Are arbitrators immune from liability?
No. Section 594(4) ACCP stipulates that an arbitrator shall be liable to the parties for all losses caused if he/she does not or in an untimely manner fulfil his/her obligations assumed under the appointment. However, according to the case law of the Austrian Supreme Court regarding this provision – bar cases of wrongful refusal or delay – the setting aside of the award rendered by the arbitrator is a prerequisite for his/her liability. Conversely, the annulment of an award does not automatically entail an arbitrator’s liability.
Nothing under French law provides that arbitrators are immune from liability. French courts, however, have established that arbitrators are generally immune from liability for rendering incorrect decisions. That immunity is, however, not absolute. Arbitrators may be found liable for gross negligence, wilful misconduct, denial of justice or fraud (see Court of Cassation, First Civil Chamber, 16 December 1997, No. 96-10703; Paris Tribunal de grande instance, 16 September 2009, Case No. 06/10155; Court of Cassation, First Civil Chamber, 15 January 2014, No. 11-17196).
Arbitrators may not be held liable for damages resulting from their decisions, save for those situations in which judges may be so.
Arbitrators are generally immune from liability in respect of decision making, considering their power to assess the case according to their “intimate conviction”. The Code of Civil Procedure provides that arbitrators are to be held liable for the damage incurred as a result of their following actions:
• withdrawal from serving (abandoning their duty as arbitrators) in the case with no justified reason;
• failure to participate in the adjudication of the case;
• failure to render the award within the established time limit;
• failure to comply with the duty of confidentiality; and
• breach of their other duties, intentionally or by reckless negligence.
Whereas the SCC Rules provide for a general exclusion of liability for arbitrators, the Arbitration Act does not contain any provision concerning immunity from liability for arbitrators. Hence, arbitrators can be held liable for damages under general contract liability, unless a separate agreement between the parties and the arbitrators exists.
Section 13 of the Act provides that arbitrators are not liable for negligence in respect of anything done or omitted to be done in the capacity of arbitrator.
The legal relationship between the arbitrator and the parties (receptum arbitri) is to be qualified according to the law at the seat of arbitral tribunal (lex arbitri). According to Swiss case law and the legal doctrine, the arbitrator is obliged to personally fulfill all his/her duties with all due care. Throughout the proceedings, arbitrators are committed to independence and impartiality.
The liability of arbitrators is limited to the event of unlawful intent or gross negligence. However, in case of breach of duties by the arbitrator, parties are likely to in the first instance challenge the arbitration award and only subsequently attempt to hold the arbitrator liable for damages. In addition, an arbitrator may be liable if he/her accepts an appointment without disclosing a reason for refusal that finally leads to refusal or revocation of the arbitration award in appeal proceedings.
In Swiss Rules arbitration, art. 45 Swiss Rules declares the exclusion of liability of, inter alia, the arbitrators for any act or omission in connection with arbitration conducted under the Swiss Rules, except if such act or omission is shown to constitute intentional wrongdoing or gross negligence.
The CPC does not address arbitrator liability except with regard to instances of unjustifiable resignation, which may constitute a cause of action for damages for the concerned parties. However, the DIAC Arbitration Rules are clear in excluding the liability of arbitrators for acts and omissions in relation to the arbitration. The Dubai courts have recently rejected several claims against arbitrators for alleged procedural misconduct.
Under the DIFC Arbitration Law and ADGM Arbitration Regulations, with the exception of wilful conduct to cause harm, arbitrators, in addition to their agents and employees, enjoy certain immunities from liability. In the DIFC, this immunity does not extend to causes of action arising from an arbitrator’s resignation. No equivalent provision exists under the ADGM Regulations.
Any acts or omissions by the arbitrator in the discharge of his functions will not attract liability (section 47, AA). However, an arbitrator may not avail himself of this immunity where impugned act or omission was in bad faith.
Where the impugned act or omission did not arise from a discharge of the arbitrator’s functions, such as where the arbitrator fails to act at all having accepted an appointment, the arbitrator would not be able to rely on this statutory immunity.
The FAA and other statutes do not expressly govern this issue, but US courts have held that an arbitrator is immune from civil liability for acts related to the arbitrator’s decision-making function. Various court decisions have also extended immunity to arbitral institutions.
The IAA provides that an arbitrator shall not be liable for:
- negligence in respect of anything done or omitted to be done in the capacity of arbitrator; and
- any mistake in law, fact or procedure made in the course of arbitral proceedings or in the making of an arbitral award. IAA, Section 25.
No, according to Article 17 of Law nº 9.307/96, the arbitrators, when in the exercise of their duties or because of them, are treated as public officers for the purposes of criminal law. By equating the arbitrator to public officers, the legislature aimed to strengthen the reliability offered by arbitration, ensuring users of this alternative means of resolving disputes a decision free from distortions and deviations. By reporting (indirectly) to the title of the Criminal Code dealing with crimes against public administration, the Article 17 of Law nº 9.307/96 aimed to protect the parties against misconduct in office, corruption and malfeasance.
The jurists’ opinion criticizes the wording given to that article 17 of Law nº 9.307/96, because it leaves aside the question of the arbitrator's civil liability, which is thinly mentioned in the caput of Article 14 of Law nº 9.307/96, which provides that are prevented from working as arbitrators the persons who have with the parties or with the dispute brought before them some of the relationships that characterize cases of impediment or suspicion of judges, applying, as appropriate, the same duties and responsibilities as provided in the Civil Procedure Code. In the absence of an article that regulates the civil liability of the arbitrator, the jurists’ opinion has held that the arbitrators can’t be held responsible for any error in judicando, and that in case of error in procedendo the arbitrator's civil liability should always be restricted to the hypotheses of malicious fraud or grievous fault.
Consistent with immunity for judges and other members of the judiciary, arbitrators are immune from liability absent bad faith or fraud.
The Panama Arbitration Law is silent as to the liability of arbitrators.
We are not aware of any case in Panama where the parties have sought the liability of the arbitrators.
No, they are liable under art. 21 of the Arbitration Law.
The relationship between the parties and the arbitrators are contractual. This contract is made once the arbitrators accept the appointment. Therefore, the liability of the arbitrators can be assessed according to the general provisions of the obligations law. The arbitrators must consider their duty of care. Local Law states that, unless otherwise agreed, the arbitrator is obliged to compensate the parties’ damage arising from his/her failure to fulfill his/her duties without a valid reason.
German law contains no explicit provisions on the immunity of arbitrators. Therefore, arbitrators are generally liable to the parties. However, the German Federal Court of Justice (Bundesgerichtshof) drew comparisons to the work of judges at German state courts and hence granted the same immunity to arbitrators. In particular, arbitrators cannot be held liable for the correctness of their decisions. Without such limitation of liability an arbitral award would factually not have a res iudicata effect because the unsuccessful party could always reopen the case by filing a new claim against the arbitrator arguing that the arbitrator made a mistake.
Pursuant to article 813 bis of the Italian Civil Procedural Code, arbitrators are liable for damages resulting from (i) their intentional or gross negligence in delaying their duties, or (ii) unjustified withdrawal, or (iii) intentional or gross negligence that caused delay in rendering the award within the provided deadline.
Yes (section 29). The 2 exceptions are (a) bad faith and (b) resignation.
An arbitrator is not liable in any proceedings for anything done or omitted in the discharge or purported discharge of his or her functions. This immunity also extends to persons engaged by the arbitrators and arbitral institutions. The immunity applies even where an arbitrator acts in bad faith.