Arbitration Know-How Series – Part 4: Perfecting The Art Of Selecting Legal Professionals

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THE AUTHOR:
Clémence Prévot, Senior Content Manager & Editor in Chief of Daily Jus at Jus Mundi

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As part of the in-house legal team, you are the guardian of your company’s legal interests from contract negotiations to enforcement of arbitral awards. Be the internal asset and business partner you’re meant to be!

At Jus Mundi, we are aware that not all legal departments have a dedicated arbitration or disputes team. To make your life extra easy, Jus Mundi is publishing a series of practical Arbitration Know-How articles, specifically intended for in-house counsel.

Take a look at the previous articles of our Arbitration Know-How Series:

• The Ultimate Arbitration Checklist: a Practical Guide for In-House Counsel, which exposes, in practical terms, the steps to be taken in the contract negotiation phase, pre-dispute phase, and during arbitration.
• Arbitration Clause Drafting 101 explains how to confidently draft a dispute resolution/arbitration clause to avoid using a claim-generating clause;
• Mitigate Business, Financial & Legal Risks Through Arbitration Intelligence & Legal Monitoring, which exposes how to stay on top of the new arbitral developments and mitigate legal risks.

The last article of our Arbitration Know-How Series will cover:

• Prompting compliance with awards without having to enforce them, which addresses how a business can recuperate its damages effectively and swiftly.

Introduction

Arbitration is sometimes unavoidable.

The selection and due diligence of arbitrators are critical steps in the process. Fortunately, in-house counsel can take part in the decisions which ultimately lead to the selection of a de facto judge of their dispute by collaborating closely with their external counsel. Doing so effectively ensures savings on legal fees, as well as more control over the legal strategy adopted.

Due to their strategic position, in-house counsel can both advise on the legal strategy and the business’s bottom line. External counsel do not have the same outlook, as they are not privy to all of their clients’ legal, financial and commercial interests.

It is therefore primordial to carefully select external counsel you can effectively collaborate with.

How to Select Arbitration External Counsel That Will Be Strategic Partners?

To have the best chances of success in your arbitration while managing costs, choosing the right law firm and external counsel for your business is a crucial first step.

Even though in-house counsel may already have an established relationship with their trusted and usual corporate counsel or litigator, retaining them to represent your interest in arbitration may not be the best strategic choice. Indeed, as explained in our Arbitration Checklist, arbitration is a very specific form of dispute resolution which requires experience in the arbitral process and, often, specific expertise in the subject matter of the dispute.

Our insights:

• Counsel specialized in arbitration are the most suited to handle your arbitral needs. Not only do they have the expertise, but their vast experience will ensure efficiency in the process and procedure, which may ultimately help you make savings on legal fees.

• The right external counsel should be a strategic partner, not completely take over your dispute resolution strategy.

In-house counsel hold a pivotal role in the dispute resolution strategy: they are representing the interests of their company while also informing the legal decisions taken by external counsel. In addition, in-house counsel have access to witnesses, documents, and the insights as to how to gather the evidence required for their arbitration case.

As such, “helicopter” external counsel are not the best decision for your arbitral strategy, however competent they may be. Involving the in-house counsel of their clients should be a priority to external counsel that wish to personalize the approach they take towards a case.

They should, therefore, understand that you, as the guardian of your company’s interests, oversee the dispute’s strategy, meaning you should be regularly updated on your case’s progress and make the strategic decisions that best suit your company’s interests. One such decision regards the selection of arbitrators, which will be discussed below.

Our tips:

Word of mouth can be useful but, to convince your C-suite of the interest of a specialised external counsel, data rules over any personal recommendations.

Make the right choice for your business’ s needs by:

• checking past pleadings to determine if an external counsel is right for you.

You can find exclusive pleadings submitted to arbitral tribunals in Jus Mundi’s search engine.

• getting a diverse counsel team. Arbitrations usually involve an international element, meaning different perspectives, mindsets and cultural awareness are assets in developing a strong and creative arbitration strategy. It ensures that your team of counsel has a global vision of the dispute and arbitral proceedings often involving different legal systems and languages, as well as the subject matter of the dispute.

Jus Connect by Jus Mundi offers a range of filters to help you find what you are looking for in an external counsel. We add new filters regularly.

• taking a look at firm profiles with caseload information and analytics for a broader vision of a law firm’s arbitration practice:

Jus Mundi’s Firms Profiles can help you identify law firms with arbitration experience and get specific analytics about their expertise. New features are coming soon.

Save on legal cost and gain in autonomy over your case management by collaborating with your external counsel in selecting arbitrators right for your dispute.

The Importance of Selecting the Right Arbitrator

Arguably, one of the most crucial decisions of the arbitration process is selecting an arbitrator.

The selected arbitrator can influence the findings of the Arbitral Tribunal and therefore, the outcome of the case. A poorly selected arbitrator, for instance, appearing partial or with conflict of interest, may be challenged by the adverse party and your choice may eventually end up costing you.

As the parties are responsible for selecting their own arbitrators, the selection process can be considered a key strategic element of your wider strategy. However, as an arbitrator is to be neutral and impartial, the selection can be tricky. It is important therefore to select someone that MIGHT be on your side, whilst still ensuring neutrality, i.e., someone that may have ruled in favour of parties which used similar legal arguments as yours.

Failing to select the right arbitrator can prolong your dispute and increase legal fees, rendering the arbitral process less efficient:

• Primarily, an arbitrator that is not available enough may lack focus for being on too many cases at one time, and delay the process as they may have scheduling issues (to plan for conference calls, hearings, etc).
• A challenged arbitrator can also result in time wasted and increased legal fees. So making a choice that is above any appearance of partiality is primordial: a potentially conflicted arbitration would surely lead to challenges, delays, and further conflicts.
• An unqualified arbitrator, meaning without expertise in the subject matter of the dispute or, at the very least, its industry, may prove inefficient in understanding the ins and outs of your case.

However, note that an arbitrator with little experience as an arbitrator is not an unqualified arbitrator. Giving a chance to a lesser-known arbitrator with less extensive arbitrator experience may have advantages:

• They tend to be more available,
• They tend to show eagerness to work efficiently and prove oneself, and
• You are fairly assured that this kind of arbitrators will work on your case themselves (as opposed to famous arbitrators with packed schedules and caseloads who may rely more on associates’ work).

How to Research Suitable Arbitrators for Your Dispute?

To put it simply, the only guidance given by most institutional rules and domestic laws on the selection of arbitrators is that they must be independent and impartial.

Given that the parties can often select their own arbitrator, it is important to make an informed decision, meaning you should be involved in the research from the outset to find a candidate that will have the relevant expertise and conduct thorough due diligence of any potential candidates.

Our insights:

• Strictly follow the selection process set in the arbitration clause, the arbitral institution’s rules, and the laws of the seat of arbitration
  • First, the dispute resolution clause may contain some specific criteria arbitrators of the dispute must observe. Therefore, be mindful of the content of your arbitration clause.
  • Second, the arbitral institution selected in your arbitration clause likely has rules on the selection of arbitrators. Follow the steps and requirements indicated.
  • Be aware that some arbitral institutions can assist in proposing a pool of suitable candidates tailored for the disputes. Do not hesitate to talk to the case manager, who usually can also provide neutral advice.

If you decide to appoint an arbitrator in this manner, it is important to note that all institutions are not equal in the diversity of candidates they may propose. Doing some independent research is therefore paramount.

• Finally, ensure you comply with requirements stated in the laws of the seat of the arbitration. Not all jurisdictions are equal (g., some restrict the nationality of arbitrators), which is why the selection of a suitable seat is critical.

1. Broad research: The process starts with parties looking for arbitrators by using fundamental case criteria such as applicable law, industry, excluded nationalities, etc.

This information can be found on public databases, institutional lists, individual arbitrator CVs, awards but usually require extensive research on numerous different resources.
Jus Connect by Jus Mundi is your one-stop to all these information and more. Due diligence made easy!

2. Specialized research: Parties then narrow down their long list of potential arbitrators by conducting further research using publicly available information such as published cases and articles. At this point, parties also draw on other information such as previous work experience, connections or potential conflicts with other parties, arbitrators or counsel, general caseload or depth of knowledge of a specific industry.

To avoid having to comb through multiple obscure resources, Jus Connect also gather and analysis this data on individual arbitrator’s profiles.

3. Your selected arbitrator: The final step is the most important decision – narrowing down your specialized research to one arbitrator. Parties draw on any additional information that can be publicly sourced, such as procedural priorities, interpretive preferences, timing etc. At this point, parties also enquire within their personal and professional networks to corroborate their selection.

Interviewing the candidate is a must and your external counsel should involve you in such an important step. Your external counsel can inform you of the limits as to the kind of questions that you can ask, as the arbitrator must remain independent and impartial from the outset.

Our tips: your one stop solution to arbitrator due diligence

By following the above steps, it is likely you will find an appropriate arbitrator. However, the final point shows that not only is there a need for deeper insights into topics that are not in publicly available sources, but deeper insights into new and less well-known international arbitrators that are outside local networks and traditional hubs.

This is where Jus Connect by Jus Mundi comes in. Jus Connect is a professional network tailor-made for arbitration. Profiles are automatically created for anyone who has been mentioned in at least one document publicly available on the Jus Mundi search engine.

To date, Jus Mundi’s search engine contains 58,633 documents that are sourced by advanced algorithms and institutional partnerships. Our network currently has 42,709 profiles including arbitrators, lawyers, and experts.

The search filters on Jus Connect make it easy to see a diverse set of practitioners, so everyone has an equal opportunity to be considered for an arbitration appointment. Since profiles come with data-backed insights, the results are even more reliable.

Every profile on Jus Connect is publicly available for easy access.

Jus Connect is the only platform where arbitrators and arbitration practitioners can share their entire case experience and track record to their public profile, without sacrificing confidentiality. This includes commercial arbitration cases since only non-confidential case information is collected. When a user uploads their own cases, the information is validated prior to publishing to assure the quality of the network. This means in-house counsel know they can rely on the information contained in arbitrators’ profiles.

Additionally, with Jus Connect by Jus Mundi, you can have an idea of how an arbitrator has previously ruled on specific legal issues and how they tend to conduct arbitrations, by taking a look at the procedural orders, awards and other documents from arbitrators on Jus Mundi.

What To Look For In An Arbitrator?

The best arbitrators have a combination of skills that make them excellent at running arbitration hearings, including strong analytical abilities and great reasoning. While researching suitable arbitrators, it’s important to be able to distinguish their characteristics and expertise.

Our tips:

• Research your arbitrator’s professional expertise

Ensure that you’ve thoroughly researched who will be the most suitable practitioner related to the economic sector or industry setting in which your dispute takes place.

Not only do you want to make sure they have the relevant legal and professional expertise, but you will want to know their history in that industry and even more crucially, their vision of what the arbitral process should be. Do they fully understand the development of your industry? And will they be able to evaluate that effectively?

• Ensure your arbitrator has a practical approach to proceedings

It is crucial for an arbitrator to have the ability not only to observe but to actively guide proceedings.

The selected arbitrator is expected to rule in a thorough and clear manner, including on damages. So it is important to make sure that the decision they will render will be legible, precise, and argumented. No guesswork should be required. Taking a look at arbitrators’ previous awards on Jus Mundi and Jus Connect allow you to do just that.

• Choose from a diverse pool of potential arbitrators

It is important to promote gender, generational and cultural diversity among candidates. This will result in a more balanced pool of potential arbitrators. Diverse arbitrators allow for a more global perspective on the proceedings and wider social, or cultural understanding.

Logistically speaking, selecting an arbitrator that speaks a particular language could influence the outcome of the case: the communication and delibeartions is impacted by the ability of arbitrators to communicate with the parties and with each other.

Take An Active Role in Selecting Your Arbitrator

It is no secret that arbitration can be costly. An easy way to reduce external counsel’s billable hours is to handle the selection of potential arbitrators mainly in-house. With the right tool, you can even deal with arbitrator due diligence and check candidates for potential conflict of interest yourself, saving on legal cost.

• Actively propose arbitrators to your external counsel:

To choose the right arbitrator for the dispute, take the lead, and propose arbitrators to your external counsel. At the very least, be actively involved in the selection process, as this is a key choice in your arbitration, which has a direct effect on your final award.

Some of the elements discussed above may not be as essential to your external counsel in appointing your arbitrator. In addition, you are privy to your business’ strategic positions and bottom line. You are therefore better equipped to take all-rounded legal decisions in the best interest of your company than external counsel.

Also consider that some external counsel may propose very similar lists of arbitrators to their various clients, for instance, because they know the arbitrator. This may mean that the list they propose is not as tailored for your dispute as you may make it.

Our tips:

• A diverse counsel team will be better equipped to help you make more all-rounded choices in your arbitrator selection. In addition, different perspectives and mindsets are assets in developing a strong and creative arbitration strategy. It ensures that your team of counsel has a global vision of the dispute. Arbitral proceedings often involve different legal systems and languages.

Jus Connect by Jus Mundi offers a range of filters to help you find what you are looking for in an external counsel. Some of these filters include nationality of the practitioner, languages spoken, and gender. You can also take a look at pleadings on Jus Mundi.

• Do your own due diligence:

Searching for information on some arbitrators can be difficult given the nature of the proceedings. Because of this, due diligence can be a lengthy process and therefore costly when outsourcing to external counsel.

Minimize the time and resources spent on due diligence by using tools like Jus Connect by Jus Mundi, as previously mentioned. No other tool in the marketplace gives you access to a practitioner’s full case history. On a single platform, you can determine recent activity, current caseload, and previous roles held in arbitral proceedings.

• Check for conflicts: A conflict of interest is a clash between the private interests and the official responsibilities of a person in a position of trust. To mitigate conflicts of interest and simplify the due diligence process, it is essential to identify any past connections between arbitrators, counsels, or parties instantly.

Jus Mundi’s Conflict Checker enables users to identify the past connections between arbitrators, counsels or parties instantly. This makes the due diligence process much simpler and more effective to avoid  conflicts of interest and subsequent challenges to the arbitrator or the final award.

Conclusion

As we have seen, in-house counsel should not rely solely on external counsel when making decisions about arbitration proceedings including selecting an arbitrator. The interests of the company are better served by the in-house legal department which is more familiar with the company and its operations. Ultimately, the in-house lawyer will be held accountable by the company for the entire management, coordination, and end result of arbitration proceedings. It is therefore important for your team to be as autonomous as possible from the external counsel in order to oversee the arbitration strategy effectively, as well as reduce legal cost where possible.

Thanks to innovative tools, in-house counsel can be more involved in their arbitration strategy, even if they do not have extensive experience in arbitration. Jus Mundi offers a series of tools to empower in-house legal team to protect their company’s business, financial and legal interests.

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ABOUT THE AUTHOR