to apply national law to resolve such disputes. 29 (2) Once the host State has agreed to refer a dispute to an international tribunal applying international norms, the process of internationalization requires it to agree to the inclusion of a stabilization clause preventing it from changing its policy (and its laws). It is consequently divested of the sovereign right to enact legislation bringing the contract and any related disputes back within the scope of its national law and judicial institutions. (3) The host State is required to recognize that the arbitration clause, in which it undertakes to submit disputes to binding international arbitration, would survive the parent contract if the latter were to be found to be inoperative for any reason. 30

After considering the doctrines put forward in support of the internationalization of State contracts (pacta sunt servanda, the sanctity of property rights, and the principle of acquired rights), Somarajah finds this strategy unsound and its application by arbitral tribunals since the Sapphire Petroleum award 31 to be a departure from 'standards of neutrality which are central to the evolution of an acceptable system of international arbitration'. 32 He believes that if international arbitration is to recover the confidence of capital-importing States, arbitral tribunals should accord greater weight to what he calls 'competing norms', such as those contained in an evolving 'law of development', whose theoretical foundations, even if weak, are no less reliable than those underlying the internationalization of State contracts. 33[Page634:]

If there are at least two cultural approaches to law, justice and thus to dispute resolution, and if they differ so fundamentally, with the communal element being predominant in the Asian/African/Islamic approach and the principle of individuation in the European/Atlantic, is there any prospect of achieving a synthesis and establishing a single international dispute resolution culture? A formidable number of experts in legal philosophy would seem to suggest a negative answer to the question. For example:

When two countries governed by dialectically related (i.e. logically incompatible) ideals . . . face an international dispute, the dispute is completely misunderstood and falsely conceived if it is described as a difference merely of ways to a common goal. A goal is meaningless except as it is specified by a given ideology or the factors of knowledge which that ideology designates. Hence, when the ideologies are incompatible, the goals are also. Being in its essence dialectical, justice with respect to such a dispute simply cannot consist in the mediational, pacifistic Gandhian purely Asian technique of softening down or covering up the determinately expressed doctrinal differences as if they were of secondary importance and merely verbal.

To ask a people or nation with a theoretically formulated morality to compromise the basic principles of that morality is, from the standpoint of the spiritual foundations of Western civilization here outlined, to ask them to stop being moral men . . . 34

In her penetrating reflections on cultural differences in approaches to law, Adda Bozeman draws attention to the time perspective. She contrasts the African and Asian tendency to concentrate on the past, seen as the trusted abode of truth and authority and therefore able to instruct or dominate the present, with the Western approach of looking to the future and planning ahead, so that 'the uncertain future may be partially divested of its unpredictability by human effort'. Consciously distinguishing between past, present and future, the Western mind strives at one and the same time for 'development' and 'stability'. In Bozeman's view, the institution that best illustrates the complementarity of these contrasting perspectives is the

contract-the core of all associational life in this civilization and . . . the source of constitutional government. What makes contract a unique expression of the European time sense, is the theory of confidence that it encloses: confidence not only in the ability of men to pre-empt and order[Page635:]

time that lies ahead of them by means of promises to do or refrain from doing something, but confidence also in the binding nature of obligations assumed in the past. All Western constitutions, bills of rights and acts of legislation that are normative . . . are in the final analysis emanations of this mode of thinking. That is to say, they cannot be transplanted effectively into other civilizations, ruled by totally different political traditions and philosophies of time. 35

Northrop's work was published in 1952, just after some of the independence movements in Asia had triumphed, and while others were gathering momentum. While Western initiatives at the United Nations had till then been assured of a sympathetic hearing (outside the sphere of Soviet influence), the situation seemed likely to change following the admission of new members with hubris born of sovereignty regained, anxious to distinguish their policies from those of the former imperial powers and to validate them by reference to the ancient glory of their cultural heritage. It behove the West to determine whether anything in that cultural heritage could threaten the stability of the modern world order which they saw as essentially of their making. Bozeman's book first appeared in 1971, by which time the Soviet Union and its allies formed a countervailing influence to the West, the Non-Aligned Movement was gathering strength, and at the United Nations the Group of 77 could insist on being addressed as a caucus in every negotiation of consequence. The world order created by an Atlantic society that adhered to the principle of individuation and the institution of contract, and was now based upon and protected by international law, risked being destabilized by communism and Asian and African ideas concerning law and political organization. Bozeman's work warned Atlantic society, and the United States in particular, of the many threats to the foundations of their world, and especially its protective fabric of international law, from alien cultures and ideologies.

Brilliant as the analyses of Northrop and Bozeman are, their relevance may well have diminished through one of the elements on which they themselves laid stress: time. The Europeans' sense of time may well differ today from that of their neighbours in Asia and Africa, but for all of them time passes, and with its passage comes change. Changes in a culture may be slow, held back by human agencies thriving on stagnation and protected by complex and ancient taboos. However, in all countries, oriental and occidental, other human agencies are at work causing habits of thought that seemed immutable gradually, and[Page636:]

perhaps painfully, to change. From the time of Socrates (469-399 B.C.) who, as Cicero said, brought philosophy down from heaven to earth, to the emergence of an Atlantic society inspired, it has been argued, by the currents of reason generated in Socrates' time, we may count more than twenty centuries. In Europe, the emergence of that society was hindered and delayed at various times by war, famine, the Dark Ages and a variety of disasters, many wrought by human agencies.

Given the global interaction resulting from developments in communications and transport systems and greater facilities for trade, the coming century is likely to see the convergence of Western and Asian concepts of law and political organization. It will be achieved not through the triumph of one approach over the other, but through their interaction and the recognition that both have their roots in reason. In the field of international commercial dispute settlement that process may already have begun; the outcome will not be Western, Asian or African, but international.

One European authority on international commercial arbitration has conceded that the principle of keeping an arbitrator's duties strictly separate from any attempt to mediate or reconcile has been brought into question as a result of the involvement of jurists from different legal cultures in international commercial arbitration, including those from the Far East for whom 'conciliation is something natural and closer to the mentality . . . than litigation or arbitration'. 36 The same author finds that it is 'excessive "judicialization" of international commercial arbitration . . . [that] has in fact led to the search for alternative dispute resolution techniques distinct from both litigation and arbitration'. 37 To avoid a conflict of legal cultures, he proposes that arbitrators adopt an 'increased interactive approach' to encourage open discussion and the harmonization of cultural differences. 38[Page637:]

An Asian authority on international commercial arbitration has observed that the Western pursuit of 'the ideal of procedural due process' has

pushed arbitration towards the litigation culture . . . [and] brought about an excessive legalization of arbitration and made the arbitration culture almost indistinguishable from the litigation culture. 39

Admitting that it may be difficult for the two cultures to co-exist, he suggests that the arbitration culture be understood as encompassing a range of processes from those resembling litigation to those allowing for amiable composition and thus resembling conciliation. However, he sees this as but a step in the evolution towards an attainable single international commercial arbitration culture, which might combine elements of both conciliation and arbitration.

A survey of the relationship between conciliation and arbitration in different jurisdictions contrasts the Chinese model, where 'the arbitrator may become a conciliator, then become an arbitrator again at any stage of the proceedings' with the Western view that 'the role of the arbiter is that of an unbiased "truth" seeker, who then strictly applies the law to the truth that has been discovered and renders a decision based solely on such application, without regard to the effect on the parties' relationship'. 40 The latter approach is epitomized in the UNCITRAL Conciliation Rules, which forbid a conciliator to act as arbitrator in the same dispute. It is believed in the West that offers to compromise and disclosures of confidential information made during, and essential to, the conciliation process might affect the ability of the conciliator to act as an unbiased arbitrator in the same dispute. Recalling the critical importance of maintaining harmonious personal (and business) relationships in East Asian cultures such as those of Korea and Japan, the author concludes-in the view of this writer, correctly-that

if there is one principle which can be said to lead to the combining of the role of arbitrator with that of conciliator it is that of preserving the harmonious relationship between the parties to the dispute. This principle is one that is frequently cited by western arbitral institutions in promoting the use of commercial arbitration over litigation. 41

He notes that within Asia conciliation with arbitration may be combined in a variety of ways. In Indonesia and Korea, an arbitrator is allowed to conciliate a dispute at the outset, prior to the commencement of arbitration, or, if the parties agree to conciliation in the course of arbitration, to suspend the arbitration while attempting conciliation. In Japan, if attempts at conciliation fail, the conciliator may, with the advance written consent of the parties, issue a binding[Page638:]

decision that is then converted into a judgment by a court. In Hong Kong, a conciliator may act as arbitrator, and vice versa, provided that confidential information regarded as material by the person called upon to act in both capacities is disclosed before he or she changes hats. 42 In India and neighbouring Asian countries, where the strong influence of English legislation gave the pre-existing legal cultures an overtly Western orientation, arbitration and conciliation are completely separate. 43

The gradual absorption into the conciliation culture of aspects of the litigation culture reflects the desire of conciliation culture governments to meet the demand of potential foreign private investors (or investment insurers) from the litigation culture for a system of international arbitration acceptable to them, [Page639:]

as a pre-condition for the release of funds. 44It does not necessarily signal- even in the case of India, which now has arbitration and conciliation laws along Western lines-that a country has embraced a litigation-style arbitration culture through belief in its general efficacy, although it may be a step in that direction. Moreover, there is little indication of a movement in the other direction, such as might foreshadow a true synthesis of the two philosophies, although it has been suggested that the presence in the British Columbia International Commercial Arbitration Act of an express provision allowing an arbitrator to act as conciliator at any stage of the proceedings, subject to the agreement of the arbitrating parties, might be due to relations between Canadian populations of Asian origin and their Asian trading partners on the Pacific rim. 45

The search for a genuinely international dispute resolution culture continues. As one writer wisely observes:

the American ADR movement and underlying Japanese cultural norms for dispute resolution are compatible; if lawyers and businessmen concentrate on the commonalities of these processes (rather than their different roots), they can evolve a system of international dispute resolution which avoids or more efficiently resolves disputes and, therefore, leads to increased productivity and efficiencies for industry in both countries. 46

V. Prospects of a single international arbitration culture

A study of the role of law and legal institutions in Asian economic development, carried out at the request of the Asian Development Bank, asked whether the essentially formal institutions (courts, binding arbitration) that were transplanted from the West into Asian communities where the preference had previously been for mediation and conciliation had come to play an important role in settling commercial disputes. The study found that although those institutions had remained unused or little used for a long period, their use had increased during the recent growth in the volume and complexity of entrepreneurial activity. The study's answer was a qualified yes, confirming the theory that as markets expand, informal dispute settlement mechanisms become less reliable and formal institutions with powers of enforcement more important. 47The[Page640:]

study predicted that as the level of economic development of countries in Asia (and elsewhere) converge with those in the West, and they become more rule-conscious, their preference is likely to shift from informal to formal procedures. 48

It is desirable that any evolving international dispute resolution culture remain neutral in relation to national cultural predispositions (i.e. oriented towards neither the pro-conciliation nor the pro-litigation mindset). This would tend to suggest that, pending the merger of dispute resolution cultures when levels of economic development are evened out, the current range of separate dispute resolution mechanisms should be maintained and even made more diverse, so as to be capable of responding to the needs of parties when exercising their autonomy.

Alternatively, as suggested by Professor Taniguchi, 49 the arbitration culture could be regarded as covering different kinds of processes ranging from those resembling litigation (favoured by parties from a litigation culture) to those that accommodate amicable composition (favoured by parties from a conciliation culture). When enquiring into the 'essence' of international arbitration some years ago, the present writer suggested that judicial-style arbitration had evolved among the States on either side of the Atlantic that had most frequently engaged in inter-State arbitrations during the twentieth century, and that it might remain limited to those States and not be shared by those who saw conciliation or amiable composition as an inherent part of the process and the very reason for which they preferred arbitration to court proceedings. 50

To the latter, the litigation culture's tendency to create ever more comprehensive sets of arbitration rules was undermining the pristine flexible (albeit vulnerable) character of arbitration. 51 The very act of establishing watertight sets of rules was not helpful to creating a level playing field between the parties. Even if those rules were subject to voluntary acceptance, the fact that they embodied a[Page641:]

judicial approach gave the impression that this approach was being endorsed and established as part of international law, even if it was merely on account of the superior bargaining position, vigilance, enterprise and resources of some Western States. Furthermore, it meant that prior negotiation would be necessary in order to eliminate any of the optional rules that were unacceptable to a party, and the party seeking to apply the rules in their entirety would be in the stronger negotiating position. In order to preserve the neutrality of arbitration rules and prevent their being tilted towards either litigation- or conciliation-style arbitration, it would appear desirable for the main body of the rules to contain only those provisions agreed at a diplomatic conference and for others, including those designed to protect the integrity and uninterrupted working of the process, to be presented in the form of model clauses annexed to the main body, available for inclusion if both parties to the dispute were to agree to do so.

As to the outcome of the arbitral process, the difference between the expectations of the litigation culture and those of the conciliation culture can best be demonstrated by contrasting the reference to decisions ex aequo et bono in the applicable law provision of the UNCITRAL Arbitration Rules (1976) with a corresponding reference in a statement of principle by Oppenheim, then Whewell Professor of International Law at Cambridge. Article 33 (Applicable Law) of the UNCITRAL Arbitration Rules reads:

1.The arbitral tribunal shall apply the law designated by the parties as applicable to the substance of the dispute. . . .

2.The arbitral tribunal shall decide as amiable compositeur or ex aequo et bono only if the parties have expressly authorized the arbitral tribunal to do so and if the law applicable to the arbitral procedure permits such arbitration. . . . 52

Oppenheim, on the other hand, declared that:

an arbitral tribunal is not a court in the real sense of the word, for its decisions are not necessarily based on rules of law, and it does not necessarily deal with legal matters. An arbiter, unless the terms of reference otherwise provide, decides ex aequo et bono, whilst a judge founds his decision on rules of law and is only applied to on legal issues . . .

The experience which we have so far had of arbitral tribunals shows that they make praiseworthy efforts to arrive at a finding which shall as far as possible satisfy both parties, and that they have in view a compromise rather than a genuine declaration of law. 53[Page642:]

Oppenheim was writing in 1921. In just over half a century, the Atlantic States- the principal users of international arbitration in that period-had taken the arbitral process into the litigation culture and given it its present character. Those States which might have had a different, conciliation-oriented conception of arbitration were, for most of that period, either colonies or under the cultural, economic and political influence of the Atlantic States, and could not be heard in their own right. When the latter regained their independence, any attempt to effect a radical change in the (by then entrenched) litigation-style arbitration would have involved a confrontation with the Atlantic States that seemed, at best, impolitic, since they had begun to court private investment from those States, and were doing so in competition with each other.

It may be that Professor Taniguchi's litigation culture and conciliation culture are not, after all, so distinct and far apart as it might appear. Could it not be that all arbitration is influenced by both cultures, and that this mix represents an actual, albeit unexpressed and even covert, international arbitration culture? It is perhaps because litigation and conciliation perspectives subsist that the adherents of each, when subjecting the outcome of a particular arbitration to critical appraisal, sometimes find that an award leans toward one culture or the other, and conclude that the apparently determinant culture was the only one that had influenced the proceedings. The existence of such an unexpressed international arbitration culture, discernible in relation to both process and outcome, has been suggested by several scholars. Thus, Professor Simon Roberts observes:

Because the arbitrator depends for his authority to make a decision upon the disputants' agreement that he should do so, he must be sensitive towards their opinions as to what an acceptable decision might be; otherwise, the chances of his decision being complied with, and his being approached to deal with subsequent quarrels, will be small. Such considerations are not present in the case of the adjudicator who hears and decides a dispute by virtue of his office in the community. Not only is he entitled to hear the dispute but he is also likely to have force at his disposal to ensure compliance with his decision if the parties do not like it. Only in the much longer term can unpopular decisions affect his legitimacy. 54

A scholarly review of the work of 'mixed arbitral tribunals' seems to reach very similar conclusions. Having noted that arbitration is a means of dispute[Page643:]

resolution rooted in party autonomy and therefore dependent for its smooth operation upon the continuing consent of the parties, the author emphasizes the value of compromise:

throughout the process, arbitrators attempt to employ the rules so as to encourage the continuing participating of the parties and voluntary compliance with the resulting award. 55

He cites another authority to the effect that the award, too, should be such as not to alienate one party completely:

[m]ediate solutions acceptable to both parties are the goal, and, as a practical matter, few arbitrators would find much employment if they did not develop a record of providing such solutions. 56

To determine the existence of an international arbitration culture, or the prospects of such, in light of the input from both the litigation and conciliation cultures, would require a global study of surviving arbitration concepts. While being as comprehensive as possible in the collection of data and unbiased in the analysis thereof, the study would need to be orientated towards the identification and definition of the common features universally recognized as part of an international arbitration culture. If left solely to legal experts, understandably keen to provide a basis for expedient, practical solutions that would satisfy their clients, the study may fail to take adequate account of an existing legal pluralism. The study should thus be inter-disciplinary, an experiment in collaborative research, with lawyers joined by experts in such fields as political science, branches of psychology and sociology, and legal anthropology.

Although dispute resolution cultures may be converging in the wake of increased and more complex entrepreneurial activity in countries where social structures had previously hindered it, that process could take generations to mature, even at an accelerated pace when compared to similar developments in the West. Until then, designing or refining aspects of international arbitration might be assisted if, through a study of the type suggested, awareness and knowledge of[Page644:]

the cultural pluralism that subsists could be enhanced, leading to a better understanding of 'the process whereby disputing mechanisms maintain and legitimize the distribution of power, and the means by which the powerful control disputing mechanisms'4 .

Today, in most important fields of endeavour, there is a preference for taking initiatives on the basis of the best available scientific evidence and advice relevant to the problem being addressed. The objective of designing or refining aspects of international arbitration, so as to attract the confidence of all communities based on commonly held expectations as to its efficacy, surely ought not to be accorded less meticulous and thoughtful treatment. [Page645:]

1
H. Lauterpacht, The Function of Law in the International Community (Oxford, 1933) at 379; see also J.H. Ralston, International Arbitration from Athens to Locarno (Stanford, 1929) at 24 ff., and the authorities cited in these works.

2
Ibid. at 381, n. 2 (emphasis added).

3
Ibid.

4
J.B. Scott, The Proceedings of the Hague Peace Conferences. Translation of the Official Texts. The Conference of 1907, Vol. II, Meetings of the First Commission (hereinafter 1907 Conference Proceedings) (Oxford, 1921) at 49-50.

5
Statute of the International Court of Justice, Article 26, paragraph 2.

6
1907 Conference Proceedings at 660.

7
Ibid. at 319.

8
Ibid. at 234.

9
P. Mayer, 'Reflections on the International Arbitrator's Duty to Apply the Law. The 2000 Freshfields Lecture' (2001) 17 Arbitration International 235 at 240-41.

10
F.S. Nariman, 'The Spirit of Arbitration. The Tenth Annual Goff Lecture' (2000) 16 Arbitration International 261. See also, by the present author, 'Thoughts on the "Essence" of International Arbitration' (1993) 6 Leiden Journal of International Law 241.

11
M.J. Moser, 'Arbitration in Asia: An Overview' in International Commercial Arbitration in Asia, ICC ICArb. Bull. Special Supplement (Paris, 1998) 6.

12
M. Kusuma-Atmadja, Address to the Seminar on Legal Aspects of Regional Co-operation organized by the Asian Development Bank, 29 April 1996, Proceedings, 15. On the preference for conciliation over adjudicatory methods, see also L. Marasinghe, 'Third World Jurisprudence for the Twenty-first Century' in A. Anghie, & G. Sturgess, eds., Legal Visions of the 21st Century: Essays in Honour of Judge Christopher Weeramantry (Kluwer Law International, 1998) 49 at 68-69.

13
M.S. Donahey, 'The Asian Concept of the Conciliator/Arbitrator: Is it Translatable to the Western World?'(1995) 10 ICSID Rev. 120 at 121, citing J. Nafziger & R. Jiafang, 'Chinese Methods of Resolving International Trade, Investment and Maritime Disputes' (1987) 23 Willamette Law Review 619.

14
B.M. Cremades., 'Overcoming the Clash of Legal Cultures: The Role of Interactive Arbitration' (1998) 14 Arbitration International 157 at 159. On what might be considered key aspects of an arbitral culture see H. Holtzmann, 'The Permanent Court of Arbitration and the evolution of a worldwide arbitration culture' in the Proceedings of the Centenary Conference of the Members of the PCA, 17 May 1999 [hereinafter PCA Centenary Conference Proceedings].

15
Y. Taniguchi, 'Is there a Growing International Arbitration Culture? An Observation from Asia', International Arbitration Conference, Seoul, 10-12 October 1996, ICCA Congress Series No. 8 (Kluwer Law International, 1998) [hereafter ICCA Congress Series No. 8] 31.

16
A.S. El-Kosheri, 'Is there a Growing International Arbitration Culture in the Arab-Islamic Juridical Culture?' in ICCA Congress Series No. 8, 47. See also by the same author, 'The inter-relation between worldwide arbitral culture and the Islamic traditions' in PCA Centenary Conference Proceedings. Citing passages from the Koran, H.G. Gharavi, 'The 1997 Iranian International Commercial Arbitration Law. The UNCITRAL Model Law à L'Iranienne' (1999) 15 Arbitration International 85 at 86, confirms that 'alternative dispute settlement mechanisms to court litigation are deeply rooted in Islam - a fact evidenced by many historical events'.

17
It may be noted that a study of the role of law and legal institutions in six Asian countries (China, Chinese Taipei, India, Japan, Korea and Malaysia) prepared for the Asian Development Bank, confirms that 'Asia shows a preference for the mechanisms of mediation and conciliation available through traditional dispute settlement institutions'. See K. Pistor & P.A. Wellons, The Role of Law and Legal Institutions in Asian Economic Development, 1960-1995, Executive Summary (1996) at 13.

18
F.S.C. Northrop, The Taming of the Nations: A Study of the Cultural Bases of International Policy (1952) at 186-204.

19
Ibid. at 209.

20
Ibid. at 195-96 (emphasis added).

21
See C.F. Murphy, The Search for World Order: a Study of Thought and Action (1985) at 29ff.

22
'That creed was that the individual is absolute master of his own, and, within the limits set by positive law, may exploit it with a single eye to his pecuniary advantage, unrestrained by any obligation to postpone his own profit to the well-being of his neighbours, or to give account of his actions to higher authority. It was, in short, the theory of property which was later to be accepted by all civilized communities.' R.H. Tawney, Religion and the Rise of Capitalism (1926; reprinted Peregrine, 1987) 151 (emphasis added).

23
L.W. Pye, Asian Power and Politics: The Cultural Dimensions of Authority (1985) at 26: 'the Western belief that progress should result in ever greater scope for individual autonomy is not taken as self-evident by most Asians, who are more inclined to believe that greater happiness comes from suppressing self-interest in favour of group solidarity. The success of the Japanese, and now of the Koreans, Taiwanese and Singaporeans, in building modern institutions through strong group loyalties suggests that individualism does not have to be either a prerequisite or a consequence of economic development.'

24
Ibid. at 26-27: 'a reverence for individualism can blind Westerners to the fact that Asians can find satisfaction and security in knowing that their social fabric is firm and that they have the blessings of belonging to some larger and coherent community. The pluralism which seems so desirable to Westerners was rejected in those Asian cultures in which there were only two alternatives of consensus: loyalty and conformity, or selfishness and opportunistic scheming.'

25
Adda Bozeman suggested that 'Asian and African traditions had been at one for millennia in stressing the primacy of the group, assigning essentially role-playing functions to the individual, and keeping thought subordinate to custom and authority. Impressive conceptual systems . . . were recorded in the Orient, but, as administered by elites claiming a monopoly of knowledge, they proved to be impediments rather than stimuli to secular, innovative thinking. This was so firstly because they instructed men to aim at the elimination rather than the development of the personality; and secondly, because . . . they did not allow for the evolution either of distinct categories of thought or of politically significant ways of perfecting society. No possibility thus existed either in [the Orient] or in Africa of disengaging "law" as a separate system of norms, of fathoming "contract" as a structuring principle for human relationships, and of rendering rights and obligations in the language of legal abstractions.' A.B. Bozeman, The Future of Law in a Multicultural World (1971) at 162-63.

26
In addition to the panchayats or village tribunals, disputes might be referred to the Kula (a group bound by family ties), the Sreni (an assembly of tradesmen and artisans), and the Puga (a group of local dignitaries belonging to various social divisions). While these appear to represent a kind of hierarchy, their interrelationship and the source of their authority are not fully understood. An appeal always lay to the King. See e.g., V. Raghavan, 'New Horizons for Alternative Dispute Resolution in India-The New Arbitration Law of 1996' (1996) 13:4 J. Int. Arb. 5 at 6-7; R. Lingat, The Classical Law of India (1973) at 246-47.

27
V. Raghavan, supra note 26 at 42. The foregoing summary of the legislative history of arbitration in India is based on the presentation found in Mr Raghavan's fine essay. A recent case before the Supreme Court of India, Oil and Natural Gas Corp. Ltd. v. SAW Pipes Ltd., Civil Appeal No. 7419 of 2001, JT2003(4) SC 171, in which the Court reviewed an arbitral award on the merits under the 1996 Act, and a parliamentary bill introduced in December 2003 providing for 'error of law' as a new ground for setting aside a domestic arbitral award, may have introduced a measure of uncertainty. See N. Darwazeh & R.F. Linnane, 'Set-Aside and Enforcement Proceedings: The 1996 Indian Arbitration Act Under Threat?' [2004] Int. A.L.R. 81.

28
M. Sornarajah, International Commercial Arbitration: The Problem of State Contracts (1990).

29
He stated, in support the Court's dictum in the Serbian Loans case, that 'any contract which is not a contract between States in their capacity as subjects of international law is based on the municipal law of some country', (1929) P.C.I.J.. Ser. A., No. 20 at 41; and in the Panevezys-Saldutiskis Railway Co. case, that '[i]n principle, the property rights and the contractual rights of individuals depend in every State on municipal law and fall therefore more particularly within the jurisdiction of municipal tribunals', (1939) P.C.I.J. Ser. A/B, No. 76 at 18.

30
M. Somarajah, supra note 28 at 6-22.

31
(1963) 35 International Law Reports 136. The tribunal held that the law applicable to a contract between Sapphire Petroleum and Iran could not have been Iranian law, as the latter would have been subject to change at will by the government, but was 'the general principles of law recognized by civilized nations'.

32
M. Somarajah, supra note 28 at 29.

33
Ibid. at 29-48.

34
F.S.C. Northrop, supra note 18 at 197.

35
A.B. Bozeman, supra note 25 at xvi.

36
B.M. Cremades, supra note 14 at 162.

37
Ibid. at 162-63.

38
Ibid. at 160

39
Y. Taniguchi, supra note 15 at 37.

40
M.S. Donahey, supra note 13 at 126. However, under the 1994 Rules adopted by the China International Economic and Trade Arbitration Centre (CIETAC), this may occur only with the consent of the parties; and the Rules provide restrictions on the use of information gained during the conciliation effort.

41
Ibid. at 123.

42
Ibid. at 124, 126. As to the practice of combining different settlement methods (mediation, conciliation, arbitration) in relation to the same dispute, see the contributions of M.E. Schneider, Tang Houzhi, M. Hoellering, T. Oyekunle, and C.N. Netto in PCA Centenary Conference Proceedings, supra note 14. On legislation providing for both conciliation and arbitration and rules governing their consecutive application in the same dispute, see H.M. Holtzmann & D.F. Donovan, 'Recent Legislation that Combines Conciliation and Arbitration' in Proceedings of ICCA/CIETAC 1994 International Commercial Arbitration Conference, Beijing, 1994.

43
See V. Raghavan, supra note 26.

44
Many Asian countries have adopted modern statutes governing international commercial arbitration along Western lines, often using UNCITRAL's Model Law and Arbitration Rules as guides, and arrange for disputing parties to receive institutional support: Singapore: International Arbitration Act 1994; Singapore International Arbitration Centre (SIAC) Rules; Malaysia: an amendment to the Arbitration Act 1952 allows international disputes to be referred by the parties to the Kuala Lumpur Regional Arbitration Centre, and to be governed by the KLRAC Arbitration Rules 1978; Thailand: the Arbitration Act 1987 allows international disputes to be dealt with at the Ministry of Justice's Arbitration Institute under the application of the Institute's Arbitration Rules and Conciliation Rules 1990; Indonesia: parties to an international commercial dispute may, by agreement, refer it to a tribunal constituted in accordance with the procedures of the Indonesian Board of Arbitration established in 1997 by the Indonesian Chamber of Commerce with government support; Vietnam: international commercial arbitrations are dealt with by the Vietnam International Arbitration Centre (VIAC), established in 1993 along similar lines to SIAC, and by application of the VIAC Rules, again similar to those of SIAC; China: international commercial disputes are governed by the Arbitration Law of 1995 and may be resolved by application of the 1994 Revised Arbitration Rules of the China International Economic and Trade Arbitration Commission (CIETAC), which are based on the ICC Arbitration Rules; Japan: international commercial arbitration may be resolved by application of the Japan Commercial Arbitration Association's Arbitration Rules, revised 1992 (see M. Kusuma-Atmadja, supr

45
See M.S. Donahey, supra note 13 at 126, who also notes, at 121, that 'it should not be surprising that the concept of the arbitrator/conciliator has been accepted most completely by western dispute resolution centers on the Pacific Rim'.

46
C.R. Ragan, 'Emerging Dispute Resolution Techniques in the Pacific Basin' (1993) 9 Arbitration International 131 at 145. See also F. Nariman, 'East Meets West: Tradition, Globalization and the Future of Arbitration' (2004) 20 Arbitration International 123.

47
See K. Pistor & P.A. Wellons, supra note 17 at 12-13.

48
Although such a prediction may be justified where non-State entities are involved, it is more doubtful where at least one of the parties to the dispute is a State.

49
Y. Taniguchi, supra note 15.

50
M.C.W. Pinto, 'Structure, Process, Outcome: Thoughts on the "Essence" of International Arbitration' in S. Muller & W. Mijs, eds., The Flame Rekindled: New Hopes for International Arbitration (1994) 43.

51
See J. Stone, Legal Controls of International Conflicts (1954) at 736: 'The features of arbitration law which offer so many avenues of escape and which serve in the [International Law] Commission's eyes as excuses for shirking international undertakings, may be the very features which attract states to enter into social undertakings.'. Similar observations were made by the Netherlands Government concerning the ILC's Model Rules on Arbitral Procedure, (1953) 5 (II) Yearbook of the International Law Commission 235. a note 12 at 17-23); India: international commercial disputes are governed by the Arbitration and Conciliation Ordinance of 1996 and may be referred to either the Indian Council of Arbitration (1965) or the International Centre for Alternative Dispute Resolution (1995); Sri Lanka: arbitration proceedings and the enforcement of arbitral awards, including foreign awards, are governed by the Arbitration Act of 1995. All of the foregoing are parties to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. However, the efficiency with which the international arbitral process functions across this range of countries is reported to be highly variable, particularly with respect to enforcement. On Iran's 1997 Law on International Commercial Arbitration, see H.G. Gharavi, supra note 16.

52
cf. Article 38, paragraph 2, of the Statute of the International Court of Justice.

53
L. Oppenheim, The Future of International Law (1921) at 46-47 (emphasis added).

54
S. Roberts, Order and Dispute: An Introduction to Legal Anthropology (1979) at 78. For a criticism of the 'anthropological approach', see J. Frank, Courts on Trial: Myth and Reality in American Justice (Princeton, 1973) at 378-79.

55
S.J. Toope, Mixed International Tribunals: Studies in Arbitration between States and Private Persons (Cambridge: Grotius, 1990) at 392.

56
M. Shapiro, Courts: A Comparative and Political Analysis (1981) at 4. See M.S. Donahey, supra note 13 at 126, n. 23, who observes: 'A common criticism of commercial arbitration in the United States arises from the perception that an arbitrator has a tendency to "split the baby", or reach a compromise result. Arbitration associations go to great lengths to dispel this perception, citing statistics which show that arbitrators tend to decide cases largely in favor of one party or the other.'

57
L. Nader & H.F. Todd, eds., The Disputing Process: Law in Ten Societies (1978) at 20; ibid. at 21: 'When individuals are no longer dependent on each other for their welfare, the tendency is for the powerful to manipulate legal means for their exclusive advantage.'