Originally from Limits to Party Autonomy in International Commercial Arbitration

“And if you can’t be with the one you love, honey, 
love the one you’re with.”
                                         – Steven Stills 

INTRODUCTION

Arbitrator challenges and the attendant effects on party autonomy have received increased attention in recent years.  Challenges have been on the rise over the past decade, not only because the number of disputes submitted to arbitration has increased, but also because the parties, arbitrators and issues involved in international arbitrations have tended to recur in multiple proceedings, particularly in the context of investment disputes.  As a result the connections – or perceived connections – between the tribunal members, the parties and the issues in dispute have become increasingly complex.  Concerned parties have relied on arbitrator challenges as a tool to ensure fairness in the arbitral proceedings by seeking to remove arbitrators who may lack the requisite independence or impartiality.  Meanwhile, unscrupulous parties have sometimes seized on the challenge mechanism as a tool to delay or disrupt the proceedings, raising what have been termed “strategic” or “tactical” challenges. 

Arbitrator challenges invoke equally important but potentially conflicting values that underpin the system of international arbitration.  These are party autonomy, on the one hand, and adjudicatory fairness, on the other.  The ability to appoint an arbitrator is a key manifestation of party autonomy, often credited with contributing to arbitration’s legitimacy and attractiveness as a method of international dispute resolution.   At the same time, the right to be judged by an unbiased decision-maker is an essential principle of adjudication, as old as the law itself.  

This chapter explores these issues, concludes that strategic challenges appear to be on the rise, and evaluates potential mechanisms for deterring them while still safeguarding arbitrator independence and impartiality.  Section I sets the stage by discussing the interrelationship between party autonomy and the perceived “right” to appoint an arbitrator.  Section II introduces a number of accepted limitations on parties’ freedom to appoint the arbitrator of their choice, concluding that the “right” to appoint is at best a qualified one.  Section III discusses the increasing frequency and changing nature of arbitrator challenges in contemporary practice, finding that there is meaningful evidence that the incidence of strategic challenges is increasing.  In Section IV, a number of remedies that might be considered to address the problem of strategic challenges are assessed.  That Section concludes that while no major reforms are needed, a few relatively modest practical measures – including broader publication of challenge decisions, stricter control over the challenge process, and a greater willingness on the part of arbitrators and institutions to sanction abusive behavior – could usefully be considered.