Appointment, Disclosures, and Disqualification of Neutral Arbitrators - Chapter 2 - The College of Commercial Arbitrators Guide to Best Practices in Commercial Arbitration - 2nd Edition

Author(s):

James H. Carter

Paul J. Dubow

Ruth V. Glick

Robert A. Holtzman

June R. Lehrman

James R. Madison

Bruce E. Meyerson

Page Count:

18 pages

Media Description:

PDF from "The College of Commercial Arbitrators Guide to Best Practices in Commercial Arbitration - 2nd Edition"

Published:

October, 2010

Jurisdictions:

United States

Practice Areas:

Arbitrators and Arbitral Tribunals,

Capacity and Qualifications of Arbitrators,

Independence and Impartiality,

Designation of Arbitrators

Author Detail:

James H. Carter, Esq., Partner, Sullivan & Cromwell, New York, New York

Paul J. Dubow, Esq., Independent Arbitrator and Mediator, San Francisco, California

Ruth V. Glick, Esq., Independent Arbitrator and Mediator, Burlingame, California

Robert A. Holtzman, Esq., Of Counsel, Loeb & Loeb, Los Angeles, California

June R. Lehrman, Esq., Los Angeles, California

James R. Madison, Esq., Independent Arbitrator and Mediator, Menlo Park, California

Bruce E. Meyerson, Esq., Independet Arbitrator and Mediator, Phoenix, Arizona

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Description:

In addressing appointment and disclosure issues, the goals of arbitrators are (1) to comply with applicable law, institutional rules, and party agreements, and (2) to ensure that they are, and reasonably appear to be, impartial and independent.

I. INTRODUCTION

To ensure a fair arbitration process, neutral arbitrators must be impartial and independent. An effective disclosure and appointment process, in compliance with applicable law, institutional rules, ethical standards, and the parties’ agreement, is essential for public confidence in the arbitral process and to ensure the enforceability of arbitration awards. Revised in March 2004, the AAA and American Bar Association (ABA) Code of Ethics for Arbitrators in Commercial Disputes (AAA/ABA Code) sets forth generally accepted standards of ethical conduct for commercial arbitrators, including standards relating to appointment, disclosure, and disqualification of arbitrators. This chapter examines those subjects in relation to neutral arbitrators. Chapter 3, infra, discusses appointment, disclosure, and disqualification of arbitrators who are not expected to act as neutrals.

II. APPOINTMENT OF ARBITRATORS

The parties’ agreement to arbitrate ordinarily sets out the process to be used in selecting and appointing arbitrators either specifically or by reference to the procedures of an arbitral institution. In the absence of such direction, the appointment process is derived from applicable state or federal law and in some instances, from industry custom and practice. The first contact arbitrators have with a case ordinarily will be an inquiry concerning their suitability and availability to serve. They should respond in accordance with applicable law, arbitral institutional rules, party agreements, and prevailing practice. In responding to such an inquiry, arbitrators should conduct an investigation into all maters bearing upon their abiliy to serve. The award of neutral arbitrator will be subject to potential vacatur if the arbitrator fails to conduct an appropriate investigation and thereby fails to learn of and disclose a fact that would rise an inference of bias. See, e.g., New Regency Prod, Inc. v. Nippon Herald Films, Inc., 501 F.3d 1101, 1109 (9th Cir. 2007).

Table of Contents:

I. INTRODUCTION

II. APPOINTMENT OF ARBITRATORS

A. Initial Ex Parte Communications

B. Determining Impartiality and Independence

C. Determining Fitness to Serve

D. Establishing Terms of Appointment

E. Appointments Made through Arbitral Institutions

F. Appointments in Ad Hoc Arbitrations

G. Party-Appointed Neutral Arbitrators

III. DISCLOSURES

A. FAA

B. RUAA

C. AAA/ABA Codex Table of Contents

D. Other Ethical Standards

E. California Requirements

IV. DISQUALIFICATION

V. CONTINUING DISCLOSURES AND LIMITATIONS ON ACTIVITIES DURING PENDENCY OF A CASE