Economic Analysis On Some Issues In Commercial Arbitration Practice

Commercial arbitration has become the prevalent way to settle dispute. However, due to the astonishing economic progress and disputing parties’ improving awareness of legal rights, the current operating mechanism of commercial arbitration is unable to meet the demands of the parties who are seeking to change the existing commercial arbitration to maximize their interest. Up till now, the relevant domestic arbitral institutions have not attached great importance to the problems in arbitral practice and turn a blind eye to the actual demands of the parties and arbitral tribunal. Based on the problems arising in arbitral practice, the author analyzes the causes behind these problems through economy analytical methods and offers suggestions for the improvements of arbitration mechanism in this thesis. Except for the introduction and the conclusion part, the main body of this thesis consists of six chapters as follows:Chapter one, economic analysis on arbitration agreement. This chapter employs the game theory to discuss the battle of the seat of arbitration, and then, based on the actual demands of the parties, the author makes research on the validity of selective arbitration agreement and general arbitration agreement.Chapter two, economic analysis on arbitration rules. Arbitration practice reveals that arbitration rules are tending to be more complete in recent years. In this chapter, the author discusses the reason behind the trend by empirical analysis and system analysis methods. Cost-benefit theory is also used in this chapter to make static and dynamic analysis on this new trend. In the end, the author compares the development maps of domestic arbitration institutions and foreign ones. It turns out that domestic arbitration institutions are unable to adjust themselves like foreign ones, so domestic arbitration institutions should be aware of the system barrier caused by over-complete arbitration rules.Chapter three, economic analysis on arbitration claim. This chapter begins with analysis about the "imbalanced rights" in the filing of arbitration claims. Before the acceptance of the application for arbitration, the applicants’ rights are obviously restricted. The rules of "the clear and the only arbitration claim" and the principle of "ne bis in idem" make it difficult for applicants to freely file arbitration applications. In contrast, once the case is received, the applicants’right is extended and the applicants gain the upper hand thanks to the rules concerning changing and withdrawing arbitration claims. After analyzing the relationship between the applicants’execution of rights and the current arbitration environment, the author uses "cobweb model" to discuss the influence of applicants’change and withdrawal of arbitration claims on the arbitration environment, and proves that the arbitration institutions should set limits on parties’ autonomy of will. The author also probes into the preparatory arbitration claim and repetitive arbitration claim. In the end of the chapter, the author proves the significance of preparatory arbitration claim by comparing the interests of both parties, and uses cost-benefit analysis methods to prove the inapplicability of the principle of "ne bis in idem".Chapter four, economic analysis on the composition of arbitral tribunal. This chapter consists of two parts. The first part discusses the selection of arbitrators and the second part makes analyzes on the rules of establishing arbitral tribunal. In order to find a way to better equalize the amount of information between the parties and arbitrators and to bridge their demands better, the author makes analysis on the actual demands of them respectively. The chapter also discusses the "differentiation" trend in the composition of arbitral tribunal. The game theory is also adopted hereunder to study the different ways of establishing arbitral tribunal and their effects, based on which the author suggests the improved rules to form arbitral tribunal.Chapter five, economic analysis on arbitration mediation. The two conflicts exiting in practice are mentioned in this chapter, that is, the conflict between arbitral tribunal’s will and the parties’will, and the conflict between the mediation intentions and mediation skills. By discussing the factors affecting the mediation intentions and the relationship between the arbitral tribunal and the parties, the author proves that cooperation between them is the most efficient way to solve the first conflict mentioned above. In addition, the author seeks to find the reason behind the second conflict with the help of bilateral monopoly theory and game theory. It turns out that the parties may lack the motivation to settle the dispute themselves, therefore, external guidance is needed to facilitated it.Chapter six, economic analysis on arbitration award.In this chapter, the author makes analysis on the acceptability of arbitration award and the imbalance of information between the arbitral tribunal and the parties. Then the feasibility of the stage-by- stage disclosing of arbitration award is discussed. In the end, the author analyzes the economic value of "the finality of arbitral awards", and comes up with its conflict with arbitration relief.