INTRODUCTION

International arbitration disputes often require the resolution of important and complex legal issues. To rule on the merits (questions relative to jurisdiction are outside the scope of this paper), arbitrators must often determine how to interpret one or several contracts, whether these contracts have been breached and what damages are payable as a result. In this respect, the law chosen by the parties to apply to the contract in dispute plays a central role. The subject of choice of the applicable law by the parties has been dealt with earlier in this publication. In addition to issues of contract law, disputes may involve questions of law that fall outside the scope of the parties’ choice of law. Such additional laws may concern, inter alia, the capacity of the parties, insolvency, public law and regulation, and competition law. Cases may thus involve a plethora of mandatory rules originating from different jurisdictions and legal systems, such that even the most experienced of legal practitioners cannot claim to know the rules of law that apply to the dispute in their entirety. There must therefore be a process of identification and determination of the relevant laws.

With this in mind, this paper addresses the important question of how to establish the content of the applicable substantive law(s) in international arbitration. Establishing the contents of the applicable law means determining what the law is, i.e. understanding the meaning of the applicable legal rules so that they may be applied to the facts of the case and resolve the dispute. The first step in this endeavour is to determine the meaning of the phrase ‘applicable law’, which, as foreshadowed, must often be used in the plural form. Once the relevant laws have been identified, it must then be ascertained who, among the various actors in the arbitral proceedings, should be responsible for establishing the content of such laws: the parties and their counsel or the arbitrators? The next point of focus is how to establish the content of the applicable law, in other words, what are the techniques and procedural means available to ascertain the relevant legal issues?

The questions of who should establish the content of the applicable substantive law, and how they should do it, have been extensively discussed within the arbitration community. Surprisingly enough, there are many different answers. On one side of the spectrum, some rely on the principle of iura novit curia, widely recognized in civil law countries, which allows the court to research and determine the content of the law, whether it is domestic or foreign. On the opposite side, some adopt the classic common law approach and consider foreign law to be a matter of fact that has to be proven by the party relying on it. However, neither of these perspectives make a lot of sense in the context of international arbitration, as no law is ‘foreign’ in international arbitration.

Yet, these national judicial traditions have influenced the way in which the contents of the applicable law are established in international arbitration. The sole fact that the applicable law is sometimes said to be ‘proven’ shows that the common law approach of treating law as factual evidence has infiltrated arbitration practice. The use of experts to determine issues of law is another token of common law influence. However, international arbitration should not be considered as governed by any specific legal system or tradition. Rather, the prevalent opinion is that international arbitration should be governed by what is known as ‘international best practice’. The tricky part, however, is to identify what the international best practice is with respect to establishing the contents of the applicable law.

1. DIFFICULTIES ARISING IN THE CONTEXT OF INTERNATIONAL ARBITRATION

In the particular context of international arbitration, the issue of establishing the contents of the applicable rules of law is more intricate than in domestic judicial cases. Indeed, international arbitration is characterized by its multi-jurisdictional connections. The parties, their counsel and the arbitrators are often of different nationality, the seat of the arbitration may be a jurisdiction to which none of the parties or the arbitrators have any connections and the agreement in dispute may be closely connected to yet another jurisdiction.

a. Potential for Multiple Applicable Laws

A fundamental part of the arbitrators’ obligations is, most of the time, to decide the dispute in accordance with law. The expression ‘most of the time’ is used here as it is perfectly possible for the parties to agree otherwise, for example by giving the arbitrators the mandate to decide the dispute ex aequo et bono or as amiable compositeur. ‘Most of the time’, however, the arbitral tribunal must ascertain the content of the applicable law in order to fulfil its duties. But in order to come to this, it must first be established which law (or laws) is applicable.

As emphasized above, no law is ‘foreign’ in international arbitration. The applicable law may be different from the law of the seat of the arbitration and it may be unfamiliar to the parties and/or to the arbitrators, but it is never foreign.

The Law Designated by the Parties

The law applicable will often be the one designated by the parties. Most institutional arbitration rules as well as national and international arbitration laws acknowledge the parties’ choice of law as the primary source when establishing which law is the applicable law.

Section 46(1) of the English Arbitration Act 1996 provides:
“The arbitral tribunal shall decide the dispute […] in accordance with the law chosen by the parties as applicable to the substance of the dispute […].”

Article 28(1) of the UNCITRAL Model Law on International Commercial Arbitration similarly provides:
“The arbitral tribunal shall decide the dispute in accordance with such rules of law as are chosen by the parties as applicable to the substance of the dispute. Any designation of the law or legal system of a given State shall be construed, unless otherwise expressed, as directly referring to the substantive law of that State and not to its conflict of laws rules.”

The parties’ choice of law is also adhered to pursuant to Article 21(1) of the ICC Rules of Arbitration:
“The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate.”

The same applies according to Rule 27.1 of the Arbitration Rules of the Singapore International Arbitration Centre:
“The Tribunal shall apply the rules of law designated by the parties as applicable to the substance of the dispute. Failing such designation by the parties, the Tribunal shall apply the law which it determines to be appropriate.”

As seen from the examples cited above, it is a very common approach in arbitration rules and laws around the world that the parties have the right to decide which law should govern their dealings. However, there are exceptions. For example, some arbitration laws do not allow parties in a domestic arbitration (where the nationality of both parties and the seat of the arbitration is the same jurisdiction) to choose the applicable law. For example, Clause 30 of the Malaysian Arbitration Act provides:
“(1) In respect of a domestic arbitration where the seat of arbitration is in Malaysia, the arbitral tribunal shall decide the dispute in accordance with the substantive law of Malaysia.
(2) In respect of an international arbitration, the arbitral tribunal shall decide the dispute in accordance with the law as agreed upon by the parties as applicable to the substance of the dispute. […]”

However, parties to an international arbitration in Malaysia are permitted to choose the applicable law.

Where parties have made use of their right to designate the applicable law, the choice of law clause is often rather straightforward and designates the law of a state. This is, however, not always the case. Sometimes other rules are made applicable, for example lex mercatoria. When lex mercatoria is made applicable, special issues arise for both the parties and the arbitrator. Lex mercatoria is not an explicit set of rules which content can be easily ascertained by studying the text of the rules, case law and other legal authorities.1

Pursuant to Section 46(1)(b) of the English Arbitration Act 1996, the parties may also agree that the arbitral tribunal shall determine the dispute in accordance with other considerations than law, either as agreed between the parties or as determined by the tribunal.

Even if choice of law clauses are often straightforward, as mentioned above, there are a number of ways parties can tailor their choice of law clause to be even more suitable to their intentions. For example, instead of wording the choice of law clause ‘this agreement shall be governed by English law’, the parties can choose to word it ‘all questions not settled in this agreement shall be governed by English law’. With the latter wording, the choice of law only applies to filling the gaps in the contract and, inter alia, issues of validity of specific contractual provisions will not be governed by the chosen law.2

Sometimes parties can be quite creative when drafting their choice of law clause. One example of this is the choice of law clause in the contract for the design and construction of the Channel Tunnel between France and England. The clause reads:
“The construction, validity and performance of the contract shall in all respects be governed by and interpreted in accordance with the principles common to both English law and French law, and in the absence of such common principles by such general principles of international trade law as have been applied by national and international tribunals. Subject in all cases, with respect to the works to be respectively performed in the French and in the English part of the site, to the respective French or English public policy (ordre public) provisions.” 3

The author, having personal experience of dealing with this interesting choice of law clause, can confirm that its application worked more smoothly than the reader might assume.

Even though there is a widespread uniformity among arbitration rules and laws in respect of party autonomy in choice of law, it should be noted that the applicable substantive law may not be limited to the law designated by the parties. Furthermore, the parties may not have included a choice of law clause in their agreement and may not be able to agree on the law applicable to the merits. This will be addressed below.

The Law Chosen by the Arbitral Tribunal

In the absence of an agreement on the applicable law, it is up to the arbitrators to decide on the matter.

Pursuant to some arbitration rules and laws, the arbitrators are given the right to apply the law that they determine to be appropriate4 or the law with which the dispute is most closely connected, 5 while others provide that the arbitrators should identify the applicable law by applying the conflict of law rules that they consider applicable. 6 The latter ‘method’ of identifying the applicable substantive law is sometimes referred to as voie indirecte, and the first two as voie directe.

Sometimes, the applicable arbitration rules or arbitration law is silent on the issue of applicable substantive law. In such situations, the arbitral tribunal should identify the applicable law by guidance of the applicable conflict of law rules. Identifying the applicable conflict of law rules can sometimes be a challenge in itself, but that issue lies outside the scope of this paper. 7

In the absence of an agreement on the applicable law, the arbitrators may be facing a difficult task, or at least a task that requires careful consideration. For example, which law should the arbitrators apply on the merits of a dispute under a sales contract between a German seller and an Egyptian buyer, where the seat of the arbitration is Sweden (governed by the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce) and the buyer argues that the sales contract is governed by mandatory public policy rules under Egyptian law? 8

Mandatory Public Policy Rules

Even after the law generally applicable to the merits of a dispute has been identified, either with reference to the parties’ agreement or by the choice of the arbitrators, there might still be applicable rules in other laws than the one chosen.

Arbitration is a contractual dispute resolution method in which party autonomy is one of the most important parameters. The parties are free to decide on almost all procedural issues that might arise and the parties are free to choose the applicable substantive law or other rules to govern the merits of their dispute. However, arbitration cannot be used as an instrument to evade mandatory rules that would have been applicable to a business transaction in the absence of the parties’ choice of law and that are considered as public policy rules in the other jurisdiction. Mandatory public policy rules are thus a limit to the parties’ freedom of choice.

There may be mandatory rules in a number of jurisdictions that must be taken into account in an international dispute. As mentioned above, there is the jurisdiction of the seat and possibly other jurisdictions where the parties are domiciled. In addition, certain types of disputes tend to involve even more jurisdictions.

One interesting example in this respect is a field well known by the author, namely large-scale infrastructure disputes. In infrastructure disputes, there is always a site. The site may even be crossing national frontiers, which was the case in the Channel Tunnel project referred to above. In infrastructure disputes there is also frequent cross-border movement of material and labour. As a result, there are often many jurisdictions to take into account.

The existence of mandatory public policy rules places a burden on the arbitrators. One of the arbitrators’ general duties is the duty to render a final and enforceable award. 9 Should, for example, an arbitral tribunal enforce an agreement that is considered to violate public policy in the jurisdiction in which the respondent is domiciled, the claimant would probably encounter difficulties when trying to enforce the award. 10 Furthermore, the award might be challenged and set aside to the extent it violates public policy in the jurisdiction of the seat of the arbitration.11

In order to fulfil their duty to render a final and enforceable award, the arbitrators may have to consider such mandatory rules even in the event that none of the parties refer to them. It has been considered that arbitrators have more freedom to do so regarding mandatory rules than other legal rules applicable to the dispute. The International Law Association’s Committee on International Commercial Arbitration has stated that:
“Mandatory rules expressing public policy norms may warrant special consideration by arbitrators. When such laws may be implicated in a dispute, arbitrators should with respect to such issues generally have more freedom to probe, to set the agenda, and to drive the development of the legal analysis than is typically the case when no such issues are present.”12

It can be questioned, however, whether the limitation to the parties’ freedom of choice and the duty on the arbitrators to consider public policy rules apply with respect to all national public policy rules, or if it does only apply to certain ‘qualified’ public policy rules — in this respect Yves Derains refers to rules that are part of ‘truly international public policy’.13

Rules Applicable to Non-Contractual Issues

A dispute may include non-contractual issues, for example a claim for compensation related to dealings prior to the conclusion of a contract, culpa in contrahendo. Such claims are not necessarily governed by the law chosen by the parties in the agreement that was subsequently entered into.

The Rome II regulation14 deals specifically with claims based on the principle of culpa in contrahendo. According to Rome II, such claims are governed by the same law that applies to the contract. But what if Rome II is not applicable? Then the arbitrators will of course have to seek guidance in the conflict of law rules that are applicable or, if authorized to do so by the applicable arbitration rules or law, to choose the law that it finds most appropriate. The result of this exercise may, however, be that different laws are to be applied to different aspects of the dispute.

Another very interesting applicable law issue is which rules of law are applicable on issues of privilege in international arbitration. Is privilege a matter of substance or is it a procedural issue? There seems to be different opinions with respect to this issue and there seems to be, at least partly, different perceptions between the common law and civil law traditions. There are indications that some common law jurisdictions tend to consider privilege a matter of substance while others consider it a procedural matter.15 The civil law tradition tends to consider it a procedural matter. As always, however, there are exceptions and variations. Even if the aforementioned simplified distinction between common law and civil law was correct and absolute, the question still stands: which rules of law are applicable on issues of privilege in international arbitration?16

The IBA Rules on the Taking of Evidence in International Arbitration (the IBA Rules) recognize privilege as a ground for inter alia excluding documents from evidence and production. Article 9.2(b) reads:

“The Arbitral Tribunal shall, at the request of a Party or on its own motion, exclude from evidence or production any Document, statement, oral testimony or inspection for any of the following reasons: […]

(b) legal impediment or privilege under the legal or ethical rules determined by the Arbitral Tribunal to be applicable”.

Pursuant to the IBA Rules, the arbitrators are given the authority to determine which legal or ethical rules are applicable by their own discretion. Article 9.3, however, provides a number of elements to be taken into account by the arbitrators when doing so, namely (1) any need to protect the confidentiality of a document created or statement or oral communication made in connection with and for the purpose of providing or obtaining legal advice and in connection with and for the purpose of settlement negotiations, (2) the expectations of the parties and their advisors, (3) any possible waiver of any applicable legal impediment or privilege, and (4) the need to maintain fairness and equality as between the Parties, particularly if they are subject to different legal or ethical rules.

The American Arbitration Association (AAA) and its international arm, the International Centre for Dispute Resolution (ICDR) has published guidelines for arbitrators concerning exchanges of information. The guidelines provide, inter alia, that when the parties, their counsel or their documents would be subject under applicable law to different rules, the tribunal should to the extent possible apply the same rule to both sides, giving preference to the rule that provides the highest level of protection.17

It should be noted that the parties are, of course, free to choose the rules of law to apply to issues of privilege in an arbitration matter. Although choice of law clauses explicitly referring to the law governing privilege are undoubtedly very rare.

It follows from the above that the arbitrators are often free to determine which law to apply to issues of privilege at their own discretion. However, there is a valid question as to whether arbitrators do not tend to use this authority in order to apply the rules with which they are most familiar. Is there not a risk that, for example, an English tribunal in a London-seated arbitration too eagerly (and perhaps wrongly) jumps to apply English rules of privilege without taking proper notice of all relevant circumstances?

b. Absence of Detailed Legal Framework

Another difficulty in the context of international arbitration is the absence of common legal framework. It is remarkable that very few of the arbitration laws and institutional rules seem to address how the contents of the applicable law should be established. As mentioned above, many laws and rules give directions as to what law should be applied, but once the applicable law has been identified there is little guidance as to who should establish its contents and by what means.

For example, Section 34(2)(g) of the English Arbitration Act of 1996 simply states that the arbitral tribunal shall decide on procedural and evidential matters, including ‘whether and to what extent the tribunal should itself take the initiative in ascertaining the facts and the law’. Similarly, Article 22(1)(c) of the London Court of International Arbitration (LCIA) Rules provide that the tribunal has the power:

“to conduct such enquiries as may appear to the Arbitral Tribunal to be necessary or expedient, including whether and to what extent the Arbitral Tribunal should itself take the initiative in identifying the issues and ascertaining the relevant facts and the law(s) or rules of law applicable to the arbitration, the merits of the parties’ dispute and the Arbitration Agreement.”

This relative absence of legal framework distinguishes arbitration from national court procedure. It is true that there may be international elements in cases brought before national courts: the parties may come from different cultural and legal backgrounds and there may even be points of foreign law that have to be addressed by the court to resolve the dispute (although parties often align their choice of jurisdiction clause with their choice of law clause, so the competent court will often know the main law applicable to the dispute). However, it is easier to ascertain the content of the applicable law in court cases because the lex fori often provides the rules of civil procedure explaining how the contents of the law must be ascertained.18 In addition, parties in national court proceedings are typically represented by local counsel who have the same legal background as the judge in charge of deciding the case.

By contrast, there is no such common framework in international arbitration, which means that the parties, their counsel and the members of the arbitral tribunal may have different expectations as to how the contents of the applicable law must be established.

c. Lack of Familiarity with All the Laws Applicable to the Dispute

As shown above, a lot of different national and anational rules of law may be applicable in an international arbitration. However, lawyers are often not qualified to practise in more than one or two jurisdictions. This increases the likelihood that the legal practitioners involved in the arbitration proceedings, i.e. counsel and arbitrators, will be unfamiliar with at least some of the legal issues arising in the arbitration.

The unfamiliarity of counsel and arbitrators with the applicable law may also be explained by the basis on which they are selected by the parties.

Choice of Counsel

Counsel are not necessarily chosen for their knowledge of the applicable law. Parties will take many factors into consideration when appointing their counsel and experiences will differ according to the scale of the dispute. For example in construction and large-scale infrastructure projects, principal counsel are often chosen for their expertise and reputation in relation to both such projects and international arbitration. Lawyers qualified in the jurisdiction of the seat of arbitration may also be preferred. If they are not qualified in the country of the applicable law, principal counsel will typically work with co-counsel that have knowledge of the most significant applicable law (as shown above, there may be several other applicable laws to a dispute).

Counsel are also often selected based on the sector of the dispute: for example, it may be preferable to choose a counsel with specialist expertise in engineering or particular knowledge in the relevant type of agreement. This is particularly the case for disputes concerning very technical areas of the law, such as construction or energy disputes.

Certain practical considerations may also be taken into account in the choice of counsel, such as the proximity of the counsel’s office with the client’s, the legal fees or language abilities. Parties may also elect to keep the same law firm they habitually use for other legal work.

Choice of the Arbitral Tribunal

The situation is similar with respect to the parties’ choice of the arbitral tribunal: the selection of arbitrators is often a complex question of strategy, in which the parties will consider many other factors beside the arbitrator’s knowledge of the applicable law.19

The parties may indeed elect to appoint an arbitrator who has expertise in the most significant law applicable to the dispute (usually, the law governing the contract), or someone who is at least familiar with the same family of law than the applicable law, (i.e. a lawyer trained in common law, civil law or Islamic law). In a three-member tribunal, parties may also be concerned that there be an imbalance as to familiarity with the applicable law. If there are important legal issues at stake and one of the parties has appointed an arbitrator with significant knowledge of the relevant law, the other party will want to ensure that the tribunal’s decision is not solely based on the views of the arbitrator appointed by their opponent, and will therefore try to appoint someone with corresponding knowledge of the relevant legal issues.

However, the parties may just as well choose someone who is less knowledgeable of the relevant law but more technically savvy or commercially oriented. Knowledge of the relevant field or industry may be preferable in certain types of disputes. If counsel is very experienced in arbitration, he or she is also more likely to consider an arbitrator for his or her perceived appetite for complex material and industry calculations, or propensity to construe legal issues more narrowly. In fact, although arbitrators are usually lawyers, this is not necessarily the case: for instance, there are appointments of engineers or accountants to arbitral tribunals.

In addition, arbitrators may be chosen for their familiarity with the language of the arbitration and for their experience with international arbitration practice and procedure. Parties may select an arbitrator based on his or her approach to procedure, particularly for example a perceived attitude towards document requests.

In view of the different criteria considered for selecting the arbitral tribunal, it may often be the case that one or several arbitrators have limited knowledge of the issues in the applicable law(s). This knowledge gap is even more apparent in the case of a three-member tribunal, where arbitrators may come from different legal traditions.

So the situation often arises that the various actors in the arbitral proceedings lack the requisite knowledge on all the issues of law that may arise. How then can counsel competently argue on behalf of their clients on points of law that are unfamiliar to them? And how can arbitrators reach a decision on the merits when they do not know the contents of the applicable law? This is not always problematic: a lot of commercial disputes lie mostly on facts and contract interpretation. Nevertheless, the legal points that do arise will have to be addressed appropriately.

2. WHOSE ROLE IS IT TO ASCERTAIN THE CONTENTS OF THE SUBSTANTIVE RULES?

After determining which rules of law apply to the merits of the dispute, the contents of such rules need to be ascertained in order for the arbitral tribunal to rule on the merits. The first question which needs to be addressed is to whom does this important task fall? As has been explained above, there is practically no legal framework to provide guidance in this respect. The allocation of roles between the parties and arbitrators is not so straightforward, particularly in light of the differences in legal culture.

a. Iura Novit Curia and the Different Perceptions as to the Role of the Judge/Arbitrator

The principle of iura novit curia, ‘the court knows the law’, has already been mentioned above. In jurisdictions where the principle is applied, the parties to court proceedings do not need to produce any proof to establish the content of the applicable law (such as statutes and case law), because judges, and even more generally, the public, are supposed to know the law.20 This is along the lines of the famous French saying ‘everyone is presumed to know the law’ (‘nul n’est censé ignorer la loi’).

The principle of iura novit curia is widely recognized in civil law jurisdictions with respect to both lex fori and foreign law. This means that in jurisdictions where the principle is most strictly applied, the court is obligated to investigate and clarify the applicable law, regardless of whether the applicable law is the lex fori or foreign law. In some jurisdictions, the court can also appoint an expert to assist in determining the content of the foreign law. Little initiative is thus given to the parties.

There are however variations within civil law countries. One example is Sweden, where the iura novit curia principle is fully applied to Swedish law but only partially with respect to foreign law. The Swedish Code of Judicial Procedure provides:

“Proof of a circumstance that is generally known is not required.

Nor is proof required as to legal rules. If foreign law is to be applied and its content is not known to the court, however, the court may request party to present proof thereon.”21

The court is given an opportunity to request that the parties present proof with respect to the content of foreign law, and thus is not obligated to investigate it independently.

At the other end of the spectrum, in jurisdictions of common law tradition, foreign law is considered to be a matter of fact that has to be proven by the parties:

“It is a fundamental principle of the common law that courts will take judicial notice of the public laws of their own State, and that such laws need not be specially pleaded nor proved. But the laws of other States are universally regarded as facts which, independently of statute, must be specially pleaded, wherever the lex fori requires other facts, under like circumstances, to be pleaded.”22

Thus in the English common law tradition, the courts perform no investigations of the content of foreign law but leave it fully to the parties. If the parties do not present sufficient proof, the courts consider the content of the applicable foreign law to be equal to the lex fori.23

Another consequence of foreign law being treated as fact is that parties in common law court proceedings will use expert evidence to establish the contents of the applicable law. Just as technical experts would be used to provide opinions on matters in dispute (for example engineers, scientists or accountants), legal experts (typically, law professors) are appointed by the parties to provide an opinion on the foreign law.

In between these extremes there are some jurisdictions that apply a hybrid approach between civil law and common law.24 One example is US law, where Rule 44.1 of the Federal Rules of Civil Procedure reads:

“A party who intends to raise an issue about a foreign country’s law must give notice by a pleading or other writing. In determining foreign law, the court may consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence. The court’s determination must be treated as a ruling on a question of law.”

This hybrid-model leaves the court free to consider any relevant legal authorities whether or not submitted by a party, but also imposes an obligation upon the parties to plead on the foreign law issues they wish to raise. The court is thus permitted to do its own research and to apply rules of law not invoked by the parties, but not obligated to do so.

b. Influence of National Judicial Tradition in International Arbitration

As mentioned in the introduction above, neither the civil law nor common law approach makes much sense in the setting of international arbitration. The parties and the arbitrators are often from different judicial background, which is why there is no logic in speaking about civil law or common law. In practice, however, one cannot overlook the influence that the judicial background of the actors in an international arbitration often has on the proceedings.

Lawyers, whether they act as counsel or arbitrators, tend to lean on the principles that they are most familiar with. In the absence of a common framework for international arbitration, this will mean that arbitrators and parties will often have different expectations and approaches, as explained above.

With respect to the civil law approach, whereby the parties are not obliged to plead on the applicable law, it has been rightly argued that such practice should be rejected in the context of international arbitration.25 This is because each party should have the opportunity to comment and respond to every point raised and considered by the tribunal, be it legal or factual.

However, it may be argued that the common law view is not ideal either because in international arbitration the tribunal does not have a lex fori to rely upon if the parties do not sufficiently establish the contents of the applicable law. How can the arbitral tribunal rule on the merits if the parties have not adequately demonstrated what the content of the applicable law is? One solution to this problem is for the arbitral tribunal to give directives as to what issues of law they want the parties specifically to address.

In light of these considerations, it may be concluded that one should not let national judicial tradition determine practice in international arbitration. The advice to the practitioner is to bear the civil and common law perspectives in mind and take a flexible approach depending on the judicial background of the other actors in the arbitration. For example, if the parties and arbitrators all come from the same civil law background and the arbitrators are legally qualified in the applicable law, it would make little sense for the parties to prove the applicable law as ‘fact’.26

Acting as counsel before a common law originated tribunal, the practitioner might need to take further actions in order to prove the content of the applicable law than when acting in front of a civil law originated tribunal. Acting as an arbitrator in an arbitration where one party is from the civil law tradition and the other from the common law tradition, the practitioner should consider an active case management strategy in order to decrease the discrepancy between the parties’ expectations. The issue of establishing the content of the applicable law can be addressed during the first procedural meeting in the same manner issues regarding witness evidence, document production, translations and interpretations are routinely addressed.

c. The Need to Ensure the Validity and Enforceability of the Award

As mentioned above in the section regarding the applicability of mandatory rules, one of the arbitrators’ general duties is the duty to render a final and enforceable award. In addition, the arbitrators must always comply with the adversarial process and the principle of due process. With respect to the ascertainment of the content of the applicable law, the principle of due process has one main aspect — the arbitrators must give the parties a reasonable opportunity to present their case.

What does this mean in practice? The denial of the parties’ right to present their case and to oppose the opponent’s case is the widely acknowledged ground for setting aside and for refusing enforcement of arbitral awards. Arbitrators must bear this principle in mind throughout the entire arbitration proceedings, not least when applying the applicable law. This issue relates back to difficulties linked with the principle of iura novit curia and the respective roles of the parties and arbitrators in determining the contents of the applicable law.

There are cases where arbitral awards have been set aside because the arbitrators have applied principles and rules of the applicable law which had not been invoked or argued by the parties, a few of which will be referred to below. However one should not infer from these cases that the principle of iura novit curia is banned in international arbitration. In such cases the key reason for setting aside has more to do with the principle of due process.

The Swiss Federal Supreme Court has set aside an arbitral award where the arbitrators applied a Swiss law provision (the agreement was governed by the FIFA rules and secondarily by Swiss law) which neither party had invoked. According to the Federal Supreme Court, the arbitrators should have informed the parties about their intention to apply the Swiss law provision and given both parties opportunity to plead on the issue.27

An arbitral award has also been set aside by an English court where the arbitrators had raised a legal ground that had not been invoked by either party. The court held that the tribunal had not invited the parties to plead on the issue and noted that ‘this was not simply a case of a tribunal drawing a further inference on an issue which the parties had otherwise had the opportunity to address’.28

In the French case of Sporprom,29 an award was set aside because the arbitrator failed to give the parties the opportunity to comment on an opinion they had requested from a third party. Similar case law can be found in Belgium, Singapore, Quebec and Finland, among other jurisdictions.30

Looking at the available case law, it seems that there is no commonly accepted prohibition for the arbitrators to research the content of the applicable law or to apply rules that have not been invoked by the parties. However, the arbitrators’ authority in this respect is limited by the principle of ultra petita, meaning that the arbitrators may not make an award that exceeds the parties’ claims. Furthermore, when considering legal issues beyond the scope of the parties’ legal submissions, the arbitrators must give the parties the opportunity to comment on and argue their case on the issue raised by the arbitrators. The arbitrators’ establishment of the content of the applicable law should never come as a surprise to the parties.

However, it should be emphasized that this does not mean that there is a duty upon the arbitrators to research all relevant aspects of the applicable law and that the parties’ are free of the burden to argue on legal issues. One might say that the arbitrators’ application of iura novit curia in international arbitration is a right, but not a duty.31

Given the risks of the award being challenged in cases where the arbitrators do apply the iura novit curia approach, it is often advisable for the arbitrators to lay the main burden of researching and arguing the content of the applicable law on the parties. However, as elaborated above, this does not mean that the arbitrators should sit back and refrain from taking an active role in the process.

d. Should Administrative Secretaries Have a Role?

A particular topic, and possibly a problem, that should be recognized in connection with the question of the role of the arbitrator, is the issue of tribunal secretaries and their role in the arbitration proceedings.

The ICC International Court of Arbitration has addressed this topic in its ‘Note on the Appointment, Duties and Remuneration of Administrative Secretaries’.32 As concluded above, the arbitrators, at least to a certain extent and with the limitation of e.g. the principle of due process, should have the authority to investigate the content of the applicable law. Apparently, so does an administrative secretary.

The ICC Note states that an administrative secretary may perform ‘organizational and administrative tasks such as: […] conducting legal or similar research’.33 This is rather intriguing considering the above-mentioned uncertainty within the arbitration community with respect to the arbitrators’ own authority to perform legal research.

Even more interesting are the rules set out in Section 2 para. 3 of the ICC Note:

“Under no circumstances may the Arbitral Tribunal delegate decision-making functions to an Administrative Secretary. Nor should the Arbitral Tribunal rely on the Administrative Secretary to perform any essential duties of an arbitrator.”

This awakens a number of interesting questions regarding the role of the decision maker in relation to establishing and applying the applicable law. Naturally, the first question is: do administrative secretaries participate in the decision making? Do they act as a fourth arbitrator? If it is the case, what are the risks and how can these risks be eliminated?

e. Can National Courts Also Have a Role?

A final question to consider in determining who should ascertain the contents of the applicable law is: can the national courts play a role? Certain arbitration laws enable the courts to intervene in establishing the contents of the applicable law. For example, Section 45(1) of the English Arbitration Act 1996 regarding ‘Determination of preliminary point of law’ provides that:

“Unless otherwise agreed by the parties, the court may on the application of a party to arbitral proceedings (upon notice to the other parties) determine any question of law arising in the course of the proceedings which the court is satisfied substantially affects the rights of one or more of the parties […].”

Very similar provisions may be found in other common law jurisdictions.34

However, it should be noted that Section 45 of the English Arbitration Act applies to very limited circumstances as the application must be agreed by all parties to the arbitral proceedings or with the permission of the arbitral tribunal; the court must also be satisfied that it would produce substantial savings in costs.

Applications under Section 45 are limited to questions of English law, in accordance with the definition of ‘questions of law’ provided in Section 82(1) of the Act. The same approach is taken in Section 69 of the Act, which allows the English courts to hear appeals on points of law from arbitration awards, but only on points of English law. These two provisions, which are not mandatory, stem from the English courts’ interest in developing English commercial law and their wish not to be excluded from the law-creating process. English courts have the most expertise in applying the common law and it is understandable that parties to an English arbitration may wish to have the courts decide issues of English law. There could be costs savings, for example, if as a result the parties will not have to appoint several legal experts to debate on an uncertain area of the law.

3. MEANS OF ’PROVING‘ THE CONTENTS OF THE APPLICABLE LAW

As discussed above, the main burden of researching and arguing the content of the applicable law should be placed on the parties. The parties therefore need to decide how they are going to ‘prove’ the contents of the applicable laws.

The fact that parties are often said to be ‘proving’ the contents of the applicable law highlights a certain confusion between questions of law and fact. Indeed, the Oxford Dictionary of Law defines proof as ‘the means by which the existence or nonexistence of a fact is established to the satisfaction of the court’.35 It is frequently pointed out that the parties to arbitration proceedings assimilate points of law with factual evidence, adducing ‘proof’ of questions of law.36 Thus, it is not uncommon for parties to submit expert opinions on particular points of law, rather than arguing these points in their legal submissions.

One explanation for using legal experts may be found in the influence of the common law courts’ tradition of treating foreign law as factual evidence, as has been discussed above. But there are also practical considerations underlying the parties’ procedural choices. Though the influence of national court procedural rules remains to some extent, the actors in arbitral proceedings are progressively breaking away from the constraints of their respective national judicial systems. The wide acceptance of the IBA Rules on the Taking of Evidence in International Commercial Arbitration reflects an increasing trend to adopt common international standards for the conducting of the arbitral proceedings.

Typically, there are two (non-exclusive) ways for the parties to establish the contents of the applicable law: through legal submissions and/or legal experts. When the parties’ submissions take the form of a ‘memorial’, the expert opinions are submitted alongside the parties’ written submissions.

a. Counsel’s Arguments in Legal Submissions

In many cases the parties have counsel who have experience in the law applicable to the dispute. Counsel should therefore be able to address the content and meaning of the relevant rules in their written and oral submissions.

When doing so, one typically submits the legal authorities as exhibits, whether they are primary sources of law (such as statutes and, in common law systems, case law) or whether they assist in interpreting the law (secondary sources such as work of legal scholars).

In this respect, commentary on the new ICC rules indicates that:

“Unlike a judge in a national court, an arbitrator in an ICC arbitration should not be presumed to know the law, and will therefore need to be provided source material for any legal principles that he or she is requested to apply, unless the arbitral tribunal expressly states otherwise.”37

This is in line with the above-discussed assumption that it is preferable for the parties to establish the contents of the applicable law, considering that the arbitral tribunal does not necessarily have the requisite knowledge.

Another difficulty the parties and arbitrators may face in their endeavour to determine the applicable law is the language. Unless otherwise agreed, the parties should provide translations of the relevant legal sources.

Use of Co-Counsel

What is the best way to proceed if counsel lack the requisite knowledge or are not qualified to deal with certain aspects of the applicable law? The use of legal experts is often used in international arbitration and is addressed in more detail below. Instead of appointing an expert, the parties can also choose to use the relevant person as co-counsel, in addition to their principal counsel. There are generally no restrictions in arbitration laws and institutional rules as to the place of qualification of the parties’ legal representatives. Therefore a party may select counsel from the local bar of the seat of the arbitration and/or from ‘foreign’ jurisdictions (it should nevertheless be noted that certain jurisdictions require joint representation, where foreign lawyers need to be assisted by local counsel).38 However, the employment of multiple law firms may have adverse consequences on the awarding of costs if the tribunal considers the amount of legal fees to be unreasonable.

Co-counsel can provide their input on the legal issues at hand and participate in the preparation of the parties’ written and oral submissions.

As such they will sign the briefs and memorials and can participate in the hearing. However, a notable difference with the use of expert evidence is that there is no cross-examination of the parties’ counsel. The pros and cons of using co-counsel or legal experts are further discussed below.

b. The Use of Expert Evidence

Alternatively, the parties may elect to present the content of the applicable law through the use of legal experts.

Need for Legal Experts?

As mentioned above, it is somewhat unusual that issues regarding the applicable law should be addressed in an expert’s report in a similar fashion to factual evidence. Many authors also highlight this surprising feature, querying as to the necessity of appointing legal experts when specialized arbitrators have already been appointed to the tribunal.39

In Jean-François Poudret’s words:

“Is not one of the main arguments in favour of arbitration that specialists well informed about the issues involved are used, thus obviating the need to consult experts?”40

There are certainly cases where appointing legal experts would be superfluous. In particular, it has been suggested that arbitrators are expected to know certain areas of law, particularly international public law or transnational law (i.e. lex mercatoria and trade usages).41 But in certain complex international disputes, the arbitrators (and the parties’ counsel) cannot be expected to be knowledgeable on every aspect of the applicable law, particularly controversial issues of domestic law. As explained above, some arbitrators may be chosen for the technical expertise and may not even be legally qualified. In light of this, an independent and specialized third party with skills complementary to those of the arbitral tribunal may bring a valuable input to the dispute resolution process.

Legal Framework for Using Expert Evidence

Expert evidence may be separated in two broad categories: evidence provided by party-appointed experts and evidence provided by tribunal-appointed experts. Although both types of expert evidence are not always expressly mentioned in national arbitration laws and institutional rules, they are generally both admitted in practice. As to the specific use of legal experts, there are very few express provisions but it is also generally admitted.

Arbitration Laws

As noted previously, the common law tradition is to rely on party-appointed experts whereas civil law-trained lawyers often prefer tribunal-appointed experts. It is somewhat surprising that national arbitration laws do not reflect these preferences. Indeed, most arbitration laws, including from common law countries, provide primarily for the use of tribunal-appointed experts.42 For example, the English Arbitration Act of 1996 does not mention party-appointed experts (though they are commonly used in English arbitrations) but deals with tribunal-appointed experts in Section 37. Interestingly, Section 37 also refers to the tribunal’s power to appoint ‘legal advisors or assessors’, clearly showing that the arbitral tribunal may receive assistance from a third party to determine points of law.

The UNCITRAL Model Law also only mentions the appointment of experts by the tribunal,43 while some laws do not mention expert evidence at all (arbitration laws of France, Switzerland and the United States for example). However, more recently enacted laws recognize the common practice of using party-appointed experts, and have included express provisions for it (for example Austria44 and Spain,45 even though they are civil law systems).

Institutional Rules

Most institutional rules allow both the parties and the arbitral tribunal to appoint experts, but offer little assistance as to how they should be used in the arbitration proceedings.46

For example, Article 25 of the ICC Arbitration Rules of 2012 provides that:

“[…] (3) The arbitral tribunal may decide to hear witnesses, experts appointed by the parties or any other person, in the presence of the parties, or in their absence provided they have been duly summoned.

(4) The arbitral tribunal, after having consulted the parties, may appoint one or more experts, define their terms of reference and receive their reports. At the request of a party, the parties shall be given the opportunity to question at a hearing any such expert.”

Although these two rules fall under the broad heading of ‘Establishing the Facts of the Case’, it is generally accepted that nothing precludes the arbitral tribunal and the parties in an ICC arbitration from appointing legal experts, in addition to technical and financial experts.47 There are known cases where arbitral tribunals have appointed legal experts,48 as well as cases where the appointment of an expert was refused.49 Overall, it appears that the practice of appointing legal experts remains rare in ICC arbitrations, due to the expectation that arbitrators are capable of resolving the legal issues on their own.50

As their title suggests, the IBA Rules on the Taking of Evidence in International Arbitration primarily apply to the taking of evidence, i.e. the process of establishing facts. As such, the IBA Rules do not refer specifically to the use of legal experts. Nonetheless, the IBA Rules provide more detailed mechanisms for using expert witnesses, which may prove useful to determine which procedure to use for legal experts, should the parties decide to use experts for establishing points of law.

Choice of the Expert

When appointing legal experts, the parties should take into account possible preferences of the arbitrators. Civil law-trained lawyers have a preference for law professors,51 while common lawyers will prefer to choose experienced practitioners, for example a Queen’s Counsel (QC) for English law. However, the problem with appointing lawyers, whether they are retired or still practising, is the potential for bias and conflicts issues.52

When each party appoints an expert to determine the same legal issue, it is advised to appoint the expert as early as possible, as there may be a limited pool of experts on a given issue.

The Role of the Legal Expert

The legal expert’s role is to provide analysis and opinions on the applicable law in a fair and impartial manner. This requires the expert first to identify and provide the relevant legal sources and materials, before evaluating and interpreting them. Submissions from the parties’ counsel will often address the applicable law to the dispute as well. In that case, the expert should focus on the points of law that are particularly complex or outside the counsel’s area of practice or expertise.

It has been suggested that legal experts should help the tribunal only in assessing the nature and content of the applicable rules, but should refrain from giving any opinion or conclusion as to how these rules apply to the specific facts of the case.53

c. Should Legal Experts Be Appointed by the Parties or by the Arbitral Tribunal?

As shown above, arbitration rules usually provide for the possibility of using party-appointed and tribunal-appointed experts. Again, the choice between one or the other option may be heavily influenced by the legal culture of the parties and arbitrators. As stated by Jean-François Poudret and Sébastien Besson, ‘evidence by expert opinion is one of those subjects where the differences between common law and civil law countries are most marked’.54

The Use of Party-Appointed Experts

In common law traditions, which have a more adversarial and oral approach to proceedings, the preference goes to party-appointed experts. Common lawyers seek to keep control over their experts in order to present the best possible arguments for their clients. As such, it is important for each party to be able to present their own expert and for these experts to be cross-examined in the course of a hearing.55

However there is a legitimate concern, particularly from lawyers from civil jurisdictions, that party-appointed experts lack the requisite independence and neutrality. These experts are paid by the parties, and confer with the parties and their counsel when preparing their report. Party-appointed experts may be tempted to withhold certain information that would have adverse consequences for the appointing party, but that is not the preferred approach.56There is therefore a perceived danger that expert testimonies are ‘hired guns’ and ‘no more than paid advocacy of a party’s cause’.57

Doubts have also been expressed as to whether a battle between two party-appointed experts on points of law truly brings clarity and assists the arbitrators in deciding the case.58 This is because the submission of opposing expert reports is rarely coordinated and such reports may produce divergent or conflicting conclusions. Additionally, experts are instructed by the parties’ counsel and tend to focus on different priorities than that of the tribunal.

The Use of Tribunal-Appointed Experts

By contrast, tribunal-appointed experts are more prevalent in civil law traditions, where written and inquisitorial proceedings are favoured. An expert appointed by the tribunal may be perceived as having greater credibility than a party-appointed expert and his or her report will be given more weight by the tribunal.59

Letting the tribunal appoint a legal expert, however, is not so popular in modern arbitration proceedings, due to the perceived risk of unfairness and the suspicion that the expert will decide the dispute instead of the tribunal chosen by the parties. Strong scepticism comes from common law practitioners, who, due to their inclination towards adversarial procedures, believe expert evidence should be put into the arena of the parties.

One instance, however, in which it would make more sense for there to be a legal expert appointed by the tribunal, is when there is a sole arbitrator. In certain sectors it remains common to appoint non-lawyers as sole arbitrators. In such case, the assistance of a legal assessor or expert would be useful.

If the tribunal appoints the expert, the parties must nonetheless be given proper notice and the opportunity to comment on the expert’s legal assessment (as shown above).

Arbitrators should also be careful not to regard the expert they have appointed as an additional member of the tribunal: the tribunal has a duty not to delegate decision-making.60 Experts should therefore not participate in the tribunal’s deliberations or even meet with the tribunal in the absence of the parties.61

Another issue with tribunal-appointed experts is that in practice the parties will typically appoint their own experts, though such experts will not testify nor formally be part of the arbitration proceedings. The parties use these ‘shadow experts’ or ‘expert advisers’ to receive advice on the tribunal-appointed expert’s report. This effectively results in having three experts instead of one, which is hardly of any benefit when it comes to saving time and money.

Considering the reasons for and against each method of appointment, it appears the general trend in international arbitration today is to primarily rely on the testimony of party-appointed experts, with the use of tribunal-appointed experts limited to exceptional circumstances.62

d. Techniques for Gathering the Legal Expert’s Testimony

Written and Oral Testimony of the Legal Expert

Traditionally, experts are required to submit a written report on a limited number of issues, clearly defined in the parties’ instructions. The experts then typically provide oral testimony. The hearing of experts is significantly influenced by common law court procedures, for which reason experts can be subject perhaps to direct examination and certainly to cross-examination.

The parties’ counsel may assist the experts in the preparation of their reports and discuss with them their testimony.63 However, to maintain the impartiality and credibility of the expert, counsel should also seek to ensure the expert report reflects the expert’s own analysis and opinion.64

Many practitioners and authors have highlighted the inadequacy of examining and cross-examining expert witnesses, particularly legal experts.65 Indeed, the legal expert’s role is simply to assist and direct the tribunal on points that are outside the facts, as such they have no custody of the case. So why are they to be challenged by the other side in cross-examination? It is curious that distinguished and renowned law professors are subject to credibility attacks. If they are truly independent, they should not be subject to such hard questioning. Subjecting them to cross-examination effectively recognises that they are in fact ‘hired guns’.

From a practical aspect, the common law-influenced technique of questioning experts one after the other is also said to be time-consuming and inefficient. The experts often contradict each other and excessively develop points that are irrelevant or undisputed, which achieves very little in assisting the arbitral tribunal in making its decision. As a result, traditional examination and cross-examination of legal experts is becoming less frequent. It is suggested that confronting experts to each other is much more productive as it clearly reveals the source of diverging opinions and the underlying rationale for each party’s position.66

More Recent Techniques for Gathering the Experts' Testimony

From experience as arbitrator and counsel, it seems that the quickest and most efficient way to use legal experts is through witness/expert conferencing, colloquially referred to as ‘hot-tubbing’. It is a relatively novel procedure in which several witnesses and experts are questioned simultaneously, as opposed to one after the other, by both the arbitral tribunal and counsel. Witness conferencing saves time because there is no need to repeat the same question to each expert witness.67 The debate is also more valuable and informative as it takes place between experts of the same field, between peers who most often respect each other. It is more interactive and is not centred on aggressive or intimidating questioning techniques used by the parties’ counsel.

Some authors have suggested that witness conferencing should include the simultaneous questioning of all witnesses and experts participating in the case, so as to present a full picture of the relevant issues.68 However, this should not be necessary in the context of using legal experts. Legal experts are removed from the facts of the dispute and are to deal with specific legal issues. Organising a conference between the legal experts appointed by each party should be sufficient to obtain clarification on the content of the applicable law. Legal experts often do not apply the law to the facts, leaving this to the responsibility of the parties’ counsel and of the arbitral tribunal.

Witness conferencing is envisaged in the IBA Rules, which allow the tribunal to vary ‘the arrangement of testimony by particular issues or in such a manner that witnesses presented by different Parties be questioned at the same time and in confrontation with each other’.69

Another technique, similar in approach to witness conferencing, is to organise ‘pre-hearing meetings’. This technique allows the party-appointed experts who are preparing reports on same or related issues to meet on a privileged basis to discuss the contents of their expert evidence. This discussion may take place before, but more typically after the experts prepare and submit their respective reports. Following the meeting, the experts proceed to prepare a joint report which sets out the points they have managed to agree on and those for which they continue to have differences of opinion. This method has been taken into account in the IBA Rules70 and in the CIArb Expert Protocol.71 The preparation of a joint report may also be used in combination with expert conferencing.

Some practitioners have suggested an alternative method combining aspects from both party-appointed and tribunal-appointed experts: ‘expert teaming’.72 With this technique, each party proposes a list of prospective experts, from which the arbitral tribunal will select two experts, one from each list. The two experts will then prepare one or several joint reports and may subsequently be questioned by the tribunal and the parties. Legal experts may have very opposing views on the status and contents of the law, but when they meet they tend to moderate their stance and converge naturally. A joint report will thus elucidate the genuine points of difference.

Finally, there are also suggestions that oral testimony of legal experts should be dispensed with entirely. Instead, the questioning of legal experts could be conducted in writing, which may be favourable to obtaining more accurate opinions.73

e. Means of Proving the Content of the Applicable Law: Is there a Better Approach?

As has been shown, currently the parties can establish the contents of the applicable law in two main ways: through counsel submissions or through legal experts. The arbitral tribunal itself also has the possibility of appointing a legal expert, but as explained above, this solution is seldom chosen for fear that the dispute be resolved by the expert instead of the tribunal. As such, it is mainly up to the parties to determine, as early as possible in the proceedings, which method they prefer to use in order to prove the contents of the applicable law. To that end, what considerations should the parties take into account? Arguably there is not one method that is overall better than the other.

Considerations Regarding the Composition of the Arbitral Tribunal and the Parties’ Legal Team

As has been detailed above, the way in which the parties establish points of law may depend on the arbitrators’ and counsel’s familiarity with the applicable laws. If counsel is not familiar with the applicable law, the party can appoint a legal expert or instruct a local co-counsel. Regarding the arbitrators, if the members of the tribunal are all thoroughly versed in the relevant legal issues, they may be offended if the parties appoint an expert to provide them with an outside opinion.74 Whether the arbitrators are civil law-trained or common law-trained also has an impact on the choice of procedure (see above).

Considerations Regarding the Nature of the Case and Legal Issues

In view of the multitude of laws that can potentially apply to a dispute on distinct issues, arguably it would be inefficient for the parties’ legal teams to include co-counsel from each jurisdiction involved. If there are isolated, distinct points of laws which cannot be dealt with by the parties’ legal team, it seems more appropriate to appoint a legal expert with the requisite knowledge whose report will be strictly confined to the particular legal point at hand.

Furthermore, the parties must consider the extent of the connections between the factual and legal issues of their case. If the legal issues are closely intertwined with issues of fact, the use of legal submissions may this time be preferred because (i) the parties’ counsel have an extensive knowledge of all the facts of the case, whereas the experts only know the facts provided to them by counsel in their instructions, and (ii) in legal submissions, the parties can argue as to how the law applies to the facts (how the facts are qualified and what the legal outcome should be) whereas legal experts would typically refrain from addressing the facts of the case.

Considerations Regarding Costs

Appointing an expert can be quite costly, so the parties may prefer to have their counsel argue on the applicable law. However this argument becomes invalid if the parties’ principal counsel has no expertise in the applicable law. In such case, the parties will need to instruct a co-counsel that is familiar with the relevant law(s), which adds to the legal fees incurred in the proceedings.

In an overall cost analysis, the additional cost of appointing an expert should also be assessed against a possible reduction in arbitrator costs. Where arbitrators are paid on an hourly or daily basis, it should be considered to what extent the expert report helps with the arbitrators’ analysis of the issues, and accordingly reduces time spent by arbitrators on the case.75

Considerations Regarding Efficiency

There are considerations of efficiency both in the preparation and hearing phases of the case.

Using co-counsel can be easier for the preparation phase of the case. From experience of working in an international law firm, communications with known colleagues are much simpler than having to select an expert and give him or her instructions.

Regarding the hearing phase, it is often argued that cross-examination of experts can significantly increase the length of the hearings. This is even more so when the expert’s language is different than the language of the arbitration, as appropriate translation will have to be introduced into the exchange between the advocate and the expert. It is also debatable whether cross-examination on legal issues brings further clarification to the arbitral tribunal (see above), compared with, say hot-tubbing of legal experts.

By contrast, there is no cross-examination of the parties’ counsel regarding the contents of their legal submissions. With this in mind, it seems that clients increasingly prefer that their international counsel associate with a firm with the requisite local legal expertise and plead the relevant issues directly to the tribunal. There are therefore fewer legal experts used in commercial arbitration today.

Considerations Regarding Credibility

The sole reliance on written and oral submissions by the parties’ counsel may be less effective in terms of credibility and persuasive value. This is because counsel submissions are, by definition, more partisan and one-sided. Expert reports, on the other hand, are supposed to be neutral and objective, even if the expert is party-appointed.76 Accordingly, their reports may have more persuasive value in the eyes of the members of the tribunal. So, even when principal counsel do have the requisite knowledge and qualification to address the legal issues, they may want to benefit from the perceived independence of a law professor.

On the other hand, it may also be viewed that party-appointed experts are the parties’ advocates in disguise, and it that would be more transparent and legitimate for legal arguments to be advanced by the parties’ counsel. It is based on this realisation that the parties are said to have more and more recourse to counsel submissions.77

Considerations Regarding Ethical Rules

A practical consideration when choosing whether to use a co-counsel rather than an expert, is the ethical rules to which counsel and expert may be subject to, respectively.

For example, when the parties consider using legal submissions rather than expert evidence: is co-counsel also required to give a power of attorney? Practices have differed in international arbitration as to whether powers of attorney should be presented by the parties’ counsel. The current trend leans towards universal authorisation of counsel to represent the parties, perhaps because powers of attorney are perceived as unnecessary.

For the person brought into the arbitration by a party to provide their legal expertise, there are different consequences arising from being appointed as an expert witness or as a co-counsel. Indeed, ethical duties of lawyers may apply differently depending on whether they participate in the arbitration proceedings as an expert witness or as co-counsel. A party’s legal representative is obliged under most professional rules of conduct to diligently represent the client’s interests as an advocate. By contrast, expert witnesses are bound by duty to objectively testify, which may include presenting information that is adverse to the interests of the appointing party. Very few professional responsibility codes specifically address the duties of an attorney acting as an expert witness.78 For example, the English Solicitors’ Regulation Authority considers that the rules of conduct related to litigation and advocacy do not apply if the solicitor is acting as an expert witness, as it does not constitute ‘legal practice’.79

f. Importance of the Arbitral Tribunal

It has been submitted that the duty to determine the contents of the applicable law belongs primarily to the parties, rather than the arbitral tribunal. This is not to say, however, that the arbitrators have no role in the process, on the contrary.

In light of the various procedural means available to the parties for establishing the contents of the applicable law, careful consideration should be given to the choice of the arbitral tribunal. As has been shown above, little guidance is provided by arbitration laws and institutional rules on such means. As such, if the parties are unable to agree on the relevant procedure, the arbitral tribunal will have the last word on how the parties should proceed to establish the contents of the applicable law. The arbitrators will decide if and how legal experts are selected (by the tribunal or the parties),80 how they are heard (cross-examination, witness conferencing or expert teaming) and the weight to be given to oral versus written evidence.81 These decisions may have a decisive impact on the case, so the parties should consider prior to selecting an arbitrator what his or her stance is likely to be on such procedural matters.

As foreshadowed, it is advisable for the arbitral tribunal to consult the parties at the earliest stage of the proceedings to determine how the contents of the law will be ascertained and if there are particular legal issues that it considers material to the outcome of the case. This is line with the approach presented in Article 2 of the IBA Rules, though it relates to evidentiary issues.

CONCLUSION

Certain considerations discussed seem clear and established: no law is ‘foreign’ in international arbitration, there are only applicable laws; the many actors to an arbitration procedure are likely to be unfamiliar with many or all of the applicable laws, or in some cases may have no legal training at all; the common law and civil law traditions have vastly different approaches with respect to procedure, particularly concerning the respective roles of the decision-maker and the parties, the mode of proof of ‘foreign’ law, the method of appointment of experts and the importance given to oral testimony.

As is often the case in international arbitration, many procedural and practical questions, however, remain open-ended. How to properly inform the arbitral tribunal of the contents of the applicable law? Is it the role of principal counsel, of co-counsel or of legal experts? What are the consequences of choosing one or the other for the conduct of the proceedings? If the ‘proof’ provided by the parties turns out to be insufficient, can the arbitrators, or even their administrative secretaries, research the contents of the applicable laws themselves? And what should they then do?

Aside from legal submissions, document disclosure, expert evidence and witness statements of fact, could there be other types of documents in arbitration? For example, one could imagine the possibility for each party to provide an independent report from a third party with the relevant legal expertise. Since that third party is supposed to have credibility and authority, there would be no need to involve him or her further in the arbitral proceedings or to gather his or her oral testimony.

Should national courts have a more active role in the determination of points of law, along the lines of Section 45 of the English Arbitration Act? It is true that parties who choose to go to arbitration typically prefer to avoid involvement of the courts, but if such involvement were to be circumscribed to a specific question of law, would it not be desirable to have this legal issue settled by the most authoritative body? One could imagine a procedure similar to that of questions referred to the Court of Justice of the European Union for preliminary ruling, which are restricted to points of EU law and do not impact the domestic courts’ application of the law to the facts.

1
See Julian Lew, Loukas Mistelis and Stefan Michael Kröll, Comparative International Commercial Arbitration, 2003, page 452-460.

2
See Yves Derains, Part VIII. Choice of law applicable to the contract and international arbitration, The ICC International Court of Arbitration Bulletin, vol. 6/N° 1 — May 1995.

3
The clause has been cited in the judgment in the case Channel Group v Balfour Beatty Ltd. [1993] A.C. 334.

4
Such as Article 22(1) of the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce, which provides that ‘The Arbitral Tribunal shall decide the merits of the dispute on the basis of the law(s) or rules of law agreed upon by the parties. In the absence of such agreement, the Arbitral Tribunal shall apply the law or rules of law which it considers to be most appropriate.’

5
Such as Article 187 of Switzerland’s Federal Code on Private International Law provides that ‘The arbitral tribunal shall rule according to the law chosen by the parties or, in the absence of such choice, according to the law with which the action is most closely connected.’

6
Such as Article 28(2) of the UNCITRAL Model Law on International Commercial Arbitration that reads: ‘Failing any designation by the parties, the arbitral tribunal shall apply the law determined by the conflict of laws rules which it considers applicable.’

7
See Nigel Blackaby and Constantine Partasides et al., Redfern and Hunter on International Arbitration, 2009, page 220-235.

8
The arbitrators were faced with this question in an arbitration in which the issue of governing law (and jurisdiction of the arbitral tribunal) was determined in an interlocutory award in year 2006. The award has been cited in Stockholm International Arbitration Review 2007:2, pages 235-253. See also comments to the award by Phillip Capper, Stockholm International Arbitration Review 2007:2, pages 254-261.

9
Naturally, this duty should be seen as a “best efforts” obligation. See Nigel Blackaby and Constantine Partasides et al., Redfern and Hunter on International Arbitration, 2009, para. 11.11.

10
Article V.2(b) of the New York Convention.

11
Practically every country’s arbitration legislation provides that an arbitral award can be set aside if it is contrary to public policy.

12
The International Law Association’s Committee on International Commercial Arbitration, Final Report on Ascertaining the Contents of the Applicable Law in International Commercial Arbitration, Rio de Janeiro Conference, 2008.

13
Yves Derains, “Part VIII. Choice of Law Applicable to the Contract and International Arbitration”, ICC International Court of Arbitration Bulletin, vol. 6/N° 1 — May 1995.

14
Regulation(EC) No 864/2007 of the European Parliament and the Council of 11 July 2007 on the Law Applicable to non-contractual obligations.

15
Klaus Peter Berger, “Evidentiary Privileges: Best Practice Standards versus/and Arbitral Discretion”, Arbitration International, Volume 22 Issue 4, 2006, pages 501-520 and Daria Kozlowska, “Privilege in the Multi-Jurisdictional Area of International Commercial Arbitration”, International Arbitration Law Review, Issue 4, 2011, pages 128-137.

16
For a more extensive analysis of the classification of privilege , the applicable law with respect to issues of privilege and related questions, see articles by Klaus Peter Berger and Daria Kozlowska, above.

17
Rule 7 of the ICDR Guidelines for Arbitrators Concerning Exchanges of Information.

18
See for example Section 4 of the English Civil Evidence Act of 1972 and Rule 33.7 (“Evidence of finding on question of foreign law”) of the English Civil Procedure Rules; see also Article 12 and 13 of the French Code of Civil Procedure.

19
See Christopher R. Seppälä, “Obtaining the right international arbitral tribunal: a practitioner’s view”, The International Construction Law Review, Volume 25, Part 2, April 2008, pages 198-219; see also Gabrielle Kaufmann-Kohler, “The Arbitrator and the Law: Does He/She Know It? Apply It? How? And a Few More Questions”, Arbitration International, Volume 21, Issue 4, 2005, pages 631-638, 636-637.

20
Emmanuel Gaillard and John Savage (editors), Fouchard Gaillard Goldman on International Commercial Arbitration, 1999, paragraph 1263.

21
Chapter 35 Section 2 of the Swedish Code of Judicial Procedure.

22
Raleigh C. Minor, Conflicts of Laws or Private International Law, 1901, page 527.

23
Gisela Knuts, “Jura Novit Curia and the Right to be Heard — An Analysis of Recent Case Law”, Arbitration International (LCIA 2012 Volume 28 Issue 4) page 671.

24
Ibid; see also the International Law Association’s Committee on International Commercial Arbitration, Final Report on Ascertaining the Contents of the Applicable Law in International Commercial Arbitration, Rio de Janeiro Conference, 2008, page 9.

25
Emmanuel Gaillard and John Savage (editors), Fouchard Gaillard Goldman on International Commercial Arbitration, 1999, paragraph 1263.

26
See Nigel Blackaby, Constantine Partasides et al, Redfern and Hunter on International Arbitration, 2009, page 410.

27
Urquijo Goitia v. da Silva Muñiz, the Federal Supreme Court of Switzerland, case 4A_400/2008.

28
OAO Northern Shipping Company v Remolcadores De Marin SL (Remmar) [2007] EWHC 1821 (Comm) (26 July 2007), England and Wales High Court (Commercial Court).

29
Sté Sporprom Service BV v. Sté Polyfrance Immo, Court of Appeal of Paris, 18 January 1983, Revue de l’Arbitrage, 1984, page 87.

30
For references, see for example Jeff Waincymer, Procedure and Evidence in International Arbitration, 2012, page 172-175 and Gisela Knuts, “Juria Novit Curia and the Right to be Heard — An Analysis of Recent Case Law”, Arbitration International, (LCIA 2012 Volume 28 issue 4) page 669-688.

31
Alberi Christian, “Part I: International Commercial Arbitration, Chapter 1: Iura Novit Curia in International Commercial Arbitration: How Much Justice Do You Want?” in Kröll Stefan Michael, Mistelis Loukas et al. (editors), International Arbitration and International Commercial Law: Synergy, Convergence and Evolution, 2011, page 23-27.

32
ICC International Court of Arbitration, Note on the Appointment, Duties and Remuneration of Administrative Secretaries, revised version issued on 1 August 2012.

33
Ibid, section 2 para. 2.

34
For example Singapore’s Arbitration Act 2001( domestic arbitration), section 45; Malaysia’s Arbitration Act 2005, section 41 (applying mainly to domestic arbitration, unless the parties agree otherwise); Australia’s uniform Commercial Arbitration Acts (domestic arbitration), section 27J; New Zealand’s Arbitration Act 1996, Schedule 2 (optional rules), section 4; however there is no equivalent to this section in the UNCITRAL Model law.

35
Oxford Dictionary of Law, 6th edition, 2006.

36
Jean-François Poudret and Sébastien Besson, Comparative Law of International Arbitration, second edition, 2007, page 554.

37
Jacob Grierson and Annet van Hooft, Arbitrating under the 2012 ICC Rules, 2012, page 169.

38
Gary Born, International Arbitration: Cases and Materials, 2011, pages 975 and 976.

39
Yves Derains and Eric A. Schwartz, Guide to the ICC Rules of Arbitration, second edition, 2005, page 278.

40
Jean-François Poudret, “Conclusions”, in ICC Institute of International Business Law and Practice, Arbitration and Expertise, 1994, page 143.

41
Ahmed S. El Kosheri, “The Different Types of Experts with Special Emphasis on Legal Experts (Jura Novit Curia)”, in Albert Jan van den Berg (editor), International Arbitration 2006: Back to Basics?, 2007, pages 797-800; see also Pierre Bienvenu and Martin J. Valasek, “Witness Statements and Expert Reports”, in Doak Bishop and Edward G. Kehoe (editors), The Art of Advocacy in International Arbitration, second edition, 2010, pages 275-276.

42
See Klaus Sachs and Nils Schmidt- Ahrendts, “Protocol on Expert Teaming: A New Approach to Expert Evidence”, in Albert Jan van den Berg (editor), Arbitration Advocacy in Changing Times, Volume 15, 2010, pages 136-137.

43
Article 26 of the UNCITRAL Model Law on International Commercial Arbitration.

44
Section 601(4) of the Austrian Arbitration Act of 2006.

45
Section 32(3) of the Spanish Arbitration Act of 2003 (revised in 2011).

46
See for example Article 22 of the ICDR’s International Dispute Resolution Procedures, Article 21 of the LCIA Rules, Article 29(5) of the UNCITRAL Arbitration Rules (revised in 2010).

47
Yves Derains and Eric A. Schwartz, Guide to the ICC Rules of Arbitration, second edition, 2005, page 277.

48
See Order in ICC Case No. 6848(1992), Clunet, 1992, page 1047, referred to in Yves Derains and Eric. A. Schwartz, Guide to the ICC Rules of Arbitration, second edition, 2005, page 278, note 229.

49
See ICC Case No. 6465, Clunet (1994), page 1088, referred to in Yves Derains and Eric. A. Schwartz, Guide to the ICC Rules of Arbitration, second edition, 2005, page 279, note 234.

50
Yves Derains and Eric A. Schwartz, Guide to the ICC Rules of Arbitration, second edition, 2005, page 278, note 229.

51
Jeff Waincymer, Procedure and Evidence in International Arbitration, 2012, page 952.

52
See Kap-You (Kevin) Kim and John P. Bang, “Commentary on Using Legal Experts in International Arbitration”, in Albert Jan van den Berg (editor), International Arbitration 2006: Back to Basics?, 2007, pages 779-785, 782.

53
Ibid, page 784; see also Pierre Bienvenu and Martin J. Valasek, “Witness Statements and Expert Reports”, in Doak Bishop and Edward G. Kehoe (editors), The Art of Advocacy in International Arbitration, second edition, 2010, pages 279-280.

54
Jean-François Poudret and Sébastien Besson, Comparative Law of International Arbitration, second edition, 2007, page 560.

55
Yves Derains and Eric A. Schwartz, Guide to the ICC Rules of Arbitration, second edition, 2005, page 279.

56
Jeff Waincymer, Procedure and Evidence in International Arbitration, 2012, page 933.

57
See Arthur Marriott, “Arbitrators and Settlement”, in New Horizons in International Commercial Arbitration and Beyond, 2005, page 534; see also Klaus Sachs and Nils Schmidt-Ahrendts, “Protocol on Expert Teaming: A New Approach to Expert Evidence”, in Albert Jan van den Berg (editor), Arbitration Advocacy in Changing Times, Volume 15, 2010, page 139.

58
See Klaus Sachs and Nils Schmidt- Ahrendts, “Protocol on Expert Teaming: A New Approach to Expert Evidence”, in Albert Jan van den Berg (editor), Arbitration Advocacy in Changing Times, Volume 15, 2010, page 139.

59
Yves Derains and Eric A. Schwartz, Guide to the ICC Rules of Arbitration, second edition, 2005, page 278.

60
See Audley Sheppard, “English Arbitration Act (Chapter 23), Part I, The Arbitral Proceedings, Section 37 [Power to appoint experts, legal advisers or assessors]” in Loukas A. Mistelis (editor), Concise International Arbitration, 2010, pages 789-791.

61
Yves Derains and Eric A. Schwartz, Guide to the ICC Rules of Arbitration, second edition, 2005, page 279.

62
See Klaus Sachs and Nils Schmidt- Ahrendts, “Protocol on Expert Teaming: A New Approach to Expert Evidence”, in Albert Jan van den Berg (editor), Arbitration Advocacy in Changing Times, Volume 15, 2010, pages 136 and 141; see also Michael Feutrill and Noah Rubins, “The preparation of expert evidence in international commercial arbitration: practical aspects”, International Business Law Journal, n°3, 2009, pages 307-331, 307.

63
See for example Guidelines 20 and 24 of the IBA Guidelines on Party Representation in International Arbitration, 2013.

64
See Guidelines 22 of the IBA Guidelines on Party Representation in International Arbitration, 2013.

65
Michael Feutrill and Noah Rubins, “The preparation of expert evidence in international commercial arbitration: practical aspects”, International Business Law Journal, n°3, 2009, pages 307-331, 316; see also Wolfgang Peter, “Witness ‘Conferencing”, Arbitration International, Volume 18, Issue 1, 2002, pages 47-58.

66
See Wolfgang Peter, “Witness ‘Conferencing’”, Arbitration International, Volume 18, Issue 1, 2002, pages 47-58.

67
See Michael Hwang SC, “Witness conferencing”, in James McKay (editor), Legal Media Group Guide to the World’s Leading Experts in Commercial Arbitration, 2008, page 3.

68
See Wolfgang Peter, “Witness ‘Conferencing’”, Arbitration International, Volume 18, Issue 1, 2002, pages 47-58.

69
Article 8(2) of the IBA Rules.

70
Article 5(3) of the IBA Rules.

71
Article 6 of the Chartered Institute of Arbitrators’ Protocol for the Use of Party-Appointed Expert Witnesses in International Arbitration.

72
See Klaus Sachs and Nils Schmidt-Ahrendts, “Protocol on Expert Teaming: A New Approach to Expert Evidence”, in Albert Jan van den Berg (editor), Arbitration Advocacy in Changing Times, Volume 15, 2010, pages 144-147.

73
See Kap-You (Kevin) Kim and John P. Bang, “Commentary on Using Legal Experts in International Arbitration”, in Albert Jan van den Berg (editor), International Arbitration 2006: Back to Basics?, 2007, pages 779-785, 784-785.

74
See Gabrielle Kaufmann-Kohler, “The Arbitrator and the Law: Does He/She Know It? Apply It? How? And a Few More Questions”, Arbitration International, Volume 21, Issue 4, 2005, pages 631-638, 638.

75
Jeff Waincymer, Procedure and Evidence in International Arbitration, 2012, page 933.

76
See Kap-You (Kevin) Kim and John P. Bang, ‘Commentary on Using Legal Experts in International Arbitration’, in Albert Jan van den Berg (editor), International Arbitration 2006: Back to Basics?, 2007, pages 779-785, 780.

77
See Pierre Bienvenu and Martin J . Valasek, “Witness Statements and Expert Reports”, in Doak Bishop and Edward G. Kehoe (editors), The Art of Advocacy in International Arbitration, second edition, 2010, pages 276-277.

78
Mark Kantor, “A Code of Conduct for Party-Appointed Experts in International Arbitration — Can One be Found?” in Arbitration International, 26(3), 2010, page 364.

79
Ibid, page 365.

80
It is the arbitrators’ role to either accept the opinion of experts appointed by the parties or to appoint an independent expert themselves. See Jean-François Poudret and Sébastien Besson, Comparative Law of International Arbitration, second edition, 2007, pages 560-561.

81
See Christopher R. Seppälä, “Obtaining the right international arbitral tribunal: a practitioner’s view”, The International Construction Law Review, Volume 25, Part 2, April 2008, pages 198-219, page 199.