Are arbitrators immune from liability?
International Arbitration (3rd edition)
There is no default immunity under the Arbitration Law. Immunity granted by the parties under the agreement to arbitrate, or through institutional rules, may be challenged in cases of fraud and gross fault (gross negligence or intentional fault)
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. Such immunity, however, is 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 06/10155; Court of Cassation, First Civil Chamber, 15 January 2014, No. 11-17196).
There are no laws regulating such matter, however, because of the proportionality principle and the common law principles in general, arbitrators have the same rights as judges do.
The Czech Arbitration Act does not contain any provisions on liability of arbitrators. Since the Civil Code applies subsequently in such cases, standard civil liability applies, even though there are certain specifics set by Czech Supreme Court case law, i.e. liability applies only if an arbitrator violates his duties and this leads directly to setting aside an award.
According to a decision of the Czech Constitutional Court, in case the arbitrator issues an award on behalf of an arbitral institution, the arbitration court is liable and not the arbitrator.
However, arbitrators generally have no immunity under Czech law.
Considering that the arbitrators perform a similar activity to that of national judges, their liability is also to some extent similar to that of national judges.
Under the Romanian CPC, the arbitrators are held liable for the damages incurred as a result of the following:
- The arbitrator abandons his duty as arbitrator in the case with no justified reason;
- The arbitrator fails to participate in the adjudication of the case with no justified reason;
- The arbitrator does not render the award within the established time limit with no justified reason;
- The arbitrator does not respect his duty of confidentiality;
- The arbitrator is subject to breach of his other duties, intentionally or by reckless negligence.
There are no provisions concerning immunity of arbitrators in the Serbian legislation.
However, arbitrators could be subject to a general regime of liability prescribed under Serbian Law on contracts and torts, and could in theory be found liable to compensate damages they incurred to a party provided that this damage could be ascribed to their willful intent or negligence.
In practice, an arbitrator would likely argue that he acted with due care and that therefore he cannot be found liable. The exception could be made in case of the existence of criminal conviction of an arbitrator for an offense made in relation to an arbitration proceeding.
No. According to Article 38 of the Arbitration Law, an arbitrator shall assume legal liability and be removed from the penal of arbitrators by the arbitration commission if he or she engages in activities prescribed in Article 34 of the Arbitration Law (see Question 15).
In addition, Article 399 of the Criminal Law of People’s Republic of China provides that where an arbitrator intentionally goes against the facts or laws and makes any wrongful ruling in the process of arbitration, he or she shall be sentenced to no more than three years of imprisonment or detention. If the circumstances are extremely serious, he or she shall be sentenced to imprisonment of no less than three years but no more than seven years.
a. DIA-Rules states that the members of the Arbitral Tribunal shall not be liable for any act or omission in connection with the commencement of an arbitration, the processing of an arbitration or an award made by the Arbitral Tribunal except when such limitation of liability is prohibited by applicable law.
There is no general regulation in Polish law concerning arbitrators’ immunity from liability. To the contrary, arbitration law expressly provides that if an arbitrator resigns without a valid reason, he or she is liable for damage caused by the resignation. On the other hand, the rules of the arbitration institutions usually provide for express waiver of liability for negligent breach of arbitrators’ duties.
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 considered to be 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.
UAE - Federal
An English translation of the recent amendment to Article 257 of the UAE's Federal Law No. 3 of 1987 by Federal Decree Law No. 7 of 2016 (the “Penal Code”) provides that:
‘Temporary imprisonment shall be inflicted on whoever issues a decision or expresses an opinion or submits a report or presents a case or proves an incident, in favour of a person or against him, contrary to the duty of fairness and unbiasedness, in his capacity as an arbitrator, expert, translator or investigator who is appointed by a judicial or an administrative authority or elected by the parties.’
The introduction of the above caused significant concern amongst the arbitration community, with both experts and arbitrators rejecting potential appointments.
The concern within the arbitration market has however subsided, assisted by the fact that no arrests nor convictions of either arbitrators or experts have occurred since the promulgation of the above amendment.
The DIAC Rules (Article 40) provides for immunity for any act or omission in connection with the arbitration, by an arbitrator. The terms of reference, should be produced, normally limit an Arbitral Tribunal’s liability to acts of bad faith.
The ADCCAC Rules do not expressly provide for the grounds on which arbitrators, will or will not be held liable for their actions and/or omissions.
UAE - Free-zone Jurisdictions
DIFC Arbitration Law (Article 22) provides that an arbitrator will only be liable for his / her acts or omissions where such have caused ‘damage by conscious and deliberate wrongdoing’.
The above does ‘not affect any liability incurred by an arbitrator by reason of his resigning’
The ADGM Regulations (Regulation 23) also provides that an arbitrator shall be not be liable unless the ‘act or omission in connection with an arbitration’ is shown to have ‘caused damage by conscious and deliberate wrongdoing’.
Under the 1996 Act, an arbitrator is not liable for anything done or omitted in the discharge or purported discharge of his functions as arbitrator unless the act or omission is shown to have been in bad faith (s.29(1)). Another exception is where the arbitrator resigns (s.29(3)). A procedure is provided in s.25 for the courts to deal with the resignation.
Neither the Law of Arbitration nor its Implementing Regulations address arbitrator liability.
Under general Shariah principles, an arbitrator may be held liable for losses caused by intentional wrongful behavior or gross negligence.
Article 16 of the SCCA Arbitration Rules provides that members of the tribunal, the emergency arbitrator, the administrator and the SCCA board shall not be liable to any party for any act or omission in connection with any arbitration under these rules, except to the extent that such a limitation of liability is prohibited by applicable law.
The FAA does not speak to immunity for arbitrators. Courts have held that an arbitrator is immune from civil liability for those acts taken by the arbitrator “within the scope of their duties and within their jurisdiction.” Wasyl, Inc. v. First Boston Corp., 813 F.2d 1579, 1582 (9th Cir. 1987).
Arbitrators are subject to civil liability if they culpably do not fulfil, or do not timely fulfil, the obligations of their mandate. However, based on jurisprudence, the setting aside of the award is a prerequisite for any the liability of the arbitrators.
Arbitrators are not accorded any statutory immunity under the ACA. There is no provision governing liability for negligence of the arbitrator and in such a circumstance an action is likely to be maintainable. The Lagos Law grants arbitrators statutory immunity unless they act in bad faith. Generally, public policy favours immunity for arbitrators from liability for their judicial acts. The recourse that parties have against arbitrators that do not perform their tasks with all due diligence is to terminate the mandate of such arbitrators.
Arbitrators cannot be held liable for damages arising from decisions issued except in the cases in which the State judges may also be held liable. Such liability is limited and regards mostly gross errors in which there may have been intent or serious negligence. Also, the liability is only towards the parties.
Arbitrators may also be held liable for damages in specific cases such as when they unjustifiably refuse to exercise its functions after having accepted the position to arbitrate (art. 12 (3) LAV) or when they unjustifiably hamper that an arbitral award is issued within the determined period (art. 43 (4) LAV).
The DAA excludes the civil liability of an arbitrator except in cases when they have been found guilty of a crime. Arbitral institutions, however, are entitled to reduce an arbitrator’s fees should they fail in the proper performance of their duties.
Yes. Section 22 of the Arbitration Act, 2010 provides that arbitrators shall not be liable for anything done or omitted in the discharge or purported discharge of their functions. This immunity extends to any employee, agent or advisor of an arbitrator and to an expert appointed by an arbitrator under the Arbitration Act, 2010 and it also extends to cover arbitral or other institutions by whom an arbitrator is appointed and their employees and agents.
There is no provision to the effect that arbitrators are immune from liability. There is a general consensus that an action based upon error in fact or in law, will not succeed. However, there may be basis for a claim against an arbitrator in the event of serious misconduct or breach of the criminal law, such as corruption. There have been no such cases in Norway.
No. Arbitrators can be held liable depending on whether the breach of duties is related to the actual decision of the dispute or to other duties.
Pursuant to the applicable case law it is recognized that the parties of the arbitration proceedings implicitly agree to treat the arbitrator's liability equivalent to the liability of the state court judges laid down in section 839 (2) Civil Code. Thus, arbitrators cannot be held responsible for the incorrectness of the judgment unless the breach of duty consists in a criminal offence.
The arbitrator cannot invoke this privilege if the breach relates to other contractual duties, e.g. if the arbitrator terminates his contract without justified reasons at an inappropriate stage of arbitration. In this case the arbitrator must compensate the parties for their damages on the basis of general contractual liability principles.
Arbitrators are not immune from liability.
In domestic arbitration, an arbitrator may be held liable if a party challenges its final award by filing a recourse of complaint (recurso de queja) before the Court of Appeals. As stated in Article 545 of the CJO, the recourse of complaint’s purpose is to correct faults and serious abuses committed in the rendering of the final award, which may also be set aside by the local court. According to Article 548 of the CJO, parties have 5 business days from the notice of the final award to file the recourse of complaint. Also, parties may seek for an arbitrators’ liability by filing against them a disciplinary complaint before local courts (queja).
As for international arbitration, the ICAL does not contain specific provision regarding arbitrators’ liability and the CAM Santiago Rules of International Commercial Arbitration, exclude in Article 4 the arbitral tribunal’s liability for “acts or failures relating to the arbitral process they are conducting”.
Finally, arbitrators may be liable under Chilean criminal law for acts that are crime constitutive for judges, such as the crime of prevarication.
Arbitrators are not personally liable. However, it may be a cause for voiding the arbitral proceedings or the arbitral award.
Arbitrators are not immune from liability. Nevertheless, pursuant to article 881 GrCCP the arbitrators may be held liable only for gross negligence or intentional breach of their duties. Same rule applies to judges regarding the violation of their duties. In case the conduct of the arbitrator constitutes a criminal act, such as bribery for example, apart from the fact that he may be subject to prosecution, the aggrieved party may bring a tort claim against him under article 914 of the Greek Civil Code.
Specific procedural requirements apply. Claims against arbitrators shall take the form of a special remedy provided for under article 73 para. 5 of the Introductory Law to the GrCCP, the so-called action for judicial misconduct. This remedy must be filed within 6 months from the time the arbitrator’s wrongful act or omission takes place (see however the analysis below).
In case the claim against the arbitrator is premised upon an erroneous award, it is argued in legal literature, that, by analogy to what is applicable to State Court judges, the aggrieved party must first exhaust all available remedies against the award. In case the aggrieved party succeeds in his request for setting aside the award, an action for judicial misconduct is precluded for lack of damage. On the contrary, in case the request is dismissed, the aggrieved party must file side action within six months.