Gift Importers Ltd. has a contract with a Philippine government exporting agency for the purchase of numerous handmade artifacts. Since neither party was comfortable having the courts of the other party's country adjudicate any disputes between them, the contract contains a clause which identifies the procedure by which a third party acceptable to both would settle any disputes. The two parties in this case chose a German, Holtz, as their arbitrator. The contract is silent as to the language of an arbitration. Though neither party to the dispute has German as their native tongue, it would by custom probably be the language of this arbitration.

Question

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The choice of a neutral third party (Holtz, a German) as an arbitrator, and the absence of a specified language for arbitration in the contract, suggests that the arbitration language would default to the arbitrator's native language or a language deemed neutral and acceptable by custom, which in this case could logically be German. This is a common practice in international arbitration to ensure neutrality.