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Alternative Dispute Resolution | Monday, March 30, 2015 | S9

ates uncertainty about whether a potential a challenge may “pull punches” throughout assess separately the costs of any challenge non-challenging party may communicate that it “do[es]
not agree to the challenge.” UnCITRAL Arbitration Rules, art. 13(4) (2010), available at http://www.uncitral.
selection is conflicted, or whether a potential the arbitration, including in the final decision, against the unsuccessful party.
org/pdf/english/texts/arbitration/arb-rules-revised/arb-
challenge is meritorious.
to avoid being seen as biased to a confirm- rules-revised-2010-e.pdf; SIAC Arbitration Rules, r. 13.1
While certain business or personal rela- ing court.
Conclusion
(April 1, 2013), available at http://www.siac.org.sg/our-
tionships are clearly disqualifiers, in reality rules/rules/siac-rules-2013#siac_rule13.
most party-appointed arbitrators have at least Preventing Abuses of the Process
Most arbitrator selections, and arbitrator 9. AAA Administrative Review Council: Review Stan- dards, supra note 2. As stated in one treatise, “the AAA
some relationship with the party and/or its challenges, are bona fide and made in good approach is unsatisfactory. Putting aside questions of
counsel. But without any guidance, a party When such difficulties arise, parties and faith. However, the relatively sparse guid- procedural fairness to arbitrators, the AAA process de-
may feel constrained to choose a suboptimal arbitral bodies have no choice but to resolve ance on procedural and substantive issues nies both the institution and the parties of the benefits
arbitrator with whom it has no relationship, them, but arbitral bodies should consider in arbitrator challenges yields a potential of a challenged arbitrator’s comments (or decision to withdraw voluntarily, saving the expense and delays of
a disputed decision).” 2 Gary B. Born, International Com-
solely to avoid a challenge.
whether certain measures could address for abuse. Arbitral bodies would help par- mercial Arbitration §12.06[A][1] (2nd ed. 2014).
Moreover, the challenge decision-makers these concerns in advance, without imping- ticipants address potential abuses and other 10. LCIA Rules, supra note 4, r. 10.3, 10.4; CPR Chal-
themselves have less precedent than would ing on a party’s right to be heard, and without inefficiencies through a thoughtful public lenge Protocol, supra note 6, 1.c., 1.d
be useful. While administrators likely hear sacrificing the flexibility and efficiency that process designed to balance the important, 11. ICC Rules, supra note 5, art. 14(3); SCC Rules, su- pra note 7, art. 15(3).
and decide numerous challenges, there is arbitration ideally affords.
but often competing, goals of flexibility, con- 12. UnCITRAL Rules, supra note 8, art. 13(2); SIAC
seemingly no mechanism to ensure that the First, we add our voices to the chorus fidentiality, and efficiency.
Rules, supra note 8, r.12.2.
decisions are consistent from administrator saying that arbitral bodies should publish 13. ICSID Rules of Procedure for Arbitration Proceed-
to administrator, or from body to body. There reasoned arbitrator challenge decisions as do •••••••••••••• •••••••••••••• •
ings, r. 9(1)-9(4) (April 2006), available at https://icsid. worldbank.org/ICSID/StaticFiles/basicdoc/CRR_English-
is also scant guidance for a party to ascertain the LCIA, SCC and ICSID.final.pdf.
21 The bodies should 1. The AAA Commercial Arbitration Rules and Media- 14. LCIA Rules, supra note 4, r. 10.7; CPR Challenge
whether a challenge decision comports with make these decisions available on their tion Procedures merely provides that “[u]pon objection of a party to the continued service, or on its own initia- Protocol, supra note 6, 5; SIAC Rules, supra note 8, r. 13.4.
precedent.20
websites or in some other easily accessible tive, the AAA shall determine whether the arbitrator 15. AAA Commercial Arbitration Rules, supra note 1,
location. To preserve confidentiality, arbitral should be disqualified under the grounds set out above, r. R-18(a); FInRA Code of Arbitration Procedure for Cus- tomer Disputes, supra note 1, r. 12407(a)(1), FInRA Code
Possible Abuses of Selection Process
bodies could redact the names and identify- and shall inform the parties of its decision, which decision of Arbitration Procedure for Industry Disputes, supra
ing characteristics of the parties, the parties’ shall be conclusive.” AAA Commercial Arbitration Rules and Mediation Procedures, r. R-18, (Oct. 1, 2013), avail- note 1, r. 13410(a)(1); JAMS Rules, supra note 3, r. 15(i);
The relative lack of guidance can impact counsel, and/or the arbitrator. Alternatively, able at https://www.adr.org/aaa/ShowProperty?nodeId=/ CPR Rules, supra note 6, r. 7.5; LCIA Rules, supra note 4,
the early stages of the arbitral process in arbitral bodies could publish summaries (or UCM/ADRSTG_004103. However, the AAA’s Consumer r. 10.1; ICC Rules, supra note 5, art. 14(1); ICSID Rules, supra note 13 art. 57; SCC Rules, supra note 7, art. 15(1);
ways ranging from mildly to extremely trou- periodical collections) of instructive deci- Arbitration Rules go a step further and state that the UnCITRAL Rules, supra note 8, art. 12(1); SIAC Rules, su-
AAA will “gather[] the opinions of the parties,” but do pra note 8, r. 11.1.
blesome.
sions, again without identifying information.
not elaborate further. AAA Consumer Arbitration Rules, r. R-19, (Sept. 1, 2014), available at https://www.adr.org/aaa/ 16. IBA Guidelines on Conflicts of Interest in Interna-
At the milder end, the uncertainty of know- With more published decisions, par- ShowProperty?nodeId=/UCM/ADRSTAGE2021425&.
tional Arbitration, (Oct. 23, 2014), available at http://bit.
ing whether a potential selection or challenge ties could make more informed arbitra- FInRA’s rules state that the FInRA “Director” will ly/1FXS45r.
17. See Born, supra note 9, §12.06[A][4] (“The LCIA’s de-
will succeed is a common issue—and for the tor selections, without worrying about make the determination to disqualify an arbitrator but cision was explained on the grounds that ‘[t]he publication
most part, is resolved without much difficulty.
unwarranted challenges. Parties would also must “first notify the parties before removing an arbi- trator on the Director’s own initiative.” FInRA Code of in appropriate form of the growing wealth of LCIA learning
At the more extreme end, however, there better understand the criteria for success- Arbitration Procedure for Customer Disputes, r. 12407, and guidance on independence and impartiality not only
is a real danger of abuse. Overzealous advo- ful arbitrator challenges, leading to fewer (Feb. 1, 2011), available at http://finra.complinet.com/ responds to mounting calls for greater transparency, but is also likely to make a unique contribution to filling the void
cates may seek to push the boundaries of wasteful non-meritorious challenges.22 Pub- en/display/display_main.html?rbid=2403&element_ in guidance’ regarding the challenge process.”).
good behavior and collegiality to secure lishing decisions would also help inform id=4148; FInRA Code of Arbitration Procedure for In- 18. Margaret L. Moses, “Reasoned Decisions in Arbitra-
dustry Disputes, r. 13410, (Jan. 8, 2009), available at http://finra.complinet.com/en/display/display_main. tor Challenges,” in ABA Section of Litigation, 2012 ABA
an advantage for their clients, including the decision-makers themselves, leading html?rbid=2403&element_id=4245.
Annual Meeting, Aug. 2-4, 2013: So, This is Your First In- ternational Arbitration, at 4 n.26, available at http://www.
any advantageous delay. A party seeking to to greater consistency and predictability 2. AAA Administrative Review Council: Review americanbar.org/content/dam/aba/administrative/litiga-
delay an arbitration can take advantage of in challenge decisions.23
Standards, available at https://www.adr.org/cs/ tion/materials/2012_aba_annual/2_4.authcheckdam.pdf.
the procedural ambiguities of the arbitrator Second, arbitral bodies should consider idcplg?IdcService=GET_FILE&dDocname=ADRSTAGE2012 632&RevisionSelectionMethod=LatestReleased; FInRA Dis- 19. Moreover, the “preparation of a reasoned decision
challenge process.
clearer rules on the procedure of arbitra- pute Resolution Arbitrator’s Guide, (Dec. 2014), available at would delay the challenged process (and therefore the
A party can deliberately nominate an arbi- tor challenges, including the standards of http://www.finra.org/web/groups/arbitrationmediation/@ arbitration), provide grounds for future litigation and plant seeds for future challenges.” BORn, supra note 9,
trator candidate who is conflicted or other- such challenges. The arbitral bodies should arbmed/@arbtors/documents/arbmed/p009424.pdf.
§12.06[A][4].
wise unsuitable, forcing the counterparty ensure that the text of the rules explicitly 3. JAMS Comprehensive Arbitration Rules & Proce- 20. See Gabriel Bottini, “Should Arbitrators Live on
to choose the Scylla of a potentially biased dures, r. 15(i), (July 1, 2014), available at http://www. jamsadr.com/files/Uploads/Documents/JAMS-Rules/ Mars? Challenge of Arbitrators in Investment Arbitra-
reference any supplemental materials. This JAMS_comprehensive_arbitration_rules-2014.pdf.
tion,” 32 Suffolk Transnat’l L. Rev. 341, 342 (2009) (“It has been rightly noted that ‘[t]he process of disqualifi-
arbitrator, or the Charybdis of a lengthy and might include an explicit adoption of (or 4. LCIA Arbitration Rules, art. 10.4 (Oct. 1, 2014), avail- cation is often shrouded in secrecy, thus hindering the
costly battle before the arbitration can pro- reference to) the IBA standards, or to other able at http://www.lcia.org//Dispute_Resolution_Servic- development of known, consistent standards.’”) (quot-
ceed.
guidance that the particular body has pro- es/lcia-arbitration-rules-2014.aspx.
5. ICC Arbitration Rules, art. 14(3) (2012), available at ing Michael Tupman, “Challenge and Disqualification of
Alternately, a party can launch an unjus- mulgated.
http://www.iccwbo.org/products-and-services/arbitra- Arbitrators in International Commercial Arbitrations,”
tified challenge to an arbitrator candidate Third, arbitral bodies should consider tion-and-adr/arbitration/icc-rules-of-arbitration/.
38 Int’l & Comp. L. Q. 26, 26 (1989)) (brackets in original).
21. See, e.g., Gary Born, “Institutions need to Publish
who is unobjectionable, again forcing delay. clearer rules on the ramifications of a failed 6. CPR Challenge Protocol, r. 1.c., 1.d., available at Arbitrator Challenge Decisions,” Kluwer Arbitration
Even worse, this tactic may be seen as a arbitrator selection or challenge, or one http://www.cpradr.org/RulesCaseServices/CPRRules/ Blog (May 10, 2010), http://kluwerarbitrationblog.com/
way to manufacture evidence for a poten- made in bad faith. For example, if a party ChallengeProtocol.aspx. The Challenge Protocol is ex- plicitly referenced in the CPR rules. CPR Administered blog/2010/05/10/institutions-need-to-publish-arbitrator-
Arbitration Rules, r.7.6, 7.8 (July 1, 2013), available at challenge-decisions/.
22. See Bottini, supra note 20, at 342 (“Publication of
tial later “second chance”—if the party repeatedly appoints arbitrators in bad http://www.cpradr.org/Portals/0/Administered%20Arbi- a higher number of reasoned decisions on challenges to
loses an arbitrator challenge, and later faith as a delay tactic, the party may lose tration%20Rules.pdf.
arbitrators could be an important contribution to the
loses the arbitration, that party may argue the right to appoint its own arbitrator and 7. SCC Rules, art. 15(3) (Jan. 1, 2007), available at functioning of investment arbitration, by signaling to
in the confirmation stage that the arbitra- the arbitral body may reserve the right to http://www.sccinstitute.com/media/56030/2007_arbitra- tion_rules_eng.pdf.
prospective arbitrators and parties what kind of circum- stances could affect the integrity of the Tribunal.”).
tor was biased after all.
appoint a candidate of its own choosing. 8. Both the rules of the United nationals Commis- 23. See also Born, supra note 9, §12.06[A][4] (“The
These tactics are further complicated Separately, an arbitral body may adopt a sion on International Trade Law (UnCITRAL) and the publication of challenge decisions serves the construc-
when the arbitrators themselves are privy costs rule similar to the LCIA, CPR and Singapore International Arbitration Centre (SIAC) do not tive and important purpose of providing greater predict-
to the challenge. An arbitrator who survives
SIAC rules, allowing the arbitral body to
explicitly provide that the non-challenging party may formally respond to the challenge, but state that the
ability and clarity with regards to standards of impartial-
ity and independence.”).

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