Ensuring equality of arms and fairness in International Arbitration

“God is not on the side of the big battalions but on the side of those who shoot best” 
Voltaire - Notebooks (c.1735-c.1750)

Voltaire was – amongst other things – a law student who over his lifetime would have called many cities, that have become leading European centres of arbitration, his home, among them Paris, London, Geneva and The Hague. He is the personification of the philosophe and the humanist of the Enlightenment, and was a staunch advocate of personal autonomy, intellectual liberty and equality before the law, all preconditions for religious tolerance – lack of which he perceived to be the ultimate barrier to prosperity and free commerce.

These ideas also underpin the basic tenets of international arbitration, including equal treatment of the parties, expressing the principle of the rule of law in the terms of due process. No arbitration law or rule is complete without ensuring the parties’ equality of arms and indeed, a material breach of the principle should result in the setting aside or unenforceability of the award.

1.    Equality of Arms in Arbitration

Beyond expressing the equality of the parties, arbitration laws and rules provide express specific rules embodying that principle.

Arbitrability. The rules of non-arbitrability delineate subjects that are fit for arbitration from those that are not. Employment and labour disputes, consumer claims and claims against entities under liquidation have been held non-arbitrable in some jurisdictions due specifically to the inherent imbalance of power between parties that casts doubt on the validity of the arbitration agreement and the ability of the arbitral proceedings to maintain the equality of arms. The fact that the sphere of arbitrable disputes and subjective arbitrability is now expanding indicates a growing trust in the ability of arbitral proceedings to effectively manage such power imbalances and ensure equality of arms.

Yet in other cases, it will be the inherent asymmetry of power and arbitration’s aspiration to ensure equality of arms that will be the primary reason that the parties seek arbitration instead of the ordinary courts. For instance, in commercial disputes with state entities – particularly where there is a perceived lack of judicial independence – removing the dispute from the bench of national courts will serve as some safeguard against extra-judicial state meddling.

The Right to be Heard. Once a dispute is admitted to arbitration, equality between the parties is primarily ensured by the right to be heard and balanced evidentiary procedures, particularly relating to document production rules. Tribunals should be careful to provide adequate time for each party to present their case, which will often require considering not just equality but also fairness. Where one party’s case is more nuanced or requires extensive witness testimony, equal hearing time would lead to an inequality and so fairness requires allocation of time proportionate to each party’s needs. Furthermore, a party’s ability to present and evidence their case will oftentimes be hampered by informational asymmetry that tribunals can remedy through document production mechanisms and careful consideration of evidentiary motions.

Impartiality. The right to an independent and impartial arbitral tribunal is ensured by, amongst other things, the conflict of interest rules which reduce the advantages that repeat users or their counsel might amass. The waivable red and orange list of IBA Guidelines on Conflicts of Interest in International Arbitration provides guidance where the arbitrator’s relationship with the parties or their counsel or where previous services rendered to one of the parties might cast doubt on his or her impartiality.

Financing. Procedural fairness does not of itself ensure equality of arms. Oftentimes there will be financial barriers of entry to arbitration or one actor’s economic wherewithal will significantly exceed the others. Third party financing has served as a great equalizer to ensure that parties have the means and access to first tier counsel and experts.

2.    The Arms Race in Arbitration 

Where there is an equality of arms, there is bound to be an arms race to upend that balance.

In Voltaire’s lifetime, France was engaged in numerous wars, but perhaps none upset the balance of power in Europe as much as the Seven Years’ War. It began with the Diplomatic Revolution and resulted in the rise of both Britain and Prussia – under Frederick the Great’s rule – on the world stage, while France was significantly weakened despite its overwhelming economic and military advantage at the beginning of the conflict. 

Where battalions cannot ensure victory, there must be another solution. Defeat in the Seven Years’ War led to the reform of the French artillery, specifically the introduction of the Gribeauval artillery system, the multidisciplinary and technological innovation of the day. This reform was fuelled not so much by the actual revelations of Newton’s grand work on physics, the Principia Mathematica, but by the underlying sentiment of sceptical empiricism. It was in fact Voltaire and Emilie du Chatelet who – in the aptly named Newtonian Wars – championed  sceptical empiricism over – the contemporary continental doctrine of deductive reasoning that, in the absence of evidence-based verification, often gave way to colourful and incredible metaphysical accounts of the natural laws. Voltaire perceived this practice to be cartesian romance  that needed to be rooted out of the sciences. The reform required a better empirical understanding of ballistics, reorganisation of the French artillery academies to enable officers to make use of Newtonian calculus and technological innovations in the design  and manufacture of cannons, none of which could have been achieved without this revolution of thought

The reforms bore their fruit in the French Revolutionary Wars when, faced with overwhelming force, France drove back the First and Second Coalition, including Prussia. In other words, despite not being the ‚bigger batallion‘, the French artillery ‚shot best‘.

So, what does “shooting best” mean in arbitration today? 

To shoot best we need skilled professionals, a fact-based understanding of our craft, state-of-the-art technology and strategy.

The stepping-off point is specialisation. Large battalions of lawyers are not necessary for most disputes, but highly skilled and dedicated counsel with specific training in arbitral procedure and the subject matter of the dispute – whether it be construction, energy, finance, or telecommunications – are indispensable. 

Specialisation must be informed by both experience and academia. The legal profession of course is itself susceptible to romance. Legal scholarship on arbitration include treatises, commentaries and anecdotal recollections that are informative and amusing but stop just short of practical advice and might peddle in long held arbitral myths without substantiation. Following Voltaire’s footsteps, crushing the infamy of arbitral romance requires a greater emphasis on empirical research. The already begun empirical turn in legal scholarship should be spurred on by the publication of a greater number of awards in our new era of transparency in arbitration. Our hope is that widespread access to a greater set of awards scrutinized by academia will provide practitioners with a better understanding of the terrain.  As the École d’application de l’artillerie trained the officers of the French army in the new sciences of Newtonian calculus, so arbitration specialists should be informed by the empirical research of our day to dispel the fog of war.

Embracing technological innovation by legal professionals should be a priority. Large battalions of lawyers may be substituted by deep learning AI for highly labour-intensive work such as initial document review and classification, or due diligence during document production phases. Of course, we also already see application of these technologies in some disputes, such as delay and disruption modelling in construction disputes or the ever-expanding arsenal or programmes available for detailed damages valuation. Similarly, data visualisation tools are indispensable. Once your facts are in order, presenting these to the tribunal in a relatable fashion is key. 

These same technologies should also be applied to the management of the arbitral process itself, not just by the parties but also by arbitrators. Legal project management tools appear as the short-term solution to extended arbitral proceedings and spiralling arbitration costs. The ability to design more efficient work processes within firms and setting procedural schedules for the arbitral proceedings will deliver a net benefit to clients by driving down costs.

“Shooting best” requires an application of all these tools by legal professionals to the client’s means and needs in order to obtain their goals.Before pulling the trigger professionals need a clear line of sight and should only fire when any obstacles are out of the way.  Still, when there isn’t a clear line of sight, the best legal strategies might be likened more to cannonballs than bullets in that they will have a parabolic trajectory to circumvent apparent obstacles. The difference between the Voltairean best shooters and the rest is that they will apply arbitral calculus to find that trajectory, while the latter will just claim that they can “bend the bullet”. Nonetheless an arms race need not be a race to arms and sometimes “shooting best” might be to not shoot at all. Learning from Clausewitz – who surveilled the battles of his time, including the French Revolutionary Wars – arbitration is merely the continuation of the transaction by other means. 

Perhaps though, however convenient, the language of war is not best suited to the idea of arbitration. Arbitration professionals share in the esprit de corps, participating in collaborative projects to find resolution to disputes. Perhaps our profession finds better expression in the terms of reason, economy and mutual understanding – which we are sure would have pleased Voltaire very much.

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