International Commercial Arbitration: A Comparative Introduction by Franco Ferrari and Friedrich Rosenfeld (Edward Elgar Publishing, 2021) — Reviewed by Eric Morgan, Q.Arb with additional commentary by Hon. Barry Leon
Arbitration practitioners can pick and choose for each dispute the most appropriate aspects from various national dispute resolution processes and traditions, in addition to processes that have been developed for arbitration. In international commercial arbitration, where practitioners are exposed to many other ways and thinking about resolving disputes between businesses, this is particularly so. Without being tied necessarily to any specific jurisdiction, international commercial arbitration practitioners can borrow and adapt ideas and approaches from all jurisdictions.
In International Commercial Arbitration: A Comparative Introduction, Franco Ferrari and Friedrich Rosenfeld, professors at New York University in New York and Paris, offer a practical introductory overview of international commercial arbitration and how it is both separate from and influenced by national legal systems.
The book is structured in the chronological order of an arbitration, first laying out general concepts around an arbitration agreement before moving through the initiation and conduct of an arbitration through to the award and its enforcement.
It begins by exploring key concepts and dichotomies animating arbitration—the importance of the parties’ consent as the basis for arbitrating their dispute, institutional versus ad hoc arbitrations, commercial versus investment treaty arbitrations—as well as examining the benefits and disadvantages of arbitration compared to other forms of dispute resolution.
The book draws on several sources as it moves through the typical steps in an arbitration proceeding, hugging closely to the UNCITRAL Model Law on International Commercial Arbitration which underpins many national arbitration laws, including all Canadian arbitration statutes. The book also draws on the procedural rules and soft law instruments of various international arbitration institutions and bodies, such as the International Bar Association.
Ferrari and Rosenfeld’s book, though, is at its most interesting when it departs from any particular set of rules and procedures and explores practical issues like the assessment of evidence or when arbitrations are especially complex due to the involvement of multiple contracts and multiple parties. These chapters raise issues around the practice of arbitration on the ground rather than the broader framework of rules and laws which occupy more the other chapters.
When dealing with the national laws of specific countries and how they interact with international commercial arbitration, the book is necessarily fragmented almost to the point of being scattershot. So we learn what the Tokyo High Court has to say about the right to be heard, what the Frankfurt Court of Appeals held regarding procedural deficiencies and an arbitrator’s independence and impartiality, and how the Singapore High Court approaches the standard of review on questions of jurisdiction. Canadian case law makes its fair share of appearances too, for example, the Supreme Court of Canada’s decision in Dell Computer Corporation v Union des Consommateurs et al.,  2 SCR 801 regarding the court deciding arbitral jurisdiction on a question of law, and the Federal Court’s decision in Canada (Attorney Gen.) v S.D. Myers Inc.  3 FC 38 regarding the principle of minimal judicial intervention when a court is asked to set aside an award. The commentary of some Canadian practitioners such as Henry Alvarez is also featured.
Ferrari and Rosenfeld do not allow any one jurisdiction to dominate their examples, though it may have been better if they had reflected a bit more the case law from the common hubs of international commercial arbitration. Anyone wanting a further analysis of any one jurisdiction’s approach to international commercial arbitration will have to look elsewhere.
In this relatively slim book, we are only given snatches and glimpses, though with some attempts to set out categories and recognize trends. This analysis includes how national laws can diverge fundamentally from each other, with implications for international arbitration. For example, in certain jurisdictions, including Germany and Italy, the partial invalidity of a contract invalidates the entire contract, which then gives rise in arbitration (including under the UNCITRAL Model Law) to the doctrine of separability by which an arbitration clause is considered a separate agreement from the other terms in the contract for the purpose of establishing arbitral jurisdiction. Learning about other jurisdictions can help Canadian practitioners understand what lies behind certain international arbitration instruments and practices. Sometimes these are aimed at addressing issues that are not commonplace in Canadian law.
The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) rightly dominates the post-award discussion. A careful tour through the New York Convention occupies fully about one-fifth of the book. Ferrari and Rosenfeld look at both the requirements of the New York Convention and how national courts have approached enforcement of arbitral awards.
The authors end their book by tying the New York Convention and the post-award phase more generally to the pre-award phase. Ferrari and Rosenfeld look at how decisions at the drafting phase can impact the ability to enforce an award made following an arbitration pursuant to that contract.
International Commercial Arbitration: A Comparative Introduction will be a helpful resource to arbitration practitioners in any jurisdiction, including Canada, as an introduction to the area and as a reminder that there are many choices to be made about how a dispute is resolved through arbitration, informed by but not necessarily restricted to the national jurisdictions of arbitration practitioners. The book offers Canadian practitioners a richer understanding of international commercial arbitration at both a conceptual and practical level, including the points of view of practitioners from other jurisdictions. Under the UNCITRAL Model Law (which underlies arbitration laws in all Canadian jurisdictions), regard must be had to its international original and the need to promote uniformity; this book helps Canadian practitioners do this by showing how arbitration is developing at the international level and in other jurisdictions. Even for those not practising international commercial arbitration, this book may inspire Canadians practising domestic arbitration or litigation to be more creative about working to resolve their clients’ disputes.
Additional Commentary by Hon. Barry Leon
A practical take-away from Franco Ferrari and Friedrich Rosenfeld’s book for Canadian disputes lawyers—and indeed disputes lawyers in many jurisdictions—is that arbitration should not mimic any national court system’s procedures and practices.
While those of us who have done court litigation in a particular jurisdiction may be comfortable with “how we have always done things,” our ways of doing things are not the only ways and are not necessarily the best ways—at least not for every dispute. Indeed, those ways usually lack the flexibility that would enable parties to customize procedures and practices to fit their circumstances.
Commercial arbitration’s ways of doing things provide opportunities for disputing parties and their counsel to shape the process to fit the dispute and the circumstances of the parties, to be efficient in both time and cost, and to do things in ways that make sense in the circumstances. Almost nothing must be done in a particular way simply because “the rules require it.”
Lawyers who view arbitration as court litigation done in private and sitting down, miss opportunities for their clients.
Arbitration offers process options for dispute resolution that can benefit from customization and creativity. If the objective is to enable an arbitral tribunal to obtain what it needs (evidence, relevant law, etc.) to make a fair, timely, and sensible decision in accordance with the law chosen by the parties, the lawyers involved need to consider at each step whether the activity is advancing that objective, and whether there are better ways to do it.
Eric Morgan, Q.Arb
Eric Morgan, Q.Arb is a partner at Kushneryk Morgan LLP, a Toronto boutique law firm specializing in corporate governance, securities litigation and commercial and corporate litigation and arbitration. He was selected as an inaugural member of the NextGen Roster of Arbitrators at Arbitration Place. https://kmcounsel.ca/
Hon. Barry Leon, CIArb
Hon. Barry Leon, CIArb, independent arbitrator/mediator (Arbitration Place; 33 Bedford Row; Caribbean Arbitrators). Judge, BVI Commercial Court, 2015–2018. IMI Certified Mediator; past Chair, ICC Canada; Member: TCAS’ Arbitration Act Review Committee, Campaign for Greener Arbitrations, CanArbWeek Organizing Committee; CJCA Executive Editor; CPR Award: Outstanding Contribution to Diversity in ADR.