Economic Analysis of the Arbitrator’s Function Bruno Guandalini Arbitration has become an important market, where arbitrators are rational economic agents maximizing their utility. Although this is self-evident, it is rarely discussed. This penetrating book is the first to comprehensively analyze the market for arbitrators and arbitrators’ economic role within it. In great depth, the author tackles such salient issues as the following: effect of perceived inefficiencies and high costs on arbitration legitimacy; alleged commercialization of the arbitrator’s function; possible ethical problem raised by financial remuneration for rendering justice; what motivates a person to arbitrate; market for arbitrators’ functioning and failures, providing a better understanding of how actors could behave in such a specific market; structural and artificial entry barriers; effect of an arbitrator’s strategic behavior on the arbitrator’s function; limitations on an arbitrator’s rationality; and preventing and correcting these limitations. Numerous references to customs and procedures in major arbitral jurisdictions and to international laws and conventions affecting the efficiency of the arbitrator’s function are included. Pursuing a non-prescriptive analysis, the author draws on the discipline of law and economics, rational choice theory, behavioral economics, and psychological work on bounded rationality. Understanding the arbitrator’s function as a legal institution that is influenced by the market, this pioneer in developing and systematizing the study of the market for arbitrators and how it works will prove of inestimable value to all stakeholders in the arbitration market. Arbitrators, policymakers, regulators, and academics will be enabled to open the way to a more efficient market for arbitrators and betterment in arbitration worldwide.

The scope of the arbitrator’s powers in arbitration proceedings has been widely discussed in recent years, but remains understudied. Among prominent international arbitrators, none have focused on this issue more than Dr. Pierre A. Karrer. Dr. Karrer is celebrated here on the occasion of his seventy-fifth birthday by more than thirty leading arbitration practitioners and academics worldwide who have been part of, and have been influenced by, his extensive professional career. Following Dr. Karrer’s primary interests, notably his advocacy of a strong arbitrator role in proceedings as evidenced in his lectures, presentations, and publications as well as in his own arbitrations, the contributions in this book consider such questions as the following: ·What are the sources of an arbitrator’s power? ·What are the limits of an arbitrator’s power? ·Should arbitrators have a role in encouraging settlement? ·May arbitrators regulate and impose sanctions against counsel? ·How managerial should arbitrators be? ·What are the duties and liabilities of arbitrators? ·What is the nature of the arbitrator’s relationship to arbitral institutions? ·Are emergency arbitrators actually ‘arbitrators’? ·Should arbitrators raise issues of arbitrability and public policy ex officio? ·To what extent may arbitrators delegate tasks and use tribunal secretaries? With its in-depth perspectives on the arbitrator’s role, powers, and duties in an arbitration proceeding, and its extensive analysis of some of the most timely and controversial issues in arbitration today, this book offers an abundance of thought-provoking yet also practical commentary and guidance for practitioners and academics in the field of international arbitration and international commercial law.

The distinguished international lawyer Michael Pryles, who launched a meteoric career as an arbitrator after many years of teaching and writing on conflicts of law and other topics, has made a mark on arbitral law and practice that is recognized worldwide. In this book, over forty prominent arbitrators and arbitration scholars offer insightful essays on the thorny matters of jurisdiction, admissibility and choice of law in arbitration – topics which have long interested Professor Pryles and are of wide interest. Among the specific issues and topics examined are the following: • res judicata; • investment arbitration; • free trade agreements; • party autonomy; • application of provisional measures; • issue estoppel; • evidentiary inferences; • interim measures; • emergency and default proceedings; • the intersection of financing and jurisdiction; • consolidation of cases; and • non-contractual claims. Remarkable for its roster of highly distinguished contributors, this book is the only in-depth treatment of its subject. By turns thought-provoking and practical, it is bound to appeal to and be put to use by arbitrators and other lawyers who handle international cases. It will also prove of great value to global law firms and companies doing transnational business.

The agreement of disputing parties to each make a unilateral appointment of an arbitrator is among the most distinctive features of arbitral practice. A detailed examination, long overdue, of how this feature affects the actual process of arbitration is presented in this book. The study includes a historical analysis of unilateral nominations, a critical assessment of how the unilateral appointments system currently works and an empirical study of challenges of arbitrators. The author's critical assessment addresses several issues including: - limits to the right of the parties to make unilateral appointments; - the principle of equality of the parties in the constitution of the arbitral tribunal; - arbitrators' duty to be impartial and independent; - specific problems of bias in tribunals with party-appointed members; - the question of whether a different standard of impartiality and independence in party-appointed arbitrators makes any sense; - the presumption that party-appointed arbitrators can do things that presiding arbitrators cannot; and - the question of whether it is worth keeping the system of unilateral appointments as the default method for the constitution of multiple-member tribunals, or keeping it at all. The empirical study, in which the author offers a comparative analysis of challenges of arbitrators taking into account the method of appointment of the arbitrator, reveals interesting differences and coincidences between party-appointed and non-party-appointed arbitrators. The book ends with some suggestions on how the system of unilateral appointments could be improved, namely in order to increase the trust of each party in the arbitrator appointed by the other party and to allow an accurate match between what arbitration end-users may want from party-appointed arbitrators and what they ultimately get. For both its thorough and well-informed analysis and its sound recommendations, the book is sure to be welcomed by professionals in the arbitral community worldwide, as well as by arbitration law academics.

Central to the book’s purpose is the procedural challenge facing arbitrators at each and every stage of the arbitral process when fairness arguments conflict with efficiency concerns and trade-offs must be determined. Some key themes include how can a tribunal be fair, and in particular be neutral, if parties are so diverse? How can arbitration be made efficient and cost-effective without undue inroads into fairness and accuracy? How does a tribunal do what is best if the parties are choosing a suboptimal process? When can or must an arbitrator ignore procedural choices made by the parties? The author thoroughly evaluates competing arguments and adds his own practical tips, expertly synthesizing and engaging with the conference literature and differing authors’ views. He identifies criteria that offer a harmonized approach to each stage of the arbitral process, with particular attention to such aspects of international arbitration as: appropriate trade-offs between flexibility and certainty; the rights, duties and powers of arbitrators; appointment and challenge of arbitrators; responses to ‘guerilla’ tactics; drafting of arbitration agreements, including specialty clauses; drafting of required commencement notices and response documents; set-off; fast track arbitration and other efficiency options; strategic use of preliminary conferences and timetabling; online arbitration; multi-party, multi-contract, class arbitration; amicus and third party funders; pre-arbitral referees and interim relief; witness evidence, both factual and expert; documentary evidence, production obligations, and challenges to production; identifying applicable law; and remedies and costs.

In this thoroughly researched study of the grounds and procedures involved in challenging an arbitrator, the author provides the first in-depth analysis of the pertinent rules, guidelines, and standards of all the major international arbitration tribunals, as well as relevant issues raised in national case law in the United States, France, England, Sweden and Switzerland. Among the matters addressed are the following: the arbitratorand’s duty to disclose and investigate conflicts of interest; the duty of the parties to investigate and inform the arbitrator of conflicts of interest; the formal and timing requirements of making a challenge; the challenge procedure and effect on the arbitral proceeding; the standard for disqualifying arbitrators; the consequences of a successful challenge; issues of independence giving raise to challenges, including multiple appointments, the arbitratorand’s relationship with a party/counsel in the arbitration and the relationship between the arbitratorand’s law firm and a party/counsel; issues of impartiality giving raise to challenges, including the membership of other tribunals, the conduct of the arbitration and the failure to disclose. In light of the continuing growth of international business and the manner in which it is conducted, this book will be of immeasurable practical value to parties in both business and government, as well as to international law firms and the arbitral community. As a detailed guide to evolving best practice and the general obligation to arbitrate in good faith, it has no peers.