Stare Decisis Without Courts? Normative And Practical Arguments For Precedential Reasoning In Arbitration
- IJLLR Journal
- Apr 25
- 2 min read
Kavya S, The Tamil Nadu Dr. Ambedkar Law University, Soel
Subash S, The Tamil Nadu Dr. Ambedkar Law University, Soel
ABSTRACT
Arbitration stands out as a dispute resolution method because it offers procedural flexibility and privacy, along with self-governed authority to the parties. The doctrine of stare decisis does not constrain arbitral tribunals because they operate independently, unlike national courts. Ad hoc constitutions of each tribunal grant them independence to make decisions without any legal requirement to consider previous cases or their analogous facts or legal issues. The traditional understanding views this feature as favorable because it enables arbitration to adapt and maintain its focus on individual cases. International commercial and investment arbitration has witnessed substantial changes during recent decades because tribunals alongside practitioners now use past arbitral awards as persuasive reasons to validate their arguments and demonstrate legal coherence. This research investigates the developing precedent-based approach in arbitration while answering the query about whether and how arbitrators should develop stare decisis mechanisms in systems without formal court hierarchies. This study establishes that arbitral practice benefits from a specific form of precedential reasoning due to both effective normative and practical grounds.
This study reveals that arbitral decisions benefit from prior references because they increase award legitimacy and protect both legal principles and fair treatment of the same cases. Repeat commercial and investment parties seek legal coherence and predictability so the method meets their reasonable expectations. The practical benefits of precedential reasoning consist of reducing costs and increasing efficiency as well as maintaining a consistent dispute resolution framework. The legal process becomes more efficient because arbitrators can base their decisions on past reasoning rather than creating new frameworks from zero in each proceeding, which helps limit controversy by focusing arbitrators on the fundamental legal questions.
The paper examines negative consequences of precedent adoption, including unproductive preservation of flawed judgment choices and restricted flexibility, and the replication of formal judicial approaches in this minimally formal dispute resolution system. The author suggests applying a “soft precedent” framework that permits prior awards to serve as instructive but not mandatory. The proposed model keeps arbitration's core characteristics yet provides its users with advantages from legal consistency.
Keywords: Arbitration, Stare Decisis, Soft Precedent, International Commercial Arbitration, Investment Arbitration.
