This clause establishes the qualifications and credentials that an arbitrator must possess before being appointed to hear a dispute between the parties. Typical requirements might include professional certifications, years of experience in relevant fields, language proficiency, or absence of conflicts of interest. The clause essentially creates a screening mechanism to ensure that whoever decides the dispute has sufficient expertise and impartiality to do so fairly.
This matters because arbitrator quality directly impacts the fairness and enforceability of the arbitration outcome. A poorly qualified or biased arbitrator can render a decision that is difficult to challenge and may result in significant financial or operational harm. By establishing clear qualification standards upfront, parties reduce uncertainty and protect themselves against later claims that the arbitration was fundamentally flawed. However, overly restrictive qualification requirements can also limit the pool of available arbitrators and increase costs or delays.
When reviewing this clause, ensure the qualification requirements are specific and measurable (e.g., "minimum 10 years' experience in commercial contracts" rather than vague terms like "substantial experience"). Verify that the requirements are proportionate to the dispute's complexity and value—a small contract dispute doesn't need a Nobel Prize winner. Also confirm that the clause includes a mechanism for disclosing potential conflicts of interest and allows parties to challenge an arbitrator's appointment if qualifications aren't met. Consider whether the requirements might inadvertently exclude qualified candidates from underrepresented groups.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause establishes the qualifications and credentials that an arbitrator must possess before being appointed to hear a dispute between the parties.
Why should I care about this clause?
Typical requirements might include professional certifications, years of experience in relevant fields, language proficiency, or absence of conflicts of interest.
What are my options?
The clause essentially creates a screening mechanism to ensure that whoever decides the dispute has sufficient expertise and impartiality to do so fairly.
How does this affect small businesses?
This matters because arbitrator quality directly impacts the fairness and enforceability of the arbitration outcome.