chat off
Toll Free:
order now
most popular orders
Accounting Essays
Biology Essays
Environment Essays
Law Essays
Literature Essays
Management Essays
Marketing Essays
Music Essays
Religion Essays
Technology Essays

Paypal

 
 
← Mendel's Law of HeredityA Comprehensive View of Business Management →
Live Chat

The Difficulties and Possible Solutions to the Immunity of Arbitrators

Buy custom The Difficulties and Possible Solutions to the Immunity of Arbitrators essay

Introduction

Modern life is governed by the principles of law. People live in the law environment and are subjects of the law. Therefore, studying law, its principles and rules is essential for understanding basic rules of life. In the framework of the arbitration, the rule of law raises a very important issue. If all people are considered to be subjects of law, then something needs to be changed with respect to arbitrators that are immune to legal liability. Governed by the regulations of the arbitral institutions like International Chamber of Commerce in the United States, England and other countries with common law, immunity of arbitrators is questionable.

Therefore, this essay is focused on the research of the immunity principle in the international arbitration, evaluation of the arguments that are in favour of or against its presence in the international law practice. At the same time, it provides information about the historical background of the evolution of arbitration. Furthermore, the nature of the arbitration and immunity principle will be discussed with the help of referencing to several theories.

Historical Background

When arbitration was not as frequently used as an argument resolution system, as it is nowadays, the engagement of an expert to work as an arbitrator had been considered highly honourable for that person. It was a sign of his position in the society, an indication of his accomplishments in the field of his work. The arbitrators’ compensation was more of a formal remuneration for the time they dedicated to the case at focus, rather than a payment for the services that they provided. Arbitrators were not professionally trained experts; their source of revenue did not depend on the remuneration they received for providing their knowledgeable opinion on the subject issue of the argument. “Arbitrations were done mostly during the lunch hours as well as after working hours in the evening,” identified by Manfred Arnold, practicing arbitrator. At that time, the question whether an arbitrator should bear accountability for his behaviour was only just an issue of concern. The existence of protection was fairly self-evident and “the matter of enforcing cures against an inadequate arbitrator would hardly ever occur”.

On the other hand, this situation has changed over time. In the multifaceted modern society, with the arbitration playing a role of colossal significance in disagreement resolution and extraordinary authority, the state of affairs is barely self-evident. Yet, being elected as an arbitrator is still considered to be honourable. However, in the majority of cases, arbitrators are specially trained and educated experts that work full-time. Numerous institutions have been established in order to regulate arbitrations in a more efficient way.

Justification of the Immunity Principle

In considering the field of arbitration in the international commerce, there is a need for consistent international law that will regulate it. Nevertheless, there is no such consistent system of law, with the only exception of the Model Law of the United Nations Commission on the International Trade Law, which has only been ratified by a small number of countries and in general does not deal with the issue. For that reason, given that international instruments are not sound or even do not deal with the arbitrator’s accountability, the officially recognized rules that regulate the arbitrators’ immunity have mostly depended upon the various legal systems and considerably remain to be defined by the field of law defined as “conflict of laws” and private international law.

Arbitrators’ Immunity Theories

There is a big body of literature that is focused on the analysis, developing, contrasting, and studying of theories of arbitration and its background. Over the course of the past years, three streams of analysis have been developed in the literature, including the jurisdictional analysis, the contractual analysis, and finally the hybrid, or mixed, theoretical analysis. Afterwards, the autonomous theoretical analysis has also been established in the literature.

In the beginning, the contractual theoretical analysis was developed from the perceptions of arbitration that were common in the 19th century. According to the latter, nature of arbitration agreement was similar to the character of the contract. Shortly, Adam Samuel summarized the classical contractual theory in the following way: “it is the arbitration agreement that solely provides the arbitrators with the authority to receive the award. They, in turn, are operating as the agents of the stakeholders in resolving the dispute. According to that theory, an arbitrator cannot be considered as a judge due to the fact that his purpose does not bear community character. The stakeholders’ determination is of supreme significance and his powers do not originate from the state’s power. This theory has been criticized or supported substantially in the following years and a lot of arguments have been offered for it as well as against it. Still, in the framework of the theory, a lot of questions and various aspects have remained vague or unanswered at all.

Bernard made an attempt to study the association between the stakeholders and an arbitrator. His analysis has been further used and extended to the practice of the jurisdictions within the civil law. According to Bernard, the agreement of arbitration is still considered to be a contract. However, it is determined by exceptional rules. The authority of the arbitrator originates from the stakeholders’ agreement. Nonetheless, the arbitrator is not considered to be an agent of the stakeholders due to the fact that that the duty determines joint obligations of the stakeholders and is not capable to accommodate the duties of the agent. Moreover, Bernard has defined the origin of this exceptional agreement as “a contract sui generis, controlled by the rules suitable to it and which must be dealt with by taking into account both the principles of the agreement and the specific background of the purpose exercised by the arbitrator”.

Next, in the framework of the jurisdictional theory, two unique schools of thought have been also defined. On the one hand, some scholars consider the role of arbitrators similar to the role of judges, while the award for their work was associated with “an act of jurisdiction (this stream of literature is called judgement theory). On the other hand, arbitrators are considered to perform the public functions of short-term judges (this stream of literature in the framework of the jurisdictional theory is called the school of delegation theory).

Finally, the hybrid or mixed theory combines a fusion of the two theories discussed above. The scholars that support the hybrid theory consider that the truth lies somewhere in the middle of the jurisdictional and contractual theories. In particular, they believe that the arbitrator performs no lawful function and that the remuneration is an agreement. “The stakeholders, by their contract, fixed and created the bounds of their private jurisdiction”. The arbitrator’s responsibility is to judge but the authority to do so is bestowed on him according to the contract of the stakeholders.

Finally, the most recent theory is the autonomous theory, according to which the central idea was more or less that arbitration should be separated from all the theories discussed above and obtain an autonomous character. According to Rubellin-Devinchi, “In order to permit arbitration to enjoy the growth it deserves, whilst all along keeping it inside its suitable bounds, one must recognize that its nature is neither jurisdictional, nor contractual, but autonomous”. However, this theory does not seem to have any sensible application by any jurisdiction. Consequently, even if its essence seems to be attractive, in principle, there are a lot of problems in its use, for the reason that it implies an inequitable surrender of lawful power.

Even though these are the major theories of arbitration that have had a significant influence on the attitude towards the arbitrators, there are a lot of other theories that have emerged subsequently.

Arbitrators’ Immunity in the USA and England

Jurisdictions of the common law that support the segregation of legal responsibility for the arbitrators have conventionally based their claim on the position that arbitrators should be considered analogous to judges.

In the United States, as well as in England, there is a long practice in that way of thinking. According to the Arbitration Act, adopted in England in 1996, this tradition has been adopted and sustained afterwards. The raised question is whether this supposed correspondence with the courts is adequate to justify the segregation of legal responsibility.

In the case of Bremer Schiffbau versus South India Shipping Corporation Ltd, Donaldson declared that “arbitrators and courts are in the identical business that is the supervision of justice”. Despite the fact that a lot of articles as well as legislative provisions relied on that hypothesis, there are a lot of significant differences between the two groups.

Analysis of the source of power is a starting point for comparison between the judges and arbitrators and their immunity. Power of the judge is derived straight from the state (in the case of the United Kingdom it is derived from the Crown) and also from the general law of the country. On contrary, jurisdiction of the arbitrator is derived directly from the stakeholders’ contract. Next, the arbitrator is nominated and receives remuneration for his work from the stakeholders unlike the judge. For instance, according to the influential case of Arenson versus Arenson & Casson Beckman and Ruttey & Co., Lord Kilbrandon claimed that “the resident does not choose the judges in this system, nor does he reward them …the judge has no negotiations with the stakeholders…he pledges them no experience…his obligations are to the state”. Applying the supposition that an arbitrator should be neutral and autonomous like a judge, and the judge in doing so should be protected from legal responsibility, scholars have incorporated the two notions and summarized that, as a result, an arbitrator should be also protected from legal responsibility. In the principal case Sutcliffe versus Thakrah, this consideration was emphasized by Lord Salmon that “it is well established that barristers, judges, and solicitors enjoy an complete protection from any type of public action being brought in opposition to them with respect of anything they do or say in court during the intercourse of a trial and this assumption has been evenly applied to arbitrators on the background of the public policy.

As it has been discussed an arbitrator “must be able to do his task without continually looking over its shoulder in the apprehension of being challenged in the course of a trial”. Yet, it is quite self-evident that the reasons for the existence of the immunity of judges are considerably dissimilar to those that support the immunity of arbitrators. The judge will not be individually responsible for the decision he made in a particular trial to the litigants due to the fact that he is thought to be responsible to the state only. On the other hand, his decisions can be upturned or rectified upon appeal. As a result, his obligation to apply the law of the state should not be disturbed by the apprehension of personal legal responsibility. Independence of the judge should be protected against the possibility of personal implication to proceedings based purely to the disappointment of a losing stakeholder, so that the judiciary could successfully put into effect the law of the state.

Pierre Lalive, knowledgeable arbitrator, in his effort to deny the assumption of the “arbitrator’s judicial character”, had distinguished “private” and “public” types of justice. He claimed that the expression of justice did not have the same meaning in the application to the two concepts, saying that “when stakeholders resort to international commercial arbitration, generally it is due to the fact that they want to have “another kind of justice”.

Therefore, it is clear that “the similarity between a judge and an arbitrator is tempting, but if pushed too far, can guide to phony conclusions”.

The conventional approach that is used in England has long recognized a condition for professionals in their field of expertise to have substantial practical skills and experience. That condition could be put into practice either by adopting contract and law of obligations or by using tort proceedings. According to the Lord Kimbrandon “…the result, whether in contract or in tort, is the same”. Still, in the system of the contract law, the obligations of the arbitrator with respect to the stakeholders could be considered as an implicit term to the in-between them agreement, whilst in tort an argument can barely be brought up for violation of the obligation of care. Particularly, in tort the term of professional legal responsibility has been confirmed and further expanded after the two influential rulings of the House of Lords in Donogue versus Stevenson and Hedley Byrne & Co. Ltd versus Heller & Partners Ltd. According to the former, general grounds for action were recognized and, according to the latter, the background for neglectful misstatement was founded. In the modern society, in which the laws of inattention have been extended to cover a constantly growing legislation on medical carelessness, the immunity privilege of the arbitrators seems to be quite discomfited. According to Tindal, “every individual who enters into the obtained profession undertakes to bring to the exercise of it a sensible degree of concern and expertise”. Hence, it is not arguable that the profession of the arbitrator is also considered a full-time professional work that is remunerated at high rates.

As a result, there are some commentators that are in favour of the idea that there is no need for the immunity of arbitrators from the legal responsibility for negligence, while other professionals are not immune against negligence, since, according to Veeder, “arbitrators are providing what is definitely a service as it was identified by the Act of Supply of Goods and Services adopted in 1982”. In addition, arbitrators unquestionably have a range of duties towards the stakeholders to the arbitration. Those duties include the duty to act fairly, to take care, and to carry on thoroughly. Nonetheless, in contrast to other professionals, this kind of obligations is not enforceable due to their immunity and as a result a suffering stakeholder might be left with no solution.

Similar reasoning with respect to the issue of professional legal responsibility has been taking place in the United States as well. Carelessness is more impartially measured against the benchmark of the sensible knowledgeable member of that profession and, as a result, professional liability has attained growing recognition, albeit arbitrators receive complete immunity even in the cases when bad faith can be established. This can be explained by the fact that, in the system of the courts in the United States, arbitrators are not perceived as professionals when performing their work. They have largely emphasized the similarity of their functions with the functions of judges. The explanation for that approach seems to have the rationale of encouraging the regular use of arbitration and spreading out of its application. The court in the United States indicated a set of cases about an increasing interest in the arbitration as an “attractive method of argument resolution, in particular in the framework of the international transactions” and consequently, by giving immunity, they wanted to persuade individuals to arbitrate disputes voluntarily without having to be “trapped up in the effort between the saddled and the litigants with the weight of defending a court case”.

It is worth mentioning, however, that, while arbitrators in the United States have complete immunity, the Arbitration Act, adopted in 1996, has bound that immunity to decisions and acts taken in bad faith. As a result, if judges are immune from suits for scam and English jurisprudence supports the similarity of arbitrators and judges, it remains puzzling why arbitrators do not experience equivalent immunity in the United States.

Conclusion

To sum up it should be noted that the issue of arbitrators’ immunity is widely discussed in a lot of countries. The principle of legal responsibility that is applicable to people practicing numerous professions is a vital instrument in the legal system. Due to historical background of the arbitrator’s profession, people exercising arbitrator’s obligations bear immunity with respect to negligence. Being partially explained by the similarity of the profession with the one of judges, it still preserves numerous distinct features and needs to foresee legal responsibility for negligence as well.

Buy custom The Difficulties and Possible Solutions to the Immunity of Arbitrators essay

Order Now
Orderhesitating

Related essays

  1. A Comprehensive View of Business Management
  2. Business Ethics and the Role of the Corporation
  3. Mendel's Law of Heredity
  4. Federalism and the Defense of Marriage Act
 
Email:
Password:
why we are #1
More than a decade of practical
experiences working in the essay
writing business
Sustained customer satisfaction
A broad range of custom writing services
Complete confidentiality and privacy
Delivering custom papers within 3 hours
A cohesive team of outstanding, experienced writers
Free revision (within 2 days)
Direct communication with the assigned writer
Free reference and cover page
current status
At least 8 live chat and phone operators available at a time
991 active/working writers
16544 registered custom writers
2 writers passed our interviews and language tests yesterday
144 total pages completed
99% satisfied customers
9.6 of 10 writing quality and professionalism score
discounts
order now
Type of assignment:
Writer level:
Timeframe:
Cost per page: ...
Number of pages:
Total without discount: ...
categories
Buying an Essay
Essays for Sale
Good Advice
Purchase Term Paper
Research Paper Ideas
Student's Life
Using Writing Service
Writing a Reflection Paper
Writing an Essay
Writing Papers Guide
Writing Term Paper
categories
Surprising Benefits of Volunteering
Getting Prepared to Finals
Five Lessons About The Entire Career That Your First Job Can Teach You
Academic Success in the College
5 Steps to Earning a Living through Blogging

15% off your first custom essay order. Order now

PRICES
from $12.99/PAGE
X