Author: Shavonne Hui Si Teo**
Capacity and Qualifications of Arbitrators
Challenge of Arbitrators
Composition of Arbitral Tribunal
Arbitrators and Arbitral Tribunals
Jurisdiction and Powers of the Courts in Matters of Arbitration Generally
As part of Delos TagTime’s Season 2 with Dr Kabir Duggal and Amanda Lee, Dr Stephan Wilske† discussed the topic of “The Phenomenon of the Ailing Arbitrator and Its Consequences”. This blog post summarizes Dr Wilske’s presentation, which considered issues relating to the appointment of the ailing arbitrator, including the approaches adopted by courts and tribunals in dealing with challenges of arbitral awards entered by ailing arbitrators, and the regulatory frameworks available to preempt such a problem.
REQUIREMENTS FOR ARBITRATORS AND THE PHENOMENON OF THE AILING ARBITRATOR
In the wider context of arbitration, the appointment of the arbitrator is one of the most significant decisions to be made. This process is guided by the traditional requirements that arbitrators be impartial and independent, that they possess the necessary expertise, experience, and qualifications, and, in some cases, that they fit certain nationality requirements. More recently, the requirement of the availability of the arbitrator has come into focus to ensure that arbitrations can be heard in a manner allowing the case to be brought to a rapid conclusion. However, another important requirement, that of ensuring the physical and mental fitness of potential arbitrators, has been less discussed. This is troubling owing to the delay and legal recourse that may be possible against an award entered by an arbitrator deemed to be physically or mentally unfit. Several courts have been faced with such problems, considering the impact of an arbitrator dealing with issues such as inoperable brain tumors and serious hearing problems on the validity of an arbitral award.
The US District Court for the Northern District of Iowa was faced with such a question in the case of Dustex Corp. v. Board of Trustees of the Mun. Electric Utility of Cedar Falls. The presiding arbitrator there was criticized as having suffered from a “significant hearing disability” that caused him to ignore numerous legal objections and miss witness testimony. [He] did not have the “cognitive ability” to recognize the parties or attorneys even after several days of hearings; did not take notes or look at the exhibits in the highly technical case; misstated evidence; and repeatedly appeared to doze off during the proceedings.
These concerns were however dismissed by the Court, noting that Dustex “provides no legal authority that supports a finding that this behavior deprived it of a fair hearing[,]” and that they had failed to “articulate how its allegations actually prejudiced it to justify relief under [the relevant section of the Federal Arbitration Act].”
Similarly, the US District Court for the Southern District of New York considered a challenge to an award entered by an arbitrator who failed to inform the parties that he suffered from an inoperable brain tumor, and who had, subsequent to the issuing of the award in 2013, passed away the next year. The Court dismissed the allegations of corruption and misconduct stemming from the failure to disclose the medical condition, stating that “under the FAA, an arbitrator is under no duty to disclose medical conditions. There is no guarantee that an arbitrator is free from conditions which might affect his abilities. Any number of matters – brain tumors, substance issues, marital problems, lack of sleep – might affect an arbitrator’s concentration or faculties. Parties are entitled to unbiased and uncorrupted arbitrators . . . not perfect arbitrators.”
Dr Wilske also referred to the practice of ad hoc arbitrations in India as a response to the backlog of court cases, noting that these arbitrations are heard mostly be retired judges of the High Courts or the Indian Supreme Court who have been described as being “very old, retired judges who are bogged down by the system they were used to.” Citing examples, including one that he had observed personally while serving as “shadow-counsel” in an ongoing Indian ad hoc arbitration, Dr Wilske spoke of problems experienced by parties, such as arbitrators sleeping during hearings and waking up only to speak of issues unrelated to the dispute.
However, while the aforementioned cases raises the problem of the ailing arbitrator suffering from ailments more common in those advanced in age, it would be unfair to cast off every elderly arbitrator as being an “ailing arbitrator” unfit to perform the job. The US Supreme Court, for example, features “many Justices [who] serve beyond age seventy-five without suffering mental or physical decline.” Whilst Dr Wilske acknowledges that there have been cases where US Supreme Court justices have stayed on the bench for too long, and where the appointed justice is clearly beyond their prime at the time of appointment, the example of the US Supreme Court demonstrates the danger of typecasting every elderly arbitrator as an “ailing arbitrator”.
REGULATORY FRAMEWORK DEALING WITH THE AILING ARBITRATOR
In response to the problems associated with the ailing arbitrator, Dr Wilske made reference to several national arbitration laws and institutional arbitration rules, considering the guidance provided in dealing with this issue as concerns the appointment and removal of the ailing arbitrator.
In comparing national arbitration laws, Dr Wilske looked towards the UNCITRAL Model Law on International Commercial Arbitration 1985, as well as the Federal Arbitration Act of the United States and the English Arbitration Act. Common to these three sets of laws is the fact that no provision exists to avoid the appointment of an ailing arbitrator. The US Federal Arbitration Act further does not provide for the removal of an ailing arbitrator. The UNCITRAL Model Law, Art. 14, creates the possibility of requesting a court or other authority to decide on the termination of the mandate of an arbitrator if such arbitrator becomes de facto unable to perform his functions. This allows parties to seek legal recourse should they encounter difficulties associated with the appointment of an ailing arbitrator. In a similar vein, the English Arbitration Act, Art. 24(c), explicitly provides for the removal of an arbitrator who is “physically or mentally incapable of conducting the proceedings.”
Existing institutional rules also deal with the physical and mental fitness of arbitrators to account for the problems associated with the ailing arbitrator, with Dr. Wilske referring specifically to the ICC Arbitration Rules 2021, the LCIA Arbitration Rules 2020, the Vienna Rules 2018, and the DELOS Rules of Arbitration 2020. The following table provides a comparison of the relevant provisions relating to the confirmation of arbitrators, and to the removal of physically or mentally unfit arbitrators.
|ICC||Art. 13(1): Possibility to avoid confirmation of an ailing arbitrator if her “availability and ability to conduct the arbitration in accordance with the Rules” is an issue.||Art. 15(2): Ailing arbitrator may be replaced on the ICC Court’s own initiative if it decides that the arbitrator is prevented de facto from fulfilling his or her functions.|
|LCIA||Art. 5.4: The arbitrator candidate has to declare in writing before an appointment “whether the candidate is ready, willing and able to devote sufficient time, diligence and industry to ensure the expeditious and efficient conduct of the arbitration.”||Art. 10.1: “The LCIA Court may revoke any arbitrator’s appointment upon its own initiative, at the written request of all other members of the Arbitral Tribunal or upon a written challenge by any party if: (ii) that arbitrator falls seriously ill, refuses or becomes unable or unfit to act[.]”|
|Vienna||Art. 16(3): Declaration on availability is mandatory.||Art. 21(2): “Either party may request that an arbitrator be removed from office if the arbitrator is prevented from performing his duties more than temporarily or otherwise fails to perform his duties, including also the duty to proceed without any undue delay.”|
|DELOS||Art. 6.6(b): DELOS has discretion on whether to confirm a nominated arbitrator.||Art. 6.10: “DELOS may revoke an arbitrator’s appointment if DELOS determines that said arbitrator has become unable or unfit to act.”|
While the appointment of an ailing arbitrator by counsel may be an efficient guerrilla tactic to delay and obstruct proceedings, such an approach should be cautioned owing to the potential of a lose-lose situation for all parties. Not only could the appointment of an ailing arbitrator result in delays and the obstruction of cost-efficient arbitral proceedings, the outcome of such proceedings may also face challenges by the parties, resulting in further time and financial costs. Accordingly, measures should be taken by all parties involved — including the arbitral tribunal, counsel, and the arbitrators sought to be appointed — to ensure that all arbitrators eventually appointed to hear the dispute are fit for purpose.
As noted above, arbitral institutions should use their powers consciously in the appointment, and possibly, removal processes, ensuring that the mandate of an arbitrator may be terminated where it is evident that they are no longer physically or mentally capable of conducting the proceedings. The ability for arbitral institutions to take such actions on their own initiative may be of exceptional importance given the delicate relationship that may exist between counsel and the arbitrators set to decide on their cases.
Parties to the arbitration can further prevent the appointment of unfit or ailing arbitrators by ensuring that their first submissions contain sufficient information on the details of the case and the expectations the parties have of the appointed arbitrators in order to ensure that the qualifications, skills, capacities, and experiences of the potential arbitrators are in line with those expected in their case. Furthermore, due diligence should also be conducted by counsel to ensure that their own arbitrator candidates, as well as those nominated by opposing counsel, are well-suited to the dispute.
Most importantly, arbitrator candidates should make enquiries as to the details of the case, seeking a full picture of the efforts that will be required in order to effectively arbitrate the case. Given the challenges in accurately ascertaining whether an arbitrator candidate is suitable for the case or if they are indeed an ailing arbitrator, without depending on unreliable judgments based purely on the stereotypes associated with elderly arbitrators, it is crucial that arbitrator candidates conduct an honest self-assessment of what the role requires and what they are able to commit. Dr Wilske, spinning a quote by The Rolling Stone’s Keith Richards, noted that “‘some things get better with age. Like me.’ Is correct for Keith Richards, but maybe, not for every arbitrator.” Senior arbitrators should avoid accepting appointments to hear arbitrations they are unsuited for, if not to avoid the problems associated with the appointment of an ailing arbitrator, then to avoid the potential risk to their reputations.
 Stephan Wilske, The Phenomenon of the Ailing Arbitrator and Its Consequences, TagTime (Nov. 25, 2020), available at https://member-delosdr.org/video-tagtime-dr-stephan-wilske-on-the-phenomenon-of-the-ailing-arbitrator-and-its-consequences/; see also Stephan Wilske, The Ailing Arbitrator – Identification, Abuse and Prevention of a Potentially Dangerous Delaying and Obstruction Tool, 7 Contemporary Asia Arb. J. 279 (2014).
 Dustex Corp. v. Bd. of Trs. of Mun. Elec. Util. of Cedar Falls, No. 13-CV-2087-LRR, 2014 WL 2759630 (N.D. Iowa June 18, 2014)
 Ryan Foley, Company Claims Arbitrator Couldn’t Hear, Dozed Off, Bloomberg Businessweek (Jan. 3, 2014), http://www.businessweek.com/printer/articles/388179?type=ap; see also Dustex Corp., 2014 WL 2759630, at *11.
 Dustex Corp., 2014 WL 2759630, at *13.
 Id. at *12.
 Zurich Am. Ins. Co. v. Team Tankers A.S., No. 13cv8404, 2014 WL 2945803, at *10 (S.D.N.Y. June 30, 2014).
 Kian Ganz, India Special Report: Hard Court Battle, The Lawyer (June 8, 2009), http://www.thelawyer.com/india-special-report-hard-court-battle/1000999.article (quoting Norton Rose arbitration associate Sherina Petit).
 David Stras & Ryan Scott, Retaining Life Tenure: The Case for a “Golden Parachute”, 83 Wash. U. L. Rev. 1397, 1437 (2005).
 Federal Arbitration Act, Pub.L. 68–401, 43 Stat. 883.
 Arbitration Act 1996, c. 23 (UK).
 Int’l Chamber Commerce (ICC), 2021 Arbitration Rules (Jan. 1, 2021).
 London Ct. Int’l Arb. (LCIA), LCIA Arbitration Rules (Oct. 1, 2020).
 Vienna Int’l Arbitral Ctr. (VIAC), Vienna Rules (Jan. 1, 2018).
 DELOS Dispute Resolution (DELOS), Rules of Arbitration (Jan. 14, 2020).
* This post is part of a series summarising Delos Disputes Resolution’s TagTime webinars. A list of past TagTime webinars is available at https://delosdr.org/index.php/past-webinars/.
** J.D. Candidate 2021, Columbia Law School.
† Dr. Stephan Wilske is a Partner at Gleiss Lutz. Stephan advises national and international clients on arbitration and cross-border litigation. He also provides legal guidance on the procedural aspects of private antitrust litigation. He has extensive expertise in (both domestic and international) arbitration with a special focus on project-related disputes, post M&A disputes, joint ventures, investment arbitration proceedings and general business law.