In the world of international arbitration, cases come in all shapes and sizes, from billion-dollar blowouts with big geopolitical consequences to minor dustups involving commercial disputes, regional backwaters or arcane treaties. But the cases tend to have one thing in common: those selected as judges are almost always men, predominately white and disproportionately from wealthy industrialized nations.
ADR AND DIVERSITY
This article is part of a series examining the barriers faced by women and minority attorneys in the field of arbitration.
For experienced women and minority attorneys, whose ranks in the legal profession have grown over the past two decades, that means obtaining appointments on international matters can be the steepest climb of their careers, even after rising to law firm equity partnership or judicial appointments. “People say it’s a tight club. How one gets on this list is so obscure, obscure even to me,” said Shira Scheindlin, a domestic arbitrator who retired this year from the Southern District of New York federal bench. “It’s something I’d like to do, but it hasn’t been that easy.”
While the legal profession is predominately white men in many categories, international arbitration appointments—mostly chosen by lawyers and their clients—is one of the least diverse fields in law, according to multiple studies, statistics and interviews with arbitrators and practitioners.
For instance, only about 10 to 15 percent of the appointed arbitrators in international disputes are women—significantly lower than the representation of women in law firm partnerships and the U.S. judiciary.
Meanwhile, international arbitration is taking on more importance in international law and policy. Arbitration institutions are generally reporting a rising number of new matters each year, and international arbitration practices at large firms are flourishing as one of the most lucrative practices in dispute resolution.
As it happens, the more money that’s at stake in a dispute, the less likely it is that a woman will have a seat on a panel: The American Lawyer’s Arbitration Scorecard last year, looking at matters in a two-year period with at least $1 billion in dispute, found that the proportion of women among all arbitrators hovers around 4 percent.
Racial and ethnic diversity are also hot button issues in international arbitration, though they take on a different tenor there than they hold in the domestic ADR because the practice involves many foreign nationals.
Critics contend that the dominance of North American and European practitioners serving as neutral third parties, or neutrals, gives international arbitration a credibility problem.
“I would like to see equal emphasis placed on all kinds of diversity,” not just gender, said Foley Hoag partner MÉlida Hodgson, an arbitrator in international trade disputes under North American Free Trade Agreement rules. “The system needs to look at diversity” for the sake of legitimacy.
‘A LONG WAY TO GO‘
Last year, the International Centre for Settlement of Investment Disputes, an arm of the World Bank, reported that 12 percent of those selected as arbitrators through the organization were women. The figure was 16 percent for the London Court of International Arbitration and 10 percent for the International Chamber of Commerce’s International Court of Arbitration, according to research by Lucy Greenwood, a foreign legal consultant at Norton Rose Fulbright.
Edna Sussman, a prominent independent arbitrator in international and domestic commercial disputes, said she was struck by statistics showing appointments of mostly men. “It’s got a long way to go,” she said.
Still, she pointed to some anecdotal progress. Five years ago, Sussman said, she never sat with another woman in a three-person tribunal. That happens from “time to time” now, she said.
Since May hundreds of lawyers, companies and law firms have signed onto the Equal Representation in Arbitration Pledge, which commits signatories to consider appointing women arbitrators wherever possible. For instance, law firms commit to include women on their short lists of recommended arbitrators to clients. Among the signatories are Baker & McKenzie, Clifford Chance, Dentons, DLA Piper, Freshfields Bruckhaus Deringer, Hogan Lovells, Quinn Emanuel Urquhart & Sullivan, Sidley Austin and White & Case.
But while it’s been widely embraced, the pledge is mostly symbolic; it doesn’t require anything of signatories or contain any enforcement mechanism.
Julissa Reynoso, an international arbitration partner at Chadbourne & Parke, said there is still much room for improvement to appoint U.S. minorities and women.
“There are a lot of great lawyers who practice in the arbitration space with diverse backgrounds, and to my knowledge, that has not translated to diverse arbitration panels,” she said.
Internationally, the diversity debate has historically centered on national or economic diversity, such as developing countries versus developed countries, said Susan Franck, an international law professor at American University.
There’s no uniform practice for tracking diversity on international arbitration panels, which allows the profession to function as an “invisible college,” according to an article she wrote last year in the Columbia Journal of Transnational Law.
Some diversity data does provide clues, however.
In 2015, among 549 cases registered with the International Centre for Settlement of Investment Disputes, nearly half of the arbitrators, conciliators and ad hoc committee members were European nationals, 21 percent were from North America, 13 percent were from Latin America, 10 percent were from Asia or the Pacific and 6 percent were from Africa or the Middle East. The United States, France and the United Kingdom were the countries most frequently represented.
John Townsend, who chairs Hughes Hubbard & Reed’s arbitration practice, said it’s difficult to list more than a few non-white arbitrators in Europe. Townsend said international arbitration may encourage more diversity than U.S. business arbitration, partly because a party can’t pick an arbitrator from the same country as the party, under the rules of some institutions.
On the other hand, many commercial contracts require particular law, such as U.K. or New York law, to govern disputes in arbitration, pointed out Miguel López Forastier, a partner in international arbitration at Covington & Burling.
“If English law governs, you are more likely to appoint a British citizen,” Forastier said.
HARD TO BREAK IN
Edward Kehoe, co-head of King & Spalding’s international arbitration practice, said when it’s time to recommend an arbitrator to clients, he considers the client’s business and the governing law, as well as prior experience with the arbitrator.
“If I were drafting up a short list right now, it would be predominantly men,” Kehoe acknowledged. That’s because he is not as familiar with as many female arbitrators, he added.
In the last 10 years, Kehoe said he has appeared before a female arbitrator only about four times as counsel and has sat on only two panels where a woman was co-arbitrator. Putting forward names he is already familiar with “makes it easier for me to recommend them,” Kehoe said.
Arbitrators are typically paid by the hour or on a scale based on the amount in controversy—which can exceed hundreds of millions of dollars. But the appointments are also sought after because they come with tremendous prestige and peer recognition and provide critical experience that can lead to more business.
“People have become famous in the arbitration community and that fame leads to more visibility which leads to business,” said Hodgson of Foley Hoag.
Franck’s research suggests that once women break into international arbitration with their first appointment, the frequency of subsequent appointments is roughly equivalent to those of men.
“It’s the old classic ‘don’t apply without experience’ problem,” said Townsend, Hughes Hubbard ADR chair.
Reynoso, at Chadbourne, said law firms and ADR organizations can also help by promoting and training diverse candidates.
“You need people to promote you, to support you, to give you an opportunity to present yourself in leading publications and leading forums,” she said. “You need to be given the opportunity to join the pool, and it’s very difficult to break in [as an arbitrator], but once you do, it’s much easier to get assigned.”
One explanation for the gender gap is that the field of international arbitration as well as other areas of dispute resolution suffers from a “pipeline problem” that will take time to turn around. The field will grow diverse in time, the theory predicts, as women and minorities serving as judges or still developing their practices as advocates seek a second career in ADR.
Scheindlin, the former federal judge and now a JAMS neutral, doubted that the “pipeline” issue is the only reason why women are not being appointed in the same numbers as men.
“I assume it’s like any other old boy network. People recommend people they already know,” she said. “It’s hard to break in when there’s a network that’s already successful.”
Christine Simmons can be reached at firstname.lastname@example.org. Twitter: @chlsimmons
Ben Hancock and Samantha Joseph contributed to this report.