Extract of a Seminar on International Commercial Arbitration Delivered by Hefin Rees on 13th May 2010
It is important to reflect on the current relationship between national courts and international commercial arbitration as both must co-exist together. Because arbitration is essentially a consensual process, where there is a reluctant party it is sometimes necessary to use the court’s coercive powers.
The nature of this relationship has been compared to a relay race. As Lord Mustill put it:
“Ideally, the handling of arbitral disputes should resemble a relay race. In the initial stages, before the arbitrators are seized of the dispute, the baton is in the grasp of the court; for at that stage there is no other organisation which could take steps to prevent the arbitration agreement from being ineffectual. When the arbitrators take charge they take over the baton and retain it until they have made an award. At this point, having no longer a function to fulfil, the arbitrators hand back the baton so that the court can, in case of need, lend its coercive powers to the enforcement of the award.”
There is a tension that lies at the heart of the relationship of the courts and arbitration. On the one hand, the concept of arbitration as a consensual process, reinforced by the ideas of transnationalism, leans against the involvement of the mechanisms of state through the medium of a municipal court. On the other side, there is the plain fact, palatable or not, that it is only a court that possesses coercive powers which can rescue the arbitration if it is in danger of foundering.
In the recent case of West Tankers the tension that lies between international commercial arbitration and the intervention of the courts in the arbitral process has come to the fore.
Click on the link to read more about West Tankers and its effect on anti-suit injunctions.