Arbitration – where to start? Part II: Selection of arbitration and arbitrator

Łukasz Wydra, PhD
26.03.2024

Which arbitration

When deciding to arbitrate, the parties determine the type of arbitration. In practice, this involves arbitration: (1) before a permanent arbitral tribunal, (2) ad hoc, or (3) administered.

Permanent arbitration courts usually hear “larger caliber” cases, including international cases. They also enjoy a certain reputation. They have their own infrastructure, and maintain lists of recommended arbitrators that parties can use. Crucially, they have their own rules of procedure, since, as a rule, the parties do not want to conduct a dispute based on a formalized procedure under national law. The permanent arbitration court also proceeds according to its own rules of procedure if the parties do not choose such rules. These institutions often publish the judgments they issue, which affects the stability of jurisprudence. Their own calculators are also common, allowing them to calculate the essential costs of a dispute.

Ad hoc arbitration is the adjudication of a case or specific cases outside the structures of permanent arbitration courts. This is the most flexible form of arbitration, which should not be equated with the greatest comfort for the parties. It is a reprehensible practice to use the rules of permanent arbitration courts in ad hoc arbitration. For example, the fees of arbitrators hearing the dispute can be set at a flat rate.

Administered arbitration, provides a “bridge” between ad hoc arbitration and permanent arbitration. With the approval of the permanent institution, for a fee, the dispute can be resolved on an ad hoc basis using the infrastructure of the permanent institution. Usually, the use of the rules of the permanent arbitration court is also excluded. It is the least common type of arbitration.

Selection of arbitrator

Arbitrators play a role analogous to that of judges in state courts; they issue a ruling – an award. Arbitration proceedings may also end in other ways (such as discontinuance).

The autonomy of the parties’ will is manifested, among other things. in the appointment of arbitrators to resolve the dispute. This is an absolutely fundamental right of the plaintiff and the defendant. The choice of the type of arbitration in the clause determines the freedom of the parties to nominate arbitrators. Parties can specify the number of arbitrators, their qualifications, the language the arbitrator speaks, and in certain cultures even…gender. The lists of recommended arbitrators maintained by permanent lists of recommended arbitrators courts play a large role. They are helpful when the parties have a problem choosing an arbitrator, or do not know her/his professional achievements or qualifications. However, the parties are not bound by the lists; they can choose an arbitrator from outside the lists even if the dispute is decided by a permanent institution.

Disputes are usually decided by a single arbitrator (sole arbitrator), or a panel of three (called a “panel/judicial panel” or “tribunal”). The rule is that disputes are decided by an odd number of arbitrators. In ad hoc arbitration ad hoc with a sole arbitrator a problem arises when the parties fail to agree on his choice, or he refuses to accept the appointment. The regulations of the permanent arbitration courts specify procedures to help resolve it. More often, however, regardless of the type of arbitration, each party nominates its own arbitrator (arbitrators), and then they make a selection presiding arbitrator. Again, the rules of the arbitration institutions precisely define the procedure in the event of (1) failure of the parties to elect lateral arbitrators, (2) election of the presiding arbitrator, (3) appointment of a replacement when an arbitrator resigns, is excluded, is unable to accept or serve.

The number of arbitrators affects the cost of arbitration, as they serve for a fee.

National legal orders determine who can be an arbitrator. In Poland, it can be anyone with full legal capacity (except, for example, an incumbent judge). The arbitrator does not have to be a lawyer (hence, for example, the frequent presence of engineers in tribunals resolving construction disputes).

Regardless of the qualifications of arbitrators, it follows from the New York Convention, the Geneva Convention, as well as the arbitration soft-law that they should be impartial and independent . Violation of any of these requirements should result in the arbitrator’s exclusion from the case and the so-called “soft-law”. substitute appointment.

The appointment of an acquaintance as an arbitrator is not ruled out, although this may raise suspicion of a breach of impartiality or independence. It is worth nominating arbitrators professionally familiar with the subject matter of a given dispute. It is also in good taste to check the time disposition of the prospective arbitrator (permanent courts are available to help in this regard). The international rankings also take into account the most prominent arbitrators in a given jurisdiction.

Author

dr Łukasz Wydra
ADVOCATE, PARTNER+48 22 416 60 04lukasz.wydra@jklaw.pl

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