Analyze whether the challenges made against arbitrators in arbitrations conducted in Sri Lanka are used to delay or disrupt the arbitrations

Abstract

Arbitration has become the preferred method of dispute resolution in international business transactions due to its flexibility, neutrality, and the ability to appoint subject matter experts as arbitrators. Arbitrators' independence and impartiality are fundamental to ensuring fair and equitable arbitration proceedings. Challenges against arbitrators are necessary when legitimate doubts arise about an arbitrator's impartiality, independence, or qualifications. Institutional arbitration rules and national laws provide mechanisms for challenging arbitrators who do not comply with their duty of independence and impartiality, ensuring the integrity of the arbitration process. Challenges against arbitrators can potentially cause delays and disruptions in the arbitration process, affecting its efficiency and effectiveness. While challenges are essential to preserving the independence and impartiality of arbitrators, their misuse can undermine the arbitration process. This research aims to analyze whether challenges made against arbitrators in arbitrations conducted in Sri Lanka are used to delay or disrupt the proceedings. The study further examines the mechanisms available for challenging arbitrators and the global trend in misusing challenges. A comprehensive literature review was conducted alongside a structured survey among stakeholders in Sri Lankan arbitrations, with data analyzed using frequency analysis to summarize participants' opinions on arbitrator challenges. The literature review indicates that in the global context, most challenges against arbitrators across various legal systems and arbitration rules do not favor the initiating party. Despite a low success rate, the number of challenges is increasing alongside the growth of arbitrations. When faced with a challenge, arbitrators often choose to resign without verifying or substantiating the accusations. This trend encourages parties to make tactical challenges against arbitrators they perceive as unfavorable to their interests. The analysis findings reveal that participants in Sri Lankan arbitrations strongly believe that challenges or potential challenges substantially impact causing delays and disruptions in the arbitration proceedings. Additionally, participants perceive these challenges as a strategic tool to buy time, delay proceedings, tactical tool to frustrate the opposing party, pressure arbitrators to resign and to influence arbitrators conduct in arbitrations to some extent.