Page 8 - Alternative Dispute Resolution

S8 | Monday, March 30, 2015 | Alternative Dispute Resolution
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it.2 The rules of the International Centre for

Arbitrator Challenges:
Settlement of Investment Disputes (ICSID)
do not state whether the other party may
submit a response. Other arbitral bodies,
such as JAMS,3 the London Court of Inter-
national Arbitration (the LCIA),4 the Interna-
Balancing Flexibility, tional Chamber of Commerce (ICC),5 the CPR,6
and the Arbitration Institute of the Stockholm
Chamber of Commerce (SCC)7 allow parties
to respond formally.
8
Confidentiality and Efficiency
Only some bodies provide guidance as to
whether the challenged arbitrator (or the
other arbitrators) should be made aware of
the challenge and should be able to com-
ment. The JAMS and FInRA rules are silent
on this point. The AAA rules say nothing on
this issue, but the aforementioned Administra-
tive Review Council Review Standards state
that the “arbitrator shall not be copied on

any objection.”9
The LCIA and CPR rules provide that the
challenging party must inform the entire tri-
bunal of the challenge, and provide the chal-
lenged arbitrator an opportunity to respond.10
Under ICC rules and SCC rules, a challenge
is submitted to the relative secretariat, but
the entire tribunal is able to comment.11 Both

UnCITRAL and SIAC require that notice of
challenge be sent to the entire tribunal, but
are silent as to whether the challenged arbi-
trator may provide comments.12 The ICSID
rules provide that the challenge “proposal”
will be sent to the entire tribunal, after which
the arbitrator in question may provide com-
ments and the rest of the tribunal will decide
the challenge.
13
none of the aforementioned arbitral bodies
has a rule regarding whether a challenging
party may take discovery of the challenged
arbitrator, a party or a party’s counsel to
obtain information about the nature of the
challenged relationship. The rules also do not
provide detail about what kind of hearing (if
any) may be used to decide the challenge.

Moreover, many of the arbitral rules are silent
regarding penalties for an unsuccessful chal-
lenge, although some reference allocations of
costs in connection with challenges.14
Arbitral bodies handle challenges regularly,
and each has its own way of doing so. This flex-
ibility is often an advantage. But the dispari- K
ties can leave participants—especially those OC
arbitrating under a less clear set of rules, or GST
BI
new to a given arbitral body—unaware of
how challenges will be handled, introducing
uncertainty and a potential for abuse.

participants have less information about while preserving confidentiality. Finally, we Relative Lack of Guidance in Standards
By JaSon goTTlIEB whether their arbitrator choice may be sub- discuss potential abuses of the arbitration
and mICHaEl mIx
ject to challenge; whether a prospective chal- selection process, concluding with sugges- In addition to the dearth of procedural rules,
lenge is justified; what procedures (if any) are tions for measures arbitral bodies can take to the arbitral bodies provide only general stan-
P roponents of arbitration typically laud its available to gather more information about an improve efficiency and prevent such abuses dards, if any, for arbitrator disqualification.
15
advantages of flexibility, efficiency and arbitrator; or what penalties (if any) exist for without impinging on a party’s right to be The International Bar Association (IBA) has
confidentiality. However, challenges to
a party who abuses the process. As a result, heard.
published a useful list of hypothetical arbitra-
a nominated arbitrator can put these goals in disputes may arise on basic issues. And while tor conflicts, characterizing them by color
conflict right from the arbitration’s inception. most arbitrator selections and challenges are Relative Lack of Guidance in Procedures
based on their seriousness.16 However, the
Perhaps to enable flexibility, many arbitral undoubtedly made in good faith, the lacuna of IBA’s guidelines are non-binding, and are less
bodies’ procedural guidelines for challeng- information yields a situation that is subject The rules of the major arbitral bodies do often used in domestic arbitrations. Moreover,
es are not highly detailed. And perhaps to to abuse by overzealous participants.
not contain highly detailed procedures regard- there is little guidance as to their application
safeguard confidentiality, few arbitral bodies This article surveys the rules of several ing arbitrator challenges.
in circumstances that do not neatly fit into

publish their arbitrator challenge decisions.
arbitral bodies to review their guidance on The rules of the American Arbitration a given “color.”
The result, however, is that arbitration
challenge procedures and standards, and Association (AAA) and the Financial Industry The LCIA, SCC17 and ICSID18 publish some
what may be lacking in those rules. next, we Regulatory Authority (FInRA) do not explicitly reasoned arbitration challenge decisions, but
explore whether there is any way for arbi- provide for the party opposing the challenge most arbitral bodies do not, presumably to
JaSon gottliEB is counsel and miChaEl mix is an trator challenge decisions, or their collected to submit a formal response,1 but both bod- protect the confidentiality of the parties.19
associate at Curtis, Mallet-Prevost, Colt & Mosle.
wisdom, to be made available to the public,
ies publish supplemental materials allowing
The relative lack of available decisions cre-