In international commercial arbitration, the arbitrator is the judge. Unlike litigation, where a judge is assigned by a court administrator with no input from the parties, arbitration gives the parties a direct role in selecting the person who will decide their dispute. That power comes with responsibility — and with risk. Getting arbitrator selection right is one of the most consequential decisions in any arbitration, and understanding how conflicts of interest are evaluated is essential to making that decision well.

Why Arbitrator Selection Matters

In a three-arbitrator panel, each party nominates one arbitrator, and the two nominees jointly select — or the institution appoints — a presiding arbitrator. In a sole arbitrator proceeding, the institution typically appoints the arbitrator from a list the parties agree on or from the institution's roster. Either way, the parties have meaningful input into who will hear their case.

That input creates an opportunity for strategic advantage and for abuse. An arbitrator with relevant expertise in the industry or the applicable law may decide certain issues differently than a generalist. An arbitrator who has previously served as counsel or expert in related disputes may bring preconceptions to the proceeding. An arbitrator with ongoing relationships with one party's counsel — through repeat appointments, firm engagements, or joint committee work — may consciously or unconsciously favor that side.

Unlike federal judges, who are appointed through a public process and subject to lifetime tenure, international arbitrators are private individuals hired for a specific case. Their prior relationships, financial interests, and professional connections are not a matter of public record. The IBA Guidelines on Conflicts of Interest in International Arbitration were developed precisely to address this opacity — to establish a common standard for disclosure and disqualification that parties and institutions can apply consistently across jurisdictions.

How Arbitrators Are Appointed

The appointment process varies by institution and by the number of arbitrators in the panel.

Under ICC Rules, each party nominates its co-arbitrator. The two co-arbitrators then attempt to agree on the presiding arbitrator, typically from a list the Court circulates. If they cannot agree within the allotted time, the ICC Court appoints the president directly. The Court also has the authority to reject a nominated co-arbitrator if it finds that person lacks the requisite independence or impartiality.

Under ICDR Rules (the international division of the American Arbitration Association), the parties exchange lists of potential arbitrators ranked by preference, and the ICDR administrator identifies mutual selections from the ranked lists. If no mutual selection is possible, the administrator appoints from the roster. The ICDR also administers a disclosure process and rules on challenges to appointed arbitrators.

Under JAMS International Rules, the process is similar: parties exchange ranked preference lists and JAMS selects the arbitrator with the highest mutual ranking. JAMS arbitrators are typically experienced U.S.-based commercial lawyers and retired judges, making JAMS proceedings somewhat more familiar to U.S.-based parties while still following international arbitration norms.

When evaluating a potential nominee, parties should consider: industry expertise and familiarity with the applicable law; language capabilities (particularly important in U.S.-Latin America disputes where Spanish-language documents and witnesses may be central); prior experience as presiding arbitrator versus sole co-arbitrator; known procedural tendencies; publication record; and current and past relationships with the other party, other arbitrators, and opposing counsel. Due diligence on potential nominees — reviewing published awards, speaking with practitioners who have appeared before them, and checking disclosed relationships — is standard practice for sophisticated parties.

The IBA Guidelines on Conflicts of Interest

The IBA Guidelines on Conflicts of Interest in International Arbitration were first published in 2004 and revised in 2014. They are not a binding instrument — no treaty or institutional rule requires their application — but they have achieved near-universal adoption as a reference standard. Arbitral institutions cite them. Tribunals apply them. Courts in enforcement proceedings consult them. In practice, they function as the global standard for evaluating arbitrator conflicts.

The Guidelines set out a General Standard requiring that every arbitrator be impartial and independent at all times during the arbitration, and that any doubts about impartiality or independence be resolved in favor of disclosure. The Guidelines then organize specific situations into three lists: the Red List, the Orange List, and the Green List.

The Red List covers situations where an arbitrator should not serve — either because disqualification is automatic (the Non-Waivable Red List) or because the arbitrator may serve only if all parties expressly agree after full disclosure (the Waivable Red List).

The Orange List covers situations that require disclosure but do not automatically disqualify the arbitrator. An arbitrator on the Orange List must disclose the relevant relationship; after disclosure, any party that fails to object within the time provided by the applicable rules is deemed to have waived the conflict.

The Green List covers situations that present no conflict and require no disclosure. Knowing what is on the Green List is useful for distinguishing genuine concerns from background noise.

The Non-Waivable Red List

The Non-Waivable Red List identifies relationships that automatically disqualify an arbitrator, regardless of party consent. These are situations in which the appearance of partiality is so severe that no waiver can cure it. They include:

  • Identity with a party: The arbitrator is the same legal entity as a party, or is a legal representative or employee of a party.
  • Significant financial interest: The arbitrator has a significant financial interest in the outcome of the dispute, whether through ownership of shares in a party, a contingency arrangement, or otherwise.
  • Prior legal advice in the dispute: The arbitrator has previously advised or represented a party on a matter that is the subject of the arbitration — for example, the arbitrator was previously counsel to one of the parties in connection with the contract now in dispute.
  • Prior decision-maker in the dispute: The arbitrator has previously served as a judge, arbitrator, or mediator in a proceeding that determined the same set of facts now in dispute.

These situations are genuinely rare in properly managed proceedings. When they arise, the arbitrator must decline the appointment. No amount of party agreement can cure a Non-Waivable Red List conflict.

The Waivable Red List and Orange List

More commonly encountered are the situations on the Waivable Red List and Orange List, which cover the range of relationships that require disclosure and careful evaluation.

The Waivable Red List includes situations such as: the arbitrator's law firm currently represents one of the parties in a matter unrelated to the arbitration, generating significant revenue; the arbitrator has a close personal friendship with a senior representative of one of the parties; or the arbitrator regularly advises a party on business matters outside the arbitration. These situations require disclosure and full, informed waiver from all parties before the arbitrator may proceed.

The Orange List is longer and covers a wider range of relationships that are common in the relatively small world of international arbitration practice. Examples include:

  • The arbitrator has been appointed two or more times in the past three years by the same party or the same counsel.
  • The arbitrator has previously expressed a published opinion on a legal issue that is directly relevant to the dispute.
  • The arbitrator's law firm has in the past three years acted against one of the parties in an unrelated matter.
  • A close family member of the arbitrator has a financial interest in one of the parties.
  • The arbitrator and counsel for one of the parties are members of the same bar association committee or professional organization.

Orange List disclosures do not automatically disqualify an arbitrator. They trigger a party's right to investigate and, if warranted, object. The arbitrator proceeds if no timely objection is raised or if the objecting party's challenge is rejected by the institution.

Challenging an Arbitrator

When a party believes an arbitrator has a disqualifying conflict — whether discovered before or after appointment — it may file a challenge. The procedural mechanics vary by institution.

Under ICC Rules, challenges are submitted to the Secretary General and decided by the ICC Court. The process is confidential. The standard is whether "a justifiable doubt exists as to the arbitrator's impartiality or independence." The ICC Court applies this standard strictly, and the statistical rate of successful challenges is low — the ICC reports that challenges are rejected more often than they are sustained.

Under ICDR Rules, challenges are decided by the AAA/ICDR administrator and follow a similar standard. The ICDR requires challenges to be filed promptly — within fifteen days of learning of the basis for the challenge — and late challenges are routinely rejected on timeliness grounds.

Timing is critical. A party that learns of a potential conflict and fails to raise it promptly risks waiving the challenge entirely. A challenge raised after an adverse award has been rendered is generally treated with great skepticism — courts and institutions look unfavorably on parties who sit on known conflicts and raise them only after losing. The proper approach is to challenge promptly, preserve the issue for later stages if the challenge is denied, and document the challenge in the record so that it can support a post-award annulment or enforcement defense if necessary.

The strategic question is whether to challenge or not. Many experienced practitioners advise that a challenge with a moderate probability of success is often worth raising — not because it will necessarily succeed, but because it creates a record and signals to the tribunal that the challenging party is paying close attention to procedural fairness. On the other hand, a frivolous or transparently strategic challenge can damage a party's credibility with the tribunal. The decision requires honest assessment of the strength of the grounds and the likely institutional response.

The Repeat-Appointments Problem in LATAM Commercial Arbitration

A structural issue in Latin American commercial arbitration deserves particular attention: the concentration of repeat appointments. In many LATAM jurisdictions, and in international arbitrations involving LATAM parties, a relatively small number of arbitrators receive the vast majority of appointments. Law firms in those markets frequently nominate the same individuals as co-arbitrators across multiple cases — individuals whose track records are known, whose availability is reliable, and whose fees are predictable.

The IBA Guidelines' Orange List addresses this directly: two or more prior appointments by the same party or counsel within three years triggers a disclosure obligation. But the threshold for a successful challenge based on repeat appointments alone is high. Institutions have generally held that repeat appointments, standing alone, do not establish justifiable doubts about independence — particularly if the appointments are disclosed and no pattern of award bias can be demonstrated.

For parties entering a LATAM-related arbitration for the first time, the practical implication is straightforward: before nominating an arbitrator or evaluating the opposing party's nominee, research their appointment history. Request full disclosure of all current and prior appointments by the nominating counsel and the parties involved. Evaluate the pattern of disclosed relationships against the IBA Guidelines' standards. If the relationship between the nominated arbitrator and opposing counsel is materially closer than the Guidelines contemplate, a timely and well-documented challenge stands a better chance of success than it otherwise would.