The culture of arbitration.

• Author: Ginsburg, Tom

TABLE OF CONTENTS I. LEGAL CULTURE AND ARBITRATION II. WHOSE CULTURE? III. EXPLAINING ARBITRATION CULTURE IV. CONCLUSION The relationship between "legal culture" and the practice of international arbitration has received increasing attention in recent years. Many see arbitration as a meeting point for different legal cultures, a place of convergence and interchange wherein practitioners from different backgrounds create new practices. Some have suggested that this process has led to an emergent "international arbitration culture" fusing together elements of the common law and civil law traditions. (1) Others see arbitration as a locus of conflict among traditions (2) or as competition among various players. (3)

This comment contests the view that the current state of convergence in arbitration is properly considered a cultural phenomenon. It argues that the phenomenon of convergence is driven primarily by economic rather than cultural factors, and that claims of an arbitration culture reflect the anticompetitive impulse of those already in the business. I argue that convergence in rules and norms is better understood as the result of competition to capture network benefits in the rapidly expanding field of international commercial arbitration.

1. LEGAL CULTURE AND ARBITRATION

   Legal scholars talk about culture in two ways. First, there is the notion of a general legal culture, which is usually taken to mean those aspects of national culture that find expression in the legal system. (4) We speak regularly of Japanese legal culture, French legal culture and U.S. legal culture as well as, more broadly, a civil law and common law culture. (5) As Friedman put it, legal culture consists of the "attitudes, values and opinions held in society with regard to law, the legal system and its various parts." (6) These values might be expressed as a preference for arbitration over litigation, for oral procedures over written ones, or for punitive remedies, to mention only a few examples. (7)

   This idea of culture conceptualizes culture as a feature of the decision making environment of legal actors. It posits that prior cultural endowments create the preferences behind certain choices, either procedural or substantive. (8) The preferences of legal actors are exogenously produced by the national culture or legal tradition and will shape behavior. (9) This approach emphasizes the relative immutability and constraining effect of culture on legal choices. (10) It also implies that culture will dictate outcomes even when it is costly, that is, when rational cost-benefit calculation would not produce the same result. (11)

   A second notion of culture contemplates culture as consisting of shared norms and expectations produced by legal actors. Actors engaged in repeated interaction over time produce culture. (12) Lawyers form an epistemic community, that is, a community of professionals with common training and expertise. (13) This common training and expertise, combined with interactive practices, produces a common set of expectations. (14) These expectations, in turn, shape behavior, though they are also subject to change as new norms arise. (15) This notion emphasizes the dynamism of culture. It is culture as a product of law rather than constraint on law, an effect rather than a cause. Broadly speaking, globalization leads to pressure on legal cultures in the first sense of fixed endowments of ideas: national legal cultures that were more or less autonomous are now subject to a variety of external pressures because of the growing rate of cross-national interaction. But precisely because of this cross-national interaction, globalization produces culture in the second sense. One arena in which this plays out is international commercial arbitration. Hence, there is increasing discussion of a culture of arbitration, a transnational culture common to practitioners, arbitrators and parties involved in arbitral practice. (16) The culture of arbitration typically refers to the gradual convergence in norms, procedures and expectations of participants in the arbitral process. (17)

   Professor Kaufmann-Kohler describes this phenomenon quite nicely. (18) She demonstrates the phenomenon of convergence in a number of areas. She argues that the dominant test for determining the law governing arbitration proceedings is now the objective or territorial test, in which the law of the seat of the arbitration applies. (19) She also notes convergence on the role of the tribunal in setting its rules and in deciding procedural matters. (20) Procedures have also converged around a blend of oral and written procedure, with a strong tendency toward oral hearings, written witness statements and reliance on experts but subject to limitations and control by the panel. (21) Even the dreaded Anglo-American discovery practice has been adopted in a limited form, tamed by the moderating influence of commercial arbitration. (22)

   Further convergence is found in the ability of the tribunal to determine its own jurisdiction, the so-called kompetenz kompetenz, (23) and provisions for severability of the arbitral clause, without which arbitration would be severely constrained. (24) Another example argued to reflect cultural convergence is the substantial agreement on the general principles of arbitration, such as party autonomy and the need for procedural fairness. (25) Finally, the spread of the Model Law and the New York Convention have been major forces pushing toward uniformity. (26)

   It is worth noting that the emergent arbitration culture does not reflect the hegemony of the Anglo-American law firm, as some would have it, (27) On balance, the various shifts may have encouraged arbitration to become more like Anglo-American style litigation, but this shift is far from complete. (28) Indeed, there are signs that U.S. arbitration practice may be shifting toward international practice on a number of dimensions. The American Arbitration Association has recently amended its Rules for Commercial Arbitration so that party-appointed arbitrators are expected to be neutral, as in all international rules, unless the parties specify otherwise. (29) Professor Park's article in this Symposium, calling for modest amendment of the FAA along the lines of the Model Law with regard to judicial review of international awards, is another example. (30) Park really calls for the United States to join the global arbitration culture on this point, displacing our national "legal culture" of judicial autonomy, rights consciousness and inconsistent decision making. (31) In this sense, both Professor Kaufman-Kohler and...