The independence and impartiality of arbitrators

Abstract

One core element that arbitration panels under DTCs, the MLI, Arbitration Convention and the Tax Dispute Resolution Directive all have in common is that they include a number of so-called ‘independent’ persons or ‘experts’. The role of these experts is, on the one hand, to provide expertise that may not be available among tax administration officials - who can also participate in arbitration panels under some procedures – and, on the other hand, to ensure the strength and legitimacy of the procedure and the result from an arbitration procedure. Yet the rules to determine who may qualify as an ‘independent’ person vary between the different instruments; as does their role and importance in the procedure itself. In addition, once nominated as an ‘independent’ person, what safeguards are in place for persons to decide in a truly impartial fashion? In contrast to judicial appointments, independent arbitrators are considerably less regulated or protected from undue influence both by taxpayers and governments. This chapter will explore the existing rules and safeguards and will propose ideas for possible improvements.