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International Arbitration Law Review2010

Challenging the rules of the game: certainty through procedural harmonisation of challenges in international commercial arbitrationChristine McIsaac Subject: Arbitration Keywords: arbitration Appointments; Arbitrators; Harmonisation; International commercial

*Int. A.L.R. 127 AbstractChallenges to the independence and impartiality of arbitrators can impede the effectiveness of international commercial arbitration. As rising costs and growing uncertainty stand in the way of commercial parties' ability to obtain enforceable and efficient dispute resolution, the standards that govern challenges must be clarified and simplified. This article proposes the Revised Model Rule for the Procedures to Challenge ( RMRPC ), which includes a heightened standard for judging challenges to arbitrators, an effort to remove challenges from the reach of national courts, and a short time limit for raising challenges. RMRPC represents an updated provision that reflects current trends and closes existing gaps, and thus promotes certainty, minimises delays, and preserves proportional party autonomy. All the while, arbitration will remain the top choice for transborder dispute-resolution.

IntroductionThe international business community continues to choose commercial arbitration over national courts for their international disputes.1 One main reason for this preference is the desire for impartial and independent decision-makers, who will preside over the dispute free of bias and influence. As globalisation poses new challenges to international arbitration, questions over the benefits of harmonising procedural rules have driven the dialogue involving cost-effective, fair, and timely dispute resolution--and with good reason. A fundamental requirement of the arbitral process currently stretches the limits of cost effectiveness: the policing of the impartiality and independence of the arbitrators.2 The parties in arbitration retain a right to challenge the arbitrator's ability to resolve the dispute objectively and perform his duties impartially. 3 The right to challenge a nominated arbitrator has created the often irresistible urge to stall the arbitral process with a challenge that rears partway, midway, and even following a proceeding. Accordingly, parties have begun to demand a minimising of challenges.4 By relying on harmonised challenge procedures that are updated to reflect current trends and to close existing gaps, the arbitration community can more effectively serve its clients through a standard that promotes certainty, minimises delays, and preserves proportional party autonomy. All the while, arbitration will remain the top choice for transborder disputeresolution. This article focuses on challenges to proffered arbitrators,5 which touches on several fundamental aspects of arbitration: a party's right to an impartial decision-maker, the potential set-aside of an award rendered by an arbitrator with a significant conflict, and needless and damaging delay tactics. Institutions seek to avoid ethical conflicts with arbitrators by outlining qualifications that arbitrators must meet in order to serve the parties to a dispute.6 These qualifications of *Int. A.L.R. 128 independence and impartiality form a minimum requirement for proposed arbitrators. Even so, the standards by which these qualifications are judged remain unclear and even conflicting. The practical reality is that procedural ambiguities in current rules hinder the process of selecting arbitrators and create barriers to identifying and utilising competent decision-

makers.7 While a wealth of commentary discusses the evolution and overall benefits of arbitration over other dispute-resolution mechanisms, few scholars have suggested a concrete solution to minimise the costs of challenges in the current environment.8

To respond to these ambiguities, the process of harmonisation should be embraced and relied upon. Harmonisation9 refers to a set of model rules that govern a narrow procedural aspect of arbitration, and it exists as an option for parties to adopt if they wish to reduce ambiguity in the arbitral process. The resulting model rules can guide institutions as they create and update their rules and be adopted by parties to govern ad hoc arbitration. The process of harmonising rules requires updates and readjustments to address current needs and discourage unintended trends.10

A roadblock to the proliferation of harmonised rules exists. Harmonisation has become a term of art in international commercial arbitration.11 Academics and practitioners use the word to defend (or rail against) the evolution of the procedural rules of arbitration, and the word continually evades a succinct definition. Therefore, the starting point is defining the process of developing and adopting model rules. Three essential components influence the rules of arbitration as they evolve: the principles underpinning arbitration,12 the procedural framework governing the course of the dispute, and the practicalities of enforcing an award rendered.13 The first component (principles of arbitration) poses a significant problem, as various legal traditions often view arbitration as fulfilling differing or conflicting purposes or adhering to opposing ideals. The lack of accepted principles hinders the development of procedures, which should aim to implement these very principles. It is within the procedural framework that harmonisation fits. Further, the notion of the great divide between civil and common-law traditions underlies the harmonisation debate, yet it actually strains the wrong component of arbitration--the procedural framework instead of the underlying principles. 14 This article does not explore nor attempt to outline the arbitration principles, but it does recognise that the principles creep into the procedural debate surrounding harmonisation. The LCIA (formerly the London Court of International Arbitration) boasts that its procedures, the LCIA Rules, offer a combination of the best features of the civil and common law systems, and it lists those best features . 15 The principles of arbitration derive from these two legal traditions; however, arbitration exists as its own unique pillar in the legal community and should not be constrained by this hybrid approach. 16 As the academy has begun to challenge the efficiency of the arbitration process and question its popularity in lieu of its growing complexity,17 it places much blame on the slide toward the commonlaw adversarial system. Still, international commercial arbitration continues to burgeon without any apparent slowing, and so the harmonisation debate must shift from legal and academic jargon to a focus on the benefits of synthesised procedures in a narrow context.18 This article explores the appropriate solution to the challenge dilemma in three parts. First, it outlines the accepted, basic framework in challenge provisions, which I label the current minimum requirements for an arbitrator under institutional rules. Secondly, it examines the need for specific standards and limitations to the challenge procedures by highlighting the ambiguities that remain. Thirdly, it discusses the advantages to harmonising challenge procedures and proposes a model rule that lays out the standards to sustain a challenge, the ultimate authority to decide the challenge, and the appropriate timing of a challenge. Fourthly, it argues for *Int. A.L.R. 129 an updated harmonised challenge procedure, which I call the Revised Model Rule for the Procedures to Challenge ( RMRPC ), that describes the contours of independence and impartiality, the authority to decide the challenge, and the timeframe within which a party waives its right to challenge.

The Current Minimum in Challenge ProvisionsA scan of challenge provisions in leading institutions shows that commonalities exist regarding the requirement to serve as an arbitrator. Undoubtedly, the cornerstone of international arbitration is the ability of the parties to obtain impartial and independent arbitrators.19 Accordingly, institutional rules contain provisions prescribing independence and impartiality that remains at all stages of the arbitration. 20 Many rules also require immediate notice if a conflict arises and preserve the right to challenge an arbitrator if a

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party has a justifiable doubt as to the arbitrator's neutrality. These common features form a minimum standard that an arbitrator must meet to serve on a tribunal. The LCIA Rules contain the impartiality and independence requirements in art.5.2, which provides: All arbitrators conducting an arbitration under these Rules shall be and remain at all time impartial and independent of the parties; and none shall act in the arbitration as advocates for any party. No arbitrator, whether before or after appointment, shall advise any party on the merits or outcome of the dispute. 21 Many rules also now require the arbitrator to disclose any circumstances giving rise to doubts about his ability to serve. For example, the LCIA Rules in art.5.3 provide in relevant part: [A]nd [the proposed arbitrator] shall sign a declaration to the effect that there are no circumstances known to him likely to give rise to any justified doubts as to his impartiality or independence, other than any circumstances disclosed by him in the declaration. Each arbitrator shall thereby also assume a continuing duty forthwith to disclose any such circumstances to the LCIA Court if such circumstances should arise after the date of such declaration and before the arbitration is concluded. Similarly, in the Stockholm Chamber of Commerce (SCC) Rules art.14.2 provides: Before being appointed as arbitrator, a person shall disclose any circumstances which may give rise to justifiable doubts as to his/her impartiality or independence. If the person is appointed as arbitrator, he/she shall submit to the Secretariat a signed statement of impartiality and independence disclosing any circumstances which may give rise to justifiable doubts as to that person's impartiality or independence. The Secretariat will provide the parties with a copy of the statement of impartiality and independence. Recently, UNCITRAL released its long-anticipated revised Arbitration Rules. The mandatory disclosure requirements, now found in art.11, have changed only minimally from the previous version. Article 11 provides: When a person is approached in connection with his or her possible appointment as an arbitrator, he or she shall disclose any circumstances likely to give rise to justifiable doubts as to his or her impartiality or independence. An arbitrator, from the time of his or her appointment and throughout the arbitral proceedings, shall without delay disclose any such circumstances to the parties and the other arbitrators unless they have already been informed by him or her of these circumstances.22 Additionally, the arbitrator must immediately inform the parties if a conflict later arises during the arbitration process under the SCC Rules, under art.14.3, which provides: An arbitrator shall immediately inform the parties and the other arbitrators in writing where any circumstances referred to in paragraph (2) arise during the course of the arbitration. Another common ground involves the nationality of the arbitrator, which plays a role in selecting arbitrators but is not determinative under institutional rules. The UNCITRAL Rules do not explicitly allow a party to complain about a proposed arbitrator based solely on his or her nationality.23 They go on to instruct an appointing authority to take into account the advisability of appointing an arbitrator whose nationality differs from that of the parties.24 The phrase take into account indicates that a different nationality is not a mandatory criteria but instructive.25 Further, nothing in the International Centre for Dispute Resolution (ICDR) Rules or the American Association of Arbitration (AAA) Rules prevents the appointment of a national of one of the parties: *Int. A.L.R. 130 At the request of any party or on its own initiative, the administrator may appoint nationals of a country other than that of any the parties. 26 Again, this rule is not mandatory. The International Chamber of Commerce (ICC) Rules provide that the ICC Court:

[S]hall consider the prospective arbitrator's nationality, residence and other relationships with the countries of which the parties or the other arbitrators are nationals. What to do with these considerations, however, is left up to the appointing authority.

The Current Minimum is Not Enough: Ambiguities in Challenge ProvisionsThe shared minimum requirements are accepted, essential components that provide the foundation for challenges. The minimum requirements themselves are not controversial. The procedures that govern these challenges--or the determination of when the minimum requirements have not been met--are not quite as clear. The ambiguities lie in the standards that govern challenges. Decisions on the challenge are typically not subject to appeal, thus heightening the significance of the challenge and evidencing the need to get it right.27 The flexible nature of the existing challenge procedures leaves arbitrators open to nuanced arguments and possible disqualification at the whim of delay-focused parties. 28 As extreme costs strain the vitality of arbitration, the community must strive to appropriately balance the parties' right to an impartial and independent arbitrator with much-needed certainty and limitations on the availability of costly challenges.29 Parties face differing institutional rules regarding challenge procedures as well as competing interpretations or interactions between institutional rules and national arbitration acts. Even more, a challenge to the impartiality or independence of an arbitrator potentially threatens the entire arbitral award. Three specific issues stand out as particularly opaque among institutional rules governing challenges30 : (1) the standards necessary to sustain a challenge; (2) the issue of who properly decides the challenge; and (3) the time limits for challenges. First, ambiguity surrounds the standard that governs challenges. Provisions such as if a party becomes aware of circumstances [that] exist 31 giving rise to justifiable doubts shed little light on precisely what sustains a doubt and what specifically a party must know. In the Republic of Poland v Eureko BV, Poland faced tremendous difficulty and ultimately failed to establish a valid challenge to an arbitrator in a bilateral investment treaty arbitration, even when the arbitrator acted as counsel in one arbitration and an arbitrator in a legally similar arbitration.32 Poland challenged Judge Stephen Schwebel due to his ties with the US law firm, Sidley Austin, and his alleged involvement with a related case against Poland. Further complicating the challenge, Judge Schwebel was co-counsel in a similar case involving Vivendi and Argentina in which the parties relied on the award rendered by Judge Schwebel in Eureko v Poland. Poland lost its challenge against Judge Schwebel, leaving some to wonder what exactly a justifiable doubt would entail. The significance of an arbitrator's past experience could turn on the interpretation of the independence and impartiality test. Albert Jan Van Den Berg, for example, argued for a strict interpretation of the requirements, under which an arbitrator should be absolutely impartial and independent .33 It appears that any doubt would suffice to disqualify an arbitrator under his view, and thus it is unlikely that he would support arbitrators who have worked with parties before and are thus familiar with the issues of the dispute. The International Centre for Settlement of Investment Disputes ( ICSID ) has proposed requirements that arbitrators engage in broader disclosures to air any potential conflicts early on and minimise late discovery, seeming to take a comprehensive approach to conflicts.34 Secondly, there is no international consensus regarding the authority to determine challenges and the related role of the national courts in the process. Three options for jurisdiction to hear challenges exist: the challenge is decided: (1) exclusively by a court; (2) exclusively by an *Int. A.L.R. 131 arbitral institution; or (3) by an institution with a potential appeal to a court.35 In several prominent institutions, the institution itself decides the merits of the challenge.36 ICSID, however, permits the other two arbitrators to determine the challenge and only relies on the institution if the arbitrators are divided.37 The role of the national courts further complicates the issue. Under the English Arbitration Act of 1996, the courts retain the power to remove an arbitrator if his

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impartiality is suspect but it remains unclear whether the English courts are a default or if they can be the first step in a challenge absent explicit agreement. 38 In the United States, the Federal Arbitration Act ( FAA ) does not explicitly resolve the question but the answer seems to be that it is within the court's inherent power to decide a challenge under s.5 of the FAA. In practice, challenges tend to be decided when the award is challenged, which leads to added expense and potentially a mooted award.39 The French Code of Civil Procedure contains its own ambiguities regarding the role of national courts, and it appears that an arbitration institution would determine whether grounds for removal exist.40 Finally, the issue of time limits within which parties must submit a challenge differs among institutions and jurisdictions. Most institutional rules fluctuate between 15 and 30 days from the date when the challenger becomes aware of the facts that suggest a conflict.41 Therefore, these rules impose a relatively short time limit on parties, and a corresponding waiver of the right to challenge seems to result if the objection is not timely raised. The LCIA Rules, however, seem to promote a free-flowing challenge process as they allow a challenger to submit written cause any time it becomes aware of questionable circumstances involving an arbitrator.42 In turn, a party loses the incentive to investigate an arbitrator immediately and retains a right to raise doubts after an arbitrator does significant work on a tribunal. State statutes complicate the timing issue by introducing subjective standards or no standards at all. For example, the Swiss Statute on International Arbitration of 1987 provides that, [t]he ground for challenge must be notified to the arbitral tribunal and the other party without delay . The overarching principle of good faith to act without delay once a party knows of grounds that support a challenge reigns in the unlimited nature of such provisions. Even so, good faith introduces a new wrinkle--if a party receives notice of a proposed arbitrator but fails to research the arbitrator and later discovers a potential conflict that existed all along, does (and should) the standard of good faith permit him to challenge after the proceedings begin? The answer is closely linked with the issue of what a challenger must know to sustain a challenge.43

Absent time limitations that link to a party's knowledge, a party holds the right to introduce grounds for conflict even after the tribunal renders an award. On the other hand, arbitral rules regarding time limits must have proportionality and sufficient flexibility to allow for parties to raise doubts and air conflicts whenever discovered. In ASM Shipping v TTMI, the claimant lost the right to challenge the validity of the award on the grounds of bias because of its delay in challenging.44 Additional challenges ultimately proved unsuccessful, and the procedures continued for more than two years after the tribunal rendered the award--all in an effort to determine a challenge. ASM demonstrates the significant delays that result from procedural gaps regarding waiver and the potential risk in a cutting challenges off without exceptions.

The Next Step in the Continued Development of Global Legislation on Challenges: The Revised Model Rule for the Procedures to ChallengeA new approach should be adopted through the Revised Model Rule for the Procedures to Challenge ( RMRPC ). RMRPC can address the ambiguity illustrated above and curb open-ended rules that allow parties to waste time and money and generally to frustrate the process of selecting arbitrators. These consequences have long-term *Int. A.L.R. 132 effects on arbitration. First, they pose a threat to the enforcement of the award-the most important aspect of arbitration.45 Secondly, the differing principles subject challenges to an opaque regime of speculation and open the award up to hindsight's underhandedness. Commentators have noted the need for a sufficient degree of international uniformity regarding the interpretation and application of grounds for challenge, and yet, no current consensus exists.46 A functional solution to the challenge problem begins with an understanding that harmonisation does not mean surrendering party autonomy or bloating procedural requirements. This requires distinguishing harmonisation from other dirty words in arbitration and discussing the advantages to harmonisation generally. Additionally, this section lays out the specific benefits to harmonisation in the challenge context. Finally, it outlines the points that RMRPC must address. RMRPC should attempt to reduce the

number of objections to appointed arbitrators in an effort to simplify the constitution of the tribunal and promote lower-cost, higher-quality proceedings. 47 RMRPC would specify the knowledge of a conflict required to sustain a challenge, who decides the merits, and when challenges must occur.

Harmonisation DecoupledHarmonisation should be understood as a legal construct, separate from civil or common-law traditions, that implements principles of arbitration through a balance of procedural flexibility and certainty to resolve a cross-cultural business dispute. Surely, differing legal regimes will influence international arbitration's principles and procedures. Those differing traditions should not, however, become the focus in a debate about harmonisation.48 A recent scholar defined harmonisation loosely as a complex process of developing new ways of conducting arbitration proceedings in cross-cultural arbitrations .49 This captures the push-pull between common and civil law, where, a legal regime adapts to the global market and reacts in ways that neither system alone could.50 Instead of attempting to smooth the more troublesome rough edges between civil and common law, harmonisation shows that arbitration exists as a unique form of private dispute-resolution and adheres to the demand for arbitral rules freed of heritage. The effort will ultimately conflate legal traditions, but the process should aim to develop a more thorough body of procedural guidelines that facilitate efficient and legitimate arbitration--a developing legal tradition in itself.51 In an effort to embrace a certainty-inspired arbitration regime, harmonisation must be divorced from the concept of a full-blown civil procedure mandate. Loaded words such as Americanisation , judicialisation , unification, or processualisation skew the purpose of harmonising procedure and evoke unnecessary hostility toward model rules. Those who oppose harmonisation rail against a recognisable trend of transforming arbitration into a meticulously-governed, rigid set of rules meant to adopt common-law methods. A close reading of these complaints reveals at least three major categories of over-generalisations regarding harmonisation. This section considers each broad category in turn.

AmericanisationPerhaps the most oft-cited attack on harmonisation is that additional procedural standards attempt to align arbitral proceedings with American litigation and all of its intricate steps. Further, Americanisation reflects the view that an individual arbitration will take on the identity of the parties' counsel and the nationality of the arbitrators (increasingly American litigators).52 Both ideas cause harmonisation to become a dangerous caricature of formalistic, judicial-styled dispute resolution with all of its rigidity and cost-increasing steps. In fact, harmonisation differs from American litigation from its inception through its implementation. First, harmonised rules are created with ingrained flexibility, as practitioners and scholars from many backgrounds develop and update rules based on expressed needs that change over time. Additionally, harmonisation permits (indeed requires) that the parties choose to give the rules effect. Most importantly, American litigation rules are not open for adoption or rejection, as harmonised laws certainly are. If an institution adopts harmonised procedures that fall out of favour or inadvertently lead to an increase in cost for the parties, the institution will lose its competitive advantage, and the market will force a change in procedures. American litigation procedures are designed to evolve slowly, facilitating very gradual, deliberate changes that ignore immediate demands. Even with these differences in mind, harmonisation is American-like in one key way. It allows ideas to flow freely among top thinkers and permits trends to develop at major arbitral sites. In this way, individual tribunals *Int. A.L.R. 133 and arbitration scholars can work as laboratories of ingenuity, proposing (and striking down) new approaches to long-standing tenets of arbitration. Unworkable solutions, therefore, can be weeded out and the community can benefit from the robust exchange of ideas and a steep learning curve. Trends in challenge procedures continue to evolve. For example, practitioners from the United States advocated for a different set of independence criteria for

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arbitrators appointed by the parties and for the chairman of the tribunal. The 2004 Code of Ethics for Arbitrators in Commercial Disputes, prepared by the AAA and the American Bar Association, rejected this position and created a presumption of neutrality for all arbitrators, included party-appointed arbitrators. The presumed independence of all arbitrators prevails today, as the IBA Guidelines on Conflicts of Interest in International Arbitration confirm the uniformity of independence. Importantly, a Swiss Federal Tribunal left open the question of whether party-appointed arbitrators are subject to less stringent requirements, and thus demonstrated how differing approaches may take hold. Harmonisation provides a vehicle for responding to these varying ideas and effectively incorporating them into institutional rules when a critical mass of participants shares the same view.

UnificationThe distinction between harmonisation and unification is not a tenuous one.53 Unification is a more benign term that implies uniform rules across multiple jurisdictions. Yet, the issue of who imposes the uniform rules remains vague but crucial to the debate. Commentators have noted a trend toward uniformity in arbitration and a corresponding fear that parties will surrender autonomy and end up bound by provisions they never explicitly agreed upon due to an implied minimum standard. Through harmonisation, however, uniform procedures would not be possible without an institutional or contractual choice affecting the parties. Additionally, harmonisation does not imply that all arbitration procedures should be uniform. In fact, harmonisation facilitates differences and allows parties to choose governing principles. Model laws promote flexibility and party choice by highlighting the effects of those choices. A model rule that outlines an option encourages a party to think about this choice prior to ending up in the default world. Still, unification may feasibly be the result of harmonised laws, as well-reasoned model laws based on leading experts' consensus will likely widely influence institutional and ad hoc rules. This process would simply reflect the value of harmonisation and should be a welcome development for those who benefit from the clearer procedures.

NationalisationHarmonisation differs from nationalisation because it lies on the outskirts of the state sovereignty debate and reserves states' participation in arbitration at various levels. Thus, harmonisation and nationalisation operate in their own distinct phase of arbitration--harmonisation in the formulation of rules and nationalisation in the execution of results--although a degree of overlap remains. Currently, divergent state legislation has created a complex and tangled web of national approaches. Nationalisation captures the tension between those who fear the states' various policies that affect arbitration and those who recognise the states' necessary, supervisory role in the operation of arbitration.55 The former group tends to argue for a supranational system to address and abolish the uncertainties surrounding the influence of national courts and laws.56 Arguments for denationalisation have blurred the harmonisation discussion, and the link should be dispelled. Harmonisation strikes a balance between the desire for a consistent system and the states' interests in managing its interaction with the international business community. It does so by guiding the states with model laws that expose and correct ambiguities and facilitate a party-friendly body of laws. Further, it empowers states by requiring state action and adoption before the model laws take force. Some argue additionally that efforts to harmonise arbitration laws effectively impose national standards on international arbitration as if they were international norms .57 The argument is unpersuasive for two reasons. First, some international norms such as nationalised enforcement of arbitral awards have developed out of necessity and proved essential to arbitration's success.58 Thus, a fear of the effects of the resulting uniformity is questionable. Secondly, international arbitration has largely become emancipated from nationalised arbitration as the trend toward private arbitration

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continues, yet it remains intertwined with national courts and laws regarding enforcement, appeals, and legitimacy.59 In fact, *Int. A.L.R. 134 arbitrators often depend on the national courts during the proceedings and remain indebted to the same when faced with recalcitrant opponents. The international regime must unavoidably coexist with nation states, and harmonisation facilitates this relationship by allowing party and state choice.60

Advantages to HarmonisationHarmonisation holds the potential to increase certainty and clarity in the arbitral process while simultaneously securing flexibility and party autonomy. As the vitality of arbitration has been called into question,61 harmonisation may pose one part of the solution to rein in costs. Harmonised rules would stand as options for institutions to adopt or contracting parties to specifically agree to, and thus the pervading fear of a take-over of standardisation is unfounded. Therefore, harmonisation advantages international commercial arbitration for three reasons: (1) it fosters certainty and clarity; (2) it encourages reliable and predictable outcomes; and (3) it allows parties to retain freedom and flexibility that would be surrendered in state-based litigation.62

Harmonisation Shores Up International Arbitration when Arbitration Faces Criticism and CompetitionInstitutions and parties alike face challenges and complexities when developing procedures to govern arbitration.63 Considerations such as the interactions among various rules and national laws,64 the impact of ambiguity on the validity of the award, and the perception of fairness to the parties involved create barriers that delay procedural decisions and jeopardise the cost-effectiveness of arbitration. Harmonisation unites procedures and addresses these concerns as experts in arbitration collaborate to establish procedures, resulting in economical and experienced procedural decisions. 65 In the United States, the individual states exist as laboratories for experimentation that test policies and influence national norms. This concept can transfer to the global arbitration system as working parties assess the various successes and failures of national arbitration and institutional rules and create a body of model laws that combines the most effective results. In this way, harmonisation encourages experimentation and exploration of national arbitration acts and institutional rules by creating a vital mechanism to examine and update the rules, analysing the effects of the current rules and retaining procedural competitiveness. Judge Howard Holtzmann touched on the value of such a process when he examined the American Arbitration Association International Rules ( AAA Rules ).66 He concluded that the AAA Rules: [H]ave undergone searching scrutiny by international arbitrators, practitioners and arbitration administrators to ensure they embody provisions which contemporary practice calls for and with which both American and foreign attorneys are comfortable.67

Further, the International Chamber of Commerce ( ICC ) revised its International Court of Arbitration Rules of Arbitration ( ICC Rules ) in 1998 to stay in step with the current needs of the international business community , which demonstrated the competitive motive to react to the parties' demands for procedural changes.68 UNCITRAL has prominently led countries to harmonise their national arbitration acts with its Model Law of 1985, perhaps the strongest testament to harmonisation.69 UNCITRAL's work on its Model Law and its updates to the Arbitration Rules have streamlined the process of arbitration, allowing new institutions to emerge and states to adopt more consistent, yet specifically-tailored arbitration acts. They have also facilitated economic growth and foreign investment in developing countries as they have guided countries that might not otherwise have the means to develop their own acts and has provided surety for foreign investors through this non-biased method of dispute resolution. 70 *Int. A.L.R. 135 Similarly, the International Bar Association ( IBA ) Rules on the Taking of Evidence in International Arbitration71 revolutionised the procedures for gathering evidence in the face of almost silence from institutional rules. 72 The IBA committee that developed the model rules consisted of a diverse sampling of experts

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who built off of the 1983 IBA rules in an effort to harmonise procedures and reflect the needs of arbitration. The working party explicitly reserved the parties' rights to adapt the model rules to individual circumstances, and thus epitomised the basic aspects of harmonisation.73 UNCITRAL and the IBA originally designed their model laws to address ambiguities that existed among national arbitration laws,74 and both institutions continue to change their rules and account for insufficiencies in prior procedures as Holtzmann noted.75 The model rules have made great strides, yet a continuing and growing desire for quicker arbitration and higher quality awards requires further collaboration and immediate action in the context of challenges.76 Harmonisation places the burden on congresses, practitioners, and committees to adapt the current norms to respond to the needs of parties. It further leaves the option of choice to the parties and institutions.

Harmonisation Fosters Party AutonomyEven in the face of these advantages, a general tension exists between those for harmonisation and those who fear a loss of party autonomy. After all, arbitration's value stems from the parties' ability to enter into a contract that dictates the choice of both substantive and procedural law.77 Surely: It would be a paradox if Americans were to export into international arbitration the very procedural excesses that have driven U.S. companies into the arms of domestic ADR. 78 The concern that harmonisation will transform arbitration into a complex system of autonomy-stealing rules--namely, American litigation--ignores the premise of harmonisation--model rules that memorialise a community consensus and expose potentially unimagined detrimental consequences. Harmonisation appeases its critics in three ways: (1) it encompasses practitioners' procedural concerns and can thus simplify the process; (2) parties' choice remains supreme; and (3) procedural certainty increases, and thus heightens the value of arbitration. First, harmonisation does not necessarily lead to more complex standards. In fact, updates and revisions to procedural rules can result in fewer restrictions and a broader freedom to develop rules by agreement.79 Secondly, party autonomy remains the cornerstone of arbitration as the parties create the contours of the tribunal's authority in their agreement.80 Harmonisation must go hand-in-hand with the continuing standard that the agreement of the parties determines the arbitration proceedings.81 The New York Convention and UNCITRAL explicitly adhere to the parties' choice of procedural provisions. Therefore, no gap-filling function should be permitted, as in the Uniform Commercial Code in the litigation in the United States, which governs commercial contracts. Harmonisation does not parallel this type of gap-filling that results from ambiguities in contracts.8382

Thirdly, a balance must be struck between arbitration's inextricable relationship with national laws and maintaining the attractiveness of arbitration by securing party autonomy.84 The desire for flexibility does not necessarily yield to the need for certainty. Certainty exists as a goal in arbitration because international commercial arbitration facilitates cross-border business and interstate commerce. Investors and businesses that have faced uncertainty on foreign terrain have often shied away from the investment. Further, established procedures can speed up arbitration, currently a major complaint. Model laws strike that balance by providing an option to benefit from what we already know about arbitration, while leaving the ultimate choice up to the parties.8685

*Int. A.L.R. 136 Harmonisation is Not the Answer for Every Procedural RuleModel rules will not become procedural default rules because they should not cover many aspects of arbitration, and thus the inherent values of arbitration remain intact. For example, parties remain free to choose fast-track arbitration, a documents-only arbitration, or the installation of a specialised tribunal for specific issues.87 The tribunal has largely determined procedures governing a party's method of establishing the facts

of its case, with much resulting praise.88 These procedures allow parties to maintain an ongoing commercial relationship through convenience, confidentiality, and choice. While this article focuses on the advantages related to harmonising procedures for challenging arbitrators, many commentators advance more widespread harmonisation. 89 A comprehensive mechanism for conducting all arbitrations jeopardises the integrity of the procedures and would be reminiscent of national courts with specific and allencompassing rules of civil procedure. Harmonisation, instead, should have the limited purpose of addressing problematic provisions that are either too broad or too narrow to be practically applied. In addition, the parties' benefit from harmonised procedures comes from their option to choose the rules that have produced reliable outcomes.

Harmonisation and Challenge ProceduresChallenges are a unique area of arbitral procedures because they are a procedural safeguard that is tied to a substantive right. Because the substantive right to have a conflict-free panel is uniform in arbitration, challenge procedures provide an ideal opportunity for an updated, stringent, and harmonised provision. Importantly, the main objection to harmonisation does not apply to challenges, as challenge procedures do not rely on flexibility to meet the parties' goals. In fact, due to the indispensable nature of independent and impartial arbitrators, it is necessary to define and uniformly apply the conflict standards to all arbitrators to ensure arbitration-wide independence and impartiality. RMRPC should therefore aim to reduce the number of objections to appointed arbitrators in an effort to simplify the constitution of the tribunal and promote lower-cost, higherquality proceedings.90 To reduce the number of challenges, RMRPC should specify the knowledge of a conflict required to sustain a challenge, who decides the merits, and when challenges must occur. The standard governing the requirements of impartiality and independence should be considered a heightened standard to adapt to arbitration's growing popularity and scope of qualified arbitrators. Accordingly, a challenge should be sustained if the conflict poses a real danger of bias .91 An arbitrator's disclosure of the mere existence of any relationship should not suffice to disqualify him or her, as it does not, by itself, prevent the arbitrator from rendering a fair and impartial decision. In short, while broader disclosures serve the parties by making them immediately aware of potential conflicts, disclosures of a conflict alone do not establish impropriety. As the pool of arbitrators grows and tribunals successfully preside over complex, multi-party disputes, it is not unthinkable that proposed arbitrators will have repetitive experience with parties, concepts, or legal issues. The fact of experience alone should not disqualify an otherwise competent arbitrator. The arbitrator's expertise in the industry could improve the quality of the award and promote a resolution in line with industry norms, which serves the parties who often want to maintain their business relationships. Instead, disqualification should be reserved for circumstances where the arbitrator has a financial stake in the outcome, has a close relationship with one of the parties that rises to the level of serious bias, or has directly worked on a specific issue in the dispute. This enumerated list is not exhaustive, and thus should not be considered as a provision of the challenge standard, which may then limit a party's right to seek removal for other grounds. The examples illustrate the types of circumstances that should support a challenge and the necessary shift to more serious grounds for challenges. An arbitrator should not, for example, be banned from serving on a panel because he is a board member of a party's competitor. As the English Court of Appeal found in AT&T v SCC, the membership on the board alone does not provide evidence of bias. A challenger should have to offer concrete evidence of a slant or tendency to favour his colleagues. The AT&T case, however, would turn out differently under RMRPC, as the arbitrator failed to disclose his board membership upon his appointment. The question of who decides the merits of a challenge is inextricably intertwined with national arbitration acts--and thus, national courts. The UNCITRAL Model Law embraces the courts, while first selecting the tribunal to determine the merits of a challenge in art.13.2. If the tribunal rejects the challenge, the UNCITRAL Model Law allows for the appropriate national court to reconsider the challenge, with no appeal of the decision.

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The UNCITRAL system, therefore, builds in two layers for challenges and includes domestic courts. These are *Int. A.L.R. 137 the same courts that parties typically seek to avoid by choosing arbitration over domestic litigation. In terms of efficiency, the challenge (and subsequent appeal) should remain within the arbitral tribunal or institution only. Such a policy would remove the challenge process from the courts at the seat of the arbitration, and reduce the differing rules regarding whether the arbitral panel must first decide or whether the parties can seize the courts directly. For example, Germany and Sweden follow the UNCITRAL approach, while English, Belgian, French, Italian, Dutch, and Swiss law allow for judges to be seized first.92 RMRPC cannot effect this change through a harmonised provision alone because the provision will not trump national law, which reserves its right to consider the challenge. Therefore, the community should move for a convention on the jurisdiction to govern challenges and take challenges out of national courts all together. After establishing a heightened standard for challenging arbitrators, RMRPC builds from the higher burden on a challenger to effectively reign in the standard on time limits without having to reduce the days from 15. Therefore, RMRPC's time limits provision can align with the common 15 to 30-day period open to challenge, with waiver resulting after those days. To adequately balance the need for arbitration to respond to newlydiscovered conflicts, RMRPC will also contain an irreparable defects clause that exempts later-discovered information that would lead to a real danger of bias against the challenger. Absent irreparable defects suffered by a challenger, the waiver of a challenge should be strictly construed and enforced because a challenge is not based on the existence of an irregularity alone but the attitude of a party toward that irregularity. Therefore, the optional nature of challenges lends support to two Swiss Federal Tribunal judgments that note, a party which does not react at once is forfeited from subsequently invoking the ground for challenge in question .93 Taking the above updates into account, RMRPC should read:

Grounds for ChallengeA proposed arbitrator shall disclose any circumstances likely to give rise to justifiable doubts as to his impartiality or independence. From the time of his appointment and throughout the arbitral proceedings, the arbitrator shall immediately disclose any circumstances that call his impartiality or independence in to question. Such circumstances are those of such a nature as to affect the judgment of the arbitrator and to create a real danger of bias with regard to one of the parties to the dispute.94 A party may challenge an arbitrator only if it demonstrates that circumstances (disclosed or discovered) rise to the level of affecting the judgment of the arbitrator or creating a real danger of bias as to one of the parties.

Challenge ProcedureAbsent party agreement as to the challenge procedures, a party who seeks to challenge a proposed arbitrator must exercise good faith to raise its objection immediately and no longer than 15 days from learning of circumstances justifying the challenge. The arbitral tribunal shall decide the challenge, subject to an appeal to a competent court within 30 days.

ConclusionChallenges to arbitrators pose unique problems in the current international arbitration environment. As rising costs and growing uncertainty impinge on commercial parties' ability to obtain an effective and efficient dispute resolution, the standards that govern challenges must be clarified and simplified. Harmonisation of procedural rules exists as option to update and enhance the framework for challenges to ensure that it reflects business norms and parties' expectations. A revision of challenge procedures is overdue and a new look at impartiality and independence is in order. Building off of the work of existing model rules, three essential updates--to the standards, the decision-maker, and

the timeframe--can effectively address the outstanding delays and prepare institutions for the next phase of international arbitration. Office of the US Trade Representative, Washington, DC; LL.M., Georgetown University Law Centre; J.D., Chicago-Kent College of Law; BA, University of Michigan.The views expressed in this article are those of the author only and do not reflect the opinions of any governmental entity or institution. The author would like to thank Arif Ali and Baiju Vasani for their invaluable and extensive comments. Int. A.L.R. 2010, 13(4), 127-137 12.See Christophe r R. Drahozal and Richard W. Naimark (eds), Toward a Science of Internatio nal Arbitration : Collected Empirical Research (Kluwer Law Internatio nal, 2005), p.59 (noting that approxima tely 90% of commercia l contracts include an arbitration clause); Gary Born and Rachael Kent, Rules of the Game (2006) 4 Legal Business Arbitration Report (naming new major state players such as the countries of the former Soviet Union, China, Russia, the Middle East, and Latin American countries). Further, the Internatio nal Centre for Settlemen t of Investmen t Disputes (ICSID) currently lists 127 cases

Page13pending, as opposed to five in 1995, and the number of cases filed spiked in 2003 through 2009. See List of Pending Cases, available at http://icsi d.worldba nk.org/IC SID/Front Servlet? requestTy pe=GenCa seDtlsRH& actionVal= ListPendin g [Accessed August 8, 2010]; The ICSID Caseload-Statistics, available at http://icsi d.worldba nk.org/IC SID/Front Servlet? requestTy pe=ICSID DocRH&ac tionVal=C aseLoadSt atistics [Accessed August 8, 2010] (showing 38 cases filed in ICSID's first 25 years and 267 cases filed in the past 13 years). 2. See, e.g. David Foster and David Edwards, Challenges to Arbitrators (2008) The European & Middle Eastern Arbitration Review, available at http://ww w.globalar bitrationre view.com/ handbook s/3/sectio n/5/chapt er/68/chal lenges-

arbitrators [Accessed August 8, 2010] (evaluatin g heightene d costs associated with more challenges to arbitrators ); Albert Jan Van Den Berg (ICC (ed.)), Report on the Challenge Procedure, The Arbitral Process and the Independe nce of Arbitrators (1991), pp.87-93. 3. Foster and Edwards, Challenges to Arbitrators (2008) The European & Middle Eastern Arbitration Review. 4. Ibid. 5. Other important procedural issues, such as interim measures and notice requireme nts, deserve attention but are outside of the scope of this article. See Mark Appel, Emergenc y and Interim Relief in Internatio nal Arbitration (MarchMay 2002) 7(1) ADR Currents 1; report of the UN Secretary General, Settlemen t of Commerci al Disputes, A/CN.9/W G.II/WP.1 08 (January

Page152000), p.104. For example, interim measures introduce questions of speed in the face of potentially imminent and significant harm to a party. The decision on interim measures requires a balancing of interests, powers, and cooperation in enforceme nt. Similarly, notice requireme nts pose questions among various institution s as the method of notice and the content of a request for arbitration vary widely and influence the course of the dispute. 6. Omar E. Garca Bolvar, Comparing Arbitrator Standards of Conduct in Internatio nal Commerci al Trade Investmen t Disputes (Novembe r 2005/Janu ary 2006) Dispute Resolution Journal 2. 7. See Gary Born, Internatio nal Commerci al Arbitration : Comment ary and Materials (Kluwer Law

Internatio nal, 2001), p.451. Born describes the procedural timetable of arbitration s and notes that the ICC, AAA Internatio nal, LCIA and UNCITRAL Rules each employ similar substantiv e principles regarding choice of law, separabilit y of the arbitration agreement , provisional relief, and waiver of appellate review. He emphasise s, however, that the leading institution s provide for only a general procedural framework , and thus significant --and often meaningfu l-differences exist. 8. Winston Stromberg , Avoiding the Full Court Press: Internatio nal Commerci al Arbitration and Other Global Alternative Dispute Resolution Processes (2007) . 40 Loy. L.A. L. Rev. 1337, 1343 9. When I refer to harmonisa tion , I refer to the process by

Page17which congresse s, working parties, or other groups of practitione rs develop, and most importantl y, update model rules. 10. The IBA intended just this when it began drafting the Rules on the Taking of Evidence in Internatio nal Arbitration . 11. Indeed, the concept of harmonisa tion has evoked many conflicting uses and ideas. The Oxford English Dictionary defines harmoniza tion as, the action or process of bringing into agreement ; reconciliati on, standardiz ation : The New Shorter Oxford English Dictionary (Oxford: Clarendon Press, 1993). 12. These principles include the lex mercatoria (internatio nal commercia l norms or customs), which increasingl y have provided the source for internation al arbitration laws.

Berthold Goldman, Frontires Du Droit Et Lex Mercatoria (1964) 9 Archives De Philosophi e Du Droit 177 (translated in Karim Youssef, Consent in Context: Internatio nal Arbitration (Decembe r 2009), para.2:14) . 13. The enforceme nt componen t is largely a national issue, requiring parties to rely on state courts and governme nts for effective implement ation. 14. For an analysis of the great divide , see Elena V. Helmer, Internatio nal Commerci al Arbitration : Americaniz ed, Civilized, or Harmonize d? (2003) 19 Ohio St. J. on Dispute Resolution 35. 15. See http://ww w.lciaarbitration .com [Accessed March 22, 2010] (explanato ry note found on the website introducin g the LCIA Rules). 16. I recognise that various legal

Page19traditions have not equally influenced the developme nt of arbitration . See Leon Trakman, Legal Traditions and Internatio nal Commerci al Arbitration (2006) 17 Am. Rev. Int'l Arb. 1, 2 (discussin g the differences between legal traditions and legal cultures and both concepts influence on arbitration ). In turn, many may feel that the harmonise d system does not take their views into account. Even so, I advocate a pragmatic view arbitration in which the communit y resists the urge to incorporat e all legal traditions as impractical and attempts to dispel the common versus civil law aspects of harmonise d provisions. Instead, the communit y should focus on the realities of practicing in internation al commercia l arbitration

and respond to the parties' desires for updates to the underlying procedure s regardless of the historical backgroun d of the procedure or party. 17. See, e.g. Foster and Edwards, Challenges to Arbitrators (2008) The European & Middle Eastern Arbitration Review (evaluatin g heightene d costs associated with more challenges to arbitrators ); Pierre Lalive, Towards a Decline of Internatio nal Arbitration ? (1999) 65 The Journal of the Chartered Institute of Arbitrators 251, 253 (arguing that traditional rigor and quality in arbitration has dwindled with the increasing and excessive profession alisation of the field). 18. Susan Franck, The Role of Internatio nal Arbitrators (2006) . 12 ILSA J. Int'l & Comp. L. 499, 500 fn.1. 19. Van Den Berg,

Page21Report on the Challenge Procedure, The Arbitral Process and the Independe nce of Arbitrators , 1991, p.416 (calling these requireme nts fundament al ). 20. See SCC Rules art.15; LCIA Rules art.10.3; AAA Rules art.8.1; and ICC Rules art.7.1, which requires the arbitrator must be and remain independe nt. 21. Similarly, the SCC Rules art.14.1 require, [e]very arbitrator must be impartial and independe nt . See also ICC Rules art.7.1 (independ ence); AAA Rules art.7.1 (impartial and independe nt). 22. The 1976 version of the UNCITRAL Rules, art.9, used only the masculine pronoun to refer to the arbitrator. More importantl y, the 1976 UNCITRAL Rules did not clarify that the disclosure requireme nt was

continuous , throughou t the entire arbitral proceedin gs. The 2010 UNCITRAL Rules make this explicit. 23. The 2010 UNCITRAL Rules, art.6.7, permit an appointing authority to take nationality into account when considerin g how to secure independa nt and impartial appointme nt. This has not changed from the 1976 UNCITRAL Rules, art.6.4. See UNCITRAL Rules, available at http://ww w.uncitral. org [Accessed on August 16, 2010]. 24. 2010 UNCITRAL Rules art.6.7. 25. See 2010 UNCITRAL Rules art.6.7.; Garca Bolvar, Comparing Arbitrator Standards of Conduct in Internatio nal Commerci al Trade Investmen t Disputes (Novembe r 2005/Janu ary 2006) Dispute Resolution Journal 2. 26. ICDR Rules, art.6.4.. 27. ICC Rul

Page23es art. 7.4 pro vide s: [T] he deci sion s of the Cou rt as to the app oint me nt, con firm atio n, chal len ge or repl ace me nts of an arbi trat or shal l be fina l and the rea son s for suc h deci sion s shal l not be co mm unic ate d. See also UN CIT RAL Mod el Law of 198 5 art. 13. 3; Net herl and s Arbi trati on Act of 198

28. Rules art.7.4. The ICC report on Technique s for Controllin g Time and Costs in Arbitration urges parties to carefully consider their nominated arbitrator to avoid possible objections. See Selection

6 arts 103 5 and 107 0. The LCI A Rul es art. 29. 1 pro vide s: [T] he deci sion s of the LCI A Cou rt wit h res pec t to all mat ters rela ting to the arbi trati on shal l be con clus ive and bin din g upo n the part ies and the Arbi tral Trib una l. ICC

Page25of Arbitrators , Avoiding Objections -Technique s for Controllin g Time and Costs in Arbitration , ICC Publication 843, para.14 (hereinaft er ICC, Avoiding Objections ). 29. The balance ultimately includes publicpolicy considerati ons involving conflicts that influence the legitimacy of the final award. I focus on the pragmatic goal of reducing the cost associated with delays to stress the overwhelm ing desire to reign in the abuse of the challenge procedure s and to encourage the start of a dialogue that will lead to simplified and clarified standards governing challenges . 30. Other outstandin g discrepanc ies exist that this article does not address. For example, most rules require an arbitrator to disclose potential conflicts,

as noted above. These rules do not, however, provide details indicating what must be or should be disclosed. Foster notes that the IBA Guidelines may contain insights into this issue. Foster and Edwards, Challenges to Arbitrators (2008) The European & Middle Eastern Arbitration Review. 31. See LCIA Rules art.10.3; SCC Rules art.15.1; AAA Rules art.8.1. 32. See Foster and Edwards, Challenges to Arbitrators (2008) The European & Middle Eastern Arbitration Review. 33. Van Den Berg, Report on the Challenge Procedure, The Arbitral Process and the Independe nce of Arbitrators , 1991, p.417. 34. Born and Kent, Rules of the Game (2006) 4 Legal Business Arbitration Report 6. 35. Van Den Berg, Report on the Challenge Procedure, The Arbitral Process and the

Page27Independe nce of Arbitrators , 1991, pp.421423. 36. See CIETAC Rules art.26.6 (Chairman of CIETAC decides challenge) ; LCIA Rules art.10.4 (LCIA Court decides challenge) ; ICC Rules art.11.3 (ICC Court decides challenge) . 37. ICSID r.9.4 provides: Unless the proposal relates to a majority of the members of the Tribunal, the other members shall promptly consider and vote on the proposal in the absence of the arbitrator concerned. If those members are equally divided, they shall, through the SecretaryGeneral, promptly notify the Chairman of the proposal, of any explanatio n furnished by the arbitrator concerned and of their failure to reach a decision. Additionall y, ICSID r.9.5 leaves the final decision to the

Chairman of ICSID if no consensus is reached. 38. 39. 40. This ambiguity is a result of the interaction of Arbitration Act 1996 arts 23 and 24. Article 23.1 ensures the parties' freedom to determine the challenge procedure s, and art.23.2 provides that the rest of art.23 (and possibly art.24) apply if the parties do not agree to specific procedure s. Article 24.2 again relegates the courts to a secondary power if the parties agree to vest challenge decisions in an institution or specific person. If the parties do not agree, however, the English Arbitration Act is unclear whether the parties are permitted (or whether they must ) seek a court decision first. 41. Howard M. Holtzmann , Balancing the Need for Certainty and

Page29Flexibility in Internatio nal Arbitration Procedure in Lillich and Bower (eds), Internatio nal Arbitration in the 21st Century: Toward Judicializa tion and Uniformity (1993), p.419, fn.4. 42. French Code of Civil Procedure art.1463 provides: An arbitrator may not withdraw himself nor be recused save for a ground of recusal that has become apparent or has occurred after his designatio n. Difficulties relating to the implement ation of this Article are brought before the president of the competent court. The use of the word president implies that French national courts do not retain the power to determine a challenge. 43. 44. 45. See ICC Rules art.11.2 (30 days from the date the challenger was informed of questionab le

circumstan ces); SCC Rules art.15.2 (15 days); AAA Rules art.8.1 (15 days). CIETAC gives a party 10 days to challenge on the grounds disclosed by the arbitrator (10 days from the receipt of the disclosure) in art.26.1 and 15 days from the date the party becomes aware of a reason for challenge but no later than the conclusion of the last oral hearing . CIETAC Rules art.26.3. CIETAC, therefore, sets a slightly different limitation on the party's ability to challenge that prevents delayed challenges after the tribunal renders an award. 46. See LCIA Rules art.10.4 ( A party who intends to challenge an arbitrator shall, within 15 days of the formation of the Arbitral Tribunal or (if later) after becoming aware of any circumstan ces ). 47. Swiss Statute on Internatio nal

Page31Arbitration of 1987 art.180.2. 48. Foster and Edwards, Challenges to Arbitrators (2008) The European & Middle Eastern Arbitration Review 5. 49. Van Den Berg, Report on the Challenge Procedure, The Arbitral Process and the Independe nce of Arbitrators , 1991, p.419. 50. Van Den Berg, Report on the Challenge Procedure, The Arbitral Process and the Independe nce of Arbitrators , 1991, p.419. 51. See ICC, Avoiding Objections . 52. Holtzmann , Balancing the Need for Certainty and Flexibility in Internatio nal Arbitration Procedure in Lillich and Bower (eds), Internatio nal Arbitration in the 21st Century, 1993, p.3. 53. Helmer, Internatio nal Commerci al Arbitration (2003) 19 Ohio St. J. on Dispute Resolution

35, 49. 54. See Bernardo Cremades, quoted in Helmer, Internatio nal Commerci al Arbitration (2003) 19 Ohio St. J. on Dispute Resolution 35. 55. The sine qua non of a legitimate arbitration is the award surviving challenges . 56. Alan Scott Rau, The Culture of American Arbitration and the Lessons of ADR, presented at the University of Texas at Austin School of Law's Symposiu m on Globalizati on and the Judiciary in September 2004 (quotes Serge Lazareff, Internatio nal Arbitration : Towards a Common Procedural Approach in Stefan N. Frommel and Barry A. K. Rider (eds), Conflicting Legal Cultures in Commerci al Arbitration : Old Issues and New Trends (1999), p.19 ( we can only note amongst arbitrators and practitione rs alike the

Page33increasing awareness of an emerging harmonize d procedural pattern in internation al arbitration which has the good sense to combine the best elements of both legal systems while avoiding their pitfalls. ). 57. Franco Ferrari, Defining the Sphere of Application of the 1994 UNDROIT Principles of Internatio nal Commerci al Contracts (1995) . 69 Tul. L. Rev. 1125, 1225 58. See Peter Binder, Internatio nal Commerci al Arbitration in UNCITRAL Model Law Jurisdictio ns (2000), pp.42-43 (but also discussing the significanc e of national enforceme nt mechanis ms without which voluntary complianc e with awards would seem nonexisten t). 59. See Katherine L. Lynch, Globalizati on and

Internatio nal Commerci al Arbitration , a thesis submitted to the Stanford Program in Internatio nal Legal Studies at the Standard Law School (May 1997), p.101. 60. It doe s not app ear that this app roa ch has gai ned acc ept anc e, eve n in the curr ent incr easi ngl y inst ituti ona lise d regi me. For a det aile d co mm ent ary of glo bali sati on's role on stat e pow er, see Mar tin Wol f, Will the Nati on Stat e Sur vive

Page35Glo bali zati on? (Ja n/F eb 200 1) 80( 1) For eig n Affa irs 178 (co nclu din g that stat es are not unn ece ssar y in a glo bali sed env iron me nt). See

61. Lynch, Globalizati on and Internatio nal Commerci al Arbitration , a thesis submitted to the Stanford Program in Internatio nal Legal Studies at the Standard Law School, May 1997, p.100. 62. The New York Conventio n on the Recognitio n and Enforceme nt of Foreign Arbitral Awards of 1958 is one of the most important internation al treaties that ensures crossborder enforceme nt of awards,

and thus legitimatis ed the arbitral process globally. See Guiditta Cordero Moss, Internatio nal Commerci al Arbitration : Party Autonomy and Mandatory Rules (1999) 68(3) Nordic Journal of Int'l Law 375. 63. The states occupy a key role in arbitration as they possess unique powers to enforce awards or legislativel y alter arbitration acts. In many ways, harmonisa tion recognises this importanc e of states and encourage s the arbitration communit y to utilise states to the fullest extent. 64. Further, a Harmonise d law should be one based on expertise and experience d dealings with the intricacies of national and internation al law. Thus, Harmonisa tion relieves practitione rs from the need to be intimately familiar with multiple state laws

Page37thereby increasing efficiency in arbitration . 65. Several prominent scholars have examined the challenges that arbitral processes face in the future and concluded arbitration risks extinction. See Lalive, Towards a Decline of Internatio nal Arbitration ? (1999) 65 The Journal of the Chartered Institute of Arbitrators 1 (quoting Mr Neil Kaplan Q.C. from the Chartered Institute and noting that Sir Michael Kerr predicted a decline in internation al arbitration ). 66. See Kevin T. Jacobs and Matthew G. Paulson, The Convergen ce of Renewed Nationaliz ation, Rising Commoditi es, and Americaniz ation in Internatio nal Arbitration and the Need for More Rigorous Legal and Procedural Defenses (2008) . 43 Tex.

Int'l L.J. 359, 364 67. See Helmer, Internatio nal Commerci al Arbitration (2003) 19 Ohio St. J. on Dispute Resolution 35, 60. 68. An ambiguity results from the unknowns of these interaction s. Even so, the impact of this uncertaint y must not be overstated , as parties continue to choose institution al arbitration rather than attempt the exhaustive exercise of creating detailed procedure s. 69. See id. (using the IBA Rules of on the Taking of Evidence in Internatio nal Arbitration as an example of efficient rulemakin g by practitione rs). 70. See Holtzmann , Balancing the Need for Certainty and Flexibility in Internatio nal Arbitration Procedure in Lillich and Bower (eds), Internatio nal Arbitration in the 21st Century, 1993, p.3.

Page3971. Holtzmann , Balancing the Need for Certainty and Flexibility in Internatio nal Arbitration Procedure in Lillich and Bower (eds), Internatio nal Arbitration in the 21st Century, 1993, p.3. 72. A provocativ e debate has emerged regarding the effect of competing institution s on arbitration procedure s. For example, several scholars argue that competitio n among institution s in the internation al arbitration market can and indeed has led to less restrictive procedure s governing the parties. This demand from the consumers will also influence the drafting of model rules and can prevent rigid procedural norms from taking force. See Larry Smith and Lori Tripoli, Privatized Internatio nal Dispute Settlemen t

Competing Arbitration Centers Mean UserFriendly Resolution s Worldwide in Inside Litigation (May 1998), p.2. 73. See Pieter Sanders, UNCITRAL' s Model Law on Conciliatio n (2002) 12 Internatio nal Journal of Dispute Settlemen t 1 (Verlag Recht und Wirtschaft, Heidelberg ) (noting that UNCITRAL' s Arbitration Rules and Model Law have been invaluable ); Helmer, Internatio nal Commerci al Arbitration (2003) 19 Ohio St. J. on Dispute Resolution 35, 58 (describin g UNCITRAL' s tremendou s acceptanc e and influence on institution al rules and ad hoc procedure s). 74. Steven Austermill er et al., Internatio nal Lawyer: Asia/Pacifi c Law Committee (2008) 42 Int'l Law 905, 909 (demonstr ating that Cambodia

Page41exemplifie s a state that adopted UNCITRAL Model Law without significant modificatio ns and correspon dingly attracted foreign investmen t). 75. Available in multiple languages at http://ww w.ibanet.o rg/Publica tions/publi cations_IB A_guides_ and_free_ materials. aspx [Accessed March 20, 2010]. 76. IBA Working Party, Comment ary on the New IBA Rules of Evidence. 77. See IBA Working Party, Comment ary on the New IBA Rules of Evidence. 78. See Explanator y note by the UNCITRAL secretariat on the Model Law on Internatio nal Commerci al Arbitration , United Nations document A/40/17, annexe I, p.A(4). 79. For example, the 2006 amendme nts to the Model Law include a new chapter that attempts to secure a more comprehe nsive regime

governing interim measures. These changes better reflect the worldwide demand for enhanced guidelines and protection s. See http://ww w.uncitral. org/uncitr al/en/unci tral_texts/ arbitration /1985Mod el _arbitratio n.html [Accessed August 16, 2010]. 80. See Lalive, Towards a Decline of Internatio nal Arbitration ? (1999) 65 The Journal of the Chartered Institute of Arbitrators 6 (describin g these two seemingly conflicting demands on arbitration ). 81. See Kenneth R. Davis, Unconvent ional Wisdom: A New Look at Articles V and VII of the Conventio n on the Recognitio n and Enforceme nt of Foreign Arbitral Awards (2002) . 37 Tex. Int'l L.J. 43, 44-45 82. Delissa A. Ridgway, Internatio nal Arbitration : The Next Growth Industry (1999) Dispute Resolution

Page43Journal 51. 83. The ICC revisions exemplify this point. See Smith and Tripoli, Privatized Internatio nal Dispute Settlemen t in Inside Litigation, May 1998. 84. See Julian D.M. Lew et al., Comparati ve Internatio nal Commerci al Arbitration (2003), pp.99, 413 (pointing out that parties' right to choose substantiv e law is undispute d). 85. Therefore, uncertaint y surroundin g amended rules of arbitration will be minimised, as the rules as adopted by the parties will govern the arbitration . See Elizabeth Shackelfor d, Party Autonomy and Regional Harmoniza tion of Rules in Commerci al Arbitration (2006) . 67 U. Pitt. L. Rev. 897, 901 86. For example, if a contract is silent on price, the UCC provides that the price to

the sale of the goods is a reasonable price at the time of delivery: UCC s.2305. 87. SN056 ALI-ABA 455 s.2.01. 88. See Moss, Internatio nal Commerci al Arbitration (1999) 68(3) Nordic Journal of Int'l Law 375, 376. 89. Moss, Internatio nal Commerci al Arbitration (1999) 68(3) Nordic Journal of Int'l Law 375, 376. 90. The advantage s to internation al commercia l arbitration extend beyond mere freedom and autonomy. It also enables parties' disputes to proceed in confidence , which allows the parties' relationshi p to continue after the dispute ends, unlike the finality and segregatio n that results from litigation. Steven Nelson, Alternative s to Litigation of Internatio nal Disputes (1989) 23

Page45Int'l Law 187, 19899. 91. Gary Born, Keynote Address: Arbitration and the Freedom to Associate (2009) 38 Ga. J. Int'l & Comp. L. 7, 16; Hans Bagner, Expedited Arbitration Rules: Stockholm and WIPO (1997) . 13 Arb. Int'l 193, 197 92. See ICC Rules. 93. For example, Kevin Jacobs and Matthew Paulson advocated for a more rigorous use of legal defenses in model rules to aid in the early resolution of claims. See Jacobs and Paulson, The Convergen ce of Renewed Nationaliz ation, Rising Commoditi es, and Americaniz ation in Internatio nal Arbitration and the Need for More Rigorous Legal and Procedural Defenses (2008) 43 Tex. Int'l L.J. 359, 387(specif ically arguing for prescriptio n, laches, estoppels, and waiver). 94. See

ICC, Avoiding Objections . 2011 Sweet & Maxwell and its Contributo rs