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Arbitration Rules

International Arbitration Institutions

Applicable Rules in International Commercial Arbitration

Summery

►Arbitration is subject to different bodies of legal systems according to the different stages of arbitration. These are:

- the law which governs the parties’ capacity to enter into arbitration and to constitute a valid arbitration agreement;
- the law which governs the arbitration agreement;
- the law or the set of rules which governs the proceedings of arbitration;
- the law, or set of rules which governs the substantive issues of the dispute;
- the law governing the recognition and enforcement of the arbitral award.

Parties Autonomy

Since arbitration is founded on a contract, it follows that parties to an international commercial contract can autonomously agree to settle any disputes. In international commercial arbitration, “parties’ autonomy” means that parties can, within certain limitations, determine which law governs issues involving the nature of their obligations, the validity of their contract, the arbitration proceedings and the law applicable to the substance of their dispute.

In the absence of the parties’ choice, arbitrators will be obliged to decide the applicable rules. This duty emanates from their paramount duty to resolve the dispute and to provide the parties with a binding decision that can be recognised and enforced by national courts.


Parties’ choice of substantive rules

► Generally, the parties’ freedom to choose foreign laws to govern the substance of their dispute is subject to the courts’ control in order to ensure that their agreement does not contravene the national mandatory rules.

The modern trend in international commercial arbitration tends towards liberating commercial arbitration from the control of national courts.

- International entities and several legal systems have accepted the application of this concept:
• Article 28 of the Model Law (1985); Article 33. (1) of the UNCITRAL Rules of (1976);
• Article 17(1) of the ICC Rules;
• Section 46 (1) of the English law;
• Article 39(1) of the Egyptian law;
• Article (212) (2) The UAE Civil Procedure Code, Federal Law No. (11) of 1992;
• Article (33) of the DIAC Arbitration Rules: 2007.

► Parties to an international contract may sometimes agree to have their dispute governed by:
- a particular national law or;
- may choose to apply the customs and usage of international trade that are common to all or most of the states connected with the dispute or;
- international trade law (lex mercatoria).

►If the parties’ intention is not clear or absent, then it is for the arbitral tribunal to decide the applicable rules in order to proceed with the arbitration and decide on the outcome of the dispute.

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