Where Has International Commercial Arbitration Come From?

If we are to understand fully the present role ofconsiderably by its own national environment. Whilst
international commercial arbitration, and what shape itthere are a large number of arbitral institutions, the
is likely to take in the future, it is important to lookmajor institutions are:
at past developments that are the basis for our
current system of arbitration. In short, to understand1. London Court of International Arbitration ("LCIA"),
the future you need to understand the past.based in London (established in 1892);
Arbitration is a system of justice, born of merchants.2. Stockholm Chamber of Commerce ("SCC"), based
In one form or another, it has been in existence forin Stockholm (established in 1917);
thousands of years.3. International Chamber of Commerce ("ICC"), based
The earliest law dedicated to arbitration in Englandin Paris (established in 1919);
was in 1697. In France, the French Revolution4. American Arbitration Association, based in New
considered arbitration as a droit naturel and theYork (established in 1926);
Constitution of 1791 proclaimed the constitutional right5. China International Economic and Trade Arbitration
of citizens to resort to arbitration. It was alsoCommission ("CIETAC"), based in Beijing (established
included in the Code of Civil Procedure in 1806. Thein 1956);
origins of the concept of arbitration in France go6. Hong Kong International Arbitration Centre
back to the ancient courts of Pie Poudre (from the("HKIAC"), based in Hong Kong (established in 1985);
French pied poudreux, meaning vagabond), set up by7. Singapore International Arbitration Centre ("SIAC"),
boroughs to settle disputes between merchants onbased in Singapore (established in 1991).
market days.. The origins of arbitration go back toIn the early 1970s there was an increasing need for a
dispute settlement usages in ancient times, in Europe,neutral set of arbitration rules suitable for use in ad
in Greece and Rome, including Roman law, and in Asia.hoc arbitration. Under the auspices of the United
Up until the 20th century, the national courts laggedNations, arbitration rules were prepared by the United
behind in recognising the decisions of arbitrators. ThisNations Commission on International Trade Law
may be because the courts saw arbitration as a rival,("UNICTRAL"). The UNCITRAL Rules cover all
as well as being suspicious about the standards beingaspects of the arbitral process, providing a model
applied in arbitrations at the time. Even in England, forarbitration clause, setting out procedural rules
long a centre for international commercial arbitrationregarding the appointment of arbitrators and
due to its pivotal position as the centre for shipping,establishing rules in relation to the form, effect and
insurance, commodity and financing businesses,interpretation of the award.
arbitration was initially closely controlled by the EnglishThe UNICTRAL Rules were intended to be
courts.acceptable in both capitalist and socialist countries, in
In 1883 the Court of Common Council of the City ofdeveloped and developing countries, and in common
London set up a committee to consider thelaw as well as civil law jurisdictions. The UNICTRAL
establishment of a tribunal for the arbitration ofRules have achieved international recognition and are
trans-national commercial disputes arising within thenow widely used. Since 2006, UNCITRAL has
ambit of the City. The initiative came from theengaged its Working Group II in the revision of the
London business community, which was becomingRules which is now in a late stage of completion. The
increasingly dissatisfied with the slow and expensiverevised Rules are expected to be adopted by
process of litigating in the English courts. As The LawUNCITRAL in the summer of 2010.
Quarterly Review was to report at the inaugurationA further historical landmark came in 1985 with the
of the tribunal a few years later:UNCITRAL Model Law on Arbitration, which is
"This Chamber is to have all the virtues which the lawaccepted by an increasing number of countries
lacks. It is to be expeditious where the law is slow,throughout the world; and many other countries
cheap where the law is costly, simple where the law(where they have not adopted it outright) have
is technical, a peacemaker instead of a stirrer-up ofbased their arbitration laws upon it. As the authors of
strife"Redfern and Hunter on International Arbitration (5th
In 1919 the world's business community establishedEdition) state at p. 76:
the International Chamber of Commerce ("the ICC")."If the New York Convention propelled international
The ICC has been the voice of the internationalarbitration onto the world stage, the Model Law
business community and has been a major drivingmade it a star, with appearances in States across the
force in the promotion of both arbitration as aworld."
mechanism for the resolution of internationalWhilst accepting the significant advance brought by
commercial disputes and the need for internationalthe Model Law, it soon fell behind the pace of the
regulations to uphold and support the arbitrationfast-moving world of international arbitration in at
process.least two respects. Firstly, the requirement for an
As world trade expanded, the need to create aarbitration agreement to be in writing, if it is to be
mechanism for international recognition andenforceable; and secondly, the provisions of Article 17
enforcement of both arbitration agreements andgoverning the power of an arbitral tribunal to order
awards in relation to international commercialinterim measures of relief. This resulted in the
agreements was regarded as essential.Revised Model Law, which was approved by the
In 1958 the New York Convention on the RecognitionUnited Nations in December 2006. The Revised Model
and Enforcement of Foreign Arbitral Awards ("theLaw allows for the "writing requirement" to be
NYC") was adopted. The NYC provides fordefined in very wide terms, and recommends that an
international recognition and enforcement ofarbitral tribunal should have the power to issue interim
arbitration agreements and awards by national courts.measures.
Since it was adopted, the NYC has been theIn the last 25 or so years there has been an increase
cornerstone of international commercial arbitrationin the number of institutions providing arbitration
and has represented a quantum leap forward forservices. In particular, in 1985 the Hong Kong
international arbitration. Lord Mustill described the NYCInternational Arbitration Centre ("HKIAC") was
as a convention which: "perhaps could lay claim to beestablished; and in 1991 the Singapore International
the most effective instance of international legislationArbitration Centre ("SIAC") was established. More
in the entire history of commercial law". The successrecently, in 2008 the ICC set up a branch of its
of the NYC is illustrated by 3 factors:Secretariat in Hong Kong and in Singapore. Also, in
2008, the LCIA established (together with the Dubai
1. 144 countries are signatories to the NYC;International Financial Centre) a centre in Dubai,
2. A body of international case law has developed inknown as DIFC-LCIA. And, in April 2009, the LCIA
applying the NYC which has had a direct influence onset up a satellite branch in India, known as LCIA India.
international arbitration practice and law;This brief summary of the history of international
3. It is accepted that agreements to arbitrate andcommercial arbitration shows that, throughout history,
arbitration awards will be enforced by the courts ofinternational trade has led to the creation of
the countries that are party to the NYC.;arbitration machineries and legal frameworks. In
As international arbitration increased and the influencelooking to the future of arbitration, one similarly has
and benefits of the NYC became apparent newto look at the current and future needs of
arbitration institutions began to be created as ainternational business practice to consider what future
supplement to ad hoc arbitrations. Each institution hasdevelopments will occur in the field of international
its own arbitration rules and procedures and offerscommercial arbitration.
arbitration services that were initially influenced