October 24, 1997, Geneva, Switzerland
The Perspective of Users
Dr. Robert Badinter
President, Court of Conciliation and Arbitration of the Organization on Security and Cooperation in Europe (OSCE)
President, Arbitration Commission of the International Conference on ex-Yugoslavia
Formerly Minister for Justice and President, Constitutional Council
In the book on modern rhetoric that I shall never write, I might have warned under the heading of "luncheon addresses": never speak of serious things, lest the euphoria of happy things be disturbed. If the luncheon has been indifferent, avoid making jokes: they do not find favor with cheated appetites. So just one word of advice: speak to your hosts of things that they like and, preferably, of themselves.
This is what I intend to do when I speak to you of arbitration, as there is not one of the distinguished speakers and participants attending this Conference who does not have profound experience of the subject. I am thus spared the necessity of an introduction and can proceed with what I have to say, which can be summarized in a classical proverb: "The way is short from the Capitol to the Tarpeian Rock."
Speaking of arbitration, and more specifically of international arbitration, which I for one do not consider very different in the commercial context from national arbitration, the success of the concept in the last few years has been extraordinary.
In quantitative terms, of course, it is not easy to get to know a great many of the arbitral awards that have been handed down, as the majority of them are neither confirmed by a court nor published.
What is striking, however, is: (a) the emergence of arbitration centers in the various regions of the world for evidence of this we have only to consider the standing and origin of our speakers; (b) the proliferation of international conventions and legislation governing arbitration; (c) the growing sophistication of arbitration procedures; (d) the growing number of works and periodical publications on arbitration, which has become a branch of law in its own right; and (e) the multitude of national and international symposia on the subject of arbitration, many of them lacking the excellence of this one however.
This spectacular success of arbitration is attributable to a number of factors.
1. There are the traditional factors, namely:
a) the choice of arbitrator, selected for his competence, experience and sense of equity;
b) the need to escape the rigid constraints of State procedures and appeal routes;
c) the desire to avoid the public nature of court hearings, which can be detrimental to the parties;
d) in international trade, the need to bypass the jurisdiction of certain national authorities suspected of not always being impartial or of lacking experience.
2. The considerable expansion of international exchanges, with the attendant need to be familiar with the specific practices of a given sector of international trade, has made for growing recourse to arbitration.
All this has spawned a real international arbitration "market" offering quality "services" in the form of very elaborate rules of procedure and lists of tested arbitrators, to a growing and increasingly demanding "clientele," themselves assisted by specialized law firms.
Moreover, as the market has grown, States have endeavored to improve access to international arbitration and to promote it.
This was accomplished either by way of:
a) international conventions; or
b) through the legislative reforms that have been taking place continuously in a great many countries, with a view to bringing arbitration within a legislative framework. There was indeed a unique phenomenon when national legislators were presented with a model, known as the UNCITRAL Model Law, which is a remarkable example of "soft law" exerting a direct influence on the law of international arbitration, as no reform can take place without due reference to it;
c) the growth of a body of State jurisprudence specifically on arbitral awards bears testimony to the increasing consideration given to the specific nature of arbitrations procedure and its substantive rules; and
d) the best universities offer high-level courses in arbitration, especially international arbitration, thus ensuring the training, and making possible the recruitment, of highly qualified practitioners.
If, finally, we bear in mind that international arbitration, like State justice, abides by the "due process" principles universally proclaimed in particular by the European Convention on Human Rights, I feel bound to repeat what I said nearly 15 years ago, at the 60th anniversary celebrations of the Arbitration Tribunal of the International Chamber of Commerce: "International arbitration is one of the spontaneous yet harmonious expressions of justice ... it respects the major canons of justice."
Be that as it may, the spectacular progress and success of arbitration should not be allowed to mask the threats that loom over its futurewhich, paradoxically, have been engendered by that very success.
Its shortcomings are well-known. What we expect of arbitration is: (a) procedural simplicity, and yet we are aware of their sophistication, especially with regard to the production of briefs and the hearing of witnesses; (b) rapid decisions, and yet delays, are becoming steadily longer; (c) rapid enforcement of the award, and yet recourse to appeal procedures is becoming widespread.
The parties are even losing their hold on the choice of arbitrators, who are now designated by arbitration centers. And as for the cost of arbitration, there is the remuneration of the arbitrators themselves, but above all the fees of the major law firms and traveling, translation, secretarial and other expenses.
The post-modern arbitrator is thus tending to abandon what originally inspired him, namely simplicity, clarity, speed and economy, and to emphasize the more formal jurisdictional, legalistic and official aspects of his work.
What is more, from our reading of legal publications we gain the impression that arbitration, far from being assured of its original simplicity, has been annexed and disfigured by the doctors of law.
A return to the original sources of inspiration is therefore necessary.
In the Law of August 16 to 24, 1790, Organizing the New Justice, Article 1 defined arbitration as "the most reasonable means of ending disputes between citizens." One could not have put it better oneself. And yet arbitration has still to become reasonable in terms of its procedure, its time limits, its cost and its transparency. Indeed, if it were necessary to measure the risk of disenchantment with arbitration, it would be sufficient to reflect on one simple question: if there is no arbitration clause written into the contract, how often do the parties resort to arbitration once a dispute has arisen?
The task that falls to us as a matter of priority is that of restoring to arbitration the virtues required of it by its "consumers": an arbitrator chosen by them; simplicity and clarity of procedure; rapid transparent awards; moderate costs; and conciliation incentives under the sponsorship of the arbitrators.
It is on those conditions alone that arbitration will fulfill its social function and that it will move onward to the brilliant future that we know it has.