A proper control
Ensuring the impartiality and independence of arbitrators is indeed an appropriate exercise, both of them being essential ingredients of arbitration and could perhaps be described as the heart of those proceedings.
A distructive approach
However, in reviewing an arbitrator’s statement of impartiality and independence, it is not infrequent for Counsel for the parties to conduct an oppressive search to cover any possible personal, intimate, family, financial or professional links of the contractors in order to build up a case of a possible bias of that arbitrator. Enquiry agents and occasionally accountants are frequently involved in such a process.
The purpose of this search is not merely to get rid of an arbitrator just because he/she has given the impression of not agreeing on the expectations of that party.
From the above remarks, it follows that while removing an arbitrator, who is partial or dependent from one of the parties, is a positive result, aggressing an “innocent” arbitrator is indeed not a commendable practice which sometimes might be described as a real witch hunting.
An objective source of problems
Frequently the arbitrator is a member of the legal profession and the size of his/her law firm and of its ramifications in various countries, combined with the size and the links of the parties to an arbitral proceeding, give wide opportunities to conduct such a thorough hunting.
Such deep investigations may lead to prove that someone at the arbitrator’s law firm, out of the hundreds or thousands of its members, has advised or is advising a company belonging to the group of companies to which a party to such arbitral proceedings belongs.
Even if one forgets such excesses, investigations on whether a party to the proceedings belongs to a group of companies, with one of which the arbitrator’s law firm has had or has professional contacts, frequently give rise to delicate problems.
One of such precedents, a judgment handed down on 27 May 2019, by which the Swiss Supreme Court dismissed the appeal, which had been made to set aside two awards on the ground that the chairman of the arbitral tribunal was not impartial because his law firm had provided legal assistance to companies belonging to the same group of companies of the corporation on the other side.
The Court stressed that one has to take into account that international law firms have a very large size and that the general trend is to increase that size.
The Court had taken notice that the law firm of the arbitrator had received during such proceedings, fees for legal assistance from companies belonging to the group of companies, to which the other party belonged, but has held that the performance by other members of that law firm of work for companies, belonging to the same group of companies, was no evidence of lack of impartiality.
Relevant Doubts as to the asserted lack of impartiality
To exclude that payments made by a party, or by a company belonging to its group of companies, be not an alarming factor, which justifies doubts as to impartiality, does not seem obvious.
A lack of knowledge by the arbitrator
An element against a removal of an arbitrator, who finds itself in a similar situation, might be his/her full and innocent bona fide unawareness of such a situation, what in fact is quite possible in case of very large law firms with offices in various jurisdictions.
A delicate balance
It is submitted that a party to court proceedings would be uncomfortable if it were to become aware that the family of the judge who hears its case has received money from the other party. Arbitration, in order to be entitled to exist, is required to be better and not to be worse than court proceedings.
Party appointed arbitrators
While the above quoted precedent concerned the chairman of an arbitral tribunal (the vote of whom is generally decisive), that problem affects indeed also party appointed arbitrators, who are frequently definitely closer to the appointor than the chairman of that tribunal.
The selection of party appointed arbitrators is in fact made for all sorts of reasons.
It may be the result of a search for an expert arbitrator, but not unfrequently it is due to personal friendship and not rarely to the expectation that the arbitrator will always be on the side of his/her appointor.
All such challenges are sometimes fully justified, but on other occasions just the result of tactics. Going back to the initial query, one wonders whether there is any way to avoid or to reduce such problems arising from the appointment of arbitrators.
Where is the root of the problem ?
Slight improvements here and there are certainly possible. However, one could wonder whether, by just doing so, there are serious prospects to solve this problem. It is suggested that this looks quite unlikely.
The source of the problem – it is suggested – is that the great majority of arbitrators generally carries on another activity, frequently as members of the legal profession. This means having on the one hand clients, and on the other hand parties to the arbitral proceedings – in which he/she acts as arbitrator – who have many, even close, links which some client of his/her law firm and therefore having many professional links which may interfere with the total impartiality required from his/her as an arbitrator.
The premise of impartiality of independence is a distance from the parties, what is exactly what his/her other activity makes it quite difficult.
Now, if arbitration wishes to be recognized as suitable to render a service, there should be a better method of deciding a dispute rather than resorting to court proceedings.
To achieve this result and to avoid or at least to narrow very much what has been discussed above, one may have to go to the root of the problem and to make a basic change.
This might consist in creating a separate profession of arbitrators, access to which would require specific training, a proper certification and abandoning any other activity.
In this way, arbitration would be handled by professional arbitrators, who would be private judges in the real sense of this expression.