The Liability of Arbitrators and Arbitral Institutions - Chapter 8 - Arbitral Institutions Under Scrutiny: ASA Special Series No. 40
Hans van HOUTTE, LL.M. Harvard, is President of the Iran- United States Claims Tribunal (The Hague) and teaches arbitration at the University of Leuven (Belgium), where he held successively the chair of international public law and international private law, while also teaching international business law. He has been a member of the Brussels Bar since 1971 and withdrew as litigation and arbitration Partner at Stibbe (Brussels) in 2000. Since then he has been an independent arbitrator. He sits frequently as an arbitrator in commercial and investment disputes (ICC, LCIA, ICSID, NAFTA, UNCITRAL, ICDR, CEPANI, DIS, Vienna Centre, DIAC, Geneva Chamber, etc.) and has rendered over 200 awards. He also sat as a Commissioner for Real Property in Bosnia, was a member of the United Nations Compensation Commission (UNCC), an arbitrator at the Dormant Bank Accounts Tribunal (CRT- Zurich) and was President of the Eritrea-Ethiopia Claims Commission. He was also vice-president of CEPANI.
Bridie MCASEY is Legal Adviser to the President of the Iran-United States Claims Tribunal. She has previously worked as an associate at White & Case (working on both contentious and non-contentious matters) and at a state Supreme Court in Australia (assisting with cases before the court as well dealing with policy issues). She has also gained experience at the UN Assistance for the Khmer Rouge Trials and at an NGO. She holds an LLB (Hons) from the University of Melbourne and is undertaking an LLM in Public International Law, also at the University of Melbourne. She is admitted to practice in Australia and the United Kingdom.
For many decennia, arbitrators have been held liable for their actions from time to time. As early as the 17th century,1 the liability of arbitrators was being considered by courts. Nowadays, the threat of arbitrators—and now also arbitral institutions—being held liable has become an unfortunately recurrent feature, reflecting a changed atmosphere in arbitration.
Parties may wish to sue an arbitrator or an arbitral institution for many reasons. An invalid reason is to use arbitrator’s liability as a vehicle for an attack on an award;2 impugning an award has its own grounds and procedures. Similarly, a claim is sometimes made against an arbitrator after the period for requesting the annulment of the award has passed;3 this is also an invalid basis for a claim against an arbitrator. However, a losing party is sometimes left genuinely and perhaps justifiably unsatisfied by enforcement or annulment of procedures, and may want further recourse. A party may be seeking reimbursement of the arbitration costs incurred in the course of obtaining the impugned award, or the cost of setting aside or resisting enforcement. Moreover, when an arbitrator has to withdraw because of a conflict of interest which he or she failed to report and the proceedings had to be suspended whilst the arbitrator was replaced or, worse still, a hearing has to be repeated because an arbitrator had to withdraw, disgruntled parties may claim compensation from the arbitrator who caused these inconveniences. Finally, an arbitrator who fails to render an award can of course also be held liable for the damage he or she causes.
The Liability of Arbitrators and Arbitral Institutions