2025 LAW: Arbitration and the Rule of Law

As part of London Arbitration Week 2025 (“LAW”), Queen Mary University of London (“QMUL”), in partnership with OGEMID and the CIArb London Branch, hosted an event dedicated to International Arbitration and the Rule of Law. The programme featured two keynotes and a panel discussion examining whether, and how, arbitration strengthens or strains the rule of law.

The event opened with welcome remarks from Professor Dr. Crina Baltag FCIArb (QMUL) and Robert Price FCIArb (CIArb London Branch; Latham & Watkins LLP). Professor Baltag delivered the first keynote, addressing How arbitration contributes to the rule of law, while Sir Robin Knowles CBE followed with a second keynote on Rule-of-law concerns about arbitration and arbitration’s legitimacy.

A panel discussion moderated by César Pereira C.Arb FCIArb (Justen, Pereira, Oliveira & Talamini) and Hon. Barry Leon FCIArb (33 Bedford Row | Arbitration Place) then explored the practical implications of evolving rule of law issues. The panel comprised Sir Bernard Eder, Peter Griffin (GBS Disputes), Hilary Heilbron KC (Brick Court Chambers), and Khawar Qureshi KC (McNair International).

This post summarises the principal takeaways.

1.      Arbitration as a Rule of Law Mechanism

Professor Baltag opened by recalling access to justice as one of the “ingredients” of the rule of law. Drawing on Lord Bingham’s formulation, access to justice is the ability to resolve bona fide civil disputes “without prohibitive cost or inordinate delay”. Arbitration should enable parties to vindicate rights through a neutral, efficient, and effective process, fulfilling its role in the rule of law.

However, she warned, arbitration’s contribution to the rule of law weakens when delays and costs escalate. Echoing the conclusions of Lord Justice Jackson and Lord Woolf’s studies, she stressed that dispute-resolution mechanisms must remain affordable if they are to ensure access to justice.

She posed a central question: “Should access to arbitral justice be viewed differently from access to state justice”? Arbitration is consensual, she noted, yet its operators still bear responsibility for due process, fairness, and efficiency. Professor Baltag concluded that arbitration must remain accessible, affordable, and expeditious if it is to continue fulfilling a rule of law function.

2.      Arbitration, Fairness, and Systemic Coordination

Sir Robin Knowles stressed that business and society depend on the rule of law, which in turn relies on courts, arbitration, and mediation operating as a coordinated system. He identified four qualities essential to dispute resolution: certainty, confidence, trust, and fairness.

In his view, two systemic challenges require greater attention:

(1)   accurate assessment of quantum, particularly in high-value claims where resource asymmetries can skew outcomes; and

(2)   corruption, which may persist during proceedings and leave tribunals uncertain how to act while safeguarding the process.

These issues arise in courts as well, but are more complex in international arbitration because disputes are resolved “across systems and cultures” without a single overarching legal framework.

Sir Robin also addressed emerging issues such as AI governance, climate-related responsibility, and virtual assets, noting that confidentiality complicates oversight.

He set out six priorities for strengthening arbitration’s rule of law function:

(1)   improve quantum assessment;

(2)   enhance tools to address party imbalance;

(3)   recognise the supervisory role of courts;

(4)   avoid assuming uniform reasons for choosing arbitration;

(5)   emphasise ethics, not only cost and speed; and

(6)   treat courts, arbitration, and mediation as an integrated system, consistent with SIFoCC conclusions.

He invited the audience to reflect on what parties truly expect when agreeing to arbitration: neither untested quantum nor inaction in the face of corruption or imbalance. Party autonomy entails responsibility, and these issues require ongoing attention. Sir Robin concluded that these matters must be addressed not only during the proceedings but mostly at the contractual stage, when shaping the dispute-resolution framework.

3.      Panel Discussion

3.1 Can Arbitration Collaborate With the Rule of Law if Arbitrators Are Not Required to Apply the Law Correctly?

Sir Bernard started the debate with controversy, stating that “arbitration and the rule of law are uneasy bedfellows”. The New York Convention and the UNCITRAL Model Law, he noted, focus primarily on jurisdiction and due process, not on the substantive correctness of awards. If an award is legally incorrect and cannot be challenged on that basis, he argued, arbitration cannot meaningfully claim to uphold the rule of law. He concluded that arbitration serves party autonomy, not the rule of law: “The rule of law in arbitration is the ability to obtain a decision not in accordance with the rule of law”.

Mr. Griffin firmly disagreed, emphasising that the rule of law encompasses more than the correct application of substantive law. Arbitration, he argued, is often the only mechanism that provides fair and impartial dispute resolution in jurisdictions where the administration of justice is compromised. Its global enforceability is itself a rule of law achievement.

Ms. Heilbron also disagreed, recalling the Dallah case, where the UK Supreme Court applied French law differently from the French courts. Even judges, she noted, may misapply the law without any further appeal, so this is not an arbitration-specific problem.

3.2 Does Consent to Arbitrate Impair Parties’ Access to Independent Courts?

Ms. Heilbron responded decisively: it does not. Arbitration avoids the home-court advantage and uncertainty of national courts, and access to state courts is not always assured in practice. Parties voluntarily choose arbitration, typically with legal advice, and select the seat, and therefore, the supervising courts.

She noted that arbitration often enhances access to justice, including through third-party funding, and provides a final, binding process. Tribunals remain subject to court supervision, as they cannot assume jurisdiction they do not have, and courts, particularly in England, can review jurisdiction de novo.

On concerns about arbitrator independence, she observed that in three-member tribunals, the chair, not party-appointed arbitrators, usually exercises decisive influence. Concerns about the co-arbitrators, in her view, are overstated, and fairness and due process remain the central factors.

3.3 Does Arbitration’s Legitimacy Depend on Procedural Fairness?

Mr. Qureshi highlighted that arbitration is an opt-out from court system, but with safeguards. The recently amended English Arbitration Act reinforces fairness and efficiency: section 33 requires arbitrators to act fairly, section 24 requires impartiality, and most challenges are procedural in nature, echoing issues raised in Sir Robin’s P&ID v Nigeria judgment.

Arbitration lacks the transparency of courts, he cautioned, and equality of arms may be illusory. A State responding to multiple claims while poorly resourced may face an inherent disadvantage, “like taking candy from a baby”. He added that legitimacy concerns are deeper in treaty arbitration, where review is narrower, public policy safeguards do not apply, and ICSID annulment standards are limited.

Sir Robin asked how tribunals can address clear imbalances, to which Mr. Qureshi responded that the chair plays a critical role: the stronger and more confident the chair, the less room for procedural abuse. Arbitrators must sometimes ask difficult questions, even when parties do not raise them.

Ms. Heilbron agreed, noting that tribunals must evaluate how to proceed when only one party appears. Some arbitrators rely strictly on what parties raise, others probe further to avoid unenforceable awards. This tension, present beyond corruption cases, requires continued debate.

3.4 When States Refuse to Honour Awards, Does Arbitration Depend on the State for Its Rule of Law Legitimacy?

Mr. Griffin warned that refusal to honour arbitration agreements or awards undermines the rule of law. He cited Heirs of the Sultan of Sulu v Malaysia, in which Spanish courts imposed a prison sentence and a one-year ban on arbitrator Gonzalo Stampa for failing to comply with a court order to halt the arbitration, a precedent he believes creates a chilling effect.

He added that Spain has refused to pay almost all ECT awards against it, seeks to extend Achmea to deprive intra-EU investors of treaty rights, and has pursued worldwide anti-suit injunctions and clawback threats. He compared this to Russia’s approach in Lukoil v. Russia, including amendments giving Russian courts exclusive jurisdiction and attacks on party autonomy.

According to Mr. Griffin, the EU has reinforced this trend: the Court of Justice of the European Union’s Achmea judgment and the Commission’s position in Antin, treating payment of damages as unlawful State aid, supported Spain’s non-compliance.

Mr. Griffin concluded that the rule of law breakdown lies with Spain, Russia, and the EU, not with international arbitration, which still offers effective enforcement routes in neutral jurisdictions. Commercial arbitration, supported by the New York Convention, remains, nevertheless, a strong promoter of the rule of law.

Mr. Qureshi responded by noting that the Sultan of Sulu case arose under a 19th-century treaty with no arbitration clause, involving claimants asserting questionable lineage, and resulted in awards later set aside in Paris and rejected in the Netherlands and Luxembourg. Regarding Russia, he noted that in certain anti-suit injunction cases (such as Google), courts were upholding contractual promises to arbitrate, rather than usurping jurisdiction.

4.      Conclusion

The debate concluded with a lively Q&A session. Across the keynotes and panel discussion, one theme consistently emerged: arbitration’s relationship with the rule of law is neither absolute nor uniform. It can be challenged, strengthened, or undermined depending on actors and circumstances. But when supported by fair process, ethical conduct, and effective court supervision, arbitration remains a powerful instrument for upholding the rule of law in international commerce.