STEP 3: Determining the method of constituting the arbitral tribunal and selecting the arbitrators - number, qualifications and nationality

The Parties should agree whether the arbitration clause will specify the number of arbitrators as well as the method by which such arbitrators will be appointed. In this context, it should be noted that most institutional arbitration rules will contain default provisions in the event the Parties fail to agree on the number of arbitrators and/or method of constituting the tribunal, or fail to appoint the agreed number of arbitrators.

Typically, for large value contracts parties would choose to have three arbitrators, even though this will make the resolution of any dispute more costly as the parties must pay the fees of three arbitrators. This is because a three arbitrator tribunal is less likely to reach a maverick decision than a sole arbitrator and so reduces unpredictability. See Section 8.3, Sample Drafting 8, Clause (13).

Some arbitration clauses may specify particular expertise or other requirements as to qualifications arbitrators should have, for example that an arbitrator should be a lawyer experienced in a particular type of transaction. It may be helpful to specify that all or the majority of arbitrators are legally qualified in the governing law. Parties should, however, avoid being too prescriptive, as this may narrow the pool of potential arbitrators available.

Sometimes Parties wish to specify that none of the arbitrators can be of the same nationality as any of the parties to the arbitration. This may be relevant to PPP Contracts as the Private Partner may have concerns that an arbitrator who is a national of the Contracting State may not be impartial. Certain institutional rules include provisions relating to the nationality of arbitrators, and these should be checked.