International arbitration as a complex system

Generally speaking, I am used to writing about complexity theory and international law in my other blog, tuglobalista.com. I do enjoy talking about international law as a complex system and keep my curiosity about arbitration and complex systems swirling around my head.

Some of the questions that I have also relate to the issue of international dispute settlement, and in concrete therms with international arbitration being a complex system. But with that comes the necessity to fine thread the element of complexity, and in the other side that of international arbitration.

For starters, the first question to answer is: What is arbitration?

The second question to answer is: What is a complex system?

Arbitration is a mechanism for resolving disputes. Two or more parties agree to solve a dispute before one, three, or more individual members, which in turn form an arbitral tribunal. Such a mechanism is typically agreed upon through an arbitration clause, either before or during a dispute, contained in a special agreement or an arbitration clause. The dispute is typically resolved through a final award. The intricacies of all the processes are a matter for another post.

Now to the second question. What is a complex system?

In essence a complex system is understood as a system that is created and composed by the interaction of many individuals. (This is obviously a simple definition).

But with that simple definition we can say then that taking complex systems for one side and with international arbitration in the other side. We get the idea that international arbitration as a complex system, is the understanding that international arbitration is a complex system that is composed by the interaction of many individuals.

The vision that I am providing about international arbitration suggests that there is a merging of public and private arbitration, that means, disputes resolved in the public sphere and disputes resolved in the private sphere. Where to draw the line, is quite hard I do not attempt to do it.

What does entail to say that international arbitration is a complex system?

First is that it is composed of a great number of agents, which can be organizations or individuals. On the side of the organizations, we can name the usual suspects, like institutions that administer international arbitrations, but also other institutions like UNCITRAL, which has been working on the standardization of international arbitration rules and, under its work, adopted the New York Convention for the recognition of international awards and arbitration agreements, as well as a model law so countries could change their laws regarding arbitration. And finally, the UNCITRAL Rules of Arbitration, which are rules of ad hoc arbitration when no institution is involved, Also, within this realm of organizations involved, there are other institutions, universities and think tanks with specialized programs, and finally, law firms.

Under a smaller grain, we can see the individual, in this sense, the type of individuals that compose the system is quite diverse, you have academics, lawyers (with all the ranks), as well as arbitrators, students, and administrative staff that works within the institutions that administer arbitrations, and finally arbitral tribunals (however their existence is subject to the dispute, it is created and finishes with the dispute)

That is the complex world of international arbitration, and the individuals tend to interact with each other.

Following the question, how do these agents interact with each other? In my opinion, the interaction has two possible forms: within the disputes and outside the disputes. That is, within disputes, the arbitral tribunal interacts with the parties involved, which in essence are the lawyers who represent clients in arbitration.

Outside arbitration, that is the whole academic discussions that take part of arbitration, the gossip around international arbitration, the actual courses taken by students and the lectures dictated by academics, also by lawyers with experience in arbitration, but as well being professors of universities. Academics writing about new cases, etc.

A consequence of all of that, is that international arbitration seen as a complex system, then causes that the world of international arbitration is subject to change. Changes, in essence come from inside, even if there are external factors.

Some of the changes are caused by technological evolution, and others are due to extreme events. And sometimes, we will see that those extreme events prompt the adoption of new technologies. We experienced firsthand such two elements that caused international arbitration to behave differently, applying new technologies that allowed for the continuation of disputes in the distance.

To look at international arbitration as a complex system opens new ways of looking at phenomena taking place in it and how it behaves, for example, from a network systems approach, the existence of small-world phenomena coupled with non-linearities. Which is the case with international arbitration; that is, it seems to be that a small number of individuals get almost all the attention. It seems then that is a type of industry of a winner takes all situation. You have small clusters and centers that have almost all the cases; for example, in investment arbitration, it seems to be the case that a small number of individuals are appointed on repeated occasions to act as arbitrators. Which is a phenomenon that seems to repeat in commercial arbitration and also seems to be the case with law firms. The above also seems to follow another aspect of the creation of niches in complex systems.

When it comes to international arbitration, there are agents who tend to specialize in particular types of disputes within a complex system. Some of these agents focus on interstate arbitration, while others specialize in investment arbitration, others in commercial arbitration involving international sales, still others in construction disputes, long-term complex contracts, sports-related disputes, etc. I hope you get the idea.

So, arbitration is complex—much more complex than what we seem to accept, even if the rules are quite standard.