INTRODUCTION
1. Several International Tribunals have come to the conclusion that “[t]he requirements of independence and impartiality serve the purpose of protecting the parties against arbitrators being influenced by factors other than those related to the merits of the case.”
2. Taking such statement as a starting point, this paper will focus on the importance that this double requirement has, both for resolving particular disputes as well as for the whole arbitration system itself. For that purpose, it will be divided into four parts.
3. In the first section (A), this paper will try to define the concepts of “independence” and “impartiality”, while at the same time, making a distinction between them. All of that, with the ultimate purpose of finding a common ground between them. The next section (B), will conduct a brief analysis of different legal standards used for assessing independence and impartiality. The third section (C), will deal with some of the current challenges being faced by arbitration. Finally, section (D), will have a personal conclusion on the subject matter of this paper.
(A) CONCEPT AND DISTINCTION BETWEEN “INDEPENDENCE” AND “IMPARTIALITY”
4. Whereas an independent arbitrator is one who does not have any type of personal and/or employment relationship, nor any economic link or tie, or does not depend in any way on any of the parties; and impartial arbitrator does not have any inclination –or disinclination- towards them. In this sense, while impartiality is needed to ensure that justice is done, independence is needed to ensure that justice is seen to be done.
5. In practice, independence is relatively easier to measure since it consists of an objective assessment into the relationship between the arbitrators and the parties for the purposes of determining whether any link exists between them. On the other hand, impartiality entails an abstract concept which is subjective; and hence extremely difficult to measure (one cannot scan the brain of an arbitrator). Therefore, it can only manifest itself throughout external conducts which may serve as evidence or indications of the arbitrator’s state of mind.
6. Despite of the differences between one another, they should always be assessed together since they are two sides of the same coin. The requirement that an arbitrator be both independent and impartial constitutes basically two different means aiming at a common end, i.e. for the parties to have a neutral person who can guarantee them a fair trial. If either of these requirements is missing, chances are that an arbitrator’s ability to exercise fair judgment will be most likely compromised or affected.
7. In essence, what we really ask when we demand independence and impartiality from arbitrators –irrespective of whether there are party-appointed or not-, is for them to be neutral and conduct the proceedings fairly without providing any advantage –or disadvantage- to any of the parties, which is based on reasons unrelated to the dispute.
(B) DIFFERENT LEGAL STANDARDS FOR ASSESSING INDEPENDENCE AND IMPARTIALITY
8. There is no uniform legal standard on which to analyze arbitrators’ independence and impartiality. In fact, there are several standards used in various jurisdictions. Some of them include, “the real danger of bias” applied by English Courts, the American standard that “an arbitrator not only has to be impartial but also appear to be impartial”, and the “justifiable doubts” standard applied by the UNCITRAL Model Law, which has been adopted by several jurisdictions.
9. On the other hand, arbitral rules such as those applied by the ICC, contain subjective and objective components which encompass -quite correctly- both concepts of independence (assessed under “the eyes of the parties”), and impartiality (assessed under a “reasonable doubts” standard). In turn, while ICSID applies solely the “manifest lack of independence” standard, there is almost unanimity in awards and scholarly opinions that this principle is to be read in conjunction with that of impartiality.
10. One of the attempts at harmonizing the applicable legal standards is the proposal by the IBA of a set of Guidelines on conflicts of interest. While the effectiveness these guidelines have achieved may be somewhat controversial, it is undeniable that they are increasingly getting more attention out of the international community.
11. Their relevance is two-fold. Firstly, they provide a reasonable basis for guiding an arbitrator into making the conscious decision on selecting which personal information should or should not be disclosed to the parties. And secondly, they provide an insightful guideline for judges or arbitral institutions to decide on challenges to arbitrators, by pointing to certain situations that may justify doubts as to the arbitrators’ independence and impartiality.
12. Indeed, the standard proposed by these guidelines refers to “justifiable doubts -in the eyes of an informed third person- that there was a likelihood that the arbitrator may be influenced by factors other than the merits of the case” and again encompasses the double requirement of independence and impartiality.
13. Even though one may have several discrepancies with some of the proposals put forward by the IBA guidelines, one must also acknowledge that they evidence a fairly decent approach -by conducting a multi-jurisdictional study- with the aim of reconciling the differences between the various legal systems, and the way in which different cultures perceive human relationships vis-à-vis issues of conflicts of interest arising out of them.
14. The idea that States may get together one day and agree on a uniform text which may adopt the form of an International Convention seems rather utopian. Until that day comes, the international community should welcome attempts like the one made by the IBA guidelines and further embrace other attempts to improve them, as is the case of the revised text that was discussed by the IBA group on October 2014.
15. While reasonable and well-founded reasons may exist to justify differences in the legal standards used in the various jurisdictions, at the end of the day, all jurisdictions aim at the very same thing: to have neutral persons resolving disputes fairly. It follows from that, that such persons should commit themselves to the parties and decide on the only basis of facts, evidence and legal arguments. In order to do so, both independence and impartiality must be guaranteed.
16. Bearing all of this in mind, the more comprehensive and demanding the legal standard is, enshrining both subjective and objective elements which in turn encompass the double requirement of independence and impartiality, the better purpose it will serve for safeguarding the principles of neutrality, fairness and due process.
(C) CURRENT CHALLENGES FACED BY ARBITRATION
17. With the increased growth of alternative dispute resolution methods, there has been a considerable concern within the legal community that speaks about the “privatization of justice”. This idea proposes the recently discovered -yet not fully understood- reality, that there are fewer cases being tried by juries or judges and more being resolved through mediation and/or arbitration. This reality is particularly true in the international dispute arena. The main concern lies in how and who controls this private arbitrators who “take away” the jurisdiction from public judges, and are chosen and paid by the parties.
18. While choosing the most appropriate legal standard to asses an arbitrator’s independence and impartiality will require a much in-depth analysis than what the scope of this paper intends to cover, I will now focus on the standard that “an arbitrator not only has to be independent and impartial, but also appear to be that way”. The reason for this is because this standard serves the purpose of legitimizing the entire arbitration system by sending a message to the international community, especially to address the concerns of those that feel alarmed by this modern trend of what some call “justice behind closed doors”. Furthermore, since bias is almost impossible to prove, this standard becomes relevant given that it is generally through appearances that partiality is proven.
19. One of the main reasons why some people and/or States –especially developing ones- have such a hostile attitude towards arbitration is because of their lack of knowledge on how this system works. Human beings tend to distrust what they do not know and, conversely, defend or trust what they do know. In this sense, if one is educated under the idea that justice is only and exclusively served at a judge’s desk, the process of making room -in that person’s mind- for the idea that arbitration can also serve that purpose, will become a highly complex one.
20. Insofar as we do not come up with persuasive and compelling answers to address the concerns of those who oppose to the development of arbitration, the whole system will find itself crippled. It is for this, and other reasons, that not only the guarantee of actual independence and impartiality of arbitrators but also the appearance of these qualities, will cause a substantial contribution to the development of arbitration itself and therefore, to the international community as a whole.
21. Put simply, not only do we need to make sure that justice is done, but also that justice appears to be done. By doing so, we will find ourselves in a much better position to address the criticisms of those who question what they do not know nor understand.
22. For that purpose, disclosure of personal information on behalf of the arbitrators becomes crucial in order to demonstrate that there is nothing to hide. Hence, in case of doubt, disclosure should always prevail. In this vein, if we manage to keep arbitration in an environment of good faith, transparency, and honesty –and also ensure that others view and understand how it works- the system will find its own way of fighting against the threat posed by bias arbitrators. The reasons for this can be analyzed both from the perspective of the arbitrators as well as from the parties’ viewpoint.
23. From the arbitrator’s perspective, one will often find that a bias arbitrator in a three member tribunal will lose the respect of his colleagues, and his opinion will be therefore not heard or taken into account. Additionally, a bias arbitrator’s reputation will be destroyed rapidly amongst the arbitration community, thus striking such arbitrator out of the system.
24. From the parties’ perspective, this very same issue will result in the practical conclusion that appointing bias arbitrators will not constitute a wise choice and will generally be counter-productive to the party’s interests. In this vein, the very same poison that constitutes a real threat towards killing the legitimacy of the arbitration regime may well constitute the medicine that saves it. In other words, the system finds its own way to stay immune.
25. Be that as it may, truth is that, the dispute resolution system needs to be improved and updated constantly in order to meet the needs of the globalized business world. Our task as international lawyers nowadays consists of assisting our clients in finding the most efficient solution to their problems. Frequently, that requires a certain degree of creativity and flexibility that is not always available though the traditional trial process offered by local jurisdictions. Under this scenario, arbitration seems to be an appealing alternative.
26. In this regard, insofar as we do not guarantee that our “chosen” decision-makers can be trusted, the whole arbitration system is at stake. Hence, it is crucial that arbitral tribunals meet both requirements and are entirely independent and impartial from the parties; and can objectively analyze the issues presented to them.
(D) CONCLUSION
27. In sum, the requirement than arbitrators be both independent and impartial not only guarantees the parties that their particular dispute will be resolved fairly, but also legitimates the whole concept of arbitration altogether. It is therefore our task, the task of those who are involved in the international arbitration community, to make the public get used to the idea that justice is not exclusively served to them by a judge who can guarantee them “their day at court”; but rather that justice can also be served behind the doors of a conference room -by a “private judge” of their own choice- in a fair and efficient fashion that keeps pace with the needs of the international community. To this end, the double requirement that the arbitrator be independent and impartial –and the appearance of these requirements- constitutes one of the pillars in which the whole system rests.
