Private Law Research

Repeated Appointments in Institutional Arbitration: Challenges and Solutions

Document Type : Research Paper

Authors

Maryam Farsi 1
Hamidreza Oloumiyazdi 2

1 Ph.D. Student of Private Law, Faculty of Law and Political Science, Allameh Tabataba'i University, Tehran, Iran,

2 Associate Professor, Faculty of Law and Political Science, Allameh Tabataba'i University, Tehran, Iran,

https://doi.org/10.22054/jplr.2024.75287.2773
Abstract
Although the party autonomy plays a greater role in arbitration compared to the law, the legitimacy and popularity of arbitration exists as long as the administration of justice is not distorted by the parties' agreements and free will. One of the most obvious manifestations of party autonomy in arbitration is the freedom of the parties to appoint an arbitrator. In fact, one of the main reasons that the parties choose to use arbitration over other dispute resolution mechanisms is that they are given the opportunity to choose their own arbitrator. On the other hand, the arbitrator's power to arbitrate comes directly from the right of the parties to appoint the arbitrator, and makes the party appointment of the arbitrator an important and decisive step. However, contrary to principles, the parties are more focused on appointing an arbitrator who supports their interests in the best way possible in disputes and, in other words, plays the role of their lawyer for them. Therefore, although the arbitrator is obliged to observe the principle of independence and impartiality, the parties generally do not choose him impartially. For this reason, the unconditional application of party autonomy in the appointment of the arbitrator may adversely affect the legitimacy and authority of the arbitration. Especially when the parties rely on their previous experiences or their lawyer’s experiences to ensure the impartiality of their appointed arbitrator, this concern is exacerbated. In other words, when a person has a history of appointing an arbitrator in another case and is satisfied with his choice, he prefers to choose the same person as an arbitrator again in order to increase his chances of success in the next arbitration. In addition, Unfortunately, in such appointments, the repeated arbitrator may, with the motive of increasing the chances of his appointments in the future by the same person, instead of acting based on justice and justice, tend to be biased and get the satisfaction of the appointer. For this reason, "repeated appointment of an arbitrator" is one of the cases that, regardless of its real impact, can cause justifiable doubts about the independence and impartiality of the arbitrator, as well as the credibility and legitimacy of the arbitration, due to its biased appearance. Limiting the dubious appointments of arbitrators by the parties, by minimizing doubts about their impartiality and independence, increases the validity of awards and the legitimacy of the commercial and international investment arbitration regime.
Considering the role and position arbitral institutions have in protecting the arbitration and monitoring the good implementation of the process, they try to create a reasonable balance between respecting the parties’ autonomy and the legitimacy and integrity of the arbitration. However, the rules of the arbitral institutions, especially in the field of repeated appointments, do not have clear provisions and in general, they foresee two ways of disclosing questionable conditions and the possibility of challenging the arbitrator in the event of "justifiable doubt in the independence and impartiality of the arbitrator". Unfortunately, the generality and lack of clarity of the subjective test of "reasonable doubt" without guidance regarding its possible examples, as well as the lack of publication of the institution's reasoned awards regarding how to deal with this sort of appointments, has caused confusion in how to deal with repeated appointments and needs to be revised.
By analyzing the direct and indirect adverse effects of repeated appointments on the integrity of the issued awards and the legitimacy of arbitration, this article describes the non-transparent positions of arbitration institutions in this regard and subsequently suggests that, firstly, arbitration institutions should reduce the existing confusion by setting clear objective rules for disclosure and how to deal with suspicious conditions, and also strengthen the credibility of arbitration and related organizations. In this regard, arbitration institutions can prevent conflicts of interest as well as objectify the test for disqualification of repeated arbitrator by developing a professional code of ethics for arbitrators with a more detailed reference to the duties of arbitrators in respect of independence, impartiality and disclosure of suspicious cases, and also avoid spending extra time and money on challenging arbitrators. Secondly, it is suggested that the arbitration institutions monitor the party appointments of the arbitrators in order to prevent damage to their credibility as well as the quality of proceedings and the legitimacy of the arbitration. In such a way that the appointment process includes two stages of nomination of the arbitrator by the parties and its approval by the arbitration institutions. This sort of two-stage appointment, which is recognized in some institutions, in addition to respecting the party autonomy, also guarantees the implementation of justice to some extent.

Keywords

Repeated Appointments
Institutional Arbitration
Impartiality and Independence
Justifiable Doubt
Biased Appearance
Disclosure
Ethical Code of Arbitration
Subjects
 
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Private Law Research
Volume 12, Issue 46
Spring 2024
Pages 37-64

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