Three Approaches to Challenges of ICSID Arbitrators for Manifest Lack of Reliability for Independent Judgment

Abstract

Article 14(1) of the ICSID Convention sets forth certain qualities that all ICSID arbitrators must possess. They must, in the words of Article 14(1), be “persons of high moral quality and recognized competence in the fields of law, commerce, industry or finance, who may be relied upon to exercise independent judgment.” In accordance with Article 57 of the ICSID Convention, a party may propose the disqualification of an arbitrator—or in briefer terms, challenge him or her— “on account of any fact indicating a manifest lack of the qualities required” by Article 14(1). Pursuant to Article 58 of the Convention, the decision on a proposal to disqualify an arbitrator will be taken by the other members of the tribunal, unless they are equally divided or the proposal relates to a sole arbitrator or the majority of the arbitrators, in which cases the decision will be taken by the Chairman of the Administrative Council of ICSID (the President of the World Bank). Parties to ICSID Convention arbitration cases have frequently set in motion the challenge procedures of Articles 57 and 58. Proposals to disqualify arbitrators have been made in over 100 such cases. About a quarter of the disqualification proposals have been met by resignations of the challenged arbitrators. Almost all the other proposals have been rejected by decision of the unchallenged arbitrators or of the Chairman of the Administrative Council.The decided proposals all apparently sought disqualification owing to a supposed manifest lack of reliability for independent judgment. The decisions themselves, however, have taken different approaches to the standard to be applied for disqualification, that there be a fact indicating a manifest lack of the required quality.Three main approaches can be discerned from the cases.They are examined in this article through the lenses of the individual decisions that inaugurated or prominently reinforced the respective approaches.Albeit in varying degrees, the approaches identified with these decisions have each highlighted a weakness of the disqualification procedures of the ICSID Convention, that they may less adequately guarantee arbitral independence than the corresponding procedures of leading international commercial arbitration systems. A concluding part of the article considers the scope for addressing the problem through amendments of the ICSID Arbitration Rules.