Precedents In Arbitration – A Practical Position (Part 1)

This article follows a talk Maurice Kenton, partner in Clyde & Co's Global Arbitration Group gave as part of the Oxford Symposium on Comparative International Commercial Arbitration in November 2017.

It is often stated that 'there is no precedent in commercial arbitration'. Challenging that statement, this article focusses on the practice of arbitration to see how 'precedents' are created and used in international commercial arbitration.

The meaning of 'precedent'

The Oxford Dictionary defines precedent in law as 'A previous case or legal decision that may be or (binding precedent) must be followed in subsequent similar cases'. For common-law English lawyers this is the intuitive meaning of precedent but this article takes a wider view of 'precedent' to mean 'what has gone before' or, as the dictionary puts it, 'an earlier event or action that is regarded as an example or guide to be considered in subsequent similar circumstances'.

Precedent in the context of this discussion is also not just about legal decisions - it is about the entire arbitral process encompassing the parties, the lawyers, experts and the arbitrators. A precedent is not limited to something that is binding - the existence of some form of prior decision already shapes the future.

In Part 1 of this article we look at sources of precedent.

In Part 2 we look at the way practitioners and arbitrators create and use precedent and consider whether this system of informal precedent creates consistency.

Sources of precedent

While commercial arbitration is a private consensual process wholly confidential to the parties, it can also be a rather leaky sieve. There are several sources of information about arbitrations and arbitral awards which enable information to become publicly available.

Institutional publications

The ICC publish extracts of arbitral awards giving insight into the reasoning of international arbitrators on the interpretation and application of contractual clauses, international conventions and the law of international trade. The ICC states that the publication 'is invaluable to both scholars and practitioners involved in the drafting and negotiation of international commercial contracts and the resolution of international commercial disputes'.

Similarly the SCC has published arbitral awards. The SCC state that 'the extracts from the arbitral awards provide indispensable and extremely helpful insights into the attitudes of tribunals on arbitration matters and...