Revisiting the 'Content-of-Laws' Enquiry in International Arbitration

• Author: Soterios Loizou
• Position: Teaching Fellow in Commercial Law, King's College London, School of Law; LL.M. mult. (UoA, NYU), PhD cand. (Cambridge), Esq. Earlier versions of this Article received the prestigious Colin B. Picker Prize of the American Society of Comparative Law ('ASCL') in 2016 and the first prize at the international student writing competition, which was...
• Pages: 811-875

Revisiting the “Content-of-Laws” Enquiry in

International Arbitration

Soterios Loizou*

Establishing the content of the applicable law is one of the most

important, albeit seldom examined, topics in the theory and practice of

international arbitration. Setting as the point of departure the regulatory

vacuum in nearly all national laws on international arbitration, this study

examines in depth this “content-of-laws” enquiry in an attempt to foster

doctrinal integrity, legal certainty, and predictability in arbitral proceedings.

Specifically, this study encompasses a three level analysis of the topic.

Firstly, it explores the theoretical underpinnings and the various approaches

articulated in legal theory to the establishment of the content of the

applicable law in international litigation and arbitration. Secondly, on the

basis of an elaborate comparative review of the various legal regimes and

jurisprudence in the most frequently selected venues of arbitration, namely

England & Wales, France, Hong Kong, Singapore, Switzerland, the State

Copyright 2018, by SOTERIOS LOIZOU.

* Teaching Fellow in Commercial Law, King’s College London, School of

Law; LL.M. mult. (UoA, NYU), PhD cand. (Cambridge), Esq. Earlier versions of

this Article received the prestigious Colin B. Picker Prize of the American Society

of Comparative Law (“ASCL”) in 2016 and the first prize at the international

student writing competition, which was organized in conjunction with the

University of Missouri-American Society of International Law Dispute Resolution

Interest Group Works-in-Progress Conference in 2017. For helpful comments,

conversations, and suggestions, I am deeply grateful to Professor Cindy Buys,

Professor Dimitrios Ph. Christodoulou, Professor Nikolaos A. Davrados, Professor

Richard G. Fentiman, Professor Franco Ferrari, Dr. Anastasios Gourgourinis,

Professor Joshua Karton, Ms. Seo Hyung Kim, Ms. Michela Mancini, Dr. Louise

Merrett, Professor William J. Moon, Ms. Maria Lucia Passador, and the participants

at the inaugural Harvard Arbitration Discussion Series at Harvard Law School, the

American Society of Comparative Law Fifth Annual YCC Global Conference at

Tulane Law School, the Cambridge Private Law Centre Seminars at the University

of Cambridge, Faculty of Law, and the MU Center for the Study of Dispute

Resolution & the American Society of International Law Works-in-Progress

Conference. I would also like to thank the librarians at the Harvard Law School

Library, the Cambridge Squire Law Library, and the NYU Law Library for their

perseverance and invaluable assistance in procuring the voluminous sources

necessary for the preparation of this Article. Last, but not least, sincere thanks to the

Louisiana Law Review at the Paul M. Hebert Law Center, Louisiana State

University for the uniquely rigorous and insightful editing of the Article. All errors

remain, of course, mine.

812 LOUISIANA LAW REVIEW [Vol. 78

of New York (USA), and Sweden, as well as in leading investment

arbitration fora, it challenges conventional wisdom by showcasing the

emerging trend toward the application of a “facultative” jura novit arbiter

principle in international arbitral proceedings. Thirdly, it delineates a clear

modus operandi for arbitral tribunals and national courts reviewing arbitral

awards in annulment proceedings and offers model clauses, arbitration rules,

and national law provisions on the content-of-laws enquiry. The study

concludes with some final remarks and observations that amplify the

importance of continuous governing law related consultations between the

parties and the arbitrators throughout the arbitral proceedings and, certainly,

before the tribunal has rendered its final award.

TABLE OF CONTENTS

Introduction .................................................................................. 813

I. Meeting the Latins: Jura Novit Curia, Lex Fori,

and Lex Aliena ............................................................................. 816

II. International Commercial Litigation and Foreign Law ................ 817

III. International Arbitration: The Content-of-Laws

Enquiry in Theory ........................................................................ 821

A. Setting the Scene .................................................................... 821

1. Party Autonomy .............................................................. 824

2. Lex Arbitri ....................................................................... 828

B. The “Fall-Back” Approach .................................................... 830

C. The Inquisitorial Approach .................................................... 833

D. The Adversarial Approach ..................................................... 837

E. The “Hybrid” Approach ........................................................ 839

IV. International Arbitration: The Content-of-Laws

Enquiry in Practice ....................................................................... 839

A. The Civil Law Jurisdictions ................................................... 840

1. Sweden ............................................................................ 840

2. Switzerland ...................................................................... 843

3. France .............................................................................. 845

B. The Common Law Jurisdictions ............................................ 847

1. England and Wales .......................................................... 848

2. Hong Kong SAR ............................................................. 852

3. Singapore......................................................................... 854

4. New York ........................................................................ 856

2018] REVISITING THE “CONTENT-OF-LAWS” ENQUIRY 813

C. The Investment Arbitration Experience ................................. 861

D. Convergence of Laws? .......................................................... 864

V. De Lege Ferenda .......................................................................... 866

Conclusion .................................................................................... 874



“ . . .   

    ,

    



     

.”

[Syriscus

“ . . . At all times

And in all regions Justice should prevail,

And, in the co mmon interest of

mankind,

‘Tis the concern of all who pass to see

Justice upheld.”]1

INTRODUCTION

The method of establishing the content of the applicable law is one of

the most important, albeit seldom examined, topics in the theory and

practice of international arbitration. In stark contrast to the abundance of

publications relating to international arbitration, only a handful of scholars

have attempted to shed light on this dark corner of alternative dispute

resolution and to systematize the plethora of different approaches to the

ascertainment of the content of the applicable law in international arbitral

proceedings.2

1. THE ARBITRATION: THE EPITREPONTES OF MENANDER 40 (Gilbert Murray

trans., 1945).

2. As uniquely put by Professor Park, “Many trees have been felled to make

paper for articles o n how to find facts, [but] . . . [l]ess attention has been paid to

the arbitrator’s truth-seeking function with re spect to legal norms.” William W.

Park, Arbitrator s and Accuracy, 1 J. INT’L DISPUTE SETTLEMENT 25, 42 (2010).