Arbitration meets human rights—the Pechstein saga and its implications for commercial disputes

Abstract This article maps the future of commercial arbitration. With its decision in the Pechstein case, the European Court of Human Rights sanctioned the Swiss Federal Supreme Court for its rather generous approach towards the Court of Arbitration for Sport and imposed human rights restrictions on arbitration proceedings. The major upheaval is that Article 6 of the European Convention of Human Rights applies to ‘involuntary’ arbitrations with full force—including the right to a public hearing. Moreover, the concept of an involuntary arbitration agreement has not remained an oxymoron, as the court ruled that the agreements athletes must sign for their participation in sports competitions are to be classified as heteronomous. Building on this jurisprudence, the German Federal Constitutional Court held that even a serious imbalance of bargaining power may render arbitration agreements ‘involuntary’. Where does this case law leave commercial arbitration? One natural object of investigation is arbitration clauses in contracts that one party presents to the other on a take-it-or-leave-it basis; another is clauses included in the terms and conditions of undertakings that dominate the respective market in the sense of competition law. If such clauses were deemed to be heteronomous for the party on which they are imposed, arbitral tribunals would have to hold their oral hearings in public. Arguably, this would mean the end of commercial arbitration ‘as we know it’.