The decision sits in party agreement, the default with the institution
Panel size is first a matter of party agreement in the arbitration clause. Where the clause is silent or the parties disagree, the institution decides by the case character and value under its rules. This means the best configuration decision is taken at drafting time, when neither side knows whether it will be claimant or respondent — that neutral position yields a far more balanced choice than after the dispute erupts and each side calculates to its own advantage.
This article analyses the size variable alone. Choosing the individual arbitrators from the VIAC list — profiles, criteria, matching — is the subject of the separate article on selecting VIAC arbitrators for FDI disputes; the question here sits one step earlier: one seat or three, before asking who fills them.
The real cost difference
The difference sits mainly in tribunal remuneration: three arbitrators plainly cost more than one, although under institutional schedules the three-member total does not rise to exactly three times the sole fee, because of degressive elements and shared work. Beyond fees, a three-member panel drags ancillary cost: three diaries to align for every meeting and hearing, longer deliberation, and higher counsel fees as document rounds tend to multiply.
The other side of the equation is the cost of error: a wrong award on a central technical or legal issue can cost many times the entire fee difference, and an arbitral award has practically no merits-appeal mechanism to correct it. The right question is not “how much more do three cost” but “the probability and price of a wrong decision in a one-person versus a three-person configuration, multiplied by the case value”.
Which cases should choose three arbitrators
Three arbitrators earn their cost in four case shapes. One, high dispute value, where the fee difference is a small percentage of the sum at risk. Two, a multidimensional case: technical issues, cross-border legal issues and damages quantification together — three members let the tribunal distribute expertise internally. Three, a multicultural and multilingual case, where arbitrators from different legal traditions raise both sides confidence in the result. Four, where the outcome needs internal precedent weight across a group for many similar contracts.
Conversely, a sole arbitrator is the right choice for small-to-mid value cases with contained facts and a single-line legal issue — where speed and cost are the greatest values, and both sides accept trading part of the collegiality insurance for efficiency.
The risks of a sole arbitrator
The first risk is the personal blind spot: one individual has no colleague to test assessments of evidence or governing law, so case quality depends entirely on the quality of that single appointment. The second is availability: a sole arbitrator who falls ill, is overloaded or is successfully challenged stops the case outright, while a three-member panel can often keep operating. The third is the losing party fairness perception: an award by one person is more easily seen by the loser as a personal opinion, raising the motivation to seek setting aside or resist enforcement, even though the legal grounds are unchanged.
These risks shrink by appointing the sole arbitrator through a strict institutional mechanism (the institution appointing from a vetted list) rather than a hasty party compromise mid-dispute, and by writing into the clause a fallback on panel size where the dispute value crosses a set threshold.
Frequently Asked Questions
Should an FDI dispute have 1 or 3 arbitrators?
It depends on value and complexity: choose three arbitrators for high-value, multidimensional technical-legal-quantum cases or multicultural ones; choose a sole arbitrator for small-to-mid, contained, single-issue cases where speed and cost matter most. Absent agreement, the institution decides by case character.
How much is the cost difference between 1 and 3 arbitrators?
The gap is mainly tribunal remuneration: a three-member panel costs considerably more, though institutional schedules usually do not triple the sole fee due to degressive elements. Add ancillary costs of aligning three diaries, longer deliberation and more document rounds. The correct comparison sets this against the price of a wrong award, which has no merits appeal to correct it.
For which cases should 3 arbitrators be chosen?
Where the dispute value is large against the fee difference; where the case combines technical, cross-border legal and quantum issues needing distributed expertise; where multicultural and multilingual elements demand high confidence on both sides; or where internal precedent weight for many similar contracts is needed.
What are the risks of choosing 1 arbitrator?
Three risks: a personal blind spot with no colleague to test assessments; the case stopping outright if the sole arbitrator has an incident or is successfully challenged; and the loser seeing a one-person award as personal opinion, raising set-aside motivation. Reduce them by institutional appointment and a value-threshold fallback clause on panel size.
This article has been quality-reviewed by the FLAW AI Legal Council