After the arbitration claim has been registered, the next order of business is to establish the arbitral tribunal that will be responsible for adjudicating the dispute. Arbitrator(s) are the person(s) who make up the arbitral tribunal, which may be constituted by a single arbitrator (often referred to as the sole arbitrator) or a number of arbitrators, depending on the relevant investment treaty, the parties’ agreement and the arbitration rules.
II. Appointment of arbitrators / Appointment procedure
Arbitrators may be nominated and/or appointed by (i) the parties, (ii) the administering arbitral institution or the relevant appointing authority designated by parties’ agreement, or (iii) co-arbitrators of the arbitral tribunal. Arbitrators may also be selected from a roster of qualified individuals prepared by the administering arbitral institution or the relevant appointing authority.
The process of selecting arbitrators is critical and requires attention. An arbitrator must be independent, impartial, and be available to execute diligently his or her mandate. Arbitrators are typically selected on the basis of the following key considerations:
The procedure for the appointment of arbitrators is usually prescribed by the relevant investment treaty, the parties’ agreement, and/or the arbitration rules.2 Some arbitration rules provide that the parties’ nomination is subject to confirmation by the administering arbitral institution or the relevant appointing authority.3
III. Requirements of arbitrators
Before accepting appointment, the prospective arbitrator is typically required to furnish a signed declaration disclosing any circumstances, interests and/or relationships that may give rise to justifiable doubts as to the prospective arbitrator’s impartiality or independence.4
When an arbitrator accepts the appointment, he agrees to be bound by a set of duties and responsibilities that he must execute with professional integrity, diligence and care, until the conclusion of proceedings. These duties and responsibilities go towards:
The Secretariats of the ICSID and UNCITRAL have jointly prepared and released a Draft Code of Conduct for Adjudicators in Investor-State Dispute Settlement on 1 May 2020 (the “Draft Code”). The Draft Code is part of (a) the work of the UNCITRAL Working Group III on ISDS reform; and (b) the process underway to amend the ICSID’s procedural rules. In its current form, the Draft Code provides a useful overview of the requirements and standards that an arbitrator should meet.
IV. Disqualification of arbitrators
Parties to the arbitration or other members of the arbitral tribunal may challenge or propose to disqualify an arbitrator. Generally, the challenge must be premised on justifiable doubts as to the arbitrator’s impartiality or independence. The decision on any challenge or proposal to disqualify is taken by the administering arbitral institution or the relevant appointing authority. The precise standard and procedure for the challenge or disqualification of an arbitrator is set out in the arbitration rules and/or the arbitral seat’s arbitration laws.
The arbitrator is entitled to compensation (fees and expenses) for his or her participation and administration of the arbitration. The arbitrator’s fees may be assessed on an ad valorem basis, time-cost basis, or fixed-fee basis. The arbitrator is also entitled to certain expenses incurred in connection with his or her work on the case.