Number of Arbitrators

An arbitral tribunal may consist of one or more arbitrators, depending what the parties have agreed. In practice, tribunals in international arbitrations consist of one or three arbitrators.

In the absence of agreement by the parties, the ICC rules provide that a sole arbitrator will be appointed, unless "the dispute is such as to warrant the appointment of three arbitrators" (article 12.2). Under that article, the ICC will, generally speaking, only consider appointing a three member tribunal in cases with a value of over $5m. Even then, it may still appoint a single arbitrator in relatively simple cases. In disputes with a state, however, it will normally appoint three.

The LCIA rules adopt the same approach: "a sole arbitrator shall be appointed unless the parties have agreed in writing otherwise, or if the LCIA Court determines that in the circumstances a three-member tribunal is appropriate (or, exceptionally, more than three)" (article 5.8). The circumstances which the LCIA will take into account will include the complexity of the arbitration and the amount at stake.

However, it is generally better for the arbitration clause to specify the number of arbitrators.

Appointment of a sole arbitrator minimises fees and expenses and reduces the length of an arbitration. The arbitrator makes decisions alone, without having to consult fellow tribunal members, and meetings and hearings are easier to arrange when only one arbitrator's schedule needs to be accommodated. Where the amount at stake is not large, or the issues not complex, it is advisable to provide for appointment of a sole arbitrator.

However, the general trend in international arbitration is for three arbitrators, except where the sum in issue does not justify it. Where three arbitrators are chosen then, under most sets of institutional rules, each party is entitled to nominate one of the three (the LCIA rules work somewhat differently; the default being that the LCIA will appoint all arbitrators unless the arbitration agreement "howsoever calls for any form of party nomination" in which case the parties (in their respective request, and response) become entitled to each provide a nominee).
 
Where institutional rules have been used, the third, presiding, arbitrator will then usually be chosen by one of two methods. Some rules provide for the first two arbitrators to make the appointment (e.g. UNCITRAL, HKIAC), whilst the default under the ICC, LCIA and SIAC rules is for the institution to do so unless the parties agree to another procedure. Generally, appointment by the two party nominated arbitrators can be more streamlined so our precedent clauses for those sets of latter rules do make that provision (and thus, in the case of the LCIA rules, also provide the requisite call for party nomination of arbitrators to trigger the nomination procedure noted above). 
 

Note that different sets of institutional rules adopt a different nomenclature with respect to the position of presiding arbitrator, hence some cosmetic differences in any reference to the title of that position in our precedent clauses.

Where each party has appointed an arbitrator, this will contribute to a feeling of confidence in the tribunal. This is particularly important in international arbitrations, where each of the parties and the members of the tribunal may come from different legal backgrounds and cultures, and even speak different languages.

Clauses providing for three arbitrators pursuant to which disputes involving multiple (i.e. more than two) parties are likely to be resolved should make particular provision for the appointment of arbitrators designed to ensure that the appointment process works fairly as between the claimant and respondent “sides”. Most institutional rules, following the French Dutco decision, have incorporated such provisions and therefore express wording in the arbitration clause itself will often be unnecessary when choosing institutional rules (hence, our institutional clauses say no more on the matter as the relevant rules make such provision) . If using a non-institutional/stand-alone (ad-hoc arbitration) clause in a multi-party situation, however, express wording will be required to deal with this issue in a three-arbitrator clause and our Stand-Alone Clause therefore contains an example of basic wording to effect this (paragraphs (iv) and (v)).

Whether or not appointed by a party, an arbitrator is usually expressly bound to be independent and/or impartial. Thus parties must take care to nominate an arbitrator whose independence from the party is not open to challenge.

Parties may specify that no arbitrator may be of the same nationality as any party. The last part of paragraph (iii) of our basic three-arbitrator clause provides for this (see Stand-Alone Clauses and the various clauses under Arbitral Institutions and Clauses). While this may be inappropriate in normal commercial contracts, it is important in contracts with governments. It prevents the government appointing as its arbitrator its own national, who may not be predisposed to finding against it:. This provision should be difficult for a state to resist at the negotiation stage but will be valuable if a dispute arises: if facing a genuinely independent tribunal, a state is likely to be more willing to do a deal rather than go through arbitration.