PCA Responds to Queries on Arbitral Legitimacy
The PCA was recently asked by ICCA to answer a questionnaire on arbitral legitimacy and expound on this subject at the 2014 ICCA Congress in Miami. The questionnaire covered topics such as the participation of arbitration users and practitioners based in developing arbitral jurisdictions, the role of institutions in arbitral appointment and decision-making processes, and the effects of rising costs in international arbitration. A summary of the PCA’s views on these aspects of arbitral legitimacy and its own role in fostering legitimacy are described below.
It is part of an arbitral institution’s role to foster legitimacy. Arbitral institutions are focal points for the world’s perception of international arbitration, so they are uniquely positioned to foster legitimacy and have an obvious interest in doing so. The continued faith of PCA Member States and other potential users in international arbitration depends in no small part on their perception of the system as a global one that serves the interests of all relevant actors..
One way in which arbitral institutions can foster legitimacy is to reduce the geographic concentration of arbitral practice. Encouraged by its Member States, the PCA seeks to establish a global presence beyond its headquarters in The Hague through the conclusion of Host Country Agreements. A diverse group of Member States—including Argentina, Chile, Costa Rica, India, Singapore and South Africa—has offered to the PCA the same or similar treatment as it enjoys in the Netherlands.
These Agreements facilitate access to PCA services around the world and are often implemented in cooperation with regional centers in the developing world, which the PCA may advise on best practices and other aspects of institutional organization. In a number of jurisdictions seeking to develop a local arbitral institution, the PCA also seeks to foster systemic legitimacy through advice to governments and other interested parties on aspects of institutional management.
Moreover, the PCA has begun to expand its global presence by establishing a permanent PCA office in Mauritius. From its Mauritius platform, the PCA has not only actively assisted the local community in developing its arbitral infrastructure, but also engaged the regional arbitration community by participating in educational outreach and training programs throughout Africa.
A related way in which arbitral institutions can foster legitimacy is by training arbitrators based in less-frequently utilized arbitral jurisdictions. This may be done in an ad hoc manner, by assisting less-experienced arbitrators in case administration, organizing conferences and producing publications. With respect to future arbitrators, the PCA’s Educational Assistance Fund also aids the PCA’s efforts to geographically expand arbitration expertise. This fund enables the PCA to offer fellowships to young lawyers from jurisdictions where access to such expertise is not typically available, allowing them to join the International Bureau for a period of one year. The fund thereby helps to diversify the ranks of lawyers who will be competent to work as arbitral practitioners and arbitrators in the future.
The Secretary-General of the PCA looks very carefully for opportunities to appoint arbitrators with relatively limited experience in international arbitration and those of diverse national backgrounds. While the confidential nature of most PCA proceedings limits the public perception of this diversity, awareness of the availability of arbitrators from a broad base of regional and national backgrounds is assisted through the PCA’s publication of its list of Members of the Court. Through this mechanism, the 115 PCA Member States may nominate potential arbitrators of known competency in questions of international law. This list serves as one of the resources assisting in the identification of a diverse group of potential arbitrators.
When the Secretary-General is called upon to appoint an arbitrator, the circumstances of a specific case may raise considerations such as neutral nationality, language abilities, relevant experience, knowledge of applicable law, availability and any comments which the parties may provide. Arbitral institutions should never consider gender and race as limiting factors in the selection of an arbitrator. Where two equally qualified candidates are available for a particular appointment, however, a candidate from a group that is less often represented in arbitral tribunals may be preferred. In this manner, institutions should take responsibility for widening the pool of arbitrator candidates when qualified candidates are available.
The cost of arbitration may also affect perceptions of legitimacy. As such, the PCA established its Financial Assistance Fund in 1994 with the aim of helping developing countries to meet the costs involved in international arbitration or other means of dispute settlement. The Fund remains available to States which are listed on the “Development Assistance Committee (DAC) List of Aid Recipients” of the OECD. The PCA believes that this improves the legitimacy of the international arbitration system in the eyes of States who would otherwise consider it to be prohibitively expensive.
More recently, the PCA instituted a new mechanism to review arbitration costs when revising its Arbitration Rules in 2012. A proactive institutional role in this area is particularly valuable because parties awaiting a tribunal’s decision are not in an appropriate position to dispute arbitrator fees. By enhancing institutional oversight, this change helps to increase institutional legitimacy in the eyes of parties concerned about rising costs in international arbitration.
The PCA is in constant contact with arbitrators and counsel regarding their satisfaction with PCA services and considers their suggestions concerning the improvement of these services. It is important that arbitral institutions engage with arbitration users and potential users to the greatest extent possible in order to understand their perception of legitimacy and all relevant concerns. In the PCA’s experience, its diverse array of users share common interests in these institutional efforts to improve such perceptions.