The arbitral tribunal's authority to determine the applicable law in international commercial arbitration: patterns and trends

Author:Ramona Elisabeta Cîrlig
Pages:18-32
SUMMARY

Party autonomy prevails in determining the law applicable to the procedure and to the merits in international commercial arbitration. Nevertheless, when parties fail to make a choice or fail to reach an agreement, the arbitral tribunal has the authority to determine the applicable law. The paper's aim is to present the legal grounds for this authority, its extent and limits, and how it works in... (see full summary)

 
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The arbitral tribunal’s authority to determine the applicable law
in international commercial arbitration: patterns and trends
Ramona Elisabeta CÎRLIG1
Abstract
Party autonomy prevails in determining the law applicable to the procedure and to
the merits in international commercial arbitration. Nevertheless, when parties fail to make
a choice or fail to reach an agreement, the arbitral tribunal has the authority to determine
the applicab le law. The paper’s aim is to present the legal grounds for this authority, its
extent and limits, and how it works in practice. In order to reach this, aim the paper starts
with a general analysis of the said legal grounds (the parties’ agreement, international
instruments, arbitration rules, national laws on arbitration), then continues with an
analysis of the limits imposed on the a rbitral tribunal’s authority, which is large but not
unlimited, and in the end looks at how this authority is exe rcised in practice, by scrutinizing
recent jurisprudence and boiling down patterns and trends. The study will contribute to a
better understanding of the current practice a nd trends in international commercial
arbitration as regards arbitral tribunal’s authority to determine the law applicable to the
procedure and the merits of a dispute.
Keywords: applica ble law, international commercial arbitration, authority of the
arbitral tribunal, party autonomy.
JEL Classification: K33, K41
1. Introduction
In international commercial arbitration party autonomy prevails in
determining the law applicable to the procedure and to the merits of the dispute.
Most often, parties include in their contracts choice of law agreements, which are
rigorously observed by arbitral tri bunals without no further discussion about
determining the applicable law. Nevertheless, there are several hypotheses when
the authority of the arbitral tribunal to determine the applicable law becomes the
centerpiece of the discussion in the arbitral dispute, with important implications for
the solution rendered in the dispute, and the finality of the award.
First of all, it is straightforward that when parties fail to choose the
applicable law, the arbitral tribunal will have the task of determining the applicable
law.
Secondly, although parties may not expressly choose the applicable law,
they could however provide in their agreement that they empower the arbitral
1 Ramona Elisabeta Cîrlig - Lawyer in the Bucharest Bar Association, Romania, ramona.cirlig@musat.ro.

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