In international arbitration, arbitrators are expected to act impartially, ethically, and in accordance with the rules of the relevant arbitral institution or the applicable arbitration laws. However, instances of alleged misconduct, such as bias, conflict of interest, failure to disclose relevant information, or procedural errors, can raise questions about an arbitrator’s accountability. While arbitrators enjoy a degree of immunity, there are circumstances under which they may be held accountable for their actions, and legal avenues may be available for parties to challenge or sue an arbitrator for misconduct.
One of the most serious forms of misconduct is when an arbitrator is biased or fails to disclose potential conflicts of interest, leading to a lack of impartiality.
Arbitrators must follow the rules of the arbitral institution, the applicable arbitration laws, and the agreement between the parties. Deliberate disregard for these rules or procedural fairness can be grounds for misconduct.
Arbitrators are required to disclose any potential conflicts of interest, such as personal, professional, or financial ties to any party involved in the dispute. Failure to do so can lead to allegations of misconduct.
If an arbitrator exceeds their authority, for instance, by making decisions outside the scope of the arbitration agreement, it may be considered misconduct.
In some cases, extreme delays or negligence in rendering a decision or in managing the arbitration process can be viewed as misconduct.
Arbitrators generally enjoy a degree of legal immunity for their decisions, which protects them from being sued for errors of judgment or decisions made within the scope of their arbitral authority. This immunity is in place to encourage impartial decision-making without fear of personal liability.
However, immunity does not cover acts of misconduct or gross negligence. In such cases, arbitrators can be held accountable if their actions are found to be outside the scope of their function or if they violate the rules governing the arbitration process.
In most jurisdictions, parties can challenge an arbitral award in court on limited grounds, such as if there was misconduct or a serious procedural error that impacted the fairness of the process. Grounds for challenging an award under the New York Convention include:
A party may request judicial review of the arbitration award in a national court if they believe an arbitrator's misconduct has affected the decision. However, the grounds for judicial review are typically narrow, and courts are reluctant to intervene in the merits of the arbitration.
Some arbitration institutions have specific procedures to address allegations of misconduct by arbitrators. For example, the International Court of Arbitration (ICC) has an advisory body that handles ethical issues involving arbitrators.
In rare cases, arbitrators can be sued for civil liability if their actions are deemed grossly negligent or outside the scope of their authority. However, this is an extreme measure and typically occurs when the misconduct is severe and has resulted in significant harm to the parties involved.
Arbitration institutions, such as the ICC, London Court of International Arbitration (LCIA), or Singapore International Arbitration Centre (SIAC), may investigate allegations of misconduct. While these institutions do not typically have the authority to directly discipline an arbitrator, they can remove the arbitrator from the panel or take other steps to ensure the integrity of the process.
Many institutions maintain codes of conduct and ethical guidelines that arbitrators must follow. Violating these standards can lead to an arbitrator being removed from future panels or barred from participating in arbitration proceedings under the institution’s rules.
If a party believes that an arbitrator has committed misconduct, they should first raise the issue with the tribunal, typically in writing. This may prompt the removal or replacement of the arbitrator if the misconduct is deemed serious.
If misconduct is suspected, parties can request the removal of an arbitrator in accordance with the arbitration rules of the institution. This may require showing that the arbitrator's actions have prejudiced the fairness of the proceedings.
If the arbitration award is issued, a party may challenge it in court, citing arbitrator misconduct as one of the grounds for appeal. This could result in the award being set aside, although the court will typically only intervene in the most extreme cases.
If an arbitrator is found guilty of serious misconduct, they could face disciplinary action from the arbitration institution, such as being banned from serving on future arbitration panels or removed from an ongoing case.
Additionally, some national legal systems allow professional bodies or bar associations to take action against arbitrators for unethical behavior or misconduct.
Imagine a multinational corporation in the U.S. and a supplier in Europe involved in a cross-border dispute over breach of contract. The arbitrator presiding over the case has a longstanding business relationship with the U.S. corporation but fails to disclose this conflict of interest to the parties.
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