Freshfields Lecture.doc

16 frankfurter j suggested this in new york trust

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16 Frankfurter J. suggested this in New York Trust Company v. Eisner , 256 U.S. 345, 349 (1921) (upholding federal estate tax against constitutional attack). 5
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This may not matter when all parties share or have adopted a common legal culture, 17 or belong to a relatively homogeneous community that shares confidence in the individuals chosen to decide the case. Two Boston law firms arbitrating before a well- known Boston arbitrator would normally be expected to behave professionally and accept rulings that comport with their common range of expectations on matters such as witness sequestration and document production. However, if backgrounds and experiences differ materially, the ad hoc imposition of procedures uncustomary to one side and not announced in advance, risks reducing the perception of arbitration’s legitimacy. 18 The aggrieved party may then feel justified attempting to disrupt and derail the proceedings with charges of procedural unfairness. B. Arbitral Orthodoxy To many in the arbitration community, any suggestion that arbitral discretion should be curtailed may be as welcome as ants at a picnic. 19 The flexibility inherent in arbitrator discretion not only constitutes a pillar of orthodoxy, 20 but rests on deeply entrenched practical considerations. Arbitral institutions that aspire to market their services globally are understandably shy about taking sides in long-standing debates between different national legal systems, particularly on those controversies that divide continental and Anglo-American civil litigation. 21 By leaving procedural matters to the arbitrators’ discretion, institutions side-step the hard choices about what exactly it means to conduct a fair and efficient proceeding. 17 For example, shipping arbitration in London is certainly international, but proceeds under an accepted common legal culture. A quite different sociology attaches to arbitration of cross-border contracts related to joint ventures, sales, distribution agreements, licences and agency contracts. 18 For a discussion of some of the tensions resulting from the heterogeneous nature of the world’s legal cultures, see William W. Park, ‘Arbitration’s Discontents: Of Elephants and Pornography’ in Ian Fletcher, Loukas Mistelis and Marise Cremona (eds), Foundations and Perspectives of International Trade Law (2001), p. 258; reprinted in (2001) 17 Arb. Int’l 263 and (2002) 17 Int’l Arb. Rep. (February) 20. 19 In this connection, much of the history of English arbitration during the past three decades has involved a move toward flexibility, which is all right and good. But the starting point was a hyper-legalised arbitration culture. Prior to 1979 any award might well end up being retried in court under the ‘case stated’ procedure. In the United States now, there is a trend to allow appeal on the merits of the dispute — on the assumption that an unappealable award presents too great a risk because of arbitrator error. The problem, of course, is that appealable awards also present a risk: that of having to try the same case twice.
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