Expanded Judicial Review in International Commercial Arbitration: Which Jurisdictions Offer the Optimal Approach from the Private Parties' Perspective?

Abstract

The article at hand delves into the topic of ‘expanded judicial review’ in international commercial arbitration. The phrase ‘expanded judicial review’ refers to the situation when the parties in their arbitration agreement stipulate that, in addition to the available statutory grounds (which are generally extremely narrow), the court should set aside an arbitral award for the arbitral tribunal’s misapplication of law and/or errors of fact. Several years ago, the question of whether the contractual stipulations calling for an expanded judicial review ought to be honoured was fervently debated both by the courts (especially in the United States) and the scholarly community. Eventually, at least in the international context, the approach perceiving the statutory grounds for setting aside an arbitral award as being exhaustive seems to have won the battle. After exploring the topic of ‘expanded judicial review’ from the private parties’ perspective (and by employing the law and economics analysis), this article reaches the conclusion that is in discord with the current situation on the ground; i.e., it is the jurisdictions that would have the narrow grounds for setting aside as the default solution, but would allow the parties to expand them freely that would offer the optimal approach from the private parties’ perspective. At least among the jurisdictions that are considered to be major arbitration hubs, these are nowhere to be found. While acknowledging the reasons in favour of disallowing expanded judicial reviews, this article suggests that the strong dominance of such an approach should be reduced by at least having one or two major arbitration jurisdictions to enable the parties to exercise an expanded judicial review.