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International Arbitration Law Review

2010

Challenging the rules of the game: certainty through procedural

harmonisation of challenges in international commercial
arbitration
Christine McIsaac

Subject: Arbitration

Keywords: Appointments; Arbitrators; Harmonisation; International commercial

arbitration

*Int. A.L.R. 127 Abstract

Challenges to the independence and impartiality of arbitrators can impede the

effectiveness of international commercial arbitration. As rising costs and growing
uncertainty stand in the way of commercial parties' ability to obtain enforceable and
efficient dispute resolution, the standards that govern challenges must be clarified and
simplified. This article proposes the Revised Model Rule for the Procedures to Challenge
(“ RMRPC” ), which includes a heightened standard for judging challenges to arbitrators,
an effort to remove challenges from the reach of national courts, and a short time limit
for raising challenges. RMRPC represents an updated provision that reflects current
trends and closes existing gaps, and thus promotes certainty, minimises delays, and
preserves proportional party autonomy. All the while, arbitration will remain the top
choice for transborder dispute-resolution.

Introduction

The international business community continues to choose commercial arbitration over

national courts for their international disputes.1 One main reason for this preference is
the desire for impartial and independent decision-makers, who will preside over the
dispute free of bias and influence. As globalisation poses new challenges to international
arbitration, questions over the benefits of harmonising procedural rules have driven the
dialogue involving cost-effective, fair, and timely dispute resolution--and with good
reason. A fundamental requirement of the arbitral process currently stretches the limits
of cost effectiveness: the policing of the impartiality and independence of the
arbitrators.2 The parties in arbitration retain a right to challenge the arbitrator's ability to
resolve the dispute objectively and perform his duties impartially. 3 The right to challenge
a nominated arbitrator has created the often irresistible urge to stall the arbitral process
with a challenge that rears partway, midway, and even following a proceeding.
Accordingly, parties have begun to demand a minimising of challenges.4 By relying on
harmonised challenge procedures that are updated to reflect current trends and to close
existing gaps, the arbitration community can more effectively serve its clients through a
standard that promotes certainty, minimises delays, and preserves proportional party
autonomy. All the while, arbitration will remain the top choice for transborder dispute-
resolution.

This article focuses on challenges to proffered arbitrators,5 which touches on several

fundamental aspects of arbitration: a party's right to an impartial decision-maker, the
potential set-aside of an award rendered by an arbitrator with a significant conflict, and
needless and damaging delay tactics. Institutions seek to avoid ethical conflicts with
arbitrators by outlining qualifications that arbitrators must meet in order to serve the
parties to a dispute.6 These qualifications of *Int. A.L.R. 128 independence and
impartiality form a minimum requirement for proposed arbitrators. Even so, the
standards by which these qualifications are judged remain unclear and even conflicting.
The practical reality is that procedural ambiguities in current rules hinder the process of
selecting arbitrators and create barriers to identifying and utilising competent decision-
makers.7 While a wealth of commentary discusses the evolution and overall benefits of
arbitration over other dispute-resolution mechanisms, few scholars have suggested a
8

concrete solution to minimise the costs of challenges in the current environment.

To respond to these ambiguities, the process of harmonisation should be embraced and

relied upon. Harmonisation9 refers to a set of model rules that govern a narrow
procedural aspect of arbitration, and it exists as an option for parties to adopt if they
wish to reduce ambiguity in the arbitral process. The resulting model rules can guide
10

institutions as they create and update their rules and be adopted by parties to govern ad
hoc arbitration. The process of harmonising rules requires updates and readjustments to
address current needs and discourage unintended trends.

A roadblock to the proliferation of harmonised rules exists. Harmonisation has become a

term of art in international commercial arbitration.11 Academics and practitioners use the
word to defend (or rail against) the evolution of the procedural rules of arbitration, and
the word continually evades a succinct definition. Therefore, the starting point is defining
the process of developing and adopting model rules. Three essential components
influence the rules of arbitration as they evolve: the principles underpinning arbitration,12
the procedural framework governing the course of the dispute, and the practicalities of
enforcing an award rendered.13 The first component (principles of arbitration) poses a
significant problem, as various legal traditions often view arbitration as fulfilling differing
or conflicting purposes or adhering to opposing ideals. The lack of accepted principles
hinders the development of procedures, which should aim to implement these very
principles. It is within the procedural framework that harmonisation fits.

Further, the notion of the “ great divide” between civil and common-law traditions
underlies the harmonisation debate, yet it actually strains the wrong component of
arbitration--the procedural framework instead of the underlying principles. 14 This article
does not explore nor attempt to outline the arbitration principles, but it does recognise
that the principles creep into the procedural debate surrounding harmonisation. The
LCIA (formerly the London Court of International Arbitration) boasts that its procedures,
the LCIA Rules, offer a “ combination of the best features of the civil and common law
systems,” and it lists those “ best features” . 15 The principles of arbitration derive from
these two legal traditions; however, arbitration exists as its own unique pillar in the legal
community and should not be constrained by this hybrid approach. 16 As the academy has
begun to challenge the efficiency of the arbitration process and question its popularity in
lieu of its growing complexity,17 it places much blame on the slide toward the common-
law adversarial system. Still, international commercial arbitration continues to burgeon
without any apparent slowing, and so the harmonisation debate must shift from legal
and academic jargon to a focus on the benefits of synthesised procedures in a narrow
context.18

This article explores the appropriate solution to the challenge dilemma in three parts.
First, it outlines the accepted, basic framework in challenge provisions, which I label “
the current minimum requirements” for an arbitrator under institutional rules. Secondly,
it examines the need for specific standards and limitations to the challenge procedures
by highlighting the ambiguities that remain. Thirdly, it discusses the advantages to
harmonising challenge procedures and proposes a model rule that lays out the standards
to sustain a challenge, the ultimate authority to decide the challenge, and the
appropriate timing of a challenge. Fourthly, it argues for *Int. A.L.R. 129 an updated
harmonised challenge procedure, which I call the Revised Model Rule for the Procedures
to Challenge (“ RMRPC” ), that describes the contours of independence and impartiality,
the authority to decide the challenge, and the timeframe within which a party waives its
right to challenge.

The Current Minimum in Challenge Provisions

A scan of challenge provisions in leading institutions shows that commonalities exist

regarding the requirement to serve as an arbitrator. Undoubtedly, the cornerstone of
international arbitration is the ability of the parties to obtain impartial and independent
arbitrators.19 Accordingly, institutional rules contain provisions prescribing independence
and impartiality that remains at all stages of the arbitration. 20 Many rules also require
immediate notice if a conflict arises and preserve the right to challenge an arbitrator if a
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party has a “ justifiable doubt” as to the arbitrator's neutrality. These common features
form a minimum standard that an arbitrator must meet to serve on a tribunal.

The LCIA Rules contain the impartiality and independence requirements in art.5.2, which
provides:

“ All arbitrators conducting an arbitration under these Rules shall be and remain at all
time impartial and independent of the parties; and none shall act in the arbitration as
advocates for any party. No arbitrator, whether before or after appointment, shall advise
any party on the merits or outcome of the dispute.” 21

Many rules also now require the arbitrator to disclose any circumstances giving rise to
doubts about his ability to serve. For example, the LCIA Rules in art.5.3 provide in
relevant part:

“ [A]nd [the proposed arbitrator] shall sign a declaration to the effect that there are no
circumstances known to him likely to give rise to any justified doubts as to his
impartiality or independence, other than any circumstances disclosed by him in the
declaration. Each arbitrator shall thereby also assume a continuing duty forthwith to
disclose any such circumstances to the LCIA Court… if such circumstances should arise
after the date of such declaration and before the arbitration is concluded.”

Similarly, in the Stockholm Chamber of Commerce (SCC) Rules art.14.2 provides:

“ Before being appointed as arbitrator, a person shall disclose any circumstances which
may give rise to justifiable doubts as to his/her impartiality or independence. If the
person is appointed as arbitrator, he/she shall submit to the Secretariat a signed
statement of impartiality and independence disclosing any circumstances which may give
rise to justifiable doubts as to that person's impartiality or independence. The Secretariat
will provide the parties with a copy of the statement of impartiality and independence.”

Recently, UNCITRAL released its long-anticipated revised Arbitration Rules. The

mandatory disclosure requirements, now found in art.11, have changed only minimally
from the previous version. Article 11 provides:

“ When a person is approached in connection with his or her possible appointment as an

arbitrator, he or she shall disclose any circumstances likely to give rise to justifiable
doubts as to his or her impartiality or independence. An arbitrator, from the time of his
or her appointment and throughout the arbitral proceedings, shall without delay disclose
any such circumstances to the parties and the other arbitrators unless they have already
been informed by him or her of these circumstances.22 ”

Additionally, the arbitrator must immediately inform the parties if a conflict later arises
during the arbitration process under the SCC Rules, under art.14.3, which provides:

“ An arbitrator shall immediately inform the parties and the other arbitrators in writing
where any circumstances referred to in paragraph (2) arise during the course of the
arbitration.”

Another common ground involves the nationality of the arbitrator, which plays a role in
selecting arbitrators but is not determinative under institutional rules. The UNCITRAL
Rules do not explicitly allow a party to complain about a proposed arbitrator based solely
on his or her nationality.23 They go on to instruct an appointing authority to “ take into
account” the “ advisability” of appointing an arbitrator whose nationality differs from
that of the parties.24 The phrase “ take into account” indicates that a different
nationality is not a mandatory criteria but instructive.25 Further, nothing in the
International Centre for Dispute Resolution (ICDR) Rules or the American Association of
Arbitration (AAA) Rules prevents the appointment of a national of one of the parties:

*Int. A.L.R. 130 “ At the request of any party or on its own initiative, the
administrator may appoint nationals of a country other than that of any the parties.” 26

Again, this rule is not mandatory. The International Chamber of Commerce (ICC) Rules
provide that the ICC Court:
“ [S]hall consider the prospective arbitrator's nationality, residence and other
relationships with the countries of which the parties or the other arbitrators are
nationals.”

What to do with these considerations, however, is left up to the appointing authority.

The Current Minimum is Not Enough: Ambiguities in Challenge

Provisions

The shared minimum requirements are accepted, essential components that provide the
foundation for challenges. The minimum requirements themselves are not controversial.
The procedures that govern these challenges--or the determination of when the
minimum requirements have not been met--are not quite as clear. The ambiguities lie in
the standards that govern challenges. Decisions on the challenge are typically not
subject to appeal, thus heightening the significance of the challenge and evidencing the
need to get it right.27

The flexible nature of the existing challenge procedures leaves arbitrators open to
nuanced arguments and possible disqualification at the whim of delay-focused parties. 28
As extreme costs strain the vitality of arbitration, the community must strive to
appropriately balance the parties' right to an impartial and independent arbitrator with
much-needed certainty and limitations on the availability of costly challenges.29 Parties
face differing institutional rules regarding challenge procedures as well as competing
interpretations or interactions between institutional rules and national arbitration acts.
Even more, a challenge to the impartiality or independence of an arbitrator potentially
threatens the entire arbitral award. Three specific issues stand out as particularly
opaque among institutional rules governing challenges30 : (1) the standards necessary to
sustain a challenge; (2) the issue of who properly decides the challenge; and (3) the
time limits for challenges.

First, ambiguity surrounds the standard that governs challenges. Provisions such as if a
party “ becomes aware” of “ circumstances [that] exist” 31 giving rise to “ justifiable
doubts” shed little light on precisely what sustains a doubt and what specifically a party
must know. In the Republic of Poland v Eureko BV, Poland faced tremendous difficulty
and ultimately failed to establish a valid challenge to an arbitrator in a bilateral
investment treaty arbitration, even when the arbitrator acted as counsel in one
arbitration and an arbitrator in a legally similar arbitration.32 Poland challenged Judge
Stephen Schwebel due to his ties with the US law firm, Sidley Austin, and his alleged
involvement with a related case against Poland. Further complicating the challenge,
Judge Schwebel was co-counsel in a similar case involving Vivendi and Argentina in
which the parties relied on the award rendered by Judge Schwebel in Eureko v Poland.
Poland lost its challenge against Judge Schwebel, leaving some to wonder what exactly a
“ justifiable doubt” would entail.

The significance of an arbitrator's past experience could turn on the interpretation of the
independence and impartiality test. Albert Jan Van Den Berg, for example, argued for a
strict interpretation of the requirements, under which an arbitrator should be “
absolutely impartial and independent” .33 It appears that any doubt would suffice to
disqualify an arbitrator under his view, and thus it is unlikely that he would support
arbitrators who have worked with parties before and are thus familiar with the issues of
the dispute. The International Centre for Settlement of Investment Disputes (“ ICSID” )
has proposed requirements that arbitrators engage in broader disclosures to air any
potential conflicts early on and minimise late discovery, seeming to take a
comprehensive approach to conflicts.34

Secondly, there is no international consensus regarding the authority to determine

challenges and the related role of the national courts in the process. Three options for
jurisdiction to hear challenges exist: the challenge is decided: (1) exclusively by a court;
(2) exclusively by an *Int. A.L.R. 131 arbitral institution; or (3) by an institution with
a potential appeal to a court.35 In several prominent institutions, the institution itself
decides the merits of the challenge.36 ICSID, however, permits the other two arbitrators
to determine the challenge and only relies on the institution if the arbitrators are
divided.37 The role of the national courts further complicates the issue. Under the English
Arbitration Act of 1996, the courts retain the power to remove an arbitrator if his
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impartiality is suspect but it remains unclear whether the English courts are a default or
if they can be the first step in a challenge absent explicit agreement. 38 In the United
States, the Federal Arbitration Act (“ FAA” ) does not explicitly resolve the question but
the answer seems to be that it is within the court's inherent power to decide a challenge
under s.5 of the FAA. In practice, challenges tend to be decided when the award is
challenged, which leads to added expense and potentially a mooted award.39 The French
Code of Civil Procedure contains its own ambiguities regarding the role of national
courts, and it appears that an arbitration institution would determine whether grounds
for removal exist.40

Finally, the issue of time limits within which parties must submit a challenge differs
among institutions and jurisdictions. Most institutional rules fluctuate between 15 and 30
days from the date when the challenger becomes aware of the facts that suggest a
conflict.41 Therefore, these rules impose a relatively short time limit on parties, and a
corresponding waiver of the right to challenge seems to result if the objection is not
timely raised. The LCIA Rules, however, seem to promote a free-flowing challenge
process as they allow a challenger to submit written cause any time it becomes aware of
questionable circumstances involving an arbitrator.42 In turn, a party loses the incentive
to investigate an arbitrator immediately and retains a right to raise doubts after an
arbitrator does significant work on a tribunal. State statutes complicate the timing issue
by introducing subjective standards or no standards at all. For example, the Swiss
Statute on International Arbitration of 1987 provides that, “ [t]he ground for challenge
must be notified to the arbitral tribunal and the other party without delay” . The 43

overarching principle of good faith to act without delay once a party knows of grounds
that support a challenge reigns in the unlimited nature of such provisions. Even so, “
good faith” introduces a new wrinkle--if a party receives notice of a proposed arbitrator
but fails to research the arbitrator and later discovers a potential conflict that existed all
along, does (and should) the standard of good faith permit him to challenge after the
proceedings begin? The answer is closely linked with the issue of what a challenger must
know to sustain a challenge.

Absent time limitations that link to a party's knowledge, a party holds the right to
introduce grounds for conflict even after the tribunal renders an award. On the other
hand, arbitral rules regarding time limits must have proportionality and sufficient
flexibility to allow for parties to raise doubts and air conflicts whenever discovered. In
ASM Shipping v TTMI, the claimant lost the right to challenge the validity of the award
on the grounds of bias because of its delay in challenging.44 Additional challenges
ultimately proved unsuccessful, and the procedures continued for more than two years
after the tribunal rendered the award--all in an effort to determine a challenge. ASM
demonstrates the significant delays that result from procedural gaps regarding waiver
and the potential risk in a cutting challenges off without exceptions.

The Next Step in the Continued Development of Global Legislation on

Challenges: The Revised Model Rule for the Procedures to Challenge

A new approach should be adopted through the Revised Model Rule for the Procedures to
Challenge (“ RMRPC” ). RMRPC can address the ambiguity illustrated above and curb
open-ended rules that allow parties to waste time and money and generally to frustrate
the process of selecting arbitrators. These consequences have long-term *Int. A.L.R.
132 effects on arbitration. First, they pose a threat to the enforcement of the award--
the most important aspect of arbitration.45 Secondly, the differing principles subject
challenges to an opaque regime of speculation and open the award up to hindsight's
underhandedness. Commentators have noted the need for a sufficient degree of
international uniformity regarding the interpretation and application of grounds for
challenge, and yet, no current consensus exists.46

A functional solution to the challenge problem begins with an understanding that

harmonisation does not mean surrendering party autonomy or bloating procedural
requirements. This requires distinguishing harmonisation from other dirty words in
arbitration and discussing the advantages to harmonisation generally. Additionally, this
section lays out the specific benefits to harmonisation in the challenge context. Finally, it
outlines the points that RMRPC must address. RMRPC should attempt to reduce the
number of objections to appointed arbitrators in an effort to simplify the constitution of
the tribunal and promote lower-cost, higher-quality proceedings. 47 RMRPC would specify
the knowledge of a conflict required to sustain a challenge, who decides the merits, and
when challenges must occur.

Harmonisation Decoupled

Harmonisation should be understood as a legal construct, separate from civil or

common-law traditions, that implements principles of arbitration through a balance of
procedural flexibility and certainty to resolve a cross-cultural business dispute. Surely,
differing legal regimes will influence international arbitration's principles and procedures.
Those differing traditions should not, however, become the focus in a debate about
harmonisation.48 A recent scholar defined harmonisation loosely as a “ complex process”
of “ developing new ways of conducting arbitration proceedings in ‘ cross-cultural’
arbitrations” .49 This captures the push-pull between common and civil law, where, a
legal regime adapts to the global market and reacts in ways that neither system alone
could.50 Instead of attempting to smooth the more troublesome rough edges between
civil and common law, harmonisation shows that arbitration exists as a unique form of
private dispute-resolution and adheres to the demand for arbitral rules freed of heritage.
The effort will ultimately conflate legal traditions, but the process should aim to develop
a more thorough body of procedural guidelines that facilitate efficient and legitimate
arbitration--a developing legal tradition in itself.51

In an effort to embrace a certainty-inspired arbitration regime, harmonisation must be

divorced from the concept of a full-blown civil procedure mandate. Loaded words such as
“ Americanisation” , “ judicialisation” , “ unification,” or “ processualisation” skew the
purpose of harmonising procedure and evoke unnecessary hostility toward model rules.
Those who oppose harmonisation rail against a recognisable trend of transforming
arbitration into a meticulously-governed, rigid set of rules meant to adopt common-law
methods. A close reading of these complaints reveals at least three major categories of
over-generalisations regarding harmonisation. This section considers each broad
category in turn.

“ Americanisation”

Perhaps the most oft-cited attack on harmonisation is that additional procedural

standards attempt to align arbitral proceedings with American litigation and all of its
intricate steps. Further, Americanisation reflects the view that an individual arbitration
will take on the identity of the parties' counsel and the nationality of the arbitrators
(increasingly American litigators).52 Both ideas cause harmonisation to become a
dangerous caricature of formalistic, judicial-styled dispute resolution with all of its
rigidity and cost-increasing steps.

In fact, harmonisation differs from American litigation from its inception through its
implementation. First, harmonised rules are created with ingrained flexibility, as
practitioners and scholars from many backgrounds develop and update rules based on
expressed needs that change over time. Additionally, harmonisation permits (indeed
requires) that the parties choose to give the rules effect. Most importantly, American
litigation rules are not open for adoption or rejection, as harmonised laws certainly are.
If an institution adopts harmonised procedures that fall out of favour or inadvertently
lead to an increase in cost for the parties, the institution will lose its competitive
advantage, and the market will force a change in procedures. American litigation
procedures are designed to evolve slowly, facilitating very gradual, deliberate changes
that ignore immediate demands.

Even with these differences in mind, harmonisation is American-like in one key way. It
allows ideas to flow freely among top thinkers and permits trends to develop at major
arbitral sites. In this way, individual tribunals *Int. A.L.R. 133 and arbitration scholars
can work as laboratories of ingenuity, proposing (and striking down) new approaches to
long-standing tenets of arbitration. Unworkable solutions, therefore, can be weeded out
and the community can benefit from the robust exchange of ideas and a steep learning
curve. Trends in challenge procedures continue to evolve. For example, practitioners
from the United States advocated for a different set of independence criteria for
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arbitrators appointed by the parties and for the chairman of the tribunal. The 2004 Code
of Ethics for Arbitrators in Commercial Disputes, prepared by the AAA and the American
Bar Association, rejected this position and created a presumption of neutrality for all
arbitrators, included party-appointed arbitrators. The presumed independence of all
arbitrators prevails today, as the IBA Guidelines on Conflicts of Interest in International
Arbitration confirm the uniformity of independence.

Importantly, a Swiss Federal Tribunal left open the question of whether party-appointed
arbitrators are subject to less stringent requirements, and thus demonstrated how
differing approaches may take hold. Harmonisation provides a vehicle for responding to
these varying ideas and effectively incorporating them into institutional rules when a
critical mass of participants shares the same view.

“ Unification”

The distinction between harmonisation and unification is not a tenuous one.53 Unification
is a more benign term that implies uniform rules across multiple jurisdictions. Yet, the
issue of who imposes the uniform rules remains vague but crucial to the debate.
Commentators have noted a trend toward uniformity in arbitration and a corresponding
fear that parties will surrender autonomy and end up bound by provisions they never
explicitly agreed upon due to an implied minimum standard. Through harmonisation,
however, uniform procedures would not be possible without an institutional or
contractual choice affecting the parties.

Additionally, harmonisation does not imply that all arbitration procedures should be
uniform. In fact, harmonisation facilitates differences and allows parties to choose
governing principles. Model laws promote flexibility and party choice by highlighting the
effects of those choices. A model rule that outlines an option encourages a party to think
about this choice prior to ending up in the default world. Still, unification may feasibly be
the result of harmonised laws, as well-reasoned model laws based on leading experts'
consensus will likely widely influence institutional and ad hoc rules. This process would
simply reflect the value of harmonisation and should be a welcome development for
those who benefit from the clearer procedures.

“ Nationalisation”

Harmonisation differs from nationalisation because it lies on the outskirts of the state
sovereignty debate and reserves states' participation in arbitration at various levels.
Thus, harmonisation and nationalisation operate in their own distinct phase of
arbitration--harmonisation in the formulation of rules and nationalisation in the
execution of results--although a degree of overlap remains. Currently, divergent state
legislation has created a “ complex and tangled web” of national approaches. 54

Nationalisation captures the tension between those who fear the states' various policies
that affect arbitration and those who recognise the states' necessary, supervisory role in
the operation of arbitration.55 The former group tends to argue for a supranational
system to address and abolish the uncertainties surrounding the influence of national
courts and laws.56

Arguments for denationalisation have blurred the harmonisation discussion, and the link
should be dispelled. Harmonisation strikes a balance between the desire for a consistent
system and the states' interests in managing its interaction with the international
business community. It does so by guiding the states with model laws that expose and
correct ambiguities and facilitate a party-friendly body of laws. Further, it empowers
states by requiring state action and adoption before the model laws take force.

Some argue additionally that efforts to harmonise arbitration laws effectively impose
national standards on international arbitration as if they were “ international norms” .57
The argument is unpersuasive for two reasons. First, some international norms such as “
nationalised” enforcement of arbitral awards have developed out of necessity and
proved essential to arbitration's success.58 Thus, a fear of the effects of the resulting
uniformity is questionable. Secondly, international arbitration has largely become
emancipated from nationalised arbitration as the trend toward private arbitration
continues, yet it remains intertwined with national courts and laws regarding
enforcement, appeals, and legitimacy.59 In fact, *Int. A.L.R. 134 arbitrators often
depend on the national courts during the proceedings and remain indebted to the same
when faced with recalcitrant opponents. The international regime must unavoidably
coexist with nation states, and harmonisation facilitates this relationship by allowing
party and state choice.60

Advantages to Harmonisation

Harmonisation holds the potential to increase certainty and clarity in the arbitral process
while simultaneously securing flexibility and party autonomy. As the vitality of arbitration
has been called into question,61 harmonisation may pose one part of the solution to rein
in costs. Harmonised rules would stand as options for institutions to adopt or contracting
parties to specifically agree to, and thus the pervading fear of a take-over of
standardisation is unfounded. Therefore, harmonisation advantages international
commercial arbitration for three reasons: (1) it fosters certainty and clarity; (2) it
encourages reliable and predictable outcomes; and (3) it allows parties to retain freedom
and flexibility that would be surrendered in state-based litigation.62

Harmonisation Shores Up International Arbitration when Arbitration

Faces Criticism and Competition

Institutions and parties alike face challenges and complexities when developing
procedures to govern arbitration.63 Considerations such as the interactions among
various rules and national laws,64 the impact of ambiguity on the validity of the award,
and the perception of fairness to the parties involved create barriers that delay
procedural decisions and jeopardise the cost-effectiveness of arbitration. Harmonisation
unites procedures and addresses these concerns as experts in arbitration collaborate to
establish procedures, resulting in economical and experienced procedural decisions. 65 In
the United States, the individual states exist as laboratories for experimentation that test
policies and influence national norms. This concept can transfer to the global arbitration
system as working parties assess the various successes and failures of national
arbitration and institutional rules and create a body of model laws that combines the
most effective results.

In this way, harmonisation encourages experimentation and exploration of national

arbitration acts and institutional rules by creating a vital mechanism to examine and
update the rules, analysing the effects of the current rules and retaining procedural
competitiveness. Judge Howard Holtzmann touched on the value of such a process when
he examined the American Arbitration Association International Rules (“ AAA Rules” ).66
He concluded that the AAA Rules:

“ [H]ave undergone searching scrutiny by international arbitrators, practitioners and

arbitration administrators to ensure they embody provisions which contemporary
practice calls for and with which both American and foreign attorneys are comfortable.”
67

Further, the International Chamber of Commerce (“ ICC” ) revised its International Court
of Arbitration Rules of Arbitration (“ ICC Rules” ) in 1998 to stay in step with “ the
current needs of the international business community” , which demonstrated the
competitive motive to react to the parties' demands for procedural changes.68

UNCITRAL has prominently led countries to harmonise their national arbitration acts with
its Model Law of 1985, perhaps the strongest testament to harmonisation.69 UNCITRAL's
work on its Model Law and its updates to the Arbitration Rules have streamlined the
process of arbitration, allowing new institutions to emerge and states to adopt more
consistent, yet specifically-tailored arbitration acts. They have also facilitated economic
growth and foreign investment in developing countries as they have guided countries
that might not otherwise have the means to develop their own acts and has provided
surety for foreign investors through this non-biased method of dispute resolution. 70
*Int. A.L.R. 135 Similarly, the International Bar Association (“ IBA” ) Rules on the
Taking of Evidence in International Arbitration71 revolutionised the procedures for
gathering evidence in the face of almost silence from institutional rules. 72 The IBA
committee that developed the model rules consisted of a diverse sampling of experts
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who built off of the 1983 IBA rules in an effort to harmonise procedures and reflect the
needs of arbitration. The working party explicitly reserved the parties' rights to adapt the
model rules to individual circumstances, and thus epitomised the basic aspects of
harmonisation.73

UNCITRAL and the IBA originally designed their model laws to address ambiguities that
existed among national arbitration laws,74 and both institutions continue to change their
rules and account for insufficiencies in prior procedures as Holtzmann noted.75 The model
rules have made great strides, yet a continuing and growing desire for quicker
arbitration and higher quality awards requires further collaboration and immediate action
in the context of challenges.76 Harmonisation places the burden on congresses,
practitioners, and committees to adapt the current norms to respond to the needs of
parties. It further leaves the option of choice to the parties and institutions.

Harmonisation Fosters Party Autonomy

Even in the face of these advantages, a general tension exists between those for
harmonisation and those who fear a loss of party autonomy. After all, arbitration's value
stems from the parties' ability to enter into a contract that dictates the choice of both
substantive and procedural law.77 Surely:

“ It would be a paradox… if Americans were to export into international arbitration the

very procedural excesses that have driven U.S. companies into the arms of domestic
ADR.” 78

The concern that harmonisation will transform arbitration into a complex system of
autonomy-stealing rules--namely, American litigation--ignores the premise of
harmonisation--model rules that memorialise a community consensus and expose
potentially unimagined detrimental consequences. Harmonisation appeases its critics in
three ways: (1) it encompasses practitioners' procedural concerns and can thus simplify
the process; (2) parties' choice remains supreme; and (3) procedural certainty
increases, and thus heightens the value of arbitration.

First, harmonisation does not necessarily lead to more complex standards. In fact,
updates and revisions to procedural rules can result in fewer restrictions and a broader
freedom to develop rules by agreement.79 Secondly, party autonomy remains the
cornerstone of arbitration as the parties create the contours of the tribunal's authority in
their agreement.80 Harmonisation must go hand-in-hand with the continuing standard
that the agreement of the parties determines the arbitration proceedings.81 The New
York Convention and UNCITRAL explicitly adhere to the parties' choice of procedural
provisions. Therefore, no gap-filling function should be permitted, as in the Uniform
Commercial Code in the litigation in the United States, which governs commercial
contracts. Harmonisation does not parallel this type of gap-filling that results from
82

ambiguities in contracts.83

Thirdly, a balance must be struck between arbitration's inextricable relationship with

national laws and maintaining the attractiveness of arbitration by securing party
autonomy.84 The desire for flexibility does not necessarily yield to the need for certainty.
Certainty exists as a goal in arbitration because international commercial arbitration
facilitates cross-border business and interstate commerce. Investors and businesses
85

that have faced uncertainty on foreign terrain have often shied away from the
investment. Further, established procedures can speed up arbitration, currently a major
complaint. Model laws strike that balance by providing an option to benefit from what we
already know about arbitration, while leaving the ultimate choice up to the parties.86

*Int. A.L.R. 136 Harmonisation is Not the Answer for Every Procedural
Rule

Model rules will not become procedural default rules because they should not cover
many aspects of arbitration, and thus the inherent values of arbitration remain intact.
For example, parties remain free to choose fast-track arbitration, a documents-only
arbitration, or the installation of a specialised tribunal for specific issues.87 The tribunal
has largely determined procedures governing a party's method of establishing the facts
of its case, with much resulting praise.88 These procedures allow parties to maintain an
ongoing commercial relationship through convenience, confidentiality, and choice.

While this article focuses on the advantages related to harmonising procedures for
challenging arbitrators, many commentators advance more widespread harmonisation. 89
A comprehensive mechanism for conducting all arbitrations jeopardises the integrity of
the procedures and would be reminiscent of national courts with specific and all-
encompassing rules of civil procedure. Harmonisation, instead, should have the limited
purpose of addressing problematic provisions that are either too broad or too narrow to
be practically applied. In addition, the parties' benefit from harmonised procedures
comes from their option to choose the rules that have produced reliable outcomes.

Harmonisation and Challenge Procedures

Challenges are a unique area of arbitral procedures because they are a procedural
safeguard that is tied to a substantive right. Because the substantive right to have a
conflict-free panel is uniform in arbitration, challenge procedures provide an ideal
opportunity for an updated, stringent, and harmonised provision. Importantly, the main
objection to harmonisation does not apply to challenges, as challenge procedures do not
rely on flexibility to meet the parties' goals. In fact, due to the indispensable nature of
independent and impartial arbitrators, it is necessary to define and uniformly apply the
conflict standards to all arbitrators to ensure arbitration-wide independence and
impartiality.

RMRPC should therefore aim to reduce the number of objections to appointed arbitrators
in an effort to simplify the constitution of the tribunal and promote lower-cost, higher-
quality proceedings.90 To reduce the number of challenges, RMRPC should specify the
knowledge of a conflict required to sustain a challenge, who decides the merits, and
when challenges must occur.

The standard governing the requirements of impartiality and independence should be

considered a heightened standard to adapt to arbitration's growing popularity and scope
of qualified arbitrators. Accordingly, a challenge should be sustained if the conflict poses
a “ real danger of bias” .91 An arbitrator's disclosure of the mere existence of any
relationship should not suffice to disqualify him or her, as it does not, by itself, prevent
the arbitrator from rendering a fair and impartial decision. In short, while broader
disclosures serve the parties by making them immediately aware of potential conflicts,
disclosures of a conflict alone do not establish impropriety. As the pool of arbitrators
grows and tribunals successfully preside over complex, multi-party disputes, it is not
unthinkable that proposed arbitrators will have repetitive experience with parties,
concepts, or legal issues. The fact of experience alone should not disqualify an otherwise
competent arbitrator. The arbitrator's expertise in the industry could improve the quality
of the award and promote a resolution in line with industry norms, which serves the
parties who often want to maintain their business relationships.

Instead, disqualification should be reserved for circumstances where the arbitrator has a
financial stake in the outcome, has a close relationship with one of the parties that rises
to the level of serious bias, or has directly worked on a specific issue in the dispute. This
enumerated list is not exhaustive, and thus should not be considered as a provision of
the challenge standard, which may then limit a party's right to seek removal for other
grounds. The examples illustrate the types of circumstances that should support a
challenge and the necessary shift to more serious grounds for challenges. An arbitrator
should not, for example, be banned from serving on a panel because he is a board
member of a party's competitor. As the English Court of Appeal found in AT&T v SCC,
the membership on the board alone does not provide evidence of bias. A challenger
should have to offer concrete evidence of a slant or tendency to favour his colleagues.
The AT&T case, however, would turn out differently under RMRPC, as the arbitrator
failed to disclose his board membership upon his appointment.

The question of who decides the merits of a challenge is inextricably intertwined with
national arbitration acts--and thus, national courts. The UNCITRAL Model Law embraces
the courts, while first selecting the tribunal to determine the merits of a challenge in
art.13.2. If the tribunal rejects the challenge, the UNCITRAL Model Law allows for the
appropriate national court to reconsider the challenge, with no appeal of the decision.
 Page11

The UNCITRAL system, therefore, builds in two layers for challenges and includes
domestic courts. These are *Int. A.L.R. 137 the same courts that parties typically seek
to avoid by choosing arbitration over domestic litigation. In terms of efficiency, the
challenge (and subsequent appeal) should remain within the arbitral tribunal or
institution only. Such a policy would remove the challenge process from the courts at the
seat of the arbitration, and reduce the differing rules regarding whether the arbitral
panel must first decide or whether the parties can seize the courts directly. For example,
Germany and Sweden follow the UNCITRAL approach, while English, Belgian, French,
Italian, Dutch, and Swiss law allow for judges to be seized first.92

RMRPC cannot effect this change through a harmonised provision alone because the
provision will not trump national law, which reserves its right to consider the challenge.
Therefore, the community should move for a convention on the jurisdiction to govern
challenges and take challenges out of national courts all together.

After establishing a heightened standard for challenging arbitrators, RMRPC builds from
the higher burden on a challenger to effectively reign in the standard on time limits
without having to reduce the days from 15. Therefore, RMRPC's time limits provision can
align with the common 15 to 30-day period open to challenge, with waiver resulting
after those days. To adequately balance the need for arbitration to respond to newly-
discovered conflicts, RMRPC will also contain an “ irreparable defects” clause that
exempts later-discovered information that would lead to a “ real danger of bias” against
the challenger.

Absent “ irreparable defects” suffered by a challenger, the waiver of a challenge should

be strictly construed and enforced because a challenge is not based on the existence of
an irregularity alone but the attitude of a party toward that irregularity. Therefore, the
optional nature of challenges lends support to two Swiss Federal Tribunal judgments that
note, “ a party which does not react at once is forfeited from subsequently invoking the
ground for challenge in question” .93

Taking the above updates into account, RMRPC should read:

“ Grounds for Challenge

A proposed arbitrator shall disclose any circumstances likely to give rise to justifiable
doubts as to his impartiality or independence. From the time of his appointment and
throughout the arbitral proceedings, the arbitrator shall immediately disclose any
circumstances that call his impartiality or independence in to question. Such
circumstances are those of such a nature as to affect the judgment of the arbitrator and
to create a real danger of bias with regard to one of the parties to the dispute.94 A party
may challenge an arbitrator only if it demonstrates that circumstances (disclosed or
discovered) rise to the level of affecting the judgment of the arbitrator or creating a real
danger of bias as to one of the parties.

Challenge Procedure

Absent party agreement as to the challenge procedures, a party who seeks to challenge
a proposed arbitrator must exercise good faith to raise its objection immediately and no
longer than 15 days from learning of circumstances justifying the challenge. The arbitral
tribunal shall decide the challenge, subject to an appeal to a competent court within 30
days.”

Conclusion

Challenges to arbitrators pose unique problems in the current international arbitration

environment. As rising costs and growing uncertainty impinge on commercial parties'
ability to obtain an effective and efficient dispute resolution, the standards that govern
challenges must be clarified and simplified. Harmonisation of procedural rules exists as
option to update and enhance the framework for challenges to ensure that it reflects
business norms and parties' expectations. A revision of challenge procedures is overdue
and a new look at impartiality and independence is in order. Building off of the work of
existing model rules, three essential updates--to the standards, the decision-maker, and
the timeframe--can effectively address the outstanding delays and prepare institutions
for the next phase of international arbitration.

Office of the US Trade Representative, Washington, DC; LL.M., Georgetown University

Law Centre; J.D., Chicago-Kent College of Law; BA, University of Michigan.The views
expressed in this article are those of the author only and do not reflect the opinions of
any governmental entity or institution. The author would like to thank Arif Ali and Baiju
Vasani for their invaluable and extensive comments.

Int. A.L.R. 2010, 13(4), 127-137

12. See
Christophe
r R.
Drahozal
and
Richard W.
Naimark
(eds),
Toward a
Science of
Internatio
nal
Arbitration
: Collected
Empirical
Research
(Kluwer
Law
Internatio
nal,
2005),
p.59
(noting
that
approxima
tely 90%
of
commercia
l contracts
include an
arbitration
clause);
Gary Born
and
Rachael
Kent, “
Rules of
the Game”
(2006) 4
Legal
Business
Arbitration
Report
(naming
new major
state
players
such as
the
countries
of the
former
Soviet
Union,
China,
Russia,
the Middle
East, and
Latin
American
countries).
Further,
the
Internatio
nal Centre
for
Settlemen
t of
Investmen
t Disputes
(ICSID)
currently
lists 127
cases
 Page13

pending,
as
opposed
to five in
1995, and
the
number of
cases filed
spiked in
2003
through
2009. See
List of
Pending
Cases,
available
at
http://icsi
d.worldba
nk.org/IC
SID/Front
Servlet?
requestTy
pe=GenCa
seDtlsRH&
actionVal=
ListPendin
g
[Accessed
August 8,
2010];
The ICSID
Caseload-
-Statistics,
available
at
http://icsi
d.worldba
nk.org/IC
SID/Front
Servlet?
requestTy
pe=ICSID
DocRH&ac
tionVal=C
aseLoadSt
atistics
[Accessed
August 8,
2010]
(showing
38 cases
filed in
ICSID's
first 25
years and
267 cases
filed in the
past 13
years).
2. See,
e.g. David
Foster and
David
Edwards, “
Challenges
to
Arbitrators
” (2008)
The
European
& Middle
Eastern
Arbitration
Review,
available
at
http://ww
w.globalar
bitrationre
view.com/
handbook
s/3/sectio
n/5/chapt
er/68/chal
lenges-
arbitrators
[Accessed
August 8,
2010]
(evaluatin
g
heightene
d costs
associated
with more
challenges
to
arbitrators
); Albert
Jan Van
Den Berg
(ICC
(ed.)),
Report on
the
Challenge
Procedure,
The
Arbitral
Process
and the
Independe
nce of
Arbitrators
(1991),
pp.87-93.
3. Foster
and
Edwards, “
Challenges
to
Arbitrators
” (2008)
The
European
& Middle
Eastern
Arbitration
Review.
4. Ibid.
5. Other
important
procedural
issues,
such as
interim
measures
and notice
requireme
nts,
deserve
attention
but are
outside of
the scope
of this
article.
See Mark
Appel, “
Emergenc
y and
Interim
Relief in
Internatio
nal
Arbitration
” (March-
May 2002)
7(1) ADR
Currents
1; report
of the UN
Secretary
General,
Settlemen
t of
Commerci
al
Disputes,
A/CN.9/W
G.II/WP.1
08
(January
 Page15

2000),
p.104. For
example,
interim
measures
introduce
questions
of speed
in the face
of
potentially
imminent
and
significant
harm to a
party. The
decision
on interim
measures
requires a
balancing
of
interests,
powers,
and co-
operation
in
enforceme
nt.
Similarly,
notice
requireme
nts pose
questions
among
various
institution
s as the
method of
notice and
the
content of
a request
for
arbitration
vary
widely and
influence
the course
of the
dispute.
6. Omar
E. García
Bolívar, “
Comparing
Arbitrator
Standards
of Conduct
in
Internatio
nal
Commerci
al Trade
Investmen
t
Disputes”
(Novembe
r
2005/Janu
ary 2006)
Dispute
Resolution
Journal 2.
7. See
Gary Born,
Internatio
nal
Commerci
al
Arbitration
:
Comment
ary and
Materials
(Kluwer
Law
Internatio
nal,
2001),
p.451.
Born
describes
the
procedural
timetable
of
arbitration
s and
notes that
the ICC,
AAA
Internatio
nal, LCIA
and
UNCITRAL
Rules each
employ
similar
substantiv
e
principles
regarding
choice of
law,
separabilit
y of the
arbitration
agreement
,
provisional
relief, and
waiver of
appellate
review. He
emphasise
s,
however,
that the
leading
institution
s provide
for only a
general
procedural
framework
, and thus
significant
--and
often
meaningfu
l--
differences
exist.
8.
Winston
Stromberg
, “
Avoiding
the Full
Court
Press:
Internatio
nal
Commerci
al
Arbitration
and Other
Global
Alternative
Dispute
Resolution
Processes”
(2007) .
40 Loy.
L.A. L.
Rev. 1337,
1343
9. When I
refer to “
harmonisa
tion” , I
refer to
the
process by
 Page17

which
congresse
s, working
parties, or
other
groups of
practitione
rs
develop,
and most
importantl
y, update
model
rules.
10. The
IBA
intended
just this
when it
began
drafting
the Rules
on the
Taking of
Evidence
in
Internatio
nal
Arbitration
.
11.
Indeed,
the
concept of
harmonisa
tion has
evoked
many
conflicting
uses and
ideas. The
Oxford
English
Dictionary
defines “
harmoniza
tion” as, “
the action
or process
of bringing
into
agreement
;
reconciliati
on,
standardiz
ation” :
The New
Shorter
Oxford
English
Dictionary
(Oxford:
Clarendon
Press,
1993).
12. These
principles
include
the lex
mercatoria
(internatio
nal
commercia
l norms or
customs),
which
increasingl
y have
provided
the source
for
internation
al
arbitration
laws.
Berthold
Goldman,
“
Frontières
Du Droit
Et Lex
Mercatoria
” (1964)
9 Archives
De
Philosophi
e Du Droit
177
(translated
in Karim
Youssef,
Consent in
Context:
Internatio
nal
Arbitration
(Decembe
r 2009),
para.2:14)
.
13. The
enforceme
nt
componen
t is largely
a national
issue,
requiring
parties to
rely on
state
courts and
governme
nts for
effective
implement
ation.
14. For
an
analysis of
the “ great
divide” ,
see Elena
V. Helmer,
“
Internatio
nal
Commerci
al
Arbitration
:
Americaniz
ed, ‘
Civilized,’
or
Harmonize
d?”
(2003) 19
Ohio St. J.
on Dispute
Resolution
35.
15. See
http://ww
w.lcia-
arbitration
.com
[Accessed
March 22,
2010]
(explanato
ry note
found on
the
website
introducin
g the LCIA
Rules).
16. I
recognise
that
various
legal
 Page19

traditions
have not
equally
influenced
the
developme
nt of
arbitration
. See Leon
Trakman,
“ ‘ Legal
Traditions’
and
Internatio
nal
Commerci
al
Arbitration
” (2006)
17 Am.
Rev. Int'l
Arb. 1, 2
(discussin
g the
differences
between
legal
traditions
and legal
cultures
and both
concepts
influence
on
arbitration
). In turn,
many may
feel that
the
harmonise
d system
does not
take their
views into
account.
Even so, I
advocate a
pragmatic
view
arbitration
in which
the
communit
y resists
the urge
to
incorporat
e all legal
traditions
as
impractical
and
attempts
to dispel
the
common
versus
civil law
aspects of
harmonise
d
provisions.
Instead,
the
communit
y should
focus on
the
realities of
practicing
in
internation
al
commercia
l
arbitration
and
respond to
the
parties'
desires for
updates to
the
underlying
procedure
s
regardless
of the
historical
backgroun
d of the
procedure
or party.
17. See,
e.g. Foster
and
Edwards, “
Challenges
to
Arbitrators
” (2008)
The
European
& Middle
Eastern
Arbitration
Review
(evaluatin
g
heightene
d costs
associated
with more
challenges
to
arbitrators
); Pierre
Lalive, “
Towards a
Decline of
Internatio
nal
Arbitration
?” (1999)
65 The
Journal of
the
Chartered
Institute
of
Arbitrators
251, 253
(arguing
that
traditional
rigor and
quality in
arbitration
has
dwindled
with the
increasing
and
excessive
“
profession
alisation”
of the
field).
18. Susan
Franck,
The Role
of
Internatio
nal
Arbitrators
(2006) .
12 ILSA J.
Int'l &
Comp. L.
499, 500
fn.1.
19. Van
Den Berg,
 Page21

Report on
the
Challenge
Procedure,
The
Arbitral
Process
and the
Independe
nce of
Arbitrators
, 1991,
p.416
(calling
these
requireme
nts “
fundament
al” ).
20. See
SCC Rules
art.15;
LCIA Rules
art.10.3;
AAA Rules
art.8.1;
and ICC
Rules
art.7.1,
which
requires
the
arbitrator
must “ be
and
remain”
independe
nt.
21.
Similarly,
the SCC
Rules
art.14.1
require, “
[e]very
arbitrator
must be
impartial
and
independe
nt” . See
also ICC
Rules
art.7.1
(independ
ence);
AAA Rules
art.7.1
(impartial
and
independe
nt).
22. The
1976
version of
the
UNCITRAL
Rules,
art.9, used
only the
masculine
pronoun to
refer to
the
arbitrator.
More
importantl
y, the
1976
UNCITRAL
Rules did
not clarify
that the
disclosure
requireme
nt was
continuous
,
throughou
t the
entire
arbitral
proceedin
gs. The
2010
UNCITRAL
Rules
make this
explicit.
23. The
2010
UNCITRAL
Rules,
art.6.7,
permit an
appointing
authority
to take
nationality
into
account
when
considerin
g how to
secure
independa
nt and
impartial
appointme
nt. This
has not
changed
from the
1976
UNCITRAL
Rules,
art.6.4.
See
UNCITRAL
Rules,
available
at
http://ww
w.uncitral.
org
[Accessed
on August
16, 2010].
24. 2010
UNCITRAL
Rules
art.6.7.
25. See
2010
UNCITRAL
Rules
art.6.7.;
García
Bolívar, “
Comparing
Arbitrator
Standards
of Conduct
in
Internatio
nal
Commerci
al Trade
Investmen
t
Disputes”
(Novembe
r
2005/Janu
ary 2006)
Dispute
Resolution
Journal 2.
26. ICDR
Rules,
art.6.4..
27.
ICC
Rul
 Page23

es
art.
7.4
pro
vide
s: “
[T]
he
deci
sion
s of
the
Cou
rt
as
to
the
app
oint
me
nt,
con
firm
atio
n,
chal
len
ge
or
repl
ace
me
nts
of
an
arbi
trat
or
shal
l be
fina
l
and
the
rea
son
s
for
suc
h
deci
sion
s
shal
l
not
be
co
mm
unic
ate
d.”
See
also
UN
CIT
RAL
Mod
el
Law
of
198
5
art.
13.
3;
Net
herl
and
s
Arbi
trati
on
Act
of
198
 6
arts
103
5
and
107
0.
The
LCI
A
Rul
es
art.
29.
1
pro
vide
s: “
[T]
he
deci
sion
s of
the
LCI
A
Cou
rt
wit
h
res
pec
t to
all
mat
ters
rela
ting
to
the
arbi
trati
on
shal
l be
con
clus
ive
and
bin
din
g
upo
n
the
part
ies
and
the
Arbi
tral
Trib
una
l.”
28. ICC
Rules
art.7.4.
The ICC
report on
Technique
s for
Controllin
g Time
and Costs
in
Arbitration
urges
parties to
carefully
consider
their
nominated
arbitrator
to avoid
possible
objections.
See
Selection
 Page25

of
Arbitrators
, Avoiding
Objections
--
Technique
s for
Controllin
g Time
and Costs
in
Arbitration
, ICC
Publication
843,
para.14
(hereinaft
er “ ICC,
Avoiding
Objections
” ).
29. The
balance
ultimately
includes
public-
policy
considerati
ons
involving
conflicts
that
influence
the
legitimacy
of the final
award. I
focus on
the
pragmatic
goal of
reducing
the cost
associated
with
delays to
stress the
overwhelm
ing desire
to reign in
the abuse
of the
challenge
“
procedure
s” and to
encourage
the start
of a
dialogue
that will
lead to
simplified
and
clarified
standards
governing
challenges
.
30. Other
outstandin
g
discrepanc
ies exist
that this
article
does not
address.
For
example,
most rules
require an
arbitrator
to disclose
potential
conflicts,
as noted
above.
These
rules do
not,
however,
provide
details
indicating
what must
be or
should be
disclosed.
Foster
notes that
the IBA
Guidelines
may
contain
insights
into this
issue.
Foster and
Edwards, “
Challenges
to
Arbitrators
” (2008)
The
European
& Middle
Eastern
Arbitration
Review.
31. See
LCIA Rules
art.10.3;
SCC Rules
art.15.1;
AAA Rules
art.8.1.
32. See
Foster and
Edwards, “
Challenges
to
Arbitrators
” (2008)
The
European
& Middle
Eastern
Arbitration
Review.
33. Van
Den Berg,
Report on
the
Challenge
Procedure,
The
Arbitral
Process
and the
Independe
nce of
Arbitrators
, 1991,
p.417.
34. Born
and Kent,
“ Rules of
the Game”
(2006) 4
Legal
Business
Arbitration
Report 6.
35. Van
Den Berg,
Report on
the
Challenge
Procedure,
The
Arbitral
Process
and the
 Page27

Independe
nce of
Arbitrators
, 1991,
pp.421-
423.
36. See
CIETAC
Rules
art.26.6
(Chairman
of CIETAC
decides
challenge)
; LCIA
Rules
art.10.4
(LCIA
Court
decides
challenge)
; ICC
Rules
art.11.3
(ICC Court
decides
challenge)
.
37. ICSID
r.9.4
provides:“
Unless the
proposal
relates to
a majority
of the
members
of the
Tribunal,
the other
members
shall
promptly
consider
and vote
on the
proposal
in the
absence of
the
arbitrator
concerned.
If those
members
are
equally
divided,
they shall,
through
the
Secretary-
General,
promptly
notify the
Chairman
of the
proposal,
of any
explanatio
n
furnished
by the
arbitrator
concerned
and of
their
failure to
reach a
decision.”
Additionall
y, ICSID
r.9.5
leaves the
final
decision to
the
Chairman
of ICSID if
no
consensus
is reached.
38. 39.
40. This
ambiguity
is a result
of the
interaction
of
Arbitration
Act 1996
arts 23
and 24.
Article
23.1
ensures
the
parties'
freedom
to
determine
the
challenge
procedure
s, and
art.23.2
provides
that the
rest of
art.23
(and
possibly
art.24)
apply if
the parties
do not
agree to
specific
procedure
s. Article
24.2 again
relegates
the courts
to a
secondary
power if
the parties
agree to
vest
challenge
decisions
in an
institution
or specific
person. If
the parties
do not
agree,
however,
the
English
Arbitration
Act is
unclear
whether
the parties
are
permitted
(or
whether
they
must )
seek a
court
decision
first.
41.
Howard M.
Holtzmann
, “
Balancing
the Need
for
Certainty
and
 Page29

Flexibility
in
Internatio
nal
Arbitration
Procedure”
in Lillich
and Bower
(eds),
Internatio
nal
Arbitration
in the 21st
Century:
Toward “
Judicializa
tion” and
Uniformity
(1993),
p.419,
fn.4.
42.
French
Code of
Civil
Procedure
art.1463
provides:“
An
arbitrator
may not
withdraw
himself
nor be
recused
save for a
ground of
recusal
that has
become
apparent
or has
occurred
after his
designatio
n.
Difficulties
relating to
the
implement
ation of
this Article
are
brought
before the
president
of the
competent
court.”
The use of
the word “
president”
implies
that
French
national
courts do
not retain
the power
to
determine
a
challenge.
43. 44.
45. See
ICC Rules
art.11.2
(30 days
from the
date the
challenger
was
informed
of
questionab
le
circumstan
ces); SCC
Rules
art.15.2
(15 days);
AAA Rules
art.8.1 (15
days).
CIETAC
gives a
party 10
days to
challenge
on the
grounds
disclosed
by the
arbitrator
(10 days
from the
receipt of
the
disclosure)
in art.26.1
and 15
days from
the date
the party
becomes
aware of a
reason for
challenge
“ but no
later than
the
conclusion
of the last
oral
hearing” .
CIETAC
Rules
art.26.3.
CIETAC,
therefore,
sets a
slightly
different
limitation
on the
party's
ability to
challenge
that
prevents
delayed
challenges
after the
tribunal
renders an
award.
46. See
LCIA Rules
art.10.4 (“
A party
who
intends to
challenge
an
arbitrator
shall,
within 15
days of
the
formation
of the
Arbitral
Tribunal or
(if later)
after
becoming
aware of
any
circumstan
ces…” ).
47. Swiss
Statute on
Internatio
nal
 Page31

Arbitration
of 1987
art.180.2.
48. Foster
and
Edwards, “
Challenges
to
Arbitrators
” (2008)
The
European
& Middle
Eastern
Arbitration
Review 5.
49. Van
Den Berg,
Report on
the
Challenge
Procedure,
The
Arbitral
Process
and the
Independe
nce of
Arbitrators
, 1991,
p.419.
50. Van
Den Berg,
Report on
the
Challenge
Procedure,
The
Arbitral
Process
and the
Independe
nce of
Arbitrators
, 1991,
p.419.
51. See
ICC,
Avoiding
Objections
.
52.
Holtzmann
, “
Balancing
the Need
for
Certainty
and
Flexibility
in
Internatio
nal
Arbitration
Procedure”
in Lillich
and Bower
(eds),
Internatio
nal
Arbitration
in the 21st
Century,
1993, p.3.
53.
Helmer, “
Internatio
nal
Commerci
al
Arbitration
” (2003)
19 Ohio
St. J. on
Dispute
Resolution
35, 49.
54. See
Bernardo
Cremades,
quoted in
Helmer, “
Internatio
nal
Commerci
al
Arbitration
” (2003)
19 Ohio
St. J. on
Dispute
Resolution
35.
55. The
sine qua
non of a “
legitimate”
arbitration
is the
award
surviving
challenges
.
56. Alan
Scott Rau,
The
Culture of
American
Arbitration
and the
Lessons of
ADR,
presented
at the
University
of Texas
at Austin
School of
Law's “
Symposiu
m on
Globalizati
on and the
Judiciary”
in
September
2004
(quotes
Serge
Lazareff, “
Internatio
nal
Arbitration
: Towards
a Common
Procedural
Approach”
in Stefan
N.
Frommel
and Barry
A. K. Rider
(eds),
Conflicting
Legal
Cultures
in
Commerci
al
Arbitration
: Old
Issues and
New
Trends
(1999),
p.19 (“ we
can only
note
amongst
arbitrators
and
practitione
rs alike
the
 Page33

increasing
awareness
of an
emerging ‘
harmonize
d
procedural
pattern’
in
internation
al
arbitration
… which
has the
good
sense to
combine
the best
elements
of both
legal
systems
while
avoiding
their
pitfalls.” ).
57.
Franco
Ferrari, “
Defining
the
Sphere of
Application
of the
1994 ‘
UNDROIT
Principles
of
Internatio
nal
Commerci
al
Contracts”
’ (1995) .
69 Tul. L.
Rev. 1125,
1225
58. See
Peter
Binder,
Internatio
nal
Commerci
al
Arbitration
in
UNCITRAL
Model Law
Jurisdictio
ns (2000),
pp.42-43
(but also
discussing
the
significanc
e of
national
enforceme
nt
mechanis
ms
without
which
voluntary
complianc
e with
awards
would
seem
nonexisten
t).
59. See
Katherine
L. Lynch,
Globalizati
on and
Internatio
nal
Commerci
al
Arbitration
, a thesis
submitted
to the
Stanford
Program in
Internatio
nal Legal
Studies at
the
Standard
Law
School
(May
1997),
p.101.
60.
It
doe
s
not
app
ear
that
this
app
roa
ch
has
gai
ned
acc
ept
anc
e,
eve
n in
the
curr
ent
incr
easi
ngl
y
inst
ituti
ona
lise
d
regi
me.
For
a
det
aile
d
co
mm
ent
ary
of
glo
bali
sati
on's
role
on
stat
e
pow
er,
see
Mar
tin
Wol
f, “
Will
the
Nati
on
Stat
e
Sur
vive
 Page35

Glo
bali
zati
on?
”
(Ja
n/F
eb
200
1)
80(
1)
For
eig
n
Affa
irs
178
(co
nclu
din
g
that
stat
es
are
not
unn
ece
ssar
y in
a
glo
bali
sed
env
iron
me
nt).
61. See
Lynch,
Globalizati
on and
Internatio
nal
Commerci
al
Arbitration
, a thesis
submitted
to the
Stanford
Program in
Internatio
nal Legal
Studies at
the
Standard
Law
School,
May 1997,
p.100.
62. The
New York
Conventio
n on the
Recognitio
n and
Enforceme
nt of
Foreign
Arbitral
Awards of
1958 is
one of the
most
important
internation
al treaties
that
ensures
cross-
border
enforceme
nt of
awards,
and thus
legitimatis
ed the
arbitral
process
globally.
See
Guiditta
Cordero
Moss, “
Internatio
nal
Commerci
al
Arbitration
: Party
Autonomy
and
Mandatory
Rules”
(1999)
68(3)
Nordic
Journal of
Int'l Law
375.
63. The
states
occupy a
key role in
arbitration
as they
possess
unique
powers to
enforce
awards or
legislativel
y alter
arbitration
acts. In
many
ways,
harmonisa
tion
recognises
this
importanc
e of states
and
encourage
s the
arbitration
communit
y to utilise
states to
the fullest
extent.
64.
Further, a
Harmonise
d law
should be
one based
on
expertise
and
experience
d dealings
with the
intricacies
of national
and “
internation
al” law.
Thus,
Harmonisa
tion
relieves
practitione
rs from
the need
to be
intimately
familiar
with
multiple
state laws
 Page37

thereby
increasing
efficiency
in
arbitration
.
65.
Several
prominent
scholars
have
examined
the
challenges
that
arbitral
processes
face in the
future and
concluded
arbitration
risks
extinction.
See Lalive,
“ Towards
a Decline
of
Internatio
nal
Arbitration
?” (1999)
65 The
Journal of
the
Chartered
Institute
of
Arbitrators
1 (quoting
Mr Neil
Kaplan
Q.C. from
the
Chartered
Institute
and noting
that Sir
Michael
Kerr
predicted
a decline
in
internation
al
arbitration
).
66. See
Kevin T.
Jacobs
and
Matthew
G.
Paulson, “
The
Convergen
ce of
Renewed
Nationaliz
ation,
Rising
Commoditi
es, and ‘
Americaniz
ation’ in
Internatio
nal
Arbitration
and the
Need for
More
Rigorous
Legal and
Procedural
Defenses”
(2008) .
43 Tex.
Int'l L.J.
359, 364
67. See
Helmer, “
Internatio
nal
Commerci
al
Arbitration
” (2003)
19 Ohio
St. J. on
Dispute
Resolution
35, 60.
68. An
ambiguity
results
from the
unknowns
of these
interaction
s. Even
so, the
impact of
this
uncertaint
y must not
be
overstated
, as
parties
continue
to choose
institution
al
arbitration
rather
than
attempt
the
exhaustive
exercise of
creating
detailed
procedure
s.
69. See
id. (using
the IBA
Rules of
on the
Taking of
Evidence
in
Internatio
nal
Arbitration
as an
example
of efficient
rulemakin
g by
practitione
rs).
70. See
Holtzmann
, “
Balancing
the Need
for
Certainty
and
Flexibility
in
Internatio
nal
Arbitration
Procedure”
in Lillich
and Bower
(eds),
Internatio
nal
Arbitration
in the 21st
Century,
1993, p.3.
 Page39

71.
Holtzmann
, “
Balancing
the Need
for
Certainty
and
Flexibility
in
Internatio
nal
Arbitration
Procedure”
in Lillich
and Bower
(eds),
Internatio
nal
Arbitration
in the 21st
Century,
1993, p.3.
72. A
provocativ
e debate
has
emerged
regarding
the effect
of
competing
institution
s on
arbitration
procedure
s. For
example,
several
scholars
argue that
competitio
n among
institution
s in the
internation
al
arbitration
“ market”
can and
indeed has
led to less
restrictive
procedure
s
governing
the
parties.
This
demand
from the
consumers
will also
influence
the
drafting of
model
rules and
can
prevent
rigid
procedural
norms
from
taking
force. See
Larry
Smith and
Lori
Tripoli, “
Privatized
Internatio
nal
Dispute
Settlemen
t…
Competing
Arbitration
Centers
Mean
User-
Friendly
Resolution
s
Worldwide
” in
Inside
Litigation
(May
1998),
p.2.
73. See
Pieter
Sanders, “
UNCITRAL'
s Model
Law on
Conciliatio
n” (2002)
12
Internatio
nal
Journal of
Dispute
Settlemen
t 1 (Verlag
Recht und
Wirtschaft,
Heidelberg
) (noting
that
UNCITRAL'
s
Arbitration
Rules and
Model Law
have been
invaluable
); Helmer,
“
Internatio
nal
Commerci
al
Arbitration
” (2003)
19 Ohio
St. J. on
Dispute
Resolution
35, 58
(describin
g
UNCITRAL'
s “
tremendou
s
acceptanc
e” and
influence
on
institution
al rules
and ad
hoc
procedure
s).
74.
Steven
Austermill
er et al., “
Internatio
nal
Lawyer:
Asia/Pacifi
c Law
Committee
” (2008)
42 Int'l
Law 905,
909
(demonstr
ating that
Cambodia
 Page41

exemplifie
s a state
that
adopted
UNCITRAL
Model Law
without
significant
modificatio
ns and
correspon
dingly
attracted
foreign
investmen
t).
75.
Available
in multiple
languages
at
http://ww
w.ibanet.o
rg/Publica
tions/publi
cations_IB
A_guides_
and_free_
materials.
aspx
[Accessed
March 20,
2010].
76. IBA
Working
Party,
Comment
ary on the
New IBA
Rules of
Evidence.
77. See
IBA
Working
Party,
Comment
ary on the
New IBA
Rules of
Evidence.
78. See “
Explanator
y note by
the
UNCITRAL
secretariat
on the
Model Law
on
Internatio
nal
Commerci
al
Arbitration
” , United
Nations
document
A/40/17,
annexe I,
p.A(4).
79. For
example,
the 2006
amendme
nts to the
Model Law
include a
new
chapter
that
attempts
to secure
a more
comprehe
nsive
regime
governing
interim
measures.
These
changes
better
reflect the
worldwide
demand
for
enhanced
guidelines
and
protection
s. See
http://ww
w.uncitral.
org/uncitr
al/en/unci
tral_texts/
arbitration
/1985Mod
el
_arbitratio
n.html
[Accessed
August 16,
2010].
80. See
Lalive, “
Towards a
Decline of
Internatio
nal
Arbitration
?” (1999)
65 The
Journal of
the
Chartered
Institute
of
Arbitrators
6
(describin
g these
two
seemingly
conflicting
demands
on
arbitration
).
81. See
Kenneth
R. Davis, “
Unconvent
ional
Wisdom: A
New Look
at Articles
V and VII
of the
Conventio
n on the
Recognitio
n and
Enforceme
nt of
Foreign
Arbitral
Awards”
(2002) .
37 Tex.
Int'l L.J.
43, 44-45
82.
Delissa A.
Ridgway, “
Internatio
nal
Arbitration
: The Next
Growth
Industry”
(1999)
Dispute
Resolution
 Page43

Journal
51.
83. The
ICC
revisions
exemplify
this point.
See Smith
and
Tripoli, “
Privatized
Internatio
nal
Dispute
Settlemen
t…” in
Inside
Litigation,
May 1998.
84. See
Julian
D.M. Lew
et al.,
Comparati
ve
Internatio
nal
Commerci
al
Arbitration
(2003),
pp.99, 413
(pointing
out that
parties'
right to
choose
substantiv
e law is
undispute
d).
85.
Therefore,
uncertaint
y
surroundin
g
amended
rules of
arbitration
will be
minimised,
as the
rules as
adopted
by the
parties will
govern the
arbitration
. See
Elizabeth
Shackelfor
d, “ Party
Autonomy
and
Regional
Harmoniza
tion of
Rules in
Commerci
al
Arbitration
” (2006) .
67 U. Pitt.
L. Rev.
897, 901
86. For
example,
if a
contract is
silent on
price, the
UCC
provides
that the
price to
the sale of
the goods
is a
reasonable
price at
the time of
delivery:
UCC s.2-
305.
87.
SN056
ALI-ABA
455
s.2.01.
88. See
Moss, “
Internatio
nal
Commerci
al
Arbitration
” (1999)
68(3)
Nordic
Journal of
Int'l Law
375, 376.
89. Moss,
“
Internatio
nal
Commerci
al
Arbitration
” (1999)
68(3)
Nordic
Journal of
Int'l Law
375, 376.
90. The
advantage
s to
internation
al
commercia
l
arbitration
extend
beyond
mere
freedom
and
autonomy.
It also
enables
parties'
disputes
to proceed
in
confidence
, which
allows the
parties'
relationshi
p to
continue
after the
dispute
ends,
unlike the
finality
and
segregatio
n that
results
from
litigation.
Steven
Nelson, “
Alternative
s to
Litigation
of
Internatio
nal
Disputes”
(1989) 23
 Page45

Int'l Law
187, 198-
99.
91. Gary
Born, “
Keynote
Address:
Arbitration
and the
Freedom
to
Associate”
(2009) 38
Ga. J. Int'l
& Comp.
L. 7, 16;
Hans
Bagner, “
Expedited
Arbitration
Rules:
Stockholm
and WIPO”
(1997) .
13 Arb.
Int'l 193,
197
92. See
ICC Rules.
93. For
example,
Kevin
Jacobs
and
Matthew
Paulson
advocated
for a more
rigorous
use of
legal
defenses
in model
rules to
aid in the
early
resolution
of claims.
See
Jacobs
and
Paulson, “
The
Convergen
ce of
Renewed
Nationaliz
ation,
Rising
Commoditi
es, and ‘
Americaniz
ation’ in
Internatio
nal
Arbitration
and the
Need for
More
Rigorous
Legal and
Procedural
Defenses”
(2008) 43
Tex. Int'l
L.J. 359,
387(specif
ically
arguing
for
prescriptio
n, laches,
estoppels,
and
waiver).
94. See
ICC,
Avoiding
Objections
.

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Sweet &
Maxwell
and its
Contributo
rs