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Recent Book Shines Light on International Arbitration Issue

Hossein Fazilatfar

Hossein Fazilatfar

A book written by Hossein Fazilatfar, assistant professor of business law at Western Carolina University, on what experts have called one of the most pressing issues in the field of international arbitration is winning rave reviews from legal scholars and attorneys from international law firms alike.

Fazilatfar’s book, titled “Overriding Mandatory Rules in International Commercial Arbitration,” takes a deep dive into the sometimes competing concerns of the commercial affairs of business and industry and regulations that are designed to protect the public interest. It goes on to offer a potential roadmap for arbitrators and judges to follow when those competing interests hit the desk of an arbitrator in an international setting.

Unlike judges in a courtroom, arbitrators are appointed by the opposing parties in a transactional dispute in an effort to come to a resolution. As such, arbitrators gain their authority from the disputing parties through a contractual appointment that requires them to apply laws and rules as dictated by both parties. That said, arbitrators must also take into account any overriding mandatory laws of other jurisdictions that may come into play.

As a private adjudicator, the arbitrator has a duty to resolve any potential conflicts that may arise between the law chosen by the parties involved in the dispute and other mandatory laws that may apply even if not designated by the opposing parties as being applicable to their specific dispute, Fazilatfar said.

“The book recognizes how mandatory laws, also known as public policy norms, can complicate decision-making in arbitration tribunals when attempting to decide international commercial disputes,” he said. “It also provides a comprehensive understanding of mandatory laws and the status quo on how they are coped with both in tribunals and subsequently in courts. Finally, the book provides a framework for dealing with such norms in arbitration by considering the concerns of all actors involved: the parties, states or other governmental bodies, and adjudicators.”

The book is designed to be of interest to legal scholars and students researching the laws applicable in international commercial arbitration, as well as legal practitioners, including arbitrators, judges and attorneys as they deal with navigating the mandatory rules in international conflict resolution situations.

Topics covered in Fazilatfar’s book include the definition, distinction and function of public policy and mandatory rules of law; arbitrability of overriding mandatory rules; the role of overriding mandatory rules before arbitration tribunals; overriding mandatory rules and the judicial review of international arbitral awards; and approaches to mandatory rules in international arbitration.

“The impact of mandatory rules of law or mandatory norms is one of ‘the most burning issues’ in international arbitration practice. Such norms have been understood to cover both specific statutory provisions (an established law or rule) and general principles of public policy,” Fazilatfar said.

“The purpose of mandatory norms is twofold: not only to protect state or public interests but also to protect private interests that the state wishes to protect,” he said. “The mandatory or imperative nature of mandatory norms does not allow contracting parties to derogate from or evade them through coming to an agreement.”

Overriding mandatory norms are those that are “national provisions, compliance with which has been deemed to be so crucial for the protection of the political, social or economic order in the member state concerned as to require compliance therewith by all persons present on the national territory of that member state and all legal relationships within that state,” he said.

George A. Bermann, director of the Center for International Commercial and Investment Arbitration at Columbia Law School, is among those singing the praises of “Overriding Mandatory Rules in International Commercial Arbitration.”

“To say that Hossein Fazilatfar’s work on mandatory law in international arbitration is a major contribution to the literature is a vast understatement,” said Bermann, a world-renowned authority on comparative law, European Union law, international trade contracts, World Trade Organization dispute resolution, and transnational litigation and arbitration.

“No aspect of this complex subject escapes Fazilatfar's attention, and no prior writing on it fails to be valorized. Nor has anyone assembled all of this thinking in so clear, coherent and convincing a way. All who are interested in international arbitration, whatever the functions they perform, owe it to themselves to read this book and reflect on the insights with which it is replete,” he said.

International lawyer and academic Gary Born, chair of international arbitration and international litigation practices at the law firm Wilmer Cutler Pickering Hale and Dorr, applauded Fazilatfar’s book for deftly navigating a complex and enduring problem of international arbitration scholarship and practice – “how to reconcile the parties’ contractual bargain regarding choice-of-law with due consideration of imperative substantive rules while delivering an arbitral award that is minimally exposed to challenge or set aside claims.”

“In doing so, he adds invaluable structure and methodology to the ‘unruly horse’ of public policy/ mandatory law, deliberations about which have grown in number and complexity over the years,” said Born, author of “International Commercial Arbitration.” “His book reminds us of the responsibility that arbitrators bear when addressing this problematique on a case-by-case basis, and the sophistication required to do so. Fazilatfar’s insightful solutions and critiques enlarge the analytical toolkit available to arbitrators, as well as to practitioners, students and the academy, to discharge that responsibility.”

Fazilatfar said he is personally and professionally humbled by the response to the book, which is his first full-length manuscript. “I feel particularly proud for contributing something of professional value in a difficult area like law, which I am somewhat foreign to its language and culture,” said Fazilatfar, a native of Iran.

“Professionally, I feel humbled for the recognition of my work among colleagues of great respect in the field. Further, those admirations inspire me to continue exhausting my academic potentials in producing quality and impactful scholarship for the years to come, I hope. I, too, feel very grateful to all of those who made that piece of scholarship possible early in my academic career,” he said.

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