Month: March 2015

ISSUE CONFLICTS IN INVESTMENT TREATY ARBITRATION: A MOVE TOWARDS STRICTER APPLICATION OF IMPARTIALITY STANDARDS? (PART 2 OF 3-PART SERIES)

by Kuda Tshiamo*[1]

 

 PART 1 :: PART 2 :: PART 3

 

The previous blog discussed the various standards employed by different investment arbitration institutions. It is now necessary to look at some of the cases in which issue conflicts have been invoked as a ground for arbitrator challenge in investment treaty arbitration.

 

  1. CASE STUDIES: ISSUE CONFLICTS CHALLENGES

It is not in dispute that a number of cases have come before the tribunals in an attempt to ensure that the arbitration proceedings will not be marred with lack of independence and impartiality.[2] Some of these cases have been successful while others were dismissed.

 

  1. Telkom Malaysia v Ghana ( District Court of The Hague) October 2004

This was a case conducted under the UNCITRAL Rules. In this case, Prof. Gaillard’s appointment as an arbitrator was vigorously challenged. The main issue for contention stemmed from the fact that at the time of his appointment, Prof. Gaillard was also acting as counsel in a different ICSID case on annulment proceedings.[3] Respondent argued that Prof. Gaillard was likely to be biased towards a pro-investor approach because, in RFCC v Morocco, he was actually seeking annulment of an award in favour of Morocco – an award that Ghana was relying on in the present case.[4]

In applying Dutch law, the District Court of The Hague was of the view that Prof. Gaillard indeed appeared to have an issue conflict, namely, the likelihood not to act in an impartial manner and there was doubt as to whether he will conduct the proceedings in a justifiable manner. Consequently, he was instructed to take off one hat: either to resign as counsel in the said RFCC case or to give up his arbitrator role in the present proceedings (Ghana case). He resigned in the RFCC case.[5]

Continue reading ISSUE CONFLICTS IN INVESTMENT TREATY ARBITRATION: A MOVE TOWARDS STRICTER APPLICATION OF IMPARTIALITY STANDARDS? (PART 2 OF 3-PART SERIES)

ISSUE CONFLICTS IN INVESTMENT TREATY ARBITRATION: A MOVE TOWARDS STRICTER APPLICATION OF IMPARTIALITY STANDARDS? (Part 1 of a 3-Part Series)

by Kuda Tshiamo [1]

 

PART 1 :: PART 2 :: PART 3

 

This three-part series investigates whether the international investment arbitration tribunals have introduced a new standard and, hence, have moved towards stricter application of impartiality standards with regard to issue conflicts in international investment treaty arbitration. Issue conflicts in investment arbitration are primarily concerned with the (in)ability of the arbitrators to be independent and impartial in the arbitration cases in which they are engaged. It involves an inquiry as to whether arbitrators will tend to be more biased towards one position as opposed to the other based on a number of factors.

Factors that have been put forward to challenge the suitability of certain arbitrators include, among others, previous academic publications, involvement in other proceedings either as counsel or arbitrator which could be deemed likely to affect the current proceedings, having heard similar arbitration cases several times, and lack of experience in investment arbitration.

The paper will be divided into three parts. This first part is concerned with providing a brief description of what issue conflicts in investment arbitration entails. In so doing, it alludes to UNCITRAL Rules, the ICC Rules and the ICSID provisions on issue conflicts, as well as the IBA Guidelines on Conflicts of Interest in International Arbitration (IBA Guidelines). The second part shall look at the tests on issue conflicts as laid down in the abovementioned instruments and notes how they have been articulated by the international investment arbitration tribunals.

The third paper examines recent cases on issue conflict in an attempt to determine if the tribunals have raised the standards required of arbitrators higher. In light of the latest decisions, the paper concludes by observing that indeed the tribunals seem to have introduced a new requirement over and above what the prevailing provisions on issue conflict stipulates which has the effect of raising the bar too high.

The argument in these publications is not whether a third party test is wrong. Nor is this paper concerned with the rightfulness or wrongfulness of the standard. It merely investigates whether there has been a new move towards stricter application of impartiality standards in investment arbitration.

 

Continue reading ISSUE CONFLICTS IN INVESTMENT TREATY ARBITRATION: A MOVE TOWARDS STRICTER APPLICATION OF IMPARTIALITY STANDARDS? (Part 1 of a 3-Part Series)