Judicial Interpretation of Standard Arbitration Clauses

Abstract

Traditionally, courts exercised a balance between careful scrutiny of arbitration agreements and limited review of arbitral procedures and awards, thereby laying the foundation for the development of arbitration from a niche method of dispute resolution into one of the primary methods through which international commercial disputes are resolved. However, the growth of international commercial arbitration since the late 20th century has resulted in an adjustment to this traditional balance. Arbitration came to be acknowledged as a professionalised field of legal practice, which in turn reduced concerns that requiring parties to arbitrate meant subjecting them to an unknown process that might work well but also might result in appalling injustice. In short, acceptance of arbitration as a valid form of dispute resolution argued in favour of a broad interpretation of arbitration agreements.

As this chapter demonstrates, jurisdictions around the world are steadily moving towards an approach that focuses on identifying the intentions of the parties, rather than one that focuses on the strict language of the arbitration agreement. Indeed, while this is not yet a universal position, even those jurisdictions that have traditionally been resistant to arbitration can now be seen to be moving towards this position. This chapter addresses this issue through a comparative analysis of the judicial interpretation of standard arbitration clauses. A short overview of standard arbitration clauses is provided (Section I), followed by a description of the relevant New York Convention provisions courts apply to the interpretation of such clauses (Section II). The chapter then analyses and compares the approach taken by courts in France, the United States, Hong Kong and mainland China, and Argentina (Section III) before offering conclusions (Section IV).

Keywords: Arbitration