Importance of Diversity while forming an Arbitration Tribunal

“If everyone is moving forward, then success takes care of itself.”
‐ Henry Ford

Vikrant Pachnanda comments on the importance of diversity while forming an arbitral tribunal.

Introduction

Diversity is about bringing together collective knowledge, wisdom and comprehension, born from an array of skills and experiences, in order to ensure a high-profile quality of the decisions to be respected and followed. The benefits of diversity reflect on team-work, productivity and decision-making process of an arbitration tribunal and through the various stages of the arbitration proceedings.¹

Having studied law in multiple jurisdictions, I noticed that women have been as numerous as their male counterparts in law schools. In India, where I worked as an Associate in a leading law firm I noticed that the same was also the case at the Associate level as well. Yet, growth of female lawyers whether it is a Partner at a law firm or General Counsel at a multi-national corporation, is not always the case and this is often referred to as the women’s ‘glass ceiling’². In 2015, for instance, the Singapore International Arbitration Centre registered less than a quarter of female arbitrator appointments.³

In order to achieve greater diversity, all actors playing a role in the field must act together.⁴ With respect to arbitration, not only arbitration institutions but even law firms, arbitrators and bar associations have vital roles to play and take concrete actions to ensure gender diversity while simultaneously benefiting the community.⁵ The author in this essay thus delves into the lack of gender diversity as well as regional and ethnic diversity in arbitration tribunals and how it is important for arbitration institutions to play an essential role in maintaining diversity.

Reasons for lack of diversity

There are no several reasons for a lack of diversity amongst members of an arbitration tribunal with no doubt, overt discrimination and unconscious bias being some but not the only factors. A career, which requires long working hours or frequent international travel across the globe may not always turn out to be practical especially for women who have childcare responsibilities. This is a major impediment for women who want to establish a career in international arbitration, which operates across several jurisdictions and hence requires international travel.⁶ The author disagrees with the notion that women practitioner are significant minority and hence not often chosen as a member of the arbitration tribunal.

Furthermore, parties are rightly, looking to appoint senior and experienced arbitrators who have an excellent track record. However owing to the fact that there a fewer women in senior legal roles such as a partner of a law firm for example, the pool of women lawyers available to be appointed as arbitrators is quite small and parties may also have limited access to information about suitable candidates especially because much of the arbitration process is confidential. In such a scenario, it can be very difficult for a female lawyer to break in and be appointed as an arbitrator especially since the same arbitrators often tend to be appointed repeatedly again and again thereby leading to the creation of a small of arbitrators that is mostly male dominated.⁷

This is also known as ‘pipeline leak’ and refers to a solid resume that one can build in order to become a successful arbitrator through legal education, experiences etc.⁸

Why diversity is essential

A diverse arbitration tribunal is in my opinion, an indispensible requirement akin to a diverse judiciary being an indispensable requirement for any democracy. Diversity in an arbitration tribunal not only ensures equity and equality amongst genders but also may improve the quality of decision-making since different perspectives result in better decisions.⁹ Lack of diversity may lead to a failure on part of the arbitration tribunal to understand a party’s point of view.¹⁰ Gender diversity will also introduce ‘fresh blood’ on arbitration tribunals and this is necessary in order to widen the pool of arbitrators. Widening the pool of arbitrators in turn will give greater choice to parties to select an arbitrator and also lead to fewer conflicts.¹¹

Arbitration Institutions can thus commit to ensuring that lists of potential arbitrators include a fair representation of female candidates who also meet the requirements from a merit perspective as well as collate and publish gender statistics for appointments.¹² Leading law firms and chambers globally should also support the expansion of networks of women in arbitration practice as that will lead to more women being appointed in senior legal roles. This will make it easier for female candidates to make an impact as far as appointment as an arbitrator is concerned and break the glass ceiling. Moreover it will also ensure that parties have information about suitable female candidates while appointing arbitrators.¹³

In Switzerland, for instance, the Code de Procedure Penale Suisse states that it is mandatory for the judge in charge of certain cases such as sexual harassment, to be the same gender as the victim which ensures from a victim’s perspective that no crucial point is ignored but well understood.¹⁴ However the lack of diversity on arbitration tribunals is not only limited to gender and also extends to ethnic and regional diversity. The benefits of different perspectives to the quality of effective decision making as stated above, apply equally to ethnic and regional diversity composition of the arbitration tribunal as well. Also publication of statistics in this regard similar to the one in case of female candidates as explained above would be vital to endure a change in this area as well.¹⁵

Role of arbitration institutions in ensuring diversity

Arbitration institutions can play a major role in acting on diversity. This is because they hold the relevant date regarding the identity of frequently appointed arbitrators and hence would be in a better position to assess the results of any measures undertaken. Moreover they will be able to accurately gauge the extent of the issue pertaining to diversity in order to act upon it.¹⁶ For example, in 2016, the International Chamber of Commerce started publishing names and nationalities of the arbitrators sitting in its arbitration cases as well as whether the arbitrator(s) was chosen by the parties or by the arbitration institution.¹⁷

Another reason is that arbitration institutions are in a position to take key decisions regarding selection of arbitrators and hence can enhance diversity while doing so. These institutions should thus take the lead in diversity in instances where the institution itself is selecting the entire arbitration tribunal for appointment.¹⁸ Therefore even though parties usually prefer indicating a preference for choosing their own appointed arbitrator as opposed to arbitration institutions to do the same, however there is ample room for institutions to maneuverer in order to make a difference.¹⁹

Additionally, arbitration institutions could also adopt a more inclusive panel of speakers while organizing conferences by inviting speakers from diverse ethnic and regional backgrounds as well as female speakers. This can assist in achieving diversity to a great extent without being a burden on its exchequer. This will lead to visibility of potential arbitrators amongst in-house counsel who work for organizations that are prospective parties to arbitration. Arbitration institutions can also take concrete action with respect to ensuring diversity while forming their panel of arbitrators but at the same time not compromising on merit.

Conclusion

A diverse tribunal will thus more likely to be an effective tribunal, that will be able to understand its parties and lawyers better as well as benefit from perspectives, ideas, challenges etc. thereby leading to better decision-making. It is essential to achieve a better balance on the arbitration tribunal by ensuring diversity while at the same time, making sure that merit is not set aside. Parties normally prefer to select arbitrators keeping in mind the stakes involved in the arbitration proceeding and the risk factor involved in case the award is rendered against them.

Thus candidates from diverse backgrounds including females should be aware that eventually parties or arbitration institutions are looking to appoint the best person equipped with best skills, expertise, knowledge and experience for the particular arbitration proceedings and diversity is only one of the factors to keep in mind while making the choice of the arbitrators.