International arbitration: the arbitrator. Method of appointment and main characteristics

Coming back to the ABC on international arbitration, today we analyze the figure of the arbitrator and the main characteristics.

Method of appointment

First of all, it is necessary to verify what are the procedures for appointing the arbitrator and, more generally, the arbitral institution to which the dispute resolution will be devolved (in the case of administered arbitration).

In this case it is advisable, in general, to opt for arbitral institutions possibly with a long tradition in administering international arbitrations, taking into account the regulation of the chosen institution, which must be as close as possible to the needs of the specific case and of the international arbitration in general.

As regards specifically the procedures for appointing individual arbitrators or the arbitration board, they differ according to the type of arbitration chosen.

In particular, in the case of an ad hoc arbitration (entirely governed by the parties), it may happen that the arbitrators are already appointed in the arbitration agreement through a specific clause or that the procedures for their appointment are specifically determined. If this discipline is not already present, the parties will appoint arbitrators following the request of one of the parties and, in the event of disagreement, an Authority designated by the parties will be contacted (recalling already existing Regulations such as the UNCITRAL Regulation, which governs in detail the entire arbitration procedure) or competent according to the applicable law.

In the case of administered arbitration (where the parties rely on an international arbitral institution, such as the Paris ICC), in the absence of specific provisions of the parties, the methods indicated by this third party will instead be followed.

Requirements

The arbitrators chosen by the arbitral institutions (or directly by the parties in ad hoc arbitration) are normally selected from experts in the subject matter of commercial arbitration (for example in the field of #internationaldistribution or #internationalsale).

There are no particular requirements to be met, except for the necessary impartiality and independence of each arbitrator from the parties involved in the procedure, characteristics that must be maintained throughout the procedure.

Number of arbitrators

Considering the number of arbitrators, there can be a single arbitrator or an arbitration panel, depending on the specific case (by choice of parties, value, complexity of the dispute).

As regards the appointment of the sole arbitrator, we have already analyzed the methods of choosing this with regard to the ad hoc arbitration procedure. In the case of an administered procedure, however, the arbitral institution provides the parties with a list of possible arbitrators, within which the parties will report their preferences. If it is not possible to appoint the arbitrator in this way, the arbitral institution will proceed with the selection from the same list in a discretionary manner.

The panel is composed of an odd number of members and the parties nominate one or more arbitrators and the President of the panel is appointed by mutual agreement, by the parties themselves or by the arbitrators, or by a third authority.

This choice must be considered carefully, in the light of the value and complexity of the dispute, taking into account that the costs of the arbitral procedure will increase by virtue of the number of appointed arbitrators (each one is entitled to compensation).

Seat and language of the arbitration

Once the arbitral panel has been established (or the sole arbitrator has been appointed), the parties (or in the absence of a choice, the arbitrators) choose the language and the seat of the arbitration based on the needs of the specific case.

The choice of language is very important because it must allow the parties to participate consciously in the procedure. The choice of the seat is also particularly important, as it closely links the procedure to the procedural rules of a given country, and consequently submits it to the jurisdiction of the courts of that State for any interventions to support arbitration (think of the hypothesis of replacement of the arbitrators, or of appeal against the arbitral award).

In conclusion, given the wide autonomy left to the parties in managing the procedure, it is advisable to proceed with extreme care in choosing the arbitral institution, the number of arbitrators and the type of specific procedure during the negotiation and before the signing of the contract.

Luca Davini
Avvocato in Milan and Turin

#ABCarbitration #internationalarbitration #commercialarbitration #appointmentofarbitrators #internationallitigation #internationalcontracts #internationalsales #internationaldistribution #internationaltrade

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