APPOINTING ARBITRATORS – CULTURAL CONSIDERATIONS

There are various factors to consider when selecting arbitrators. Rates, availability, experience are all often cited. However, there are other features and characteristics too. Cultural characteristics, for instance, which may neatly apply in cases you may be involved in.

By way of illustration, take a hypothetical arbitration between a panel of three English lawyers. The issues are contractual and related to business transactions in Russia. In the arbitration there are two competing versions of the contract on offer, one written, the other oral. The party relying on the written agreement advances its case on the written agreement alone. It is said to be the only document governing the parties’ relationship. The other party claims that the written agreement is a sham and the real agreement under which the parties did business together was oral, on entirely different terms. For those familiar with these kinds of disputes, this will not sound unfamiliar.

The evidential hearing is conducted over the course of a week. As the hearing progresses it becomes evident that various members of the tribunal have only limited experience of post-Soviet business practices. One of the parties’ witnesses starts giving evidence in which various facts are candidly and openly presented. However, that evidence is met with astonishment. The tribunal looks on in disbelief as the evidence, which is not particularly remarkable for those who have worked in the region, is delivered. For this panel it seems just too incredible; however, would a panel made up entirely of regional practitioners have viewed this evidence differently?

When it comes to appointing arbitrators, the starting point is always independence and impartiality. Independence and impartiality are not conceptually synonymous. Independence relates to the relationship between the arbitrator and the parties and whether that relationship can be said to be independent. Impartiality is more subtle. This relates to whether the arbitrator is able to judge the case on its merits without influence from external factors or bias. A lack of independence or impartiality can be a legitimate ground to challenge an arbitrator’s appointment and could also later be grounds for challenging an award.

Oct-Dec 2015 issue

Signature Litigation LLP