The Role of Party-Appointed Arbitrators - Chapter 20 - AAA Handbook on Commercial Arbitration - 2nd Edition
Richard M. Mosk is an Associate Justice for the California Court of Appeal, Second Appellate District, Division 5, and was formerly judge on the Iran-U.S. Claims Tribunal. He earned an A.B. from Stanford University "With Great Distinction" and a cum laude J.D. from Harvard Law School.
In some arbitrations there are three or more arbitrators. Sometimes all of the arbitrators are selected by an independent institution-often the one administering the proceeding-or by another designated appointing authority. In many instances of multiple arbitrators, each party will appoint an arbitrator, with either those arbitrators or the parties or the appointing authority naming the remaining arbitrator(s).
A multi-arbitrator panel is more expensive and can lead to delays, but it has advantages. Many believe that it reduces the risk that an award might be based on a major misunderstanding. More than one arbitrator can be helpful in resolving complicated cases in the required time. Knowledge by party-appointed arbitrators of the practices and customs of the industry and of the laws of the domicile of the party that appointed them can ensure that the positions and arguments of the appointing parties are considered by the other arbitrators. This is especially so in international arbitrations, in which there may be arbitrators of three different nationalities and each party may desire that one of the arbitrators be familiar with its domicile’s laws and customs. Different viewpoints can be helpful in the deliberation process. Finally, the presence of party-appointed arbitrators may make the award more acceptable to the parties, especially to the one that did not prevail.