REUTERS | Mike Blake

Diversity on arbitral tribunals: are we getting there? BLP international arbitration survey 2016

The issues

A perceived lack of diversity among arbitrators is forever captured in the oft-quoted description “pale, male and stale”.

Statistics tend to confirm this perception. In relation to gender balance, the Singapore International Arbitration Centre’s (SIAC’s) Annual Report for 2015 reports that the number of women appointed as arbitrators accounted for just under a quarter (25%) of appointments. International Chamber of Commerce (ICC) statistics for 2015 indicate that women represented 10% of all appointments and confirmations, and that women were more frequently appointed as co-arbitrators (43%), rather than sole arbitrators (32%) or tribunal presidents (25%). ICC data on arbitral appointments for 2016 shows that, to November 2016, only 20% of appointed arbitrators were women. Statistics published by many other arbitral institutions follow a similar pattern.

There is a dearth of statistics on ethnic and racial representation on tribunals, but writers on this topic suggest that the majority of men appointed (the number of women being small in number) are Caucasian and of advancing years, and that minority ethnicities and candidates of non-western geographic origin are blatantly under-represented, as are younger practitioners. In the investment arbitration arena, International Centre for Settlement of Investment Disputes (ICSID) statistics appear to support this view. One commentator has reported that from January 1972 to May 2015, in nearly half of 289 closed cases (45%), the tribunals were composed of all Anglo-European arbitrators. In 84% of the cases, two or more of the tribunal members were Anglo–European, or the sole arbitrator was Anglo–European. Only 11 cases (4%) were arbitrated by entirely non Anglo-European tribunals.

Another issue is the limited biographical and professional information available on the existence, ability and past performance of potential arbitrators. Ad hoc enquiries may be made amongst those in the “arbitration club” but, in the absence of information on performance benchmarks (such as party satisfaction and efficiency, challenges to and time to publish an award), as well as an increased visibility and acceptance of lesser known candidates, it seems inevitable that arbitrators will continue to be drawn from the same pool and in the same image.

Does a lack of diversity matter to the parties?

International arbitration is a private process for resolving commercial disputes. The parties to the dispute will generally want the tribunal to be made up of experienced arbitrators who will determine the dispute fairly and efficiently. If a party chooses to appoint a white European man because they regard him as a respected arbitrator whose views will carry weight with the rest of the tribunal, then why should party autonomy not prevail? Parties have one opportunity to have a dispute determined in their favour and, for wholly legitimate reasons, they will have a very short-term, self-interested view of the appointment process.

Should diversity matter?

Various reasons are put forward as to why diversity does (or should) matter.

It is said that the inclusion of individuals of varied racial, ethnic, gender and social backgrounds has a value in itself. There is also the notion that a system serving the needs of a particular constituency (in this case, participants in international commerce) should reflect the make-up of that community. Concerns have also been voiced that a lack of diverse perspectives and backgrounds on the tribunal may affect the quality of arbitral awards.

A more positive argument is that widening the pool of arbitrators and increasing transparency around performance will:

  • Give greater choice and fewer conflicts.
  • Remove the imbalance in information available to different parties.
  • Encourage greater efficiency (in light of the greater competition for appointment).

What is being done and who should do it?

Debate on gender balance in arbitration has gained momentum in the last few years. There is increased transparency about the number of women appointed as arbitrators and there are various initiatives underway to encourage the appointment of more women. There are fewer initiatives in relation to other under-represented groups.

Assuming a consensus that improved diversity is a good thing, an important question is: who should take the lead in promoting change?

The BLP survey

On 9 January 2017, Berwin Leighton Paisner (BLP) released the results of its annual International Arbitration survey, this year focussing on diversity on arbitral tribunals. The 122 respondents to the survey come from across the globe (the geographical regions in which they work include Asia, Australia, the Middle East and North Africa, North America, Latin America and the Caribbean, Western and Eastern Europe, East and West Africa, the British Virgin Islands/Cayman Islands and Bermuda). Respondents included arbitrators, corporate counsel, external lawyers, users of arbitration and those working at arbitral institutions. The views of these respondents were sought in relation to a variety of issues around diversity.

The survey results confirm that diversity should be on the agenda for change.

80% of respondents thought that tribunals contained too many white arbitrators, 84% thought that there were too many men and 64% felt that there were too many arbitrators from Western Europe or North America.

The majority of respondents favour improved diversity, both in respect of gender and ethnicity. On the assumption that all potential candidates have the necessary level of expertise and experience, 50% of respondents thought it was desirable to have a gender balance on arbitral tribunals, and 54% thought it was desirable that the tribunal should come from a diverse range of ethnic and national backgrounds.

A substantial majority of respondents (70%) thought that it was desirable for institutions to publish statistics about the gender, and ethnic or national identity of appointed arbitrators, although only 28% said that the content of the statistics would influence their choice of institutional rules in the future.

A key focus of the survey was to obtain views on steps that might improve diversity and increase informed choice in arbitrator appointments. An overwhelming 92% of respondents said that they would welcome more information about new and less well-known candidates. 81% of respondents said that they would welcome the opportunity to provide feedback about arbitrator performance at the end of a case, although 50% of respondents thought that feedback to institutions should not be made publicly available.

Responsibility for change

As regards responsibility for change, the clear message from respondents was that everyone has a part to play in improving diversity on tribunals. 78% of respondents thought that arbitral institutions have a role, 65% of respondents thought counsel for the parties had a part to play and 60% thought that arbitrators also had a role.

Let us hope that everyone involved in international arbitration is prepared to take up the challenge.

 

Note: Over the last six years, BLP’s International Arbitration Group has conducted a number of surveys on arbitration user perceptions on various issues affecting the arbitration process including: delay (2012), document production (2013), choice of seat (2014), and use of tribunal secretaries (2015). The final report on each of those studies can be found on BLP’s website.

 

Berwin Leighton Paisner Carol Mulcahy

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