December 9, 2013

1. Arbitrators in International Arbitration December 9, 2013 Name of Footer

2. Arbitrators in International Arbitration What is the role of an arbitrator? • The function of the arbitrator is to resolve disputes • The arbitrator as “private judge” - duty to the Parties

3. Arbitrators in International Arbitration The Parties’ Autonomy to Select Arbitrators of Their Choosing • Typically, the choice of the procedural mechanism for selection of the arbitrator is expressed in the arbitral agreement or by incorporation of procedural rules • Article V(1)(d) of the NY Convention provides that recognition of an award may be refused if “the composition of the arbitral authority […] was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place.” • The parties’ autonomy to select arbitrators is subject to very limited exceptions • The arbitrators must be impartial and independent

4. Arbitrators in International Arbitration Constitution of the arbitral tribunal - Mechanics • Selection of a sole arbitrator can be done by agreement or by the appointing authority • If three arbitrators, a party gives notice of its choice, and the arbitrator then submits a declaration of independence and impartiality along with any disclosures • Within a short time thereafter, the opposing party may challenge the arbitrator • What happens if a party does not nominate an arbitrator? • Generally, the parties will have designated a neutral “appointing authority”

5. Arbitrators in International Arbitration Constitution of the arbitral tribunal - Mechanics • If three arbitrators are to be appointed, the two co-arbitrators can agree on the third, presiding arbitrator, or, failing agreement, the third arbitrator will be appointed by the appointing authority • Parties often agree in their arbitration clause that the presiding arbitrator will be chosen by the co-arbitrators • If the parties or co-arbitrators cannot agree on selection of the presiding arbitrator, arbitration agreements typically provide a mechanism for selecting the third arbitrator [e.g., 2012 ICC Rules, Art. 12(5)]

6. Arbitrators in International Arbitration What to look for in a party-appointed arbitrator? • Expertise in relevant subject area • Familiarity with the applicable law • Prior experience as an arbitrator • Reputation and Published writings • Nationality • Availability

7. Arbitrators in International Arbitration Independence and Impartiality • UNCITRAL Rules Art. 12(1): “any arbitrator may be challenged if circumstances exist that give rise to justifiable doubts as to the arbitrator’s impartiality or independence.” • 2012 ICC Rules Art. 11(1): “every arbitrator must be and remain impartial and independent of the parties involved in the arbitration.” • UNCITRAL Model Law Art. 12(2): “An arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to his impartiality or independence…”

8. Arbitrators in International Arbitration Independence and Impartiality IBA Guidelines on Conflicts of Interest • 1987 IBA Ethics for Arbitrators in International Commercial Disputes • 2004 IBA Guidelines on Conflicts of Interest in International Arbitration

9. Arbitrators in International Arbitration Independence and Impartiality Examples of grounds for finding lack of impartiality and independence • Financial stake in the outcome of the dispute • Identity between a party and the arbitrator • Prior involvement in the dispute • A family or personal relationship • Prior representation of a party • Recurrent arbitral appointments by the same party or the same counsel • Law firm conflicts • Adversity to one of the parties

10. Arbitrators in International Arbitration Challenge of arbitrators • Example: 2012 ICC Rules Article 14 • Parties wishing to make a challenge must do so within a short period of time • Challenges must be made in writing, ordinarily to the appointing authority • The appointing authority will typically solicit the views of the challenged arbitrator and the non-challenging party • The authority’s decision is generally announced without reasons, although some institutions do provide reasoned decisions on challenges • The substantive standards generally focus on impartiality and independence • Other factors may include incapacity, failure to conduct or participate in the arbitral proceedings, and failure to satisfy the qualifications required by the parties’ arbitration agreement. (ICC Rules, Art. 15(2))

11. Arbitrators in International Arbitration December 9, 2013 Daniel Reich International Arbitration Shearman & Sterling (Paris) LLP Name of Footer