Originally from Leading Arbitrators' Guide to International Arbitration - 2nd Edition

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I. SANCTIONS AND IMMUNITY

“Let sleeping dogs lie.” For many years little more was said about criminal and civil liability of arbitrators and arbitral institutions. More recently, “immunity of arbitrators and arbitral institutions” as one liked and likes to call it, gained popularity. With increasing enthusiasm, one arbitral institution after another wrote into its arbitration rules that its arbitrators were immune. Enthusiasm is contagious. Legislators inserted a provision providing for immunity of arbitrators. And while one was at it, one added experts and the arbitral institutions and said that they were immune also. All this could do no harm, one thought, and it might on occasion do some good.

This was rather remarkable since the authors who had studied the subject had generally come to the opposite conclusion. One also forgot that earlier arbitration laws do in fact expressly provide for liability of arbitrators.

A change of heart? Successful lobbying by arbitrators, and even more, by arbitral institutions? Competition?

One should start with the general ideas. Usually more than one, because international commercial arbitration is often at the crossroad of ideas. One should be careful: Unfortunately, ideas do not always travel well. Particularly when peripheral issues are discussed, many people are given to carrying a particular theoretical idea too far. Some people’s ideas about neighbouring fields may be outdated. Let us not forget practical issues.

In some ways arbitration is a service furnished by private individuals to private parties, but in other ways it is a service akin to the service furnished by judges who are public officials. The position of an arbitrator is similar to the position of a member of the legal profession, and indeed, many arbitrators are also members of the legal profession. And let us face it, arbitration, as any activity involving large sums of money, provides opportunities for criminal activity.

Each time an arbitral institution is involved in an arbitration, the legal complexity increases which, in the views of many, is a price well worth paying for the advantages of institutional arbitration.

We will first discuss the legal situation in ad-hoc arbitration, then discuss institutional arbitration.