International Arbitrator, Counsel, Consultant

Arbitration Blog

Topical issues.

Interpretation of Contracts - It's what we do

Given that almost every commercial arbitration turns on the contractual relationship between the parties, there is surprisingly little easily available information on how to go about interpreting this relationship.

I recently wrote an article on this issue (full article available here) in which I tried to shed some light not only on how tribunals ought to go about applying principles of contractual interpretation under English law but how counsel disregard at their peril other factors that may play upon the decision maker, namely principles of anchoring and framing.

As I note in the article interpretation of a contract is simply shorthand for determining what the parties to the contract meant when they chose that language, but, as we know from people’s different reactions to music, drama and the media, people can reach very different conclusions when faced with the same experience .

Different approaches to the conduct of arbitrations, different legal backgrounds, and different reactions to the subliminal effects of anchoring, priming and the ability or otherwise to disregard precluded evidence or argument means that counsel in international arbitration are shooting in the dark when it comes to advising clients as to how a tribunal may rule. 

Revisiting the English court decisions on contractual interpretation and looking at them through an international arbitration lens reminded me that arbitrators should not be dismissed as having a ‘black letter’ or ‘purposive’ approach, but also reinforced to me the importance of conforming to the governing law (others would disagree with me on this one). When ruling on a dispute I am constantly surprised how much I am influenced by the bargain struck by the parties and by the law that they chose to determine any disputes under. However, I am also of the view that arbitrators are not jurists and are there to decide disputes rather than to make law. Researching this article has led me to the conclusion that, certainly in relation to disputes under English law, it is possible to achieve a hallowed middle ground, being a purist (in the sense of adhering strictly to the principles of the governing law), but doing so in a commercial manner.

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