Arbitrator selection and old school chums

By Huang Zhuoxin, CIETAC South China Sub-Commission

Should the presiding arbitrator and the arbitrator nominated by the parties be challenged because of their schoolmate relationship? Article 34 of the Arbitration Law stipulates that, “An arbitrator shall be removed from the case, and the parties concerned shall have the right to request such removal, in any of the following circumstances:

(1) the arbitrator is a party or a close relative of a party, or his representative, in the case;

(2) the arbitrator has an interest in the case;

(3) the arbitrator has any other relationship with a party, or his representative in the case, which may affect the impartiality of the arbitration proceedings; or

(4) the arbitrator has met a party or his representative in private, or accepted a treat or gift from a party or his representative in the case.”

However, the Arbitration Law does not further clarify the extent to which “interest” constitutes a challenge, which may cause doubts in practice.

In an arbitration case accepted by the China International Economic and Trade Arbitration Commission (CIETAC), the respondent appointed arbitrator A. Since the parties failed to jointly appoint or jointly entrust the chairman of CIETAC to appoint the presiding arbitrator within the specified time limit, the chairman appointed arbitrator B as presiding arbitrator, in accordance with the arbitration rules.

Following this, the claimant submitted a challenge to CIETAC on the ground that arbitrator A, appointed by the respondent, was a schoolmate of arbitrator B. Therefore, the claimant submitted the challenge to arbitrator B. The claimant claimed that arbitrators A and B entered into the law school of Beijing University in the same year.

The two were classmates at the same level and same school, had been working in Shenzhen since 1989, and were both engaged in the legal service industry. The claimant had doubts to the impartiality of the presiding arbitrator, due to the arbitrators’ shared close classmates and the same working region and fields over a long period.

The respondent argued that the two arbitrators did not share the same major class, but just had an alumni relationship with the same school and department. At the same time, since the place of arbitration in this case was Shenzhen, the arbitrator appointed by the claimant, the respondent and CIETAC were all working in Shenzhen.

Paragraph 2 of article 32 of the Arbitration Rules of CIETAC stipulates that: “A party having justifiable doubts as to the impartiality or independence of an arbitrator may challenge that arbitrator in writing, and shall state the facts and reasons on which the challenge is based, with supporting evidence.”

Taking into account the Arbitration Law and the arbitration rules, CIETAC held that the claimant did not submit any evidence to prove that the presiding arbitrator had a biased opinion that was sufficient to affect the fair hearing of the case and the legitimate interests of the claimant. It did not fall under the circumstance that an arbitrator should be challenged as stipulated in article 34 of the Arbitration Law. Therefore, the decision was made not to remove the presiding arbitrator.

Schoolmate relationships do not necessarily constitute a challenge if they are not sufficient to identify the existence of interest, and the People’s Court holds the same view. For example, in the case of Zhang Yongjian and China Electronics Industry Corporation and China Power Great Wall Computer Group (Jing 04 Min Te Case No. 40 [2017]), the claimant argued that the arbitrator appointed by the respondent, and the presiding arbitrator appointed by CIETAC, were undergraduate, master and doctoral students at the School of Law of Renmin University of China at the same time. The presiding arbitrator neither disclosed the classmate relationships and interests on his own initiative, nor applied for removal in accordance with the law.

The Beijing Intermediate People’s Court of Railway Transportation held that the two arbitrators were not classmates, and that the difference between undergraduate, master and doctoral degrees of several years only showed that they graduated from the same university, and did not affect the independence and impartiality of the hearing of the case.

What is more, even if both arbitrators graduated from Renmin, they did not fall within the legal circumstances under which an arbitral tribunal should be removed, and did not affect the impartiality and independence of the arbitrators.

In another case of Beijing Poly International Auction and Zhang Jinfu’s application for revocation of the arbitral award (Jing 04 Min Te Case No. 325 [2018]), the claimant held that the arbitrator appointed by the respondent and the respondent’s representative were schoolmates and alumni. The Beijing Intermediate People’s Court of Railway Transportation held that the claimant neither provided further evidence to prove that such relationship may affect the impartial handling of the case, nor provided evidence to prove that the members of the arbitral tribunal had circumstances under which they should be removed in accordance with the Arbitration Law and arbitration rules.

Summarising the above-mentioned cases, we can see that the schoolmate relationship as the miscellaneous provision under the circumstances, under which an arbitrator shall be removed, has no corresponding legal basis. Although the law does not further specify the “interest” in article 34 of the Arbitration Law, we may consider the matter according to the principle of proportionality.

Huang Zhuoxin is a case manager of CIETAC South China Sub-Commission