Precedent and Lawmaking in International Arbitration

International Arbitrators as Lawmakers by Rahim Moloo and Brian King.

The abstract:

Arbitration scholars and practitioners have, for many years, spilled much ink debating the role of arbitrators as lawmakers. The debate has tended to center on two questions involving the role of precedent. First, should arbitrators treat prior arbitral decisions as a form of precedent, and, if so, to what degree should they rely on them? Second, to what extent should arbitrators view themselves as precedent-makers: Is their role limited to deciding strictly the dispute that is before them, or should they take into account the potential impact of their decision on future awards? Coloring the debate on both questions have been concerns about the implications of the answers for the legitimacy of the international arbitration "regime" as a whole.

The debate has assumed more urgency in certain fields of international arbitration, such as investment treaty arbitration, where the recent availability of an abundance of public awards has spurred much interest within the international legal community. As discussed in this article, this development is unsurprising given that the publicity of awards is, in itself, one of the critical prerequisites to the possibility of viewing arbitrators as lawmakers.

While this Article will touch upon some of the issues highlighted above, its focus is different. We begin from the standpoint that regardless of whether, normatively speaking, one believes that arbitrators should perform a lawmaking function, the fact is that they do. Arbitrators regularly cite to prior awards, appear to consider themselves cabined by them to some extent, and demonstrate concern about the impact that the awards they render may have on the development of the law. Parties, for their part, pepper their pleadings with references to past awards where they are available, seeking to convince the panel to follow or distinguish what tribunals have done before. Given the reality on the ground, it seems appropriate to shift the inquiry from the whether to the when and the what. What kind of law do arbitrators make, and when do they do so? Is the process of arbitral lawmaking legitimate, and are all awards created equal as far as precedential value is concerned? These are the questions that this Article seeks to address.