Can the local courts intervene in the selection of arbitrators? If so, how?
International Arbitration (3rd edition)
Arbitrators are selected in accordance with the contractual arbitration provisions and any rules incorporated therein, failing which they are selected in accordance with the default procedural rules in the Arbitration Law. If the default procedures under the Arbitration Law are applied and a party fails to nominate an arbitrator, or the parties fail to appoint a chairperson, then the arbitrator in question is appointed through a court action.
The French juge d’appui can be asked to appoint one or several arbitrators where the parties cannot agree on their appointment and where the arbitration is not administered by any institution.
In domestic arbitration, the support judge is the President of the Tribunal de grande instance (or of the Commercial Court, if the arbitration agreement so provides) (Article 1459, CCP). Article 1459 CCP lays down the rules to determine which Tribunal de grande instance has territorial jurisdiction – typically (in the absence of specific agreement of the parties), the Tribunal de grande instance of the seat of arbitration.
In international arbitration (unless the arbitration agreement provides otherwise), the juge d’appui is the President of the Paris Tribunal de grande instance, if one of the following conditions is met:
- The arbitration takes place in France.
- The parties have agreed that French procedural law will apply to the arbitration.
- The parties have expressly granted jurisdiction to the French courts over disputes relating to the arbitral procedure.
- One of the parties is at risk of a denial of justice.
Both Cap.4 and to Law 1no 01/1987 Law contain provisions that vest to domestic courts with power to intervene in the selection of arbitrators usually following an application by any of the parties, only as a last resort. In any case that (a) the parties or two of the parties cannot concur in any of the procedural matters, (b) an arbitrator appointment is revoked on the grounds of misconduct, failure to act, (c) there are reasonable doubts concerning his/her impartiality then the court can designate another arbitrator to issue an award for the dispute.
As aforementioned (see above question 13), the state courts play a key role in appointing the arbitrators in case one of the parties fails to appoint an arbitrator or if the appointed arbitrators fail to appoint a presiding arbitrator.
The Romanian CPC stipulates that the local courts may intervene in the selection of arbitrators if: (i) the parties cannot reach an agreement as to the appointment of the sole arbitrator; (ii) one of the parties does not appoint its arbitrator; or (iii) the two party-appointed arbitrators cannot reach a decision regarding the person of the presiding arbitrator.
Under Serbian law, competent courts may take part in the process of selection of arbitrators in cases when the arbitrators are not appointed by the parties or by the appointing authority (provided it exists). The decision of the court on the appointment of an arbitrator is final and binding.
In addition, competent courts can be called upon to decide upon the challenge of arbitrators. Such a decision can be subject to an appeal.
Finally, courts can decide on the motion to revoke the arbitrator’s mandate. In that case the court decision on the matter is final and binding.
No, the Chinese courts play no role in this regard. According to article 32 of the Arbitration Law, if the parties fail, within the time limit prescribed by the relevant arbitration rules, to select the form of the arbitration tribunal or fail to select arbitrators, the arbitrators shall be appointed by the chairman of the arbitration commission.
a. If a party object against the appointment of an arbitrator, and the objection is overruled, the party objecting to the appointment may ask the local courts to decide on the matter. The request to the local courts must me made no later than 30 days after the party was notified of the decision.
The arbitration can continue while the local court decides on the request.
Under the default rule, if a party fails to appoint an arbitrator within one month from receipt of the request from another party, or the appointed arbitrators fail to appoint a presiding arbitrator, or the parties fail to jointly appoint a sole arbitrator within one month, such arbitrator or arbitrators may be appointed by the court, upon motion of any of the parties. The same applies, if under the arbitration agreement the arbitrator or arbitrators should be appointed by a third party and the third party fails to do so in time.
In both the international and the domestic arbitration, the court at the seat of the arbitral tribunal may intervene and appoint, challenge, remove or replace an arbitrator upon request of a party to the arbitration proceeding (art. 179 et seq. PILA and art. 367 et seq. CPC). When seized, the court ("juge d'appui") must accept and act on the request to appoint an arbitrator unless a summary examination reveals that no arbitration agreement exists between the parties.
UAE - Federal
Article 11(5) of the UAE Arbitration Law provides that the court may take the relevant actions for the ‘completion of the composition and appointment of the members of the Arbitral Tribunal’, upon request of a party.
Such actions may be taken where the authorised entity fails to appoint the Arbitral Tribunal, pursuant to the agreement of the parties or the terms of the UAE Arbitration Law.
Article 11(8) of the UAE Arbitration Law further provides for the Court, upon the request of the parties, ask an arbitral institution to provide a list arbitral specialist for potential appointment. This would seem to expand the possibility more suitable arbitrator may be appointed.
UAE - Free-zone Jurisdictions
A party may request the DIFC Court of First Instance to intervene where there has been a failure on behalf of the parties, the arbitrators or third parties (including the relevant arbitral institution) to validly constitute an Arbitral Tribunal (Article 17).
Should the parties fail to agree on the procedure for appointing an arbitrator or arbitrators, the ADGM Regulations (Regulation 18) provide the below.
A Sole Arbitrator
Where parties cannot agree on a sole arbitrator, within 30 days of one party requesting the other to do so, the arbitral institution administering the arbitration or the Court (where no arbitral institution has been appointed) shall, on the request of either party, appoint the arbitrator.
A Three-Member Arbitral Tribunal
Where an Arbitral Tribunal is to comprise of three members, each party shall appoint one arbitrator. These two appointed arbitrators shall subsequently appoint a third arbitrator as the ‘presiding arbitrator’.
The arbitral institution which administers the arbitration, or the Court (where no arbitral institution has been appointed) on request of either party shall appoint:
two arbitrators for a three-member Arbitral Tribunal where no arbitrators have been appointed within 30 days of receipt of a party’s request to the other party to do so; or
a ‘presiding arbitrator’ where the two party-appointed arbitrators cannot agree on a ‘presiding arbitrator’ within 30 days of their appointment.
Multiple Claimants and/or Respondents before a Three-Member Arbitral Tribunal
Where there are multiple claimants and/or multiple respondents, the parties shall jointly appoint a single arbitrator on behalf of the claimant and the respondent, in accordance with any procedures agreed upon by the parties.
Where no agreement has been reached between the parties, the Arbitral Tribunal shall appoint the three-member Arbitral Tribunal in accordance with the section entitled ‘A Three-Member Arbitral Tribunal’’ above.
In the absence of joint nomination procedure and where there is no agreement between the parties as to a method for the constitution of the Arbitral Tribunal, the arbitral institution administering the arbitration or the Court (where no arbitral institution administering the arbitration has been appointed) shall appoint the arbitrators and ‘presiding arbitrator’.
The decision of the arbitral institution or the Court is not subject to appeal.
The arbitral institution or the Court, when appointing the Arbitral Tribunal, shall:
have due regard to the qualifications of the arbitrators, on which the parties have agreed;
have due regard to such considerations which are likely to result in the appointment of an ‘independent and impartial ‘ arbitrator; and
take into account the ‘advisability of appointing an arbitrator of a nationality other than that of any party’.
The courts can intervene where the parties have not provided for the procedure for the appointment of the arbitral tribunal. Pursuant to s.18 of the 1996 Act, any party may apply to the court (under Part 62 of the Civil Procedure Rules) to exercise its powers to (a) give directions on the appointment, (b) approve or revoke previous appointments or (c) make the appointment itself.
The KSA Law of Arbitration requires the appellate court appointing the arbitrators to observe the conditions stipulated in the arbitration agreement as well as the conditions required under its law. The decision of the appellate court appointing the arbitrator shall not be independently subject to any form of appeal.
The appellate court, upon the petition filed by the party seeking to expedite the arbitration, shall appoint the arbitrators in the following situations:
1. the arbitration parties fail to appoint the arbitrators and reach an agreement or a party fails to appoint its arbitrator within fifteen (15) days from receipt of a petition from the other party; and
2. the two appointed arbitrators fail to agree on appointment of the umpire within fifteen (15) days from date of appointment of the last arbitrator.
The appellate court, also upon the petition filed by the party seeking to expedite the arbitration, shall take the necessary measures or actions in the following situations (unless the agreement provides for other means for completing such measure or action):
1. the two parties to the arbitration fail to agree on the procedures for appointment of arbitrators;
2. one party thereof fails to adhere to such procedures;
3. the two appointed arbitrators fail to agree on a matter that requires their agreement; and
4. a third party fails to perform a function entrusted thereto under such procedure.
Local courts cannot intervene in the selection of arbitrators except to make a default appointment where necessary, as explained above.
Courts are only involved in the appointment of arbitrators upon application of a party in case the applicable mechanism to appoint the arbitral tribunal has failed. Courts may also be called upon to decide on the application to remove an arbitrator, e.g. due to lack of independence or impartiality.
A party may apply to the court for the appointment of an arbitrator where (a) a party fails to act as required under the procedure by appointing an arbitrator; or (b) the parties or two arbitrators are unable to reach agreement as required under the procedure; or (c) a third party, including an institution, fails to perform any duty imposed on it under the procedure. See section 7(3) of the ACA. In such situation, the High Court is the default appointing authority (section 7, ACA). Where the arbitration is international in nature and the nationality of the arbitrator(s) is not stated, it is recommended to appoint an arbitrator of a nationality other than the nationality of the parties (section 44(4), ACA). The parties might have also agreed in international arbitrations that the appointing authority, being the Secretary-General of the Permanent Court of Arbitration at the Hague, should appoint the arbitrator in the event of default. Under the Lagos Law, the default appointing authority is the Lagos Court of Arbitration (section 8, Lagos Law).
Yes. If the parties cannot agree on the appointment of the sole arbitrator, such appointment will be made by the State court (art. 10 (2) LAV).
Also, if a party does not appoint the arbitrator (or arbitrators) that it should within a period of 30 days counting from the reception of the request from the other party, or if the party-appointed arbitrators do not agree on the choice of the chairman within a period of 30 days counting from the appointment of the last arbitrator, such appointments can also be made by the State court at request of any of the parties. The State courts should take into account the qualifications required by the agreement of the parties as well all the relevant facts to assure the appointment of an independent and impartial arbitrator. In case of international arbitration the State court should also take into consideration the possible convenience to appoint an arbitrator who has a different nationality from the parties (art. 10 (6) LAV).
Should the parties’ chosen method for selecting arbitrators fail, they may apply to the competent court for the appointment of arbitrators in accordance with such a method. This is the case, in particular, when one of the parties fails to comply with the procedure agreed between them, or parties or arbitrators fail to reach an agreement in accordance with such procedure, or a third party (usually, an arbitral institution acting as an appointing authority) fails to perform actions requisite to appoint the tribunal.
When acting as an appointing authority the competent court shall take cognisance of any requirements to arbitrators agreed to by the parties along with such considerations that it might deem relevant for appointing an independent and impartial arbitrator.
If the dispute is administered by an arbitral institution having received a governmental authorisation, the parties may expressly exclude the option of the arbitrators’ appointment by the court. In such case, a failure of the parties to agree on the appointment of arbitrators would lead to termination of the arbitral proceedings, and the dispute might be submitted to a court.
Irish courts may intervene only to the extent provided for in sub-paragraphs (3) and (4) of Article 11 of the Model Law (see 12 above).
The courts may not intervene in the selection of arbitrators. However, if the arbitrary panel cannot be constituted in accordance with the arbitration agreement or as described in item 13 above, each of the parties may request that the local courts appoint the missing arbitrator(s). The appointment made by the court cannot be appealed.
Local courts can intervene in the selection of arbitrators, particularly in the following cases:
Imbalanced arbitration agreement regarding the composition of the tribunal: section 1034 (2) ZPO provides for a court intervention if the arbitration agreement significantly favors one party as regards the composition of the arbitral tribunal, and this places the other party at a disadvantage. In this case the disadvantaged party may request the competent OLG to appoint the arbitrator(s). The court's decision may diverge from the party agreement to ensure balanced influence of both parties on the formation of the tribunal.
Appointment of arbitrators: As already set out in question no. 13, the competent OLG may intervene if (a) the parties fail to agree on the sole arbitrator, if (b) the parties fail to select the arbitrator for a tribunal consisting of three arbitrators, or if (c) the arbitrators selected by the parties fail to appoint the chairman.
Other procedural matters: The court is furthermore entitled to intervene upon a party's application if the parties to the dispute have agreed on a procedure for the appointment, and where one party does not adhere to this procedure, or where the parties to the dispute or the two arbitrators are unable to come to an agreement in accordance with the said procedure, or where a third party does not fulfil the tasks conferred upon it under the procedure (section 1035 (4) ZPO).
Challenge procedure: According to section 1037 (1) ZPO the parties are free to agree on a procedure for challenging an arbitrator. If a challenge under the procedure agreed upon by the parties remains unsuccessful, the challenging party may request the court to decide on the challenge (section 1037 (3) ZPO).
In cases where it is necessary to appoint an arbitrator and there is no agreement between the parties on the appointing authority, the appointing authority is the president of the Commercial Court in Zagreb or a judge authorized by the president of the Commercial Court in Zagreb.
Local courts, and specifically the President of the Court of Appeals, may intervene in the selection of arbitrators, when the parties do not determine a selecting method for the arbitral tribunal or when the selecting method agreed on by them fails.
Article 11(3) of the ICAL provides for the arbitrators’ selecting mechanism that shall apply in case the parties have not agreed on an appointment procedure. Specifically, Article 3(a) of the ICAL, states that in case of a three member tribunal, each part will appoint an arbitrator, and those two arbitrators will be in charge of the appointment of the third arbitrator. If one of the parties fails to do so in a 30 day period starting upon the request of the other party, or if there is no agreement between the two chosen arbitrators to appoint the third arbitrator within a 30 day period from their own designations, the appointment will me made, upon party request, by the President of the Court of Appeals of the place of the arbitration.
Article 11(3)(b) of the ICAL later states that for sole arbitrator cases, the President of the Court of Appeals will be entitled to designate the arbitrator when the parties fail to reach an agreement. This designation mechanism is also activated upon party request.
Finally, the President of the Court of Appeals is also entitled to intervene in the arbitrators’ appointment (a) when one of the parties’ does not comply with the agreed method; (b) when, following a specific proceeding drafted by the parties, there is no agreement between them to appoint the arbitrators or between the two appointed arbitrators to designate the third arbitrator; and (c) when a third party, including an arbitral institution, does not comply with the rules previously agreed on by the parties for the arbitrators’ appointments. (Article 11(4)(a)(b)(c) of the ICAL.)