Lex causae in international arbitration

During the latter part of the 20th century, arbitrators have increasingly resorted to novel approaches in the determination of the law applicable to the merits of the case, the lex causæ. Today, arbitral tribunals have been granted wide powers of discretion in determining the lex causæ; they are no longer bound to apply the private international law of the country in which the tribunal has its seat. Furthermore, arbitral tribunals abroad have increasingly begun questioning the boundaries of the lex causæ, holding that the lex causæ need not necessarily be the law of a particular country. This study introduces these pioneering tendencies and attempts to evaluate the foothold they have gained so far in Finnish arbitration law and practice. The questions whether and to what extent, if any, the determination or application of the lex causæ may affect the validity or enforceability of an arbitral award are also examined.