Can the appointment of an arbitrator be challenged? What are the grounds for such challenge? What is the procedure for such challenge? Has there been an increase in number of challenges in your jurisdiction?
International Arbitration (3rd edition)
The Arbitration Law has a specific procedure for the recusal of arbitrators. According to Article 18 of the Arbitration Law an arbitrator cannot be recused unless there is an issue regarding his or her neutrality or impartiality. According to the Arbitration Law Article 19, a party may make an application for recusal of an arbitrator to the arbitral tribunal. The arbitrator then has 15 days to step down as arbitrator. If the arbitrator does not step down within 15 days of the application, then the recusal application must be referred to the competent court for review. The competent court then decides on the application. The above procedure of referral is mandatory public policy. The Cairo Regional Center has objected to this Rule, and it has been subjected to challenges before the courts, where it was submitted that where parties have agreed to a set of rules including recusal procedures, recusal should be subject to these rules and not a court decision. The matter is still not clear. Absent an amendment to the Law, it is likely that the courts will continue to apply the mandatory statutory provision that provides that recusal is to be decided by the courts.
If a party becomes aware of a problematic situation, that party must challenge the arbitrator during the arbitration proceedings by following the procedure and time limits set out in the applicable arbitration or procedural rules (rather than waiting until the setting-aside stage). If the party waits until the moment of setting-aside to challenge the arbitrator, the French courts will consider that the party waived its right to challenge the award on the basis of a lack of independence and impartiality of the arbitrator (see Court of Cassation, First Civil Chamber, 25 June 2014, No. 11-26.529, Tecnimont).
An arbitrator can be challenged on any of the following grounds, which apply to both domestic and international arbitration:
- Any circumstance that can affect his or her independence or impartiality (Article 1456, CCP).
- Legal incapacity, refusal to act or resignation (Article 1457, CCP).
- Unanimous consent of the parties (Article 1458, CCP).
If the parties cannot agree on the removal of an arbitrator, the issue is resolved by the person in charge of administering the arbitration or, where there is no such person, by the juge d’appui (Articles 1456 and 1458, CCP). The time limit to file an application before the juge d’appui is one month following the disclosure or the discovery of the fact at issue.
Statistics from the Secretariat of the ICC Court suggest that the number of challenges registered with the Court has increased in recent years, but this is likely due to the substantial increase in the Court’s caseload rather than a stronger propensity for challenging arbitrators.
Upon application by any of the parties, the court may revoke an arbitrator’s duties for a certain dispute if there is failure to act with all due diligence or expedition to conduct the said arbitration or to issue an award.
In the case of reasonable doubt on the arbitrator’s impartiality or independence the court may remove said arbitrator upon petition of the concerning party.
There is no official data which could support the proposition that there exists an increase of challenges of arbitrators in Cyprus. We can infer however from case law data base currently in place that the challenge of the appointment of arbitrators is something which is not unusual.
According to Section 12 of the Arbitration Act, the appointment can be challenged by either party under the circumstances of Section 8 (see above question 12), which means that the arbitrator is possibly biased and did not resign himself. The parties may agree on a procedure regarding the preclusion of an arbitrator. Any party can submit a motion to a state court to challenge/preclude an arbitrator.
However, according to rules Rules of the The Arbitration Court attached to the Economic Chamber of the Czech Republic and Agricultural Chamber of the Czech Republic, challenges must be brought prior to the commencement of the oral hearing. Later challenges will be taken into account only if there was a serious cause for the delay. The challenges are decided by the remaining members of the tribunal. If the remaining arbitrators do not agree, or if the challenge concerns two arbitrators or a sole arbitrator, it is decided by the Board of this permanent arbitral institution. If the challenge of the arbitrator is upheld, a new arbitrator shall be elected or appointed in accordance with the Rules.
There has been no increase in the number of challenges in the Czech Republic in recent years.
An arbitrator may be disqualified for the same reasons calling for the disqualification of a judge, such as direct commercial relations with one of the parties, or when they have provided assistance to one of the parties, assisted and represented one of the parties, or testified in an earlier procedural stage of the case and other situations alike.
When a party is knowledgeable of any reason for disqualification, the party may challenge the appointment before the competent court within 10 days as of the appointment of the arbitrator, or as of the date when the party became aware of grounds for a challenge. The decision of the court on the grounds or disqualification is final.
Similarly, the CICA Rules stipulate a set of grounds triggering the incompatibility of the arbitrators, including, inter alia:
- The arbitrator does not meet the qualifications or other requirements regarding arbitrators provided in the arbitration agreement;
- A legal person whose shareholder the arbitrator is or in whose governing bodies the arbitrator is bears an interest in the case;
- The arbitrator has employment connections or direct trade links with one of the parties, with a company controlled by one party or that is placed under common control with the latter;
- The arbitrator has provided consultancy to one of the parties, assisted or represented one of the parties or testified in one of the earlier stages of the case.
The challenge shall be made within 10 days since the date the party has acknowledged the appointment of the arbitrator or, as the case may be, since the reason for challenge occurred.
Appointment of arbitrators may be challenged only if the circumstances exist that may justifiably raise doubts as to the arbitrators’ impartiality or independence or if they do not possess qualities agreed upon by the parties.
Unless otherwise agreed by the parties, a party shall submit a request for challenge of an arbitrator in writing within 15 days after becoming aware of the appointment of the arbitrator or of grounds for his challenge.
The party may challenge an arbitrator appointed by that party or jointly with the opposing party, only if the grounds for the challenge have occurred after the appointment, or the party became aware of those facts after the appointment.
Unless the parties agreed otherwise, the competent court shall decide on the challenge of an arbitrator.
The parties who entrusted the organization of their arbitration to a permanent arbitral institution shall have the challenge of arbitrators resolved in accordance with the rules of that institution.
The procedure of challenge of arbitrator does not prevent the arbitration from continuing with the arbitration proceedings and rendering an award.
Yes. According to Article 34 of the Arbitration Law, a party may challenge an arbitrator if he or she: (1) is a party or a close relative of a party or of a party’s representative; (2) has personal interest in the case; (3) has some other relationship with a party to the case or with a party’s representative which may affect the impartiality of the arbitration; or (4) meets a party or its representative in private, accepts an invitation for dinner by a party or its representative or accepts gifts presented by any of them.
Under Article 35 of the Arbitration Law, a party challenging the appointment of an arbitrator shall state his reasons and submit the application prior to the first hearing, or before the conclusion of the last hearing if reasons for the withdrawal only became known after the commencement of the first hearing. Article 36 further provides that the challenge shall be determined by the chairman of the arbitration commission, and if the chairman is serving as an arbitrator, the withdrawal shall be determined collectively by the arbitration commission.
It is worth noting that the rules of arbitration institutions in China generally contain provisions on the challenge of arbitrators.
Although the topic of challenging arbitrators has invoked a considerable amount of discussion in the last two years, so far there has been no known data released by Chinese arbitration commissions or courts regarding the number of challenges they have heard.
a. A party can challenge an arbitrator only if it finds that there exist circumstances that may give rise to justifiable doubts as to the impartiality or independence of the arbitrator, or if the party finds that the arbitrator does not posses the qualifications agreed on by the parties.
A challenge must be submitted within 15 calendar days of the party having become aware of the appointment of the arbitrator and the circumstances on which the challenge is based.
No statistics have been published regarding the number of challenges.
Arbitration law provides two grounds to challenge an arbitrator: lack of impartiality or independence, and lack of the qualifications agreed by the parties. The party that appointed an arbitrator may challenge the arbitrator only if the party became aware of the grounds for the challenge after the appointment.
The parties are free to agree on the procedure for challenging arbitrators. Usually the rules of the arbitration institution provide their own procedures for challenging arbitrators. For example, under the Rules of the Court of Arbitration at the Polish Chamber of Commerce, the Arbitral Council of that institution decides on the challenge. The rules or the parties’ agreement may not however waive the right to challenge the arbitrator in court.
Under the default procedure, the party seeking to challenge an arbitrator must notify all arbitrators and the opposing party of the grounds. If the arbitrator does not resign or is not removed by the parties within two weeks, the party may seek removal by the court. An order of the court denying a challenge to an arbitrator is subject to an interlocutory appeal.
We did not notice a significant increase in number of challenges in recent years.
The appointment of an arbitrator may be challenged based on three grounds (art. 180 para 1 PILA and art. 367 CPC), namely, (i) if the appointed arbitrator does not have the qualification agreed upon by the parties, (ii) if the rules of arbitration agreed upon by the parties provide a ground for challenging the arbitrator, and (iii) if circumstances giving rise to reasonable doubts as to the arbitrator's independence exist.
A party that wishes to challenge an arbitrator it itself nominated, or in whose appointment it participated, may only do so on grounds that have come to its attention after the appointment. The grounds for challenge must be notified to the arbitral tribunal and the other party without delay.
In case the parties have not agreed on a procedure for challenging an arbitrator (including by means of referring to institutional rules of arbitration), the competent court at the seat of the arbitral tribunal shall take a final decision (art. 180 para 3 PILA). We noted no noticeable increase in the number of challenges.
UAE - Federal
Article 15 of the UAE Arbitration Law and the DIAC Rules (Article 13) both provide for the challenging of an arbitrator’s position.
Article 14 of the UAE Arbitration Law provides that an arbitrator may be recused, ‘in circumstances which are likely to give rise to serious doubts regarding his impartibility or independence’.
Article 15 of the UAE Arbitration Law requires that a party intending to recuse an arbitrator must write to the Arbitral Tribunal within 15 days of becoming aware of:
‘the arbitrator’s appointment’ (Article 15(1)); or
the grounds for the recusing the arbitrator (Article 15(1)).
This written statement should set out the grounds for the arbitrator’s recusal.
Should the arbitrator not recuse himself / herself or the other party ‘does not approve the recusal within 15 days from the date of notification’, the challenging party may file its application with the [arbitration authority or court] within 15 days of the expiry of the above 15 day period.
The [arbitration authority or court] shall subsequently make its decision as to whether to recuse the arbitrator within 10 days.
This provision may be particularly helpful in ad hoc arbitrations and could be viewed as even more detailed and thorough than the equivalent process set out in some arbitral rules of institutional arbitration proceedings.
Where the relevant grounds exist, this process can be used to remove both arbitrator and chairman alike from their position on the Arbitral Tribunal.
UAE - Free-zone Jurisdictions
The appointment of an arbitrator can be challenged pursuant to DIFC Arbitration Law (Article 18) on the grounds he / she is not independent, impartial or does not possess the qualifications agreed upon by the parties.
A party challenging the arbitrator’s position, must write to the LCIA Court, Arbitral Tribunal and all other parties within 14 days of the formation of the Arbitral Tribunal or becoming aware of the grounds for removal of the arbitrator. Should all other parties agree with the challenge brought, the arbitrator’s appointment shall be revoked by the LCIA Court.
If the arbitrator does not resign or the parties do not agree to the removal of the arbitrator, the LCIA Court shall issue its decision upon the challenge as set out in Article 10 of the DIFC-LCIA Arbitration Rules.
Challenging an Arbitrator where no Procedure was agreed by the Parties
Where the parties have not agreed on a procedure for challenging an arbitrator, the ADGM Regulations provide the below.
A party wanting to challenge an arbitrator must send a written statement to the Arbitral Tribunal setting out its reasons, within 30 days of becoming aware of:
‘the constitution of the arbitral tribunal’’ or;
the existence of grounds on which to challenge the arbitrator (Regulation 20(2)).
The grounds for challenging an arbitrator are as followings:
‘circumstances likely to give rise to justifiable doubts as to his [the arbitrator’s] impartiality or independence’; or
he/she does not possess the qualifications agreed upon by the parties (Regulation 19).
The arbitration institution administering the arbitration or the Court (where there is no arbitral institution appointed) shall decide on the challenge to the arbitrator, unless the arbitrator withdraws, or the other party agrees to the challenge (Regulation 20(2)).
The arbitration shall, however, not be stayed pending the decision of the arbitral institution or the Court (Regulation 20(2)).
Failure or Impossibility to Act
‘If an arbitrator becomes as a matter of law or fact unable to perform his function or for other reasons fails to act without undue delay’, his mandate will be termination upon:
his ‘withdraw from his office’; or
the parties’ termination of that arbitrator (Regulation 21).
Should the arbitrator not withdraw, or the parties cannot agree on his/her termination, or the ‘controversy remains concerning any of these grounds’, a party may request that the arbitral institution administering the arbitration or the Court (where no arbitral institution has been appointed) to terminate the mandate of the arbitrator.
This decision of the arbitral institution or the Court is not subject to appeal.
Pursuant to s.24 of the 1996 Act, any party may apply to the court (under Part 62 of the Civil Procedure Rules) to remove an arbitrator where (a) circumstances exist that give rise to justifiable doubts as to his impartiality, (b) the arbitrator lacks the requisite qualifications or capacity or (c) the arbitrator refuses or fails to properly conduct proceedings or make an award. Where another entity (whether the tribunal itself or the institution administering the arbitration) is vested with the power to effect such removal, the complaining party is required to first exhaust that avenue for removal before approaching the court (section 24(2), 1996 Act).
Arbitrator challenges are not common, but statistics from arbitral institutions indicate a recent increase in arbitrator challenges, particularly in investment treaty disputes. This trend is also reflected in a number of recent decisions by the English courts regarding arbitrator challenges, including Cofely Ltd v Bingham and another  EWHC 240 (Comm).
Article 16(2) of the Law of Arbitration provides that an arbitrator shall be barred from considering or hearing a case for the same reasons for which a judge can be barred, even if neither party so requests.
As per the Saudi Law of Procedure before Sharia Courts, the appointment of arbitrators can thus be challenged if any of the following occurs:
1. either the arbitrator or his/her spouse has a case similar to the case before the arbitrator;
2. the arbitrator, or his/her spouse, has a dispute with a litigant or his/her spouse after the lawsuit was filed and pending with the judge, unless that [latter] lawsuit was filed with the intention of disqualifying him/her from considering the case before the arbitrator;
3. the arbitrator’s divorcee with whom he has a child or one of his relatives or in-laws up to the fourth degree has a dispute before the judiciary with a litigant in the case, or with his wife, unless the case was brought with the intention of disqualifying the arbitrator;
4. a litigant is the arbitrator’s servant or the judge had habitually dined or lived with him/her, or if he had received a gift from him shortly before the lawsuit was filed or thereafter; or
5. if enmity or friendship exists between the arbitrator and a litigant such that it is likely he/her would not be able to judge impartially.
In addition, Article 16(3) of the Law of Arbitration provides more generally that an arbitrator may be challenged in the presence of circumstances giving rise to justifiable doubts as to his impartiality or independence, or if he lacks the qualifications agreed to by the parties.
Further, under Article 18(1), the appellate court may dismiss an arbitrator when it causes unjustifiable delay to the arbitration proceedings.
As far as we are aware, there are no statistics available revealing the frequency of arbitrator challenges being raised in court.
The FAA does not address arbitrator challenges. Institutional rules provide the conditions for challenging an arbitrator’s appointment. The typical grounds for challenge are the lack of impartiality and independence of the arbitrator. The procedure for challenging varies by institutional rules. Given that most challenges to an arbitrator’s appointment happen prior to the final award and out of court, there is little publicly available information allowing us to determine whether the number of challenges have recently increased in the U.S.
The Austrian Code of Civil Procedure and the Vienna Rules provide that arbitrators may only be challenged based on justifiable doubts as to their impartiality and independence or on the ground that the arbitrator does not fulfil the requirements of the agreement of the parties.
Austrian law provides for a default procedure if the parties have failed to determine a challenge procedure by agreement: A party shall first submit a written statement of the reasons for the challenge to the arbitral tribunal. This gives the challenged arbitrator the opportunity to resign from office or the other party may agree to the removal of the challenged arbitrator. If the challenged arbitrator does not resign or is not removed upon mutual agreement of the parties, the sole arbitrator respectively the arbitral tribunal shall decide on the challenge. If the challenge before the sole arbitrator respectively the arbitral tribunal is unsuccessful, the challenging party may apply to the Austrian Supreme Court as first and last instance to decide on the challenge.
The prevailing impression is that challenges have not increased in number.
The appointment of an arbitrator can be challenged if circumstances exist that raise justifiable doubts as to his/her impartiality or independence; or that he/she does not possess the qualifications agreed by the parties. See section 8 of the ACA. The parties are at liberty to determine the procedure to be followed in challenging the appointment of an arbitrator. Under the ACA, where no such procedure was agreed, the party intending to challenge the arbitrator must forward a written statement of the reasons for the challenge to the arbitral tribunal within 15 days of becoming aware of the constitution of the arbitral tribunal or the circumstances for the challenge.
Unless the arbitrator whose appointment has been challenged withdraws or the other party agrees to the challenge, the arbitral tribunal will decide on the challenge. See section 9 of the ACA. Under the Lagos Law, the arbitral tribunal or the appointing authority (if there is one) will determine the challenge. There has been a rise in number of challenges to the appointments of arbitrators of late but such challenges are largely unreported. Nigeria does not have comprehensive reporting of appellate cases, and cases in the trial court are rarely reported at all. There is increasing awareness of the importance of arbitration and the need for expediency in the process.
The appointment of an arbitrator can be challenged if circumstances arise that may cause justified doubts as to its impartiality or independence or if it does not have the qualifications that the parties agreed upon (art. 13 (3) LAV).
The parties are free to agree on the challenge procedure. If there is no agreement, the party that wishes to challenge an arbitrator should state in writing its motives to the arbitral tribunal within a period of 15 days counting from the appointment or from the date that had knowledge of the circumstances that motivate such challenge. If the challenged arbitrator does not renounce to its functions and the party that has appointed him insists in its maintenance, the arbitral tribunal, with the participation of the challenged arbitrator, will decide on the challenge. If however the destitution of the arbitrator still cannot be obtained, the party that challenged the arbitrator may, within a period of 15 days after being notified of the decision that rejects the challenge, request the State court to decide. Such decision will not be subject to appeal (art. 14 LAV).
The challenge of arbitrators is not particularly frequent within the Portuguese jurisdiction and there is no data to support that there has been an increase in the number of challenges.
A party, who has reasonable doubts as to an arbitrator’s impartiality and independence or as to their compliance with statutory requirements or the arbitration agreement, may seek removal of the arbitrator. A party may challenge an arbitrator appointed by them only if the grounds for challenge came to their knowledge after the appointment. Furthermore, an arbitrator’s mandate terminates if an arbitrator becomes legally or factually unable to perform their functions or does not fulfil their duties for an unreasonably long period of time.
Unless otherwise agreed by the parties, an application for the removal must, first, be submitted to the tribunal itself which will rule on the matter unless the parties agree on the recusal or the challenged arbitrator recuses themselves. Should, however, a challenge fail before the tribunal, the losing party may apply to the competent court for the removal, although this by no means prevents the tribunal from going forward with the case. The parties to an institutional arbitration may expressly waive recourse to courts.
The grounds and procedures in respect of challenges to the appointment of arbitrators are as set out in Article 12 and 13 of the Model Law to the effect that the arbitrator may not be impartial or independent or if he does not possess qualifications agreed to by the parties. The procedure is that prescribed by Article 13 of the Model Law. If the parties’ own procedure cannot resolve the challenge there is an option of applying to the high Court. The arbitration may proceed during any challenge process.
The appointment of an arbitrator may only be challenged in the event that there is firm basis for justifiable doubt as to the independence or impartiality of the arbitrator, or if the appointed arbitrator does not possess the necessary or agreed qualifications. The challenge of the appointment of an arbitrator may only take place if the challenging party became aware of the basis for challenge after the appointment was made.
The appointment of an arbitrator can be challenged. The parties are free to agree on a l challenge procedure (section 1037 ZPO).
Absent such agreement, section 1037 (2) ZPO provides for a default statutory challenge procedure. In this case the challenging party must file a written statement specifying the reasons for the challenge within two weeks after the constitution of the arbitral tribunal or after obtaining knowledge of any reasons which give rise to doubts about the impartiality and independence of the arbitrators.
If this challenge is unsuccessful, the party can, within one month after receiving notice of the arbitral tribunal's decision rejecting the challenge, request from the competent state court to decide on the challenge (section 1037 (3) ZPO). Should that the party fail to file such a request with the competent state court, it will be barred from raising objections to the impartiality or independence of the arbitrator during the enforcement proceedings.
The arbitral tribunal, including the challenged arbitrator, may continue with the arbitral proceedings and issue an arbitral award while the challenge request is pending in the court. Should the arbitral award already be valid, and the state court subsequently consider the challenge request as founded, the arbitral award becomes void due to section 1059 (2) no. 1. lit. d. and no. 2. lit. b. ZPO.
An arbitrator may be challenged: i) in the case of justifiable doubts regarding his independence or impartiality; ii) if the arbitrator does not possess qualifications agreed to by the parties; and iii) if arbitrator fails to fulfil his obligation to conduct the arbitration in an expeditious manner.
The parties are free to agree on the procedure for the challenge of the arbitrator. In the absence of such an agreement, a party indenting to challenge the arbitrator has to send a substantiated written statement explaining the reasons for the challenge within 15 days from becoming aware of such reasons or from becoming aware of the appointment. Unless the challenged arbitrator resigns or the other party agrees to the challenge, the arbitral tribunal (including the challenged arbitrator) shall decide on the challenge.
If a challenge is unsuccessful, a party may request the appointing authority to decide on the challenge. This procedure does not preclude the continuation of arbitral proceedings.
In practice, the number of procedures challenging the arbitrators is rising.
The ICAL regulates the grounds to challenge an appointed arbitrator in Article 12(2). Under such provision “an arbitrator may be challenged only if there are circumstances that give rise to justifiable doubts as to his impartiality or independence, or if he does not possess the qualifications agreed on by the parties. A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons known to the party after the appointment has been made”. The procedure for challenge is regulated in Article 13 of the ICAL. Under section 13(1), the parties may freely agree on the arbitrators’ challenge procedure. If such an agreement is not reached, the party seeking to challenge an arbitrator shall send to the arbitral tribunal, within 15 days after becoming aware of the arbitral tribunal’s constitution, or of the circumstances stated in Article 12(2) of the ICAL, a written statement explaining the grounds for challenge. Unless the challenged arbitrator resigns her or his appointment, or the other party agrees on the challenge, the arbitral tribunal shall rule on such challenge (Article 13(2) of the ICAL). If the challenge procedures under Articles 13(1) and 13(2) fail to succeed, the challenging party may request to the President of the Court of Appeal of the place of the arbitration, within a 30 day period upon the notification of the challenge rejection, to make a final ruling on the matter. Such decision will be final and while the resolution of the President of the Court of Appeals is pending, the arbitral tribunal, including the challenged arbitrator, may proceed to conduct the arbitration and render an award (Article 13(3) of the ICAL). The recent Chilean Court of Appeals’ jurisprudence does not reveal an increase in the number of challenges against arbitrators under the rules of the ICAL.