The Gazette 1972

46 / 294

Arbitration in international contracts
Some of these problems may be illustrated in relation
to arbitration, which is particularly important because
of the established practice of including provision for
arbitration in commercial contracts with an internati-
onal element. Increasingly the provision is for arbi-
tration under the rules of an international body such
as the International Chamber of Commerce.
An inexperienced practitioner may rashly assume that
arbitration is arbitration—that whatever the legal sys-
tem which governs, the activity is much the same. In
fact Anglo-Irish and continental arbitration differ
fundamentally.
Under the Anglo-Irish system an arbitrator must of
course state a case on any question of law for decision
oy the courts, when required to do so by either party.
As a result arbitrators are not free to concoct their own
legal system. Against this a prudent arbitrator does not
give reasons for his award, because his award once
made cannot be set aside unless he shows an error on
fhe face of the award. On the continent there is no
such thing as a case stated, but the arbitrator gives
reasons for his award, and under German law, for
example, an award may be set aside if reasons are not
given or are not "logical, clear and easily understand-
able".
Differences id arbitration procedure
The procedure is also quite different. In Ireland and
England the ridiculous practice is entrenched of treating
an arbitration as a miniature or informal court action,
and most of the proceedings are conducted orally before
the arbitrator. On the continent the arguments and
evidence must generally be stated in writing and there
will only be a short, if any, hearing. At its worst this
nas been called justice by pen pushing, but it has very
many advantages over our "system". An Irish lawyer
involved in a foreign arbitration must therefore be pre-
pared to state his client's case at length in writing and
to support it by written evidence. He is unlikely to help
ms client by writing the necessary documents in plead-
ln g language, particularly if his pleading is of the
appalling standard accepted by the Bar in this country.
In addition under the procedural law of most coun-
ties the questioning is- mainly carried out by the judge
0 r arbitrator. Cross-examination is neither permitted
n o r , indeed, understood by continental judges or arbi-
trators, or the litigants themselves.
. In advising on the inclusion of an arbitration clause
m a contract, or on whether to compromise or fight, an
adviser will have to keep these differences very much
m mind.
Questions of jurisdiction to be considered
One of the other results of differences in local law
and practice is that the lawyer may have to consider
VerY difficult questions of jurisdiction, and manoeuvre
accordingly. Not only the law which governs the parti-
cular legal transaction may be relevant but also the
choice of forum in which to litigate, since it is the law
of the forum which governs procedure. In a recent case,
for example, the House of Lords held that although the
proper law of a contract was English law, nevertheless
because the arbitration was held in Scotland a party
had no right to apply to the court for a case stated,
since the procedure is also unknown under Scottish
law.
In addition the courts of different jurisdictions may
arrive at different results as to what is the proper law
of a contract. The attitude of the English courts that a
statement by the parties of the proper law in their
contract is binding is not followed by some other
systems.
A party therefore may be in a position to initiate
proceedings in several jurisdictions, and his adviser's
choice may be decisive for the success or failure of his
client's case in arbitration, or claim to set aside an
arbitration award.
To help with these problems there are several useful
publications by the International Chamber of Commerce
(28 Cours Albert ler Paris VIII). For example, the
Rules of Conciliation and Arbitration, Commercial
Arbitration and the Law throughout the World and
Commercial Agency-Guide for the Drawing up of
Contracts.
Minimum employment of counsel urged
A solicitor in Dublin, now unfortunately no longer
with us, was an outstanding practitioner but knew his
own limitations, and if a case appeared to have anything
whatsoever to do with the law he used to pronounce
that it "reeked of law" and despatch it straight down
to the Bar Library. An Irish solicitor may find himself
sitting around a table with a valuable foreign client
who is waiting for a reply to a question about Irish
law, with the Bar Library very far away indeed. Irish
solicitors also will have to compete with large firms of
solicitors in England (often with branches abroad) who
give a very full service with the minimum employment
of counsel. This is part of a much wider problem, but
one on which the profession might well commission a
very full research project. The Bar, of course, realises
that as such it will have no future if there is fusion,
but solicitors should surely consider what their future
as a learned profession will be if the present system
continues unaltered.
A fairly obvious conclusion is that to advise on dis-
pute". with an international element will require a good
knowledge of the national law and above all of the
basic principles of procedure and jurisprudence which
will make it possible to understand other systems and
to co-operate fruitfully with colleagues in other coun-
tries; that the Common Market is going to bring with
it demanding but extremely interesting work; and that
it is for our educational authorities to ensure that Irish
solicitors are properly equipped to obtain a share of this
new work, and are able to cope with the share they
obtain.
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