Agreements limiting or expanding grounds for annuling international arbitral awards

Abstract

Arbitration is a contractual method of resolving disputes by which parties themselves charter a private tribunal to render a final and binding decision in accordance with neutral procedures affording each party an opportunity to present its case. A central feature of international arbitration is party autonomy, which enables the parties to adopt flexible procedures and tailor them to their particular needs. Other equally important attractions of international arbitration in comparison to litigation are the efficiency and finality of the arbitral process. In accordance with the principles of party autonomy and finality, arbitration produces a final and binding award, subject only to narrow grounds for annulment available under the law of the seat. However, parties sometimes seek to modify these statutory grounds for setting aside arbitration awards. For example, they may limit the grounds of review in annulment proceedings or preclude review altogether. On the other hand, parties may agree to expand the grounds on which an award may be set aside in order to mitigate the risk of a tribunal falling into error.