On
the occasion of the 40th anniversary of the French Arbitration Association
(the AFA), it seemed particularly relevant to review the legal nature of
institutional arbitration. The law in this area (which is overwhelmingly
judge-made law) has progressively ossified through decisions in liability
actions brought against various arbitral institutions. The borders of the
contract between the parties to arbitrations, on the one hand, and an arbitral
institution, on the other hand, is now well-defined.
Arbitral institutions operate under the general
purview of State courts, whose judges have successfully struck a fine balance
between the need for regulation and the need to provide flexibility to the
arbitral process. Nevertheless, we must remain vigilant, to prevent the situation
whereby arbitral institutions, themselves (through their own practices), might become
the source of excessive regulation