Commercial Arbitration without Hearings: The Court of Innovative Arbitration

• Author: Richard McLaren & Kaleigh Hawkins-Schulz
• Pages: 443-460

443

chapter seventeen

Commercial Arbitration without

Hearings: The Court of Innovative

Arbitration

riChArd mClArEn & KAlEiGh hAWKins-sChulz

A. INTRODUCTION TO THE COURT OF INNOVATIVE

ARBITRATION

The Court of Innovative Arbitration (COIA) was established in

late 2015 to provide an expedited commercial arbitration pro-

cess in response to the reality that commercial arbitrations were

becoming more lengthy and costly.1 The COIA is modelled after

the Basketball Arbitral Tribunal (BAT), which was established

in 2007. This chapter describes the principles and procedures

underlying the COIA, and it describes how the BAT, as the par-

ent from which the COIA emerged, operates to explain how the

COIA is likely to develop. The chapter also discusses how the

conceptual principles underlying the COIA are gaining inter-

national momentum and posits that the COIA is emerging as

a strong contender to be a successful and widely used mode of

commercial dispute resolution in the future.

1 See Dirk-Reiner Martens & Heiner Kahlert, “Back to the Roots of Arbitration”

Kluwer Arbitration Blog (26 October 2015), online: http://kluwerarbitrationblog.

com/2015/10/26/back-to-the-roots-of-arbitration.

riChArd mClArEn & KAlEiGh hAWKins-sChulz

444

B. FOUNDATIONAL PILLARS OF THE COIA

1) Ex aequo et bono

The foremost foundational pillar of the COIA is that decisions

can be based on principles of ex aequo et bono, that is, justice and

fairness as recognized internationally. The COIA Arbitration Rules

state, “If the Arbitrator is authorized by the parties to decide the

dispute ex aequo et bono . . . , he shall apply general considerations

of justice and fairness instead of any particular national or inter-

national law.”2 This is the case irrespective of the parties’ domicile

or the seat of arbitration.

The application of a foreign national or international law very

often causes signicant delay as the arbitrator is most likely not

familiar with such law. Under traditional principles of commer-

cial arbitration, the proof of foreign legal systems must be ob-

tained through expert testimony. Having been educated on the

content of the foreign legal principles, the arbitrator must then

interpret the contract and other aspects of the dispute in accord-

ance with the applicable domestic laws. To apply foreign law is

both time-consuming and expensive. An expert in the foreign law

to be utilized must rst be accepted by the parties and the arbi-

trator as being such. If accepted, the expert must then opine upon

the parameters of the foreign law applicable to the dispute at arbi-

tration. This is an especially relevant consideration for cases that

may be submitted to the COIA since many commercial matters

have an international dimension.

The clash of conicting local domestic laws in an international

commercial arbitration is at the centre of the diculties in inter-

national commercial law disputes, and relying on ex aequo et bono

avoids this pitfall. The use of the principle of ex aequo et bono also

eliminates the possibility of conict or unfairness surrounding

the use of expert witnesses.3 For example, one party may not be in

2 COIA (Court of Innovative Arbitration) Arbitration Rules (in force as of 1 Oc-

tober 2015) art 16.3, online: http://coia.org/wp-content/uploads/2015/10/

151001-COIA-Arbitration-Rules.pdf [COIA Rules].

3 See Martens & Kahlert, above note 1.