TRADE ARBITRATORS + LAWYER ARBITRATORS – EPISODE 2

TRADE ARBITRATORS

Written by Graham Perry

Graham Perry M.A. Cantab FCIArb Experienced Arbitration Lawyer | China & Chinese Business Affairs | Public Speaker/Lecturer

12 June 2021

ARBITRATION #109

Are arbitrators drawn from the commodity trade best placed to be the decision-makers in commercial disputes referred to arbitration or is there also a role for lawyers?

It has been a silent issue for many years with some trade arbitrators seeing themselves as the ultimate protectors of the trade’s dispute resolution procedure. After all, the argument goes, the trade knows about the trade + lawyers know about the law. In popular parlance, the trade arbitrator would say “We’ve been there + done it. We have sweated over oral contracts + late L/Cs and questionable B/Ls. We know the score”. Sometimes it goes further. “Lawyers have superior ways. They talk in Latin + don’t know a pellet from a pallet. We know the Trade + what is best for the Trade”. A little license of expression, I accept, but it contains more than a grain of truth. The trade needs protection from the law, the argument goes.

In recent years the balance has changed. Mistakes by trade arbitrators highlighted in Commercial Court judgments forced a change. There was a growing recognition within the Trade + the Trade Associations that lawyers had a role to play as arbitrators – unless they are in full-time legal practice. Lawyers do grasp the law quicker than the trade. They have spent many years wrestling with legal disputes arising from the trade +  have experience of commodities even if they have never actually negotiated a contract.

So there is a growing consensus. The Trade needs the Law + the Law needs the Trade. Trade arbitrators need training in the areas of the trade where the law is key – when is a contract made? When does title/risk pass? Similarly, lawyers need to understand the norms and conventions of trade practices. There is a prevailing argument now that the trade should always be in the majority but lawyers can contribute as Tribunal members. But there is more to come.
Episode 2, 14 June 2021

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