Originally from Behind the Scenes in International Arbitration

Preview Page

CHAPTER SIX -- ARBITRAL INSTITUTIONS

I. GENERAL REMARKS

I should say at the outset that, in my personal experience, arbitral institutions fulfil their role in administered arbitrations remarkably well, even though that role varies a lot from one institution to the next.1

I would also say, without hesitation, that the benefits of an arbitral institution become much clearer if one has been involved in ad hoc arbitrations, in which the much-vaunted advantages (such as greater flexibility, lower costs or greater confidentiality) often do not materialize and are offset by the fact that there is no disciplined framework or predictability on important aspects like the arbitrators’ fees or the duration of the proceedings. Nor do the parties receive any assistance, with regard for example to the constitution of the arbitral tribunal. In an ad hoc arbitration, everything depends on a factor that cannot be taken for granted, the conscientiousness of the arbitrators, who are not subject to any framework of procedural rules issued by an arbitral institution, nor is their award subject to any form of scrutiny, even at a formal or procedural level. In my modest opinion, an arbitration administered by a qualified institution that provides a frame of reference for the conduct of the arbitration unquestionably offers the parties both a better guarantee that the proceedings will be properly conducted and a better idea of what they will cost.