The relationship between Arbitration and Court Litigation

(history, Prunier case)

Created by Drahomíra Fridrichová, Šárka Malinovská, Dušan Valent, Jana Vávrová

Introductionorigin: lost in obscuritynot clear boundariesall ages of recorded history

Ancient times• Middle East

• Tulpunnaya v. Killi• King Solomon

• Egypt• arrangements in funerary trusts, 2 500 B.C.

Ancient Greece and Rome Greece

private and commercial disputes arbitration = natural process Greek Courts, lack of clear boundaries

Rome compromissum, penalty Post-Classical period – pacta sunt servanda

From Middle ages…

What would you say, popular or not?

guilds – mandatory arbitration

penalty clauses

influence of canonical law and Roman law

arbitral deeds

...to modern era• worldwide spread of arbitration• fragmentality of arbitration in each

country

England arbitration older than the common law system 1698 Arbitration Act

promoting commerce BUT limited by courts

Civil Procedure Act (1833) improvement: arbitration agreements could not be revoked,

witnesses under oath Common Law Procedure Act (1854)

comprehensive arbitration statute extensive judicial review of the substance of arbitrator’s

awards 1889 Arbitration Act

widely adopted throughout the Commonwealth countries

France• Edict of 1560

• use of mandatory arbitration for resolving commercial disputes

• French Revolution • many changes arbitration as a threat • numerous restrictions

Prunier case, 1843• validity of an arbitration clause• “clause compromissoire” (in advance of a dispute) v.

“compromis”• court´s holding – invalid: the names of the arbitrators

not given• grounds for decision – protection of weaker parties

(adhesion contract)

• mistrust of arbitration

• Prunier rule = nullifying all arbitration clauses concluded before

the dispute• distinct legal regime of international and internal

arbitration

Prunier case

Around Europe

Austria-Hungarypermanent arbitration panel by Commercial and

industrial Chamber1895 – civil procedure act

responsive to arbitrationCzechoslovakia –this act into national law in 1918

Germany, Belgium, Netherlandsopen to arbitration (unlike France)

United States• earliest days of European settlement

• difficulties resolving disputes

• New Amsterdam (New York)• Dutch settlers: mandatory and consensual arbitration.• different development (world business center)

• colonies • hostility towards arbitration until 1833

• 1925 Federal Arbitration Act • hostility fully overcome in the early 20th century• in force until today

Internation Commercial Arbitration

arbitration = rival of national courts → arbitration developed on international levelthe growth: continental Europe in the 1920s

Geneva Convention & Geneva Protocol

Geneva Protocol on Arbitration Clauses (1923)Geneva Convention for the Execution of

Foreign Arbitral Awards (1927)

New York Convention (1958)

recognition and enforcement of foreign arbitral awards

referral by a court to arbitrationwww.newyorkconvention.org

UNCITRAL Model Law

Systems of justice• delegated: legitimacy - the state justice

system• parallel: separate tracks of business dispute

and formal state justice• abandoned: little role of judicial institutions

Today’s reality

A) less supportive national legislations▪ low practical experience ▪ potential to support v. readiness of courtsB) supportive Europe, North America, parts of Asia

Thank You for Your ATTENTION!

Bibliography: VÁRADY, Tibor; BÁRCELO, John J.; VON MEHREN, Arthur T. International Commercial Arbitration : A Transnational

perspective. 3rd edition. St. Paul : Thomson/West, 2006. 931 s. ISBN 0-314-16062-0.Dezalay, Yves, and Bryant G. Garth : Dealing in Virtue. Chicago: University of Chicago Press, 1996. Ch. 10, pp. 197-

218.EMERSON, Frank D. History of Arbitration Practice and Law. Clevelant St. Law Review. 1970, 19, s. 155-165. WOLAVER, Earl S. . The Historical Background of Commercial Arbitration. The University of Pennsylvania Law

Review. 1934 , 83, 2, s. 132-146 . Dostupný také z WWW: <http://www.jstor.org/stable/3308189?seq=3>.DE VRIES, Henry P. . International Commercial Arbitration: A Contractual Substitute for National Courts. Tulane

Law Review. 1982-1983, 57, s. 42. Settlement of Disputes by Arbitration in Fifteenth-Century England. Law and History Review. 1984 , 2, s. 21-43.

Dostupný také z WWW: <http://www.jstor.org/stable/743909>.JONES, William C. An Inquiry into the History of the Adjudication of Mercantile Disputes in Great Britain and the

United States. The University of Chicago Law Review. 1958 , 25, 3, s. 445-464. Dostupný také z WWW: <http://www.jstor.org/stable/1598356>.

SOIA, Mentschikoff. Commercial Arbitration. Columbia Law Review. 1961, 61, s. 846-870.ROZEHNALOVÁ, Nadežda. Rozhodčí řízení v medzinárodním a vnitrostátním obchodním styku. 2. Praha : Aspi,

Wolter Kluwer, 2008. 388 s. ISBN 978-80-7357-324-9

Online sources: www.uncitral.com; newyorkconvention.com

Sources