"I realise that some of my criticisms may be mistaken; but to refuse to criticize judgements for fear of being mistaken is to abandon criticism altogether... If any of my criticisms are found to be correct, the cause is served; and if any are found to be incorrect the very process of finding out my mistakes must lead to the discovery of the right reasons, or better reasons than I have been able to give, and the cause is served just as well."

-Mr. HM Seervai, Preface to the 1st ed., Constitutional Law of India.

Monday, May 2, 2011

SSRN Articles for April 2011

Lots of SSRN articles on arbitration last month. Many promising abstracts. Cunningham, for example, argues that by having a judicial policy of favouring arbitration, the American courts might be putting their interest ahead of the contracting parties. Check out ADR Prof Blog's take on this article from here.Another article deals with the validity of religious arbitrations in USA and UK. Abstract of the article by Schultz about the concept of law in transnational legal order seems promising (on a related note, check out the article by Jan Paulsson titled 'Arbitration in Three Dimensions'). We also have two articles on transnational norms-lex mercatoria and lex sportiva. Happy reading!

Brussels I and Arbitration Revisited - The European Commission’s Proposal COM(2010) 748 final -
Martin Illmer

Abstract:
In December 2010, the European Commission presented its long-awaited proposal for a reformed Brussels I Regulation. One of the cornerstones of the proposal is the interface between the Regulation and arbitration. In the first part, the article sets out the development of the exclusion of arbitration from the Regulation's scope up to the West Tankers and National Navigation cases. In the second, main part, the author, who is a member of the Commission's Expert Group on the arbitration interface, provides a detailed account and evaluation of the new lis pendens-mechanism established by the Commission proposal in order to effectively prevent parallel proceedings in the arbitration context. In the third, final part, the author scrutinizes the Commission proposal against the background of the Commission's Impact Assessment before concluding with a short resumé.

Rhetoric versus Reality in Arbitration Jurisprudence: How the Supreme Court Flaunts and Flunks Contracts (and Why Contracts Teachers Need Not Teach the Cases)
Lawrence A. Cunningham

Abstract:
Supreme Court rhetoric about the role of contracts and contract law in arbitration jurisprudence differs sharply from the reality of its applications. In the name of contracts, the Court administers a self-declared national policy favoring arbitration, a policy directly benefiting the judicial branch of government. This often puts the Court’s preferences ahead of those of contracting parties while declaring its mission as solely to enforce contracts in accordance with contract law. The Court thus cloaks in the rhetoric of volition a policy in tension with constitutionally-pedigreed access to justice and venerable principles of federalism.

This Article documents the rhetoric-reality gap and explores why it exists and why it matters. The rhetoric-reality gap is attributable in part to a dilemma the Court created for itself: its national policy favoring arbitration is constitutionally-suspect unless people assent, yet letting people make what contracts they wish would prevent implementing the national policy. The jurisprudence diminishes the Court’s legitimacy, tempts defiance, creates doctrinal incoherence, and poses other costs. This Article calls for reconciling these conflicting positions rather than sustaining the status quo: the Court should either give up its national policy favoring arbitration and truly respect freedom of contract or come clean about its national policy’s real implications and acknowledge its narrow conception of contract and contract law.

The Status of Religious Arbitration in the United States and Canada
Nicholas Walter

Abstract:
This paper discusses, and challenges, the status of religious arbitration in the United States and Canada. Religious arbitration - defined as the settling of disputes through the intermediation of religious authorities, rather than having recourse to the courts - has been written about considerably in recent years. All writers to date have considered ways in which rights guaranteed by secular courts can be maintained before religious tribunals. This paper is the first to consider the problem caused by religious tribunals for the rights of free exercise of religion for those using religious tribunals. It argues that the enforcement of awards made by religious tribunals, and agreements to arbitrate before religious tribunals, by secular courts is an unconstitutional infringement of parties’ rights of free exercise of religion in both the United States and Canada. This is true even though the United States Supreme Court and the Canadian Supreme Court have different jurisprudence on freedom of religion. Although the United States and Canada may still encourage parties to mediate their disputes through religious means, statutes should be enacted in both countries providing that no party may enter a contract to enter a binding arbitration process based on religious principles. Furthermore, the discussion in the paper has implications for debates about the status of religious tribunals in other countries, such as the United Kingdom.

The Interplay of International Dispute Resolution Mechanisms: The Softwood Lumber Controversy
Leonila Guglya

Abstract:
The Article discusses the interrelation of ‘competing’ international mechanisms for the settlement of disputes originating from the same factual background. The problem is assessed with reference to the of the fourth and fifth phases of the Softwood Lumber controversy between the United States and Canada - an immense dispute featuring the interplay between domestic litigation, investment arbitration and dispute settlement conducted under the rules of different chapters of the regional trade agreement (North American Free Trade Agreement), WTO dispute settlement, as well as interstate arbitration proceedings conducted within the London Court of International Arbitration under specially ‘customized’ rules of the latter.

Why Arbitrate? Substantive versus Procedural Theories of Private Judging
Christopher R. Drahozal

Abstract:
This paper examines why parties agree to arbitrate. Or, more specifically, it examines whether parties agree to arbitrate for procedural reasons or for substantive reasons. Procedural reasons focus on how the arbitral process differs from the litigation process: it may be faster, cheaper, or avoid "hometown justice," for example. Substantive reasons focus on the rules of decision in arbitration versus litigation: parties may want a decision maker who applies more formalistic rules than courts would apply or rules (such as transnational law) that are separate from national laws, for example.

Of course, parties can agree to arbitrate for both procedural and substantive reasons, and some reasons are difficult to classify as either procedural or substantive. But subject to those important limitations, the available empirical evidence suggests that procedural reasons tend to be more important (for many, although not all, types of contracts) than substantive reasons in explaining why parties agree to arbitrate. One exception is that in some U.S. consumer contracts, businesses use arbitration clauses to reduce the risk of class relief, a reason that might be classified as either substantive or procedural.

Foreign Investment and Dispute Resolution Law and Practice in Asia: An Overview
Vivienne Bath and Luke R. Nottage

Abstract:
International investment, especially Foreign Direct Investment (FDI), continues to grow apace across the Asian region, despite the Asian Financial Crisis and now the aftermath of the Global Financial Crisis (GFC). This paper is based on the introductory chapter for our 13-volume book (Foreign Investment and Dispute Resolution Law and Practice in Asia, forthcoming in October 2011 from Routledge). The book surveys both substantive law affecting FDI and investment dispute resolution law and practice, focusing on major capital exporting and importing countries in the region (especially Japan, China, India, Korea, Indonesia, Malaysia and Vietnam). Another distinguishing feature of the book is the way it integrates comparative law studies of domestic legal systems with analyses of important emerging trends in international investment treaty law. With a Preface from the President of the International Bar Association, the book also brings together further chapters from a diverse group of senior and up-and-coming academics and practitioners expert in these fields:

- Preface (by Akira Kawamura)
- Investment Arbitration in Asia: Five Perspectives on Law and Practice (Luke Nottage and J. Romesh Weeramantry)
- A Passive Player in International Investment Law: Typically Japanese? (Shotaro Hamamoto)
- The Quandary for Chinese Regulators: Controlling the Flow of Investment into and out of China (Vivienne Bath)
- China’s Investment Treaties: A Procedural Perspective (Nils Eliasson)
- Foreign Investment in Indonesia: The Problem of Legal Uncertainty (Simon Butt)
- The Japan-Indonesia Economic Partnership Agreement: An Energy Security Perspective (Sita Sitaresmi)
- Malaysia’s New Foreign Investment Law Regime (Salim Farrar)
- Treaty Definitions of ‘Investment’ and the Role of Economic Development: A Critical Analysis of the Malaysian Historical Salvors Cases (Govert Coppens)
- The ‘Object and Purpose’ of Indian Investment Agreements: Failing to Balance Investment Protection and Regulatory Power (Prabhash Ranjan)
- The Evolution of Korea’s Investment Treaties and Investor-State Dispute Settlement Provisions (Joongi Kim)
- Legal Issues in Vietnam’s FDI Law: Protections under Domestic Law, Bilateral Investment Treaties and Sovereign Guarantees (Hop Dang)
- Review of Asian Views on Foreign Investment Law (Muthucumaraswamy Sornarajah)
 
The present paper sets the scene for these other chapters in the book by outlining key features and some current controversies about FDI flows and the regulatory regimes under domestic and international law. Part II presents an historical overview of economic development and foreign investment in Asia, including the ASEAN sub-region, as well as the most recent trends. Part III provides a brief introduction to dispute resolution more generally throughout Asia. Part IV offers short summaries of the other chapters in the book.

The Concept of Law in Transnational Arbitral Legal Orders and Some of its Consequences
Thomas Schultz

Abstract:
If an arbitration system, hypothetically disconnected from states, were to seek to replicate the rule of law beyond the state, in its own transnational order, what would it look like? This question, which seems current given the proliferation of international dispute resolution mechanism and the continuing rise of international arbitration, formed an implicit theme of the scholarship known as the School of Dijon. Some thirty years ago, the School of Dijon asserted the existence of non-national legal systems revolving around arbitration mechanisms, such as the lex mercatoria. Over the years, their claim developed into the argument that these systems’ own legality forms a basis for claims of autonomy from the state, the presence of law dispensing from the need for control by another legal order. This article argues first that this line of arguments is an enthymeme, as the concept of law has been the object of a near wholesale eschewal of definitional attention by the School of Dijon and its kindred theories. The article then maintains that any concept of law used for the aforementioned rhetorical and political purposes ought to include the fundamental principles of the rule of law. It then examines the guise that the rule of law takes when applied to transnational adjudicative normative orders instead of national legal systems.

Friends of the Panel: The Evolution of Amicus Participation in International Investment Arbitration
Andrew Friedman

Abstract:
This paper traces the history of amicus briefs in international investment arbitration from their first introduction through their recent use. It further discusses the potential future importance of amicus participation in international investment arbitration due to the newest generation of bilateral investment treaties.

The Competence of Investment Arbitration Tribunals to Seek Preliminary Rulings from European Courts
Miloš Olík and David Fyrbach

Abstract:
In the wake of the accession of new EU Member States in 2004 and in 2007, the portfolio of bilateral investment treaties (BIT) between Member States has become significantly larger. The fact that these BITs overlap with EU law creates friction when BITs are applied by investment tribunals which are constituted thereunder. In the spirit of the requirement that EU law be applied uniformly, these tribunals should have the authority to refer matters to the ECJ for preliminary rulings. Given the peculiarities of commercial and investment arbitration tribunals, it will not do to point to the previous case law of the ECJ on the admissibility of requests for a preliminary ruling by international commercial tribunals (i.e., in particular, Nordsee, Danfoss). In assessing the options of investment arbitration tribunals for referring matters for a preliminary ruling, one must put the focus on the basis of their jurisdiction, which derives from the provisions of the given legal system, i.e., the international treaty.

Private Selection and Arbitrator Impartiality
Alon Klement and Zvika Neeman

Abstract:
This paper examines the effect of private selection of arbitrators over arbitrators’ incentives in deciding the cases before them in an impartial and unbiased manner. We argue that the private selection of arbitrators might adversely affect the accuracy of arbitrators’ decisions. Arbitrators might want to make an incorrect decision when a correct decision may raise the suspicion that they are biased. We compare the accuracy of arbitrators’ decisions under different arbitrator selection procedures and discuss the implications for the design of arbitration rules by arbitration and dispute resolution providers.

The Three Pursuits of Dispute Settlement
Thomas Schultz

What is dispute settlement? What should we expect or ask from a dispute resolution mechanism? To what extent and with what consequences can we buy dispute resolution, privatise it and remove it from society’s purview? Should arbitration be seen as a mechanism that merely does away with disputes, or rather as an instrument of governance? These are some of the principal questions on which this essay seeks to provide some basic structuring reflections. To this effect, the essay envisions three functions that dispute settlement may pursue: the individualised and isolated maximisation of the parties’ satisfaction; the sustainment of the rule of law and of predictability; and the enforcement of substantive societal values

Arbitration Provisions: Little Darlings and Little Monsters
Stephen E. Friedman

Abstract:
This Article takes a new approach to resolving the growing tension between the Federal Arbitration Act (FAA) and the unconscionability doctrine. While arbitration provisions are favored under the FAA, they are viewed far more skeptically by courts applying unconscionability to refuse enforcement of one-sided arbitration provisions. This tension, which has increased dramatically in recent years, represents a major fault line in contract law. Jurisprudence and commentary on this issue have assumed that courts have the authority to apply the unconscionability doctrine to arbitration provisions. This Article refutes that assumption, taking the position that Congress, in passing the FAA, removed from the courts the power to use unconscionability to deny enforcement of arbitration provisions. This argument is based on the language and structure of the FAA, the FAA’s legislative history, commentary contemporaneous with the passage of the FAA, and the nature of unconscionability. To the extent it is necessary to protect vulnerable parties from one-sided arbitration provisions, judicial application of the unconscionability doctrine cannot be the solution. This Article suggests that the arbitration system itself may be capable of addressing any such overreaching.

Lex Sportiva: Transnational Law in Action
Ken Foster

Abstract:
This paper deals with the concept of lex sportiva as an example of transnational law. It attempts a defintion of the concept after reviewing the literature, and argues that it is mainly the application of general legal princples to sports-related disputes settled by the awards of the Court of Arbitration for Sport. It further argues for a recognition of the special features of sports jurisprudence as a 'lex ludica' as a distinct category. It ends by highlighting the extent to which lex sportiva is private justice created by global sporting organisations and outside the range of judicial review by national courts.

Yes, Final and Binding but We Have To Talk: Humanizing or Vacating the Award?
Simon M. Weldehaimanot

Abstract:
After a devastating war that lasted for two years, Eritrea and Ethiopia went to an international arbitration the award of which they agreed to take as a “final and binding” settlement of their border dispute. Unfortunately, settled in law the dispute remains alive as a matter of fact. Ethiopia is demanding that both countries talk on the demarcation process of their boundaries to eliminate those situations in which villages are divided by the boundary and that, as a precondition, Eritrea ceases being a security threat to the region lest Ethiopia would consider regime change in Eritrea. Knowing the delimitation award does not prohibit such sensible departure in the course of demarcation and believing that Ethiopia’s demand for dialogue is not honest, Eritrea has adamantly declined talks on the “final and binding” award. This article explores the legal validity of the several positions of both countries. Questions pertaining to the wisdom of opening a “final and binding” international award for dialogue and the very rare possibilities of vacating such an award are some of the relevant issue of international law involved.

Whose Dictionary Controls?: Recent Challenges to the Term ‘Investment’ in ICSID Arbitration
Joseph Boddicker

Abstract:
In April 2009, two ICSID tribunals once again split over the definition of the term “investment.” The tribunal in Phoenix Action, Ltd. v. Czech Republic elected to employ an objective standard for investment. Building upon the ubiquitous Salini hallmarks, the tribunal added the requirements that the assets be invested in accordance with the laws of the host state and bona fide. Yet in an annulment granted merely a day later, the ad hoc committee in Malaysian Historical Salvors SDN BHD v. Malaysia (MHS) minimized the importance of the Salini criteria, stating that they were not “fixed or mandatory as a matter of law.” Using a subjective standard, it defined “investment” based almost entirely on the term’s definition in the applicable BIT. Since neither the Convention nor international law incorporates the concept of stare decisis, this vacillation will likely persist.

This Comment analyzes the bases of ICSID tribunals’ authority to define “investment” given the Phoenix tribunal’s supplementation to the Salini factors, and the MHS tribunal’s rejection thereof. After concluding that Article 25 of the ICSID Convention requires that tribunals assign an expansive definition to the term “investment,” the analysis shifts to the Phoenix tribunal’s failure to apply basic principles of equity and international law in reaching its decision and to the MHS tribunal’s correct derivation of “investment” from both the ICSID Convention and the U.K.-Malaysia BIT. This Comment contends that, in order to sufficiently eliminate legal risk and induce private international investment, ICSID tribunals’ jurisdiction over investment disputes must lie in the intersection of its Convention and applicable member states’ BITs and FTAs.

Consumer (In)Justice: Reflections on Canadian Consumer Class Actions
Jasminka Kalajdzic

Abstract:
This paper was written on the occasion of the 40th anniversary of the Annual Workshop on Commercial and Consumer Law and as a contribution to a collection of retrospective essays in the 50th volume of the Canadian Business Law Journal. In the paper, I reflect briefly on the impact of collective action on consumer access to courts, and the promised guarantee of effective justice. In the first part of the paper, I summarize the results of an empirical study which asked class action lawyers to identify the categories of cases being litigated, including those that come within the rubric of "consumer protection actions." I then examine two of the more significant advances in consumer rights litigation, namely, the development of the waiver of tort doctrine and the widespread rejection of mandatory arbitration clauses in consumer contracts. In the final part of the paper, I discuss two challenges to achieving substantive justice for consumers that have recently become more pronounced: increasing reliance on cy près distribution of settlements, and the effect of adverse costs awards on representative plaintiffs.

Is There Light at the End of the Gas Pipe? On the (Provisional?) Applicability of the Energy Charter Treaty to the 2009 Russia-Ukraine Gas Transit Dispute and the Relevance of the Yukos Interim Awards
Anna Marhold

Abstract:
This article focuses on the Energy Charter Treaty (ECT) and what role Article 7(7) on energy transit could have played in resolving the gas transit dispute between Russia and the Ukraine in 2009. Subsequently, the article discusses Russia’s provisional application of the ECT and its withdrawal from the Treaty in October of 2009, and the implications thereof for a potential future gas transit dispute between the two countries. Finally, the article looks at the conclusions to be drawn from the Interim Awards of the Yukos arbitration in order to answer the question: Is there light at the end of the gas pipe?

Internet Disputes, Fairness in Arbitration and Transnationalism: A Reply to Dr Hörnle
Thomas Schultz

Abstract:
This article is a reply to Julia Hörnle's book Cross-border Internet Dispute Resolution. Starting from Dr Hörnle's insistence on fairness, the author discusses three dimensions of online arbitration that shape the contours of justice in a transnational dispute resolution setting: accuracy, due process and applicable law. The author contends that online arbitration must remain limited to seeking approximate truth, applying an 80/20 principle to due process, where 20 per cent of the efforts yield 80 of the results in terms of due process. More importantly, the author maintains that the pursuit of the sort of justice with associate with the rule law requires online arbitration to apply transnational rules, and national consumer laws.

The State, a Perpetual Respondent in Investment Arbitration? Some Unorthodox Considerations
Mehmet Toral and Thomas Schultz

Abstract:
International arbitration, generally speaking, has dramatically increased in use over the last decades and, as an institution, has begun to play a more central role in shaping the global economy. In particular, the important role played by investment arbitration as a de facto regulatory institution of international investment is increasingly recognized. But this regulatory role is rather divorced from the original raison d’être of the system of international investment arbitration, which was to provide heightened protection of investors and thereby encourage international investment. Accordingly, the system was initially designed as a shield placed in the hands of the investor, some form of defense directed toward protecting it from the state. While the number of cases submitted to the International Centre for Settlement of Investment Disputes (ICSID) and other investment arbitral tribunals has risen spectacularly, the number of arbitration proceedings initiated by states has remained extremely low, leaving the state in the role of perpetual respondent. In other words, while the shield is well used, it is increasingly coming to resemble the sword. The ensuing, and repeated, blows against states presumably contribute to the current backlash against international investment arbitration. The institution that is arbitration, establishing in this case such a disproportionate balance of arms, understandably encounters problems when it acquires a rather unintended regulatory role as an effect of its widespread use. Put more prosaically, the investor is almost systematically cast in the role of the claimant in disputes in opposition to the state that hosts the investment. The structure of investment arbitration is thus seen as primarily benefiting the investor to the detriment of the state.

Consequently, the system of investment arbitration, because of the way its de facto role has evolved, requires us to seriously consider the possibility of proceedings that go both ways rather than one. We must ask ourselves how, in which situations and to what extent the state is legally capable, and politically and economically likely, to act as a claimant. Some aspects of this question have already been discussed rather extensively, such as issues of consent in treaty-based arbitration, and the possibility for the state to bring counterclaims. These now orthodox considerations do not form the main subject of our study and are only raised en passant. Rather, we seek to extend our understanding of the problem by approaching it from more substantive aspects and political/realistic perspectives than strictly procedural considerations.

This essay moves in two parts. Part I relates to treaty-based arbitration; it examines the dichotomy between the obligations of states and the obligations of investors. It challenges the assumption that the current regime of bilateral investment treaties imposes obligations only on states and not on investors. Part II relates to contract-based arbitration; it contemplates the situations in which the state has the right incentives to act as claimant. Brutally simplified, the state acts as a private party and not as a sovereign power when expropriation would presumably not achieve the state’s objectives: lack of sufficient investor assets within the territory of the state; mistrust by the state in its own institutions, such as a corrupt judiciary; or the need to take internal dissensions to an independent international tribunal.

Law and International Commerce: Between the Parochial and the Cosmopolitan
J. J. Spigelman

Abstract:
In the context of international commerce, legal decision-makers in the legislative, executive and judicial branches of government are influenced by their philosophical predisposition about respect for foreign elements of the matter involved. This predisposition ranges over a broad spectrum: from parochialism at one end to cosmopolitanism at the other. This paper discusses those areas of the law where the contrasting values of cosmopolitanism and parochialism are evident, including commercial arbitration, the possible emergence of an international lex mercatoria, venue and forum disputation, the availability and use of anti-suit injunctions, the enforcement of foreign judgments, judicial cooperation and comity, and the determination of questions of foreign law. In all these contexts, this paper argues that international judicial cooperation is required to provide a functional response to cross-border problems, and that the trend towards judicial globalisation ought to continue.

The Interplay Between U.S. Statutory Rights and Public Policy Under the FAA/New York Convention in International Disputes
Daniel Schwarz
 
Abstract:
The "prospective waiver" doctrine allows U.S. courts to invalidate or sever arbitration clauses in otherwise valid agreements to arbitrate where arbitrating under foreign law would prevent a U.S. party from seeking relief under a U.S. statute. The loss of this opportunity is said to affront U.S. public policy. This paper acknowledges that courts’ application of this idea has resulted in the need for a more fundamental revisiting of the question of whose law should be "mandatory" in international arbitration. But more specifically, this paper proposes appropriate sets of factors for pre-arbitration courts, arbitrators, and post-arbitration enforcement courts to consider in balancing the competing forces of desiring to protect vulnerable parties, to hold parties to their bargain, to give regard to the general preference for international arbitration as a beneficial means for resolving international commercial disputes, and otherwise to ensure that the interest in effective implementation of public policy is not stifled.

American Justice at a Crossroads
Thomas Stipanowich

Abstract:
This Article provides a transcript of Professor Stipanowich’s remarks during the Pepperdine Dispute Resolution Law Journal’s symposium, American Justice at a Crossroads. In these remarks, Professor Stipanowich discusses issues raised in the Final Report of the American College of Trial Lawyers and the Institute for the Advancement of the American Legal System, including those related to discovery and court rules. He also comments on the new Protocols for Expeditious, Cost-Effective Commercial Arbitration: Key Action Steps for Business Users, Counsel, Arbitrators, and Arbitration Provider Institutions. Finally, he expresses his hope that the symposium serves as a landmark occasion for those interested in developing more effective and appropriate approaches to resolving conflict.

The Roles of Dispute Settlement and ODR
Thomas Schultz

Abstract:
To anyone asking whether online dispute resolution (ODR) works, whether it is important, whether it deserves to get a chapter of its own in a book such as this, a simple answer may be offered: eBay today resolves through ODR about sixty million disputes per year. At this stage, the normal reader will probably feel either dismayed or puzzled. Or both.

Dismayed that a few lines into the article, an important typo has escaped correction. But no, this staggering number is not a reckless lapse in accuracy. To make it more credible, it may simply be compared with this statement by two high-ranking eBay officials, one of whom is perhaps the world’s most respected ODR expert: ‘Unofficial estimates put the number of online disputes into the hundreds of millions of cases per year, maybe even into the billions.’ Sixty million disputes resolved remains a relatively small fraction of all the disputes that could be submitted to these forms of resolution – there is in fact much room for growth of ODR.

How is it possible that this set of dispute resolution mechanisms has grown so much without attracting notice? Why are important international regulatory bodies not evincing more compunctions about their lack of work in this area? Why have the numerous books on ODR (including some of my own) not found their way onto the shelves of every arbitration and mediation practitioner, when they deal with the world’s most successful dispute resolution systems, caseload-wise? Possibly yet more puzzling is why is it so extremely rare to meet an e-commerce consumer who has ever heard of the concept of ODR?

A partial answer to this last question likely is that many online shoppers have used an ODR system, but without actually identifying it as such. And there is the rub – ODR is, to a certain extent, not really dispute resolution at all.

So what is there to know about ODR? However much one may enjoy the logical thrills of investigating legal rules and their interconnections, at this stage of the research in the field one must surrender to the conclusion that questions of black letter law relating to ODR have become barely deserving of esteem by anyone not looking for an exercise. A recent excellent book by Julia Hornle adroitly settled the remaining questions in this regard and only invites comments regarding some of its sociological, practical and philosophical underpinnings. Today one is left with a gnawing sense that the real questions are elsewhere. They may well be situated at two extremes: on the one hand at the level of punctilious but nonetheless crucial questions of practical implementation, such as the most appropriate ways to design a webpage and an IT system so as to create an electronic environment particularly conducive to settlement. On the other hand, important underlying questions appear with respect to the role of dispute resolution in society. This book’s editor asked me to focus on the latter, quite rightly so.

Accordingly, this chapter will start with a particularly terse summary of ODR mechanisms, before quickly moving on to a nutshell illustration of how a dispute resolution-based regulatory system can be made transnational and over-come the hurdles of the world’s segmentation into different states with different laws. These two sections set the background for the real theme of this chapter, which will form the balance of the essay: the variegated roles of dispute resolution systems.

The Use of Information Technology in Arbitration
Gabrielle Kaufmann-Kohler and Thomas Schultz

Abstract:
Information technology (IT) has invaded the legal profession. Very few are those who, today, do not work on a daily basis with electronic communication technologies. And dispute resolution is one of the most rapidly developing fields of IT usage. This article thus seeks to chart progress of the use of IT in offline arbitration.

This article is not about specific niches of dispute resolution, but about standard procedures. In other words, it is not about online dispute resolution (ODR), but about how various IT solutions may be put to good use in traditional arbitral proceedings. Moreover, it is not meant for particularly computer-literate counsel or arbitrators, but for practitioners with a standard understanding of IT. Hence, its subject-matter is centered on a discussion of the more commonplace IT solutions (e.g. e-mails, online filing, case-management websites, videoconferencing), and not of exotically sophisticated and rarely used technologies.

This article is practice oriented, and thus includes practice guidelines and suggests standard forms for the use of IT. It also presents the services currently offered by arbitral institutions, such as NetCase, the ICC's IT facility that has recently just become operational.

This article has been substantially revised for publication as a book: Thomas Schultz, Information technology and arbitration - A practitioner's guide, Kluwer Law International, 2006.

Arbitration – A Good Deal for Consumers
Peter B. Rutledge

Abstract:
This white paper provides lawmakers and their staffs with a counterpoint to the Public Citizen Report and sets forth the case, grounded in empirical research, for why arbitration is a good deal for consumers.

Flexible Arbitration for the Developing World: Piero Foresti and the Future of Bilateral Investment Treaties in the Global South
Andrew Friedman

Abstract:
The recent arbitration of Piero Foresti et al v. Republic of South Africa opened several questions that will no doubt have tremendous implications going forward in the world of international investment. It concerned the rights of investors weighed against the right of a host state to pass legislation in an effort to remedy past discrimination. The paper suggests a flexible method for review of such cases in an effort to allow host states to fulfill internationally recognized goals such as remedying past discrimination and marginalization.

Some Critical Comments on the Juridicity of Lex Mercatoria
Thomas Schultz

Abstract:
This article discussed the legality of the lex mercatoria, that it whether lex mercatoria can be considered law. It is divided into three Parts, which reflect the three main views of the nature of the lex mercatoria, in an order that starts with the most watered-down acceptance of the lex mercatoria and ends with the most ambitious one. It may be pointed out that these different views of the lex mercatoria are assessed not according to their appeal, workable character, or popularity in practice, but only with respect to their accuracy as theoretical constructs.

Part I examines the idea that the lex mercatoria is merely a method of decision making used by arbitrators. This view relies on the idea that the lex mercatoria is a method of rule-selection, ac- cording to which rules are extracted from other legal systems (typically national ones), reinterpreted and adapted to international commerce, and applied in this new guise. The analysis will show that this view implicitly and necessarily relies on the idea that the lex mercatoria is, in fact, a legal system of its own.

Part II delves into the view that the lex mercatoria is not a legal system, but merely a set of legal rules. The discussion will show that this view is fundamentally flawed, inasmuch as that which makes rules legal is their belonging to a legal system, which legal system is necessarily the lex mercatoria itself.

Part III then critically analyzes the lex mercatoria as a legal system of its own, and concludes that it fails to meet certain requirements of structure and that its normative contents lack certain formal qualities, which all are essential features of a legal system. The article concludes that the lex mercatoria is not law, that it is in and of itself devoid of jural character, that it is not an instance of legal pluralism.

International Commercial Litigation: An Asian Perspective
J. J. Spigelman

Abstract:
This paper focuses on the legal transaction costs which operate as a significant non-tariff barrier to mutually beneficial exchange in trade and investment between nations. It sets out the role, functions and advantages of the international regime for commercial arbitration, based on the UNCITRAL Model Law and the New York Convention for Enforcement of Arbitral Awards. The paper discusses a range of mechanisms to harmonise civil procedure and to enhance co-operation between courts on cross-border issues, including: the Model Principles of Transnational Civil Procedure of the American Law Institute and UNIDROIT; the incidence of venue disputation; the Hague Choice of Court Convention; the UNCITRAL Model Law on Cross-Border Insolvency; the Hague Evidence Convention and Hague Service Convention and the mechanisms for enforcement of foreign judgments. The emergence of a new conception of judicial comity and of an international sense of collegiality in the context of globalisation is discussed.

Whither Arbitration?
Peter B. Rutledge

Abstract:
Over the past several decades, scholars and policymakers have debated the future of arbitration in the United States. Those debates have taken on new significance in the present Congress, which is considering a variety of reform proposals. Among the most widely watched are ones that would prohibit the enforcement of predispute arbitration clauses in employment, consumer and franchise contracts. Reviewing the available empirical literature, the paper explains how many of the assumptions driving the arbitration reform debate are unproven at best and flatly wrong at worst. It then tries to sketch out the economic impact of any move by Congress to limit arbitration in certain fields. The effect, I submit, would be to harm the very consumers and employees whom Congress is trying to protect. While arbitration certainly can be refined on the edges and more empirical research needs to be done, advocates for reform simply have not made their case.

International Commercial Arbitration Address
J. J. Spigelman

Abstract:
The coherent international system for resolving cross-border commercial disputes that has been devised in the interlocked provisions of the UNCITRAL Model Law on International Commercial Arbitration, the New York Convention for Enforcement of Arbitral Awards and the Washington Convention for Investment Disputes plays an essential role in reducing the non-tariff barriers to international trade. This paper discusses the relationship between the courts and commercial arbitration, particularly, the circumstances in which the court’s supervisory power over arbitrations ought to be exercised. In this respect, the paper documents a change in judicial attitude, from a time when the judiciary and arbitrators treated one another as trade rivals, to the current situation where Australian commercial judges are, generally, active proponents of alternative dispute resolution mechanisms, including commercial arbitration. It argues against any trend towards making arbitration processes similar to those in a court, and urges judges, arbitrators and practitioners to ensure that arbitration remains a just, quick and cheap form of dispute resolution.

Mediation in Employment and Creeping Legalism: Implications for Dispute Systems Design
Lisa Blomgren Bingham , Susan Summer Raines , Timothy Hedeen and Lisa-Marie Napoli

Abstract:
This article will explore the question of creeping legalism in mediation of statutory disputes arising out of employment. First, it will briefly review the issue of creeping legalism in arbitration. Second, it will introduce dispute systems design (DSD). Third, it will review the analogous debate on legalism in mediation in three design contexts: evaluative mediation of employment disputes in the court-connected setting, grievance mediation embedded in the collective bargaining agreement, and transformative mediation of employment disputes in the United States Postal Service’s (USPS’s) REDRESS program. Most employees do not face a choice among mediation models; instead, they choose among adjudicative processes or mediation. Thus, the article will conclude by reporting the results of an interview study comparing USPS employees’ experiences in the EEO complaint process, grievance arbitration, and employment mediation. These results show that an individual employee complainant may benefit from a non-adversarial, non-legalistic, and voluntary mediation model that seeks to foster communication and mutual understanding.

A Reflection on American Justice at a Crossroads: A Public and Private Crisis
Maureen Weston

Abstract:
In this essay, Professor Weston outlines the ideas discussed, in relation to the theme of “Justice for All,” at the Pepperdine Dispute Resolution Law Journal’s symposium, American Justice at a Crossroads. These ideas included the challenges faced by the federal judiciary, innovations that are impacting the American court system, approaches to conflict management, the duty of lawyers to facilitate wide-reaching access to justice, judicial reforms, alternative dispute resolution, and modern arbitration practice.

On Repeat Players, Adhesive Contracts, and the Use of Statistics in Judicial Review of Employment Arbitration Awards
Lisa Blomgren Bingham

Abstract:
This Article empirically examines the repeat player employer and the use of personnel manuals, one form of contract of adhesion, in employment arbitration. First, it briefly reviews some of the salient cases that allow for the imposition of arbitration through an adhesive employment contract. Second, it summarizes prior empirical research on employment arbitration. Third, it reports the results of an empirical study on the repeat player effect as it relates to the presence of a personnel manual or handbook as the basis for arbitration. That study finds that repeat player employers do better in arbitration than one-shotters, and that employers arbitrating pursuant to a personnel manual do better than those arbitrating under an individual contract. Thus, adhesive contracts do put employees at a disadvantage. Fourth, the article examines some of the accounts for the repeat player effect in light of Marc Galanter's catalogue of advantages. Lastly, it discusses ways empirical analysis of arbitration awards should, and should not, be used in the judicial review of employment arbitration awards in light of the repeat player effect. It argues that statistics on an arbitrator's past record should not be used in judicial review for actual active bias of the arbitrator. However, undisclosed prior cases with the same employer are relevant evidence on the question of the reasonable appearance of arbitrator bias. Finally, statistical analysis on the set of cases decided under certain arbitration rules or protocols may be helpful in examining structural bias.

Collective Arbitration Under the DIS Supplementary Rules for Corporate Law Disputes: A European Form of Class Arbitration?
S.I. Strong

Abstract:
A great deal of attention has been paid recently to class arbitration, a US form of large-scale arbitral relief that brings many of the procedures used in judicial class actions into the arbitral context. However, the United States is not the only country to use arbitration to provide collective redress. Germany has recently developed its own form of collective arbitration through the promulgation of the DIS Supplementary Rules for Corporate Law Disputes. This article compares the DIS Supplementary Rules with the American Arbitration Association's Supplementary Rules for Class Arbitration to identify differences and similarities between the two procedural approaches and to consider the extent to which the two rule systems reflect the jurisprudential preferences of Germany and the United States.

First Contract Arbitration and the Employee Free Choice Act: Multi-Jurisdictional Evidence from Canada
Sara Slinn and Richard W. Hurd

Abstract:
First contract arbitration (FCA) provisions are posed as a solution to the difficulties of negotiating a first contract for newly certified bargaining units. FCA is a longstanding, and no longer controversial, element of Canadian labor legislation. FCA provisions now exist in six Canadian jurisdictions and four distinct FCA models have developed (the exceptional remedy or fault model, the automatic access model, the no-fault model, and the mediation intensive model). In the United States the Employee Free Choice Act (EFCA) included a highly contested proposal to amend the National Labor Relations Act (NLRA) to include an FCA provision similar to the Canadian automatic access model. This chapter offers a balanced assessment of FCA evidence from Canada addressing the main objections to FCA in the EFCA debates. Individual case level data from jurisdictions representing each of the four FCA models is examined. The evidence demonstrates that although FCA is widely available in Canada, it is an option that is rarely sought and, when sought, rarely granted; that parties involved in FCA are able to establish stable bargaining relationships; and, that this process does not, as critics charge, simply prolong the life of nonviable bargaining units. This chapter concludes by suggesting that the practice under Quebec’s "no-fault" model and British Columbia's "mediation intensive" model merit consideration for adoption elsewhere. These models position the FCA process as a mechanism fostering collective bargaining and voluntary agreements, rather than treating it as a remedy for dysfunctional negotiations and as part of the unfair labor practice framework.

Is This a Great Leap Forward? – A Comparative Review of the Investor-State Arbitration Clause in the ASEAN-China Investment Treaty: From BIT Jurisprudential and Practical Perspectives
Wei Shen

Abstract:
A major feature of modern bilateral investment treaties (BITs) is to allow investors to access international tribunals such as ICSID for the resolution of disputes between the investor and the host state. Both ASEAN member states and China are active BIT players and entered into more than 240 and 120 BITs respectively. With tremendous political, economic and legal significance, ASEAN and China concluded an investment treaty in 2009. The focus of this article is to scrutinize key aspects of the investor-state arbitration clause in this new regional treaty from BIT jurisprudential and practical perspectives, in particular, the Chinese BIT perspectives. Compared to old-generation Chinese BITs, this treaty is leaning towards a liberal stance further facilitating investors to resort to international arbitration for investment disputes, which in turn promotes liberalism and unity in BIT activities in the region.

Law Applicable to the Merits of the Dispute Submitted to Arbitration in the Absence of the Choice of Law by the Parties (Remarks on Polish Law)
Mateusz J. Pilich

Abstract:
The main purpose of this paper is to analyze dominant trends in conflict of laws under Article 1194(1) of Polish Code of Civil Procedure, which concerns the law applicable to the merits of international commercial arbitration. Polish arbitration law is generally opened to various approaches in this respect, so that Polish law should be interpreted as recognizing both “indirect” and “direct” method of designating the law applicable by arbitrators.

Oral Advocacy Training: a Beginner’s Look at the Willem C. Vis International Commercial Arbitration Moot from a Coaching Perspective
Leonila Guglya

Abstract:
The Article is based on the author’s personal experience of the participation as an oralist in W.C. Vis International Commercial Arbitration Moot – in 2004 and 2006, as an arbitrator and a team coach in 2007. It discusses practical dilemmas arising in course of the oral advocacy training of the Moot team participants, focusing on the issues of selection and motivation of oralists, organizing and carrying through internal and external pre-moot rehearsals, emphasizing at the meantime an importance of keeping a healthy spirit of team cooperation high in course of the practice phase. The Article is aimed at fostering the academic debates over the issues related to coaching of the Vis Moot teams among those involved in this sphere and so to enhance the cooperation therein.

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