Karel Daele - Mkono & Co. Advocates, Tanzania and Burundi MOST FAVORED NATION TREATMENT OF SUBSTANTIVE RIGHTS & INVESTMENT ARBITRATION IN CHINA

Karel Daele - Mkono & Co. Advocates, Tanzania and Burundi Karel Daele Selected Problematic Issues Regarding Disqualification of Arbitrators under the ICSID Arbitration Rules

I. Introduction Importance of disqualification proceedings: -unilateral appointment of arbitrators; -no solid safety net for awards issued by biased Tribunals; Substantial rise in disqualification proceedings in the last 5 years; Identify problematic issues; Karel Daele - Mkono & Co. Advocates, Tanzania and Burundi

II. Arbitrator’s duty to disclose Disclosure serves a number of purposes: -to avoid selection of biased arbitrator; -to challenge biased arbitrator; -waive of right to challenge; ICSID Arbitration Rule 6(2): (a) [his or her] past and present professional, business and other relationships (if any) with the parties; and (b) any other circumstance that might cause [his or her] reliability for independent judgment to be questioned by a party. Karel Daele - Mkono & Co. Advocates, Tanzania and Burundi

II. (continued) Inconsistent case law: Suez v. Argentina (ICSID Case No. ARB/03/17); EDF v. Argentina (ICSID Case No. ARB/03/23); and Vivendi v. Argentina (ICSID Case No. ARB/97/3); Suez v. Argentina: an arbitrator is required to disclose a fact only if he or she reasonably believes that such fact would reasonably cause his or her reliability for independent judgment to be questioned by a reasonable person Karel Daele - Mkono & Co. Advocates, Tanzania and Burundi

II.(continued) EDF v. Argentina: Nothing inherently suspect can be found in Professor Kaufmann- Kohler’s participation in the board of directors of that particular financial institution, such as to cause her to question the propriety of her service as arbitrator in this case. While some legal systems and arbitral rules might require such disclosure, no such duty indication can be found in the ICSID standards discussed above [...] Non-disclosure in itself cannot be a ground for disqualification, but must relate to facts that would be material to a reasonable likelihood of impartiality or lack of independence, which is not the case here. Without some link of materiality, an arbitrator would be called upon to reveal all (or almost all) elements of his or her life, a situation that would paralyze any arbitral process. Karel Daele - Mkono & Co. Advocates, Tanzania and Burundi

II. (continued) Vivendi v. Argentina: Rather, having properly and adequately investigated and established any relationship between the bank and any of the parties to the arbitrations, it is for the arbitrator personally first to consider such a connection in terms of a voluntary resignation as arbitrator. Such connection must otherwise be properly disclosed to the parties through an adequate amendment of earlier declarations under Rule 6. Karel Daele - Mkono & Co. Advocates, Tanzania and Burundi

II. (continued) The arbitrator/board-member’s duties are not fully exhausted even by such action [of disclosure of conflicts]. Since the bank might not be able easily to track the multiple types of contacts it may have with any of the parties to the arbitrations, it is also proper that at least an updated curriculum vitae be circulated to all parties to the arbitrations so that each party can decide for itself whether there are reasons why the arbitrator/board-member should no longer serve, even if any subsequent challenge is ill-founded. Karel Daele - Mkono & Co. Advocates, Tanzania and Burundi

III. Prompt Filing Proposal Timing requirement; ICSID Arbitration Rule 9(1): A party proposing the disqualification of an arbitrator pursuant to Article 57 of the Convention shall promptly, and in any event before the proceeding is declared closed, file its proposal with the Secretary-General […] 1 month ˂ proposal ˂ 5 months; Taking all the factors of the case into account; Karel Daele - Mkono & Co. Advocates, Tanzania and Burundi

III. (continued) Suez v. Argentina: Argentina’s delay of 53 days in submitting its Proposal, a document of just 23 pages, does not constitute acting promptly given the nature of the case and the fact that hearings on the merits were scheduled to take place within two weeks of the submission. The … proposal does not develop elaborate legal arguments that would have necessitated extensive legal research and the selection of various errors from the hearing transcript is also not a task that would reasonably require nearly two months to be achieved. Moreover, to facilitate the efficient functioning of the arbitration, Argentina might have notified the Tribunal much earlier than it did of its intention to challenge one of the arbitrators, setting out its basic case on that issue, with supporting documents to follow at a later time. Taking all of these factors into consideration, we conclude that Argentina did not file its Proposal … promptly Karel Daele - Mkono & Co. Advocates, Tanzania and Burundi

III. (continued) Duty to investigate? Alpha v. Ukraine: The Two Other Members do find credulity strained if [Ukraine] insist[s] that over these many months, no referral was made, or should have been made, to the Internet to ascertain publicly available information about Dr Specht and his background... While the global realities of this computerized, digitized age might reasonably lead to the opposite conclusion (that is, to a recognition of a constructive duty to perform basic Internet research in the early stages of a proceeding), the Two Other Members conclude that they need not determine this issue in order to reach a decision in this case. Karel Daele - Mkono & Co. Advocates, Tanzania and Burundi

III. (continued) The Two Other Members thus decline to rule on the question whether Respondent’s Proposal is time barred, although other arbitrators charged with resolving only this issue might reasonably reach the conclusion that it is; Karel Daele - Mkono & Co. Advocates, Tanzania and Burundi

IV. Deciding body Article 58 ICSID Convention: The decision on any proposal to disqualify an arbitrator shall be taken by the other members of the Tribunal, provided that where those members are equally divided, or in the case of a proposal to disqualify a sole arbitrator; or a majority of the arbitrators, the Chairman shall take that decision. Shortcomings of the peer review: -impact on the arbitration proceedings; -no consistent case law; -independence and impartiality of co- arbitrators; Karel Daele - Mkono & Co. Advocates, Tanzania and Burundi

IV. … (continued) Ad Hoc Commitee Vivendi v. Argentina: In annulment cases, members of ICSID ad hoc committees are chosen exclusively from the Panel of Arbitrators, and serve at the invitation of ICSID to address this concern. Their position is therefore different from that of arbitrators. In this connection, the ad hoc Committee noted the claim contained in Professor Mistelis’ Report that there has been a demonstrable inclination of international arbitrators to raise the threshold for a challenge of their fellow arbitrators. This was not contested.... It may be that such an attitude more easily results amongst arbitrators who are called upon to determine a challenge in respect of an arbitrator with whom they sit... Ad hoc Committees are not in a similar position. Karel Daele - Mkono & Co. Advocates, Tanzania and Burundi

IV. … (continued) Mandatory application of Article 58; Perenco v. Republic of Ecuador: -parties’ agreement to have any challenge resolved by the Secretary-General of the Permanent Court of Arbitration applying the IBA Guidelines; -challenge in September 2009 and decision 8 December 2009; -ICSID did not acknowledge the disqualification decision, no indication on ICSID website; Karel Daele - Mkono & Co. Advocates, Tanzania and Burundi

IV. … (continued) Role of ICSID Secretariat in ICSID Convention; “Recommendation” to Chairman Administrative Council; Opinion Prof. Dalhuisen Vivendi v. Argentina: -approaching individual members; -filing submissions reflecting its own views and policy; Karel Daele - Mkono & Co. Advocates, Tanzania and Burundi

IV. (continued) … the ICSID Secretariat even took the view that on its own initiative it could intervene to “streamline” the texts earlier agreed by the ad hoc Committee and senior Secretariat members approached individual Committee Members informally with a view to amending the text […]. Another idea seems to be that the Secretariat is the voice of a jurisprudence constante which it is its task to advance and protect and which gives it an autonomous right of intervention[…]. The Secretariat should not have a policy or view in these matters but respect the authority and independence of the Arbitral Tribunals and ad hoc Committees Submissions by the Secretariat, whatever the intention, are here legally irrelevant and no more than unsolicited opinion […] In sum, the Secretariat is not the fourth member of ICSID Tribunals or ad hoc Committees and is not an interested party in any other way. It also does not have powers of scrutiny in the manner of the ICC Court [...] Karel Daele - Mkono & Co. Advocates, Tanzania and Burundi

IV. (continued) On 7 October 2010, Argentina requested an investigation by the Vice-President Integrity of the World Bank; Karel Daele - Mkono & Co. Advocates, Tanzania and Burundi

V. Conclusion Disqualification proceedings are an issue of high priority; Procedural issues can determine the outcome of a challenge; *** Thank you for your attention Karel Daele - Mkono & Co. Advocates, Tanzania and Burundi