Book Reviews
| Published date | 01 December 1997 |
| Date | 01 December 1997 |
| DOI | http://doi.org/10.1111/1467-6478.00061 |
DEALING IN VIRTUE: INTERNATIONAL COMMERCIAL ARBIT-
RATION AND THE CONSTRUCTION OF A TRANSNATIONAL LEGAL
ORDER
by YVES DEZALAY AND BRYANT G. GARTH
(Chicago: University of Chicago Press, 1996, 317 pp., £27.95)
This is an unusual and intriguing book by two authors with backgrounds
in the social sciences: Yves Dezalay is Director of the Centre National de
la Recherche Scientifique in France; Bryant G. Garth, formerly the Dean
of Indiana University School of Law, is now the Director of the American
Bar Foundation in Chicago. It is unusual, because its authors have embarked
upon a study based principally upon the development of international
commercial arbitration and the practice and practitioners of arbitration
without the benefit of any extensive empirical experience of their own upon
which to draw. It is intriguing, not least because these ‘outsiders’ have
succeeded in eliciting the thoughts and opinions of those who do practice
in the field, including a number of those who would unquestionably be
regarded as among the pre-eminent of today’s international arbitrators.
Having done so, the authors seek to draw a number of conclusions as to
how the ‘market of international business disputing’ is likely to develop,
acknowledging that, for the present at least, international commercial
arbitration is the accepted method of resolving international commercial
disputes.
Dealing in Virtue is intended to open to outsiders the closed door of this
arcane world; to be informative to those who are already on the inside; and
to give those ‘insiders’ a better understanding of their chosen field of practice
by dealing with issues with which they would regard themselves as entirely
familiar from a very different perspective. It is a book which is expressly
stated to be aimed at an audience beyond those who are active in
international arbitration, fascinating as it will be for the ‘insiders’ to try to
identify the sources of the unattributed remarks cited from the record of the
authors’ many interviews and to see the development, practice, and
procedures of the field in which they operate couched in terms which, to
many practitioners, will seem wholly foreign.
The authors make clear at an early stage that their study of the development
and practice of international commercial arbitration is not meant to be a
technical study of arbitration. Rather, what is intended is to provide a:
. . . point of entry into the more complex questions of the role of law, the relationship
between the national and the international, and the relationship between business, state
and law.
© Blackwell Publishers Ltd 1997, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street, Malden, MA 02148, USA
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Book Reviews
It is here, and in the social scientists’ analysis of the development of the
international arbitrator from ‘local notable’ to ‘superjudge’ that the book
is likely to have its principal attraction to the legal academic and the social,
scientific scholar whom the authors also seek to attract.
With an eye to this broad church to which their book is pitched, the
authors explain at the outset the aims and content of each section and
chapter of the study, and how they intend to tackle them. Such an approach
has much to commend it in the case of an analysis which, it is acknowledged,
is often complex and esoteric. Having explained their methodology in the
opening chapter, the authors go on to consider what attributes (defined here
as ‘symbolic capital’) coalesce to result in acknowledged status as an
international arbitrator. This is done by reference to the career paths of a
handful of ‘notables’ in the arbitration world. As the authors’ thesis
develops, it is clear that the importance of building up such ‘symbolic capital’
is undiminished, albeit that its origins may differ from the classic
development exemplified by the ‘notables’ whom the authors have selected
as their principal models.
The authors then proceed to develop one of their principal general themes
– that the growth of international commercial arbitration, derived initially from
the status, charisma, and credibility of the ‘grand old men’, has been developed
by the tension between these ‘founding fathers’ of modern international
commercial arbitration and a new generation of specialist and technically
competent ‘technocrats’ from large international law firms. The growth in the
business of international commercial arbitration is graphically described by
reference to the pre-eminence of the International Chamber of Commerce
(ICC) which, it is suggested, has institutionalized the procedure of international
commercial arbitration by the enlisting of young progressive arbitrators and
the scrutiny of arbitrators’ conduct of the proceedings (most controversially
by the use of terms of reference and the review of awards). The result is that
the ICC has ‘devoured the father founders to better follow their work’.
The authors maintain that the market for international commercial
arbitration was further stimulated over the same period of time (through
the 1960s, 70s and 80s) by another conflict, that between the north (Anglo-
American multinationals) and the south (Third World countries). Transnational
economic and political conflicts arising in the wake of decolonization
(symptomatic of which was the arbitrary nationalization of Western
interests, particularly in oil) became the impetus and the raw material for
the construction of a transnational legal order and created the ‘dynamic’ (as
the authors frequently describe it) for the growth of international commercial
arbitration. In that context, the reluctance of Western interests to submit
disputes to local judges and local courts, on the one hand, and an increasing
insistence on the part of Third World countries that their own laws be
adopted to govern contracts, on the other, encouraged recourse to ‘general
principles of international commerce’ or lex mercatoria, and thereby
increased the influence of civil law professors and ‘grand notables’ who
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© Blackwell Publishers Ltd 1997
propounded it. (The authors subsequently note the relative decline in the
role of the lex mercatoria as a result of the ceding of influence by the ‘grand
old men’ to the Anglo-American international law firms, and the criticism
by the ‘technocrats’ fostered by them of the imprecision of the lex mercatoria
and the degree of discretion it affords to arbitrators.)
Following a case study demonstrating the nature of the conflict between
New York litigators and civil law academic lawyers, the analysis moves on
to a consideration of the way in which the development and transformations
in the international area of commercial arbitration have led to an alteration
of the hierarchies and positions found in the national domain, which in itself
affects the way that business disputes are handled. The essential message is
that international commercial arbitration is, in effect, a club of its own, self-
promoting and, to an extent, self-important, with a ‘foundation in learned
law created by the ability of major clients to invest heavily in legal
representation in “big stake” cases.’
The authors point to the success of the ICC in the, at first blush, less than
promising environment of Paris in placing a new product on the ‘market of
justice’ in the 1960s, in response to the new demands and levels of
international economic developments, the political challenge of the Third
World, and the problem of managing East-West commercial relations. They
explain why the lack of control over the handling of business disputes by
the Cour d’Appel and the Tribunal de Commerce de Paris and the distain of
the Paris Bar for ‘vulgar’ conflicts arising out of commercial life – the
distance between the worlds of law and business, as the authors put it –
afforded the founding fathers of modern international commercial arbitration
in France, notably Goldman and Eiseman, and the incoming Anglo-
American law firms an opportunity to exploit the resultant gap. In contrast,
it is argued, the City of London, for all its long history as an arbitral centre,
was unable to exploit the situation at that time, essentially, because legal
practitioners were restricted by the ‘symbolic field’ to which they belonged,
namely, one in which the Bar and the Commercial Court had such an
overwhelming influence that any form of business dispute resolution which
might seek to establish itself unchecked and unsupervised could not flourish.
Having begun to explore why international business practices led to the
location of the ‘capital’ of international commercial arbitration in Paris, the
study proceeds to consider in more detail the circumstances prevailing in
England, the United States of America, Stockholm, Cairo, and Hong Kong.
It comes, after a study of the first three, to the ‘quite surprising finding’ that:
international commercial arbitration . . . is not an extension of domestic knowledge and
usages with respect to business justice. It arrives as something new.
After a brief return to the explanation as to why Paris and the ICC served
as the ‘beach-head for the penetration of legal multi-nationals of the
European market of arbitration’, the book sets out the reasons for the
authors’ conclusions: that international commercial arbitration in general is
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© Blackwell Publishers Ltd 1997
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