Generally, the choice of substantive law applicable to a particular contract will affect the outcome of a case. It is common, however, for the evidentiary and interpretive rules to also have important implications for a case’s outcome. Arbitral rules leave such matters to a tribunal’s discretion that can be exercised in different ways. For instance, suppose that two disputes arise under the terms of a form agreement and that parole evidence points to a particular interpretation of the contract. Let us further suppose that one dispute is heard by an arbitrator in a jurisdiction where parole evidence is admissible as a matter of course, and the other dispute is heard in a jurisdiction where such evidence is generally inadmissible. The outcome of the arbitrations is likely to diverge even though the arbitrators are interpreting the same agreement. Regrettably, this is not an isolated example of how the choice of evidentiary and/or interpretative rules can affect the outcome of a given dispute.
We argue that greater uniformity in evidentiary and interpretive rules in international arbitrations would ensure that outcomes turn on the choice of substantive law and—unless the parties prefer otherwise—not, for example, on the vicissitudes of how an arbitrator reads a contract. To that end, we survey the different approaches to interpreting contracts in California, New York, and a few select civil law jurisdictions. We then propose some potential reforms to evidentiary and interpretative approaches that will reduce subjectivity in outcomes irrespective of the substantive law that the parties have chosen.
Content Authorship and Sources
Dr. Kabir Duggal
Arbitration and Mediation Panelist at BIAMC
Senior International Arbitration Advisor at Arnold and Porter/Columbia Law School
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