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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
What do parties want from arbitrators? What do arbitrators want from the parties? Are they compatible?
This paper suggests that parties want efficient, independent, reliable and impartial arbitrators to determine their differences. They expect the tribunal to establish the facts, determine the law and apply it, remain unbiased, objective and fair throughout the process, and keep the arbitration confidential. They want a tribunal that can manage and conduct the arbitration effectively, act without undue delay and deliver valid decisions. However, the selection of arbitrators is more complicated. Often parties may want arbitrators who they think may be more flexible, pliant and willing to accept delays or who they believe may be receptive to different arguments and procedures.
Arbitrators' principal duty is to resolve disputes by determining the respective rights and obligations of the parties. In return for completing their mission, parties have an obligation to remunerate the arbitrators. The arbitrators' right to remuneration is widely recognized in international arbitration. Yet, in the decision-making process, tribunals may be called to fulfil tasks that suggest that other entitlements may be derived from the arbitration mandate. Do arbitrators have the right to act without threat, harassment and pressure? Do they enjoy the right not to be called as witnesses in subsequent proceedings? Can they resign when circumstances dictate such course of action? Do arbitrators have any other rights in addition to payment? Do arbitrators have a right to exercise their powers as arbitrators, for example, to call for evidence or for the attendance of witnesses, appoint experts? The main question is: what do arbitrators and parties bargain for in the dispute resolution process?
In addition to being paid, arbitrators also hope and expect that parties and their counsel will provide clear arguments and all relevant supporting evidence and authorities. This will assist them to reach their determinations. Arbitrators invariably hope that the arbitration will be conducted in a professional and courteous manner. Arbitrators would prefer not to be involved with or embroiled in disputes between counsel, be copied on inter-counsel correspondence or find themselves an object of counsel's aggression.
A close look into the relationship between parties and arbitrators shows a shift of power during the arbitral process from the parties to the arbitrators. At the outset of the arbitral process, the parties retain control: they select the tribunal, can agree on the applicable law, decide on the procedure and timetable, and fix the seat and language of the proceedings. After the arbitration is set in motion, the arbitrators' control over the process grows exponentially. Ultimately, the arbitrators take command by deciding procedural issues that may arise and cannot be agreed, ordering production of documents where appropriate, determining the evidence considered relevant, conducting the hearings, establishing the facts, applying the law and delivering the award. Some might say that is real power.
Arbitrators' duties develop in connection with their powers and gravitate around due process, fairness and completing the parties' mandate. The rights of arbitrators derive not only from the contractual nature of arbitration but also from their adjudicatory function. Perhaps more subtle or less visible than their powers, these rights aim at ensuring that the same principles of fairness and due process intended to protect the parties also protect the arbitrators. The key factor is that at the end of the process, absent settlement, the arbitrators determine the issues and their decision is final.
This paper considers three issues: first, how the relationship between the parties and the arbitrators is determined; second, arbitrators' duties towards the parties; and, third, arbitrators' rights.
Arbitrators derive their mandate from the parties' agreement, the arbitration rules, the terms of appointment or the applicable arbitration law. In recognition of the arbitrators' lack of coercive authority, national laws confer on them certain powers of direction and control of the process and facilitate access to court assistance where needed. Paradoxically, national law and institutional rules almost never deal with the status of the arbitrators and the nature of their relationship with the parties.1 Notwithstanding the legal controls, it is widely recognized that, most of the time, the relationships between the arbitrators and the parties, and their respective rights and obligations, have a contractual nature.2 In addition, mandatory requirements under national laws operating as prerequisites of any dispute resolution system may have a bearing on arbitrators' duties.3
The arbitration agreement is the primary source for arbitrators' authority. Arbitrators and parties enter into an agreement, directly or indirectly, sometimes called the arbitrator's contract, whereby both sides assume reciprocal obligations in exchange for certain rights. The arbitrator's contract can be express-when parties actually sign an agreement with the arbitrator (i.e., terms of appointment)-or implied-by accepting appointment (e.g., under applicable arbitration rules and/ or national law).
arbitrator's contract
The nature of the arbitrator's contract has stirred strong conceptual debates. It has been qualified as an agency contract,4 a contract for services5 or a sui generis contract "not being categorizable in conventional terms and instead giving rise to a unique set of rights and duties".6 In the recent Jivraj v. Hashwani decision,7 the UK Supreme Court qualified the arbitrator as an "independent provider of services who is not in a relationship of subordination with the parties who receive his services".8 The Supreme Court noted that the arbitrator's role is to be independent from both parties. The arbitrator is not subordinated to any party; on the contrary, the nature of his function requires him to "rise above the partisan interests of the parties and not to act in, or so as to further, the particular interests of either party. … He is in effect a 'quasi-judicial adjudicator'…".9
When the arbitration agreement contains a reference to the rules of an arbitral institution, the arbitrator's rights and duties will be defined by those arbitration rules. In institutional arbitration, the relationship between those involved is trilateral. The institution enters into a contract with the parties when it accepts the case. It also enters into a separate (yet related) contractual relationship with the arbitrator via appointment and/or confirmation of appointment. Through this tripartite relationship, the institution's rules become part of the arbitrator's contract and may affect various aspects of the arbitrator's rights (e.g., remuneration), powers (e.g., the power to order security for costs) and duties (e.g., the duty to present the draft award to the institution for scrutiny before releasing it to the parties). There may be subtle and substantive differences between rules of different institutions giving greater or lesser authority, duties and powers to arbitrators. If there is a dispute between parties and arbitrators, it will generally be determined (at least at first instance) by the institution.
The terms of appointment define the arbitrator's rights, powers and duties in ad hoc arbitration. They are also common practice in some legal systems, notably in maritime, insurance and other arbitrations in England. The terms of appointment typically confirm the arbitrator's appointment and the financial arrangements (appointment and booking fees, hourly and daily rates, deposits, interim billing, fees in the event of settlement, cancellations and adjournments, and expenses). They may also deal with certain procedural aspects of arbitration: conflicts, the arbitrator's right to appoint assistants, governing law, document retention, and so forth. Terms of appointment are signed by the parties and the arbitrators and are usually final. Disputes related to the terms of appointment are typically deferred to courts. For example, where arbitrators sought during the arbitration process to impose a cancellation fee formula that had been rejected by one of the parties at the outset of the arbitration, the court considered that they had misused their position and removed the arbitrators.10
When the arbitration agreement is silent or does not set down in detail the arbitrators' mandate, the applicable arbitration law defines their rights, powers and duties. For example, if parties agree to arbitration in England, it is reasonable to assume that the arbitration will be governed by the English Arbitration Act 1996. In particular, sections 33 and 34 of the Act complete the arbitrator's mandate. Section 33 provides for the general duty to act fairly and give each party a reasonable opportunity of presenting its arguments and to adopt procedures suitable to the circumstances of each case. Section 34 details the procedural and evidentiary matters to be decided by the arbitrators.
Because of the numerous ways in which an arbitration can be conducted, the applicable arbitration laws can often embrace general formulas. Under the principle of party autonomy, parties can supplement or depart from the provisions of the applicable law. However, their freedom is limited where the relevant provisions are mandatory. In this context, the DAC Report (published with the Arbitration Act 1996) notes:
"It seems to us that the public interest dictates that Clause 33 must be mandatory i.e. that the parties cannot effectively agree to dispense with the duty laid on arbitrators under Clause 33. In other words, they cannot effectively agree that the arbitrators can act unfairly, or that the arbitrators can be partial, or that the arbitrators can decide that the parties (or one of them) should not have a reasonable opportunity of putting his case or answering that of his opponent, or indeed that the arbitrators can adopt procedures that are unsuitable for the particular circumstances of the case or are unnecessarily slow or expensive, so that the means for resolving the matters to be determined is unfair."11
Where parties agree on procedures that in their view conform to the mandatory provisions of the applicable law but the arbitrators do not share the same view, it is, as the DAC drafters noted, "neither desirable nor practicable to stipulate that the tribunal can override the agreement of the parties".12
The law governing the arbitration may have an impact on the arbitrators' mandate even when parties explicitly define it in the arbitration agreement. In fulfilling their role, the arbitrators must be mindful of the mandatory legal provisions impacting the conduct of the proceedings and the substantive law. For example, if there is a local time requirement or form of award, or if there is some other requirement as to how the arbitrators should conduct the arbitration, they should be careful to comply with it. This is not easy where arbitrators are from different jurisdictions and may not know or be fully conversant with the content and details of the lex arbitri. This imposes an obligation on counsel to bring any such legal requirements to the attention of the tribunal.
The arbitrator has five main duties to the parties: (1) to determine the dispute between the parties; (2) to stay impartial and independent; (3) to conduct the arbitration fairly and without undue delay; (4) to keep the arbitration confidential; and (5) to deliver an enforceable award. There are of course other duties that come under some of these headings, but this paper will focus only on those five.
First and most obviously, the arbitrators' main duty is to determine the dispute between the parties. In doing so, it is generally accepted that, unless otherwise agreed by the parties, arbitrators may conduct the proceedings as they see fit. They may establish the facts, apply the law and "conduct the arbitration in such a way that it leads to a valid award not open to challenges".13 It is open to question whether, in fulfilling this function, the arbitrator must limit the decision-making process to the parties' submissions or whether he or she has the power to conduct the proceedings as deemed appropriate under the circumstances.
For example, article 22(2) of the ICC Arbitration Rules (2012) provides that "the arbitral tribunal, after consulting the parties, may adopt such procedural measures as it considers appropriate". Article 25 of the ICC Rules mandates the arbitrators to determine the facts "by all appropriate means". This may include reviewing pleadings, briefs, summaries,14 documentary and oral evidence, ordering document production15 and calling its own experts.16 Other arbitration rules explicitly provide for arbitrators' power to take evidence. Article 14.2 of the LCIA Rules of Arbitration provides that:
"[u]nless otherwise agreed by the parties … the Arbitral Tribunal shall have the widest discretion to discharge its duties allowed under such law(s) or rules of law as the Arbitral Tribunal may determine to be applicable; and at all times the parties shall do everything necessary for the fair, efficient and expeditious conduct of the arbitration."
On the same topic, article 27(4) of the UNCITRAL Rules of Arbitration allows arbitrators to determine the admissibility, relevance, materiality and weight of the evidence offered. Sometimes, in the absence of evidence rules, arbitrators are allowed to evaluate the evidence "freely", for example, in Sweden.17
The way the arbitrators conduct the proceedings should not contradict the parties' agreement and must ensure that their equality and the right to be heard are safeguarded at all stages of the arbitral process.18 Ultimately, as section 33 of the English Arbitration Act provides, the arbitrators should be mindful of "avoiding unnecessary delay or expense so as to provide a fair means for the resolution of the matters falling to be determined". This is not always easy to do where the parties are seeking different procedural and evidentiary rights (e.g., to submit additional submissions and evidence) and issues are complicated.
In essence, the power to set the appropriate procedure has been interpreted as including: (1) taking control over establishing the facts; (2) proof of substantive law; (3) appointment and instruction of experts; (4) assistance with settlement; (5) limiting time for oral argument and witness examination; and (6) issuing awards and bifurcation of determinative issues.19
Applying the law is closely linked to arbitrators' adjudicatory function. Arbitrators are called to make final and binding awards, which they should decide either in accordance with the applicable law (except where the parties have expressly agreed that they should decide ex aequo et bono or as amiables compositeurs) or taking into account the contract terms and trade usages.20 Under certain legal systems, the arbitrator is deemed to know the law (iura novit curia), while in other jurisdictions (particularly in countries following common law traditions) parties have a duty to prove and argue the law.21 Applying the law has been interpreted to refer not only to the substantive law of the contract or the contract itself but also to any mandatory law provisions having an impact on the case.22 For some, this also means taking criminal rules into consideration.23 For others, the arbitrators should take a "pro-active approach, especially if there is more than one law that could be applied".24 Yet, it is clear that applying the law does not mean complying with agreements, procedures or rules "that are unlawful or that, in the arbitrator's judgment, would be inconsistent with this [AAA/ABA] Code"25 or would allow for concealing illicit behaviour.
Delivering the award entails addressing all matters raised by the parties, including those that "seem unimportant or peripheral",26 and determining all connected disputes. In making the award, the arbitrators should carefully assess the limits of their mandate under the arbitration agreement or the applicable rules or law. Exceeding their authority or addressing matters not contemplated by the parties may have unwanted consequences, varying from remanding the award to the tribunal (where the lex arbitri so allows), supplying grounds for annulment27 or refusal of recognition and enforcement.
In 1799, George Washington wrote in his will that "all disputes (if unhappily any should arise) shall be decided by three impartial and intelligent men, known for their probity and good understanding; two to be chosen by the disputants-each having the choice of one-and the third by those two".28 Over two centuries later, international arbitrators must guide their conduct by similar values and maintain their independence and impartiality during the arbitral process.
Impartiality and independence are qualities established in most arbitration rules, domestic laws, codes of ethics, international conventions and the IBA Guidelines on Conflicts of Interest in International Arbitration. Some instruments refer to only one of the two concepts. Notwithstanding, when arbitration rules make reference to either independence or impartiality, practice seems to have evolved towards implying both. For example, section 33(1)(a) of the English Arbitration Act provides that the arbitrators "shall act fairly and impartially as between the parties". This provision has been interpreted as encompassing both impartiality and independence, due to England's adoption of the European Convention of Human Rights.29
Without intending to discuss or review the meaning of these concepts, independence can essentially be defined as the absence of an actual or past dependent relationship likely to affect the arbitrator's freedom of judgment. Independence entails an objective enquiry into the connections, relations or dealings between the arbitrator and the parties. Impartiality is a state of mind. It means that the arbitrator does not favour one party (i.e., is not biased) and that the arbitration is not pre-decided as to the question(s) in dispute. It is a "fairly abstract and subjective standard".30
In general, when challenging the independence or impartiality of an arbitrator, "it is … sufficient to show that there is enough 'doubt' or 'suspicion' … to justify either not appointing or removing the arbitrator".31 The LCIA Court recently confirmed that the notion of independence is applied "as an objective test for the existence of circumstances that create the appearance of potential bias on the part of the arbitrator".32 When, on the other hand, the challenge questions impartiality, the LCIA Court applies "a test for the actual presence of bias … as demonstrated by the actions of the arbitrator, rather than simply by the appearance of potential bias."33 Both standards are applied from the angle of a "fair minded and informed observer".34
Arbitrators have a duty to disclose those circumstances giving rise to conflicts of interest prior to accepting a nomination or as soon as it becomes known during the proceedings. They must be careful not to do anything that might affect or give the parties reason to be concerned about their impartiality and independence. Disclosures of actual and potential conflicts should be made as early as possible and must include all relevant facts-both public and private information.35 Current trends in international arbitration suggest that when in doubt the arbitrator should disclose.36 Failure to comply can result in challenge and removal of the arbitrator and may occasionally go as far as to trigger annulment of the award or a refusal to enforce the award and perhaps even civil liability on the part of the arbitrator.37
Arbitrators have a duty to conduct the arbitral process in a fair manner, giving each party an equal opportunity to be heard and respond to the opponent's submissions. Whether this is a full opportunity as required under the UNCITRAL Model Law,38 a reasonable opportunity under English law,39 a "pertinent and material to the controversy" opportunity under the Federal Arbitration Act,40 or an opportunity to ensure, in the language of the New York Convention, that the party is "[able] to present his case",41 is a pedantic question.
Fairness is a subjective standard42 and accordingly varies from one case to another. What may seem fair in one dispute may not meet the test in a different set of circumstances. Fairness is reflected at procedural level by granting the parties a sufficient opportunity to present and argue their case, including the presentation of documentary and testamentary evidence. This includes the right to comment on and rebut the other party's evidence, the right to call witnesses and experts and the right to have a hearing if so required by the parties or called for by the circumstances. More controversial is the right to request documents from the other party.
To expedite arbitral proceedings, institutions set deadlines for delivering the award. The ICC aims at ensuing that arbitral tribunals render the final award within six months from the date of the last signature by the parties or the arbitrators of the Terms of Reference.43 How practical these timetables are in real terms is debatable, as deadlines depend not only on the times agreed or fixed for the presentation of the case but also on all concerned, including the parties and their lawyers, keeping to the agreed timetable, as well as other external factors. Sometimes there are too many issues to determine, but the tribunal nonetheless has to deal with them to avoid an infra petita argument.
Are arbitrators bound by a duty of confidentiality in international arbitration?44 It is suggested that this duty arises as "a prerogative inherent in [the arbitrators'] judicial function".45 The confidentiality obligation also has a contractual nature, arising from the arbitration agreement or, indirectly, through the application of arbitral rules.46 Some institutions can also require arbitrators to enter into explicit declarations of confidentiality.47 Depending on the circumstances, other sources include regulations of the professional bodies to which the arbitrator belongs and ethical guidelines such as the AAA/ABA Code of Ethics for Arbitrators in Commercial Disputes48 and the IBA Rules of Ethics for International Arbitrators.49
Deliberations are generally confidential and should not be disclosed. The principle of confidential deliberations goes to the heart of the arbitrators' independent adjudicatory role.50 Arbitrators are often discouraged from publishing dissenting opinions in the award. However, in certain instances, arbitrators have been called before courts to provide testimony about past arbitrations.51
The extent of this duty is unclear. Does it cover the existence of the arbitration, the subject matter, the names of the parties or the legal issues? A more complicated question is whether this duty of confidentiality requires arbitrators not to disclose information about money laundering transactions and transnational criminality to the relevant authorities. It is suggested that the tension between the arbitrators' confidentiality obligations and the public interest duty to report illegalities must be approached from a jurisdictional perspective. This will require a tribunal to carefully consider how to deal with a case when it suspects that the dispute is a sham or that the underlying transaction involves criminal behaviour.52 The arbitrator should not turn a blind eye and issue an award in accordance with the parties' wishes. Yet, under the current state of law, it is not clear whether the arbitrators have a duty to report suspicious behaviour. This question remains to be dealt with at national level.
Is it realistic or even feasible to expect arbitrators to deliver awards conforming to local laws and foresee all places where recognition and enforcement are sought? Thomas Clay argues that arbitrators can achieve this goal at three levels: first, by "improving the award" by completing gaps, clarifying vague points and correcting errors; second, by participating in enforcement procedures, such as in Belgium where arbitrators are required to register the awards with the legal authorities;53 and, third, by being involved in the setting-aside procedure.54 Supporting examples come from Switzerland, where arbitrators may be called by the Federal Tribunal in post-arbitration litigation, and from Norway and Thailand, where arbitrators have been called to give explanations in court regarding the discussions between the parties and the award.55
Assuming that the duty to deliver enforceable awards exists, to what extent are arbitrators willing and able to complete such a duty after the arbitration ends? Is testifying about the arbitration implied in the arbitrator's contract with the parties? Who pays for the expenses associated with such testimony once the tribunal is functus officio? Would it be fair to ask the arbitrators to cover the costs associated with such testimony? Should they factor them into their contract with the parties? These questions await debate and call for pragmatic answers.
Arbitrator's rights are not widely discussed, especially in contrast to the discussion of arbitrators' obligations. When considering arbitrators' rights, it is essential to differentiate between the rights and powers (or authority) of the tribunal. Since arbitrators have obligations, do they also have commensurate rights?
A right is "something that is due to a person by just claim, legal guarantee, or ethics" or "a legally enforceable claim that another will do or will not do a given act".56 Power, on the other hand, is "the legal right or authorization to act or not to act; the ability conferred on a person by the law to alter, by an act of will, the rights, duties, liabilities, or other legal relations either of that person or of another".57 In the arbitration context, we talk about the arbitrators' power to direct the parties and conduct the procedure in accordance with their mandate as defined by the arbitration agreement, the applicable rules or national law. It is suggested that arbitrators' rights under the present state of law include: the right to remuneration, the right to free decision making and, under certain circumstances, the right to resign.
Remuneration is the principal right of the arbitrator. For many, it may be the raison d'être for taking on the role of an arbitrator. In return for his services, the arbitrator receives remuneration by way of fees. The right to remuneration stems either from the agreement with the parties, the arbitration rules or the applicable law. The costs of the arbitration-or at least how they are to be made up-should be clear and understood from the outset. Arbitrators' fees may be calculated based on the time spent (hourly or daily rates) or on the amount in dispute (the ad valorem system). Even when there is no agreement on fees, it is accepted that "an arbitrator appointed to decide a commercial dispute has a right to be paid a reasonable fee".58
raison d'être
ad valorem
However, a key practical issue, specifically for ad hoc arbitrations, is that the arbitrators' remuneration should be agreed on appointment or very soon after. This may include hourly and daily rates, travel time and cancellation fees (where a hearing is postponed or cancelled within a specified time before a scheduled hearing). Arbitrators and parties should also deal with reimbursement of expenses incurred for the purpose of the arbitration (e.g., travel, couriers and hotels) and periodic billing. There is no reason why an arbitrator should wait until the case is completed before being paid for work undertaken.
Typically, parties are jointly and severally liable for the arbitrator's remuneration. The English Arbitration Act provides that the parties are jointly and severally liable to pay to the arbitrators "such reasonable fees and expenses (if any) as are appropriate in the circumstances".59 When one party agrees to fix rates of remuneration while the other consents to reasonable fees, joint and several liability applies only to the reasonable amount. In principle, this can be lower or higher than the agreed fee. "[I]n practice, the agreed fee is likely to be the same as or accepted to be a reasonable fee."60
A more delicate issue is dealing with the arbitrators' remedies in case of nonpayment. Can the arbitrators stop the proceedings or refuse to release the award if parties do not make the agreed/necessary payment? Alternatively, if the fees prove insufficient during the proceedings, can the arbitrators approach the parties for an augmentation? Can either party pay the shortfall of deposits requested? These issues should be addressed in the arbitrator's contract either directly or through the applicable rules or law.
It is generally recognized that arbitrators enjoy immunity from suit. This protects arbitrators from being blamed, harassed, pressured, threatened or blackmailed by the dissatisfied parties. Ultimately, immunity is meant to encourage an independent and impartial decision-making process.
The existence and extent of immunity will depend on the applicable national law or arbitration rules. It can also be dealt with in the arbitrator's terms of appointment. Through their agreement, parties can limit arbitrators' immunity, albeit such instances are rarely reported in practice.61 Without immunity, arbitrators would arguably be reluctant to take cases and fulfil their mandate.
Some arbitration rules promote complete immunity for arbitrators. For instance, article 40 of the ICC Arbitration Rules (2012) provides that arbitrators, any person appointed by the tribunal and the emergency arbitrator "shall not be liable to any person for any act or omission in connection with the arbitration, except to the extent that such limitation of liability is prohibited by applicable law". Article 31.1 of the LCIA Rules follows a narrower approach, allowing for the removal of immunity "where the act or omission is shown by that party to constitute conscious and deliberate wrongdoing committed by the body or person alleged to be liable to that party".
At national level, there is no uniform approach. Some laws are more protective than others, providing for arbitrators' liability only for acts or omissions in bad faith.62 Others-typically the jurisdictions following the UNCITRAL Model Law- tend to be silent on this matter.63
In order to exercise their role and complete their mandate effectively, the arbitrators should be free of any external constraints and tensions. This includes: (a) the right to protection against vexatious conduct by parties or their representatives; (b) non-interference in decision making; and (c) the secrecy of deliberations.
Vexatious conduct can manifest itself in different ways: threats to the physical integrity of arbitrators or their family members, blackmail, offensive language in the correspondence copied to the tribunals and even kidnapping. Arbitrators have the right to carry out their mission free from pressure, intimidation and threat of physical and mental aggression from any arbitration participant or third party.
In the Himpurna arbitration involving Indonesia,64 there were repeated attempts to intimidate the members of the tribunal. Professor Priyatna, the arbitrator nominated by the Indonesian government, was kidnapped from the airport en route to a deliberations meeting with the other arbitrators. The perpetrators hoped that Professor Priyatna's absence would preclude the other arbitrators from issuing an interim award and eventually force them to cancel the proceedings. Relying on Professor Priyatna's absence, government representatives also unsuccessfully challenged the arbitration before the Dutch courts. Despite these threats, the remaining arbitrators issued an interim award and recorded the reasons for the third arbitrator's absence. Professor Priyatna was subsequently released, but later on in the proceedings he and his co-arbitrators faced claims raised by the Indonesian Ministry of Finance before a local court in Jakarta to the effect that they would be fined USD 1 million per day if they continued with the arbitration. Fortunately, due to a change in the political regime, these claims were subsequently withdrawn. The arbitration eventually continued, but the kidnap remained as a disgraceful episode in the history of international arbitration.
Himpurna
Another example occurred during the ICSID proceedings in Biwater Gauff (Tanzania) Ltd v. United Republic of Tanzania.65 An organization initiated a campaign to persuade Biwater to discontinue the ongoing ICSID arbitration. The organization reportedly set up a link on its website in an attempt to "exert personal pressure on claimant's chairman".66 These attempts at intimidation made their way to the tribunal through a party application for provisional measures.
Biwater Gauff (Tanzania) Ltd v. United Republic of Tanzania
Over the years, various tribunals have held that parties' conduct should not prejudice the integrity of the arbitral procedure, nor aggravate or exacerbate the dispute.67 This type of behaviour undermines the whole process but is fortunately rare. It is important that arbitrators are not intimidated and are left free to reach their decision without fear or any other interference.
Parties generally expect a speedy dispute resolution. This goal is easier to achieve in some cases than in others. The reality is that cases are often more complicated than initially envisaged, and there are sometimes genuine reasons for last-minute drama and delays. Once the proceedings are closed, parties should abstain from interfering in the making of the award.
Parties should abstain from compromising the arbitration by seeking the arbitrators' presence or company at any type of private or public event or by sitting next to the arbitrator on plane, particularly during the deliberations stage. Parties should not send additional unsolicited submissions to the tribunal raising issues that they did not think of at an earlier time. While arbitrators will reject such submissions, inevitably the other party will feel it must have the right of reply. This behaviour is an unnecessary and invariably an unjustifiable distraction that interferes with the process.
Secrecy of deliberations goes to the heart of the arbitrators' independent function and the private nature of arbitration. It lies at the cross-roads between a duty and a right. As a duty, it is an integral part of the arbitrators' obligation to maintain confidentiality over the proceedings. As a right, it affords arbitrators the protection needed for a free decision-making process. The positions taken and views expressed by arbitrators during deliberations and their exchanges in the making of the award should be confidential.
Secrecy of deliberations is not absolute. Parties may limit it through their express agreement or the circumstances may require disclosing parts of the decision-making process. For example, article 30.2 of the LCIA Rules provides: "The deliberations of the Arbitral Tribunal are likewise confidential to its members, save and to the extent that disclosure of an arbitrator's refusal to participate in the arbitration is required of the other members of the Arbitral Tribunal under Articles 10, 12 and 26." This provision calls for disclosure if an arbitrator dies, is seriously ill, refuses or becomes unable or unfit to act, acts in violation of the arbitration agreement, does not act fairly and impartially or fails to conduct the proceedings with reasonable diligence.
Courts may also limit the secrecy of deliberations. In CME v. Czech Republic,68 for example, the Svea Court of Appeals held that the obligation to testify overrode the principle of confidentiality surrounding deliberations in arbitral proceedings. The court held that no penalties would be imposed but rather that negative inferences could be drawn from a failure to testify. Notwithstanding the court's permissive ruling, all three arbitrators testified.
Under certain rules, arbitrators can express opinions that depart from the majority's view. In these cases, one can speak of the arbitrators' right to express dissent. The right to secrecy of deliberations may be considerably limited where the dissenting opinions can be made public. For example, article 48(4) of the ICSID Convention provides: "Any member of the Tribunal may attach his individual opinion to the award, whether he dissents from the majority or not, or a statement of his dissent."69 Similarly, article 32(3) of the Rules of Procedure of the Iran-United States Claims Tribunal reads:
"The arbitral tribunal shall state the reasons upon which the award is based, unless the parties have agreed that no reasons are to be given. Any arbitrator may request that his dissenting vote or his dissenting vote and the reasons therefor be recorded."
An arbitrator cannot be forced to continue taking part in the proceedings against his will. For this reason, arbitrators should have the right to resign at any time during the proceedings, although their resignation may be seen as contradicting their general duty to complete their mandate.
Many laws significantly qualify or limit the right to resign. This is the practice in England, where arbitrators cannot resign absent a specific agreement with the parties.70 Even so, the DAC Report recognizes that:
"[i]n theory it could be said that an arbitrator cannot unilaterally resign if this conflicts with the express or implied terms of his engagement. However, as a matter of practical politics an arbitrator who refuses to go on cannot be made to do so, though of course he may incur a liability for breach of his agreement to act."71
Some laws recognize only resignation for cause;72 others imply it in the arbitrator's failure or impossibility to act.73 In other cases, the law requires arbitrators to obtain leave from the court before exercising their right to resign.74
When an arbitrator's decision to relinquish his function is made without cause or without the leave of a court where such a requirement exists, the arbitrator may be liable for damages or face a reduction in fees. If the right to resign is exercised in bad faith, so as to delay, hamper or scuttle the process, the other arbitrators may continue their mandate and decide without the resigning arbitrator.75
In the light of the above analysis, one open question remains: ought there to be a corresponding right to every obligation? Such correspondence is not easy to find in international arbitration. However, if arbitrators are expected and required to act in certain ways, arbitrators naturally need to have the power and authority to take the necessary actions to achieve those expectations. Power and authority are based in the arbitrator's contract whether arising under contract, from the applicable institutional rules or from governing law. In addition to the arbitrators' rights discussed above, namely the right to remuneration, immunity from suit, the right to resign and the right to free decision making, it may be appropriate to recognize arbitrators' powers as a right rather than an authority. The origin of the rights will remain the same, namely the parties' agreement to arbitration. However, would it make the arbitral process stronger and increase its autonomy if it was accepted that arbitrators' rights mirrored the many obligations expected and required from and imposed on arbitrators?
1 Gary Born, International Commercial Arbitration (2009) pp. 1595-1597.
2 Julian Lew, Loukas Mistelis and Stefan Kröll, Comparative International Commercial Arbitration (2003) p. 276.
3 Christian Hausmaninger, 'Rights and Obligations of the Arbitrator with Regard to the Parties and the Arbitral Institution-A Civil Law Viewpoint', in ICC Court Bulletin-Special Supplement-The Status of the Arbitrator (1995) p. 37 et seq.
4 In the Netherlands and Switzerland, the contract with the arbitrator is qualified as an agency agreement or a mixed contract with features similar to an agency contract. In this sense, see Jean-François Poudret and Sébastien Besson, Comparative Law of International Arbitration (2007) p. 368.
5 In Germany, the contract between the parties and the arbitrator is considered a contract for services. See Poudret and Besson, supra note 4, at p. 368; see also Emmanuel Gaillard and John Savage (eds.), Fouchard, Gaillard, Goldman on International Commercial Arbitration (1999) pp. 606-607, paras. 1119-1121.
6 Born, supra note 1, at 1607.
7 Jivraj v. Hashwani [2011] UKSC 40.
8 Id., at [40].
9 Id., at [41].
10 ICT Pty Ltd v. Sea Containers Ltd [2002] NSWC 77, [42].
11 DAC Report on Arbitration Bill (2006) ch. 2, para. 155, available at: <http://arbitration. practicallaw.com/5-205-4994#sect1pos2res1> (last visited 19 December 2011).
12 Id., at para 157.
13 Lew, Mistelis and Kröll, supra note 2, at p. 279.
14 Antonio Crivellaro, 'An Art, a Science or a Technique?', in Albert Jan van den Berg (ed.), Arbitration Advocacy in Changing Times, ICCA Congress Series no. 15 (2011) p. 9 at p. 16.
15 Limited document production is accepted and largely practiced in international arbitration. The IBA Rules on the Taking of Evidence in International Arbitration provide that document production requests should call for disclosure only of "documents in the possession, custody or control of the other party", "relevant to the case", and "material to its outcome". In this sense, see article 3(b) and (c) of the IBA Rules.
16 See, e.g., Friederike Schäfer, 'Practical Problems Arising from the Contractual Relationship Between Expert and Participants in an Arbitration', in Christian Klausegger et al. (eds.), Austrian Yearbook on International Arbitration 11 (2011) pp. 113-127.
17 Kay Hobér, International Commercial Arbitration in Sweden (2011) p. 222 at paras. 6.101- 6.102.
18 See, e.g., article 17 of the UNCITRAL Arbitration Rules (2010).
19 Julian Lew, 'Arbitrators' Control of Tactical and Procedural Issues in the 21 Century', in Ian Fletcher at al. (eds.), Foundations and Perspectives of International Trade Law (2001) pp. 248, 252.
20 Article 21(2) of the ICC Rules (2012); article 35.3 of the UNCITRAL Rules (2010).
21 See, e.g., Gabrielle Kaufmann-Kohler, 'Iura Novit Arbiter-Est-ce bien raisonnable? Réflexions sur le statut de droit du fond devant l'arbitre international', in Réflexions sur le Droit Désirable en l'Honneur du Professeur Alain Hirsch (2004) pp. 71-78; Lew, supra note 19, at pp. 253- 254; See also Julian Lew, 'iura novit curia and Due Process', in Yves Derains and Laurent Lévy (eds.), Liber Amicorum en l'honneur de Serge Lazareff (2011).
22 Born, supra note 1, at p. 1626.
23 In this sense, see Alexis Mourre, 'Arbitration and Criminal Law: Reflections on the Duties of the Arbitrator', Arbitration International 22(1) (2006) pp. 95-118. Alexis Mourre notes that "it is because arbitrators are the natural judges of international trade that they are the natural guardians of ethics and good morals in international commerce. They may even be better placed than national judges to combat international fraud." Id., at p. 96.
24 Thomas Clay, 'The Role of the Arbitrator in the Execution of the Award', ICC Bulletin 20(1) (2009) p. 43 at p. 45.
25 Cannon I (E) of the AAA/ABA Code of Ethics for Arbitrators in Commercial Disputes.
26 L ew, Mistelis and Kröll, supra note 2, at p. 280.
27 See La Société Commercial Caribbean Niquel v. La Société Overseas Mining Investments Ltd, Paris Court of Appeals, 1st Chamber, 08/23901, 25 March 2010. In this case, the award was annulled because the arbitrators raised a new legal theory in granting damages replacing that invoked by the requesting counsel. For a discussion of the case, see William Park, 'The Four Musketeers of Arbitral Duty: Neither One-For-All Nor All-For-One', ICC Dossiers: Is Arbitration Only as Good as the Arbitrator? Status, Powers and Role of the Arbitrator, ICC publication no. 714E (2011) p. 25 at pp. 28-29.
28 The will of George Washington is available at: <http://gwpapers.virginia.edu/documents/will/ text.html> (last visited 5 January 2012).
29 L CIA reference no. 81160 (29 August 2009), Arbitration International 27(3) (2011) p. 442 at p. 449, para. 3.5; LCIA reference no. 81224 (15 March 2010), Arbitration International 27(3) (2011) p. 461 at pp. 465-466, paras 3.2-3.6.
30 Lew, Mistelis and Kröll, supra note 2, at p. 258.
31 B orn, supra note 1, at pp. 1475-1476.
32 Thomas Walsh and Ruth Teitelbaum, 'The LCIA Court Decisions on Challenges to Arbitrators: An Introduction', Arbitration International 27(3) (2011) p. 283 at p. 287. See also LCIA reference no. 81160, supra note 29, at p. 449, para. 3.8; LCIA reference no. 81224, supra note 29, at p. 466, para. 3.7.
33 Walsh and Teitelbaum, supra note 32, at pp. 287-288. See also LCIA reference no. 81160, supra note 29, at p. 449, para. 3.9; LCIA reference no. 81224, supra note 29, at p. 466, para. 3.8.
34 Walsh and Teitelbaum, supra note 32, at p. 288.
35 Universal Compression International Holdings, S.L.U. v. The Bolivarian Republic of Venezuela, ICSID case no. ARB/10/09, Decision on the Proposal to Disqualify Prof. Brigitte Stern and Prof. Guido Santiago Tawil, para. 92, available at: <http://icsid.worldbank.org/ICSID/Fron tServlet?requestType=CasesRH&actionVal= showDoc&docId=DC2411_En&caseId=C1021> (last visited 5 January 2012).
36 See, e.g., General Standard 3(c) of the IBA Guidelines on Conflicts of Interest in International Arbitration.
37 J&P Avax SA v. Tecnimont SPA, Cour d'appel de Paris, 1st chamber (section C), 12 February 2009, case no. 07/22164. The Paris Court of Appeal annulled an ICC award on the grounds that the chairman, despite disclosing a conflict of interest upon nomination, failed to update his disclosure statement. Upon nomination, the chairman stated that his law firm provided assistance to the respondent's parent company, but that the case was closed and, moreover, that he never worked on any matter for that client. While the arbitration was pending, the appellant continued questioning the chairman's law firm's relationship with the respondent. Almost five years into the arbitration, the chairman disclosed that, while the arbitration was pending, certain offices of his law firm represented the respondent's parent company and the tribunal's rights and duties: what do parties and arbitrators bargain for? advised two subsidiaries and that one colleague attorney was appointed sole arbitrator in a dispute involving one of respondent's subsidiaries. After unsuccessfully challenging the appointment before the ICC, the appellant continued to participate in the arbitration under protest. Shortly after a partial award was issued, the chairman resigned for reasons related to his perceived incompatibility. The partial award was ultimately annulled by the Court of Appeals for the chairman's failure to disclose conflicts of interest between offices of his law firm and the respondent's corporate group.
38 Article 18 of the UNCITRAL Model Law on International Commercial Arbitration.
39 Section 33(1) of the English Arbitration Act 1996.
40 Section 10 of the Federal Arbitration Act.
41 Article V.1(b) of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
42 Lew, Mistelis and Kröll, supra note 2, at p. 282.
43 Article 30(1) of the ICC Arbitration Rules (2012).
44 Julian Lew, 'The Arbitrator and Confidentiality', in ICC Dossiers: Is Arbitration Only as Good as the Arbitrator? Status, Powers and Role of the Arbitrator, ICC Publication No. 714E (2011) pp. 105-129; See also Gaillard and Savage, supra note 5, at p. 612, para. 1132; Born, supra note 1, at p. 1631 et seq.; Poudret and Besson, supra note 5, at p. 320; Lew, Mistelis and Kröll, supra note 2, at p. 283.
45 Gaillard and Savage, supra note 5, at pp. 627-628, para. 1167.
46 See, e.g., article 34 of the AAA International Rules, article 18 of the ACICA Rules, article 8 of the Arbitration Rules of the Chamber of National and International Arbitration of Milan, article 7 of the Rules of Arbitration of the Court of International Commercial Arbitration attached to the Chamber of Commerce and Industry of Romania, article 37 of the CIETAC Rules, article 36 of the CAMCA Arbitration Rules, rule 9 of the KLRCA Rules, article 30 of the LCIA Arbitration Rules, article 43 of the Swiss Rules of International Arbitration, and article 76 of the WIPO Arbitration Rules.
47 Rule 6(2) of the ICSID Arbitration Rules provides: "I shall keep confidential all information coming to my knowledge as a result of my participation in this proceeding, as well as the contents of any award made by the Tribunal."
48 Cannon VI of the AAA/ABA Code of Ethics for Arbitrators in Commercial Disputes.
49 Article 9 (Confidentiality of the Deliberations) of the IBA Rules of Ethics for International Arbitrators.
50 Himpurna California Energy Ltd. v. Republic of Indonesia, Interim Ad Hoc Award, 26 September 1999, in A.J. van den Berg (ed.), Yearbook Commercial Arbitration XXV (2000) pp. 112, 151.
51 CME v. Czech Republic, Svea Court of Appeal, Sweden, case no. T8735-01, 15 May 2003, available at: <http://www.chamber.se/filearchive/2/21294/ CME_tjeckiska_republiken.pdf> (last visited 5 January 2012); Mond & Mond v. Dayan Rabbi Isaac Dov Berger [2004] VSC 45.
52 Lew, supra note 44, at p. 123.
53 Article 1702(2) of the Belgian Judicial Code reads: "The chairman of the arbitral tribunal shall deposit the original of the award with the registry of the Court of First Instance; he shall notify the parties of the deposit."
54 Clay, supra note 24, at p. 47.
55 Id., at 48.
56 Bryan Garner, Black's Law Dictionary, 7th ed. (1999) p. 1322.
57 Id., at p. 1189.
58 Mustill & Boyd: Commercial Arbitration, 2nd ed. (2001) at p. 223. See also K/S Norjarl AS v. Hyundai Heavy Industries Co Ltd [1991] 1 Lloyd's Rep. 524.
59 Section 28 of the Arbitration Act 1996.
60 at Linnett v. Halliwells LLP [2009] EWHC 319, at para. 62.
61 Lew, Mistelis and Kröll, supra note 2, at p. 290.
62 See, e.g., section 29 of the Arbitration Act 1996.
63 Lew, Mistelis and Kröll, supra note 2, at p. 292.
64 H. Priyatna Abdurrasyid, 'They Said I Was Going to Be Kidnapped', Mealey's International Arbitration Report 18(6) (2003) p. 29 at p. 31.
65 Biwater Gauff Tanzania Ltd. v. United Republic of Tanzania, ICSID case no. ARB/05/22, Procedural Order no. 3, available at: <http://icsid.worldbank.org/ICSID/FrontServlet?reque stType=CasesRH&actionVal=showDoc& docId=DC1583_En&caseId=C67> (last visited 5 January 2012).
66 Id., at para. 16.
67 See, e.g., Amco Asia Corp., US and others v. Republic of Indonesia, ICSID case no. ARB/81/1, Decision on Request for Provisional Measures of 9 December 1983, in A.J. van den Berg (ed.), Yearbook Commercial Arbitration XI (1986) pp. 159-161; Biwater Gauff (Tanzania) Ltd v. United Republic of Tanzania, supra note 65, at p. 34, para. 135 et seq.
68 Svea Court of Appeal, Sweden, case no. T8735-01, 15 May 2003, available at: <http://www. chamber.se/filearchive/2/21294/ CME_tjeckiska_republiken.pdf> (last visited 5 January 2012).
69 In the same vein, rule 46 of the ICSID Arbitration Rules provides: "The award (including any individual or dissenting opinion) shall be drawn up and signed within 120 days after closure of the proceeding."
70 See Article 2 of the Arbitration Act 1996.
71 DAC Report on Arbitration Bill (2006) clause 25.
72 Article 1457(1) of French Decree no. 2011-48 of 13 January 2011.
73 Section 1038 of the German Arbitration Act 1998 (Book 10 ZPO).
74 See article 1689 of the Belgian Judicial Code of 19 May 1998 and article 1029 of the Dutch Arbitration Act of 1 December 1986, Code of Civil Procedure-Book Four: Arbitration.
75 Poudret and Besson, supra note 4, at p. 657, para. 738; Pierre Lalive, 'Du nouveau sur les tribunaux arbitraux "tronqués"?', ASA Bulletin 2 (1999) pp. 211-219; Jean-Pierre Ancel, 'Measures Against Dilatory Tactics: The Cooperation Between Arbitrators and the Courts', in Albert Jan van den Berg (ed.), Improving the Efficiency of Arbitration Agreements and Awards, ICCA Congress Series no. 9 (1999) p. 410 at pp. 418-419; Nigel Blackaby et al., Redfren and Hunter on International Arbitration, 5th ed. (2009) p. 288, paras. 4.141-4.142.