On Principle Of Party Autonomy Of International Commercial Arbitration

The fact that party autonomy was a basic principle of international commercial arbitration used to be natural and merited. Although party autonomy was intervened by national law, depending on commercial society’s the strong desire for commercial autonomy and global expansion with capital, international society was forced to reach a consensus that autonomy had revived in international commercial arbitration and then established or intensified the commander position of the autonomy through legislation and revision of arbitration rule. However, the structural change of modern commercial society has totally altered the foundation of international commercial arbitration, the principle of autonomy is seriously challenged by the expansion of complex jurisdiction supported by national law, the procedural and litigation tendency caused by arbitration organizations, the special interest protection appeal of nonmerchant arbitration and the uncertainty appeared when countries coordinate the enforcement of international commercial arbitration awards with national interests. Because of this, scholars continually announced that “the empire of contract” of international commercial arbitration had fall and it would soon be replaced by other ADR especially meditation. How far could the principle of autonomy in international commercial arbitration extend in modern commercial society depends mostly on how we comprehend international commercial arbitration, the principle of autonomy and the relationship between them.Chapter I: The Essential Meaning of the Principle of Party Autonomy of ICA.That the fundamental status and value of autonomy for international commercial arbitration is, as it to civil law, almost self-evident truth, but it is not clear what is autonomy and how it became the basic principle of international commercial arbitration. The autonomy principle of international commercial arbitration has its own distinct characteristics. The core of the autonomy in international commercial arbitration is the autonomy of jurisdiction. Its boundary had reached beyond the space of private interests and gone into the competition of national jurisdictions. The theoretical content of the autonomy principle of international commercial arbitration are as followings: first, the autonomy principle of international commercial arbitration is both a kind of freedom as well as an approach of achieving freedom; second, because the autonomy principle of international commercial arbitration is centered on authority choice of judgment, it has the ability of order rebuilding; third, the parties always have the right of authority choice. As the general principle of international commercial arbitration, the principle of autonomy has played an important role. First of all, it is the essence and soul of international commercial arbitration. Then, it is the general principle of international commercial arbitration. In the end, it is the legal reason of international commercial arbitration. The autonomy principle of international commercial arbitration has three levels: from the aspect of subject, it appears as the autonomy of parties and arbitral tribunal; from the aspect of object, it is the autonomy of arbitration agreements and procedure, they are supplementary to each other. In this way, the effect of the autonomy of international commercial arbitration behaves as positive effect and negative effect. The former is that it depends on the parties will to conduct the arbitral procedure, the latter means non arbitration would take place without the free decision of the parties.Chapter II: The Theoretical Foundation of the Principle of Party Autonomy of ICA.History is a key to comprehend human affairs. The parties’ right of authority choice in international commercial arbitration threats the national judicial authority. On what reason and basis and on what theory and fact that modern countries are generally willing to accept such a competition, even willingly create a gradual easy legal environment for this type of competition. To elucidate this point, we must trace back to the society and history that principle of autonomy grows to find the answer.1. The legal philosophical foundation of the principle of party autonomy in international commercial arbitration, which profoundly reflects “human-oriented” spirit of ius naturale in philosophy of law. It has been held by Arthur Kaufmann that a history of natural law is the better part of that of legal philosophy. A history of natural law is an ideological/intellectual history of “human-oriented” spirit of law. It is the respect of natural law philosophy for the natural rights which roots in humanity that constitutes the subject and the theme of human legal ideal with eternally renewed vitality over past two thousand years. Those legal prospects concerned with universalism which established upon the basis of freewill structure the value-objective carried by the principle of party autonomy in international commercial arbitration. The entire legal system of the society has been unremittingly improved and consummated since the transnational independent choice and self-determination with respect to the judicial authority made by the parties of international commercial arbitration challenge the particular legal order or judicial system with both positive competition as well as adverse incentive.2. The social foundation of the principle of party autonomy in international commercial arbitration. There exists specific living space for all kinds of legal ideology, theory, institution or principle. The principle of party autonomy in international commercial arbitration is based on the merchant community/society which relies on their self-governing forces. In contrast with the conceptual existence of civil society, commercial community, as a historic existence, which was formed by merchant community has all along significantly distinguished itself from other profession communities by virtue of its indefatigable pursuit for profits. Merchant community and international commercial arbitration mutually reinforce and supplement each other during the course of their evolution.3. The economic foundation of the principle of party autonomy in international commercial arbitration. International commercial arbitration should be considered as the institution with the most value of economic analysis to an extent. Why would the parties intend to choose private judging mechanism instead of public judicial resources? Why would a state allow a private judging mechanism to compete with itself for judicial authority? The consideration of economic effectiveness has to be regarded as a paramount factor while a prognosis for those who has made the selection is whereas behind. Economic, as a science of rational choice, provides theoretical framework for this analysis-economic person hypothesis. Economic rationality of merchant is the origin of the principle of party autonomy in international commercial arbitration. Merchant has a thorough request for freedom from which only can the wealth be created perennially. International commercial arbitration is none other than a dispute settlement mechanism brought about by their freewill in purpose of profit maximization. It has been indicated by the history of the development of international commercial arbitration that states were coerced to recognize and support the arbitration. As long as such a private judging mechanism does not diminish state authority and public interest, the state would be inclined to recognize and even support such an existence. Particularly when the three prerequisites are all met: the controllability of private judging mechanism; the reliability of the merchant realizing economic person hypothesis; the irreversibility of international capital flows.4. The juristical foundation of the principle of party autonomy in international commercial arbitration. In view of the history of its emergence, international commercial arbitration was created by merchant with freewill in their commercial practice instead of by statutory law. Even though the international commercial arbitration has later been adopted in various legal systems of different countries, it represents nothing but an identity certificate of this institution. Its intrinsic motivation arises from merchant’s character of economic man. Merchant community constitutes its social foundation while lex mercatoria furnishes the juristical foundation for its evolution. Is lex mercatoria a law? The answer of historical school of law to this question is that if we inspect its effect in relation with statutory law, we must deem the origin of them as exactly the same. Whereas the answer of school of natural law to this question is that similar to the restrictions supposed to be imposed on autonomy of will in the legal order of any specific state, lex mercatoria hence becomes a legal order that party autonomy in international commercial arbitration has to rely on. Depending on the freewill of the party, lex mercatoria deserves the recognition from international society including sovereign state since it serves as its own law to govern its own transaction act.-In contrast with official law, its source of legitimacy derived from democratic requirement.5. Methodological foundation of the autonomy principle of international commercial arbitration. What methods do we take to research the autonomy principle of international commercial arbitration depends on the recognition we have about the study object. The party autonomy principle of international commercial arbitration is a way to realize self-rule system of merchant society by independent resolution of disputes. So in the view of sociology to explore the reason why merchant society needs the autonomy principle of international commercial arbitration instead of a certain national legal system and judicial system, we may get closer to the truth.Max Weber’s theoretical framework”social action—social relations—social order” objectively and all-embracingly explains the necessity of the autonomy principle of international commercial arbitration and the value of international commercial arbitration as a bridge to connect business and law, individuals and society, countries and international community. Another sociologist Ruman,from an opposite idea, prompts international commercial arbitration to cooperate with justice instead of competition by means of the principle of autonomy.Chapter III: Modern Development of the Party Autonomy principle of ICA: Based on Modern Commercial Society.After experiencing the free development era of Middle Ages, international commercial arbitration successfully went into capitalism nation international legal system, however, it was depressed by the expansion of the confidence of national courts about international dispute settlements. But modern commercial economy, driven by profit-pursuing operation of capitals, forces the countries to confront the important role the international commercial arbitration played in international commercial society and admit this Commercial dispute solution whose nature is autonomy. Today, party autonomy has become the general principle of international commercial arbitration and is universally established in the legal system of all countries. But the uncertainty is under the framework of human law, how far could party autonomy go. This part depends on whether the autonomy principle of international commercial arbitration can solve the self-consistency of its own theory.1. Modern legalized track of international commercial arbitration. The opinions of modern countries experienced a process of changes from hostility to supporting. Especially after the mid-20 th century, international commercial arbitration developed prosperously. It is the communion and cooperation of the government and businessmen society produces modern legal frame of international commercial arbitration. The ultimate value of international commercial arbitration is to find the best legal rules that meet both business ethics and innovation requirements in all the legal system in international community, by means of the autonomy of the businessmen and the arbitrators they chose. This happens in the self-determined options of main bodies in economic activities, happens in the tribunals of international commercial arbitration which connects economy and law, international and domestic, nation and society.2. The practical observation of the modern development of the party autonomy principle of international commercial arbitration. Compared the development of the party autonomy principle of international commercial arbitration with the development of the autonomy principle in private law, we can find an interesting phenomenon that they did not develop in the same time, this is not a historical accident, it is a wrestle between political and economic blocs—God closes a door, will open another window. Today, international commercial arbitration has been universally supported and the principle of party autonomy has gain respect from international and domestic, legislation and justice. Meanwhile, the principle is experiencing a constant process of self-adaption as well in order to respond to the demand of the contemporary commercial society for international commercial arbitration. The international community generally adopts: principle of independence of arbitration agreement and effective support; principle of autonomy jurisdiction; autonomy principle of applicable law and other arbitration support policies.But meanwhile, party autonomy in international commercial arbitration is limited by national law to some extent, and there are some changes in those limitations compared with traditional limitations. In general, party autonomy in international commercial arbitration is the secondary autonomous order rooted in specific national law and order, which will always be limited by specific national law and order. Some of these limits are fundamental for party autonomy, or those forming inherent regularity of party autonomy based on coexistence value of human society, these limits cannot be considered to be limited in nature, such as limits on human rights or in terms of due process; Some worthy limits, or collectively known as adjustable limits, is characterized by mandatory provisions on interests between equal parties unrelated to national interest and public interest. It is specifically shown as follows: limits of effectiveness of arbitration agreement, declaration of will and capacity of will, i.e. typical and written documentation, also including arbitrability; limits of autonomy of arbitration procedure, such as Arbitration award shall be final and binding; limits of autonomy of arbitration entity, complexity of public policy in recognition etc.3. Influence of modern commercial society on party autonomy in international commercial arbitration. The development of modern commercial society enables a more free status for international commercial arbitration in terms of national legal order, and also has greatly changed the social soil for the growth of international commercial arbitration system, resulting in significant influence on party autonomy principle in international commercial arbitration, and even the challenges. On the one hand, the complexity of public policy does not only make it become the “Achilles’ Heel” of party autonomy held by the sovereign, and also has produced another byproduct to limit the party autonomy on the parties concerned–heavy reliance on the lawyers; As a kind of agency costs, the parties concerned have to be subject to the attorney’s interest appeal for their own party autonomy–the “formalized”, “Americanized” program, the Court of Piepowders age that may get the decision immediately has been gone forever. On the other hand, modern commercial society has structurally changed the social base of international commercial arbitration– merchant community, and proceeds to “commercial society”. Such change has greatly altered the position of the main bodies of international commercial arbitration who have dissolved the dispute by means of arbitration, brought significant challenge to existing theory and institutional arrangement of party autonomy of parties concerned, the formalized clauses of arbitration and unilateral arbitration agreement completely break through the traditional “formalized consensus” arbitration agreement requirements. Meanwhile, business practices in the modern commercial society obviously shows dependence on “relationship”, not only individual contractual relationship plays a prominent position in the business world, and is gradually replaced by more intimate relational contractual relationship established through capital operation, and the establishment and maintenance of “relationship” have been highlighted between the individual contractual relationship and relational relationship. The long hand of social capital based on the “relationship” has become new profit growth power for merchants, and the concept of “relation capitalism” system has been raised. The relational contract theory, raised by Macneil, who was the most significant contributor for the contract theory in the 20 th century, formally mixes together the opposition of “living law” and “national law”, which not only provides best way to dispute resolution as international commercial arbitration, and also provides more comprehensive theoretical support for party autonomy principle, and reflects obvious adaptability to international commercial arbitration system with “rational choice”.8 Chapter IV: Influence of Party Autonomy Principle on Basic Category of International Commercial Arbitration SystemThe changes of the legal principles mean the changes of the whole legal nature. The party autonomy principle, as the nature and basic principle of international commercial arbitration, will have an effect on the basic categories of international commercial arbitration system, including its introduction, nature, categorized and functional value etc. in the development of modern commercial society. Although in recent years, international commercial arbitration encounters “most devastating predict”, its unique function and value in the modern commercial society should not and can not be replaced by any other way of dispute resolutions as long as it always maintains its own unique charm – keep the party autonomy as an order, rather than shift towards the litigation or mediation.1. Influence of party autonomy principle on the concept and type building of international commercial arbitration is displayed as follows: first, expand the concept extension of international commercial arbitration, no matter from the scope of the “international” or “commercial” has expanded significantly than before, and in terms of reveal of arbitral problem, more and more internal reveal of party autonomy principle have been shown. Second, in terms of the type of international commercial arbitration, compared with the traditional classification method, it takes the significant difference between the abilities of those main bodies to realize their will in international commercial arbitration as the foundation for type building. This is a kind of new changes under modern commercial society, such as international investment arbitration, consumer arbitration or group arbitration, such classification must be reflected in the categorized system of international commercial arbitration, and shown in the system design.2. Adjustment of party autonomy principle on the recognition of nature of international commercial arbitration system. Traditionally, international commercial arbitration is all about justice, contractual, autonomy, and mixed viewpoint. In fact, international commercial arbitration is generally considered to be “commercial service market” by the developed countries and thus with less noble decision status. From the viewpoint of acquiring the support of coercive force of the state by performing compulsory jurisdiction of the arbitrators, it can be deemed as “quasi” judicial. While although “contract theory” accords with the requirements of party autonomy principle, traditionally, the party autonomy principle and contractual causal relationship are inversed, resulting in blind respect of formal consensus in the practice, it is said to limit the jurisdiction basis of international commercial arbitration, and produce inside collapse of party autonomy system, which is harmful to the position of party autonomy principle in the international commercial arbitration and is useless. While “autonomy” is fully fit into the intention of “party autonomy principle”, even under the premise of root connection with specific national legal order, it may build a kind of self autonomous order, which is possible because of its authority, and the right of authority comes from the credit granting of the parties concerned, and all kinds of responsibilities and obligations will be dissolved inside the autonomous order.3. The influence of the principle of party autonomy on the function and value orientation of the institution of international commercial arbitration. From the perspective of its function, it obtains the same feature of dispute settlement as litigation and mediation, nonetheless, it distinguishes itself from litigation by enabling the parties to utilize living law to govern its own act through the principle of party autonomy which is further received by analytical school of law or legal positivists; meanwhile, it distinguishes itself from mediation by permitting autonomy order. Above all, the paramount meaning of the international commercial arbitration is to solve the disputes in international commercial society instead of pursuing logical perfection of statutory law constrained in a certain territorial scope. Hence, to understand, interpret, apply a law in perspective of international commercial arbitration as a means of social control, it aims to regulate various kinds of international conflicting interests and constitute legitimate working order, instead of judging the distribution of rights and obligations between particular parties by certain state law. From the perspective of value orientation, no matter legislators or judiciaries suppose that the parties treat efficiency or justice as value orientation to design and provide the institution of international commercial arbitration, it is merely an assumption. The power to make such decisions should be relinquished to the parties.Chapter V: Institutional Realization of the Principle of Party Autonomy of ICAParty autonomy serves as the fundamental principle of the institution of international commercial arbitration which is the basis and origin of the institution and rules of international commercial arbitration. The extension of the principle of party autonomy in modern commercial society is bound to affect the development and modification of specific rules. Those changes reveal not only in the arbitration agreement institution of party autonomy between the parties, but also in the jurisdiction and control of the arbitral procedure by the tribunal/arbitrator and the selfrestraint of judicial intervention initiated by the principle of party autonomy. Party autonomy, which indicates that of a subject, all subjects regarding to the arbitral procedure are deemed to affected positively or passively by the principle of party autonomy which would eventually promote modern commercial society towards the goal of this principle through the commercial practice of the parties-the realization of “autonomous legal order” by means of self “authority of choice”.1. Shift from “consent” model to “assent” model to shape the jurisdictional basis. The international community made every effort to rectify the deterrent effect about international commercial arbitration because of formal consensus, but too much is as bad as too little. The tendency of the new development of modern arbitration is confining the parties’ choice of litigation and detracting the judicial autonomy. Therefore, the most important thing for international commercial arbitration is to thoroughly maintain the principle of autonomy and respect the parties’ choice of authority. “Assent” model has already existed in the practice of international commercial arbitration, compared with consensus model, its strength is that it can realize the principle of autonomy with more adaptability and flexibility, its shortage is unilateral actions are lack of a clear legal effect. By the model of agreement to expand jurisdiction, we should notice that the third person’s assent is superior to the parties’, this is the outcome of the balance between efficiency and equity of the principle of autonomy.2. The autonomy principle of international commercial arbitration and the legal status of arbitrators. Arbitrators as well as the parties constitute the subjects of international commercial arbitration together, and arbitrators have decisive significance for the resolution of dispute. But the Traditional Theory about international commercial arbitration did not attach importance to the relationship between parties and arbitrators. There is contractual relationship between parties and arbitrators, this relationship is different from agency in all aspects, but they are both the results of the authorization of the parties. So the arbitrators should limit the exercise of arbitration in the scope of the parties’ authorization.3. The autonomy principle of international commercial arbitration and judicial support. Faced with all the complex problems of modern commercial society, the best choice a country can choose may be formulate more objective criterions to define boundary of the limit of the autonomy principle of international commercial arbitration. On one hand, using more objective standard of public policy to Intervene the parties’ autonomy; on the other hand, identifying the public policy and mandatory rule of law in domestic law system. As a matter of fact, to provide the parties with competitive legal remedy between judicature and arbitration is a kind of support.The purpose of this paper is to demonstrate the legitimacy and unshakable character of the autonomy principle in international commercial arbitration. The followings are basic conclusions:First, there is no justice without freedom.Second, in addition to the parties, nobody is “juge natural”—authority of choice.Third, the most significant advantage of international commercial arbitration is autonomy of the parties.Fourth, the mordernizing evolution of commercial society shows that any deviation from the autonomy principle of international commercial arbitration would lead to the fall of international commercial arbitration.Fifth, there is no system could separate itself completely from state law system.Sixth, the autonomy principle of international commercial arbitration not only manifests the autonomy of private law but also reflects personal self-determination and humanism in philosophy.All countries are making efforts to improve the support for international commercial arbitration to gain more competitiveness in the new round of the form of International political and economic order. Twenty years has passed since the promulgation of arbitration law in our country, the disadvantages appear constantly. We must comprehensively review the legal system centered on autonomy principle to make our country stronger and more competitive in international commercial arbitration market.