The Rise of Arbitral Power Over Domestic Courts

  • June 2013
  • 1 Stan. J. Complex Litig. 373
  • Article
Michael D. Goldhaber

On numerous occasions, domestic courts have been called upon to check the power of arbitrators. These occurrences have not gone without notice by commentators, and there is a rich literature discussing courts’ control over arbitrators. But the opposite phenomenon—that is, the willingness of international arbitrators to check the power of domestic courts—has received no such treatment. Indeed, the existence of arbitral power over domestic courts likely comes as a surprise to observers outside the world of investor-state arbitration. It has been seldom considered that arbitrators might control judges. Nonetheless, investment tribunals are far more willing than courts to assert control over a foreign court, and do so with increasing frequency.

The unique strength of arbitral power over courts has been dramatically demonstrated in Chevron’s epic dispute over oil pollution in Ecuador. On January 25, 2012, the arbitrators hearing Chevron Corporation v. Republic of Ecuador issued interim orders that the Republic (including its judiciary) take all measures within its power to halt a vast Ecuadorian judgment against Chevron from becoming final and enforceable. The very next day, American courts declined to serve as a “transnational arbiter” to block enforcement of the Ecuadorian judgment.

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