Promoting diversity and inclusion through procedural rules and institutional reforms

Lucas Mejias
TozziniFreire, São Paulo
lmejias@tozzinifreire.com.br​​​​​​​

Report on panel discussion at the 23rd Annual IBA Arbitration Day, Friday 25 March 2022, presented by the IBA Arbitration Committee​​​​​​​

Session Chair/Proponent

Arif Hyder Ali Dechert, Washington, DC

Commentators

Kathleen Paisley AMBOS, Brussels

Jacomijn Van Haersolte-van Hof  London Court of International Arbitration, London

Can Yeginsu 3 Verulam Buildings, London

The fourth panel of the 23rd Annual IBA Arbitration Day dealt with a subject of utmost relevance: fostering diversity in international arbitration and the means to promote inclusion through procedural rules and institutional reforms.

The session’s chair and proponent was Arif Hyder Ali. He opened with an inspiring poem that illustrated how we all see diversity differently depending on where we are – just as we see different parts of an elephant depending on our angle – and how there are different ways to achieve diversity. According to Arif, our locations are relevant for finding different paths. Western and Eastern cultures have different views on how to promote diversity.

Arif submitted four reasons why diversity matters in international arbitration:

1. as a matter of party autonomy – parties should be able to appoint arbitrators from a diverse pool, as a means to effectively appoint an arbitrator of their choice;
2. to assure legitimacy – a diverse pool of arbitrators shows that international arbitration is not oligopolistic, neo-imperialistic, or narrow-minded;
3. to enhance the quality of the award – reducing ‘group think’ by bringing different cultural and commercial perspectives to the decision-making process; and
4. as a matter of continuity – since a lack of diversity leads to loss of talent, energy and fresh ideas.

In Ali’s view, we still have a long way to go before we effectively achieve diversity. Diversity of nationalities is definitely an issue; we should also consider whether there is a pay gap between male and female arbitrators. Arbitration practitioners should be ‘bold and intentional’ about assuring diversity, according to Ali.

Ali proposed eight measures that should be taken by arbitral institutions to promote diversity:

1. adopt the Equal Representation in Arbitration (ERA) pledge;
2. encourage the inclusion of language in arbitration clauses requiring diversity;
3. include a statement on diversity as part of their ‘missions’;
4. provide training on diversity and include the promotion of diversity as one of the requirements of their lists of arbitrators;
5. offer discounts on administrative fees to parties who appoint a diverse tribunal;
6. include the promotion of diversity as a guideline for default appointments;
7. encourage statements from arbitrators promoting diversity; and
8. include optional provisions on diversity in their rules, such as requiring parties ensure diversity when appointing arbitrators and requiring institutions to do the same when making appointments. If this is not possible, they should provide explanations to the parties.

Ali closed his speech with a reminder that ‘our desire for perfection should not prevent our path towards the future’.

The panellists’ views

Can Yeginsu began by highlighting a broad consensus: diversity is critical in arbitration, whether commercial or investment arbitration. Among other things, he submitted that:

• diversity is imperative as a matter of legitimacy;
• diversity makes a group decision stronger; and
• institutions should be taking the necessary measures to promote and protect diversity.

Jacomijn Van Haersolte-van Hof took the floor to provide two encouraging statements: if you have the view that someone is not sufficiently included, you should yourself reject the invitation; and that diversity is doing right, but is also doing well.

She shared some data on how the London Court of International Arbitration (LCIA) is dealing with diversity and ended her remarks with three reminders:

• it is too simplistic to focus the problem on male Caucasians;
• focusing on institutions is not enough; and
• raising awareness is imperative.

Kathleen Paisley reminded the audience of the corporate responsibility that law firms have in promoting diversity. They should work to create the right incentives for promoting inclusion.

Kathleen mentioned the US regulations requiring companies with more than 100 employees to report on diversity. Although these reports are not required from law firms, companies are currently requesting similar information as a condition for hiring. This is an indication that companies are effectively embracing diversity.

Kathleen regretted that less than 10 per cent of equity partners are females or of colour; she emphasised that there is no excuse for not having diverse appointments in arbitration. In her opinion, the best way of solving the problem is to create a bigger pool.