The London Court of International Arbitration (LCIA) has launched an online database containing anonymised decisions of the LCIA Court on challenges made to arbitrators between 2010 and 2017.
Background - challenges to arbitrators
In certain circumstances, parties to arbitrations may challenge the appointment of an arbitrator and seek to have that arbitrator replaced. Although the grounds of challenge may differ from one arbitral institution or jurisdiction to another, they generally revolve around apparent bias or the arbitrator's failure properly to perform their duties.
For arbitrations proceeding under the LCIA Arbitration Rules 2014, the grounds for revoking an arbitrator's appointment are set out in article 10. They include:
- Justifiable doubts as to the arbitrator's impartiality or independence;
- Arbitrator acting in deliberate violation of the parties' arbitration agreement; and
- Arbitrator's failure to conduct the arbitration with reasonable efficiency, diligence and industry.
Where a party makes a challenge to an arbitrator's appointment, unless all other parties agree to the challenge or the challenged arbitrator resigns, the LCIA Court will determine the challenge. The decision is made by either one or three members of the LCIA Court following consideration of written submissions from the parties and arbitrator and, in some cases, a hearing. The LCIA Court's reasoned decision is then provided in writing to the parties and arbitrator.
What does the database show?
The database launched by LCIA contains digests of the 32 LCIA Court decisions on such challenges in the period 2010 to 2017. Each digest contains a brief summary of the background to the challenge, and an anonymised excerpt of the LCIA Court's written decision, giving an insight into the decision-making process.
The figures show that challenges to arbitrators are rare in LCIA arbitrations; successful challenges rarer still. Of the 32 challenges detailed in the database, only seven were upheld in whole or part - the remainder were rejected by the LCIA Court. Given that over 1,600 arbitrations were registered with LCIA in the period covered by the database, that means that challenges were made in around 2% of arbitrations, and successful challenges in just 0.4% of cases.
In the majority of challenges, applicants complained of justifiable doubts as to the arbitrator's independence or impartiality - in many cases citing (albeit unsuccessfully) a procedural decision that was contrary to their interests as evidence of bias.
Transparency in arbitration
LCIA says it is releasing these digests as part of its ongoing commitment to transparency. Whilst privacy and confidentiality in substantive proceedings remain key attractions of international commercial arbitration, users of arbitration are clamouring for greater transparency over the way in which institutions and their arbitrators approach decision making and interpretation of the institution's rules. Anonymised digests such as these, together with data on the costs and duration of proceedings, give users a degree of reassurance on the procedures being adopted, without compromising the privacy which draws those users.
LCIA released a similar tranche of digests (covering the period 1996 - 2010) seven years ago, but it has indicated that the new database will now be updated periodically with new decisions, which has the potential to give a much more contemporaneous insight into the LCIA decision making process.