Careful what you write:
The impact of issue conflicts in International Commercial Arbitration
Dr Hamish Lal, Brendan Casey and Léa Defranchi, Akin Gump Strauss Hauer & Feld discuss the impact of issue conflicts in International Commercial Arbitration.
It seems as though arbitrators are starting to learn a lesson that expert witnesses in international arbitration have known for some time: be careful what you write. Historically, when referring to an arbitrator’s potential lack of independence or impartiality, one usually thought in terms of the arbitrator’s relationship with the parties, either personal or professional rather than a relationship to the subject matter of the dispute. However, an arbitrator’s views and thoughts as codified in published papers, articles, blogs, interviews or advocacy on an issue that is at the heart of the dispute can also raise justifiable doubts about the arbitrator’s ability to approach the dispute with an open mind and without unconscious bias.
The line between an arbitrator’s knowledge and familiarity with a particular issue (perceived to be desirable in sector-specific international commercial arbitration) and an arbitrator with, for practical purposes, a “closed mind” on a particular point of law is fine. One commentator has illustrated the dilemma that arises in the following terms:
On the one hand, experience in international public or private law is a threshold qualification for international adjudicators (whether they are selected by an international institution or the parties), but on the other hand, the fundamental unfairness is obvious when a party is faced with an adjudicator who has closed her mind on important issues in dispute.1
The term “issue conflict” refers to an arbitrator’s relationship with the subject matter(s) of the dispute which results in actual or apparent bias:
An “issue conflict” in arbitration describes the existence of actual or apparent bias on the part of the arbitrator stemming from his or her previously expressed views on a question that goes to the very outcome of the case to be decided. It denotes the arbitrator’s relationship to the subject matter of the dispute, and his or her perceived capacity to adjudicate with an open mind.2
Although guidance on independence and impartiality with respect to an arbitrator’s relationships with the parties or their counsel exists extensively, the same is not true with respect to an arbitrator’s relationship with the subject matter of the dispute. Many arbitral institutions do not adequately address the topic: for example, the LCIA, SCC, ICSID, and CIArb leave this issue unsettled and appear to defer to ‘soft law’, the common-law and/or lex arbitri. As a result, the users of international arbitration, in particular lay clients, are left with unsatisfactory ambiguities or a “sense of unease” with respect to an arbitrator’s independence and impartiality resulting from this relationship to an issue in dispute.
The 2014 IBA Guidelines, which are widely referenced “soft law” with respect to assessing conflicts of interest, have sought to codify (on the so-called “traffic light” system) potential conflicts of interest. With respect to issue conflicts, the IBA Guidelines contemplate three “issue-conflict” situations in the Lists:
- Article 4.1.1 (Green List): “The arbitrator has previously expressed a legal opinion (such as in a law review article or public lecture) concerning an issue that also arises in the arbitration (but this opinion is not focused on the case).”
- Article 3.1.5 (Orange List): “The arbitrator currently serves, or has served within the past three years, as arbitrator in another arbitration on a related issue involving one of the parties, or an affiliate of one of the parties.”
- Article 3.5.2 (Orange List): “The arbitrator has publicly advocated a position on the case, whether in a published paper, or speech, or otherwise” (emphasis added).
However, some have criticised that the IBA Guidelines favor simplicity and memorability over rigorous analysis thereby “over-simplifying” certain species of conflicts of interest, issue conflicts. Practically speaking, the issue conflict over-simplification has arguably allowed practitioners, arbitrators and institutions to avoid pro-active disclosure of a potential issue conflict by analogising to a situation falling under one of the traffic light categories (in particular the Green List classification of previous academic writings). That trend is changing.
It appears to be settled from the “jurisprudence” on the subject, mostly in terms of published investment arbitration awards, that a small number of academic publications on fleeting topics – without other circumstances – is unlikely to give rise to justifiable doubts about an arbitrator’s independence or impartiality. However, the same would not (and perhaps should not) be true when the writings in question evidence a deeply held view refined and strengthened over many years’ worth of writings.
When considering an arbitrator’s past publications, the fundamental question underlying concerns about issue conflicts remains: how does one distinguish between unobjectionable forms of predisposition and those triggering reasonable concerns about the lack of an open mind and bias? To be clear: this is not simply an issue plaguing arbitral institutions. The Court of Appeal in Halliburton Company v Chubb Bermuda Insurance Ltd & Ors has also grappled with this fundamental question and found that the relevant experience of an arbitrator is material to the risk of unconscious bias. The UK Supreme Court will be called upon shortly (later this year) to grapple with this question.
There remain differing views with respect to previous writings and the impact they may have on an arbitrator’s independence impartiality. Some commentators have attempted to draw a distinction between writing about legal issues and deciding cases as an arbitrator:
it can also be said that it is different to write a legal article or research piece about what one believes the law should be, than to approach a case as an arbitrator that should apply existing law as it is, rather than as what it should be.3
As the panel in Urbaser stated: “One of the main qualities of an academic is the ability to change his/her opinion as required in light of the current state of academic knowledge”.4
These comments have a logical pragmatism – for example, just because an arbitrator thought one way about a particular legal doctrine in the past does not mean they cannot now approach the same doctrine with an open mind. There are, however, complex factual questions in parsing between an innocuous academic or legal paper and “achieving academic recognition” on a particular subject through the articulation and publication of particular views. The practical difficulty often faced in arbitration is the lack of disclosure from the arbitrators (who having read the Notice for Arbitration and the Response are in a privileged and best position to know how many relevant academic papers or Awards have been written). In such circumstances, it seems unfair for the institutions and disqualifying bodies to place the higher burden on parties making a challenge and a low or no burden on arbitrators. Enhanced and pro-active disclosure from arbitrators would be one solution – but will institutions require it?
This article started with the premise that arbitrators are just now learning a lesson that expert witnesses in international arbitration have known for some time. In particular, expert witnesses are well aware that their previous writings can be used by an opposing party in an arbitration (in cross examination or argument) to draw a picture of an expert who is biased in favor of a party or a particular view, has in other cases expressed views which are contradictory to the views it is proposing in the current case, or that previous writings otherwise undermine the expert or its positions in the arbitration. It is curious that such a system exists to shed light on potential areas of bias (or conflicts of interest) for participants in an arbitration, but does not exist for the ultimate decision makers in international arbitration.
1 Joseph R. Brubaker, The Judge Who Knew Too Much: Issue Conflicts in International Adjudication, Berkeley Journal of International Law, Volume 26 Issue 1 Article 3 (2008).
2 Anthony Sinclair and Matthew Gearing, Partiality and Issue Conflicts, Transnational Dispute Management, Vol. 5, Issue 4 (July 2008).
3 Hernando Diaz-Candia, "Issue Conflict" in Arbitration as apparently [un]seen in 2011 by a U.S. Court in STMicroelectronics vs. Credit Suisse Securities, Arbitraje: Revista de Arbitraje Comercial y de Inversiones, Centro Internacional de Negociacion CIAMEN), IproLex 2012, Volume 5 Issue 1, p. 288.
4 Urbaser S.A. v. Argentine Republic, ICSID Case No. ARB/07/26, 12 August 2010, at para. 51.