Originally from: Between East and West: Essays in Honour of Ulf Franke - Hardcover
Between East and West: Essays in Honour of Ulf Franke - Electronic
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Contractual Relations in Institutional Arbitration
Patrik Schöldström
I. INTRODUCTION
The simplest institutional arbitration creates relationships between
four “participants:” two disputing parties, one arbitrator, and the arbitral
institution. Are these relationships contractual? If so, how and between
which participants are they formed? This essay discusses answers to such
questions.
It is appropriate to do this in honor of Ulf Franke, who for many
years has been so involved in arbitration in general and institutional
arbitration in particular.
Is the subject of any practical significance? Yes, it is. It is difficult to
analyze and discuss concrete problems and situations that might arise in
relationships created in institutional arbitration without an understanding
of the rights and duties and powers that each participant has towards
other participants. An example of a concrete situation is where after the
award one of the disputing parties wishes to bring an action in court to
reduce the fees due to the arbitrators as fixed by the arbitral institution.
Should the party sue the arbitral institution or the arbitrators, or maybe all
of them? Would it be a good defense for the institution or the arbitrators to
say, in effect, “You have sued the wrong defendant”? Another example of
a concrete problem has to do with tax law, such as VAT. Does an arbitrator
in institutional arbitration provide services to the institution or to the
disputing parties? In other words, who is the arbitrator’s counterpart for
VAT purposes? Similarly, who is the arbitrator’s employer for income tax
purposes: the disputing parties or the arbitral institution? A final example
concerns insurance; the cover and cost of a participant’s policy may be
different depending on the identity of the counterpart.
II. BACKGROUND
It has been said that institutional arbitration gives rise to a triangle of
relationships, all of them not necessarily contractual, between the
disputing parties as a collective, the arbitrator, and the arbitral institution.
About the Author:
Dr. Patrik Schöldström has been a Court of Appeal Judge in the Svea Court of Appeal, Stockholm, since 2008. He was previously in private practice, specializing in litigation and arbitration as counsel and arbitrator. His doctoral thesis, “The Arbitrator’s Mandate,” was published in 1998.
