Is the arbitrator obliged to follow a judicial precedent in

international arbitration?

IS THE ARBITRATOR OBLIGED TO FOLLOW A JUDICIAL PRECEDENT IN

INTERNATIONAL ARBITRATION?
O árbitro é obrigado a seguir um precedente judicial na arbitragem internacional?
Revista de Direito Constitucional e Internacional | vol. 110/2018 | p. 265 - 278 | Nov -
Dez / 2018
DTR\2018\22630

Christiane Freire de Paula Reis

Formada em Direito pela Pontifícia Universidade Católica de São Paulo (PUC-SP). Mestre
(LL.M.) em Arbitragem Internacional pela University of Miami. Atualmente cursa Juris
Doctor (J.D.) na University of Miami. chrisfreirepr@gmail.com

Área do Direito: Internacional; Arbitragem

Resumo: O propósito deste estudo não é apenas acadêmico, mas principalmente uma
análise prática, especialmente considerando o ponto de vista de um árbitro em uma
arbitragem internacional. Eles, mais do que juízes, tendem a considerar as implicações
de suas decisões em conflitos de leis e talvez tenham a tendência a evitá-las, buscando
olhar para diferentes soluções, talvez em outros sistemas legais, que ofereçam uma
“melhor” opção para o caso em questão. Entretanto, algumas vezes encontrar tal opção
não seja tão fácil, porque decidir casos concretos não é uma tarefa tão simples como
parece. Dessa maneira, o objetivo deste artigo não é dar uma resposta positiva ou
negativa para esta questão, mas, principalmente, discutir e esclarecer o sentido e a
importância dos precedentes judiciais e de que maneira tais precedentes precisam ser
considerados por um árbitro enquanto julgador inserido no cenário da Arbitragem
Internacional. A intenção, portanto, é promover uma abordagem entre árbitros e a
realidade e complexidade de casos concretos diante deles. Assim, precedentes judiciais
podem ser considerados uma valiosa ferramenta, em alguns casos, para auxiliar os
árbitros a atingirem uma sentença arbitral mais justa e previsível, bem como promover
uma cooperação mais íntima entre árbitros e o Poder Judiciário.

Palavras-chave: Arbitragem internacional – Common law – Arbitragem – Precedente

judicial – Conflito de leis
Abstract: The question proposed in this study is raised not for an academic purpose only,
but mainly for practical ones, especially from an international arbitrator’s perspective.
They, much more than court judges, tend to take into account the implications of their
conflict of laws decisions on the outcome and may try to evade it by looking for a
different solution, maybe in another legal system, which offers a “better” option. But
sometimes finding this option is not so easy because facing and deciding real cases is
not a simple task as it may seem. Therefore, the purpose of this paper is not to provide
a yes or no answer for this question, but mainly to discuss and clarify the meaning and
importance of the judicial precedent and in which manner and extent they should be
considered by arbitrators as decision-makers within the International Arbitration
scenario. The intention, then, is to promote an approach between the arbitrators and the
reality and complexity of cases before them by showing that judicial precedents could be
a valuable tool, in some cases, in order to help them to achieve a more just and
predictable award and also to enhance a close cooperation with the judiciary.

Keywords: International arbitration – Common law – Arbitration – Judicial precedent –

Conflict of laws
Sumário:

Introduction - The role of precedents in Common and Civil Law systems - The role of
precedents in International Arbitration - The International Arbitrator’s Application of
Judicial Precedents - Conclusion - Bibliography

Introduction
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 Is the arbitrator obliged to follow a judicial precedent in
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One of the concerns parties have while choosing International Arbitration to resolve
international disputes is their perception that they are not quite sure what decision the
arbitrators are going to reach. So, by choosing International Arbitration, parties are
looking for many things, amongst them confidentiality and procedural flexibility, but they
also seek for a system that its procedure is predictable and neutral. Party autonomy also
plays an important role as being one of the cornerstones of International Arbitration.
Considering that parties had the freedom to choose International Arbitration over
litigation in national courts, that freedom also includes the choice-of-law clause, which
also embrace the applicable law and conflict of laws principles applicable to the validity
and enforceability of that agreement. However, this study is not intended to discuss
conflict of laws doctrine and I will start the analysis by assuming that the arbitral tribunal
has already defined the applicable law, either through the parties’ choice (express or
implied), through conflict of law rules or through any other acceptable mean.

So, once the arbitrators have ascertained the applicable law, the law so determined
should be applied to the legal issues in dispute. This leads us to some issues and
questions as to whether international arbitrators’ procedural duties in construing and
applying the law are equal to or more liberal than court judges; how is the relationship
between the international arbitrator and the law that he or she shall apply; and when
parties agree to have their dispute to be solved out of the judicial courts, if they can
expect the same standards of a system they have just evaded. Finally, the question that
is the main purpose of this paper: whether the arbitrators have an obligation or duty to
follow judicial precedent.

Therefore, the main intent of this study is to analyze and show that international
arbitrators, while interpreting and applying an applicable law, are bound to judicial
precedents not in a blindly way, but they should consider the jurisprudence developed
for that particular law and apply only after a pragmatic analysis of the benefits and
values that the doctrine of precedent and the case-law could bring to the legal issues in
dispute. So, this paper will initially analyze judicial precedents and what type of
relationship it would have with International Arbitration, whether in Civil Law or Common
Law systems. Once it becomes logical that judicial precedents are part of the legal
system of determined country, it will be examined in which way international arbitrators
should follow those precedents.

The role of precedents in Common and Civil Law systems

The practical relevance of the judicial precedent and how it can help arbitrators on the
task of searching for directives while applying and interpreting the substantive law of a
case before them is one of the main goals of the present study. This topic starts to
become relevant for international arbitrators when they are confronted with a particular
situation and the international arbitral tribunal may need some guidance as to how they
should apply the law.

For example, imagine a long-standing case-law of the highest court of the country whose
law is the lex causae, which reflects a view on certain legal issue relevant to the
resolution of the dispute before the arbitrator, which is unacceptable in an international
context as it contravenes the underlying economic interest and commercial realities of
international commerce and trade in general and of the concrete case to be decided by
1
the arbitral in particular. A case may become even more complicated if the relevant
case-law is that of a jurisdiction which has not implemented the applicable law but
whose case-law and doctrine have a significant influence on the development of the law
to be applied by the arbitrators, like the case-law of the United Kingdom as precedents
2
under Indian law or case-law of France as applied in Lebanon. Those are good
illustrations when the judicial precedent may be used as an important tool to help
arbitrators to fully exercise their role as decision-makers.

Historically, it took hundreds of years before a culture of precedents and its

corresponding theory could develop in common law countries, but now civil law countries
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have conquered the development of systems of precedents mainly because of a

recurring distrust on domestic judges. Countries like Russia and China have recently
3
begun to shift towards the common law tradition by adopting precedent-like systems . It
is also the case of Brazil. More than 40 (forty) years after the former Brazilian Code of
Civil Procedure was enacted, in 2015 the new Code incorporated a system of binding
precedents into Brazilian procedural law. Brazilian judges are now bound by precedents
and must either follow or distinguish them.

It is true that the civil law and common law systems adopt different approaches to prior
judicial decisions. There are two different traditions, the former much older than the
latter. In the common law system, countries recognize prior decisions as binding
precedent by adopting a consistent rule of stare decisis derived from the notion of stare
decisis et non quieta movera – “to stand by and adhere to decisions and not disturb
4
what is settled” . In other words, it is to stand by what has been decided. While in the
civil law system the courts are said to give much less weight to judicial precedent and
5
more value to codified statutory authority.

However, despite contrary opinions, in a very broad way, civil law systems treat previous
judicial precedents in a very similar way as common law countries. Both generally
recognize the importance of precedential authority of judicial decisions. According to
Gary Born, in both systems the principle of binding precedential “is flexible, with courts
taking into account a variety of factors concerning the prior authority, including the
extent to which a precedent is well-settled (i.e., the number of prior decisions and their
age), the extent and quality of judicial reasoning, the expertise and competence of the
courts and judges that rendered that decisions, the subject-matter at issue and similar
6
factors”.

In fact, the interpretation of the law by the courts in civil law and common law countries
creates directly binding law for the specific case only, and no court is bound to interpret
the law in the same way in another case. They will only do so if they are convinced of
the accuracy and legal certainty of the previous held interpretation. Only by doing this,
the courts will contribute to the equality, predictability, economy and respect of the
system. Equality because the application of the same rule to successive similar cases
results in an equal treatment between the parties. Predictability because consistent
following of precedents contributes to a predictable result in future disputes. Economy
because the use of the same criteria to settle new cases saves parties’ and courts’ time
and energy. Finally, Respect, because the adherence to previous decisions shows
reverence for the wisdom and experience of prior generations of judges.

Equally, precedent is never immune from overruling with courts retaining the power to
rethink prior precedent in light of new legal and other developments. Such rethinking
must be considered and deliberate, but, as in common law jurisdictions, there is no rule
7
that judicial precedent is frozen in time, while the rest of the world continues.

Thus, it is possible to conclude that precedents work in two different perspectives: the
8
vertical and the horizontal perspective. According to Gustavo Rizzo Amaral , the vertical
one implies that inferior courts are bound by precedents from higher courts in the same
jurisdiction. Depending on the relationship of the court that held the opinion and the
court in which the opinion would be applied we may say that the holding would be
persuasive or binding to the outcome. Higher courts can be persuaded by precedents
from lower courts, just as parallel courts can be persuaded by precedents from each
other. Yet when it comes to different courts, binding effects can only be achieved when
hierarchy is at play. On the other hand, the horizontal perspective implies that any given
court must follow its own precedents, even when they arise from holdings rendered by
an entirely different panel of judges.

The role of precedents in International Arbitration

According to what was described above, the judicial precedents can be of two kinds –
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binding or persuasive – and they have an important role in the stability and development
9
of the Law. However, these precedent ideas are not suitable to explain the power of
judicial precedents over arbitrators. One of the reasons is the absence of hierarchy
between arbitral tribunals and judicial courts. Not even the highest constitutional court
has any control over what arbitrators decide. Regardless of the exercise of true
jurisdictional power, arbitrators are not part of the judicial system itself.

Nevertheless, regarding the argument that there is no hierarchy between judicial courts
and arbitration it is important to notice that it is not possible to have it both ways. The
arbitrator is either part of a state jurisdictional system and therefore bound by hierarchy,
or the arbitrator draws his or her power solely from the parties, being therefore bound
10
by the parties will. As having party autonomy as one of the cornerstones of arbitration,
I believe the second option is more suitable. Any attempt by the arbitrator to go beyond
the choice of law made by the parties would be a groundless journey and would be
considered an arbitrariness that does not fit in the arbitration system.

From an arbitrator standpoint, there are many benefits from adopting a culture of
precedents while deciding a case. Professor MacCormick once stated that to treat like
cases alike contributes to “the idea of an impartial legal system that does the same
11
justice to everyone, regardless of who are the parties to a case and who is judging it.”
The arbitrators’ behavior in countries where precedents are recognized as binding
sources of law (England and United States, for example), shows not only a deep respect
and deference to the so-called judge-made law, but also to the duty to follow precedents
is in tune with what parties expect from arbitrators. However, even in countries of the
common law tradition, there are “grounds for skepticism about the role of precedent in
12
arbitration”. One such ground is the assumption that whenever parties choose
arbitration “they wish to create a different kind of precedent, a body of rules better
13
suited to their needs than government-created rules”.

However, it is undeniable that predictability plays an important role when parties chose
arbitration. One of the fundamental goals of parties in entering in International
Commercial Arbitration agreements, coupled with the choice-of-law provisions, is to
obtain certain predictable results. It is essential to entrepreneurs and citizens alike the
necessity to provide legal certainty in order to promote progress and economic growth.
Although limited empirical evidence, it is safe to say that while there are multiple
reasons why parties choose arbitration to solve their conflicts, gambling with their
chances is certainly not one of them. If arbitrators are not to follow or to create
precedents of any kind, the more matters are decided by arbitral tribunals rather than by
14
state courts, the less the law will evolve in common law systems. In fact, evidence
15
actually points the other way: arbitrators do follow precedents most of the time.

Accordingly, the U.S. Supreme Court once put it: “A contractual provision specifying in
advance the forum in which disputes shall be litigated and the law to be applied is,
therefore, an almost indispensable precondition to achievement of the orderliness and
predictability essential to any international business transaction. [Absent such
agreements, one enters] the dicey atmosphere of … a legal no-man’s-land [which] would
surely damage the fabric of international commerce and trade, and imperil the
willingness and ability of businessmen to enter into international commercial
16
agreements.”

Despite this, some scholars and authorities suggest that international arbitrators are
either not subject to rules of judicial precedents or are free to apply such rules in lighter
way compared to national court judges. However, those views are incompatible with the
adjudicative function and mandate of international arbitrators. In addition, the
supporters of the idea that the choice for arbitration involves a complete isolation from
anything that comes out of the courts fail to see that it is not the case of two worlds
colliding (arbitration v. judiciary), but rather of one world that should be harmonic
despite the existence of different dispute resolution mechanisms. Another missing idea of
those who criticize the idea of an arbitrator’s duty to follow precedents is the difference
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between judgement against the law and those in disregard of the law. They mistakenly
conclude that arbitral awards are immune to judicial review when arbitrators do not
abide by judicial precedents or by statutory law itself, for that matter.

As it will be addressed in the next section, it is widely accepted that arbitral awards
cannot be set aside due to ordinary errors of law. In other words, ordinary arbitral
mistakes while applying the law are immune to judicial review. But what about disregard
of the law? What if the arbitrator, confronted with the applicable law (be it statutory law
or a precedent) decides to ignore it? In what instance would that differ from a decision in
equity and, therefore, not be authorized by the parties when the arbitration is in law?
Therefore, as a brief answer I would say that ignoring statutory law and wrongly
applying it are not the same thing, neither are ignoring precedents and wrongly
distinguish them.

So, the finality of the decisions is another important aspect that one should bear in mind
while analyzing whether international arbitrators should or should not have a duty to
follow judicial precedents is the fact that arbitral awards are final and, saving rare
exceptions, they cannot be subject to challenges based on the arbitrator’s mistakes while
applying the law. It is true that choosing arbitration is a compromise and final awards
come with the risk of final mistakes. Notwithstanding, this compromise does not include
excess of powers. As Paulsson once stated, “as long as there is no unfairness or
arbitrariness, we accept that arbitration as an alternative to the court system must
17
include the finality of decisions”.

The International Arbitrator’s Application of Judicial Precedents

In order to establish the relationship between judicial precedents and arbitrators in

International Arbitration, it is necessary to first discuss the relationship between
International Arbitration and the rule of law. Also, while examining how International
Arbitration deals and relates to the issue of judicial precedent it is essential to identify
the approach and the treatment that is given to the matter of the definition of the law
applicable to the substance of international disputes.

It is of the utmost importance to make a distinction between judgements against the law
and those in disregard of the law. Most of the authors do not become aware of this
distinction and conclude that arbitral awards are immune to judicial review when
arbitrators do not comply with judicial precedents or by the law itself. However, it is
widely accepted that arbitral awards cannot be set aside for arbitral mistakes while
applying the law.

One of the main issues in International Arbitration is the definition of the law applicable
to the substance of the dispute. It has a legal, practical and psychological influence on
18
every arbitration. It is very important to know the legal standards to be applied in the
dispute resolution process and party autonomy is a dominant feature in this matter. Any
attempt by the arbitrator to go beyond the choice of law made by the parties is going
against a general principle of international law.

In addition, according to information provided by ICC, approximately 80% of the

agreements subject to arbitration proceedings in that institution contain choice-of-law
19
clauses. These statistics show the importance parties give to the definition of the law
applicable to their disputes. They also tell us that, in most cases, party autonomy will be
enough to determine the applicable law, making unnecessary for the arbitrators to do so.

For the determination of the applicable law in International Arbitration, Mistelis, Lew et
al. propose a three step method, but for the purposes of this study I will assume that the
arbitral tribunal has already defined the applicable law, either through the parties’ choice
(expresses or implied), through conflict of law rules or through any other acceptable
20
mean. The issue of binding judicial precedents does not arise if the applicable law is
transnational or a-national, but the same does not happen when the applicable law is a
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national law. According to Mistelis, Lew at. al. the ambit of application shall be “all rules
of that law with the hierarchy of sources as valid in that system. This will include
references to statutes, case law, scholarly writings and customs, with the authorities
21
they are vested within that legal system.” The issue is not unanimous when it comes to
case law. Paulsson, for instance, disagrees: “[w]e need to let that sink in. […] It does
not require international tribunals to obey the rulings of national courts – or to be
victims of paralysis if those courts are silent, or silenced. Their authority is plenary,
22
albeit naturally to be exercised with great circumspection.
23
Therefore, this topic has the legitimacy debate as its background. Understanding the
concept of legitimacy in the International Arbitration scenario also indicates an emerging
awareness for the exercise of power in and through International Arbitration. I believe
that regardless of the nature of arbitration, it involves power. Great part of these power
is reserved to the arbitrators, that can be empowered by the states or by the parties. It
is their role to assert and apply the law governing the dispute to resolve the parties’
conflict. But, here, I will not delve into this philosophical discussion, but I will take one
step further and question the relationship between the international arbitrator and the
applicable law itself. Like Mayer, I will pose all the right questions before establishing a
challenge against the idea that the parties’ choice of applicable law would bind the
arbitrator.

Mayer starts the debate stating that he wonders about the relationship between the
international arbitrator and the law that he or she is supposed to apply to the merits of
the case. He continues questioning in what extent the arbitrator enjoys more freedom
than a judge and if his or her sense of equity and fairness plays a greater role while
deciding the dispute. He keeps framing the debate by asking “when, in the case of
international arbitrator, he has to resolve a conflict of laws, is he supposed to apply a
24
conflict of laws rule? If the parties have chosen the law, is he bound by that choice?”.

The first point raised by Mayer is the idea of associating the disregard of the law by the
arbitrator with an unauthorized decision in equity (ex aequo et bono or amiable
compositeur). He starts by differentiating arbitrators from judges and he is correct by
saying that arbitrators are not judges, but private players engaged by the parties to
25
solve their disputes. They do not belong to the judiciary’s hierarchical scheme. They do
not create law, so their mistakes will not change the law itself.

However, this may not solve the problem because there are still the matter of the parties
expectations, but “even faced with a choice-of-law he has the power to settle in
accordance with his own views any dispute between the parties concerning the validity
26
or the scope of the choice-of-law itself”. It is important to remain clear that I do not
oppose the notion that the arbitrator may sometimes address the issue of choice-of-law
clause itself and apply a law other chosen by the parties, but that would happen when at
least one of the parties would have challenged the choice-of-law clause in the first place.
That is very different from voluntarily disregarding the parties unchallenged
27
choice-of-law. There is no reason for an arbitrator to refuse to apply the chosen law
mainly because it is a surprising effect in the circumstances of the contractual
relationship. So, as an illustration, if a reasonable entrepreneur already made and
included a choice of law in an arbitration clause of an international agreement, it is not
for arbitrators to decide if that choice was inappropriate.

According to Mayer, even for domestic arbitrators “the law ceases to be the mandatory
basis for the award; it becomes a model, a reference, a privilege one no doubt, but one
28
that can nonetheless be disregarded, should there be good reasons to do so”. While in
International Arbitration, “the status of the law as a non-mandatory model for the
29
arbitrator stands out even more clearly”. He provides two reasons for that. The first
reason is basically the fact that in many cases the arbitrator must apply a law other than
the one he is qualified or trained to apply. As a consequence, when faced with
uncertainties, the arbitrator could easily be assisted by the model of reference he was
30
trained for .
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A good example would be the Ometto case. Here, there is a dispute arising out of
Abengoa’s acquisition of a sugar business from Brazilian businessman Adriano Ometto in
31
2007. Two years later, Abengoa filed two ICC arbitrations against Ometto mainly
claiming that he had made important misrepresentations before the sale transaction.
Parties had chosen Brazilian Law and both arbitrations were heard by a three arbitrator
panel, with only one of them being Brazilian. After the arbitrators deciding in favor of
Abengoa in both arbitrations, awarding Abengoa hundred millions on damages, Ometto
tried to vacate the award and filed in the United States District Court of the Southern
District of New York claiming that the award should be vacated because they were
rendered in manifest disregard of Brazilian Law, between other reasons. In 2013, District
32
Court held denying Ometto’s petition . Ometto’s than sought to appeal to the United
33
States Court of Appels for the 2nd Circuit , but it was also denied, holding that
“manifest disregard of the law is rare” and that the Court had to be “deferential to the
arbitral award.” What these cases show us is that party autonomy, as being one the
cornerstones of International Arbitration, opens the possibility to the parties to choose
the law they want to be applied but also the arbitrators that will compose the tribunal.
So, if the tribunal decides by applying the law chosen, not disregarding it, but using its
own means of interpretation, it is actually not a manifest disregard of the law, but the
freedom of the arbitrator to decide based on the arbitrator’s experience and background.

Regardless the conscious or unconscious processes that the arbitrator’s mind goes
through to reach a decision, there is no way around the fact that either the arbitrator
applies the law that stems not only from statute but also from judicial precedents,
reaching one of the possible legal outcomes, or he does not, hence disregarding the law
34
. Therefore, it is one thing to use different legal interpretation techniques to apply the
law and it is quite a different thing to use a different law altogether.

Second reason is the case when parties have not agreed upon a choice of applicable law
and “the status of the law in International Arbitration is affected by the fact that is up to
35
the arbitrator to select the applicable law among the various competing laws”. So,
having the power to define the applicable law in some circumstances does not give to an
arbitrator the power to disregard it once that definition has been made. As Posner and
Voser once stated, “[a]rbitrators care about their reputation, Certainly, if the analysis is
accurate, they should. If they routinely ignore mandatory rules, they will eventually lose
36
their business”.

So, once recognized as binding sources of law, judicial precedents must be followed or
distinguished. Theories that connect the arbitrators’ power and legitimacy to the state
would demand that arbitrators behave exactly as domestic judges and, consequently,
being bound by judicial precedents. And theories that deny any relationship between
arbitrators and the state claim that the arbitrator’s power legitimacy rest solely on the
will of the parties to the arbitration.

Therefore, if the parties choose arbitration in law rather than in equity (ex aequo et bono
or “amiable compositor”), based on their party-autonomy, the arbitrators are bound by
the law in its totality, which includes statute and judicial precedent, whenever they are
binding sources of law; and cannot, without arbitrariness and illegality, replace the law
with his own sense of equity or justice.

The only time in which an arbitrator can tailor the law is when the parties expressly
authorize them to do so. This is widely recognized in practically all arbitral institutions’
rules as well as in the UNICTRAL Model Law. The idea of an arbitrator with no
responsibility either to the state jurisdictional system or to the parties’ will does not fit
any of the theories briefly described above that attempt to explain the legitimacy of
arbitration. So, if a given system recognizes precedents as law, so must the arbitrator.
On this sense Born states that “[i]f a national (or international) legal system accords
binding precedential weight to judicial decisions, then arbitral tribunals should give those
decisions no less legal effect than would a court in that system: this conclusion follows
inevitably from the arbitrators’ adjudicative function of applying the law to the
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37
evidence”.

Parties do not expect arbitrators to apply what he or she subjectively considers as being
fair because they cannot trust on his or her sense of justice. What parties really want is
what can only be achieved by applying the rules of law. Also, when one looks at
38 39
institutional rules, such as UNCITRAL Model Law and ICC Rules , it remains clear that
judgements based on the arbitrators’ own policy or sense of justice are always treated as
exceptions, only to be legitimate when authorized by the parties.

Choosing the applicable law in cases where such choice falls upon the arbitrator is much
40
different from choosing to disregard the already-defined applicable law . Parties do not
expect the arbitrator to apply what he or she considers as being fair, just as they do not
expect that from judges as well. When parties so wish, they choose arbitration in equity
(ex aequo et bono or amiable compositeur). Therefore, if parties choose an applicable
law that determine the obedience of judicial precedents, then arbitrators shall follow this
orientation and they will be bound by it.

Conclusion

Considering the practical relevance of the judicial precedents as a valuable tool to help
arbitrators while deciding the disputes, party autonomy should always be their guiding
principle as decision-makers. Party autonomy would lead the arbitrators away from a
strict and blind application of the predominant case-law to considerations which relate to
the scope of the choice-of-law clause and the legitimate expectations of the parties.

It is my understanding that the arbitrator has not only a professional but also a moral
and legal duty to comply with the law chosen by the parties. It means that once the
applicable law is settled by the parties or by the arbitrator, it cannot be ignored in favor
of a subjective sense of justice unless the parties have so authorized. The arbitrator has
to deal with the temptation to rule in equity and stick to his or her responsibility of not
disregarding the law chosen by the parties.

The parties always expect a predictable decision but it does not mean that arbitrators
are not allowed a certain margin of freedom in the application of the foreign law. This
leeway is important to guarantee that the specificity of the international context of the
case will be take in consideration, especially in more complex cases. However, it is not
acceptable that arbitrators view their mandate as coming moderately close to applying
the law or as being able to disregard it. If a national legal system gives binding,
precedential weight to judicial decisions, then arbitral tribunals should give to those
decisions no less legal effect that would a court in that system.

Therefore, if the attitude of the arbitrators is to consider the judicial precedents as a

useful and helpful tool while applying the applicable law chosen by the parties and
following it to the dispute not in a blind but in a conscientious way, it will promote a
valuable approach between them, as decision-makers, and the reality and complexity of
cases, thus developing a close cooperation with the judiciary. The prosperity of the
International Arbitration is a result of a win-win relationship between arbitrators and the
judiciary, where everyone will end up gaining from the flourishing of business that rely
not only on International Arbitration but also from the relieve of the judicial system.

Bibliography

Berger K. P., The International Arbitrator’s Application of Precedents, Journal of

International Arbitration, Kluwer Law International; 1992.

Born G., Chapter 27: Preclusion, Lis Pendens and Stare Decisis in International
Arbitration, International Commercial Arbitration, 2nd Edition, Kluwer Law International;
2014.

Farber, The Rule of Law and the Law of Precedents, 90 Minn. L. Rev.; 2006.
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and Brazil, Wildy, Simmonds & Hill Publishing; 2017.

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Lew JDM, Mistelis LA, Queen Mary, University of London. School of International
Arbitration, Freschfields Bruckhaus Deringer. Arbitration insights: twenty years of the
annual lecture of the School of International Arbitration. Alphen aan den Rijn: Kluwer
Law International; 2007.

MacCormick N., Rhetoric and the Rule of Law: A Theory of Legal Reasoning, Oxford
University Press; 2005; 2010.

Mayer P., Chapter 15: Reflections on the International Arbitrator’s Duty to Apply the Law
in Lew JDM, Mistelis LA, Queen Mary, University of London. School of International
Arbitration, Freschfields Bruckhaus Deringer. Arbitration insights: twenty years of the
annual lecture of the School of International Arbitration. Alphen aan den Rijn: Kluwer
Law International; 2007.

Mistelis L., Is Arbitration Changing? Kluwer Arbitration Blog, 12 August; 2009.

[http://kluwerarbitrationblog.com/2009/08/19/is-arbitration-changing/].

Paulsson J., The Idea of Arbitration, Oxford University Press; 2014;2013.

SCHILL S., Conceptions of Legitimacy of International Arbitration. In Caron DD, Schill S,

Smutny AC, Triantafilou EE. Practising virtue: inside international arbitration. Oxford:
Oxford University Press; 2016; 2015.

Posner EA, Voser N., Should International Arbitration Awards Be Reviewable?

Proceedings of the Annual Meeting, American Society of International Law; 2000.

Weidemaier WMC, Judging-lite: How Arbitrators Use and Create Precedent. North
Carolina Law Review; 2012.

1 Berger, 1992, p. 6.

2 Id., p. 7.

3 Rizzo do Amaral, Kluwer, 2017, p. 50.

4 Farber, 2006, p. 1173.

5 Born, 2014, p. 3811-3810.

6 Id., p. 3817.

7 Id., p. 3817.

8 Rizzo Amaral, Kluwer, 2017, p. 52.

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 Is the arbitrator obliged to follow a judicial precedent in
international arbitration?

9 Rizzo Amaral, 2017, p. 34.

10 Id., 2017, p. 159.

11 MacCormick, 2005.

12 Weidemaier, 2012, p. 1097.

13 Weidemaier, 2012, p. 1097-1098.

14 Weidemaier, 2012, 1098-1099.

15 Rizzo Amaral, 2017, p. 45-46.

16 Scherk v. Alberto-Culver Co., 417 U.S. 506, 516-17 (U.S. S. Ct. 1974).

17 Paulsson, 2013, p. 287.

18 Lew, Mistelis et al., 2003, p. 412.

19 Id., p. 413, footnote 2.

20 Id., p. 436-437.

21 Lew, Mistelis et al., 2003, p. 445.

22 Paulsson, 2013.

23 Schill, 2016; Mistelis, 2009.

24 Mayer, 2007, p. 289.

25 Id., p. 291.

26 Id., p. 294.

27 Rizzo do Amaral, 2017, p. 83.

28 Mayer, 2007, p. 292.

29 Id., p. 292.

30 Rizzo do Amaral, 2017, p. 83.

31 ICC case n. 16.176/JRF/CA and 16.513/JRF/CA.

32 Ometto v. ASA Bioenergy Holding A.G., 2013 U.S. Dist. LEXIS 7402 (S.D.N.Y., Jan. 7,
2013).

33 Ometto v. ASA Bioenergy Holding A.G., 549 Fed. Appx. 41, 2014 U.S. App. LEXIS 222
(2D CIR. N.Y., 2014).

34 Rizzo do Amaral, 2017, p. 84.

35 Mayer, 2007, p. 293.

36 Posner and Voser, 2000, p. 128.

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 Is the arbitrator obliged to follow a judicial precedent in
international arbitration?

37 Born, 2014.

38 UNCITRAL Model Law, Article 28 (3): “The arbitral tribunal shall decide ex aequo et
bono or as amiable compositeur only if the parties have expressly authorized it to do
so”.

39 ICC Rules, Article 21 (3): “The arbitral tribunal shall assume the powers of an
amiable compositeur or decide ex aequo et bono only if the parties have agreed to give
it such powers”.

40 Rizzo do Amaral, 2017, p. 85.

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