The parties to arbitration proceedings may become dissatisfied or have doubts regarding the ability and neutrality of a chosen arbitrator. While there are many very good arbitrators, there are some who are biased or simply incompetent. However, it can be fiendishly difficult to dislodge even a very poorly performing arbitrator once he or she has been appointed. While the best manner to avoid this predicament is to perform adequate due diligence on the arbitrator prior to his or her selection, this note will discuss how to remove an arbitrator from an ongoing arbitration proceeding, the steps that must be taken to remove an arbitrator, and the potential consequences of his or her removal on ongoing arbitration proceedings.
1. Grounds to Remove an Arbitrator from Ongoing Proceedings
The grounds to remove an arbitrator may vary depending on the applicable law, the arbitration agreement, and the rules of the institution administering the arbitration. However, there are some common grounds for removing an arbitrator, which include:
1.1. Lack of Impartiality or Independence of the Arbitrator
The most common ground to attempt to remove an arbitrator is on the basis of their lack of independence or impartiality. If a party can demonstrate that the arbitrator is biased or is not independent, the arbitrator may be removed.
Most arbitration laws and rules recognise a lack of independence and impartiality as justifiable reasons for a challenge.[1] However, they do have different standards that are not always implemented consistently.
Thus, the arbitration rules of the United Nations Commission On International Trade Law (“2021 UNCITRAL Arbitration Rules”) allow challenging an arbitrator based upon “justifiable doubts as to his impartiality or independence”.[2]
Similarly, the rules published by the International Chamber of Commerce (“2021 ICC Arbitration Rules”) permit challenges to an arbitrator for “alleged lack of impartiality or independence, or otherwise”[3].
It should be noted that, under most institutional rules, a party cannot challenge its own arbitrator except for reasons it became aware of following the appointment.[4]
Also, accusing an arbitrator of a lack of independence or impartiality without very strong evidence of this may fail to remove the arbitrator, merely resulting in an irate arbitrator.
1.2. Failure of the Arbitrator to Disclose Current or Former Conflicting Relations
An arbitrator must disclose any potential conflicts of interest or relationships that could affect their impartiality. If an arbitrator fails to disclose such information, he or she may be potentially removed.
In this regard, national and institutional rules of arbitration require disclosing any relationship or connection between an arbitrator and a party or its counsel. To ensure this, the UNCITRAL Arbitration Rules require that:[5]
When a person is approached in connection with his or her possible appointment as an arbitrator, he or she shall disclose any circumstances likely to give rise to justifiable doubts as to his or her impartiality or independence. An arbitrator, from the time of his or her appointment and throughout the arbitral proceedings, shall without delay disclose any such circumstances to the parties and the other arbitrators unless they have already been informed by him or her of these circumstances.
The International Bar Association (“IBA”) has developed and published Guidelines on Conflicts of Interest in International Arbitration (revised in 2014)[6] to assist parties and prospective arbitrators in deciding what kind of relationships or connections should be disclosed.
However, there are not precise standards that are consistently applied, so arbitrators should err on the side of excessive disclosure.
1.3. Failure of the Arbitrator to Conduct the Proceedings Fairly and Efficiently
An arbitrator must conduct the proceedings fairly and efficiently. If a party can demonstrate that the arbitrator is delaying the proceedings, preventing the party from presenting its case or failing to consider evidence or arguments, the arbitrator may hypothetically be removed.
Arbitrators’ conduct can be dilatory. They may be incompetent and unresponsive to the parties’ requests or submissions. They could also become incapable of conducting arbitral proceedings or rendering an award due to sickness, injury, or age.[7] This will also give potential grounds to remove the arbitrator.
For example, the UNCITRAL Arbitration Rules provide that if an arbitrator fails to act, or if the arbitrator is not able to perform arbitrator functions, the procedure in respect of the challenge of an arbitrator, as provided in Article 13 of the UNCITRAL Arbitration Rules, shall apply:[8]
In the event that an arbitrator fails to act or in the event of the de jure or de facto impossibility of his or her performing his or her functions, the procedure in respect of the challenge of an arbitrator as provided in article 13 shall apply.
The ICC Arbitration Rules correspondingly provide that an arbitrator may be removed on the ICC Court’s own initiative, without a challenge, if “the arbitrator is prevented de jure or de facto from fulfilling the arbitrator’s functions, or that the arbitrator is not fulfilling his functions in accordance with the Rules or within the prescribed time limits”.[9]
1.4. Failure to Comply with the Applicable Law or Arbitration Agreement
The arbitrator is required to apply the applicable law and the terms of the arbitration agreement. If a party can demonstrate that the arbitrator is applying the wrong law, ignoring the terms of the arbitration agreement, or acting outside their authority, the arbitrator may also theoretically be removed.
2. Steps to Remove an Arbitrator from Ongoing Proceedings
In international arbitration, the party seeking to remove an arbitrator must follow the applicable law, the chosen arbitration rules, and the applicable law.
A formal challenge is not always required. Arbitrators are, at times, asked to voluntarily resign by one or more parties, prior to a formal challenge. If he or she refuses, however, as is often the case, a challenge procedure may be initiated.
Although most of the procedure is set by the arbitration rules, the starting point of a challenge shall be the law of the seat.[10]
Thus, the procedure for removing an arbitrator may vary depending on the applicable law, the arbitration agreement, and the rules of the institution administering the arbitration. However, there are some common steps that a party should follow when seeking to remove an arbitrator.
The first step is to review the arbitration agreement and rules to determine the procedure for attempting to remove an arbitrator. The applicable law, as well as the rules of the chosen arbitration institution, will determine how to proceed.
Then, according to most rules, the party shall file a written request to the arbitral tribunal or the institution administering the arbitration process by following the institution’s procedure for removing an arbitrator. This request should clearly state the grounds for removal and provide supporting evidence.
In this respect, most institutional arbitration rules[11] provide that a party must promptly establish objections to an arbitrator after the arbitrator’s nomination or after a party learns of the basis for the challenge.
Hence, according to the UNCITRAL Arbitration Rules:[12]
A party that intends to challenge an arbitrator shall send notice of its challenge within 15 days after it has been notified of the appointment of the challenged arbitrator, or within 15 days after the circumstances [on which the challenge is based] became known to that party.
The ICC Arbitration Rules similarly provide that:[13]
For a challenge to be admissible, it must be submitted by a party either within 30 days from receipt by that party of the notification of the appointment or confirmation of the arbitrator, or within 30 days from the date when the party making the challenge was informed of the facts and circumstances on which the challenge is based if such date is subsequent to the receipt of such notification.
Such rules are intended to prevent a party from holding back a potential challenge to the award based on the arbitrators in place and deciding to challenge the award only once an unfavourable decision has been rendered.
The arbitrator and the other parties involved in the arbitration will have an opportunity to respond to the request for removal. They may provide evidence or arguments supporting the arbitrator’s continued involvement in the proceedings.
Finally, if the objections are still unresolved, the party may seek the relevant national court’s intervention if it is provided for by the applicable law in such cases. The court of the seat of the arbitration will usually have the final say on matters of arbitrators’ challenges. This is a guarantee to preserve the integrity of the arbitration process.[14]
3. Consequences of Removing an Arbitrator from Ongoing Proceedings
If the challenge is successful, the arbitrator will need to be replaced. Most arbitrational rules provide that vacancies on the arbitral tribunal will be filled in the same way the arbitrator being replaced was selected initially[15]. For example, the UNCITRAL Arbitration Rules provide:[16]
[I]n any event where an arbitrator has to be replaced during the course of the arbitral proceedings, a substitute arbitrator shall be appointed or chosen pursuant to the procedure provided for […] that was applicable to the appointment or choice of the arbitrator being replaced.
Of course, there are also adverse consequences of removing an arbitrator, such as delaying the proceedings or impacting the overall outcome of the dispute. Thus, it is not always prudent to challenge an arbitrator on the perceived basis of inefficiency, for instance, as the challenge itself may lead to greater delays in the procedure. Conversely, arbitrators are also at times challenged merely as a dilatory tactic.
The parties may also incur increased costs for filing a request to remove an arbitrator. The parties will need to pay the new arbitrator’s fees and expenses and any additional costs incurred during the delay in proceedings. This can include legal fees, expert witness fees, and other costs associated with preparing for arbitration. For example, the rules of the Hong Kong International Arbitration Center require the request to “be accompanied by payment, by cheque or transfer to the account of HKIAC, of a non-refundable Challenge Registration Fee of HKD 50,000 on account of HKIAC’s fees and expenses. If the party submitting the Notice of Challenge fails to pay the Challenge Registration Fee the challenge will be dismissed”.[17]
In conclusion, challenging an arbitrator is a serious step that should be taken only in exceptional circumstances, such as in cases of actual bias, conflict of interest, or serious misconduct. The reality is that most challenges of arbitrators fail. While an arbitrator can be requested to voluntarily resign, or can be formally challenged, parties should carefully consider the potential consequences and consult their legal counsel before making a challenge. As most challenges fail, the most frequent result is angering one or more arbitrators and delaying the arbitral proceedings.
[1] H. Vitali and U. Anastasiya, Arbitrator’s Impartiality and Independence, available at: https://jusmundi.com/en/document/publication/en-arbitrators-impartiality-and-independence (last accessed on 29 April 2023).
[2] 2021 UNCITRAL Arbitration Rules, Art. 11.
[3] 2021 ICC Arbitration Rules, Art. 14.
[4] G. Born, International Commercial Arbitration (3rd ed., 2021), p. 116.
[5] 2021 UNCITRAL Arbitration Rules, Art. 11.
[6] IBA, Guidelines on Conflicts of Interest in International Arbitration, General Standard.
[7] G. Born, International Commercial Arbitration (3rd ed., 2021).
[8] UNCITRAL, Challenge of Arbitrators – UNCITRAL Arbitration, ICSID (last accessed on 29 April 2023).
[9] 2021 ICC Rules, Art. 15.
[10] Baker McKenzie, Arbitrator Challenges, a Practical Guide, Lexology, 2020.
[11] G. Born, International Commercial Arbitration (3rd ed., 2021); see, e.g., 2021 ICC Rules, Art. 14(2); 2016 SIAC Rules, Art. 15(1); 2021 ICDR Rules, Art. 15(1); 2020 LCIA Rules, Art. 10(3); 2012 CIETAC Rules, Arts. 32(1), (3); 2018 DIS Rules, Art. 15(2); 2018 HKIAC Rules, Art. 11(7); 2021 JCAA Rules, Art. 34(3); 2012 PCA Rules, Art. 13(1); 2017 SCC Rules, Art. 19(3); 2021 VIAC Rules, Art. 20(2). See also 2022 ICSID Rules, Rule 22(1)(a); 2022 ICSID Additional Facility Rules, Rule 30(2)(a).
[12] 2021 UNCITRAL Arbitration Rules, Art. 13(1) (emphasis added).
[13] 2021 ICC Arbitration Rules, Art. 14(2).
[14] Baker McKenzie, Arbitrator Challenges, a Practical Guide, Lexology, 2020.
[15] G. Born, International Commercial Arbitration (3rd ed., 2021).
[16] 2021 UNCITRAL Arbitration Rules, Art. 14(1).
[17] HKIAC, Practice Note on the Challenge of an Arbitrator, 2014.