Arbitration Without Law: Choice of Law in FRAND Disputes

By Eli Greenbaum

Recent arbitration between InterDigital and Huawei seems to demonstrate the purported advantages of arbitration as a means of dispute resolution.  The warring parties subsumed their multiple suits across different jurisdictions and forums into a single binding arbitral process.  By virtue of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“the New York Convention”), the arbitral award would be enforceable across jurisdictions.  But even an agreement to arbitrate requires agreement on certain basic matters.  On the most fundamental level, it requires agreement on the substantive and procedural laws governing the dispute, as well as the situs—or location—of the arbitration.  The InterDigital arbitration shows the unfortunate difficulty of bridging even these basic gaps, and the recent Southern District of New York decision in InterDigital Communications, Inc. v. Huawei Investment & Holding Co., concerning the arbitral award, may make such agreement even harder.  At the same time, however, InterDigital provides unexpected insight into when proceeding without such agreement can facilitate dispute resolution.  An agreement on substantive law may not necessarily provide legal clarity, and arbitrating parties should weigh the difficulty of obtaining consensus on such basic matters against the certainty that substantive law can, in practice, bring to the arbitration.