To my mind, arbitration is viewed by lawyers with a whole multitude of negative feelings, but paradoxically, these all combine to produce a positive result.

For the vast majority of lawyers arbitration is not a good solution.

However they cannot find a better one.

In "The Jugurthine War", Sallust immortalised a dispute. The adversaries were Carthage, the rulers of the major part of North Africa, and Cyrene, its rich and powerful rival.

The dispute concerned a boundary. Between the two cities stretched a featureless, sandy plain, with no river or mountain that could serve as a boundary. This was the cause of a long and cruel war between the two countries. Each army and fleet beat each other and put it to flight; both enemies were totally exhausted.

This dispute incited the parties to conclude what might be called an arbitration agreement. Taking advantage of a truce, they drew up an agreement in the following terms: at an appointed time, the representatives of each city would leave their respective cities and the point where they met would be recognized as the boundary between the two nations.

Carthage appointed two brothers, the Philenes, as "lawyers" who made great haste. The Cyreneans moved more slowly and when they saw their protagonists getting ahead of them, they accused the Carthaginians of having set off from their city before the appointed time. Accordingly the award which should have come into effect automatically could not be rendered.

The Carthaginians then asked for other conditions to be laid down, provided they were equitable. The people of Cyrene offered them a choice: either the Philene brothers could be buried alive at the place where they wished their countries' boundaries to be, or Cyrene's representatives could advance to their chosen place, on the same terms.

The agreement was approved, the Philene brothers sacrificed their lives for their country and the award was imposed when the "lawyers" were buried alive. The Carthaginians erected altars to them on the spot and awarded them other honours in the city.

Lawyers are well aware that no dispute, no process and no arbitration is a good solution. In every case there are detrimental consequences, even for the party that wins the case. In every case there are Philene brothers who have to be sacrificed.

Yet, viewed from a global perspective, it has to be admitted that arbitration is the least bad method of settling disputes and that, all things considered, it is preferable to sacrifice two people, however painful this may be, rather than continue a war in which thousands of soldiers will be killed or badly injured.

Why is arbitration the least bad outcome of an international conflict? Basically because there is no international trial procedure for private law cases. When the parties to a dispute are of different nationalities, arbitration is the only method whereby the dispute can be settled whilst placing the two parties on an equal footing. And lawyers are well aware that the best solution of a dispute is one which ensures that the parties' right to defend their cases are respected as strictly as possible.

This is not to say that a foreign judge is not impartial. The fact remains however, that a judge with the same nationality as one of the parties obviously cannot put the other on an equal footing. Because of the facility of access resulting from factors such as geographical proximity and linguistic identity, similar mentality and a common legal training, a party is much closer to a judge from his own country than to a foreign judge. It is of little help to say that the lawyers are there to be the parties' spokesmen and to re-establish that equality. This is true. But all lawyers know that when a file is referred to them, it already contains the factors determining the outcome of the case. A party engaging in a relationship which becomes conflictual will [Page13:] prepare his evidence in accordance with his own tradition. He is at particular advantage if the evidence this prepared and his reactions in the face of difficulties are the same as those the judge hearing the case is accustomed to seeing.

One might argue that, under these circumstances, it would be preferable for a party to use a contractual method for ensuring that jurisdiction is attributed to a judge of his own nationality, so as to take maximum advantage of this affinity. However, it must be borne in mind that often the other party will be opposed to such an attribution of juristiction and that without resort to the solution of international arbitration, one would run the risk of reaching an impasse. In addition, it is far from obvious that a decision rendered by one country's national court can be easily enforced on the other. Paradoxically, through the plan of international conventions, in many countries it is infinitely easier to enforce an arbitral award than a foreign judgement.

For fans of court jurisdiction, one might also envisage jurisdiction being attributed to a judge from a third country. This poses many problems. Firstly, it is not certain that a judge from a third country can declare that he has jurisdiction to judge a dispute that has no connection at all with his jurisdiction. There are also difficulties in enforcing the judgement. And above all, in every country judges are obliged to follow a number of binding rules that arbitrators are exempt from. For example, a judge may apply a foreign law, but only if his own country's rules of private international law authorise this. The arbitrator's freedom is such that he may even be dispensed from applying the rules of private international law at the place of arbitration. In the same way, one cannot expect a national judge not to comply with his own procedural law. Arbitral procedure, on the other hand, can be organised in any way one wishes. Often national judges are bound by strict rules, by precise traditions, for example with regard to the choice of experts: yet in an international arbitration it is often advisable to apply to experts who are better known at international level, who are not necessarily experts on a particular court list.

This is why it seems clear that arbitration, whilst being a bad solution - since it implies the existence of a dispute that could not be resolved amicable - is the least bad of all possible solutions.

Fear of the Unknown

II. The second feeling that many lawyers have towards international arbitration is a feeling of fear.

Fear due, first and foremost, to the normal reservations felt by any lawyer when he quits the home ground of his own legal system. Even in the context of his national law, that he has thoroughly mastered and practices every day - sometimes for many years - the lawyer always has his ear to the ground: he is never immune from the content of a page of the Official Journal that he has accidently failed to read, or from a change in case law due to a court decision that he has not even had the chance to consult, because, for example, it has not yet been published in the usual precedent books.

As soon as one leaves one's own law, the hesitation becomes even greater; one knows how to interpret a provision of one's own legislation but how can one be sure that one has clearly understood the real meaning of a law, a regulation, a custom or a foreign court decision?

This feeling is exacerbated when one enters the international field; in addition to the difficulty of applying a foreign law, there is often the problem of knowing which particular foreign law should be referred to. The problem persists even when it is a question of invoking one's own national law: this law is going to be applied by foreigners and there is the danger that their interpretation of a national provision may not be exactly the same as a local court would give.

However, such difficulties are not peculiar to arbitration. They are also encountered by everyone who has been involved in drafting international contracts, in making investments abroad, etc. More and more lawyers are becoming accustomed to being involved in such international transactions. As specialists, they know how far they can go, how far they need to involved their correspondents from other countries, what rules of the game are generally applicable, etc. There is no doubt that provided he has a sense of caution - and good sense - any lawyer can easily adapt to the international field.

But even lawyers who are used to working in the field of international contracts are assailed by a feeling of [Page14:] fear when they are faced by an international arbitration for the first time.

This fear is not merely due to the fact that they have never carried out this type of procedure before every lawyer is used to following new procedures and therefore knows how to adapt to the realities of the new situation.

The fear derives from the vision of the world of arbitration as perceived from the outside, a world which can give the impression that it is a closed circle. For many, arbitration is the realm of "numerous clauses", of the circle of initiates, of a select club, of co-option, of Sybilline science - as in the ancient Roman procedure - which enabled you to find out the magic formula that has to be used if yo uwant to have a chance of winning the case.

The origin of this feeling derives from a number of truths about international arbitration : sometimes international arbitration bodies have a closed list of arbitrators, clubs of specialists who co-opt one another; the confidentiality of arbitrations which sometimes results in secrecy about the operating methods of the bodies that administer them, all reasons which can make a stranger to these circles think that gaining entrance into international arbitration without following the arcane mysteries of the esoteric initiation rites would be culpably foolhardy.

In fact, from the very first contact with international arbitration, the magic spell is broken and you find that this institution contains nothing mysterious, abstruse or secret.

No abstruse science inaccessible to the uninitiated: the reading of a set of arbitration rules, an international convention, or even if he must, a book on the subject, suffice to enable any lawyer to conduct an arbitration in excellent conditions. All things considered, it is more difficult to conduct a case before a domestic court with precise and complicated procedural rules than to conduct an arbitration from start to finish using the procedural freedom inherent in this method of settling disputes.

As regards the international nature of arbitration, any lawyer who advises a party on his international business is perfectly capable of defending him before an arbitral tribunal: it is much easier to plead a case before an arbitral tribunal than to cope with the numerous problems posed by the drafting of an international contract.

For this reason, there is only one danger for the lawyer facing his first arbitration: that of falling prey to the temptation of leading other people to believe that he is now a member of a tiny circle of the chosen to whom, of necessity, recourse must be had if you want your case to be well defended...

Apprehensions in the Face of Ill-Drafted Arbitration Clauses

III. Lawyers also have a certain apprehension in the face of arbitration.

In fact, contracts are often prepared without assistance from a lawyer. When they only contain commercial clauses, there may be problems of interpretation, for individuals who are not professionals accustomed to drafting documents will not necessarily have the gift of being able to draft a contract clearly foreseeing the way in which it may be subsequently interpreted.

But when non-lawyers take to drafting arbitration clauses, the result is generally catastrophic. Not only does the clause often not even come into play, but what is more, its very existence blocks access to the courts which could normally be called to intervene in the case.

How many times have we come across arbitration clauses which refer to a non-existent body (for example, the Geneva International Chamber of Commerce, whereas there is only one International Chamber of Commerce and its headquarters are in Paris) which attribute concomitant jurisdiction to an arbitral tribunal and an ordinary court without providing which is to take priority, which seem to give the arbitral award the force of a mere recommendation of conciliation, or which are manifestly incomplete (a typical example being the clause attributing jurisdiction to the arbitral tribunal for everything connected to its performance and interpretation of the contract, but which excludes the contract from arbitration if it turns out to be null and void)?

When clauses of this kind come into lawyers' hands, they give rise to such problems that the most difficult arbitrations are generally those where one does not know whether or not the arbitration clause will come into play.

Another ground for apprehension is the fact that even [Page15:] when the arbitration clause is drafted by a lawyer, a number of choices have to be made, which are often delicate and fraught with consequence for the future of the contractual relationship.

Naturally, the first choice is between institutional arbitration and ad hoc arbitration. Anybody's natural inclination would be to tend to opt for an arbitration specially organised for a given case. Is there a better way of settling a dispute than placing its solution in the hands of someone who has the confidence of all parties? However, in nearly every case, one comes up against the difficulty of choosing that person and, especially, the impossibility of resolving later incidents affecting the arbitration itself. What is to happen if the arbitrators thus appointed have to replaced for one reason or another; how to come to an arrangement with the arbitrators on the amount of their fees; what is to be done to avoid interference by the courts once the slightest problem arises between the parties and the arbitral tribunal, etc. Drafting an ad hoc arbitration clause is particularly difficult, since provision has to be mae to cover any problems that may arise during the arbitration. The task of the person drafting the clause is lightened if he refers to the Rules of Arbitration of the United Nations Commission on International Trade Law; but, in such a case, he also has to specify which authority is to be responsible for appointing the arbitrators and taking decisions if the arbitrators are challenged.

All such difficulties roll away if one decides to have recourse to institutional arbitration, since the arbitration administration centres will then have the task of coping with resolving all the incidents in the course of the arbitration. But here too, a party may well ask his lawyer to include a national arbitration centre, which there are in many countries; quite naturally, the other party will be opposed to this proposal and one will usually end up with one of the few international arbitration centres: the ICC International Court of Arbitration in the case of international commercial arbitrations; ICSID (International Centre for the Settlement of Investment Disputes) under the aegis of the World Bank, in the case of arbitrations between states and nationals of other states relating to investments. Such centres guarantee that the parties will all be placed on an equal footing by avoiding giving one party the advantage of pleading before arbitrators of his own nationality.

Often, although logically resort to such centres would seem practical, a party has already had dealings with them, and as I pointed out at the beginning of this article, arbitration is a bad solution : it implies a dispute and nobody - unless he is mentally disturbed - is happy in litigation. Accordingly the party in question will be opposed to an arbitration clause attributing jurisdiction to the institution that settled the earlier dispute, since he will still have bad memories about it. The lawyer's role will be to convince the party that even, if that solution is bad, there is no other solution that would be better.

Resort to an arbitration institution facilitates the drafting of the arbitration clause, since it is sufficient to adopt the model clause proposed by the centre. However, there are still important decisions to be taken by the lawyer: the language of the arbitration, the place of arbitration, the law applicable to the merits of the case, the law applicable to the procedure, the possibility of having an arbitration based on the principles of equity, etc. And here the feeling of apprehension is justified; sometimes a non-lawyer drafting the contract uses the arbitration clause suggested by the centre but, without reference to the lawyer, includes choices which may turn out to be detrimental later on: for example, without consulting their lawyers, the negotiators of the contract may decide that the arbitration should be held in a place that it is easy for all the parties to get to by air, without asking whether subsequently an arbitral award rendered in that country will be able to be easily enforced in other countries.

The fear of finding arbitration clauses drafted without resort to lawyers is all the more justified the more complex the dispute becomes. Let us take, for example, the case of ICC arbitration : the person drafting the contract often has to bear in mind not only the ICC Rules of Conciliation and Arbitration, but also in many cases, the Guide to Multiparty Arbitration, the Rules for Technical Expertise, the Rules for a Pre-arbitral Referee Procedure, etc. These documents enable many problems to be resolved and provide the arbitration with a considerable amount of flexibility, but it is clear that they prevent the drafting of an arbitration clause at a moment's notice and above all, they make the clause extremely dangerous if it is not drafted by a lawyer.

Moreover, it is essential to bear in mind the limits of arbitration. For example, it will never enable the joinder of third party plaintiffs or defendants, unless the same arbitration clause is binding on all the parties involved, which is often impossible.

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Composition of the Arbitral Tribunal

IV. There is also a feeling of fear when it is a question not merely of arbitration in the abstract, but of an actual arbitration.

In the first place, with regard to the appointments of arbitrators which have to be made, except in the case of an ad hoc arbitration where the parties have agreed who the arbitrators are to be.

Fear of the arbitrators who may be appointed or proposed by the parties: will one of them succumb to the temptation of appointing not an independent arbitrator, but instead a sort of super attorney who will thus upset the balance of the arbitration? This fear vanishes however when one realises that, in the workings of arbitration, if one of the arbitrators is not independent this is of no advantage to the party who nominated him: once the chairman of an arbitral tribunal notes the lack of impartiality, he will take no account of the points of view of this arbitrator who hence becomes marginalised.

Next, and above all, fear with regard to the appointment of a sole arbitrator of the chairman of the arbitral tribunal. He it is who has a dominant role in the settlement of the dispute. Who will be appointed? Obviously, he must be a lawyer. In no circumstances should the conduct of an arbitration be entrusted to a non-lawyer, even a specialist in the problem that is at the heart of the arbitration. One can ask an expert to settle a practical point that two parties mutually agree to submit to him. One cannot ask him to direct proceedings leading to the decision. Indeed, in order to conduct arbitration procedure, he also needs technical knowledge acquired through legal studies. Experience has proved that only a lawyer is capable of correctly chairing proceedings, even when these are non-formal proceedings like the arbitral procedure.

But, it is not enough for him to be a lawyer, the Chairman of the arbitral tribunal also has to be a good arbitrator, a gift which not everybody has. Some of the set-backs in arbitration derive from people appointed as arbitrator for the first time proving to be unsuited to the task. They will not be appointed again, but the parties who had dealings with them will bitterly regret it all their lives. Knowledge of the law, the necessary authority for conducting the discussions, the diplomacy needed for resolving incidents, the sense of fairness, just reasoning and mastery of the languages in which the arbitration takes place are a difficult mixture to find.

A further feeling of fear derives from the possibility of the arbitrator becoming arbitrary. And he is arbitrary whenever, although he has to settle the dispute in law, he drifts towards his personal and sometimes debatable concept of equity. Not to speak of the current fashion of referring to the "lex mercatoria", not as the body of knowledge that usages, customs and arbitral or court decisions have contributed to international trade law, but as a complete legal system enabling any dispute to be resolved. The most absolute arbitrariness reigns when the arbitrator himself makes the "lex mercatoria" when he renders his award. Certain arbitrators believe that they are vested not only with the power to decide the case, but also with legislative power, and conduct the case in an arbitrary fashion referring to a non-existent "lex mercatoria" which enables them to reach the most aberrant solutions. There is nothing worse for international trade than legal uncertainty. And this derives from the impossibility of forecasting the precise and determined set of legal rules, known in advance, which will be applicable to a given dispute.

The office of arbitrator is as imposing as that of a judge. Any lawyer holds arbitrators in respect and esteem. Sometimes at meetings of arbitration specialists one shudders at the sight of certain candidates impelled by the hope of being appointed arbitrators one day. Thank heavens they generally retire without ever having seen their dreams fulfilled.

Arbitration Costs

v. Is there a feeling of reservation in the face of the costs of arbitration?

As most countries have eliminated court fees, it would seem that if one were to compare free state dispute resolution with arbitration which has to be paid for, the latter would be bound to be too expensive.

The reply, however, is much more finely shaded. Anybody, any lawyer involved in the world of business, is well aware that cost in monetary terms is of less account than value for money. Time is money. A good dispute settlement procedure pays for itself. If the arbitration is well organised, the arbitrators' fees, far from being an additional cost, are a source of savings.

And this leads us to turn to the problem of the amount of these fees, a question that lawyers are particularly sensitive about. Sensitive, because they know that [Page17:] certain arbitrators are law professors or judges but that many are also practicing lawyers. Yet fees that may be extremely attractive to a professor or a judge who does not have his firm's general overheads to pay for, may be totally discouraging for a practicing lawyer who receives a much lower fee than he would had received if he had devoted the same efforts as an attorney and not as an arbitrator. There are some very good arbitrators who are practicing lawyers; it is essential to ensure that the scale of fees laid down for other professions does not result in the best lawyers distancing themselves from arbitral office.

There is also the arbitration centre's administratitive costs. In this field too it is impossible to make comments in the abstract. A comparison of scales is meaningless. Of the other hand, it is essential to analyse whether the sums requested in the form of registration fees or administrative dues are commensurate with a speedy and effective intervention. Lawyers provide services. They therefore know that a centre is entitles to adequate remuneration for the services it provides. The fee is never expensive if it is commensurate with a service rendered in satisfactory conditions.

Discouraging Pitfalls

VI. the last feeling that I find lawyers have, is one of discouragement in the face of arbitration.

Discouragement, firstly, because when people sign an arbitration clause, they do not know whether any subsequent dispute will be large or small. Yet international arbitration as ait stands is not suitable for the settlement of minor disputes. It represents formalities, expenditure and procedures that are dissuasive for disputes that do not involve a minimum amount.

This is a situation which is a denial of justice and we need to be aware of this. Until a formula is found for all ddisputes, both large and small, to be settled by arbitration in accordance with the same arbitration clause, something important will be missing from arbitration.

A possible solution might be to set up permanent arbitral tribunals, within the arbitration institutions, which could settle minor disputes that arise rapidly and inexpensively.

In any case, the present unsuitability of international commercial arbitration to minor disputes makes a certain number of international commercial relationships fall into a "non-law" zone.

The feeling is due, secondly, to the difficulty of enforcing certain non-arbitrable decisions.

Serious arbitration bodies refuse to draw up blacklists featuring the firms which fail to carry out the arbitral awards rendered by them. It is fortunate that there has been no proscription of people bringing appeals against an arbitral award before the courts. The possibility of having aspects of the arbitration, such as its correct procedure and its enforcement, reviewed is an essential guarantee of justice. A party who exercises this right cannot be sanctioned directly or indirectly.

But at the same time it should be noted that at present the number of cases calling into question the validity of an arbitration of the possibility of enforcing it are on the increase. And these procedures are becoming more and more ingenious and difficult, even if national legislations are not in favour of it.

This trend goes back to ancient times.

Since I started my article with a Roman historian, let me finish with a Greek historian. Herodotus recounts the dispute between the inhabitants of Sparta and Argos. Rather than adopting the usual method of settling disputes, in other words war, they agreed that a battle should take place between 300 men from each side. The award would be in favour of the party which was the winner at sunset.

The two opposing armies withdrew from the scene to avoid partisans who feared that their side was on the point of being beaten from succumbing to the temptation of coming to their assistance.

When night fell after a hard day's combat, only three men remained out of 600 two from Argos and one Spartan. The two citizens if Argos returned home to declare that they were the winners. The Spartan remained on the spot, took the weapons from his opponents' corpses and did not quit the field.

The next day, the two armies arrived on the scent to discover the outcome. One side claimed that they had won because they had more survivors, the other proclaimed themselves the victors, because their sole warrior had remained master of the field. This argument led to a battle between the two armies where all the advantage of the arbitration agreement was lost since the war was hard and fierce.

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An arbitration that degenerates into a judicial battle is also an experience which is encountered today.

Parties' legal advisors are ingenious at finding grounds for challenging an arbitration procedure that is badly presented or an arbitration award that goes against them. How many claims for setting aside, challenges of arbitrators, appeals against and challenges of decisions are solely doe to one party's desire to delay an arbitral award or not to carry out an unfavourable award.

One intends to avoid interventions by the courts by using arbitration, but one ends up drowned in procedure. This can go to lengths that can have tragic-comic results; for example in a case where the place of arbitration is badly chosen and an ordinary court in the place where the arbitral tribynal is meeting prohibits the tribunal from meeting until after the court proceedings have been completed, leaving the arbitration blocked and resort to the ordinary courts unavailable because of the arbitration clause.

Through Arbitration the Worst is Avoided

VII. It is not possible to restrict ourselves to saying that lawyers view arbitration with negative feelings; everything in this life is relative.

It is therefore important to know if these feelings are more or less negative than their feelings towards the other methods of resolving disputes.

And from this point of view, there is only one single method that lawyers consider better than arbitration: conciliation. Any amicable settlement of a dispute is preferable to a conflictual settlement.

Legal practicioners in Spain claim that the worst of all curses is the one that consists of telling someone:

"May you go to law and win all your cases".

To be involved in litigation is the worst thing that can happen to you, but to win your case is even more catastrophic, for afterwards you have to enforce the decisions.

However, when conciliation is not possible, arbitration is the method that lawyers consider to be the least inadvisable.

However much certain people imprecate against arbitration, supporting their assertions by one particular arbitral procedure or another which ended badly and comparing it to a court case which progressed idyllically, the fact remains that the scales will always tip in favour of arbitration. Certainly a good court case is better than a bad arbitration. But a good arbitration is preferable to a good court case and a bad arbitration is also preferable to a bad court case.

One could spend all day debating the respective merits of institutional and ad hoc arbitration. One could discuss at length the advantages of one particular town or another as the place of arbitatoin. One could build up learned theories as to the scope of the waiver of rights of recourse against the enforcement of awards. But the vast majority of lawyers are well award that, in international commercial relationships, if there is a conflict, the existence of an arbitration clause - often coupled with reference to an arbitration institution - enables many difficulties to be awarded.

The proof of this is that the International Union of Lawyers founded in 1927 and representing lawyers from all over the world, since it groups the Bars of a hundred or so countries and lawyers who are specialists in every field, from all countries and of all languages (6 official languages which the IUL), has set up an International Commission on Arbitratoin with the aim of familiarizing lawyers from all parts of the world with arbitration, particularly in the international field.

Lawyers everywhere know that by fostering recourse to arbitration in business deals between nations they are smoothing the path to justice worldwide.

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