Irrespective of the increasing
harmonization of law at the transnational level, every arbitration raises a
number of conflict of laws problems relating to procedural questions as well as
to issues concerning the merits of the case. Unlike a state court judge, the
arbitrator has no "lex fori" in the proper sense providing the relevant conflict
rules to determine the applicable law. This raises the question of what conflict
of laws rules to apply and, consequently, of the extent of the freedom the
arbitrator enjoys in dealing with this and related issues. The best example of
the importance of conflict of laws questions in arbitration is the
Vivendi-Elektrim saga where the outcome of the various proceedings depended on
the question of characterization.
