Why Do Companies Err in Selecting Arbitrators Despite Strong CVs?
When arbitration is referenced in commercial or real estate transactions, a familiar array of advantages is typically invoked: confidentiality, flexibility, the autonomy to select arbitrators, and the straightforward enforcement of awards in most jurisdictions. Consequently, incorporating arbitration clauses has become standard practice across high-value and multi-party contracts.
However, a fundamental question is raised far less frequently than it should be: Is submitting a dispute to arbitration alone sufficient to secure these advantages?
In reality, no.
Arbitration is not inherently superior to court litigation simply because it is arbitration, nor does the presence of an arbitration clause mean the parties made the optimal decision. The final outcome is shaped by numerous variables: clause design, procedural rules selection, choice of seat, tribunal constitution, and individual arbitrator selection.
Among these, selecting the arbitrator remains one of the most consequential—and least remediable—decisions in the dispute lifecycle.
For this reason, one of the premier international empirical studies in arbitration warrants rigorous examination.
In a study conducted by the School of International Arbitration at Queen Mary University of London in partnership with White & Case, 50% of participants reported disappointment with the performance of an arbitrator they had previously selected.
This metric does not imply that half of practicing arbitrators are unqualified, nor does it prove that state courts are superior to arbitration. But it raises a critical question: If selecting the arbitrator is touted as a primary advantage of arbitration, why did nearly half of participants experience disappointment with an arbitrator they chose?
The Problem Is Not Qualifications
A review of arbitrators’ CVs reveals common components: advanced degrees, professional fellowships, institutional panel memberships, training certifications, and academic or professional publications.
All of these are undoubtedly valuable.
However, a party to a dispute ultimately needs to know how the candidate will handle their case, not merely what they studied.
A CV reflects what a candidate knows; it does not reveal the quality of their decision-making, procedural efficiency, adherence to deadlines, handling of expert evidence, or competence in steering complex, multi-faceted commercial disputes.
Unsurprisingly, the causes of disappointment identified in the study were grounded in practical execution: quality of the award, weak case management, delays, deficient reasoning (tasbeeb), or a lack of industry-specific experience.
In short, the problem was not credentials—it was performance.
What Do the Numbers Reveal?
The value of the Queen Mary study lies in its empirical breadth, capturing the experiences of corporate users across diverse sectors and jurisdictions.
In addition to the 50% who reported disappointment with a chosen arbitrator:
- 75% of participants favored a mechanism for evaluating arbitrators post-proceeding. If CVs were sufficient indicators, this high demand for post-case performance evaluations would not exist.
- 68% expressed that publicly available information regarding arbitrators is insufficient to make an independent selection. This explains why corporate legal departments rely heavily on specialized arbitration counsel when nominating arbitrators—counsel often possess qualitative operational insight that never appears on a CV.
- When constituting the tribunal, 73% expressed a clear preference for tribunal size, with 87% of those preferring a three-member tribunal, recognizing that a panel mitigates the risk of individual error and provides balanced perspective and expertise.
These figures do not suggest that arbitration is inherently flawed. Rather, they demonstrate that its success depends on precise decisions taken long before the first procedural hearing.
Is Specialization the Sole Solution?
A primary rationale driving corporate adoption of arbitration is the desire to select a subject-matter expert.
In principle, this approach is sound. In real estate disputes, sector-specific knowledge carries tangible value; in construction disputes, technical expertise can eliminate months of expert explanations; in corporate and investment disputes, understanding complex deal structures and shareholders’ agreements is vital to grasping the merits.
However, specialization alone is insufficient.
Arbitration does not guarantee a specialized arbitrator; it merely provides the opportunity to select one. The distinction is substantial.
Furthermore, specialization introduces nuanced considerations. Contemporary arbitration literature highlights that an arbitrator’s professional and legal background shapes their procedural management style. An arbitrator hailing from a specific legal tradition may tolerate certain procedural motions while rejecting others.
Recent scholarship also addresses “substantive bias”—the potential that an arbitrator’s prior publications, research, or professional positions could subconsciously color their view on specific legal or technical issues in dispute.
This does not imply a lack of independence or impartiality (hayad). However, it prompts a legitimate inquiry: Will the arbitrator’s specialization assist them in evaluating the case objectively, or enter the proceedings with a pre-formed view of the outcome?
The goal is neither selecting an individual ignorant of the subject matter nor one captive to a rigid professional dogma. The objective is securing an expert who retains the capacity to evaluate the dispute with an open mind.
The Saudi Empirical Landscape
In recent years, the Saudi judiciary has undergone significant transformation through digitization, accessibility, court specialization, and expedited procedures. This evolution renders the decision to opt for arbitration more complex than before.
An arbitration clause is no longer an automatic inclusion. Corporations must evaluate:
- Does this specific dispute genuinely require arbitration?
- Or is a specialized commercial court the superior forum?
In this context, empirical findings from the Saudi Center for Commercial Arbitration (SCCA) examining Saudi court judgments carry particular significance. Reviewing over 1,400 judicial decisions rendered between 2017 and 2022, the study established that enforcement rates for arbitral awards consistently exceeded 92% across all reviewed cohorts. Furthermore, in the 2022 sample, 94.32% of annulment claims (da’wa al-butlan) were dismissed.
These figures should not be used to market arbitration as a universal panacea. However, they reveal a crucial reality: Once an arbitral award is rendered, the Saudi judiciary does not treat annulment proceedings as a full appeal on the factual or legal merits.
Annulment actions are strictly confined to exhaustive statutory grounds. Consequently, dissatisfaction with an arbitrator’s performance or discovering procedural mismanagement after the award is rendered will rarely suffice to set aside the award and reset the dispute to zero.
This heightens the stakes for pre-arbitration decision-making.
Are Qualified Arbitrators Readily Available?
A notable finding in studies on the Saudi arbitration market includes recommendations to broaden the pool of arbitrators equipped with both procedural skills and domain expertise. Practitioners report that sourcing an optimal arbitrator for mid-market or highly specialized technical disputes is not always straightforward.
This brings the discussion back to a frequently overlooked consideration when inserting an arbitration clause:
- Not only: Do we want arbitration?
- But also: Does an appropriate arbitrator exist for this specific dispute?
- Does an individual exist who combines domain expertise, independence, availability, procedural control, and a deep understanding of the regulatory and commercial context?
More Than Selecting a Name
A common error is treating arbitration as an operational matter that commences only upon filing a demand or attending the first hearing.
In reality, the process begins much earlier:
- Drafting the arbitration clause;
- Evaluating whether arbitration is the optimal forum for the dispute;
- Selecting the procedural rules, seat (miq’ad), and language; and
- Vetting candidates, reviewing disclosures, and balancing expertise against availability, specialization, and independence.
True value lies not in securing a famous name or an impressive CV, but in managing these decisions to mitigate risks that become virtually irreversible post-award.
Conclusion
In judicial litigation, you do not select the judge, but you operate within an institutional framework featuring multi-tiered appellate review. In arbitration, you choose the decision-maker, but the scope for reviewing the final award is exceptionally narrow.
Consequently, quality of selection at the outset is far more critical than many subsequent tactical decisions.
- If you misjudge counsel, you can replace them.
- If you misjudge an expert, you can substitute them.
- If you misjudge an arbitrator, you may only realize the impact when the final award is rendered.
The question is no longer merely: Should we include an arbitration clause? Rather, it is: Does this dispute truly require arbitration? And if so, who is the most qualified arbitrator to adjudicate it?
At Alsalamu Law Firm, we do not view arbitration as inherently superior to state courts under all circumstances, nor do we treat arbitrator selection as an absolute guarantee of success. We assist corporate clients in managing arbitration files holistically: from drafting and reviewing arbitration clauses and assessing forum feasibility when disputes arise, to representing clients before tribunals and handling enforcement or annulment proceedings. On a selective basis, our partners accept appointments as arbitrators where strict independence and impartiality are met within our core areas of practice.
The true value lies not in promising a flawless arbitrator, but in eliminating errors that cannot be remedied once the award is rendered.
