Contemporary Challenges and Continuing Relevance
Edited by Franco Ferrari and Diego P. Fernández Arroyo
Chapter 18: Private international law and arbitration: arbitral determination of the law or rules of law governing the merits
This chapter starts by differentiating choice of law criteria observed by national courts of law and international commercial arbitrators in determining the law or rules of law governing the substance of the dispute. After highlighting that – unlike courts of law – arbitral tribunals are not bound by a national lex fori to establish the applicable substantive law or legal rules, and excluding from the scope of the analysis arbitral decisions under bilateral investment protection treaties, the chapter explains actual arbitral choice of law decisions on the merits by essentially looking at awards rendered under the aegis of the International Chamber of Commerce arbitration rules. Against the backdrop of such decisions, the chapter shows that arbitral choice of law determinations are prompted by choice of law stipulations originated in the disputing parties themselves, notions of reasonableness and fairness finding their legal support in a functional analysis of competing laws and rules vying for application to the disputed merits issue at stake, and the large leeway enjoyed in practice by international arbitrators in making choice of law determinations.
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