Mini-Symposium

Overriding Mandatory Rules in International Commercial Arbitration: A Comparative Study between France, Switzerland, England and Egypt

This event is anchored in the doctoral research of Ibrahim Shehata, whose work addresses one of the most delicate tensions in international commercial arbitration today. Overriding mandatory rules – the lois de police or imperative laws a state insists on applying regardless of the parties’ chosen law – sit at the intersection of party autonomy and sovereign interests. Their relevance in arbitration cannot be overstated: such rules protect crucial public interests, yet they pose a challenge to the arbitral process built on party choice. If arbitrators ignore these mandatory norms, their awards risk annulment or non-enforcement by courts; yet excessive deference to every state mandate may undermine the principle of party autonomy that undergirds arbitration. This core dilemma underlies Shehata’s research, driving two fundamental questions: under what conditions should arbitrators apply overriding mandatory rules, and how do national courts review an arbitral tribunal’s treatment of those rules? These questions go to the heart of arbitration’s legitimacy and enforceability, balancing state interests with the finality of awards.

To explore these issues, Shehata’s thesis adopts a rigorous comparative methodology across four jurisdictions – France, Switzerland, England, and Egypt – each representing a distinct legal tradition and approach. Through a survey of national laws and court decisions, as well as an empirical analysis of arbitral awards, the research examines how tribunals and courts grapple with overriding mandatory rules in practice. The comparative lens is especially illuminating: for example, French courts confine themselves to enforcing awards unless a violation of international public policy is evident (often ignoring foreign mandatory statutes), whereas Swiss courts require that arbitrators at least consider all invoked mandatory rules, intervening only for core public policy violations. England’s courts refuse to enforce awards that uphold contracts illegal under any applicable law, treating foreign and domestic mandatory rules alike, and Egyptian courts, in line with UNCITRAL Model Law principles, show deference to arbitrators except in cases of manifest disregard of fundamental laws. These cross-jurisdictional insights – even illustrated by a single arbitral award’s inconsistent fate across France, Switzerland and England in the “Alstom saga” – highlight the diverse ways legal systems scrutinize arbitrators’ choices. By comparing these perspectives, the thesis not only charts the landscape of current practice but also identifies best practices that transcend any one legal system.

Importantly, this research makes both theoretical and practical contributions. Theoretically, it sharpens our understanding of how overriding mandatory rules can be defined and distinguished from public policy, and how arbitrators’ duty to render an enforceable award creates a bridge between the arbitration process and state legal norms. Practically, it offers guidance to arbitrators and practitioners: it clarifies thresholds and best practices for when to apply or consider mandatory laws, advising tribunals to proactively account for crucial mandatory norms of the lex causae (governing law) and other interested jurisdictions so as to preempt enforcement problems. The study also provides a nuanced model for courts. Shehata proposes that judges worldwide adopt a “Swiss-inspired” procedural check – verifying that arbitrators have duly considered all relevant overriding mandatory rules – as part of the international public policy standard of review. Such an approach, he suggests, would bolster state courts’ confidence in arbitration without undermining arbitral finality. In short, the thesis bridges the gap between sovereignty and party autonomy by recommending a balanced framework: arbitrators remain mindful of essential state laws, and courts, in turn, confine themselves to ensuring that diligence rather than re-litigating the merits.

By contextualizing these findings in a comparative panorama, Shehata’s research offers timely and much-needed insights. The proliferation of economic sanctions, financial regulations, and other mandatory statutes across jurisdictions makes this inquiry incredibly pertinent; arbitrators increasingly face situations where ignoring a country’s mandatory law could doom an award. This thesis arrives at a critical moment with practitioner-oriented recommendations for navigating that reality. Ultimately, the work underscores a fundamental “grand bargain” in international arbitration: the enforceability of arbitral awards is secured by respecting certain overriding laws that societies deem indispensable. By carefully balancing autonomy with mandatory norms, the research assures that arbitration can remain a robust and credible mechanism for resolving cross-border disputes.

In opening this symposium, we not only celebrate the scholarly achievement of Shehata but also invite all of us to reflect on the nuanced interplay between arbitral freedom and mandatory regulation that his comparative study illuminates. His findings set the stage for a rich discussion on how arbitral tribunals and national courts can harmoniously coexist in upholding justice and party autonomy across different legal systems. Let us engage with these insights and the questions they raise, as we delve into the theoretical frameworks and practical solutions presented by this remarkable comparative research.