Limitations to Party Autonomy in International Arbitration
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Description
Arbitration is often referred to as ‘a creature of contract’ and, therefore, ‘an expression of party autonomy’. Some commentators even consider party autonomy to be the ‘backbone’ or ‘bedrock’ of international arbitration. This liberalist thinking is based on the premise that arbitration is a dyadic process between two rational parties that rests on the parties’ delegation of adjudicatory authority to an arbitral tribunal through an exercise in party autonomy. This party autonomy is not only the source of any arbitral tribunal’s adjudicatory authority; it also allows the parties to decide how that adjudicatory authority is to be exercised. In other words, party autonomy allows the parties to shape the arbitration in a way that best fits given facts and circumstances. And it is this autonomy ‘and the promise that parties to international arbitration are free to control their process’ that have contributed to the success of arbitration. Without party autonomy, it appears, arbitration would not be what it is and much of its appeal would be lost. However, closer scrutiny shows a different picture. Neither are the actors who may potentially be involved in arbitration proceedings by definition rational agents, nor is arbitration a process involving only the parties in dispute. Arbitration creates a web of relationships involving the parties, the arbitrators, arbitral institutions, and the public at large. While the interests of these different stakeholders overlap in some cases, they diverge in others, thus creating tensions that at times are solved by limiting party autonomy. The present paper develops a taxonomy of these limitations to party autonomy that reflects the diverging interests of the various stakeholders affected by the arbitral procedure. It is submitted that there are limitations to party autonomy in the interest of the parties themselves, the public at large, the arbitrators, as well as the arbitral institutions. By acknowledging these limitations, which may also be imposed in the interest of more than one stakeholder at the same time, the authors do not wish to downplay the merits of party autonomy or depart from the liberalist tradition. Quite to the contrary, the authors’ position is that a clear understanding of the limitations to party autonomy is necessary to protect arbitration against legitimacy challenges and uphold its role as the primary instrument for resolving business disputes. Ultimately, the limitations to party autonomy hence also ensure that arbitration can persist as a viable system of dispute resolution.
Source Publication
Cambridge Compendium of International Commercial and Investment Arbitration
Source Editors/Authors
Stefan Kroll, Andrea K. Bjorklund, Franco Ferrari
Publication Date
2023
Volume Number
1
Recommended Citation
Ferrari, Franco and Rosenfeld, Friedrich, "Limitations to Party Autonomy in International Arbitration" (2023). Faculty Chapters. 549.
https://gretchen.law.nyu.edu/fac-chapt/549
