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Non-administered arbitration - What are your thoughts?

In a non-administered arbitration, how should a party-appointed arbitrator respond to a challenge by the non-appointing party to her/his continued seating/appointment?

Please provide your thoughts/comments below.

Comments (2)

If there are non-administered rules, then follow them. Otherwise, parties should check whether the law of the seat of arbitration makes any provision. For example, the default position under English law is that the English courts have the power to remove an arbitrator (section 24(2), AA 1996). Article 13(2)of the UNCITRAL Model Law provides for the tribunal to decide the challenge. A party wishing to appeal against an unsuccessful challenge must do so within 30 days of receiving notice of the decision rejecting the challenge (Article 13(3), UNCITRAL Model Law).

The FAA makes no provision for challenges to or removal of an arbitrator during the course of the arbitration. In In re Sussex, 781 F.3d 1065 (9th Cir. 2015), the US Court of Appeals for the Ninth Circuit took the rare step of granting a writ of mandamus and vacated the district court's decision to remove an arbitrator for conflict of interest. The Ninth Circuit reasoned that court intervention mid-arbitration should occur only in extreme cases and that the case below was "emphatically" not an extreme case (see Legal update, District Court Erred by Intervening Mid-Arbitration: Ninth Circuit). In AVIC Int'l USA, Inc. v. Tang Energy Grp., Ltd., 614 F. App'x 218 (5th Cir. 2015), the court declined to stay arbitration, holding that courts may not rule on arbitrator challenges until after the final award (see also John Hancock Life Ins. Co. (U.S.A.) v. Employers Reassurance Corp., 2016 WL 3460316, at *3 (D. Mass. June 21, 2016)).

In the US, therefore, absent agreed-on rules, the arbitrator must exercise his good judgment on whether or not to step aside.

Judge Gerald Harris:

I believe it would be appropriate for the arbitrator to suggest that the dispute be referred to an arbitral administration agency, such as the AAA, for resolution.

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