The Secret Weapon: Party Appointed Arbitrators in International Commercial Arbitration

International commercial arbitration has become an integral part of resolving disputes between businesses from different countries. Unlike traditional court proceedings, arbitration provides an efficient and confidential alternative that is often favored for its flexibility and expertise. However, one aspect of this process that has sparked considerable debate is the appointment of party-appointed arbitrators.

Arbitration, by its very nature, involves the settlement of disputes by individuals chosen by the parties involved. In the international commercial arbitration context, party-appointed arbitrators are selected by each side in a dispute to represent their interests. These arbitrators play a crucial role in shaping the outcome of the proceedings, making their appointment a matter of utmost importance.

The Role of Party-Appointed Arbitrators

Party-appointed arbitrators act as advocates for the party that selects them. Their role is to ensure that their party's interests are zealously represented and that the final decision aligns with their client's objectives. This approach is often perceived as both a strength and a weakness of the arbitration process.

Party-appointed Arbitrators in International Commercial Arbitration

by Joachim Hagopian (Kindle Edition)

5 out of 5

Language	:	English
File size	:	2394 KB
Text-to-Speech	:	Enabled
Screen Reader	:	Supported
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Print length	:	99 pages
Hardcover	:	242 pages
Item Weight	:	1.13 pounds
Dimensions	:	6.25 x 0.75 x 9.75 inches

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On the one hand, party-appointed arbitrators bring a specialized knowledge and understanding of the industry or sector in dispute. This expertise allows them to better comprehend the complex technicalities involved, enabling a more informed decision-making process. Additionally, their selection usually reflects a party's trust in the arbitrator's ability to protect their interests.

However, the appointment of party-appointed arbitrators can also lead to concerns about bias and lack of impartiality. Critics argue that these arbitrators may be swayed by the party that appointed them, compromising the neutrality and fairness of the proceedings. Thus, striking a delicate balance between party representation and impartial decision-making is crucial.

Code of Ethics and Ensuring Impartiality

To address these concerns, international arbitration bodies have developed strict codes of ethics that govern the conduct of arbitrators. These codes aim to ensure that appointed arbitrators act with integrity, independence, and impartiality throughout the arbitration process.

Moreover, arbitrators are required to disclose any potential conflicts of interest and disqualify themselves if necessary. Parties also have the opportunity to challenge the appointment of an arbitrator if they believe there is a justifiable doubt about their impartiality. Panels of arbitrators, composed of both party-appointed and neutral arbitrators, make these decisions to maintain fairness and transparency.

The Benefits of Party-Appointed Arbitrators

Despite the ongoing debate around their appointment, party-appointed arbitrators bring unique advantages to international commercial arbitration. Their specialized industry knowledge can provide invaluable insights, resulting in well-informed and targeted decisions.

Furthermore, their selection often contributes to a sense of ownership and confidence in the process. Parties tend to put more faith in an outcome that is achieved with the participation of an arbitrator of their choosing, which can ultimately lead to greater acceptance and compliance with the decision.

In the realm of international commercial arbitration, party-appointed arbitrators play a vital role in ensuring that the interests of the disputing parties are fairly represented. While concerns about bias and partiality exist, the strong code of ethics and strict regulations help maintain the integrity and impartiality of the arbitration process.

With their specialized industry knowledge and representation of party interests, party-appointed arbitrators contribute to well-informed decisions that offer a higher chance of acceptance for all parties involved. In a rapidly globalizing world, international commercial arbitration continues to evolve, and the appointment of party-appointed arbitrators remains an essential element in its success.

Party-appointed Arbitrators in International Commercial Arbitration

by Joachim Hagopian (Kindle Edition)

5 out of 5

Language	:	English
File size	:	2394 KB
Text-to-Speech	:	Enabled
Screen Reader	:	Supported
Enhanced typesetting	:	Enabled
Print length	:	99 pages
Hardcover	:	242 pages
Item Weight	:	1.13 pounds
Dimensions	:	6.25 x 0.75 x 9.75 inches

FREE

The agreement of disputing parties to each make a unilateral appointment of an arbitrator is among the most distinctive features of arbitral practice. A detailed examination, long overdue, of how this feature affects the actual process of arbitration is presented in this book. The study includes a historical analysis of unilateral nominations, a critical assessment of how the unilateral appointments system currently works and an empirical study of challenges of arbitrators.

The author's critical assessment addresses several issues including:

• - limits to the right of the parties to make unilateral appointments;
• - the principle of equality of the parties in the constitution of the arbitral tribunal;
• - arbitrators’ duty to be impartial and independent;
• - specific problems of bias in tribunals with party-appointed members;
• - the question of whether a different standard of impartiality and independence in party-appointed arbitrators makes any sense;
• - the presumption that party-appointed arbitrators can do things that presiding arbitrators cannot; and
• - the question of whether it is worth keeping the system of unilateral appointments as the default method for the constitution of multiple-member tribunals, or keeping it at all.

The empirical study, in which the author offers a comparative analysis of challenges of arbitrators taking into account the method of appointment of the arbitrator, reveals interesting differences and coincidences between party-appointed and non-party-appointed arbitrators.

The book ends with some suggestions on how the system of unilateral appointments could be improved, namely in order to increase the trust of each party in the arbitrator appointed by the other party and to allow an accurate match between what arbitration end-users may want from party-appointed arbitrators and what they ultimately get. For both its thorough and well-informed analysis and its sound recommendations, the book is sure to be welcomed by professionals in the arbitral community worldwide, as well as by arbitration law academics.