This is a time of major upheaval. The collapse of the communist system, particularly in Europe, not only marks the disappearance of a misguided ideology, but has also revealed unsuspected backwardness in the law, economy and finances of countries which lived under that system. For the moment, not all the changes resulting from the Gulf War and the crisis in Yugoslavia have come to light: they are likely to entail some important strategic developments. Meanwhile the commercial and financial expansion of certain Asian countries is sowing the seeds of serious problems for the industrialised nations' economies, whilst elsewhere the distressing misery of hundreds of millions of human beings forebodes the worst. Accordingly, at the end of the present millenium, society is suffering a serious increase in the risks facing both governments and companies.

At the same time, in this troubled world, a number of basic trends have developed that have already started to change the lives of certain countries. Science is a universal factor: in a wide variety of domains, many types of advanced technology are essentially transnational. Communications, culture, information and television are also becoming international. The major financial and technical projects have nearly all taken on a multinational dimension. Every development contract involves suppliers, bankers, insurers and engineers as well as buyers and customers from many countries. No developing country can avoid the gradual internationalisation of financial commercial, economic, and technical matters. The legislation that will dominate the next century will be based on economic solidarity between nations, as well as the extreme competitiveness of their instruments of production and services.

The more the world shrinks, the more it leaves extra leeway for competition. In bygone days countries could protect themselves behind their borders; today this is no longer possible. Indeed, it was the removal of the obstacles to information that hastened the collapse of the communist ideology, leading this social system to break up once its inhabitants were able to compare their living standards with those of other populations. We are therefore in a difficult period when the international environment, bounded on all sides by uncertainties and insecurity, will witness the continuation of extremely fierce inter-company competition, often coupled with inter-state competition too, as states will find themselves compelled to back up their own country's national activities, because economic and commercial failure always leads to political and cultural consequences.

In such a difficult situation, it is extremely important to consider what conditions are necessary for business relationships whether financial, economic, commercial or technological, to become established and flourish. Indeed, this is one of the prerequisites for a nation's development and perhaps for the development of humankind as a whole. It is also a condition for peace between nations.

In this connection, the world seems to be in quite a curious situation. Never has business been so difficult, so competitive and so risky. Never have managers felt so anxious about what steps they should take, even in the short term. And, at the same time, never has there been so great an increase in international trade. Despite the disastrous events of 1991 to 1993, one of the features of world trade is that it appears to be growing more quickly and strongly than the increase in production of various countries. This means that, overall, countries are producing substantial amounts, but they are trading even more. A fundamental factor of the development of our societies is therefore the need to trade - to trade not only in goods and services, but also in human and technological skills, which can often be very advanced and very expensive. No longer can any country insulate itself from this development, without running the risk of being crossed off the map of the future.

I - The legal framework of international trade

In every sector of activity, an important and ongoing trend of the modern world is the immense power of competition. The search for investments, the expense and power of science and innovation, and the prerequisite of profitability will weigh on all companies that aspire to develop. In this new-born global economy, trade will make it essential to view markets and outlets for technology, raw materials, services and human resources in an overall context. Accordingly, all the large financial, commercial and even cultural enterprises will have to pay close attention to the conditions of the international market.

This situation, which has developed since the last World War, and especially over the past twenty years or so, clearly brings difficulties in its wake. Indeed, when private, public or semi­ public companies conclude contracts for major and expensive projects, whether medium or long-term, they seek not only profit, but also security - in other words the certainty that the contracts they conclude will be clearly and faithfully performed and that, if they are not completed, it will be possible to obtain compensation or indemnification. Accordingly, when all such major projects are being negotiated, lawyers have to pay close attention to the enforcement of contracts. The situation is similar in the domestic law context, but less worrying. In classic national systems there is usually a system of legislation and courts: when an individual or a company defaults in its obligations, established procedures enable it to be constrained to carry them out, to pay compensation and reestablish the respective rights. This does not apply on an international scale.

In fact, it has to be admitted that international trade is developing in a vast and worrying legal vacuum. There is no court and no international commercial procedure, nor is there even any international commercial law of general application, apart from a few conventions. Moreover, these have not been ratified by every country, and only relate to certain particular sectors of the economy (such as sales, transport, trademarks and patents). Even within the European Communities it has not yet been possible to establish the status of a p an­ European commercial company. Hence, when firms have to conclude contracts abroad or with foreign companies, they have no specific coherent set of legal rules available to them, even with regard to the conditions of their own existence, capacity and transparency.

This situation is difficult but interesting, and very stimulating for the legal professions: an environment in which trade is developing strongly and rapidly in every domain and which quite naturally, pragmatically and gradually is building up a system of regulations despite the fact that there is no appropriate law or court, or rather because of that very lack. Although disputes may arise between private parties - that is mainly between companies - they can be aggravated further when states are involved. Indeed, in today's world, many companies have government backing, or states themselves may conclude the contract with a view to national development. The drafting of international contracts thus often becomes a real battlefield over questions such as the legal regime applicable and the methods for settling difficulties in the event of future problems. Few such activities in the area of commercial negotiation escape the attention of the state, or even its intervention, particularly in countries where the economy is nationalised and where virtually every activity involves administrative backing. The international organisations, for their part, take an interest in the negotiations when they are providing the necessary funds or technical assistance.

When such contracts are improperly drafted, companies run the risk of having great difficulty in determining which court should have jurisdiction, which languages and foreign procedures should be applied and in ascertaining the law of the contract. True, one easy answer to this consists in referring to the law of a given country, for example that of the country where one particular company or bank has its registered off or that of the country where the technology was perfected, or again that of the place of performance of the contract. The contracting parties may also agree that a particular court is to have jurisdiction. However, such a solution is unlikely to suit companies or governments that fear that such legal clauses are drawn up and imposed by the party having the strongest position and may result in consequences that are unfavourable to their interests.

Generally, ignorance of national legal systems and, it must be said, a certain mistrust, a certain fear in the face of the unknown, lead companies to seek for solutions which avoid their having to plead their cases applying laws they are unfamiliar with, before courts whose composition, procedure and even sometimes whose ethical rules, they do not know. When they are asked for their opinion, the task of company lawyers, attorneys, legal counsel and professors is to contribute to foreseeing all the possibilities and forms of dispute as well as the methods of resolving such matters. They have to do this at the time the basic contracts are signed. They also have to take into consideration the fact that nowadays investment contracts consist of a number of sub-contracts, with a variety of disparate parties: engineering or maintenance firms, expert consultants and insurance firms, sub-contractors or various brokers. In preparing contracts, it is hence particularly essential to bear in mind the multi-party nature of procedures, in other words they have to study the interrelationship between the various contracts, and between the various parties involved depending on the type of project concerned. The contracts often take the form of sets of legal documents in the context of a single economic scheme. If the clauses are not harmonised in the course of the negotiations, the risk arises of there being a contradiction between arbitration rules – a further complication which will obviously not be auspicious to the settlement of any disputes that arise.

All major projects entail a whole series of contracts linked one to the other and sometimes involve a group of legal and technical documents. It is essential to study and draft these documents in such a way as to ensure that they provide adequate safeguards to parties from countries where the answers to problems in dispute may well differ significantly. Legal engineering of major international trade deals involves foreseeing events and problems likely to arise in the performance of contracts five, ten or twenty years in advance. This type of activity did not exist fifty years ago - it is a new and difficult activity. And it is this activity that has given rise to the amazing up surge in international commercial arbitration. Indeed, the sums at stake in certain international disputes can amount to tens or even hundreds of millions of dollars. It is unlikely that international funding requirements will diminish in the short term: one only need observe the extent of the investments that are required in the countries of Central and Eastern Europe.

The legal advisor's task is not limited to the drafting of the contract. It continues throughout the whole duration of the contract, and relates to its interpretation and performance either on consultation by companies or sometimes on the lawyer's own initiative. Changes in circumstances - that can often be very difficult - have to be accompanied by constant legal supervision and by attentive follow-up procedures. The task of the attorney will be to foresee imaginatively and pragmatically any difficulties that might lead to disputes, to prepare appropriate position statements and arguments ready for use with a view to conciliation or arbitration. Gradually the lawyer has become a sort of "company doctor", responsible firstly for preventing crises that may jeopardise the company's health, or even its existence, and then with curing them by appropriate treatment.

II - The expansion of arbitration

Pursuant to the express will of the signatories of a contract, arbitration enables the settlement of disputes resulting from the interpretation and performance of contracts to be removed from the domain of legislations, regulations or courts of a narrowly national character. Such disputes are instead entrusted to individuals chosen on the basis of their independence and their skill, with the task of drawing up an award with res judicata authority over the parties concerned.

This facility was not constructed ready-made. It is the fruit of empiricism and necessity, for its expansion in the international community ensues from the impossibility of finding any alternative solution to the problems of major trade. Arbitration is a well known process in domestic law: indeed for some peoples, it existed even before the national courts began. At this level it does not pose any fundamental problems because it is rendered under the supervision of a competent judge, who is empowered by the state, and pursuant to procedural and substantive rules laid down by the law in force. Although the courts generally apply the principle that if there is an arbitration clause in a contract, this will exclude court jurisdiction, so that the court accordingly has to declare it has no jurisdiction to hear the case, the backing of the national court may well be essential once the award is rendered. Only the national court is vested with the power to prescribe compulsory enforcement measures in accordance with its national law over citizens and companies, whether such measures are provisional in scope or whether they involve enforcement of an arbitral award.

The main characteristic of international arbitration is precisely that its users cannot and do not wish to be subject to a restrictive national regime, whether as to procedure, as to the law applicable to the merits of the case, or even as to which court has jurisdiction. They rely on the answer provided by commercial practice, an answer which is both simple and complex at the same time, for it makes everything depend on the will of the parties. Although the principle is simple, its application is often complicated. From the outset of negotiations the contracting parties will have to seek agreement on the legal regime applicable to their mutual relationship. This will naturally include the applicable law - which may for example be that of a third state - or indeed another legal rule. They will also, where necessary, specify the procedure applicable to any disputes that may arise, will choose the place of arbitration (often an important decision not only for the procedure, but also for the law and jurisdiction) and will agree on the method of selecting the arbitrators. Such stipulations are important for the fundamental reason that through arbitration a "judicial" decision is obtained: the arbitral settlement is not a mediation, a compromise or an arrangement, it is an award which has res judicata authority between the parties and which may therefore be enforced compulsorily.

Lawyers preparing contracts will accordingly also have to consider the practical conditions for the implementation of any arbitrations, so that they are able to give parties who consult them the wisest possible recommendation in particular as regards which rules to select and which arbitration centre to use, if necessary, depending on the subject-matter of the contract concerned. For there are many types of arbitration, dealing with marine affairs or technology, construction, patents, intellectual or industrial property, major construction projects, etc. A well drafted arbitration clause is hence a precondition to the smooth-running of international contracts.

Whilst they are aware that resort to arbitral procedures is expensive, companies consider they have a variety of advantages : a better solution to technical problems; the means for a more speedy procedure; confidentiality and also the benefit provided by international treaties which make arbitral awards enforceable whereas court decisions are only enforceable provided there are bilateral diplomatic conventions in force. When a dispute arises relating to an international arbitral award or to its enforcement, the court's power is much more restricted than it is when domestic arbitration is involved. Indeed, under the New York Convention state courts have only to be satisfied that there exists an arbitration agreement, that the arbitral tribunal was properly constituted and was independent, applied objectively a procedure that ensured a fair hearing to all the parties, and complied with the principles of internationally accepted public policy.

In arbitration practice, two different systems are used. Ad hoc arbitration is a type of arbitration which each contract provides for specifically. By virtue of such a clause, the parties undertake to entrust the settlement of any disputes to an arbitral tribunal, choose the place of arbitration, and determine the rules of constitution of the tribunal and of its operation. This method is fa widespread and useful in that it enables a legal solution to be given to everyday disputes. It is facilitated by the adoption of the model law proposed by the United Nations (UNCITRAL). But sometimes, in the case of more weighty and difficult disputes, it leaves room for dangerous uncertainties, particularly at the level of what procedure is applicable in the absence of precise stipulations (apart from diplomatic procedures, of course). Ad hoc arbitration is particularly under threat of losing its international character because in certain countries it may depend on the law and on the court of the place where the decision is rendered.

This consequence, as well as o t her considerations, have led to the drafting of rules which organise the administration of the arbitration in advance, in accordance with standard clauses laying down the lines to be followed for constituting the arbitral tribunal, with regard to the procedure, and sometimes for the drafting of the award. The parties only have to stipulate reference to the rules in question, as published. Generally, a set of rules of this kind is applied under the aegis of a centre whose function is to provide the arbitration with the independence necessary for the impartial and final settlement of the dispute. International trade needs procedures that whilst being infinitely adaptable and evolving can still be regulated objectively and stably, thus offering security as to means, if not as to outcome. The best known and the oldest of such rules (they date from 1923 and have been gradually improved over the years), are those of the International Chamber of Commerce, a Paris­based non-governmental international organisation, whose task is to respond to the needs of international trade.

The increase in the number of centres administering arbitrations is a trend in international commercial arbitration which does not facilitate the formulation of a concept of general policy in this area. Many institutions have followed the example of the International Chamber of Commerce, some institutions being set up for the needs of international trade and others designed for reasons of domestic policy which have extended their jurisdiction to international activities. There are some one hundred arbitration institutions, many of which are either inactive or devoted to domestic arbitration. The most important of them may be mentioned specifically. The London Court of International Arbitration currently administers sixty or so cases per annum involving companies from some thirty countries. The American Arbitration Association administered more than 60,000 cases in 1992, about 200 of which were international arbitrations. The Stockholm Chamber of Commerce receives approximately ten to twenty international arbitration cases per annum and the Vienna Arbitration Centre received sixty or so requests in 1992. As to the ICC International Court of Arbitration, it has received over 8,000 requests for arbitration in the seventy-years since its founding. The number of cases referred to certain other international arbitration institutions is insignificant.

The increase in the number of arbitration centres has been criticized on a variety of grounds: duplication of services, rivalry between institutions, the withholding of information and the threat of control by political authorities. In fa this is inevitable because the choice of the rules and of the tribunal can be freely determined by the parties. This situation results both from the very success of arbitration and from international cultural disparities. It is desirable for companies to be able to choose, by mutual agreement, which rules should be applied to any disputes that may arise between them and that each institution should be encouraged to operate in optimum conditions at the level of cost-effectiveness. Accordingly, competition is not unhealthy provided it leads to a better quality of awards, improvement in procedures and the promotion of the cultural concept of arbitration; to the contrary, in this field as in any other, it is invigorating.

Another characteristic of international commercial arbitration is its tendency towards regulation. Although at present there is no plan for the adoption of an international code of arbitration procedure, the Rules drafted by the International Chamber of Commerce have been used as a model. Improved on over the years - the latest edition being the 1988 edition - these Rules are still the most complete. The 1985 UNCITRAL model-law on international commercial arbitration has had a similar effect with regard to recent national legislations on arbitration. Paradoxically, the existence of a set of rules, provided they can be freely interpreted and applied by an institution with a permanent secretariat, affords the arbitration greater flexibility than contractual stipulations which the parties may not diverge from otherwise than by agreement. For example, ensuring objective independence of arbitrators results in reducing the number of challenges of arbitrators as well as the failure of such challenges (8 successes out of 73 claims from 1983 to 1989, 1 success out of 10 in 1991, 4 out of 16 in 1992 and 2 out of 14 in 1993 in ICC proceedings). Moreover, in general, among the clauses in a set of arbitration rules, it is essential to draw a distinction between those that are mandatory and the others that the parties are allowed to waive by mutual agreement, the general trend being to make international arbitration subject to rules that the arbitrators should have knowledge of.

The desire to achieve an enforceable award results in the policing and disciplining of international arbitration in that arbitral tribunals have to apply a certain number of procedural prescriptions which ensure that justice is well administered. Governments have come to learn that it is necessary to facilitate, back up and stimulate international trade dispute settlement systems. They have done so by means of diplomatic negotiations which started in the days of the Geneva Protocol on arbitration clauses (1923) and the Geneva Convention on the enforcement of foreign arbitral awards (1927). On the IC C's initiative this was particularly the case of the 1958 New York Convention, which, whilst facilitating the recognition and enforcement of foreign arbitral awards, aims to regulate the conditions under which such awards are rendered. This was likewise the aim of the 1961 Geneva Convention for all the European countries that have ratified it. The Washington Convention (ICSID) on the Settlement of Investment Disputes between States and Nationals of other States (1965); the Panama Inter-American Convention on International Commercial Arbitration (1975); the Amman Arab Convention on International Commercial Arbitration (1987); as well as UNCITRAL's work leading to the drafting of a model law (1985), have established this movement in favour of international arbitration. The aim of all such regulations, adopted by a considerable number of states, is to constitute a genuine body of law governing jurisdiction and procedure.

Another fact that should be noted is the increasing number of cases submitted to international arbitration. The statistics reveal that more cases have been submitted to the ICC International Court during the past ten years than were in the previous half century. These are cases involving many countries since about 90 states are represented each year. The disputes in question concern a wide variety of companies, whether totally private, semi-public or public. The amounts at stake vary from case to case, but the total is substantial. Today there is no doubt that all major companies with international business activities have already or will be involved in arbitration cases either before one or other of the institutions in this fi or through procedures organised on an ad hoc basis. International arbitration is hence an activity that is expanding.

The cases themselves bear witness to current trends in arbitration. The situation at the ICC International Court of Arbitration can be used to highlight the whole problem. First of all we have noted a constant increase in the complexity of the cases and the amounts at stake. Between 1980 and 1993 new cases involving more than one million dollars rose from 40% to 53.3% of cases; some cases relate to hundreds of millions of dollars, others exceed one billion. As at 31 December 1993, 764 cases were in progress, with the total overall amount at stake exceeding22 billion dollars. Moreover, it is quite noticeable that overall, classic arbitration cases relating to supply, sales or construction contracts now account for only about half the cases submitted to the ICC. Many cases of different types are now coming to the fore, in particular in the most dynamic economic sectors: the service industries, state of the art technologies, the law relating to culture, science and information. The breakdown of cases into the main economic sectors in 1993 was as follows - starting with the largest section: international trade, sale of goods, distributorship agreements), 42 .1 %; construction, 20.3%; finance, management, acquisition and mergers, 17.7%; agreements relating to licences, patents and transfers of technology, 12.1%; marketing and services, 7.8%. Some of these cases are among the most complex in the field of international arbitration and have the highest stakes. It is possible to extrapolate these trends, but account has to be taken of the fact that ad hoc arbitrations - whose exact number it is difficult to pinpoint - tend to be included among the classic type of contracts.

It should also be pointed out that there has been a very appreciable increase in the number of multi-party arbitrations. These types of dispute pose increasingly delicate and complex problems and will probably give rise to a considerable development in arbitration practices. Their administration will call for a great deal of care. In this field ad hoc arbitrations are not easy to operate and it is more effective to ensure that the various contractual clauses are drafted uniformly.

The worldwide spread of ICC arbitration is constantly increasing. In 1980 the parties represented in arbitrations came from some sixty countries; this number rose to 94 in 1993. The proportion of companies from Western Europe was of 60% in 1993 and we are now witnessing significant percentages of claimant or defendant companies from African or Asian countries, as well as government or public entities. Another trend should be noted: the increase of the role of the parties and their legal advisors in the choice of the language and place of arbitration, since from 1982 to 1993 the percentage of companies that chose the place of arbitration rose from 62.6% to 80%. Hence the role of the ICC International Court in this area has decreased considerably.

Arbitrations took place in 33 different countries in 1993, more than one third of them being developing countries, including several in central Europe. Today ICC arbitrations are in progress in a variety of states: India, Mexico, the Philippines, Malaysia and Singapore, with the assistance of arbitrators from widely differing countries such as Australia, Bahrain, Bulgaria, China, Hungary, Japan, Pakistan, Tunisia, Venezuela, etc. The fact remains that the choice of the place of arbitration is not neutral. It has a variety of consequences, depending on the country concerned, on the applicable procedure and law, and possibly on the extent of the supervision of the national courts over the procedure, the merits of the case and the enforcement of the arbitration, particularly if one of the parties is a state entity. Out of the 182 recognized states, more than half (96 states) have ratified the 1958 New York Convention on the recognition and enforcement of foreign arbitral awards.

Another characteristic in this area is the growth in the number of cases involving public authorities rather than only private affairs. Accordingly it has become difficult to speak of "international commercial arbitration". It is preferable to use the expression "arbitration in international commercial affairs" an expression which may cover the operations carried out under the direct aegis of governments or administrative authorities. Indeed, in many countries development projects are planned and negotiated under government control and any disputes that arise from them are very closely followed by the public authorities. These cases may also concern international organisations if they have supplied development aid in the form of gifts or loans. They sometimes implicate public credit, or even the authority of politicians. International arbitration is sometimes even a matter of public concern, via the press or in the course of political consultations. Indeed, as the outcome - sometimes unfortunate - of major development operations has an impact on employment, on the level of the economy and on national resources, the electors are bound to take an interest in it. A certain amount of tension has been noted in the administration of major arbitration cases deriving from this political impact.

The notion of international arbitration, defined by practice as appropriate for the exercise of trade between nations or companies of different nationalities, is now stabilised. However, it is clear that companies - often of different nationalities - while wanting this dispute settlement method to be genuinely international, impartial and objective at the political, commercial and cultural levels nonetheless do not want the awards to lose their res judicata character. Accordingly, one of the advantages of arbitration should be to leave the parties free to choose - if they so wish - the place of arbitration and the arbitration procedure, the determination of the applicable law and the appointment of arbitrators they have confidence in. They may also, by mutual agreement, either start off with a conciliation procedure, or appoint arbitrators to act as amiable compositeurs. In any case, arbitration can only succeed through the express agreement of the parties, for the case they have agreed to of their own free will and without constraint, and according to the stipulations of the contract binding them.

III – Setting up the arbitration

The source of arbitration and the justification for it spring from the autonomy of the will of the parties to an agreement. Its main feature is the deliberate selection of an individual or a tribunal whose task is to provide a legal and enforceable settlement of the dispute between the contracting parties. In this sense, it is different from national or official jurisdiction, which imposes ready-made courts as well as official and generally public, procedures on individuals and companies.

The arbitration agreement is binding on the signatory parties in accordance with the stipulations set out in it. This is particularly the case when the arbitral tribunal has to be constituted, in other words from the moment that the dispute arises and one of the parties no longer wishes to negotiate an amicable settlement. Difficulties may start to arise from this very moment, for example if the other party is in default, has no intention of carrying out the agreement or acts in bad fa Indeed, the appointment of a sole arbitrator may be delayed or even paralysed by this, as may be the constitution of the full tribunal. It is wise to forearm oneself against such a risk at the time the agreement, the clause or arrangement is concluded, in other words to make provision for an appointment procedure and authority that is independent of the parties. The same process will be used for the selection of the chairman of an arbitral tribunal, whose vote may in effect be a casting vote and hence dictate the solution of the dispute.

Unlike ad hoc arbitration, arbitration administered according to a published set of rules, provides solutions of general scope to such questions, and mere reference to these rules in the contract is all that is needed. Although specific details will vary depending on the particular set of rules concerned, the authority that appoints the arbitrator(s) is vested with the necessary power to set in motion the arbitration process from the moment the Request is submitted, starting with the constitution of the arbitral tribunal: appointment of a sole arbitrator, appointment or confirmation of the members of a tribunal, selection of a chairman, ensuring that the arbitrators are independent at the very moment they are chosen, with a view to avoiding subsequent challenges, and notification of each of these measures to the parties concerned with a view to complying with the principles of due process.

Concerning the number of arbitrators, the general practice and sometimes the applicable legal framework lean towards the choice of an odd number. This it appropriate for enabling an award to be voted on, subject to the particular case provided for in article 19 of the ICC Rules relating to the specific decision-making power of the chairman of the arbitral tribunal. In this area, the rules and practice of the ICC International Court of Arbitration may be used as a reference point. Under these rules, disputes are settled by a sole arbitrator or by three arbitrators. The choice of the number of arbitrators depends fi and foremost on the parties. Practice has shown that this choice is often made either when the arbitration agreement is drafted or again once the dispute has arisen. For example, in 1992 and 1993 parties agreed on the number of arbitrators in over 75% of new cases submitted to the Court. In the absence of agreement of the parties on this point, the Court determines the number of arbitrators, taking into account in particular the complexity of the dispute, the amounts at stake and the nationality and capacity of the parties. It also takes into account the cultural or the political environment of the case liable to give rise to difficulties in understanding. When the amount in dispute is low and the parties have agreed in advance to appoint three arbitrators, the secretariat takes care to draw the parties' attention to the financial consequences of constituting an arbitral tribunal. In 1993, 47% of arbitrations were submitted to a sole arbitrator.

As the ICC system upholds the principle of giving precedence to the parties' choice, the Court only intervenes in the appointment of arbitrators to fill in any gaps. However, in any case, it ensures that the arbitrators are independent of the parties. A distinction should be drawn between the choice of co-arbitrators and the choice of a sole arbitrator or the chairman of the arbitral tribunal. When three arbitrators are envisaged, each of the parties - in the Request for arbitration and in the Answer to it - nominates an arbitrator for confirmation by the Court. If a party fails to nominate an arbitrator, the Court will appoint him in its place and stead, and for this purpose, will ask the ICC National Committee (of which there are 60 in total) of the defaulting party's country of origin to submit a proposal, giving the Committee the necessary details regarding the characteristics of the dispute and the qualifications sought. Each of the ICC National Committees is in close touch with their country's legal community and is thus in a position to propose the most suitable and most available arbitrators, bearing in mind the specific features of each dispute. In most cases, the National Committee's proposal is followed. However, the Court is not obliged to accept it, nor to limit its choice to a citizen of one of the countries where a National Committee has been set up. Indeed, under its Rules, the Court is authorised to choose an arbitrator from a country where there is no National Committee, unless one of the parties objects. Naturally, the parties may agree on the choice of a sole arbitrator or the chairman of the arbitral tribunal, in which case the person proposed by them will be confirmed by the Court. They may also provide that the chairman of the arbitral tribunal will be chosen by the co-arbitrators. It will be the duty of the Court to confirm such individuals as arbitrators and check their independence.

The outcome of the arbitration will often depend on who is selected as chairman of the arbitral tribunal or as sole arbitrator. Accordingly, in an essentially pluridisciplinary and pluricultural context, the Court will endeavour to appoint an individual who can offer every guarantee of impartiality and is capable of establishing the appropriate balance and harmony within the arbitral tribunal.

The increase in the number of cases of multi­party arbitration complicates the nomination of the arbitrators still further. More than one in five disputes submitted to ICC arbitration involves at least three parties, in other words either several plaintiffs or several defendants. The Court has been administering this type of cases for many years by applying its rules, and in particular the principle of giving primacy to the parties' agreement. There may be no consolidation of separate arbitrations involving different parties unless the parties agree. When claimants or defendants jointly nominate an independent arbitrator, this choice is generally confirmed by the Court. In the absence of agreement between joint parties on the choice of an arbitrator, the Court may appoint the arbitrator in their place and stead in accordance with the usual procedure or may split up the arbitration if this suits the case better. In practice, there is no correlation between the number of parties and the number of arbitrators; indeed, it is neither necessary nor desirable to constitute extra-large arbitral tribunals to settle a multi-party dispute, provided that the arbitral tribunal's independence cannot be challenged and that the equality between the parties is preserved.

Checking the independence of the arbitrators is essential to the quality and enforcement of awards. In this connection, the ICC International Court of Arbitration has developed a tested practice. Any arbitrator confirmed or appointed by the Court has to be free of any ties with the parties involved and must remain independent in the eyes of the parties throughout the whole of the process. Before proposing to confirm or appoint a prospective arbitrator, the secretariat invites him to declare in writing whether or not he is independent of the parties, and if applicable, to indicate any fa or circumstances that might call his independence into question in the eyes of the parties. When the prospective arbitrator accepts his nomination and at the same time indicates factors that might call his impartiality into question, these reservations must be transmitted to the parties for their comments. In light of this information, the Court will decide or refuse to confirm the appointment of the arbitrator in question. A statistical study has shown that 94% of arbitrators' declarations of independence are issued without reservation; where reservations are made by the prospective arbitrator (that is in 6% of the cases), he/she is confirmed or appointed only in one case out of three. When the Court takes administrative decisions in this area, it takes into account the particular circumstances of each case. Such decisions evidence the desire to implement an arbitral procedure which from its earliest stages is based on foundations which are sound. This practice has the advantage of reducing from the outset the risks of challenges in the course of the procedure.

Factors calling the impartiality and objectivity of one or more arbitrators into doubt may come to light during the procedure. These need to be dealt with if one wishes to ensure that the enforcement of the future award benefits from the New York Convention. The possibility of challenges has not been neglected in the ICC rules, since any serious failure by one of the arbitrators to comply with his obligations can totally vitiate the arbitral process. However, the requisite procedure is subject to specific provisions aimed at avoiding delaying tactics. For a challenge to be admissible, it has to be filed within thirty days of the notification of the arbitrator's appointment, or from the date when the circumstances on which the claimant's challenge is based came to light. The arbitrator concerned, as well as the other arbitrators and the other party are allotted an appropriate time limit to submit their comments. The Court rules on the challenge in its Plenary Session. It does this by an administrative decision whose reasons are not communicated to the parties. The arbitrator who has been challenged is replaced in accordance with the normal procedure.

In addition to the possibility of challenge, the ICC Rules make provision for the replacement of an arbitrator. This will naturally apply if he dies in office. It also applies when his resignation is accepted by the Court. In contrast with the isolation of arbitrators appointed in an ad hoc procedure, an arbitrator appointed in the context of an ICC arbitration, faced with the discouragement and difficulties inherent to his task, has the benefit of the backing of the secretariat and the Court which can refuse to accept his resignation. An arbitrator may also be replaced if the Court notes that he is prevented de jure or de facto from fulfilling his functions, that he is not completing his task or is behindhand in his work. Examples of cases that would prevent him from carrying out his task are the arbitrator's accession to an office that is incompatible with his duty as arbitrator or the onset of a serious illness. Although rarely applied, this stipulation of the rules is nonetheless useful since it provides the Court with the power to sanction any failures in the arbitrator's duties, either at the request of a party, or even - in rare cases - on the Court's own motion.

Generally, and naturally, the arbitrator is expected to have qualities at least equivalent to those of a judge: honesty, impartiality, skill and diligence. In reality, requirements may go beyond that. Indeed, unlike the service provided by the state, arbitration is usually expensive and its cost is borne by the parties. They are entitled to receive the best possible service.

IV - The workings of arbitration

The arbitrator's role ensues not only from the arbitration clause, but also from the fact that he has been seised by one of the parties to the contract. He is responsible for settling the dispute referred to him, taking precise account of the respective claims, either in principal or in the form of counter-claims; he has to rule on all these claims, but no further. His jurisdiction function is contractual in character; the performance of the contract underlies the whole course of the procedure.

All the procedural questions are particularly important because of the need for arbitration to comply with the basic rules resulting from the New York Convention on the recognition and enforcement of foreign arbitral awards. It is a matter of checking that there is indeed an arbitration agreement, ensuring that the arbitrators are independent, that their behaviour is neutral, and that the procedures they follow respect the rules of due process and are complete, that the evidence has been correctly dealt with - all questions that are not only in the hands of the parties and their counsel but also in those of the arbitral tribunal, in particular when the latter is acting on the basis of rules drawn up by an arbitration institution. It is particularly a matter of offering the parties every opportunity to submit their arguments and adduce their evidence, but also to give the strong impression that the tribunal has heard them fully and has treated them entirely equally and that its decision will be taken in full knowledge of the case. In this area practices vary considerably not only depending on the particular legislation or procedural rules applicable, but also depending on the type of civilisation.

Arbitration practice is characterised by the gradual establishment of a sort of general law. The increase in the number and complexity of arbitration cases, the procedural difficulties to be resolved, the more and more detailed rules and customs drawn up by certain arbitration centres, have culminated in the formulation of a number of governing principles. In this area the ICC Rules - one of the most developed sets of rules - constitutes a sort of benchmark that can be used for resolving problems that may arise elsewhere. Along the same lines, the harmonising effect of the model law drafted by the United Nations should also be noted as well as the consequences of the guidelines laid down in the New York Convention and in several other conventions applicable to foreign arbitration. Although these general procedural principles have very varied points of application, the establishment of a general law relating to the management and administration of arbitration certainly presages the practices of the next century when - after further improvements - this dispute-settlement method will be seen to be an independent discipline, at the height of its development. It should be remembered that the principles of diplomacy originated in generally accepted customs rather than in diplomatic treaties; the same applies to arbitration.

The Terms of Reference - a distinctive feature of the ICC Arbitration Rules - consist of a document drawn up by the arbitral tribunal with the participation, if possible, of all the parties, with a view to summarising the dispute, listing the parties' claims and the contentious issues to be resolved. This document, which may be short, also contains the necessary details regarding the procedure. The Terms of Reference have to be transmitted to the Court within two months of the appointment of the arbitral tribunal. If they are signed by the arbitral tribunal and all the parties, the Court takes note of them. If one of the parties refuses to take part in drawing them up or refuses to sign them, the Terms of Reference are submitted to the Court for approval; the arbitration procedure will then continue once more after the expiry of the time limit for signing the Terms of Reference allotted to the defaulting party. Subsequently, provided they mutually agree, the parties may enter new claims in an addendum to the Terms of Reference which is transmitted to the Court.

Although it is sometimes criticised because it slows down the start of the procedure, the drafting of Terms of Reference prior to the investigation of the case has many advantages at the technical, psychological and legal levels. It enables the case to be structured and circumscribed, and its stakes to be defined; it is used for recording definitively the points of agreement between the parties in relation to questions such as the law applicable to the substance of the case, the language of the arbitration, the procedure as regards evidence and witness statements and sometimes certain points relating to the merits of the case. Lastly, it enables the Court to check the points that fall within the scope of the Terms of Reference when the award is examined and hence imposes a discipline both on the arbitral tribunal and on the parties. It has turned out to be particularly useful when disputes are complex or ill-defined and when the companies in dispute come from very different civilisations.

According to the ICC Rules, a defendant may enter a counterclaim within thirty days from the receipt of the Request for arbitration, subject to the grant of a supplementary time limit insofar as it has replied to the proposals put forward relating to the constitution of the arbitral tribunal, and in consideration of the claimant's right to present an answer within the same time limit. Once the Terms of Reference have come into effect, no counterclaim may be submitted unless it is set out in the form of an addendum to the Terms of Reference signed by all the parties. A counterclaim results in increasing the amount in dispute and in consequence the corresponding amount of the costs and particularly the advance to be paid by the parties. This circumstance, as well as the risk of having to bear the whole or part of the costs of the arbitration at the end of the procedure, may well deter improper claims.

The arbitration procedure has to comply with one of the main principles of dispute settlement: equal treatment of the parties. In other words, without extending the time limits unduly, it has to off each of the parties every opportunity to set out its claims and arguments, to read and discuss those of its opponent, to produce any evidence it considers necessary and criticize its opponent's evidence, to take part in or be represented at all hearings and, where applicable, in expertise proceedings prescribed by the arbitrator. Such points are checked by certain institutions responsible for administering arbitrations, in particular by the ICC International Court of Arbitration, whose arbitration rules have been drafted in total compliance with the internationally-recognized standards relating to what is termed contradictoire in the civil law countries, and due process in the Common Law countries. These are: transparency of the arbitral process; the right of the parties to be called and heard; equal treatment of the litigants in the exchange · of pleadings, in evidentiary matters, in resort to expertise proceedings and in the holding of hearings.

The trend of making arbitral procedure as closely similar to court procedure as possible has gone so far as to lead the ICC to set up a pre­arbitral referee procedure enabling the parties to obtain interim or conservatory measures prior to the decision on the merits of the case, before the arbitral procedure is started.

Before an arbitral tribunal is constituted and the case referred to it, correspondence is sent through the Court Secretariat which has the task of notifying to each party all the pleadings and written statements presented by the other party; in certain multi-party arbitrations, there may be hundreds of such notifications. These preliminary exchanges (principal claim, answer to the claim, counterclaim and answer to the counterclaim) have time limits attached to them. so far as the proceedings before the arbitral tribunal are concerned, the hearings must respect the rules of due process and non­appearing parties will have the same opportunities of being called and heard as those taking part in the proceedings. The Court ensures that the same principle is applied in the dealings between the arbitrators. Thus, an arbitral award will not be approved unless all the arbitrators have had the possibility of taking part in the deliberations.

According to the ICC Rules: "The rules governing the proceedings before the arbitrators shall be those resulting from these Rules and where these Rules are silent, any rules which the parties (or failing them, the arbitrator) may settle, and whether or not reference is thereby made to a municipal procedural law to be applied to the arbitration" (Article 1 1 ). Therefore, the parties have the prerogative of choosing the applicable procedure. In the context of ICC arbitration, the rules grant extended powers to the arbitrator, as he may: establish the fa of the case "by all appropriate means"; appoint one or more experts; determine the language or languages of the arbitration when the parties have not agreed on this; settle the proceedings of the hearings which, in any case, should comply with the rules of due process. In practice, the rules governing procedure are specified by the arbitrator after consulting the parties. Indeed, in ICC arbitration there need be no link between the place of arbitration and the procedure the arbitrators have to follow. However, in order to safeguard the legal effectiveness of the award, the rules of public policy of the place of arbitration cannot be ignored.

An arbitral decision is comparable to a court decision. This is so not only because of its res judicata nature and its effects, even abroad, but also because of the conditions of its correct, honest and reflected application of the law. This principle is a major factor in the classic arbitral award, more so than in the case of the award rendered by amiable composition. It affords arbitration the characteristic of a procedure that results in an award that the parties concerned have undertaken to perform in good faith. Naturally, this method of dispute settlement is not generally applicable, it only concerns cases of an arbitrable nature, in other words relating to assets or financial matters as opposed to matters of civil status or criminal law. But once this nature is defined and recognized, it is generally considered that the arbitration clause binds all the p arties who have signed it even if those parties are states or state agencies, at least when they are operating in the field of international trade.

As a good arbitration system is one that off the best chances of obtaining a legally correct solution, the parties are entirely justified in questioning their legal advisors on all the conditions required as regards jurisdiction, procedure and applicable law. These choices are very important since they will precondition the solution of the process; deciding on the applicable law is to provide a method of resolving a dispute in advance. The place of arbitration will also have to be determined - an important choice from the standpoint not only of the working facilities, but also of the conditions under which any disputes relating to the arbitral award might have to be settled.

In this connection the International Chamber of Commerce has noted a very appreciable increase in the international nature of arbitrations. For example, in 1993, the Court appointed more than 571 arbitrators of 52 different nationalities, over twenty of them from developing countries. These tribunals have been operating in some 33 different places, in disputes often involving parties from several different countries. In all there are some thousands of arbitrators arbitrating worldwide under the auspices of the International Chamber of Commerce or on another basis.

Accordingly it is clear that there is today a special legal approach to international arbitration which is viewed as an ever improving and eff service, which thus involves extremely careful work. When the dispute arises, the parties' counsel will have to prepare the case, the arguments in fact and law, the hearings and the pleadings just as they do before a state court. The arbitrators themselves do not have the task of defending the parties' interests, but rather of providing a valid legal decision on the case after due process and a full hearing. Like a court, the arbitral tribunal does not render its award until after it has heard all the arguments, examined all the evidence, fully discussed the case and reached a deep-seated final decision on the basis of the information communicated to it. Indeed, it is essential to remember that an arbitral award is a decision with res judic ata authority which - particularly in countries that have ratified the New York Convention - will if necessary be granted enforcement. Thus in many cases in the field of international trade, arbitration represents a form of access to justice - sometimes the only one available. It is therefore easy to explain the very significant rate of increase in arbitration cases both before the International Chamber of Commerce and elsewhere.

The fact that arbitration procedures are dealt with by firms of lawyers which are becoming increasingly specialised is an indication of their importance in the settlement of major international trade disputes. The increase of the parties' involvement in the arbitration procedure is quite characteristic. It responds to a trend towards the jurisdictionalisation of arbitration in the field of international trade, whether the matter in question is the choice of the applicable law, the drafting of the Terms of Reference, the presentation of written statements and counterclaims, the composition of files pleadings and sometimes manoeuvres such as delaying tactics or efforts to frustrate the procedure, which are entirely characteristic of the trend towards proceduralism. The increasing weight of arbitration and the desire for precaution by companies and their advisors are translated in particular by a clear trend towards the increase in the number of arbitrators with all the problems ensuing from this. Dissenting opinions are on the increase, as challenges of the Court's decisions or of the arbitrators' competence and action. This potential for challenge adds to the costs and procedures and slows down the settlement of disputes. It entails an obligation on the part of institutions to respond so as to avoid undue delays or interruptions and obstructions in arbitral procedures.

It is essential not to lose sight of the fact that one of the aims of arbitration is to encourage the speedy settlement of disputes. Firmness should prevent delaying tactics or efforts at frustrating the proceedings. Generally, the arbitrators have the power to bring the investigation to an end and to start deliberating once they consider that all the necessary evidentiary details have been presented to them and they are in a position to evaluate them. Procedural time limits are laid down in certain rules such as the ICC Rules. Under these Rules no extension of a time limit is granted unless the Court is kept informed of developments in the case. With the agreement and assistance of the parties these time limits may be reduced so as to implement an accelerated procedure, since the Chairman of the Court may use the power accorded to him by article 1.3 of the Rules and confirm all the administrative measures relating to the case, provided he reports on this to the Court subsequently.

V - The arbitral award

Arbitration is expensive. Accordingly, companies p ay very close attention to the conditions under which it is rendered. They intend the award to be solid, clear and impartial, rendered by a tribunal that is independent of any pressure, in particular governmental pressure. Therefore a special set of ethical rules applicable to international arbitration have come to the fore. These consist of a set of standards which are closely akin to the ethical standards of the bar, but more complete thus bringing them closer to the standards applicable to judges - whose task is more restrictive than the attorney's, particularly at the level of evidentiary investigation and deep-seated conviction. Anything that might result in the award being challenged should be avoided. Accordingly it is appropriate to check the composition and jurisdiction of the arbitral tribunal carefully. It is a matter of ensuring that the tribunal operates totally impartially and that its future decision will settle the dispute fully and correctly. The arbitrator also has a duty to comply with the international nature of his task. In other words he must not adopt any attitude of political or cultural exclusion either towards the parties appearing before him or towards any arbitrator that draws up a dissenting opinion, and must disallow any interference, whether it is procedural or whether it is aimed at influencing the final decision.

In addition to being independent, the arbitrator needs to have legal skills, linguistic knowledge and human qualities - a combination that is often difficult to find. In practice, the smooth­ running of a case is dependent on the care the arbitrator brings to his task, by devoting to it the necessary work, time and vigilance, without wasting time but freely and frankly approaching all the procedural difficulties that may arise. The definition of the terms of reference in agreement with the parties must not omit any question so as to ensure that the discussions are correctly situated in the context of the applicable law and relate to all the factors and all the claims in question, including where applicable interest on the sums claimed. It is generally accepted that the grounds for the award should be complete, clear, and adequately stated both in fa and in law. This is an overriding duty of an arbitrator operating under the aegis of the ICC, apart from those cases of domestic arbitration submitted by the parties' will to a national law which exempts the arbitrator from this rule.

The chairman has a key role to play in the arbitral tribunal's decision-making process. It is up to him to ensure that the hearings are held in compliance with the formal requirements that underly the good administration of justice. This means that he must pay close attention to the wording of the Terms of Reference, ensure that the exchange of documents and arguments is balanced, and supervise the progress of the proceedings during which the discovery of the facts and the determination of the law take place. His responsibility will be asserted not only in the procedure but also in the drafting of the award. The decision-making process is the hidden side of the work of the arbitral tribunal. Its quality is intimately linked to the arbitrators' intelligence and methods, and particularly to their chairman's authority. His duty includes allowing each arbitrator to contribute to the discussion commensurate with his personal qualities and experience, and at the end of the day to frame the questions on which the tribunal has to give its opinion and which will serve as a basis for reaching the final solution to the dispute.

However, the work is not completed once the decision is finally taken unanimously, by a majority, or by the chairman himself in accordance with ICC Rules (Article 19) : the draft award has to be drawn up - a task to which the chairman often has to devote great care, with professional awareness, just confidence in himself, and the desire to avoid any appeal to a national court. In addition, in any arbitration under ICC auspices, the arbitral tribunal knows that prior to signing the award and communicating it to the parties, the draft has to be submitted to the International Court of Arbitration for scrutiny in accordance with articles 21 and 26 of the ICC Rules of Arbitration.

The duties of the arbitral tribunal are delicate by their very nature, involving both specific requirements as to procedure and answers to substantive questions that are often not governed either by the national law or by commercial customs. General attention has been given to determining the general principles of law applicable to international commercial arbitration, inspired by commercial or corporate customs and established in a society in the course of integration. The question relates to a space within the legal community which has no acknowledged sovereign legislature, where the rule of law seems to derive from a wide variety of sources: diplomatic (for example, Vienna Convention on the Sale of Goods), case law precedents (court or arbitral decisions), customary (lex mercatoria), or even moral (codes of good conduct), matters of professional ethics, or indeed contractual sources.

Clearly the steps taken by the arbitrator must be free of any dogmatic inflexibility and take as their main reference point the will of the parties, even when the parties intend to elude a national law. However, they cannot depart from those rules of fundamental international public order that cannot be disregarded without jeopardising the whole legal basis of the arbitration. These principles, which are generally recognised, or at least strongly enough stated to bring pressure to bear on the arbitrators' assessment of the case, include the following: human rights (but the accepted sense of the term can vary) ; the respect of moral standards (but interpreted narrowly as for manifest corruption); the rejection of illegal and fraudulent claims; competition law (in its public policy context); the respect of good faith; the duty to keep the other contracting party informed; and the disallowance of violence or open constraint. The mere listing of these basic standards reveals the extent to which at one and the same time they have characteristics that are both specifically legal and generally cultural.

In addition to these ethical principles there are a number of features specific to arbitration. The first of these is that the procedure should not be long drawn out. Whereas frequently civil and commercial cases are slow and repetitive, one of the merits of arbitration is the fa that it provides companies with a rapid answer to the legal problems they encounter; that is why their lawyers should not increase the procedural obstacles. Another of the benefits of commercial arbitration is the fa that it is confidential. A person using this method can be sure that nothing will be divulged about the dispute without his consent, and that thus certain of the disadvantages of court proceedings can be avoided. In this connection, arbitral tribunals often have to be very careful and always bear in mind the question of business secrecy. In ICC arbitration, unless the tribunal so decides and the parties agree to it, the hearings are not open to the public. The International Court of Arbitration is bound by a duty of non­disclosure; the Court also imposes this duty on everyone involved in its work. However, its Rules do not provide any sanction against parties who disclose their disputes: in this connection, the limits on the principle of confidentiality are those laid down by the parties concerned.

The arbitral award is final. The ICC Rules of Arbitration do not make any provision for an arbitral appeal procedure. However, in order to give the award the best possible guarantee of legal effectiveness, the ICC Rules provide that no draft award can be signed by the arbitrators until it has first been scrutinised and approved by the International Court of Arbitration. The Court, in carrying out its contractual function, will ensure that the arbitrators decide on the merits of the case. True, the arbitrators are "judges"; but their decision has to be enforceable and enforcement is dependent on the quality of the award. Experience has shown that if an arbitral award is a good award, well studied, well reasoned and well drafted, and gives a full legal answer to the questions posed, the parties will carry it out, even if they have lost the case. Firstly, because they will not take the risk of proceedings before the national courts. And also because they run the risk of losing their credibility, either in the eyes of the banks, or in the eyes of other parties contracting with them, and even more generally with the business community. All in all, at the ICC, problems of enforcement only arise in one arbitral award out of ten, in cases where a fi has become insolvent, may have disappeared, or acts in bad fa This latter example has notably been the case of certain official bodies which, when they have lost the case, argue that the award has no res judicata authority over them at the risk of jeopardising their country's credibility.

Another feature of the present era is the delocalisation of law, in other words the range of opportunities for choice of the rules of law governing international contracts. Competition between legal systems and between arbitration methods contributes to the improvement of the service rendered. It results in increasingly specialised legal services benefiting a body of users who are becoming more and more demanding. Authority, expertise and experience are also often the precondition of the tribunal's impartiality. The role of the arbitrators and particularly of the chairmen of arbitral tribunals is essential in this connection, both as regards the arbitration procedure and as regards the formulation of awards. Where the applicable law has been decided by the parties or by the tribunal there is nothing to prevent the tribunal from interpreting the rule and - sometimes going beyond the law - to discover applicable usages and customs. What then becomes essential is to provide the parties with an award whose reasoning is sufficiently full and detailed to allow for understanding of the rationale that led the tribunal to reach its decisions on the basis of the applicable law, its interpretation of that law and the evaluation of the facts submitted to it. In this connection, international arbitration should be dispassionate, and arbitral tribunals should operate in an atmosphere of clarity, transparency and objectivity.

Experience accordingly leads one to bear in mind the cultural aspect of international arbitration. It often involves parties from countries whose civilisations are very different. Each party carries its own store of knowledge expressed not only in the language that it uses but also in all the legal advice that it uses. In international trade, arbitration is expected to supply what cannot be obtained from the national courts - in other words an opening to the needs of a very diverse and developing international society, and the application of general principles which enable the harmonisation of different civilisations. Thus the arbitrator has to ensure that the cultural identity of each of the parties appearing before him is respected, whether they come from developing countries or industrialised nations, whether they are from the Southern hemisphere, from Central Europe, or from Asian, Arab or African backgrounds. This principle of the identity of each is very difficult to explain, because it is difficult to define cultural identity. However it starts with respect of the parties and the opportunity offered to them to express themselves fully. Its application is naturally also found in the constitution of arbitral tribunals, in the quality of the arbitrators; it is linked to the extent of their experience, their legal and cultural knowledge, their perception of the world of trade across the continents. Positively applied, arbitration is a means of overcoming obstacles and taboos in the vast domain of individual or collective psychology.

This is a new profession where the practitioner's knowledge is born of experience which is difficult to exercise, but which will become better defined over the years under the guidance of the parties, since it is they who pay for the service rendered. Thus gradually a set of general ethical rules applicable to arbitration will be established - ethical rules whose elements the ICC is seeking to define as cases progress. These ethical rules should relate to compliance with a certain number of behavioural rules, not only in society or in relation to the parties, but also in dealings between the arbitrators and in the internal workings of arbitral tribunals. The rules concerned are not generally in written form yet compliance with them is a precondition for the success of this activity.

All civilisations have accepted arbitration as a means of settling a wide variety of disputes. A particular feature of the modern world is the development of a type of arbitration that is international in character, outside national systems and attentive to different civilisations, and this type of arbitration is aimed at responding to the constantly changing needs of trade where security is becoming more and more essential. It is not a question of duplicating the national courts - whose task is known - but of responding to a new need that the national courts are not capable of fulfilling. There is a strong probability that this trend in world economy will continue to develop into the next century. In sum international arbitration has gradually become an autonomous discipline within the law and practices of international trade.

If all the observations resulting from a study of trends in international commercial arbitration were gathered together it would be noted that this activity not only is becoming increasingly important both in the domain of law and in relation to the development of business, but also that it poses ever more complicated and varied problems, in other words that it calls for careful management, enabling obstacles stemming from nationalities, cultures and political or ideological rivalries to be overcome in total impartiality. Frequently the solution of technical questions is referred to experts whose role is differently viewed depending on the arbitral tribunal concerned; on the other hand they are confronted with legal problems rendered increasingly complex and difficult by the contentious approach of the parties and their lawyers or the disparities of national laws.

In truth, as a provision of services of a legal nature and as a method of settling disputes, international commercial arbitration has become a major activity which calls for increasing attention from large companies and their lawyers at every stage of projects :- the conclusion of contracts and drafting of arbitration clauses, the legal follow-up of cases, and the administration of arbitrations. The consequences of this are the increasing weight of litigation departments in companies, the widening grip of the major firms of business consultants over the preparation and progress of arbitrations, the need for thorough legal qualification and experience on the part of arbitrators, whose role is becoming more and more delicate owing to the disparities of the laws applicable and the complexity of procedure, whereas traders and engineers are more often called in as experts. In this area, through the equality of its rules and its practices, through the care it provides, particularly in the follow-up of procedures, in verifying the independence and smooth-running of arbitral tribunals and the scrutiny of draft awards submitted to it, the ICC International Court of Arbitration usefully contributes to the security and expansion of world trade.

VI – Conclusions

International commercial arbitration can only prosper owing to the companies concerned, and no-one else. They expect it to provide them not only with confidentiality and business expediency, but also with the reestablishment of a certain balance in the services provided, an opening towards plurality of cultures, moderation of financial or industrial power, independence from the public authorities and, generally, a minimum of security in a dangerously risky world where mistrust too often wins the day over confidence and where commercial disputes are often underlaid and aggravated by national interest.

Over the years, international arbitration has become a sort of public service, particularly when rendered under the aegis of institutions with a high reputation and by independent and experienced lawyers. True, this service is not free of charge: the parties not only have to pay their counsel, but also cover the costs of the procedure. However, in that there is no other choice for ensuring the smooth-running of world trade and maintaining the development of investments in every field, arbitration should be encouraged - whatever rules are applicable - provided it fulfills the prerequisites of quality.

In reality, the foundations on which this whole edifice is built is the will of the parties, naturally expressed in contractual form. International commercial arbitration is one of the expressions of a free world. Accordingly it should not be compared to the national courts, but it should simply be understood that it offers a dispute­ settlement method that respects companies' and individuals' freedom, enabling them in particular to choose their "judges" - a major constituent of the confidence that will subsequently be a precondition of the acceptance and carrying out of the award.

Arbitration is not only an expression of freedom in the relationships between the parties, it is also a form of freedom in the choice of the dispute settlement method. It is developing in an atmosphere of competition. Indeed it is a service whose provision results from the will of the parties. They have the power not only to choose the rules which they wish to govern their disputes, but also to direct the whole procedure, starting with the choice of arbitrators. True, there are arbitrations carried out within specific geographical regions, between firms having close economic and cultural ties. But most of the time arbitration is an activity of a totally international nature, dominated by healthy competition between companies, between arbitration centres, or even between lawyers. This competition should be directed towards an essential goal: to render the best possible arbitral award at the most reasonable cost, an award that will be applied by the parties, insofar as possible of their free will and without the exercise of constraint. Although it leads to duplication, to withholding of information and sometimes to nationalism, the development of this competition has beneficial effects, the main one being to offer enterprises an opportunity when negotiating contracts, to choose the most appropriate rules and institutions for governing any future dispute between them.

There is no international monopoly in arbitration. Although the International Chamber of Commerce offers a set of arbitration rules, it is only one among a variety of others. Indeed, in a world where the economy needs to grow, where innovation reigns, competition between the various types of arbitration is a means of improving its quality, eliminating bureaucracy, increasing the efficiency and effectiveness of arbitration procedures. Thus it is essential to see clearly that there are no grounds for criticizing or complimenting one particular system or another. It should merely be understood that in reality the world is being built before our very eyes and that in particular arbitration is continually being improved, often in the face of great difficulty, because the questions to be resolved are important and sometimes new and difficult. Indeed, one of the interesting aspects of the ICC Rules of Arbitration is the wide facility they afford to parties to choose their arbitrators, the place of arbitration, the applicable law and - if required - different rules or procedural modalities in cases where the provisions of its rules are not mandatory. In other words, the International Court of Arbitration offers the greatest possible freedom to the parties, whilst providing them with fundamental guarantees that they will have a "judge" and that if necessary they will be able to circumvent those obstructive and delaying tactics which are a major risk of non-institutional arbitration.

Arbitration requires a great deal of work, a great deal of information, an increased specialisation by legal firms, as well as on the part of corporate lawyers and state legal advisors. It also calls for very highly qualified arbitrators at both the legal and procedural levels. Of all these requirements the most important one is quality. That is why there is a growing need for international lawyers. Whether it is a question of drafting contracts, advising companies, preparing cases or pleading before the courts, or whether it is a matter of carrying out the difficult task of an arbitrator, top level people are essential. So far as the ICC International Court of Arbitration is concerned, its steady perseverance for nearly seventy years have enabled it to get governments, courts and enterprises to accept the principle that an arbitration is not simply a "manoeuvre" but should be carried out and enforced in good faith. The parties concerned understand nowadays that their credibility depends on the good-will they show in carrying out awards, even when the awards are not in their favour. The law should not be merely theoretical but should actually be applied. It is therefore fortunate that year after year, the idea that arbitration is a genuine method of settling the most delicate of international disputes is becoming more firmly established.

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