Sifting Through the Arbitrators For The Woman, The Minority, The Newcomer.

• Author: Pilawa, Douglas

This Note examines the process of choosing an arbitrator in international arbitration. Much of the debate and criticism of this process addresses the lack of diversity in arbitral tribunals around the world. Diversity in this context means not only traditional diversity (i.e. gender, race, ethnicity), but also the basic idea of adding "fresh faces" to arbitral tribunals.

Yet the ethical obligation to provide a client with the best chance to prevail encourages counsel to choose a familiar, well-known name with an established "track record" over a little-known "dark horse." This tension illustrates a fundamental point of friction in international arbitration: choosing experienced arbitrators or "fresh faces," and which group ensures continued success of international arbitration as a dispute-resolution system. This Note argues that much of the debate and the calls to action are unconvincing for two reasons. First, the unsupported arguments used to justify proactive efforts to diversify arbitral tribunals frustrate skeptics from seeing the actual benefits that diversity could bring. Second, the yearly surveys that state the same findings that arbitral tribunals are not diverse enough are crucially misdirected. Instead, the groups behind those surveys would be better served to show how diversity of arbitral tribunals could solve other problematic areas in international arbitration like lengthy proceedings and rising costs. Once clients and counsel alike begin to take notice of diversity's collateral effect, the subsequent natural shift to a more diverse arbitrator pool will occur and prove sustainable for the health of the whole system.

Introduction I. Arbitral Tribunals are a Perennially Rich Topic of Debate and Critique II. The Party-Appointed Arbitrator is the Cornerstone of International Arbitration from Time Immemorial III. The Resources, Time, and Effort Expended in The Arbitrator-Selection Process Underscores the Importance of the Arbitrator's Role in International Arbitration A. The Typical Objective Qualities sought in the Arbitrator-Selection Process B. The Subjective Qualities of the Arbitrator-Selection Process and How these Characteristics Affect the Proceeding IV. The Other Contributing Factors to Non-Diverse Tribunals That Further Complicate Diversity Efforts A. Lack of Transparency: The Problem and Proposed Solutions to help Diversify Tribunals B. The Best Chance to Succeed Conundrum Requires Counsel to Put the Client's Interests Above Diversity Initiatives V. All of the Criticism about Diversity Assumes that there is Poison in the Well. But is there? A. Repeat Appointments and the Appearance of Bias is a Potential Problem that can be connected to a Lack of Diversity B. The Moral Argument for Diversity Lacks Tangibility and Feels Too Much Like a Direct Infringement on Party-Autonomy C. Cultural Differences Related to Fact Finding Is One of the Strongest Arguments for Diverse Tribunals VI. Changing Individual Behavior Remains the Largest Obstacle to Diversity Initiatives VII. The Financial Incentive to Choose the Newcomer is an Organic Approach that can be Used to Address Diversity Concerns Conclusion Introduction

Throughout the rise of international arbitration's place in the legal world, insiders and outsiders have observed that the same names continue to dominate arbitral tribunals across the globe. (2) These high-profile arbitrators sit in judgment of arbitrations with staggering amounts of money at stake. (3) In investor-state arbitration, the ramifications of an arbitral proceeding can go beyond money; sometimes an entire country's political system is implicated. (4) In a system that promotes party autonomy and unfettered freedom, how is it, then, that the same people dominate these tribunals? Arbitrators are not elected like a U.S. Federal Judges--they do not serve lifetime tenures. (5) This phenomenon has exacerbated the claim that international arbitration is an insular club of a few privileged elite. (6) Some have even referred to this group of international arbitrators as a mafia--a corrupt inner circle of lawyers and arbitrators who trade appointments for financial gain and professional prestige. (7)

Admittedly, seeing the same private individuals ruling on million and billion dollar claims behind closed doors objectively raises an eyebrow. Who are these arbitrators and why do they always decide these cases? This innocuous inquiry reveals an intense debate over the lack of diversity in international arbitral tribunals. (8) While some approach the subject with reservation, others claim that the continued existence of international arbitration depends upon increased diversity. (9) In general, efforts to regulate the arbitration selection process (10) receive praise and criticism. (11) Parties who welcome this change perceive the efforts as an attempt to rectify certain wrongs in the system. (12) Others, however, view these sorts of efforts as infringing upon the sacrosanct freedom that international arbitration promises (13)--the same freedom that has largely contributed to its success as the premier dispute resolution mechanism for cross-country disputes. (14)

However desirable and morally good those efforts to diversify tribunals may be, they arguably collide with an attorney's ethical obligation to provide their client the best chance to prevail. No one seems to disagree with the premise that, given the choice between an arbitrator with a favorable jurisprudence to one's side and a totally unknown newcomer, a competent lawyer will choose the former. But every year, more and more voices call for change. (15) As explored in the next section of this Note, the literature on this subject comes in many forms and at a quick pace: presentations are given on the topic, articles are written, and "grassroots" efforts are made to diversify the practice on a near-monthly basis.

By examining why individuals believe diverse tribunals positively affect international arbitration, we can determine whether the continuance of this dispute resolution mechanism is in jeopardy. In asking that question, we can also hypothesize whether the call for diversity must be answered, and more importantly, how it should be answered. The analysis leads to one of the great tensions in the diversity debate. On one side is party autonomy and client interests--international arbitration was founded on the principle that the parties control the process. On the other side is the value that diversity can bring to international arbitration and the struggle to convince practitioners that party autonomy does not have to be subverted in the quest for diverse tribunals. Thus, how to answer the diversity question is the most important aspect of toeing this line between party autonomy and the benefits of diversity.

Part I of this Note explores the current research trends and critiques of arbitral tribunals, and looks at the most recent survey on diversity in international arbitration. Parts II and III examine the importance of the party-appointed arbitrator as evidenced by the history of arbitration and the importance of the arbitrator selection process in today's arbitral proceedings. Part IV focuses on some of the primary reasons for which international arbitral tribunals have become homogenous. Part V asks to what extent does a lack of diversity harm international arbitration, and analyzes three possible ways homogeneity affects the quality of the arbitral system. Part VI addresses the largest obstacle remaining in the diversity debate: changing behavior. Part VII concludes by illustrating how organic solutions--like taking into consideration financial incentives--could lead to more diverse tribunals in international arbitration.

1. Arbitral Tribunals are a Perennially Rich Topic of Debate and Critique.

   Arbitrators, the selection process of arbitrators, and diversity of arbitral tribunals are perennially rich topics in the international arbitration community. In February (2017), the Kluwer Arbitration Blog published its" (10) Hot Topics for International Arbitration in 2017." (16) Arbitrator Selection Process was number two on the list; (17) Diversity in International Arbitration was number nine. (18) Indeed, 2017 saw a flurry of law publications on the subject, including surveys detailing the gender disparities in international arbitration. (19) In March, Won Kidane published his analysis of cultural diversity in international arbitration in his article Does Cultural Diversity Improve or Hinder The Quality of Arbitral Justice? (20) In the same month, Pennsylvania State University, in tandem with the International Arbitration Association, hosted the "Contemporary Issues & Emerging Trends in International Arbitration" conference. (21) One of the main panel discussions involved women in arbitration and the diversity issues related to gender in international arbitration. (22)

   Later, in Fall 2017, The International Dispute Resolution News, a publication of the American Bar Association, published an article titled Diversity in International Arbitration: Daring To Open New Doors. (23) Even up until the very last days of the year, scholars were writing about diversity. Catherine Rogers, a notable international arbitration scholar, ended 2017 with her article The Key to Unlocking the Arbitrator Diversity Paradox?: Arbitrator Intelligence, published on December 27th. (24)

   The topic even made it into the 25th Annual Willem C. Vis International Commercial Arbitration Moot problem--an international arbitration competition with thousands of law school participants. (25) One part of the mock legal problem dealt with the challenging of an arbitrator (Mr. Prasad) over his repeat appointments (a topic associated with lack of diversity) by the same law firm as well as his ties to a third-party funder in the proceeding. (26) In March 2018, for the oral arguments portion of the competition, thousands of law students from around the...