Why the Applicable Law in International Commercial Arbitration Does Not Matter and Why It Should

Abstract

The principle of minimum interference of courts into the arbitral proceedings has been vital for the success of international commercial arbitration. The autonomy of the parties to choose their arbitrators based on expertise and parties’ interest in confidential proceedings shall not be compromised by courts supervision or review. The cross-border nature of disputes requires the arbitrators to determine the applicable law following the arbitration rules and laws and the conflict of laws analysis provided therein. The accuracy of the arbitral award will often depend on the accuracy of the conflict of laws analysis. The main principles such as party autonomy, confidentiality, or efficiency are followed under the assumption that the award will remain accurate. Yet arbitral awards issued without any conflict of laws analysis can hardly be challenged by the parties. The determination of the applicable laws falls under the undesirable court’s review on merits, that the arbitration world has successfully fought against at latest since the entry into force of the New York Convention of 1958. It is the purpose of this paper to explore to which extent a review of the conflict of laws analysis would endanger main principles of international commercial arbitration and to propose solutions which may be accepted by the international arbitration community.