Do Arbitrators have to be Lawyers?

An arbitrator is like a judge who issues a legally binding award to the parties entered into arbitration. However, a judge and an arbitrator cannot be misunderstood for each other as arbitration and litigation are two different things entirely. The process of arbitration is less formal and both parties agree to the choice of the arbitrator. Firstly we need to understand the job of an arbitrator in order to figure out whether he should be a lawyer only or not.

What does an arbitrator do?

An arbitrator gives a fair decision along with maintaining neutrality. The decision must be based on the evidence presented. The arbitration process is like a less formal mini-trial with both sides presenting themselves with arguments. The job of the arbitrator during arguments is to frequently ask questions and request additional documentation. After arguments are presented the arbitrator renders his decision based on the pieces of evidence and his expert knowledge of the field. Mostly The decision is final and is not subjected to appeal

 Education and Training of an Arbitrator

People from various educational and professional backgrounds can become arbitrators. Most of the arbitrators are from legal backgrounds or are practicing lawyers.   Many others have backgrounds in accounting, insurance, finance, health care, construction, or a variety of other professions. Arbitrators are expected to have a background in their field of specialization, which typically entails a bachelor’s degree.

Qualifications of the Arbitrator

Arbitrators must be properly trained or recognized as arbitrators, as well as seasoned professionals in their industry. Arbitrators are required to be experienced attorneys in a few states. To be added to the American Arbitration Association’s National Roster of Arbitrators, arbitrators must have a minimum of 10 years of professional experience. Also the adequate education and training in arbitration.

What is written in the Arbitration and Conciliation Act, 1996 about the appointment of an arbitrator?

It is legal because the Arbitration and Conciliation Act, 1996 contains no pre-qualifications for the appointment of an arbitrator. It only contains disqualifications in the Fifth and Seventh schedules. This allows an arbitrator’s appointment to be challenged on the basis of facts affecting his or her independence or impartiality, or grounds for ineligibility to act as an arbitrator.

There is, nevertheless, something intriguing here. The following is one of the grounds listed in the Fifth Schedule (added through the 2015 amendment): The arbitrator has been appointed as an arbitrator on two or more occasions in the last three years by one of the parties or an affiliate of one of the parties.  

Dominance of retired judges to be appointed as arbitrators

In the commercial world, it was common for large businesses with a lot of arbitrations to choose stock arbitrators,’ meaning they would appoint the same retired High Court or Supreme Court judge for all of their arbitrations (subject to their availability). As a result, the chance was formerly limited to retiring judges or a few select insiders, most of whom are experienced or age-old.

However, parties cannot designate the same arbitrators more than twice in three years, whether for themselves or their subsidiaries. As a result of this inclusion in 2015, the chance for people who are not retired judges to act as arbitrators has greatly increased. Tata and Reliance Industries, for example, have over 200 subsidiaries in India. The clause will apply and prevent an arbitrator from being appointed more than twice in any of the group firms. So you can picture the immense impact this will have.

 This only went into effect in 2015, so this aspect of the ecosystem is still developing, and there is a chance for you to get involved.

A statutory regulatory agency, the Arbitration Council of India, is scheduled to be established to manage recognition, qualification, and disciplinary issues relating to arbitrators and arbitration institutes. This will also be a game-changer, giving newcomers greater opportunities

Who all are appointed as arbitrators? 

Some issues necessitate the experience and skill of a retired judge, but not all of them do. Although subject-matter expertise (e.g., in the power industry) is important, in smaller-scale matters, the following groups of people are more likely to be appointed as arbitrators:

Senior lawyers – If a retired judge is unavailable or his or her fees are unaffordable, the next best option is to appoint a senior advocate.

Young lawyers who are well-known and have some expertise in that field. He may be referred for an appointment as an arbitrator from time to time if the dispute is not very complicated. And he is known by other professionals to be highly skilled and known for his professional integrity. For disputes where the stakes are not extremely high or where the points of law involved are not extremely complicated, he may be referred for appointment as an arbitrator.

Technical experts (may or may not be lawyers or practicing lawyers) – This refers to those who have technical experience in the subject and know how to pass an award. There is a demand for such arbitrators, but the ecology for their training is lacking. Many lawyers believe that this is the missing piece in ensuring that arbitration fulfills its full potential. And it improves the overall state of contract enforcement and ease of doing business in India.

CONCLUSION

The quick answer is that in arbitration, you do not require the services of a lawyer. However, because the dispute resolution process is adversarial in character and the conclusion is frequently final and affects your rights. You may need legal assistance in preparing and presenting your case.   It can be concluded that arbitrators need not be lawyers. However, lawyers with their litigation experience can serve as perfect arbitrators. It is quite obvious that people who are experts in the area of dispute can serve as better arbitrators. . People who are experienced in the areas of consumer disputes, stocks, etc. are appointed as arbitrators in the disputes dealing with these issues. Lawyers are familiar with the works of arbitration as a process is quite similar to litigation. But this necessarily does not mean that arbitrators have to be lawyers only.