Selecting an international arbitrator

Business
Maybe in all situations the most important factor is the decision-making person. In arbitration this person is the arbitrator. Knowing how to choose your arbitrator is the first step in knowing how to win your case. — Bazil Oglinda It is now widely accepted that the success of an international commercial arbitration is heavily influenced by the quality of the arbitral panel. Once arbitrators are appointed they assume absolute jurisdiction over the proceedings and are conferred with enormous powers. Therefore, it is of critical importance to get the appointment right from inception. Arbitral panels make binding decisions and they are endowed with wide discretion to craft remedies but, unfortunately, the parties have a very limited ability to challenge or appeal against an arbitral award if the arbitrators do a shoddy job. It is, therefore, vital to select, from the outset, credible arbitrators to engender faith and confidence in the arbitral process and to secure the popular benefits of arbitration such as low cost, efficiency, neutral forum and enforceability.

arbitration insights:WITH JACOB MUTEVEDZI

Maybe in all situations the most important factor is the decision-making person. In arbitration this person is the arbitrator. Knowing how to choose your arbitrator is the first step in knowing how to win your case. — Bazil Oglinda It is now widely accepted that the success of an international commercial arbitration is heavily influenced by the quality of the arbitral panel. Once arbitrators are appointed they assume absolute jurisdiction over the proceedings and are conferred with enormous powers. Therefore, it is of critical importance to get the appointment right from inception. Arbitral panels make binding decisions and they are endowed with wide discretion to craft remedies but, unfortunately, the parties have a very limited ability to challenge or appeal against an arbitral award if the arbitrators do a shoddy job. It is, therefore, vital to select, from the outset, credible arbitrators to engender faith and confidence in the arbitral process and to secure the popular benefits of arbitration such as low cost, efficiency, neutral forum and enforceability.

In most, if not all cases, arbitral tribunals are required to state the reasons for their decisions. Once an award is challenged, judges will review the award.

It is, therefore, important to choose an arbitrator with a legal background such as a lawyer or retired judge. The world has become a global village and frequently, parties to international commercial transactions tend to submit to foreign governing laws. As a result, the modern arbitrator often has to grapple with questions of comparative law, conflict of laws and statutory interpretation more often than one might expect. An arbitrator with a legal qualification is better positioned to handle these complex questions of international commerce.

Being legally trained is, however, merely the minimum standard. One cannot overstate the prudence of appointing an arbitrator who also possesses professional knowledge of the industry related to the dispute. Thus in disputes where the arbitrators may have to deal with complex technical issues, for example, aerospace, pharmaceuticals and intellectual property issues, it may be appropriate to appoint an industry expert.

It is a foundational principle in international commercial arbitration that an arbitrator must be and remain impartial and autonomous at all times. This principle is reflected in most national laws, arbitral rules and international conventions. An arbitrator should have no business, familial, or social relationships with the parties and should not have a vested interest in the outcome of the dispute.

Most institutional rules do not define the term “independence”. It is indeed difficult to define the qualities of independence or impartiality expected of arbitrators. One can, however, distinguish independence and impartiality on the ground that autonomy is invariably perceived to be a situation of fact or law which is capable of objective establishment while impartiality is a highly subjective category. In my experience, it is easier to establish an absence of independence than to prove impartiality. The bias of arbitrators is rarely exposed by their conduct however it is easier to demonstrate a lack of independence by tendering evidence that the arbitrator has links to the other party.

For practical reasons, where each of the parties have an opportunity to appoint an arbitrator to the panel, commonly referred to as a “party-appointed arbitrator”, it is prudent to appoint an arbitrator who knows the lawyer making the appointment. This will afford you at least one voice on the arbitral panel who will listen to your requests; for example, simple requests relating to scheduling or even more complex ones like discovery. Having a party-appointed arbitrator who has regard, without failing in her independence, for the lawyer making a request to the arbitral panel is invaluable.

An arbitrator must be endowed with the necessary social skills to engage in a constructive fashion with counsel, the parties, experts and co-arbitrators, in such a way as will enable the conduct of an effective arbitral process. It is important for an arbitrator to be able to strike an appropriate balance between observing and actively steering the proceedings. Arbitrators must not hijack proceedings or descend into the arena. Their ability to listen takes precedence over their ability to lead the proceedings.

Moreover, an arbitrator must be able to engender in the parties a feeling that he or she is listening to their divergent arguments and that there is room for discussion. A charismatic arbitrator who can keep the proceedings on a steady course is better than a dictatorial one. Be that as it may, a flexible approach must not be allowed to jeopardize the legal foundation of a decision. All things considered, however, experience has proved that when an arbitrator is bereft of people management skills, the speed and cost-effectiveness typically associated with arbitration cannot be realised.

Most parties prefer to appoint a well-known arbitrator. However, it is important to bear in mind that popular arbitrators usually have congested schedules and numerous commitments, sometimes involving work abroad. Notwithstanding the arbitrator’s extensive knowledge and experience, it is not cost-effective to the parties when the arbitrator cannot devote the time required to the proceedings. Such unavailability can also lead to delays in setting down the matter for hearing and in rendering the award.

l Jacob Mutevedzi is a commercial lawyer and partner at Clairwood Chambers Attorneys and writes in his personal capacity. He can be contacted at +263775987784 or at [email protected]