Electronic copy available at: http://ssrn.

com/abstract=2262257






Queen Mary University of London, School of Law
Legal Studies Research Paper No. 144/2013







Delocalization and Its Relevance in
Post-award Review






Loukas Mistelis







Electronic copy available at: http://ssrn.com/abstract=2262257
165
Chapter 8
Delocalization and Its Relevance in
Post-award Review
Loukas Mistelis*
INTRODUCTION
Historically, one of the most hotly debated topics in international
arbitration has been the relevance and varying degree of application of
delocalization and denationalization theories. The topic of delocalization
was heated in the 1970s and 1980s
1
and was reignited in the 2000s.
2

Aspects of the debate have focused on a closely related but not identical
theme: denationalization.
3
Denationalization assumes that no national

* LL.B., MLE, Dr. iur., Advocate (Greece) and Barrister (England); Director,
School of International Arbitration, Queen Mary University of London; Clive M.
Schmitthoff Professor of Transnational Commercial Law and Arbitration.
L.Mistelis@qmul.ac.uk
1
See JULIAN D.M. LEW, THE APPLICABLE LAW IN INTERNATIONAL
COMMERCIAL ARBITRATION 51-61 (1978); Jan Paulsson, Delocalisation of
International Commercial Arbitration: When and Why It Matters, 32 INTL &
COMP. L.Q. 53 (1983); Jan Paulsson, Arbitration Unbound: Award Detached
from the Law of its Country of Origin, 30 INTL & COMP. L.Q. 358 (1981)
[hereinafter Paulsson, Arbitration Unbound]; William W. Park, The Lex Loci
Arbitri and International Commercial Arbitration, 32 INTL & COMP. L.Q. 21
(1983); Frederick A. Mann, England Rejects Delocalised Contracts and
Arbitration, 33 INTL & COMP. L.Q. 193 (1984); Pierre Mayer, The Trend
Towards Delocalisation in the Last 100 Years, in INTERNATIONALISATION OF
INTERNATIONAL ARBITRATION 37 (Martin Hunter, Arthur Marriott & Van
Vechten Veeder eds., 1995).
2
See the discussion in Tatsuya Nakamura, The Place of Arbitration in
International Arbitration: Its Fictitious Character and Lex Arbitri, 15
MEALEYS INTL ARB. REP. 23 (2000); Tatsuya Nakamura, The Fictitious Nature
of the Place of Arbitration May Not Be Denied, 16 MEALEYS INTL ARB. REP.
22 (2001); Noah Rubins, The Arbitral Seat Is No Fiction: A Brief Reply to
Tatsuya Nakamuras Commentary, 16 MEALEYS INTL ARB. REP. 23 (2001).
3
See Klaus Lionnet, Should the Procedural Law Applicable to International
Arbitration Be Denationalised or Unified? The Answer of the UNCITRAL Model
Law, 8 J. INTL ARB. 1 (1995) (for a particular aspect of denationalization [in
relation to procedure]).
Electronic copy available at: http://ssrn.com/abstract=2262257
THE UNCITRAL MODEL LAW AFTER TWENTY-FIVE YEARS
166
system has a bearing on arbitral regulation at any level: only generally
accepted international or transnational rules are of relevance. In contrast,
delocalization focuses the discussion of the proposition that the local law
and local courts (i.e., the law of the seat or arbitration and the courts of
the seat of arbitration) have no control or regulatory competence over
international arbitration proceedings held on their territory. In other
words, arbitration is a creature of the parties, fully emancipated from law
and court review or regulation.
4

While the topic is very important and ideologically central to any
theoretical discourse about international arbitration and its regulation, the
focus may well have shifted in the last thirty to forty years, since what
has taken centre stage is the discussion about the importance of the seat.
5

This shift was compounded in particular by a wave of legislative reforms,
largely centred around the drafting of the UNCITRAL Model Law on
International Commercial Arbitration (Model Law)
6
and its various
national or other (e.g., regional) incarnations. It is the view of this author
that this is an unintended consequence of the Model Law, the drafters of
which wanted to have a clear provision on the (territorial) scope of
application of the Model Law rather than to localize arbitration. In
particular, article 1 of the Model Law was clearly intended to provide for
the instances in which the Model Law applies, thus laying down
unilateral conflict of laws rules. Arguably,
7
however, whilst the drafters

4
See Julian D.M. Lew, Achieving the Dream: Autonomous Arbitration, 22
ARB. INTL 179 (2006); EMMANUEL GAILLARD, ASPECTS PHILOSOPHIQUES DU
DROIT DE LARBITRAGE INTERNATIONAL (2008).
5
See Loukas Mistelis, Reality Test: Current State of Affairs in Theory and
Practice Relating to Lex Arbitri, in ZIVIL- UND WIRTSCHAFTSRECHT IM
EUROPISCHEN UND GLOBALEN KONTEXT / PRIVATE AND COMMERCIAL LAW IN
A EUROPEAN AND GLOBAL CONTEXT: FESTSCHRIFT FR NORBERT HORN ZUM 70
GEBURTSTAG 1005 (Klaus P. Berger et al. eds., 2006), reprinted in 17 AM. REV.
INTL ARB. 155 (2006).
6
U.N. COMMN ON INTL TRADE LAW [UNCITRAL], UNCITRAL MODEL
LAW ON INTERNATIONAL COMMERCIAL ARBITRATION 1985, WITH AMENDMENTS
AS ADOPTED IN 2006, U.N. Sales No. E.08.V.4 (2008) [hereinafter MODEL LAW].
7
See HOWARD M. HOLTZMANN & JOSEPH E. NEUHAUS, A GUIDE TO THE
UNCITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL ARBITRATION:
LEGISLATIVE HISTORY AND COMMENTARY 1, 592, 826 (1989). It appears that
the delocalization debate did not play any major role in the UNCITRAL Model
Law drafting. Quite to the contrary, the commentary clearly states that the seat
of arbitration (place in the terminology of the Model Law) determines whether
the Model Law applies; whether courts of the place will supervise, assist, or
DELOCALIZATION AND ITS RELEVANCE IN POST-AWARD REVIEW
167
never intended to denounce any concept of localization, it is undisputed
that they also wished to achieve a high level of legal certainty.
This short paper agrees with the historical evolution of the
theoretical framework and challenges the shift of the localization
discussion to the seat debate. One particular aspect it examines is the
relevance that delocalization theory had, has, and will have as far as the
review of arbitral awards is concerned. If delocalization (or
denationalization for this purpose too) is embraced, then the award
cannot be reviewed by the courts of the seat (or place) of arbitration after
it has been rendered by an arbitral tribunal, as these courts will have no
jurisdiction or interest in the arbitration proceedings and their outcome.
Accordingly, awards would only be challenged at the enforcement stage
but not at the end of the arbitration. This will be the case with so-called
anational or floating awards.
8
For some people, this is a fully
unacceptable proposition as arbitration would and should always be
under the supervisory role of courts.
9

In addressing the topic of delocalization in the context of the Model
Law and the review of arbitral awards at the end of the arbitration, this
paper first discusses briefly the evolution of the delocalization debate
(Part I) before looking to what happens after an award has been rendered
and what the impact of the law of the seat or other relevant law is (Part
II). Finally, a few conclusions are offered.
I. THE EVOLUTION OF THE DELOCALIZATION
DEBATE AND THE ROLE OF THE MODEL LAW
A. The Delocalization Debate and the Role of the Seat of
Arbitration
The delocalization debate challenges the importance of the seat of
arbitration and the relevance of the law and the courts over arbitral

both supervise and assist, the arbitration; whether the arbitration is international
or not; and where the award is being made, id. at 593.
8
See, e.g., Clive Schmitthoff, Finality of Arbitral Awards and Judicial
Review, in CONTEMPORARY PROBLEMS IN INTERNATIONAL ARBITRATION 230-40
(Julian D.M. Lew ed., 1987) [hereinafter CONTEMPORARY PROBLEMS]; Thilo
Rensmann, Anational Arbitral Awards: Legal Phenomenon or Academic
Phantom?, 15 J. INTL ARB. 37 (1998).
9
Roy Goode, The Role of the Lex Loci Arbitri in International Commercial
Arbitration, 17 ARB. INTL 19 (2001).
THE UNCITRAL MODEL LAW AFTER TWENTY-FIVE YEARS
168
proceedings within their territorial jurisdiction. The supporters of
delocalization theories challenge the importance of the seat on several
grounds. In particular:
The choice of seat is often a matter of convenience.
The choice of seat is often determined not by the parties but by the
arbitral institution they have selected.
The choice of seat is often governed by the desire for neutrality.
The role of the arbitral tribunal is transitory, and the seat has no
necessary connection with the dispute.
10

Supporters of delocalization theories further argue that the 1958
Convention on the Recognition and Enforcement of Foreign Arbitral
Awards (New York Convention)
11
has established an international and
widely (nearly globally) accepted legal (and largely
12
uniform) regime
for the recognition of arbitration agreements and arbitral awards, so there
is no need for additional national regulation. Hence, delocalized (or even
autonomous) arbitration is not in any way lawless; it relies on
transnational and international rules. In the text of the New York
Convention there are very limited and exhaustive references to the seat
of arbitration:
In article I, awards are defined as foreign (made outside the
territory or deemed to have been made outside the territory) and
therefore enforceable under the convention, but there is no
definition of domestic ones, linking them with the seat of
arbitration.
In article V(1)(a) we have as a second alternative the law of the
country where the award was made (rather than seat), absent an
agreement by the parties, as the test of the capacity of the parties
and the validity of the arbitration agreement.
In article V(1)(d) we have again as a second alternative the law of
the country where the award was made (rather than seat), absent

10
See id. (for a comprehensive summary).
11
Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, June 10, 1958, 330 U.N.T.S. 38.
12
Save for the harmonization of the concept of public policy, scope of
arbitrability, and procedure for enforcement domestically, which are left to
national laws.
DELOCALIZATION AND ITS RELEVANCE IN POST-AWARD REVIEW
169
an agreement by the parties, as the test for the composition of the
arbitral authority and the arbitral procedure.
In article V(1)(e) we have the notion that the enforcement of the
award may be resisted if it has not yet become binding on the
parties or if it has been set aside by the competent authority of the
country in which, or under the law of which, that award was
made. This last description is quite broad and could arguably
apply to a range of cases (i.e., an award set aside by the courts of
the place where it was made or set aside by the courts of the place
whose arbitration law regulated the arbitration, irrespective of
where the arbitration was seated).
The delocalization school of thought sees and seeks the emancipation
of arbitration from national laws. Delocalized arbitration is detached
completely from the law of the place of arbitration to the extent that there
is no need for support by local courts, for example, for enforcement
purposes.
13
In support of arbitration proceedings detached from national
law, it is argued that it is both pointless and misleading to create a link
between the arbitrator and some national law just in case . . . one of the
parties wishes to resort to the courts.
14
Also in support of detached
arbitral proceedings is the international business community, which has
successfully carried on arbitration proceedings detached from national
legal systems.
15

There are a number of illustrations of this trend. For example, parties
may choose a procedural law other than the law of the seat of
arbitration.
16
Further, a tribunal may decide not to follow any particular
national law but to conduct the proceedings under generally accepted

13
See discussion between Nakamura and Rubins in the sources cited supra
note 2.
14
See LEW, supra note 1, at 253.
15
Id. Recent surveys conducted by the School of International Arbitration
(SIA) show mixed results as to the legal importance of the seat. Specifically, a
2006 survey found that legal considerations were important, but convenience
and neutrality of the seat were equally critical, see PricewaterhouseCoopers,
International Arbitration: Corporate Attitudes and Practices 13-14 (2006),
http://www.arbitrationonline.org/docs/IAstudy_2006.pdf., and the 2010 survey
demonstrated that, although the seat is important, the most important choice is
the law applicable to the merits, White & Case, 2010 International Arbitration
Survey: Choices in International Arbitration 17 (2010), http://www.
arbitrationonline.org/docs/2010_InternationalArbitrationSurveyReport.pdf.
16
Mayer, supra note 1, at 37.
THE UNCITRAL MODEL LAW AFTER TWENTY-FIVE YEARS
170
rules or principles of procedure. These could be crystallized or otherwise
expressed in the UNCITRAL Arbitration Rules
17
or the UNCITRAL
Notes on Organising Arbitral Proceedings
18
or in international rules
prepared by an international institution, such as the International
Chamber of Commerce or the International Bar Association. In most
cases, the application of national arbitration law is unnecessary. A
tribunal may conduct proceedings in accordance with the arbitration
agreement on the basis of general rules or, if one of the parties is a
sovereign state, based on principles of public international law. In such
cases, it is suggested that the tribunal could render an award unattached
to any legal system, making it a so-called floating award.
19
In a previous
article, this author has made the distinction between internal lex arbitri
and external lex arbitri. While internal lex arbitri (covering the
organization and conduct of the arbitration as between the parties and the
arbitration tribunal) is always relevant, the external lex arbitri (regulating
the arbitration in its relation to the outside world, that is, the courts that
may supervise the arbitration and the laws or rules that may have a
regulatory role; typically the law of the place of arbitrationlexi loci
arbitri) is rarely activated.
20

Additional support for delocalization is drawn from a series of
cases
21
in which French or other courts have held that the setting aside or

17
UNCITRAL Arbitration Rules (as Revised in 2010), G.A. Res. 65/22, U.N.
Doc. A/RES/65/22 (Nov. 8, 2010).
18
UNCITRAL Notes on Organising Arbitral Proceedings, Rep. of the
UNCITRAL, 29th Sess., May 28-June 14, 1996, U.N. Doc. A/51/17; GAOR,
51st Sess., Supp. No. 17 (1996).
19
See Paulsson, Arbitration Unbound, supra note 1.
20
Mistelis, supra note 5.
21
See, e.g., Pabalk Ticaret Ltd. Sirketi v. Norsolor S.A., Cour de cassation
[Cass.] [supreme court for judicial matters] 1e civ., Oct. 9, 1984, Clunet 1985,
679, comment Kahn, Rev. Arb. 1985, 432, note Goldman, I.L.M. 1985, 360,
note Gaillard, Y.B.C.A. 1986, 484 (Fr.); Polish Ocean Line v. Jolasry, Cour de
cassation [Cass.] [supreme court for judicial matters] 1e civ., Mar. 10, 1993,
Rev. Arb. 1993, 258, note Hascher, Y.B.C.A. 1994, 662 (Fr.); Socit Hilmarton
Ltd. v. Omnium de traitement et de valorisation (OTV), Cour de cassation
[Cass.] [supreme court for judicial matters] 1e civ., Mar. 23, 1994, Rev. Arb.
1994, 327, Y.B.C.A. 1995, 663 (Fr.); Rpublique arabe dEgypte v. Chromalloy
Aeroservices Inc., Cour dappel [CA] [regional court of appeal] Paris, Jan. 14,
1997, Rev. Arb. 1997, 395, Mealeys Intl Arb. Rep. 1997, B-1, Y.B.C.A. 1997,
691 (Fr.). Similar cases also exist in a few other jurisdictions, such as the
Netherlands.
DELOCALIZATION AND ITS RELEVANCE IN POST-AWARD REVIEW
171
suspension of an award by a court at the place of arbitration did not
deprive the party obtaining the award of its right to enforce it in France.
However, it is also important to note that the French decisions relied on
the fact that French law does not contain the restriction in article V(1)(e)
of the New York Convention.
22

Sports arbitration, particularly in the context of the Olympic Games,
is yet another good example of delocalized arbitration (or at least of an
arbitration system where the seat is a construction, rather than a real one).
The International Olympic Committees Court of Arbitration for Sports
(CAS)
23
has a fictional place of arbitration in Lausanne, Switzerland,
irrespective of the actual seat of arbitration (e.g., Athens, Sydney,
London or Beijing).
24
It is also, however, worth pointing out that in
recent years, few CAS cases have been challenged in Switzerland, and
the Swiss Federal Tribunal has assumed jurisdiction over them,
irrespective of the actual seat of arbitration.
25
The positive aspect of this
development is that an award may be reviewed when review is necessary,
and Switzerland, which is considered arbitration friendly, provides a
developed legal system in which such a review may take place.
Moreover, an emerging e-arbitration, which includes fully online
arbitration as well as asynchronous offline arbitration with the use of
electronic media,
26
may be delocalized. In such arbitrations, there are no

22
The US decision Chromalloy Aeroservices Inc. v. Egypt, 939 F. Supp. 907
(D.D.C. 1996), was criticized. See Georgios Petrochilos, Enforcing Awards
Annulled in Their State of Origin Under the New York Convention, 48 INTL &
COMP. L.Q. 856 (1999); Eric Schwartz, A Comment on Chromalloy Hilmarton,
lamricaine, 14 J. INTL ARB. 125 (1997).
23
See TAS/CAS: TRIBUNAL ARBITRAL DU SPORT; COURT OF ARBITRATION
FOR SPORT, http://www.tas-cas.org (last visited Feb. 28, 2013). See also
TAS/CAS: TRIBUNAL ARBITRAL DU SPORT; COURT OF ARBITRATION FOR SPORT,
http://www.tas-cas.org/recent-decision (last visited Feb. 28, 2013) (for CAS
jurisprudence).
24
See GABRIELLE KAUFMANN-KOHLER, ARBITRATION AT THE OLYMPICS:
ISSUES OF FAST-TRACK DISPUTE RESOLUTION AND SPORTS LAW (2001).
25
See, e.g., Press Release, Tribunal fdral, Francelino da Silva Matuzalem /
FIFA: peine statutaire contraire lordre public [Francelino da Silva Matuzalem
/ FIFA: Penalty Contrary to Statutory Public Order] (Mar. 27, 2012) (Switz.),
available at http://www.bger.ch/fr/mm_4a_558_2011_d.pdf.
26
See, e.g., ETHAN KATSCH & JANET RIFKIN, ONLINE DISPUTE RESOLUTION:
RESOLVING CONFLICTS IN CYBERSPACE (2001); COLIN RULE, ONLINE DISPUTE
RESOLUTION FOR BUSINESS (2002). See also JULIA HRNLE, CROSS-BORDER
INTERNET DISPUTE RESOLUTION (2009); Antonis Patrikios, The Role of
THE UNCITRAL MODEL LAW AFTER TWENTY-FIVE YEARS
172
physical hearings and the tribunals may have no physical or legal seat.
Consequently, the creation of new substantive rules has been suggested,
since it has been considered problematic to link online arbitration with a
particular legal system.
27
An alternative to further regulation is the wider
acceptance of party autonomy or the acceptance of delocalized and
denationalized arbitration.
The main argument against delocalized arbitration is that arbitration
cannot operate in a legal vacuum. At the very least, ultimately, the
parties will expect the law to recognize and give effect to the tribunals
award. There are other areas where the support of the courts may be
needed as well, for example, to uphold and enforce the agreement to
arbitrate, to appoint or remove arbitrators, and for interim relief in
support of the arbitration process. National courts are always asked for
support or to intervene for these purposes. This is why arbitration cannot
be fully delocalized from the national law.
28

In fact, delocalized arbitration is self-regulatory arbitration. However
the point also needs to be made that delocalization relates usually either
to the arbitration process, to the award, or both. While the emancipation
from the procedural law of the place of arbitration is now accepted and
most systems have very limited mandatory provisions relating to arbitral
procedure, the enforcement of delocalized awards appears to be

Transnational Online Arbitration in Regulating Cross-Border E-Business,
24 COMPUTER L. & SEC. REV. 2 (2008).
27
See, e.g., Michael E. Schneider & Christopher Kuner, Dispute Resolution
in International Electronic Commerce, 14 J. INTL ARB. 5 (1997); Jasna Arsic,
International Commercial Arbitration on the Internet: Has the Future Come Too
Early?, 14 J. INTL ARB. 209 (1997); Richard Hill, The Internet, Electronic
Commerce and Dispute Resolution: Comments, 14 J. INTL ARB. 103 (1997);
Gabrielle Kaufmann-Kohler, Le lieu de larbitrage laune de la
mondialisation: Rflexions propos de deux formes rcentes darbitrage, REV.
ARB. 517 (1998); Catherine Kessedjian & Sandra Cahn, Dispute Resolution On-
Line, 32 INTL L. 977 (1998); M. Scott Donahey, Dispute Resolution in
Cyberspace, 15 J. INTL ARB. 127 (1998); Richard Hill, On-line Arbitration:
Issues and Solutions, 15 ARB. INTL 199 (1999). See also Paul A. Gelinas, et al.,
Electronic Means for Dispute Resolution: Extending the Use of Modern
Information Technologies, in IMPROVING INTERNATIONAL ARBITRATION 51
(Benjamin Davis ed., 1998); Rosahel E. Goodman-Everard, Arbitration in
Cyberspace: An Off-Line, Low-Tech Guide for Compucowards, 14 ARB. INTL
345 (1998).
28
See Park, supra note 1; Stewart Boyd, The Role of National Law and the
National Courts of England, in CONTEMPORARY PROBLEMS, supra note 8, 149.
DELOCALIZATION AND ITS RELEVANCE IN POST-AWARD REVIEW
173
problematic. Ultimately, the enforcement is controlled by national courts.
However, in some jurisdictions, including France and the United States,
29

delocalized awards have been enforced.
30
Belgium
31
and Switzerland
have given foreign parties the option to contract out of any judicial
review in limited circumstances.
32

As far as English law is concerned, while most parts of the English
Arbitration Act 1996
33
will apply to arbitral proceedings in England and
Wales, many provisions will also apply if the seat is outside England and
Wales.
34
Hence, the seat becomes particularly relevant for the external,
as opposed to the internal, lex arbitri.
35
In fact, section 4 of the English
act endorses and emphasizes the freedom of the parties to choose the law

29
See, e.g., Socit Hilmarton Ltd. v. Omnium de traitement et de
valorisation (OTV), Cour de cassation [Cass.] [supreme court for judicial
matters] 1e civ., Mar. 23, 1994, Rev. Arb. 1994, 327, Y.B.C.A. 1995, 663 (Fr.);
Chromalloy Aeroservices Inc. v. Egypt, 939 F. Supp. 907 (D.D.C. 1996), 35
I.L.M. 1359 (1996), XXII Y.B.C.A. 1001 (1997); Rpublique arabe dEgypte v.
Chromalloy Aeroservices, Cour dappel [CA] [regional court of appeal] Paris,
Jan. 14, 1997, Rev. Arb. 1997, 395, Mealeys Intl Arb. Rep. 1997, B-1,
Y.B.C.A. 1997, 691 (Fr.).
30
Also, in the context of the Iran-US Claims Tribunal, the US courts
enforced national awards under the New York Convention. See, e.g., Iran
Aircraft Indus. v. AVCO Corp., 980 F.2d 141 (2d Cir. 1992); Ministry of Def. of
the Islamic Republic of Iran v. Gould, 887 F.2d 1357 (9th Cir. 1989), cert.
dismissed, 110 S. Ct. 1319 (1990).
31
See CODE JUDICIAIRE [C.JUD.] art. 1717(3) (Belg.).
32
See BUNDESGESETZ BER DAS INTERNATIONALE PRIVATRECHT [IPRG]
[PRIVATE INTERNATIONAL LAW ACT] Dec. 18, 1987, SR 291, art. 192 (Switz.);
Bundesgericht [BGer] [Federal Supreme Court], Dec. 21, 1992, 118
ENTSCHEIDUNGEN DES SCHWEIZERISCHEN BUNDESGERICHTS [BGE] I 562, 568
(Switz.).
33
Arbitration Act, 1996, c. 23 (Eng.).
34
See id. 1-2. See also id. 3 (the definition of seat). Section 3, entitled
The seat of the arbitration, provides:
In this Part the seat of the arbitration means the juridical seat of the
arbitration designated
(a) by the parties to the arbitration agreement, or
(b) by any arbitral or other institution or person vested by the parties
with powers in that regard, or
(c) by the arbitral tribunal if so authorised by the parties, or determined,
in the absence of any such designation, having regard to the parties
agreement and all the relevant circumstances.
35
See the distinction in Mistelis, supra note 5.
THE UNCITRAL MODEL LAW AFTER TWENTY-FIVE YEARS
174
applicable to the procedure. The act also makes it clear that it is the
juridical seat of arbitration proceedings that links an arbitration with the
local courts, upon which jurisdiction is conferred in support of the
arbitration.
36
Under English law, an arbitration must have a seat, and it is
contrary to the whole idea of a juridical seat if this should somehow
become peripatetic; the procedural law regime of an arbitration cannot
change capriciously from one point in the arbitration process to the next.
Once a seat had been identified, it cannot move.
37

The US Supreme Court analysed the nature and needs of
international arbitration in the case of Scherk v. Alberto Culver Co.
38

With regard to the choice of the lex arbitri, the court said that an
agreement to arbitrate before a specified tribunal is, in effect, a
specialized kind of forum-selection clause that posits not only the situs of
suit but also the procedure to be used in resolving the dispute.
39
This
language seems to suggest that the court would allow the parties to
choose the applicable procedural law.
It would be a reasonable conclusion to draw that the nationality of
arbitration retains an important role to the extent that the seat of
arbitration is also of significance. For instance, a number of laws provide
that a countrys procedural rules apply automatically to an arbitration
held on its territory, subject to the express will of the parties and the rules
selected to govern the arbitration.
40
Other jurisdictions follow this
position but adopt a different set of rules for international arbitrations.
41

In other words, the possibility of delocalizing arbitration in terms of
applicable procedural law is quite well established, perhaps with France

36
See Dubai Islamic Bank PJSC v. Paymentech Merch. Servs. Inc., [2001] 1
Lloyds Rep. 65, 71 (U.K.) (where the court held that it was clear from s. 2(1)
of the [English Arbitration] Act that the concept of the seat was used in order to
define which arbitrations would be subject to the statutory regime in Part One of
the 1996 Act; . . . only those arbitrations that had their seat in England and Wales
would be subject to the exercise of the Courts powers in Part One of the Act).
37
Id. at 73-74.
38
417 U.S. 506 (1974).
39
Id. at 519.
40
See, e.g., Arbitration Act, 1996, c. 23, 2, 33 (Eng.).;
ZIVILPROZESSORDNUNG [ZPO] [CODE OF CIVIL PROCEDURE], Jan. 30, 1877,
REICHSGESETZBLATT [RGBL.] 83, as amended, 1025, 1042 (Ger.).
41
See, e.g., BUNDESGESETZ BER DAS INTERNATIONALE PRIVATRECHT
[IPRG] [PRIVATE INTERNATIONAL LAW ACT] Dec. 18, 1987, SR 291, art. 176
(Switz.); MODEL LAW, supra note 6.
DELOCALIZATION AND ITS RELEVANCE IN POST-AWARD REVIEW
175
and Switzerland as its strongest proponents.
42
And even in non-
delocalized regimes, the particular delocalization that would be allowed
provides that fundamental (effectively transnational) mandatory rules of
fairness and equality of the parties should not be interfered with.
At the same time, delocalization in terms of the review of awards at
the seat of arbitration after the awards have been rendered seems to be
quite rare, if not also an endangered species. English law, US law,
French law, and Swiss law all allow applications to set aside, annul, or
vacate an award at the place where it was made. National systems may,
however, have different standards with respect to the grounds for review
and the ability of disputing parties to modify or exclude review.
43

B. The Model Law and Delocalization
The drafting of the Model Law
44
coincided with the height of the
debate about delocalization and the regulatory and supervisory role of the
law of the seat. The Model Law, adopted in 1985, takes a moderate
territorial approach that aims at regulating and restricting the role of
courts by identifying exclusively cases of court intervention.
The travaux prparatoires indicate that delocalization (or de-
territorialization, as it is sometimes referred to in the discussions) was
raised by the French representative, suggesting that the approach in the
draft was perhaps a bit too territorial.
45
And indeed, the final text takes a

42
See IPRG, art. 182; Loi 2011-48 du 13 janvier, 2011 de portant rforme de
l'arbitrage, JOURNAL OFFICIEL DE LA REPUBLIQUE FRANAISE [J.O.] [OFFICIAL
GAZETTE OF FRANCE], Jan. 13, 2011, p. 777, 1505, 1511 (Fr.).
43
For more details, see, e.g., CHRISTOPH LIEBSCHER, THE HEALTHY AWARD:
CHALLENGE IN INTERNATIONAL COMMERCIAL ARBITRATION (2003).
44
For more details, see 1985: UNCITRAL MODEL LAW ON INTERNATIONAL
COMMERCIAL ARBITRATION, WITH AMENDMENTS AS ADOPTED IN 2006,
http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/1985Model_arbitra
tion.html (last visited Feb. 28, 2013). Note also the case law digest on the Model
Law presented in 2012, see UNCITRAL 2012 DIGEST OF CASE LAW ON THE
MODEL LAW ON INTERNATIONAL COMMERCIAL ARBITRATION, Sales No. E.12.V.9
(2012) [hereinafter UNCITRAL DIGEST], and the related (and expanding)
database maintained by McGill University, MCGILL MODEL ARBITRATION LAW
DATABASE, http://www.maldb.org (last visited Feb. 28, 2013).
45
For the contributions from Finland, the commission, and Austria, among
others, see UNCITRAL Model Law on International Commercial Arbitration,
306th mtg., 54, U.N. Doc. A/CN.9/246 (June 3, 1985), available at
http://www.uncitral.org/pdf/english/travaux/arbitration/ml-arb/306meeting-e.pdf;
THE UNCITRAL MODEL LAW AFTER TWENTY-FIVE YEARS
176
moderate territorial approach: the Model Law applies to arbitrations
within jurisdictions with limited mandatory provisions (fairness and
equality) and regulated court interference, typically in support of arbitral
proceedings or in relation to challenge and recognition and enforcement
proceedings, or both.
It is, however, possible that the whole doctrine of denationalized
awards and proceedings will eventually become redundant as a result of
the increased and indirect unification of arbitration procedural law
achieved through the emergence of the Model Law.
46
Delocalization can
only function provided that quasi-autonomous international procedural
rules emerge.
47
This is limited delocalization, and it covers the aspect of
delocalization where there is no need to rely on local courts and where
parties voluntarily enforce the awards. While proceedings can effectively
be delocalized, awards normally acquire a nationality at the time of
enforcement.
Other modern legislative texts have adopted the same principles.
48

The Model Law, in article 19, reduced the role of the seat in accordance
with international standards. The fact that modern laws often take a
territorial approach in respect to their scope of application does not
automatically limit party autonomy. As expressed above, maximum party
autonomy remains intact in relation to internal lex arbitri. External lex
arbitri is normally subjected to the law of the seat, but the parties may
agree otherwise; their agreement is enforceable to the extent that it does
not clash with mandatory rules of the law of the seat. This creation of
international standards is being supported by an increased

UNCITRAL Model Law on International Commercial Arbitration, 307th mtg.,
2-3, 7, U.N. Doc. A/CN.9/246 (June 4, 1985), available at http://www.
uncitral.org/pdf/english/travaux/arbitration/ml-arb/307meeting-e.pdf.
46
Lionnet, supra note 3, at 5.
47
See Serge Lazareff, International Arbitration: Towards a Common
Procedural Approach, in CONFLICTING LEGAL CULTURES IN COMMERCIAL
ARBITRATION: OLD ISSUES AND NEW TRENDS 31 (Stefan N. Frommel & Barry
A.K. Rider eds., 1999) [hereinafter CONFLICTING LEGAL CULTURES]; Andreas F.
Lowenfeld, International Arbitration as an Omelette: What Goes into the Mix,
in CONFLICTING LEGAL CULTURES, supra note 47, 19.
48
See, e.g., Stb. 1986, p. 372, 1036 (Neth.); Law No. 31 of Aug. 29, 1986,
15 (Port.); Law No. 27 of 1994 (Promulgating the Law Concerning Arbitration
in Civil and Commercial Matters (as Amended by Law No. 9 of 1997)), Al-
Jarida Al-Rasmiyya, 18 Apr. 1994, 25 (Egypt); art. 816 Codice di procedura
civile [C.p.c.] (It.).
DELOCALIZATION AND ITS RELEVANCE IN POST-AWARD REVIEW
177
institutionalization of arbitration (where most institutional rules look
quite similar) and the growing crystallization of best practices.
49

With respect to the review of awards, the Model Law fully embraces
territoriality. An application to set aside an award may only be brought at
the courts of the place of arbitration (noting that the Model Law uses
place rather than seat), and it is widely accepted that the current
system is satisfactory, certain, and efficient.
50

It is clear that pursuant to articles 1(2), 6, and 34(2) of the Model
Law, an award may only be set aside at the place of arbitration,
irrespective of where the hearings took place.
51
This is especially true the
case if the place of arbitration agreed upon by the parties is sound,
reasonable, and certain. If, however, there is no party agreement as to the
seat, this will have to be determined or implied by various indicators,
such as the place of hearings.
52
The Digest of Case Law on the Model
Law on International Commercial Arbitration provides a very good
collection of court decisions on these matters.
53

II. AWARD REVIEW AND THE LAW OF THE SEAT
There is a compelling argument that arbitral awards have to be
reviewed by national courts: that is, the judicial review of arbitral awards
is seen as a form of risk management.
54
What is being debated is

49
See the recent survey by SIA, White & Case, 2012 International
Arbitration Survey: Current and Preferred Practices in the Arbitral Process
(2012), http://www.whitecase.com/files/Uploads/Documents/Arbitration/Queen-
Mary-University-London-International-Arbitration-Survey-2012.pdf.
50
See William W. Park, Why Courts Review Arbitral Awards, in
FESTSCHRIFT FR KARL-HEINZ BCKSTIEGEL 591 (2001); Hans Smit,
Annulment and Enforcement of International Arbitral Awards: A Practical
Perspective, in LEADING ARBITRATORS GUIDE TO INTERNATIONAL ARBITRATION
591 (Lawrence Newman & Richard Hill eds., 2008). A different approachin
which there is no need to challenge anywhereis taken by Philippe Fouchard,
La porte internationale de l'annulation de la sentence arbitrale dans son pays
d'origine, REV. ARB. 329 (1997).
51
See, e.g., PT Garuda Indon. v. Birgen Air, [2002] SLR 393 (Sing.),
available at http://www.maldb.org/hpjlaw-275.html.
52
See, e.g., CLOUT Case No. 374, Oberlandesgericht Dsseldorf [OLG
Dsseldorf] [Higher Regional Court of Dusseldorf], Mar. 23, 2000, 6 Sch 02/99
(Ger.).
53
See UNCITRAL DIGEST, supra note 44 (regarding article 34).
54
See Park, supra note 50.
THE UNCITRAL MODEL LAW AFTER TWENTY-FIVE YEARS
178
(a) why such review has to occur at the place of arbitration while, for
example, an award may be challenged at the time of enforcement by an
enforcing court, and (b) what the extent of the review should be. There is
also the practical question of why the parties should have to challenge an
award in the courts of the place where the award was made, especially in
the many cases where neither the parties nor the subject matter of the
arbitration have any relation to that place. Most national legal systems
will intervene in the review of awards where there are blatant breaches of
procedural fairness, major procedural irregularities, or a lack of
jurisdiction. Typically, however, there is no review of the merits or the
law. Considering all these questions, however, together with the
predominant role of the seat of arbitration in the review of awards, there
should be no doubt as to the importance of the seat of arbitration and the
attention that parties need to pay in relation to its selection.
With respect to the first question, the arguments given in support of
exclusive review of awards at the place of arbitration are largely
technical: the place of arbitration is certain (at least in the vast majority
of cases), and hence forum shopping and speculation may be avoided; a
certain place of challenge promotes efficiency. The argument is also
made that the courts of the seat of arbitration can best assess all these
procedural matters, irrespective of whether the parties or the proceedings
have an association with the seat. It is further suggested that the
requirement of challenging at the place of arbitration combined with a
rather tight deadline after the award has been rendered ultimately
promotes finality, while at the same time leaving ample opportunity for
fairness controls.
The arguments against the exclusive challenge at the place of
arbitration are all linked to the delocalization debate: the seat may have
been used for its neutrality and often neither party nor subject matter
would be connected with the place. If this is the case, and it often is, then
it becomes onerous, costly, and inefficient for one party to have to go
back to the place of arbitration well after the hearing has been completed
simply to challenge the award. Similarly, local standards of jurisdiction,
admissibility of claims, or procedural fairness may be coloured by
domestic litigation practice and legal culture, and may not necessarily be
applicable to foreign parties in an international arbitration. A convenient
seat of arbitration may well prove an inconvenient place of challenge.
There is also quite a bit of discussion about the standards and
grounds for setting aside an arbitral award. If the relevant grounds for
annulment are very domestic (and peculiar rather than widely accepted)
DELOCALIZATION AND ITS RELEVANCE IN POST-AWARD REVIEW
179
and possibly obscure, then one can safely argue that they should have no
bearing on the international effectiveness of an award, so that the
annulment merely has local, rather than international, effect.
55
This issue
alone challenges the primacy of the seat of arbitration, as on certain
occasions, an award that has successfully been challenged at the place
where it was made may still be enforced in other places.
56

CONCLUSION
It appears that the Model Law has had two distinct effects on the
question of delocalization.
On the one hand, the territorial approach to the regulation of
arbitration proceedings adopted in the Model Law has largely eliminated
any scope for delocalization, at least as far as the review of awards is
concerned. Certain aspects of delocalization may survive at various
levels, conditioned upon the wide acceptance of party autonomy, as far
as procedural arrangements are concerned.
On the other hand, the Model Law has brought about a considerable
amount of harmonization and has had an impact on states that decided
not to adopt it. Practically, the grounds and procedures upon which
awards are challenged are very similar, if not identical, in many
jurisdictions. There are, however, still certain significant dis-unifying
factors. For example, there is no harmonization of standards of public
policy or, indeed, scope of arbitrability. This allows for very different
decisions in similar circumstances, such as, for example, the impact of
bankruptcy on arbitral proceedings.
Acceptance of some level of moderate delocalization, not only in
terms of procedure where delocalization is practically tolerated, if not
accepted, but also in relation to the review of awards may well provide a
very useful counterbalance to nationalizing trends in public policy and
arbitrability.

55
See, e.g., HAMID G. GHARAVI, THE INTERNATIONAL EFFECTIVENESS OF
THE ANNULMENT OF AN ARBITRAL AWARD (2002).
56
See e.g., supra notes 21-22, 27 and accompanying text.