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Arbitration offers significant advantages over litigation, not only because of the worldwide enforceability of arbitral awards but also because its flexible rules of procedure and evidence allow greater efficiency and accommodate users from diverse legal systems. Its growing popularity can be seen from the fact that since the 1980s, jurisdictions around the world have been improving their arbitration regimes to better compete as venues in the international arena. The dominant overall trend has been to enhance arbitral independence by lessening the extent to which local courts may become involved in any capacity other than a supportive role. Recent developments in two major jurisdictions bear this out. China has been reviewing its legislation which dates from 1991 (Civil Procedure Law) and 1995 (Arbitration Law) and, last month, a further and important ‘interpretation’ by the People’s Supreme Court came into effect. Earlier this year, the Comite Francais de l’Arbitrage published a proposal in the form of a ‘mini-code’ of 81 articles for Part IV of the Nouveau Code de Procedure Civile that has been submitted to the Chancellerie. In each case, these texts are designed to clarify the law for users, to bolster the enforcement of arbitration agreements and, further, to restrict state intervention in the arbitral process. In the run-up to the 10th anniversary of the enactment of the Arbitration Act 1996 in England, healthy reflection is underway on what additional reforms might be introduced. England will eventually have to keep up by improving the Arbitration Act, especially as the statute did not go as far as it might have at the time, retaining many local particularisms inconsistent with international standards. In addition, the effect of certain advances under the Arbitration Act has been attenuated by an inconsistent and, at times, interventionist judicial response together with a failure to fully appreciate just how different international arbitration may be from domestic litigation. International arbitration calls on its own reflexes, style of pleadings, rules of procedure and evidence, body of ‘statu-tory’ law, jurisprudence and case law. The profession and the judiciary in England have been slower than other jurisdictions to take this on board because arbitration has long been viewed here as a subordinate and integrated part of the legal system and too often judged with reference to the state model. In addition, a certain ‘legal nationalism’ remains a feature of discussion among practitioners who often aim more to promote England than to critically assess track record. Associated with this is the still-popular belief in the inherent superiority of common law procedure and the system of precedent which, it is claimed, lead to a legal system that is more coherent, reliable and predictable than others. The reality is somewhat different, of course. In Arbitration Act 1996, third edition, Professor Robert Merkin notes that the Act itself has, “generated a mass of complex and contradictory case law which is scarcely compatible with any of [the] aspirations… to be user-friendly in its language and logic, to lay down clear principles on the conduct of arbitrations and the powers of the courts and to encourage the use of London as a neutral forum”. One measure of increased arbitral independence is found in the Chinese Supreme Court’s affirmation of a strong principle of separability beyond cases concerning the illegality or invalidity of the main contract. Article 10 of the interpretation provides that an arbitration agreement will remain binding even where the parties do not complete the underlying contract. This principle was recently affirmed by the French Cour de Cassation which, following doctrinal censure of earlier jurisprudence less supportive of a strong principle of separability, finally enforced arbitration despite the inexistence of a host contract in Societe Omenex c. M Hugon [2005]: “en application du principe de validite de la convention d’arbitrage et de son autonomie en matiere internationale, la nullite non plus que l’inexistence du contrat qui la contient ne l’affectent.” Where the same question has arisen in a number of cases in England, the courts have not enforced arbitration, adhering instead to a weak principle of separability, despite section seven of the Arbitration Act stating: “An arbitration agreement which forms or was intended to form part of another agreement… shall not be regarded as non-existent… because that other agreement… did not come into existence.” A cornerstone of arbitral independence is the power to rule on jurisdiction, at least in the first instance (known as competence-competence). The recent Comite Francais proposal provides, in relation to both domestic and international arbitration, that in no case may a court determine ‘a titre principal’ the validity of an arbitration agreement (articles 1447 and 1497). This issue must be referred to the arbitral tribunal. While arbitrators in England also enjoy the power to rule on their own jurisdiction, where issues arise before the court relative to the validity, scope or enforceability of an arbitration agreement, these are resolved by the courts and not referred to arbitrators. This displacement of arbitral jurisdiction introduces the risk that the legal assessment of arbitration agreements will be conducted from a judicial perspective with reference to norms and imperatives (including rules of evidence and procedure) that are not relevant to arbitration. This is often detrimental to support for arbitration. The approach of the courts in England varies, as a contractual or textual analysis may be applied without regard to general principle or the parties’ intentions. A natural further consequence is recourse to local courts by parties who might prefer a judicial approach to arbitral jurisdiction after disputes arise. In China, the Supreme Court has issued a number of directives favouring a liberal approach to the enforcement of arbitration agreements and the most recent interpretation contains many provisions strengthening support for arbitration. Both the French proposal and the Supreme Court Interpretation entrench broad definitions of an agreement in writing to arbitrate which includes any form of written record or communication. The Comite Francais proposal confirms that there are no particular requirements of form in international arbitration (Article 1493). In England, section five of the Arbitration Act sets out equally broad criteria. The Chinese Interpretation now clarifies that a reference to institutional rules will be understood as an agreement to administration by the institution. The Comite Francais proposal and the Supreme Court interpretation close down avenues of recourse to the courts by requiring parties to raise objections to jurisdiction or procedural defects during the arbitration. This is also a feature of the Arbitration Act, section 73 of which provides that parties lose rights of challenge where they continue to participate in proceedings without raising an objection. Limited reforms introduced by the Arbitration Act 1996 require the courts to enforce a procedural independence the Act confers on arbitrators who are not required to adhere to rules of evidence and procedure applicable before the courts, even where English law applies to the merits. In the future, the courts will be required to become still less interventionist. In the interests of uniformity and to avoid the intrusion of domestic legal considerations, it may be an advantage to identify a specialist judicial panel to deal with international arbitration claims. This is already the practice in other jurisdictions, France for example, where such cases are heard directly by a special division of the Cour d’Appel (section C of the 1ere Chambre). The courts’ main challenge lies in developing a theoretical basis for treating international arbitration in accordance with other than domestic norms. The courts also need to allow arbitral tribunals greater independence in the areas of substantive law and jurisdiction. The clash was evident in the High Court decision partially to set aside an ICC award in Peterson Farms v C & M Farming [2004]. In contrast, the speech of Lord Steyn in the House of Lords decision in Lesotho Highlands v Impregilo [2005] embraced the freedom of arbitrators to develop procedural and substantive law and in more cases than ever before last year, English courts accepted to refer to arbitral awards as sources of legal norms. Further reforms should be introduced to bring England more fully within the United Nations Commission on International Trade Law model law ‘club’ (if not to go beyond). This should involve the abolition of the appeal regime under section 69 of the Arbitration Act, currently the statute’s most litigated provision. In all other model law jurisdictions, appeals from the legal merits of arbitration awards are already excluded in relation to international disputes (unless the parties agree otherwise). This is, likewise, the case in France where an appeal regime remains in place only for domestic arbitration awards. Under the Comite Francais’s recent proposal, this will be excluded even for domestic arbitration unless parties expressly opt for it. The process of continued reforms means that it is safer than ever before to arbitrate disputes. A surprising convergence of legal standards in favour of maximum autonomy for the arbitral process is emerging from the competition for users.

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