This entire process affects the speedy disposition of cases which is every arbitration institution’s prized possession. But, “empirically, double hatting is more a norm than transition,” they conclude. One of them being the problem of ‘elitism’. Unless developments occur at an institutional level, such an approach seems to be the new normal. Only. In this void, institution-appointed arbitrators can effectively curb the issues in the short-run. ©2005-2020 K&L Gates LLP. This practice is now attracting increasing criticism on the basis that performing multiple and sometimes overlapping roles can affect an arbitrator’s ability to act impartially. The practice of double-hatting has contributed to other supplementary issues. However, the disqualification must be based on incapacity or manifest lack of moral and/or professional qualities as provided under. The Annulment Committee’s decision marks the first time in ICSID history that an award has been annulled for improper constitution of the tribunal and for a serious departure from a fundamental rule of procedure – two grounds for annulment under the ICSID Convention. When an arbitrator in a case practices double-hatting, a party may propose to disqualify that arbitrator on grounds enunciated under Article 14 of the Convention. The practice of double-hatting has contributed to other supplementary issues. The draft Code of Conduct suggests in its accompanying commentary that “an outright ban may exclude a greater number of persons than necessary to avoid conflicts of interest and would interfere with the freedom of choice of adjudicators and counsel by States and investors.” There are differing views as to whether an obligation to disclose overlapping roles is sufficient, or whether some form of prohibition is required if the problem is really to be tackled. Moreover, arbitrator challenges merely highlight and not address the larger question of the legitimacy issue. Whilst addressing double hatting is considered important in opening up arbitral appointments to a more diverse group of candidates, there is also some concern that an outright ban on double hatting could operate as a significant barrier to new entrants. Even if an arbitrator avoids such a temptation, the appearance of a conflict of interest is a problem. An arbitrator, who acts as a counsel for a party in another case, would reason the award in such a way that it would inevitably support his arguments put forth in the case where he/she acts the counsel. It proposes that arbitrators either refrain from acting, or at least disclose that they act, in a significant capacity on matters involving the same parties (with the possibility of expanding this to cover matters involving the same facts and/or treaty). Empirical studies have proved that such a ‘club’ exists with a membership of twenty-five individuals called the “power brokers” of which only two are women. With the legal sector working digitally, it's a great time to review your current content marketing strategy and see where you can get the best ROI from your existing content. However, the prevalence of double-hatting has raised potent questions about its legitimacy. In 47% of the cases of the International Centre for Settlement of Investment Disputes (“ICSID”), the leading institution in resolving investor-state disputes, at least one arbitrator was acting as a legal counsel in another international investment arbitration. ( Log Out / Change ), You are commenting using your Twitter account. With ICSID’s inaction towards the problem, parties have taken the matter into their own hands. In May 2017, an ICSID tribunal chaired by Mr John Crook of the US ordered Spain to pay €128 million plus interest after finding that the reforms violated the ECT. One of them being the problem of ‘elitism’. A number of cases like Vivendi v. Argentina and Telekom Malaysia v. Ghana, highlight the practical relevance of these instances. The Annulment Committee stated that this relationship should have been disclosed, and that Dr Alexandrov’s absence of disclosure deprived Spain of the opportunity to challenge him in the arbitration proceedings. This seems to be the new normal since a blanket ban seems unthinkable in the near future. In investment disputes, the primary dispute is regarding the interpretation of the BITs. The notion of impartiality has raised the problem of, . International arbitration has become the primary dispute resolution mechanism for international investment disputes between investors and sovereign states. CONTEMPORARY ATTEMPTS AT CURBING DOUBLE-HATTING AND THE WAY FORWARD. In at least eight other cases, Dr Alexandrov was counsel where the client engaged the Brattle Group as expert. ”) provides for a party’s right to propose the disqualification of an arbitrator. The Annulment Committee’s decision turned on the fact that this situation involved an arbitrator sitting in adjudication of an expert’s work in one matter while simultaneously, as counsel, advocating for the same expert’s analysis in another.