Cultural Dimensions, Psychological Expectations and Behavioral Patterns
in Arbitration
Fan Kun
Visiting Scholar, Harvard Yenching Institute;
Assistant Professor, Faculty of Law, Chinese University of Hong Kong ([email protected])
Even though the procedural rules are getting more standardized and less country specific,
expectations of the process differ based on culture background of parties or arbitrators. To use an
analogy, the two impressionists Pissaro and Cezanne often painted and drew side-by-side, yet
each was keen to demonstrate his own personality. From their paintings on the same subject, we
can clearly observe two paths, and two very different ways of thinking about painting. So do
arbitrators. When exercising the broad procedural powers, two different arbitrators, influenced by
their own cultural background, may paint the arbitration proceedings differently just like Pissaro
and Cezanne. This influence of the cultural attributes of arbitrators, counsels or lawyers is often
implicit and sometimes unconscious. However, one cannot overlook culture and its role in
shaping institutional design and its influence on the process and even the outcome of the
arbitration.
One example of the cultural divergences is the perception on the role of the arbitrators. The
appropriateness of arbitrators to act as mediators remains to be one of the most controversial
issues in international arbitration today, due to different perceptions on the role of arbitrators: If
the role of arbitrators is perceived to ensure that arbitration in general provides the parties with a
menu of processes that may assist the parties in resolving their disputes in the most effective way,
which includes assisting the parties in reaching a fair resolution of their differences at the earliest
practical time, then facilitating settlement would fall within their mission; if role of arbitrators is
considered solely to ensure that the arbitral process results in an enforceable award arrived at in a
fair way, then promoting settlement should fall beyond the mission of the arbitrators.
Different Behavioral Patterns
There is a noticeable regional variation in the role of arbitrators in settlement, with arbitrators
in the East playing an active role in promoting settlement. An empirical survey revealed that a
significantly higher number of respondents working in East Asia (82 %) saw the facilitation of
voluntary settlement as one of the goals of arbitration, in comparison to 62 % of practitioners
working in the West. More than 40 % of practitioners working in East Asia report regularly
suggesting settlement negotiations to the parties, in comparison with 16 % of their counterparts
working in the West. Similarly, over 30 % of practitioners working in East Asia reported that
arbitrators regularly participate in settlement negotiations in comparison with 16 % of those
surveyed working in the West (Ali, 2011). Another survey shows that Chinese arbitrators almost
systematically propose mediation at the beginning of arbitration proceedings (Fan, 2012). I argue
that the different behavioral patterns are attributable to the different notions of the dispute
resolution process and divergent psychological expectations on the role of neutrals, as well as
variations in cultural dimensions.
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Different notions of the process and divergent psychological expectations of the neutrals
In the West, the notion of mediation and arbitration is clearly distinguishable: the former is an
adjudicatory process and the latter is not. The role of an arbitrator and the role of a mediator are
clearly defined and can be easily distinguished. In contrast, the notion of mediation and
arbitration was historically blurred in East Asia. For instance, the function of the dispute resolver
in traditional Chinese society (ie, family heads, clan heads, village leaders, guild leaders, tiaoren)
was neither equivalent to that of a mediator nor an arbitrator defined in the Western context.
Sometimes their role resembled that of an arbitrator, who heard the arguments of the parties,
looked into the evidence, and then handed down a decision. Although not directly enforceable as
a judgment, such decisions were often respected by the disputing parties, as it was considered
dishonorable to disobey the elders. However, before the dispute reached the stage of decision
making, the dispute resolver often first adopted a conciliatory role and suggested ways in which
the disputants could come to a compromise or suggested possible solutions satisfactory to both
disputing parties. In that sense, their role may be comparable to that of a mediator, who assists
the parties to arrive at a satisfactory settlement. (Fan, 2013)
The different notions of the process have led to divergent perceptions and psychological
expectations on the role of the arbitrator today. In the West, the arbitrator is generally viewed as
an unbiased fact-finder unconnected to the parties, uninfluenced by previous knowledge of the
facts of the dispute, who renders a decision based solely on the application of the law to proven
facts, without regard to the effect on the parties’ relationship. As a result, there is a clear
distinction between the role of an arbitrator and that of a mediator, and the combination of the
two roles is not viewed favourably. In East Asia, on the other hand, parties tend to seek an
arbitrator who is familiar with them, and who will not only end their dispute, but do so in a
mutually agreeable fashion, with as little loss of face as possible. Thus, the distinction between
the function of the arbitrator and that of the mediator is blurred and can be combined (Donahey,
1995).
Variations in cultural dimensions
A study carried out by Geert Hofstede may offer some quantitative indication of the cultural
personalities in Asian societies. Hofstede’s model suggests some features of Asian societies: (i)
low Individualism (IDV): most Asian societies value collectivism, in which the interests of the
community are placed above the individual. Individual interests can be sacrificed in order to
maintain social harmony; (ii) high Long-Term Orientation (LTO): maintaining relationship is
often considered more important than aggressively asserting individual rights; and (iii) high
Power Distance Index (PDI), suggesting greater degrees of hierarchy. An interesting correlation
demonstrated by empirical research is that people high on power distance placed lesser weight on
procedural justice than distributive justice concerns (Tom Tyler, et al., 2000). In other words, Asian
people’s perception of justice tends to take into account the unique features of each case, and be
less concerned with procedural fairness.
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Cultural Dimensions in Asia
140
China
120
Japan
100
Korea
80
Hong Kong
60
56.5
40
45
40
Singapore
Taiwan
20
India
0
Maylaysia
IDV
LTO
PDI
When it comes to dispute settlement, all of these common culture dimensions can be
translated into a ‘conciliation culture’ comprising a variety of forms, which has flourished in Asia
for centuries. The ‘conciliation culture’ stems from a deep mistrust in any pre-set rules of law
and the concept of right as an absolute entitlement. The belief behind it is that no such general
rules can deal with every aspect of the complicated human relations. A just solution must take
into account of the particularities of each case. A conciliatory process offers a socially and
individually satisfactory result, and is thus a preferred way to reach a just solution. Under such an
ideology, it is not socially acceptable to sue in order to win one’s right without first giving the
other party the opportunity to find a reasonable solution (Taniguchi, 1996).
Influenced by its local culture emphasizing conciliation to maintain harmony, even when an
arbitration is initiated, Asian arbitrators tend to play an active role in assisting the parties in
reaching a mutually agreeable solution and restore harmony and Asian parties tend to accept such
assistance from arbitrators. Furthermore, with a high power distance and thus paying less
attention to procedural fairness, Asian people are generally less concerned about due process and
natural justice concerns raised by the opponents, and focus more on having the disputes resolved
in the most efficient manner. As a result, the combination of mediation and arbitration is
generally recognized and widely practiced in Asia, in both common law and civil law
jurisdiction.
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