The American Influence on International Commercial Arbitration: Doctrinal Developments and Discovery Methods
If national economies ever were independent of international markets, they certainly are not now. At the speed of the internet, economic globalization has moved the world toward a single, world-wide market for goods, services, and capital. What has not kept pace is the development of commensurate international legal norms needed to make such a near-universal market work.
Bridging the gap — more accurately the chasm — between the monolithic, transnational economic market on which all nations now depend and our fragmented, nation-based legal order is the daunting task of international commercial arbitration.
In the second edition of his seminal book, Pedro Martinez-Fraga offers his vision of how the law in this field would benefit from certain aspects of American law and be distorted by others. He argues for a greater recognition in international arbitration of some form of cross-examination, discovery, and remedies to address the problem of testimony often taken without the threat of penalties for perjury.
Although clearly a champion of arbitration, he argues that the U.S. Supreme Court has failed to establish a clear test to determine when courts should leave to arbitrators the decision whether the parties are bound to arbitrate. When courts let arbitrators determine whether the parties entered into a binding arbitration agreement, he wryly observes, “the foxes are being asked to decide whether the door to the hen house should be unlocked.”
In perhaps the most insightful but potentially controversial chapter, Martinez-Fraga argues that international arbitrators in civil arbitrations should not be extended absolute immunity. Arbitrators, he argues, should not be equated to judicial officers. They are private actors contracting to hear private civil disputes and are subject to virtually none of the constraints and oversight that apply to judges.
Moreover, the historical forces that drove the adoption of America’s absolute form of judicial immunity are inapplicable to private arbitration, as he points out in a groundbreaking argument relying upon new and more accurate understandings of Reconstruction era jurisprudence. He makes a convincing case that the problem of “risk-hedging” arbitrators can never be addressed if international arbitrators are afforded American-style absolute judicial immunity.
Martinez-Fraga’s method is one of the best parts of this book. After identifying a problem, he refrains from offering a pat answer. He focuses instead on the principles that should be used to reach the solution. Like all great teachers, he is respectful of both his readers’ intelligence and their diverse backgrounds.
Indeed, he acknowledges that the law of international arbitration must be truly international. It must overcome “the doctrinal shackles of territoriality and nationalism” and instead “integrate doctrines from all cultures.”
In this regard, he argues that the future development of this embryonic field of law would best be served, not by promulgating codes, or accepting the content of the common law, but by adopting the method of the common law.
“The common law corrects itself. It knows not pride of authorship. The common law not only questions itself, but it does so constantly. It is in this regard a perpetual motion of idea: the perfect physics.”
Martinez-Fraga has represented numerous countries in international arbitrations and has served as an arbitrator in World Bank proceedings. His other books have been the topics for symposiums at New York University, New York, and Kings College, London. His friends refer to him as the last Aristotelian practicing law in the United States.