Arbitrator Misconduct

Ethical Breach

A deviation from the neutrality required by the China International Economic and Trade Arbitration Commission or local commissions signifies a fundamental failure in the fiduciary duty of the neutral. This ethical breach is most visible when an arbitrator maintains undisclosed business relationships with a litigant or counsel. National standards require that any potential conflict of interest must be disclosed at the earliest opportunity to all participants.

When such disclosure is withheld, the resulting award faces immediate scrutiny from the Intermediate Peoples Court. The law provides that the presence of these undisclosed ties invalidates the consent upon which the arbitration agreement was built. Proving this state of affairs often requires evidence of financial transfers or frequent communication outside the official record.

Judicial Review

Oversight by the court system provides the primary mechanism for correcting the outcomes of a tainted process. This judicial review involves a thorough examination of the record to determine if the arbitrator acted with a biased intent. Article 58 of the PRC Arbitration Law allows a party to apply for the cancellation of an award based on evidence of misconduct.

The court does not usually re-examine the facts of the original dispute but focuses on the behavior of the tribunal members during the proceedings. Judges look for specific instances where the arbitrator failed to provide an equal opportunity for both sides to present their case. If the evidence shows a deliberate exclusion of evidence from one side while admitting similar evidence from the other, the court may find that the neutral failed their duty.

This process requires a high standard of proof from the applicant, as the court assumes the validity of the award until clear evidence of wrongdoing is presented. Once a finding of misconduct is made, the award is vacated and the parties are returned to their original position. They may then choose to initiate a new arbitration or take the matter to a regular court.

Liability Consequence

Sanctions against a neutral who fails to uphold the standards of the office extend beyond the simple invalidation of the legal award. The liability consequence includes the potential for criminal prosecution under the PRC Criminal Law for crimes related to bribery or power abuse. On a professional level, the arbitration commission will remove the offending individual from its roster of qualified arbitrators.

This permanent exclusion acts as a deterrent for other practitioners in the field. Civil liability may also arise if the misconduct caused quantifiable damage to one of the parties. While arbitrators generally enjoy a degree of immunity for their professional judgments, this protection disappears when their actions are found to be malicious or fraudulent.

Professional associations keep records of these violations to ensure that individuals cannot simply move to a different jurisdiction to practice. Effective enforcement of these rules ensures the continued viability of the arbitration system as a whole.