Which criteria does the ICC Court apply when deciding arbitrator’s challenges? This is an interesting question with no straightforward answer, especially taking into account that the ICC Court has yet to begin publishing decision on challenges, although it has recently begun providing its reasoning to Parties with respect to its decisions on challenges.
The 2012 ICC Rules refer to independence and impartiality in Article 11 and Article 14 but do not provide any guidance as to what is to be understood by independence and impartiality. The Court has not adopted any internal regulations nor guidelines on the issue. What then, does it use as the main criteria and guidance?
Elements Taken into Account by the ICC Court when Deciding Upon a Challenge
When determining the challenge, the Court may take into account a range of factors and sources from a variety of perspectives.
Its primary resource is the experience of its members and a non-public database on the decisions on objections and challenge to arbitrators.
A secondary resource is the IBA Guidelines on Conflict of Interest in International Arbitration; however, they relate to disclosure and do not propose to set standards in relation to challenges against arbitrators.
In is important to mention that the Court does not apply a single standard to all cases, but rather decides the questions in each case on its own. The ICC Court analyses the facts and whether they show a close, substantial, recent and proven relationship between a prospective arbitrator and one party.
The general basis for refusal is the past or present direct professional link between the arbitrator and a party or between a partner or business associate of the arbitrator and a party or an entity connected to the party. Successful challenges are relatively infrequent. The Court has not normally accepted to replace an arbitrator unless it appears likely that he is not, in fact independent. Decisions of the Court concerning challenges for lack of independence were not communicated to the Parties until recently. The Court did not historically give reasons for the decision. This made it extremely hard to distinguish any criteria on which they base their decisions.
Challenging an Arbitrator at the ICC Is Highly Unlikely to Succeed
The statistics show that in the period 1998-2006 there were 270 challenges out of 8,085 arbitrators confirmed. There was no significant increase in challenges at the ICC (probably the disclosure requirements and the ICC Court’s review of independence helped). A very small number of challenges are accepted (an average of 0.2% of the number of arbitrators confirmed or appointed each year). When making the decision on the challenge, the Court shall take into account, amongst other factors, the stage at which the challenge is made. Challenges that serve purely dilatory purposes will be readily rejected by the Court. The Court decides using an objective test rather than a subjective “in the eyes of the parties” standard.
Relevance of the IBA Guidelines on Conflicts of Interest in International Arbitration
What is the position of the ICC with respect to the IBA Guidelines on Conflicts of Interest in International Arbitration? The ICC has always viewed them as a commendable effort to try to identify uniform standards for disclosure related to conflict of interest. However, the ICC Court has repeatedly made clear it is not bound by the IBA Guidelines. When parties agree to ICC Arbitration they implicitly accept that that the Court will apply the ICC Rules of arbitration. Therefore, it seems the utility of the IBA Guidelines is limited for the ICC.
An internal review of the ICC Court also revealed that there are some facts and circumstances which are not covered by IBA Guidelines but which may give raise to a successful challenge. In a small number of cases, the Parties referred to the IBA Guidelines in their arguments and in a few cases they were mentioned in relation to non-confirmation and challenges.
Recent Steps Towards Transparency
The criteria for the successful challenge of an arbitrator at the ICC Court are still unknown and far from clear. It remains to be seen whether the ICC will change its position in the future and possibly start publishing its decisions on challenges which would make lawyers’ work much easier and help to enhance the transparency of the ICC proceedings in general. Providing the Parties with an explanation of the ICC Court’s decision on this matter is a step in the right direction.
The most relevant provisions of the ICC Rules of Arbitration on this issue are found below.
- Nina Jankovic, Aceris Law SARL
Article 11: General Provisions
1) Every arbitrator must be and remain impartial and independent of the parties involved in the arbitration.
2) Before appointment or confirmation, a prospective arbitrator shall sign a statement of acceptance, availability, impartiality and independence. The prospective arbitrator shall disclose in writing to the Secretariat any facts or circumstances which might be of such a nature as to call into question the arbitrator’s independence in the eyes of the parties, as well as any circumstances that could give rise to reasonable doubts as to the arbitrator’s impartiality. The Secretariat shall provide such information to the parties in writing and fix a time limit for any comments from them.
3) An arbitrator shall immediately disclose in writing to the Secretariat and to the parties any facts or circumstances of a similar nature to those referred to in Article 11(2) concerning the arbitrator’s impartiality or independence which may arise during the arbitration.
4) The decisions of the Court as to the appointment, confirmation, challenge or replacement of an arbitrator shall be final, and the reasons for such decisions shall not be communicated.
5) By accepting to serve, arbitrators undertake to carry out their responsibilities in accordance with the Rules
Article 14: Challenge of Arbitrators
1) A challenge of an arbitrator, whether for an alleged lack of impartiality or independence, or otherwise, shall be made by the submission to the Secretariat of a written statement specifying the facts and circumstances on which the challenge is based.
2) For a challenge to be admissible, it must be submitted by a party either within 30 days from receipt by that party of the notification of the appointment or confirmation of the arbitrator, or within 30 days from the date when the party making the challenge was informed of the facts and circumstances on which the challenge is based if such date is subsequent to the receipt of such notification.
3) The Court shall decide on the admissibility and, at the same time, if necessary, on the merits of a challenge after the Secretariat has afforded an opportunity for the arbitrator concerned, the other party or parties and any other members of the arbitral tribunal to comment in writing within a suitable period of time. Such comments shall be communicated to the parties and to the arbitrators.