Objectives and Considerations
The majority of international arbitrations are decided by three-member arbitration panels. Each party selects its “party-appointed” arbitrator, and the president or chair of the three-member panel is selected by the two party-appointed arbitrators, by a neutral authority or by other agreement of the parties. This blog discusses some of the more critical considerations that a party and its attorney should review in the selection of its arbitrator. The importance of an in-depth review and analysis of an arbitrator’s background, experience and ability to work with her co-arbitrators cannot be overstated. Indeed, the selection of an arbitrator may be one of the most critical decisions a party makes.
Predisposition vs. Appearance of Bias
The ideal party-appointed arbitrator is a person who, because of her legal or cultural background, nationality, history and professional and technical experience is likely to be predisposed toward the selecting party’s side. To that end, prior professional positions and relationships, arbitration experience, including prior decisions, and academic writings should be scrutinized. However, a commonality of views with the appointing party cannot override her conscience and professional judgment, undermine her effectiveness and/or violate the governing arbitration rules regarding bias, independence and partiality. She should have not only stature, experience and gravitas, but the credibility to persuade her co-arbitrators of the strength of her party’s position.
The major international arbitration institutions have rules relating to bias, impartiality and/or independence. For example, the arbitration rules of the United Nations Commission on International Trade (UNCITRAL), the London Court of International Arbitration (LCIA) the International Arbitration Rules of the American Arbitration Association (AAA) and the International Chamber of Commerce (ICC) embody one or more of these concepts. There are requirements regarding the disclosure of bias, and there are provisions regarding the potential overruling of an arbitration award if bias can be demonstrated.
Both parties expect to pursue justice in an unbiased fashion. Even if the party-appointed arbitrator may be generally predisposed to the party personally or to its position, the other arbitrators should believe that the appointee will vote against the appointing party if required by the facts and/or law. Although an arbitrator may qualify as non-biased pursuant to relevant rules, a party should avoid selecting an arbitrator who will be perceived by the other arbitrators as biased in favor of the appointing party. A party-appointed arbitrator is expected to vote for the party with the better or more compelling arguments, law and facts, even though the arbitrator may be sympathetic to the appointing party because of a common nationality, shared background, culture or shared legal perspectives ― such as a common or civil law training, view about contract interpretation and summary disposition, and inclination regarding limited or more expansive discovery.
Experience as an Arbitrator
In most cases, it is best to select an individual with multiple experiences in international arbitration, or at least to avoid an individual who has never served as an arbitrator. The lack of experience can undermine confidence in the appointee during deliberations and in crafting an award, and limit the appointee’s effectiveness. Of course, there must be a first time for every arbitrator and there may be times when an individual’s other qualities are compelling enough for the appointing party to give the individual an opportunity, even if he or she lacks experience in arbitrations.
Knowledge/Stature in Field
For similar reasons, it is important to select a person who is knowledgeable or an expert in the area that is the focus of the arbitration and ideally enjoys a level of stature and respect. Knowledge is needed for the arbitrator to fully understand the issues and to participate in a meaningful way in deliberations and the drafting of the award. A reputation in the relevant area adds weight to any arguments that the arbitrator may present to the other arbitrators. For example, in a complex construction matter, many parties are likely to prefer to appoint an arbitrator with expertise not only in construction generally, but in the technical issues critical to the resolution of the dispute.
A knowledgeable and experienced person will have little impact on their fellow arbitrators if they lack interpersonal skills or have off-putting personality traits. An arbitrator who is the greatest figure in his field will not be persuasive if he constantly announces himself as such. It is best to select a person who is confident and forceful, as well as collegial and capable of participating in a respectful, meaningful and persuasive discussion.
Checking the availability of a prospective candidate is a must. Selecting a highly skilled arbitrator who is too busy can be problematic. So it’s best to evaluate this issue and try to get an honest assessment of the arbitrator’s schedule in advance.
Sources of Information
The best source of information to be used in selecting an arbitrator is the appointing party’s or its lawyers’ personal experience with the individual. However, in many cases, the decision will be made in the absence of that direct personal knowledge. In these situations, the decision is usually based on a recommendation from a network of friends and professional connections or an evaluation of the individual’s CV and information that can be garnered from the internet and other public sources of information.
Some private vendors are attempting to develop more detailed, data-driven analytics to aid in a more objective assessment of arbitrators and their professional qualities. For each prospective arbitrator, these vendors obtain a variety of information relating to critical aspects of an arbitration(s) from participants. This data includes:
- How the arbitrator under discussion administered the proceedings
- How often the tribunals (on which the arbitrator sat) engaged in an early resolution of issues
- How satisfied or dissatisfied the parties were with the award.
The vendors then create reports on each arbitrator candidate that include graphs and charts, as well as information regarding how to interpret the data.
A party-appointed arbitrator is selected with the hope that she will be able to persuade the other two arbitrators about the merits and truths of her client’s position. Remember that the opposing party has the same view about its arbitrator. A party-appointed arbitrator with stature, the requisite skills and experience will understand the importance of independence and the appearance of objectivity, which cannot be overstated. The checklist of arbitrator characteristics set forth above is not a guarantee that one’s position will prevail, but the list will help guide a party in the appointment of an arbitrator who can maintain that balance.
 Each arbitral institution has its own rules about the selection of the presiding arbitrator if the parties cannot agree. Those rules are beyond the purview of this blog.
 UNCITRAL Arbitration Rules, Articles 11 and 12.
 LCIA Arbitration Rules, Articles. 5, 10, and 11.
 AAA International Rules, Articles 7 and 8.
 ICC Arbitration Rules, Articles 11, 13, and 14.