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5. Arbitrablity
U.S courts unfortunately use the word arbitrability interchangeably with the word Jurisdiction. It is widely accepted to mean that the inquiry whether the claims raised are prohibited by law from being resolved by arbitration—irrespective of the otherwise undoubted jurisdiction of the arbitral tribunal. Article 1(5) of the Model Law provides: This Law shall not affect any other law of this State by virtue of which certain disputes may not be submitted to arbitration or may be submitted to arbitration only according to provisions other than those of this Law. The article grants a very wide latitude to each country adopting it. It leaves sacrosanct any law or rule the country may have by virtue of which any kind of dispute is not arbitrable. It also does not affect any law under which any dispute can only be submitted to arbitration following particular provisions. Obvious instances are crimes and status. In other words, it means Model Law can be adopted by a country without sacrificing that country''s cherished “national interests”.
In the controversial issue of this article, the Law simply makes itself neutral. The mandatory rules and public policy can adopt by each country freely to limit permissive legislation. However, they are really “nebulous and fluid concepts”. Thus the international businessman or corporate entity cannot be sure that disputes arising out of a transaction at hand will be arbitrable in the countries concerned or the one with which the transaction will have the closest connection or in which the parties would have desired that the disputes be arbitrated. The parties would be forced to a detailed study of the laws of each country to ascertain their respective positions. Such variance of rules, the attendant uncertainties to foreigners, the delay and great inconvenience of ascertainment, and their effects generally, both on international business and international commercial arbitration are the very things the UNCITRAL Model Law set out to solve. It leaves the problems untouched--out of pragmatism really--in the short run. And the problem of ascertaining the rules or the position of public policy and arbitrability on a matter across several jurisdictions can indeed be a herculean task! This is because in most nations the public policy position vis- a-vis arbitrability is to be found not in statutes but in scattered case law.
In international commercial arbitration practice, certain subject matters are excluded by national laws, such as: “bankruptcy, antitrust, securities or patents,” and claims sounding in tort, competition law, trademarks, trade boycott, employment agreements, consumer transactions and matters of personal status. It is eminently arguable however that removing disputes from arbitrability is not really effective in ensuring that the standard is decided by the country. Some standard might be changed with the change of time. For example, in the Scherk V. Alberto-Clulver Co. case, the federal high court of U.S. in 1974, disputes of the international security are thought as arbitrable; Cartel Law of Switzerland 1995 regards the competition law as arbitrable. In addition, antitrust and patents are regarded as arbitrable at some extend in U.S. practice. It is not difficult to see that only the law relative to family and person’s capability is comparatively stable to be non-arbitrability. In practice, all countries have adopted more open minds and frank assessments to the other issues. Because their interests in the long run will invariably lie in a more global, friendly and free world economy, and their rules on arbitrability will gravitate towards a working uniformity. It is a main trend that the law will achieve its aim of harmonisation or uniformity of rules, just as the original intention of the Model Law.
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