Ensuring the Neutrality Of Arbitrators In International Arbitrations

Co-written by Marisa Marinell

A longstanding and unresolved issue in international arbitrations that are held in the United States is whether the same standards of arbitrator independence and neutrality apply as would apply if the arbitration were conducted under the laws and practices of other major arbitration venues. In the arena of international arbitration the impartiality and independence of every arbitrator, regardless of the method of his or her appointment, are fundamental precepts to the arbitral process. Indeed, arbitrator bias or partiality is one of the few recognized bases for vacating a final award in the United States and may, in certain limited circumstances, give rise to an interlocutory judicial challenge under the US Federal Arbitration Act. International conventions, such as the New York Convention, also recognize a lack of impartiality as a basis for refusing to recognize an arbitral award.

Notwithstanding the fundamental nature of an arbitrator's impartiality and independence, applying these concepts, particularly to party-appointed arbitrators, can be problematic. Both in domestic and international arbitration, there may be a question as to which state's (or nation's) law will apply in determining an arbitrator's impartiality. The institutional rules selected by the parties, as well as the laws of the arbitral situs and the laws of the state or country where enforcement of an award may be sought, will probably govern. For example, the Rules of the International Chamber of Commerce International Court of Arbitration (in force as from January 1 1998), the American Arbitration Association's (AAA) International Arbitration Rules and the United Nations Commission on International Trade Law Commercial Arbitration Rules all provide that arbitrators acting under those rules shall be impartial and independent. The AAA's Commercial Arbitration Rules, in contrast, provide that "[u]nless the parties agree otherwise, an arbitrator selected unilaterally by one party is a party-appointed arbitrator" and arguably need not be neutral.

What are the standards of independence and impartiality that govern a party-appointed arbitrator's independence and impartiality in international arbitration? The answer to this inquiry is not as simple and straightforward as it seems. In the United States, for example, party-appointed arbitrators historically have not been required to be 'neutral', unless the parties agree otherwise in their...