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In our latest annual survey of international  arbitration statistics, James Clanchy, arbitrator in independent practice, notes that arbitral organisations’ caseloads declined in 2021 but appointments were more widely distributed among arbitrators. Institutions have been pleased to report high proportions of arbitrators taking only one appointment in the year and increasing numbers of first-time appointments. Enlarging and diversifying pools of arbitrators should be welcomed but the data raises some challenging questions for the future. 

A return to normal

As expected, the COVID-19 pandemic brought in its wake a worldwide increase in commercial arbitrations in 2020. Our graphs below show that the following year saw normal service resumed with most of the six bodies in our annual study seeing both their numbers of new cases and their numbers of arbitral appointments return to a level between 2018’s and 2019’s numbers. 

Arbitral institutions were slow to publish their 2021 statistics. Indeed, one of the reasons that this blog post is appearing so late in 2022 is that the International Chamber of Commerce (ICC) has still not made its 2021 report available. However, a few weeks ago, the institution published some statistics, including a record number of appointments (1525) and an analysis of gender diversity on tribunals. 

The most striking drop in new case numbers comes from the Singapore International Arbitration Centre (SIAC), which shed more than 600 between 2020 and 2021. As noted in my blog post in April 2021, Arbitrations without arbitrators: an institutional paradox, SIAC’s caseload is not directly comparable with that of European headquartered institutions, such as the ICC, because so much of it comprises international trade and shipping disputes. Outside the Asia Pacific region, cases in these sectors traditionally go not to institutions but to trade association and ad hoc arbitration, notably in London. 

As also noted in that blog post, there is a time lag built into institutional appointments, which is not found in ad hoc arbitrations where the commencement of the arbitration and the appointment of the tribunal are generally synchronous. This time lag is visible in SIAC’s record number of appointments in 2021, 371. Some of these will have been made in the more than a thousand SIAC arbitrations commenced in 2020. This appointments figure is still almost a hundred below the number of filings in 2021 (469), but it makes for a higher ratio of arbitrators to cases (0.8) than in 2020 (0.3). 

The London Court of International Arbitration (LCIA), on the other hand, saw a decline in both new cases registered and in appointments of arbitrators. On the latter measure, it remains substantially ahead of SIAC, as it always has, but 449 is exactly equal to its figure for 2018. Comparing the post-Covid effect with the post-global financial crisis, it is interesting to note that 2021’s tally is some ten per cent below the 502 appointments made by the LCIA Court in 2009, a figure seared in my memory because I was Registrar of the LCIA at that time.

London and ad hoc arbitration remain strong

My initial blog posts about arbitration statistics, in 2017 (Arbitration statistics and alternative facts) and 2018 (Arbitration statistics: a reality check), were prompted by misleading commentary from certain institutions, university law schools, and lawyers to the effect that international arbitration was on a growth trajectory, that its future belonged to institutions, and that London was losing its attractiveness as a hub for international arbitration even before the Brexit vote in 2016. Caseload statistics for 2016 and 2017, for the five most popular institutions in the White & Case Queen Mary international arbitration survey, with the addition of the London Maritime Arbitrators Association (LMAA), demonstrated that caseloads were not, in fact, growing but that ad hoc arbitration and London remained strong.

The 2021 statistics indicate that little has changed. In 2016, the total caseload across the six organisations was 3793, of which the LCIA and the LMAA shared 2023. In 2021, the total was just five higher at 3798 and the LCIA and the LMAA had eleven more cases (2034). If there is to be a Brexit effect, it is a long time coming. Meanwhile the LMAA, whose Terms and Procedures are used in ad hoc arbitrations in shipping, international trade and energy, remains firmly in first place on case numbers. The association sees around twice as many cases as the ICC, probably more as, without any obligation to register the commencement of an arbitration, its collation of statistics is inevitably incomplete.

New destinations

If the six bodies in our study have not been seeing sustained growth in their caseloads, the question naturally arises whether cases are going elsewhere.

In my 2020 blog post, I drew attention to the growing caseload of the DIFC-LCIA Arbitration Centre in Dubai, which saw 80 new cases filed in 2019. The centre was closed in 2021, pursuant to a decree from the ruler of Dubai, which also saw the closure of the Emirates Maritime Arbitration Centre (EMAC). Both institutions have merged with the Dubai International Arbitration Centre (DIAC), which saw an uptick in 2021 with 276 new cases. DIAC reported that 43% of its cases involved parties solely from the United Arab Emirates (UAE) and that ten per cent involved parties, none of whom were from the UAE. Its tally is more than a hundred lower than it was in 2012 (379).

In last year’s blog post, Arbitration statistics 2020: from sole arbitrators to no arbitrators, I noted that the China International Economic and Trade Association Commission (CIETAC) had entered the ranks of the top five arbitral institutions chosen by the respondents to the White & Case Queen Mary survey. In 2020, 739 of its 3,615 cases were reported to be ‘foreign-related’. In 2021, that number dropped to 636.

From pools to lakes of arbitrators

The 2021 plateau may look dull after the spike in 2020 but there is another part of the arbitration landscape which demands attention: the expanding pools of arbitrators.

The ICC has reported that its record 1,525 confirmations/appointments in 2021 were of 1,060 individuals.  A higher percentage of arbitrators was confirmed/appointed only once in the year (70% in 2021 compared to 66% in 2020).

The LCIA reported that it made 449 appointments of 298 different arbitrators in 2021. This compares to 239 different arbitrators appointed in 2018 when the total number of appointments was identical. The overall percentage of arbitrators appointed only once in the year increased from 62% in 2020 to 68.5% in 2021. Only 4.5% of arbitrators were appointed more than three times during the year, which was explained as being partly due to appointments in related cases. The percentage of arbitrators not previously appointed by the LCIA increased to 17% from 14% in 2020.

The continuing expansion of the pools of arbitrators confirmed and/or appointed by institutions should be seen against the background of essentially static, if not actually declining, caseloads. It reflects a growing interest in, if not practice of, arbitration around the world. The Chartered Institute of Arbitrators reported a 3% increase in its professional membership to 16,881 in 2021. Meanwhile the institute’s following on LinkedIn has grown from 55,000 to 75,0000 in the last year.

New arbitrators must obviously be welcomed, as must the diversity which they bring to the international arbitration community. However, it is inevitable that first-time and once-a-year appointments in institutional arbitration will largely go to one type of arbitrator, the practising lawyer.

It is with this class of arbitrators that the ICCA Cross-Institutional Task Force on Gender Diversity in Arbitral Appointments and Proceedings was exclusively concerned. The task force’s updated report, launched at the ICCA congress in Edinburgh in September 2022, contains numerous statistics but it has a focus on career progression inside law firms, as if all arbitrators came from there. It treats non-lawyer arbitrators as non-persons and the only ad hoc arbitrations, which it mentions, are those in which institutions provide various services, including as appointing authority.

In contrast, our graph of appointments of arbitrators shows that very nearly one half (49%) of all the appointments across the six organisations in 2021 were in ad hoc arbitrations under the LMAA’s Terms and Procedures. With no institutional involvement in the process, anyone anywhere in the world can be appointed to an LMAA tribunal; it is a matter of choice for the parties. Contrary to the wording of the exception made for it in the IBA Guidelines on Conflicts of Interest in International Arbitration, maritime arbitration has a vast lake, if not a sea, of available candidates, not a small pool.

Nevertheless, most appointments in LMAA arbitrations go to the association’s full members, for whom arbitrating is a second and full-time career. Parties in maritime arbitration appreciate their diverse professional backgrounds, expertise, independence, and lack of competing activities.

Without an institution to introduce new arbitrators to users, the LMAA’s full members take this role on themselves. From time to time, two full members appointed by the parties will appoint a third arbitrator from outside the full membership.

This practice has not been universally welcomed. In a blog post published in 2021, a shipping law firm reported that, on clients’ instructions, it had amended a standard LMAA arbitration clause to ensure that the parties themselves had a say in the selection of the third arbitrator. They offered this wording for others to adopt in their contracts. They explained that their clients’ concern was that, if left unchecked, party-appointed arbitrators might appoint a less experienced third person, if only to give that person the experience that they would need to secure more appointments. It was felt that this was not in the best interests of the parties.

In their statistical reports, institutions express frustration that, despite their efforts, progress in diversifying tribunals is impeded by parties who take a conservative approach when making their nominations.

On the other hand, if a large proportion of appointments goes to relatively inexperienced part-time arbitrators, the sustainability of the model of arbitration which allows this to happen, the double-hatting that it requires, the utility of data analytics predicated on repeat appearances on tribunals, and the future for full-time dedicated arbitrators will all come into question. 

Conclusion

The 2021 statistics may not look particularly exciting, and anecdote suggests that 2022’s numbers might turn out to be even less inspiring. However, the appetite for international arbitration remains strong. To meet demand and the expectations of the international arbitration community, in these times of economic hardship, institutions and other organisations should look to make their offering more accessible, affordable, and attractive. It must be in everyone’s interests to move on from the plateau or the downward slope.