Proskauer Rose International Practice Guide Proskauer Rose LLP |
      Proskauer on International Litigation and Arbitration:
       Managing, Resolving, and Avoiding Cross-Border Business or Regulatory Disputes
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  1. When the arbitration clause is vague or ambiguous regarding which arbitral body’s rules should govern, a court will decide. See Schulze & Burch Biscuit Co. v. Tree Top, Inc., 831 F.2d 709 (7th Cir. 1987) (where arbitration clause did not specify which arbitral body’s rules would govern, court decided that the AAA would arbitrate the dispute and the AAA rules would govern the proceedings). District courts also have authority under the FAA and the New York Convention to appoint an arbitrator absent a specific provision in the parties’ contract that names one. Id.; see also 9 U.S.C. §§ 5, 206. Where the parties’ arbitration clause requires agreement on an arbitrator and the parties fail to agree, or where the arbitrator named by the parties is unable to hear the dispute, courts will step in to appoint a neutral arbitrator rather than hold the whole agreement invalid. See, e.g., United Ass'n of Journeymen, Local Union No. 342 v. Bechtel Const. Co., 128 F.3d 1318, 1323 (9th Cir. 1997); Erving v. Virginia Squires Basketball Club, 468 F.2d 1064, 1067-68 (2d Cir. 1972) (affirming district court order appointing neutral arbitrator where arbitrator named in the parties’ agreement was conflicted).
  2. Although the FAA provides for appointment of arbitrators, it does not provide for their removal once the panel is established; the qualifications or partiality of an arbitrator will generally only be scrutinized in an application to vacate the award. See Aviall, Inc. v. Ryder Sys., 110 F.3d 892, 895 (2d Cir. 1997) (“it is well established that a district court cannot entertain an attack upon the qualifications or partiality of arbitrators until after the conclusion of the arbitration and the rendition of an award.”). For a discussion of the grounds for challenging an award under the New York Convention, see Guide Chapter 23.
    1. Practice Tip: To avoid court involvement, the arbitration clause should address appointment of arbitrators either expressly or through reference to the rules of an arbitral body.  Consideration should be given to how disputes will be resolved that connot agree on a choice of arbitrator, or if an arbitrator becomes incapacitated or conflicted out and needs to be replaced.

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