Lecture 1. The Notion, Historical Evolution and Consensual Nature of the Arbitration plan

1. Characterization of Arbitration and its consensual nature.

1.1 The Classical Characterization o f Arbitration

1.2 The consensual nature o f arbitration

1.3 An alternative to national courts

1.4. The discontent with the classical characterization of arbitration, in particular with its consensual nature

2. The Historical Evolution o f the Concept and the Consensual Nature o f Arbitration

2.1The traditional concept o f arbitration

2.2 The modern concept of arbitration

2.3The UNCITRAL Model Law’s

3. International conventions and investment treaties

1.1Characterization o f Arbitration

Consent is controlling factor of jurisdiction in international arbitration. Consent not only establishes jurisdiction, but it also determines its extent. Therefore, not surprisingly, the consensual nature has been seen as one of the distinctive features of arbitration. However, with the growing acceptance of arbitration as a dispute resolution mechanism the concept and the consensual nature of arbitration have evolved over time. Nowadays the acceptance of the use of arbitration to resolve disputes finds expression in a number of instruments. Likewise, consent to arbitration can be expressed in different ways.

A. The Classical Characterization o f Arbitration

The classical characterization of the concept of arbitration is still influenced by the form of arbitration which is considered to have existed since the dawn of commerce, and which for many years has been the predominant one: commercial arbitration. It has been pointed out that there is no legal definition for arbitration. Indeed, as arbitration is a dynamic dispute resolution mechanism varying according to law and international practice, national laws do not attempt a final definition of it. At most, a definition can be inferred from the provisions defining the arbitration agreement contained in the various legislations. On the other hand, definitions o f‘arbitration’ have been provided by legal authors.

1. Party autonomy as the primary source of the arbitration jurisdiction

The crucial difference between arbitration and courts thus lies in the fact that the basis of the jurisdiction of an arbitral tribunal is the will of the parties, while courts owe their competence to the procedural norms of a State or of an international convention. Moreover national courts have a constitutional role.

Freedom o f contract embraces two closely connected, but nonetheless distinct, concepts:

• it indicates that contracts are based on mutual agreement;

• it emphasizes that the creation of a contract is the result of a free choice, unhampered by external control such as government or legislative interference.

In arbitration the freedom of contract, as the primary rule that governs the law, practice, and regulation of arbitration in the vast majority of national j urisdictions, allows the parties to write their own rules of arbitration—indeed, it permits them to have the agreement establish the law of arbitration for that particular transaction: the parties can customize the arbitral process to fit their needs, eliminate legal rules or trial techniques that might prove inconvenient or unsuitable, and maintain procedural elements they believe necessary to achieve fairness, finality, and functionality.