Due process is the legal requirement that
the state must regard all legal rights that are owed to a person. Due process
balances the power of law of the land that must be adhered to and shields the
individual person from it. The requirement of due process as a constitutional
guarantee is something that has been developing in Anglo-Saxon and continental
laws as a fundamental right of the citizen. The basic rule of arbitral
proceedings consists of submitting to fair hearing, the principles of equality
and the right of contradiction.
Due process has also been frequently
interpreted as restricting laws and legitimate procedures (see substantive due
process) so that judges, instead of legislators, may characterize and ensure
principal decency, equity, and freedom. That interpretation has proven
controversial. Analogous to the concepts of natural justice, and procedural
justice used in various other jurisdictions, the translation of due process is
some of the time communicated as a charge that the government must not be
unreasonable to the general population or abuse them physically.
In international arbitration, the “due
process” requires the arbitrators to conduct the proceedings and, consequently,
draft their awards in such a way that their awards are enforceable. And this
means that they should make their best efforts to ensure that their awards are
not subject to annulment in the place of the arbitration and that they are also
enforceable where the person entitled to enforce them wishes to do so.1
Pursuant to Article V(1)(b) of the New York
Convention, recognition and enforcement of foreign awards may be refused when
“the parties against whom the award is invoked was not given proper notice of
the appointment of the arbitrator or of the arbitration proceedings or was
otherwise unable to present his case.” The UNCITRAL Model Law2,
after which many local arbitration statutes are modelled, carries the same
protection in Articles 34(2)(a)(ii) and 36(1)(a)(ii). This provision sanctions
violations of what is called “due process” in common law jurisdictions, and “le principe de la contradiction, du respect
des droits de la défense et d’égalité des parties” in civil law systems. These
provisions serve a laudable goal – they enshrine the importance of due process
and ensure a minimum standard will be observed; failing which, an award will
not have the force of law.3
Given that the standard for review of
arbitration awards is very narrow and arbitration awards cannot be appealed on
the merits, efforts to ensure a credible decision (distributive justice) is
made are of critical importance. Even though arbitration is distinct from
litigation, parties will want well-reasoned decisions that are enforceable.
Indeed, enforceability of an award is of paramount importance to the parties,
particularly when emergency arbitrators are utilized.
The structure and function of arbitration
institutions plays a critical role in satisfying (albeit imperfectly) the needs
of parties to balance the party driven flexibility and autonomy that are the
hallmarks of arbitration with due process. The underlying psychological aim of
due process—to promote a sense of fairness and justice—is achievable through
the mechanisms of procedural justice.
The U.S. courts have clarified the due
process requirement in arbitration in a way that could perfectly reflect the due
process requirements in the arbitral community. They have made it clear that: “an
arbitral award should be denied or vacated if the party challenging the award
proves that he was not given a meaningful opportunity to be hear…. It is clear
that an arbitrator must provide a fundamentally fair hearing. A fundamentally
fair hearing is one that meets ‘the
minimal requirements of fairness’—adequate notice, a hearing on the
evidence, and an impartial decision by the arbitrator … Nevertheless, parties
that have chosen to remedy their disputes through arbitration rather than
litigation should not expect the same procedures they would find in the
judicial arena … Arbitrators enjoy wide latitude in conducting an arbitration
hearing. Arbitration proceedings are not constrained by formal rules of
procedure or evidence; the arbitrator’s rule is to resolve the disputes, based
on his consideration of all relevant evidence, once the parties to the dispute
have had a full opportunity to present their cases.”
Unfortunately, due process protections have
been subject to increasing abuse by losing parties.4
Professor Reed believes that what was meant to be a shield is now being used as
This may in part be a consequence of a phenomenon called ‘due process paranoia’.
Parties may repeatedly capitalize on this by seeking to adduce additional
evidence or to make further submissions not originally catered for in the
procedural timetable. Post-award, a dissatisfied party may nit-pick for
instances where the tribunal appears to have declined their request to present
further arguments, adduce more evidence, or be given more time to respond.
These instances of abuse add to the time and cost of the arbitral process, both
pre- and post-award. As a result, scholars have started to suggest means to
tackle the paranoia.6
2 UNCITRAL Model Law on International Commercial Arbitration (Model
Law). The Model Law was first published in 1985, and was updated and amended in
3 Prof Bernardo Cremades, 2016 CIArb Alexander Lecture, ‘The Use and
Abuse of Due Process in International Arbitration’, 17 November 2016.
4 Prof Lucy Reed, 2016 Freshfields Arbitration Lecture, ‘Ab(use) of
due process: sword vs shield’, 27 October 2016; Prof Bernardo Cremades, 2016
CIArb Alexander Lecture, ‘The Use and Abuse of Due Process in International
Arbitration’, 17 November 2016.
5 Prof Lucy Reed, 2016 Freshfields Arbitration Lecture, ‘Ab(use) of
due process: sword vs shield’, 27 October 2016.
6 KP Berger and JO Jensen, ‘Due process paranoia and the procedural
judgment rule: a safe harbour for procedural management decisions by
international arbitrators’ (2016) Arb Int. 415–435.