Originally from The American Review of International Arbitration (ARIA)

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ABSTRACT

 This paper presents a critical examination of the doctrine of arbitrators’ immunity, questioning its underlying legal and policy foundations. Drawing distinctions between the roles and functions of judges and arbitrators, the paper underscores that the conventional justifications for judicial immunity do not apply straightforwardly to arbitrators. The paper endorses the view of arbitrators as service providers, with arbitrators’ duties spanning both contractual and pre-contractual obligations, emphasizing the need to analyze them in their respective contexts. The issue of determining the applicable law governing an arbitrator’s contract is further complicated by the absence of consensus. The paper explores the potential implications of altering or eliminating arbitrators’ immunity, hinting at the necessity for adjustments within the arbitration business model. It concludes by advocating for a more nuanced understanding of arbitrator immunity, emphasizing the need to question traditionally accepted norms. In sum, while apprehensions about altering the status quo exist, the paper champions rational, policy-based decision-making, urging a shift from arbitrators’ individual interests to system-wide benefits.

“Virtually all legal systems accord arbitrators a substantial degree of quasi-judicial immunity from civil claims arising out of their conduct of the arbitration.”  But should they? Is there a sound rationale for arbitrator immunity? The topic has received relatively little attention. Yet it raises interesting and important questions that go to the core of the dual nature of arbitration as both contractual and adjudicatory/judicial.  Alas, arbitrator immunity persists as the status quo rule without serious scrutiny.

Some cases stray from the status quo. In Puma S.E. v. Luis Jacinto Ramallo García and Miguel Temboury Redondo, for example, the Spanish Supreme Court found two arbitrators liable for excluding the third arbitrator from deliberations, and awarded damages flowing from the consequent annulment of the award rendered.  In a similar vein, in Morgan Philips v. JAMS/Endispute, the Californian Court of Appeals ruled that an arbitrator’s failure to decide the issues before him did not warrant arbitral immunity.  In L. Juliet, B. Juliet v. P. Castagnet, P. Coilleaux and A. Boitteaux, the French Court de Cassation found that arbitrators who failed to render an award within an agreed deadline were not immune from liability for breach of contract.  Finally, in Ruola v. X, the Supreme Court of Finland ruled that arbitrator X was liable for the damages caused to the parties by his failure to comply with his duty to disclose conflicts.  These cases, however, depart from the generally accepted status quo with respect to arbitrator immunity: arbitrators, like judges, generally remain untouchable. While it is generally recognized that arbitrators are required to exercise due skill and care in the performance of their duties, there is no professional body or organization with disciplinary powers over international arbitrators, and the courts have largely found them immune from liability.

This article examines the rationales used to justify the arbitrators’ immunity and concludes that arbitrator immunity, as currently applied in most jurisdictions, lacks a sound policy basis.