The Role of the Arbitrator

Introduction

The arbitrator occupies a unique and pivotal role within the architecture of alternative dispute resolution (ADR). Unlike judges, who derive their authority from the sovereign, arbitrators derive legitimacy directly from party autonomy, the agreement between disputing parties to refer disputes to arbitration. This principle makes the arbitrator both an adjudicator and a facilitator, balancing fairness, efficiency, and flexibility.

In international commerce, investment disputes, and even domestic conflicts, the arbitrator’s conduct largely determines whether arbitration remains a trusted substitute for litigation. Thus, examining their powers, duties, and ethical standards is critical to understanding arbitration’s effectiveness as a dispute resolution mechanism.

I. Powers of the Arbitrator

Arbitrators are empowered by three sources: the arbitration agreement, the law of the seat, and, where applicable, institutional rules. Their authority encompasses procedural, substantive, and administrative aspects.

1. Procedural Powers

• Flexibility in procedure: Arbitrators are not bound by rigid rules of evidence or procedure unless parties agree otherwise.

  • Example: Section 19 of the Arbitration and Conciliation Act, 1996 (India) provides that arbitral tribunals are not bound by the Code of Civil Procedure or the Evidence Act.¹

• Case management: Power to determine timelines, mode of hearing (physical/virtual), and admissibility of evidence.

• Discovery and document production: Though limited compared to courts, arbitrators may order disclosure of documents.

  
  

2. Substantive Powers

• Jurisdiction (Kompetenz-Kompetenz): Arbitrators can rule on their own jurisdiction, including objections to validity of the arbitration agreement.²

• Interim measures: Under Article 17 of the UNCITRAL Model Law, arbitrators may order measures to preserve assets, maintain status quo, or prevent harm.³

• Binding decision-making: Arbitrators issue final and binding awards, enforceable under the New York Convention (1958) across 170+ jurisdictions.

  
  

3. Administrative Powers

• Control over hearing schedules, seat of arbitration, consolidation of proceedings, and tribunal expenses.

• In institutional arbitration (e.g., ICC, LCIA, SIAC), certain administrative powers may be delegated to the institution (appointment of arbitrators, scrutiny of awards).

Case Law: In Centrotrade Minerals & Metal Inc. v. Hindustan Copper Ltd. (2006),⁴ the Indian Supreme Court upheld the enforceability of a two-tier arbitration clause, reflecting arbitral autonomy and powers derived from party agreement.

II. Duties of an Arbitrator

Arbitrators’ duties ensure that their broad powers do not compromise fairness or party confidence.

1. Duty of Impartiality and Independence

• Core duty in all arbitral frameworks.

• UNCITRAL Model Law (Article 12) requires disclosure of circumstances likely to give rise to justifiable doubts.

• Institutional rules (e.g., ICC, LCIA, SIAC) mandate arbitrators to remain neutral throughout proceedings.

  
  

2. Duty of Equal Treatment and Fair Hearing

• Arbitrators must treat parties equally and give each a full opportunity to present their case.⁵

• Procedural equality forms part of natural justice and is a ground for setting aside awards under Section 34 of the Indian Act.

  
  

3. Duty of Diligence and Efficiency

• Arbitrators must ensure proceedings are conducted without undue delay or expense.

• Example: Section 29A of the Indian Act prescribes a 12-month timeline for rendering awards in domestic arbitrations.⁶

  
  

4. Duty of Confidentiality

• Arbitration is private by default; arbitrators must protect sensitive information.

• While not universally codified, confidentiality is implied in most jurisdictions and institutional rules.

  
  

5. Duty to Render a Reasoned Award

• Awards must state reasons unless parties agree otherwise.

• Section 31(3) of the Indian Act requires reasoning to ensure transparency and judicial review.⁷

  
  

III. Ethical Standards for Arbitrators

Ethics form the backbone of arbitration, as arbitrators’ conduct directly impacts parties’ trust in the process.

1. Disclosure Obligations

• Arbitrators must disclose any financial, professional, or personal relationship with parties or counsel.

• The IBA Guidelines on Conflicts of Interest in International Arbitration (2014) classify disclosures into “Red,” “Orange,” and “Green” lists to indicate severity of conflicts.⁸

2. Avoidance of Bias and Improper Conduct

• Arbitrators must not favor one party or engage in ex parte communications.

• Even the “appearance of bias” can justify removal.

3. No Delegation of Decision-Making

• Arbitrators must personally deliberate and sign the award. Delegation to clerks or assistants is prohibited.

4. Accountability and Integrity

• Arbitrators are fiduciaries of the arbitral process.

• Failure to act with diligence or independence can lead to removal under Section 14 and 15 of the Indian Act.

  
  

Case Law: In TRF Ltd. v. Energo Engineering Projects Ltd. (2017),⁹ the Indian Supreme Court held that a person ineligible to act as arbitrator cannot nominate another arbitrator, strengthening the requirement of independence.

IV. Removal and Challenge of Arbitrators

Arbitrators can be challenged on grounds of bias, lack of independence, or failure to act.

• UNCITRAL Model Law (Article 13): Provides procedure for challenge.

• India: Fifth and Seventh Schedules of the Arbitration Act enumerate specific grounds (e.g., relationships with parties, previous involvement).¹⁰

• International Practice: Institutions like ICC and LCIA allow challenge applications, usually decided by the institution’s court or secretariat.

V. Global Best Practices

• IBA Guidelines (2014): Global reference for conflicts of interest.

• UNCITRAL Model Law (1985/2006): Basis for over 80 jurisdictions’ arbitration laws.

• Institutional Rules (ICC, SIAC, LCIA): Provide detailed codes on arbitrator ethics and responsibilities.

• India’s 2015 Amendments: Strengthened independence requirements by introducing disclosure forms and strict ineligibility lists.

Conclusion

The arbitrator’s role transcends decision-making; it embodies the values of party autonomy, fairness, and procedural efficiency. With great powers come corresponding duties and ethical obligations, ensuring that arbitration retains legitimacy in the eyes of its users.

In a globalised world where arbitration has become the preferred mechanism for cross-border disputes, arbitrators are not merely neutral decision-makers; they are guardians of justice without borders.

Their impartiality, integrity, and diligence ultimately determine whether arbitration delivers on its promise of being a fair, efficient, and credible alternative to litigation.

References

1. Arbitration and Conciliation Act, 1996, Section 19.

2. Arbitration and Conciliation Act, 1996, Section 16; UNCITRAL Model Law, Article 16.

3. UNCITRAL Model Law on International Commercial Arbitration, Article 17 (as amended 2006).

4. Centrotrade Minerals & Metal Inc. v. Hindustan Copper Ltd., (2006) 11 SCC 245.

5. UNCITRAL Model Law, Article 18.

6. Arbitration and Conciliation Act, 1996, Section 29A.

7. Arbitration and Conciliation Act, 1996, Section 31(3).

8. IBA Guidelines on Conflicts of Interest in International Arbitration, 2014.

9. TRF Ltd. v. Energo Engineering Projects Ltd., (2017) 8 SCC 377.

10. Arbitration and Conciliation Act, 1996, Fifth and Seventh Schedules.