Author: E. VUILLARD & A. VAGENHEIM
N0:5 of 2008
Arbitration in equity is widely accepted in comparative law. It seeks to have disputes resolved in an equitable manner, which is not achievable through a strict application of legal rules. Referring disputes to amiable composition is however not obvious a choice! Doubts arise as to why one would refer disputes to amiable composition. Why arbitration in equity is not set up by arbitration rules and legislations the form of arbitration applicable by default? The inherent uncertainty and lack of clarity of the notion of amiable composition as opposed to arbitration at law renders the choice for arbitration in equity risky for parties in international trade, which explains the little attraction given to it.
Amiable composition presupposes a society of trust and not of defiance. This is why in practice recourse to amiable composition is extremely rare. The condition precedent for amiable composition is to be capable to ‘compose’ with others. It is indeed only possible if not all has been destroyed by the dispute and if both parties see the survival of their relationship after the resolution of the dispute as of paramount importance.
This is what makes arbitration in equity similar to conciliation though the process finishes by the issuance of an award. It is therefore allowed to speak about “sweet justice”, which is the reason why submitting disputes to arbitration in equity is not an obvious choice for the actors in international trade.