Arbitrating in a World of Communicative

Reason

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by P A O L O ESPOSITO & J A C O P O M A R T I R E *

ABSTRACT
The present article advocates for a reworking of the theoretical foundations of international
arbitration. With the aim of strengthening legitimacy and improving its dispute resolution
efficiency, the authors argue in favour of a different approach to international arbitration's
practices. Taking in consideration the transnational and trans-cultural nature of international
arbitration they claim for a framework that would be more inclusive of parties' different
socio-legal systems of reference, the latter suggested as the proper foundation upon which to
build a system respectful of the parties' expectations. Jiirgen Habermas's discourse theory
provides the theoretical outline for a communicative dynamics that would move international
arbitration towards a new dimension of mutual understanding among parties' diverging
backgrounds. The authors explore the feasibility of such project and, suggesting possible
guidelines, hope to open up a debate about the future perspectives of international arbitration.

I. INTRODUCTION

In the context of today's ever-growing importance of international arbitration in

the global business environment, the present article aims at proposing a new 'social
theory oriented' approach to this phenomenon, whose significance is no longer
merely legal.'

Paolo Esposito, awocato (Italy), solicitor of the Supreme Court of England and Wales, LL.M., FCIArb, Senior
Associate at Studio Legale Esposito (London). Jacopo Martire, LL.M., PhD candidate in Law at King's
College London.
1
It must be acknowledged that the phenomenon of international arbitration has not been entirely neglected by
social theorists and socio-legal analysis, see e.g. G. Teubner (ed.), Global law without a State, Studies in Modern Law
and Policy (Dartmouth 1997); Y. Dezalay & B. Garth, Dealing in Virtue: International Commercial Arbitration and the
construction ofa transnational legal order (University of Chicago Press 1996). Available studies, however, do not offer
a sufficient normative basis for the consolidation and further development of the field at stake in the face of
its fast-changing legal and increasingly multicultural environment. As it will be clear in the following analysis,
the present article aims at filling precisely that gap by suggesting a new theoretical framework for international
arbitration that is responsive to its fluid social, cultural and economic community.

ARBITRATION INTERNATIONAL, Vol. 28, No. 2

©LCIA, 2012

325
326 Arbitration International, Volume 28 Issue 2

As a matter of fact, a social theory approach to international arbitration could

help us to better understand and put into practice such an autopoietic, private-
based legal phenomenon which brings together different, and sometimes reputedly
irreconcilable, cultural elements. 2 International arbitration is essentially an

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'interculturelle'3 field. To work properly, international arbitration requires — and to a
large extent is in itself — an understanding of the diverse motivations of the actors
in play that could both legitimize and rationalize the system. To this end,
arbitration needs to be a process aimed at understanding the differing parties'
cultures and backgrounds in order to handle them properly. That may be the right
way to achieve a satisfactory dispute resolution framework capable of fully meeting
the users' expectations. 4
Following a social theory oriented approach 5 this article focuses on bringing
into light the possible, still unexplored, link between international arbitration and
some theories developed in the social field, namely Jiirgen Habermas's theory of
communicative action. 6 As a consequence of an equally inductive and deductive
investigation7 (although necessarily conducted ex post),8 we use international
arbitration as a case study for Habermas's theories that in turn, in the authors'

2
'Cultural elements' is a broad expression encompassing several components. In particular, the conflict of legal
traditions, typically common law versus civil law, and the impact it has on the proceedings has been repeatedly
stressed as a central issue in international arbitration. Our standpoint is different as we consider the broader
cultural element (of which the legal culture is an appendix) and its social element (which may not be
technicalities of the legal proceedings themselves, but which are still elements deeply affecting the proceeding
itself). Therefore, we will not consider discuss the differences legal concepts may take under the different legal
cultures e.g. the concepts of the role of the judge/arbitrator, independence etc, although we acknowledge and
agree that these legal traditions, in tandem with the cultural influences discussed in this article, have not to be
ignored for the benefit of arbitration itself (see e.g. L. Trakman 'Legal Traditions' and International Commercial
Arbitration, Am, Rev. Intl. Arb. , Vol. 17, 1 (Spring 2007). Understanding the different parties' cultures and
backgrounds and handling them properly is the right way to avoid international arbitration suffering from an
inability to meet the users' expectations. And social theory can be the right tool for achieving such a result.
P. Lalive, Sur Des Dimensions Culturelles De L'Arbitrage International, in Theory ofInternational Law at the Threshold of th
21" Century, Essays in Honour of Krzysztof Skubiszewski 772 (J. Makarczyk and K. Skubiszewski eds., Kluwer Law
International 1996).
4
Infra n. 35.
5
Intended to bring into light the socio-political elements underpinning the arbitration practice, rather than the
strictly legal ones.
6
See J. Habermas, The Theory of Communicative Action (Polity 1984). In a nutshell, communicative action may be
defined as that practice where 'coordinating achievements in the process of interaction are tied to an insight
which is tendentially based in linguistic communication' (G. Dux, Communicative Action 95 (A. Honneth & H.
Hansjoas eds., Polity Press 1991)).
7
In plain language, our investigation will move from major pragmatic issues arising out of the international
arbitration practice to highlight that they have already been addressed elsewhere by social theories (inductive
stage). Habermas's analysis of communicative action in the public sphere, more specifically, will help us better
understand and maybe offer a practical and viable solution to those very same problems (deductive stage).
8
'Necessarily' because international arbitration, rather than a natural or conceptually coherent order, is more
a mechanism made of several fragments fixed and improved by practice. Unlike national legal orders,
elaborated through sociological and philosophical theories reflecting the local peculiarities of the communal
gentes, the discipline of international arbitration — as we understand it in the modern vision — arises as a
consequence of the cross-border business life. It becomes established by means of the day-by-day practice,
subsequently followed by analytical studies which necessarily focused on the already established practice for
elaborating a theoretical matrix.
 Arbitrating in a World of Communicative Reason 327

view, could provide a new theoretical understanding of international arbitration

practices.

II. D O E S S U C H A N I N V E S T I G A T I O N R E A L L Y M A T T E R ?

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The conflict of cultures, in the same way as the conflict of rights and laws, has
always been the bedrock of the international arbitration mare magnum. Although
sometimes overlooked, it was long ago pointed out that conflict of cultures and
cultural differences carries a greater importance than most businessmen and
practitioners suspect, and may often be a decisive factor.9
It is generally accepted that international arbitration is nowadays the preferred
method of resolving international commercial disputes, 10 its practice embracing
virtually all nations and cultures. This widespread recourse to arbitration is
commonly explained by the assumption that it is a more neutral forum than a
national court. 11 Nulla quaestio. But what neutrality should really mean is not just
absence of bias or prejudice towards a party. 12 Melius, the concept of neutrality
should be understood as the absence of predominant ethical and cultural standards
of a particular participant, and as the capacity of the system's participants to
mitigate local differences and accommodate the legitimate expectations of all the
parties by means of the adoption of an attitude — formal and substantial — that
respects the arbitration's multicultural context. International arbitration has to be
considered neutral because it is defacto capable of neutralizing the cultural-clash so
often present in international disputes. 13
From this naturally flows the necessity of establishing a process of achieving
mutual understanding by means of a renewed cultural knowledge. The parochial
approach of state-courts has to be resisted in a field where the participants to the
process and the elements to be weighted in it all come from different legal,

See P. Lalive, Cultural Differences and International Arbitration, 9 Euromoney 13—15 (1995). As trite as it might be,
the vital role plaid by cultural elements in the acceptance and proper functioning of international arbitration
is easy to recognize, but difficult to accomplish.
See, e.g., DJ. McLean, Toward a New International Dispute Resolution Paradigm: Assessing The Congruent Evolution of
Globalization and International Arbitration, 40 U. Pa. J. Int'l L. 1087-1097 (2009), acknowledging, at 1087, that
'traditional international litigation has given way to international arbitration as the preferred and fastest-
growing method of cross-border dispute resolution'. More generally, see the School of International
Arbitration, Queen Mary University of London survey International Arbitration: Corporate Attitudes and Practice
(2008), sponsored by PWC PricewaterhouseCoopers, i, Prof. L. Mistelis' introduction.
See e.g., C. Borris, in Conflicting Legal Cultures in Commercial Arbitration, Old Issues and Mew Trends 18 (S. Frommel
& B. Rider eds., Kluwer Law International 1999); see also Lew, Mistelis & Kroll, Comparative International
Commercial Arbitration (Kluwer Law International 2003), stating at 6 that '[t]he neutrality and independence of
the arbitration process, established within the context of a neutral venue, and not belonging to any national
system, is a real attraction for the parties for international arbitration as a system to resolve disputes arising
from international transactions'.
For this common understanding of neutral tribunal and forum see e.g., A. Redfern & M. Hunter, Law and
Practice of International Commercial Arbitration 22 (4th ed., Thomson Sweet & Maxwell 2004). See also G. Born,
International Commercial Arbitration 72—73 (Kluwer Law International 2009).
It is paramount to avoid the 'lack of understanding between legal systems, a certain mutual isolation'
(I. Fadlallah, Arbitration Facing Conflicts of Culture, 25 Arb. Intl. 303-317, 303 (2009)).
328 Arbitration International, Volume 28 Issue 2

economic, social, cultural and linguistic backgrounds, 14 thus bringing into the
proceedings different collective values which may often result in harsh conflicts.
This encounter in a 'nowhere land' 15 requires the adoption of a mental and
behavioral attitude oriented at sustaining a rational and neutral approach toward

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communicative action. 16 And because every process of understanding takes places
against the background of a culturally ingrained pre-understanding, it is crucial to
adopt a change of perspective: in plain language, it is necessary to adopt a stance
that would allow all the participants to include the position of the others, by
making the others' interpretation of the situation the viewers' own. 17 It has been
pointed out that the internationality of arbitration, being one of its essential
features, is generally overlooked because of the 'tendency of many or most
practitioners to think along national lines, practices, procedures and laws, in their
habit to transpose to transnational situations their national (or provincial) methods
and solutions, and/or attempt to impose them on foreign parties'. 18

'International commercial arbitration knows of no frontiers and thus innumerable physical and legal entities,
of very different nationalities and distinct cultural origins, jointly participate more and more each day in its
practice' (B. Cremandes, Conflicting Legal Cultures in Commercial Arbitration, Old Issues and Mew Trends 150
(S. Frommel & B. Rider eds., Kluwer Law International 1999).
Intended to be an area not under the state-control - at the pre-award stage - as well as not under the control
of any particular participant to the process, but of all of them jointly and mutually. O n a more practical side,
'cultural familiarity' is an aspect that corporations take into account in selecting the seat of arbitrations, see
the '2010 International Arbitration Survey: Choices in International Arbitration', School of International
Arbitration, Queen Mary University of London, sponsored by White & Case, pp. 18-19. More generally
and in relation to the transnational nature of the arbitral process, see also E. Gaillard, Aspects Philosophiques du
Droit de I'Arbitrage International, Academie de Droit International de La Haye (2008); J.D. Lew, Achieving the
Dream: Autonomous Arbitration, 22 Arb. Int. 179 (2006); J. Paulsson, Arbitration Unbound: Award Detachedfromthe
Law of its Country of Origin, 30 Ind. Comp. L. Q. 358-387 (1981).
Such approach cannot be achieved by 'culturally biased' national courts, see below at p. 11. That is also the
reason with it has been pointed out that 'for developing countries to accept a European or American
jurisdiction frequently involves a radical change of legal system and of culture', see M. Rubino Sammartano,
Developing Countries vis-a-vis International Arbitration, 13 J. Intl. Arb. 21—36(1996).
As a matter of practicality, practitioners involved in international arbitration should take advantage of the
businessmen' negotiating practice and apply the art of the deal to people, i.e. fully investigate the contracting
parties background and feel comfortable with it for the purpose of successfully manage the deal. Following
this approach, it would be possible to adequately understand the parties' expectations as to the conduct of
arbitration proceedings, and thus reach at the outset an agreement as to the best way to meet their
expectations, i.e. by agreeing on the conduct of the proceedings which is respectful of their background and
dispute-resolution-traditions, in order — amongst others - to avoid unpleasant surprises during the
proceedings.
See P. Lalive, Cultural Differences and International Arbitration, 9 Euromoney 13-15 (1995). This kind of problem
is well known in the international community, although no theoretical study - that has necessarily to be
conducted under a comparative perspective - has addressed the issue so far. Similarly, see M. Rubino
Sammartano, Developing Countries vis-a-vis International Arbitration, 13 J. Intl. Arb. 21-36 (1996). ('In international
disputes, the parties will often belong to different jurisdictions and will have different cultures. If the
arbitrator measures their conduct and construes what they say as if they were his neighbours, he risks to come
to deeply wrong conclusions. Furthermore, if one of the parties shares his culture, or a conduct close to his
own, his construction may involuntarily favour that side. An open mind on the part of the arbitrator and
constructive dialogue, which have been referred to above, can help to avoid this outcome. T h e parties, too,
should not expect that international proceedings be conducted as their domestic ones would be, and they
must understand in time that the proceedings are different, in order to be able to cope with the
consequences.')
 Arbitrating in a World of Communicative Reason 329

Cross-cultural analysis and awareness should be the starting point before any
strategy or action in international dispute takes place. Culture, not merely the legal
one, is no more than the expression of mixing elements, rooted in religious, social,
political, linguistic and other related traditions that irretrievably reflect and are an

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expression of local perspectives. Within the context of the current globalized
economy, 'international arbitration is a direct witness of the interaction among
different legal cultures.' 19 Therefore, in such an international context, we should
aim at mitigating these differences without imposing the adoption of one over the
others. And even if the participation of jurists and parties from very different
backgrounds and contexts has already caused a surprising evolution in the way
arbitration is dealt with, alongside this evolution a continuous and genuine effort
should be made by arbitrators 'to achieve effective communication with both the
parties in conflict and their lawyers' in order to 'overcome the inevitable conflicts
of approach which are encountered daily during arbitration proceedings'. 20 Thus,
behaviour and attitudes aimed at achieving a mutually interactive communication
are fundamental to this end. 21
Understanding different cultures would inevitably generate a better
appreciation of how they impact on law (and the other way round) and on the way
businesses are dealt with and evolve around the globe. For example, informal
business relationships, local trade usages, etc. are direct consequences and
expression of local cultures, which will have to be given serious consideration when
such aspects come into play in the course of an arbitration proceeding. Further,
arbitration itself is unavoidably affected (whether by way of incorporating or being
influenced by them) by disparate legal cultures (e.g. common law and civil law
traditions), which will have an effect on the way the proceeding is dealt with at
different stages (e.g. discovery). As a result, the arbitration practice, being an
amalgam of several cultural elements, would necessarily need to respect cultural
differences, as arbitration is in itself a reflection of multicultural elements. 22
Amongst others, parties want the dispute to be handled in a proactive way, in a
manner with which they feel at ease because it is respectful of their cultural
background and does not impose on them a different, alien cultural model. That
should easily fall within the concept of a correct understanding of the parties'
legitimate needs; and, although this is generally claimed to be a feature of the
arbitration community, it is seldom taken into account. If it is true that
'harmonization of arbitration has led to a greater professionalism among those

19
B. Cremandes, Conflicting Legal Cultures in Commercial Arbitration, Old Issues and New Trends 151 (S. Frommel &
B. Rider eds., Kluwer Law International 1999).
20
Id.
Although no general rules can be set down, as such 'attitudinaT aspects are mainly at the discretion of each
individual participating in the proceeding, it surely would be beneficial (and auspicious) at least to draw up
a set of general guidelines, especially for the benefit of young practitioners, thereby supporting a notion that
otherwise would be only acquired through long experience. Infra n. 73 (see conclusions)
22
Supra n. 2; infra n. 29.
330 Arbitration International, Volume 28 Issue 2

who engage in it' 23 as well as having contributed to the creation of an

'international arbitration culture encompassing the essential of domestic and
international philosophies', 24 this is still the result of individualistic attitudes and
professional understanding by arbitrators and counsels, more than the result of a

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reasoned theoretical approach. 25 Therefore, as Gremandes has suggested26, the
'way to overcome the conflict of legal cultures is an increased interactive approach
among those who participate in each single arbitration proceeding', which
amounts to no more than the pursuit of effective communication and interaction
with both the parties to the dispute and their lawyers. Interactive communication
and integrative thinking should be considered a proper duty of arbitrators and
counsels; in the end, commercial arbitration is conducted for the benefit of its users
and without a proper and fuller understanding of the parties' position (not only
substantive as to the matter at stake, but also to their personal socio-cultural and
economical background and environment) the arbitration-mechanism will not
render a properly beneficial service to them. 27
It is therefore necessary to understand the parties' broad background, focusing
on both procedural and substantive differences, on personal and experiential
variations in communication style, perceptions and mores. Once such a perspective
has been obtained, it has then to be transposed into the global arena where the
dispute resolution takes place. It has been stated that '[w]hen arbitration becomes
transnational, the cultural unity is disrupted and the resulting kaleidoscope of
different cultural patterns gives rise to a multiplicity of images affecting each stage
of the arbitration proceeding.' 28 Although it has been stressed that 'in international
arbitration, where the activities giving rise to disputes are transnational or global in
nature and where the participants come from different national and legal
backgrounds or cultures, divergences are not desirable',29 it is a fact that
international arbitration is all about differences which are endemic to the system it

B. Cremandes, Conflicting Legal Cultures in Commercial Arbitration, Old Issues and New Trends 150 (S. Frommel &
B. Rider eds., Kluwer Law International 1999).
/rf. at 151.
As to the different procedural patterns, it has been pointed out that '[t]he approach of most experienced
advocates and arbitrators is rather more case-driven than ideological', see J. Lew & L. Shore, International
Commercial Arbitration: Harmonizing Cultural Differences, 54, Disp. Resol. J. 33—38 (1999).
B. Cremandes, Conflicting Legal Cultures in Commercial Arbitration, Old Issues and New Trends 151 (S. Frommel &
B. Rider eds., Kluwer Law International 1999).
Disregarding these elements would just contradict the evolution towards arbitration. It is generally accepted
that arbitration benefited in its growth from the litigants' perception of unfamiliar rules, different legal
customs, languages and traditions, bias, challenges to enforcement and the inefficiency of national courts,
which generated the request for a 'global, rather than parochial, adjudication' (see e.g. DJ. McLean, Toward
a New International Dispute Resolution Paradigm: Assessing The Congruent Evolution of Globalization and Internationa
Arbitration, 40 U. Pa. J. Int'l L. 1087-1097, 1089 (2009)).
B. Cremandes, Conflicting Legal Cultures in Commercial Arbitration, Old Issues and New Trends 151 (S. Frommel &
B. Rider eds., Kluwer Law International 1999).
G. Kaufmann-Kohler, When Arbitrators Facilitate Settlement: Towards a Transnational Standard, 25 Arb. Intl.
187-205, 188 (2009). Divergences might instead not be desirable when affecting the way different cultural
elements are handled — for that reason, a normative development, also by way of guidelines, would be
propitious (see conclusive paragraph below).
 Arbitrating in a World of Communicative Reason 331

operates within. 30 These very differences - reflecting the different origins,

cultures, laws etc. of the participants to the dispute resolution mechanism at stake
— and the attempt to solve them cause international arbitration to exist.31 Its
practice, therefore, must take into account and respect those heterogeneous

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elements, 32 integrate them as far as possible, and promote cultural harmonization
by adopting an interactive approach, which is the desired end of such an
integrative way of thinking. 33 For that purpose, a theoretical foundation would
strengthen the practice and offer a better evaluation of the social phenomena
behind these differences.

III. T O W A R D S A N E W U N D E R S T A N D I N G O F
INTERNATIONAL ARBITRATION
We have seen that a major element in the establishment and success of
international arbitration lies in the need of parties with different legal, social,
economic and cultural backgrounds to find a 'common ground' for the resolution
of their disputes. We have also seen that the classical setting provided by
international arbitration often falls short of such demands. More precisely, we have
located the problematic point of these shortcomings in the unfortunate
dependency of international arbitration on attitudes peculiar to single national
legal systems. These systems, while widely used because of traditional stances and
instrumental purposes, cannot represent a satisfactory 'common ground' as they
are the most representative expression of a national social and legal culture. Our

As already pointed out, differences are a normal consequence of the parties being 'drawn from jurisdictions
across the world, with very different legal, political, cultural and ethical systems'. For these differences
'arbitration provides a forum in which all of these interests can be protected and respected, whilst
determining the most appropriate way to resolve the dispute between the parties' (Lew, Mistelis & Kroll,
Comparative International Commercial Arbitration 6 (Kluwer Law International 2003).
Again, parties seek in international arbitration a 'culturally-biased free' dispute resolution mechanism
capable of overcoming the local influences, peculiarities and hardships of national litigation. In a (business)
world untouched by municipal differences (in its broader meaning) there would probably be no reason for
international arbitration to exist as national litigation would suffice. Supra nn. 27 and 30.
Although the necessity of an 'international arbitration culture encompassing the essentials of domestic and
international philosophies' (B. Cremandes, Conflicting Legal Cultures in Commercial Arbitration, Old Issues and Mew
Trends 151 (S. Frommel & B. Rider eds., Kluwer Law International 1999) has been stressed, there is the risk
that such an arbitration culture would then prevail over the parties' ones and then again be perceived as
alien. There is the risk that such an arbitration culture would negatively impact the parties' perception and
acceptance of international arbitration in the same way as litigation in court-rooms (where national stances
prevail). Therefore, rather than much more than create and impose another culture, it would be preferable
to stimulate an interactive approach, rooted into practical experience and supported by a social theory
oriented approach. If an arbitration culture emerges and becomes widely applicable, it will necessarily be
considered ex post and consisting of an amalgam of variable legal cultures. But then it would not be a
pre-existing arbitral culture to be considered, rather one or the several cultures encompassed into the arbitral
'melting-pot'.
It is our firm assumption that international arbitration is all about managing people. Therefore, it is perfectly
possible to adopt - mutatis mutandis - some important management notion, e.g. the concept of integrative
thinking, defined as the 'ability to face constructively the tension of opposing ideas and, instead of choosing
one at the expense of the other, generate a creative resolution of the tension in the form of a new idea that
contains elements of the opposing ideas but it is superior to each' (R. Martin, The Opposable Mind 15 (Harvard
Business Press 2009)).
332 Arbitration International, Volume 28 Issue 2

aim in this section is to take a step back from this paradox in international
arbitration (i.e. if we have to find a common ground why do we resort to national
attitudes?) 34 and address social theory in order to suggest a new approach that
would be more coherent with the inherent logic and purpose of international

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arbitration. Our claim is that, if we truly want to develop international arbitration
in a harmonious way consistent with its founding principles 35 we need a theoretical
model that could allow us to incorporate in such dispute resolution's discourse the
different backgrounds of the acting parties and bridge the gap between diverse and
often conflicting (social, legal, economic) cultures. The instrument that could help
us to achieve this complex goal is, in our opinion, Habermas's theory of
communicative action. Our suggestion is that by applying Habermas's ideas to the
dynamics of international arbitration we will be able to build a better, more
consistent and flourishing practice of dispute resolution, developed in compliance
with its transnational nature. That would eventually lead to the appreciation of a
dispute resolution mechanism that, by picking up elements from several diverse
and coexisting social, ethical and cultural stances (but without exclusively
identifying itself with any of them) stands alone as a truly cross-border, cross-
cultural, transnational dispute resolution mechanism that someone has already,
but for a different reasons, called 'floating'.36
In order to support our argument we need to briefly sketch the contours of
Habermas's theory of communicative action. 37 Habermas develops his concept of
communicative action out of the pragmatic rationality of language. The starting
point of his theory is that when people talk to each other, they engage in a specific
'performative attitude'. Language, being the privileged means of communication

As to the 'tendency of many or most practitioners to think along national lines' supra n. 18. See also
M. Rubino Sammartano, Developing Countries vis-a-vis International Arbitration, 13 J. Intl. Arb. 21 -36 (1996) on the
'tendency of some legal systems and arbitrators to nationalize the arbitral proceedings'.
And mostly in accordance with parties' expectations, being one of the main features of international
arbitration. See e.g. G. Born, International Commercial Arbitration (Kluwer Law International 2009), 73-74
('National courts apply local procedural rules, which are often designed for particular judicial
frameworks. . . and which therefore are usually unfamiliar to, and often ill-suited for, parties from different
legal traditions. In contrast, international arbitration seeks to avoid the application of domestic litigation rules
and instead to apply internationally-neutral procedures tailored to the parties' expectations and dispute' (emphasis
added), at 73. Similarly, '. . .parties' expectations of an efficient, centralized dispute resolution mechanism',
(emphasis added) at 423).
Sir Michael Kerr in BankMellat v. Helliniki Techniki [1984] 1 Q.B. 291 at 301 on English law's rejection of a
'concept of arbitral procedures floating in the transnational firmament'. For a clear position on the concept
of delocalized (a-national or floating) arbitration, see J.D. Lew, Achieving the Dream: Autonomous Arbitration, 22
Arb. Int. 179 (2006). More generally, see G. Born, International Commercial Arbitration 1299—1301 (Kluwer Law
International 2009).
For the sake of clarity, we use the expression floating, autonomous and/or stateless arbitration in a
different manner that is consistent with the argument put forward in this article. We refer to the cultural
autonomy of arbitration, thus favouring a culturally transnational (and therefore a-national) attitude and a
non-parochial (stateless) attitude of its players. To this end, we claim that floating and a-national arbitration
is no more and no less than the very essence and nature of international arbitration. A truly international
arbitration lives in a transnational world of communicative actions.
The present article is obviously no place for a complete assessment of the complex and multilayered theory
of Habermas and the following lines will deal with it only in broad terms, so to introduce the lay reader to
its fundamental elements. Similarly, due to practical constraints, this article may risk making some superficial
generalizations of the cultural differences' subject.
 Arbitrating in a World of Communicative Reason 333

and coordination amongst humans, requires for its meaningful functioning a

specific practical stance by the speaker. Speakers need to use words, phrases and
discourses to reach a mutual understanding of respective positions, a task that is
the intrinsic goal of any language. Rationality, in this context, is seen as a structural

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element of language, not so much as the possession of appropriate knowledge,
rather as 'how speaking and acting subjects acquire and use knowledge'.38
Argumentation, in particular, assumes a fundamental role in relating individuals:
'[w]e use the term argumentation for that type of speech in which participants
thematize contested validity claims and attempt to vindicate or criticize them
through argumentation.' 39 In other words, when we use language we are acting
according to certain patterns that allow us to convey and to accept different moral
and cultural values. As a consequence, in communicative action

speakers coordinate their action and pursuit of individual (or joint) goals on the basis of a shared
understanding that the goals are inherendy reasonable or merit-worthy ( . . . ) communicative
action [Thus] succeeds insofar as the actors freely agree that their goal (or goals) is reasonable,
that it merits cooperative behaviour. 40

Communicative action could therefore be defined as:

an inherendy consensual form of social coordination in which actors 'mobilize the potential for
rationality' given with ordinary language and its telos of rationally motivated agreement. 41

Reverting to international arbitration, we see that the concept of communicative

action applied to cross-cultural disputes could respond to the 'ideal demand on a
cooperative procedure of theory formation'.42 A practice of international
arbitration that would really strive for rational integration and a more
comprehensive acceptance of its rules by the parties, should embrace, in our
opinion, such discourse theory. A practice of communicative action in
international arbitration would fruitfully bind together the structure of the
argumentative process and the parties' rational acceptability of the judicial
decision; this as a result of a procedure that is culturally sympathetic to and
respectful of the participants' different background.
On a broader basis, a communicative understanding of legal, cultural and social
pluralism would also assist in the creation of a new legal common sense. 43 It has
been correctly pointed out, although for a slightly different purpose, that '[t]he
driving force in international commercial arbitration has been the physical person,

J. Habermas, The Theory of Communicative Action 11 (Polity 1984).

39
Id. 18.
40
J. Bohman & W. Rehg, Stanford Encyclopedia of Philosophy, available at http://plato.stanford.edu/entries/
habermas/ last visited on Nov. 18, 2011.
41
Id.
J. Habermas, Between Facts and Norms: Contributions to a Discourse Theory of Law and Democracy 226 (MIT Press
1996).
See e.g., B. De Sousa Santos, Law: A Map of Misreading. Toward a Postmodern Conception ofLaw, 14 J. L. & Socy.
279-302 (1987).
334 Arbitration International, Volume 28 Issue 2

rather than the state.' 44 If this is the case then why not follow a path of
communicative action?
The starting point for such a project is represented by Habermas's discourse
principle which states: '[j]ust those action norms are valid to which all possibly

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affected persons could agree as participants in rational discourses'. 45 The
application of this principle to the legal context would lead to a situation where
'only those [regulations] may claim legitimacy that can meet with the assent of all
[parties] in a discursive process of legislation that in turn has been legally
constituted'. 46 Such a powerful scheme of legitimization 47 is exactly what is needed
in international arbitration. 48 Granting the parties a space of 'communicative
freedom' where they would be able to coordinate 'their action plans on the basis of
a consensus that depends in turn on their reciprocally taking positions on, and
intersubjectively recognizing, validity claims' 49 the practice of international
arbitration would finally fmd from within a much needed legitimization stemming
from a truly inclusive deliberative dynamic respectful of the diverse legal, social
and cultural backgrounds of the members of the international community.
A practice of such a nature would involve a rational, committed and active
engagement with the system by the participants, as opposed to the passive and
often merely mechanical reception of national systems. This would build a legal
discourse based on the mutual understanding and acceptance of divergent - not
only legal but also moral, ethical, political and social - positions where parties have
a true interactive attitude in the formation and determination of the outcome of
the decision by actively participating in the process they have tailored for
themselves. In this way legal norms would be supported by a broad spectrum of
reasons 50 going beyond the mere instrumental use of national legislations.

IV. A R B I T R A T I N G I N A W O R L D O F
COMMUNICATIVE REASONS
It is important that disputes are settled peaceably. This apparent linguistic
contradiction conceals no more than one of the essential features of arbitration:
parties do not want to find themselves tied up in a strict litigation proceeding,
rather they want a self-tailored process where they can play an active role and be

I. Bantekas, The Private Dimension of the International Customary Mature of Commercial Arbitration, 25 J. Int'l Arb.
449-460, 449 (2008).
J. Habermas, Between Facts and Norms: Contributions to a Discourse Theory of Law and Democracy 107 (MIT Press
1996).
Id. 110.
That does not fall prey to a naive representation of the international commercial community but actually
makes room for a bargaining process of conflicting interests, insofar as this 'bargaining power is [ • .. ]
disciplined by its equal distribution among the parties' (id. 166).
While the parties' agreement represents the proper legal foundation of the arbitral process, the legitimating
scope of a communicative action would encompass a wider range of cultural, political, legal elements going
beyond the instrumental function of the said parties' agreement.
Id. 119.
Id. 460.
 Arbitrating in a World of Communicative Reason 335

sure that their legitimate expectations will be met as well as the cross-cultural
factors adequately considered and respected. That is an attitudinal aspect
requiring a clear identification of the parties' conditions and background in order
to let them feel confident with the bespoke dispute resolution mechanism they

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have selected. Arbitrators and counsel should therefore opt for an unfettered
approach — understand the parties by adopting a proactive attitude and so conduct
the proceeding in a way that is the result of an integrative way of thinking, so that
the parties will not perceive the mechanism as alien to them. It is an 'intelligence
work',51 burrowed into business cultures, countries and group-psychology.
What should lie at the very heart of the arbitral system and make it work is the
communication taking place among the subjects involved. Arbitration is a process
that, to function properly, has to be informed by communicative reason. The
understanding of the participants' case and its interpretation can only be properly
initiated by understanding that one's own perspective needs to take account of and
as far as possible be integrated into the other's. That is because arbitration is itself
a process of communicative actions, and therefore Habermas's theory should be
seen as the proper foundation for international arbitration.
The practical considerations identified above lead to the desirability of a
communicative discourse as the very legitimization of the system, and would be
intended as its natural justification. The interests of all those possibly affected in
the 'application discourse' 52 must work the different subjects' interpretations of the
same situation into a normatively rich description of the circumstances that does
not simply abstract from the existing differences in perception (as a question of
sensitive, non-coercive coordination of different interpretative perspectives). Here
the interpretation of the case depends on the communicative form of a discourse
pushing towards the convergence of the participants' different perspectives and
their transformation into one another, thus fundamentally stressing the
importance of an argumentative process.
It has been righdy pointed out that 'what an arbitration looks like will largely be
determined by the identity of the parties' counsel, and of the arbitrators
themselves', 53 because any arbitral tribunal is likely to 'develop its own
microculture'. 54 Although such pragmatic views are hardly objectionable, a more
general discourse should still be put forward. One of the main points on which to
focus concerns the users' confidence into the system. As we saw that differences are
the very raison d'etre of the dispute mechanism de quo, it is fundamental that such
differences are handled and managed properly: such differences should be
accepted as such without attempting to ignore or replace them with a different

See T. Walde, Efficient Management ofTransnational Disputes: Mutual Gain by Mediation or Join Loss in Litigation, 22
Arb. Intl. 205-232 (2006).
J. Habermas, Between Facts and Norms: Contributions to a Discourse Theory of Law and Democracy 229 (MIT Press
1996).
A. Scott Rau, The Culture ofAmerican Arbitration and the Lessons ofADR, a paper presented at University of Texas
2005 Conference Name, Dec. 1-2, 2005 Dallas, Texas. The article is available at www.utcle.org.
J. Paulsson, Differing Approaches to International Arbitration Procedures: A Harmonization of Basic Notions, 1 ADR
Currents, 17, 19 (1996).
336 Arbitration International, Volume 28 Issue 2

(allegedly superior) arbitration culture, 55 but at the same time integrating them in
order to avoid harsh contrasts. Therefore, a dynamic and proactive approach is
needed to overcome the possible clash of cultures which would be detrimental to
the proceeding and to the acceptance of the system by the users.

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In an ideal world parties, lawyers and arbitrators should all play as a team to
realize a culturally suitable platform for favoring interactive discussion and
communicative actions. If, on the one hand, it is in the lawyers' strategy to
exasperate every contrast (cultural and not) to their client's advantage and 'create
a fictitious image of reality suitable for the application of their professional skills',56
on the other arbitrators should constantly act as amiable compositeurs of contrasting
cultural and psychological elements in order to set up a neutral playing field, which
is necessary for a fair resolution of the dispute. This is what mostly contributed to
the creation of a solid procedural arbitral attitude. 57
But the prism of our investigation is a bit more remote and goes above and
beyond that step. As we are mainly concerned with the practical attitude that
counsels and arbitrators should take in dealing with parties (i.e. at a stage well
before any legal culture breaks through), a different state of mind should be used.
Psychological and sociological elements come into play in order to avoid that for
instance the arbitrators' cultural origin might have some relevance in the course of
the proceedings or, what is worse, in the decision-making process. That is a
pervasive issue which, although often resolved by pragmatic attitude, 58 requires a
renewed professionalism. That means that, if it is true that all participants,
including arbitrators, will bring with them their own particular political and social
views, communication styles, attitudes and perceptions in the proceedings, to make
the process work arbitrators should — as far as they can — set aside their own
personal habitus and favour everyone's effort to generate a respectful
understanding of each other's culture and attitude. 59 That is a necessary step in
order to set a favourable multicultural framework freed from incongruence and
clashes, and in which to root a proceeding that, in the parties' eyes, is not culturally
biased. Such an approach would surely meet the goal that justice must not only be
done but also be seen to be done.
Thus, our argument is closely linked with the concepts of fair trial and due
process (being the magna carta of international arbitration), which are necessarily
concerned with fair dealing as a guarantee of a correct proceeding. A trial will be

Supra n. 32.
T. Walde, Efficient Management of Transnational Disputes: Mutual Gain by Mediation or Join Loss in Litigation, 22 Arb.
Int. 205-232, 213 (2006).
It has been acknowledged that arbitration is concerned about 'manners, namely, the manner of settling legal
disputes' (C. Borris, Conflicting Legal Cultures in Commercial Arbitration, Old Issues and New Trends (S. Frommel &
B. Rider eds., Kluwer Law International 1999) 1).
Practically speaking, the idea of preserving a position on the arbitration market is a decisive factor militating
in favour of arbitrators taking a flexible attitude in order to render a good service to the parties.
Counsel, and especially arbitrators (as guardians of the fair proceeding), should make an effort to understand
the possible cultural orientations of the parties. To this end, factors to be taken into account might
encompass, e.g. individualistic or corporate attitude, assertive or caring attitude, acceptance of inequalities in
the bargaining process etc.
 Arbitrating in a World of Communicative Reason 337

fair when the disputing parties perceive they have been treated in a manner that is
respectful of their cultural, linguistic and social background. 60 That has nothing to
do with rigorous adherence to legal standards or to procedural rules, compliance
with which is strictly required in national court of the country where the dispute

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take place. There is little or no room for debating the convergence of different
socio-political, religious etc. aspects in a national court-room and therefore for
discussing a theoretical foundation of the proposed approach. 61 While the
judiciary is restricted to national boundaries, the international arbitration
community, acting in a transnational environment, has to overcome cultural
differences by handling and converging them in a harmonized, global way
reflecting the cross-border and global dispute resolution mechanism elected by the
parties.

V. C O N C L U S I O N : T O W A R D S C O M M U N I C A T I V E
A C T I O N S IN I N T E R N A T I O N A L A R B I T R A T I O N 6 2
From the arguments put forward above emerges the proposition that international
arbitration — as the dimension where a business community recognizes itself in a
dispute resolution mechanism over and above the national systems and origins — is
in itself intrinsically a transnational concept. The theory of communicative action
would provide the proper theoretical foundation of the arbitral process as well as
the basis for stressing the need to accept the transnational nature of arbitration.
This premise generates the following consequences and developments.
5.1 Arbitration is the product of a cosmopolitan culture. As such, it necessarily
must respect and reflect all cultures emerging within the system. An arbitration
culture (if it exists) cannot be imposed upon the participants nor can any

'It is also necessary for the parties to believe that they have been heard and understood in their cultural
context' (William K. Slate II, Paying Attention to "CULTURE" in International Commercial Arbitration, 3 Disp. Resol.
J. (2004) (paper delivered at the 17th ICCA Conference in Beijing, China).
It has also been pointed out that 'fairness' is a 'potentially ethical significant' aspect of conduct for 'the
arbitrator, and lawyers or other representatives in the arbitration' (C. Menkel-Meadow, Melanges en Vhonneur
de Pierre Tercier (Schulthess Medias Juridiques 2008), 883-904, at 894). And, similarly, that' .. . fairness and
justice are also factors that will affect the growing number of parties (including more diverse developing
nations) engaged in international commerce, trade, development, cooperation and political co-existence'
(ibid, 886)
E.g., where language is a cross-cultural factor, arbitration is more flexible than a national court, that must
conduct proceedings and create a record in the national language, see Malcom Wilkey, Conflicting Legal
Cultures in Commercial Arbitration, Old Issues and New Trends 82 (S. Frommel & B. Rider eds., Kluwer Law
International 1999).
While our discourse - by attempting to theoretically ground international arbitration in Habermas's theory
of communicative action - might at first glance appear to be pitched at too high level of abstraction, this
article deals with a purely pragmatic problem, and thus is far more concrete that it might seem. As a matter
of fact international arbitration generated and continues to evolve according to the parties' needs and it is
intended to meet at all time their legitimate and reasonable expectations of a dispute resolution mechanism
tailored on the specific case at stake and according to the parties' peculiar background. If not, there is the risk
of ending up in a proceeding felt to be extraneous and pretty much similar to litigation in a foreign court.
Further, and for the sake of clarity, the needs the arbitral proceeding shall be respectful of are that
genuinely of the parties, not their lawyers.
338 Arbitration International, Volume 28 Issue 2

arbitration proceeding be conducted disregarding the cultural, social etc. peculiar

background of the parties. Otherwise the proceeding, and in all likelihood the
award, will not be conducted in a way that would be respectful of and reflecting the
parties' expectations. Instead, the manner in which the proceeding is conducted

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should reflect in varying degrees the preferred cultural orientation of the parties or
a neutral one with which both parties would feel comfortable. Otherwise,
imposing on the parties an alien cultural orientation would assimilate an
international arbitration into proceedings in a domestic court, thus de facto
disregarding the parties' selection of a culturally 'supranational' forum. The point
at issue is that to the extent that international arbitration transcends proceedings
before national courts, those national (legal and non-legal) traditions should be
given up.
Our discourse is sympathetic to the creation of a 'cosmopolitan legal culture',63
which, as a combination of social and scholarly skills, necessarily needs to be
rooted into the social theory. To this extent, any attempt to impose a local,
corporate etc. culture has therefore to be resisted. Rather such an ecumenical
conciliation of all cultural traditions requires different cultures to be
acknowledged, understood, and managed appropriately in order to reach a
consensus about an appropriate platform peculiar to each proceeding, which
ideally combines the best arbitration procedures, styles, techniques and attitude. As
a consequence of such a process of harmonization of cultural elements, also the
legal clash often present in international disputes (which is often no more than one
aspect of a more general cultural conflict) will be mitigated by a focus on general
and common cultural elements.
This would also require avoidance of arbitration being excessively reliant on
both the common and civil law traditions at the expense of other legal traditions
that operate within different and changing legal cultures. If on the one hand such
reliance did offer a solid bedrock for the technical development of the arbitral
practice as it stands nowadays, 64 on the other hand it created the risk of excluding
new users who do not recognize themselves into such a tradition and fear their
cultural background might be underestimated (e.g. parties from African countries).
In sum, the risk of cultural determinism 65 must be avoided.

Y. Dezalay & B. Garth, Dealing in Virtue 97 (University of Chicago 1996).

For an investigation on how Anglo-American firms have influenced the way of conducting arbitration
proceedings (and, to some extent, the very lawyers' attitude towards the system), and a discussion concerning
the process of Americanization of arbitration see Y. Dezalay & B. Garth, Dealing in Virtue (University of
Chicago 1996). See also J. Beerbower, International Arbitration: Can We Realize the Potential?, 27 Arb. Intl., 75—90
(2011); Seidenberg, International Arbitration Loses its Grip: Are U.S. Lawyers to Blame?, 90, ABA J. 50 (2010).
Without entering into such topic and for what it matters in relation to the purpose of the present article,
it is worth mentioning that even if in many respect the Anglo-American model has been permeating the
actual arbitral practice, a unique or universal model of approach to the reality of each case cannot be said
to prevail. It is vital that practitioners are able to work in a variety of cultural scenarios and their attitude in
each case must reflect the peculiarities and the background proper of each and every single case. If not, the
conflict of cultures will not be mitigated or settled, rather ignored.
Intended as to the prevalence of a perceived dominant culture.
 Arbitrating in a World of Communicative Reason 339

In the final analysis, it is one of the participants' obligations to carefully consider

the cultural context of the dispute and to focus their attention on the social aspect
of the dispute, as perceived by the parties. At the cost of repeating ourselves, no
lawyer or arbitrator can properly understand and meet the parties' reasonable

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expectations without putting their claims in the context within which they arose —
which is not a purely legal context, it is a business context with its own peculiarities.
Again and in turn, such peculiarities are no more and no less than evidence of a
specific cultural, social, linguistic and religious background. Understanding those
peculiarities for the purpose of adopting the best tailored attitude in the course of
the arbitral proceeding is necessary for lawyers and arbitrators, if they want to
comply with their mandate to render the best service to the parties. 66 This is
exacdy a way of enhancing a 'cultivation of the process' which will enable the
participants in arbitration to 'strengthen and develop the system to improve
efficiency and outcomes'. 67 Further, it will favour the pace of international
commerce, as the participants in international arbitration are largely the same
players of the global economy. And then arbitrators will surely be able to impact
the way trades are managed — but this is an argument for another discussion...
5.2 What is more, a communicative understanding of legal, cultural and social
pluralism would, as we have already argued, be functional in the creation of a new
legal common sense, whose evolution, inter alia, would ideally lead to an
international legislative development (grounded on a sociological investigation), in
a way conforming to Habermas's concepts of communicative action. Law, in
Habermas's theory, works as a means of social integration only if produces a
legitimized system and in so far as it is able to include in its own process of
formation the diverse claim and interests of the participating subjects.68 In order to
achieve this goal and therefore to bridge the gap between the different personal
social, cultural, religious and economic identities of the parties, law needs to
perform a process of harmonization of these various dimensions that, through
adequate procedural steps will guarantee the legitimizing participation of all
subjects in the drafting of the substantive rules of the game.
Understanding the cultures of the participants in international arbitration is an
essential component to developing rules and laws suitable for the evolution of the
system. Social examination of cultural conflicts and technical cooperation should
substantiate any attempt of legislative review, thus favoring a modernization of
commercial dispute resolution that is not detached from people's confidence in

Further, when arbitrators have been empowered to decide as amiable compositeur or ex aequo et bono (or similar
formulae), the outcome of the dispute will surely also have to consider the referred cultural, social, linguistic
and general background of the parties as essential to the substantive merit of the process, and not purely for
attitudinal or procedural purposes.
D.J. McLean, Toward a New International Dispute Resolution Paradigm: Assessing the Congruent Evolution of Globalization
and International Arbitration, 40 U. Pa. J. Int'l L. 1087-1097, 1089 (2009).
See J. Habermas, Between Facts and Norms: Contributions to a Discourse Theory ofLaw and Democracy 38 (MIT Press
1996).
340 Arbitration International, Volume 28 Issue 2

it.69 As it has already been properly pointed out, '[t]he time has therefore come to
consider whether there is not a need to narrow the divergences between the
approaches to arbitration adopted by different countries'. 70
As a matter of fact, processes of harmonization have already moved in that

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direction, favouring by means of soft and hard laws the creation of— culturally and
legally — common platforms. 71 For the purpose of our discussion, the greatest
cultural-meeting and opportunity of exchange of communicative reasons could
take place in the UNCITRAL, 7 2 whose model laws, recommendations and works
are more likely to take into account the diversity of all the United Nations Member
States and their cultural differences. Within that context, international cooperation
in the dispute mechanism system would bloom thanks to the understanding and
respect for the local culture and traditions which would encourage and ensure
participation of each culture and each country in the creation of global
standards. 73 Otherwise the already perceived dominant role of Anglo-American
law firms 74 and the dominant impact of the common and civil law traditions would
be criticised as a form of 'legal imperialism'. UNCITRAL might therefore be the
proper forum and catalyst in setting global standards for international commercial
dispute resolution frameworks.
From a merely international-legislative point of view, culture is not always a
main factor in preventing implementation of newly adopted laws. A process of
learning and understanding each culture, however, is the first step in bridging the
cultural gaps in order to ease cultural conflicts in the process of law reform.

Law will not be followed without people's confidence in it. And people's confidence will be gained by the fact
that it accords with the social reality and culture.
I. Fadlallah, Arbitration Facing Conflicts of Culture, 25 Arb. Intl. 303-317, 304 (2009),
To this end, see e.g. the UNCITRAL Model Law on International Commercial Arbitration, the IBA (1)
International Code of Ethics, (2) Rules of Ethic for International Arbitrators, and (3) Rules on the Taking of
Evidence in International Commercial Arbitration etc.
Within the UNCITRAL, reforms' initiatives would have a more suitable culturally-represented surrounding
and would be ideally less obstructed by the common law-civil law divide, as might instead happen in regional
contexts where a specific culture tends to emerge and impose itself over the others.
Examples of topics that the standards of practice and guidelines for participants to the arbitration
proceedings might address include: (1) Preliminary conferences (already accepted in the common practice for
setting up the proceedings' strategy, they should also be used to understanding the parties' expectations and
then to tailor the case-development accordingly. Procedures should also reflect the parties' understanding of
the proceeding; e.g. concerning disclosure: make sure that parties understand why the tribunal opts for a
specific course of action etc.). (2) Language (a neutral and easy to understand linguistic register which fits to
the differing parties' cultural background should be chosen; e.g. attempt to use standard business
terminology; avoid colloquialisms and peculiar idioms; avoid strict technical interpretations proper of a
specific legal culture not shared by all the parties etc. Further, careful attention should be paid to the use of
body language as it generally has different meanings over the globe and, if misused, it might be perceived as
offensive). (3) Substantive law (e.g. absent parties' choice, the appropriate law(s) should also encompass what
the parties might have reasonably expected in relation to their background, see e.g. M. Blessing, Choice of
substantive law in international arbitration, 14 J. Int'l Arb. 39—66 (1997). (4) Tribunals should encourage counsel's
cooperative attitude (absent such an attitude, arbitrators should manage people in order to take the
procedural course of action that is purely in the parties' best interest). (5) Role of Arbitration Centres (they
should aim at mitigating stricdy regional-approaches by reviewing the rules in order to take into account the
cross-cultural elements or setting separate guidelines to be adopted in truly intercultural cases. Last, but not
least, Arbitration Centres should actively supervise over the execution and compliance with those standards).
See Y. Dezalay & B. Garth, Dealing in Virtue (University of Chicago 1996).
 Arbitrating in a World of Communicative Reason 341

Further, interactive communication and comparative studies of cultures will

contribute to the creation of genuinely global standards and, thus, form a global
legal culture. If so, the legal regime built on those premises will be perceived as a
tool for international business cooperation.

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And in turn, if on the one hand, disputes are generally perceived negatively as
disturbing harmony and peace in a community, on the other an international
arbitration system rooted on interculturally renovated communicative reasons
(more closely reflecting business cultures and social realities) can be positively seen
as an agreed means of reintroducing those very sentiments of harmony and peace
in the business community.
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Arbitration International, Volume 28 Issue 2
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