Transparency of methodology for arbitrators’ challenge process in the ICC Court

In the final award rendered on November 3, 2008 in the “National Grid Transco plc (United Kingdom) v. Argentine Republic (Argentine) UNC 72/CCO” case, the Arbitral Tribunal:

* rejected Argentina’s argument of state of necessity to justify its actions;

* ruled that Argentina had failed to accord fair and equitable treatment, and protection and constant security to the investment of the claimant and, therefore, that Argentina had breached the Treaty;[1]

* decided Argentina shall pay the plaintiff approx. US$ 54.000.000.[2]

As a result of this ruling, Division IV of the Federal Court of Appeals on Administrative Matters decided, on March 19, 2009 that the Argentina request filed in June, 2007 —to set aside the ICC Court of Arbitration’s refusal to admit the challenge against the Arbitral Tribunal chairman Rigo Sureda— had lost its object;[3] said request —currently definitively ended— had been based on the argument that the ICC Court had failed to express the grounds of its decision.[4]

Even though the Rules of Arbitration of the ICC Court itself set forth that: “The decisions of the Court as to the appointment, confirmation, challenge or replacement of an arbitrator shall be final and the reasons for such decisions shall not be communicated”,[5] in order to prevent future attempts of judicial interference in arbitral cases, it is important to describe the procedural method, based on an objective and expert analysis, that the ICC Court puts into practice to decide the admissibility of a challenge of an arbitrator as well as the reasons why the Rules of the ICC Court do not envisage the communication of grounds in these decisions.

According to ICC Rules, a challenge of an arbitrator, whether for an alleged lack of independence or otherwise (unknown when the arbitrators were appointed) shall be made by the submission to the Secretariat of a written statement specifying the facts and circumstances on which the challenge is based. The Court shall decided on the admissibility and, at the same time, if necessary, on the merits of a challenge after the Secretariat has afforded an opportunity for the arbitrator concerned, the other party or parties and any other members of the Arbitral Tribunal to comment in writing within a suitable period of time. Such comments shall be communicated to the parties and to the arbitrators.[6] 

That decision shall be taken by majority vote at a special plenary session of the Court, which is presided over by 127 honorary members, comprised of dispute-resolution specialists and distinguished lawyers representing 90 countries’ National Committees (14 from Latin-America)[7]. It is worth stressing the variety of legal systems (civil law, common-law, mixed civil and common law, customary law) that the members of the ICC Court come from, and the different approach they have to legally frame the question under analysis.

It must be taken into account that the ICC Court is not allowed to appoint its members as arbitrators in ICC cases and, at the same time, they cannot take part of any session Court related to a case linked to them in any way[8], to protect the rule of independence and transparency of the arbitral mechanisms under ICC Rules, and therefore, the legal framework for the parties. Moreover, although there is a wide geographical and cultural diversity inside the Court, all its members have solid legal backgrounds and strong experience in arbitration. The make-up of the selection committee —in charge of deciding on the admissibility of challenges— guarantees transparency, objectivity and expertise in the decision-making process.

Due to the plurality of opinions in a plenary session of the ICC Court, it is highly improbable that there will be an agreement on a single reason to be expressed in a final decision, and if the Court does attempt to do so, the celerity principle, essential to arbitration, would be affected. Nonetheless, without mentioning the grounds but based on them, each ICC Court decision about challenges of arbitrators is a result of a responsible analysis, which allows the decision not to be subject to any recourse in favor of arbitral celerity and transparency, fundamental pillars of international arbitration.