ICC Canada International Arbitration Conference Arbitrator Independence, Impartiality and Disclosure Re-visited Moderator: Panelists: Alison G. FitzGerald Norton Rose Fulbright Canada LLP Andrea Carlevaris, J. Brian Casey, Ian Laird, Michelle MacPhee 14 October 2016
Introduction On February 12, 2016, the ICC International Court of Arbitration adopted a Guidance Note for the disclosure of conflicts by arbitrators. The Note has been incorporated into the Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration under the ICC Rules of Arbitration ( ICC Note ). Upon adoption, the President of the ICC Court explained that the Guidance Note: aims at ensuring that arbitrators are forthcoming and transparent in their disclosure of potential conflicts ; and forms part of our overarching strategy to enhance the transparency and predictability of the arbitration process in response to users needs The starting premise is the following: The parties have a legitimate interest in being fully informed of all facts or circumstances that may be relevant in their view in order to be satisfied that an arbitrator or prospective arbitrator is and remains independent and impartial or, if they so wish, to explore the matter further and/or take the initiatives contemplated by the Rules. (ICC Note, para. 17) 2
The duty to make reasonable enquiries When completing his or her Statement and identifying whether he or she should make a disclosure, both at the outset of the arbitration and subsequently, an arbitrator or prospective arbitrator should make reasonable enquiries in his or her records, those of his or her law firm and, as the case may be, in other readily available materials. (ICC Note, para. 23) An arbitrator is under a duty to make reasonable enquiries to identify any conflict of interest, as well as any facts or circumstances that may reasonably give rise to doubts as to his or her impartiality or independence. Failure to disclose a conflict is not excused by lack of knowledge, if the arbitrator does not perform such reasonable enquiries (IBA Guidelines, GS7(d)) In order to satisfy their duty of disclosure under the Guidelines, arbitrators are required to investigate any relevant information that is reasonably available to them. (IBA Guidelines, Explanation to GS7(d)) A party shall inform an arbitrator, the Arbitral Tribunal, the other parties and the arbitration institution or other appointing authority (if any) of any relationship, direct or indirect, between the arbitrator and the party (or another company of the same group of companies, or an individual having a controlling influence on the party in the arbitration), or between the arbitrator and any person or entity with a direct economic interest in, or a duty to indemnify a party for, the award to be rendered in the arbitration. The party shall do so on its own initiative at the earliest opportunity. (IBA Guidelines, GS7(a)) In order to comply with General Standard 7(a), a party shall perform reasonable enquiries and provide any relevant information available to it. (IBA Guidelines, GS7(c)) In order to satisfy their duty of disclosure, the parties are required to investigate any relevant information that is reasonably available to them. In addition, any party to an arbitration is required, at the outset and on an ongoing basis during the entirety of the proceedings, to make a reasonable effort to ascertain and to disclose available information that, applying the general standard, might affect the arbitrator s impartiality or independence. (IBA Guidelines, Explanation to GS7(c)) 3
Disclosure Issues in Large Firms For the scope of disclosures, an arbitrator will be considered as bearing the identity of his or her law firm, and a legal entity will include its affiliates. In addressing possible objections to confirmation or challenges, the Court will consider the activities of the arbitrator s law firm and the relationship of the law firm with the arbitrator in each individual case. Arbitrators should in each case consider disclosing relationships with another arbitrator or counsel who is a member of the same barristers chambers. Relationships between arbitrators, as well as relationships with any entity having a direct economic interest in the dispute or an obligation to indemnify a party for the award, should also be considered in the circumstances of each case. (ICC Note, para. 24) The arbitrator is in principle considered to bear the identity of his or her law firm, but when considering the relevance of facts or circumstances to determine whether a potential conflict of interest exists, or whether disclosure should be made, the activities of an arbitrator s law firm, if any, and the relationship of the arbitrator with the law firm, should be considered in each individual case. The fact that the activities of the arbitrator s firm involve one of the parties shall not necessarily constitute a source of such conflict, or a reason for disclosure. Similarly, if one of the parties is a member of a group with which the arbitrator s firm has a relationship, such fact should be considered in each individual case, but shall not necessarily constitute by itself a source of a conflict of interest, or a reason for disclosure. (IBA Guidelines, GS6(a)) Although barristers chambers should not be equated with law firms for the purposes of conflicts, and no general standard is proffered for barristers chambers, disclosure may be warranted in view of the relationships among barristers parties or counsel. (IBA Guidelines, Explanation to GS6(a)) 4
Disclosure Conflict An arbitrator or prospective arbitrator must disclose in his or her Statement, at the time of his or her appointment and as the arbitration is ongoing, any circumstance that might be of such a nature as to call into question his or her independence in the eyes of any of the parties or give rise to reasonable doubts as to his or her impartiality. Any doubt must be resolved in favour of disclosure. (ICC Note, para. 18) A disclosure does not imply the existence of a conflict. On the contrary, arbitrators who make disclosures consider themselves to be impartial and independent, notwithstanding the disclosed facts, or else they would decline to serve. (ICC Note, para. 19) It follows from General Standards 1 and 2(a) that an arbitrator who has made a disclosure considers himself or herself to be impartial and independent of the parties, despite the disclosed facts, and, therefore, capable of performing his or her duties as arbitrator. Otherwise, he or she would have declined the nomination or appointment at the outset, or resigned. (IBA Guidelines, GS3(c)) Any doubt as to whether an arbitrator should disclose certain facts or circumstances should be resolved in favour of disclosure. (IBA Guidelines, GS3(d)) Standard 3(d) provides that any doubt as to whether certain facts or circumstances should be disclosed should be resolved in favour of disclosure. However, situations that, such as those set out in the Green List, could never lead to disqualification under the objective test set out in General Standard 2, need not be disclosed.. (Explanation to GS 3(a)). Situations not listed in the Orange List or falling outside the time limits used in some of the Orange List situations are generally not subject to disclosure. However, an arbitrator needs to assess on a case-bycase basis whether a given situation, even though not mentioned in the Orange List, is nevertheless such as to give rise to justifiable doubts as to his or her impartiality or independence. Because the Orange List is a non-exhaustive list of examples, there may be situations not mentioned, which, depending on the circumstances, may need to be disclosed by an arbitrator. (IBA Guidelines, Part 2, para. 6) 5
Plurality of Standards for Disclosure and Independence An arbitrator or prospective arbitrator must disclose in his or her Statement, at the time of his or her appointment and as the arbitration is ongoing, any circumstances that might be of such a nature as to call into question his or her independence in the eyes of any of the parties or give rise to reasonable doubts as to his or her impartiality.... (ICC Note, para. 18) In the event of an objection or a challenge, it is for the Court to assess whether the matter disclosed is an impediment to service as arbitrator. Although failure to disclose is not in itself a ground for disqualification, it will however be considered by the Court in assessing whether an objection to confirmation or a challenge is well founded. (ICC Note, para. 19) If facts or circumstances exist that may, in the eyes of the parties, give rise to doubts as to the arbitrator s impartiality or independence, the arbitrator shall disclose such facts or circumstances to the parties, the arbitration institution or other appointing authority (if any, and if so required by the applicable institutional rules) and the co-arbitrators, if any, prior to accepting his or her appointment or, if thereafter, as soon as he or she learns of them. (IBA Guidelines, GS 3(a)) An arbitrator shall decline to accept an appointment or, if the arbitration has already been commenced, refuse to continue to act as an arbitrator, if he or she has any doubt as to his or her ability to be impartial or independent. (IBA Guidelines, GS 2(a)). The same principle applies if facts or circumstances exist, or have arisen since the appointment, which, from the point of view of a reasonable third person having knowledge of the relevant facts and circumstances, would give rise to justifiable doubts as to the arbitrator s impartiality or independence,... (IBA Guidelines, GS 2(b)). Doubts are justifiable if a reasonable third person, having knowledge of the relevant facts and circumstances, would reach the conclusion that there is a likelihood that the arbitrator may be influenced by factors other than the merits of the case as presented by the parties in reaching his or her decision. (IBA Guidelines, GS 2(c)). 6
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