International Arbitration Committee...the Looking Glass, Rachel Foxton 49 The VIAC Procedure for the...

International Arbitration Committee

Dear Members of the Committee:

In keeping with its goal of staying at the forefront of issuesin the field of international arbitration, the InternationalArbitration Committee of the ABA’s Section of International Law ispleased to present you with this special publication regardingarbitrator appointments. Historically, the freedom of parties toselect their own arbitrators has been recognized as one of theprincipal hallmarks of arbitration. In recent years, a lively debatehas emerged regarding the merits of party-appointedarbitrators. Leading practitioners and scholars have raised anumber of critical questions, the resolution of which mayinfluence the future use of this method of arbitrator selection.They include:

Are the benefits of arbitration reduced if the parties areunable to select their own arbitrators?

Is party selection of arbitrators endangering theintegrity of the arbitral process?

How do institutions currently appoint arbitrators, andwhat standards do institutions establish for the selectionof arbitrators by the parties?

In this publication, renowned experts set forth their viewson these key issues, and representatives of many of the world’sleading arbitral institutions describe in detail the procedures forinstitutional appointment of arbitrators and the rules and normsapplicable to party selection of arbitrators. We thank them fortheir timely and thoughtful contributions to this important debate.

José I. Astigarraga, Astigarraga DavisCommittee Co-Chair

Steve Smith, Jones DayCommittee Co-Chair

Edna Sussman, Fordham Law SchoolImmediate Past Committee Co- Chair and Editor

Welcome to the International Arbitration CommitteeNewsletter Regarding Arbitrator Appointments!

American Bar Association, Section of International Law, International Arbitration Committee 2013, Volume 1, Issue 1

Contents:

02 The Debate: Unilateral PartyAppointment of Arbitrators, Edna Sussman

05 Must We Live with Unilaterals?, JanPaulsson

10 The (Abbreviated) Case for PartyAppointments in International Arbitration,Charles N. Brower

14 A Review of the Principles GoverningArbitrator Pre-Selection Interview, GiugiCarminati

20 The ICDR’s Arbitrator AppointmentProcess – The Institutional Role andAvailable Options, Luis M. Martinez

25 Your Way or the ICC Way: ConstitutingAn Arbitral Tribunal Under the ICC Rules ofArbitration, Victoria Orlowski and AshleighMasson

31 Arbitral Appointments at the LCIA,Adrian Winstanley

35 Appointment to Arbitral Tribunals atICSID, Meg Kinnear

39 The HKIAC Appointment Process, ChiannBao and James H. Chun

42 SIAC Arbitration Appointments Throughthe Looking Glass, Rachel Foxton

49 The VIAC Procedure for the Appointmentof Arbitrators, Manfred Heider

53 Appointment of Arbitrators Under theSCC Rules, Celeste E. Salinas Quero

Committee Leadership/Editors:

Co-Chairs: José I Astigarraga, Steven LeeSmith

Vice-Chairs: Ethan A Berghoff, Alex B.Blumrosen, M. Cristina Cárdenas, Maria-Vittoria Galli Carminati, MichelangeloCicogna, Mark W Friedman, MatthewKalinowski, Jennifer Kirby, Zbysek Kordac,LeaHaber Kuck, Manuel Liatowitsch, Lisa BenchNieuwveld, Philip D O'Neill Jr, NikolausPitkowitz, Gaetan Verhoosel

Advisors: Laurie E Foster, Marc JGoldstein,Kevin O'Gorman,Kenneth BReisenfeld,Louise Ellen Teitz

Special Publication Editor: Edna Sussman

American Bar Association, Section of International Law, International Arbitration Committee 2013, Volume 1, Issue 1 2

This special publication of the ArbitrationCommittee of the American Bar Association’sSection of International Law is dedicated tothe subject of the appointment of arbitrators. Aheated debate as to the desirability of theestablished system of unilateral partyappointed arbitrators was launched by JanPaulsson in his speech in Miami in 2010.1 It wasfollowed by an analysis by Albert Jan van denBerg which indicated that while there was agrowing body of dissents in the context ofinvestor state arbitration awards, virtually noparty appointee in investment arbitrations hadever dissented against the interests of the partythat appointed him or her.2 Both accordinglyargued that the system of party appointedarbitrators was flawed and that it created, inthe words of Jan Paulsson, a "moral hazard."

An equally vigorous response defending theuse of the unilateral party appointed arbitratorsystem was mounted soon after led by CharlesBrower, who referred to it as one of the “mostattractive aspects of arbitration as analternative to domestic litigation.”3 The debatecontinues. In a speech delivered in April of2013, Johnny Veeder expressed the view thatwhile he had originally been persuaded by thePaulsson/van den Berg argument, on reflection

1 Jan Paulsson, Moral Hazard in International Dispute Resolution,ICSID Review, Volume 25 Issue 2 Fall 2010.

2 Albert Jan van den Berg, Dissenting Opinions by Party-Appointed Arbitrators in Investment Arbitration, in Arsanjani et al.(eds.), Looking to the Future: Essays on International Law in Honorof W. Michael Reisman (2011).

3 Charles N. Brower and Charles B Rosenberg, The Death of theTwo-Headed Nightingale: Why the Paulsson–van den BergPresumption that Party-Appointed Arbitrators are Untrustworthy isWrongheaded, Arbitration International, Vol. 29 (2013).

he had concluded that the unilateral partyappointed arbitrator system was the "keystone"of international arbitration and that “we shouldbe wary of abandoning a well - establishedtradition without good cause.”4

The 2012 International Arbitration Survey:Current and Preferred Practices in the ArbitralProcess conducted by Queen Mary Universityof London and White & Case is instructive. Itexplored the question of user preferences onarbitrator appointment with the question "Bywhat method do you favour selection of thetwo co-arbitrators in a three-member arbitraltribunal?” Interestingly, while a majority of 76%of all those surveyed preferred a unilateralappointment of the two co-arbitrators by theparties, there was a notable difference in thepercentage of those favoring such a selectionprocess in each user group: unilateralappointment was favored by 83% of privatepractitioners, 71% of in-house counsel and 66%by arbitrators. One can speculate as to thereason for these preferences and for thespread in the responses.

Why is it that only 66% of the arbitratorspreferred this method, a percentage lowerthan the other groups? Do arbitrators feelconstrained in some way when they serve inthat position? Do some go beyond feeling thatthey should ensure that the position of theparty that appointed them is understood butalso feel they should ask questions that favorthe position of the party that appointed them,or refrain from asking questions that might be

4 Sebastian Perry, Party Appointments are the Keystone ofArbitrations says Veeder, Global Arbitration Review, April 17,2013.

The Debate: Unilateral Party Appointment ofArbitratorsMessage from the Editor, Edna Sussman


damaging to that position? Conversely, dosome party appointed arbitrators feel inhibitedfrom asking questions that would favor theposition of the party that appointed them intheir desire to appear impartial to all of theparties?

While dissents are in fact rare outside theinvestor state context, do some partyappointed arbitrators feel they should write adissent or talk about doing so to drive a morefavorable result for their appointing party? Inthe context of investor state disputes wheredissents are more common and the issues thatarise from treaty interpretation repeatthemselves, there has been considerablecriticism of having ad hoc private arbitratorsdecide matters of public concern. It has beensuggested that many stakeholders doubt theimpartiality and independence of thearbitrators, many of whom also serve ascounsel in such cases and are thus motivatedto make decisions helpful to them in theircounsel practice (the “double hat” debate) orare driven to reach results that will lead tofuture appointments. 5

So should we consider whether there aredifferences in the approach to the role takenby different party appointed arbitrators thatcreate an inequity in the process? Areinfluences on the conduct of the arbitratoraspects of the issue to which further researchshould be devoted and consideration given?Are there countervailing benefits that shouldbe considered such as ensuring that all sides ofthe issues are considered until the final decisionpoint or fostering more active engagement inthe issues by the co-arbitrators?

Why is it that 83% of the private practitionerspreferred unilateral appointments by theparties, a percentage higher than the othergroups? Is it to ensure knowledge of specific

5 UNCTAD IIA, Issues Note 2, May 2013.

industries? Is it to ensure an understanding ofthe culture and manner of presentation to beexpected from them and their party? Is it toselect an individual known to them and likelyto share their view of the merits and to be astrong voice on the tribunal in setting forth theirposition? Is it largely a distrust of the ability ofthe arbitral institution to appoint goodarbitrators? Or a combination of all of thesefactors? Are there other ways to satisfy theseobjectives?

Jan Paulsson attributes much of thereluctance to move away from the unilateralparty appointed system to a lack of trust inarbitral institutions to appoint good arbitrators.There are many ways to address this and otherconcerns. Jan Paulsson points out in his originalarticle the use by some institutions of “blindappointments” so that nominees do not knowwho appointed them or the use of a listprocedure which permits the user to selectfrom an initial identification of the candidatesby the institution. Both methods ensure that allthree arbitrator act in a wholly impartialmanner without constraints. In his article in thispublication, Jan Paulsson offers a few moreoptions: jointly appointing the presidingarbitrator and letting him or her choose the co-arbitrators or negotiating the right to veto theother party’s unilateral appointment once ortwice.

Many other possibilities can be exploredthat may satisfy all interests and concerns.Refinements of the method for preparing theidentification of the candidates by theinstitution to enhance party influence on thoseselected for consideration and for informingthe parties further about the choicespresented can be developed. For example,jointly conducted interviews of prospectivearbitrators identified by the institution fromtheir list after consultation with the parties as topreferences and needs; unilateralidentification by counsel to the institution of


potential arbitrators for consideration forinclusion in the list offered to the parties thusproviding the opportunity to move beyond theinstitution’s established list, coupled with ablind appointment process; providing a list tothe institution of 5 potential arbitratorsdeveloped unilaterally by the parties andletting the other party choose its arbitrator fromthe opposing party’s list. The possibilitiesabound and our learned arbitrator communityis well able to develop creative and effectivealternatives for exploration. Piloting alternativemodalities for arbitrator selection by theinstitutions when agreed by the parties may beuseful to determine if a move away from thetraditional party appointed system is practicaland desirable. Such alternative proceduresmay also allay some of the concerns about thearbitrators in the investor state context wherethe creation of a standing internationalinvestment court has been suggested tocompletely replace the current system. 6

A further question to consider is whetherthere might be ancillary benefits to a system inwhich all parties feel that all of the arbitratorshave equal loyalty to all of the parties. Onecan consider whether the unilateral partyappointed system breeds suspicion of theother party’s appointment and has in recentyears, with the increase in the amounts atstake in arbitration, led to the very significantrise in challenges to arbitrators that are nowplaguing the system. Would a system thatprovides deeper assurance of impartiality byall arbitrators lead to a welcome reduction inarbitrator challenges?

Old habits die hard. The ultimate questionthat must be answered is: Is the partyappointed method just a habit long imbued inthe system or is a unilateral arbitrator selectionprocess necessary for parties to trust in the

6 Id.

process, respect the award and continue touse arbitration for their disputes? As the debatecontinues on this issue we offer articles by JanPaulsson and Charles Brower, setting forth theirrespective positions. In order to elucidate theappointment process utilized by many of theleading arbitral institutions we offer articlesdescribing the arbitrator appointment processat the ICC, ICDR, LCIA, ICSID, SIAC, HKIAC,SCC and VIAC. We also offer an articlesummarizing some of the perspectives thathave been published on the related subject ofarbitrator interviews.

We trust you will enjoy this issue andwelcome your comments and reactions whichcan be sent to me [email protected]. We can collectyour comments and distribute them as a groupon the Arbitration Committee listserv.

Edna Sussman, [email protected],an independent arbitrator and mediator andthe Distinguished ADR Practitioner in Residenceat Fordham University School of Law in NewYork City, is the Immediate Past Chair of theArbitration Committee of the American BarAssociation’s Section of international Law. Sheserves as a board member and member of theexecutive committee of the AAA/ICDR andthe College of Commercial Arbitrators.


In a lecture given at the University of Miamiin 2010,1 I expressed the view that the unilateralappointment of arbitrators creates a moralhazard, and that ways should be sought tocurtail the practice. This critical appraisal ofwhat is admittedly a standard practice gaverise to much subsequent commentary,2 andwas not received with enthusiasm by thecommunity of arbitration practitioners. This wasto be expected, given the comforts of thestatus quo. Yet much of the reaction to thecritique of unilateral appointments has beenbased on a fundamental misunderstanding.Alarmists view it as “an attempt to deny partiesthe freedom to choose their arbitrators.” If thiswere the idea, it would indeed be hard todefend. But the objection is a straw man. It isimportant to understand what is beingproposed before taking a position.

There is no doubt that the idealcommencement of an arbitration is theempanelling of a tribunal – whether a solearbitrator or three arbitrators – which is jointlyagreed. My proposal, hardly revolutionary, isthat the default rule (to be applied wheneverthe parties have neither jointly nominated the

1 Published in expanded form as Jan Paulsson, Moral Hazard inInternational Arbitration, 25 ICSID REV. 339 (2010).

2 See, e.g., Joseph M. Matthews, Difficult Transitions Do NotAlways Require Major Adjustment – It’s Not Time to AbandonParty-Nominated Arbitrations in Investment Arbitration, 25 ICSIDREV. 356 (2010); David Branson, Sympathetic Party- AppointedArbitrators: Sophisticated Strangers and Governments DemandThem, 25 ICSID REV. 367; Michael Schneider, Forbidding unilateralappointments of arbitrators – a case of vicarious hypochondria?,29 ASA BULL. 273 (Feb. 2011); Alexis Mourre, Are UnilateralAppointments Defensible? On Jan Paulsson’s Moral Hazard inInternational Arbitration,http://kluwerarbitrationblog.com/blog/2010/10/05; Charles N.Brower & Charles Rosenberg, The Death of the Two-HeadedNightingale: Why the Paulsson-van den Berg Presumption thatParty-Appointed Arbitrators are Untrustworthy is Wrongheaded, 6WORLD ARB. & MEDIATION REV. 3 (2012).

entire tribunal nor expressly stipulated thatthere are to be unilateral appointments)should be that all arbitrators are appointed bythe neutral appointing authority. This is alreadya feature of the much-used LCIA Rules (per thecombined effect of Articles 5.5 and 7.1).

The suggestion that the LCIA regime is worthemulating – whether by arbitral institutions ordrafters of arbitration clauses – is based onlessons drawn from experience with unilateralappointments. That experience, I believe,shows that the advantages of unilaterals aremore than offset by the damage they cause,in the aggregate, to the process as a whole.

At the heart of the problem are disturbingdoubts that will not go away: is it not ratherobvious that the insistence on a “right” toname “one’s own” arbitrator has more to dowith the hope that the nominee will shareone’s own prejudices rather than both sides’values? How can that possibly be squaredwith the legitimacy of arbitration, unless wethrow up our hands and state once and for allthat the only arbitrator is the one in themiddle?

Whatever may have been the need to“sell” arbitration across cultural divides in timespast, it seems likely today that the “clash-of-culture” theme in arbitration is exaggerated. Itis more than plausible that the true concern isnot so much about diffuse culturalparticularities as the simple fear of beingtreated as an outsider..

Must We Live with Unilaterals?By Jan Paulsson


Unilateral appointments are more likely toexacerbate the problem than to resolve it.1

Arbitrants fret about the possibility that theiropponent may know how to seize a quietadvantage by appointing an especiallyinfluential arbitrator. The only solution whichwill be reliable in all circumstances is that anyarbitrator, no matter the size of the tribunal,should be chosen jointly or selected by aneutral body. Confidence-enhancement isproperly focused on procedural rights (the rightto be heard, the opportunity to confront theopponent’s case, equality of arms) rather thanrisking the ineluctable contamination of theideal – that of an arbitrator trusted by bothsides – by a hidden operational code ofclientilism.

It may be objected that theseanimadversions against the practice ofunilateral appointments are excessive. Theworld of arbitration is well used to thephenomenon, and indeed it seems that three-member tribunals generally reach unanimousdecisions. Let us accept that this is so. Thereare still reasons for grave concern.

In the first place, unanimity is not alwaysachieved in principled ways. The practice ofunilateral appointments, like it or not, implicitlymilitates in favour of compromise, and indeedmay be said to create an expectation of it.The result may well be to the disadvantage ofa party whose entitlement would be fully

1 David Branson defends the practice of unilateral appointmentson the grounds that it is what parties want; see SympatheticParty Appointed Arbitrators: Sophisticated Strangers andGovernments Demand Them, 25 ICSID REV. 367 (2011). In sodoing, he does not, it seems, consider that this may be theconsequence of ignorance rather than discernment, especiallyin view of the carefully reasoned conclusion of Jennifer Kirby, inan important account of her extensive personal experience asan ICC official, to the effect that there may be “much to be lost”in the practice of nominating a co-arbitrator unilaterally, in WithArbitrators, Less Can be More: Why the Conventional Wisdomand the Benefits of having Three Arbitrators may be Overrated,26(3) J. INT’L ARB. 337, 350 (2009). Branson’s remarkable notion isthat the way to deal with the moral hazard of unilateralappointments is explicitly to countenance amoral behavior (byacknowledging that such arbitrators are partisan).

upheld by an objective decision-maker. Thisdynamic toward compromise is also likely tocontaminate the reasoning of the tribunal,transforming it into something more like a ritualthan a record of genuine ratiocination. Thepractice of unilateral appointments may thusbe an obstacle to coherently and sincerelymotivated awards. Since the requirement ofreasons is intended to serve as a check onarbitrariness, it follows that the subversion of thisrequirement carries the risk that awards fail tofulfil their important legitimating function.

Secondly, although one hopes they arerare, there have been instances ofunscrupulous individuals offering scarcelyveiled bargains. For example: “I will see it yourway when I preside and you as co-arbitratorwant a particular outcome; and I will thencount on you when our roles are reversed.” Inskilled hands, this process can lead tounanimous but iniquitous awards without theslightest risk of detection. Such practices (andthe very fear of such practices) woulddisappear with the eclipse of the unilateralnominee.

In the absence of unilaterals, no arbitratorwill feel that the tribunal should go easy on thelawyer who took the initiative of appointinghim. An arbitrator who is impartial as to theoutcome of the dispute between the partiesmay nevertheless see nothing wrong withaccommodating the procedural preferencesof that lawyer, indeed may not even beconscious of an attitude of indulgence whichserves the tactical interests of one side andmay have an adverse effect on the efficientdelivery of justice. An example of the kind ofrobustness which a truly impartial judge orarbitrator needs to exhibit on occasion relatesto scheduling. Arbitrators are with increasingfrequency asked to give assurances of theiravailability as a condition of appointment.With that in mind, arbitrators will act on thefooting that lawyers too must be held to asimilar degree of commitment, and not brook


any nonsense for fear of displeasing theirappointers.

True enough, in rarefied environmentswhere sophisticated professionals have readyinsights into the way institutions operate, andabout the personal reliability of leadingindividuals, the trouble with unilateralappointments is much attenuated. Lawyershave sufficient knowledge of arbitratorsnominated by their opponents, and as forthemselves tend to select persons who will beknown quantities in the eyes of the presidingarbitrators. But in such an environment, whyshould not every appointment be joint, or atleast made from a list of individuals proposedby a similarly reliable institution? Above all, thisattractive model is simply unrealistic withrespect to the run of the mill of arbitration.And if arbitration cannot produce run of themill quality, it will be condemned to function asan enclave of limited relevance.

The two evident solutions are (i) to opt for asole arbitrator to be chosen, failing agreement,by a highly reputed institution or, (ii) if the trueconcern is that the case is too important to riskthe lapse of even the most outstandingindividual person (Homer’s nod), threearbitrators appointed in the same way, i.e.,eschewing any unilateral nomination.Institutions may experiment with a variety ofsolutions, such as “blind appointments” (i.e.,seeking to ensure that nominees do not knowwho appointed them) or list procedures whichhave in common the feature that the initialidentification of the field of candidates comesfrom the institution rather than from one party.

An attractive secondary effect of avoidingunilateral appointments is to open the door toa mix of expertise within the arbitral tribunal.International cases often benefit fromcompetence in several disciplines. Whathappens when three arbitrators have beenappointed because of their general acumenin commercial law but the core issue relates to

alleged infringement of a patent, orcontentions of abuse of dominant position in acomplex market, or the understanding of amost-favoured-nation clause in aninternational treaty? Or when three senioracademics are nominated because of theirsolid reputations in the field of environmentallaw, but not one of them has any experiencein presiding over a raucous hearing, or anynotion of complex issues of accounting ortaxation which would flow from a finding ofliability?

Examples could be multiplied. They suggestthat this is not only a matter of improving thequality of decision-making, but indeed an issuethat relates to ethics: can parties with aparticular constellation of problems beproperly heard by persons who haveaccepted the mandate to resolve the disputewithout being qualified to assess an essentialaspect of it, somewhat like a triathlete whocan run and cycle, but swims like a stone? Thisproblem finds a solution in the joint orinstitutional appointments of the entire tribunal,allowing for a mix of capabilities withoutconcern as to which is predominant.

Similarly, joint or institutional appointmentsallow parties to give the opportunity to onetalented but inexperienced person to sit nextto older hands, thus contributing toreplenishment and diversity in the corps ofarbitrators. Arbitrants making unilateralappointments do not take such chances.

All this being said, recognising the likelihoodthat insistence on the “right” to appoint anarbitrator will not soon go away, one should asa matter of pragmatism take stock of theexisting means of reducing contamination.

One involves the restriction of unilateralnominations by specific contractual limitation,such as a requirement that no arbitrator mayhave the nationality of any party. In theabsence of such a restriction, a party may findit politically impossible not to name one of its


nationals as arbitrators. That nominee may feelsubject to political pressures – whether he orshe succumbs to them or fights them. Suchrestrictions, in other words, are capable ofreducing the risk of subversion of arbitralauthority.

An even more effective mechanism,provided that it is properly conceived, may bean institutional requirement that unilateralappointments be made from a pre-existing listof qualified arbitrators. The danger here is thatan arbitral institution ends up skewing the list tofavour an “in-group” operating as an opaqueoligopoly. Still, when composed judiciously bya reputable, inclusive, and continuallyreplenished international body, such arestricted list may have undeniableadvantages. In fact, they might be seen asleading to a useful hybrid of institutional andunilateral appointments; a party may indeedselect any one of a number of arbitrators, buteach of the potential nominees has beenvetted by the institution and is less likely to bebeholden to the appointing party.

Admirable arbitrators who remain whollyimpartial and independent no matter howthey are selected may be offended to hear itsaid that the tradition of unilateralappointments is a menace to arbitration. Yet itis so. The existing checks and balances areinadequate. None of the supposed reasonsfor this habit stand up to scrutiny, except theplaintive assertion that there is no better way.

It all comes down to this. The sole defenceof unilateral appointment which is difficult toanswer is that parties do not trust the arbitralinstitution to appoint impartial and aptarbitrators. Having accepted arbitration as alesser evil, so the reasoning goes, they do sowith severe mental reservations, fearing thatthe institution will appoint a presiding arbitratorwho is not only inept in case management, butalso too indolent to delve thoroughly into theevidence, too obtuse to understand essential

propositions of law, too prone to trustsuperficial impressions or intuitions, or – worse –turn out to be biased or unscrupulous. In suchcircumstances, the one thing a party can do isto insist on the opportunity to appoint onearbitrator whom it can trust to do his or her bestto prevent injustice. It might not work; the twoothers may nonetheless ruin the process. But itis the best we can do, it is said; now do not askus to accept that this institution appoint allthree arbitrators!

The bearers of this message of despair needto consider two important responses. Theyboth involve the exhortation not to be passive.The first is the suggestion that parties whosincerely desire a fair and cost-effectiveprocess should involve themselves with greatermental energy. A number of ideas may beconsidered whether or not an arbitral institutionhas a role in the matter. Once an arbitrationhas commenced, parties may seek ad hocagreement between themselves, even if theycannot jointly select the entire tribunal. Thus,to take only a few examples, they might:

- jointly identify the presidingarbitrator, and only thereafter maketheir unilateral appointments,

- begin with the same jointidentification, and then allow thepresident (i) freely to chose the otherarbitrators, or (ii) to propose lists tobe prioritised by the arbitrants, or

- negotiate with each other areciprocal right to veto the other’sunilateral nominee – perhaps onceor twice.

Such imaginative approaches may createconstructive dynamics and be more plausiblethan they may seem at first blush. Of courseeach side is focussed solely on the goal ofconstituting the tribunal most likely to view itscase with favour, but that should not meanthat it lacks rational respect for its adversary’s


intelligence. The achievement of mutualcomfort is not impossible. Nothing is lost fortrying.

Secondly, this exhortation to activeinvolvement should reasonably include thearbitral institutions. After all, their objective isthat the process be smooth and unassailable.So when they take initiatives, like the AmericanArbitration Association’s attempt to deviseprotocols that seek to engage the arbitrantsunder an “Enhanced Neutral Selection Processfor Large, Complex Cases,” it seems foolish nottake advantage of the opportunity.

In our complex and transient modern world,the ideal of both parties having personalconfidence in an arbitrator is unrealistic outsidethe realm of homogenous groups. How couldindividuals with whom the arbitrants have nopersonal experience fit the bill? It is practicallyimpossible for unilaterally appointed arbitratorsto claim such confidence, so trust mustultimately be institutional. If the reason totolerate the unprincipled tradition of unilateralappointment of arbitrators is that there is nobetter alternative, the institutions that appointarbitrators need to take a hard look atthemselves and ask why they are exposed toconcerns about (i) poor selections ofarbitrators, and even (ii) cronyism and otherforms of corruption. That is likely to be one ofthe great challenges for the internationalarbitral process in the coming years.

Jan Paulsson is co-head of the internationalarbitration and public international law groupsat Freshfields Bruckhaus Deringer. He has actedas counsel or arbitrator in hundreds ofinternational arbitrations and is the president ofthe International Council for CommercialArbitration, president of the AdministrativeTribunal of the OECD, vice-president of the ICCInternational Court of Arbitration and a boardmember of the AAA.


In recent years, a handful of commentatorshave criticized the feature of partyappointments in international arbitration. Theyhave questioned the independence andimpartiality of party-appointed arbitrators andsuggested that international arbitration wouldbe more credible if tribunals were appointedby neutral third parties, such as arbitralinstitutions. In my view, however, suchcriticisms are unwarranted. The right of theparties to choose the arbitrators is a basic andimportant element of international arbitration;indeed it is often described as one of the mostattractive aspects of arbitration as analternative to domestic litigation.1 As partyappointments enhance the perceivedlegitimacy of international arbitration,eliminating this right would clearly impede thefurther development of the field.

A. Historical Background

The right of the parties to appoint thearbitrators has existed for decades, evencenturies.2 An early treaty providing for suchright was the Jay Treaty between the UnitedStates and Great Britain (1794), one of theearliest examples in modern history of the use

1 See, e.g., Daphna Kapeliuk, The Repeat Appointment Factor: Exploring

Decision Patterns of Elite Investment Arbitrators, 96 CORNELL L. REV. 47, 60

(2010); Loukas Mistelis & Crina Mihaela Baltag, Trends and Challenges in

International Arbitration: Two Surveys of In-House Counsel of Major

Corporations, 2(5) WORLD ARB. & MEDIATION REV. 83, 94 (2008).

2 See Michael E. Schneider, President’s Message: Forbidding unilateral

appointments of arbitrators – a case of vicarious hypochondria?, 29(2) ASA

BULL. 273, 273 (2011) (“The basic paradigm in arbitration as we know it

is for each party to appoint its arbitrator and for the two then to appoint a

chairperson. The model has worked seemingly well for decades if not

centuries . . . .”).

of an international tribunal to resolve aninternational dispute.3 The right wassubsequently included in the Treaty ofWashington between the United States andGreat Britain (1871),4 The Hague Convention of1899,5 and The Hague Convention of 1907.6

Moreover, the very first bilateral investmenttreaty (“BIT”), the Germany-Pakistan BIT (1959),provided for party-appointed arbitrators,7 asdid one of the first BITs providing for investor-State arbitration, the Netherlands-Tunisia BIT(1963).8

Today the right to appoint an arbitrator isincluded in most BITs, all of the majorinternational arbitration rules, and many of theworld’s domestic arbitration laws, including theUNCITRAL Model Law.9 Furthermore, none ofthe major international arbitral institutionsrequires that arbitrators be appointed from a

3 See Treaty of Amity, Commerce and Navigation, arts. V-VII.

4 See Treaty of Washington, art. I.

5 See 1899 Convention for the Pacific Settlement of International

Disputes, arts. 24, 32; see also id. at art. 15 (“International arbitration has

for its object the settlement of differences between States by judges of

their own choice, and on the basis of respect for law.”).

6 See 1907 Convention for the Pacific Settlement of International

Disputes, arts. 45, 87.

7 See Germany-Pakistan BIT, art. 11(3)(b).

8 See Netherlands-Tunisia BIT, art. 8.

9 See, e.g., ICSID Convention, art. 37(2)(b); ICSID Arbitration Rules, art.

3(1); UNCITRAL Arbitration Rules (2010), art. 9(1); UNCITRAL

Arbitration Rules (1976), art. 7(1); SCC Arbitration Rules, art. 13(3); ICC

Arbitration Rules (2012), art. 12(4); ICC Arbitration Rules (1998), art.

8(4); ICDR Arbitration Rules, art. 6; UNCITRAL Model Law (2006), art.

11(3); UNCITRAL Model Law (1985), art. 11(3).

The (Abbreviated) Case for PartyAppointments in International Arbitration

By Charles N. Brower


closed list.10 In light of this extensive historicalbackground, it would seem that the right ofthe parties to appoint the arbitrators hasbecome an established principle of law ininternational arbitration.

B. Perceived Legitimacy of theProceedings

One reason why parties have historicallyinsisted on the right to name the arbitratorsinvolves the parties’ perceived legitimacy ofthe arbitration proceedings. Parties to anarbitration will tend to have greater faith in anarbitral process in which they themselves areinvested, not just as disputants, but as thecreators of the tribunal that will judge them.11

Naturally, the parties and their counsel knowmore about the specific nuances of their casethan anyone else. The parties are thus in thebest position to identify the correspondingknowledge, skills, and expertise desired (oreven needed) in a tribunal to adjudicate thedispute.

By the same token, a losing party may beless likely to challenge the legitimacy of thetribunal’s decision-making process if that partyplayed an intimate role in constituting thetribunal. Party appointments thereby promotethe perceived legitimacy of internationalarbitration by helping insulate the resultingaward from being challenged.12 There thus is a

10 An exception is ICSID ad hoc annulment committees. See ICSID

Convention, art. 52(3).

11 See William W. Park, Arbitrator Integrity: The Transient and the

Permanent, 46 SAN DIEGO L. REV. 629, 644 (2009) (noting that “[t]o

promote confidence in the international arbitral process, party input into

the selection of arbitrators has long been common practice”).

12 See Giorgio Sacerdoti, Is the party-appointed arbitrator a ‘pernicious

institution’? A reply to Professor Hans Smit, 35 COLUM. FDI PERSPECTIVES

(Apr. 15, 2011), http://www.vcc.columbia.edu/content/party-appointed-

arbitrator-pernicious-institution-reply-professor-hans-smit (“Acceptance

of the ultimate result (the award) by the parties is enhanced by their trust

in the arbitral process where consent – including consent regarding the

adjudicator – replaces judicial authority.”); see also Richard M. Mosk &

Tom Ginsburg, Dissenting Opinions in International Arbitration, in LIBER

AMICORUM BENGT BROMS 259, 272 (1999) (noting that “greater confidence

close nexus between the perceived legitimacyof international arbitration and the parties’appointment of the arbitrators.

C. The “Arbitrator-Advocate”

Notwithstanding enhanced perceivedlegitimacy, commentators have criticizedparty appointments in international arbitration.The primary criticism is that party-appointedarbitrators will not be neutral decision-makers,but rather will be biased in favor of the partywho appointed them. However, criticsoverlook the internal controls that in practiceprevent such an impermissible quid pro quo.

First, all of the major international arbitrationrules today provide that arbitrators, includingparty-appointed arbitrators, must be andremain independent and impartial.13 Criticsthus cynically presume that party-appointedarbitrators are untrustworthy and will ignoretheir mandate of independence andimpartiality. Second, an arbitrator’s reputationfor apparent bias will undercut his or hercredibility (hence influence) within a tribunal.14

No party will want to appoint such anindividual as “there is little advantage tohaving one guaranteed vote on a three-

in the process from the perspective of the loser . . . [will likely] increase

the possibility that the award will be complied with voluntarily without

enforcement proceedings”).

13 See, e.g., ICSID Convention, art. 14(1); UNCITRAL Arbitration Rules

(2010), art. 11; UNCITRAL Arbitration Rules (1976), art. 9; ICC

Arbitration Rules (2012), art. 11(1); ICC Arbitration Rules (1998), art.

7(1); LCIA Arbitration Rules, art. 5.2; SCC Arbitration Rules, art. 14(1);

ICDR Arbitration Rules, art. 7(1); see also IBA Guidelines on Conflicts of

Interest in International Arbitration, General Principle 1.

14 See, e.g., NIGEL BLACKABY ET AL., REDFERN AND HUNTER ON INTERNATIONAL

ARBITRATION 266 (5th ed. 2009) (“Experienced practitioners recognise

that the deliberate appointment of a partisan arbitrator is

counterproductive, because the remaining arbitrators will very soon

perceive what is happening and the influence of the partisan arbitrator

during the tribunal’s deliberations will be dismissed.”); The American

president: an interview with Rusty Park, 6(2) GLOBAL ARB. REV. 28 (2011)

(“The users should realise (as many smart ones do) that a partisan party-

appointed arbitrator lacks credibility.”).


person tribunal.”15 In practice this has proventrue, as recently emphasized by Alexis Mourre:“[t]here is nowadays widespread awareness,amongst the users of arbitration, that hiredguns do them more harm than good.”16 Thesystem is thus self-policing.

D. The Alternatives

As an alternative to party appointments,Professor Jan Paulsson recently suggested that“any arbitrator, no matter the size of thetribunal, should be chosen jointly or selectedby a neutral body.”17 He furtherrecommended an “institutional requirementthat appointments be made [by the parties]from a pre-existing list of qualified arbitrators,”similar to that used for the Court of Arbitrationfor Sport.18 In my view, however, thesealternatives are not viable.

The pre-existing list approach is undesirablebecause it unavoidably infuses politics into thesystem and creates an artificial barrier to entry.Potential arbitrators must have closeconnections with the States involved or withthe appointing institution to be included on theinstitution’s list of potential arbitrators.Otherwise wannabe arbitrators will wage anextensive lobbying campaign of the former orto the latter. A pre-existing list also providesonly a limited choice, whereas the pool ofarbitrators is greatly expanded through theinput of parties. This militates against theappointment of uniformly high-qualityprofessional arbitrators. The current system of

15 See CRAIG, PARK & PAULSSON, INTERNATIONAL CHAMBER OF COMMERCE

ARBITRATION 196 (2000).

16 See Alexis Mourre, Are Unilateral Appointments defensible? On Jan

Paulsson’s Moral Hazard in International Arbitration, KLUWER ARB. BLOG,

(Oct. 5, 2010), http://kluwerarbitrationblog.com/blog/2010/10/05/are-

unilateral-appointments-defensible-on-jan-paulsson%E2%80%99s-

moral-hazard-in-international-arbitration/.

17 See Jan Paulsson, Moral Hazard in International Dispute Resolution,

25(2) ICSID REV. 339, 352 (FALL 2010).

18 Id.

party appointments, by contrast, is the highestform of a merit system; appointments aredepoliticized as potential arbitrators effectively“stand for election” by parties every time anew case is brought.19

Institutional appointments are likewiseundesirable. It is highly to be doubted that anyinstitution could ever achieve a level of userconfidence that even approaches that ofselections made by sophisticated parties andcounsel. No institution could have the fullknowledge of potential arbitrators that clientsand their counsel possess. Institutions thereforecould never properly evaluate how much trusta party would have in the arbitrators it wouldappoint, which might negatively affect theperceived legitimacy of the arbitrationproceedings. Along these lines, David WilliamsQC recently observed that parties generallyavoid having an institution appoint thechairman of the tribunal, which“demonstrate[s] a lack of confidence ininstitutions in respect of appointments.”20

Finally, before thrusting the job of appointingarbitrators onto the arbitral institutions,shouldn’t we ask them whether they actuallywant this additional responsibility?

E. Conclusion

The continued viability of internationalarbitration hinges on users of the systemviewing it as a legitimate form of internationaldispute resolution. One important element of

19 See David J. Branson, American Party-Appointed Arbitrators – Not the

Three Monkeys, 30 U. DAYTON L. REV. 1, 46 (2004).

20 See David A R Williams QC, Address to Society of Construction Lawyers

FCL, DIFC COURTS, Mar. 20, 2011

http://difccourts.complinet.com/en/display/display_main.html?rbid=27

25&element_id=4500&print=1 (“[E]xperienced arbitrators have noted

that where dispute resolution clauses call for the parties, or two party-

appointed arbitrators, to appoint the Chairman it is commonly observed

that they try very hard to avoid the default mechanism which is the

utilisation of an institution to appoint the Chairman. This is said to

demonstrate a lack of confidence in institutions in respect of

appointments.”).


perceived legitimacy is the significant andtimeless right of the parties to choose thearbitrators. As discussed in this contribution,neither the pre-existing list approach norinstitutional appointments is an adequatealternative to party appointments. The right ofthe parties to choose the arbitrators shouldtherefore be preserved, as eliminating it wouldnegatively affect the perceived legitimacy ofthe proceedings and clearly impede thefurther development of the field.

Charles N. Brower is an Arbitrator Member of 20Essex Street Chambers, London, England. Hehas served as a Judge for the Iran–UnitedStates Claims Tribunal and Judge Ad Hoc forthe Inter-American Court of Human Rights.Formerly Acting Legal Adviser, United StatesDepartment of State and Deputy SpecialCounsellor to the President of the United States,he is a past President of the American Societyof International Law and Chair of the AdvisoryBoard of the Institute for TransnationalArbitration.


While several arbitral institutions andorganizations have attempted to provideguidance, the issue of pre-selection arbitratorinterviews continues to be a subject ofconsiderable debate and varying points ofview.1 This article summarizes some of thedifferent views concerning the practice andvarious arbitral rules and guidelines thataddress it. The goal is to provide readers with a360 degree view of the guidelines thatcurrently exist and leaves conclusions as towhat is acceptable and desirable to thereader.

A. What’s Actually Going On Out There?

The recently published Queen MaryUniversity of London 2012 InternationalArbitration Survey: Current and PreferredPractices in the Arbitral Process (the “QueenMary Survey”) asked respondents questionsabout pre-selection interviews of arbitrators.The respondents had the following to say.

Respondents were asked, “Do you considerpre-appointment interviews with potentialarbitrators appropriate?”2 The answer was anunqualified “yes” by 46% of respondents and

1 See, e.g., Queen Mary University of London 2012 InternationalArbitration Survey: Current and Preferred Practices in the ArbitralProcess; D. Bishop and L. Reed, Practical Guidelines forInterviewing, Selecting, and Challenging Party-AppointedArbitrators in International Commercial Arbitration, King &Spalding (2007), available athttp://ksintranet.kslaw.com/library/pdf/bishop4.pdf (lastaccessed January 8, 2013); J. Sutcliffe, Interviewing ProspectiveArbitrators, MEALEY’S INT’L ARB. REP. (Aug. 2007); C. Rogers,Regulating Int’l Arbitrators: A Functional Approach toDeveloping Standards of Conduct, 41 STAN. J. INT’L L. 53 (Winter2005); M. Freidman, Regulating Judgment: A Comment on theChartered Institute of Arbitrators’ Guidelines on the Interviewingof Prospective Arbitrators, 2(20) Dispute Resolution Int’l ( 2008).

2 Queen Mary Survey, at 6.

sometimes yes by 40%. In other words, 86% ofrespondents approved of pre-selectioninterviews at least to a certain degree.3 Thesurveyors reported that most privatepractitioners and in-house counsel find “pre-appointment interviews to be useful as theyassist in providing a clearer picture of thecandidate’s availability, personality andknowledge or experience in the specific fieldrelevant to the dispute.”4 The Queen MarySurvey authors note that two thirds ofrespondents reported having eitherinterviewed or having been interviewed as apotential arbitrator.5 The most experiencedwith these types of pre-selection interviewswere North Americans (87%), followed by LatinAmericans (70%), Western Europeans (67%),and Africans and Middle Easterners (48%).6

The respondents were also asked, “Whichtopics are inappropriate for pre-appointmentinterviews?”7 The vast majority of respondents(85%) answered that interviewing thecandidate about the candidate’s position onlegal questions relevant to the case wasinappropriate.8 The second mostinappropriate topic, according to therespondents (64%), was whether thecandidate is a strict constructionist or someonewho is influenced by the equities of the

3 Id.

4 Id.

5 Id.

6 Id.

7 Id. at 7.

8 Id.

A Review of the Principles GoverningArbitrator Pre-Selection InterviewBy Giugi Carminati


discussion, selected by 59% of respondents,was the candidate’s prior views expressed, forexample, as an expert or arbitrator, on aparticular issue.9 A third of respondents (30%)deemed discussions of the candidate’sattitudes to particular proceduresinappropriate.10 Just over a quarter ofrespondents (28%) found discussions aboutpotential nominations for chair inappropriate.11

A mere 10% found discussions about thecandidate’s experience, knowledge of aparticular legal topic, technical environment orindustry inappropriate.12 And lastly, 9% ofrespondents found all of the topics aboveappropriate to discuss at a pre-selectioninterview.13

With respect to disclosure of such interviews,respondents were asked whether theinterviewing party or the arbitrator, ifappointed, should: i) notify the opposing partyof the interview; ii) disclose notes of theinterview to the opposing party; or iii) neithernotify nor disclose anything to the opposingparty.14 Exactly half of respondents answeredthat the interviewing party is under no duty todisclose the interview. And 41% of respondentsanswered that the arbitrator is under no dutyto notify the opposing party.15 On the otherside, 43% of respondents believe that theinterviewing party should notify the opposingparty of the interview (33% believe merenotification is appropriate, while 10% believethat the interview notes should also bedisclosed).16 Half of respondents believe thatthe interviewed arbitrator should notify theopposing party of the interview. A little over a

9 Id.

10 Id.

11 Id.

12 Id.

13 Id.

14 Id. at 8.

15 Id.

16 Id.

tenth of respondents (12%) answered that it isup to the interviewed arbitrator to notify theparties of the interview and disclose theinterview notes.17 More than a third (38%) ofrespondents answered that the interviewedarbitrator should notify the parties of theinterview, but not disclose interview notes tothose same parties.18

This summary of the Queen Mary Survey isincluded to provide a backdrop for the below-summarized guidelines addressing pre-selection interview of arbitrators.

B. So Who Makes The Rules?

The short answer is: nobody. Apparently,until 2007, there were no uniform rules orguidelines governing pre-selection interviews.19

However, a number of arbitral institutions have,in one way or another, attempted to provideguidance for the process of pre-selectioninterviews, which, as shown above, are bothcommon and largely accepted, albeit tovarying degrees. This next section of the articlecollects rules addressing pre-selectioninterviews of arbitrators.

1. The AAA/ICDR

The AAA/ICDR publishes a “Fact Sheet”called Enhanced Neutral Selection Process forLarge Complex Cases. As part of thisenhanced neutral selection process, theAAA/ICDR provides a screening process thatincludes pre-selection interviewing of arbitratorcandidates:

Oral or written interviews of the arbitratorcandidates

The AAA will work with parties to develop aninterview protocol in order for the parties tohave an opportunity to present questions topotential arbitrator candidates, either througha telephone conference, or in writing.

17 Id.

18 Id.

19 See e.g., Fulbright Alert (Apr. 2007), Fulbright & Jaworski.


Examples of interview question topics mightinclude: industry expertise, relative experiencein similar disputes, the arbitrator’s proceduralhandling practices, and any other questionsthat the parties would find helpful to theselection process.20

The list of acceptable topics is somewhatbroad, going beyond the categories ofqualifications and availability imposed by othersets of guidelines (discussed below). The list ofacceptable topics is also not exhaustive,providing that the pre-selection interview caninclude “any other questions that the partieswould find helpful to the selection process.”21

The process, however, is done with theAAA/ICDR, which indicates oversight by athird-party and is conducted with theparticipation of all parties.

The AAA/ICDR International Rules(“AAA/ICDR Rules”) prohibit ex partecommunications between a party or itscounsel and a prospective arbitrator, exceptto advise the candidate of the general natureof the controversy and the anticipatedproceedings, and to discuss the candidate’squalifications, availability, andindependence.22 The AAA/ICDR Rules alsoauthorize the parties “to discuss the suitabilityof candidates for selection as a third arbitratorwhere the parties or party designatedarbitrators are to participate in thatselection.”23

2. The IBA

In 2004, the IBA issued the new IBAGuidelines on Conflicts of Interest inInternational Arbitration (the “IBA Guidelines”).Section 4 of the IBA Guidelines comprises the

20 AAA Fact Sheet, available athttp://www.adr.org/aaa/ShowPDF?doc=ADRSTG_003909(last accessed on December 18, 2012) (emphases added).

21 Id.

22 AAA/ICDR, Int’l Arbitration Rules, Art. 7(2).

23 Id.

so-titled “Green List.”24 Items on the Green Listneed not be disclosed to opposing counselbecause they do not lead to either theappearance of or any actual “conflict ofinterest . . . from the relevant objective point ofview.”25 As a result, “the arbitrator has no dutyto disclose situations falling within the GreenList.”26 One of the items in the Green List iscontact between the party and the arbitrator,which specifically includes the pre-selectioninterview:

4.5.1 The arbitrator has had an initialcontact with the appointing party or anaffiliate of the appointing party (or therespective counsels) prior to appointment, ifthis contact is limited to the arbitrator’savailability and qualifications to serve or to thenames of possible candidates for achairperson and did not address the merits orprocedural aspects of the dispute.27

Note, however, that the pre-selectioninterview need not be disclosed only if it islimited to a narrow set of topics, i.e.: i)availability; ii) qualifications; and iii) the namesof possible candidates for chairperson.28 Thepre-selection interview cannot cover the meritsor procedural aspects of the dispute and stillfall within Section 4.5.1.29 The IBA Guidelines,however, do not state whether discussing themerits and procedural aspects of the case isforbidden or whether it merely warrantsdisclosure.

3. The ABA

The ABA Code of Ethics for Arbitration inCommercial Disputes (2004) (“ABA Code ofEthics”) also addresses pre-selection interviews.And although these rules are national, they are

24 IBA Guidelines, Sec. 4.

25 Id. at Part. II, Par. 6.

26 Id.

27 Id., at Sec. 4.5.1.

28 Id.

29 Id.


included for the sake of completeness. TheABA Code of Ethics lists what the prospectivearbitrator can ask about parties’ identities andthe general nature of the case as well as whatthe party or its counsel can ask about suitabilityand availability:

When the appointment of a prospectivearbitrator is being considered, the prospectivearbitrator: (a) may ask about the identities ofthe parties, and the general nature of thecase; and (b) may respond to inquiries from aparty or its counsel designed to determine hisor her suitability and availability for theappointment.30

However, consistent with other guidelines,the parties and the candidate arbitrator areprohibited from discussing the merits of thecase: “In any such dialogue, the prospectivearbitrator may receive information from theparty or its counsel disclosing the generalnature of the dispute but should not permitthem to discuss the merits of the case.”31 This isconsistent with the other guidelines outlinedabove, which generally prohibit discussion ofthe merits of the case.

4. The CIArb

In 2007, the Chartered Institute of Arbitrators(“CIArb”) issued the first set of “institutionalguidelines” addressing pre-selection interviewsof arbitrators,32 CIArb Practice Direction:Interviewing of Prospective Arbitrators(Practice Direction 16), usually referred to asthe “Guidelines.”33 The Guidelines weredeveloped by consulting practitioners fromboth civil and common law jurisdictions.34 TheGuidelines are recommendations and “do not

30 ABA Code of Ethics for Arbitration in Commercial Disputes(2004), Canon III, Par. B(1).

31 Id.

32 See e.g., Fulbright Alert (Apr. 2007), Fulbright & Jaworski, at 3.

33 See, e.g., International Arbitration Fulbright Alert (Apr. 2007),Fulbright & Jaworski, at 1.

34 Guidelines, at par. 1.3.

carry any implication of being mandatory.”35

Also, the Guidelines incorporate guidelines andstatements authored by scholars andcommentators. The rules are unique in theirbreadth and detail, especially with regards tothe procedural aspects of the interview.

The Guidelines suggest that the arbitratorestablish, in writing, rules governing theinterview—whether it be the Guidelinesthemselves or “something else.”36 In addition,the Guidelines also provide that prior to theinterview, the arbitrator be notified as to the“constitution of the interviewing team” andtold “who will lead and how it will beconducted.”37

The Guidelines also suggest that theinterview be conducted by either both partiesjointly, or by one party in the presence of theother party’s representative.38 In addition tothe other party’s presence, the Guidelinesprovide for some manner of recordkeeping,either by means of an arbitrator’s secretary ora tape recorder.39 The authors of theGuidelines recognize that the recordingrequirement “has been attacked informally onsimilar lines by other practitioners as beingexcessive.”40 However, the authors persist indefending their position, stating that anarbitrator “would be well advised to follow thisprecaution to avoid any risk of suspicion orimpropriety.”41

The Guidelines do not allow the parties todiscuss: i) the specific facts or circumstancesgiving rise to the dispute; ii) the positions orarguments of the parties; or iii) the merits of thecase. The Guidelines note that the first two

35 Id. at 2.2.

36 Id. at 3.1(1)-(2).

37 Id. at 3.1(6).

38 Id. at 3.1(4) (citing N. BLACKABY ET AL., REDFERN AND HUNTER ON

INT’L ARBITRATION 4.71 (5th ed. 2009)).

39 Id. at 3.1(5), (7).

40 Id. at 3.1(7).

41 Id.


topics are problematic. Although “theinterviewer is entitled to assess the arbitrator’ssuitability for the appointment, the Guidelinesnote that there is “a distinction between askingquestions designed to elucidate familiarity witha legal topic or a technical environment and apresentation of the facts of the case or theissues expected to arise and an enquiry as tothe arbitrator’s views on them.”42 TheGuidelines state that inquiring aboutknowledge is acceptable, but inquiring aboutthe candidate arbitrator’s views about thoseareas is not.43

The Guidelines allow the parties to discuss: i)the names of the parties and any third partiesinvolved, or likely to be involved; ii) the generalnature of the dispute; iii) sufficient detail “butno more than necessary, of the project,” toallow the interviewer and the arbitrator toassess the arbitrator’s suitability; iv) theexpected timetable of the proceedings; v) thelanguage, governing law, seat of and rulesapplicable to the proceedings, if agreed orthe fact that some or all of these are notagreed; and vi) the candidate arbitrator’sexperience, expertise and availability.44

The Guidelines suggest the candidatearbitrator decline to answer any inappropriatequestions and, of course, the interviewershould not ask any inappropriate questions.45

The Guidelines also direct the candidatearbitrator to terminate the interview if theycome to the conclusion that that interviewer isseeking a partisan arbitrator.46

Finally, the Guidelines provide that a timelimit should be agreed for the interview andthat any “failed interviewee” can bereimbursed his or her reasonable travel

42 Id.

43 Id.

44 Id. at 3.1(10).

45 Id. at 3.1(12)-(13).

46 Id. at 3.1(14).

expenses for attendance at the interview, but“should not be reimbursed for his or her timesave in exceptional circumstances.”47 Theselected candidate should not be reimbursedfor travel expenses or time spent attending theinterview. But the appointed arbitrator cansubmit expenses for reimbursement after thearbitral proceedings are underway, as long asthe expenses are “clearly separated andidentified as relating to the interview.”48

C. So What’s Next?

No doubt, scholars, commentators, andpractitioners will continue to debate theproper conduct of a pre-selection interview.And some—the marked minority—maycontinue to deem such pre-selection interviewsalways inappropriate. What remains to beseen is whether the arbitration world will movetowards more regulation of the practice, less,or remain at status quo. This may depend onthe perception over time of actual andperceived lapses that would encourage andcreate a framework for the development ofguidelines that are generally accepted. Anillustration of this point is the CIArb’s suggestionthat interviews be recorded—either in noteform or by tape recorder—for disclosure to theother side. In practice, as shown by the QueenMary Survey, the majority of practitionerswould not favor such disclosure. In addition,and maybe most importantly, there remains aquestion as to whether pre-selection interviews,in fact, present a problem. Many lawyers mayview this as a case of “If it ain’t broke, don’t fixit.”

Giugi Carminati, [email protected], isa Houston-based associate in Weil, Gotshal &Manges’ International Arbitration Group. Ms.Carminati's practice focuses on internationalarbitration matters, including natural gas andmining companies, as well as complex

47 Id. at 3.1(17).

48 Id. at 3.1(18).


commercial litigation. Ms. Carminati recentlyco-authored a book on the laws governingcommercial spaceflight.


The International Centre for DisputeResolution (ICDR) is the international division ofthe American Arbitration Association (AAA)and since its creation in 1996 its focus has beenon providing international conflictmanagement services for the global businessand legal communities.1 These servicesinclude a full range of international alternativedispute resolution (ADR) processesadministered by multilingual staff applying triedand tested international arbitration andmediation rules. The ICDR administrators aredivided into regionally specialized teamswhere their knowledge of local culture,different legal traditions and linguisticcapabilities are important components of theadministrative regime. This framework provides

1 The global leader in conflict management since

1926, the American Arbitration Association (AAA) is

a not‐for‐profit, public service organization

committed to the resolution of disputes through the

use of arbitration, mediation, conciliation,

negotiation, democratic elections and other

voluntary procedures. In 2012, over 250,000 cases

were filed with the AAA in a full range of matters

including commercial, construction, labor,

employment, insurance, international and claims

program disputes. The ICDR received 996 new

international case filings in 2012. The AAA has

promulgated rules and procedures for commercial,

construction, employment, labor and many other

kinds of disputes. It has developed a roster of

impartial expert arbitrators and mediators through

30 offices in the United States, and with the ICDR,

which has offices in Mexico, Singapore, and Bahrain

through the BCDR‐AAA.

a level of procedural predictability under theICDR system and creates in its users anexpectation of a quick, efficient andeconomical ADR process.2

One of the more crucial phases of aninternational arbitration concerns theappointment of the arbitrators. While theability of the parties to select their arbitrators isrecognized as one of arbitration’s most desiredfeatures, the selection phase can bechallenging. The ICDR will be guided by thearbitration agreement and the applicable ruleswhile balancing a number of other factorssuch as the parties’ requested qualifications forthe arbitrators or their nominations, along withpossible disclosures and conflicts, due processand its commitment to the efficiency andintegrity of the ICDR dispute resolution system.

Many ICDR arbitrations are based on itsmodel arbitration clause or closely follow itssuggested language. Users by incorporatingthe ICDR’s model clause in their contract, inaddition to ensuring that the institution isproperly designated to administer the case,take comfort in not having to address eachand every procedural step with specificity asthe ICDR’s International Arbitration Rules (ICDRRules) address all of the procedural issues thatmay arise and include default mechanismsthat when triggered will ensure the completionof the arbitral process and ultimately anenforceable award.

2 See Luis M. Martinez, ICDR Awards &

Commentaries, in A GUIDE TO ICDR CASE MANAGEMENT

(Grant Hanessian ed., 2012).

The ICDR’s Arbitrator Appointment Process -The Institutional Role and Available OptionsBy Luis M. Martinez


Having said that, experienced users armedwith the knowledge of the type of dispute thatmay be common to their trade or industry willcustomize their clause accordingly providingfor the dispute resolution mechanism that bestaddresses their needs. One area that userspay special attention to is the method ofappointment that will be used for theirmediation or arbitration. Pursuant to the ICDRsystem, parties can select any method ofappointment they have agreed to byincorporating it into their arbitral agreement.Failing that, if they do not provide nor agree toa method of appointment, the list method isthe ICDR’s default mechanism for appointingthe arbitrators.

A. Pros and cons of appointment methods

Parties have a number of options whenappointing their arbitrators. One option used isthe party-appointed method. The parties mayeach designate their own arbitrator and thenthose two arbitrators may designate thepresiding arbitrator, the president of thetribunal. The party-appointed method inrecent years has been the subject of greatdebate. Charles Brower and other advocatesof this method argue that it is consistent withparty autonomy and as arbitration awards arefinal and not subject to appeal unless theaward is vacated, parties must have a highlevel of trust and confidence in the arbitratorsthey nominate.3

Moreover the level of complexity in many oftoday’s international arbitrations requirearbitrators with extensive subject matterexpertise, cultural sensitivity and a strongfoundation in the conduct of an internationalarbitration proceeding. Counsel and theirclients argue that in addition to their research,which includes a review of the arbitrator’swritings, speeches, and recommendations

3 Paulsson and van den Berg Presume Wrong, Says

Brower, Global Arb. Rev., Feb. 6, 2012.

from their colleagues, their ability to interviewthe prospective arbitrator provides anotheropportunity to interact and address anyconcerns that they may have in order tocomplete their profile and decide whether toproceed with their nomination or not. Ofcourse the parties are hopeful that theirnominated arbitrator will see the case theirway and will also be able to sway the othermembers of the tribunal. Unfortunately that iswhere other commentators have identifiedpotential problems that may arise as it is thenorm in international arbitration and requiredunder the ICDR Rules that all arbitrators beimpartial and independent.4

Critics of the party-appointed methodargue that there may be an inherent flaw inthe system in terms of the expectations,practice and the ex parte interviewconducted to select the arbitrator.5 In somecases, less experienced arbitrators may notappropriately control the interview processand fail to establish strict parameters regardingthe permissible scope of acceptablequestions. They may feel that they have to gobeyond a party’s possible spoken or unspokenexpectation or belief that their appointedarbitrator at a bare minimum will ensure thatthe other two arbitrators understand theirappointing party’s position.

Some party appointed arbitrators may havethe mistaken belief that they have anobligation to the party that appointed themwhich will impede their ability to be impartialand independent and they may engage in

4 For a review of the impartiality and independence

requirement of the arbitrators and the permissible

scope of communications between the arbitrators

and the parties, see ICDR Rules Article 7.

5 Hans Smit, The pernicious institution of the party-

appointed arbitrator, COLUMBIA FDI PERSPECTIVES, No.

33, Dec. 14, 2010.


dilatory tactics or, as some scholars havesuggested, draft a dissenting opinion in supportof their parties’ position.

For example Jan Paulsson discussed twoICC studies observing that in over 95% of thedissenting opinions the authors were party-appointed arbitrators.6 This troubling statisticmay suggest that a disproportionate numberof party-appointed arbitrators lack impartialityor independence in arriving at their finaldecision.

In another article this trend was furtherconfirmed by a review of dissenting opinions inthe International Centre for Settlement ofInvestment Disputes (ICSID) investment-treatyarbitration awards where Albert Jan van denBerg examined 150 awards and found thatnearly all of the 34 dissenting opinions wereissued by the arbitrators appointed by theparty that lost the case.7

These findings they argue support the trendto move away from the direct appointment bya party method towards appointments beingmade by the institutions either directly or fromtheir panels using the list method therebycreating an important buffer between thearbitrators and the parties, thus removing thepotential for the aforementioned problems.Anecdotally more than one party-arbitratorhas noted that, while they understand theICDR Rules require they be impartial andindependent, on occasion during the courseof the arbitration they were going to pose aquestion and before doing so paused andconsidered the question’s impact on the caseof the party that appointed them. They addedthat the issue never arises when they areappointed via the list method; in fact theywere not aware of which parties’ selections

6 Jan Paulsson, Are Unilateral AppointmentsDefensible?, KLUWER ARB. BLOG, Apr. 2, 2009.7 Albert Jan van den Berg, Dissents and Sensibility,

GLOBAL ARB. REV., Feb. 28, 2011.

from the list led to their appointment. Finally asthe ICDR (or for that matter any otheradministrative institution) has little or no controlover the party-appointed arbitrators by virtueof their not typically being on the institution’slists, these arbitrators do not have anexpectation of future appointments and areless concerned about the institution’s policiesbut may have a greater motivation to establishthe track record of an arbitrator that has astheir primary consideration the position of theparty that appointed them and this may affectpredictability and problems during the courseof the arbitral proceedings.

B. The ICDR List Method

While the party-appointed method can andis used effectively with safeguards in place, theICDR’s default method of appointment, wherethe parties have not specified the use of theparty appointed method in their contract, isthe list method. This method has a number ofbenefits within the ICDR system and canprovide the parties with options whileminimizing the aforementioned risks. Itremoves the ex parte contact between theparties and the arbitrators and any confusionover their role or responsibilities towards theparty that selected them. This can be asignificant advantage in an internationalarbitration especially during any enforcementproceedings where these contacts may laterbe used to establish the foundation for possiblebias or evident partiality during an action tovacate an arbitral award.8

8 For further analysis and discussion regarding

disclosures and evident partiality, see AAA/ABACode of Ethics for Arbitrators in CommercialDisputes, revised and effective March 1, 2004. Seealso Commonwealth Coatings Corp. v. ContinentalCasualty Co., 393 U.S. 145 (1968); Schmitz v. Zilveti,20 F.3d 1043 (9th Cir. 1994); Positive Software v. NewCentury Mortgage Corp., 476 F.3d 278 (5th Cir.2007).


Arbitrators selected from the ICDR’s rosterhave been vetted and their qualificationsscrutinized in advance by a number of trainingprograms highlighting “best practices” in amock complex international arbitration andthe application of the ICDR Rules and itsGuidelines for Arbitrators ConcerningExchanges of Information along with itsadministrative system and policies.9 Suchtraining reduces the risk of procedural errors orother failures such as the improper completionof the clearing of conflicts phase or failing tocomply with the ICDR’s expectations regardingtime deadlines and the management of thearbitration.

It is sine qua non that the list method is onlyas good as the quality of the members whocomprise that list. Recognizing the need forthese exceptional international arbitrators, theICDR has established a demanding set ofqualifications for potential arbitrators seekingadmission to its international panel. Openingson the panel are limited depending on theICDR’s caseload needs which may in turn drivethe needs for a particular nationality, expertiseor linguistic capability for that particular year.Applicants undergo a two-tiered reviewprocess that has resulted in a panel ofeminently qualified international disputeresolution specialists from nations all over theworld.10

When appointing the arbitrators by usingthe list method the ICDR will raise the issue withthe parties during the administrative

9 The ICDR Guidelines for Arbitrators Concerning

Exchanges of Information can be found on the

ICDR’s website at www.ICDR.org and reflect the

ICDR’s policies on document exchange and are

required to be applied by the arbitrators serving on

ICDR cases.

10 For information on the ICDR application, see the

ICDR’s web site at www.ICDR.org.

conference call and will consider all of thequalifications they have requested including aspecific nationality, type of expertise orexperience in a particular industry or perhapsfluency in a particular language or substantivelaw. Combining this party input with its ownviews from its review of the case, the ICDRcreates a balanced list of potential arbitratorsfor consideration and selection by the parties.

The list of names will be transmitted alongwith their corresponding curriculum vitae whichprovide the arbitrator’s professional work andADR experience, as well as education,publications, affiliations, language capabilitiesand rate of compensation. Parties are askednot to exchange these lists and are allowed toobject to anyone listed without providing anyreasons. The parties must rank the remainingarbitrators with number 1 reflecting their firstchoice down to their last acceptable arbitratorremaining on the list. Once the parties returntheir lists to the ICDR, the arbitrators with thelowest combined rankings are invited to serveand once they clear the conflicts stage theirappointments are confirmed by the ICDR.11

While rare, parties seeking a broader range ofoptions may request a second list.

The list method offers additional options; forexample, lists can be customized for theselection of the presiding arbitrator only, anoption which can significantly reduce the timethat may otherwise be required to agree onthat selection. The lists can be divided in thecase of a tri-partite panel where the partiesare seeking to have a panel that is comprisedof an attorney, an engineer and an architectperhaps for an international construction case.

The ICDR can also make administrativeappointments. If within 45 days from the dateof the commencement of the arbitration, theparties have not mutually agreed on a

11 For an example of the list strike and rank method,

see supra note 2.


procedure for appointing the arbitrators, orhave not designated their arbitrators byfollowing their agreed upon procedure fromthe clause, the ICDR, at the written request ofany party, shall complete the appointmentprocess.12

In the event of multiparty cases, the ICDRapplies ICDR Rules Article 6(5) and, absent theagreement of the parties, will make allappointments. This Article was drafted toavoid the potential problems that could occuras was the subject of the Dutco case where anICC arbitration award was found to becontrary to public policy as not all of therespondents were allowed to appoint theirown arbitrator.13 While the ICDR can appointthe entire tribunal in reality this hardly happensas the parties usually agree to coordinate andagree on the appointment mechanism.

C. Conclusion

The ICDR provides users with choices andallows them to utilize an arbitrator selectionmethod that fits their needs and expectations.The ICDR is accustomed to and experienced inadministering arbitrations in which the partiesselect their own party appointed arbitrators.But the ICDR also offers a carefully selectedand trained list of international arbitrators fromwhich users can choose the arbitrators in aprocess that insulates all of the arbitrators fromany risk of even unconscious bias towards oneof the parties, a selection method many usersfind preferable.

12 See ICDR Rules Article 6 (3), which includes an

administrative pause should the parties be

conducting settlement discussions, as the ICDR

requires a written request to complete the

appointment process.

13 Stefan Kröll, Dutco Revisited? Balancing Party

Autonomy and Equality of the Parties in the

Appointment Process in Multiparty Cases, ITA BLOG,

Oct. 15, 2010.

For any questions or comments regardingthis article please contact Luis M. Martinez [email protected]. The opinions made aresolely attributable to the author. They do notnecessarily represent the views of theInternational Centre for Dispute Resolution, theInternational Division of the AmericanArbitration Association or the Inter-AmericanCommercial Arbitration Commission.

Luis M. Martinez is Vice President of theInternational Centre for Dispute Resolution(ICDR), located in New York, and HonoraryPresident of the Inter‐American CommercialArbitration Commission (IACAC). Mr. Martinezis responsible for international arbitration andmediation business development for the UnitedStates' North‐East region and Central andSouth America. In his capacity as President ofthe IACAC, Mr. Martinez was responsible forthe oversight of its network of arbitral centersthroughout the Americas. He is a frequentauthor and speaker.


The 2012 Rules of Arbitration of theInternational Chamber of Commerce (“ICCRules”), like their previous iterations, recognizethe paramount importance of constituting anarbitral tribunal properly. To understand howarbitrators are put in place under the ICCRules, it is worth taking a moment tounderstand the terminology in the ICC Rulesbefore discovering their basic principles.Where relevant, references to the applicableArticles of the ICC Rules appear inparentheticals.

A. ICC Terminology: Understanding the Lingo

The International Court of Arbitration of theInternational Chamber of Commerce (“Court”)is an independent arbitration body thatadministers the resolution of disputes by arbitraltribunals in accordance with the ICC Rules. Itdoes not resolve disputes itself.

“Arbitral tribunal” can refer to one or threearbitrators. When there is one arbitrator, he orshe is the “sole arbitrator” and when there arethree arbitrators, the third arbitrator is calledthe “president.”1

Under the ICC Rules, parties or co-arbitrators“nominate” arbitrators. The Court’s Secretariatinvites every potential arbitrator to complete aStatement of Acceptance, Availability,Impartiality and Independence (“Statement”)and circulates the Statement and the

1 This term represents a change, at least in the English version ofthe Rules, as the term used in earlier versions of the Rules was“Chairman”. The term used in English is now gender neutral andis in line with the term used in the French text of the Rules.

nominee’s curriculum vitae to the parties.Nominees only become arbitrators if they areconfirmed by the Court or by the Court’sSecretary General (“Secretary General”).

If a party objects to a nominee’sconfirmation, be it based on a “disclosure” asto independence, qualifications, availability orotherwise, the Court will decide whether to“confirm” that nominee as an arbitrator.Parties generally choose their arbitrators. In thepast five years, on average, 71.5% of arbitratorswere confirmed, with parties choosing 58% ofarbitrators and empowering co-arbitrators tochoose 13.5% of arbitrators.2

The Court chose the remaining 28.5% ofarbitrators. When the Court chooses anarbitrator, the Court “appoints” the arbitrator.The Court generally selects one of the ICC’sNational Committee or Groups to “propose”an arbitrator. Like nominations, any arbitratorproposed by a National Committee or Groupmust be appointed by the Court, giving theCourt the ultimate choice of whether theproposed arbitrator is appropriate for thearbitration. In addition, as described below, incertain circumstances the Court chooses anarbitrator itself, i.e., “directly.”

Parties only can “challenge” an arbitratorfor an alleged lack of impartiality or

2 2007 through 2011. This information can be found in the ICCStatistical Reports, which are published yearly in the ICCInternational Court of Arbitration Bulletin. They are availableonline through the ICC Dispute Resolution Libraryhttp://www.iccdrl.com. Throughout, references to statistics havebeen taken from the information available for 2007 to 2011.

Your Way or the ICC Way: Constituting AnArbitral Tribunal Under the ICC Rules ofArbitration

By Victoria R. Orlowski and Ashleigh Masson


independence, or otherwise, once thatarbitrator has been confirmed or appointed.

B. Ten Tenets of Constituting an ArbitralTribunal Under the ICC Rules

The Court has extensive experience inconstituting arbitral tribunals. In 2011 alone, itput 1341 arbitrators in place, consisting of 900individuals from 78 different countries. Whilethe process of constituting arbitral tribunalsunder the ICC Rules can appear complex, itessentially is a carefully crafted system ofchecks and balances. The basic tenets of thissystem are set forth below.

1. Considering the consensual nature ofarbitration, the Court tries to give effect to anyagreement of the parties as to the constitutionof the arbitral tribunal, whether in thearbitration agreement or a subsequentagreement.

This allows parties the flexibility to create amethod for constituting the arbitral tribunalthat meets their needs and preferences.1

Some examples of recent methods includerequesting a customized list of arbitrators fromthe Court, a coin-toss as a tie-breaker betweentwo candidates for President that the co-arbitrators were in a stalemate over, strikingnames off exchanged lists and having theCourt pick one of the remaining names out ofa hat, or simply to have the Court appoint allarbitrators, but the possibilities are limitless if theparties agree to such a procedure and itcomports with the Rules. If there areambiguities concerning the parties’ agreedmethod of constituting the arbitral tribunal,which there often are, or potential issues underthe Rules, the Secretariat will ask the parties toclarify such ambiguities. In the absence ofsuch agreement, the ICC Rules provide aframework for the constitution of the arbitraltribunal.

1 ICC Rules, Art. 11(6).

2. When the parties do not agree on thenumber of arbitrators, the ICC Rules provide fora sole arbitrator unless it appears to the Courtthat the dispute is such as to warrant theappointment of three arbitrators.2

In taking its decision, the Court considers thearbitration agreement,3 the parties’ comments,the nature of the dispute, the amount indispute, the presence of a State or State entityand any other relevant factors. While three-member arbitral tribunals conduct about 60%of ICC arbitrations,4 when the Court decideson the number of arbitrators, in 80% of thecases it submits the arbitration to onearbitrator.5

3. The ICC Rules contain realistic timelimits for the parties to nominate arbitrators.

The Rules require claimants to provideinformation regarding the number of arbitratorsand their choice thereof, including anyrequired nomination, in the Request forArbitration (“Request”).6 If they fail to do so,the Secretariat requests the same within 15days. Respondents must provide suchinformation within 30 days of their receipt ofthe Request, either in their Answers to theRequest for Arbitration (“Answers”) or toreceive an extension of time for filing theirAnswers.7 Where the respondent fails tonominate a co-arbitrator in its Answer, it usuallyis offered a further opportunity to make anomination. These time limits apply regardlessof any objections that may be raised as to

2 Id. Art. 12(2).

3 For example, where an arbitration agreement referred to “oneor more arbitrators” and to the “President of the ArbitralTribunal”, the Court, to give effect to the arbitration agreement,decided to submit the arbitration to a three-member arbitraltribunal.

4 Average between 2007 and 2011.

5 Average between 2007 and 2011.

6 ICC Rules, Art. 4.

7 Id. Art. 5.


jurisdiction. However, if the Secretary Generalrefers such objections to the Court for adecision8 and the Court makes a prima faciefinding to allow the arbitration to go forwardwith that party,9 the Court will entertain aparty’s request for additional time to nominatean arbitrator.

While 30 days may sound unduly long, abrief consideration of the steps a respondentmay take to select an arbitrator or formulatecomments on the process, including any time ittakes for a Request for Arbitration to get intothe right hands at the respondent’s legaldepartment, for respondent to find or consultlegal counsel, analyze the Request, possiblycontact the potential nominee, etc., dispelsthat initial perception. Parties that initiallyagreed to shorter time limits often mutuallyagree to extend them, finding that theiroptimistic time line may deprive them of anopportunity to choose the right arbitrator.

If the Court decides that there will be athree-member arbitral tribunal, claimantreceives 15 days from receipt of the Court’sdecision to nominate a co-arbitrator.Respondent then has 15 days to nominate anarbitrator10 The Secretariat applies the sameprocess by analogy where the partiessubsequently agree to have a three-memberarbitral tribunal. If a party fails to nominate aco-arbitrator, the Court will appoint on itsbehalf.

When the arbitration agreement providesfor a sole arbitrator but does not specify a timelimit or method for nomination, the parties willhave 30 days from respondents’ receipt of theRequest to nominate a sole arbitrator. Upon

8 Id. Art. 6(3).

9 Id. Art. 6(4).

10 Id. Art. 12(2).

request, the Secretariat may grant the partiesadditional time to nominate a sole arbitrator.11

4. Parties may nominate any individual toact as an arbitrator, although all arbitrators aresubject to independence and impartialityrequirements and must be available to act.

The Rules do not contain any exemptionsthat allow for non-neutral arbitrators. On thecontrary, Article 11(1) of the ICC Rules providesthat “[e]very arbitrator must be and remainimpartial and independent of the partiesinvolved in the arbitration.” All arbitrators havea continuing duty of disclosure that begins withtheir completing the Statement. In 2007, 11.4%of nominees filed disclosures in theirStatements. In 2011, the percentage doubledto 22.6%, evidencing a trend towards greaterdisclosure. If a nominated arbitrator makes adisclosure, the Secretariat grants the parties atime limit to comment on the disclosure andfacilitates the process of exchanging furtherinformation about the disclosure if the partiesrequest it.

The same process of inviting commentsapplies when the Court considers appointing aprospective arbitrator who makes a disclosure.However, the Court only considers circulatingsuch a disclosure to the parties if it considers itto be de minimis.

The Court also seeks to ensure thatarbitrators are available. By signing theStatement, each prospective arbitratorconfirms that he or she can devote the timenecessary to conduct the arbitration diligently,efficiently and in accordance with the timelimits in the Rules. Furthermore, he or sheconfirms that it is important to complete thearbitration as promptly as reasonablypracticable and that the Court will considerthe duration and conduct of the proceedings

11 Id. Art. 12(3).


when fixing his or her fees.12 Some of theCourt’s recent decisions evidence the Court’semphasis on this requirement. The Court hasdecided not to confirm arbitrators whereobjections were raised as to their availabilityand where, in the absence of objections, theCourt was aware of past cases in which anarbitrator was removed by the Court due to hisinability to timely fulfill his or her mandate.

While the process of confirming an arbitratormay take longer than when the parties directlyappoint arbitrators under different rules, theprocess ensures that arbitral tribunals areconstituted properly. The confirmation processreduces the number of challenges againstarbitrators once they are in place, thus helpingavoid the potentially disruptive nature ofchallenges and preventing nominees withsignificant conflicts from receiving a copy ofthe file, which often contains confidential orsensitive information. In 2011, parties brought atotal of 39 challenges in 27 out of theapproximately 1501 pending cases.

5. In arbitrations with multiple claimants orrespondents, each side will nominate jointly aco-arbitrator.13

If one side is unable to make such jointnomination, the Court may appoint all threemembers of the arbitral tribunal.14 Inconsidering whether to do so rather than onlyappointing an arbitrator on behalf of the sidethat failed to do so, the Court considerswhether there is a suggestion that there maybe differing interests between parties that areasked to nominate jointly. Similarly, if anadditional party joins the proceedings,15 it mayjoin in claimants’ or respondents’ nomination.16

12 Id. Art. 2(2) of Appendix III.

13 Id. Art. 12(6).

14 Id. Art. 12(8).

15 Id. Art. 7.

16 Id. Art. 12(7).

If such additional party fails to join in claimants’or respondents’ nomination, as in the absenceof a joint nomination, the Court may appointall three members of the arbitral tribunal.

6. When there is a three-member arbitraltribunal, the Court will appoint the Presidentunless the parties agree to a differentprocedure.17

Parties often agree that the co-arbitratorswill nominate the president or do sothemselves. From 2007 to 2011, co-arbitratorsnominated 51% of presidents. If the partiesagree that the co-arbitrators will nominate thepresident, they will have 30 days to do sounless the Court fixes a different time limit orthe parties otherwise agree.18

7. Sole arbitrators and presidents shouldnot be the same nationality as the parties,unless there are “suitable circumstances” andno party objects.19

This requirement usually does not come intoplay in the context of nominations, as theparties’ or co-arbitrators’ nomination of thesole arbitrator or president is a suitablecircumstance. When the Court appoints, itgenerally considers a suitable circumstance tobe that all parties are of the same nationality,because usually there could be no perceivedlack of neutrality in those circumstances. If theCourt decides to appoint an arbitrator of thesame nationality of the parties, it grants them ashort time limit to object. If the parties do notobject, the Court proceeds to appoint sucharbitrator. In the interest of promoting theinternational nature of ICC arbitrations, theCourt generally is hesitant to take a decisionthat would result in all three members of an

17 Id. Art. 12(5).

18 Id.

19 Id. Art. 13(5).


arbitral tribunal being of the same nationality.To preserve an independent and diversearbitral tribunal, the Court also avoidsappointing a president of the same nationalityas one of the co-arbitrators, unless the partiesagree otherwise.

8. When the Court is invited to appoint anarbitrator, it usually does so upon the proposalof a National Committee or Group, whichallows the Court to have a truly global anddiverse range of potential arbitrators.

It is worth a brief a trip back in time tounderstand the origins of the appointmentmethod in the ICC Rules. When the ICCintroduced its arbitration rules in 1922, theworld was a different place—there were nocomputers, no internet, no television and mostcommunication was by mail. The ICC sought—and still seeks—to promote peace throughinternational business and one way to do sowas to provide parties with a method toresolve disputes that arose in internationalbusiness. To do so effectively, ICC arbitrationhad to be truly international. The ideadeveloped to use local chambers ofcommerce to assist the ICC in finding qualifiedarbitrators. The Court uses the same processtoday, needless to say by faster means ofcommunication. The National Committeesystem allows the Court to find the rightarbitrator for each arbitration. NationalCommittees and Groups know the localarbitration community and are well situated tosearch for the best arbitrators in their region.They are of assistance, particularly when theparties have agreed to very specificcharacteristics, such as anything from anexpert in the polyester film industry to achartered quantity surveyor who is a lawyerand speaks Arabic.

Like nominations, when the Court appointsupon the proposal of a National Committee orGroup, it uses a two-stage process. First, theCourt decides which of the approximately 90

National Committees or Groups to invite. Inmaking its decision, the Court considers,amongst other things, the parties’ nationalities,the place of arbitration, the language ofarbitration, the location of the parties’ counsel,the applicable law, the amount in dispute andany requirements set out in the arbitrationagreement. To minimize the costs ofarbitration, the Court endeavors to findarbitrators at, near, or with easy access to theplace of arbitration.

When the Court appoints a co-arbitrator, itusually will invite the National Committee orGroup which represents the nationality of theparty that failed to nominate. Whenappointing on behalf of multiple parties thathave similar interests and fail to nominatejointly, the Court usually considers inviting aproposal from a National Committee or Groupof a country of which one of them is anational, or where the interests behind themlies.20

When deciding whether to appoint theproposed arbitrator, the Court considers thecandidate’s arbitration experience, availabilityand qualifications in light of the above-mentioned needs of the case. The Court’s rateof non-appointment of proposals from NationalCommittees of 3.6% over the last five years isslightly higher than the rate of its non-confirmation of arbitrators, which is 2.7%,evidencing the Court’s determination to findthe right arbitrators for each case.

9. The Court has the flexibility to directlyappoint arbitrators, which further expands thepool of potential arbitrators.21

The 2012 Rules now empower the Court todirectly appoint arbitrators where a NationalCommittee or Group has been invited butfailed to make a proposal, one of the parties is

20 This current practice aligns with Article 9(6) of the 1998 Rules.

21 Id. Art. 13(4).


a state or claims to be a state entity, thecountry from which the Court seeks anarbitrator does not have a NationalCommittee or Group or the President of theCourt certifies that it is necessary. When theCourt does so, it appoints any candidate itdeems suitable.

10. The decisions of the Court as to theappointment, confirmation, challenge orreplacement of an arbitrator are final, and thereasons for such decisions shall not becommunicated.22

This provision was debated heavily in theprocess of drafting the 2012 ICC Rules, butremains the same as its predecessor in the 1998Rules. Two policy reasons for this provision arethat it supports the finality of the Court’sdecisions and that, practically, it would bedifficult to fully provide reasons for suchdecisions, which may be based, at a typicalsession, on 25 to 35 different legal perspectivesand reasons that end in the same conclusion.

In conclusion, the ICC Rules reflect ahistorical evolution, maintaining theirinternational perspective, while responding tousers’ demands for available, impartial andindependent arbitral tribunals. Parties choosingthe ICC Rules maintain the autonomy tofashion an arbitral tribunal to meet their needswhile benefitting from the Court and itsSecretariat’s extensive experience inconstituting arbitral tribunals. When questionsarise as to how they can do so, the Secretariatis available to assist from the conception of thearbitration agreement through the process ofconstituting the arbitral tribunal and beyond.

Victoria R. Orlowski is Managing Counsel at theSecretariat. She served as Counsel of theteam that principally handles arbitrationsinvolving common law jurisdictions, particularlythe United States and Canada. She is a

22 Id. Art. 11(4).

member of the New York bar and worked as alitigation associate at White & Case LLP in NewYork City. She can be reached [email protected].

Ashleigh Masson is a Deputy Counsel at theSecretariat. She works on the team thatprincipally handles arbitrations involvingcommon law jurisdictions, particularly theUnited Kingdom. She can be reached [email protected].


A. Introduction

Parties to international arbitration areentitled to expect of the process a competentand diligent arbitrator, who will, in timelyfashion, render a just, well reasoned andenforceable award, and that anyadministering institution should be working tosupport this outcome.

The parties naturally want to succeed intheir claim, defence, or counterclaim, andmay reasonably be expected to seekarbitrators who are sympathetic to theirposition.

An administering institution, on the otherhand, wants the arbitration to succeed (that isto reach a just and binding conclusion); tosafeguard the process; the effectiveness andreputation of arbitration; and its ownreputation.

The institution, therefore, must be at pains toappoint arbitrators with no preconceived viewson the merits, and no bias towards either side.

B. Procedures for Selection andAppointment

In all cases, whether or not the arbitratorsare nominated by the parties, the basic LCIAprocedure is as follows, save that steps four,five and seven are omitted in the case of partynomination.

1. The Secretariat reviews the Requestfor Arbitration and the accompanyingcontractual documents, and the Response (ifany).

2. A résumé of the case is preparedfor the LCIA Court.

3. Key criteria for the qualifications ofthe arbitrator(s) are established and recorded.

4. The criteria are entered into theLCIA’s database of arbitrators, from which aninitial list is drawn.

5. If necessary, other sources areconsulted for further recommendations.

6. The résumé, the relevantdocumentation, and the names and curriculavitae of the potential arbitrators are forwardedto the LCIA Court.

7. The LCIA Court advises whicharbitrator(s) the Secretariat should contact(who need not be, but usually will be, fromamong those put forward by the Secretariat),to ascertain their availability and willingness toaccept appointment.

8. In the case of a party nomination,the Court advises whether it considers thenominee suitable, subject to conflicts checks.

9. The Secretariat sends thecandidate(s) an outline of the dispute.

10. When the candidate(s) confirmtheir availability, confirm their independenceand impartiality, and agree to fee rates withinthe LCIA's bands, the form of appointment isdrafted.

11. The LCIA Court formally appointsthe tribunal and the parties are notified.

Given the Secretariat’s considerableexperience in selecting arbitrators, andpersonal knowledge of many candidates,there are some cases in which a suitableselection of candidate arbitrators may be put

Arbitral Appointments at the LCIA

By Adrian Winstanley


forward to the Court by the Secretariat withoutthe need to interrogate the database.

Whilst the LCIA is concerned that eacharbitrator should be appropriately qualified asto experience, expertise, language and legaltraining, it is also mindful of any other criteriaspecified by the parties in their agreement andin the Request and Response.

The LCIA is also concerned to ensure theright balance of experience, qualifications andseniority on a three-member tribunal; inparticular, what qualities the Chair should haveto complement those of his co-arbitrators. TheLCIA is mindful also of any particular nationaland/or cultural characteristics of the parties towhich it should be sensitive, so as to minimiseconflict. Similarly, it addresses such issues aswhether the arbitrator(s) should have a lighttouch or a firm touch, bearing in mind, forexample, the degree of professionalism itexpects of the parties, given whom they havechosen to represent them.

The LCIA also considers the nature of thecase (sum in issue, declaratory, technicallycomplex, legally complex, etc); the initialstance of the parties (aggressive, constructive,etc); the identity and known characteristics ofthe parties’ lawyers and, indeed, whether theparties are represented at all.

The LCIA is equally concerned to ensurethat all arbitrators are not only suitablyqualified and without conflict, but are alsoavailable to deal with the case asexpeditiously as may be required. This doesnot mean that an arbitrator must have animmediately clear diary, but some cases placegreater demands on an arbitrator’s time (inreviewing submissions, dealing with preliminaryissues, in hearings etc) earlier in theproceedings than do others.

The LCIA is also amenable to a joint requestby the parties that it provide a list of candidatearbitrators, from which they may endeavour to

select the tribunal, whether in straightforwardnegotiation, or by adopting an UNCITRAL-stylelist procedure. In such cases, the selectionprocess described above is carried out inrespect of all candidates to be included onthe list, so that any candidate selected by theparties has already confirmed his willingnessand ability to accept appointment and hasbeen approved for appointment by the LCIACourt.

Thus, the process of selecting arbitrators isby no means mechanical; it is a consideredcombination of science and art, as to whichthe LCIA, both in its Secretariat and in its Court,is well qualified.

C. Rules Concerning Selection andAppointment

By Article 1.1(e), of the LCIA Rules, if thearbitration agreement calls for partynomination, the Claimant should nominate anarbitrator in the Request for Arbitration.

By Article 2.1(d), the Respondent shouldnominate an arbitrator at the time of theResponse.

By Article 2.3, failure by the Respondent tonominate within time (or at all) constitutes awaiver of the opportunity to nominate.

By Article 5.3, there is a presumption infavour of a sole arbitrator unless the partieshave agreed in writing otherwise, or unless theLCIA Court decides that the circumstances ofthe case demand three.

By Article 5.5, the LCIA Court alone isempowered to appoint arbitrators, thoughalways having due regard for any method orcriteria for selection agreed by the parties.

By Article 7.1, any purported agreementthat the parties themselves, or some thirdparty, shall appoint an arbitrator is deemed anagreement for party nomination.


By Article 7.2, the LCIA Court may, itself,select an arbitrator, notwithstanding anagreement for party nomination, if any partyfails to nominate, or nominates out of time.

By Article 8, multiple parties lose the right tonominate if they cannot agree that theyrepresent two sides to the dispute for thepurposes of the formation of the tribunal.

By Article 9, the LCIA Court may abridge thetime for the appointment of the tribunal, incases of “exceptional urgency” and may, thus,require a Respondent to nominate its arbitratorwithin a shorter period than the 30 daysprescribed by Article 2.

D. Independence, Impartiality andChallenges

One of the key functions of an administeringinstitution is to provide procedures, checks andbalances for ensuring the independence andimpartiality of the arbitrators it appoints, andfor dealing with doubts about independenceor impartiality fairly and expeditiously, shouldsuch doubts arise.

A party which has concerns that suchcircumstances exist, has a duty promptly tobring a challenge, which, if not accepted byall other parties, or by the arbitrator himself, willbe referred to the LCIA Court.

In common with the decisions of all arbitralinstitutions, the decisions of the LCIA Court,though conclusive and binding upon theparties and the tribunal, are administrative innature, and the LCIA Court is not required togive any reasons for these decisions.

The LCIA Court has, however, long adoptedthe practice of giving reasons whendetermining challenges; a practice in which itis greatly assisted by the procedure set out in itsConstitution by which challenges are referredeither to the President or a Vice President or toa Division of three or five members of the

Court, chaired by the President or by a VicePresident.

In November 2011, abstracts of 33challenged decisions of the LCIA Court werepublished in a special issue of ArbitrationInternational, and further abstracts will bepublished in due course.

E. Rules and Procedures ConcerningIndependence and Impartiality

By Article 5.2, it is an express requirementthat an arbitrator shall not act as advocate toany of the parties and shall not advise a partyon the merits or outcome of the arbitration.

By Article 5.3, arbitrators are required tocomplete a statement of independencebefore appointment, declaring that they areindependent of the parties and impartial. Thestatement may, however, be qualified if thereare circumstances that the arbitrator believesmay give rise to doubts as to his or herindependence or impartiality.

Any doubts as to whether circumstancesought to be disclosed must be resolved infavour of disclosure.

The LCIA’s response to a disclosure willdepend upon the LCIA Court’s assessment ofits significance. Thus, a disclosure that isregarded by the institution as one that shouldhave led the arbitrator simply to decline theappointment will lead to the institutionrejecting the arbitrator.

A disclosure, considered to be such that itmight raise doubts as to the arbitrator’sindependence or impartiality in the mind ofone or more of the parties, will be placedbefore the parties before confirmation of theappointment, to elicit any objections thatmight lead the LCIA Court to decline theappointment and thus avoid a more disruptivechallenge at a later stage.

A disclosure that is made through anabundance of caution, rather than for any


reasonable doubts that it might raise, wouldnot inhibit the appointment, but would,nonetheless, be brought to the parties’attention at the time of notifying theconstitution of the tribunal.

By Article 6 of the Rules, there is a bar on theappointment of sole arbitrators or chairmen ofthe same nationality as any of the parties,unless the parties who are not of the samenationality as the proposed appointee allexpressly agree in writing.

By Article 10, the removal of an arbitrator,once appointed, may be initiated by fellowarbitrators; by the institution of its own motion;or, most commonly, by a party mounting aformal challenge.

By Article 10.1, co-arbitrators may ask theLCIA Court to revoke the appointment of acolleague, in the event that that colleaguerefuses to act or is considered to be unfit for hisor her responsibilities.

By Article 10.2, the LCIA Court may, of itsown motion, remove an arbitrator who itconsiders to be acting in deliberate violation ofthe Rules, or failing to act impartially, or failingto avoid unnecessary delay.

However, the removal of an arbitrator at theinitiation either of co-arbitrators or of theinstitution is rare, which is an affirmation of theeffectiveness of the rigorous selection processemployed by the institution.

By Article 10.3 an arbitrator may bechallenged by a party “if circumstances existthat give rise to justifiable doubts as to hisimpartiality or independence”.

The challenging party must lodge itschallenge within 15 days of becoming awareof the circumstances giving rise to it. If, withina further 15 days, the challenged arbitratorsteps down or the other party or parties to thearbitration accept(s) the challenge, thearbitrator will automatically be removed, with

no inferences being drawn as to the validity orotherwise of the challenge. More usually,however, the challenge will be referred to theLCIA Court for determination.

By Article 11.1, the LCIA Court may refuse toappoint an arbitrator nominated by a party if itconsiders the nominee not to be independentor impartial, or to be in some other wayunsuitable.

An arbitrator may be considered“unsuitable” if, for example, he lacks therequisite knowledge of the language of thearbitration, of the applicable laws, or of thesubject matter.

This Article provides a significant safeguardagainst bias and inefficiency in the case ofparty nominations, where the institution’srigorous selection process may not have beenapplied.

F. Officers of the LCIA Court

By the Constitution of the LCIA Court, thePresident of the Court is only eligible forappointment if all parties agree to nominatehim as sole arbitrator or as Chairman. VicePresidents may only be appointed ifnominated by a party, or by the parties jointly.

The President or any Vice Presidentsnominated in this way are, of course, excludedfrom taking part in the appointment of thetribunal to which they have been nominatedand from any other function of the Courtrelating to that arbitration.

Adrian Winstanley is the Director General ofthe LCIA and a member of the LCIA Court. Hefulfils the role of Chief Executive Officer, withday to day responsibility for all aspects of theconduct of the business of the LCIA, and is theprincipal point of contact between theinstitution and its Board and Court.


A. Introduction

The practice of ICSID is to support thedisputing parties in reaching consensuswhenever possible during this process. At thesame time, ICSID is conscious of theimportance of constituting the Tribunal in anexpeditious manner, and the ICSID Conventionand Arbitration Rules set time frames forcompletion of the various steps in theappointment process so that no party canprevent the timely constitution of a Tribunal.

Articles 37 to 40 of the ICSID Conventionand Rules 1 to 12 of the ICSID Arbitration Rulesare the main provisions governing arbitralappointments.1 The basic process is outlinedbelow, however, parties should remember toconsult the treaty, law or contract at issue intheir dispute as these may also address thequalifications of arbitrators, the number ofarbitrators on a Tribunal, or the method of theirappointment.

B. Qualifications of ICSID Arbitrators

Parties to an ICSID case can select anyarbitrator they wish, subject to threerequirements imposed by the Convention andArbitration Rules:

General qualifications – The ICSIDConvention requires arbitrators to be personsof high moral character who may be reliedupon to exercise independent judgment andwho have recognized competence especiallyin law, but also in commerce, industry, or

1 This article addresses appointment of tribunal members inarbitrations governed by the ICSID Convention. Differentprovisions may apply to the appointment of ICSID ad hocCommittees and to appointment of arbitrators under the ICSIDAdditional Facility or other sets of rules.

finance.2 In practice, parties usually seekarbitrators with: (1) expertise in internationalinvestment and public international law; (2)experience in presiding over complexinternational arbitrations; (3) the ability to workin the language(s) of the case; and (4)availability to act in a timely manner.

Nationality – The majority of the Tribunalmust be nationals of States other than theState party to the dispute and the State whosenational is a party to the dispute, unless eachindividual member of the Tribunal is appointedby agreement of the parties.3 For example, inan arbitration between a Korean investor andthe State of Malaysia, the Tribunal could notinclude two Korean arbitrators, two Malaysianarbitrators, or one Korean and one Malaysianarbitrator, unless the parties agreed to thiscomposition.

No prior involvement in the dispute - Aperson who previously acted as a conciliatoror arbitrator in any proceeding to settle thedispute at issue in the arbitration cannot beappointed to the Tribunal.4

C. Number of Arbitrators and Method ofAppointment

An ICSID Tribunal may consist of a solearbitrator or any uneven number of arbitratorsthat the parties agree on.5 If the partiescannot agree on the number of arbitrators, theTribunal will consist of three arbitrators.6 Inpractice, most ICSID Tribunals consist of

2 ICSID Convention Articles 40(2) & 14(1).

3 ICSID Convention Article 39; ICSID Arbitration Rule 1(3).

4 ICSID Arbitration Rule 1(4).

5 ICSID Convention Article 37(2)(a).

6 ICSID Convention Article 37(2)(b).

Appointment to Arbitral Tribunals at ICSID

By Meg Kinnear


three arbitrators, although occasionally partieswill agree to have a sole arbitrator. It is rare tohave tribunals of five or more members.

The parties can agree on any method toconstitute the Tribunal. Usually parties agree toname one arbitrator each (the party-appointed arbitrator) and to select thepresiding arbitrator by mutual agreement or tohave the party-appointed arbitrators name thepresiding arbitrator. While these models areseen most frequently, other methods arepossible. For example, in several recent casesparties have agreed that the ICSID Secretary-General will select the presiding arbitrator froma short-list submitted by the parties, or that thepresiding arbitrator will be selected from ashort-list compiled by ICSID.

If the parties cannot agree on the numberof arbitrators and the method of appointingthe Tribunal, Article 37(2)(b) of the ICSIDConvention imposes a default method: thateach party will appoint one arbitrator and theparties will jointly name the presidingarbitrator.7

D. Process and Timing

The Tribunal must be constituted “as soon aspossible” after registration of the request forarbitration.8 The Convention and Rules set outthe time allotted for each step in the process,but these may be shortened or extended byagreement of the disputing parties.

As soon as the request for arbitration isregistered, the ICSID Secretariat asks theparties whether they have agreed on thenumber of arbitrators and the method ofconstituting the Tribunal. Such an agreement isoften found in the applicable treaty, contractor law. In practice, claimants usually note anyagreement concerning the number ofarbitrators and the method of constituting theTribunal in their request for arbitration. Some

7 ICSID Convention Article 37(2)(b).

8 ICSID Convention Article 37(1); ICSID Arbitration Rule 1(1).

claimants may even name their party-appointed arbitrator in the request forarbitration in order to expedite the process. Ifthe parties have an agreement as to thenumber of arbitrators and the method ofappointment, that agreement will be applied.

Absent such agreement, the parties haveup to 60 days to exchange proposals on thenumber of arbitrators and the method of theirappointment. The sequence followed is that:(1) the requesting party (usually the claimant)proposes the number of arbitrators and themethod of appointment within 10 days afterregistration of the request; (2) the respondingparty (usually respondent) must reply to thisproposal within 20 days of receiving it, either byaccepting the requestor’s proposals or bymaking a counter-proposal; and (3) therequesting party must either accept or rejectthe counter-proposal within 20 days ofreceiving it.9

If this process does not result in anagreement within 60 days after registration ofthe request for arbitration, either party canelect the default method of appointing aTribunal set out in ICSID Convention Article37(2)(b): two party-appointed arbitrators anda presiding arbitrator agreed on jointly by theparties.10 While the parties are free to continuetheir discussions on the number of arbitratorsand method of appointment beyond the 60day period if they both wish to do so, Article37(2)(b) gives each party the ability to moveforward on constitution of the Tribunal if theybelieve further discussions would not beproductive. ICSID leaves this election to theparties and does not intervene unless oneparty asks it to do so after the 60 day period.

Where a party elects the default method inICISD Convention Article 37(2)(b), that partywill name their arbitrator and propose a

9 ICSID Arbitration Rule 2(1).

10 ICSID Arbitration Rule 2(3); ICSID Convention Article 37(2)(b).


presiding arbitrator. The party receiving thisproposal must promptly name its arbitrator andeither concur in the proposal for presidingarbitrator or propose a different person asPresident.11 If the Tribunal has not beenconstituted within 90 days from the date ofregistration, either party can ask ICSID toappoint the arbitrator(s) not yet appointedand to designate the President of theTribunal.12 This approach allows the partiesmaximum flexibility to name a Tribunal byconsensus while ensuring that the processcannot be held up if the parties are unable toreach consensus. In about 75% of all ICSIDcases, the parties agree on the full Tribunal,and do not request assistance from ICSID inconstituting the Tribunal. Where parties invokeICSID assistance, it is usually to appoint thePresident, although occasionally ICSID will beasked to designate both an unnamed partyappointee and the presiding arbitrator.

ICSID follows a two-step process when it isasked to appoint a missing arbitrator. First, itsends the parties a ballot listing five or morepotential arbitrators, with the curriculum vitaeof each nominee. Each of these nominees hasbeen conflict checked by the Centre, and theparties are asked to indicate which of thesenominees would be acceptable. This is asimple “yes/no” check-off, and the parties areasked to return the ballot form to the Centre ina short time (usually 5-10 days). The parties arenot required to share their ballot selections withone another, but may do so if they wish. If theparties concur on a candidate proposed in theballot, ICSID will name that person.13 If theparties do not concur on a candidate, ICSIDwill propose an arbitrator from the ICSID Panel

11 ICSID Arbitration Rule 3.


13 Such a candidate is deemed to have been appointed byagreement of the parties. If parties agree on more than oneballot candidate, ICSID will select one of the arbitrators agreed-upon.

of Arbitrators.14 Again, ICSID will do a conflictcheck and provide the parties with thecandidate’s curriculum vitae before namingan arbitrator from the List of Arbitrators. Onaverage, ICSID concludes these steps within sixweeks of being asked to appoint the missingarbitrators.

E. Acceptance of Appointment byArbitrators

Communications between the partiesrespecting the number of arbitrators and themethod of appointment may be transmittedthrough the ICSID Secretary-General or directlybetween the parties with a copy sent to theSecretary-General.15 Parties are required tonotify the Secretary-General of theappointment of each arbitrator. Usually theappointing party will send the Centre a letterincluding the name, nationality and curriculumvitae of the arbitrator to be appointed. Assoon as the Secretary-General is so advised,the Centre seeks formal acceptance of theappointment from the arbitrator. If anarbitrator fails to accept appointment within 15days of the Centre’s request, the Secretary-General will so advise the nominating partyand invite them to appoint a differentarbitrator.16

F. Constitution of Tribunal

The Tribunal is deemed to be constitutedand the proceeding to have begun on thedate the Secretary-General notifies the partiesthat all of the arbitrators have accepted theirappointment.17 The date of constitution is

14 ICSID Arbitration Rule 4. The ICSID Panel of Arbitrators iscomposed of four people named by each of the (currently) 148member States and 10 people named by the Chairman of theICSID Administrative Council. They serve for renewable six yearperiods, but are eligible for appointment at any time until asuccessor has been designated: see Articles 12-16 of the ICSIDConvention. The ICSID website maintains an up to date list ofthe Panel of Arbitrators.

15 ICSID Arbitration Rules 2(2) & 3(2).




important as it triggers several other steps inthe process. For example, the first session ofthe tribunal and the parties must take placewithin 60 days of constitution18 and a partyshould file any objection that a claim lackslegal merit within 30 days of constitution of theTribunal.19

G. Declaration as to Confidentiality andConflict

Each arbitrator must file a declarationbefore or at the first session of the Tribunal inthe form stipulated in ICSID Arbitration Rule6(2). In that declaration, the arbitrator agreesto keep information obtained in the processand at deliberations confidential, undertakesto judge the matter fairly, and declares anyrelationship that “might cause [their] reliabilityfor independent judgment to be questionedby a party.” Each arbitrator assumes acontinuing obligation to disclose potentialconflicts of interest in the declaration. TheCentre provides the declarations to the partiesas soon as they are received. A party wishingto challenge an arbitrator must do so promptlyafter constitution of the Tribunal, inaccordance with the procedure in ICSIDConvention Articles 57 to 58 and ICSIDArbitration Rule 9.

H. Conclusion

Given the importance of increasedinvestment flows among States and ICSID’smandate to facilitate investor-State arbitrationand conciliation, ICSID has taken numeroussteps to ensure that parties are well-equippedto select a Tribunal and to navigate the ICSIDprocess thereafter. These steps includeimplementation of the ballot process, efforts toincrease the size and diversity of the Panel of

18 ICSID Arbitration Rule 13. The parties can agree to a differentperiod for holding the first session if they wish.

19 ICSID Arbitration Rule 41(5) allows objections for lack of legalmerit and requires a party to make such objection “no later than30 days after constitution of the Tribunal, and in any eventbefore the first session of the Tribunal.”

Arbitrators, encouraging States to nominatequalified persons to the Panels, andreplenishing the nominations to the Panel ofArbitrators by the Chairman of the ICSIDAdministrative Council. Such initiativescomplement recent efforts by the Centre toimprove user service generally and to expandoutreach and technical assistance. Theseefforts will continue given the growth of theglobal economy and increased internationalinvestment, and the important role of ICSID inproviding an impartial and effective disputesettlement system for resolution of investmentdisputes.

Meg Kinnear is the Secretary-General of ICSID,and heads the ICSID Secretariat in theadministration of cases under the ICSIDConvention, the ICSID Additional Facility, theUNCITRAL Arbitration Rules and other rules asparties may re


The arbitrator appointment process forHKIAC administered arbitrations is governed bySection III of the current HKIAC AdministeredArbitration Rules (2008) (the “HKIAC Rules”).1

The following paragraphs discuss the HKIAC’sappointment procedures and internalpractice.

A. Designations by Parties or Arbitrators

The HKIAC Rules prescribe standardprocedures for the appointment of a solearbitrator and a three-member tribunal.

Where the parties have agreed to refer thedispute to a sole arbitrator, parties are giventhe opportunity to jointly designate the solearbitrator within 30 days from the later of (i) thedate on which the Notice of Arbitration wasreceived by the Respondent or (ii) the date onwhich the parties agreed that the matterwould be handled by a sole arbitrator. Partiesare free to designate arbitrators outside of theHKIAC’s List of Arbitrators and Panel ofArbitrators.2

Any arbitrator designated by the parties orby the party-appointed arbitrators must beconfirmed by the HKIAC Council inaccordance with Article 10.1 of the HKIACRules. Before confirmation, the HKIACSecretariat would request that an arbitratorsubmit a signed declaration form confirminghis or her availability to decide the dispute as

1 The HKIAC Administered Arbitration Rules (2008) is due topublish its revised HKIAC Rules in the next few months. It isanticipated that the revised HKIAC Rules will take effect in May2013.

2 The HKIAC maintains a List of Arbitrators and a Panel ofArbitrators, the distinction being that the latter comprises ofarbitrators with more substantial experience in arbitrationpractice. The CVs of the List and Panel of Arbitrators can all befound on the HKIAC’s website.

well as his or her impartiality andindependence, and disclose anycircumstances likely to give rise to justifiabledoubts as to his impartiality or independence.Additionally, the HKIAC would ask that thearbitrator submit his current CV, together withhis or her terms of appointment if applicable.3

Upon receipt of such documents, the HKIACwould forward them to the parties, who thenmay raise any objections or concerns.Confirmation of the arbitrator is made on thebasis of the arbitrator’s independence,impartiality and availability.

If the parties fail to jointly designate the solearbitrator within the 30-day time limit, theHKIAC Council will be tasked with appointingthe sole arbitrator pursuant to Article 7.2 of theHKIAC Rules. Appointments by the HKIAC arediscussed in further detail below.

Where parties have agreed upon a three-member tribunal, each party has theopportunity to designate one arbitrator of itschoosing, and those co-arbitrators areresponsible for selecting the presiding arbitratorto complete the tribunal. Typically, theclaimant will designate its co-arbitrator at thetime of filing of the notice of arbitration orshortly thereafter, but the rules do not bar therespondent from making the first designation.

3 Pursuant to Article 36.2 of the HKIAC Rules, the parties have 30days from the date of the notice of arbitration to agree on oneof two methods for determining the fees of the arbitral tribunal:(i) a schedule of fees based on the amount in dispute or (ii) aseparate fee arrangement agreed between the parties and thearbitrator. A separate fee arrangement is almost always basedon an hourly rate system. When an hourly rate applies, theHKIAC would request that the arbitrator provide his or her termsof appointment for the parties’ consideration.

The HKIAC Appointment Process

By Chiann Bao and James H Chun


Regardless of when and by whom the firstdesignation has been made, the opposingparty has 30 days from the date on which itreceives notification of the first appointment toselect its own arbitrator.

Once both parties’ designations have beenconfirmed by the HKIAC Council, the two co-arbitrators would have 30 days to jointly selectthe presiding arbitrator. If a party fails todesignate its arbitrator, or if the co-arbitratorsfail to select a third arbitrator, the HKIACCouncil is empowered to appoint an arbitratoron behalf of such party pursuant to Article 8.1of the HKIAC Rules.

B. Appointment by the HKIAC

When tasked with appointing an arbitratorpursuant to Article 7 or 8 of the HKIAC Rules,the HKIAC Council considers several factorsincluding inter alia the arbitrators’ (i)qualifications, (ii) track record with HKIACarbitrations and (iii) the nationality (ifnecessary). These factors are discussed in thesubsections below.

After due consideration of potentialcandidates, the HKIAC Council wouldadvance its nomination to the parties, who willthen be given an opportunity to comment onthe nominated arbitrator. If there are no validobjections are submitted by the parties, theHKIAC would proceed to consult with and seekadvice from at least three members of theHKIAC Appointment Advisory Board beforemaking a final decision on the appointment ofany arbitrator.

1. Qualifications

It goes without saying that nominating anarbitrator with the right credentials to managethe case and to decide the dispute is one ofthe most important decisions of the arbitralprocess.

The arbitrator’s professional experiencewould be one aspect that the HKIAC would

strongly consider. The extent of experiencerequired will vary case by case, and theassessment would largely depend on theamount in dispute, the complexity of the caseand the role for which the arbitrator is beingconsidered (i.e., sole arbitrator, co-arbitrator orpresiding arbitrator). For instance, where theamount in dispute is substantial and the legalquestions at issue complex, the HKIAC wouldnaturally favor an experienced arbitrator. Aseasoned arbitrator might also be preferred incases where the HKIAC has to appoint apresiding arbitrator of a three-member tribunal,as the position generally requires that sucharbitrator takes the lead in managing theconduct of the arbitration and in renderingprocedural orders and arbitral awards. Thesame could be said for when HKIAC isappointing a sole arbitrator, who will have toexclusively handle the case.

Depending on the circumstances of thecase, other qualities, such as an arbitrator’sarea of expertise and language skills, may alsoweigh in heavily on the HKIAC’s nomination.When a dispute requires knowledge in aspecialized industry (e.g., maritime,construction or insurance), the HKIAC wouldbe minded to appoint an arbitrator that hasexpertise in or, at the very least, sufficientexposure to the relevant area of law. Wherethe parties’ agreement specifies the languageof the arbitration, the HKIAC would choose anarbitrator that has shown an ability to conductthe proceedings in the requisite language.

2. Track Record with HKIAC Arbitrations

The HKIAC would also take into account anarbitrator’s past performance. Relevantconsiderations might include a history ofchallenges or complaints being filed againstan arbitrator, as well as instances ofunreasonable delay in advancing proceedingsor issuing awards. Preference would be givento those arbitrators that have regularlydisplayed an ability to efficiently manage the


proceedings, act fairly and impartiallybetween the parties and timely issueenforceable awards.

3. Nationality of the Arbitrator

The nationality of the arbitrator will berelevant when an arbitration involves parties ofdifferent nationalities. Pursuant to Article 11.2of the HKIAC Rules, the default position is thatthe sole or presiding arbitrator cannot have thesame nationality as any party. Whenappointing a sole or presiding arbitrator undersuch circumstance, the HKIAC would onlyconsider those arbitrators that have a differentnationality from any party.

Chiann Bao currently serves as Secretary-General of the HKIAC. Prior to joining theHKIAC, Chiann worked as a dispute resolutionlawyer in New York.

James H. Chun currently serves as Counsel atthe HKIAC. Prior to joining the HKIAC, Jameshad worked as a legal assistant to William WPark in Boston, Massachusetts.


The Singapore International ArbitrationCentre (the “SIAC”) came of age this yearcelebrating the close of its 21st year with arecord number of new arbitration cases. (Thefull details and annual report will be availableon February 19, 2013.)

Many readers will be familiar with ourservice. For our new friends I would like to takethis opportunity to introduce the backgroundto the SIAC and the type of arbitration servicesthat we offer.

The SIAC was established in 1991 as a not forprofit organization to meet the demands of theinternational business community for a neutral,efficient and reliable dispute resolutioninstitution in Asia.

We are based in and operate from MaxwellChambers, a magnificent state of the artarbitration and alternate dispute resolutionhearing facility, which provides 14 hearingrooms and 12 meeting rooms of whichSingapore is rightly proud but there is a lotmore to the success and popularity of SIACarbitration than bricks and mortar.

The new filings for 2012 involved parties from41 jurisdictions, confirming that we are morethan a pan Asian arbitration provider. Ourrules are user friendly to those from commonlaw and civil jurisdictions from the USA, Europe,the Middle East and Asia.

The Secretariat of the SIAC has lawyersqualified in the USA, Canada China, India,Indonesia, Korea, Malaysia, Singapore andEngland and Wales, and the SIAC outlook andexperience is a global one.

We handle a broad range of cases rangingfrom international trade, shipping, insurance,banking, construction, and energy to licensingagreements, sports arbitration telecoms andbiotechnology.

In addition to the administration of casesunder the SIAC and UNCITRAL Rules andauthentication of arbitral awards in Singapore,one of the services we provide is theappointment of arbitrators under theSingapore International Arbitration Act and theSIAC and UNCITRAL Rules.

Lawyers experienced in representing partiesin arbitration often contend that there is nomore important aspect of arbitration than theselection of the arbitrator. Like manyinstitutions, the SIAC maintains an internationalpanel of arbitrators with a broad range ofknowledge and expertise (currently 380arbitrators from 32 jurisdictions).

The SIAC panel is not a permanent one.Each panel is appointed for a term of twoyears and at the conclusion of the term thepanel becomes vacant and we start afresh tocompile a new panel. This is done by invitingpeople to join and also by consideringapplications for membership.

The current panel which was appointedwith effect from January 1, 2013 will last untilDecember 31, 2014. At that time the entirepanel term will expire and the Board ofDirectors will consider the needs of theinstitution and the trends of the cases that arecrystallizing and appoint a new panelaccordingly. This means that we can always

SIAC Arbitration Appointments Through theLooking Glass

By Rachel Foxton


ensure that the SIAC panel accords with thestatus quo of arbitration at our centre and willmatch projected needs in expertise andexperience.

The SIAC has a number of criteria that itconsiders for panel membership including thenumbers of members from any one jurisdiction.There are certain jurisdictions where we havebeen rather overwhelmed by expressions ofinterest and applications from many retiredjudges and highly eligible lawyers. So as not tounduly unbalance our panel, in terms ofcountry representation and legal systemrepresentation, we do have to be ratherselective.

The panel list is a helpful guide and those onit are selected because they are talented intheir fields, however we are not inflexible whenit comes to permitting the parties a right ofselection of an arbitrator. We do not operatefrom a closed list, nor is it mandatory for partiesto appoint an arbitrator listed on our panel.The SIAC reserves the right to appoint personswho are not on our panel in appropriate cases.

As of December 31, 2012, the SIAC made167 individual appointments of arbitrators to155 sole member tribunals and 12 threemember tribunals. Of these, 105 appointmentswere made under the SIAC Rules (including sixemergency arbitrator appointments) and 62appointments were made by us under otherregimes and ad hoc cases. The arbitratorsappointed by the SIAC came from Australia,Austria, China, Hong Kong SAR, India, Korea,Malaysia, New Zealand, Singapore, the UnitedKingdom and the USA.

When the SIAC is called upon to appoint anarbitrator, the SIAC choose on the basis of thearbitrator’s expertise, experience relevant tothe dispute and neutrality. The Secretariatmay put forward to the Chairman of the SIACa number of curricula vitae of appropriatecandidates from a neutral country whoseexpertise and experience are appropriate to

the dispute in question. The Chairman willdecide who will be appointed havingreviewed the curricula vitae and thedocuments filed in the case. Sometimesclauses are very detailed in terms of thequalifications required of the arbitrator andwhere appropriate we may appoint acandidate who is not currently listed on theSIAC panel to meet the requirements in theclause.

As you will see from the case studiesdiscussed below, the appointment processincluding conflict searches by the appointeesmay take as little as 48 hours. These timeframes are competitive with many otheradministered arbitration providers.

The first case study is an appointment madeunder the SIAC Rules, which involved a shipsale dispute between Japanese andBangladeshi parties. In this case, the partiesmade an agreement for the sale of a ship,which was docked at a port in Bangladesh.The parties got into a dispute over the terms ofpayment. The seller sought to terminate theagreement and sell the ship to a third party.The buyer got an injunction from theBangladeshi court against the sale of the shipto any third party until final determination ofissues in arbitration. The ship was incurringdemurrage costs running into several thousanddollars per day. The SIAC received the noticeof arbitration in early February and constitutedthe tribunal within 72 hours of receipt of theappointment request. The selected arbitratorwas a shipping expert from the SIAC panel ofneutral nationality who had over 40 yearsexperience in the trade.

The second case study is one pursuant tothe Emergency Arbitrator provisions under theSIAC Rules. In July 2010, the SIAC was the firstinstitution in Asia to introduce an EmergencyArbitrator procedure.

A party in need of emergency relief prior tothe constitution of the tribunal may apply for


such relief pursuant to Rule 26.2 and Schedule1 of the SIAC Rules. Under this mechanism:

(i) the Chairman of the SIAC will appointan Emergency Arbitrator within onebusiness day of accepting anapplication for emergency relief underthese provisions;

(ii) any challenge to the appointment ofthe Emergency Arbitrator must be madewithin one business day of hisappointment; and

(iii) the Emergency Arbitrator must establisha schedule for considering theapplication for emergency relief withintwo business days of his appointment.

There have been 11 cases under thisprocedure since the rule was introduced in July2010.

This particular case involved BVI,Vietnamese and Singapore parties. The natureof the emergency relief sought was an orderfrom the Emergency Arbitrator to grant theclaimant access to inspect a major propertydevelopment in which all the parties hadtransacted. The SIAC received the EmergencyArbitrator application at 10:40 p.m. on aThursday evening. The next day, the Chairmanof the SIAC determined that the applicationshould be accepted and on the basis of thenature of dispute, nationalities of the partiesand relief sought, appointed a constructionexpert from Hong Kong who was a recognizedleading international arbitrator with over 30years experience as Emergency Arbitrator.

The key role that any arbitral institution playsin arbitration under the UNCITRAL rules is whenwe are asked to appoint an arbitrator. TheSIAC can be designated as an appointingauthority by the parties or by the PCA. In themajority of the UNCITRAL cases that wehandle, the SIAC is nominated to appoint bythe parties.

In this next case study, the SIAC wasdesignated by the parties to appoint anarbitrator and administer the case under the1976 UNCITRAL Rules. This case involved adispute between Irish and Singaporean partiesrelating to an alleged failure of payment undera Deed of Guarantee by the respondents. TheSIAC received the notice of arbitration onOctober 29, 2010 and sent out first letters to theclaimant and respondent on November 3,2010 (within the third working day).

By the end of November 2010, the claimantrequested the Chairman of the SIAC, pursuantto Article 6(3) of the UNCITRAL Arbitration Rules1976, for the appointment of a sole arbitratoras the respondent was not responding to anycommunications. This is a scenario when theChairman may dispense with the list procedureand will appoint using the usual SIAC Process.A neutral arbitrator with over 25 yearsexperience was appointed and the tribunalwas constituted on December 8, 2010.

A similar example where the SIAC wasasked to appoint under UNCITRAL 2010 Rulesand where the list procedure was followedinvolved Indian and Chinese parties who werein a dispute related to a sale and purchasecontract for iron ore to be exported from India.The arbitration commenced in July 2012 and inlate July 2012 a response received fromrespondent.

In August 2012, the Chairman of the SIACdecided the list procedure was appropriateand five names of experienced arbitrators ofneutral nationality were communicated to theparties.

In September 2012 the parties returned thelist with their order of preference and onOctober 8, 2012, a sole arbitrator wasappointed and parties informed.

Institutions may see a growing role inrelation to appointments under UNICITRALarbitration. In line with the expansion of that


vast area of international relations, investmenttreaty arbitration has grown exponentially andhas been a major development incontemporary international law. Bilateral andmultilateral investment treaties continue toprovide for significant dispute resolutionguarantees, allowing private investors a directrecourse against a sovereign state should thatinvestor believe that its investment has beenexpropriated or otherwise impeded.

The Organization for Economic Cooperationand Development 2012 report on disputeresolution provisions in international investmentagreements has a graph that shows that since1979 when UNCITRAL was first used in theseagreements it has grown to 60% of agreementsin this arena choosing UNCITRAL arbitration –second only to ICSID.

There are 158 contracting states to ICSID butcountries such as India, Brazil, MexicoVenezuela, Laos and Myanmar are notmembers. This leaves the importance of BITclaims and UNICITRAL Arbitration and agrowing role for institutions when they areasked to make arbitral appointments underthe UNCITRAL regime.

At the recent UNCITRAL Conference held inKorea in November 2012, most institutions whoparticipated agreed that more guidanceshould be given to appointing authorities onwhen to dispense with the list procedure as it isopen to tactical abuse to prevaricate on theprogress of arbitration.

The overall conclusion is that an institutionsuch as the SIAC, has considerable expertise tomake appointments when requested to do soand assuming there are no conflicts, we willappoint an individual purely on the basis ofneutrality and expertise as efficiently aspossible.

Rachel Foxton is the Director of BusinessDevelopment at the SIAC and has overallcharge of SIAC’s marketing activities andpublications. She qualified as a solicitor in theUK and regularly designs conferences andseminars on international arbitration.


A. The VIAC

The International Arbitral Centre of theAustrian Federal Economic Chamber (VIAC -Vienna International Arbitral Centre) is theleading arbitral institution in Central andEastern Europe. It was established in 1975. Asregards international arbitration, Austria cameinto the picture in the early seventies as thevenue for East-West commercial arbitrations asa neutral country along with Switzerland andSweden. For this reason, the Austrian FederalEconomic Chamber, which is the umbrellaorganization of the nine Regional EconomicChambers, established the VIAC in 1975particularly for the settlement of East-Westcommercial disputes.

Soon after its foundation the VIAC cameinto the searchlight of the American ArbitrationAssociation which in 1977 had entered into atrilateral agreement with the Foreign TradeChamber of the Soviet Union and with theStockholm Chamber of Commerce. As a result,the three parties agreed to recommend totheir members to arbitrate disputes at theArbitration Institute of the Stockholm Chamberof Commerce. This agreement served as apattern for negotiations of the AmericanArbitration Association’s Board with the ForeignTrade Chambers of various member countriesof the CMEA which was an economicorganization under the leadership of the SovietUnion that comprised the countries of theEastern Bloc along with a number of socialiststates elsewhere in the world. The CMEA wasthe Eastern Bloc's reply to the formation of theOrganization for European Economic Co-operation in non-communist Europe.

In the late 1970s a working group consistingof experts from the United States, Hungary andAustria started its consultations whether Austriaand, in particular, Vienna would be eligible asthe venue of arbitration for East-West disputesand therefore could be recommended toparties from both sides. The Americandelegates within this committee were (amongothers) Judge Howard M. Holtzmann, RobertCoulson and Gerald Aksen. As the findings ofthe working group turned out to be quitepositive a series of trilateral agreementsbetween the American Arbitration Association,the Austrian Federal Economic Chamber andvarious Eastern Foreign Trade Chambers wasconcluded, the first one with the HungarianChamber of Commerce as partner from aCMEA country. The other CMEA countries tofollow were Bulgaria, Czechoslovakia, theGerman Democratic Republic, Poland andYugoslavia. Under these trilateral agreementsthe partners recommended to their membersto arbitrate their disputes under the auspices ofthe UNCITRAL Arbitration Rules using theSecretariat of the International Arbitral Centreof the Austrian Federal Economic Chamber asadministering body and VIAC’s Board asAppointing Authority.

Since the fall of the Iron Curtain, VIAC hasoperated on worldwide basis. It administersonly international cases in the sense that atleast one of the parties has its place of businessor normal residence outside of Austria at thetime of the conclusion of the arbitrationagreement, or cases involving parties havingtheir place of business or normal residence inAustria but where the dispute has aninternational character.

The VIAC procedure for the appointment ofarbitratorsBy Manfred Heider


B. The VIAC’s organisational structure

VIAC’s organisational bodies are:

the Board consisting of at least 5members (currently 10) appointed for aperiod of five years by the EnlargedPresiding Committee of the AustrianFederal Economic Chamber bynomination of the President of VIAC. TheBoard members are prominent Austrianand foreign members in the field ofarbitration from various professionsincluding lawyers, academics andjudges.

the President who is elected by themembers of the Board (one of theirnumber).

the International Advisory Boardconsisting of international arbitrationexperts who may be invited by theBoard of VIAC for the duration of itsperiod of office.

the Secretary General who is appointedby the Enlarged Presiding Committee ofthe Austrian Federal EconomicChamber for a period of five years. TheBoard has a right to make a proposal forthe position of the Secretary Generaldue to its key position within the VIAC.

the Secretariat which is the executivearm of the Secretary General.

VIAC’s bodies are independent and notsubject to any instruction by the AustrianFederal Economic Chamber. Theindependence is guaranteed by the AustrianFederal Act on Economic Chambers.

C. The composition of the arbitral tribunal

The parties are free to agree that theirdispute may be decided either by a solearbitrator or by an arbitral tribunal consisting ofthree arbitrators. When no agreement on thenumber of arbitrators has been made and the

parties do not agree on the number ofarbitrators, the Board of VIAC has discretion todetermine whether the dispute is to bedecided by a sole arbitrator or by an arbitraltribunal taking into consideration in particularthe difficulty of the case, the amount in disputeand the interest of the parties in a rapid andcost-effective decision. The practice of thecurrent Board is to decide on a sole arbitrator ifthe amount in dispute does not exceed 1Million Euros.

D. The appointment of arbitrators

Under VIAC’s Arbitration Rules (“ViennaRules”) the parties nominate arbitrators, i.e.name candidates. At present such nominationis not subject to later acceptance orconfirmation by VIAC but will be under theamended Vienna Rules which will becomeeffective by July 1, 2013. Under the newVienna Rules an arbitrator is appointed whenhe/she is confirmed by the Secretary General.Only where the parties fail to nominate anarbitrator (co-arbitrator or sole arbitrator), theBoard of VIAC will make the appointment.

When accepting the mandate thearbitrator shall confirm his/her independenceand impartiality, the submission to the ViennaRules and, under the new Vienna Rules his/heravailability. Of course, he/she is obliged todisclose all circumstances with regard tohis/her independence and impartiality.

If the dispute is to be decided by a solearbitrator, the parties may agree on a solearbitrator and indicate that person’s nameand address to the Secretary General withinthirty days. The parties are completely free inchoosing the arbitrator, there are no specialrequirements on nationality or being part of alist and VIAC is not entitled to review thequalifications of a chosen arbitrator.

If no such agreement is reached within thatperiod, the sole arbitrator shall be appointedby the Board of VIAC. There is no time-limit for


such appointment but it is usually carried outwithout undue delay, approx. 3-4 weeks. Thereare no specific criteria that the Board shouldtake into account when appointing anarbitrator but it follows from the Vienna Rulesthat the nationality of the parties as well as anyexperience in the field of the dispute must betaken into account.

If the dispute is to be decided by an arbitraltribunal, each party may nominate anarbitrator. Usually, this is already done in thestatement of claim and the memorandum inreply and the parties are then bound by theirnomination. The party that has not yetnominated an arbitrator shall be requested toindicate the name and address of anarbitrator within thirty days after service of therequest. If the party has not appointed anarbitrator within that time limit, the arbitratorshall be appointed by the Board of VIAC.

The two party-appointed arbitrators (orarbitrators appointed by the Board) then areto nominate a Chairman and indicate hisname and address within thirty days afterservice of the request. If no such indication ismade within that period, the Chairman shallbe appointed by the Board.

When appointing arbitrators the Board ofVIAC tries to respect the intentions of theparties. This means that when a party hasnominated its arbitrator only after expiry of the30 days period as of the Vienna Rules theBoard will appoint this person as an arbitratorfor the concerned party. The same principleapplies when in multiparty situations not allparties have jointly nominated their arbitratorand one or more parties have remained silent.Then, the Board will appoint the arbitratornominated by the parties which have activelyparticipated in the nomination procedure alsowith effect for the silent party (parties).

The Board of VIAC also remains neutralregarding the nationality of arbitrators. In 2012,

about two third of the arbitrators appointed bythe parties were Austrian nationals. However,the proportion of Austrian parties was clearlybelow 25 percent. In contrast, the Board ofVIAC when appointing arbitrators in lieu offoreign parties in the last two years alwaysdecided for foreign arbitrators, in most casesfor persons of the same nationality as the partythat failed to make a nomination. If a solearbitrator was to be appointed by the Boardand an Austrian party was involved the Boardalmost never decided for an Austrian national.The few exceptions were made in cases withextremely low amounts in dispute to savetravel costs.

As per the end of April 2013, 80 internationalarbitral proceedings were pending at VIACwith an aggregated amount in dispute of 1.4billion Euros. The arbitrators (whethernominated by the parties or appointed by theBoard) come from the following countries:

Austria: 85

Switzerland: 9

Germany: 5

Czech Republic: 4

Hungary: 4

Slovak Republic: 4

Spain: 4

P.R. of China 2

Poland: 2

Slovenia: 2

United Kingdom: 2

Ukraine: 2

One arbitrator each from:

Bulgaria, Dubai, Greece, Romania, Serbia andthe United States.


E. Conclusion

Leading arbitrators from all over the worldare sitting on tribunals under the Vienna Rules.Austria is a highly qualified and desirablevenue for international arbitration.

Manfred Heider, [email protected] is theSecretary General of the Vienna InternationalArbitral Centre.


Arbitration is about choice. Parties choosethe law governing the contract, the rules toconduct the arbitral proceedings, the seat ofarbitration, counsel which represents theirinterests and, most importantly, parties choosethe decision makers: the arbitrators. Theparties’ right to appoint their arbitrators is oneof the clearest expressions of party autonomy,an essential principle of arbitration, which hasmade arbitration such an attractive means ofdispute resolution.

The 2010 SCC Rules were carefully drafted,recognizing the importance of partyautonomy, particularly in appointmentprocedures. Article 13 of the 2010 SCC Rulesgoverns the appointment of arbitrators. Thefirst sentence of Article 13 sets the grounds forappointment of arbitrators and follows theautonomic tone of the SCC Rules: parties arefree to agree on a different procedure forappointment; by default, when the partieshave not agreed upon a procedure, or whenthe agreed deadlines to appoint haveexpired, the SCC Board appoints thearbitrator(s). Article 13 provides a simple andeffective appointment procedure, which onaverage does not exceed three months aftera request for arbitration is received by the SCCSecretariat.

A. Who can be appointed?

Anybody can be appointed, given thatthey have legal capacity and areindependent and impartial. The SCC does nothave a list of arbitrators. Thereby, the SCCBoard makes each appointment taking intoconsideration the specific needs of each case

and is not limited to appointing members ofany particular list.

Before being appointed as an arbitrator, aperson must disclose any circumstances whichmay give rise to justifiable doubts as to theirimpartiality.i The SCC Rules set a low thresholdfor disclosure. Prospective arbitrators mustdisclose circumstances that may give rise tojustifiable doubts, indicating by this wordingthat the mere possibility (not the probability) ofsuch doubts calls for disclosure.ii In practice,arbitrators comply with their duty of disclosureby filling in a standard form which theSecretariat sends to the arbitrator inviting themto confirm their independence and impartialityand to indicate if they wish to disclose anycircumstances in connection with thearbitration.

Importantly, a distinction is to be made inthe way party appointed arbitrators and SCCappointed arbitrators comply with their duty ofdisclosure: the former do not need to fill in theabovementioned form before they areappointed by the parties, whereas the latter(usually the chair) must fill in the form uponappointment by the Board.

B. How are SCC appointments made?

The appointment of arbitrators by the SCCcould be described as a two-step procedure.First, the matter is discussed by the SCCSecretariat, and, second, a proposal for theappointment is presented before the SCCBoard.

The SCC Secretariat comprises a SecretaryGeneral, a Deputy Secretary General andthree different divisions, each headed by a

Appointment of arbitrators under the SCCRulesBy Celeste E. Salinas Quero


legal counsel and one assistant. Each legalcounsel and its assistants are responsible forone third of all registered cases at any giventime.

The SCC Board has an international Boardof Directors, and consists of 15 members, ofwhom six are Swedish and nine internationalmembers. As of 1 January 2013, the SCCBoard includes members from China, England,Egypt, Denmark, Germany, Russia, Scotland,Sweden, Switzerland, and the USA. Thedifferent nationalities not only add to thediversity of the decision making process, butalso to the representation of the nationalities ofthe parties which most frequently appear inSCC arbitrations.iii

The SCC Board meets once a month. Ateach meeting and when necessary, the SCCBoard makes decisions under Article 9 of theSCC Rules, including decisions on the numberand appointment of arbitrators. The exactdates of SCC Board meetings are listed in thecalendar at the SCC website to facilitatetransparency and foreseeability for parties andcounsel.

C. Number of arbitrators and appointmentprocedure

Article 12 of the SCC Rules allows the partiesto agree on the number of arbitrators. Wherethe parties fail to agree on the number ofarbitrators, the tribunal will consist of threearbitrators unless the Board, taking intoaccount the complexity of the case and theamount in dispute or other circumstances,decides that the dispute will be decided by asole arbitrator.

Criteria for assessing the number ofarbitrators include the amount in dispute, thenationality of the parties, and the complexityof the case. Other circumstances may also betaken into account, depending on thecharacteristics of each case.

In three-member tribunals, the SCC usuallyappoints the chair. In some cases, the SCCalso appoints the co-arbitrator on behalf ofone of the parties.iv When the dispute is to beresolved by a sole arbitrator, it is common thatthe SCC makes the appointment. Yet theparties are first invited to jointly appoint thesole arbitrator within 10 days.v When the partiesfail to jointly appoint the sole arbitrator, theSCC Board makes the appointment.

In any case, Article 13 of the SCC Rulesallows the parties to deviate from the defaultappointment procedure by agreeing on adifferent procedure, for example byintroducing a list procedure or other elementsin the appointment process.

D. Procedure for appointment: role of theSCC Secretariat

The first step of the appointmentproceedings takes place at the SCCSecretariat. The SCC receives and registers therequest for arbitration, which in most casesincludes information on the arbitratorappointed by the claimant.vi

Upon receipt of the request for arbitration,the counsel in charge of the division will sendthe request to the respondent for comment.Respondents are invited to comment on claimsraised, on the number of arbitrators, if calledfor by the parties’ arbitration agreement, orother circumstances of the case. If needed,respondents are also invited to appoint theirarbitrator.

At this stage, all communications betweenthe parties regarding the number of arbitratorsand the method of appointment aretransmitted through the SCC Secretariat. Afterthe counsel has sent the claimant’s request tothe respondent, the two most commonscenarios are that the respondent either filesan answer to the request for arbitration, or


remains inactive and does not participate inthe proceedings.

a) The respondent answers the request forarbitration or comments on the request forappointment

In this scenario, when the respondentappoints an arbitrator in its answer,vii the SCCSecretariat contacts the party-appointedarbitrator and sends them the standard formfor confirmation of acceptance of theappointment and statement of independenceand impartiality. In any case, if the respondentfails to appoint its arbitrator within the deadlinestipulated by the parties or set by the SCCSecretariat, the SCC will proceed to make theappointment.

Article 9 of the SCC Rules bestows on theSCC Board the exclusive power to appointarbitrators.viii The Secretariat’s task is then topropose to the SCC Board the names of thearbitrators which it considers should beappointed for a specific case.

Usually the Secretariat proposes at leastthree names for each appointment by theSCC Board. When considering what names toput before the Board, the Secretariat may takeinto account the following factors:

the nationality of the parties;

the nationality of the party-appointedarbitrators;

the subject matter of the dispute;

the law applicable to the dispute;

the language of the proceedings;

the seat of arbitration;

the complexity of the dispute;

the level of particular legal expertiseand skills required;

The importance of each criterion variesdepending on the circumstances of the case.

(It should be noted that the criteria abovehave not been listed in any order ofpreference.)

b) The respondent does not participate in thearbitral proceedings

If the respondent remains inactive, this doesnot preclude the proceedings from continuing.The consequence of the respondent’sinactivity is that the legal counsel will pursuethe administration of the case, and dependingon whether the dispute contemplates a three-member panel or a sole arbitrator, the SCC willappoint the respondent’s arbitrator and thechair, or a sole arbitrator, as the case may be.

1. The role of the SCC as appointingauthority

The SCC also often acts as appointingauthority in investment arbitrations. In thesecases, the SCC receives a “Request forappointment” which, depending on the case,may be a request for appointment of thechair, or of the respondent’s arbitrator. In itsrole as appointing authority, the SCC canmake appointments under its own rules orunder other sets of rules, such as the UNCITRALArbitration Rules, or in ad hoc proceedingsunder the rules agreed upon by the parties.

2. Teamwork

Members of the SCC Secretariat regularlymeet and discuss cases to be presentedbefore the SCC Board at the monthly Boardmeeting. At the Secretariat meetings eachcounsel presents to their colleagues and to theSecretary General and Deputy SecretaryGeneral the cases that are to be taken to theBoard for appointment.

At this stage the SCC Secretariat discussesthe names proposed by counsel. TheSecretariat can approve or amend the list ofnames proposed by counsel. This is acollective decision making process, in which


the counsel of other divisions and the SecretaryGeneral and Deputy Secretary participate,sharing their expertise and opinions on theproposals made by each counsel. Once theSecretariat agrees on the names proposed bycounsel, the case is ready to be put before theSCC Board at its next meeting.

E. Procedure for appointment: role of SCCBoard

At the Board meeting, each legal counselwill present their case to the SCC Board,including proposals for decisions to be takenby the Board. The SCC Board discusses eachone of the names presented by counsel. In thedecision making process, each Board memberis invited to share their views. When Boardmembers cannot be physically present at themeeting, they participate via telephoneconference, or submit opinions in writing to theSecretariat before the meeting.

Notably, when discussing cases before theBoard meeting takes place, the Secretariatconsiders potential conflicts between any ofthe Board members and the parties in disputeor their counsel. When a Board member has aconflict of interest, they do not participate inthe decision making process to appoint thearbitrator in the dispute.

The SCC Board takes into account the samecriteria as listed above when deciding onappointment of arbitrators. The Boardmembers may agree or disagree with theSecretariat’s proposal. In case ofdisagreement, the Board members maychange the order of preference of the names,or may agree on new names for the list.

F. Execution of the SCC Board Decisionand Confirmation of Appointment

Once the SCC Board has approved a list ofnames, the legal counsel will contact theapproved arbitrators in the order decided bythe Board.

As Article 14(2) of the SCC Rules provides,the legal counsel will send to the appointedarbitrator a confirmation form for acceptanceof the appointment and a statement ofindependence and impartiality. The forminvites the prospective arbitrator to discloseany circumstances which they consider that inthe eyes of the parties may raise justifiabledoubts as to their independence andimpartiality. This form is filled in by the arbitratorbefore they are appointed. As mentionedabove, in the case of party-appointedarbitrators, the form is filled in by the arbitratorafter the party has made the appointment.

Once the arbitrator signs and submits to theSecretariat the confirmation form with thestatement of independence and impartiality,the counsel informs all parties of theappointment, with a copy for the attention ofthe tribunal, finalizing the appointmentproceedings.

G. Conclusion

The appointment procedure at the SCC isquite straightforward and efficient. Onaverage, the constitution of a tribunal takes nomore than three months after registration of arequest for arbitration until communication ofthe Board’s decision to the parties. When theSCC acts as appointing authority, theappointment procedure is even faster;normally less than one month after receivingthe request for appointment.

Celeste E. Salinas Quero is a Chilean lawyerwith an LL.M in International Commercial Lawat Stockholm University. She is associatecounsel at the Arbitration Institute of theStockholm Chamber of Commerce. She is alsovisiting lecturer at the Master in InternationalCommercial Arbitration Law program atStockholm University.


i See Article 14 of the SCC Rules.

ii See KAREN DAELE, CHALLENGE AND DISQUALIFICATION OF

ARBITRATORS IN INTERNATIONAL ARBITRATION 38 (2012).

iii Of the international parties appearing before the

SCC in 2012, Russian parties continued to be the

second most frequent nationality represented at

the SCC, followed by Chinese, Norwegian, German

and Finnish parties. For more information on SCC

statistics visit http://www.sccinstitute.com/hem-

3/statistik-2.aspx.

iv See Article 13(3) of the SCC Rules.

v See Article 13(2) of the SCC Rules.

vi Article 2 of the SCC Rules provides that “A

Request for Arbitration shall include: (vi) if

applicable, the name, address, telephone number,

facsimile number and e-mail address of the

arbitrator appointed by the Claimant.”

vii Article 5 of the SCC Rules provides that “The

Answer shall include: (iv) comments on the number

of arbitrators and the seat of arbitration; and (v) if

applicable, the name, address, telephone number,

facsimile number and e-mail address of the

arbitrator appointed by the Respondent.”

viii See Article 9 of the SCC Rules.

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