A party’s right to appoint an arbitrator is regarded as a historical¹ and keystone characteristic of arbitration,² featuring in the earliest definitions and codifications of international arbitration.³ It is also regarded as an expression of the principle of party autonomy.⁴ In investment arbitration, where tribunals are generally composed of three arbitrators⁵ (a president and two co-arbitrators), co-arbitrators are generally party-appointed, meaning that claimant and respondent each have equal rights to appoint one.⁶ This is the preferred method of practitioners⁷ and is seen as an advantage of arbitration, in particular by States.⁸

Party-appointed arbitrators are not party representatives and are bound by obligations of independence and impartiality throughout the arbitration.⁹ They are often called upon in the selection and appointment of the president of the tribunal.¹⁰ As tribunal members, they participate fully in deliberations and decision-making. They may also be charged with specific roles – for example, under ICSID Arbitration Rules, co-arbitrators may have to decide together on challenges against the president, or with the president, against the other co-arbitrator.¹¹ Party-appointed arbitrators have sometimes been said to have a supplementary, special, role: assisting the tribunal to understand the position, and/or cultural background, of the party that appointed them.¹²

Multiparty proceedings pose practical challenges for the tribunal’s constitution.  Some rules envisage that multiple parties sharing a common interest in the dispute will jointly appoint an arbitrator.¹³ Where they disagree or where more than two distinct positions exist among them, it may be necessary, to ensure equal treatment of all parties, for an appointing authority or the administering institution (if any) to appoint the tribunal.¹⁴

Special care has been taken to govern the arbitrators’ relations with (a) parties and (b) parties’ counsel, and avoid potential conflicts of interest.  When appointed, arbitrators will generally be called upon to disclose any conflict they might have in a declaration. Such disclosure may be required by the law of the seat (when there is one), the arbitration rules, or the parties’ agreement. Some non-binding resources exist, including the IBA Guidelines on Conflict of Interest in International Arbitration (2004 and 2014), and may assist in assessing these questions.¹⁵

Whether a risk exists that party-appointed arbitrators might favor the party that appointed them has prompted an extended debate over the importance of this method.¹⁶ The debate has grown during the past decade in investment arbitration.¹⁷ The terms of the debate are as follows.

On the one hand, party-appointed arbitrators are considered to be an intrinsic characteristic of arbitration¹⁸ and a means to ensure trust in the overall process,¹⁹ enabling the parties to manage expectations with regards to an award²⁰ and encouraging compliance with the award.²¹

On the other hand, critics say that party appointments can lead to the appointment of advocates ready to blindly accept the position of the party that appointed them.²² Such critics have argued that (i) dissenting opinions are mainly drafted by party-appointed arbitrators appointed by the “losing” side²³ and that (ii) the tribunal may be forced to compromise rather than reach a principled decision.²⁴

Responses to this debate have varied: some have argued that party appointment should be maintained,²⁵ others have called for an overhaul of investment arbitration by having institution-appointed arbitrators²⁶ (including in new BIT models²⁷), which some say might simply move the target of criticism.²⁸ Concerns about party appointment have contributed to the UNCITRAL Working Group II’s work on a draft working paper on the selection and appointment of arbitrators in investment tribunals²⁹ and the European Union’s proposal to replace investment arbitration by a court system as the preferred investor-State dispute settlement mechanism.³⁰

Schreuer, C. and al., The ICSID Convention – A Commentary, Oxford University Publications, 2^nd ed., 2009, pp. 475-489.

Blackaby, N, Partasides, C., Hunter, M. and Redfern, A., Chapter 4. Establishment and Organisation of an Arbitral Tribunal, in Blackaby, N, Partasides, C., Hunter, M. and Redfern, A. (eds.), Redfern and Hunter on International Arbitration, Sixth Edition, Oxford University Press, 2015, pp. 229 – 304.

Julian, D., Lew, M., Mistelis, L.A. and Kröll, S., Chapter 11 Impartiality and Independence of Arbitrators, in Julian, D., Lew, M., Mistelis, L.A. and Kröll, S. (eds.), Comparative International Commercial Arbitration, Kluwer Law International, 2003, pp. 223-273.

Gomez-Acebo, A., A Special Role of Party-Appointed Arbitrators?, in Kalicki, J.E. and Abdel Raouf, M. (eds.), Evolution and Adaptation: The Future of International Arbitration ICCA Congress Series No. 20 Sydney 2018, Kluwer International Law, pp. 381-416.

Daly, B., Goriatcheva, E. and Meighen, H., A Guide to the PCA Arbitration Rules, 2016, pp. 35-63.

Menon, S., Adjudicator, Advocate, or Something in Between? Coming to Terms with the Role of the Party-appointed Arbitrator, Journal of International Arbitration, Kluwer Law International 2017, Vol. 34, Issue 3, pp. 347-372.

Shany, Y., Squaring the Circle? Independent and Impartiality of Party-Appointed Adjudicators in International Legal Proceedings, Loyola of Los Angeles International and Comparative Law Review, Vol. 30, Issue 3, 2008.

Veeder, V.V., The Historical Keystone to International Arbitration, The Party-Appointed Arbitrator—From Miami to Geneva, in David D. Caron & al. (eds.), Practising Virtue: Inside International Arbitration, Oxford University Press, 2016, pp. 127-149.

Paulsson, J., Chapter 5 Ethical Challenges, in Paulsson, J. (ed.), The Idea of Arbitration, Oxford University Press, 2013.

Paulsson, J., Moral Hazard in International Dispute Resolution – Inaugural Lecture as Holder of the Michael R. Klein Distinguished Scholar Chair University of Miami School of Law 29 April 2010.

Paulsson, J., Must we live with unilaterals?, ABA, Section of International Law, International Arbitration Committee, 2013, Vol. 1, Issue 1, pp. 5-9.

Brower, C.N., The (Abbreviated) Case for Party Appointments in International Arbitration, ABA Section of International Law International Arbitration Committee, 2013, Vol. 1, Issue 1, pp. 10-13. 

Brower, C.N. and Rosenberg, C.B., The Death of the Two-Headed Nightingale: Why the Paulsson—van den Berg Presumption that Party-Appointed Arbitrators are Untrustworthy is Wrongheaded, Arbitration International Arbitration International: The Official Journal of the LCIA, Vol. 29, Issue 1 2013, pp. 7–44.

van den Berg, A.J., Dissenting Opinions by Party-Appointed Arbitrators in Investment Arbitration, in Arsanjani, M., and al. (eds.), Looking to the Future: Essays on International Law in Honor of W. Michael Reisman, Brill, 2008, pp. 821-843.

van den Berg, A.J., Charles Brower’s problem with 100 per cent – dissenting opinions by party-appointed arbitrators in investment arbitration, Arbitration International: The Official Journal of the LCIA, Vol. 31, Issue 31, 2015, pp. 1-11.

Mourre, A., Are unilateral appointments defensible? On Jan Paulsson’s Moral Hazard in International Arbitration, Kluwer Arbitration Blog, 2010.

Battison, A. and Teo, C., The Call to Remove Unilateral Appointments: Seven Years On, Kluwer Arbitration Blog, 2017.

Gomez-Acebo, A., Party Appointed Arbitrators in International Commercial Arbitration, International Arbitration Law Library, Vol. 34.

EU Commission, Concept Paper Investment in TTIP – the path beyond, 5 May 2015.

European Parliament resolution containing the European Parliament’s recommendations to the European Commission on the negotiations for the Transatlantic Trade and Investment Partnership (TTIP) (2014/2228(INI)), 8 July 2015.

United Nations Commission on International Trade Law, Report of Working Group III (Investor-State Dispute Settlement Reform) on the work of its thirty-sixth session (Vienna, 29 October–2 November 2018), 6 November 2018.

United Nations Commission on International Trade Law, Draft Working Paper “Selection and Appointment of ISDS Tribunal Members”.