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by the ICC’s International Court of Arbitration, the members of which are chosen by the ICC world council of business on the recommendation of the ICC Executive Board. On its website, the ICC describes itself as “the world business organization”, as “the voice of world business”, and as an organization that “speaks for world business whenever government make decisions that crucially affect corporate strategies and the bottom line.” ⁴³³ It is doubtful whether the ICC would remain completely neutral in appointing arbitrators of investment tribunals considering that the disputes arise between private business and sovereign states. Similarly, according to Article 6 the UNCITRAL Arbitration Rules, if three arbitrators are to be appointed, each party shall appoint one arbitrator. The two arbitrators thus appointed shall choose the third arbitrator who will act as the presiding arbitrator of the arbitral tribunal.

Where the two arbitrators have not agreed on the presiding arbitrator, the presiding arbitrator shall be appointed by the appointing authority. If the parties have not agreed on the choice of an appointing authority within 30 days after a proposal made has been received by all other parties, any party may request the Secretary-General of the Permanent Court of Arbitration to designate the appointing authority. Notably, the UNCITRAL Arbitration Rules imposing a greater discipline requiring that “the appointing authority shall have regard to such considerations as are likely to secure the appointment of an independent and impartial arbitrator”.

Furthermore, the question of unequal information may lead to “information asymmetries” between the disputing parties in selecting arbitrators. The disputing parties may have unequal access to both public and non-public information about potential arbitrators, which is seen as a highly valuable commodity possessed by law firms specializing in investment arbitration. ⁴³⁴ Law firms in possession of more non-public information about potential arbitrators, including knowledge about a potential arbitrator’s opinions about the interpretation of particular investment treaty provisions, would provide significant advantages to the represented disputing party, usually foreign investors.

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Arbitrators should be persons that may be relied upon to exercise independent and impartial judgment. The term independence suggests the absence of any connection, professional, financial or otherwise, with the disputing parties. As to the term impartiality, it suggests the absence of prejudice or bias.

The multiple roles played by investment arbitrators, however, lead to potential conflict of interest and thus pose a significant threat to their independence and impartiality. A majority of investment arbitrators also serve as counsels for investors in other investment arbitration cases. ⁴³⁵ It has become normal for investment arbitrators to be involved as counsel, advocate, or expert witness for investors in other pending cases. Arbitrators thus wear several hats simultaneously: arbitrator, expert and counsel. The multiple roles of arbitrators may encourage arbitrators and investors to form a community of interests. ⁴³⁶ It raises questions of due process and may have a negative impact on the equality of the disputing parties. For one thing, the legal opinion of a person acting as counsel for investors in one case would inevitably influence the legal stance of the same person acting as arbitrator in other cases. An arbitrator may be tempted, consciously or unconsciously, to adjudicate a case in favor of the interests of a client in another case he serves as counsel. Conflict of interest can thus arise when an arbitrator has ongoing interests relating to the same legal issue as counsel in another case. For another, arbitrators have a financial and career stake, including further appointment in future investment arbitration cases, in strengthening investor protection and in being friendly to investors. Since investment arbitration is ad hoc in nature, the appointment of arbitrators is one-off but not permanent. To increase the opportunity of reappointment, arbitrators in a particular case may not refrain from showing their preference for investment protection. Furthermore, unlike arbitrators in commercial arbitration where they may frequently serve as counsels for either the claimants or the respondents in other cases, arbitrators in investment arbitration are more likely to work as counsels for the claimant investors rather than for the respondent states in other cases.

However, under the existing investment arbitration rules, prohibitive or restrictive regulations on the multiple roles of investment arbitrators are missing. Arbitrators can

435 David Gaukrodger & Kathryn Gordon, Investor-State Dispute Settlement: A Scoping Paper for the Investment Policy Community, OECD Working Papers on International Investment, No. 2012/3, 2012, p. 44; Michael Waibel & Yanhui Wu, Are Arbitrators Political, ASIL Research Forum, UCLA, 5 November 2011, p. 28.

436 Pia Eberhardt & Cecilia Olivet, Profiting from Injustice: How law firms, arbitrators and financiers are fuelling an investment arbitration boom, Corporate Europe Observatory and the Transnational Institute, 2012, p. 43.

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freely act as counsel, advocate or expert in other cases without limitation. In spite that arbitration rules generally require arbitrators to disclose information that might give rise to justifiable doubts about their independence and impartiality, they do not describe in detail what needs to be disclosed. The disclosure is left to the arbitrators’

discretion. Failure of arbitrators to disclose relevant information does not automatically lead to disqualification. Even if arbitrators indeed disclose their multiple roles as legal counsel, advocate or experts in other cases, it does not necessarily provide sufficient grounds for challenging the qualification of arbitrators under the existing arbitration rules since the multiple roles played by arbitrators may involve different parties and different legal relationships.

Article 6(2) of the ICSID Arbitration Rules provides that each arbitrator shall sign a declaration disclosing (a) his past and present professional, business and other relationships (if any) with the parties and (b) any other circumstance that might cause his reliability for independent judgment to be questioned by a party. However, the ICSID Arbitration Rules contains no definition of the kind of relationships and the type of circumstances that should be disclosed by arbitrators. According to Article 9(4) of the Arbitration Rules, when a party proposes for disqualification of a minority of arbitrators, the other arbitrators of the tribunal shall promptly consider and vote on the proposal in the absence of the arbitrator concerned. If those arbitrators are equally divided, it is the Chairman of the ICSID Administrative Council who has to decide on a proposal to disqualify an arbitrator. Are an arbitrator’s multiple roles of counsel, advocate or expert in other cases a “relationship” or “circumstance” that needs to be disclosed? Do an arbitrator’s multiple roles of counsel, advocate or expert in other cases provide sufficient grounds for disqualification of the arbitrator? The ICSID Arbitration Rules provides no further specification on these questions.

Disclosure requirements by arbitrators are also found in other international arbitration rules. Article 11(2) and 11(4) of the ICC Arbitration Rules stipulates that the prospective arbitrator shall disclose in writing to the Secretariat any facts or circumstances which might be of such a nature as to call into question the Arbitrator’s independence in the eyes of the parties, as well as any circumstances that could give rise to reasonable doubts as to the arbitrator’s impartiality. The decisions of the Court as to the appointment or challenge of an arbitrator shall be final, and the reasons for such decisions shall not be communicated. Article 11 of the UNCITRAL Arbitration Rules provides that when a person is approached in connection with his or her

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possible appointment as an arbitrator, he or she shall disclose any circumstances likely to give rise to justifiable doubts as to his or her impartiality or independence. An arbitrator, from the time of his or her appointment and throughout the arbitral proceedings, shall without delay disclose any such circumstances to the parties and the other arbitrators unless they have already been informed by him or her of these circumstances. Where a party challenges an arbitrator, it shall be decided by the appointing authority.

These arbitration rules do not specify in detail the type of information or circumstance that needs to be disclosed by arbitrators. More importantly, the legal consequence of failure to satisfy the disclosure requirements is not stipulated in these arbitration rules. It seems that the disclosure is left to the arbitrators’ discretion and that failure of arbitrators to disclose relevant information does not automatically lead to disqualification. Even if arbitrators choose to disclose their multiple roles as legal counsel, advocate or experts in other cases, it does not necessarily provide sufficient ground for the disqualification of those arbitrators under the existing arbitration rules.

Although dealing with similar legal issues, acting as arbitrator in a case and acting as counsel in another case might be considered as relating to different parties and thus having no relationship to the parties he is adjudicating as arbitrator. Yet it can be reasonably doubted that an arbitrator may not be able to maintain an entirely unbiased approach if he acts as counsel in other cases involving similar legal issues. Therefore, the existing investment arbitration rules are inadequate in avoiding arbitrators’

conflict of interest.

To illustrate, in Gallo v. Canada, an investment arbitration case proceeded under the UNCITRAL Arbitration Rules, the claimant challenged the respondent-appointed arbitrator on the ground that the arbitrator was advising Mexico in another case. The former deputy Secretary-General of ICSID performing the Secretary- eneral’s functions, as the appointing authority, denied the challenge. It was ruled that “as things stand today, and irrespective of the advisability of such a situation, one may as a general matter be simultaneously an arbitrator in one case and a counsel in another.

There is no need to disavow the possibility of assuming either role.” ⁴³⁷ The multiple roles of arbitrators and counsels in different cases have been acknowledged without condemnation in the practice of investment arbitration.

The absence of regulation of dual arbitrator-counsel roles in investment arbitration

437 Vito G. Gallo v. Government of Canada, Decision on the Challenge to Mr. J. Christopher Thomas, QC, 14 October 2009, para. 29.

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practice is in stark contrast to the practice of the ICJ and the WTO. In its Practice Direction VII, the ICJ considers that it is not in the interest of the sound administration of justice that a person sits as judge ad hoc in one case who is also acting or has recently acted as agent, counsel or advocate in another case before the Court. Accordingly, the ICJ has directed that parties, when appointing a judge ad hoc, should refrain from choosing persons who are acting as agent, counsel or advocate in another case before the Court or have acted in that capacity during the three years preceding the date of the nomination. Furthermore, parties should likewise refrain from designating as agent, counsel or advocate in a case before the Court a person sitting as a judge ad hoc in another case before the Court. Practice Direction VIII further provides that a person who has been a member of the court, a judge ad hoc, registrar, deputy-registrar, or high official of the Court should not, for a period of three years after leaving his or her position, be designated as agent, counsel, or advocate in a case before the Court. ⁴³⁸

With respect to the WTO system, the Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of Disputes was adopted to preserve the integrity and impartiality of the dispute settlement proceedings. Each covered person, including members of ad hoc WTO dispute settlement panels, the Standing Appellate Body, arbitrators and experts participating in the dispute settlement mechanism as well as members of the Secretariat, is required to disclose the existence or development of any interest, relationship or matter that that person could reasonably be expected to know and that is likely to affect, or give rise to justifiable doubts as to, that person’s independence or impartiality; and to take due care in the performance of their duties to fulfill these expectations, including through avoidance of any direct or indirect conflicts of interest in respect of the subject matter of the proceedings. Moreover, the disclosure requirement is accompanied by an Illustrative List of Information To Be Disclosed (Annex 2), which deserves full quotation here:

Each covered person, as defined in Section IV:1 of these Rules of Conduct has a continuing duty to disclose the information described in Section VI:2 of these Rules which may include the following:

(a) financial interests (e.g. investments, loans, shares, interests, other debts);

business interests (e.g. directorship or other contractual interests); and property interests relevant to the dispute in question;

438 See Practice Directions of the ICJ (as amended on 20 January 2009 and 21 March 2013), available at:

http://www.icj-cij.org/documents/index.php?p1=4&p2=4&p3=0.

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(b) professional interests (e.g. a past or present relationship with private clients, or any interests the person may have in domestic or international proceedings, and their implications, where these involve issues similar to those addressed in the dispute in question);

(c) other active interests (e.g. active participation in public interest groups or other organisations which may have a declared agenda relevant to the dispute in question);

(d) considered statements of personal opinion on issues relevant to the dispute in question (e.g. publications, public statements);

(e) employment or family interests (e.g. the possibility of any indirect advantage or any likelihood of pressure which could arise from their employer, business associates or immediate family members). ⁴³⁹