Hossein Fazilatfar, Overriding Mandatory Rules in International Commercial Arbitration

Date01 September 2020
Published date01 September 2020

Public policy, and its reflection in overriding mandatory rules, has been a long-discussed hurdle in the international arbitration community, and it still represents a puzzle for even experienced arbitrators and academics. This book leads the reader through five chapters of a well-thought-out perspective on the application of overriding mandatory rules in international commercial arbitration.

The definition of overriding mandatory rules has long been discussed back-to-back with the notion of public policy. It is not an easy job to offer a solid definition of either of these terms; however, the author's attempted definition in chapter one is concise and supported by a thorough overview of legal sources and authorities. The leitmotiv of the pursuit of the definition of overriding mandatory rules is that the definition of these rules is underpinned by the notion of public policy, even though the mandatory rules have, over time, emerged as a separate legal institution from public policy (26). This separation or “emancipation” is, however, respected to the extent of using “the Shield and the Sword” metaphor to depict the negative and the positive manner of the operation of public policy and mandatory norms respectively (28–29). The assertive nature of mandatory rules stems from the definition that is provided, according to which these are “provisions with an imperative nature, thus directly applicable within their sphere of application, irrespective of the chosen law governing parties’ commercial relationship” (21).

When discussing the definition of public policy, the author points out the spectrum of definitions: from domestic public policy, being the broadest notion, to international public policy, and finally, transnational public policy (9–19). These intersect with the theories of international arbitration – the localized, international, and transnational theories – but unfortunately, the book fails to take an express stance regarding which theory is being used with respect to the definition of public policy. Based on the author's emphasis that public policy involves “denying [foreign judgments or rules of law] domestic effect” (14), one could assume that the author has accepted the localized theory as a starting point for the discussion. This, however, leaves the question of whether the book provides an equally valid roadmap for practitioners and academics adopting the two other theories of arbitration, especially the transnational theory of arbitration...

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