Ethical Rules for International Arbitrators - 5

Ethical Rules for International Arbitrators - 5

Ramon Mullerat OBE

7. Independence and impartiality of the party-appointed arbitrator

Depending on the arbitral rules selected, a significant difference may exist between the role of party-appointed arbitrators in the US and elsewhere. While leading arbitral organisations outside the US require that party-appointed arbitrators be independent and impartial (art. 7 ICC Rules of Arbitration, art. 5.2 Rules LCIA, Model Rules UNCITRAL, etc.), certain US arbitral rules and laws permit party-appointed arbitrators to serve as non-neutral partisans (A A A Commercial Arbitration Rules, also the case law interpreting the Federal Arbitration Act, etc.).

In the US, a party-nominated arbitrator was historically not obliged to satisfy the same standards of independence and impartiality that were imposed on non party-appointed arbitrators. Code Canon VII of the ABA/AAA permits arbitrators to: a) be "predisposed" towards the appointing party; and b) have communications with the appointing party subject only to a general obligation to "act in good faith and with integrity and fairness.

"Canon, VII. Ethical considerations relating to arbitrators appointed by one party
In some type of arbitration in which there are three arbitrators, it is customary for each party, acting alone, to appoint one arbitrator. The third arbitrator is then appointed by agreement either of the parties or of the two arbitrators, or, failing such agreement, by an independent institution or individual, in some of these types of arbitration, all three arbitrators are customary considered to be neutral and are expected to observe the same standards of ethical conduct. [In other instances] ... it has been the practice that the two arbitrators appointed by the parties are not considered to be neutral and are expected to observe many, but not all, of the same ethical standards as the neutral arbitrator. For the purpose of thin code, an arbitrator appointed by one party who is not expected to observe all of the same standards as the third arbitrator is called a 'nonneutral arbitrator' ".

Canon VII describes the ethical obligations that nonneutral party-appointed arbitrators should observe and those that are nol applicable to them.

But the trend in contemporary international arbitration is strongly towards a uniform set of standards of independence and impartiality for all members of the tribunal 15. Today, the general opinion is that all arbitrators, including ex parte arbitrators, should be fully independent and impartial 16. An arbitrator that has powers similar to those of a judge, and sometimes even broader, should be absolutely independent and impartial in respect to both of the parties 17 18. All arbitrators, including party-appointed arbitrators must respect the same ethical duties, which must apply to all of them without distinction.

In order to protect the independence and impartiality of party-appointed arbitrators, some solutions have been envisaged. For example, the CPR Institute for Dispute Resolution, in their revised rules (Rule 5.4 d) provides for an optional "screened" selection of party appointed arbitrators designed "in such a manner so that the arbitrators wouldn't know who picked them"19.

15 Gary B. Born, International Commercial Arbitration in the United States. Klubcr, 1994, p. 64. back
16 J. Coc, International Commercial arbitration. Transnational Publishers, 1997. back
17 René David, L'arbitrage dans le commerce international, Editorial Economica, 1982.back
18 Mauro Rubino-Sammartano, L'arbitrato Internazionale, Cedam, Padua, 1989back
19 Under these rules, parties wishing to follow this procedure arc given a copy of the CPR "Panel of Distinguished Neutrals", and each party is to designate three candidates, in order of preference "as candidates for its party-designated arbitrator", A party may object to any appointment "on independent and impartial grounds by written and reasoned notice to CPR", which is to make a final decision with respect to any objection. "Neither the CPR nor the parties shall advice or otherwise provide any information or indication to any arbitrator candidate or arbitrator as to which party selected cither of the party-designated arbitrator". Sec Scott Ran, Sherman and Peppet, op. cit., p. 852. back