Human Rights vs Contract Law in Arbitration Mechanisms

The consideration of human rights is often kept out of international investment arbitration proceedings. This can be related to the privileging of contract law in a market society and the differences in values underlying contract law and human rights. The tension between different kinds of laws can be viewed as being irreconcilable or as reflecting a Polanyian “double-movement.”

In October 2016, the Mumbai Centre for International Arbitration (MCIA) became operational, an event that attracted considerable attention in the realm of commerce and investment (and the legal/institutional framework related to these) in India. MCIA is designed to provide an alternative to the already-existing institutional arbitration mechanisms, such as the Singapore International Arbitration Centre, the London Court of International Arbitration, and the International Chamber of Commerce’s International Court of Arbitration. It is also supposed to be part of the Government of India’s “Make in India” strategy as well as the Government of Maharashtra’s plan to set up an “international financial services centre” in Mumbai. These larger goals are questionable as is the possibility of MCIA successfully meeting them. But the focus of this article is on a particular concern related to international arbitration which has not been dealt with in the case of MCIA or for that matter, in most arbitration mechanisms. More specifically, the manner in which international arbitration (particularly investment arbitration) has been working has often led to a separation between different legal regimes, such that the consideration of human rights or public purpose are kept out of arbitration proceedings and the focus is restricted to contract law. The implications of such a separation are discussed in terms of a relationship between economy, society, and law, drawing on the ideas of Karl Polanyi (1944/1957) and Radha D’Souza (2006). 

Concerns in International Arbitration

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Updated On : 6th Feb, 2018

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