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International Arbitration Trends That Will Move Forward in 2017

16 January 2017 Features

In a year that saw significant change to the world’s political and social landscape, 2016 also brought many proactive global initiatives to the arbitral community. The following trends are likely to grow in 2017.

Diversity

International arbitration has long been referred to as an ‘Old Boys’ Club’. With a view to change this historical perception, 2016 paved the way to promote diversity on arbitral tribunals. While diversity of all types has been addressed, the main focus in the arbitration community revolved around gender diversity.

At the end of 2015, the Equal Representation in Arbitration Pledge was launched, aiming to increase the number of female arbitrators within the international arbitration community.

As a collaborative effort between global representatives of corporate entities, states, arbitral institutions, arbitration practitioners and academics, the Pledge aspires to be a first step in achieving more equal representation of all under-represented groups within the arbitration field.

By the end of 2016, the Pledge gained 1604 signatories, ranging from individuals to the world’s most prominent law firms and arbitral institutions.

This initiative will carry on in 2017, with a view to build on what has been achieved in the past year. In this respect, a recent survey conducted by Berwin Leighton Paisner LLP shows that 56% of the participants listed diversity as one of the main considerations when shortlisting potential candidates for arbitral appointments, but 80% thought that there were too many “white, male arbitrators”.

Of the 39% of participants who had sat as an arbitrator, 23% indicated that they had lost appointments because of their gender, 14% because of their nationality, 6% because of their ethnicity and 3% because of their religion, with 28% thinking they had lost appointments because they were considered too young.

Additional progress needs to be made in this field, because parties, as the ultimate users of arbitration, need to become more actively involved. Essentially, the parties are the ones to choose the arbitrator and some have shown reluctance to appoint new names.

Transparency

In the investment arbitration arena, arbitral institutions have started to live-stream oral hearings in investment proceedings.

This is a trend that has yet to see further development in 2017, as it has not been a very straightforward process.

Such an example can be seen in the ICSID Case No. ARB/14/24, United Utilities (Tallinn) B.V. and Aktsiaselts Tallinna Vesi v Republic of Estonia, where the hearing on jurisdiction and merits was transmitted via internet feed in November 2016. Parties generally do not like to make their claims public, with some States being more willing than others to make proceedings publicly available.

The main reason is that parties to investment arbitration proceedings perceive a clash between the highly valued confidentiality principle and the need for transparency.

Last year brought a shift towards transparency in the field of commercial arbitration as well, with many institutions updating or changing their rules to reflect this trend.

Such an initiative has been successfully implemented by the ICC, which publishes on its website the names of the arbitrators, their nationalities, their method of appointment and which arbitrator is the tribunal chairperson for cases registered after 1 January 2016. More arbitration institutions are expected to follow the same initiative in 2017.

Aside from the initiatives conducted by arbitral institutions and law firms, transparency is also at the core of the Arbitrator Intelligence database. Launched in 2014, Arbitrator Intelligence has been an ongoing project, increasing in popularity while benefitting from support from practitioners worldwide.

Essentially, Arbitrator Intelligence aims to help overcome the challenges faced by younger practitioners as well as law firms in developed and developing jurisdictions that do not undertake arbitration cases on a regular basis, whether due to their size or lack of international arbitration in the relevant jurisdictions.

In response to the challenge to the legitimacy of international arbitration, Professor Catherine Rogers established Arbitrator Intelligence, a tool to provide users with a free database of all possible choices of commercial and investment arbitrators as well as information about them.

Ethics in International Arbitration

Ethics in international arbitration has been a recurring topic in 2016, bringing a significant number of arbitrator challenges. This has caused a proactive behaviour on behalf of arbitral institutions that aimed to impose a higher threshold in the scrutiny process.

This area will still be of interest in 2017, as most of the arbitrator challenges were due to the fact that, occasionally, arbitrators fail to disclose potential conflicts of interest. Different institutions have provided guidance on the matter, however there is room for further development.  

Sabina Adascalitei LLB, LLM, MCIArb
Research and Academic Affairs Coordinator
sadascalitei@ciarb.org