International Arbitration and the Lex Arbitri

Abstract

The Transatlantic Trade and Investment Partnership (TTIP) between the EU and the US will be the most significant of the free trade agreements (FTAs) that the EU and its Member States is contemplating with third states. FTAs generally envisage arbitration as the preferred method for dispute resolution not only between the contracting parties but also between a contracting party and a private investor. Generally, a choice for arbitration entails application of a lex arbitri, which governs the arbitral procedure and provides safeguards ensuring the proper conduct of arbitration proceedings. While the existence and relevance of a lex arbitri is considered self-evident in relation to international commercial arbitration, there is not a similar understanding when it comes to inter-state arbitration or arbitration between states and private parties, i.e. mixed arbitration. This paper posits that inter-state arbitrations are generally subject to public international law, since the adjudicative and the prescriptive jurisdiction of host states are limited by general rules of customary international law. Further, this paper posits that mixed arbitrations, which are not governed by a stand-alone system (such as ICSID or arguably the Iran-U.S. C.T.), nowadays appear to be governed by national arbitration laws. Therefore, if the envisaged mixed arbitration system in the TTIP and other FTAs is to function as a stand-alone regime, independently from national arbitration laws and without interference from national courts, specific regulations in these treaties will be necessary.

Keywords: international arbitration, interstate arbitration, mixed arbitration, TTIP, lex arbitri

JEL Classification: K33, K49