Originally from Law and Practice of Arbitration - 4th Edition

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The law of arbitration is comprised of a set of basic principles, concepts, and doctrines. Understanding the latter is essential to writing arbitration agreements, participating in the arbitral process, and conducting judicial litigation relating to it.

1. Party Autonomy

The primary rule that governs the law, practice, and regulation of arbitration in the vast majority of national jurisdictions, including the United States, is the principle of freedom of contract. To civil law lawyers, this is known as the party autonomy concept or the will of the parties. In Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University,1 the U.S. Supreme Court endorsed this fundamental principle when it held that:

The FAA does not require parties to arbitrate when they have not agreed to do so . . . nor does it prevent parties who do agree to arbitrate from excluding certain claims from the scope of their arbitration agreement. . . . It simply requires courts to enforce privately negotiated agreements to arbitrate, like other contracts, in accordance with their terms. . . . Arbitration under the Act is a matter of consent, not coercion, and parties are generally free to structure their arbitration agreements as they see fit. . . .2

Freedom of contract allows arbitrating parties to write their own rules of arbitration—in effect, it permits them to establish the law of arbitration for their transaction. The parties can customize the arbitral process to their needs—eliminate legal rules or trial techniques that might prove inconvenient or unsuitable, and maintain procedural elements they believe necessary to achieving fairness, finality, and functionality.