Freshfields Lecture.doc

Consequences which arise from application of

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consequences which arise from application of undefined and undefinable standards described as rules of a lex of unknown origin’: F.A. Mann, ‘Introduction’ in T. Carbonneau (ed.), Lex Mercatoria and Arbitration (1990), p. xxi. 55 And of course, both methods implicate an authoritative adjudicatory process connected to stories: narratives of problems that law addresses, and the ‘for instance’ of how rules and standards should be applied. 56 An argument might also be made that specific rules can be justified by their effect on third parties affected by a case. For example, better arbitration rules might create more attractive options for neutral dispute resolution, which in turn would facilitate wealth-creating economic co-operation in cross-border commerce and investment. On the third party effects of predictable dispute resolution, see William W. Park, ‘Neutrality, Predictability and Economic Cooperation’ in (1995) 12 J. Int'l Arb . 99. 15
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To some extent this is true. Parties to arbitration have long muddled through with the sketchiest of procedural structures. 58 So why change things now? In a way, however, this ‘not needed’ argument is a bit like saying that Thomas Edison need not have invented the gramophone in 1876, since people had enjoyed live music for millenia. Analogously, the fact that modern arbitration is based on arbitrator discretion does not mean that precise protocols have been tried and found wanting, but simply that they have not been tried in earnest. 59 Unless Voltaire’s Dr. Pangloss was correct in asserting that all is for the best in the best of all possible worlds, 60 the present system of arbitrator discretion derives more from institutional fear of alienating one constituency or another than from any reliable indication of what the business community really wants. Until a major service-provider adopts ‘rules-rich procedure’ (or at least a stand- alone option for procedure-rich rules), it is hard to know how the market will respond. No empirical studies exist to permit falsification of one position or the other concerning rule specificity. 61 Only if and when an experiment is tried will we have any indication of whether greater ex ante precision is attractive to the enlightened. B. Market Forces A more serious debater might suggest that the decision to arbitrate itself indicates that market forces favour minimal procedural complexities. But the question is not whether arbitration means fewer rules, but rather which rules should be left out. Many reasons to arbitrate have nothing to do with simplicity, but derive from other concerns, such as fear of bias, a search for expertise and concern over crowded dockets. 62 Of course, if the parties really want more detail, they can bargain for it.
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