Competition and Cooperation in International Commercial Arbitration: The Birth of a Transnational Legal Profession

• DOI: http://doi.org/10.1111/lasr.12295
• Published date: 01 December 2017
• Date: 01 December 2017

Competition and Cooperation in International

Commercial Arbitration: The Birth of a

Transnational Legal Profession

Florian Grisel

This paper revisitsthe sociology of international commercial arbitrationon the

basis of unexploited archives and data. This material casts new light on the

competition between “grand old men” and “young technocrats” in the 1980s

and 1990s, a theme thathas structured the analysis of international commercial

arbitration since the pioneering work of Yves Dezalay and Bryant G. Garth

(Dealing in Virtue). In contrast, the data show that the crucial transformative

period actuallytook place between the 1950s and1970s, when a relatively well-

defined group of individuals emergedas the leading arbitrators at the Interna-

tional Chamber of Commerce. These individuals— the “secant marginals”—

succeeded in constructing a cooperative interface (rather than competition)

between otherwiseseparate legal systems andprofessions. In doing so, they cre-

ated the conditions necessary for the emergence of a new transnational legal

profession.At a more general level, the article proposesan alternative narrative

of globalization,wherein actors operating at the intersection of various systems,

create new arenasof governance on the basis of inter-systemcooperation.

For in the meantime the tightrope walker had begun his performance:

he had come out of a small door and was walking along the rope,

which was stretched between two towers so that it hung over the peo-

ple and the marketplace. When he was just halfway across, the small

door opened once again, and out jumped a colorful, buffoonish fellow

who quickly followed after him. ‘Move it, lamefoot,’ he cried in a ter-

rible voice, ‘get going, lazybones, chiseler, whey -face! So I don’t tickle

your heel with my foot! What do you think you’re doing here between

these towers? Back in the tower is where you belong, behind bars, you

who bar the way of one who is your better!’

Friedrich Nietzsche, Thus Spoke Zarathustra

1

Please direct all correspondence to Florian Grisel, Centre national de la recherche Sci-

entifique, Centre de Th

eorie et analyse du droit, 200 avenue de la R

epublique, Nanterre,

France; email: floriangrisel@gmail.com

The author would like to express his deep thanks to the editors and anonymous

reviewers of the Law & Society Review who have offered valuable feedback on this article.

The author is also deeply grateful for the extremely helpful guidance provided by Robert

C. Ellickson, Maria Hauser, Jan Paulsson, Alec Stone Sweet, Albert Jan van den Berg, V.V.

Veeder, and Patrick Weil.

1

Transl.by Thomas Wayne, Part 1, Title 6.

Law & Society Review, Volume 51, Number 4 (2017)

V

C2017 Law and Society Association. All rights reserved.

790

International commercial arbitration (ICA) has become the pre-

ferred method for the settlement of important transnational business

disputes over the course of the last half century,

2

displacing domestic

courts (Stone Sweet and Grisel 2017). A network of arbi tral institu-

tions, the International Chamber of Commerce (ICC) being the

most important, processes the bulk of these disputes, the stakes

of which are enormous. A recent survey of the leading law firms

in the field reported information on 109 active ICA cases in

which at least $500 million was “in controversy,” including fifty-

eight cases in which claims totaled more than $1 billion, and

nine with claims over $9 billion.

3

The actors who manage the

system, typically leading arbitrators themselves, once worked in

relative obscurity. Today, they publish scholarship,

4

organize con-

ferences,

5

and build new organizational forms for promoting

arbitration,

6

activities that are now accessible to the public. As

the importance of ICA has grown so has interest in the sociologi-

cal profile of arbitrators, and in how they succeeded in construct-

ing ICA as a private system of transnational governance.

The pioneering monograph by Yves Dezalay and Bryant G.

Garth (1996), Dealing in Virtue,

7

has dominated this topic for more

than 20 years. Dezalay and Garth tracked the evolution of ICA

between the 1980s and the 1990s, focusing on the competition

between two groups of “merchants of law” which, they claimed,

structured the emergence of a new “field” (Dezalay and Garth

1996: 57). The first group of incumbents was composed of “grand

old men,” a category dominated by “very senior European profes-

sors imbued with the traditional values of the European legal elit-

es” (Dezalay and Garth 1996: 34). The second group of

challengers was made of “young technocrats” who acquired their

legitimacy as litigators in Anglo-American law firms (Dezalay and

Garth 1996: 36). According to the authors, each of these groups

drew their legitimacy from specific systems: the law schools of the

civil law world on the one hand, and the law firms of the common

2

On the disputing parties’ preference for international commercial arbitration, see

for instance the survey carried by White and Case and Queen Mary (University of London),

“2015 International Arbitration Survey: Improvements and Innovations in International

Arbitration.”

3

Michael Goldhaber (2013) “Arbitration Scorecard 2013: Contract Disputes,” The

American Lawyer 1July.

4

Specialized reviews count, among others, Arbitration International,theJournalof Inter-

national Arbitration, and the Revue de l’arbitrage.

5

The annual congress organized by the International Council for Commercial Arbi-

tration (ICCA) is particularly important in the field.

6

These include, for instance, the ICCA and the Milan Club of Arbitrators.

7

This book followed an article published in the Law & Society Review (Dezalay and

Garth 1995).

Competition and Cooperation in International Commercial Arbitration 791

law world on the other hand (Dezalay and Garth 1996: 33–62).

The divides between these two groups—cultural (civil law/common

law), generational (old/young), and professional (professors/attor-

neys)—were progressively resolved in favor of the young techno-

crats. They prevailed over the grand old men in the 1980s,

pushing arbitration from (1) an informal mode of dispute settle-

ment to (2) a judicialized system more akin to U.S. “litigation”

(Dezalay and Garth 1996: 54). Put summarily, the “victory” of the

young technocrats led to the emergence, and steady Americaniza-

tion, of a new version of ICA.

Scholars subsequently grounded new research on the argu-

ments of Dezalay and Garth. Franck, for example, mentioned a

“shift in the group serving as arbitrators, which has grown

beyond the ‘grand old men’ to a younger generation of arbitra-

tion technocrats” to introduce her study of the “role” of interna-

tional arbitrators (Franck 2006: 500). Others have sought to

update the conclusions of Dezalay and Garth in light of addi-

tional data. Schultz and Kovacs claim, on the basis of a survey of

lawyers and arbitrators, that a “third generation of arbitrators”

(the “Managers”) has now emerged (Schultz and Kovacs 2012).

Arbitrators themselves have adopted terms employed by Deza-

lay and Garth, referring to what they do as “practicing virtue”

(Caron et al. 2015). More generally, the prioritization of a small

group of “lawyers that count” (Dezalay et al. 2015: 27)

8

has had

a strong influence on the ways in which sociolegal scholars have

analyzed the significance of legal elites in globalization processes

(Dezalay and Madsen 2012; Hagan et al. 2006; Kauppi and

Madsen 2013; Sacriste and Vauchez 2007; Shaffer et al. 2015).

Dealing in Virtue has not only been highly influential, it has

also gone largely unchallenged. Dezalay and Garth based their

analysis on “almost three hundred interviews” (Dezalay and

Garth 1996: 9), making any challenge a daunting task.

9

This

paper is based on the analysis of new data that was specifically

compiled to explore an alternative explanation. Dezalay and

Garth emphasized incompatibilities between systems, tensions

that produced what they portray as a zero-sum competition

8

See Puig (2014) for an application to investor-state arbitration.

9

One early critique should be noted in this regard. A book reviewer of Dealing in Vir-

tue, who happened to be a former Secretary-General of the ICC International Court of Arbi-

tration, argued that “there [wa]s little basis, in [his] view, for the authors’ contention that

conflict between an aging cadre of notables, i.e., ‘grand old men,’ and a younger generation

of ‘technocrats’ hashelped to shape the modern development of international commercial

arbitration” (Schwartz 1997: 231). Among other reasons, Schwartz pointed out how “many

of those prominent in international arbitration are at the same time academics and practi-

tioners, which makes it even more difficult to speak of cleavage between the two.” (Schwartz

1997: 232).

792 Grisel