Should International Arbitrators be Liable for Awards which are Subsequently Annuled or Held Unenforceable?

• Author: Robert Shaw
• Position: LLB, LLM (Candidate), Newcastle University. The author would like to thank his parents, Ian and Dawn Shaw, for their continued support and encouragement
• Pages: 41-52

[2017] 16 COLR 41

41"

SHOULD INTERNATIONAL ARBITRATORS BE LIABLE FOR AWARDS

WHICH ARE SUBSEQUENTLY ANNULLED OR HELD

UNENFORCEABLE?

Robert Shaw*

A INTRODUCTION

The liability of arbitrators is a concept which ‘touches the heart’ of arbitration yet is

characterised by conceptual chaos.1 It is an issue of particular contemporary significance, given

that arbitration is rapidly developing, but this development is ‘accompanied by a perceived

deterioration of its moral standards’.2 The situation is only made worse as liability is approached

internationally from ‘two radically different perspectives’.3 Because of this there is a glaring

absence of uniformity in international arbitration law regarding the liability of arbitrators; a

lacuna which needs to be filled.4

This article will argue that arbitrators should be liable for awards which are subsequently

annulled but not for those that are held unenforceable. It will propose that the imposition of

liability rests on a two-step test. Firstly has the arbitral award been annulled? Secondly, if so

annulled, is this due to a breach of duty by the arbitrator? This proposition will be justified via

critical analysis of the theoretical rationales for arbitral liability which will determine that

arbitrators should be afforded immunity but not in absolute terms, with the setting aside of an

award the appropriate threshold to apply.

""""""""""""""""""""""""""""""""""""""""""""""""""""""""

* LLB, LLM (Candidate), Newcastle University. The author would like to thank his parents, Ian an d Dawn Shaw,

for their continued support and encouragement.

1 Dario Alessi, ‘Enforcing Arbitrator’s Obligations: Rethinking International Commercial Arbitrators’ Liability’

(2014) 31(6) JIA 735.

2 Emmanuel Gaillard and John Savage, Fouchard Gaillard Goldman on International Commercial Arbitration

(Kluwer Law International 1999) [1010].

3 Susan Franck, ‘The Liability of International Arbitrators: A Comparative Analysis and Proposal for Qualified

Immunity’ (2000) 20(1) New York Law School Journal of International and Comparative Law 1, 16.

4 Chiara Orlandi, ‘Liability of Arbitrators in the Italian Legal System’ (2002) 7 IBLJ 795.