Revue - Les Cahiers de l'Arbitrage N°1-2023 - 129

COMMENTAIRES DE JURISPRUDENCE
one nation or multiple nations, and neither the commercial arbitration tribunal nor
the ad hoc investor-State tribunal qualified.
3. A critical analysis of Luxshare
In the authors' view, Luxshare's application of § 1782 is incorrect. Most
importantly, the Court misunderstood the source of an arbitral tribunal's authority-
believing it to spring solely from the consent of the parties, unmoored from the
Sovereign. Irrespective of end-result, however, the Court's opinion suffers from at
least two other flaws (more precisely, lacunae): It never defines the contours of
" governmental authority " and-in part as a result-it does not explain how a State
can grant " governmental authority " to an arbitration tribunal. We address each
flaw in the following three subsections.
3.1 The Court misunderstood the source of the authority
of arbitral tribunals
Foundational to the holding in Luxhsare is the Court's premise that the
commercial and investor-State tribunals at issue derive their authority solely from
the consent of the disputing parties. 49
authority of arbitral tribunals. Instead, the source of an arbitral tribunal's authority
is both the consent of the disputing parties and the law (national and international).
First, commercial and ad hoc investor-State tribunals do not operate in a
legal vacuum. It is a basic principle of international arbitration that the law of the
arbitral seat generally governs the arbitral proceeding. 50
The law of the seat often
contains mandatory and permissive provisions and allows parties to derogate from
the latter through, for instance, the selection of arbitral rules. 51
seat remains the law that governs the arbitration. 52
But the law of the
As a corollary, only the courts
of the seat have supervisory authority over the validity of arbitral awards through
the vacatur mechanism. 53
49. See Id. at 2089 ( " Private parties agreed in a private contract that DIS, a private disputeresolution
organization, would arbitrate any disputes between them. " ); see also id. at 2090 ( " In a
private arbitration, the panel derives its authority from the parties' consent to arbitrate. The ad hoc
panel in this case derives its authority in essentially the same way. " ).
50. See 2 Gary Born, International Commercial Arbitration § 11.01[B] (3d ed. 2021) ( " Of critical
importance, the national arbitration legislation (and judicial decisions) of the arbitral seat will almost
always provide the procedural law of the arbitration and govern a wide range of issues concerning
both the 'internal' procedural conduct of the arbitral proceedings and the 'external' relationship
between the arbitration and national courts. " ); cf. Karaha Bodas Co. v. Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara, 364 F.3d 274, 290-92 (5th Cir. 2004) ( " Authorities on international
arbitration describe an agreement providing that one country will be the site of the arbitration but the
proceedings will be held under the arbitration law of another country ... as ... complex, inconvenient,
and inconsistent with the selection of a neutral forum as the arbitral forum. " ) (citation omitted).
51. See e.g., Zivilprozessordnung [ZPO] [Code of Civil Procedure], § 1042(3).
52. See Nigel Blackaby et al., Redfern and Hunter on International Arbitration, § 1.78 (6th ed. 2015).
53. See Karaha Bodas, 364 F.3d at 287 ( " Only a court in a country with primary jurisdiction
over an arbitral award may annul that award. " ); Yusuf Ahmed Alghanim & Sons v. Toys " R " Us,
Les Cahiers de l'Arbitrage 2023‑1
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That is a misunderstanding of the source of
Revue - Les Cahiers de l'Arbitrage N°1-2023

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