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In practice there are some different approaches used by arbitrators commonly because homogeneous rules, which can be followed, have not yet been given.
(i) The conflict of law rules of the forum
Some systems of law insist that an arbitral tribunal should follow the rules of conflict of the state where arbitration take place. This attitude, however, looks increasingly anachronistic.
The basis for this opinion falls in two categories, one is the assumption that a national court and an arbitrator play the same role in a legal system, in another word; the arbitrator replaces the judge of a national court. On the other hand, some authors maintain that the arbitrator derives his mandate from the authority of the State in which he conducts the arbitration and that he is bound to follow its choice of law rules. The advantages of applying the conflict of law rules of the forum are, firstly, the strict application entails the predictability and uniformity of disputes’ results; furthermore, the will of the parties is respected: by choosing the seat of arbitration, they can indirectly select the conflict of laws rules. In the real world, however, the view has been accepted that the arbitrator should not be bound to apply the same choice of law rules which bind the courts. The Model Law required the arbitral tribunal apply the conflict rules which it considers applicable. In Britain, the 1996 Arbitration Act broke with English tradition by providing that ‘the tribunal shall apply the law determined by the conflict of laws rules which it considers applicable’.
Applying the conflict of law rules of the forum does not only unaccepted in practice, for the reasons why the parties or the arbitrator choose a certain country as the seat of arbitration usually have nothing in common with the conflict of laws provisions of that country, but also be challenged upon theoretical grounds. There is a theoretical reason demonstrating a weakness of applying the conflict of law rules of the forum, namely the comparison with national judges, neglects the private character of arbitration.
(ii) Conflict rules of arbitrator’s own law
The basis of this point of view is the arbitrator has the best knowledge of his own law. But firstly I have to ask, what is arbitrator’s own law? It’s not convincing to answer since the question occurs of which test should be followed: the nationality, the domicile, or the residence of the arbitrator? This would again be circular because in order to select governing test, a kind of conflict of laws rule would be necessary. Secondly, which arbitrators’ law will be applied when the arbitral tribunal was consisted by more than one arbitrator? Thirdly, arbitrators in international commercial arbitration are almost always appointed because of their experiences with different legal systems. Fourthly, if the arbitrator is replaced by another of different nationality, should the applicable law be changed?
Sometimes, in practice, the law of nationality of arbitrator is realized the arbitrator’s own law, and the fact that parties have chosen arbitrators is to be regarded as a tacit choice of law of the nationality of arbitrator. This approach, however, is not widely accepted because the law of the nationality of the arbitrator mostly has no connection with the dispute. So if arbitrator’s own law has no connection with the dispute, why it will be authorised as the source of the conflict of law rules?
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