Independence and Impartiality of Arbitrators: 3 Issues

Article excerpt

A. INTRODUCTION

Independence and impartiality of arbitrators are derived from their essential obligation towards the arbitrating parties, which is the adjudication of the dispute submitted to their jurisdiction in the arbitration agreement. This obligation is an accepted principle of arbitration laws in Europe.1 The relationships between the parties to the arbitration and the arbitrators themselves are in the nature of a contract, as can be deduced from the bilateral source of an arbitrators appointment, even when nomination is made at the initiative of one party, such as the nomination of a co-arbitrator. Thus, the choice of an arbitrator by one party is part of a contractual scheme between the parties and the arbitrator.2

The United Kingdom Supreme Court highlighted in Jivraj v. Hashwani3 that, "[i]t is common ground, at any rate in this class of case, that there is a contract between the parties and the arbitrator or arbitrators appointed under a contract and that his or their services are rendered pursuant to that contract." As explained by the Cour de cassation in a judgment delivered in 1972 in the Consorts Ury case in France, "[t]he appointment of each arbitrator is not a unilateral act, even when initiated by one party alone. [It] results from the common intention of the parties, who take into account the qualities of the person whom they call upon to judge their dispute."4 Similarly, in Raffineries de Homs, the Paris First Instance Court decided that "[a]n arbitrator - who is a judge, not a representative of the party that appointed him - must derive his judicial powers from a single, common manifestation of the intentions of the parties to the arbitration proceedings, even though his appointment may have been initiated by one party alone."5

This view is also propounded by Phillipe Fouchard in his Report to the ICC on the status of arbitrators in 1995:

[t]he settlement of a dispute is not an undertaking or a work as such. Admittedly, the arbitrator is bound to comply with [the] arbitration agreement and rules that the parties have adopted, but the parties are not allowed to go so far as to give him instructions on the manner in which he is to conduct the proceedings, less still in relation to the direction or content of his decision.6

The judgment of the United Kingdom Supreme Court clarifies in Jivraj 7 that an arbitrator is not a person employed under a contract to do work within the meaning of the Regulations 2003 on Employment Equality. The Court states,

[t]he arbitrator is in critical respects independent of the parties. His functions and duties require him to rise above the partisan interests of the parties and not to act in, or so as to further, the particular interests of either party. As the International Chamber of Commerce ("the ICC") puts it, he must determine how to resolve their competing interests. He is in no sense in a position of subordination to the parties.8

The Fouchard Report further stresses that, "[s]uch a classification [as an agency contract] is arguable, since the very purpose of an agency is to grant the agent a power of representation. Yet, the arbitrator does not represent the parties, less still the party that appointed him; the power he is granted is inherently judicial."9 The Court of Appeal of Paris also held that far from being an agent of the parties, an arbitrator is an adjudicator.10 Fouchard suggests that the contract between the parties to the arbitration and the arbitrators has a sui generis form: "[I]ndeed the contractual relationship formed between the arbitrator and the parties cannot be categorized as a known type of civil contract. This contract contains the mixed characteristics of arbitration - contractual in source, judicial in object."11 His views on the nature of the contract have been endorsed in national case law. Characterization of the contract as a sui generis form of agreement has been adopted by the Court of Appeal of Paris12 and in the concurring opinion of Lord Mance in Jivraj v. …