EFFICIENCY IN ARBITRATION: CONSIDERATIONS FOR THE ARBITRATOR SELECTION PROCESS

Escalating costs, protracted processes and lack of a clear appellate mechanism are routinely reported as cause for party complaints about commercial arbitration. Meanwhile, one of arbitration’s greatest benefits is parties’ ability to consider who will serve as the decision maker for their dispute. The latter benefit – selecting the right arbitrator – can be utilised to address the former disadvantages.

But the process for vetting and selecting arbitrators is often opaque. Arbitrators may be chosen by parties to serve based on word-of-mouth reputation, expertise advertised in their CV, or other factors. However, there are more reliable and unbiased ways to obtain this information. Careful vetting of arbitrators, with an eye toward avoiding poorly written awards and runaway processes, is possible. This article provides a brief overview of party considerations for selecting arbitrators with fairness, efficiency and neutrality in mind.

Understand what is required by the parties’ agreement

The first step in the arbitrator selection process is understanding what rules must guide your process. This may be derived from the arbitration provision in the underlying contract and, in administered cases, reference to the relevant arbitral rules.

Provisions for the selection of arbitrators in an arbitration clause range from non-descript to highly specific. In consulting the arbitration clause, it is important to identify whether the clause provides a specific course for arbitrator selection. If not, the institutional rules referenced in the clause will guide the selection process. There are key factors to keep in mind. First, does the clause require a sole arbitrator be appointed or a panel of three? Second, are any specific considerations required, such as years of experience, type of experience, education level or specified degree, nationality, language capabilities and so forth? And third, what is the procedure for making selections? Will the parties be required to mutually agree on one arbitrator? For cases in which a panel must be appointed, how are the panellists and chair chosen?

Apr-Jun 2022 issue

Gleason Alvarez ADR