In a recent talk on arbitration that I had in Iran Central Bar Association, one of the participants asked that how a sole arbitrator should be selected/appointed in ad-hoc international arbitration, if one of the parties is not cooperative.
The question was smart and very challenging, because it gathered a number of important considerations at once:
- First, it is an ad-hoc international arbitration, which means that there is no Rules to allow an institution to appoint the sole arbitrator on behalf of parties, in case of non-agreement;
- Second, it is an international case, which also raises the question of finding the competent court for appointing the sole arbitrator. (If this was a domestic case, the answer was easy, thanks to the provisions of Iran Civil Procedure Code (Section 7));
- Third, the seat of arbitration is not selected yet and therefore, it is not clear that which law governs the procedural aspect of the arbitration. (If the seat was Iran, the answer was easy, thanks to the provisions of the Law on International Commercial Arbitration Act); and
- Fourth and most important, one of the parties is not cooperative.
In the tight time I had for answering the question, I suggested that the requesting party examines the closest-connection test to find the competent court for appointing the reluctant party’s arbitrator. After the session, however, I made further research on this matter and discussed it with some of my colleagues. We then found out that Gary Born, in the book, International Commercial Arbitration 2014 (pp. 2103 and 2104) gathered and reviewed the approaches of a number of jurisdictions in regards to the matter of appointment of arbitrator. He, however, did not answer to the specific question raised here, that is how the reluctant party’s arbitrator (or the president) should be appointed, if there is no hint as to the seat or the competent court.
I have made further research on this matter and would now suggest that respondent’s home country would be the safest solution for appointment of the reluctant respondent’s arbitrator. That is mainly because in such case, respondent enjoys a home benefit and therefor, it would be difficult to set aside/annul the arbitral product at a later stage. Another solution that I can suggest is that to recourse to the court of a country that one is intended to enforce the award later. That is, if one is aware that the respondent has properties in a country which makes the enforcement easy, then this should be a reasonable solution to select the courts of such country for appointment of arbitrator.
Needless to add that such selection will have no effect on the choice of seat, which is a matter to be decided at a later stage by the parties or the tribunal.