This post has been written by Mamta Kumari, a law student from Banasthali Vidyapith.
Arbitration is regarded as one of the alternative methods of dispute resolution. International Arbitration is an arbitration which helps is solving cross-border dispute which are created due to several contracts, commercial transactions etc. This is also known as hybrid form of international dispute resolution and is termed to be less expensive and faster mode. It deals with the dispute between the parties belonging to different countries as it allows the parties to avoid the national court procedure.
It includes the elements of common law procedure and civil law procedure. In this form of arbitration, client can select an arbitrator concerning the field of dispute who are expert in international arbitration.
International Arbitration follows different procedure than domestic procedure for solving matters. It provides a binding solution to the disputed matter by giving arbitral award to the parties. It possesses the quality of being consensual, neutral, enforceable, binding resolution of International dispute. Companies and joint ventures generally include an international arbitration clause in the contract of their business so that on arousal of dispute, parties may opt for this method for solving the dispute rather than approaching their local courts.
CONCEPT OF LEGITIMACY OF INTERNATIONAL ARBITRATION
For the acceptability of International Arbitration in current scenario, legitimacy is becoming the prevailing standard. The legitimacy is emerging as a burning topic in the international arbitration and is gaining much popularity within the premises of arbitration and even outside of it. The concept of legitimacy is used for evaluating the validity of norms and the outcome of the process of dispute settlement. Party autonomy is one of the important criteria for the legitimacy of international arbitration.
International Arbitration pervades to the concept of legitimacy and is looked upon as an emerging awareness for the exercise of power.
While talking about legitimacy in context of international arbitration, its advantages and disadvantages should be studied because concept is judged with their benefits and drawbacks and as it is used by the users within the arbitration community aw well as by the people outside of it, who have a different conception of the said concept. people withing the arbitration community focuses on function of arbitration as a method or mechanism which settle the individual dispute.
DIMENSIONS OF LEGITIMACY IN INTERNATIONAL ARBITRATION
Legitimacy of International Arbitration is a multidimensional concept which helps in developing a more comprehensive framework of it. The concept of multi-dimensionality of legitimacy is understood for knowing the condition or dimension under which international arbitration can be seen legitimate. There are four dimensions of legitimacy i.e. party legitimacy, community legitimacy, National legitimacy, global legitimacy.
- Party legitimacy
In this dimension, the legitimacy of arbitration is understood from the perspective of the disputing party or in other words to see the validity of arbitration from the point of view of party. It is related to the function of arbitration in settling the individual dispute and the party’s acceptance about the process of settlement. The settlement of dispute must be by the independent and impartial tribunal which satisfies the party and renders them the perception of being it to be legitimate.
- Community legitimacy
Party legitimacy is not only essential as a dimension of International Arbitration but it must also be accepted by community. Community legitimacy denotes that international arbitration must be seen legitimate from the perspective of the community or in other words by the users of arbitration. Like party legitimacy it also includes the aspects like independence of arbitrators, equal treatment of parties, adoption of fair procedure and legitimate arbitral award and all these aspects must be adequately accepted by the users. It is a prevailing standard which measures the legitimacy of arbitral institutions also.
- National legitimacy
Under National Legitimacy, it designates the condition where the arbitration is seen legitimate from the perspective of specific country. It includes domestic legal system which work under the supervisory jurisdiction of domestic courts so as to ensure that the arbitration is conducted with the consent of party. This aspect of legitimacy is mentioned in the state arbitration laws which provides that party should have autonomy in solving dispute through arbitration.
- Global legitimacy
Legitimacy in international arbitration also has global dimension. It denotes the condition where the arbitration is seen legitimate from global perspective or in other words from the point of view of global society or global interest. This dimension is wider among all the dimensions which includes all the elements worldwide. And it is not only concerned with the national perception but also with its global implications in relation to both private party interest and public interest where both the interests are equally balanced in international arbitration. Like all other dimensions, it is also concerned with the arbitral proceedings and their effects, functions of arbitral institutions.
CONSTITUTIONAL CHALLENGES TO THE LEGITIMACY OF INTERNATIONAL ARBITRATION
In the debate of legitimacy of international arbitration there are three broader challenges to the arbitration which includes principle of democracy, rule of law, human rights. All forms of arbitration are not targeted by every single challenge and altogether these challenges affect the perception of legitimacy of international arbitration. the challenges are-
- First constitutional challenge is related to the general disputes like consumers, labor contracts etc.
- Second challenge can be related to the fairness and interest of all the participation in the dispute settlement, democratic representation.
- Third challenge in the debate of legitimacy is “legitimacy crises” in investment treaty arbitration.
Whenever any power is exercised, it needs to be legitimate. And legitimacy in exercising power is not only applies to individual tribunal or arbitrators but also to the transnational authority exercised by the arbitral tribunal. The discussion related to the legitimacy in international arbitration cannot be ended to the multi-dimensionality of it, but should also extends to its criticism as there are some people who criticizes the said concept of International Arbitration by revolving around legitimacy of it. People pointed out the awards of the arbitration to be inconsistent and raises a point of lack of control mechanism, some denoted it as a worst form of international dispute resolution.