-Tharika Sai*
Honourable Mention, 1st RGNUL Arbitration Essay Writing Competition
INTRODUCTION
In the last few decades, many factors such as expensive attorney fees, lengthy, time-consuming processes, and unpredictability have plagued the litigation field. This has caused an increased drift among stakeholders, including individuals and companies, to the area of arbitration which is less cumbersome and serves as a viable and attractive alternative for litigants considering the various advantages it has to offer. These include but are not limited to quicker justice, less expensive fees, confidentiality, and party autonomy, making this side relatively brighter. This has also been evinced through the Journal of Empirical Legal Studies report in 2008, [1] which stated that almost 80% of disputes are being resolved through arbitration than by following the route of traditional litigation. The soaring popularity of this mechanism has also led to a huge demand for neutral parties (formally referred to as arbitrators), mostly hailing from a legal or business background. Quite often, they are practising lawyers or retired judges. The parties can also choose an arbitrator from the list provided by autonomous organizations or select an independently practising arbitrator. These arbitrators mentioned on the list are undoubtedly experienced and well-equipped to take the arbitration forward.
However, the lack of gender and ethnic diversity is evidently prevalent in these lists. In international commercial arbitration, one would find only the profiles of white males. The Chair of the American Bar Association Section of Dispute Resolution, John Bickerman,[2] has stated that the lists usually consisted of the same prominent names in the arbitral realm, and the parties are given limited options to choose from. While it is true that they may be experienced and competent individuals to handle these cases, it is integral to underline that they form a minuscule cross-section of a diverse population and, in fact, constitute the most privileged lot.[3] Just as how the individuals who seek to arbitrate their dispute descend from different backgrounds, the arbitral panels must also be constructed so. The international arbitration realm is dominated by the “pale, stale, and male” decision-makers from across the globe, and this creates a homogeneous environment. While it is undeniable that the international arbitral realm welcomes (only to an extent) competent people from different ethnic and gender backgrounds, defying these age-old norms and traditions that have been a part of workplaces is bitterly challenging. The very essence of arbitration becoming one of the most sought-after dispute resolution mechanisms is that the rules of impartiality and unbiased behaviour to be followed by the arbitrator are implemented more strictly than litigation. However, this can easily become insignificant if there is only a centred representation and no diversity from across backgrounds. Vyapak Desai, in the London Commercial Arbitration Week, identified the significant factors that lead to a successful arbitration and coined the term “RAGE” (Race, Age, Gender, Ethnicity), and how all these factors are essential in producing an unprejudiced arbitral award.[4] This essay, however, would limit itself to gender and ethnicity due to the paucity of words.
Thus, this essay highlights the need for gender and ethnically diverse models that must be encouraged globally and how that leads to just and fair decisions. The essay proceeds in three parts. It firstly states some statistics and addresses why gender and ethnic minorities are not recognized in this field. Secondly, it talks about why it is integral to have gender and ethnic diversity in arbitral panels. Thirdly, it concludes by providing suggestions to construct arbitral panels more gender and ethnically diverse and make arbitration an accessible form of dispute resolution for all gender and ethnic minorities.
STATISTICS AND REASONS FOR THE LACK OF GENDER AND DIVERSITY IN THE EXISTENT ARBITRAL REALM
GENDER
In 1985, 90% of the arbitrators who served on panels were white males.[5] One would expect the numbers to rise over the past few years, but unfortunately, that is not the case. Most of them (males) who were young and practicing then continue to practice even today in their 60s. Since it is a growing profession, there is hardly any formal data showing gender and ethnic inequality. Still, several anecdotes and case studies show that the number of female arbitrators chosen to be in panels is starkly lower than men. As in any other profession, women are compelled to work twice as hard as their male counterparts to join the domain, let alone climb their career ladder. But the discrimination does not stop there. Women who are chosen are made to do ‘traditionally feminine’ matters such as family and employment disputes. Women who aspire to arbitrate high-profile cases in commercial matters are not given a chance, and these reports such as the Cross-Institutional Task Force on Gender Diversity in Arbitral Appointments and Proceedings [6] in 2020 show only a gradual increase over the years from 13.5% to 21% of women chosen for these cases. It is now integral to address why there are such despairing numbers and what are the factors that contribute to the same.
Caley Turner, in her paper,[7] interestingly divides this into a supply and demand problem. On the supply side, she talks about the “pipeline problem”. The “pipeline” refers to the education, training, jobs, and work experience leading to their arbitration career. She states that the problem arises from the starting point itself. Women’s access to these different factors by itself is limited; therefore, they are underrepresented. This serves as a hindrance in their career of becoming an arbitrator. Considering the strong, well-established networks and groups by men, there are hardly any places that women can turn to. On the demand side, women who aspire to join the arbitral realm have to conquer severe stereotyping and biases just because they are females. Regrettably, a factor as immaterial as gender clouds people’s judgement while assessing intellect. This is most prevalent in the process of the arbitrator appointment. Turner also quotes a compelling anecdote of a woman, Jean McKelvey, whose first name is gender-neutral. She reports that she has been chosen more often than her other female peers in the profession solely because of her first name, and interestingly enough, the parties would be shocked to see a woman enter the room as they would be expecting a man.[8]
ETHNICITY
The International arbitral realm continues to grapple with the ramifications of Euro-Centric and American male representation and the lack of representation from developing or under-developed countries. The data presented by the London Court of Arbitration proves the same. In 2018, with a total of 499 arbitrator appointments, only 3.6% were from Middle Eastern and African countries. And 58.31% were British appointments. In ICC cases, even though the parties in 2018 made up 33.5% from Africa, Asia, and the Pacific, only 14% of arbitrators were appointed from these regions.[9] One of the most common reasons why there continues to be Western dominance is that, like most other principles of law, international arbitration has its roots in the “Western legal traditions.”[10] The Western world has constantly been a teacher of the law to the rest. Additionally, the impact of a hierarchical position left by colonialism between the Anglo-European and Non- Anglo-European countries is still very much evident. The perception that arbitrators from the former countries are more experienced and knowledgeable clouds people’s judgement in appointing an arbitrator because it is perceived that people from Non-Anglo European countries would not be able to offer the same “material advantages and technological know-how.”[11] Confidentiality is a requisite for international commercial arbitration or any other ADR mechanism and so, it becomes difficult for the parties to collect information on the arbitrators and their merit records in the field. Hence, they choose arbitrators whose names are most sought-after in an international forum. Therefore, their popularity in the international sphere leaves parties with minimal choices of the “elite ones”.
WHY IS THERE A PRESSING NEED FOR A GENDER-DIVERSE ARBITRAL PANEL?
Before we move on, let us first ask, why is it necessary to recognize this problem, and what do gender, and ethnic diversity bring to the table of arbitration? Firstly, one of the key reasons why arbitration rose to the top is that the third party would be “neutral”, and the resolution would feel more personal than formal litigation. The arbitrators would put themselves in the parties’ shoes to produce an award that is beneficial for both. However, this can become easily indistinct if only one group is constantly chosen to resolve disputes between people of diverse backgrounds. A lot of the advantages of having a gender-diverse arbitral panel directly contribute to bringing out a more just and fair decision outcome of the arbitration. Arbitrators must be diverse enough to comprehend what steers any conflict. Arbitrators must be from diverse backgrounds but have the same competency and experience to tackle these disputes. Diversity helps achieve a democratic form of justice and guarantees a fair and equal chance for people from different backgrounds. It is undeniable that an arbitrator’s techniques and procedures for comprehending and applying the facts are influenced by their social and cultural experiences. The same set of facts is subject to different interpretations by a diverse panel. For example, an African woman is arbitrating in a case revolving around employment opportunities for the Blacks in front of white males; the power imbalance would most often negatively impact the decision and the woman’s perception of the decision. However, in a scenario where there are women on the panel and other gender and ethnic minorities, various perspectives can be brought to the forefront leading to a more empathetic and fair process of decision-making because it eliminates most chances of biases. This need for diversity has also been recognized in Chevron v. Ecuador on the issue of environmental pollution. This issue was brushed off by the panel because there was a lack of indigenous representation in the panel, who are, in fact, directly affected by this issue. This was reiterated in Balraj v. Balraj. The court believed that to truly understand the struggles of an Indian woman and her daughter, the court would have to appoint an Indian to understand the socio-cultural aspects. [12]
However, in reality, most international arbitration matters are led by white males who practice western cultures, and the implications are grave. These matters are unhooked from its social and cultural ethos, which results in an unfavourable arbitral award. It also goes against the very quintessence of arbitration as a more personal form of dispute resolution. A former federal judge of the United States, Deanell Tacha, stated that when the judiciary is composed of people from the same background, a larger population in the country would not feel represented because judges cannot empathize or sympathize with their life experiences. [13]Drawing a parallel to arbitration, keeping only a narrow pool of Anglo-European male arbitrators will only do more harm than good and severely hamper the quality of an arbitral award.
Diversity and representation are given true meaning when all gender and ethnic minorities are given a place in arbitral panels. A Forbes report has also suggested that over 87% of workplaces with gender and ethnic diversity have achieved the best outcomes in their respective fields.[14] In a gender-specific study conducted by over 500 arbitral organizations, while 74% of male arbitrators said that they would support female grievants more than males, female arbitrators responded that they would not discriminate between male and female grievants. Thus, this shows that female arbitrators would undoubtedly help reduce the gender bias prevalent in the field. Gender balance in these arbitral panels would be incomplete without the inclusion of the LGBTQIA+ community. Furthermore, adding more gender and ethnic minorities to the panel would reduce the “group-think” phenomenon where people from similar backgrounds are more likely to arrive at the same extreme conclusion than people from different backgrounds who have varying perspectives on the same issue. And a gender-diverse panel would enable the same.
CONCLUSION: A WAY AHEAD
Most often, the parties and the Anglo-European males in the arbitral field fail to recognize this problem due to internalized stereotypes, biases, and prejudices. A solution to this problem would start when there is acknowledgement and acceptance of this issue. But what are the steps that can be taken in the future to change the existing pattern?
Gender minorities
Firstly, arbitral organizations need to enforce a policy on gender diversity for the appointment of arbitrators, which not just covers women but also the LGBTQIA+ community. Therefore, a system needs to be brought in where gender minorities are brought into the picture and not minimized. Though the ICC Court[15] has built an LGBTQIA+ community network to ensure that these places are safe and hospitable spaces for the entire community, a more formal policy needs to mandate the inclusion of the community in arbitral appointments. Secondly, for gender minorities aspiring to enter high-profile commercial arbitration, law firms must train them in their commercial dispute departments and equip them enough. This would address the ‘pipeline’ problem mentioned by Turner. On a more informal front, women and other gender minorities rising in the arbitration field must support and encourage others aspiring to join the field whenever possible. This would create a sense of support that no one person is facing the brunt of discrimination in the field, and this further accentuates the fact that women and other gender minorities can be in this field and any other field they want to achieve in. Creating a sense of togetherness becomes integral when fighting stereotypes and other implicit biases.
Ethnic minorities
Sarah Vasani, a well-acclaimed arbitrator, proposed that the Rooney Rule, followed in the National Football League, [16]can also be implemented in arbitral organizations. This rule means that the head coach and the general manager should interview candidates from various diversities. This does not equate to reservations because the rule does not mandate hiring them but simply interviewing them. Just the interviewing of these candidates increased the percentage of diversity in leadership positions from 6% to 22%.[17] Arbitral organizations can adopt this to achieve the same results. Another proposal by Gary Benton of “Defective Panels”[18] is a feasible idea which proposes that every arbitral panel ought to include at least one ethnic or gender minority, and the panels that do not comply are considered to be defective. This would also create a level-playing field for all minorities by instilling the idea that the panel would be defective without a member from the minority community.
Ultimately, dispute resolution involves human emotions and mirrors society in many ways. Arbitral panels need to be constructed in a way that does the same and must not have a centred representation. A diverse panel is necessary for serving diverse grievants, which benefits in constructing fair decisions that are advantageous to everyone in the arbitral room. If the above-mentioned steps are thoughtfully considered and followed, gender and ethnic diversity in arbitral panels would not be far off. It can be challenging to begin with, but this is the way and a great starting point.
*Tharika Sai is a 3rd year student of B.A.LL.B. (Hons.) at O.P. Jindal Global Law School. She can be reached at 20jgls-tssmohan@jgu.edu.in and on LinkedIn.
[1] Caley Turner, “Old White Male”, CPR, March 3, 2015, https://www.cpradr.org/news-publications/articles/2015-03-03–old-white-and-male-increasing-gender-diversity-in-arbitration-panels
[2] Ibid.
[3] Megan Leonhardt, The Huge Diversity issue hiding in companies’ forced arbitration agreements’, CNBC MAKE IT, Accessed on 13th May 2022. <https://www.cnbc.com/2021/06/07/arbitrators-are-male-and-overwhelming-white-heres-why-it-matters.html>
[4] Payel Chatterjee, and Vyapak Desai. “Is Increasing Gender and Ethnic Diversity in Arbitral Tribunals a valid concern”, Kluwer Arbitration Blog, March 1, 2020. http://nishithdesai.com/Content/document/pdf/Articles/200302_A_Is_Increasing_Gender_and_Ethnic_Diversity_in_Arbitral_Tribunals_a_Valid_Concern.pdf
[5] Id at 1.
[6] International Centre for Settlement of Investment Disputes, < https://icsid.worldbank.org/news-and-events/news-releases/report-cross-institutional-task-force-gender-diversity-arbitral> (last visited 20th May 2022)
[7] Turner supra note 1.
[8] Turner, supra note 1.
[9] Dhriti Mehta, “Gender and Ethnic Diversity in Arbitral Institutions: Where do we stand?” India Corp Law, August 3, 2020 https://indiacorplaw.in/2020/08/gender-and-ethnic-diversity-in-arbitral-institutions-where-do-we-stand.html
[10] Ibid.
[11] Won L. Kidane, The Culture of International Arbitration 88 (1st ed., 2019)
[12] Mehta supra note 6.
[13] Deanell Tacha, Diversity in the Judiciary: A Conversation with Deanell Tacha, (2011) Vol. 59, Kansas Law Review, Pg. no 1037-1043, 2011.
[14] Karsten Strauss, “More Evidence that Company Diversity Leads To Better Profts” Forbes, January 25, 2018, 3:59PM, https://www.forbes.com/sites/karstenstrauss/2018/01/25/more-evidence-that-company-diversity-leads-to-better-profits/?sh=37fc83b11bc7
[15] “ICC Court to build LGBTQIA+ Network”, International Chamber of Commerce, News, Paris, July 7, 2021, https://iccwbo.org/media-wall/news-speeches/icc-court-to-build-lgbtqia-network/
[16] Zac-Al- Khateeb, What is Rooney Rule? Explaining NFL mandate to interview minority candidates, its effectiveness and criticisms, The Sporting News, Last visited 21st May 2022 < https://www.sportingnews.com/us/nfl/news/what-is-rooney-rule-nfl-minority-candidates-effectiveness-criticisms/1k4m7oilxr8nv1xjs9f9bw2k7d#:~:text=The%20Rooney%20Rule%20is%20an,coaching%20and%20front%20office%20positions.>
[17] Mehta supra note 6.
[18] Chatterjee and Desai supra note 3.
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