Asthe domestic level, parties seeking a binding approach to dispute resolutionthrough third party intervention may choose between national public courts andprivate arbitration. Internationally public court deals with internationalcommercial disputes involving the private sector. Therefor, the choice ofinternational private parties is appealed to between national courts(litigation) and resort to international private dispute settlement, ‘internationalcommercial arbitration’ or so called alternative disputes resolution (ADR)technologies such as mediation and conciliation. Commercial arbitration ishailed as the most effective form of dispute resolution for participants ininternational trade. International commercialarbitration is an alternative method of resolving disputes arising out ofcommercial transactions between private parties across national borders thatallows the parties to avoid litigation in national courts.
1 With the growth of internationaltrade and commerce, there was an increase in adjudicated through arbitration.Arbitration is the favored method for different countries do business oftenneither party will be willing to submit disputes that may arise between them tothe courts of the other party’s country. Each party will view the other party’slegal system with distrust perceiving that they do not understand the otherparty’s legal system and feeling if they are forced to litigate in the foreign country,they will be hampered by language and cultural problems, and systems andprocedures that they do not know anything about. Related to recognition andenforcement of an arbitral award made in one country by the courts of othercountries is one of the problems faced in arbitrations. In variousinternational convention, this difficulty was sought out to be removed.
Genevaprotocol on arbitral clauses in 19232 is the first internationalconvention. The 1923 protocol sought to make arbitration agreement andarbitration clauses in particular enforceable internationally. The 1923protocol was followed by the Geneva convention on the execution of foreignarbitral awards, 1927 and it known as the “Geneva Convention of 1927”.3 To govern international commercialarbitration, in 1953 the international chamber of commerce promoted a newtreat. These proposals of ICC were taken by the united nations economic socialcouncil. This was a reason to the adoption of the convention on the recognitionand enforcement of foreign arbitral awards at New York convention.4 This New York convention is adevelopment on the Geneva convention on 1927.
It provides more simple andeffective method of recognition and enforcement of foreign arbitral awards. Itprovides much wider effect to the validity of arbitration agreement. The NewYork convention is concerned with two matters.1.The recognition of and giving effect to arbitration agreement and2.the recognition of and giving effect to arbitration agreements and therecognition, and enforcements of international arbitral awards.
5 International CommercialArbitration is a resolving dispute arising international commercial agreements.On 21st June 1985, united nations commission on international tradelaw has framed a model law on international commercial arbitration. Also, thismodel law is not binding and individual states may adopt the model law byincorporating into their domestic law. This model law was amended in 2006. onthe other hand, these UNCITRAL arbitration rules are selected by the partieseither as part of their contract or after a dispute between themselves.6 According to the internationalcommercial arbitration parties are free to determine the governing law for thesubstance of the dispute. The arbitral tribunal shall apply the rules of law itconsiders appropriate in view of the surrounding circumstances, if thegoverning law is not specified, arbitration provides the parties to a contractto agree that if a dispute comes a neutral and respected third party or partieswill appointed to solve their dispute in accordance with the procedures.
The choice of where anarbitration is, venue has important implications and should not be madelightly. It impacts the role of local courts in relation to the arbitrationaward and its conduct. This choice of venue affected to many issues includingcost and convenience. As an example, the venue is always the location where thehearings are held. Therefore, it is important to ensure parties and theirwitnesses have easy physical and legal access to the area. Before the arbitration processbegins, the local court of the selected court will often call for substantialassistance from the parties. While most jurisdictions follow, the decisivepanel of judges has the power to do so independently.
The fundamental principle ininternational commercial arbitration is the independence of the party or theparty autonomy. It is described by the authors ofRedfern and Hanter in the following terms.”…..Partyautonomy is the guiding principle in determining the procedure to be followedin an international commercial arbitration. It is a principle that has beenendorsed not institutions and organizations….”7 Basically, the principle of partyautonomy is a flexible theory. This principle started to develop in the 19thcentury.
Mainly this party autonomy is based on the choice of law in a contractand also this principle has broader meaning in international commercialarbitration. In settling internationalcommercial arbitration, parties to the arbitration agreement not only choosethe rules, but are free to hold the arbitration process. The arbitrationagreement is the primary resource of the dispute settlement and the strongesttestimony to party autonomy.
One objective of the UNICITRALModel Law is by limiting the role of an international court to the relaxationof international commercial arbitration and the ‘part autonomy’ is it up to theparty to decide what constitutes their disagreements. When we talk about the party autonomy underthe New York convention, the New York convention is the united nationsconvention on the recognition and enforcement of foreign arbitral awards. Itidentifies the parties to the agreement have agreed to submit all or any of differencesin the present or future.
8 According to the above statement “thefreedom of parties to consensually execute arbitration agreement is known asthe principle of party autonomy. The principle provides a right for the partiesto international commercial arbitration to choose applicable substantive lawand these laws when chosen shall govern the contractual relationship of theparties. However, the pertinent questions have always been: Do parties actuallyhave absolute freedom to determine the arbitration process? To what extent hasthis been achieved in the resolution of disputes having international concerns?And lastly, is party autonomy a myth or reality?…
” of course, an arrangementof parties to the arbitration agreement is the basis of any arbitrationprocess, and degree of certainty. However, their independence or autonomy islimited to several limits. For example, any arbitration process has its ownbasic principles that can not be ignored or violated by the parties. A simple agreement has anarbitration agreement for elementary shares. Therefor, any factor entailing anormal contract will invalidate the arbitration agreement and will do soinevitably. For example, if the arbitration procedure is valid, the parties tothe arbitration agreement must have the capacity to make an agreement in thearbitration procedure, and the applicable dispute or contract, whether the agreementwill be terminated or not will be effective failure.
Another limitation for this isissues related to third parties. Indeed, it is only that the arbitrationagreement is bound. Third parties can not agree with anything that can beinfluenced by the parties. Third parties may be appointed to power as witnessesfor election as witnesses. Similarly, it is also necessaryfor the parties to the arbitration to choose the law applicable to thesubstance of the transaction in the execution of the contract and thearbitrator is obliged to apply the law of choice of law is not real, thearbitrator may ignore that responsibility. These are usually issues that ariseduring and both parties are free to agree on the law applicable to thearbitration and arbitration agreement.9 International CommercialArbitration recognizes that the court may not interfere in arbitrationproceedings.
This is the foundation of this process. It is noteworthy that, inthe following circumstances, the court will intervene to assists the parties inconduct the arbitration proceedings. First, if a party makes a request afterthe first statement of the substance of the dispute has been filed, the courtfiling the matter before the parties to arbitration agreement unless it isfound that the agreement is invalid or unenforceable.
Second, all parties mustagree to appoint the arbitrators, but in case of differences, the arbitrationinstitution or the court may appoint arbitrators at the request of the parties,order interim measures, subject to the arbitration agreement to determine thatthe object of the dispute is a perishable article, preferably to convert itinto currency.10 The application of the principleof party autonomy and the determination of the parties ‘freedom to agree onarbitral proceedings’ are a complex issue. When we consider internationalcommercial arbitration as drama, the principle of party autonomy is at thecenter of the arbitration process.
In the case of party autonomy, the party maychoose the applicable law and conduct arbitration proceedings such asdetermining the composition of the arbitral tribunal, the language of thearbitration, the place of the arbitration, the law applicable to the arbitrationproceedings. In other words, the principle of party autonomy allows the partiesto determine all the basic elements of arbitration. § CONCLUTION Therefore, the principle ofparty autonomy is an arbitration that is different from other disputeresolution mechanisms.
It plays the most important role in the entirearbitration process. As the degree of party autonomy is a principle based onfreedom contract. The parties can exercise such free international commercialarbitration in every stage of international commercial arbitration. However,this principle is not unlimited, as discussed in this answer it has beenlimited in some cases. For example, in order to deter commercial arbitrationover party conduct, it is in violation of public policy that courts have thepower to interfere with the procedures passed or the award awarded thereby. Inprinciple the court always intervenes to ensure that the arbitration agreementis valid and in accordance with the law governing it, and that the agreement ofboth parties does not violate public policy.
Once again contravened theprinciple of arbitration of natural justice and nature, and other factors haveevolved into checks and balance on the principle of a party autonomy, therebylimiting their implementation of agreements that may affect the publicinterest. This principle, widely accepted ininternational commercial arbitration, is a key element in all arbitrationagreements and an effective tool to promote and protect the interests of commercialarbitration parties. Although much has been said about retaining this principlein commercial arbitration, it is pointed out that “party autonomy ofpurpose” is not synonymous with “unlimited power” or”complete autonomy”, as this will lead one to assert that it is aprinciple of autonomy of parties No flexibility. For this reason, the term “partyautonomy” means that this is a basic principle of international commercialarbitration and is of great practical significance. These restrictions areexceptions to the autonomy of commercial arbitration parties.
Therefore, theprinciple of party autonomy cannot be ironically said. Unless the parties tothe arbitration comply with the basic validity of the arbitration agreement, asemphasized in this article, it may be a myth rather than a reality to apply thefunction of the principle of party autonomy.