Robert D. Taichert is of counsel to Hinkle, Hensley, Shanor & Martin, LLP, in Albuquerque, New Mexico. He serves on the roster of the American Arbitration Association for commercial, construction and large, complex cases. Mr. Taichert has written and lectured on a variety of ADR subjects. He chairs the Revised Uniform Arbitration Act subcommittee of the AAA’s New Mexico Advisory Committee.
The common procedure to constitute an arbitral panel is for each party to appoint its own arbitrator. The party appointed arbitrators then select the third arbitrator, who serves as the chair. The parties naturally select as their arbitrator a person who is most likely to favor their side of the case. This can lead to party appointed arbitrators becoming advocates for the side which appointed them. There are situations in which the parties to a contract want to be sure of the complete objectivity of arbitral proceedings and to achieve that, provide for neutral arbitrators with no connection to the party which appointed them. This article suggests that the way to provide for neutral three member panel arbitration is to specify in the arbitration section of the agreement that party appointed arbitrators will not know which side appointed them. This only works in an administered arbitration with a neutral service provider serving as intermediary. The parties agree that the case administrator will notify the party appointed arbitrators of their selection and inform them that they are not to know which side appointed them.