Challenging Arbitrators and the Importance of Disclosure: Recent Cases and Reflections

Abstract

The last few years have seen a rise in challenges to arbitrators. It is argued that challenges are a tactic resorted to by parties and their counsel to cause delay and increase the costs of arbitration and, thus, undermine the parties’ choice and the finality of awards. However, the right to challenge an arbitrator and the arbitrators’ duty of disclosure are key to ensuring the integrity of the arbitral process. This article examines how the balance is struck between these two objectives by looking at the nature and the scope of the right to challenge arbitrators and the duty to disclose under national laws and rules of arbitral institutions. After reviewing recent national court cases and arbitral decisions concerning challenge, the article calls for (i) the threshold for challenging arbitrators in investment arbitrations to be, at the very least, the same as in international commercial arbitrations; (ii) a neutral and independent body to be given the authority to review challenges under the ICSID system; and (ii) disclosure obligations to be imposed on counsel and the parties.

Keywords: Challenge of arbitrators, UNCITRAL Model Law on International Commercial Arbitration, Croatian Arbitration Act, English Arbitration Act, Rules of Arbitration of the Permanent Arbitration Court attached to the Croatian Chamber of Economy, ICC Rules of Arbitration