How To Choose An Arbitrator?

The arbitrator is perhaps the most important part of any international arbitration. Indeed, it has been said that the quality of an arbitration "cannot rise above the quality of the arbitrator."¹ A good arbitrator will deal with your dispute rigorously and agreeably, producing a fair and predictable outcome in line with the law and the reasonable expectations of businesspeople. However, a poorly chosen arbitrator risks dragging down the entire process. Many clients involved in arbitration proceedings, therefore, find themselves asking: how do I choose the right arbitrator?

There are three general steps to choosing an arbitrator. First, you must look over the arbitration agreement to identify what appointment protocol you need to follow. Second, you should prepare a list of suitable potential arbitrators. Finally, you need to pare down this list, be diligent, and make the final choice.

1. REVIEW THE ARBITRATION AGREEMENT

First of all, it is imperative to check the arbitration agreement for any specific requirements or references to arbitral institutions. Unlike courts, which are essentially permanent and derive their existence from the laws of a state, arbitral tribunals are temporary and their power stems only from the consent of the parties. As such, they need to be reconstituted for every dispute based on the provisions of the relevant arbitration agreement.

The vast majority of jurisdictions will not enforce awards if the arbitrator(s) was/were chosen through the wrong process. Article V 1(d) of the New York Convention, the pre-eminent international treaty on the enforcement of arbitration awards, dictates that enforcement can be refused if "the composition of the arbitral authority [...] was not in accordance with the agreement of the parties [...]."

If the agreement does not contain a specific protocol for the appointment of arbitrators, then it must be done in accordance with the chosen rules of arbitration. Notably, arbitration agreements vary greatly in what they prescribe. A common method of appointment of arbitrators is to allow each party to select an arbitrator of their choosing, and then to have these arbitrators agree on the appointment of a third. Disputes under the default rules of the International Centre for Settlement of Investment Disputes (ICSID), for example, follow this format (Article 37). Some agreements might even delegate the process of choosing arbitrators entirely. Regardless, it is vital to be familiar with the requirements under your arbitration agreement if you want to choose the right arbitrator.

2. PREPARE A LIST OF SUITABLE POTENTIAL ARBITRATORS

Once you have acquainted yourself with the provisions of your arbitration agreement, it is important to prepare a list of potential arbitrators based on a number of typically easily identifiable factors. This list will be significantly shortened over time and you will ultimately choose an arbitrator from it.

Perhaps the most obvious characteristic of a good arbitrator is that they will fluently speak the language of the arbitration proceedings. Being familiar with the working language of the underlying contract and business relationship is a bonus. You may also want to consider their knowledge of the subject matter of the dispute. An expert arbitrator may be beneficial if your case relies on complicated technical knowledge, though expert witnesses can always be called in regardless.

Many arbitrators have a significant public presence – they might be published authors or teachers. Certain arbitral institutions, such as the ICSID and the Hong Kong International Arbitration Centre (HKIAC) publish lists of arbitrators too. Some institutions even prepare a list for you. The Financial Industry Regulatory Authority (FINRA) of the United States, for example, provides a list of arbitrators for the parties to rank in order of preference.

It is especially important to check for any possible conflicts of interest. In investor-State arbitrations, for instance, you might want to consider the nationality of any prospective arbitrator.

3. SHORTEN THE LIST AND MAKE THE CHOICE

Finally, you want to scrupulously go through your list and look for anything which might make an arbitrator unsuitable. Most arbitrators will be open to interviews before they are appointed, though you should not discuss the specifics of the case with them. Remember – arbitrators are not your counsel. They should remain neutral throughout the process; otherwise, the award risks being thrown out for procedural misconduct.

There are some third-party tools aimed at helping parties choose their arbitrators. For example, Arbitrator Intelligence is essentially an advanced form of TrustPilot for arbitrators, with access to confidential information such as unpublished decisions. Other tools to select arbitrators may be found here.

Some institutions might not even allow you to choose an arbitrator. The London Court of International Arbitration (LCIA) is a notable example of this. Under Article 7 of the LCIA Rules, parties can only nominate an arbitrator. It is the LCIA which makes the final choice.

Additionally, it may be possible to delegate the decision on an arbitrator at this stage if you and the opposing party are unable to come to a decision together. Section 18 of the Arbitration Act 1996, which applies in England, Wales, and Northern Ireland, allows parties to apply to the court to ask it to appoint an arbitrator for them. Section 17 allows the court to appoint an arbitrator in case the other party is refusing to comply with the arbitration process.

Regardless, following these three steps will ensure that you maximise your odds of choosing the right arbitrator.

Footnote

1. Von Mehren, "Concluding Remarks", in ICC (ed), The Status of the Arbitrator, 129, as cited in Julian DM Lew, Loukas A Mistelis, Stefan M Kröll, Comparative International Commercial Arbitration (Kluwer Law International 2003) 223.