Chapter 3: The role of overriding mandatory rules before arbitration tribunals
Analyzing how mandatory rules are dealt with in practice by arbitrators is necessary to provide a pragmatic approach regarding what measures arbitrators should take to limit the extent of the dilemma mandatory laws bring to arbitration. This chapter mainly deals with substantive mandatory laws before arbitrators. The first concerns the contractual source of authority of the arbitrator in applying the law applicable to the dispute, chosen by the parties, followed by a discussion on party autonomy. Later, the link between general mandates and concerns of an arbitral tribunal with regard to the enforcement of their awards, and laws that are overridingly mandatory and foreign to their source of authority is discussed. The chapter then shifts to the approaches taken by arbitral tribunals in dealing with mandatory laws applicable to the merits of a dispute, discussing both mandatory norms of the parties’ chosen law, the lex arbitri and those that are foreign to the law chosen by the parties.
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