Public Policy and Mandatory Rules in International Commercial Arbitration

Public policy and mandatory rules play an important role in international commercial arbitration to the extent that the non-observance and application of public policy and mandatory rules by arbitrators, as the case may be, challenge the invalidity or non-enforcement. These two legal establishments narrow the scope of the free will of individuals and prevent the arbitrability of some issues. In addition to these similarities, there are also differences between public policy and mandatory rules, such as the mechanism of impediment to arbitration; In this way, mandatory rules appear as a primary obstacle and are aggressive, while public order is a secondary obstacle and is defensive. Public policy and mandatory rules are also important because they can be used as a legal tool and basis for the invalidation of unfair terms in arbitration agreements. However, it seems that public policy rules do not work in all cases to invalidate unfair terms, and that special legal provisions should be drafted to provide an appropriate solution to the challenge of unfair terms in arbitration contracts. A similar move can be seen by the French legislature. Utilizing a two-layer government control system to provide an opportunity to renegotiate and adjust the contract is a good way to deal with and overcome the challenge of unfair terms in arbitration contracts.