The Party-Appointed Arbitrator Dialectic - Part 5 Chapter 40 - The Practice of International Litigation - 2nd Edition
Lawrence W. Newman has been a partner in the New York office of Baker & McKenzie since 1971, when, together with the late Professor Henry deVries, he founded the litigation department in that office. He is the author/editor of 4 works on international litigation/arbitration.
Michael Burrows, Formerly, Of Counsel, Baker & McKenzie, New York.
Participants in international arbitration have long attached considerable importance to the right of a party to appoint its own arbitrator. This right is no longer as unfettered as it once was, as arbitral institutions have broadened the bases on which arbitrators may be denied appointment for perceived or real conflicts of interest.
Today, with what seems to be the increasing complexity of international arbitration proceedings, and concomitant concern on the part of users as to the efficiency of arbitration as a means of dispute resolution, it may be appropriate for questions to be raised as to the role of partyappointed arbitrators in the efficient operation of arbitral tribunals.
As is well known, arbitrators have considerable discretion in rendering their awards and can be called to account for erroneous awards only in limited circumstances. Parties entering into arbitration want the comfort, if not the protection, of having their own representative on the panel that will decide their dispute.
Early on, it was accepted, particularly in the United States, that party-appointed arbitrators would be, in effect, additional advocates for the position of the party appointing them. In recent years, however, arbitral institutions and courts have placed greater emphasis on the neutrality of arbitrators.
In addition, care is taken for disclosure to be made by prospective arbitrators, both before and after their appointment, of elements in their background that might lead to an inference that there is, in some way, a bias in favor of one party or another.
Nonetheless, participants in the arbitral process continue to have the understanding that, even within the realm of neutrality, arbitrators are appointed by parties so that they may play a role that the parties appointing them believe to be in their interest. This role has been recognized in the international arbitration world for some time. See, for example, the standard expressed in a leading treatise on international arbitration:
An arbitrator nominated by a party will be able to make sure that his appointor’s case is properly understood by the arbitral tribunal; in particular, such an arbitrator should be able to ensure that any misunderstanding which may arise during the deliberations of the arbitral tribunal (for instance, because of difficulties of legal practice or language) are resolved before they lead to injustice.