Newsletter-21

184 NEWSLETTER 2016 Soft Law in International Arbitration* Att. Mehves Erdem Introduction Application of soft law in international arbitration has increas- ingly become more significant. Mainly due to the party autonomy that is dominant in arbitration states tends to regulate arbitration laws in a limited way. This created a new market for players, besides lawmakers to codify rules. These rules that are drafted by such private players have a substantive, or are of a procedural, nature. One of the most referred to substantive soft law is the UNIDROIT Principles of International Commercial Contracts (“UNIDROIT Principles”). The UNIDROIT Principles will be referred to when an arbitral tribunal is in the phase of resolving the dispute (i.e. when the merits are examined). However, arbitration is a dispute resolution mechanism, and bears a significant amount of procedural matters, as well as soft law that aim to regulate such procedural matters, and which are arbitration specific, will be the main focus of this newsletter article. What is soft law in international arbitration? There is no standard definition for soft law that is mutually agreed to, in practice. However, it is possible to put forth characteristics of procedural soft law, also referred to as para-regulatory texts (“PRTs”) 1 in arbitration 2 . The main purpose of these rules are to assist and guide * Article of December 2016 1 For the purpose of this newsletter article, “soft laws” and “PRTs” will be used, interchangeably. 2 Favalli, Daniele , An Overview of Existing Para-regulatory Texts (“PRTs”): Anal- ysis, Facts and Figures, ASA Special Series No. 37, p. 1-16; Daniel p.4: “Legal texts covering substantive law aspects may also be regarded as soft laws and may, in fact, incorporate aspects similar to PRTs when their application is not directly provided for in the contract. These legal texts are not PRTs, but binding provisions, such as the ICC Incoterms, UNIDROIT Principles of International