The Allocation of Power between Arbitral Tribunals and State Courts by A.S. Rau
The ultimate question that runs through all of our law of arbitration is the allocation of responsibility between state courts and arbitral tribunals: Arbitrators are private individuals, non-public actors. If they assume the power to adjudicate the affairs of other private parties – or, for that matter, of public entities – that is, if they presume to bind others with definitive judgments – we must ask, where does this authority come from? A shorthand for this question is to speak in terms of “jurisdiction.” (The French word
compétence conveys the equivalent concept of the power to adjudicate).
In the only cases which are likely to claim our attention, the notion of an arbitrator’s “jurisdiction” will be precisely congruent with the presence of “consent”: A “jurisdictional” challenge simply rests on the proposition that a party should not be required to submit himself to arbitral determination of any dispute without having first agreed to do so: For where else may an arbitrator – fundamentally different in this respect from a state judge – derive his legitimacy? The answer is, only from that exercise of private ordering, of mercantile self-government, which characterizes any voluntary commercial transaction. A “jurisdictional” challenge asserts that this is “simply not the sort of process to which I have been willing to subject myself.”
I begin then with the dimensions of “consent” – how it should properly be understood, and how it manifests itself in connection with the various contexts in which challenges to the duty to arbitrate are raised. I then carry forward the discussion to explore how party autonomy in the contracting process may give rise to the voluntary reallocation of presumptive authority (from courts to arbitrators and conversely, from arbitrators to courts); I conclude with the necessary inquiry into the nature of autonomy with respect to the governing law – the “chosen law” that will govern the agreement to arbitrate itself.
Co-publication with: The Hague Academy of International Law.
Alan Scott Rau, born on 23 December 1942 in New York. Holds the Mark G. and Judy G. Yudof Chair of Law at the University of Texas at Austin. Earned his B.A. and LL.B. from Harvard University, and, before joining the faculty at the University of Texas, practised law with Coudert Frères in Paris. Advisor to the American Law Institute Project on the Restatement of International Commercial Arbitration. Frequently serves as an arbitrator and consultant and is a member of the panel of the American Arbitration Association and the panel of mediators of the Court of Arbitration for Sport. Has taught as a Visiting Professor at the University of Toronto Faculty of Law; at the China University of Political Science and Law in Beijing; at the University of Geneva Faculty of Law; and at the University of Paris-I and the University of Paris-II. In the fall of 2014, Distinguished Professor in Residence at Queen Mary University, London.
Excerpt from Table of Contents I. Dimensions of the Problem: “Consent” and Agreement A. The Insidious “Gateway” Metaphor B. “I Used to Teach Contracts; Did You Know That?”: Challenges Based on a Lack of “Agreement” and Challenges to the “Arbitration Agreement Itself” C. Burden of Proof D. Construction of True “Consent”: The
Dallah Case E. Contracts of Adhesion F. Consent to Arbitrate “This Dispute”: Default Rules and the Problem of “Scope” II. The Unmysterious Notion of “Separability” A. “Just One More Discrete Controversy” B. “To Particularize is the Alone Distinction of Merit” C. “Lapse, Expiration, Rescission” D. The “Illegality” of a Contract E. “The Arbitration Clause Itself” F. “Void, Schmoid” G. Being and Nothingness: Or Does the Overall Contract Even “Exist”? III. The “Spectrum of Consent”: Third Parties, “Preconditions,” and Remedies A. The Question of “Scope” B. Signatories and Non-Signatories C. “Who, Whom”? D. “Preconditions” and “Admissibility” E. Excluding Remedies IV. “Party Autonomy” and Contractual Re-allocation of Power A. The Notion of Party Autonomy B. Party Autonomy and Re-allocation by Contract C. “Expanded Review” V. “Party Autonomy” and the Choice of Law A. The “Separable” Governing Law B. The Problem of Fredonia C. The Restatement and the Rome Regulation D. The
Sarhank Case E. The Chosen Law F. Substantive Law and the
Mastrobuono Case G. English Law: The
Sulamérica Case H. The “Principle of Validity” I. “Federal Common Law” J. French Law and the “
Règle Materielle” K. “Formal Validity”