The Power of the Purse: Why Promoting Gender Diversity is Key to the Future of International Arbitration

By: Mala Stauder; Junior Staffer

A lack of diversity among appointed arbitrators has been a longstanding presence in the international arbitration community.  Achieving gender diversity specifically proved to be a consistent challenge, yet its resolution remained a low priority for years. The international arbitration arena often wastes the most qualified talent when excluding women. In 2019, the Cross-Institutional Task Force on Gender Diversity in Arbitral Appointments and Proceedings (the Task Force) was created by the International Committee for Commercial Arbitration (ICCA) to ensure the advancement of gender inclusion and equality in international arbitration.  The Task Force consists of seventeen international arbitration institutions, various global law firms, and diversity initiatives centered on studying and eliminating gender disparities within the international arbitration community.

On September 20, 2022, the Task Force released its Updated 2022 Report on Gender Diversity in Arbitral Appointments and Proceedings (the Report) at the ICCA Edinburgh Congress.  The Report includes statistical data on appointments of female arbitrators, historical gender diversity trends in international arbitration, measurable progress in representation and inclusion, and recommendations to further develop and promote diversity in the field of arbitration.  The Report states that the increase in women appointed as arbitrators is broadly beneficial to international arbitral appointments and proceedings because it lessens the likelihood of group-think decisions, produces legitimate and comprehensive decision-making, and ensures the credibility of courts and tribunals.  Studies show that this is because diversity within a group of decision-makers introduces distinct perspectives and creative approaches to problem-solving, which in turn produces more accurate, thorough, and innovative analyses and results.

The data of the Report reveals an overall positive and steady increase in the representation of women as appointed arbitrators.  Over the past five years, the global proportion of women appointed as arbitrators has nearly doubled, from 12.6% in 2015 to 26.1% in 2021.  The largest driving force behind this trend is arbitration institutions, with various institutions reporting above-average appointments of women arbitrators for 2020 and 2021.  Among those with large-scale arbitration appointments include the International Chamber of Commerce (ICC), the International Commercial Arbitration Court (ICAC), and the Singapore International Arbitration Centre (SIAC).  The ICC reported a jump from 107 women sole arbitrators in 2020, or 35.9% of all sole arbitrator appointments, to 116 in 2021 (37.1% of sole arbitrator appointments).  In 2020, the ICAC reported that 46.1% of sole arbitrator appointments appointed women and the SIAC reported that women sole arbitrator appointments constituted 36.4% of all sole arbitrator appointments made in 2021.

Institutions with fewer appointments, like the London Court of International Arbitration (LCIA), also saw significant improvements.  This positive trend is apparent upon a comparison of the 2022 Report data to figures from past reports.  In 2018, 43% of the LCIA’s arbitration appointments were female, which jumped to 48% in 2019.  In 2021, nearly half of the arbitrators appointed by the LCIA were women (47.4%) and 31.6% of arbitrators of the 449 arbitrations administered by the LCIA were women.  These statistics are commendable considering the overall global average proportion of women arbitrator appointments only increased from 24.8% in 2020 to 26.1% in 2021.  Though the statistics show a steady improvement, considerable progress in diversity is still needed in the international arbitration community.

Traditionally, users of arbitration believed that diversity amongst arbitrators was neither relevant nor determinative of the outcome of proceedings.  However, the 2022 Report clarifies how increased diversity can enhance overall productivity and performance by “mitigating the risks of tainted cognitive biases and groupthink mentalities.”  Diversity and diverse decision-makers with varied individual backgrounds and experiences are critical within the context of dispute resolution to ensure the integrity and objectivity of the decisions made.  When adjudication is “representative of the people, [it] will be considered more legitimate, and can count on greater trust and confidence from the public at large.”  The legitimacy of proceedings relies on diverse representation because the decision-makers must accurately represent the parties affected by such decisions.  Gender diversity amongst tribunal appointments ensures unique perspectives and opinions collaborate to produce constructive and efficient proceedings, leading to more comprehensive decisions. 

 “Appropriate diversity of representation before tribunals is crucial to ensure the legitimacy of international dispute resolution, particularly in cases where public interest issues arise.”

Mala Stauder

In particular contexts, gender-diverse tribunals are especially important.  Appropriate diversity of representation before tribunals is crucial to ensure the legitimacy of international dispute resolution, particularly in cases where public interest issues arise.  One example is within investor-state arbitration: the public interest nature of investor-state arbitration necessitates the diversity of decision-makers because “investment treaty arbitrators more regularly decide issues that affect nonparties” and the general public interest.  Women also prove to be the strong arbitrators for issues of gender discrimination, abuses of women’s rights, and other similar topics.  For example, there was strong support for women arbitrators to oversee trials of perpetrators of rape during the Bosnian and Rwandan conflicts, as the majority of victims were women.  The court faces the threat of losing credibility within public interest and human rights if it fails to address obvious discrimination within its community.

Given the universal trends toward increasingly progressive and inclusivity-centric societies, the international arbitration community must similarly evolve to reflect such trends within its community to adjudicate global investment and economic issues properly and effectively.  As facilitators of international dispute resolution, the arbitration community must promote sustainable development by prioritizing inclusivity and addressing gender discrimination.  While institutions have made significant strides toward mitigating the issue, there are still considerable opportunities for parties and counsel who represent them to promote gender diversity.  One solution is to implement formal policies requiring counsel to meet gender-based diversity requirements.  Parties can utilize development programs, like The Burford Capital Equity Project (Equity Project), as guidance for formulating such policies to solve gender-based issues.  The Equity Project aims to provide law firms and corporate legal departments with strategies, resources, and tools to address gender and other diversity.  In its 2020 Equity Project study, Burford details how formal policies and economic incentives can provide parties with the ability to invest in supporting women in leadership roles.  With actions like advocating on behalf of women to be given equal opportunities, providing mentors to support women’s growth and career development, and eliminating or decreasing unconscious gender biases, the arbitration community can promote gender inclusivity and advance the field far into the future.

Despite considerable progress toward resolving gender inequality within international arbitration, greater efforts are still required to reach absolute gender parity.  Further, while gender inclusion has gradually increased, there remains the need to address diversity and inclusion in terms of ethnicity, nationality, sexual orientation, race, religion, and age, among others.  Given the recent positive trends toward gender equality, there is hope that the international arbitration community can continue to expand overall diversity in representation.  Through proactive change in both actions and attitudes to address gender inequality, the international arbitration community can steadily create a more inclusive, sustainable, and flourishing future for all.

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