Author: Chiann Bao
Published: March 2022
| Jurisdictions: International |
Topics: Arbitrators and Arbitral Tribunals Capacity and Qualifications of Arbitrators Iura Novit Curia Due Process Procedure |
* This article is the transcript of the 2021 Proskauer Lecture on International Arbitration delivered by the author in May 2021.
PREVIEW
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Before addressing the legal challenges of the iura novit arbiter principle in arbitration, let me share some thoughts with you on the factual premise of whether arbitrators know the law and whether this knowledge is a relevant consideration when constituting the arbitral tribunal.
As we know, institutions select arbitrators based on multiple factors and it is difficult to pinpoint which factors are given the most weight. However, the arbitrator’s legal qualification is certainly one such factor. The presumption is that the arbitrator’s legal qualification indicates the arbitrator’s knowledge of the law of the jurisdiction. Assuming that this is correct, the conclusion reached is that this particular arbitrator must be more suitable for a dispute where the governing law is the same.
With this in view, and by looking at the 2020 ICC statistics, we see that, out of the national laws chosen by the parties in the 946 cases, English law was chosen in 13% of the cases (122 cases), followed by the U.S. law at 11% (with New York being most popular, selected in half of the cases) (104 cases), Switzerland at around 7% (66 cases), France at around 6% (56 cases), and Brazil at 4.4% (42 cases).
Unsurprisingly, the preliminary figures for arbitrator nationality statistics tie in nicely with the applicable law statistics. Of the 92 countries from which the arbitrators held citizenship, U.K. nationals were appointed in 14.5% of the cases, U.S. at 10%, Swiss at 8.9%, France at 6.6%, and Brazil at 5.8%.
Assuming that the arbitrators’ nationalities are correlated with situations where the arbitrators are legally qualified, the ICC statistics revealed a very similar percentage match between the choice of governing law on the one hand and the arbitrator’s nationality on the other.
This correlation is also reflected in the HKIAC’s appointment statistics. On the other hand, SIAC appears to give less priority to legal qualifications in the arbitrator appointment process. This may be partly due to the increased difficulty to become qualified in Singapore and, consequently, a smaller pool of possible Singapore-qualified arbitrators for its Singapore law-governed disputes. As a result, SIAC appears to give less priority to the qualification of an arbitrator when making appointments for matters governed under Singapore law.
Taking stock of the appointment landscape whereby there appears to be a strong preference for arbitrators to be qualified to practice in the jurisdiction of the governing law, a natural conclusion could be drawn that the arbitrator knows the law, or the words iura novit arbiter are true. However, just because an arbitrator is qualified in a particular jurisdiction certainly can’t mean that the arbitrator is automatically an expert in the law of that jurisdiction.
With this background in view, let us now turn to the legal question of whether an arbitrator may apply the law irrespective of what the parties have pleaded under iura novit arbiter. First, I will discuss the beginnings of this principle and examine the basis for which there is truth to the principle of iura novit arbiter. Second, I will consider whether, in the absence of any legislation or court direction, the principle can still be held up as true. Last, I will answer the question of the lecture title, namely, iura novit arbiter – truth or fiction? Whatever the answer is, I will offer a few pragmatic solutions to ensure that counsel and arbitrators alike manage expectations so that there are no surprises.
* Chiann Bao is an international arbitrator and mediator with Arbitration Chambers. She serves as Vice Chair of the IBA Arbitration Committee and Vice President of the ICC Court of Arbitration. From 2010 to 2016, she served as the Secretary General of the HKIAC and was subsequently appointed as a Council Member of the HKIAC. Chiann Bao is a member of the Board of Trustees and an Honorary Senior Fellow of the British Institute of International and Comparative Law. she also serves as a global advisory board member of the New York International Arbitration Center. She is a fellow of the Chartered Institute of Arbitrators, and a CEDR-accredited mediator.