The essence of arbitration lies in the parties’ freedom of choice, as it stems from the principle of party autonomy, given that the parties may decide how, by whom, and in what manner their disputes will be resolved.
This principle can be seen as the “driving force” of arbitral proceedings, present in all their aspects—from the decision to include an arbitration clause in a contract to the definition of procedural rules, the choice of arbitrators, the applicable law, and procedural deadlines.
Indeed, party autonomy is a major distinguishing feature of arbitration. While judicial proceedings are imposed by a predetermined system, arbitration allows the parties to “create” their own dispute resolution system, tailored to their needs and to the nature of the contract and the dispute.
It is important to note, however, that this autonomy is not absolute. It must be exercised jointly by the parties, with due regard for good faith, public policy, good morals, and the fundamental principles of due process and equality of arms. Within these limits, however, party autonomy is broad and powerful. When the parties to a contract opt for arbitration, they may shape the entire dispute resolution experience: deciding on the seat, the language, the number of arbitrators, the administering institution, the timelines, and even the standard of decision-making—whether based on law or on equity—thereby reinforcing another advantage of arbitration, namely flexibility.
In business practice, this characteristic is one of the factors that make arbitration so attractive. Consider, for example, a dispute over the scope of an engineering contract. Instead of submitting the matter to the judiciary—where it may be subject to multiple appeals and drag on for several years—the parties may agree in advance that the dispute will be decided by subject-matter experts, in a technical and confidential setting, with timelines compatible with the realities of the business (and, best of all, through a binding decision).
In an increasingly dynamic and competitive business environment, party autonomy serves as a tool for efficiency and predictability in arbitral proceedings, allowing disputes to be resolved by those who truly understand the matter and within a framework chosen by both parties.
