The Panorama of Arbitrators in England & Wales : Clyde & Co

This is the sixth and final article in Clyde & Co’s latest international arbitration series covering the topic of the landscape of arbitrators across various international jurisdictions. In this piece, associate Robin Bandar from our London office provide the legal perspective from England & Wales.

London has long been the first-choice seat for international arbitration. Its reputation speaks for itself, though those that need evidence need only look to the unrivalled institutions it houses, its pro-business climate, amenities, history, culture, stability, and established legal system which is referred to globally. This arbitral landscape offers a package that is unrivalled in any other jurisdiction. As Samuel Johnson famously wrote in the 18th Century, ‘when a man is tired of London, he is tired of life; for there is in London all that life can afford’.

As a location to hold an arbitration, legal professionals around the world consistently rate London as their first-choice jurisdiction [1]. The London Court of International Arbitration (“LCIA”) also regularly features as one of the leading arbitral forums of choice. The LCIA is in good company; London has a thriving legal market with a considerable presence of leading international law firms, world-class advocates, and top-tier academic and industry experts leading the field in virtually any topic. Among these arbitral institutions and associations include:

• the London Maritime Arbitrators Association (“LMAA”), known for its expertise in shipping, offshore, and energy disputes, it is a global leader for maritime disputes;
• the Grain and Feed Trade Association (“GAFTA”), an international trade association with over 1900 members in 100 countries and its own arbitration service that provides users of its standard forms of contract with a system to resolve trade disputes in a fast and efficient manner;
• the Federation of Oils, Seeds and Fats Associations (“FOSFA”), an international trade organisation that facilitates the global trading and shipping of vegetable and animal oils and fats, oilseeds, and their derivatives and its own arbitration and appeals service that provides its members with an efficient and impartial way to resolve trade disputes;
• the London Chamber of Arbitration and Mediation (“LCAM”), an institution that, at its forefront, prioritises the efficient resolution of domestic and international commercial disputes at a fixed fee; and
• the Chartered Institute of Arbitrators (“CIArb”), the London based professional body for arbitrators and related industry professionals.

Users of these forums are supported by a robust and stable common law legal system, which itself is upheld and administered by the world-renowned Courts of England and Wales. While the right to challenge or appeal decisions is limited, parties undoubtedly feel secure in the knowledge that the English legal system exists as a failsafe. The courts, in fact, do every so often remind parties that the arbitration process itself must be exhausted before they will be moved to action [2].

The autonomy afforded to arbitration as one of the key pillars of dispute resolution is owed to the Arbitration Act 1996 (the “Act”), a piece of legislation that has given confidence to global businesses to administer their disputes in the UK. In keeping with the times, the UK Law Commission has been tasked with reviewing the Act to ensure it retains its state-of-the-art edge over other international jurisdictions. The goal of retaining England & Wales as the global first choice for conducting international arbitration remains. Testament to the drafting of the Act, it is telling that the recent changes proposed in the Law Commission’s final report are ‘very limited’ [3]. 

In addition to the variety of specialised institutions and the availability of the stable legal system to cater for practically any dispute, London has undergone a recent transformation in offering some of the most modern and user-friendly arbitral venues available. Significant investment has gone into the new and revamped International Arbitration Centre (“IAC“) and the International Dispute Resolution Centre (“IDRC”) which house some of the most well-equipped rooms available for in-person and hybrid hearings [4]. A variety of barrister’s chambers also offer their premises as hearing venues. Centrally located in one of London’s four Inns of Court, the access to the tranquil outdoor green spaces offers a brief reprieve from the cauldron that parties find themselves in, in the hearing room.

Arbitrators: the stringent rules on impartiality

Regardless of the amenities, confidence in having a dispute heard and decided by a competent, experienced, and impartial arbitrator should be key to selecting a forum. 

Indeed, as to the issue of impartiality, the UK is a sophisticated jurisdiction with a steadfast relationship to the concepts of the rule of law and due process – these having been enshrined into English law from as far back as the Magna Carta in the 13th Century. In the context of arbitration, high standards apply to arbitrators. Not only are there clear requirements set by the various leading arbitral forums and their rules, but applicable industry standards such as the International Bar Association (“IBA”) Guidelines often also apply to guide best practice.  Ultimately, English law has itself set a high standard. For example, in the recent case of Halliburton Company (Appellant) v Chubb Bermuda Insurance Ltd [2020] UKSC 48 [5],  the Supreme Court reminded arbitrators of their strict duties, which include the need to disclose any matters which would, or may, lead to the conclusion of even a mere possibility of bias existing. The decision provided a summary of the law on apparent bias and an arbitrator’s duty of disclosure in English law which included emphasising that:

• the obligation of impartiality is a core principle of arbitration law [6];  
• the assessment of the fair-minded and informed observer of whether there is a real possibility of bias is an objective one which has regard to the realities of international arbitration and the customs and practices of the relevant field of arbitration; and
• the legal duty of disclosure is a component of the arbitrator’s statutory duty to act fairly and impartially.

Notably, the case gave guidance on the duty of an arbitrator to disclose information in the context of multiple appointments. The outcome of the case was of such important for arbitration in the UK that several arbitral institutions and organisations were given permission by the Court to intervene, with submissions made by the LCIA, ICC, CIArb, LMAA, and GAFTA.

Arbitrators: ever-growing diversity 

Indeed, the calibre of arbitrators can vary significantly.  It is important to remember that arbitration is foremost a voluntary dispute resolution mechanism with individual parties, broadly, retaining the right to set and agree the applicable rules and procedures. With three-member tribunals being the preferred set-up for a panel, parties ordinarily retain the right to directly appoint one member of the tribunal each. A separate mechanism then exists to elect the Chair or President of the Tribunal.

Parties making their nominations generally do so after a thorough review of the expertise and suitability of an arbitrator for their dispute. While any nominated arbitrator would usually be required to present their qualifications ahead of their confirmation, it is relatively rare for their nomination to be challenged by the other party, even if the nominee’s profile was deemed lacking. It is also worth noting that London, as a jurisdiction, has many instances of legal counsel working in various different roles; they may act as a party instructed-lawyer, as a party-appointed or joint expert (perhaps to offer a neutral opinion in a specific area of law), or they may even sit as an arbitrator (not in the same case, of course).

Users of arbitral forums are increasingly sensitive to ensuring inclusivity extends to arbitral panels. The industry itself has taken concrete steps towards addressing the imbalance in the gender diversity of such arbitrator appointments. The statistics in 2020 from the ICCA Taskforce reported that just over 20% of all appointments were women.  While that represented a 10% increase from 2015, and is slightly higher than the percentage of total female KC’s, it reflects a lower percentage than that of female partners at law firms. In any case, steps have been taken to address the imbalance. In 2015, the industry also widely acceded to the Equal Representation in Arbitration pledge (“ERA”), to seek to improve the equal opportunity basis of female appointments to tribunals [7]. The same call has been made regarding female appointments appointed to appear as experts, with the statistics similarly lacking [8]. 

Mileage between institutions and employers does vary. However, the LCIA reminded the industry of its credentials in addressing the imbalance – as of 2021, it reported that the statistics across both appointment by the LCIA Court, parties, and co-arbitrators was 32%. When the LCIA Court itself made the appointments, it had reached a near equal parity of 47% female appointments [9]. 

On the other hand, there remains a stark lack of ethnic diversity among arbitrators. Organisations such as REAL (Racial Equality for Arbitration Lawyers) [10] are working to promote diversity and prevent discrimination across the board. However, in 2021 only 31% of those surveyed in the “2021 International Arbitration Survey: Adapting arbitration to a changing world” [11]  felt that positive progress had been made for ethnic diversity in arbitrations. Despite there being a long road to achieve progress on this front, London is culturally well placed to lead the charge given, by most measures, it tops the international charts for its multi-culturalism, diversity, and inclusivity. Indeed, the However, the trends are positive, and it appears inevitable that further steps forward are in the works.

Despite these challenges, London remains among the world’s most attractive jurisdictions for parties to resolve their commercial disputes. Given the significant investment and strides taken to widen the talent available, despite the recent challenges of Brexit and even Covid-19, London continues to be at the forefront of parties’ minds to resolve their commercial disputes.

<sub>[1] https://arbitration.qmul.ac.uk/research/2021-international-arbitration-survey/ This is also reflected in all QMUL Arbitration surveys since 2006

[2] See, for example, the decision in Gerald Metals SA v The Trustees of the Timis Trust and others [2016] EWHC 2327.

[3] https://www.lawcom.gov.uk/improvements-recommended-to-arbitration-act-1996-to-ensure-uk-position-as-international-arbitration-leader/

[4] https://www.law.com/international-edition/2023/01/10/no-more-dickens-how-london-arbitration-venues-are-modernizing-to-outshine-global-rivals/

[5] Halliburton v. Chubb Bermuda Insurance Ltd [2020] UKSC 48

[6] The decision stated that impartiality is a cardinal duty of an arbitrator and is enshrined in section 33 of the Act.

[7] http://www.arbitrationpledge.com/about-the-pledge

[8] See, for example, the Equal Representation for Expert Witnesses (ERE) Survey 2023, p.3

[9] https://www.lcia.org/News/international-womens-day-2023-the-lcia-continues-to-lead-in-ge.aspx

[10]  REAL – Racial Equality for Arbitration Lawyers – Letsgetrealdiversity (letsgetrealarbitration.org)

[11] 2021 International Arbitration Survey: Adapting Arbitration to a Changing World – School of International Arbitration (qmul.ac.uk)</sub>