The arbitrator and institution’s contracts can be discharged or terminated through one of four methods.
Full performance
The arbitrator’s contract is fully performed when the arbitrator has delivered the final award in accordance with the arbitration agreement and he has been fully remunerated by the disputing parties or arbitration institution. The vast majority of arbitrator’s contracts terminate in this way.
This does not include proceedings before national courts to set aside or recognize and enforce the final arbitral award since this stage of the arbitral reference falls outside the remit of the arbitrator’s contract.
Agreement of the parties
Generally, the parties to any contract can agree to terminate the contract at any time during its existence. Such agreement and termination will not affect any accrued rights of the parties including those for breaches of the terms of the contract. The parties to the arbitrator’s contract may equally agree on situations or events the occurrence of which will terminate the contract. However, the parties to the arbitrator’s contract hardly agree on such events or situations, again because of the nature of the formation of the contract.
Fundamental breach
From the analysis on breaches of the terms of the arbitrator and institution’s contracts, it is evident that where one party provides a performance that is different from the one agreed or does not perform at all then that party is in actual breach of the contracts. Where one party gives an advance indication that he will not perform his obligations under any of the contracts as agreed, then that party is in anticipatory breach of the relevant contract.
Frustration
Applying the basic principle on frustration to the arbitrator’s contract, where after the conclusion of the contract, an unforeseen event happens through no fault of any of the parties to the contract so as to make its performance impossible, the arbitrator’s contract will then stand frustrated and this will terminate the contract from the time the frustrating event happened. This in effect discharges the parties from continuing to perform under the contract. The fact the arbitrator’s contract is discharged by the occurrence of a frustrating event does not make it void ab initio so that liabilities that may have been incurred before the occurrence of the frustrating event will still need to be remedied.
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