Sunday, June 14, 2015

Franck, Freda, Lavin, Lehmann, & van Aaken: International Arbitration: Demographics, Precision and Justice

Susan D. Franck (Washington and Lee Univ. - Law), James Freda (Office of the Special Representative to the Secretary-General on Sexual Violence in Conflict, United Nations), Kellen Lavin (Washington and Lee Univ.), Tobias A. Lehmann (Univ. of St. Gallen - Law), & Anne van Aaken (Univ. of St. Gallen - Law) have posted International Arbitration: Demographics, Precision and Justice (ICCA Congress Series No. 18, Legitimacy: Myths, Realities, Challenges, pp. 33-122, 2015). Here's the abstract:

Historically there has been little empirical information that analyzes international arbitration, particularly the background, perceptions and experiences of the counsel and arbitrators. In an effort to fill the gap, we gathered original empirical data during the biennial Congress for the International Council for Commercial Arbitration (ICCA) in 2014. We used the data to explore basic information about counsel and arbitrators in international arbitration and survey their perspectives on the matters concerning the conference themes of legitimacy, precision and justice in international arbitration. This Chapter examines the survey responses of 548 attendees, including 413 participants who served as counsel and 262 who served as arbitrators. The dataset also included 67 participants who served as investment treaty arbitrators, which make the results of interest to commercial arbitration and investor-state dispute settlement (ISDS).

The first part of the Chapter explores demographic information. It identified some progress beyond historical Cold War divides, and arbitrators and counsel reflected a broad spectrum of nationalities, continents, languages and legal training. Yet, there was still a degree of relative homogeneity and arguably disproportionate levels of representation by men from North American and Europe countries, and other states with high levels of economic development.

The second part of the Chapter explores precision in international arbitration related to burdens of proof, advance articulation of standards for costs assessments, withholding documents during discovery and advance arbitrator preparation for hearings. Individuals who served as international arbitration counsel and/or arbitrator considered issues burden of proof frequently to be outcome determinative in arbitration cases; yet those same respondents indicated tribunals only occasionally articulated the burden of proof in advance. Moreover, there was a statistically meaningful difference in the responses of common and civil law-trained lawyers to these questions, suggesting there were different sets of expectations, experiences, and potential normative solutions for enhanced precision. International arbitration may also benefit from providing enhanced precision and oversight in document production, as roughly 70% of respondents indicated parties “sometimes” or “frequently” withheld relevant documents. One area for cautious optimism was that nearly 79% of counsel and arbitrators indicated that international arbitrators were either “sometimes” or “frequently” prepared for hearings, and it was rare for arbitrators to be unprepared.

The third part of the Chapter explores themes of justice in international arbitration related to arbitral prestige and appointment, fraud, and diversity. The survey queried explored extra-legal factors that may motivate arbitrator decision-making such as prestige, arbitral reappointments or future interactions with co-arbitrators. The data reflected that ICCA participants viewed international arbitration appointments as prestigious, but that appointments in investment treaty arbitration were particularly prestigious. Although both men and women found international arbitration appointments to be highly prestigious, women tended to find appointments more prestigious than men, which might reflect the relative scarcity of appointments of female arbitrators. International arbitrators did not see themselves as motivated by future appointments or interactions with colleagues when rendering arbitral decisions.

Roughly 80% of ICCA participants identified that fraud occurred in international arbitration “sometimes” or “occasionally”, and under 15% believed that fraud occurred frequently or always. We detected a meaningful difference in responses between those who had acted as either counsel or arbitrator and those who had not. Individuals without any international arbitration experience, whether as counsel or arbitration, were more likely to perceive a higher prevalence of fraud in international arbitration.

Over 55% of participants identified international arbitration experiences diversity challenges related to gender, nationality or age; whereas only 15.4% actively disagreed with the idea that diversity issues exist. This perception was borne out against participants’ reported experiences, as it was rare to have experienced tribunals with multiple women or multiple arbitrators from developing countries. There were divides in participants’ perceptions of diversity concerns. Women were more likely than men to identify diversity concerns, which is perhaps unsurprising as they were a small proportion of the sample. Participants from developed states, namely OECD countries, were more likely than their developing state counterparts to identify concerns about diversity. This creates a unique opportunity for international arbitration, namely, having identified an observable problem with diversity, the community can choose to be either a leader — and how to do so — in expanding opportunities for diversity within the larger community of international courts and tribunals.