The Challenge of the Arbitrator and Its Impact on the Functioning of the Arbitral Tribunal

Τhe system of challenging an arbitrator is aimed at the protection of the parties’ fundamental right to an impartial and independent tribunal. It is a guarantee of fair and unbiased arbitral proceedings. However, it implies some drawbacks for these proceedings as well as for the arbitrator whose independence or impartiality is being put into question. A challenge may result in an important delay of the arbitral proceedings, thus jeopardizing one of the main advantages of international commercial arbitration. The functioning of the arbitral tribunal may become conditional upon an external factor, such as the decision of a state court, if the latter has jurisdiction to deal with the proposal on disqualification of the challenged arbitrator. Furthermore, the internal functioning of the arbitral tribunal may be influenced by the challenge procedure, as one of the tribunal’s members is stained by the allegations substantiating the challenge and damaging his/her reputation. The UNCITRAL Model Law on International Commercial Arbitration and domestic laws based upon it provide that the arbitral tribunal itself decides on the impartiality and independence of its challenged member, who may step down on his/her own. In such a case, it is likely that a rift may appear within the arbitral tribunal, in particular if the request has been dismissed by a not unanimous award. Other arbitration rules state that another court or authority must decide on the challenge. In any case, the challenge procedure may lead to a polarization between the arbitral tribunal and the challenging party, if the request is dismissed, or the other party, if the arbitrator is removed. Arbitrators should be very careful to avoid being involved in the turbulences generated by the challenge. The example of the ICC arbitration (and the enforcement related judgment Nr. 11/2009 of the Plenary Assembly of the Greek Supreme Court) mentioned in this article is telling, in as much as it displays the dysfunction arising out of a challenge, in particular if one of the arbitrators becomes a component of the challenging strategy.