By 14 December, 2017 0 Comments Read More →

Appointment of Arbitrators in CIS-related and Other Disputes – Practical Considerations

globe with gavelThe party’s right to appoint one of the decision-makers is what distinguishes arbitration process from litigation.  It is often said that the most important decision a party will make in any arbitration is the selection of an arbitrator.

And indeed, the arbitrators who compose a tribunal are not passive people, who at the end of the process render an award. They interact with each other, as well as with the parties, witnesses, and experts.

The arbitrators take decisions on crucial issues, such as the scope of documents production or interim measures as well as setting the procedure and the timetable of proceedings.  Law firms, therefore, treat the selection of an arbitrator seriously and this process often takes several weeks.

Search for an Arbitrator

To identify a suitable arbitrator, lawyers often take recommendations from colleagues, and consequently, word of mouth plays an important role when compiling a list of candidates. Some firms keep a list of arbitrators they have used in the past or those who have a good reputation. Arbitral institutions also have lists of arbitrators, although these lists may not be made public unless one uses that particular institution. Another resource may be found in professional networks for dispute resolution practitioners, such as the Chartered Institute of Arbitrators, which has a searchable database of arbitrators.

Recently, Global Arbitration Review also introduced a similar database. Further, internet research on the candidate can provide further insight, including the arbitrator’s track-record for being appointed by either plaintiffs or defendants, which becomes very important in the context of investor-state arbitrations. 

Research can further reveal any possible contacts and cooperation between an arbitrator and an opposing law firm or their client. Publications on the subject matter of the dispute can provide a useful insight as to the candidate’s views. The same applies to past interviews of the arbitrator, which could expose unconscious biases for or against a particular position, industry, or approach to arbitration, even if the interview pre-dates his or her arbitration career.

Selection Criteria for a Party-Appointed Arbitrator 

When selecting a party-appointed arbitrator, the key aims is to choose someone who will help to ensure that that the arguments of his or her nominating party are properly considered and taken into account in any decision by the tribunal. The following criteria should be considered:

The candidate’s legal background, for instance, whether he or she is a civil lawyer or a common lawyer. One may not wish to find themselves in front of an arbitral tribunal consisting of three QCs when the dispute is governed by Russian law.  If the case relates to a certain industry, specific expertise of an arbitrator can be of great value. An engineering background, or experience in the oil and gas industry may be essential to achieve a satisfactory result and avoid the need to explain basic industry concepts and normal practices. It is of additional benefit if the arbitrator can speak or read the language of the documents and witness statements fluently, as translation might not be always accurate.

The candidate’s professional standing, reputation, and integrity are also important, as they will invariably have an impact on the degree of influence the party-nominated arbitrator is able to exercise over the other tribunal members. The arbitrator’s availability should not be overlooked, especially by claimants, as it is important to have the arbitrator who is able to focus on the case at the appropriate times. In cases when the arbitrator is selected by the respondent, it is vital to take into account the selection of the claimant and carry out comprehensive research on that person.

The choice of the respondent’s arbitrator will depend on the results of this research. For example, one would not want to have an arbitrator who has close personal contacts with the claimant’s appointee, as the dynamics in the tribunal might not be favourable to one’s case. The same concern might arise if the research reveals that the candidate has had open controversies with the claimant’s appointee.

Selection Criteria for a Sole Arbitrator 

When selecting a sole arbitrator, it is important to ensure that the candidate has solid management skills, so that the arbitral process is administered in an efficient, cost-effective manner. The parties should try and agree on a strong arbitrator capable of managing people as well as the process. The practical considerations should be the candidate’s familiarity with the arbitration process and whether he or she will be comfortable dealing with different cultures, legal systems, and the tensions which unavoidably appear during disputes.

Specific Criteria for an Arbitrator in CIS-Related Disputes

For a CIS party choosing an arbitrator from this region is often helpful, as at least one member of the tribunal will have a good understanding of the culture, business practices and customs of the country. For example, such word as “reiderstvo” is unknown to the western ears. There are no doubts that the tribunal, where at least one of the arbitrators has the CIS background, would have a better understanding of the events involving this unlawful but often disguised activity. In addition, an arbitrator’s CIS legal background can often prove useful, especially when the subject matter of the dispute relates to the CIS country’s law or legal concepts.

For example, the tribunal, where one of the members has a CIS legal training, is less likely to make a mistake with notification of the Respondent, which could then be fatal at the stage of the enforcement proceedings. Finally, as mentioned above, the Russian language knowledge can be an additional benefit, especially when witnesses and experts speak only Russian. An arbitrator, along with the parties’ representatives, would be able to identify the critical mistakes in the translation, from which no arbitration involving foreign language is immune.

Once the sole arbitrator is appointed or the tribunal is composed, the fate of the case is in their hands.

Tatiana Minaeva

Of Counsel, Jones Day (London)

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