I would like to share some reflections on the subject matter, for what they are worth. I am also hopeful
that we keep this conversation alive, possibly through creation of an ITA-ALARB committee to advance
discussion on this important subject matter.
I make reference to the judgement handed down by the Spanish Supreme Court, 102/2017, in the
Puma law suit. The judgement presents an interpretation of the relevant provisions on immunity of
arbitrators contained in the Spanish Arbitration Act. It also appropriately references the fact that the
proponents had first, exhausted the local remedies, before pursuing damages against the arbitrators.
It recognises that the setting aside of the award was insufficient to make the proponent whole. The
interpretation of the immunity of arbitrator provisions were consistent with acceptable international
arbitration premises. The Supreme Court also alluded to the fact that each claim for liability of
arbitrators should be pursued based on the facts and circumstances of the particular case.
Accordingly, while I acknowledge that harmonisation of international norms in this area is difficult, I
do believe that we are more in agreement on what constitutes unacceptable behaviour which would
give rise to arbitrator liability, than we are in disagreement. I do believe that we could have global
acceptance of many aspects of the immunity of arbitrators’ debate.
As I try to focus this useful debate, it is to be noted that, it has been convenient to condemn the
irresponsibility of the arbitrator, as a matter of convenient public policy, but to do so without taking
into account general contractual responsibility applicable to anyone who signs a contract, is to miss
the forest for the trees.
Arbitrators enter into a contract with the parties; the arbitral contract. What are some of the acts
and/or omissions that could give rise to claims of irresponsibility of the arbitrator?
If an arbitrator renounces, without justification and/or agreement of the parties, at an advanced stage
of the arbitral proceedings, why should this act be exonerated? If the arbitrator does not issue an award, why should this behaviour be excused? If an arbitrator refuses to deliberate with his co-
arbitrators, how can this not be considered actionable? If an arbitrator publishes in the local newspaper documents used in the arbitration, how can this not be punished? If an arbitrator receives
funds on account of fees, but does not provide the services bargained for, why should this behaviour
go with impunity? If 2 arbitrators exclude the 3rd arbitrator from voting at the time of the issuance of
the award, why should the 2 arbitrators not be liable for their behaviour? Of course, the institution
may be indirectly implicated for the arbitrator’s acts and/or omissions. Why not? Also, the burden of
proof for demonstrating harm would fall to the proponent of the action. The burden of invocation of
the immunity would be on the defendant.
Most jurisdictions, regardless of legal tradition, recognise the above examples as subject to liability.
This is significant when we consider the immunity of arbitrators’ spectrum. On one end, we have the
US which promotes the functional comparison between judges and arbitrators; the quasi –judicial
functions. Although the Federal Arbitration Act does not address arbitrator immunity, the realization
for arbitrator immunity derives from the comparison of the functions of the judge and the arbitrator.
The judge enjoys almost absolute immunity, except for corruption, fraud, bad faith and gross
negligence. The analogy carries to the arbitrator in large part; although courts have recognized liability
in matters where the arbitrator has failed to issue an award; did not have subject matter jurisdiction,
activity did not constitute an arbitral act, fraud and corruption.
In the UK, there is law covering the immunity of the arbitrator, except for dishonest acts, bad faith
(although the Act does not define bad faith) fraud, serious want of impartiality, unreasonable
withdrawal. The law also provides for the immunity for arbitration institutions. Civil law jurisdictions
stress the contractual nature of the relationship established through the arbitral contract (receptum
arbitri). As a result of this mandate, the arbitrator is liable for negligence or any inappropriate conduct.
Most arbitration institutions provide for immunity for the arbitrators, institution, the staff and the
secretariat. However, they all draw the line on negligence or bad faith actions.
International arbitration involves many players, each with different nationalities. It is not unusual for
a 3 member arbitration panel to include members, each with a different nationality and from a
different legal tradition. The same tribunal could be subject to the rules of an arbitral institution which
is yet of a different nationality, with the seat being another. If a question regarding arbitrator immunity
comes before the courts at the seat, which laws should govern the immunity question? The seat? The
law governing the arbitration agreement? The law governing the arbitral contract? The laws of the
jurisdiction of the individual arbitrators? This is not farfetched as parties often do not agree these
matters. Whichever law is chosen, will come as a surprise to at least one of the arbitrators.
When a court is seized of an issue concerning arbitrator immunity, the court should ask 3 questions,
a) is the jurisdiction’s law considered mandatory?, b) does the jurisdiction have an interest in applying
its law, say, where it is an international matter and neither of the parties is a national of that
jurisdiction?, in other words would the states’ public policy concerns be offended? c) would justice and
international arbitration be better served through the non-application of the local law?
We recall the antitrust and securities cases before the US Supreme Court and Europe Court of Justice,
where the courts held that the issues of antitrust and securities law were arbitrable. The courts
distinguished domestic and international arbitration in reaching their conclusions. I make this point to
emphasize that any standards discussed/agreed would be standards for international arbitration as
distinct from domestic arbitration.
Maybe, if we were to categorize the relationship between the arbitrator and the parties as service
contracts, rather than concentrate on the functional comparison of arbitrator and judge, would better
serve to focus the discussion. In this context, it should be noted that the public discussion for the
evolution of the immunity of arbitrators continues to be the courts.
Many years ago, Susan Franck, at the time WilmerHale, proposed a wording for a statute. I am not sure
what happened to the initiative, but I reproduce for our discussion, where relevant:
“A Qualified Immunity for International Arbitrators Statute. International arbitrators shall be immune
from civil liability to parties to the arbitration agreement for anything done or omitted to be done in
their capacity as an arbitrators, except as qualified in section 2.
Exception: An arbitrator shall be liable if he or she unjustifiably fails to render an arbitral award. An
arbitrator shall be liable for bad-faith conduct done in his or her capacity as an arbitrator. Bad-faith
conduct may involve an intentional act that is based upon, but not limited to, fraud or corruption.”
Just maybe, if the judge in the Fernando Cantuarias matter had the benefit of some standards related
to immunity of arbitrators, we could have avoided that unfortunate situation.
Just some thoughts that I wanted to share. Recognising the significance of the subject area, we should
continue to discuss it.