Survey shows experts brought in to decide commercial disputes score 50% disappointment rate

A survey out this week shows widespread disappointment among businesses with the performance of arbitrators who decide commercial disputes.

The 2010 International Arbitration Survey, carried out by Queen Mary University, has revealed that 50% of respondents felt disappointed with arbitration decisions, with 18% reporting that arbitrators showed poor reasoning and a lack of industry knowledge.

Other faults cited by respondents included bad decisions, a failure to control the process and delays in making awards.

Lack of independence, bias and awarding themselves excessive fees were also other concerns in the survey.

Seventy-five per cent of respondents said they would want be able to assess arbitrators at the end of a dispute. Of these, 76% said they would like to report on an arbitrator’s performance to an arbitration institution while 30% would like to be able to submit publicly available reviews.

The research also highlighted confusion over confidentiality in arbitration, with 50% of respondents erroneously believing that arbitration is confidential even where there is no specific confidentiality clause in the arbitration agreement.

The survey also shed light on parties’ choice of the seat of arbitration, with 30% saying they preferred London above any other city. 

The ICC was the widely used arbitration institution (50%), although there was a perception amongst a majority of interviewees that ICC arbitration is too expensive and that arbitration institutions in general are costly.  Respondents have the most negative perception of CRCICA, DIAC and CIETAC.

Nick Lane, a construction partner at law firm Olswang, said: “The research confirms that for international disputes, arbitration remains the preferred means of dispute resolution in the eyes of the business community.  Its identification of London as the first choice seat for international arbitrations is welcome, if not all that surprising. 

“There are, however, certain issues identified, such as respondent disappointment, lack of control of the arbitral process, delays, bad and late decisions etc, where the arbitration community cannot afford to rest on its laurels and must do more to ensure that the process meets with the approval of claimants and respondents alike.”

The survey, sponsored by White & Case, involved 67 in-depth interviews and 136 questionnaire responses.