Which type of arbitration?

The parties should determine the type of arbitration they submit their dispute. There might be arbitration: (1) before a permanent arbitration court, (2) ad hoc, or (3) administered.

Permanent courts of arbitration usually hear “bigger cases,” they are highly esteemed, have a solid infrastructure and logistic facilities, and maintain a fixed list of arbitrators. They develop their fee schedules for conducting a dispute (providing a service) and have their own rules of procedure that they apply when deciding on cases. They often publish their judgments.

Ad hoc arbitration is the examination of a given case or specific cases outside the structures of permanent arbitration courts. This is a flexible form of arbitration. The remuneration of arbitrators and the procedural rules may be freely chosen by the parties.

Administered arbitration is intermediate between ad hoc arbitration and arbitration in a permanent court of arbitration. With the consent of a permanent institution, for a fee, the parties may use its infrastructure. Under certain circumstances, the procedural rules of a given permanent institution may be applied.

Selection of the arbitrator

Arbitrators issue authoritative decisions—awards, just like judges issue judgments in national courts. Arbitration proceedings may also be discontinued hence an award is not issued.

The parties nominate the arbitrators. It is a fundamental right of the plaintiff and the defendant. The choice of the type of arbitration in the clause determines the scope of the parties’ freedom to nominate arbitrators. Among the specified features are:

• the number of arbitrators
• their qualifications
• the language the arbitrator uses
• religion and gender (in some legal orders).

An important role is played by the lists of recommended arbitrators kept by permanent arbitration courts. They are helpful when the parties have problems concerning the choice of an arbitrator. The lists are however not binding for the parties.

A dispute is usually resolved by one arbitrator or by a three-person panel. The rule is that the disputes are resolved by an odd number of arbitrators. In ad hoc arbitration, some problems might occur for example when an arbitrator resigns. Permanent courts of arbitration have procedures to resolve such problems. Usually, regardless of the type of arbitration, each of the parties nominates their arbitrators (side arbitrators), who then choose the presiding arbitrator. Again, the internal rules of the arbitration institutions specify the procedures in the event of:

• a failure by the parties to select side arbitrators;
• an election of the presiding arbitrator;
• an alternative nomination to replace an arbitrator who resigns is excluded or is unable to accept or perform his function.

The number of arbitrators affects the costs of arbitration because they serve for a fee.

National legal systems determine who can be an arbitrator. In Poland, anyone having a full capacity for legal acts can be an arbitrator (except from, e.g. an incumbent judge). The arbitrator does not have to hold a law degree.

The New York Convention, the Geneva Convention, as well as the soft law of arbitration (non-binding general rules concerning arbitration) stipulate that the arbitrators should be impartial and independent. Otherwise, it is possible to exclude an arbitrator from a given case.

Hypothetically, nominating a friend as an arbitrator is not an excluded option, however, it can raise suspicions concerning his impartiality or independence.  It is worth nominating arbitrators who are professionally familiar with the matter of the dispute. Another good practice is to check the future arbitrator’s time disposition and professional abilities.