THE ETHICS OF INTERNATIONAL ARBITRATORS A COMPARATIVE REVIEW
In practice, the convention requires the contractual states to implement awards reached on this basis irrespective of the place where the award is made. International arbitral awards thus hold more legal force when viewed in comparison with domestic led arbitration. For example if a party brings an issue decided by an international arbitral process to court, such a court is expected to hold a stay to the proceedings.
The ICC rules of arbitration remain universal across nations, which have ratified the international law on arbitration. However, most states run their own national arbitration programs as reflected by the various institutions plying business in the different countries. Apart from few exceptions, most national arbitral processes and institutional mechanisms, the ICC wording of requirements appears to be the dominant reference point. In ICC arbitral proceedings, parties making reference to ICC Arbitration are required to stipulate the arbitration clause they require to use, the number of arbitrators, the language, and the location of the process.
Article 7 of the ICC Arbitral process clearly stipulates the need to have a fair, independent and impartial conduct from arbitrators. Towards this end, before an arbitral tribunal commences proceedings, it is required that the arbiters sign a form where they disclose any information, which might lead to questioning of impartiality and independence. On the basis of Article 22, when the arbitral panel is satisfied that the parties have had a far opportunity to present their cases, the arbitral tribunal closes proceedings. After this, no party is allowed to make further submissions unless the arbitral tribunal requests for additional information.
IBA has offered important guidelines regarding the conduct of arbitration. This is especially the case in reference to commercial issues. As indicated by the 2003 draft of rules, IBA considers conflict of interest as a serious cause for concern affecting impartiality and independence of arbitral processes. In 2004, IBA Council approved the guidelines for use across the globe. Towards universalizing the guidelines, they were translated to major world languages.
The ABA rules have also paid close attention to the need for fairness in terms of exercising of good faith while arbitrating on issues. Towards this end, parties are allowed free determination of arbitrators and procedures, arbiters are expected to be impartial, and independent, and the arbitral process is require to be carried on confidentially. However, in the recent past, it emerged that the 1997 code was irresponsive to emerging needs in arbitration necessitating a review on the Code of Ethics for Arbitrators in Commercial Disputes. The revised code clearly indicates who decides which dispute can be arbitrated, what should be disclosed, the remedies available to parties, and how arbitration is initiated.
The 1985 UNCITRAL Model Law on International Commercial Arbitration was designed to offer assistance to states towards introducing reforms and modernizing laws and arbitral procedures with a view to incorporating the needs and features of arbitration in international commercial. The law coves all the stages in arbitration from the time of commencement to the moment of conclusion. The law is a big step on international arbitration as it captures consensus on a host of issues. Its acceptance y all states which have different economic systems is testament to this.
The different national laws develop to assist arbitration processes heavily follow the international ones. However, there are instances, which necessitated the adoption of deviations from the international norms. As this paper proceeds, it is found that countries like Singapore run two regimes of arbitration one caters for domestic issues while the other addresses international disputes. Such deviations do not serve as a red flag since the choice of the regime to use in the determination of a case rests with the parties to a dispute.
Background
Arbitration has gained prominence thanks to the increasing nature of close border associations between countries. With an exception of few countries or business entities, the preferable choice to deal wit emerging disputes remains arbitration. This is primarily the case due to the fact that there are certain variations from country to country which may undermine the achievement of a deal agreeable to parties to a dispute. It is also a fact that with the much touted discrepancies or variations in law, suing another party may not be addressed adequately by a given country code of conduct. This, coupled with other reasons underlies why arbitration offers the best avenue to conflicting parties over various aspects. In a nutshell, the uncertainty in law, legal and business cultures, and language differences sum up the difficulties which may serve to undermine settlement of dispute through the use of the court normal process. On the converse, arbitration offers the benefits of a relatively affordable and expeditious mechanism to solve a dispute in a neutral location in which case proceedings are carried out in a manner familiar to established arbitration rules. Further to this, the arbitration route accords parties to a dispute the chance to select the arbitrators, the arbitration tribunal, and in some instances the arbitrations rules and regulations.
Ad hoc arbitration has grown in stature partly due to the many benefits associated with the mode of arbitration. The fact that parties to a dispute are expected to decide several aspects concerning the composition and the running of the tribunal leads to the likelihood of having certain disagreements. In such an event, parties to a dispute can agree to designate an institutional provider to act as the appointing authority. The parties to an ad hoc process also remain at liberty to seek the services of institutional arbitration shall need arise in the course of the arbitration process.
Introduction
The world has undergone many changes due to globalization and its effects. The growth of trade and commerce between states is a pointer to this phenomenon. This has meant that different nationals from separate countries may interact either at a personal or professional level. Such interaction may further lead to transactions of a business nature. From such business transactions, issues are bound to rise. Due to differences in country judicial and dispute settlement mechanisms, it is in the interests of the arties involved to find a cheaper and convenient option to tackle their problem. It is not surprising that arbitration emerges to account for these demands. It should also be noted that states as entities or companies are fond in similar situations leading to the need for arbitration processes.
Arbitration is carried out according to different codes of conduct. Most of the different institutions and national arbitral mechanisms borrow from the New York Convention on arbitration in the way the arbitral process is conducted. This paper examines the different institutional frameworks of arbitration, different countries arbitration procedures, and the obligations of arbitrators. The paper finally concludes that there are no major differences in the codes of conduct and remarks that the need to have a uniform arbitral code of conduct is of insurmountable value. However, this should apply to international arbitration.
Sources of Arbitrators obligations
There are different sources, which offer prescriptions on the ethical obligations. In the recent times, various groups which offer expert services in the field have come up with different codes of conduct. These codes of conduct have been supplemented by the development of arbitral rules governing the selection and procedural matters. Complication emerges due to the fact that different sources lack uniformity in terms of procedural issues as provided for by different codes. This implies that there are a good number of sources of obligations, ranging from institutional to national sources consequently, this paper examines the different institutional and national sources of arbitration conduct.
Ethical codes
All arbitration institutions have adopted certain codes governing their ethics in regards to the arbitral process. The AAAABA Code of Ethics comes to the fore. A number of institutions and nations in guiding the arbitral process have adopted this code. For instance, Singapore International Arbitration Centre, the Milan Chamber of National and International Arbitration have appended these codes into their arbitral guides. Some institutions demand compliance to the obligations set their codes while others leave it to the parties to a dispute to decide. Codes are wide ranging and may be adopted by institutions, national laws, international conventions and courts.
Institutional Arbitration Rules
All institutions have codes of ethics, which govern arbitral procedures however, some institutions may not have the codes fully developed though they have rules upon which they anchor their processes. Most of the institutional rules require that impartiality be maintained. Arbitration institutions are required to enforce all arbitral rules.
The ICC Ethics
The ICC Court made a decision that from august of 2009 all prospective arbiters should disclose information regarding their availability. Further, the arbitrators should comply with the revised ICC Arbitrator Statement of Acceptance, Availability and Independence. In this regard, arbitrators are expected to give an outline of their schedule capturing all their pending cases in the current or future time. This should equally reflect the position held whether, as counsel, as co-arbitrator, as sole arbitrator, as a chair, or as an assistant in any professional capacity, which holds the potential of influencing the proposed arbitral process.
In addition to the above requirements, it is a requirement that prospective arbitrators confirm, beside other issues, that they will commit time to the arbitral process. They should also guarantee diligent and efficient execution of duties assigned in accordance with the set time lines as stipulated by the ICC Rules. This indicates that the ICC aims at offering encouragement to prospective arbitrators to be more considerate on their availability before committing or accepting offers to officiate in dispute resolution. This underscores the pursuit of ensuring speedy and expeditious handling f arbitration process in the dispensation of justice.
The ICC is requires timely executions of disputes. On this basis, it sets time limits, which if not followed fines are imposed. The potential to be penalized is presented to arbitrators as a measure to underscore the severity of the offence. This new measure is of great value is so far as it allows for a timely execution of cases.
ICSID on arbitrator independence
Arbitrator independence in reference to ICSID proceedings require that arbitrators are free to exercise impartiality and independence in drawing conclusions. The ways in which these principles vary from the rest remain rather ambiguous as they basically, underscore the same requirements. This view is taken in reference to the principle of impartiality and independence. The disclosure requirement applies through the requirement of passing information, which may undermine the impartiality of the arbitral process. This principle is as the ICC Rule and all the other institutions captured in this paper. In reference to the removal of an arbitrator, the ICSID Convention requires that circumstances must indicate a manifest lack of necessary qualifications to continue serving the arbitral process. The ICSID Convention runs into criticism based on the fact that, arbiter challenges are determined and resolved by the other remaining arbitrators. This may lead to the influence of cronyism in arbitral processes.
London Court of International Arbitration Rules (LCIARules)
Article 14 provides that parties to a dispute may make an agreement on how to conduct their arbitral proceedings. The article further gives encouragement to the parties to do this. However, consistency to arbitral tribunal general guidelines is to be followed at all times. The requirement to remain fair by acting impartially and independently must for instance be observed. Equal opportunity is to be given to parties to a dispute to submit their cases. He decision on the procedures to e used during the arbitration process should reflect the prevailing circumstances in reference to arbitration. Towards this end, delay and other engagements, which may derail the process, must be discouraged. Agreements by parties concerning the arbitration procedures and the rules governing operations of the arbitral process must be written down and be availed to relevant authorities when demanded.
The Internal Rules of the European Court of Arbitration
Sole arbitrator
Traditionally, in any arbitration process, it is usually required that three arbitrators are appointed. In cases of two parties to a dispute, the contending parties appoint one arbitrator each and the chairing body appoints the remaining. This implies that this mechanism is limited to cases, which involve only two parties. This implies that when there are more parties than two, a given group must agree to appoint one arbitrator among them if the tribunal is to take off. However, the parties may decide to appoint more than the set number. In case of a disagreement, the European Court of Arbitration has the responsibility of appointing a sole arbitrator.
Time to decide
Time is of great value in arbitrating cases and the European Court of Arbitration has taken note of this fact. Time is important for the innocent party. The set rules require that the arbitrator must give a decision within nine months from the time of commencement of the arbitration process. This term can only be extended two times only for a maximum period of three months. It should be noted that the extension must be warranted and justified if it is to be given. However, in cases of more complex issues, the arbitration time may receive a further extension to facilitate an amicable conclusion of the matter. Ay arbitration process conducted based on these rules is referred as A Sole Arbitrator who issues an award in duration of nine months.
Constructive Dialogue
While conducting the arbitral process, the rules demand that the arbitrator should avoid distancing the self from the parties to a dispute. This calls on the arbitrator to initiate dialogue among or between parties. This is achieved through presenting questions before the parties with a view to getting a clarification of the submissions and allegations from the disputing parties. Submissions and allegations should be taken and documentary or other acceptable forms of evidence may be presented.Rules of Evidence
The rule on evidence allow parties to a dispute to be informed how evidence will be presented and heard before the arbitral pane. This is done way ahead before an arbitral process begins so as to allow the parties time to decide whether to engage the services of arbitration or not. This primarily outlines how evidence is used in detail. In cases where there is a three member panel, the chairman has the opportunity to make a ruling concerning procedural issues in advance with prior consent of the other two arbiters. The Arbitration Act of 1996 of the UK, section 33 makes it clear that the circumstances surrounding arbitration shall play a key role in procedure determination.
National law
National arbitration laws also make a useful contribution to the arbitral process in regards to the obligations of arbiters. There are minor discrepancies, which comes out clearly as discussed below. Towards the application of the various national provisions, the courts have been playing a great role in developing international arbitration. Just as in the case of institutional focus, national law as also zeroed in on the independence and the impartiality principle.
Singapore
In Singapore, two legal regimes guide the conduct of arbitral processes. In case the arbitration seat is in Singapore, the Arbitration Act (Cap. 10) or the International Arbitration Act (Cap. 143A) regulates the conduct of arbitration proceedings. On the other hand, Domestic Arbitration is under the governance of the Arbitration Act, which took effect on 1 March 2002. The Act applies in any arbitral process taking place in Singapore and in place where the International Commercial Arbitration Act does not apply. The Arbitration Act was repealed to strike alignment with the UNCITRAL Model Law on International Commercial Arbitration. However, IAA applies to all international matters or disputes whose parties are foreigners.
The main distinction between the two regimes rests on the degree to which courts can intervene in the arbitration processes. In reference to the international arbitration cases, courts can only interfere in a restricted and limited nature to instances expressly captured by the law. On the other hand, the arbitration law gives allowance to the parties to revert to courts if need arises to appeal against an award. The Act equally allows for seeking court guidance on sticky issues wile the arbitration process is in progress. This affects the rights of the parties in substantial ways. However, parties to a dispute remain free to make choices regarding the regime preferable to them and may select between the two depending on their agreement.
Conduct of Arbitration
Arbitration in Singapore is open to both ad hoc and institutional arbitral processes. The Singapore Arbitration Centre (SIAC) carries out its arbitral processes using its own rules relating to arbitration. These rules are however adopted by parties engaged in a dispute. The UNICTRAL Rules are the ones, which in most instances take precedence in arbitral processes.
The SIAC has a panel of arbitrators who are accredited. These arbitrators are a composition of a regional panel made up of experts. It is from this panel that arbitrators are appointed to spearhead arbitral cases. For ad hoc processes, the SIAC appoints the arbiters to aid the process. The SIAC also guide the management of finances, administration, and provision of logistic facilities towards aiding arbitral processes.
In cases where SIAC rules of conduct apply, parties to the dispute are required to pay management fees. However, no separate fee is paid in regards to the appointment of arbiters. In reference to cases, which fall outside the SIAC rules, in which case SIAC is only requested to appoint arbiters, an appointment fee applies. Management fees are pegged on the level of a claim or counterclaim. The management fees are fixed and do not depend on the claim level.
Parties remain at liberty to decide the number of arbitrators, in the event that there is disagreement on the number of arbitrators, a sole arbiter shall be appointed. There is no limit on the number of arbiters however like having odd or even numbers. In cases of any disagreements on matters relating to procedure, the Deputy Chairman of SIAC may assist upon request by the parties involved.
Orders and directions issued by a tribunal whether under the Arbitration Act or the International Arbitration Act, their enforceability rests with the permission of the High Court. Whenever lave is granted by the court, judgment is entered in reference to the orders or directions. This implies that the powers conferred on arbitrators by the Arbitration Act or the IAA is exercised by the High Court. This means that parties demanding an expeditious implementation of an order or direction can make an application to either the court or the tribunal. Certain orders like injunctions should ideally be sought from the courts. In cases dealt earlier by the court but under a tribunal, the arbitral orders take precedence.
The statutory time limit a tribunal is required to take in arriving at an award is not specified. This is the case both in regards to the arbitration Act and in the International Arbitration Act. In reference to the Arbitration Act, the court may extend the arbitration time depending on the requests of the concerned parties. This, however is done if all available avenues of the arbitration process have been used towards finding additional time. Further, the court ca only grants extra time if it is satisfied that by denying such a request, great injustice may occur. On the other hand, the SIAC Rules demand that a tribunal concludes its proceedings and delivers an award before the lapse of forty-five days. The only exception to this time limit can only be made if parties agree in favor of an extension. Just as it is the case in most instances, the arbitral award must be in writing with appended signatures by the arbitrators. in reference to the International Arbitration Act the requirement is that the majority of the arbitrators sign the award. Reasons for omitting other arbitrators signatures must however be clarified. Te award should be specific and details like time of agreement and place of arbitration must be pointed out. In instances where the SIAC Rules are used, the award is delivered to the office of the registrar of the SIAC body. The SIAC designs authentic copies of the award and transmits them to each party in a dispute. This transmission is done after the parties have made all payments due to the process. Once made, an award remains valid and binding to the parties involved. As thus, no further action is required to give effect to it. However, the law offers an avenue to aggrieved parties to challenge awards if they think injustices has been committed. However, parties are expected to voluntarily adhere to the award, if a party fails the award is enforced by the courts in Singapore.
Appeal Against the Award
An appellate tribunal is in place to receive appeals based on awards by tribunals. Legally, all parties are entitled to an opportunity to appeal if unsatisfied with the outcome of the arbitral process. However, the absence of such an institution in Singapore implies that other options like going to court must be considered. Only appeals arising from proceedings under the Arbitration Act can be reviewed in Singapore. The right to appeal may however be excluded by an agreement. An appeal can only take place if parties consent to such or the court grants leave. The time limit requires that the appeal should be concluded within twenty-eight days from the moment of the award.
Before a court grants leave for an appeal, the following conditions must be satisfied. The conclusion of the issue will have a substantial effect on the rights of a party or other parties in dispute. The issue is must be one handled by the arbitral tribunal, based on the findings of award facts, the decision arrived at the tribunal if wrong, or the decision is of public value, and if the court has a moral obligation to intervene. However, appeals are only made after all possible avenues have been exhausted.
Hong Kong
In Hong Kong, there are a good number of arbitration centers, which offer guidance to operations in various issues whenever disputes arise. The Hong Kong Arbitration Ordinance which encompasses the United Nations Commission on International Trade Law (UNCITRAL) Model Law as an attachment, and the Hong Kong International Arbitration Centre (HKIAC) has solved over one thousand six hundred disputes since is setting up in 1985.
Given the ratification by Britain and later by chinas of the New York Convention in the year 1977 in place of Hong Kong, convention awards reached in any contracting state is enforceable in Hong Kong. However, this is subject to refusal in Article five of the Convention. Since the handover, awards arrived at in china are no longer enforceable in Hong Kong. Reciprocal recognition is derived from Ordinance 2000 in reflection of the New York Convention.
Peoples Republic of China
The China International Economic and Trade Arbitration Commission (CIETAC), which was established in 1956, under the confines of the Chinese Council for the Promotion of International Trade is charged with the responsibility of handling disputes emerging due to foreign or internationally linked trade or economic transactions. The CIETAC is headquartered in Beijing from where it runs sub-commissions at Shanghai and Shenzhen. The Chinese centre remains among the busiest in the world. The centre has both Chinese and foreign arbitrators from which parties to a dispute are free to select. The arbitration law offers guidance on how arbitration is carried out in the country and it came into effect in 1995. However, the arbitration law discourages ad hoc arbitration, as it requires parties to specify recognized arbitration institution in the final agreement.
Article 269 of Chinas Civil Procedure Law allows a party pursuing enforcement of an international related local award to make an application to the Intermediate Peoples Court in the respective province where the assets in question are situated. However, the court cannot review substantive merits of such cases. In reference to foreign awards, China has follows the New York Convention, though its enforcement record has been unpredictable.
Japan
The Japan Commercial Arbitration Association (JCAA) reflects the major international arbitration law. This is the only permanent arbitral institution in the country and thus holds the responsibility of dispensing justice in both internal and external disputes brought before it. The law allows parties to a dispute to adopt the UNCITRAL Rules though it sets out its own which are applicable. Parties equally have the freedom to choose the arbitrators they wish to enlist in the dispute resolution. However, Japan has not adopted the UNCITRAL Rules and as a result, there is was no specific international law relating to arbitration in the state as at November 2002. Japan ratified the New York Convention in 1961 and consequently foreign awards are enforceable. However, this is subject to reciprocity reservations as articulated in Article 1 Section 3 of the convention. The refusal standards as set by Article 5, also applies. Awards made in Japan are just as binding as judgment. A of 2002, there was no moment when a Japanese court failed to enforce an arbitral award.
USA The Code of Ethics for Arbitrators in Commercial Disputes
The United States relies on the ABA code of conduct in arbitral processes. The Code of Ethics for Arbitrators in Commercial Disputes was approved by the American Bar Association in 2004. Originally, prepared in1977, the code off conduct is pivotal in the settlement of disputes relating to business issues. The code of conduct of conduct offers guidance in several areas though it does not extend to the labor aspect f commerce.
Neutrality
Appointed arbitrators are expected to be neutral. However, this applies to international matters in most cases as reflected by the United States internal conduct, which does not require arbitrators to be neutral. On the converse, other ethics apply in place of the neutrality note.
The code demands that arbitrators appointed by parties to a dispute disclose all information, which may affect their independence and impartiality irrespective of whether they are neutral. The code of conduct further requires the arbitrators to ensure and confirm by disclosing the soonest possible if the parties intended to have them act independently or not. In case there is doubt regarding arty appointed arbitrators, they are required to serve as neutrals until the existing doubt is shed off.
The bottom-line of an arbitration process as envisaged by this code demands that integrity and fairness is reflected throughout the process.
Construction
Arbitral processes are subject to rules. Various aspects relating to the conduct of arbitrators may however be subject to agreements as set by the parties to a dispute, borrowed from certain laws, or other relevant arbitration ethics. The rules set by parties do not however supersede or undermine the relevant ones as set by arbitration or national laws. However, this code does not impose an obligation on an arbitrator to act in a manner in which the integrity of an arbitration process is put to doubt in reference to integrity and fairness regarding the arbitral process.
The need to uphold integrity and fairness
The code of conduct holds that an arbitrator is not only responsible to the appointing parties but also to the arbitral process. This in effect means that an arbitrator must observe high standards while carrying out his or her duties. In this regard, integrity and fairness must be held accordingly. The responsibility towards the public, to the disputing parties, and to every participant must be taken into account.
On accepting the appointment to serve as an arbitrator, one must be satisfied that she is in a position to offer impartial services. She is able to offer services independently without recourse to party, witness, and or other arbitrators leanings. She should be convinced of being competent enough to handle the case at hand, and on another note, an arbitrator should be available to initiate arbitration in reference to the procedural requirements and be available throughout the process up-till its rightful conclusion. Having accepted the position of an arbiter, one should not engage in any other business either personal or professional, or acquire any kind of financial or material interest likely to influence impartiality in the proceedings. After an award has been made, arbitrators should not join positions that draw a close relationship with the case they were resolving as such may present a false impression of an interest of expectation. However, continued extension of other or related services by an arbitrator to a party should not be construed to mean partiality since personal or professional associations cannot be affected by an engagement in the past, which does not bear on the present events. This is however, unethical if in future professional engagements disclosure of associations is made as descried earlier.
Arbitrators are expected to conduct themselves in a manner that reflects fairness to all parties and resist the temptation of being swayed by pressure emanating from outside sources like public clamor, and the fear of being criticized, or self-interest. Arbitrators should avoid issuance of statements, which reflect impartiality.
At instances whereby the authority of arbitrators is derived from the agreement between or among parties, the arbitrators in question should not exceed such authority nor should they exercise less of that which is due to them. In reference to cases in which the agreement sets out the procedural guidelines to be followed, the arbitrators have the duty to follow such as clearly spelt out without getting out of the demarcations. However, the arbitrators are under no obligation to follow or adhere to procedures, which may be unlawful in any way. Other procedural requirements, which may be contrary to this code based on an arbitrators judgment, should be rejected.
It is the duty of an arbitrator to conduct the arbitral process in the best possible way to come up with an efficient and fair resolution regarding a dispute. Further, the arbitrator should put up effort geared to prevent or block any delaying tactics employed by parties to a dispute. Towards this, the arbitrator has the obligation of ensuring that there is no harassment to parties or participants, or any form of abuse, which may lead to the disruption of an arbitral process. The arbitral obligations of an arbitrator begin immediately an individual accepts to serve in such positions. It is unethical for an arbitrator to abandon an arbitration process upon appointment. The only excuse to abandonment is only premised on compelling circumstances necessitating one to quit. On another instance where an arbitrator is supposed to be given compensation and parties default in making payment, then an arbitrator is at liberty to terminate his or her services to the process. An arbitrator who leaves the process before completion is under an obligation to ensue that reasonable steps are taken to offer protection to the interests of the parties involved. This includes giving back any confidential information held without disclosing it to unintended parties.
Disclosure of interest
All individuals interested in serving as arbitrators should make public any direct or indirect personal or financial interest in the issue under arbitration. The potential arbitrator should also disclose any past or present business, financial personal or professional association which might arise to have a bearing on the impartiality and the independence of the arbitration process. The disclosure of information relating to an arbitrators relationship with a party or a partys lawyer, a co-arbiter or a key witness is of insurmountable importance. Further to this, any arbitrators family links to parties or any individual involved in the arbitration process likely to bear on the course of proceedings should be tabled. The arbitrators are required to disclose prior knowledge, which they possess regarding the case in question. The arbitrator may further disclose any other information, which may be required by the appointing parties, or the law regulating arbitral disclosure. All the above disclosure is expected to be done in a practically reasonable time to preserve the urgency of dispute resolution. Disclosure further demands that all arbitrators should be made aware of what is disclosed before the commencement of proceedings or as soon as such, disclosure is made. If a party or parties to a dispute are informed on the interests of a potential arbitrator oppose the appointment, such an arbitrator may serve. However, if all parties to a dispute demand that an arbitrator steps aside, then the arbitrator in question is under an obligation to quit.
If an arbitrator is asked to step aside by a majority of the parties, then such arbitrator should do so unless the following is in place a deal between or among parties or as set by arbitration rules or relevant law establishing procedures which determine the challenges faced by arbitrators, in this case such shall prevail. However, in the absence of such procedures, if an arbitrator arrives at a decision that the challenge to remain impartial and independent cannot be achieved, then stepping aside may be an option. If the code requires the disclosure of privileged or confidential information, the aspiring arbitrator should secure consent before disclosing the information from the source of information on the other hand, the arbitrator can withdraw altogether from the arbitration process.
Communication
Normally, parties to a dispute, establish the communication protocol in the absence of such determination, relevant rules concerning arbitration communication apply. The arbitrators are under the obligation to follow the set rules while conducting the arbitration exercise. In this regard, arbitrators are not allowed to discuss arbitration proceedings with any party while the other party or parties are absent except in certain circumstances. Such may include at a time when the appointment of arbitrators is being put into consideration in this instance, the arbitrator is free to enquire about the identity of the parties, witnesses, counsel, and the nature of the case. The arbitrator may also respond to issues raised by parties or counsel geared towards the determination of the availability and suitability of the arbitrator. However, this does not warrant a discussion on the merits of the case.
In an event where appointed arbitrators need to appoint another arbitrator, the expectation is that they should consul with their respective appointing parties before making a choice. In reference to payment settlement, the arbitrators are required to agree with the appointing parties. Routine requests indicating demands for anything should be submitted to all parties. Any information relating to the arbitration process ready for furnishing should be relayed to all parties to dispute at the same time.
The fair and diligence requirement
This demands that arbitrators conduct the proceedings of an arbitration process in a levelheaded manner. While handling the task, the arbitrator should remain courteous and patient to the disputing parties, representatives, and witnesses. At the same time the arbitrators should encourage all participants in an arbitral process to exhibit decorum. The arbitrator is further obliged to accord adequate and reasonable time to allow disputing parties the chance to air their sides of the issue being resolved. The arbitrator is expected never to deny any party the chance to be represented by a counsel in the arbitration process. In an event, that a party fails to appear and present their case after a prior notice is issued according to the procedural requirements as set by law, and then the arbitrators can proceed without any concern in reference to the absconding party. However, this is only done after ensuring that an appropriate notice was issued at the right time to the party in question.
After an arbitrator ascertains that the information delivered before the arbitral tribunal is sufficient enough, it is necessary to decide to call witnesses and pose questions deemed right for the process. The arbitrator can demand documents and any other evidence necessary to resolve the issue. At such a stage, even expert input is welcome. It is never improper for an arbitrator to propose to the parties on how to go about the case like resorting to mediation or using other possible resolution settlements though the arbitrator should desist from putting pressure on the parties to adopt a certain course of action. An arbitrator is not expected to participate in the settlement discussions nor should she act in a mediation capacity unless the parties to a dispute agree to it. Co-arbitrators are expected to avail to each other the opportunity to fully participate in the proceedings of an arbitral process.
The decision-making requirement
After a careful determination of the issues tabled before an arbitrator, a decision is made regarding them and not on any other from unknown quarters. This means that a case should be determined based on available evidence only. Towards this end an arbitrator is expected to remain unaffected by outside influence in making a ruling. The duty to decide is vested on the arbitrator and at no point in time shall such a responsibility be delegate to any other person. If the disputing parties agree and reach a decision to embody a settlement and request the arbitrator to get involved, in tendering an award, the arbitrator is free to do so if satisfied with the deal. Any time an arbitrator is charged with the responsibility of embodying a settlement, the arbitrator is suppose to state in the award that it rests on the agreement of the parties.
The trust of obligation
It is important to note that dispute settlement is of value if trust is embodied both in the process and in the integrity of arbitrators. An arbitrator while accepting to arbitrate effectively enters a relationship of trust, which requires them, not too use any information gained from the arbitral process in a manner aimed at benefiting the self at the expense of the arbitration process. The process should not be used in a way also aimed at exacting gain for a certain section or selected individuals. In this regard, the arbitrator is required to keep information regarding the process confidential and only lease such to only intended arties. The arbitrators are free to get help from associates, research assistants, or any other individual towards reaching decisions. However, the arbitrator should notify all parties of this intention to erase any doubts. After reaching an award, the arbitrators involved should not assist in enforcement proceedings or in challenging the award. Unless requested by the conflicting parties, an arbitrator is under an obligation not to appoint himself or herself to any other office associated with the dispute. The arbitration panel cannot appoint any of its members to such office either.
The UK
The major principles underpinning the operation of arbitral processes in the UK rest on the following the arbitration object should obtain a fair outcome from a dispute carried out by an independent and impartial tribunal without unwarranted delays or expenses. The parties to a dispute should enjoy the freedom necessary towards agreeing on how the issue of dispute is solved. However, this is subject to safeguards necessary in reference to public interest. Finally, matters governed by arbitral processes should be subject to court intervention unless indicated otherwise by the same. The parties to a dispute have the freedom to decide the time an arbitral process is regarded as commenced. This is useful in reference to the Limitations Acts. Secondly, the absence of such calls for the following in instances whereby an arbitrator is designated or named in the arbitral agreement, arbitral proceedings commence in reference to the issue matter in which case, parties serve the others with written notices informing them to submit their issues to the designated or named person.
In instances where an arbitrator is appointed by parties, arbitration proceedings are commenced in reference to the issue when one of the parties serve the others with a written notice on demanding that they appoint an arbitrator or confirm the appointment made in that respect. In cases where arbiters isare supposed to get appointed by an individual instead of a disputing party, arbitral proceedings commence in reference to the issue the moment one party issues a written notice to the individual requesting that she makes the appointment.
The arbitral tribunal
The contending parties have the freedom to agree on the number of arbitrators required to resolve a case. The tribunal formed can be under a chairman or umpire. Unless agreed by parties to a dispute, a deal which requires the appointment of an even number of arbitrators would imply that an additional arbiter to chair the tribunal. In case of a disagreement concerning to the number of arbitrators, the tribunal shall b led by a sole arbitrator. The parties are free to agree on the procedures to be used in the selection of arbiters and the chair to the tribunal. In case there is no such agreement in place, the tribunal is made up of one arbiter, the sole arbiter is appointed by the parties taking a period of not more than twenty eight days in the process after receiving a request from either party to do this. On case the arbitration panel is to be composed of two arbiters, the parties must appoint one arbiter each taking not more than fourteen days in the process. In an event that three arbitrators are o be appointed, each party appoints one, the appointed two then goes ahead to appoint the third party who acts as the chair of the arbitral process.
Australia
Australia is a stable political system, which enjoys a high quality legal practice. The availability of arbitrators and judges with the necessary expertise in handling international issues and a broad range of dispute settlement avenues present a good ground for arbitration. Bodies like the Australian Centre for International Commercial Arbitration (ACICA), the Institute of Arbitrators and Mediators (IAMA), and the Australian Commercial Disputes Centre (ACDC) augment the position.
International Arbitration in Australia is governed by 1974 Act, which offers procedures on how arbitration is carried out. The 1974 Act provides that UNCITRAL Model Law on International Commercial Arbitration is applicable to all aspects of commercial arbitration taking place in Australia. However,, this may not apply if parties to a dispute decide to pull out of the Model Law. In the case of opting out of the model, the relevant Commercial Acts of Arbitration shall apply with reference to the state in which the issue is taking place. There is a limited nature of intervention approaches by courts in arbitration processes. This is reflected in the way in which parties have complete control of the issues relating to their cases and hold the freedom of engaging foreign counsels in disputes. They are also at liberty to make a choice regarding the procedure and the law governing the arbitral process. The 1974 International Arbitration Act adopts the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The Act also adopts the Washington Convention relating to International Convention on the Settlement of Investment Disputes between States and Nationals of Other States. This means that enforcing arbitral awards in Australia remains subject to limited grounds as set out by the New York Convention.
International conventions
The international conventions play an important role in the area of arbitration. However, the international conventions do not expressly have provisions prescribing the obligations of arbitrators. The lack of arbitrator obligations implies that parties to a dispute are charged with the responsibility of making decisions concerning the issue. In most cases, reference has been made to the New York Convention in the absence of obligations.
National Bar Associations
National Bar Associations form another group, which has immensely contributed to the arbitral procedure. These associations impose obligations on their members regarding the conduct of the arbitral process. However, this presents an emerging trend as exemplified by the proposed Model Rule for Lawyers to act as Third Party Neutrals.
IBA Ethics
The (International Bar Association) IBA code offers an international framework within which arbitrators conduct their activities. The fact that IBA brings together members of the bar, it is important to examine the provisions it stipulates for arbitrators. The universal nature of the institutions membership makes it a good choice for examination.
International arbitrators should remain independent, impartial, diligent, competent, and discreet. The ethic requirements remain abstract and assessing them becomes a difficult prospect. As opposed to being rigid rules and regulations, the ethic requirements are a reflection of internationally agreed upon ways of conduct by all parties, which subscribe to international law. The objective of any instituted process remains the attainment of a just and fair result in any dispute. However, the rules of conduct are not enforceable by anybody. This means that compliance to the rules is a subject of good faith.
The fundamental rule governing arbitration clearly underscores the need to carry proceedings diligently and in an efficient manner to reach a resolution free from bias. When appointments of arbitrators are being done, the prospective arbiters should accept such appointments only if they are satisfied that they are equal to the challenge of discharging the duties at had without bias. Further, a prospective arbiter shall accept an appointment on condition that she is competent to offer help in determining the issues of a dispute based on possession of adequate knowledge on the dispute and the language used in the arbitration process. While accepting the appointment as an arbiter, aspiring arbitrators are under an obligation to commit their time to the arbitration exercise as entitled and expected. It should be noted also that aspirants to arbitral positions should never canvass while looking to be appointed as arbiters.
Element of Bias
The element of bias is a critical aspect considered in relation to the arbitration process. While assessing questions referring to bias, impartiality and independence come into the fray. Te element of partiality is witnessed when an arbitrator is perceived to be leaning to one side or sympathetic to one disputing partys position. The case may also arise in instance where an arbitrator holds a prejudice against a given subject matter on a dispute. On the other hand, dependence emerges in reference to an arbiters relationship with one of the disputing parties or with individuals closely connected to a party to a dispute. Other issues like considering other arbiters as dependent on others before ascertaining such a position may be a representation of bias. In other case scenarios f an arbitrator holds a material or any other kind of interest in an issue relevant to the case at or at one point taken a position regarding such dispute, and then the element of bias arises. To overcome the element of bias, it is necessary that all parties to an arbitral process get to fully disclose their association with the issue of dispute.
As pointed out, any links, either direct or indirect especially of a business nature between an arbiter and a party to a dispute or a close ally of either or both presents an element of suspicion in reference to bias. As a result, such individuals should not be considered for appointment and if considered for appointment they should honorably reject the positions in order to safeguard the independence and impartiality of a tribunal. However, if parties agree to proceed having known the facts concerning this, then there shall be no issue relating to this at a later stage in the proceedings. As an illustration, if members of a prospective arbiters family, firm, or business partners have any form of association to a party in dispute, then such creates an element of possible impartiality. However, past business links cannot act in absolute terms when it comes to acceptance, instead the nature and magnitude of the association poses a danger to the arbitration process.
Substantial continuous professional or social relationships between a party to a dispute and a potential arbitrator should be viewed keenly. This also applies to individuals who would be potential witnesses in the arbitral process. To avoid any shreds of doubt, individuals of this nature should be disqualified or disqualify themselves if appointed if independence and impartiality are to be maintained.
Duty of disclosure
Any aspiring arbitrator is under the obligation to fully disclose all facts relating to the issue at hand or circumstances, which may necessitate or lead o justifiable doubts regarding the degree of impartiality andor independence of the character in question. If such a disclosure is not made at the right time, then this may affect both the impartiality and independence of a tribunal. In such cases, disqualification is used to remedy the situation. It is worth noting at this stage that disclosure of great value as without such, even the least of concealed information, which would otherwise have no impact on the bearing of the arbitral process can, lead to disqualification.
In reference to disclosure, a prospecting arbitrator must reveal
Any business relationship whether past or present, and whether direct or indirect including earlier appointments to serve as an arbitrator should be examined. In relation to current associations, the potential arbitrator should disclose all that applies to the issue regardless of the magnitude but rather depending on the triviality connected. Only issues related to the professional conduct are put into perspective in reference to the current association between a party to a dispute and a potential arbiter. Failure to disclose an indirect association unknown to an aspiring arbitrator does not constitute a ground for disqualification. In this case, disqualification can only be instituted if it emerges that there was an attempt to conceal certain information.
Other factors like the nature of the relationship and the duration taken with any party to a dispute or a key witness in the arbitration case must be examined. The nature of association between a potential arbitrator and other arbitrators is also critical in as far as impartiality and independence pursuit are concerned. Such association may include past execution of similar or related work together. The level of prior knowledge held by the potential arbitrator must also be disclosed. The arbitral hopefuls must also outline other commitments likely to deny them ample chance to tend to matters relating to the arbitration process. As the arbitration process proceeds, arbiters are required to continue disclosing any emerging issues regarding the conduct of the case in question with a view to shading new facts on various circumstances. Any form of disclosure is expected to be made in writing and be communicated to other parties to the dispute at the earliest possible opportune moment. It is further required tat when an arbitrator is appointed previous disclosures availed to the parties should also be passed to the arbitrators.
Communication with parties
When approached for appointment to the arbitration process, the potential arbitrator should consider whether she is capable of remaining independent and impartial throughout the arbitral process. At the same time, the candidate should gauge his or her competency in reference to the matter at hand. The arbitrator must be able to decide his or her availability and be in a position to respond to questions regarding his or her suitability for the arbitral position. However, at this stage the idea of discussing the merits of the case should not crop up. In the unlikely event that a presiding or an aspiring sole arbiter is approached by a single party alone, it is prudent that the arbitrator ascertains that the other party or parties to the case hashave given consent for the process. In this case, the arbiter should pass information to the other parties detailing the approach made for his or her services orally or through writing. The substance of the case should also be shared to the contending parties or opposition arbiters. In cases where an arbitrator may be required to participate in the selection of an additional arbiter, then it is expected that the arbitrator consult with the appointing party before making a decision. As proceedings take place, the arbiters must desist from taking unilateral actions relating to relaying information on the case without the consent of the parties involved. Shall an arbiter become aware that one of them has engaged in unilateral disclosure of information regarding the case in question, she may take the opportunity to inform the other remaining arbiters and determine together the best cause of action against the offender. In most instances, the ideal initial measure involves requesting the culprit to refrain from such events. In an event that the offending arbitrator fails to toe the line, the arbiters should pass information to the parties to the case so that a decision regarding the offender can be deliberated. Arbitrators are expected not to accept any substantial present handed by a party to a dispute, in the same line of thought, hospitality both direct and indirect to an arbiter is unacceptable. All arbiters must steer clear of getting significant professional or social contact with parties to an arbitral process.
Duty of diligence
Arbitration is a time consuming exercise which require the sacrifice of all arbiters taking party in a dispute resolution. Consequently, all arbiters are expected to assign a good amount of time and largely remain committed to the dispute resolution from the word go until the end. This will help avoid a dispute resolution dragging and thus leading to additional costs. This underscores the need to resolve issues in a timely manner.
Involvement in settlement proposals
If the parties to a dispute had agreed to allow arbiters to take part in proposing the settlement of the dispute, then the arbiters have the right to go ahead and offer a proposal regarding how the case should be rested. While discussing the agreement terms, it is worthy to ensure that all concerned parties are invited to witness such as discussion in the absence of a key party would amount to contempt of party rights. Arbitrators who get involved in discussing arbitration proposals in the absence of a contending party are normally disqualified from future cases pertaining to arbitration.
Confidentiality of deliberations
An arbitral tribunal is always expected to reach certain agreements. The deliberations as exhibited by the contents of the award must remain confidential until or unless released by the disputing parties. Arbitrators are required not to participate in the release of settlements or giving information for the purposes publicity. The only time an arbitrator is allowed to go public is only when fraud or misconduct emerges on the part of fellow arbiters.
Presumption of neutrality
The neutrality presumption is applicable to all arbitrators irrespective of who the appointing authority is. This implies that even party appointed authorities are under an obligation to observe the neutrality principle by avoiding leaning to positions, which may compromise their duties as arbitrators. This presents a reversal of what the 1977 code provided for as then non-neutrality was accepted on the part of party appointed arbitrators. This concept, neutrality captures both the aspect of impartiality and independence. In instances where non-neutral arbitrators are used, the new code demands that ethical obligations must be maintained.
Party appointed arbiters are expected to ascertain and inform the arbitral panel and parties whether they are acting as neutral or non-neutral arbiters. This should be done well way ahead at the earliest possible time. In any event that doubt arises regarding the acting nature of arbitrators the expectation is that the arbitrators act non-neutrally until such doubt is erased.
Comparison between IBA and ICC
The IBA Rules of Ethics for International Arbitration of 1987 requires arbitrators to diligently conduct the arbitration proceedings and only accept appointments if they are sure of completing the tasks at hand. National arbitration laws equally expect arbitrators to remain diligent and compliant to the commitment requirement by sticking to the set time limits o arbitration processes. ICC Rules empower the ICC Court to strike out the names of arbitrators who do not fulfill their functions given the agreed time, a feature also captured by the LCIA Rules.
Whereas the ICC is moving towards more disclosure in reference to arbitrator availability, the ABA seems to have done away with the issue. On the contrary, the ABA has developed a checklist detailing the disclosure requirements with a particular focus on the principle of independence and impartiality. The major focus was on checking the discrepancies attributable to difference in statutes, standards, arbitrator disclosure, ethics and cases codes, etc.
In the initial stages of the drafting and presentation of these changes by the ABA, criticisms were leveled against the group especially from international arbitration quarters as being overly deterministic, prescriptive, and demanding excess disclosure. The overall effect was perceived as being unsupportive of the arbitral process. Further, the perception was that the ABA regulations served to undermine the finality of arbitration agreements as they encouraged post award challenges. The international law wing of the ABA group was concerned that the adopted rules would be in contradiction with international arbitration believing that such would instead of add to the confusion surrounding the field. A major concern rested on the possibility of difference between the US and the European arbitral process. This was viewed also as a possible avenue for reducing the potential of the United States being selected as a host of international arbitration cases. Even f this new set of guidelines is adopted a new sticking point would arise concerning the discrepancy between the United States and other countries. It should remain clear that this checklist is a proposed code of conduct, which has not been formalized in the United States.
Obligations
The idea of impartiality and judicial independence were originally developed to guide the conduct of both national and international judges offering services in permanent courts. However, at times problems arise in reference to the application of these principles especially on an international level. This is especially the so as adjudicators, ad hoc judges, and arbitrators are appointed by parties to case in international disputes. This position is held because individuals appointed by a party to a dispute would be expected to protect the interests of the appointing authority. It requires great sacrifice for appointed arbitrators to remain objective and avoid leaning towards the appointing side. The idea of selecting arbiters who have served individuals to a dispute in the past further complicates the whole process. Entrusting one individual to a case implies that the arbiters philosophy tallies with the appointing individuals. Simply put, disputing parties are least interested on the partiality or objectivity and fairness of the judicial process, their major concern is to reach a ruling favorable to their interests.
Adjudication of cases is thus thrust into an arena, which confounds the foundations of justice. This puts ethics of arbitration into perspective. It is very clear that in arbitration there are two sets of competing interests. In the first instance, there is the need to protect the interests of the appointing party and on the other there is the need to take care of the interests of justice. The nomination of adjudicators underscores the level of control wielded by appointing parties in reference to the adjudicators. This clearly entails the sacrifice of a certain degree of judicial impartiality and judicial independence of the appointed arbiters in favor of improved trust and confidence in the arbitration process. However, in the case of international judges serving permanent terms, this is not the case.
Examining cases to determine the application of obligations
In October 2007, the Brussels Court of Appeal gave a ruling, which nullified an early award by a lower court. The ruling dismissed a request by the polish government aimed at having Judge Stephen Schwebel a former ICJ President, disqualify himself from taking party in the UNCITRAL arbitration tribunal. This tribunal was listening to a case brought by a Dutch company Eureko BV, against the Poland government. The dispute was about unilateral decisions by Poland which bore a lot of changes on the operational terms of privatized insurance which had been acquired by Eureko on august 2005. The UNICITRAL tribunal made public its award holding that Poland had acted in expropriatoy terms, and in the process had violated a bilateral agreement the Bilateral Investment Treaty obligations requiring a fair treatment of all investments. The arbitral panel further held that the act by Poland was a breach of specific government undertakings against the Eureko Company. Poland commenced proceedings before a Belgian Court of First Instance. The proceedings aim was to have judge Schwebel disqualified from taking part in the second phase of the proceedings whereby the quantum of remedies would be assessed.
Poland was specific that in the 2005 that judge Schwebel had become a member of the International Litigation Department of Sidney. Schwebel with Austin, brown and wood were to serve as co-counsel in representing a law firm in an investment dispute between Cargill Inc. and Poland. This case was also premised upon the US Polish BIT agreement. It should be recalled that this is the same agreement, which Eureko was using in launching its complaints against the Polish government. Schwebel vehemently denied any links between the two cases though Poland argued that there was a cloud of doubt t emanating from the early engagement between Schwebel and Eureko. In addition to Polands objection, it was alleged that Schwebel who had been enlisted as an arbiter in the case between Vivendi and Argentina could use previous knowledge against the country. The country argued that the case put Schwebel in vertical conflict with Eureko proceedings. The court dismissed Polands allegations and let judge Schwebel become a member of the UNCITRAL tribunal. The court held that though Scwebel ad held a form of professional association with SABW but this did not affect his independence from the firm and that there was no truth in believing that he could be influenced while exercising his arbitral duties by the firms litigation aims. The idea that Schwebel ad worked with SAWB did not create dependence relations.
Suez v. Argentina
The case Suez v. Argentina concerned the state of a foreign investment program in Argentina. The project was on water distribution and the treatment of waste concessions. On August 2007, Argentina made demands that the claimants appointed arbiter Prof. Gabrielle Kaufmann-Kohler, be disqualified on the basis of having worked in the same capacity in the past for another party in the CAA Vivendi v. Argentina. This case also related to water issues in Argentina. On the basis of Argentina, the award by CAA was flawed in particular reference to the treatment of factual information. This raised doubts over the impartiality of Gabrielle Kaufmann-Kohler as he supported the earlier decision. The other two adjudicators held that Argentinas case lacked substance and failed the promptness test. The litigants failed to persuade the tribunal that participation by an arbiter in past proceedings on an issue can influence future decisions. Simply put, such cases do not brew up bias in ay way whatsoever.
Role of arbiters
The cases highlighted bring about the element of tension, which characterizes the principle of impartiality and judicial independence, and the notion of professional disposition and personal trust, which underlie the selection of arbiters. It may be difficult to prove that a party appointed arbiter or an ad hoc judge is chosen to protect certain interests but the doubt remains. It is possible and highly likely that litigants to a case would select individuals who they believe is in a position to secure a specific award. In this regard, judges or arbiters who have been able to obtain awards favorable to specific positions especially in the past stand a preferred chance in the selection process. It is further discernable that personal contact based on experiences with certain arbiters in a dispute may play a significant role as this creates a certain degree of trust among the involved individuals. Such trust may form a basis upon which disputing parties find it necessary to submit cases to an arbitration process. It is thus little surprise that in most cases, the appointed arbiters remain the same as ones appointed earlier.
Appointed adjudicators serve a delegated function on behalf of an appointing authority. These individuals are authorized to arrive at amicable settlements. They are charged with the task of monitoring to ensure a fair and proper conduct of the arbitral process. Secondly, they make sure that the interests and positions of parties are well-understood and put into consideration by an arbitrating tribunal. In modest terms, they help in the maintenance of confidence of the parties to a dispute by preserving a certain degree of control over the arbitration process. However, this only presents a partial picture as parties appoint arbiters to an arbitral process based on their position on the issue in question. The adjudicators must be sympathetic to the appointing authority in order to secure the position. It is ignorant to assume that such is not the case since disputing parties look for victory in any kind of dispute. On assumption that this is not the case, parties to a dispute in most instances feel that the opposing party will go for individuals favorable to their position this kind of fear leads the parties into making choices of arbiters friendly to positions desired by the disputing parties.
Fair handling or treatment of cases is a major issue in international arbitration. On investment matters, good faith is a key attribute which always crops up. On the basis of the Vienna Convention, Article 31(1) makes reference to good faith in the interpretation of treaties. A fair interpretation implies that impartiality is the goal of while settling international disputes. Good faith is used in regards to interpreting treaty obligations. This underlies the idea that fairness and equitable treatment of matters before a tribunal. The minimum requirements of customary international provides for this. States accused of reneging on treaty agreements point to acting in good faith in instances of dispute.
Various issues of misconduct have bordered on the aspect of good faith. Issues of investor misconduct have arose as pointed out by Inceysa Vallisoletana S.L. v. El Salvador, Fraport v. Philippines, Phoenix Action, Ltd. v. Czech Republic, and Plama v. Bulgaria. While listening to cases concerning good faith, tribunals are under the obligation of safeguarding the integrity of the process. Parties to an arbitral process are equally required to observe the principle of good faith and fairness. Any tribunal has the obligation of ensuring that the fairness requirement is upheld. The fair principle is applicable in reference to the arbitration process, investment arbitration, parties to a dispute, and the arbiters.
When parts draw a draft of an arbitration agreement they posses wide freedom in the construction of a dispute resolution mechanism they like. In this regard, they can commence institutional or ad hoc arbitration processes. At this stage, the parties can also decide the number of arbiters, the required credentials and all relevant matters regarding the procedural preferences. For instance, the time limit can be decided by earmarking the period of the arbitration process. Further to this, after the arbitration process, the parties can modify the agreement to reflect any desired changes. Before commencement, the number of arbitrators can be changed, the appointment procedure altered, and other issues relating to pleading sequence and time limits can be reset. Despite this, the parties freedom to make choices regarding arbitrators appointment and matters of procedure, there are few limitations however. For instance, despite these freedoms, the final agreement must be valid that is, the award must be in accordance to the law, which creates the process. The arbitral procedure should also comply with all the rues and regulations governing international disputes settlement.
Findings
Various national laws augment the arbitration process requirements as exhibited by the demand that all disclosure regarding known facts be made by arbitrators. For instance the French Code of Civil Procedure demands that an arbitrator discloses any personal cause which can lead to disqualification of which the individual is aware of. The international arbitration law of Switzerland requires that arbitrators disclose any circumstances which may cast doubts over their independence. Further afield, in the United States, Supreme Court decided that arbiters should disclose any issues or dealings which may cast aspersions or create impressions of bias in arbitration proceedings.
There is a certain degree of discrepancies, which emerge in reference to the different standards, statutes, cases, and ethics, which govern the arbitral processes. Impartiality and independence are the two principles which however seem to play a dominant role in arbitration proceedings. It clearly emerges that despite the discrepancies, there is a certain degree of congruence across the various institutions, which offer governance and guidance on arbitration issues. However, based on latest development, wit particular reference to the ABA case, it is too premature to purport the existence of a close-knit connection between countries while referring to arbitration processes. However, in Europe and the rest of the world, common sense is taking an influential role in arbitral processes. The nature through which overly prescriptive and restrictive formalistic approaches are done away with or reduced to the minimum reflects this. The move by ICC to demand disclosure on availability of arbitrators serves as a clear pointer that arbitration is emerging as an important avenue of dispute resolution as this ensures a speedy resolution of disputes.
Conflict of interest is major problem in both international and domestic arbitration. The demand that some information be disclosed presents a difficult challenge as arbitrators are left unsure about which information to share. It is also discernable that arbitrators facing the same scenario will not disclose the same depth of information to the arbitral tribunals. This raises a serious question regarding the extent to which disclosure is useful. This does not however present an attempt to dilute the value of disclosure in the arbitral processes.
Growth and development in international business has expounded the limits on international relations. Arbitration is thus a good response to help address issues arising from this phenomenon. However, the growth as witnessed interlocking of corporate responsibilities, this intensifies the conflict of interest as most international institutions are related in a way or another. Disclosing a relationship whether minor in nature may serve as an excuse to lock out an arbitrator. In other instances, challenges to the suitability of an arbitral candidate may serve to derail the arbitration process. In case the opposing party secures the removal of the arbitrator in question, further time may be required and this stands to cost the process in unnecessary ways.
On the basis of the above finding, institutions, courts, arbitrators and parties face the challenge of having to deal with complex decisions regarding to the appropriate standards useful in arbitration. A further complication is inherent if an objection is raised after a party has made a disclosure. It emerges that there is tension on the one hand, concerning parties rights to disclosure of scenarios, which can potentially influence the independence of the arbitrator, and on the other hand, there is the right of the parties to arbitrator selection. There is no doubt that there are laws and standards governing the situation the standoff concerns the detailing of the guidance to bring about uniformity in the application of the rules. It is thus little surprise that international arbitrators employ the use of different standards in coming up with decisions regarding challenges, objections, and disclosure.
Commonalities
The duty to disclose is applicable to all institutions and the various rules adopted by arbitration rules. It emerges that all rules require that arbitrators remain impartial and independent while executing their duties. With little focus on the intent of the rule, it is clear that it is at the disposal of the arbitrator to select which facts or in formation to table before the tribunal. However, the arbitrator is expected t act in good fait by disclosing all that appertains to the dispute before a tribunal. Another emerging trend in arbitration is premised on availability to serve. Due o rising commitments and the need for expeditious resolutions, it has becomes onus upon the arbitrator to declare their availability to save arbitral processes from unwarranted delays.
The unanimity of the rules on independence and impartiality is spot on. The issues, which may deter the achievement of these principle requirements, must be disclosed. The current AAA Rules directly refer to ICC Rules in reference to disclosure. However, LOA Rules differ in approach, as they require prospective arbitrators to offer an evaluation of the facts and circumstances, which may raise suspicion regarding impartiality. The arbitrator based on information then either declines the appointment or executes a declaration indicating the absence of circumstances likely to occasion any justifiable impartiality.
The different national laws also impose the independence and the impartiality principle in arbitral processes. However, the rules imposed y national laws remain discretionary in nature just as the ones adopted by the various arbitral institutions. For example, the French Code of Civil Procedure puts a requirement on arbitrators to make disclosure-detailing reasons, which may lead to their disqualification fro arbitrating. In the United States, the Supreme Court has made it clear that an arbiter ought to disclose any issues, which may bring bout bias. It is thus held that generally national laws mirror arbitral rules regarding the rule of disclosure.
The emergence that most countries are signatories of the New York convention implies a limitation on the part of national laws in reference to the way in which they can the influence arbitral processes. However, in most countries as pointed by the case of Singapore, there are options to choose from that is between a local and an international based arbitral process. In case parties opt for the local based tribunal, then the international rules may not apply. However, the local or domestic based arbitral processes do not present a big deviation in terms of procedure and rules. However, domestic arbitration may be subject to national rules and there are chances arbitral awards may be subject to challenges instituted through the court processes.
The presence of a lot of flexibility underscores a major talking point concerning arbitration. It emerges that in various institutions just as in different states, there are minute differences concerning arbitral procedures. For example in Singapore, the deputy chair of SIAC holds wide-ranging powers. This is not the case in other institutions. However, there is agreement that discrepancies in the different states and the various states is due to environmental and to some extent cultural differences. The most notable finding however rests on the fact that most institutions engaged in arbitration follow heavily from the New York convention guides. This brings a lot of uniformity in the way arbitral processes are dealt with. For example, the requirement based on the principle of impartiality and independence holds in every institution and all countries. The duty to determine arbitral procedures and the nature arbitration is carried, the timing of making a conclusion, among other important aspects appear uniform albeit on the evidence presented in this paper.
Enforcing international arbitral awards may run into problems though this is limited in nature. Some countries may fail to enforce an arbitral award. The peoples republic of china is an example whose implementation of awards track record remains unpredictable. However, other countries as indicated in this study (for example Hong Kong and Japan) implement international awards any time required to. This indicates a problem in the execution aspect of awards. However, the fact that it is only china which holds the record, it is ideally to take measures aimed at making the republic toe the line and join the rest of other nations in universalizing international arbitration.
The obligations imposed on arbitrators handling cases are relatively similar. This is irrespective of the location of an institution or of a state. However, it was found in this paper that IBA was on the verge of introducing new measure aimed at aligning the arbitral process and the state laws. This may be a plausible move if it helps towards the improvement of the arbitral process in general. But while carrying out changes, care should be exercised so as to maintain compliance to the international convention on the arbitral process. Changes of this nature may present discrepancies on arbitral processes and bring about confusion.
Another difference which emerges on the basis of the paper is premised on the disclosure requirement. Whereas all the institutional set ups require parties to disclose any information regarding personal relationships, which can lead to an element of impartiality on their part while carrying the arbitration, exercise, it is clear that the ICC rules go a step further. Apart from demanding the routine disclosure, the ICC Code further requires that prospective arbitrators disclose their availability during the arbitral process. This is aimed at ensuring that the arbitrators fully commit to the arbitration process to guarantee a timely completion of dispute resolution. This code presents a departure from the other arbitral institutional codes. It is a good measure which if universalized can help a great deal in ensuring timely conclusions of arbitral disputes.
The different codes of conduct in arbitration as clearly demonstrated in this paper do not hinder the arbitration process in any way. This rests on the fact that over one hundred and forty states are signatories to the New York Convention. After ratifying the arbitration convention, countries and various institutions are bound to practice arbitral proceedings in a manner that conforms to the convention. This implies that the differences are never fundamental in nature as a result, they do not pose a serious danger to the arbitral process at the international stage. It is concluded that the codes of conduct do not vary fundamentally. However, such a variation could lead to a plethora of issues regarding international arbitration as differences between countries could pose dangers to the whole idea of arbitration. It is thus in the interests of everybody that arbitral processes at the international stage be conducted under one uniform code of conduct. Nonetheless, this should not necessarily apply to domestic arbitration. Due to the differential nature of countries, each country should have the freedom of running its own arbitral processes according to codes preferable to citizens. This should follow the Singapore models of arbitration. However, the choice of the model to use in solving an issue should remain in the hands of the parties to a dispute.
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