I. Introduction

It has been asked whether there is such a thing as transnational law, separate from national and international law. 1 As far as substantive law is concerned, the question has been answered with the publication of the UNIDROIT Principles of International Commercial Contracts 2and the Principles of European Contract Law 3and their immediate application by many international arbitral tribunals, 4the requirements of international commerce having created a need for a transnational substantive law independent of the national laws to which the parties may be subject. There is an equal need for transnational procedural law. Here, too, UNIDROIT has played a leading role, together with the American Law Institute, with respect to State court procedure. In early 2004, a joint study group led by Professors Stürner and Hazard presented draft Principles and Rules of Transnational Civil Procedure, the purpose of which was described as follows:

Scope and Implementation

These Principles are designed primarily for adjudication of transnational commercial disputes. These Principles may be equally appropriate for the resolution of most other kinds of civil disputes and may be the basis for future initiatives in reforming civil procedure.

It may be expected that the ALI/UNIDROIT Principles of Transnational Civil Procedure 5will be used as guidelines or a model law mainly by those countries that are presently shaping and organizing their judicial systems so as to make [Page647:]

them suitable for deciding international commercial disputes. The courts in countries such as Russia and China have not yet acquired this status. It is chiefly for this reason that commercial contracts with such countries usually contain an arbitration agreement, providing for the settlement of future disputes by international arbitration. Whether the ALI/UNIDROIT Principles and the Rules of Transnational Civil Procedure will be adopted in other countries where a legal system capable of handling international commercial disputes is already operational is another question not to be discussed here. It is quite likely that the tendency in developed countries for commercial disputes between parties from different countries to be settled by arbitral tribunals rather than State courts will continue. International arbitration has clear advantages over dispute resolution through State courts, 6as was demonstrated by the failure of the Hague negotiations over an international convention for the mutual recognition and enforcement of State court decisions. 7Judgements rendered by arbitral tribunals are enforceable worldwide in all countries that are parties to the 1958 New York Convention. It is therefore uncertain whether an independent transnational procedural law will evolve in developed countries.

It is a long time since international arbitration freed itself from the restrictions imposed by national procedural laws. During recent decades, international arbitration has developed rapidly and acquired its own transnational procedural law, which Pierre Lalive described as follows in an arbitral award of 1970: 8

What the defendant fails to appreciate or to take into account, however- and this is understandable concerning a problem of such complexity-is the existence of an international custom now generally recognized and an expression of which is to be found in international treaties signed by most civilized States including Pakistan and India. According to this custom, international commercial arbitration may be entirely 'detached' or separated from the 'national' laws of the parties: it shall only be governed by the rules of arbitration chosen by the parties or referred to by the parties in their agreement (such as the ICC Rules in the present case). [Page648:]

II. The ICC Rules of Arbitration: an example of transnational procedural law

Surprisingly, there is no reference to 'transnational procedural law' in the indexes of standard commentaries on arbitration, 9even though the procedural rules of the International Chamber of Commerce in Paris-ICC Rules of Arbitration- are discussed in those works. 10 The current ICC Rules of Arbitration, in force since 1998, and its predecessors, are the epitome of transnational procedural rules. They do not derive from the legislation of a State or a community of States like the European Union, nor were they created by a subject of international law such as the United Nations. Established in 1919 and based in Paris, ICC is a private organization that defines itself as the universal voice of international commerce.

Under the successive versions of the ICC Rules of Arbitration in force since 1923, the ICC International Court of Arbitration has administrated more than 13,000 arbitrations in international commercial disputes involving parties from over 180 countries and independent territories. In 2004, the Court received 561 requests for arbitration, involving 1,682 parties from 116 countries and independent territories. In 11.6% of all cases, at least one party was a sovereign State or a Statecontrolled public law entity. Fortynine countries served as places of arbitration. 11These figures demonstrate that the ICC Rules of Arbitration have been and are applied by arbitral tribunals seated in many different countries.

1. Freedom of the parties to choose institutional rules

Arbitral tribunals have to observe mandatory national law applicable at the place of the arbitration. 12 The purpose of such law is mainly to ensure that the parties are given equal treatment and the right to be heard. Apart from these basic requirements, the arbitral tribunals are free in organizing the arbitration proceedings, unless the parties have agreed on a specific procedure. [Page649:]

This principle applies in countries that have followed the UNCITRAL Model Law and most other States that may serve as the place of an international arbitration. 13

Consequently, in almost all countries the parties may agree to make their arbitration subject to the rules of an arbitration institution. It is expressly stated in § 1042(3) of the German Code of Civil Procedure-more explicitly than in Article 19(1) of the UNCITRAL Model Law-that the parties are free to regulate the proceedings themselves or by referring to the rules of an arbitration institution, subject to the mandatory provisions of the Code of Civil Procedure. The freedom of the parties to regulate the course of their arbitration naturally includes the freedom to refer to the rules of an arbitration institution.

2. Transnational and national rules of arbitration

Arbitration institutions and the arbitration rules issued by them fall into two categories: those of a transnational character and those that refer to the national law governing the seat of the institution. If the rules of arbitration are intended and suitable for application by arbitral tribunals throughout the world, and are so applied in practice, then they are transnational in character. The ICC Rules of Arbitration are an example.

Such transnational rules of arbitration do not reflect the national law in force at the seat of the arbitration institution. In the case of ICC, located in Paris, this would be French law. However, for arbitral tribunals that apply the ICC Rules in proceedings outside France, the Rules are an autonomous private source of law, to be applied and interpreted independently of French law. This is reflected in legal commentaries concerning ICC arbitration, which hardly ever refer to French procedural law. 14 Take, for example, an ICC arbitration between English [Page650:]

and US parties, seated in Montreal, Canada, in which none of the arbitrators and none of the counsel are familiar with French law or the French language. In this case, the arbitral tribunal will only have to apply the ICC Rules and mandatory procedural law applicable in Montreal. These few mandatory rules will be taken from the UNCITRAL Model Law, which has been adopted in Canada, including Quebec. 15

On the other hand, the rules of an arbitration institution are not transnational if they require that the arbitration has to be held in a specific country, as was the case under the former Article 1(2) of the new Swiss Rules of International Arbitration, 16 or even provide that the place of the arbitration shall normally be at the seat of the institution, as stated in Article 2 of the Rules of Arbitration and Conciliation of the International Arbitral Centre of the Austrian Federal Economic Chamber (Vienna Rules). 17

3. Interpretation of transnational as opposed to national rules of arbitration

The transnational or national character of institutional arbitration rules affects how they are interpreted. Where rules strongly reflect the law of the country in which the institution is domiciled, the national law must be taken into account when interpreting them. If the rules are transnational in character, they must be interpreted autonomously, with reference being made to the procedural law of the country in which the institution is domiciled only if the arbitration has in fact taken place in that country. Article 15 of the ICC Rules provides that the proceedings before the arbitral tribunal shall be governed by the ICC Rules and, where the Rules are silent, by any rules which the parties, or failing them, the arbitral tribunal may settle on, whether or not reference is thereby made to the procedural rules of a national law applicable to the arbitration. 18

The ICC Rules do not of course prevail over the mandatory procedural law in force at the place of arbitration. Although Article 11 of the ICC Rules provides that the ICC International Court of Arbitration shall decide finally on the challenge of an arbitrator, it follows from the higher ranking of State law in [Page651:]

relation to private transnational law that this does not exclude the competence of the State court to decide on an unsuccessful challenge in accordance with Article 13(3) of the UNCITRAL Model Law. 19

The transnational character of the ICC Rules also affects their review by courts. A domestic arbitral award rendered outside France under the ICC Rules that comes before a State court in settingaside proceedings may be reviewed only on the basis of the matters listed in Article 34(2) of the UNCITRAL Model Law. If the decision to be made under Article 34(2)(b)(ii) of the Model Law is to determine whether, in the course of the proceedings, the arbitral tribunal has violated the ICC Rules of Arbitration, upon which the parties have agreed in accordance with Article 19(1) of the Model Law, the court must interpret the ICC Rules autonomously, without looking at French procedural law.

As far as Germany is concerned, the question arises as to whether the Federal Supreme Court ( Bundesgerichtshof ) itself is entitled to interpret the ICC Rules or whether, as an emanation of foreign law, the Rules are exempt from review by the Supreme Court pursuant to § 293 ZPO. In the latter case, it would be left to German courts of appeal to provide a binding interpretation of the Rules. In a 1988 judgement the Federal Supreme Court classified the ICC Rules as (French) standard business conditions. 20 It has been consistently held by the Court that foreign standard business conditions or conditions based on foreign law are exempt from its review, even if used in a domestic German context, because they are regarded as facts resulting from foreign law. Decisions by appellate courts on issues of fact may not be reviewed by the Federal Supreme Court. However, in the aforementioned case, the local appellate court (of Stuttgart) had failed to interpret the ICC Rules at all, which allowed the Supreme Court in that particular case to supply its own construction. If the ICC Rules are classified as transnational rules of procedure rather than standard business conditions, the Supreme Court will have to revise the position taken in the 1988 judgment.

There is of course a practical need for the ICC Rules to be interpreted uniformly whenever German courts have to decide on them. Arbitral tribunals conducting arbitration proceedings in Germany according to the ICC Rules usually sit in one of the country's commercial centres such as Hamburg, Düsseldorf, [Page652:]

Frankfurt, Stuttgart or Munich. Pursuant to Article 34 of the UNCITRAL Model Law, combined with § 1062(1)(4) of the German Code of Civil Procedure, jurisdiction over settingaside proceedings lies with the Higher Regional Court ( Oberlandesgericht) in those cities. Hence, the ICC Rules as transnational law are applicable in several appellate court circuits. Such law requires uniform interpretation. According to § 545(1) of the German Code of Civil Procedure, the Federal Supreme Court has jurisdiction to interpret legal provisions applicable in more than one appellate court circuit, including, as the Supreme Court has consistently held, standard business conditions used in more than one German appellate court circuit. 21

The Federal Supreme Court has hitherto consistently refused to interpret standard business conditions used in a foreign country, arguing that these conditions are part of foreign law and, as such, are exempt from its review under §§ 545 and 560 of the Code of Civil Procedure. 22 However, transnational procedural law does not form part of any national legal system and therefore is not 'foreign' law in that sense, as it is not part of a foreign legal system. Like uniform law, it is intended to be applied by any judicial body. The interpretation of uniform law, including that created by an entity seated in a foreign country, lies with the Supreme Court in the last instance. 23

Like uniform law, transnational law is designed to be applied uniformly in all countries. This presupposes that it be interpreted by the highest courts in all countries, so as to achieve consistency in its application internationally. Given this requirement, the German Federal Supreme Court will have to look at the decisions of the highest courts in the countries that are most frequently places for ICC arbitrations, especially France and Switzerland. As such decisions are generally available on the Internet, this task should not be too difficult. 24

III. International arbitration-a source of transnational procedural law

Even if institutional arbitration rules, like those of ICC, are applicable for resolving an international commercial dispute, confrontations between parties from the AngloAmerican tradition and from the Continental European tradition [Page653:]

may give rise to uncertainty and insecurity, especially when selecting arbitrators and establishing the facts of the case, due to the parties' differing approaches to procedure, determined by the contrasting legal cultures from which they originate. To overcome such disparities, the International Bar Association has drawn up Guidelines on Conflicts of Interest in International Arbitration, 25 which relate to the selection of arbitrators, and Rules on the Taking of Evidence in International Commercial Arbitration, 26 which relate to the establishing of the facts by the arbitral tribunal.

1. Impartiality and independence of arbitrators

Article 12 of the UNICITRAL Model Law requires that an arbitrator be impartial and independent of the parties. Failing this, the arbitrator may be challenged. Despite local variations that may exist, this is basically a worldwide standard. Section 24(1) of the 1996 English Arbitration Act, for example, does not mention independence, but allows a challenge to be made if justifiable doubts exist as to the arbitrator's impartiality. Article 180 of the Swiss Private International Law Act conversely allows an arbitrator to be challenged if justifiable doubts exist as to the arbitrator's independence, but does not mention impartiality. However, impartiality and independence are merely two sides of the same coin. Whereas impartiality describes a certain attitude, to be maintained by the arbitrator throughout the arbitration, independence means freedom from any external influences the parties might exercise on the arbitrator and which might affect his attitude. The requirement of impartiality and independence applies both to the chairman and to the partyappointed arbitrators, 27 for any arbitrator nominated or appointed by one party is also the arbitrator of the other party and that arbitrator's neutrality will serve to protect the other party's interest in the proper conduct of the arbitration by independent and impartial arbitrators.

a) The specific role of the partyappointed arbitrator

Although required to be neutral, the partyappointed arbitrator has a specific function in international arbitration. Unless appointed by the arbitration institution or by a court, that arbitrator will help to secure a party's confidence in the arbitration, especially if the arbitration agreement or the applicable procedural law entrusts that arbitrator, together with the arbitrator appointed [Page654:]

by the other party, with the task of choosing the chairman. 28 In the reality of international arbitration, no arbitrator is appointed by a party unless the party has confidence in his or her aptitude to serve as arbitrator, and also trusts the person. This implies a certain proximity between the arbitrator and the appointing party, which would not exist between a party and a judge in a State court. Party A will not appoint an arbitrator who is known to hold a legal opinion on an issue that is opposed to the legal position party A intends to rely on in the arbitration. Party A silently hopes that 'its' arbitrator will give at least favourable consideration to its position, and will cause the arbitral tribunal to discuss and weigh its arguments carefully. Party B must strive to ensure that, when selecting its arbitrator, party A does not question candidates as to whether they share its position in the future arbitration, so as to then choose the candidate who promises to do so. Such an arbitrator would be a caricature of an independent and impartial judge.

b) Transnational standards on impartiality or independence and on the arbitrator's duties of disclosure

Because proximity to a party may be thought to be suspect, an arbitrator is obliged to disclose any circumstances that may give rise to doubts as to his or her impartiality or independence, prior to being appointed and during the entire arbitration proceedings. 29 In domestic arbitration, the degree of proximity to a party that entitles the other party to harbour doubts as to the impartiality or independence of the arbitrator is usually well defined. The arbitrator is therefore obliged to disclose to the parties and to the coarbitrators any circumstances of the kind defined. Questions can usually be settled by referring to national case law and legal writings.

In international arbitration, there is no such certainty, since the applicable national laws provide different standards. Yet international arbitration needs a uniform standard, if possible independent of the law applicable in the country of the arbitration and the country in which an arbitral award will have to be enforced. Potential arbitrators should be able to decide under what circumstances they may accept or must decline an offer to serve as arbitrator. They also need to know what circumstances might give rise to doubts as to their impartiality [Page655:]

or independence, and therefore must be disclosed to the parties, before accepting the appointment, or later during the arbitration proceedings. Recent years have seen the misuse of challenge proceedings, especially in countries belonging to the AngloAmerican legal tradition, seriously impairing the parties' freedom to select the arbitrator of their choice and even affecting the selection of the chairman.

National standards governing challenges of arbitrators may be of little use in international arbitration. In German domestic arbitrations, if all parties are German, the German courts directly apply § 41 and following of the Code of Civil Procedure, governing the challenge of public judges, in challenge proceedings concerning arbitration. 30 Recourse to the standards applied for public judges is questionable in international arbitrations in which none of the parties is German and the proceedings take place in Germany merely for reasons of neutrality, e.g. a case between an Austrian company and a Czech company in which the partyappointed arbitrators have agreed on a Swiss chairman. If, in such a case, the local German court at the place of the arbitration has to decide on a challenge brought by the Austrian party against the arbitrator appointed by the Czech party, on account of doubts over his independence, there is no material reason to apply the principles laid down in § 41 and following of the German Code of Civil Procedure concerning the challenge of public judges. The courts called upon to decide on challenges need to be provided with standards derived from best international practice, so as to arrive at an internationally uniform application of standards in challenge proceedings, similar to the standards developed for international public policy ( ordre public international).

c) IBA Guidelines on Conflicts of Interest in International Arbitration

In early 2002, the International Bar Association created a Working Group whose task it was to develop a transnational set of rules, in the form of guidelines, on impartiality and independence in international arbitration. On the basis of reports on the situation and case law in different countries, the Working Group gathered, categorized and weighed the many diverging interests of the various users of international arbitration, their legal counsel, arbitrators and arbitration institutions. Out of this dialectical process, the IBA Guidelines on Conflicts of Interest in International Arbitration were born. The group felt encouraged in its work by the fact that the few rules on impartiality and independence put forward by the [Page656:]

American Law Institute and UNIDROIT in their Principles and Rules of Transnational Civil Procedure are mainly intended for public judges sitting in State courts. These rules are silent on the circumstances obliging judges to disclose to the parties such facts as might give rise to doubts over their impartiality or independence.

The Working Group presented its drafts at the IBA annual meetings in 2002 and 2003 for discussion and comments by leading international arbitration institutions, such as the ICC International Court of Arbitration, the London Court of International Arbitration and the American Arbitration Association, and by users of international arbitration like the heads of legal departments of multinational companies. The final version was approved and published by the IBA Council in May 2004. 31 The central section of the Guidelines consists of 'General Standards Regarding Impartiality, Independence and Disclosure', accompanied by concise comments.

Although the IBA Guidelines are meant to be selfexplanatory, three points should be made here.

(1)Any obligation of disclosure, as laid down in Article 12(1) of the UNCITRAL Model Law and Article 7(2) of the ICC Rules, presupposes that the prospective arbitrator before the proceedings, and the arbitrator during the proceedings, has carefully examined the circumstances and considers him or herself impartial and independent. If this is not the case, the arbitrator may not accept the office. If the arbitrator comes to think that he or she is no longer impartial or independent during the arbitration, then he or she must resign. The duty to disclose the circumstances giving rise to doubts over the arbitrator's impartiality or independence serves to assist the parties in making their own judgment as to the impartiality or independence of the candidate or arbitrator. The obligation of disclosure therefore exists in the interest of the parties. This purpose means that the content and scope of the disclosure must be determined from the parties' point of view. 32 If a party, on the grounds of the information received, does not share the arbitrator's own assessment, or if it thinks that the information is incomplete and therefore incorrect, it may commence [Page657:]

challenge proceedings against the arbitrator in accordance with the applicable procedural law (cf. Article 13 of the UNCITRAL Model Law). However, the Working Group considered that there are grounds for an arbitrator's removal only if, from an objective point of view, such facts are present as would cause justifiable doubts as to the impartiality or independence in the eyes of a reasonable and circumspect party. The Working Group thus used a subjective standard from the parties' point of view for the content and scope of the disclosure, and an objective standard for the challenge proceedings.

(2)An arbitrator may encounter specific problems in determining what facts must be disclosed concerning potential conflicts of interest if he or she previously rendered services to affiliated companies that are not parties to the arbitration and may operate under a different name, or is still doing so. General Standard 7 of the IBA Guidelines therefore obliges the parties to inform the arbitrator on their own initiative, before the beginning of the proceedings, about the companies belonging to the same group or affiliated to it, so that the arbitrator is able to determine whether a conflict of interest exists.

(3)In German domestic arbitration, the arbitral tribunal may at every stage of the proceedings encourage the parties to settle their dispute with or without the assistance of the arbitral tribunal. This practice is taken from German procedural law (§ 278(1) of the Code of Civil Procedure).33Arbitral tribunals influenced by Chinese or Japanese traditions have similar tendencies. However, the practice is sometimes subject to sharp criticism in countries belonging to the AngloAmerican legal tradition.34Therefore, General Standard 4(d) of the Guidelines clearly states that in international arbitration an arbitrator may assist the parties in reaching a settlement only after he or she has received the parties' express agreement. If the settlement fails, that agreement is an implicit waiver by the parties of the possibility of challenging the tribunal or an individual arbitrator for lack of impartiality or independence. [Page658:]

In addition to the comments within the Guidelines themselves, the IBA has published a separate document entitled Background Information on the IBA Guidelines on Conflicts of Interest in International Arbitration, 35 which describes the Working Group's motives and the history of the Guidelines. The Guidelines also include Application Lists designed to give practical assistance to arbitrators and parties, as well as to courts.

There are three such Lists: Red, Orange and Green.

The Red List covers typical situations in which the outward appearance in itself gives rise to justifiable doubts as to the independence or impartiality of an arbitrator. If such circumstances exist, the candidate should decline the offer to serve as arbitrator from the outset. If such circumstances arise during the arbitration, this should cause the arbitrator to resign. The Red List is divided in two. Part 1 describes situations which, in the opinion of the Working Group, generally bar a candidate from serving as arbitrator, and where not even an agreement between the parties can remove the obstacle. This concerns mainly the case of identity between party and arbitrator, since no person can be his or her own judge. The Working Group considered an equally serious situation to be that in which there is a close financial connection between the party and the arbitrator. Part II of the Red List contains situations that should normally cause a candidate to refuse the offer to serve as arbitrator. If he or she accepts notwithstanding the circumstances, a challenge ought to be successful. This may be the case if the arbitrator has previously given legal advice to a party in the matter which is now at issue in the arbitration. Nevertheless, in this type of situation both parties may agree, fully cognizant of the circumstances which would normally disqualify the candidate, that they wish this specific person to act as arbitrator. An example is a wellknown specialist in company law, who has earlier provided an expert opinion to the seller of a company. If the buyer thinks the expert's opinion convincing he may expressly agree that this specialist be appointed as arbitrator by both parties in order to decide a dispute that has arisen between the parties over the sale.

The Orange List describes typical situations that should cause the arbitrator to inform the parties of certain circumstances, even though the arbitrator regards them as not impairing his or her ability to serve. The situations enumerated in the List do not, in the opinion of the Working Group, automatically constitute [Page659:]

grounds for the challenge of an arbitrator. If a challenge is brought, the existing objective circumstances must be examined in order to determine whether, in the eyes of a reasonable und circumspect party, they give rise to justifiable doubts as to the arbitrator's impartiality and independence, and may therefore lead to his or her removal.

The Green List comprises typical situations considered as harmless by the Working Group and therefore not needing to be disclosed. This may be a previously published legal opinion of an arbitrator on questions of law, which might become an issue in the arbitration, or the arbitrator's membership of an association of which a representative of a party is also a member.The Green List is intended to avoid the disclosure of unnecessary information to the parties that could be subject to misuse, especially in an AngloAmerican setting, where mere information has been used as a ground for challenge in order to delay or even prevent the constitution of the arbitral tribunal. One might of course ask whether a Green List, enumerating typical situations, is compatible with the subjective approach-'in the eyes of the parties'-of Article 7(2) of the ICC Rules. The Working Group thinks it is. An arbitrator appointed by one party often does not know the other party and its connections at all. Therefore, that arbitrator has no way of determining what kinds of circumstances, in the 'eyes' of the party, need to be disclosed according to a subjective standard. He or she may only guess and, at best, suppose. The chairman is in a similar position, often not knowing either party, if, for example, he has been appointed by the ICC International Court of Arbitration pursuant to Article 8(4) of the ICC Rules. In such circumstances, if an arbitrator does not know one or all of the parties to the arbitration, a list describing typical situations may provide useful guidance and reduce the 'guessing factor', thus also avoiding surprises in the challenge procedure.

The Working Group is aware that the IBA Guidelines cannot prevail over mandatory national procedural law applicable in a challenge procedure. However, it hopes that these transnational rules may supplement the rules laid down in Articles 12 and 13 of the UNCITRAL Model Law and similar provisions in national arbitration laws. It is intended that the Guidelines should contribute to uniform, consistent and predictable practice in the international arbitration community, amongst users, arbitrators and arbitral institutions like the ICC Court of Arbitration, and be of use to State courts called upon to decide on challenges. [Page660:]

2.IBA Rules on the Taking of Evidence in International Commercial Arbitration

If the parties have made no agreement on the applicable procedural law, Article 19(2) of the UNCITRAL Model Law gives full discretion to the arbitral tribunal to determine the procedure to be followed for establishing the facts on which the decision will be based. If the arbitration is governed by the rules of an arbitral institution, these rules similarly allow the arbitral tribunal considerable discretion for this purpose. 36 Such discretion is to enable the arbitral tribunal to conduct the proceedings in the manner best suited to the circumstances of the case. The resulting flexibility can be regarded as one of the advantages of arbitration over the meticulously regulated proceedings in State courts.

Yet, the broad discretion enjoyed by arbitral tribunals may be a problem if parties with different ideas about the appropriate way of conducting the proceedings meet in an international arbitration. This is a regular occurrence in disputes between parties from AngloAmerican and Continental European legal traditions. If the partyappointed arbitrators, too, have diverging views on the matter, it will be up to the chairman to determine the manner in which the arbitration is conducted. If the chairman comes from a Continental European background, the proceedings will probably reflect that fact. Similarly, if the chairman comes from the AngloAmerican legal tradition, this is likely to stamp the proceedings. In either case, such a solution is unlikely to satisfy the party whose background differs from that of the chairman.

It was this predicament that led the International Bar Association to publish its Rules on the Taking of Evidence in International Commercial Arbitration in 1999. These procedural rules must be regarded as transnational in character. One of the main issues they deal with is the production of documents against the will of a party (Article 3(3)-(9)) and the objections available to a party defending itself against a request for production (Article 9(2)). 37 The approach taken in the ALI/UNIDROIT Principles and Rules of Transnational Civil Procedure is similar to that of the IBA Rules, which is not surprising as similar problems were addressed and the groups working on each text were in contact [Page661:]

with each other. However, the IBA Rules go into more detail, especially with regard to possible defenses against a request to produce document(s). Although likely to be rewarding, a detailed comparison of the two sets of rules cannot be undertaken here. The Principles and Rules of Transnational Civil Procedure contain provisions that are directly applicable to third persons who are not parties to a lawsuit before a State court. Such provisions cannot exist in the field of arbitration, where the authority of the arbitral tribunal rests entirely on the arbitration agreement between the parties. The arbitral tribunal has no authority to issue orders to third persons unless they are directly involved in the arbitration agreement. If this is not the case, it must rely on the assistance of State courts. 38

Articles 3 and 9 of the IBA Rules establish a system regulating the production of documents against the will of a party in international arbitration. The system is far more developed than provisions in the procedural laws to be applied by State courts in Continental Europe. They deliberately do not copy the discovery procedure as it exists in AngloAmerican court practice. Within the short space of time since their publication, the IBA Rules have come to be applied directly or analogously in practically all major international arbitrations.

Most of the provisions of the IBA Rules are not new in substance, but confirm internationally established best practice. This applies to the submission of written witness statements which, as part of the briefs submitted by the parties (cf. Article 4(4)-(9)), serve to prepare the oral pleadings before the arbitral tribunal and are necessary to avoid surprise attacks on factual issues during the hearing. The same goes for the questioning of witnesses in crossexaminations by the parties or the practice of witnessconferencing by the arbitral tribunal. Witnessconferencing may be particularly helpful for issues where expert knowledge is required, saving time and cost (Article 8(2)). 39 Parties and their counsel from Continental European legal systems, who are involved in an international arbitration for the first time, may find these provisions surprising, because they have no equivalent in State court proceedings. However, this is not a disadvantage. Continental Europeans quickly come to appreciate the IBA Rules, especially Articles 3 and 9, which provide an effective defence against the US discovery procedure, to which companies may be exposed when their opponents are from an AngloAmerican background. [Page662:]

IV. Conclusions

The UNIDROIT Principles of International Commercial Contracts and their application by arbitral tribunals prove that there is such a thing as substantive transnational law. The ICC Rules of Arbitration, which for decades have provided a basis for the conduct of international arbitration proceedings, testifyfrom different legal cultures may confront each other, requires uniform standardsfor determining potential conflicts of interest relating to arbitrators and fordefining the manner in which the arbitral tribunal shall establish the facts onwhich its decision will be based. In its 2004 Guidelines on Conflicts of Interesting International Arbitration and its 1999 Rules on the Taking of Evidence inInternational Commercial Arbitration, the International Bar Association hasprovided two sets of transnational rules which respond to this requirement. [Page663:]

1
P. Schlosser, Das Recht der internationalen privaten Schiedsgerichtsbarkeit, 2d ed (Tübingen: Mohr, 1989), § 193ff.

2
First published by the International Institute for the Unification of Private Law (UNIDROIT) in 1994; a new expanded version of these Principles was published in 2004; see <www.unidroit.org>.

3
<www.storme.be/PECLre.html>

4
See M.J. Bonell, 'The UNIDROIT Principles and Transnational Law' in K.P. Berger, ed., The Practice of Transnational Law (Kluwer Law International, 2001) 23.

5
The Principles and accompanying comments are available at <www.unidroit.org/english/principles/ civilprocedure/aliunidroitprinciplese.pdf>.

6
See F.B. Weigand, 'Introduction' in F.B. Weigand, Practitioner's Handbook on International Arbitration (Beck, 2002), p. 4ff.

7
See A.T. von Mehren, 'The Hague Jurisdiction and Enforcement Convention Project Faces an Impasse- A Diagnosis and Guidelines for a Cure' IPRax 2000, 465.

8
Award of 14 January 1970 in ICC case 1512, (1980) V Y.B. Comm. Arb. 170 at 176.

9
J.P. Lachmann, Handbuch für die Schiedsgerichtspraxis, 2d ed. (2002); K.H. Schwab & G. Walter, Schiedsgerichtsbarkeit, 6th ed. (2000); R.A. Schütze, Schiedsgericht und Schiedsverfahren, 3d ed. (1999); K. Lionnet, Handbuch der internationalen und nationalen Schiedsgerichtsbarkeit, 2d ed. (2001).

10
J.P. Lachmann, supra note 9, § 1477ff; K.H. Schwab & G. Walter, supra note 9, c. 41, § 13; R.A. Schütze, supra note 9, § 18; K. Lionnet, supra note 9, p. 333ff.

11
See '2004 Statistical Report' (2005) 16:1 ICC ICArb. Bull. 5 at 10.

12
See Art. 19(1) of the 1985 UNCITRAL Model Law on International Commercial Arbitration. The Model Law is cited here because its guiding rules are almost universally accepted, even by countries which, like England, claim not to be Model Law countries.

13
See e.g. Art. 1494 of the French Nouveau Code de procédure civile ('La convention d'arbitrage peut, directement ou par référence à un règlement d'arbitrage, régler la procédure à suivre dans l'instance arbitrale ; elle peut aussi soumettre celle-ci à la loi de procédure qu'elle détermine. Dans le silence de la convention, l'arbitre règle la procédure, autant qu'il est besoin, soit directement, soit par référence à une loi ou à un règlement d'arbitrage.') and Art. 182 of the Swiss Private International Law Act ('1. The parties may, directly or by reference to rules of arbitration, determine the arbitral procedure; they may also submit the arbitral procedure to a procedural law of their choice. 2. If the parties have not determined the procedure, the Arbitral Tribunal shall determine it to the extent necessary, either directly or by reference to a statute or rules of arbitration. 3. Regardless of the procedure chosen, the Arbitral Tribunal shall ensure equal treatment of the parties and the right of both parties to be heard in adversarial proceedings.')

14
See e.g. W.L. Craig, W.W. Park & J. Paulsson, International Chamber of Commerce Arbitration, 3d ed. (Oceana/ICC Publishing, 2000); Y. Derains & E.A. Schwartz, A Guide to the New ICC Rules of Arbitration (Kluwer Law International, 1999).

15
See the chapter on Canada by M. Lalonde in International Handbook on Commercial Arbitration, vol. I.

16
<www.swissarbitration.ch>

17
<www.wk.or.at/arbitration/engl/arbrules.htm>

18
W.L. Craig, W.W. Park & J.Paulsson, supra note 14, § 16.03.

19
Münchener Kommentar zur Zivilprozeßordnung, § 1037, para. 3.

20
Bundesgerichtshof, Official Reports (BGHZ) 104, 178, 181.

21
See e.g. Bundesgerichtshof, Official Reports (BGHZ) 98, 256, 258; 133, 184, 187.

22
Bundesgerichtshof, WM 1986, 461, 463.

23
See e.g. Bundesgerichtshof, Official Reports (BGHZ) 130, 259, 267ff.

24
e.g. <www.bger.ch>; <www.courdecassation.fr>.

25
Published in May 2004 and available at <www.ibanet.org/images/downloads/guidelines%20text.pdf>.

26
Published in June 1999 and available at <www.ibanet.org/images/downloads/IBA%20rules%20on %20the%20taking%20of%20Evidence.pdf>.

27
Münchener Kommentar zur Zivilprozeßordnung, § 1036, para. 15.

28
See e.g. § 1035(3) of the German Code of Civil Procedure; Art. 11(3)(a) of the UNCITRAL Model Law.

29
See § 1036(1) of the German Code of Civil Procedure; Art. 12(1) of the UNCITRAL Model Law.

30
See e.g. Bundesgerichtshof, Official Reports (BGHZ) 141, 90, 92f., concerning § 1032 of the former version of the German Code of Civil Procedure.

31
<www.ibanet.org/images/downloads/guidelines%20text.pdf>

32
cf. Art. 7(2) of the ICC Rules of Arbitration: 'Before appointment or confirmation, a prospective rbitrator shall sign a statement of independence and disclose in writing to the Secretariat any facts or circumstances which might be of such a nature as to call into question the arbitrator's independence in the eyes of the parties. . . .'

33
See e.g. Section 32.1 of the DIS Arbitration Rules: 'At every stage of the proceedings, the arbitral tribunal should seek to encourage an amicable settlement of the dispute or of individual issues in dispute.'

34
cf. M. Collins, 'Do International Arbitration Tribunals have any Obligation to Encourage Settlement of the Disputes Before Them?' (2003) 19 Arbitration International 333.

35
<www.ibanet.org/images/downloads/Background%20Information.pdf>

36
e.g. Article 15(1) of the ICC Rules of Arbitration; Art. 15 of the Swiss Rules of International Arbitration.

37
On Articles 3 and 9 see H. RaeschkeKessler, 'The Production of Documents in International Arbitration - a Commentary on Art. 3 of the New IBARules of Evidence' in Law of International Business and Dispute Settlement in the 21st Century, Liber Amicorum KarlHeinz Böckstiegel (Carl Heymanns, 2001) 641; (2002) 18 Arbitration International 411.

38
See e.g. Art. 27 of the UNCITRAL Model Law.

39
cf. M. Wirth, 'Ihr Zeuge, Herr Rechtsanwalt! Weshalb CivilLawSchiedsrichter CommonLawVerfahrensrecht anwenden' SchiedsVZ 2003, 9.