Excess of Powers in International Commercial Arbitration: Compliance with the arbitral tribunal’s mandate in a comparative perspective

(1)

(2)

2508 CG The Hague The Netherlands Tel.: +31 70 33 070 33 Fax: +31 70 33 070 30 e-mail: sales@elevenpub.nl www.elevenpub.com

Sold and distributed in USA and Canada

Independent Publishers Group 814 N. Franklin Street Chicago, IL 60610, USA Order Placement: +1 800 888 4741 Fax: +1 312 337 5985 orders@ipgbook.com www.ipgbook.com

Eleven International Publishing is an imprint of Boom uitgevers Den Haag.

The commercial edition of this book is published by Eleven International Publishing. ISBN 978-94-6236-991-7; ISBN 978-94-6094-512-0 (E-Book).

This publication is protected by international copyright law.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher.

(3)

Excess of Powers

in International Commercial

Arbitration

Compliance with the arbitral tribunal’s mandate

in a comparative perspective

Schending van de opdracht in internationale handelsarbitrage Een rechtsvergelijkend perspectief

THESIS to obtain

the degree of Doctor from the Erasmus University Rotterdam by command of the rector magnificus Prof.dr. R.C.M.E. Engels

and in accordance with the decision of the Doctorate Board. The public defence shall be held on

Friday 10 January 2020 at 11:30 hrs

by

Piotr Wiliński

born in Wrocław, Poland

(4)

Promotors: Prof.dr. F.J.M. De Ly Prof.dr. G. Meijer

Other members: Prof.dr. J. van Haersolte-van Hof Prof.dr. F.G.M. Smeele

(5)

(6)

(7)

List of Abbreviations xxi

Part I

I Introduction 3

1 Preliminary remarks 3

1.1 The power to resolve disputes 3

1.2 The role of legal theories on arbitration 4 1.3 The discourse over “the excess of mandate” type of

challenge 5

1.4 The concept of the arbitral tribunal’s mandate and potential

problems in testing its excess 6

1.5 Working definition of the arbitral tribunal’s mandate 6 1.6 Two dimensions of the mandate and their competing

characteristics 7

1.7 The exceptional character of the post-award procedure 7 1.8 The place of the “excess of mandate” type of challenge within

other grounds for review of the arbitral award 8 2 Research question(s) and objectives/problem statement 8

3 Methods and methodology 9

3.1 Methods and legal sources 9

3.2 The functional comparison 10

4 The structure of the research 11

II The UNCITRAL Model Law on International Commercial Arbitration 13

1 Introduction 13

2 Court standard of review at the post-award stage 15 2.1 The universal “pro-arbitration” approach 15

2.2 The scope of the court’s review 16

2.3 Remedies at the court’s disposal 20

3 The concept of the arbitral tribunal’s mandate under the Model

Law 21

3.1 Temporal aspect of the tribunal’s adjudicative function 22 3.2 Violation of the scope of the submission to arbitration 23

(8)

4.1 Agreement to arbitrate 24

4.2 Parties’ (subsequent) submissions 25

4.3 Mandatory rules of law of public policy character 27 4.4 The importance of the consent, the request and the law: the

three keyholes test 28

5 The Model Law approach to the “excess of mandate” type of

challenge 29

5.1 Differences in the official language versions of the Model Law

and the implementation of the Model Law 30 5.2 Textual interpretation of Article 34(2)(a)(iii) of the Model

Law 32

5.2.1 The importance of “the submission to

arbitration” 33

5.2.2 The difference between “the terms of the submission to arbitration” and “the scope of the submission to

arbitration” 35

5.2.3 The meaning of a “dispute” 36

5.2.4 The meaning of “matters” 37

5.2.5 Conclusion of the textual analysis 38 5.3 The interface between grounds for challenge prescribed by the

Model Law 39

6 Application of the three keyholes test to selected issues that might fall

outside the arbitral tribunal’s “mandate” 41

6.1 Decisions on parties’ claims 41

6.1.1 Decision on contractual claims 41

6.1.2 Decision on contractual counterclaims 43

6.1.3 Decision on set-off 44

6.1.4 Decision on claims/counterclaims based on torts or

pre-contractual liability 48

6.1.5 Decision on new claims/counterclaims and change of

claims/counterclaims 50

6.1.6 Decision not covering all claims/counterclaims 52 6.2 Process of application of law by the arbitral tribunal 54

6.2.1 Determining the method of selection of applicable

law 54

6.2.2 Decision on applicable law 56

6.2.3 Ascertaining the content of applicable law by the

(9)

6.2.4 Application of mandatory rules of law (of public policy

character) by the arbitral tribunal 60 6.2.5 Decision reached ex aequo et bono or as amiable

compositeur 62

6.3 Decisions on remedies 64

6.3.1 Decision on damages 64

6.3.2 Decision on specific performance 67 6.3.3 Decision on contract adaptation and filling of gaps in

the contract 67

6.4 Decisions accessory to the parties’ main submissions and the

merits of the case 69

6.4.1 Decision on interest 70

6.4.2 Decision on costs 72

6.4.3 The procedural decisions of the arbitral tribunal 73

7 Concluding remarks 74

III France and Book IV of the Code of Civil Procedure 77

1 Introduction 77

2 Dualism of the French arbitration regime: different statutory

architecture for domestic and international arbitration 79 2.1 Legal framework for international arbitration 79 2.2 The importance of domestic arbitration law 82 3 Court standard of review during the setting aside 83 3.1 Pro-arbitration approach towards the arbitration award 84

3.3 Remedial powers of the courts 87

4 Delineation of the mandate: the importance of the consent, the request

and the law: the three keyholes test 89

4.2 Relevance of parties’ submissions: reference of a dispute and

other requests of the parties 91

4.3 Mandatory rules of law of (French international) public policy

and their impact 92

5 The French concept of the arbitral tribunal’s mandate and testing its

excess at the post-award stage 94

5.1 The functional aspect of the arbitral tribunal’s mandate 96 5.2 The contractual framework of the arbitral tribunal’s

(10)

5.3 The time limits for the execution of the arbitral tribunal’s

mandate 98

5.4 The concept of the mandate (and of its excess) under Article

1520(3) of the CCP 100

5.5 (Contractual) waiver of the right to set an arbitral award

aside 101

6 Application of the excess of mandate ground to selected decisions of

the arbitral tribunal 102

6.2.1 Decision on the method of determining applicable

law 118

arbitral tribunal 122

6.2.4 Application of mandatory rules of law by the arbitral

tribunal 124

6.2.5 Decision reached as amiable compositeur or on

equity 128

the contract 135

6.4.3 Decision on procedure 142

(11)

IV England and the Arbitration Act of 1996 153

1 Introduction 153

2 Historical overview of the development of judicial scrutiny over arbitral

awards under English arbitration law 157

2.1 Judicial control of arbitral awards before the 1889 Act 158 2.2 Judicial review of arbitral awards before the 1996 Act 160

2.3 The 1996 Act: work in progress 163

3 The three-headed concept for the challenge procedure 164 4 Testing the scope of the substantive jurisdiction: the importance of the

contractual framework for the arbitral tribunal’s powers 167 4.1 The court standard of review when faced with the

challenge 167

4.1.1 The scope of the court’s review 167 4.1.2 Remedies at the court’s disposal 170 4.2 Limits to the scope of the arbitral tribunal’s substantive

jurisdiction 172

4.2.1 The agreement to arbitrate and its scope 173 4.2.2 Relevance of parties’ submissions 174 4.2.3 Overriding and mandatory rules of public policy 175 5 Substantial injustice and the concept of “serious irregularities” and its

relevance for testing the mandate 176

5.1 The court’s standard of review as conditioned upon the

seriousness of irregularity 176

5.1.1 The scope of the court’s review limited to the

irregularities listed 177

5.1.2 The two-step test exercised by the courts faced with

challenge 178

5.1.3 The high threshold for the irregularity to amount to

substantial injustice 179

5.1.4 Remedies at the court’s disposal 181 5.2 Selected “irregularities” relevant in the context of the arbitral

tribunal going beyond the parties’ requests 183 5.2.1 Breach of general duties of the arbitral tribunal 184

5.2.2 Excess of powers 186

5.2.3 Failure to deal with all the issues that were brought

before the arbitral tribunal 189

5.2.4 Uncertainty or ambiguity as to the effect of the

(12)

6 “Appeal on point of law”: a limited safeguard of the system and the

arbitral tribunal’s discretion to apply the law 192 6.1 The court’s standard of review when faced with challenge 193

6.1.1 Review based on factual findings made in the arbitral

award 193

6.1.2 Remedies at the court’s disposal 193 6.2 Distinctive features of the Section 69 challenge 194 6.2.1 The opt-out character of the system 194 6.2.2 Appeal on point of law not fact 195 6.2.3 Appeal on point of English law only 195 7 The application of a three-headed concept to selected issues that might

fall outside the arbitral tribunal’s authority 196

7.1.4 Decision on claims/counterclaims based on torts and

7.1.6 Decision not covering all claims/counterclaims 210 7.2 The process of application of law by the arbitral tribunal 212

law 213

7.2.3 Ascertaining the content of the applicable law by the

tribunal 218

7.2.5 Decision based on equity or reached ex aequo et

bono 222

the contract 228

(13)

V The United States and the Federal Arbitration Act of 1925 241

1 Introduction 241

2 The legal context of international commercial arbitration in the United

States 243

2.1 The Federal Arbitration Act of 1925 and its supremacy 244 2.2 State laws and their (marginal) significance 245 2.3 The role of the courts and the organization of the judicial system

in the United States 247

2.4 The role of the United States Supreme Court in (re)structuring

the system of arbitration 249

3 Court standard of review of arbitral awards 249 3.1 Pro-arbitration stand in the context of vacatur 250

3.3 The remedial powers of the courts 252

4 Limits to the arbitral tribunal’s powers 255

4.3 Mandatory rules of public policy character 258 5 The United States standards for excess of arbitral tribunal’s powers 260 5.1 The concept of the “excess of powers” 260 5.2 The notion of “imperfect execution of powers upon the subject

matter submitted” 264

5.3 The Restatement’s take on the post-award challenge

architecture 266

6 The impact of non-statutory grounds on the Federal Arbitration Act

framework: “manifest disregard of the law” and other concepts 268 6.1 Judicially created non-statutory grounds for vacatur 268 6.1.1 Decision in manifest disregard of the law 268

6.1.2 Violation of public policy 272

6.1.3 Arbitrary, capricious and completely irrational awards: the award that fails to draw its essence from the

underlying contract 273

6.2 Attempts to judicially expand the “excess of powers” challenge

(14)

7 Application of the United States standard of excess of powers to selected

issues that might fall outside the arbitral tribunal’s authority 276 7.1 Decisions on jurisdictional/threshold issues 276

7.1.1 Decision on the validity and existence of an agreement

to arbitrate 278

7.1.2 Decision on the scope of an agreement to

arbitrate 281

7.1.3 Decision on arbitrability of claims 284

7.1.4 Decision on class arbitration 286

law 300

7.3.3 Ascertaining the content of applicable substantive law

by the arbitral tribunal 302

character) by the arbitral tribunal 304 7.3.5 Decision based on equity or reached ex aequo et

bono 305

7.4.1 Decision on damages in general 307

7.4.2 Decision on punitive damages 309

the contract 312

(15)

VI The New York Convention of 1958 327

1 Introduction 327

2 Court standard of review at the enforcement stage 328 2.1 Approach favoring enforcement of arbitral awards 328

2.3 Remedies at the court’s disposal 331

3 Limits to the arbitral tribunal’s “mandate” at the enforcement

stage 333

3.3 Mandatory rules of public policy character 335 3.4 The relevance of the parties’ consent, their requests and the

law: the three keyholes test 336

4 The New York Convention approach to the “excess of mandate” type

of challenge 337

4.1 Historical overview 337

4.2 Differences in the authentic versions of the text of the New

York Convention 340

4.3 Textual interpretation of Article V(1)(c) of the New York

Convention 342

4.3.1 The meaning of the “submission to arbitration” 342 4.3.2 The difference between the “terms” and the “scope”

of the submission to arbitration 345

4.3.3 The meaning of “a difference” 346

4.3.4 The meaning of “matters” 347

4.4 Competing defenses: the interplay between the grounds for resisting recognition and enforcement under Article V(1) of

the Convention 349

5 Application of the “excess of mandate” type of challenge to selected

decisions of the arbitral tribunal 352

5.1.3 Decisions on set-off 356

(16)

5.1.6 Decisions not covering all claims 360 5.2 Process of application of law by the arbitral tribunal 362

5.2.1 Decision on the method of determining applicable

law 362

tribunal 368

5.2.5 Decision reached ex aequo et bono or as amiable

compositeur 369

5.3.2 Decision on specific performance 375 5.3.3 Decision on contract adaptation and filling of

gaps 376

5.4 Decisions accessory to the parties’ main submissions 377

6 Conclusions 380

Part II

VIIThe Comparative Law Analysis 385

1 Preliminary remarks 385

1.1 Setting the scene 385

1.2 “If it ain’t broke don’t fix it” and the legislative timeline 386 1.3 Harmony and divergence: the impact of the Model Law 388 1.4 Apples and oranges: distinctive features of analyzed

systems 389

2 Court standard of review of arbitral awards 390 2.1 The pro-arbitration approach of national courts in the context

of the challenge 391

(17)

3 Different standards for the “arbitral tribunal’s mandate” and variations

of recourse against its excess 397

3.1 Limits to the arbitral tribunal’s “mandate” 397

3.1.1 Agreement to arbitrate 398

3.1.2 Parties’ (subsequent) submissions 398 3.1.3 Mandatory rules of public policy character 399 3.2 The analysis of different concepts of “mandate”, “mission”,

“powers”, “authority” 401

3.2.1 The notion of “mandate” and “mission” 401

3.2.2 The notion of “powers” 402

3.2.3 The notion of “authority” 403

3.3 Different approaches to the “excess of mandate” type of

challenge 404

3.4 The place of the “excess of mandate” type of challenge in the

post-award architecture of selected systems 406 4 The application of different standards of the “excess of mandate” type

of challenge to selected issues that might fall outside the arbitral

tribunal’s adjudicative authority 408

4.1 Decisions on jurisdiction 409

law 419

4.3.3 Ascertaining the content of applicable substantive law

by the arbitral tribunal 422

character) by the arbitral tribunal 423 4.3.5 Decision based on equity or reached ex aequo et

bono 424

(18)

4.4.1 Decision on damages 426 4.4.2 Decision on specific performance 427 4.4.3 Decision on contract adaptation and filling of gaps in

the contract 427

4.5 Decisions accessory to the parties’ main submissions and merits

of the case 429

4.5.3 Decisions on procedure 433

5 Comparative assessment 436

5.1 Leading similarities and differences 436

5.2 Explaining the similarities 441

5.2.1 The harmonizing effect of the New York Convention

and the UNCITRAL’s undertakings 441

5.2.2 The importance of party autonomy in structuring the

adjudicative mandate 442

5.2.3 The tribunal’s autonomy: the significance of the

arbitral tribunal’s managerial toolbox 443

5.3 Explaining the differences 444

5.3.1 The ongoing competition between the leading arbitral

centers 444

5.3.2 Historical development and legal heritage 445

VIIIConclusions and recommendations 447

1 Conclusions 447

1.1 Preliminary observations 447

1.2 Pro-arbitration standard eliminating the possibility of review

on the merits 447

1.3 Two dimensions of the “tribunal’s mandate” and limits that

might be exceeded 448

1.4 The use of the “mandate” in statutory frameworks in the

analyzed legal systems 450

1.5 Possible difficulties in selecting appropriate grounds to challenge awards on the basis of “excess of the tribunal’s

mandate” 450

1.6 Availability of the “excess of mandate” type of challenge against

the tribunal’s decisions on claims 451

1.7 Availability of the “excess of mandate” type of challenge to the

(19)

1.8 Availability of the “excess of mandate” type of challenge to

tribunal’s decisions on remedies 453

1.9 Availability of the “excess of mandate” type of challenge to tribunal’s decisions accessory to the parties’ main

submissions 454

1.10 Application of the “excess of mandate” type of challenge to the

tribunal’s procedural decisions 454

1.11 Looking at the concept of the tribunal’s mandate through lenses

of the post-award challenge against its excess 456 1.12 Potential changes in the shape of the arbitral tribunal’s

mandate 456

2 Recommendations 457

2.1 Recommendations for parties 457

2.1.1 Shaping the mandate 457

2.1.2 Exclusion agreements 458

2.1.3 Inclusion of the appeal mechanism 460 2.2 Recommendations for arbitrators and judges 460

2.2.1 Active participation of the tribunal in structuring the

mandate 460

2.2.2 Following “no review on the merits” approach by

judges 460

2.3 Recommendations for legislators/the UNCITRAL 461 2.3.1 Abolishing the reference to the tribunal’s mandate at

the post-award stage 461

2.3.2 The Swiss model 462

2.3.3 The “van den Berg formula” 463

2.3.4 The UNCITRAL Recommendation regarding the

interpretation of its instruments 466

3 Directions for further research 467

4 Concluding observations 467

List of literature 473

List of cases 503

Other sources 521

(20)

Samenvatting 527

Curriculum Vitae 531

Portfolio 533

(21)

Arbitration Act AA

American Arbitration Association AAA

Commercial Arbitration Rules of American Arbitration Association

AAA Rules

American Law Institute ALI

The Belgian Judicial Code BJC

Code of Civil Procedure CCP

The Belgian Centre for Arbitration and Mediation CEPANI

confer cf

The Departmental Advisory Committee DAC

The Dutch Code of Civil Procedure DCCP

The German Arbitration Institute DIS

Arbitration Rules of the German Arbitration Institute DIS Rules

exempli gratia e.g.

The English Arbitration Act EAA

The Federal Arbitration Act FAA

The French Code of Civil Procedure FCCP

The German Code of Civil Procedure GCCP

The Geneva Convention on the Execution of Foreign Arbitral Awards

Geneva Convention

Hong Kong International Arbitration Centre HKIAC

inter alia i.a.

id est i.e.

The International Chamber of Commerce ICC

Rules of Arbitration of the International Chamber of Commerce

ICC Rules

International Council for Commercial Arbitration ICCA

The ICCA Guide to Interpretation of the New York Convention

ICCA Guide

International Centre for Dispute Resolution ICDR

Arbitration Rules of International Centre for Dispute Resolution

ICDR Rules

International Law Association ILA

International Law Association International Commercial Arbitration Committee

(22)

London Court of International Arbitration LCIA

Arbitration Rules of London Court of International Arbitration LCIA Rules

London Maritime Arbitration Association LMAA

Terms of Arbitration of London Maritime Arbitration Association

LMAA Rules

The Hypothetical Convention on the International Enforcement of Arbitration Agreements and Awards Miami Draft

The UNCITRAL Model Law on International Commercial Arbitration

ML or the Model Law

The New York Convention on Recognition and Enforcement of Foreign Arbitral Awards

NYC or the Convention

The Restatement on International Commercial Arbitration Restatement or (draft)

Restatement

The Singapore International Arbitration Act SIAA

The Singapore International Arbitration Centre SIAC

Arbitration Rules of the Singapore International Arbitration Centre

SIAC Rules

The UNCITRAL Digest of Case Law on the Model Law on International Commercial Arbitration

UNCITRAL Digest

United Nations Commission on International Trade Law UNCITRAL or the

Commission

Arbitration Rules of the United Nations Commission on International Trade Law

(23)

Part I

“The highest proof of virtue is to possess boundless power without abusing it.”

(24)

(25)

1 Preliminary remarks

1.1 The power to resolve disputes

The power to settle disputes between parties is exceptional. Historically reserved for gods or kings,1 in modern democracies it remains an exclusive domain of a judiciary in accordance with Montesquieu’s model for the separation of powers. It means, in turn, that it constitutes the reflection of sovereignty. It is truly remarkable that arbitral tribunals can be granted such a vast authority. However, as Justice Kagan once quoted: “in this world,

with great power there must also come – great responsibility.”2

Without a doubt, the power to resolve a dispute constitutes a great responsibility. It therefore comes with an obligation not to exceed the authority. If such a power is abused, parties will have a legitimate reason to challenge the decision. In a traditional court system, it is evidenced with a review of court judgments by the courts of higher instance (appeal mechanism). Importantly, the scrutiny of the reviewing court may also involve the lower court’s findings on the facts and on the law.

In arbitration, however, the system operates differently. It is based on a limited court intervention in the arbitral process and the tribunal’s findings. In principle, the post-award court review is narrow and allowed only in a listed number of cases. This is why it may be tempting for the parties to apply the grounds for recourse ever so broadly.

The ground directly relevant to the tribunal’s dispute resolution power is the “excess of mandate” type of challenge. In principle, every legal system will guarantee a post-award recourse against an alleged “excess of mandate” even though they do not, in principle, define what the “mandate” itself entails. This, in turn, attracts a broad interpretation made by the aggrieved parties and may frustrate the fundamental value of arbitration – the finality of the arbitral award.

It is therefore essential to determine how the national courts review arbitral awards on the basis of “excess of mandate” and consequently in what instances they accept the argument that the tribunal acted in violation of its mandate. This study aims at recognizing the similarities and differences of the “excess of mandate” type of challenges in selected

1 (Clay, L’arbitre, 2001) pp.33-35.

2 Albeit in a different context. See Kimble v. Marvel Entm’t, LLC, 135 S. Ct. 2401, 2415, 192 L. Ed. 2d 463 (2015).

(26)

legal systems (namely the UNCITRAL Model Law,3_{France, England, the U.S. and the New}

York Convention4).

It is expected that looking through the spectacles of what selected legal systems (and their national courts) consider to be an “excess” of the elusive “mandate” and identifying the common features of the “excess of mandate” type of challenge in reviewed jurisdictions may contribute to a better understanding of the concept of the arbitral tribunal’s mandate itself. Accordingly, this research’s objective is to add a building block to a definition of the tribunal’s mandate.

1.2 The role of legal theories on arbitration

Historically there have been some attempts to produce legal theory explaining the concept of arbitration.5_{The practical significance of these developments, however, has been rather}

limited.6_{A brief introduction of competing theoretical frameworks will be helpful in the}

context of the “excess of mandate” debate, because the same characteristics of arbitration are being balanced during the assessment when the tribunal exceeds its “mandate”.

Sanders observed that: “[o]n the one hand, arbitration must be based on an agreement

to arbitrate. This could lead to underlining the contractual nature of arbitration. On the other hand, the jurisdictional nature could be stressed because arbitral proceedings lead to an award, binding upon the parties and enforceable in the same way as a final court judgement.”7_{One may therefore easily deduct that those two features of arbitration stand}

out clearly: the first one is a contractual basis for arbitration to go forward, and the second one is the adjudicative function with which the tribunal is entrusted. These elements provide, in turn, the basis for the two competing theories of arbitration: the contractual and the jurisdictional theory. There is also a third theory, the mixed one that focuses on the arbitration’s hybrid nature, namely it underlines that both aspects of arbitration are important.8

3 The UNCITRAL Model Law on International Commercial Arbitration (1985) (hereafter “UNCITRAL Model Law” or “ML”).

4 The Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (hereafter “New York Convention” or “NYC”).

5 See (Born, International Commercial Arbitration, 2014) p.214 and the literature therein.

6 (Sanders, Arbitration, 1996) p.5 (“Dealing with arbitration theories, in my opinion, therefore is a fascinating

exercise, but for the solution of practical problems, these theories are hardly of any assistance to a legislator”),

and (Born, International Commercial Arbitration, 2014) p.214 (“Although the practical implications of this

debate are often unclear there is little academic agreement on these various theories.”).

7 (Sanders, Arbitration, 1996) p.5.

(27)

As elegantly put by Motulsky: “[t]here is always, in arbitration, an intrusion/interference

of the contractual component in the judicial function, which makes its difficulty and appeal.”9

In evaluating whether the tribunal exceeded its mandate, the same two elements – the contractual nature and the adjudicative function – are at stake. Since, as explained above, no precise definition of mandate is available, the outstanding question is which of these aspects of the mandate is being tested for its excess or, in the alternative, what is the relation of these two aspects whenever the mandate is being tested.

1.3 The discourse over “the excess of mandate” type of challenge

The legal discourse on the concept of “mandate” is rather limited and it usually refers to the contractual paradigm of the mandate.10_{When a reference is made to the “excess of}

mandate”, authors usually do refer to the same grounds for recourse although they might not have (exactly) the same meaning11_{or the analysis focuses on one jurisdiction only.}12

One should note that there are only three commonly known examples where the legislator allowed for a challenge of an award on the basis of the “excess of mandate”, namely France, the Netherlands and Sweden.13_{In each system, it seems to be recognized}

that this ground can be overly capacious. Recent studies of the French system14_confirmed,

however, that the French courts are in favor of a restrictive interpretation. Similarly, the Dutch legislator in a newly introduced legislative reform qualified the use of this ground upon the seriousness of a violation.15 _{Most recently, Swedish legislator followed this}

approach, limiting the scope of the “excess of mandate” challenge to those instances that affect the outcome of the case.16

9 (Motulsky, 2010) p.289 (“Il y a toujours, dans l’arbitrage, une immixtion, qui fait sa difficulté et son attrait,

de la composante contractuelle dans la fonction juridictionnelle.”). An alternative translation of the same

text would read as follows “in arbitration, there is always an intrusion of the contractual component in the

judicial function, which makes its [arbitration] difficulty and attractiveness.”

10 See, e.g., (Schöldstrom, 1998). As such it falls outside of the scope of this research. For further reading, see also (Poudret & Besson, 2007) pp.367-376.

11 Thus, referring for example to Art. 1520(3) of the French Code of Civil Procedure (hereafter “FCCP”) and Art. V(1)(c) of the NYC.

12 See (Giraud, 2017).

13 See Art. 1520(3) of the FCCP, Art. 1065(1)(c) of the Dutch Code of Civil Procedure (hereafter “DCCP”), Section 34(3) of the Swedish Arbitration Act (hereafter “SAA”). For the translations used see accordingly, http://www.iaiparis.com/pdf/FRENCH_LAW_ON_INTERNATIONAL_ARBITRATION.pdf [last accessed 23 April 2018], http://www.nai-nl.org/downloads/Text%20Dutch%20Code%20Civil%20Procedure.pdf [last accessed 23 April 2018] https://sccinstitute.com/media/408924/the-swedish-arbitration-act_1march2019 _eng.pdf [last accessed 23 April 2019].

14 See (Giraud, 2017). 15 Art. 1065(4) of the DCCP.

16 See https://sccinstitute.com/media/408924/the-swedish-arbitration-act_1march2019_eng.pdf [last accessed 23 April 2019]; also

(28)

http://kluwerarbitrationblog.com/2015/10/17/time-to-upgrade-review-of-the-swedish-In other jurisdictions, one may observe two models that can be qualified as the “excess of mandate” type of challenge. In the first model, most likely stemming from the English arbitration system, the recourse against the arbitral award can be made when a party alleges that the tribunal “exceeded its powers”. This argument is available, for example, in England, the U.S., but also in South Africa amongst others.17The second model has been universally introduced by the New York Convention and allows for a recourse when “the award deals

with a difference not contemplated by or not falling within the terms of the submission to arbitration or it contains decisions on matters beyond the scope of the submission to arbitration […]”.18 _{In the similar shape, it has been offered in the Model Law and}

implemented as a national legislation by a number of jurisdictions (even though the way countries implement the Model Law does differ).19

It is necessary to reflect further if those three models do refer to the same concept or in what instances they do differ.

1.4 The concept of the arbitral tribunal’s mandate and potential problems in testing its excess

As suggested above, there is no legal definition of the “arbitral tribunal’s mandate”. Yet it is a central element in the functioning of arbitration itself and essential to evaluate the scope of the “excess of mandate” type of challenge. Therefore, it is necessary to introduce a working definition for the concept (section 1.5), followed by a brief reflection on the relevant aspects of the mandate (section 1.6). Finally, one should stress the importance of the exceptional character of the post-award review (section 1.7) and the place of the “excess of mandate” type of challenge among other grounds for recourse (section 1.8).

1.5 Working definition of the arbitral tribunal’s mandate

For the purpose of the study at hand it is suggested that the arbitral tribunal’s mandate is a relationship between arbitrators and parties where arbitrators accept to finally and

arbitration-act/ [last accessed 23 April 2018] and http://arbitrationblog.kluwerarbitration.com.eur. idm.oclc.org/2018/04/09/the-swedish-government-revives-efforts-to-modernise-the-arbitration-act/ [last accessed 23 April 2018].

17 See Section 68(2)(b) of the English Arbitration Act (hereafter “EAA”), Section 10(a)(4) of the Federal Arbitration Act (hereafter “FAA”), and Section 33(1)(b) of the South African Arbitration Act (hereafter “SAAA”). The South African system is in the eve of a grand reform, aligning South African Arbitration Law with the Model Law system. See http://www.lexology.com/library/detail.aspx?g=fc348a1b-cd0a-41e0-8802-bd3fc886e76b [last accessed 23 April 2018].

18 See Art. V(1)(c) of the NYC. 19 See Chapter II.

(29)

effectively resolve the dispute(s) between the parties. At the same time, they (arbitrators) accept restrictions, rights and obligations imposed on them by the parties’ agreement to arbitrate, the parties’ submissions and the mandatory provisions of applicable law. The tribunal’s mandate entails what it can and cannot do within the limits imposed to fulfill its adjudicatory function, thus resolving the dispute between the parties. Consequently, the mandate gives autonomy to the tribunal in fulfilling its adjudicative function which creates a layer of inherent powers necessary to complete its prescribed role.

1.6 Two dimensions of the mandate and their competing characteristics

There is no doubt that the adjudicative function of the tribunal remains a central concept defining the mandate of the arbitral tribunal. At the same time, however, it is necessary to recognize that the tribunal has an authority to adjudicate only because the parties themselves commission it.

These two concepts become essential when the scope of the mandate is being assessed. As highlighted above,20both concepts address a different aspect of the tribunal’s mandate, and both are vital in evaluating which of the tribunal’s undertakings can be found to be

beyond the tribunal’s mandate. At the same time, one should note that, potentially, they

may also compete. On the one hand, party autonomy is of paramount importance in international arbitration. On the other hand, the tribunal should have its own autonomy to properly fulfill its adjudicative function. Whenever two dimensions of the mandate compete, it might be necessary to evaluate which notion should be given priority. Consequently, it raises a problem for the tribunals that wish to ensure the enforceability of their decisions.

1.7 The exceptional character of the post-award procedure

As suggested above, the setting-aside procedure is an extraordinary means of recourse against the award.21_{Therefore, it should never be equated with the review of the merits of}

the case. Nevertheless, since the “excess of mandate” type of challenge inevitably relates to the tribunal’s performance of its judicial function, the question is how far it can be used by the parties displeased with the tribunal’s conclusions. As long as the mandate itself is not defined, the “excess of mandate” type of challenge may serve as a capacious vehicle for challenges of different types of tribunal’s decisions.

20 See section 1.2.

21 The exceptional character of the recourse equally applies to the enforcement procedure pursuant to the New York Convention.

(30)

1.8 The place of the “excess of mandate” type of challenge within other grounds for review of the arbitral award

One should note that not only is the “excess of mandate” type of challenge potentially broad, it is also problematic because it competes with other grounds for review. It may happen, when the same factual circumstances give rise to different challenges at the post-award stage. In principle, there are two layers of frictions: firstly, it might be occasionally difficult to distinguish whether the tribunal exceeded its “mandate” or “jurisdiction”; secondly, it might be equally troublesome in assessing what ground should be raised in the case of the tribunal’s procedural wrongdoing. In other words, one should reflect if the “excess of mandate” type of challenge or rather due process violation should be a basis for an allegedly excessive tribunal’s undertaking. Further, it raises the question regarding what the added value is for the (elusive) “excess of mandate” type of challenge in the post-award review system if the potential violation of the tribunal’s authority can be addressed under other grounds.

2 Research question(s) and objectives/problem statement

The previous section was devoted to highlighting in which areas the application of the “excess of mandate” type of challenge gives rise to potential obstacles. It has led to the formulation of the following central research question:

How is the tribunal’s “mandate” being reviewed under the selected systems and does this test constitute an essential element of the post-award review architecture?

This question, in turn, triggers a number of subquestions:

1. What is the court standard of review when faced with an “excess of mandate” type of challenge? What are the court’s remedies to mitigate the potential “excess of mandate”? 2. What are the limits to the “tribunal’s mandate” that can be exceeded, and do they differ

depending on the system?

3. What concepts are being used in the different systems to address the “excess of mandate” type of challenge?

4. How does the “excess of mandate” type of challenge fit as an element of the post-award review mechanism of selected legal systems?

and finally

5. What are the issues that might fall outside the scope of the tribunal’s mandate? 6. How does the principle of party autonomy and the tribunal’s autonomy compete in

the context of the “excess of mandate” type of challenge? What dimension of the mandate is being challenged under the “excess of mandate” type of challenge?

(31)

This research focuses on the concept of the tribunal’s “mandate” from the perspective of the post-award review of its alleged violation. It is expected that the study will provide the actors active in international arbitration (i.e. judges, arbitrators, parties) with a better understanding of what might be considered as a tribunal’s mandate and what its dimensions are.

The objective of this research is to fill lacunae in international arbitration scholarship and to contribute to the important debate regarding the tribunal’s “mandate” and its autonomy, by analyzing in what instances challenge against its excess is allowed. Additionally, the research addresses how the “excess of mandate” type of challenge may potentially evolve should it remain available as a ground for recourse.

Importantly, the study is limited to the analysis of the “excess” of the “tribunal’s mandate”. Therefore, it does not focus on the legal nature of the “mandate” itself. Instead, it concentrates on the post-award review of its excess. At the same time, however, it is distinguished from the issues of the “excess of the tribunal’s jurisdiction” and that of due process, which fall outside of the scope of a detailed analysis.

3 Methods and methodology

3.1 Methods and legal sources

The research at hand constitutes a classical legal research. It means that it was conducted with the use of the traditional legal research method. Consequently, the statutory text and case law are of primary importance. Whenever possible the travaux préparatoires are also consulted.22 _{Finally, scholarly writings and commentaries provide a useful insight in}

understanding and conceptualizing the scope of the post-award review against the alleged “excess of mandate”.

This study is of comparative character. Therefore, the analysis focuses on different “excess of mandate” type challenges as introduced in three national legal regimes (i.e. France, England, and the U.S.) and two international legal systems (i.e. the Model Law and the New York Convention).

In principle, however, the analysis does not follow the classical comparative law divide between common law and civil law systems, because it is not as useful as in other areas of law. Instead, arguably, a line should be drawn between the Model Law jurisdictions (that includes both civil and common law countries i.a. Canada, Germany, Poland, Singapore etc.) and jurisdictions which do not follow the Model Law structure (i.a. France, England,

(32)

the U.S., the Netherlands, Switzerland, Sweden, etc.). One may observe that the states which do not follow the Model Law scheme are the major arbitration centers with established arbitration practice.23_{The rationale for not following the Model Law might be}

explained with the goal of preserving their competitive edge, providing for a unique set of tools sought by the users of international arbitration. Selected representatives of these countries (i.e. France, England and the U.S.) constitute a sample for the comparison at hand.

The comparison has to be made at two levels. At the first level, the comparison between different mechanisms to challenge the alleged excess needs to be carried out at the national level. It means that, one should examine the Model Law, which, as explained, constitutes the framework that national legislators (from both civil and common law countries) may rely upon while drafting their arbitration acts. The Model Law approach, in turn, needs to be contrasted with the rules applicable to the setting-aside procedure in France,24 England25_{and the U.S.}26_{These four legal systems may be evaluated at the same level.}27

The second level, which is the enforcement stage, requires an analysis of the application of the New York Convention. Mostly, national courts, while interpreting the Convention, do so in a uniform and consistent manner.28_{In principle, they also resist the temptation}

of transplanting the national concepts to the international level. It does not change the fact, however, that the challenging parties often keep insisting on relying on those alluring (national) notions. Therefore, the vertical comparison might also be relevant.

3.2 The functional comparison

Since the concepts introduced in the systems slightly differ, it is only reasonable to undertake a functional comparison. As suggested elsewhere,29_{the selected legal systems are each an}

example of one of the three models of the “excess of mandate” type of challenge.

According to the first model, the award may be challenged if the “tribunal’s ruling

without complying with the mandate conferred upon it.”30_{This model operates in France.}

23 (De Ly, Paradigmatic Changes – Uniformity, Diversity, Due Process and Good Administration of Justice: The Next Thirty Years, 2016) p.23 (“Notwithstanding the major breakthrough brought by the Model Law,

the picture remains one of divergence in the western world with major arbitration centres in London, Paris, New York, Zurich or Geneva having arbitration laws based on different traditions, assumptions, approaches and rules.”).

24 See Chapter III. 25 See Chapter IV. 26 See Chapter V.

27 A horizontal comparison. 28 See Chapter VI. 29 See section 1.3.

(33)

The second model is employed in the English and the U.S. arbitration regimes. In these systems, in principle, the recourse is available when the tribunal “exceed[s] its powers”.31 The last model is introduced by the New York Convention and the Model Law.32_{It allows}

for the challenge of a tribunal deciding on “differences not contemplated by or not falling within the terms of the submission to arbitration” and on “matters beyond the scope of the submission to arbitration”.

All in all, the study aims at highlighting similarities and differences between these three models for the review of the tribunal’s mandate and assesses what dimension of the mandate proves to be relevant for the review.

4 The structure of the research

As explained above, the research is conducted on a comparative basis. Therefore, in Part I of the research, each of the reviewed legal systems is analyzed independently. In turn, in Part II, the comparative assessment and general conclusions will be offered.

Additionally, it should be noted that each substantive chapter has a similar structure which is also two-fold. It means that the first sections of the chapter are dedicated to more general (procedural) elements related to the challenge against the award at the post-award stage (such as court standard of review of the award and remedies available to the parties), whereas the subsequent sections aim to identify (i) the limits to the arbitral tribunal’s mandate and (ii) how the “excess of mandate” type of challenge applies to different decisions taken by the tribunal throughout the arbitral process.

The latter part of the studies indicated above (i.e. application of the “excess of mandate” type of challenge to selected tribunal’s decisions) is essential for the study at hand, because it has been dedicated to the application of the “excess of mandate” type of challenge to selected issues that arguably may fall outside the scope of the arbitral tribunal’s powers.

The selection of the issues that may fall outside the scope of the tribunal’s mandate has been divided thematically into four parts: the first is devoted to the arbitral tribunal’s decisions on parties’ claims (including i.a. contractual claims, set-off claims and tort claims); the second explains the process of application of law by the arbitral tribunal (starting from the application of the relevant choice of law rules through decision on the applicable law and finishing with ascertaining the content of the applicable law by the arbitral tribunal); the third part focuses on the excess of the arbitral tribunal’s powers when awarding different types of remedies (such as damages, punitive damages, specific performance, contract

31 See Section 68(2)(b) of the EAA and Section 10(a)(4) of the FAA. The exact wording slightly differs. It will be discussed in detail in the next chapters.

(34)

adaptation and filling the gaps); the fourth and final part is contributed to the arbitral tribunals’ decisions on interest and costs which are decisions accessory to the parties’ main submissions. Decisions on the procedure are also taken into account.

Chapters II and VI deal with the important international instruments, namely the Model Law and the New York Convention. Both include a similar, rather descriptive provision that requires a burdensome interpretation. It is therefore necessary to closely examine it and explain its scope of application.

Chapters III, IV and V introduce national reports on (subsequently) France, England and Wales and the U.S. Notably, the French regime is the only system that in its setting-aside mechanism makes a reference to the tribunal’s mandate. Yet, the English and the U.S. references to the “excess of powers” also require further analysis.

Part II (Chapters VII to VIII) reflects the comparative assessment of all the reviewed systems (Chapter VII) and general conclusions of the research (Chapter VIII). The comparative chapter mirrors the structure of the chapters introduced in Part I (Chapters II to VI), therefore it first deals with more general elements of the post-award challenge and subsequently reflects on the application of the “excess of mandate” type of challenge to the different tribunal’s decisions.

(35)

International Commercial Arbitration

1 Introduction

Undoubtedly the UNCITRAL Model Law on International Commercial Arbitration (1985) (“Model Law” or “ML”) is a milestone in the history of international arbitration. As observed by Born: “[the Model Law] is the single most important legislative instrument in the field of

international commercial arbitration. It has been adopted in a substantial (and growing) number of jurisdictions and served as a model for legislation and judicial decisions in many others.”1The question at hand is, however, whether (and if so how) the drafters of this legal instrument defined the challenge for the alleged “excess of the tribunal’s mandate”.

Although the Model Law itself does refer to the mandate of the arbitral tribunal, it does so in a different context than with a reference to the post-award recourse. For the purpose of the setting-aside provision, the system operates with the concept that can be broadly summarized as a violation of the scope of the submission to arbitration. Consequently, in this chapter the analysis will primarily focus on Article 34(2)(a)(iii) of the Model Law. According to this provision, the court may test whether an arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration. If, in turn, the court finds that any of the objections above are justified, it may set aside the arbitral award.

At the outset it is necessary to briefly outline the underlying principles of the courts’ review at the post-award stage. In principle, one should discuss the “pro-arbitration” stand of the courts, the scope of their scrutiny regarding the award and the remedial tools they have at their disposal when faced with challenge.

In turn, the limits to the “arbitral tribunal’s mandate” will be explained. Put differently, when faced with the “excess of mandate” type of challenge, the reviewing court will have to look at three important elements structuring the tribunal’s authority to adjudicate: (i) what is the scope of the parties’ consent to arbitration, (ii) whether the party or parties requested the arbitral tribunal to decide a particular dispute or a matter, and finally (iii) whether the applicable law allows a particular decision of the arbitral tribunal to be made (thus whether the decision accords with the public policy rules of the country of the seat). Those reflections will lead to the introduction of the “three keyholes test” which the

(36)

court should undertake when determining whether the arbitral tribunal “exceeded its mandate” or not.

Furthermore, in order to explain the Model Law’s approach to the “excess of the arbitral tribunal’s mandate”, it is important to closely analyze the language that is being used in Article 34(2)(a)(iii) of the Model Law. It is so, because the text of the provision is rather descriptive and repetitive. Pursuant to this article an award may be set aside when “the

award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration […].” Consequently, it raises some interpretative difficulties which should

be tackled. In particular, the meaning of “the submission to arbitration” and the difference between “the terms of the submission to arbitration” and “the scope of the submission to arbitration” need to be determined. For a better understanding, the travaux préparatoires of the original Model Law from 1985 and its amended 2006 version will be studied. Following the textual study, it is also necessary to reflect on the place of the “excess of mandate” type of challenge within the framework of the post-award review system.

The final – and the most important – part of this chapter will focus on the application of the “three keyholes test” to the particular situations. The analysis will be based on case law and hypothetical cases which together should make up for the comprehensive catalogue of instances when the mandate can be potentially exceeded. The first type of tribunal decisions that needs to be tested targets the parties’ claims. It other words, one should consider if torts, counterclaims, cross-claims and the like will fall within the scope of the arbitral tribunal’s mandate in the Model Law jurisdictions. Secondly, it is necessary to examine if the process of application of law by an arbitral tribunal (including i.a. determination of the applicable law and the application of mandatory rules of law) can be reviewed under the “excess of mandate” type of challenge. Similar considerations relate to the tribunal’s power to decide ex aequo et bono. Thirdly, the tribunal’s remedial power will be analyzed. Final reflections relate to the tribunal’s decisions that are of an accessory character to the main claims, namely decisions on interest, costs and even the procedural decision of the arbitral tribunal. These should also be tested for their availability against the “excess of mandate” type of challenge.

In the Model Law structure the same type of ground is included not only as a basis for setting aside (see Article 34(2)(a)(iii)) but also as a basis to refuse recognition and enforcement of the arbitral award (see Article 36(1)(a)(iii)). Both grounds differ only in the timing when they can be invoked. Thus, the only difference is that Article 34(2)(a)(iii) of the Model Law can be used as an offensive tool against the arbitral award (in the setting-aside proceedings), whereas Article 36(1)(a)(iii) of the Model Law is a defensive mechanism protecting the losing party at the enforcement stage of the arbitral award. Arguably, however, the instances where these grounds can be successfully invoked remain the same. For this reason, although the focus in this chapter is on the setting-aside

(37)

mechanism, the sources (especially the case law) dealing with Article 36(1)(a)(iii) of the Model Law will also be used.

2 Court standard of review at the post-award stage

The initial inquiry should commence with a brief analysis of the court’s approach to the post-award challenge in the Model Law jurisdictions. Three aspects of the review need to be highlighted: the “pro-arbitration” attitude of the courts (section 2.1), the deferential standard of the judicial scrutiny (section 2.2) and the availability of the remedial tools given to the courts (section 2.3).

2.1 The universal “pro-arbitration” approach

What can be considered as a hallmark of the Model Law is its pro-arbitration philosophy. Essentially it means that national courts should endorse the parties’ choice to arbitrate their disputes and refrain from intervening in the process. Additionally, they should recognize the exceptional character of the setting-aside proceedings and the limited nature of their control over the award.

According to the UNCITRAL analytical commentary on the draft text of the Model Law, the Article 34 recourse is designed to be an exclusive means of recourse available against the award, available only shortly after it is rendered and only for a limited (exhaustive) number or reasons.2This philosophy has been adhered to by the countries adopting the Model Law. For example, in Germany, it has been recognized that Article 1059 of the German Code of Civil Procedure (“GCCP”) “has a limiting function” eliminating the possibility of the review on the merits and allowing the review on the closed list of internationally recognized grounds instead.3_{Similarly in Belgium, “the procedure for setting}

aside is the exclusive recourse by which a party may challenge an arbitral award before a State court.”4_{Also in Singapore “[i]t is to be emphasized that the ability to challenge the}

award is limited to jurisdictional, procedural and public policy issue[s] […]”.5

2 A/CN.9/264 pp.71-72.

3 See (Kröll & Kraft, Chapter VII: Recourse against the Award, § 1059 – Application for Setting Aside, 2015) p.386. See also (Kreindler, Wolff, & Rieder, Commercial Arbitration in Germany, 2016) p.335.

4 (Verbruggen, Commentary on Part VI of the Belgian Judicial Code, Chapter VII: Article 1717, 2016) p.461. 5 (Merkin & Hjalmarsson, Singapore Arbitration Legislation Annotated, 2009) p.116.

(38)

National courts in the Model Law jurisdictions follow the pro-arbitration principle. Consequently, they affirmed the exhaustive character of grounds for setting aside.6The same goes for the presumptive finality of the award,7_{and the minimal and restrictive}

character of the judicial intervention at the setting-aside stage.8

2.2 The scope of the court’s review

As already hinted above, the fundamental idea of the Model Law is to limit the scope of intervention of the courts in the arbitration itself. It has, in turn, consequences for the attitude the courts should exercise when faced with the “excess of mandate” type of challenge. These consequences, explained in details below, are two-fold: (i) the courts are not allowed to review the merits of the case and, arguably and (ii) they should only allow the most grievous instances of the alleged “excess of mandate”.

The first aspect is rather clear.9_{Already at the drafting stage of the Model Law, it has}

been observed that “[t]here was very wide support for the view that an award rendered in

international commercial arbitration should not be subject to court review on its merits.”10

6 CRW Joint Operation v. PT Perusahaan Gas Negara (Persero) TBK [2011] SGCA 33, [2011] 4 SLR 305 at

[25] (“The court’s power to set aside an arbitral award is limited to setting aside based on the grounds provided

under Art 34 of the Model Law and s 24 of the IAA.[…].”).

7 See, e.g., Bayview Irrigation District #11 v. United Mexican States, 2008 CanLII 22120 (ON SC), par. 63, <http://canlii.ca/t/1wwtf#par63> [last accessed on 27 April 2018] (“While the decisions of international

arbitral tribunals are not immune from challenge, any challenge advanced is confronted with the “powerful presumption” that the tribunal acted within its authority. An arbitral decision is not invalid because it wrongly decided a point of fact or law. [Corporacion Transnacional, at p. 192]. The grounds cited by the Applicants under Article 18 and Article 34(2)(a)(ii), 34(2)(a)(iii) and 34(2)(b)(ii) of the Model Law must therefore be construed narrowly and the Applicants must satisfy a high threshold to succeed in having the Award set aside.”).

8 See, e.g., CRW Joint Operation v. PT Perusahaan Gas Negara (Persero) TBK [2011] SGCA 33, [2011] 4 SLR 305 at [25] (“As declared by this court in Soh Beng Tee & Co Pte Ltd v. Fairmount Development Pte Ltd

[2007] 3 SLR(R) 86 (“Soh Beng Tee”) at [59], the current legal framework prescribes that the courts should not without good reason interfere in the arbitral process. This policy of minimal curial intervention by respecting finality in the arbitral process acknowledges the primacy which ought to be given to the dispute resolution mechanism that the parties have expressly chosen.”). Quintette Coal Ltd. v. Nippon Steel Corporation, 1991

CanLII 5708 (BC CA), par. 32, <http://canlii.ca/t/231lq#par32>, [last accessed on 27 April 2018] (“It is meet

therefore, as a matter of policy, to adopt a standard which seeks to preserve the autonomy of the forum selected by the parties and to minimize judicial intervention when reviewing international commercial arbitral awards in British Columbia. That is the standard to be followed in this case.”).

9 See, e.g., (Lew, Mistelis, & Kröll, Comparative International Commercial Arbitration, 2003) pp.673-674 (“The grounds listed in Article 34 Model Law unequivocally suggest that judicial review in the context of an

application to challenge an award can only be based on natural justice and legality grounds. There can be no review on the merits.”). See also (Roth, 2009) p.1116: (“The selection of the grounds in both sub-paragraphs avoids court review ‘on the merits’”), (UNCITRAL 2012 Digest of Case Law on the Model Law on International

Commercial Arbitration, 2012) pp.140-141. 10 A/CN.9/216 paras 107-108.

(39)

This vision of the system has been consequently adopted by the Model Law countries.11

For example, in Germany, “[t]he exhaustive character of s 1059 para 2 ZPO distinguishes

setting aside application from appeals as it in particular excludes the incorrect decision of the dispute as a ground for setting aside (no révision au fond).”12_{The same standard is also}

recognized i.a. in Belgium13and in Singapore.14The Model Law case law repeatedly confirms that the courts may not reevaluate the merits of the dispute during the setting-aside stage.15

The second characteristic of the standard for the review requires perhaps a bit more explanation. Although the leading guideline for the setting-aside court is the principle of “no review on the merits”, “[t]he content of the award may […] be relevant in connection

with an alleged excess of authority [that is the “excess of mandate” type of challenge].”16It is so because the review of the “mandate” is closely intertwined with the merits of the case. Consequently, it has been observed that “[w]hile it is uncontroversial that a reviewing court

must not re-examine the merits of an arbitral award when it determines whether a tribunal has exceeded its powers, there is currently no uniform approach regarding the degree of deference that courts are willing to accord to the arbitral tribunal’s interpretation of its competence, as set out in the Parties’ submissions or the arbitration agreement.”17

There are two explanations for the difficulties with the scope of the review and, arguably, both relate to the way the Model Law is adopted. The first reason relates to the very nature

11 Notably, Roth reported that “Tunisia empowers the court which sets aside the award to decide on the merits,

if necessary and upon the application of all parties.” See (Roth, 2009) p.1110.

12 (Kreindler, Wolff, & Rieder, Commercial Arbitration in Germany, 2016) p.335, see also (Kröll & Kraft, Chapter VII: Recourse against the Award, § 1059 – Application for Setting Aside, 2015) p.397.

13 (Verbruggen, Commentary on Part VI of the Belgian Judicial Code, Chapter VII: Article 1717, 2016) p.461 (“The court will not review the merits of the case but only examine the criticism made by claimant against

the award in light of the limited grounds for setting aside.”).

14 (Merkin & Hjalmarsson, Singapore Arbitration Legislation Annotated, 2009) p.116 (“It is to be emphasized

that the ability to challenge an award is limited to jurisdictional, procedural and public policy issues: there is no basis for a challenge based on error of law, and there is a need to ensure that challenges are genuinely made on the permitted grounds rather than amounting to disguised attempts to attack awards on their merits.”).

15 See, i.a., ABC Co. v. XYZ Ltd., High Court, Singapore, 8 May 2003], [2003] 3 SLR 546: (“The Court also

noted that an application under article 34 MAL is not a process designed for purposes of seeking review of a pre-existing judicial decision by way of appeal […] A setting aside application is not a process whereby facts which have been already established in the arbitration are being reassessed.”), Quintette Coal Ltd. v. Nippon Steel Corporation, 1991 CanLII 5708 (BC CA), par. 32, <http://canlii.ca/t/231lq#par32>, [last accessed

27 April 2018] (“It is meet therefore, as a matter of policy, to adopt a standard which seeks to preserve the

autonomy of the forum selected by the parties and to minimize judicial intervention when reviewing international commercial arbitral awards in British Columbia. That is the standard to be followed in this case.”); Nearctic Nickel Mines Inc. c. Canadian Royalties Inc., 2012 QCCA 385 (CanLII),

<http://canlii.ca/t/fqcwz>, [last accessed 27 April 2018]; see also (UNCITRAL 2012 Digest of Case Law on the Model Law on International Commercial Arbitration, 2012) p.134.

16 (Kröll & Kraft, Chapter VII: Recourse against the Award, § 1059 – Application for Setting Aside, 2015) p.397.