It is indeed a great privilege and a real honour to be asked to give
the 14th Clayton Utz/Sydney University International Arbitration
lecture this evening in one of my favourite cities. I am extremely humbled to
follow in the footsteps of such eminent past speakers.
In those fourteen years we have seen many changes in international
arbitration as it moves to adapt to the increased global demand. Changes both
in relation to international commercial arbitration and also in investor-state
arbitration. But at its core remain the same principles and expectations which
attracted parties to this mode of dispute resolution many centuries ago.
My topic this evening addresses some of these expectations and
enquires whether international commercial arbitration is becoming too
unpredictable, particularly in the sense of outcomes, and asks whether this is
a price parties are nonetheless prepared to pay in order to obtain a bespoke
method of dispute resolution. In particular I want to consider the impact of
this exponential growth of international arbitration in recent years with the
resultant involvement of many new players in the field, both as arbitrators and
practitioners emanating from many different jurisdictions.
International commercial arbitration, a consensual process, is
chosen because disputants want a private, flexible, speedy and effective means
of resolving their disputes with significant input from the parties and the
relative ease of enforcement under the New York Convention.
Nonetheless, however much we, as lawyers, strive to perfect the
arbitral process, what parties and businesses actually want is to avoid the
process altogether or at least to settle the dispute early, once arbitration
has been commenced, often to preserve business relationships and commercial
reputations. There are also the practical matters which disputes raise for
corporations, such as how large a reserve should be made in the accounts; how
the likelihood of success or failure will impinge on other elements of the
existing and future business; whether managerial heads should roll; and what
will be the cost.
Such realities and the desire for reasonably predictable outcomes
are something that we, as practitioners, often lose sight of in our endeavours
to make international arbitration as a process as efficient and effective as
possible. Importantly, these business considerations militate strongly in
favour of legal advisers being able to advise their clients, within reasonable
parameters, of the chances of success or failure and how much they may be
liable to have to pay or are likely to receive.
It is clear that a lawyer’s subjective assessment of the factual and
legal merits of a case can only be part of the answer. For the question is not
how the lawyer will himself or herself perceive the case, but how the lawyer
can predict how the tribunal will perceive the case having heard both sides.
In other words, although the outcome of any arbitration – or for
that matter any case - depends on many factors, including the evidence and
skill and persuasion of the legal representatives, this exercise also requires
an assessment of how the particular tribunal will assess and react to the
evidence and submissions.
I shall start by discussing more precisely what I mean by
predictability. Prediction pervades every aspect of our life, yet we rarely
stop and dwell on it. It is a statement of what will or may happen in the
future, but it cannot be a certainty. It usually is dependent on an act of a
third party or some unknown or uncertain future event. It takes many forms.
||The global economy is dependent on a variety of predictions from predictions as to international global cycles, to predicting currency fluctuations and other economic indices.
the professional arena, doctors predict chances of recovery; engineers whether
structures will withstand certain loads, and lawyers outcomes of cases.
the professional arena, doctors predict chances of recovery; engineers whether
structures will withstand certain loads, and lawyers outcomes of cases.
the other end of the scale weather forecasters predict the weather, writers of
horoscopes predict what will happen to you next week.
All these predictions are based on the individual’s assessment of
the facts and his or her experience of similar situations - and sometimes,
prejudices. A critical component to forecasting will often be consideration of
evidence of past behaviour, statistics or other historical information.
Legal opinions whether as to merits or damages are no different. Legal
advisers do not always get it right. What is clear is that even allowing for
the fact that clients do not always take advice, there are a large number of
lawyers, particularly on the losing side, who get it wrong. Or as Voltaire put
it: “The history of human opinion is
scarcely anything more than the history of human errors.”
There have been a variety of studies which show that expertise and
experience do not necessarily make someone a better reader of the evidence.
Philip Tetlock in his book “Expert Political Judgment: How Good is it? How can we know?”
found that distinguished experts of political science and economics not only
fare no better than less specialised predictors in reading emerging situations,
but also that the more over-confident the expert, the less likely he or she was
to be right. It is also clear that some people are better forecasters than
others and some are “superforecasters” as Philip Tetlock so describes them in his latest book.
The question therefore is whether in the arbitral context the
difficult task of predicting or forecasting outcomes is becoming even more
difficult? I propose to address the subject under three main headings:
i. First, the
increasingly wide diversity in the potential make-up of tribunals and how
tribunals are chosen;
ii. Second, the
discretionary powers of tribunals in its widest sense; and
the decision making process of tribunals and the dynamics at play in such
There is, of course, considerable overlap between these three
It is self-evident that different tribunals will react in different
ways. As Roy Cohn, a famous US attorney, once said “I don’t want to know what the law is, I want to know who the judge is.”
Where commercial disputes are determined before national courts, at
least in jurisdictions such as yours and mine and many others - although
unfortunately this is not always the case - a party and its legal team can
expect judges of a certain quality, specialism, experience, and integrity to
hear their commercial disputes. The lawyers practicing before them will know
the judges either personally or by reputation and can read their judgments.
That does not mean that the result before national courts is predictable
– far from it – but save in countries where the judiciary is corrupt, of a low
standard or a mouthpiece of its government, there is likely to be a surer
foundation on which to assess how a single judge or appellate court will react.
In contrast to national courts, the variety of decision makers in
international arbitration is potentially infinite. Whereas historically there
was a smaller body of well-known and experienced arbitrators, variously
pejoratively described as the “mafia”
or the “elite”, and perceived to be a
few well-known arbitrators from the West trying disputes between Western
countries, today we find tribunals composed of arbitrators coming from an
increasingly wide trans-global, multi-ethnic and diverse gender, pool. This
wider diversity is to be hugely welcomed, but in its wake it inevitably makes
outcomes less predictable.
Statistics as to new players in the arbitral field, both arbitrators
and lawyers, are largely anecdotal, but there is some statistical support from
LCIA and ICC figures for an increase in the number of first time arbitrators
and of arbitrators coming from a wider range of countries, including third
As for the arbitral lawyers, anyone attending arbitral conferences could not
but notice their increase in size and frequency, as well as the presence of
many unfamiliar legal faces from firms of lawyers from every corner of the
globe openly admitting that they want to get involved in arbitration or sit as
The typical three person arbitral tribunal provides a huge potential
for every kind of diversity. Let me list ten examples.
||The members of the
tribunal may vary as to their experience of arbitration and its process or even
dispute resolution in general. Sometimes an arbitrator may be completely new to
the field and be known only to the party or the party’s legal representative
appointing him or her.
||The members of the tribunal may come
from different cultures and have different languages as their mother tongue.
may be qualified in different laws, whether civil or common law: and not
necessarily that of the law of the seat or the contract.
may vary as to industry specialism. They may not even be lawyers, but could be
accountants or engineers.
may vary as to their ability as lawyers and arbitrators of fact.
may have different views as to their roles and their attentiveness.
||There will be a mixture of personalities from the quiet and
thoughtful to the loud and forceful.
may have different availability contributing to the speed with which the
arbitration can be conducted, partly ameliorated by new institutional rules on
disclosure of availability now demanded, for example, by the ICC and LCIA.
the composition of the tribunal is likely to mean that the three members may
not only have not sat with each other before, but may not even know each other
or anything about each other before sitting together as a panel, save what is
on their curriculum vitae.
Thus assessment of how a tribunal as an entity or homogenous whole
will react may at times be very difficult to predict. Importantly,
international arbitration is a global form of dispute resolution. Tribunals are
increasingly likely to include new players from less sophisticated
jurisdictions and emerging markets such that the percentage of tribunals where
all or the majority of the arbitrators are well known and experienced is likely
to decrease over time. Any discussion of the topic cannot therefore be confined
to the more cosy world of familiar faces and reputations with whom many of this
audience are familiar and in which arena we mostly tend to operate. The
landscape is much wider.
What remains significant however is that given that the past
behaviour of decision makers is clearly very relevant to predicting outcomes,
this will often be a very limited tool in arbitration where there is little
knowledge as to how a particular three person tribunal will react. Yet
prediction has an added imperative in arbitration over litigation because of
the finality of the decision, save in very limited circumstances.
Such limitations are one of the reasons why parties desire to have
as much control over the constitution of the tribunal as they can.
Choosing a Tribunal
Gary Born states a common view that:
“…one of the
defining characteristics and attractions of the arbitral process is the
parties’ ability to select a tribunal that will decide their dispute in a
competent, expert manner, rather than relying on random selection of a national
But while this may be the ultimate aim, I question whether this is
always the case. For the choice of an international arbitral tribunal may be
far more random than had been originally envisaged by the parties.
The very recent 2015 Queen Mary/White & Case Survey
indicated that 38% of respondents regarded the ability to choose arbitrators as
one of the three most valuable characteristics of international arbitration. Yet
in its 2010 survey 50% of those surveyed were disappointed with the
arbitrator’s performance in various respects. Even allowing for sour grapes of
the losing party, this is a high percentage.
There is no uniform method by which parties can choose their
tribunal in international commercial arbitration. The variety is infinite. Although
rare, the parties can even specifically choose named arbitrators.
Often, not enough thought is given to how a tribunal is to be
formed. Parties at the end of long and hard negotiations, are reluctant in the
euphoria of a successful deal to devote much thought to what might happen if it
all goes wrong and many such clauses are incomplete or pathological clauses.
Sole arbitrators are either the result of a joint choice or an
institution choice and I will not dwell on those as, on the whole, the larger
cases are dealt with by three person tribunals. Similarly I will not discuss
court appointments made to fill vacancies or meet defaults. However, for
tripartite tribunals, there are many variants.
By far the most common method, according to the Queen Mary/White
& Case study in 2012, about 75%, is for the parties each to nominate its
own arbitrator and the co-arbitrators then to nominate the chair or presiding
The most common alternatives are for
each party to nominate its own arbitrator and an institution nominates the
chair or for an institution to nominate and appoint all three members of the
tribunal. Inherent in all three methods is the
assumption that each party will have an equal stake in forming the composition
of the tribunal.
Parties and their legal advisers go to considerable lengths to
choose their appointees or to suggest criteria if the appointment is to be
institution based. Short of knowing the individual concerned, parties look to
directories and other information about potential candidates. Sometimes a party
will even hire investigators at huge expense looking for an individual’s legal
predilections to determine whether he or she is likely to be sympathetic to and
supportive of its case, short of impartiality, so far as this information is
available. On other occasions parties may interview the potential nominees
within clearly defined guidelines, such as not discussing the merits of the
case or the candidate’s views, but asking about such matters as the potential
arbitrator’s “expertise, experience,
By so nominating its arbitrator a party may feel it has some input
into the tribunal’s composition, but the extent to which this can determine the
outcome is probably illusory. At best it will ensure that it has one decision
maker of a certain quality and experience whom it believes may be sympathetic
to its case. But one out of three is not great odds for prediction.
I say that the extent of one party’s input may be illusory for three
appointed an arbitrator has to be independent and impartial. He or she cannot
be the advocate for the party. In fact he or she should forget which side made
the appointment. In their new 2014 Rules the CPR have introduced a screened
selection procedure which parties can opt into whereby the arbitrator never
knows which party originally selected him or her.
Some argue that party appointed
arbitrators should go further and ensure that the case of their appointing
party is properly put or that they should assist with cultural issues, whilst
maintaining their impartiality – a so-called middle ground.
However if the party appointed arbitrator over-steps
the mark and is not impartial, then in any event his or her views are likely to
be cancelled out by the other side’s arbitrator.
Of course, there are many cases where both sides appoint equally
experienced arbitrators: but there is no guarantee, particularly as the field
becomes larger. Moreover, a respondent may be at an advantage, because at the
time its arbitrator is nominated, it is likely to know the name of the
arbitrator the claimant has nominated, such name usually appearing in the
Request for Arbitration.
Second, the arbitration clause is predicated on the fact that the parties
to the arbitration will be the named parties to the contract, but this, of
course, is not always the case. Frequently non-signatories are brought in as
claimants and respondents and issues may or may not arise as to jurisdiction.
Nonetheless they remain claimants and respondents for the purpose of the
arbitration and the award and more particularly for the purpose of nominating
an arbitrator. Joint parties, whether or not non-signatories, may have to make
a joint choice which means compromise or, if they do not represent collectively
two separate sides, the institution appointing the tribunal, thus diluting each
party’s direct input into the choice of its own arbitrator.
Third, and critically, the assumption of equal input to the composition
of the tribunal ignores the importance of the chair or presiding arbitrator. It
is this third feature which I believe is not given sufficient prominence. There
appears to be little research or academic writing on the impact of the chair or
presiding arbitrator on arbitral decisions. But the chair or presiding
arbitrator is crucial to the arbitration. Let me give five examples:
||It is the chair who
usually dictates the pace of the arbitration as he or she does most of the
drafting of the procedural and other orders and, more especially, the award or
the extent of prior deliberations, the award will usually be in the words of
the chair and chairs are often given considerable discretion as to the way the
award is written. Moreover, depending on the conscientiousness of the
co-arbitrators, the chair’s work may not necessarily be fully cross checked.
co-arbitrators may delegate day to day procedural decisions to the chair alone
with the agreement of the parties and in any event in practice the chair tends
to have the last word in procedural decisions unless fundamental. 
This can be subject to revision by the full tribunal.
is the chair who sets the whole tone of the arbitration and conducts the
it is the chair or presiding arbitrator who manages the co-arbitrators. An
industrious chair and two less industrious, or even lazy, co-arbitrators - or
more particularly inexperienced or novice co-arbitrators who will often pay
deference to the chair, can mean the chair has a disproportionate influence or
impact on decisions.
However, despite the importance of the position and the presiding
arbitrator’s pivotal role, the procedure for selecting a chair of a tribunal
where an institution is not involved, is in my experience haphazard and
unstructured with no universal practice as to what process is to be used for
what type of case or situation. The only apparently accepted view is that,
unless otherwise agreed by the parties, the presiding arbitrator should be a
different nationality from the parties.
The process is usually dictated by what the party-nominated co-arbitrators
think appropriate, and each may have a different view on this, unless the
parties have previously indicated a preferred approach, which is less common
than one might expect. Often the choice is determined by the need to choose a
chair by a certain deadline in the arbitration agreement or to enable the
tribunal to be constituted so as to make interim rulings.
One of the questions which remains unclear is whether in choosing a
chair, the co-arbitrators should act as their appointing parties’ agent or act
as principals in their own right. The accepted view is that parties should not
have a veto on appointments other than for good faith reasons such as conflicts
or lack of experience. But to what extent should they influence the choice made
by the co-arbitrators?
The IBA Guidelines on Party Representation permit communication between
the parties and party-nominated arbitrators on the choice of presiding
arbitrator, although the 2014 LCIA Rules require notification to the Registrar
before this is done. On the other hand,
the IBA Guidelines permit direct communication between the parties and
candidates for presiding arbitrator only where all parties agree.
Where an institution is involved and agreement is not possible then
the default position is usually for the institution to choose the chair.
According to ICC statistics, in about 70% of cases agreement is
reached on a presiding arbitrator, but the issue in the context of
predictability is not the fact of agreement, but who is chosen and by what
method. As many of you here will likewise have experienced, it can include any
of the following. It should not, of course include one arbitrator communicating
with the party nominating him or her without the co-arbitrator being aware of
having cleared conflicts and ensured that the chair is not the same nationality
as the parties, just choose a chair between themselves without resort to the
parties. This may mean a narrow base of candidates.
party appointed arbitrators discuss requirements for presiding arbitrator with
their respective appointing parties either by e-mail or on the phone or in
person and then make a choice.
third scenario involves using candidates’ names and this brings up the issue of
lists whether or not a prior discussion has taken place.
the arbitrators jointly produce a short list and then ask each party to
indicate its order of preference without this being disclosed to the other
side? If one side gets its second choice and the other its fifth is this
the party appointed arbitrators just present the parties with a list and ask if
there are any principled objections?
ask the parties to try to agree a short list?
the arbitrators ask each side independently to produce a list, but this is even
less likely to produce a candidate on both lists and if a party is chosen from
one list and not the other, then one side would be justifiably dissatisfied.
rounds should the party appointed arbitrators permit.
the party appointed arbitrators indicate that if agreement cannot be reached
they will impose someone?
Importantly there is also often an imbalance where one co-arbitrator
is new to the field and may be swayed, by lack of knowledge or otherwise, by
the other co-arbitrator’s choice as to arbitrator thus in practice diminishing
the input of one party. The reality is that the chair is often a compromise, or
if no agreement can be reached because of tactical manoeuvres or otherwise,
then the decision is left to an institution or occasionally to the court.
It would appear that the method of choosing a third arbitrator is a
hangover from when there were umpires, when the umpire did not descend into the
decision making process unless and until the party appointed arbitrators had
19th century case law 
makes it clear that although the two arbitrators were expected to use their
judgment to concur in and choose, rather than leave to chance, the
identification of a third person as the umpire, the parties could agree to let
co-arbitrators choose the umpire by any method, even in one case by drawing
lots out of a hat, provided the candidates were fit and acceptable.
Thus, whether the chair is appointed by the party appointed
arbitrators or the institution, the actual parties, or realistically their
external counsel in most cases, may have no or only limited input into the
central role of the chair and no or only limited knowledge of his or her
experience and capabilities.
If past behaviour of the tribunal as a whole and its individual
components is a key indicator of prediction then this is an important element
in the prediction puzzle which lawyers have to grapple with. There is a limit
to what a legal adviser can glean from a perusal of directories as to how a
three person tribunal will gel and react. It seems to me that this lack of
uniformity of procedure as to appointment of chairs of panels or presiding
arbitrators is a lacuna to which the arbitral community should give more
prominence and I shall come back to it when looking at the way forward later in
Let me move now from diversity to the second element of prediction,
discretion. Roscoe Pound described judicial decision making as “a sort of judicial slot machine”. So
how does unpredictability impinge on the arbitral and decision-making process? One
of arbitration’s great assets is its flexibility to adapt the process to meet
the case in question untrammelled by prescriptive national court rules.
In the context of international arbitration flexibility is often a
synonym for discretion. Most institutional rules give tribunals wide powers as
to the way in which they conduct the arbitration, subject to the agreement of
the parties and any mandatory national laws of the seat.
The increasing number of such rules is reflective of the expansion
of international arbitration and they are often geared to their own particular
culture and users. Their universal purpose is to provide an efficient, speedy,
cost effective and fair procedure.
But not all arbitrations are conducted under institutional rules:
many are ad hoc and thus even the limited framework provided by institutional
rules is absent. Guidelines such as the IBA Guidelines on the Taking of
Evidence and Party Representation provide additional attempts at a more uniform
procedural approach crossing borders, but their interpretation at the end of
the day will vary from tribunal to tribunal. Experienced arbitrators will be
familiar with how international arbitration is conducted, but we have all seen
litigation lawyers who are unprepared to leave behind their national civil law
rules or US trial lawyers still finding it difficult to differentiate between
an arbitration and a jury trial.
Discretion can be exercised in various contexts.
First, there is what one can term basic procedural discretion, most
of which decisions will have no real impact on the end result such as
extensions of time. Then there are those discretionary decisions which are more
significant in terms of prognosis of outcomes, a sort of substantive
discretion, such as whether to allow expert evidence; disclosure; consolidation
and joinder of parties permitted by some institutional rules; preliminary
issues and bifurcation; the power to make peremptory orders and the powers to
continue in the absence of a respondent; and the granting of conservatory and
Finally, there are those substantive decisions which may be critical
to the ultimate outcome or result and have a discretionary element, such as
determining the “appropriate” law to
govern the substantive merits of the dispute if the parties have failed to
agree or the interpretation of imprecise contractual and statutory language.
Discretion can be widely or narrowly interpreted. Take for example
the IBA Rules of Evidence and many institutional rules which leave it to the
arbitrator to determine the admissibility, relevance, materiality and weight of
the oral and documentary evidence. A US lawyer, particularly a trial lawyer who
has not sat as an arbitrator before is likely to give a much wider
interpretation to such rules than an experienced civil arbitral practitioner. The
result of such diversity of legal cultures is that arbitrators often tend to “transnationalise” their approach to such discretionary
In the context of the exercise of any of these discretionary
decisions and in relation to the
ultimate conclusory decision on the factual and/or legal merits, the
inter-play and dynamics of the members of the tribunal is therefore critical.
Decision Making – dynamics
So let me turn to my third element of prognosis: the dynamics of
tribunals. I can only touch on this as it is a huge subject. The assumption
that judges or arbitrators act purely rationally and logically and make
rational choices has been questioned, as it really explains only part of the
judicial decision-making process.
While most studies undertaken to date are aimed towards counsel’s
better understanding of how to present a case before a judicial or arbitral
tribunal, these factors also impinge on the ability of lawyers to advise their
clients as to outcomes. Studies of judicial and arbitral behaviour based on
cognitive science and behavioural psychology
show that judicial decision making comprises both the conscious deliberative
process and the intuitive sub-conscious element and there is nothing to
indicate that arbitral decision making is any different.
As Benjamin Cardozo said: while “we
[as judges] may try to see things as objectively as we please…we can never see
them with any eyes except our own.” All arbitrators bring to the
deliberation table their knowledge and experience of their own cultures and
general experiences of life and social inter-action and with it the unconscious
and subconscious influences on decision-making and behavioural tendencies of
individual arbitrators. These studies show the presence of:
||First, heuristics or
mental shortcuts that we all make to resolve complex situations which in turn lead
to mistakes. Examples are over-reliance on hindsight in determining probability
and, in calculating damages, anchoring from a suggested figure;
the propensity for decision makers to create narratives or stories to
supplement the evidence with inferences; and
the various cognitive biases and prejudices we all have, but do not necessarily
appreciate or acknowledge. As Luther Burbank said: “It is well for people who think to change their minds occasionally in
order to keep them clean. For those who do think, it is best at least to rearrange
their prejudices once in a while.”
Of particular relevance to international arbitration is cultural
bias. Parties will often appoint someone as an arbitrator whom they believe
understands their own culture, though the presiding arbitrator is usually
culturally neutral. Individuals with different backgrounds and life experiences
will interpret the same issues or evidence differently based on different
systems of beliefs which in turn can affect outcomes. Thus where there are
balancing acts to be made, different arbitrators will attach different weight
to different matters. It is difficult to eradicate totally the norms in one’s
own legal system.
There has also been considerable psychological research on the
impact of group decision making compared with individual decision making in the
context of US juries and judges’ decisions. The
conclusions were largely inconclusive depending much on the various factors
involved in each experiment. But two themes did emerge.
First, where the error of one decision-maker is obvious and could
easily be demonstrated such as calculation of quantum, the other member or
members of the group would point it out. However, where the issue was complex
or involved a value judgment the group tended to produce a more extreme outcome
than that which would have reflected the members’ pre-deliberation preferences.
The explanation was that people strive to perceive themselves and to be
perceived by others favourably and if they see the view moving in one direction
will adopt that view, but take a more extreme position such that the initial
view is strengthened as a result of group deliberation. On the other hand, it
can be argued that diversity counters prejudice.
It is true that as Benjamin Franklin said: “If everyone is thinking alike, then no one is thinking”. But even
thinking arbitrators may reach different results depending on the make-up of
the tribunal: the nature of the dialogue, the cross-cultures, their inner and
sub-conscious beliefs and prejudices; and the inter-relationship and
familiarity between the members of the panel which in turn emanates from the
characteristics and culture of each arbitrator.
Such dynamics add further uncertainties as to the ultimate outcome. So
where does that leave us?
The rise of international arbitration, like the sea’s incoming tide,
appears unstoppable, yet those involved in disputes which surf its waves may
ponder to discern that outcomes may be increasingly unpredictable. Do we ride
the ocean of international arbitration regardless or do we pause to see if we
can predict more successfully where the ship will anchor? I venture to suggest
that the balance of advantages outweighs its disadvantages, but that does not
mean that it cannot be improved. Legal prediction will remain an art not a
So how can we reduce, if at all, the potential for increasing
uncertainty already inherent in predicting outcomes in international
arbitration given the increased diversity of tribunals and lawyers. Let me
examine briefly three options.
||First, the introduction of a
more robust appellate system to provide more uniformity. Currently appeals are
almost universally precluded save where there is procedural unfairness or the
absence of jurisdiction. England, exceptionally, allows a limited appeal on
points of law.
Ambrose Pierce described an appeal in law as “put[ting] the dice into the box for another
throw.” Over 75% of respondents to
the 2015 Queen Mary/White & Case survey were against introducing an appeal
mechanism. I believe that an appeal is inimical to the whole process based on
finality and the remarkable success of the New York Convention. If parties want to go through appellate
procedures then they should opt for national courts.
the provision of more reported redacted decisions by institutions. Given that
substantive legal issues will usually involve national law
such decisions are likely to be of benefit in predicting outcomes most often in
relation to challenges to appointment of arbitrators or procedural issues where
how a previous tribunal has acted may prove useful guidance, particularly where
some form of transnational law is applied.
But, as Professor Gabrielle Kaufman-Kohler found in
research for her Freshfield’s lecture in 2006, even
where past awards were put to arbitrators they tended to do what they wanted
with past cases and there is no clear practice. It remains doubtful therefore
how significant the absence of precedent really is in predicting outcomes, as
opposed to providing transparency, particularly with the increase in numbers of
institutions all providing redacted decisions on rule specific issues.
improvements in the method of appointing tribunals and in particular the
I am not a protagonist for an increase in institutional
appointments of tribunals, nor does this appear from studies to be what parties
actually want. By and large the procedure for appointment of party nominated
arbitrators works well and there are sufficient protections in place to ensure
that the arbitral nominating and appointment process is both fair and just.
However, the same cannot always be said for the chair or
presiding arbitrator. Again I would not
advocate that parties automatically relinquish the practice of the co-arbitrators
choosing the chair in favour of institutional choice, but there is not a
sufficiently universal acceptance of the need for prior consultation with the
parties or the method by which the appointment of presiding arbitrator should
be carried out. I will suggest three ways this can be achieved, but there are
parties can be more vociferous in demanding input into the choice of chair at
the outset of the dispute or with mutual agreement interviewing the prospective
candidates in accordance with accepted guidelines.
they can include in their arbitration clause a phrase after the statement that
the co-arbitrators shall jointly choose the presiding arbitrator such as “subject to prior consultation with the
the international arbitral community can and, in my view, should adopt a more
uniform approach. It has shown itself on many occasions to be able to provide
uniformity of practice, such as the use of Redfern Schedules or the provision
of detailed first Procedural Orders. It does not need more Guidelines. Even
experienced arbitrators do not invariably adopt a uniform practice and
inexperienced arbitrators or practitioners do not suggest it.
It should be common
practice for co-arbitrators, whoever initiates the list, to consult with the
party or parties who appointed them as to a chair or presiding arbitrator, save
in exceptional circumstances e.g. where there is extreme urgency to constitute
a tribunal. A chair whom both parties buy into may not necessarily produce a
more cohesive tribunal, nor guarantee to improve the certainty of outcomes, but
given the chair’s pivotal role, it will at least remove some elements of
uncertainty from the process and enable parties to have a more equal hand in
the ultimate composition of the tribunal. It arguably could making choosing a
chair more difficult, but default procedures exist if this happens.
Open-minded tribunals of experienced and knowledgeable arbitrators
who deliberate conscientiously are the aspiration; mixed cultures are
inevitable and to be welcomed; sub-conscious beliefs will still pervade
decisions and counsel will try to attune their arguments to the tribunal they
So let me conclude: Prediction of outcomes in international
arbitration is difficult. Does the increased diversity of tribunals with its
concomitant effect on deliberations and the exercise of discretion increase
this? The answer is probably yes, although it depends ultimately on the make-up
of the tribunal in question.
But at the same time there is no doubt, as evidenced by the huge
explosion in the numbers of arbitrations worldwide that parties will opt to
take that risk in favour of a tailored approach to the resolution of their
disputes and the other benefits of arbitration. It is a price they are prepared
This is a transcript of a speech delivered by Hilary Heilbron QC at the 14th Annual Clayton Utz / University of Sydney International Arbitration Lecture in Sydney on 25 November 2015.
statistics from the ICDR obtained by the author indicate that this may be on
the high side in relation to party appointed arbitrators (though not in
relation to the presiding arbitrator), but this may be because by choosing ICDR
the parties have bought into the list and rank procedure provided by Article
12(6) of the International Dispute Resolution Procedures 2014.