Arbitration, as with other ADR methods, has a multitude of benefits that situate it above litigation as the preferred dispute resolution method. Among these benefits, is the opportunity for parties to select their own arbitrator. The arbitrator the parties appoint can be a key to a favorable award; it’s practically like the parties are selecting their own judge. However, picking the right arbitrator is not an easy task and is often regarded as the first challenge with the arbitration. A recent survey conducted determined that almost half of the in-house counsel across the globe possessed insufficient information to make a choice about the arbitrator they want to appoint. Unlike litigation, where the majority of the information related to the proceedings is publicized, arbitrary proceedings generally enjoy immense confidentiality, and thus, searching for an arbitrator is quite a difficult task. In this article, we examine how parties and in-house counsel can make an informed decision on the arbitrator they seek to appoint.
The common notion is that an arbitrator must be an expert in all legal affairs. Whilst this may be true to some extent, if your dispute has a niche nature with respect to the subject matter, you will benefit from selecting an arbitrator who has experience in that subject matter and possess a deep range of knowledge in that industry.
This will allow you to save time – and consequently, money – in having to explain industry concepts and terms to the arbitrator, as they will be familiar with the issues being argued. For instance, a dispute regarding a doping scandal in an athletic competition would benefit from having an arbitrator well-versed in sports disputes. In a contract, an expert would have to be appointed in litigation to detail the technicalities to the judge.
Thus, when approaching an arbitrator, request the arbitrator provide you with a curriculum vitae (if they have not already provided one) in order to gauge the arbitrator’s experience and expertise. On the other hand, it is also essential to understand the potential arbitrator’s convictions, in order to determine their impact on the dispute. Thorough knowledge of the sector can be invaluable, but ultimately, a party’s interests will not be served if the nominated arbitrator has certain convictions about a matter that are diametrically opposed to the nominating party’s arguments.
What does their schedule look like?
An arbitrator’s schedule is directly linked to their efficiency throughout the proceedings. An advantage of arbitration is the flexibility of the process; management of this flexibility can have a significant impact on the length and ultimate success of the proceedings. And a busy arbitrator will negatively impact the time it takes to obtain an award. Therefore, picking an arbitrator that can devote sufficient time and attention to the dispute, and ensure their schedule allows them to take on the dispute is extremely crucial. A highly sought out arbitrator will have a busy schedule, which can lead to scheduling conflicts and the ultimate delay of the proceedings. To resolve this, a personal conversation with the arbitrator can go a long way and can provide you with a sense of how available they are. Keep in mind, this conversation will typically go no further than providing you with reassurance with respect to the arbitrator’s availability and knowledge on the subject matter. Speaking on the topic of scheduling, the chair of the International Bar Association (IBA) Arbitration Committee recently stressed the need for arbitrators to be genuinely available, and hence an interview may reveal factors that indicate their availability.
Along with knowledge and availability, you should also consider the personality of the arbitrator – does the arbitrator have good people management skills? The flexibility of managing the proceedings, if not managed properly, can result in protracted disagreements and incur unnecessary costs and time spent on granular issues. A good arbitrator will be able to demonstrate an appropriate balance between observing and actively navigating the proceedings. So choose an arbitrator that is as capable of managing the parties as they are the proceedings.
A study conducted in 2010 by Ponak et all regarding Personality and Time Delay Among Arbitrators, found that conventional, case-based coding can explain about 30% of the variance in time delay, whilst another 30% is likely due to the personality predispositions of arbitrators. The study determined that the characteristics of the arbitration process that predicted faster decision time were: (1) fewer pages of written decision (a proxy for complexity), (2) the use of legal counsel, and (3) the use of a sole arbitrator rather than a three-person panel. The study went on to examine one job-related characteristic of the arbitrator— their workload—and found that the arbitrators with the busiest schedules took longer to render their decisions.
You must also factor in the cultural differences of the parties; will the selected arbitrator be adapted to dealing with cultural differences and tensions that will eventually run high throughout the proceedings? Their management of the parties is a substantial factor in the efficiency of the case, and it must be done with a sterling judicial demeanor.
When we talk about cultural differences, we must keep in mind that in disputes between parties of different nationalities, some arbitral institutions prohibit the arbitrator from having the same nationality as any of the parties. For instance, the International Chamber of Commerce (ICC) sets a standard under Article 13(1) of the ICC Rules, as follows:
“In confirming or appointing arbitrators, the Court [International Court of Arbitration] shall consider the prospective arbitrator’s nationality, residence and other relationships with the countries of which the parties or the other arbitrators are nationals and the prospective arbitrator’s availability and ability to conduct the arbitration in accordance with the Rules.”
Their Language Capabilities
Arbitrators and the parties will often be of different nationalities; thus, it is not uncommon for different languages will be spoken. This brings about another factor of great importance – the language capabilities of the arbitrator.
The language in which the procedure is conducted is a dominant characteristic for the consensual resolution of the dispute itself. The choice of language with respect to the proceedings will typically be stipulated in the arbitration agreement and will play a significant role, as communications will be made in the language indicated in the arbitration agreement.
This bears the question, is an “implicit agreement” of the parties regarding the language of the arbitration, a facta concludentia (i.e. the use of the same language for the contract, the arbitration agreement, the correspondence, etc.), allowed if it is absent from the agreement? The choice of the “wrong” language may result in the need for translation and interpretation for the majority of the proceedings, which can severely impact the cost and duration of the proceedings.
If the arbitration is conducted in English, in a country where English is not the official language, it would be advantageous to have an arbitrator who speaks both English and the primary language of the seat of arbitration, in order to possess the ability to deduce and analyze parties’ submission on the application of legislation to the dispute, and the legislator’s intent in the drafting of the law, or provisions therein, as the parties present.
Therefore, determining what language or languages shall be used in the arbitration is decisive on three dimensions: party equality, the composition of the arbitral tribunal, and the interaction with national laws. The latter being necessary for a country where the first language is not English. When it comes to the proceedings, the choice between these languages can be a vast factor in the interpretation of the law and facts.
At the end of the day, many components come into play when picking the perfect arbitrator.
All of these components must be considered by the party making the selection.
Make sure to vet the arbitrator you wish to nominate accordingly and enhance your chance of success for your arbitration before it even begins. If you require an arbitrator to resolve a dispute, please click here to view our roster of arbitrators, or contact us for assistance in selecting an arbitrator.