What Is the Replacement Procedure for an Arbitrator Who Resigns?

In international arbitration, it is not uncommon for an arbitrator to resign due to various reasons, such as health issues, personal conflicts, or concerns about impartiality. While the resignation of an arbitrator can disrupt the proceedings, arbitration rules are designed to handle such situations efficiently to ensure continuity, fairness, and the integrity of the arbitration process. The replacement of a resigned arbitrator must follow a structured procedure to avoid delays and ensure that the arbitration continues smoothly.

The Replacement Procedure for a Resigned Arbitrator

Grounds for Resignation

Arbitrators may resign due to personal reasons, conflicts of interest, or the perception of bias. They might also resign if they feel unable to carry out their duties impartially or due to external pressure. Once the resignation is submitted, it becomes the responsibility of the arbitration institution or tribunal to follow the replacement process.

Notice of Resignation

The arbitrator wishing to resign must submit a formal resignation letter to the arbitration institution and notify all parties involved in the dispute. The resignation should be in writing and include the reasons for the resignation (if necessary) to maintain transparency.

The arbitration institution may request a formal acknowledgment of the resignation and proceed with the next steps in the process.

Effect of Resignation on the Tribunal

When an arbitrator resigns, the composition of the arbitral tribunal is affected. If the tribunal is made up of three arbitrators (a sole arbitrator, or a three-member panel), the remaining members must assess the impact of the resignation on the progress of the case.

If a resignation occurs in a sole arbitrator case, the entire tribunal is effectively dissolved, and a new arbitrator will be appointed.

In a panel of three arbitrators, the resignation of one member usually does not invalidate the tribunal. However, the remaining arbitrators or the arbitration institution must proceed with the replacement process.

Steps in the Replacement Process

Replacement by Arbitration Institution:

If the arbitrator’s resignation creates a vacancy in the tribunal, the arbitration institution (e.g., ICC, LCIA, SIAC) will be responsible for appointing a replacement. The institution will either:

• Re-appoint a new arbitrator chosen in the same manner as the original appointment (e.g., by the parties, or by the institution itself if the parties cannot agree).
• If applicable, the appointment process will follow the procedures outlined in the arbitration agreement or institution's rules.

Appointment by the Remaining Arbitrators:

In some cases, the remaining arbitrators may be tasked with appointing the new arbitrator. This is often the case in panel-based arbitrations, where the remaining members of the tribunal are authorized to nominate a replacement arbitrator, in consultation with the parties.

Party Involvement:

The parties are typically involved in the selection process. If they previously selected the resigned arbitrator, they would generally have the right to propose a replacement. However, if the arbitration rules specify a different appointment mechanism (e.g., an institutional appointment), the parties will follow the procedures outlined in those rules.

Consideration of Impartiality:

When selecting a new arbitrator, impartiality and independence are essential. The parties are usually encouraged to ensure that the new arbitrator is free from any conflicts of interest and does not have any prior knowledge of the case. Arbitration institutions often require that new arbitrators provide a declaration of impartiality and independence before being appointed.

Impact on the Arbitral Process

Continuity of Proceedings:

The resignation of an arbitrator should not unduly delay the arbitration process. Arbitration institutions and tribunal members are required to handle the replacement quickly and efficiently, with minimal disruption to the timeline.

Rehearing of Evidence:

In most cases, a new arbitrator will have to familiarize themselves with the case. However, the new arbitrator will generally not be required to rehear the evidence already presented. The remaining arbitrators and parties will assist in bringing the new arbitrator up to speed by providing them with the records of prior hearings and submissions.

New Arbitrator’s Role:

The new arbitrator’s role is to step into the arbitration process as smoothly as possible. They may be expected to read the case documents and any previous hearing transcripts to understand the progress of the case before attending future hearings.

Grounds for Further Challenges

If the parties feel that the newly appointed arbitrator is unsuitable, they may have the right to challenge the arbitrator on grounds such as impartiality or independence, just as they would have for the original arbitrator.

If the challenge is upheld, the arbitration institution will appoint a new replacement.

Arbitration Institution’s Role in Ensuring Fairness

Arbitration institutions like ICC, LCIA, or SIAC ensure the process of replacing a resigned arbitrator is fair, transparent, and free from bias. They provide a clear framework for replacing an arbitrator and ensure that the parties are informed at each stage of the process.

Many institutions also provide mechanisms for resolving disputes about the replacement process, ensuring that any disagreements are handled efficiently and in accordance with the arbitration rules.

Example

Consider a case where a multinational corporation is engaged in an arbitration against a supplier. One of the three arbitrators resigns midway through the proceedings due to personal reasons. The remaining two arbitrators, in consultation with the arbitration institution (e.g., ICC), appoint a new arbitrator to replace the resigned member.

Steps to replace the arbitrator:

• The resigned arbitrator formally submits a resignation letter to the ICC, explaining the reasons for their resignation.
• The ICC notifies both parties and asks for their input on the appointment of a replacement.
• The parties agree on a new arbitrator, and the ICC formally appoints the arbitrator.
• The new arbitrator reviews the case records and any evidence presented so far to familiarize themselves with the proceedings.
• The arbitration continues with the new arbitrator, and the remaining members of the tribunal carry on with the hearings, without rehearing the evidence unless required.