Ensuring Party Equality in the Process of Designating Arbitrators in Multiparty Arbitration: An Update on the Governing Provisions

Abstract

The arbitration world has long struggled with how best to ensure fairness in the appointment of arbitrators in disputes among three or more parties. The French Cour de cassation’s 1992 Dutco decision is widely credited with calling attention to the question and with spurring leading arbitration institutes to revise their rules to address the appointment process in multiparty cases. Although the solutions adopted differ in some particulars, most major sets of rules now either permit, or else require, the institute to designate the entire tribunal in certain multiparty instances. A number of national arbitration laws also address the question in various ways, with one common thread existing in a sizeable subset of these laws: their protective provisions apply whenever one party enjoys a privileged role in the designation process. This article also examines the relatively modest body of arbitral and judicial precedents existing on the question, and this examination reveals two emerging trends: treating multiple parties named on the same “side” of a dispute as a single entity, and finding that those multiple parties have similar interests. Either of these “solutions” allows multiparty arbitrations to be handled as if they were classic bipartite arbitrations, and for difficulties in the constitution of tribunals to be avoided. The authors conclude that the simplest solution is for parties more routinely to use their arbitration agreements to empower respected arbitration institutes to appoint the entire tribunal, either in all cases or upon the appearance of a disagreement as to a designation among multiple parties on either side.