Chapter 20 - Blind Appointments in Arbitration

Abstract

Arbitration tribunals typically consist of an arbitrator appointed by each party and a third, who acts as the chair, appointed by an independent authority. While arbitrators are supposed to be neutral and exercise independent judgment, practitioners concur that party-appointed arbitrators often lean in favor of the nominating party. Concerns over this lack of impartiality sparked a proposal to “blind appointments” as a mechanism against the “affiliation bias.” In this chapter, I explore the causes, potential consequences, and implementation challenges of this proposal. First, using data from the World Bank's investor-state arbitration proceedings, I explore the potential effect of this appointing system in causing affiliation bias. Second, I argue that compared to other alternatives, blinding appointments is a promising bias-reducing intervention that maintains the observed benefits of parties' participating in the tribunal's formation. Third, I explain how blind appointments may have limits as to their corrective effects and elaborate on the most obvious practical problems with its implementation. At a more general level, this chapter illustrates the need for more research to move forward an important discussion in a growing legal field.