Each party shall have the right to challenge an arbitrator within a sixty-day period from the date on which such party learned of the alleged cause for the challenge, regardless of whether such date is before or after the execution of the agreement. The right to request a challenge expires after the sixty-day period. In case such challenge occurs, the parties agree that it shall be resolved by the Secretary-General of the Permanent Court of Arbitration at The Hague and that the IBA Guidelines on Conflicts of Interest in International Arbitration shall apply.
Brower: It has already given notice to ICSID that it is denouncing that Convention, so during the six months from the date notice was given, they may expect a last minute rush of new claims. Either it or Venezuela has denounced its bilateral investment treaty with The Netherlands. Ecuador has spoken of the possibility of denouncing its BIT with the United States, but as far as I know that hasn't been done. Bolivia is the other country that has denounced ICSID, but that doesn't solve its problem, since bilateral investment treaties usually provide for the alternative of the UNCITRAL Rules, so they'd have to go around denouncing all of their bilateral investment treaties, and I think that's a much different and bigger step.
Editor: Tell us what you see as the most pressing issues in international arbitration.
Brower: There is an issue of acceptance and the willingness to continue participating in it, as exemplified by what Bolivia has done and what Ecuador is doing. Ecuador currently is expressly declining to comply with the orders of two ICSID tribunals with very stiff interim provisional measures, but they just say they have to enforce their national law and the orders don't make any difference. But when recalcitrant host countries find out that claimants are going to act like those who were expropriated in Libya, start bringing hot oil litigation and chasing cargos, doing detective work looking for people who will invoke cross-default clauses in loan agreements, etc., the politics may change. After a certain point, no one will invest without having something to rely on.
Every arbitrator shall be impartial and independent of the parties at the time of accepting an appointment to serve and shall remain so during the entire arbitration proceeding until the final award has been rendered or the proceeding has otherwise finally terminated.
(a) An arbitrator shall decline to accept an appointment or, if the arbitration has already been commenced, refuse to continue to act as an arbitrator if he or she has any doubts as to his or her ability to be impartial or independent
(b) The same principle applies if facts or circumstances exist, or have arisen since the appointment, that, from a reasonable third person's point of view having knowledge of the relevant facts, give rise to justifiable doubts as to the arbitrator's impartiality or independence, unless the parties have accepted the arbitrator in accordance with the requirements set out in General Standard (4).
(c) Doubts are justifiable if a reasonable person and informed third party would reach the conclusion that there was a likelihood that the arbitrator may be influenced by factors other than the merits of the case as presented by the parties in reaching his or her decision.
Based on the virtual consensus of the national reports and the discussions of national law, the Working Group decided that the proper standard for a challenge is an "objective" appearance of bias, so that an arbitrator shall decline appointment or refuse to continue to act as an arbitrator if facts or circumstances exist that form a reasonable third person's point of view having knowledge of the relevant facts give rise to justifiable doubts as to the arbitrator's impartiality or independence. If an arbitrator chooses to accept or continue with an appointment once such bias has been brought to light, disqualification is appropriate and a challenge to the appointment should succeed.
HEREBY SUSTAIN the challenge against the Hon. Charles N. Brower as arbitrator in the above-referenced matter for the reason that, from the point of view of a reasonable third person having knowledge of the relevant facts, the comments made by Judge Brower in an interview published in the August 2009 edition of The Metropolitan Corporate Counsel constitute circumstances that give rise to justifiable doubts as to Judge Brower’s impartiality or independence.
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