Social Media and Arbitration Conflicts of Interest: A Challenge for the 21st Century
Section 3.3.6 of the IBA Guidelines on Conflicts of Interest in International Arbitration advise that when a “close personal friendship exists between an arbitrator and counsel of one party, as demonstrated by the fact that the arbitrator and the counsel regularly spend considerable time together unrelated to professional work commitments or the activities of professional associations or social organizations,” the arbitrator should disclose the relationship. This advice has hardly proved controversial — no doubt in part because the Guidelines are flexible, and designed to “be applied with robust common sense and without pedantic and unduly formalistic interpretation.” (IBA Guide [...]
Third-Party Funding in Arbitration: Innovations and Limits in Self-Regulation (Part 2 of 2)
Yesterday’s post set the stage by describing the main provisions of a new voluntary Code of Conduct for “funding of resolution of disputes within England and Wales,” released in November 2011. Today’s post examines criticisms of that initiative from several corners, and notes important questions that persist in the arbitration arena, including issues surrounding the obligations of disclosure.
Despite the novelty and best intentions of the U.K. initiative, the Code has been strongly criticized both for its non-binding character and its lack of detail. Both the U.S. Chamber of Commerce’s Institute for Legal Reform (“ILR”) and the European Justice Forum (“EJF”) have expressed [...]
Third-Party Funding in Arbitration: Innovation and Limits in Self-Regulation (Part 1 of 2)
The use of third-party funding for international arbitration has been growing for several years, and its potential benefits and risks have received increasing attention from the arbitration community. The November 2011 release in the United Kingdom of a Code of Conduct for funders has galvanized the debate. The Code is the first-ever attempt at voluntary self-regulation by litigation funders, and could apply not just to third-party funders based in England and Wales, but arguably also to other funders of arbitrations seated in those jurisdictions. The Code has been welcomed as an innovative attempt to impose restraints on funding practices that otherwise raise significant ethical concerns [...]
The Unavoidability of Uncertainty: One Lesson from the Recent U.S. Court Ruling in Argentina v. BG Group
It has become fashionable in recent years, each time an ICSID annulment decision is released that takes issue with the procedures or reasoning of an ICSID tribunal, for commentators to bemoan the lack of certainty, predictability and finality that this reflects in the ICSID system for adjudicating investment treaty disputes between investors and host States. Some commentators urge a return to greater use of ad hoc UNCITRAL arbitration, or arbitration before institutions other than ICSID, to avoid the perceived vagaries of the ICSID annulment process. Yet commentators often forget that these alternatives carry their own risks of uncertainty, inherent in the national court review process tha [...]
Can States Assert Counterclaims Against Investors in BIT Proceedings?
The recent decision in Spyridon Roussalis v. Romania (ICSID Case No. ARB/06/1) is prompting renewed debate over whether ICSID arbitration, now the leading mechanism for investors to pursue treaty-based claims against host States, may also be used by those States to assert related counterclaims against the investors, allowing all such claims to be settled in a single forum. At issue are certain fundamental questions about the relationship between the ICSID Convention and investment treaties as an extrinsic source of consent to arbitrate.
Article 46 of the ICSID Convention expressly requires a tribunal, if requested by a party, to determine “counterclaims arising directly out of the subject [...]
Reflections on the LCIA Arbitrator Challenge Digests
The recently published abstracts of LCIA Court decisions on arbitrator challenges between 1996 and 2010 (Arbitration International, vol. 27, no. 3, 2011) make surprisingly interesting reading. They are an important reminder of the types of egregious arbitrator conduct that, while fortunately rare, can give the system a bad name unless promptly corrected. At the same time, the abstracts also shed light on the lengths to which parties sometimes will go in launching challenges, often for tactical reasons, on grounds that are manifestly unfounded.
Of the 28 published abstracts, six cases were considered to be sufficiently problematic to satisfy the LCIA challenge standard, involving circumst [...]
