“Diversity” – More than Just a Buzzword - Diversity in International Arbitrator Selection is Necessary

| 6 minutes

The recent rekindling of protests against anti-Black racism has reignited conversations around race in every industry around the world. As society grapples with the issue of global racial inequality, the need for diverse representation in the context of international arbitration requires our attention, passion, and action. Right now, lawyers have the opportunity to lead by example through challenging the systemic discrimination facing racialized arbitrator practitioners and by creating an inclusive international arbitration community which values practitioners for their talent and expertise.

Arbitral panels are often homogenous in gender, nationality, ethnicity, race, and age. This is not surprising given that arbitral panels are generally selected by senior (and often white male) members of firms through word of mouth discussions with colleagues. As firms across prioritize diversity as a core value, lawyers and arbitrators must address the growing need for diversity in international arbitration.[1] “The objective of diversity is to ensure a well-thought through decision, taking into consideration various socio-political factors, ground realities and different perspectives and cultural backgrounds.”[2] Therefore, there is not only an important need to have gender diversity, but an ethnic and demographically diverse arbitrator to truly understand the issues in question and best serve clients.

Challenges to Consider

We have seen arbitral panels begin to address gender diversity,[3] but racial imbalance remains a significant problem which is widely ignored. A few of the most common challenges to creating racially diverse panels include:

  1. The presumption of competence for those arbitrators who meet the “usual suspects” description and an unconscious bias against sourcing and selecting racially diverse candidates;[4]
  2. A lack of transparency around the appointment of arbitrators including the factors and considerations that lawyers and clients examine in their decision making process;
  3. A dearth of available information that can be used to assess a potential arbitrator and their ability to conduct proceedings in various industry areas;[5] and
  4. A limited pool of diverse candidates with appropriate levels of experience as a result of systematic prejudice.[6]

Time for Action

It is not a topic of debate that people of colour are underrepresented, often undervalued, and frequently ignored in various aspects of the legal profession, including international arbitration. For the sake of efficiency in processing cases and improving dispute outcomes, the arbitration pool must be broadened.[7] To promote fairness and quality decision making, underrepresented groups must be seen as competent and valued equally. A truly diverse panel will be a proper reflection of the parties appearing before them and will lead to greater acceptance of the outcome by clients. Increasing gender and racial diversity is the key to growth and success for international arbitration.

A concerted effort must be made to promote diverse candidates in international arbitration by ensuring that stakeholders expand the pool of candidates that they consider when making nominations and appointments. Internal decision-making processes for institutions need to be reevaluated to address the issue of systemic bias. Lucy Greenwood puts it in very simple terms, “The real change will come when the solicited feedback loop is redundant because there is access to a comprehensive database of international arbitrators, showing their work, their experience, and their preferences. It is only then that arbitrators, of whatever gender, race, or nationality, will be able to compete on a level playing field.”[8]

From the client’s perspective, the importance of diversity on an arbitral panel is evident -- the more diverse the panel, the less the likelihood of having uniform thinking.[9] The decision-making process of a diverse arbitral tribunal is less likely to be tainted by groupthink.[10] Diverse cultural backgrounds offer diverse perspectives, which increases the likelihood of innovative solutions.

In order to better serve our clients, the profession needs to recognize the talent, competency, and value provided by diverse candidates to arbitral panels.

[1] G Anderson, R Jerman and S Tarrant, Morrison & Foerster, “Diversity in international arbitration”, (March 2020) <https://uk.practicallaw.thomsonreuters.com/w-0195028?transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1>; [Anderson]

[2] Chatterjee, P., 2020. Is Increasing Gender and Ethnic Diversity in Arbitral Tribunals a Valid Concern?. ”, (1 March 2020), online: Kluwer Arbitration Blog <http://arbitrationblog.kluwerarbitration.com/2020/03/01/is-increasing-gender-and-ethnic-diversity-in-arbitral-tribunals-a-valid-concern/?doing_wp_cron=1593145563.7815649509429931640625>

[3] In recent years, international arbitration has focused its attention on gender diversity through initiatives such as the Equal Representation in Arbitration Pledge. The international Chamber of Commerce (“ICC”) has also made continued efforts to address gender diversity along side its continued push for regional diversity.

[4] Lucy Greenwood has argued that “[c]hange will only be achieved by first, identifying and acknowledging the factors that cause us to gravitate towards the ‘usual suspects’.” This is where word of mouth selection processes are so limiting in their ability to source ethically diverse candidates. Further, there needs to be recognition of “confirmation bias”, a mental shortcut that makes one actively seek information, interpretation and memory only to acknowledge that which affirms established beliefs, while missing data that contradicts established beliefs. This is one of the ways in which homogenous arbitral panels are selected by “senior white male partners” leaving aside diverse candidates who may be better suited to the panel.

[5] The importance of confidentiality in arbitration leads to a lack of available information that can help one assess a potential arbitrator on their ability to conduct a proceeding. This lack of information often results in arbitrators being appointed based on intuition or habit rather than on evidential data. This word of mouth enquiry process for international arbitrator appointments is limited in scope and access and results in low visibility for diverse candidates. (Anderson)

[6] Lack of diversity is often portrayed as a pipeline issue, whereby the pool of potential female or diverse candidates is simply not large enough to adequately service demand. However, it is no surprise that women are far less likely to reach the high ranks of the legal profession compared to men. Add a different ethnic or cultural background to the mix and the ladder seems even more daunting. (Anderson)

[7] Greenwood, Lucy. “Tipping the balance – diversity and inclusion in international arbitration” (2017) 33:1 Arbitration International 99, online: <https://static1.squarespace.com/static/57fe4d37c534a5c932910b78/t/59cbf91c8fd4d2a3c9a1a431/1506539805617/Tipping the Balance.pdf>

[8] Sr, Orlando R Richmond. “A black partner's perspective on why law firms are failing at diversity”, (12 June 2020), online: Fortune <https://fortune.com/2020/06/11/law-firms-black-diversity-inclusion/>

[9] Locke, Angus. “The Past, Present, and Future of Arbitral Diversity in Investment Arbitration – Ana Prundaru”, (11 May 2020), online: KSLR Commercial Financial Law Blog <https://blogs.kcl.ac.uk/kslrcommerciallawblog/2020/05/11/the-past-present-and-future-of-arbitral-diversity-in-investment-arbitration-ana-prundaru/#_edn31>

[10] In context with gender, Caley found that involving more women reduces the risk of group thinking. See Turner Caley, ‘Old, White and Male: Increasing Gender Diversity in Arbitration Panels’ (CPR International Institute for Conflict Prevention & Resolution, 3 March 2015), <https://www.cpradr.org/news-publications/articles/2015-03-03–old-white-and-male-increasing-gender-diversity-in-arbitration-panels>, accessed 27 March 2020.

diversity inclusion arbitration international arbitration commercial arbitration

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