Arbitration and the Mandatory Law Problem: A Mixed Mode ADR Approach

Authors

Hossein Fazilatfar

Abstract

Rigorous scholarly debate has shaped the discussion on the application of mandatory laws and public policy in arbitration, which has led to an array of legal solutions to the mandatory law problem. The determination of the applicable law in arbitration is a dilemma due to arbitrators’ contractual source of authority and commitments to the parties, their mandate to issue an enforceable award, and the imperative nature of mandatory laws at stake. Proposed solutions thus far have primarily been suggestions that are based on either contractual concerns of the parties, jurisdictional (mandatory law) concerns of states involved, or a mix of the two extreme ends. Depending on the circumstances of a particular case, these suggestions could warrant a workable legal solution. However, when the complexity of the question of what law(s) the arbitrator should apply is multidimensional, a more flexible approach should be available to arbitrators. This Article suggests a new and unique procedural mechanism for this substantive law problem: a multitiered alternative dispute resolution approach. An Arb-Med-Arb (Arbitration-Mediation-Arbitration) mechanism allows the arbitrator to switch hats between arbitration and mediation, and with active cooperation of the parties, make appropriate arrangements on a case-by-case basis that respond to both contractual and jurisdictional concerns of the case at hand. This Article first explains mandatory laws and the problem they present in international commercial arbitration. It then discusses the theoretical approaches to the nature of arbitration and the suggested legal solutions for the problem. Finally, it proposes the use of Arb-Med-Arb in the context of mandatory laws and the specific approach the arbitrator-mediator should take within the mediation stage.

Recommended Citation

Hossein Fazilatfar, Arbitration and the Mandatory Law Problem: A Mixed Mode ADR Approach, 2024 J. Disp. Resol. (2024)
Available at: https://scholarship.law.missouri.edu/jdr/vol2024/iss2/6