STOCKHOLM: Party versus institutional appointment; tribunal secretary or not?
A joint event held by Young Arbitrators Stockholm and ICDR Young & International debated party versus institutional appointment of arbitrators and the role of tribunal secretaries – with a poll of participants revealing overwhelming supportfor party appointment, but more division about the second issue. Noradèle Radjai of Lalive in Geneva and Fredrik Ringquist of Mannheimer Swartling inMoscow, report.
Appointment of the tribunal
A “pro” team comprising Maria Elvung, in-house counsel at ABB, Sweden, Markyian Kliuchkovskyi of Egorov Puginsky Afanasiev & Partners in Kiev and Johannes Lundblad of Gronberg in Stockholmsupported the view that arbitral tribunals should be appointed by institutions or other appointing authorities, arguing that party appointments can compromise the neutrality or even the independence of the arbitrators.
The team pointed to a study showing that the vast majority of dissenting opinions are rendered by arbitrators appointed by the losing party, in an attempt to show that arbitrators in the party-appointed system act as advocate for the party instead of being neutral. In addition, it contended that the party autonomy principle does not confer on the parties a fundamental right to choose their arbitrator.
An “anti” team, comprising Charles Nairac of White & Case in Paris and the authors of this report, argued that the right to appoint arbitrators is a fundamental party right that has existed for centuries, being one of the cornerstones of arbitration as an alternative form of dispute resolution to state court litigation. This is clearly important to parties: indeed, statistics show that, even where an arbitration agreement or institutional rules provide for the chairman to be appointed by the institution, parties choose to override this default rule in the majority of cases to select the chairman themselves.
The “anti” team noted that many dissenting opinions are on benign issues that do not affect the outcome of the decision, and highlighted empirical evidence showing that challenges to arbitrators based on a lack of independence or impartiality are brought in only a small percentage of cases, and just a fraction of them upheld. This is likely due to the widespread awareness among the users of arbitration that “hired guns” do them more harm than good.
The “anti” team also observed that any risk of bias would merely shift from the party to the institution, should the party-appointed method be abolished.
When the issue was put to the vote, the audience, consisting of over 100 participants, overwhelmingly favoured party-appointed arbitrators, with only one personsupporting the proposition that arbitral tribunals should be appointed by institutions.
Role of tribunal secretaries
In the second debate, the “pro” team advanced the position that tribunal secretaries must be fully disclosed and their work limited to strictly administrative matters. Parties appoint a particular arbitrator for his or her perceived skills and expertise, and, since their mandate is personal, it cannot be delegated to another person or arbitrator.
The team argued that parties pay the arbitrator to make decisions on procedural orders and all parts of the award, and there is no room for tribunal secretaries to be engaged in work related to the decision-making process, in particular to the drafting of decisions and awards.
The “anti” team agreed that tribunal secretaries should not be decision-makers, but argued that there are many non-administrative tasks, including drafting parts of decisions and awards, that they can do without infringing on the arbitrator’s role. The “antis” argued that it is not imperative to parties that the arbitrator personally drafts every single word of a decision or award, but rather that he or she is behind the outcome and reasoning of the final product.
The “pro” team objected, arguing that even a careful review by an arbitrator of a secretary's first draft does not entirely remove the scope given to the secretary to make judgments as to what to emphasise and what to omit. The act of writing is the ultimate safeguard of intellectual control, it argued, and an arbitrator should be reluctant to relinquish it.
The two teams exchanged further arguments regarding the role of tribunal secretaries, referring to the recently revised ICC Note on the Appointment, Duties and Remuneration of Administrative Secretaries, as well as the economy of time and cost. However, the audience remained divided on the legitimate scope of the role of tribunal secretaries, leaving the matter decidedly open for future debate and discussion.
The event took place on 12 September and was chaired by Patricia Shaughnessy of Stockholm University, and Jason Fry, global co-head of arbitration at Clifford Chance and former secretary general of the ICC International Court of Arbitration.
The positions advocated by the “pro” and “anti” teams do not necessarily reflect the views held by the debaters.