Number of Arbitrators and Method of Appointment – UNCITRAL Arbitration
Unless otherwise provided, in an UNCITRAL Arbitration administered by ICSID the tasks assigned to the “appointing authority” are performed by the Secretary-General of ICSID and are covered by the annual fee paid by the parties. As a result, the provisions regarding the tasks of the “designating authority” have no application. The following paragraphs have been drafted assuming that the Secretary-General of ICSID is the appointing authority. As further explained below, the specific procedures are slightly different depending on whether the 1976 Rules or the 2010 and 2013 Rules apply.
Party Agreement
As a first step in the appointment process, the parties should refer to the contract, treaty or law that is the basis for the parties’ agreement to refer the dispute to arbitration. The parties are generally free to adopt any workable method of appointment that suits their needs, including provisions on time limits and special procedures. The parties do not have to appoint arbitrators from the ICSID Panel of Arbitrators.
The most common agreements for three-member Tribunals are:
- Each party appoints one co-arbitrator, and the parties attempt to agree on a third arbitrator, as the President of the Tribunal. If the parties fail to agree, the Secretary-General of ICSID appoints the President.
- Each party appoints one co-arbitrator, and the co-arbitrators attempt to agree on the third arbitrator, as the President of the Tribunal. If the co-arbitrators fail to agree, the Secretary-General of ICSID appoints the President.
As part of their agreement on the method for constituting the Tribunal, the parties may agree to adopt a list procedure concerning proposed candidates. List procedures can be used for a sole arbitrator, the President of the Tribunal, or all members of the Tribunal. Commonly used list procedures include:
- The parties exchange a list of candidates; each party informs the other party of the candidate(s) whom it accepts or rejects.
- The parties request that ICSID provide them with a list of candidates. Each party can strike a certain number of candidates and rank the remaining candidates. The candidate with the best ranking is appointed.
ICSID supports parties’ efforts to agree on the method of appointment and will follow the agreed method and facilitate the process to the fullest extent possible.
Default Mechanism under the 2013 UNCITRAL Arbitration Rules
If no agreement on the number of arbitrators and the method of their appointment is reached, either party may request the application of the default solutions under the applicable UNCITRAL Arbitration Rules. The following paragraphs are based on Articles 7 through 9 of the 2013 UNCITRAL Arbitration Rules.
i. Number of arbitrators (Article 7)
If more than 30 days have elapsed since the respondent received the notice of arbitration without the parties having agreed on the number of arbitrators, the Tribunal will be made up of three arbitrators.
However, if a party proposes that a sole arbitrator be appointed and the other party fails to respond to this proposal within 30 days of receipt of the notice of arbitration, the Secretary-General of ICSID may, at the request of either party, appoint a sole arbitrator, provided that neither party has yet appointed an arbitrator pursuant to Articles 9 or 10. In doing so, the Secretary-General will generally follow the list-procedure set out in Article 8(2) of the 2013 UNCITRAL Arbitration Rules.
ii. Appointment of Sole Arbitrator (Article 8)
If the parties agree that a sole arbitrator is to be appointed but cannot agree on the identity of that arbitrator within 30 days counted from the receipt by the last party of the proposal for the appointment of a sole arbitrator, either party may request that the Secretary-General appoint the sole arbitrator. The Secretary-General will do so as promptly as possible, following the list-procedure in Article 8(2) of the 2013 UNCITRAL Arbitration Rules, unless it determines that, in view of the circumstances of the case, this is not appropriate.
Pursuant to this procedure, the Secretary-General will communicate to each of the parties an identical list containing at least three names. Within 15 days after the receipt of this list, each party may return the list to the Secretary-General after having deleted the name or names to which it objects and numbered the remaining names on the list in the order of its preference (with 1 being the most preferred candidate, 2 being the second-most-preferred candidate, and so on). A party is not required to share its list with the other party.
After the expiry of the above period of time the Secretary-General will appoint the sole arbitrator from among the names approved on the lists returned to it and in accordance with the order of preference indicated by the parties. If there is a tie between the highest ranked candidates, the Secretary-General will select one of them and will inform the parties of the selection.
If for any reason the appointment cannot be made according to this procedure, the Secretary-General will have discretion to appoint the sole arbitrator.
iii. Appointment of Three Member Tribunal (Article 9)
If three arbitrators are to be appointed, each party will appoint one and inform the Secretary-General of its selection. The two arbitrators thus appointed will choose the third arbitrator, who will act as the presiding arbitrator.
If within 30 days after the receipt of a party’s notification of the appointment of an arbitrator the other party has not notified the other party of the arbitrator it has appointed, the first party may request the Secretary-General to appoint the second arbitrator.
If within 30 days after the appointment of the second arbitrator the two arbitrators have not agreed on the presiding arbitrator, either party may request that the Secretary-General appoint the presiding arbitrator. The Secretary-General will do so following the same procedure set out in the previous section for the appointment of a sole arbitrator, unless it determines that, in view of the circumstances of the case, this is not appropriate.
The parties may agree on a different method of constituting the Tribunal even after a party has raised the default formula. Until the appointments under Article 9 of the 2013 UNCITRAL Arbitration Rules are complete, the party failing to appoint, or the two appointed arbitrators remain able to appoint the arbitrator not yet appointed or the President of the Tribunal, as applicable.
iv. Appointment of Arbitrators in Multi-party Proceedings
Where three arbitrators are to be appointed and there are multiple parties as claimant or as respondent, unless the parties have agreed to another method of appointment of arbitrators, the multiple parties will jointly, whether as claimant or as respondent, appoint an arbitrator.
If the parties have agreed that the arbitral tribunal is to be composed of a number of arbitrators other than one or three, the arbitrators will be appointed according to the method agreed upon by the parties.
In the event of any failure to constitute the arbitral tribunal under these Rules, any party may request that the Secretary-General constitute the arbitral tribunal. In doing so, the Secretary-General may revoke any appointment already made and appoint or reappoint each of the arbitrators and designate one of them as the presiding arbitrator.
Default Mechanism under the 1976 UNCITRAL Arbitration Rules
Similarly, under the 1976 UNCITRAL Arbitration Rules, if the parties have not agreed on the number of arbitrators and the method of their appointment, either party may request the application of the default solutions in Articles 5 through 8 of the 1976 Rules.
However, the 1976 Rules do not include, unlike the 2010 and 2013 Rules, any provision regarding the appointment of arbitrators in multi-party proceedings.
i. Number of arbitrators (Article 5)
Under Article 5 of the 1976 Rules, if the parties have not agreed that there shall be only one arbitrator within 15 days after the receipt by the respondent of the notice of arbitration, three arbitrators will be appointed.
ii. Appointment of a sole arbitrator (Article 6)
If within 30 days after receipt by a party of a proposal, the parties have not reached an agreement on the choice of a sole arbitrator, the sole arbitrator shall be appointed by the appointing authority agreed upon by the parties.
However, if no such appointing authority has been agreed upon by the parties, or if the agreed upon appointing authority refuses or fails to appoint the arbitrator within 60 days of the receipt of a party's request, either party may request the Secretary-General of the Permanent Court of Arbitration at The Hague to designate an appointing authority.
To appoint the sole arbitrator “as promptly as possible” (Article 6), the appointing authority will use a list-procedure, unless both parties agree that the list-procedure should not be used or unless the appointing authority determines, in its discretion, that the use of the list-procedure is not appropriate for the case.
Pursuant to this list-procedure, the appointing authority communicates to both parties an identical list containing at least three names. Within 15 days after the receipt of this list, each party may return the list to the appointing authority after having deleted the name or names to which this party objects and numbered the remaining names on the list in the order of preference. After the expiration of the above period of time, the appointing authority will appoint the sole arbitrator from among the names approved on the lists returned to it and in accordance with the order of preference indicated by the parties. Nonetheless, if for any reason the appointment cannot be made according to this procedure, the appointing authority may exercise its discretion in appointing the sole arbitrator.
In making the appointment, the appointing authority has regard to such considerations as are likely to secure the appointment of an independent and impartial arbitrator and takes into account the advisability of appointing an arbitrator of a nationality other than the nationalities of the parties.
iii. Appointment of a three-member tribunal (Article 7)
Each party shall appoint one arbitrator. The two arbitrators thus appointed shall choose the third arbitrator who will act as the presiding arbitrator.
However, if within 30 days after the receipt of one party's notification of the appointment of an arbitrator, the other party has not notified the first of the arbitrator it has appointed, the first party may request the appointing authority previously designated by the parties to appoint the second arbitrator.
Nevertheless, if no such authority has been previously designated by the parties, or if the appointing authority previously designated refuses or fails to appoint the arbitrator within 30 days after receipt of a party's request, the first party may request the Secretary-General of the Permanent Court of Arbitration to designate the appointing authority. The first party may then request the appointing authority so designated to appoint the second arbitrator. In either case, the appointing authority may exercise its discretion in appointing the arbitrator.
Then, if within 30 days after the appointment of the second arbitrator, the two arbitrators have not agreed on the choice of the presiding arbitrator, the presiding arbitrator shall be appointed by an appointing authority in the same way as a sole arbitrator would be appointed under Article 6, that is to say, through the same procedure as the one regarding the appointment of a sole arbitrator.