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Arbitrators in International Arbitration

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Arbitrators in International Arbitration

What is the role of an arbitrator?

The function of the arbitrator is to resolve disputes The arbitrator as “private judge” - duty to the Parties

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Arbitrators in International Arbitration

The Parties’ Autonomy to Select Arbitrators of Their Choosing

Typically, the choice of the procedural mechanism for selection of the arbitrator is expressed in the arbitral agreement or by incorporation of procedural rules

Article V(1)(d) of the NY Convention provides that recognition of an award may be refused if “the composition of the arbitral authority […] was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place.”

The parties’ autonomy to select arbitrators is subject to very limited exceptions

The arbitrators must be impartial and independent

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Arbitrators in International Arbitration

Constitution of the arbitral tribunal - Mechanics

Selection of a sole arbitrator can be done by agreement or by the appointing authority

If three arbitrators, a party gives notice of its choice, and the arbitrator then submits a declaration of independence and impartiality along with any disclosures

Within a short time thereafter, the opposing party may challenge the arbitrator

What happens if a party does not nominate an arbitrator?

Generally, the parties will have designated a neutral “appointing authority”

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Arbitrators in International Arbitration

Constitution of the arbitral tribunal - Mechanics

If three arbitrators are to be appointed, the two co-arbitrators can agree on the third, presiding arbitrator, or, failing agreement, the third arbitrator will be appointed by the appointing authority

Parties often agree in their arbitration clause that the presiding arbitrator will be chosen by the co-arbitrators

If the parties or co-arbitrators cannot agree on selection of the presiding arbitrator, arbitration agreements typically provide a mechanism for selecting the third arbitrator [e.g., 2012 ICC Rules, Art. 12(5)]

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Arbitrators in International Arbitration

What to look for in a party-appointed arbitrator?

Expertise in relevant subject area Familiarity with the applicable law

Prior experience as an arbitrator Reputation and Published writings

Nationality

Availability

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Arbitrators in International Arbitration

Independence and Impartiality

UNCITRAL Rules Art. 12(1): “any arbitrator may be challenged if circumstances exist that give rise to justifiable doubts as to the arbitrator’s impartiality or independence.”

2012 ICC Rules Art. 11(1): “every arbitrator must be and remain impartial and independent of the parties involved in the arbitration.”

UNCITRAL Model Law Art. 12(2): “An arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to his impartiality or independence…”

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Arbitrators in International Arbitration

Independence and Impartiality

IBA Guidelines on Conflicts of Interest

1987 IBA Ethics for Arbitrators in International Commercial Disputes

2004 IBA Guidelines on Conflicts of Interest in International Arbitration

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Arbitrators in International Arbitration

Independence and Impartiality

Examples of grounds for finding lack of impartiality and independence

Financial stake in the outcome of the dispute

Identity between a party and the arbitrator

Prior involvement in the dispute

A family or personal relationship

Prior representation of a party

Recurrent arbitral appointments by the same party or the same counsel

Law firm conflicts

Adversity to one of the parties

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Arbitrators in International Arbitration

Challenge of arbitrators

Example: 2012 ICC Rules Article 14 Parties wishing to make a challenge must do so within a short period of time Challenges must be made in writing, ordinarily to the appointing authority The appointing authority will typically solicit the views of the challenged arbitrator

and the non-challenging party The authority’s decision is generally announced without reasons, although some

institutions do provide reasoned decisions on challenges The substantive standards generally focus on impartiality and independence Other factors may include incapacity, failure to conduct or participate in the arbitral

proceedings, and failure to satisfy the qualifications required by the parties’ arbitration agreement. (ICC Rules, Art. 15(2))

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December 9, 2013

Daniel ReichInternational ArbitrationShearman & Sterling (Paris) LLP

Arbitrators in International Arbitration