What qualities should I be looking for in an arbitrator?
In U.S. court proceedings, parties typically have no control over which judge is assigned their case. International arbitration is different. Most arbitral rules allow parties to participate in the constitution of their arbitral tribunal. Unsurprisingly, surveys show that the ability to select arbitrators is among international arbitration’s most valued features. But parties should put care into choosing.
Compliance with the arbitration agreement
If the operative arbitration agreement stipulates certain qualifications, those must be respected. Failing to do so may result in the award being annulled or refused enforcement.
Virtually all international arbitration rules require impartiality and independence from arbitrators. Independence means the absence of business, familial, or social relationships with the parties or the case. Impartiality means lack of bias.
Accordingly, while nominating an overly sympathetic arbitrator may appear attractive, one should be wary of doing so. First, lack of independence or impartiality often results in the challenge and removal of an arbitrator. Further, it can result in the annulment of the arbitral award. Or it can otherwise prevent the award’s enforcement. Finally, overt partiality from one panelist risks alienating the others. It is thus often counter-productive.
Predisposition without bias?
The requirements of impartiality and independence, however, do not completely prevent a party from trying to leverage the appointment process. Predicting how, if appointed, an arbitrator might approach particular legal or factual issues is par for the course. As leading arbitrator Martin Hunter once put it, aim for an arbitrator with “maximum predisposition towards” the client, but “with the minimum appearance of bias.”
Before choosing an arbitrator, a party should carefully evaluate the strengths and weaknesses of its case. If a party anticipates that the law will be firmly on its side, it may prefer a “strict textualist” arbitrator. If a party’s legal position is less strong, it might benefit from an arbitrator who will be moved by the equities of a case. A claimant eager to paint its case as a simple debt collection claim might look for an arbitrator known to decide quickly. A party with a complex case theory might be better served by an arbitrator known for her or his intellectual patience or nuanced decision-making approach.
In investor-state arbitrations, parties routinely analyze past decisions to predict an arbitrator’s position. Doing the same research in commercial arbitration, where awards are seldom published, is more difficult. Having counsel deeply embedded within the international arbitration community is a clear advantage.
Case management skills
When selecting a sole arbitrator or the Chair of a three-member tribunal, good case management skills are vital. The absence of strict procedural rules in arbitration can lead to an efficient process. But that flexibility can also result in protracted disagreements and cause unnecessary delay. To ensure the arbitral process remains efficient, parties should choose an arbitrator with known case-management skills.
When time is of the essence, consider whether an arbitrator is decisive on questions of procedure. Parties to international arbitration have criticized the reluctance in some arbitrators to act decisively for fear their award might be challenged for breach of due process. That phenomenon is known as “due process paranoia.” It can become particularly important if a party resorts to so-called “guerilla tactics” to obstruct the arbitral process.
Familiarity with the law of the seat and place of enforcement
Familiarity with the law of the arbitration’s seat and of the likely place(s) of enforcement can also help the tribunal ensure its award will be effective and enforceable. That is especially important if the likely place(s) of enforcement are jurisdictions perceived as hostile to arbitration. Lack of familiarity with the seat or place of enforcement may allow a sophisticated respondent to plant seeds in the arbitration for a successful defense against an unfavorable award.
Those concerns matter far less, however, for a party-nominated arbitrator. There, one should focus on whether the arbitrator has the necessary qualifications and experience to understand its case and to ensure other panel members will understand it, too. That might mean, for instance, selecting an arbitrator with experience in a particular industry, such as renewable energy or life sciences; or someone trained in civil law or common law traditions; or someone from a geographical area relevant to the case.
Regardless of whether you are appointing a co-arbitrator, sole-arbitrator, or Chairperson, availability is essential. An arbitrator with good availability and prompt responsiveness is more likely to hold parties to a reasonable schedule and keep proceedings from becoming drawn-out.
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The right arbitrator can make the difference. Parties should choose their tribunal carefully. Doing so will help ensure a smooth proceeding and increase the chance of a favorable (and enforceable) outcome.
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