Impartiality and independence

The choice of arbitrators is a vital one and is important, not just for the dispute in question, but for the reputation of arbitration itself. Upon selection for appointment, an arbitrator must disclose “any circumstances likely to give rise to justifiable doubts as to his impartiality or independence” (article 12 of the UNICTRAL Model Law) and this duty of disclosure continues through the life of the arbitration proceedings.

It may seem obvious that those chosen to preside over a matter should disclose any conflicts of interest or any other information that may cast doubt on the arbitrator’s impartiality and independence; however, neither the UNICTRAL Model Law nor the accompanying Explanatory Note provides any guidance on the requirement, other than to say the arbitrator “may be challenged only if circumstances exist that give rise to justifiable doubts as to his impartiality or independence”.

Most recently, the issue of conflict of interest arose in an investor-state dispute: Eiser Infrastructure Limited v Kingdom of Spain (Annulment Proceedings) (ICSID Case No ARB/13/36 11 June 2020). The ICSID annulment committee found that the failure of the arbitrator (appointed by the investor) to disclose his relationship with the claimant investors’ damages expert (Carlos Lapuerta and his firm, the Brattle Group) and his former law firm demonstrated that there was a manifest appearance of bias on the part of Dr Alexandrov. It has also been concluded, in s IV.B.3.b, that such lack of independence and impartiality, whether actual or manifestly apparent, by even one arbitrator, in a three-member tribunal, constitutes a departure from a fundamental rule of procedure (see [243] of the decision).

Although an investor-state dispute, the principle applies equally to international commercial arbitration. To assist adjudicators and arbitrators, UNCITRAL and ICSID have released Draft Code of Conduct for Adjudicators in Investor-State Dispute Settlement (Code), which will apply to all investor-state dispute settlement adjudicators, assistants and candidates, but does not extend to counsel (who undoubtedly will be governed by their own professional code), experts and members of arbitral institutions, including secretariats. The Code, once in force, will be binding.

Arbitral institutions have also developed guidance for arbitrators and notable examples include the SIAC Code of Ethics for an Arbitrator (2015); the CIETAC Code of Conduct for Arbitrators; the CIETAC Rules for Evaluating the Behavior of Arbitrators; and the HKIAC Code of Ethical Conduct. In addition, the American Arbitration Association/American Bar Association Code of Ethics for Arbitrators 2004 and the International Bar Association Guidelines on Conflicts of Interest have been used as guidance for arbitrators.

The UNICTRAL Model Law emphasises the need for impartiality and independence; however, it does not set out the constituent elements of impartiality and independence. As arbitrators undoubtedly perform a quasi-judicial function, the international standard for “impartiality and independence” will be of relevance and assistance. The international standard has been set down in a number of instruments: The Bangalore Principles of Judicial Conduct (2002), the International Commission of Jurists, International Principles on the Independence and Accountability of Judges, Lawyers and Prosecutors (2007) and, for the ASEAN region, LAWASIA’s Beijing Statement of Principles on the Independence of the Judiciary in the LAWASIA Region (19 August 1995).

To avoid later challenges relating to conflicts of interest, impartiality and independence, interviewing a prospective arbitrator is becoming more common as it allows all those involved to properly address potential conflicts of interest, experience in arbitration, qualifications, availability and fees. Where an arbitrator misrepresents his or her experience, it can be the subject of a complaint to a regulatory body. For example, in May 2020, a software company reported a first-time London Court of International Arbitration arbitrator to the Solicitors Regulation Authority for allegedly misrepresenting her arbitration experience on her CV. The arbitrator was ordered to pay part of the costs of a discontinued challenge.

Equally, parties must also exercise care and it is vital that there is no attempt, even indirectly, to canvas the prospective arbitrator’s position on either substantive or procedural matters that are likely to be relevant in the case in question. For instance, art 27 of the THAC Arbitration Rules provide as follows:

Any party, including its legal and other representatives shall not have any ex parte communication with the arbitrator or any person that has received the nomination from that party for appointment as an arbitrator relating to the case, except:

(1) to provide information about the general nature of the dispute or the proceedings that are to take place;

(2) to inquire about the qualifications, preparedness, and independence of that person; or

(3) to inquire about the suitability of the person that should receive the nomination as the third arbitrator; when that party or the arbitrator nominated by that party has been authorized to nominate the third arbitrator.

The parties, including their legal and other representative shall not have any ex parte contact with any person to be appointed as the presiding arbitrator of the Arbitral Tribunal on any matter relating to the case under any circumstances.