Arbitration Tips: Appointing the Tribunal

Arbitration Tips

Appointing the Tribunal

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Arbitration Tips Appointing the Tribunal When a dispute arises which must, under the terms of an arbitration agreement, be referred to arbitration, the first step will be for the parties to appoint the tribunal. Finding the right arbitrators and ensuring that the relevant contractual, statutory or institutional requirements are complied with is vital.

For the parties, having a say in the choice of the person to decide their dispute is one of the most important advantages of arbitration.

Appointing the tribunal is a very important part of the arbitration process.

Failure to get it right may give rise to problems later on in the process, which could have been avoided, which may delay the arbitral process and cause additional expense to the parties.

This note provides some practical tips to assist in the process of appointing an arbitral tribunal.

John Abbott

Russell Beard

Partner john.abbott@laytons.com +44 (0)20 7842 8000

Partner russell.beard@laytons.com +44 (0)20 7842 8000

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Arbitration Tips | Appointing the Tribunal

When is the appointment made?

There cannot be an appointment until there is arbitration. This

The importance of complying with the arbitration agreement

means a notice of commencement will need to have been

It is important that both parties comply fully with the terms of

served before an arbitrator is appointed.

the arbitration agreement and any relevant rules in appointing the tribunal; otherwise, the jurisdiction of the tribunal and any

However, if you are the party which intends to instigate the

award may be subject to challenge.

arbitration, a little early research may be a benefit especially as some arbitral institutions will want the instigating party’s nomination included in the notice of commencement.

What does the contract require?

Selecting an arbitrator Where a party has the ability to choose an arbitrator, that choice needs to be made carefully; it may influence not only the potential outcome, but also matters such as the cost and

The next step is to look at the arbitration agreement. It should

duration of the arbitration. It is worth investing time

deal with matters including:

to research the qualifications and experience of potential candidates, as well as checking their availability, terms of

• the number of arbitrators who are to be appointed

appointment and fees.

• whether there is to be a chairman or umpire • whether the arbitrators must possess any particular qualifications • any rules which apply.

Who makes the appointment?

Where the institutional rules of a particular arbitral body

Be careful, it is important not to risk compromising the impartiality of the arbitrator by entering into any discussion of the merits of the case.

Attempting to agree the choice of arbitrator

apply, those rules usually set out the procedure governing the

Where the arbitration agreement requires the parties to agree

appointment of arbitrators. Procedures vary from one arbitral

the choice of arbitrator, that can be a sensitive task and it is,

body to another and may, for example, entail the arbitral

unfortunately, common for parties each to reject the other’s

body making the appointment or the arbitral body confirming

proposed candidates.

the appointment of arbitrators nominated by the parties.

Consider attempting to engage directly with your opponent In an ad hoc arbitration, where the arbitration is not governed

in a meeting to see if it is possible to identify and agree

by institutional rules, the arbitration agreement itself should

suitable candidates. Sometimes that approach can be less

set out how the parties make the necessary appointments.

confrontational than an exchange of correspondence.

That process may entail the parties making the appointment

It is common practice for each party to suggest three

or the parties referring the matter to a third party who is

candidates. A letter nominating candidates should set out the

required to make the appointment.

qualifications and relevant experience of the candidates

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Arbitration Tips | Appointing the Tribunal

or attach CVs. It is worth including a brief statement as to why each candidate is considered suitable. The letter may not

Once the appointment is made

convince a sceptical or obstructive opponent, but it may help

The tribunal is constituted only once all of the required

should it prove necessary to involve the court.

number of arbitrators have been appointed. That is straightforward where there is a sole arbitrator, who can

Generally, it is best not to discuss the dispute with an

immediately exercise the tribunal’s procedural powers. It can

arbitrator before putting him/her forward: contact of any

be less straightforward where there are multiple appointments

kind can arouse suspicions and provoke rejection. Limit the

to be made.

discussion to availability, experience and qualification. It is important that the nominated arbitrator is not compromised.

Where no agreement is possible

Remedies before appointments are made Sometimes it is necessary to seek urgent relief before a

Where it is not possible to reach agreement on the

tribunal is constituted. It is necessary to look to the laws of

appointment of an arbitrator, it becomes necessary to look to

the seat of the arbitration to assist. Where England is the seat

the law of the seat of the arbitration for help. In England and

of the arbitration, the English court can step in to provide

Wales, the Arbitration Act 1996 contains a process requiring

assistance, such as granting orders to preserve assets or

service of a formal notice requesting an appointment,

evidence.

permitting a period of time for appointments to be made and, in default, the court being empowered, on the application of one party, to give directions on appointments.

Confirming the appointment

Challenges The institutional rules of arbitral bodies may contain provisions which permit an appointment to be challenged; often they require action within tight time scales.

To complete the appointment, three things need to happen: Where there are no applicable rules, national courts generally • the appointing party needs to give notice requesting

have powers to remove an arbitrator, for example, where

that the arbitrator accept an appointment to

it can be established that the arbitrator does not possess

determine the dispute the arbitrator needs to accept

requisite qualifications or lacks impartiality or capacity.

that appointment • the arbitrator’s acceptance needs to be communicated to the parties.

The notice requesting the arbitrator to accept the appointment must carefully define the scope of the dispute so as to encompass all potential issues and claims. If it is drafted too narrowly, the arbitrator may not have jurisdiction to determine all issues in dispute.

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Arbitration Tips | Appointing the Tribunal

Arbitration Our team is experienced in resolving disputes through arbitration and committed to providing outcomes-focused, innovative and commercially minded advice to guide our clients through all stages of the arbitration process.

We represent clients from across the globe in arbitrations involving a range of sectors including construction, international trade and commodities, investment treaties and shipping.

Our experience spans arbitrations convened through the main international institutions such as the ICC, LCIA, LMAA, DIFC and SIAC as well as on an ad-hoc basis.

Our Team John Abbott

Russell Beard

Robert Clark

Simon Foster

Partner john.abbott@laytons.com +44 (0)20 7842 8000

Partner russell.beard@laytons.com +44 (0)20 7842 8000

Partner robert.clark@laytons.com +44 (0)20 7842 8000

Partner simon.foster@laytons.com +44 (0)1483 407 000

Richard Harrison

Paddy Kelly

Rebekah Parker

Will Slater

Partner richard.harrison@laytons.com +44 (0)20 7842 8000

Partner paddy.kelly@laytons.com +44 (0)20 7842 8000

Partner rebekah.parker@laytons.com +44 (0)20 7842 8000

Consultant will.slater@laytons.com +44 (0)20 7842 8000

Geraint Thomas

Ben Thorogood

Partner geraint.thomas@laytons.com +44 (0)20 7842 8000

Daniel Walter

Solicitor daniel.walter@laytons.com +44 (0)20 7842 8000

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Solicitor ben.thorogood@laytons.com +44 (0)20 7842 8000

This information is offered on the basis that it is a general guide only and not a substitute for legal advice.

We cannot accept any responsibility for any liabilities of any kind incurred in reliance on this information.

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