Trainee, FTMS Avocats
The Association Française d’Arbitrage (AFA), the Belgium Arbitration and Mediation Center (CEPANI), the Netherlands Arbitration Institute (NAI) and the Vienna International Arbitral Centre (VIAC) organized the third edition of their joint conference for the Paris Arbitration Week, hosted by the law firm Ashurst in its Paris office. For AFA, its President Marc Henry (FTMS Avocats) was the speaker with Emmanuelle Cabrol (Ashurst). Representing the CEPANI was Benoît Kohl, for the NAI Camilla Perera-De Wit and for the VIAC Niamh Leinwather.
Arbitral institutions have a dual vocation: to supervise arbitrations by enforcing a certain arbitration police and to promote arbitration by being arbitration activists. It is found in both conceptions of the State, “Welfare State” (I) and “Gendarme State” (II).
Should arbitral institutions be interventionist in the conduct of the proceedings, or should it be limited to the scrutiny of compliance with arbitration rules?
I. The arbitral institutions’ welfare role
1. Should arbitral institutions serve as a go-between or middleman between parties and arbitrators?
For Camilla Perera-De Wit, arbitral institutions have a role to play which is an advantage in comparison to ad hoc arbitration. For instance, in the event of a defaulting party, at the beginning of the procedure, the institution can communicate with the defaulting party who needs to be informed that a procedure is pending and that a tribunal has been appointed. Also, when an arbitrator misbehaves during the procedure, the arbitral institution can remind the arbitrator of his or her obligations. Furthermore, the appointment of a tribunal secretary might be a solution when there are issues with an arbitrator.
Marc Henry does not believe that arbitral institutions should become "Mr. or Mrs. Good Offices”, but they cannot ignore the way in which arbitration proceedings are conducted under their aegis. Their role is to supervise arbitration proceedings in a proactive manner and act as an interface between the parties and the arbitrators. Parties must be able to raise their concerns with the institution when they don’t want to directly face the arbitrator. But of course, being a facilitator does not mean interfering in the proceedings because it would expose itself to the reproach of becoming a quasi-party to the arbitration proceedings and parties might engage their responsibility in such capacity.
In the room, a participant insists on the role of backup of arbitral institutions because some parties, and sometimes even lawyers and arbitrators, are not very familiar with arbitration.
2. Should arbitral institutions promote amicable resolution during the arbitral process?
What is the role played by mediation during the arbitral process?
Benoît Kohl notes that CEPANI has recently created a task force on alternative dispute resolution (“ADR”) to streamline and optimize it. According to statistics, in 2020 35% of the cases were closed through settlement reached by parties. In 2021, it was 25%, in 2022 35% and last year 30%. As a comparison, the NAI closed 62 procedures last year and only 4 were terminated with a settlement.
But institutions should not necessarily promote and intervene in settlements. Niamh Leinwather wonders whether the promotion of settlements should not pertain to judicial tribunals rather than arbitral institutions.
Marc Henry mentions that in the ICC Note to Parties and Arbitral tribunals, parties are always free to settle the case at any time during the procedure. By having the parties attend the case management conference, the arbitrators can assure it. AFA rules do not have such provisions.
One participant explains that, at the Milan Chamber of Arbitration, settlements are often discussed at the beginning or even in the middle of the arbitration. The percentage of settlements is very high (50 %) because arbitrators help parties to settle. It was highlighted that often, parties need a push to mediate, because concessions can be seen as a sign of weakness in business. The presence of the mediator during the whole procedure could facilitate the process.
3. Should efforts be made by arbitral institutions in favour of a greener world and diversity?
Benoît Khol notes that in their new rules, CEPANI includes a consideration for diversity and inclusion in arbitrations administered under their aegis. The criteria of diversity (gender, age) must be taken into consideration for arbitrator appointments, alongside availability, qualifications, and ability. This effort should come from the arbitral institutions, but also from the parties. According to statistics, in 2022 there were 40% of women arbitrators appointed. 65% were appointed by the committee and 35% by the parties. And in 2023, 25% women arbitrators were appointed. 45% were appointed by the committee and 55% by the parties.
Regarding the environmental impact, Benoît Khol adds that CEPANI encourages the use of various electronic tools, avoids printing documents as often as possible, tries to hold virtual meetings, uses electronic signatures and a secure online platform to exchange information. Camilla Perera-De Wit states that NAI also promotes a more progressive, greener, and more diverse policy with a new clause. The case management conference is done electronically by default. Regarding diversity, there is still work to do because if arbitral institutions leave it to the parties, results could be improved.
One participant states that diversity and inclusion issues are not purely theoretical. It can open the windows of arbitration and narrow the field of conflict of interests.
II. Arbitral institutions: Gendarmes?
1. What is the arbitral institution’s disciplinary role from a financial point of view?
For Niamh Leinwather, arbitral institutions can keep track on the delivery of the award with financial incentive when the case is particularly complex but fees can also be reduced when an arbitrator is inefficient. Camilla Perera-De Wit notes that in the NAI rules, there are no punishment provisions.
2. At the stage of composing the tribunal, how far can the arbitral institution go?
Benoît Kohl indicates that in CEPANI arbitrations, most arbitrators are appointed by the parties, who can reappoint another arbitrator if necessary. The institution should confirm what the parties want: it is the beauty of flexibility in arbitration. Camilla Perera-De Wit indicates that in the NAI rules, the standard for independence and impartiality is very high due to parties’ autonomy. The institution can encourage the arbitrator to declare ongoing cases he or she might deal with. The role of the institution is to keep the channel of communications open. The arbitral institution which has knowledge of circumstances not disclosed by the arbitrator should address it to the arbitrator to facilitate his or her impartiality and maintain the integrity of arbitration.
A participant raises the high number of cases one arbitrator can sometimes deal with. For Camilla Perera-De Wit, it is not a criterion which reflects his or her availability. Niamh Leinwather adds that this issue must be raised by the parties because the institution does not do so autonomously. Marc Henry concludes that it depends if the case is complex or not.
3. Should an Ethical Charter be subscribed by arbitrators at the time of their declaration of independence and availability, to avoid discrepancies between ethical conceptions among arbitrators belonging to the same arbitral tribunal?
Three possible approaches can be made: the vade mecum, the deontological code or manual of conduct, and the ethical charter. But Marc Henry thinks we must resist the tendency to always fill in the blanks. Arbitrators need space and freedom to express themselves fully. Nevertheless, an ethical charter can guarantee integrity if limited to a few essential principles mandatory for arbitrators. This commitment would enable arbitrators to take responsibility and exercise self-discipline. The AFA has been a driving force in this respect and as early as 2014, adopted an Ethical Charter.
Another idea could be the adoption of a disciplinary body, beyond the adoption of a Code of Ethics, and prior to any appointment, a mandatory accreditation of arbitrators could be created. Furthermore, after the designation, disciplinary sanctions could be put in place (withdrawal of an arbitrator, refusal to confirm, financial sanctions). However, most arbitration practitioners, among whom Marc Henry, do not share such ideas. Indeed, it’s not up to arbitral institutions to discipline arbitrators and arbitrators would not be interested in what would be a regulated profession.