| 5. Special problems are presented by tripartite panels |
involving non-neutral arbitrators - that is, in situations |
such as where each of the arbitrating parties selects an |
arbitrator and a third, neutral arbitrator is jointly selected |
by the arbitrators chosen by the parties. See generally III |
Macneil Treatise § 28.4. In some such cases, it may be agreed |
that the arbitrators chosen by the parties are not regarded as |
"neutral" arbitrators, but are deemed to be predisposed toward |
the party which appointed them. See, e.g., AAA, Commercial |
Disp. Resolution Pro. R-12(b), 19. However, in other |
situations even the arbitrators appointed by the parties may |
have a duty of neutrality on some or all issues. The integrity |
of the process demands that the non-neutral arbitrators chosen |
by the parties, like neutral arbitrators, disclose pertinent |
interests and relationships to all parties as well as other |
members of the arbitration panel. It is particularly important |
for the neutral arbitrator to know the interest of the |
arbitrator selected by each of the parties if, for example, |
such non-neutral arbitrator is being paid on a contingent-fee |
basis. Thus, Section 12(a) and (b) apply to non-neutral |
arbitrators but under a "reasonable person" standard for |
someone in the position of a party and not a neutral |
arbitrator. Nasca v. State Farm Mut. Automobile Ins. Co., 2000 |
WL 374297 (Colo. Ct. App., April 13, 2000) (finding that |
party-appointed arbitrator had duty to disclose substantial |
business relationship with the party). |