Systemic Bias and the Institution of International Arbitration: A New Approach to Arbitral Decision-Making

Abstract

As international arbitration expands, arbitral decision-making comes under scrutiny, with many raising legitimate questions: how do arbitrators decide? Do they tend to favour certain classes of parties? This article examines arbitral decision-making and puts forward three main propositions. First, that the legal concept of bias needs revisiting. For arbitration law and practice to effectively respond to criticism about the integrity of arbitration, the focus of our inquiry should include not only apparent bias associated with individual arbitrators, but also implicit and systemic bias. Second, the article provides a critical assessment of the existing empirical studies on arbitral decision-making. Although empirical studies have provided useful insight in arbitral judicial behaviour, they all depart from the same behavioural assumption that arbitral decision-making is driven almost exclusively by extra-legal factors, such as the personal traits, policy preferences or financial incentives of individual arbitrators. The article discusses the theoretical and methodological limitations of such a behavioural approach, and it, finally, offers an alternative model for the analysis of arbitral decision-making, which takes into account the influence of the broader institutional context within which arbitrators are embedded. Drawing on institutional theories, the article compares the procedural design of international arbitration with that of national and international judiciaries, and provides a description of the institutional structures of international arbitration and how they can affect the way that arbitrators decide.