- 14-Jun-2025
- Elder & Estate Planning law
The number of arbitrators appointed to an arbitration tribunal is a fundamental decision that shapes the arbitration process. Typically, a tribunal can consist of either one arbitrator or three arbitrators, depending on the agreement between the parties, the applicable procedural rules, or the complexity of the dispute. The decision regarding the number of arbitrators is often influenced by factors such as the cost of arbitration, the size of the dispute, and the parties’ desire for a more streamlined or extensive process.
In most simpler or smaller disputes, the arbitration tribunal is composed of a single arbitrator. This approach is common when the issue is relatively straightforward, and the parties agree that a single arbitrator can resolve the dispute efficiently and impartially.
In more complex or high-value disputes, a tribunal is typically composed of three arbitrators: one appointed by each party, and the third (usually the chairperson) appointed by the two party-nominated arbitrators. This is the most common setup in international arbitration, especially when the dispute involves multiple parties or substantial amounts of money.
Although less common, it is possible to appoint more than three arbitrators in a tribunal, especially in highly complex disputes or cases involving multiple parties with significant contrasting interests. In such cases, an even number of arbitrators may be appointed, but this can lead to difficulties in decision-making unless there is a clear process for selecting a presiding arbitrator or resolving deadlocks.
The number of arbitrators is often determined by the arbitration agreement or clause within the contract between the parties. This agreement can specify whether the arbitration should proceed with one or three arbitrators, or sometimes provide a mechanism for how the number of arbitrators should be decided (e.g., if the parties cannot agree, an arbitral institution may step in).
When arbitration is administered by an institution (e.g., ICC, LCIA, AAA), the institution's rules may outline default procedures for determining the number of arbitrators. For example, under the ICC Rules, disputes involving claims above a certain value may default to a three-member tribunal, unless the parties agree otherwise.
The complexity of the dispute plays a significant role in determining the number of arbitrators. For more complex cases involving multiple parties, large amounts of money, or intricate legal questions, having three arbitrators can ensure a more balanced and comprehensive evaluation of the issues.
The cost of arbitration increases with the number of arbitrators. A single arbitrator generally reduces the overall cost, making this option attractive for parties looking to save on arbitration fees. On the other hand, three arbitrators increase the cost but may be justified in more complex or high-value cases.
In disputes where there is a high risk of bias or where specialized knowledge is required, having three arbitrators can offer more diversity and impartiality. The chairperson can also be selected for their particular expertise in the subject matter of the dispute.
Some jurisdictions or arbitration rules may impose limits or provide default procedures for how arbitrators are appointed. For instance, the UNCITRAL Arbitration Rules allow for one or three arbitrators, and this choice can significantly influence the arbitration process.
Let’s say a construction company from Germany and a subcontractor from Egypt enter into a contract involving the construction of a commercial building in Dubai. The arbitration clause specifies that disputes will be resolved under the LCIA Rules in London, and the contract value exceeds $100 million.
The clause stipulates that the dispute will be resolved by a tribunal consisting of three arbitrators—one nominated by each party and the third appointed by the party-nominated arbitrators.
The LCIA administers the arbitration and facilitates the appointment of arbitrators. The two nominated arbitrators will be chosen based on their expertise in construction law and international contracts. If the parties fail to agree on the third arbitrator (the chairperson), the LCIA will appoint the chairperson from its list of qualified arbitrators.
The tribunal of three arbitrators will handle the dispute, considering both legal issues and the technical aspects of the construction contract, ensuring impartiality and a balanced decision-making process.
In international arbitration, the number of arbitrators can vary based on the preferences of the parties, the complexity of the dispute, and institutional rules. Most commonly, a tribunal consists of either one or three arbitrators, with the decision influenced by factors like cost, efficiency, the need for expertise, and the parties’ desire for impartiality. While one arbitrator is used in simpler cases, three arbitrators are generally preferred in more complex disputes to ensure fairness and a well-rounded decision-making process.
Answer By Law4u Team
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