ICSID and UNCITRAL release their Draft Code of Conduct for Adjudicators: A Long Road Travelled and Yet A Long Way to Walk

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On May 1, 2020, the Secretariats of the ICSID and UNCITRAL released their long-awaited draft Code of Conduct for Adjudicators in Investor-State Dispute Settlement (“Draft Code of Conduct”).

This Draft Code of Conduct is the result of the ICSID and UNCITRAL coming together to address an ethical issue which is often the source of criticism in Investor-State Dispute Settlement (“ISDS”), namely “the lack or apparent lack of independence and impartiality of ISDS tribunal members.[1] In doing so, the Draft Code of Conduct serves to reinforce the legitimacy of the ISDS process. 

The Draft Code of Conduct sets the table for the adoption of a Code of Conduct for Adjudicators which will “contain concrete rules rather than guidelines.”[2] In other words, Member States have yet to come to an agreement on the common standards they share before this Draft Code of Conduct gives place to a binding (or non-binding) corpus of rules.

On some issues, the Draft Code of Conduct is designed to lay down general principles and obligations; on others, the Draft Code of Conduct provides suggestions and “optional” rules of conduct to be discussed further by Member States. Following this mode of operation, the Draft Code of Conduct’s most noteworthy provisions can be summarized as follows:

  • Broad Scope: According to Articles 1 and 2, the Draft Code of Conduct is designed to target “all persons serving as adjudicators”, i.e. all arbitrators, members of ad hoc, annulment and appeal committees, and judges on permanent mechanisms, including research and legal assistants working under the direction of these adjudicators.
  • General Obligations of Adjudicators: Article 3 of the Draft Code of Conduct, designed as a non-optional set of rules, provides an overview of the adjudicators’ obligations that include the duty to be independent and impartial, avoid conflicts of interest, bias and appearance of bias, display the highest standards of integrity and competence, act with diligence, and comply with confidentiality and non-disclosure obligations.
  • Conflict of Interests: The next three articles emphasize the adjudicators’ obligation to be independent, impartial and transparent on potential conflicts of interest, proposing both non-optional and optional rules to better ensure the management of conflicts of interest and appearance of same (articles 4 to 6).

Disclosure of Information: Significantly, the Draft Code of Conduct proposes an extensive approach of the adjudicators’ duty to disclose potential conflicts of interest, including the obligation to disclose their relationships with the parties and other persons involved in the arbitration, and to disclose instances where the adjudicator has previously taken a position (for example, in a publication) on matters relevant to the case.

Importantly, Article 5 puts the burden to make reasonable efforts to become aware of potential issues on the adjudicator’s shoulders and requires them to err in favor of disclosure if they have any doubt.

Double-hatting: Article 6 of the Draft Code of Conduct recommends the adoption of regulations on multiple roles (also designated as “double-hatting”), providing that, at a minimum, adjudicators shall disclose when they act or acted as counsel, expert, witness, judge or agent in matters that involve the same parties and, optionally, the same facts or the same treaty, within a certain timeframe.

The Draft Code of Conduct leaves to the Member States the option to choose between mandatory disclosure or prohibition of double-hatting, conceding that prohibition could lead to serious difficulties in the current state of affairs. For example, a prohibition could mean excluding several potential adjudicators, which could seriously limit the States’ and Investors’ freedom of choice of adjudicators.

  • Integrity, Competence and Diligence: Articles 7 and 8 of the Draft Code of Conduct expand the adjudicators’ obligations to be bound by the highest standards of integrity and fairness, requiring them to act with competence and ensure their availability.
  • Interviews and payment of adjudicators’ fees: The Draft Code of Conduct provides obligations and options regarding interviews and adjudicators’ fees (articles 10 and 11), in order to better ensure their independence and impartiality. For example, the Draft Code of Conduct provides that pre-appointment interviews shall not touch upon substantive matters and suggests that these interviews be disclosed to the parties if the candidate is selected.
  • Enforcement: Article 12 provides the Member States with the discretion to devise how to best enforce the provisions of the Draft Code of Conduct. Possible enforcement mechanisms include incorporating them into investment treaties or into procedural rules, or by using a more case-by-case approach.

The Draft Code of Conduct is still just that, a draft, though it is a promising document that may provide uniformity for expected conduct and disclosure of potential conflicts of interest. The next challenge will be to identify the common standards Member States are ready to agree upon to finalize the Code of Conduct.

The UNCITRAL and ICSID Secretariats are accepting public comments on the Draft Code of Conduct until October 15, 2020. The UNCITRAL Working Group III and Member States will then be in position to work on a finalized Code of Conduct, which will either remain as soft law and serve as inspiration for participants in ISDS processes or become a binding set of rules, capable of going beyond the existing interspersed national codes, thus helping curb the current fragmentation of rules governing the conduct of international arbitration adjudicators.

[1] United Nation General Assembly, “Report of Working Group III (Investor-State Dispute Settlement Reform) on the work of its thirty-eight session (Vienna, 14-18 October 2019)”, A/cn.9/1004, at para 51 [Report of Working Group III], available here.

[2] Report of Working Group III at para 52.

arbitration international arbitration commercial arbitration Code of Conduct

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