A Study on the Impartiality and Duty of Disclosure of Arbitrators in ICSID Arbitration

Abstract

Purpose – The purpose of this study is to suggest implications after analyzing Eiser v. Spain, and the impartiality and duty of disclosure of arbitrators in ICSID arbitration. Design/Methodology/Approach – In this study, in analyzing Eiser v. Spain, the literature analysis was mainly conducted using domestic and foreign related literature and Internet data. Findings – In 2017, Spain was ordered to pay Eiser €128 million on account of its failure to afford fair and equitable treatment. This award was subsequently annulled because the claimant-appointed arbitrator failed to disclose a professional relationship with the claimants’ damages expert, which led to, inter alia, the tribunal being improperly constituted. The full costs of the proceedings, including Spain’s legal fees and expenses, were shifted to Eiser. Research Implications – The Eiser Annulment Decision also casts doubt on the effectiveness of disclosure duties. Undisputedly, arbitrators must be neutral and must disclose facts or circumstances that may cloud their judgment. Many codes and rules specify that this duty is continuous. Yet, the vast majority of these instruments envisage no consequence for non-disclosure. This, coupled with the fact that arbitrators enjoy immunity from legal process pursuant to Article 21 of the ICSID Convention, leaves room for nonchalance when disclosing potential conflicts.