In the alternative dispute resolution series article for Construction Law (November edition), Kirsti Olson reported on a modern approach to arbitration as seen in new arbitration rules from Scotland.

The 25th Congress of the International Council for Commercial Arbitration (ICCA) recently took place in Edinburgh. Hosted by the Scottish Arbitration Centre (SAC), now an arbitral institution, the organisation used the occasion to launch its new rules – the Rules of the Scottish Arbitration Centre 2022 (the Rules) (https://scottisharbitrationcentre.org/arbitrationrules/rules/). Whilst the Rules contain the type of provisions that one would normally expect, they also take a more modern approach to arbitration, notably on diversity and ESG.

Under the heading “Equality, Diversity and Neutrality”, Article 8.1 provides that: “In proposing or appointing any arbitrator under the Rules, the parties, their counsel, any appointed arbitrator and the Centre shall have regard to the Equal Representation in Arbitration Pledge and R.E.A.L. (Racial Equality for Arbitration Lawyers).”

The Pledge is an initiative to promote gender equality in arbitration. It seeks to increase the number of women appointed to international arbitration tribunals on an equal opportunity basis. It aims to ensure that women will be fairly represented on lists of potential arbitrators (so that they can be chosen when appropriate) and that senior experienced arbitration practitioners will encourage women to pursue that opportunity.

R.E.A.L. (as the name suggests) is an organisation that promotes racial equality, diversity and inclusion. It seeks to address discrimination and bias in international arbitration and to increase the representation of under-represented groups.

Article 8.2 of the Rules provides that the parties will not be able to agree in advance the gender, race, or ethnicity of any arbitrator to be appointed.

On neutrality, Article 8.3 requires the SAC to take into account the nationalities of the parties when making an appointment. Where the parties are of different nationalities and a sole arbitrator or Chair is to be appointed, consideration must be given to appointing an arbitrator of a different nationality.

The Rules also contain provisions to encourage greener arbitration. Article 23 requires counsel, parties, arbitrators and the SAC to be “mindful of the environmental impact of the arbitration” and to consider the application of the Green Protocols developed by The Campaign for Greener Arbitration.

The Green Protocols focus on sustainability measures, such as minimising the use of paper by avoiding printing and by using email and data rooms, avoiding travel for hearings by using video-conferencing and by taking energy-saving measures when working (in the office and at home). Many of these ESG measures are already being employed, as a result of the COVID-19 crisis.

Whilst the benefits of diversity and inclusion initiatives are widely recognised in international arbitration, this is the first time that the need to have regard to such principles has been incorporated into the formal rules of an arbitral institution. Across the UK (and Scotland is certainly no exception), the pool of available arbitrators has historically been relatively small. Whilst plentiful in talent, over the last 25 years there has been a lack of diversity (and indeed, some might say, succession planning).

It is essential that the pool of potential arbitrators is widened in all respects: to encourage innovation; address issues of unconscious bias; to embrace different perspectives (cultural or otherwise); to enhance the quality of decision making; but also to ensure, going forward, that there will be a suitably diverse and well qualified “next generation” of international arbitrators for us all to choose from.

This article was first published in Construction Law, here, on 1 November 2022. You can sign up for Construction Law newsletters here.