Three factors generate unpredictability in arbitration:
diversity, discretion, and decision-making dynamics.
The increased diversity of tribunals and the greater exercise of
discretion probably make predicting outcomes more difficult, but it
appears that is a price parties are prepared to pay.
That was the conclusion of Hilary Heilbron QC, who gave the 14th
Annual Clayton Utz / University Of Sydney International Arbitration
Lecture, "Dynamics, Discretion And Diversity ? A Recipe For
Unpredictability In International Arbitration?" to 200 members
of Australia's international arbitration community at the
Federal Court of Australia's NSW Registry on Wednesday 25
November. They were joined virtually by a global audience, who
watched a live stream of the lecture.
The annual Clayton Utz and University of Sydney International
Arbitration Lecture is designed to promote and support the
development and study of international arbitration and
international dispute resolution in Australia and the Asia-Pacific
In a stimulating lecture, Ms Heilbron drew on her wealth of
experience and expertise in commercial disputes and international
arbitration to identify three factors which generate
unpredictability in arbitration: diversity, discretion, and
The greater embrace of international arbitration globally has
meant the historic perception of international arbitration as being
a few well-known arbitrators from the West trying disputes between
Western countries is no longer common; Ms Heilbron said "today
we find tribunals composed of arbitrators coming from an
increasingly wide trans-global, multi-ethnic and diverse gender,
These arbitrators also enjoy wide powers under institutional
rules. Ms Heilbron argued that "in the context of the exercise
of any of these discretionary decisions and in relation to the
ultimate conclusory decision on the factual and/or legal merits,
the inter-play and dynamics of the members of the tribunal is
therefore critical. "
This potential for uncertainty of outcomes, she suggested, will
Nonetheless, while "legal prediction will remain an art,
not a science", this does not mean that improvements are
impossible. Ms Heilbron argued that this potential uncertainty
could be reduced, and sketched out three reform options:
the introduction of a more robust appellate system to provide
the provision of more reported redacted decisions by
improvements in the method of appointing tribunals, and in
particular the presiding arbitrator.
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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