| Arbitration is an "alternative dispute resolution" method.The author defines "alternative dispute resolution" as "a mutually agreed dispute resolution alternative to the court litigation and is essentially private and informal." On the other hand,arbitration is defined as “…a process by which parties consensually submit a dispute to a non-governmental decision-maker,selected by or for the parties,to render a binding decision resolving a dispute in accordance with neutral,adjudicatory procedures affording each party an opportunity to present its case.”1There are different types of arbitration,between state and state,between state and private individual,and between private individual and private individual.The first category is in the public international law domain,such as The Alabama Claims Arbitration between the USA and the UK in 1872,which is beyond the scope of this thesis.The second type of arbitration is investment arbitration,which will be mentioned very briefly in due course.The focus of this thesis is international commercial arbitration between private individuals.From the historical perspective,arbitration has been used by the merchants in resolving disputes since the Middle-Ages.Due to the success of the Covnetion on the Recongition and Enforcement of Foreign Arbiral Awards 1958?the“New York Convention”?,international commercial arbitration is a popular method for resolving cross-border business disputes.The opportunity for parties to choose their arbitrators and the arbitration procedures,the scope for privacy and the greater capacity for enforcement of awards compared to court judgments are all important reasons that parties prefer international arbitration over litigation.Reinforcing this trend in favour of international commercial arbitration has been a general consensus among national courts and legislatures that support,rather than interference,should be provided to the arbitral process.Such a philosophy is apparent,for example,in the requirements in the widely adopted New York Convention for states to recognize and enforce both foreign arbitration agreements and awards,and in international instruments such as the 1985 UNCITRAL Model Law on International Commercial Arbitration?amended in 2006??the“Model Law”?,which authorize national courts to assist,rather than intervene,in the conduct of arbitrations within their borders.Moreover,international commercial arbitration has proven to be sufficiently flexible as a dispute resolution method to be used both in disputes between private parties,and between private and State entities.In any statute governing arbitration?e.g.the Arbitration Law of the People's Republic of China,the Model Law...etc.?,there are sections devoted to governing the relationship between the judiciary and the arbitration.The judiciary has assumed both the supporting and supervising roles of the judiciary in arbitration.Before visiting the relationship between the national courts and international commercial arbitration,it is imperative to set down the theories of international arbitration.There are three different theories and the author opines the Pluralistic Theory should be adopted for analysis.In essence,this theory advances the national court at the seat of arbitration has the primary jurisdiction over the arbitration and the national courts at the enforcement states have the secondary jurisdiction over the arbitration.Arbitration is subject to judiciary control only to safeguard its fundamental fairness.Among the two other different theories,the author opines this theory most accurately describes the reality that a multiplicity of legal order may ensure the efficacy of arbitration.Therefore,the author would visit the relationship between the national courts and international commercial arbitration based on the Pluralistic Theory.In so far as the procedural fairness of the arbitration is safeguard,the national courts should adopt “Maximum Support,Minimum Interference” policy.On this basis,the national courts and international commercial arbitration are not competitors nor in a “zero-sum” game,but rather partners-in-services.Partners-in-services for enhancing its home jurisdiction as the leading international / regional dispute resolution forum.The best example of this vision is the “Judgment to Award Conversion Protocol” advocates the former Chief Justice of the Dubai International Financial Centre Courts Michael Hwang SC in which any dispute about enforcement of a monetary judgment of the court will be submitted to arbitration hence converted into a judgment.All requires is further co-operation between the national courts and international commercial arbitration community in a jurisdiction in a hand-in-hand manner.Strength of one supports the strength of the other.There is no universal definition of “arbitration”.Arbitration is not being defined in the Arbitration Law of the People's Republic of China 1995,English Arbitration Act 1996,Malaysia Arbitration Act 2005,Hong Kong Arbitration Ordinance?Chapter 609?and the Singapore International Arbitration Act?Chapter 143A?For the purpose of this thesis,the author defines it as “arbitration is a private alternative dispute resolution method in which parties of a dispute agrees in writing in submitting their disputes to one or more third party neutral called the arbitrator selected by the parties for final adjudication which the decision of the arbitrator is final and binding upon the parties with usually no right of appeal,and the final decision are enforceable by the national courts”.On the other hand,the author defines “national court” as “a state organ created by statue staffs by judges appoint by the state which rests with the constitutional role and coercive power of adjudicating disputes between parties under its jurisdiction.”Each of the pillars discussed above deserves inclusion in an ideal arbitration system.Each has intrinsic merit and provides different and unique value to the theory of arbitration from a macro-perspective;it is very difficult if not impossible in differentiating their overall importance in an optimal arbitration system.Different users may have different perspectives of the pillars of arbitration,and some of the pillars are more important than others in formulating an optimal arbitration strategy.Neutrality and expertise of arbitrator certainly occupies high ground in arbitration theory.They each advance fairness policies and are instrumental in achieving a just outcome.Of course,to a certain extent,these pillars would be included in the arbitration rules and an arbitral institutes.But despite the difficulties,the author says party autonomy and confidentiality trump the rest of the pillars including expertise and finality.The author says these two pillars are of critical importance to arbitration and have the capacity to be paramount in policy trade-offs regarding the values that should underlie arbitration.A comparison of arbitration pillars places party autonomy and privacy at the very top of pillars of an optimal arbitration system.It must be noted that that both the national courts and arbitral tribunal are social institutions designated for resolving disputes between parties,the sociological basis of these institutions and the historical relationship between the two should be visited into.From the sociology of law perspective,and indeed supports by historical studies,the national courts being on a higher vertical hierarchy over arbitration in a society cannot be challenged.This is because this social hierarchy is being mandated by law.However,this does not mean that the role of arbitration in the society is inferior to national courts per se.Neither this mean,as will be visited in the later part of this thesis,their relationship is static at all.Instead,relationship between the two is multi-faceted and ever evolving.It is on this ever revolving relationship the author tries to advance a new hypothetical model for the relationship between national courts and arbitration for the Asia.The Model Law covers the arbitral process from the beginning to the end,and serves as framework for a State to adopt as domestic law,quit often with modifications.The objective of the Model Law is to promote the “uniformity of the law of arbitral procedures and the specific needs of international commercial arbitration practice”.As described earlier,arbitration is an alternative disputes resolution process.Alternative means alternative to court litigation.As such,by definition,arbitration is meant to detract from national court system,which is public in nature.But despite arbitration is a private dispute resolution method,it cannot be completely detracted from the state.E.g.,section 1?b?of the English Arbitration Act 1996 provides:“the parties should be free to agree how their disputes are resolved,subject only to such safeguards as are necessary in the public interest.”But in practice,the relationship between arbitration and judiciary varies from state to state,is multi-faceted at the very least and complex in fact.The Model Law is designed to assist States in reforming and modernizing their laws on arbitral procedure so as to take into account the particular features and needs of international commercial arbitration.It covers all stages of the arbitral process from the arbitration agreement,the composition and jurisdiction of the arbitral tribunal and the extent of court intervention through to the recognition and enforcement of the arbitral award.It reflects worldwide consensus on key aspects of international arbitration practice having been accepted by States of all regions and the different legal or economic systems of the world.As at 9 January 2019,the Model Law has been adopted in 80 states in 111 jurisdictions.Hong Kong S.A.R.,Malaysia and Singapore are all Model Law jurisdictions.However,the People's Republic of China and the Taiwan region are not Model Law jurisdictions.All Model Law jurisdictions have accede to the New York Convention.Some academics opine being a Model Law jurisdictions is one of the six factors for being an “arbitration-friendly” jurisdiction.The modern international commercial arbitration is evolved around two instruments,the New York Convention and the Model Law.The New York Convention has been regarded one of the most successful international convention in the 20 th century.As at 4 February 2020,it has 162 signatory states/ regions as its member.The Model Law,while it is only a soft law,but as states in the preceding paragraph,it has been adopted by 80 states in a total of 111 jurisdictions.These two instruments have set down the standards and best practice for international commercial arbitration,including the relationship with the judiciary.However,it must be pointed out in the New York Convention,the term “court” is only used one in Article III.On the other hand,Article V,which governs the grounds for refusal for recognition and refusal of enforcement of arbitral award,uses the term “competent authority”.But in practice,bases on the author's research,signatory states/ regions always designate their national courts as the “competent authority” for recognition and enforcement of the arbitral award.On the other hand,while the term “authority” for certain functions to be discharged?e.g.Article 13 of the Model Law?is also being used in the Model Law,the term “court” has been used throughout the Model Law?e.g.Articles 5,6,8,9,27,34 of the Model Law…etc.?.As such,the Model Law has more elegantly defines the relationship with the national courts than the New York Convention.On the other hand,in so far as matters being covered by the New York Convention,the Model Law is in harmony with the New York Convention in all aspects.In Chapter 1 of this thesis,the author has proposed the connecting point between the international commercial arbitration and the judiciary is the lex arbitri,which almost exclusively set down the roles of the national courts over international commercial arbitration.If one needs to select one article paramount each from the New York Convention and the Model Law,they must be Article III of the New York Convention and Article 5 of the Model Law,which respectively provides “Each Contracting State shall recognize arbitral awards as binding and enforce them” and “In matters governed by this Law,no court shall intervene except where so provided in this Law.” The spirit of Article III of the New York Convention is reflected in Article 35 of the Model Law.It cannot be denied both the New York Convention and the Model Law provides,besides the assistance roles,also the supervisory role to the national courts over the conducts of arbitration,e.g.in determining the validity of an arbitration agreement and the enforceability of an arbitral award.However,it is simply wrong in principle by adopting a view that,because the national courts exercise the supervisory role over interionatal commercial arbitration,then it means they are in a superior-subordinate relationship and international commercial arbitration is inferior to the national courts.In fact,the purpose for the national courts in exercising the supervisory role over the conducts of international commercial arbitration,is to uphold the integrity of the arbitral process.Therefore,while it may seems to be a paradox,the truth is the supervisory role of the national courts is an enhancement of the co-operative relationship between the two.In conclusion,the New York Convention and the Model Law have set down a cooperative relationship between the judiciary and international commercial arbitration for the modern international commercial arbitration regime to be followed path by various jurisdictions for the 21 st centuryTraditionally,arbitration is a consensual dispute resolution process that is an alternative to court litigation.It has the key advantages of party autonomy,expeditious,costs efficient?hence accessible?and less formality.However,there perceived advantages are not necessarily readily available for arbitration nowadays.In the past few decades,arbitration has been judicialized:it has become a complicated and prolonged processes,costly and the consensual nature of arbitration is being eroded.The Honrouable Charles N Brower,a judge of the Iran-United States Claims Tribunal,defined “judicliziation” in the Tenth Goff Lecute held in 2007 as follows: “meaning both that arbitrations tend to be conducted more frequently with the procedural intricacy and formality more native to litigation in national courts and that they are more often subjected to judicial intervention and control…”Judicialization of arbitration is now something new.This issue has been alerted by practitioners since the middle 1990's.International commercial arbitration faces the increasing of judicialization,making it very similar to litigation and thus compromising the integrity of the system as an alternative to litigation.Judicialization of arbitration is now something new.For example,matters that have been imported from court litigation including multiparty arbitration?non-consensual consolidation and joinder of third party?,discovery of documents,witness statements,examination of witness….etc.Additional items keep on adding to the list.All these are irony to arbitration.Judicial procedures and formalities built on accepted national traditions have a very different impact on foreign persons and entities” which are exactly what arbitration tries to avoid at the outset.For example,in Australia,section 39?2?of the Singapore International Arbitration Act?Chapter 143A?which describes arbitration as “efficient,impartial,enforceable and timely method by which to resolve commercial disputes”.Certainly,these are the “gold standards” to be measured against for any arbitration system.Judicialization is a concept which has no emotional value.However,this concept does mean that certain judicial procedures are being copied by arbitral procedures.So what are the problems of the arbitral procedures? Why does it need to duplicate judicial procedures? Can judicialization solve the problem? In international commercial arbitration,judicialization is mainly manifested in three aspects:?1?jurisdiction;?2?third parties in arbitration;and?3?appeal mechanism.The judicialization of international commercial arbitration involves various aspects,and the key is to make up for the shortcomings of various arbitration systems.Given that arbitration is an alternative dispute resolution mechanism,it will inevitably be copied from judicial procedures to achieve judicialization.Although there is no perfect dispute resolution mechanism,the judicial system,as routinely operating procedures,would show its advantages and disadvantages over time.As an alternative to judicial procedures,arbitration gradually shows its own limitations as the number of cases increases.In order to maintain the continuity of the arbitration system,including stakeholders,users,arbitrators,judges and arbitration institutes have begun to improve the arbitration system intentionally or unintentionally.Judicialization is therefore an ongoing process.Neither it has the beginning nor the end,as arbitration system will continue to evolve as the legal environment changes.The popularity in using arbitration in resolving cross-border disputes by way of arbitration has been increased significantly during the last two decades at the turn of twenty-first century,via-a-vis the success of the New York Convention.However,arbitration is only one of the many methods in resolving cross-border disputes.While it arms with the advantages of confidentiality of proceeding and enforceability of arbitral awards,it does not mean arbitration does not have any disadvantage at all.In the 2018 International Arbitration Survey counducted by Queen Mary University of London and White & Case LLP,the top 3 worst characteristics of arbitration are?i?cost;?ii?lack of effective sanction during the arbitral process and?iii?lack of power in relation to the third parties.If one flips the coins,litigation does not carry these luggages at all.If the issue of enforceability of court judgment can be resolved,the paddle of the clock is likely to swap back to litigation.From a border respective,cases move to arbitration instead of court litigation would hinder the development of the common law,which is based on the precedent system.In gist,the rise of international commercial arbitration gives rise to several issues.The number of cases that reach the national courts have been dramatically reduced.Decision making in the national courts plays a vitally important role in developing commercial law as in other spheres.Diminishing number of cases reduces the potential for the national courts in developing and explaining the law.Judiciaries in the common law jurisdictions,being state institutions,rests the role of not only resolving disputes between the parties,but also on the development of the common law legal system.To preserve the vibrant and indeed the bloodline of the common law system,there are different measures taken by the governments and judiciary in response to the negative impact created by the popularity of arbitration and this chapter will discuss the one very notable development in the past decade,the rise of international commercial courts,together with the anti-arbitration injunction and enforceability and the Hague Convention of 30 June 2005 on the Choice of Court Agreement.The People's Republic of China has a deep-rooted history of international commercial arbitration.The China International Economic and Trade Arbitration?the “CIETAC”?was found in April 1956,within the first decade of the founding of the People's Republic of China.CIEATC,together with the China Maritime Arbitration Commission,administrated international commercial arbitration exclusively in the People's Republic of China prior to the enactment of Arbitration Law of the People's Republic of China.However,arbitration did not start to fly off until the adoption of the “open-door” policy late 1970's and took a quantum leap since the accession to the World Trade Organization in December 2001.Despite the international commercial arbitration in the People's Republic of China started off with the founding of CIETAC,the first arbitration law,the Arbitration Law of the People's Republic of China was promulgated on 31 August 1994 and entered into force on 1 September 1995.The Arbitration Law is divided into 7 chapter with a total of 80 articles.Any reform is no easy task,and has always been constraint by the existing legal framework.Reforming the arbitration and judiciary in the PRC is no exception.Meaningful reform can only be achieved by amendments of the statutes,e.g.the Arbitration Law of the People's Republic of China,the Civil Procedure Law of the People's Republic of China.However,any reform is not easy.Further,any reform must in align with the objective of reform.No reform should be carried out for the sole purpose of reform.At the end,any reform in the arbitration and judiciary relationship in the People's Republic of China,should be excelling the People's Republic of China as an “arbitration-friendly” jurisdiction with the ultimate aim of becoming an international arbitration center in Asia.Therefore,the judiciary should adopt the “non-intervention principle,namely,maximum role in support arbitration including enforcement of arbitral awards,minimum role in with other supervisory role functions,and no role in intervening arbitral proceedings unless the law provided for.If there is any special focus of reforms,it rests not on the enforcement of arbitral awards,but rather on the execution of arbitral awards.Until today,execution of arbitral awards face immense difficulties in the Peoples' Republic of China.Local protectionism still prevails,in particular the respondent is a big local taxpayer.More importantly,in promoting transparency and enable foreign parties that are not competent in Chinese,the Supreme People's Court should publish official translations of the relevant statutes,judicial interpretations and the guiding cases on arbitration in English.Together with the Official Guide to Arbitration and the People's Courts in the People Republic of China.Judges of the China International Commerical Court should be engaged more on the international level in foresting exchanges with judges of other international commercial courts,and arbitral or legal practitioners around the world.Besides the above,while not in the arena of arbitration and judiciary relationship,supporting legal framework also plays a critical role for the People's Republic of China in excelling itself as an arbitration friendly jurisdiction,namely,have few mandatory provisions and allow the parties considerable freedom to agree upon the lawyers to represent them,the procedures to be followed,the language of the arbitration,and the tribunal to decide their dispute.There should have an available pool of specialist lawyers,experts,and technical staffs?such as translators,stenographers,and information technolog personnels?that are able to accommodate the diversities of disputes arising in the international arena.Once being internationally recognized as an “arbitration-friendly” jurisdiction,economic benefits and GDP will be increased as a result,as services in different sectors and industry in China are being engaged globally by the users.Pending these changes,the People's Courts,under the umbrella of the Supreme People's Court,has struck the right balance between the party autonomy and court intervention.At the end,the author would give prospective views of how the arbitration and judiciary relationship would be evolved in the 21 st century. |
PDF Full Text Request