The Selection Process of Arbitrators

This article discusses Arbitrator's meaning and selection process and the organizations that provide cutting-edge arbitration facilities.

Who are Arbitrators?

Arbitrators are legally qualified advocates, scholars, or jurists capable of coordinating and administering justice by arbitration. The Arbitrator acts as a neutral third person who decides the facts of the case to draft the arbitral award.

“An arbitrator is typically a professional who is selected at least in part by mutual agreement of the parties to a dispute. The evidence suggests that a key determinant of the party’s preferences for an arbitrator is usually the extent of the arbitrator’s “experience” in deciding related arbitration cases.”[1]

Different institutional guidelines provide qualifications for the selection of an arbitrator. Since arbitration is a law-driven process, the arbitrator has to be a virtuoso of the legal fraternity. Generally, the arbitrator is an aged and experienced lawyer or a judge.

The contemporary practice is, however, the contrary. Arbitration is a relatively new process therefore, there is a scarcity of trained arbitrators. However, some institutes provide trained arbitration services. Young talented individuals are trained to become arbitrators. For example, the International Chambers of Commerce is famous for including young arbitrators in the tribunals.

Organizations That Provide Cutting Edge Arbitration Facilities

• The Chartered Institute of Arbitrators

It is one of the world’s leading qualifications and professional bodies that is approached for dispute avoidance and dispute management. CIArb propagates and promotes alternative dispute resolution methods. It provides membership to trained arbitrators throughout the world. The parties can choose among the members to settle their disputes [2]

• The International Chambers of Commerce

ICC Arbitration gives the assurance of the best quality of service. It ensures providing the best arbitration service by a trusted institution and a process recognised and respected worldwide as the benchmark for international alternative dispute resolution. From straightforward sales contracts to intellectual property matters, joint ventures, share purchase arrangements or state-financed construction projects—whatever the case—we can assist in resolving disputes of all sizes.[3]

• Permanent Court of Arbitration

It was established in 1899 to facilitate arbitration and other forms of dispute resolution between states, the PCA has developed into a modern, multi-faceted arbitral institution perfectly situated to meet the evolving dispute resolution needs of the international community.[4]

• International Centre for Settlement of Investment Disputes

It is one of the organs of the world bank group, which is concerned with alternative methods of settlement of disputes. It is mostly concerned with investment arbitration. The organization was established in the year 1966. It has certified arbitrators who serve on the Panel of arbitrators.

According to Article 14 of the ICSID CONVENTION, REGULATIONS AND RULES the members of the panel should be “designated to serve on the Panels shall be persons of high moral character and recognized competence in the fields of law, commerce, industry or finance, who may be relied upon to exercise independent judgment. Competence in the field of law shall be of particular importance in the case of persons on the Panel of Arbitrators[5].”

Selection Process of Arbitrators

The process of selection of arbitrators is organization specific. The different organizations have different guidelines based on the process of arbitration and the selection of arbitration.

1. Selection of arbitrators under UNCITRAL

Article 11 of chapter 2 of the UNICTRAL model law on international commercial arbitration focuses on the arbitrator's appointment.

1. No person shall be precluded because of his nationality from acting as an arbitrator unless otherwise agreed by the parties.
2. The parties are free to agree on a procedure of appointing the arbitrator or arbitrators, subject to the provisions of paragraphs (4) and (5) of this article.
3. Failing such agreement (a) in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two arbitrators thus appointed shall appoint the third arbitrator; if a party fails to appoint the arbitrator within thirty days of receipt of a request to do so from the other party, or if the two arbitrators fail to agree on the third arbitrator within thirty days of their appointment, the appointment shall be made, upon request of a party, by the court or other authority specified in article 6(b) in an arbitration with a sole arbitrator, if the parties are unable to agree on the arbitrator, he shall be appointed, upon request of a party, by the court or other authority specified in article 6.
4. Where, under an appointment procedure agreed upon by the parties, (a) a party fails to act as required under such procedure, or (b) the parties, or two arbitrators, are unable to reach an agreement expected of them under such procedure, or (c) a third party, including an institution, fails to perform any function entrusted to it under such procedure, any party may request the court or other authority specified in article 6 to take the necessary measure unless the agreement on the appointment procedure provides other means for securing the appointment.
5. A decision on a matter entrusted by paragraph (3) or (4) of this article to the court or other authority specified in article 6 shall be subject to no one. UNCITRAL Model Law on International Commercial Arbitration 7 appeal.

The court or other authority, in appointing an arbitrator, shall have due regard to any qualifications required of the arbitrator by the agreement of the parties and to such considerations as are likely to secure the appointment of an independent and impartial arbitrator and, in the case of a sole or third arbitrator, shall take into account as well the advisability of appointing an arbitrator of a nationality other than those of the parties.[6]

2. Selection of the arbitrator under ICC

The selection of the arbitrator under the International Chamber of Commerce is, however, different from that of the UNCITRAL. Article 13 of the Arbitration Rules of the International Chamber of Commerce talks about the Appointment and Confirmation of the Arbitrators.

1. No person shall be precluded by reason of his nationality from acting as an arbitrator unless otherwise agreed by the parties.
2. The parties are free to agree on a procedure of appointing the arbitrator or arbitrators, subject to the provisions of paragraphs (4) and (5) of this article.
3. Failing such agreement: (a) in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two arbitrators thus appointed shall appoint the third arbitrator; if a party fails to appoint the arbitrator within thirty days of receipt of a request to do so from the other party, or if the two arbitrators fail to agree on the third arbitrator within thirty days of their appointment, the appointment shall be made, upon request of a party, by the court or other authority specified in article 6 in an arbitration with a sole arbitrator, if the parties are unable to agree on the arbitrator, he shall be appointed, upon request of a party, by the court or other authority specified in article 6.
4. Where, under an appointment procedure agreed upon by the parties, (a) a party fails to act as required under such procedure, or (b) the parties, or two arbitrators, are unable to reach an agreement expected of them under such procedure, or (c) a third party, including an institution, fails to perform any function entrusted to it under such procedure, any party may request the court or other authority specified in article 6 to take the necessary measure unless the agreement on the appointment procedure provides other means for securing the appointment.
5. A decision on a matter entrusted by paragraph (3) or (4) of this article to the court or other authority specified in article 6 shall be subject to no appeal. The court or other authority, in appointing an arbitrator, shall have due regard to any qualifications required of the arbitrator by the agreement of the parties and to such considerations as are likely to secure the appointment of an independent and impartial arbitrator and, in the case of a sole or third arbitrator, shall take into account as well the advisability of appointing an arbitrator of a nationality other than those of the parties”[7]

3. Selection of arbitrator under Indian Laws

Section 11 of Chapter 3 of the Arbitration and Conciliation Act of 1996 is related to the appointment of an arbitrator.

Features of the selection of arbitrator under the Arbitration and Conciliation Act of 1996:-

1. Section 10 of the Arbitration and Conciliation Act of 1996 gives complete independence to the parties to decide upon the arbitrators for the creation of the arbitral tribunal.
2. The arbitral tribunal should always consist of an odd number of arbitrators. When the parties to a dispute have separate choices for arbitrators, the chosen arbitrators are given the power to choose a presiding arbitrator.
3. When the parties cannot come to a consensual choice of an arbitrator and all methods of choosing an arbitrator fails the Supreme Court and the High Court are given the authority to be an arbitrator.

• Infallibility of an Arbitrator

Section 35 of chapter VIII of the Arbitration and Conciliation Act of 1996 makes the arbitral award final and binding on the participating parties. Furthermore, Section 37 gives limited appeals against the arbitral awards.

• Neutrality to be Maintained

The principle of ‘audi alterem partem’ is followed in arbitration tribunals where both parties have equal opportunity to speak and express their grievances. Arbitration is relegated and unsuccessful if the parties do not get equal opportunities. The parties choose the arbitrator themselves.

Conclusion

The parties to an arbitration have complete independence over the arbitrator's selection. It is different from that of the court case in which the parties have no role in the judge selection or procedural technicalities. Even the parties have a say in the arbitration process, which is not the case with that of the judicial process. Furthermore, sometimes the arbitral awards are more party-based than that of judicial orders.

The process, however, relies too much upon the arbitrator's skill and experience to investigate and sort the evidence in his capacity. Arbitrators are, after all, human beings and sometimes, their personal biases creep into the process of arbitration. This increases the subjectivity in the arbitral award. Furthermore, there are cases of cultural and linguistic differences of the arbitrators in an arbitration proceeding.

The process of selection of arbitrators has been streamlined with the emergence of organizations providing alternative dispute resolution services. The future is bright for the upcoming field of arbitration as a new generation of trained arbitrators come to the field of arbitration.

Originally Published on Aug 6, 2019

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[1] Ashenfelter, Orley. “Arbitrator Behavior.” The American Economic Review, vol. 77, no. 2, 1987, pp. 342–346. JSTOR, Available Here

[2] “Welcome to the Chartered Institute of Arbitrators.” CIArb, Available Here

[3] “Arbitration – ICC – International Chamber of Commerce.” ICC, Available Here

[4] “About Us.” Cour Permanente D’Arbitrage | Permanent of Court Arbitration, Available Here

[5] ICSID CONVENTION, REGULATIONS AND RULES, Available here

[6] UNCITRAL Model Law on International Commercial Arbitration 1985

[7] Arbitration Rules – ICC – International Chamber of Commerce.” ICC, Available Here

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