Article by Thomas E. Carbonneau
Arbitration and International Commerce
Having placed themselves outside the sphere of any one national legal system, parties to international commercial agreements encounter special problems when a contractual dispute arises. Frequently, each party is distrustful of the other's national legal institutions and both may suspect that recourse to strictly legal remedies, whether foreign or national in character, is an inappropriate way to resolve their differences. Thus, parties to international commercial agreements often provide that contractual disputes will be submitted to arbitration—a process which they see as a viable response to their particular needs. For instance, arbitration enables the parties to isolate themselves from the jurisdiction of national courts and to pursue less legalistic solutions in the confidentiality of private proceedings, possibly at a lower cost, and perhaps with greater speed. It affords them the opportunity to choose a neutral forum of dispute resolution with features uniquely suited to their needs, such as a flexible procedure, specialized technical knowledge, and a method of adjudication that merges equitable and commercial considerations with substantive legal principles.
The Role of National Courts
Arbitration proceedings, however, may not be totally free from the reach of national courts. Although the parties initially agree to resolve their disputes through this form of private justice, once arbitration is invoked by one of the contractants, the other party may be unwilling to participate in the proceeding. One party may refuse to name an arbitrator or may raise objections to the arbitration by challenging either the validity of the agreement to arbitrate or the jurisdiction of the arbitrators to rule upon a given issue. Moreover, once the proceeding is terminated, a recalcitrant party simply may refuse to comply voluntarily with the award that has been rendered. Resolution of such issues usually mandates recourse to the judicial process. National courts either may complement the arbitral process by upholding the validity of and giving full legal effect to arbitration agreements—thereby discounting dilatory claims which thwart the process—or they may condone the efforts of the uncooperative party, thus undermining the recourse to arbitration and preserving judicial control over the resolution of disputes. Therefore, the rulings of national courts involving challenges to arbitral proceedings or to the enforcement of awards are a significant factor in assessing the viability of arbitration as a means of resolving international commercial disputes.
The French Example
The importance of the judicial decisional law in the arbitration area is especially marked in the French system. There are no French statutory provisions or codal texts dealing directly with matters of international arbitration. Consequently, French courts have had the option of applying by analogy the relevant provisions of the domestic arbitration law or devising special rules to meet the unique needs of international commercial arbitration. In a word, the French courts' doctrinal methodology in the international context could have consisted of: (1) a facile and literal application of the domestic rules—an approach that would confirm the view that the French civilian courts lack the willingness or ability to be as innovative or as "transnational" as their common law counterparts—or (2) a jurisprudence which responds to the particular contours of international litigation regarding commercial arbitration—deploying, in effect, the type of creativity which would, if not dispel, at least rightly modify the systemic myths about the role of judicial decisional law in the French civilian system.
The task of the present article is to examine the historical evolution and current status of the French judicial doctrine on international commercial arbitration. It endeavors to compare this jurisprudence with the French domestic law on arbitration and to illustrate briefly its conformity to the provisions of the international conventions on arbitration to which France is a party. Its chief design, however, is to concentrate upon the court decisions themselves, underscoring their progressive quality and pointing to their systemic implications.
The rules and principles which have emerged from the case law attest to the ability of the French judiciary to devise innovative legal doctrine without extensive legislative guidance. For a number of reasons, the French courts are generally presumed to play a subordinate role in the formulation of law. First, the Codes are regarded as the primary source of law and the courts—under article 5 of the Code civil—are prohibited from rendering "legislative-type" rulings in cases. Furthermore, there is no formally recognized doctrine of stare decisis in the French system. Also, the hierarchical and civil service character of judicial offices sometimes acts as a disincentive to original and innovative judicial rulings. Despite this commonplace, and to some extent accurate, assumption, the Cour de Cassation (the French Supreme Court) and the cours d'appel (courts of appeal) have developed a sophisticated and creative body of legal principles tailored to the realities of international commercial life. The French courts have consistently supported the continued development of international commercial arbitration as a method of dispute resolution and have systematically eliminated many of the potential legal obstacles to the process.
Motivation for the Doctrine
Undoubtedly, the elaboration of such a doctrine is an achievement for the French courts. Moreover, as a result of the substantive character of this doctrine, France can lay claim to the status of being a jurisdiction which favors international commercial arbitration. While the liberal substantive orientation of the doctrine is unmistakable, the question still remains as to why the courts choose to articulate and consistently follow such an unequivocally liberal doctrine. The courts could have been more conservative in the exercise of their quasi-legislative authority and applied by analogy the domestic provisions on arbitration. Why did the French courts risk articulating new and special rules for international arbitration litigation? Finally, if the articulation of this doctrine may have been or might be inappropriate in systemic terms and substantively unacceptable because of its divergence from the domestic law, why has the French Parliament not taken action mandating changes in or a replacement of the court-articulated rules?
Although these questions are a central part of the inquiry of this article, an attempt to answer them must await full consideration of the doctrine itself. It is possible, however, to isolate tentatively a number of policy factors that may explain the underlying motivation of the jurisprudence. The unequivocal liberalism of the international commercial arbitration doctrine perhaps reflects the French judiciary's astute reading of what is in the best economic and commercial interests of France. The articulation of this doctrine, however, also seems to respond to higher-order considerations. In international commercial arbitration litigation, the French courts have acknowledged that rules appropriate for application in the domestic area may not be in keeping with the special needs of adjudicating international disputes. Recognizing the traditional demarcation made in the French system between domestic and international litigation, and, perhaps relying upon their own sense of international comity (one apparently shared by the legislature), the courts have emphasized—at least impliedly—their view that France should respond positively to the modifications in the international economic order and, thereby, make its contribution to a stable and viable world community.
About the Author
Thomas E. Carbonneau. Assistant Professor of Law, Tulane University School of Law; Diplome Superieur d'Etudes Francaises 1971, Universite de Poitiers; A.B. 1972, Bowdoin College; B.A. 1975, Oxford University; M.A. 1979, University of Virginia; M.A. 1979, Oxford University; J.D. 1978, University of Virginia; L.L.M. 1979, Columbia University. This article was submitted in partial fulfillment of the requirements for the degree of Doctor of the Science of Law in the faculty of law, Columbia University.
Citation
55 Tul. L. Rev. 1 (1980)