In today’s arbitral practice, major commercial disputes are typically resolved by tribunals consisting of three members. While each side almost always selects one co-arbitrator of their choice, the presiding arbitrator is often determined by a third party, such as an arbitration institution.
It is, however, a right of the parties to almost any arbitration to jointly nominate their preferred candidate for presiding arbitrator. Where a minimum level of co-operation remains, parties should make good use of this opportunity.
After all, the parties (together with their counsel) are in the best position to identify a suitable person to administer justice between them, and their autonomy in doing so is subject only to relatively few limitations resulting from (i) the principle of equal treatment; and (ii) the requirement of independence and impartiality. Moreover, it is accepted wisdom that the choice of a suitable presiding arbitrator can be decisive, as they will play an essential role in conducting the arbitral process and, perhaps more importantly, in preparing the final award.
If it is in the parties’ interest to select the presiding arbitrator by agreement, how, then, can they seek to do so effectively?
The Vienna Conventional List Approach
The traditional approach to finding a mutually acceptable candidate involves the exchange of candidate lists based on an individually agreed procedure. Surprisingly little guidance is currently available on designing such a procedure, and no generally recognised standard or default mechanism exists.
In an attempt to reflect known approaches and formulations which have been developed and used by practitioners across various jurisdictions over time, we propose a draft template agreement that can be adapted to suit a wide range of arbitration scenarios. In a nod to the authors’ home jurisdiction and the landmark international conventions once struck there, the procedure is referred to as the Vienna Conventional List Approach (“VCLA”).
Objectives in making a selection
Any procedure for selecting a presiding arbitrator should be oriented towards a number of objectives that typically remain common to the parties despite their otherwise adverse positions. The VCLA is designed to offer an adequate balance between these objectives:
- Legitimacy. The fairer the selection procedure is perceived by the parties, and the more all parties are involved in the selection, the higher the acceptance of the presiding arbitrator and their practical authority among the parties. Ideally, the selection procedure will strengthen the parties’ confidence in the appropriate conduct and integrity of the proceedings and reduce the likelihood that a challenge of the relevant arbitrator or the resulting award will be attempted.
- Predictability. The parties should avoid unwanted surprises during the tribunal constitution phase to the furthest extent possible. Having all members of tripartite tribunals selected by the parties is the best way to do so in and of itself, but even greater predictability can be achieved by defining clear time limits and objective criteria which all candidates must fulfil in order to be eligible for presiding arbitrator.
- Effectiveness. Any procedure should aim for the constitution of a tribunal that is capable of collaborating productively and managing the arbitration effectively. Suitable criteria to ensure a high level of effectiveness and predictability may include the candidates’ national neutrality, language capabilities, education, professional qualifications and a diverse gender, age and/or geographical background.
- Efficiency. It is crucial for parties to keep sight of the overarching objective of efficiency in selecting the presiding arbitrator. No matter the specificities of the procedure chosen, it should be efficient in terms of time required and, consequently, cost incurred. This relates both to the process of negotiating an appointment procedure and to the process of carrying the procedure out to its conclusion. Only an efficient procedure can prevent that one of the key benefits of arbitrating a dispute, the freedom to select a “judge of one’s own choice”, ends up causing unnecessary delay and expense.
- Finality. Any selection procedure must involve the commitment of all parties to submit to the outcome of the procedure and should ensure that priority is given to an individual desired by all parties. Where there is no match between the parties’ respective candidate lists, or the procedure comes to a halt for other reasons, the parties should provide for a secondary mechanism to resolve a potential deadlock.
To be clear, we do not suggest that the VCLA be appropriate in every arbitration. However, it is the authors’ hope that – by essentially codifying language setting out a procedure that “works”, and that can be relatively easily adapted to reflect different arbitration settings and a party’s individual weighting of objectives – the VCLA can serve as a useful starting point for parties that seek to effectively exercise their right to jointly select their presiding arbitrator.
For a more detailed discussion of available options and the relevant legal background, see our article in the latest issue of Arbitration International.
A full copy of the VCLA for use in arbitrations under the 2021 Arbitration Rules of the ICC is available for download here and below. A version that is aligned with the Vienna Rules 2018 can be accessed here.