Jurisdictionalists v. Contractualists: Who is Winning in the Mandatory Law Debate in International Commercial Arbitration?

Abstract

The role of mandatory rules within international commercial arbitration is a highly complex subject fraught with great difficulty and uncertainty. It has been described as one of commercial arbitration’s most challenging issues where “[m]ost relevant questions, including notion, relevance and applicability are not settled.” This article intends to bring some energy into the debate on how to deal with mandatory rules in international arbitration. In conducting a review of existing literature, it argues that in cases of uncertainty, on balance, arbitrators are safer sticking to their contractual mandate. It also provides practical proposals to assist in the development of the mandatory rules doctrine, including the propositions that rules to protect parties of weaker bargaining power should be granted international mandatory status, that arbitrators should provide detailed reasoning in their awards when approaching mandatory laws and that practical guidelines should be drafted for use by arbitrators, courts and legislatures when addressing mandatory rules of law in arbitration practice.

The article will first (Section I) introduce the concept of mandatory rules, explaining their general nature, before then (Section II) detailing some of the key theoretical issues they raise. It will then (Section III) provide some discussion on the diverse approaches taken by arbitrators and courts dealing with mandatory rules in practice, before finally (Section IV) concluding.