Diversity: Supports legitimacy of arbitrations
There is “a strong consensus” that ethnic diversity is good for arbitrations – but little evidence of this being reflected in the make-up of panels, a report for the International Bar Association (IBA) has found.
In what the IBA believes is the first global study on the issue, nine out of 10 said ethnic diversity improved the ‘perceived legitimacy’ of international arbitrations.
Similar majorities said ethnic diversity had a positive impact on perceived fairness and on final outcomes, but almost seven out of 10 said they believed arbitration panels lacked ethnic diversity.
Researchers said there was “some disagreement” among arbitrators and arbitration lawyers about the relevance of ethnic diversity.
“Whereas the majority of respondents appear to support increased ethnic diversity on arbitral tribunals, with one commenting that ‘ethnic diversity on the tribunal should mirror the ethnic diversity of the parties involved’, a small minority expressed the view, without providing further explanation, that ethnic diversity should not be a factor in the discussion of arbitral tribunals at all.”
The IBA’s arbitration committee commissioned research organisation Cortex Capital to carry out the research, based an online survey of 305 arbitrators and arbitration lawyers with 76 nationalities.
It found that 45% regarded tribunals as ‘somewhat lacking in diversity’ and 23% as ‘very lacking’. By contrast, only 18% regarded them as ‘somewhat diverse’ and just 2% ‘very diverse’.
A few survey respondents commented that tribunals were slowly becoming more diverse in line with the legal sector more broadly, but that “there is still a long way to go”.
A large number of respondents believed that diversity supported the ‘perceived legitimacy’ of panels, their ‘perceived fairness’ and the final outcomes.
A third of respondents thought ethnic diversity would ‘definitely’ help arbitral tribunals demonstrate cultural sensitivity, a third ‘probably’ and a further 30% ‘possibly’.
Almost all survey respondents (96%) said a tribunal’s ‘cultural appreciation’ was improved to some degree when there was ‘some shared ethnicity’ between the tribunal and the arbitrating parties.
Researchers said their findings indicated “a strong consensus among arbitration stakeholders regarding the positive impact of ethnic diversity on arbitral tribunals”.
Language was also raised as an issue. “Respondents commented on the challenges posed by a tribunal’s lack of proficiency in relevant languages, ranging from substantial time and costs spent on translation to outright failures to understand documents or witnesses.
“Language proficiency is not necessarily correlated with ethnicity. However, language barriers can be a common corollary of tribunals lacking relevant ethnic representation.”
The IBA’s arbitration committee added that it viewed the report as “a significant initial milestone in fostering dialogue on ethnic diversity within international arbitration”, but this was “only the beginning of what must become an ongoing and concerted effort to effect meaningful change”.
Some respondents pointed to the common or civil law backgrounds of arbitrators as being an important factor too.
