APRAG Conferences 2020 Session 3: New trends of challenges made against arbitrators

(1) Courts’ views on the challenge of arbitrators in Thailand:

          Relevant laws

It appears in the Arbitration Act B.E. 2545 (2002), Sections 19 and 20, and regulations of arbitration service agencies in Thailand, such as the TAI Regulations or the THAC Regulations, in which challenge of arbitrators is specified.

Reasons for the challenge of arbitrators: There may be cases of lack of impartiality and independence, including lack of qualifications as agreed by parties (where parties may define qualifications of arbitrators (such as nationality, special legal expertise, etc.)

 

What are impartiality and independence?

Impartiality and independence of arbitrators are clearly defined; however, it can be concluded that impartiality is the performance of duties with unbias even parties that establish themselves as arbitrators, while independence is the performance of duties without being under the authority or control of either party.

Arbitrators shall disclose facts that are justifiable to impartiality and independence in the performance of duties.

 

Procedure for challenges of arbitrators

In conclusion, it can be concluded that parties shall submit a letter of evidence of the challenge of the arbitral tribunal, and the arbitral tribunal shall make a decision on the challenge of.

In the event that the challenge cannot be unsettled or in the case where there is only one arbitrator, the challenge of shall be filed to the court having jurisdiction for proceedings.

Note:   Additional notes can be found in Section 20 of the Arbitration Act B.E. 2545 (2002) and the Supreme Judgment of 15010/2558.

 

Rulings on challenges of arbitrators

In the past, the Supreme Court had trials and Rulings on challenges of arbitrators, most of which was raised by the Court, which might be the grounds for ordering the arbitrations to withdraw from a case trial or revoke an award of the arbitral tribunal:

In the case of an arbitrator has transferred his/her shares to both transferees and the transferees had a dispute in this case (The Supreme Court’s Judgment 2231-2233/2553); in the case of an arbitrator was a former lawyer and conducted a case in the court of facts contained in the same circumstance as the dispute in this case, where although parties were of different companies, the circumstances in the trial were the same; therefore, it is considered to have interests in the legal case, and the arbitrator might have the same opinion as to the case in which the person was a lawyer (Supreme Judgment No. 3542/2561), etc.

As for the lack of qualification of an arbitrator specified by parties, although it could be the grounds for the challenge of the arbitrator, in fact, it never turned out that there had been such a case to a trial by the Supreme Court in any way as in the event that parties were of the opinion that the arbitrator was disqualified as specified, he or she would file a petition or apply for withdrawal of the arbitrator since during the trial and would not ignore the circumstance until the process of the challenge of the arbitrator.

 

(2) Challenge of arbitrators in China:

– In a part of principles of duty, as well as the Code of Ethics for Arbitrators, arbitral agencies or institutions have established their internal guidelines.

– A court is an organization for considering the challenge of arbitrators and shall make a decision whether it is deemed to withdraw an award of an arbitral tribunal or not.

– On the grounds for the challenge of arbitrators, for example, in the People’s Republic of China, most law professors are also listed as arbitrators. Therefore, it is highly likely that arbitrators in the same case or arbitrators with a lawyer of either party are law professors and students. In the past, the relationship between law professors and students has also been raised to protest arbitration over impartiality.

– The speaker pointed out that it was good that the IBA has issued the guidelines for conflicts of interest to allow those entering the role to acknowledge that the facts may constitute conflicts of interest and was deems a reasonable doubt of impartiality and independence.

 

(3) Challenges against arbitrators: Counsel Perspectives

According to the 2018 LCIA, it disclosed that from 2010 to 2017, there were 32 LCIA rulings relating to challenges of arbitrators, 25 of which were rejected, 6 of which the court agreed that the challenge was reasonable and agreed with the challenge, and 1 of which was partially agreed.

During the seven-year period, there were more than 1,600 LCIA managed arbitration cases, which indicated that in the cases of a challenge to arbitrators accounted for 2 percent of the total number of cases, only 20 percent of which was successful. Therefore, if compared with all cases, the rate in which the court may hear and agree to challenge arbitrators was only 0.4 percent.

 

Arbitration Laws and Regulations of Arbitration Service Agencies Concerning Challenge of arbitrators

– The Articles of Association of LCIA, Article 10.2, states that the LCIA Court may consider an arbitrator are not qualified to perform duties in the event that the arbitrator fails to act with fairness and impartiality, or fails to effectively conduct with or participate in arbitration proceedings.

– The Articles of Association of THAC set out the grounds for challenge of arbitrators in Article 28, which states that an arbitrator may be challenged in the event that it appears to be justifiable to impartiality or independence or lack of qualifications as agreed by parties or other serious circumstances which may impair a ruling.

– Section 12 of the UNCITRAL Model Law states that arbitrators shall perform their duties with impartiality and independence.

– The IBA Guidelines on conflicts of interest in International Arbitration sets out conflicts of interest guidelines that are justifiable to impartiality and independence of arbitrators.

In Thailand, what is a case of the challenge of arbitrators?

– Section 19 of the Arbitration Act, B.E. 2545 (2002), states that in the event that an arbitrator lacks the qualifications as agreed by parties, parties may challenge the arbitrator.

– Challenge may be presented in writing, showing grounds for challenge of an arbitral tribunal within 15 days from the date of knowledge of such fact. In this case, the arbitral tribunal shall decide the challenge.

– However, in the case of only one arbitrator, a decision of a challenge shall be made by a court only.

– An arbitral tribunal has a period of 30 days to consider the challenge, while there is no time limit for a court to consider its challenge of arbitrators.

Timing is the key to the challenge of arbitrators.

– The LCIA states that from the date of appointment of members of the court for the challenge of arbitrators, it shall take an average of 27 days to make a decision. In most cases, more than half of all rulings take 14 days.