Key Duties of International Investment Arbitrators: A Transnational Study of Legal and Ethical Dilemmas PDF
Preview Key Duties of International Investment Arbitrators: A Transnational Study of Legal and Ethical Dilemmas
Katia Fach Gómez Key Duties of International Investment Arbitrators A Transnational Study of Legal and Ethical Dilemmas Key Duties of International Investment Arbitrators Katia Fach Gómez Key Duties of International Investment Arbitrators A Transnational Study of Legal and Ethical Dilemmas KatiaFachGómez TenuredProfessor(ProfesoraTitular)attheLawSchool UniversityofZaragoza Zaragoza,Spain ThisbookispartofaresearchprojectfinancedbytheHumboldtStiftung,andhasalsobeen published by Springer with a financial subsidy from the former scientific institution. Addi- tionally,theeditingofthebookhasbeenkindlyfundedbyLegMIBIOS12_17RDGA. TheauthorisalsomemberoftheInstituteofEuropeanLawandRegionalIntegration(IDEIR) attheComplutenseUnivesityofMadrid(Spain)aswellasmemberofthefollowingSpanish ResearchProjects:LegMIBIOS12_17RDGA,DER2016-80568-RandDER2017-85585-P. ISBN978-3-319-98127-7 ISBN978-3-319-98128-4 (eBook) https://doi.org/10.1007/978-3-319-98128-4 LibraryofCongressControlNumber:2018952620 ©SpringerNatureSwitzerlandAG2019 Thisworkissubjecttocopyright.AllrightsarereservedbythePublisher,whetherthewholeorpart of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation,broadcasting,reproductiononmicrofilmsorinanyotherphysicalway,andtransmissionor informationstorageandretrieval,electronicadaptation,computersoftware,orbysimilarordissimilar methodologynowknownorhereafterdeveloped. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt fromtherelevantprotectivelawsandregulationsandthereforefreeforgeneraluse. Thepublisher,theauthorsandtheeditorsaresafetoassumethattheadviceandinformationinthisbook arebelievedtobetrueandaccurateatthedateofpublication.Neitherthepublishernortheauthorsorthe editorsgiveawarranty,expressorimplied,withrespecttothematerialcontainedhereinorforanyerrors oromissionsthatmayhavebeenmade.Thepublisherremainsneutralwithregardtojurisdictionalclaims inpublishedmapsandinstitutionalaffiliations. ThisSpringerimprintispublishedbytheregisteredcompanySpringerNatureSwitzerlandAG Theregisteredcompanyaddressis:Gewerbestrasse11,6330Cham,Switzerland Foreword In the aftermath of World War II, the United States and other Western countries made considerable intellectual efforts to establish minimum standards for the pro- tection of private property against expropriation as customary principles under international law. These efforts were doomed to failure at a time when socialist ideas and decolonization prevailed in large parts of the world. However, it soon became clear that the national development in many countries of the Third World dependsoncapitalinflowsfromabroadandthatforeigninvestorsneedsomekindof assurance that the terms of the agreements underlying their investment would be honoured in the future. As a result, more and more bilateral investment treaties (BITs) were concluded between capital-exporting and capital-importing countries. Alongside substantive principles on the protection of the foreign investment they providefordisputesettlementmechanisms,nowadaysmoreandmoreintheformof investorstatearbitration. Overmanyyears,theproceedingsbetweenforeigninvestorsandhoststateshave attractedlittleattentionoutsidethegroupofthoseinvolved.Thecaseshavenotbeen numerousandfromtheclosedclubofthelawyersandarbitratorsparticipatinginthe systemlittleinsiderinformationtranspired.Thepublicinterestgrewwhenthecapital flows changed direction. When the industrialized countries of the Western world becamedestinationsofforeigninvestment,itturnedoutthatregulatoryinterventions in the host states could be challenged under the investment protection treaties. Investor state arbitration now became a tool allowing private business to contest legislationthathadbeenapprovedindemocraticproceduresofthehoststates.The number of such cases is still small, but they have aroused the interest of a wider publicforinvestorstatearbitration,inparticularfortherecruitmentofarbitrators,for theirpowersandobligationsandforpossibleconflictsofinterest. This isthepolitical environment ofthis book.It ismeant to shed light onsome key duties of investment arbitrators and, by their analysis, contribute to a rational- ization of the debate. Caught between the duty of impartiality, the loyalty to the appointing party and their own interests, arbitrators will invariably have to take difficultethicaldecisions,relatingbothtotheprocedureandtothesubstanceofthe v vi Foreword litigation. Various intergovernmental and private bodies have tried to stake out a clearpathforarbitrators’conduct,butthedilemmaunderlyingthisbookisinherent and inevitable. In the light of the existing literature, the author does not tackle the fundamental issues of independence and impartiality but rather focuses on more specific duties which are of central significance nevertheless: the duties of disclo- sure,ofconfidentialityandofpersonaldiligenceandintegrity. Thereaderwhoislessfamiliarwithinvestmentarbitrationwillbesurprisedabout the multiple sources which give evidence of a broad discussion in arbitral circles abouttheseissues.Notonlyhastheauthordrawnfromvariousinstrumentsadopted inrecentyearsandfromabroadliterature;shehasalsoanalysedalargenumberof arbitrations which give evidence of the frequent occurrence of, and the broad discussionson,theissuestreatedinthisinvestigation. Theenquiryleadstotheproposalofacodeofconductforarbitratorsthatwould establishanumberofrulesanddutiesconcerningtheiractioninparticularphasesof the proceedings. This code may also help to improve the competitive position of investment state arbitration as compared with the multilateral investment tribunal that is currently negotiated. The author’s proposal to require for example truthful information on the arbitrators’ availability at the appointment stage relates to a problem that will be common to both investor state arbitration and the multilateral investment tribunal. Just like an investment arbitration panel, such a tribunal will have to deal with few cases only. As a consequence, it will likely be composed of part-timejudgeswhowillfacethesamedifficultyasarbitrators,i.e.toreconciletheir variousotheractivitieswiththeirjudicialoffice.Theexampleshowsthatthechoice between investment arbitration and an international arbitration tribunal depends, beyond the ethical dilemma outlined above, on a number of issues which will be discussed in the future. The author’s enquiry provides an excellent basis for such comparison and thereby for the future development of investment dispute settle- ments,bothinarbitrationandbyafuturemultilateraltribunal. ProfessorDr.Dr.h.c.mult.JürgenBasedow, 1July2018 LL.M.(HarvardUniv.);Directorem.ofthe MaxPlanckInstituteforComparative andInternationalPrivateLaw; MemberoftheInstitutdedroitinternational Preface and Acknowledgements Giventhetitleofthisbook,IfeelIhaveanethicaldutytobeginbyrecountingsome of the events that have been taking place around me as my work on this book progressedoverthelast2years. At the risk of crossing the line of what the academic establishment would consider appropriate, I feel compelled tounderline thefact that this book has been developedduringtherecentproblemsthathaveshakentheacademiccommunityin Spain. The project has unfolded and come to fruition in the midst of a devastating economic and financial crisis, which has weakened the state university system in Spaintoashockingextent. In addition to what has become a classic debate about the lack of funding for researchinSpainandtheabsenceofanygenuinecommitmenttoeducationandresearch fromthepoliticalclass,1anewbattlefronthasrecentlybeenopenedregardinghigher education.Followingaseriesofeventsinnationalpolitics,partofSpanishsocietyhas accusedstateuniversitiesofturningtheirbackontheprincipleofequality,ofignoring transparencyandofquashingmeritocracy.Thismaybeanewfrontforpublicopinion, buttothoseofuswhoformpartoftheuniversitysystem,itcertainlyisnot. Contrary to the approach taken by some of the media and part of social debate, thereisnothingneweitheraboutthereasonsthatsparkedanotherrecentevent:the women’sstrikeonInternationalWomen’sDayin2018,whichwassupportedona massive scale and with particular intensity in Spain. In spite of the indisputable progressthathasbeenmadeinrecentyears,wheregenderissuesareconcerned,my countrystilllagsbehindatbothgeneralandacademiclevel. Asaresultofthesefactors,thisbookcouldnothavebeenwrittenhadInotbeen granted a Humboldt Research Fellowship for Experienced Researchers. This has undoubtedly been one of the most outstanding milestones in my academic career. BecomingaHumboldtSeniorResearchFellowenabledmetovisitGermanyseveral 1FachGómezK(2014)EuropeandtheLegalLostGeneration:Spain’sDysfunctionalUniversity SystemisAlsotoBlame.GermanLawJournal15(6):1209–1222. vii viii PrefaceandAcknowledgements timesforresearchpurposesinthebestpossibleconditionsandalsototakeadvantage of the countless academic resources to which Humboldt Stiftung scholars have access. I am particularly indebted to the individual mentoring scheme run by two engagedandgenerousGermanacademicsofworldrenown,Prof.Dr.Dr.h.c.mult. Jürgen Basedow, LL.M. (Harvard Univ.), at the Max-Planck-Institut für ausländisches und internationales Privatrecht in Hamburg, and Prof. Dr. Dr. h.c. Matthias Herdegen attheUniversität Bonn.They haveleft theirtacitfootprint oneverypageofthebook,andmyenormousdebtofgratitudetothemfarexceeds thespaceavailableinthisshortpreface.Iamalsogratefultotheacademicauthorities attheUniversityofZaragoza,theLawFacultyandthePrivateLawDepartment,to whomit wasnotnecessarytoexplain thataresearchstay abroad, far frombearing anyresemblancetoaholiday,isinfactaperiodofintenseworkandsacrifice.Such visitsare,moreover,anabsolutenecessityforthoseofuswhowishtocarryouthigh- qualityresearchbutunfortunatelylacktheresourcesweneedatouralmamaters. TheseriesofresearchperiodsinGermanygavemeaccesstobibliographicsources thatwereessentialforwritingthisbook.Theyalsoenabledmetoenjoythegreatpleasure ofrigorousacademicconversationwithnumerousuniversitycolleagues.Iamespecially gratefultoProf.Dr.KarstenNowrotforhisintensepersonalinvolvementinthemany research-relatedprojects(internationalconferences,specialissuesofjournalsandedited volumes)thatarosefromtheHumboldtscholarship.Allthisservestohighlightthegreat honourofbeingafellowofafoundationthatfullyunderstandsthatresearchprojectsthat aspiretoqualityneedtobeallowedtodevelopslowlyandalsorequiresuitablephysical andintellectualsurroundingsiftheyaretobecarriedoutproperly. However,mygratitudetotheHumboldtStiftungincreasesevenmoreifpersonal and family circumstances are taken into account—circumstances which, nonethe- less,arenothingoutoftheordinary.Thefamilyandparentalsupportsectioninthe HumboldtGuidelinesandInformationforResearchFellowswasakeyfactorinthe successful completion of the research project presented in this book. I wish to express my most sincere thanks for the Humboldt Stiftung’s unwavering support inthedifficulttaskofcombiningmyacademicandresearchworkwithbringingup mybeloveddaughterInés.Thankstothissupport,Inéswasabletocomewithmeon myresearchvisitstoGermanyandgotoschoolthere.Becauseofthisexperience,the seedofloveforGermanlanguageandculturethatwasplantedinmemanyyearsago has now taken root in her, and as it is still alive in me, I am deeply grateful to the HumboldtStiftungforhelpingmetocultivateitinmydaughter. Unfortunately, a set of family and parental means such as that provided by the Humboldt Stiftung is still entirely alien to many national research schemes. I therefore wish to take advantage of this excellent opportunity to commend all the research contexts that take the human dimension into account, with all the conse- quences,andregardlessofgender.2Agreatdealhasbeenwrittenaboutthelife-work 2RegardingtheEUresearchframework,FachGómezK(2014)LanuevapolíticadeInvestigacióne innovación de la Unión Europea: Horizonte 2020 y el tratamiento de las Ciencias Sociales y Humanidades.RevistaGeneraldeDerechoEuropeo33:1-36. PrefaceandAcknowledgements ix balance from many different angles, but I feel that the reality requires still more reflectionandespeciallymoreresolutedecision-making. IwouldalsoliketoexpressmygratitudetoJesús,mypartnerandInés’father,for hissupportthroughoutthelengthyandintenseprocessofwritingthisbook.Iwould be lying if I did not say that being the absent mother at many school, social and familyeventswasafranklypainfulexperience.Iwanttobelievethattheseabsences havetheirpositivesideandthatthroughthemourbeloveddaughterhasunderstood the real implications of notions such as responsibility, effort and discipline. I also wanttobelieve,inmanydifferentways,thatthebestisyettocome. I could not bring this final section of acknowledgements to a close without mentioningmydearparents.Allmypreviousacademicworkshavebeendedicated tothem,anddeservedlyso;however,duringthelongprocessofwritingthisbook,I haverealizedthatwhatIreallyneedtodedicatetothemfromnowonismoretime.It issometimesimpossibletoachievetherightbalancebetweenthemanylivesthatwe areobligedtomanageonaday-to-daybasis.Unfortunately,itisoftenthosewhose love we know we have won that bear the brunt of this. In spite of everything, my parentscontinuetoprovetheirgenerosityandunswervingloyaltytome. Finishingtheresearchcomponentofthisbookinlatespring2018meantthatmy familyandpersonallifebegantomakemoredemandsonmethanpreviously.This preventedmefromcontinuingtoprocrastinateoverwritingthispreface,whichisa veryemotionalactforme.Itrustthatsomeoftheissuesmentionedheremanageto capture not only my personal circumstances, but also the reality and sentiments of other academics, whether female or otherwise. We are living in an era in which publicvisibility seemstobeawakeningsleepingconsciencesandinspiringarange ofpositiveactionsandIwishthisprefacetobemycontribution.Itisacontribution from an extremely shy person in this sense, but one who understands that it is her academic duty to publish her reflections on the professional and human circum- stancessurroundingherresearchwork. Hamburg,Germany KatiaFachGómez 25June2018 Contents 1 Introduction.ATransnationalStudyofLegalandEthical Dilemmas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 TheISDSinFlux. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.2 InvestmentAdjudicatorsandTheirDuties:PresentandFuture. . . . 6 1.3 KeyDutiesofInternationalInvestmentAdjudicators:Some TransversalUncertaintiesandChallenges. . . . . . . . . . . . . . . . . . . 11 1.3.1 PluralityofSources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 1.3.2 SanctionsandEnforcement. . . . . . . . . . . . . . . . . . . . . . . 14 References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 LegalandArbitrationReferences. . . . . . . . . . . . . . . . . . . . . . . . . . . 22 2 TheDutyofDisclosure:AnOverview. . . . . . . . . . . . . . . . . . . . . . . . 25 2.1 TheDutyofDisclosureinICSID:PreliminaryComments. . . . . . . 27 2.2 FormalAspectsoftheStatementofImpartiality andIndependence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 2.3 TheContentoftheStatementofImpartiality andIndependence,andDisclosureStandards. . . . . . . . . . . . . . . . 36 2.4 Timing,Celerity,DurationandAddresseesoftheDuty ofDisclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 2.5 TheScopeoftheDutyofDisclosure. . . . . . . . . . . . . . . . . . . . . . 50 2.6 Arbitrators’CurriculaVitae. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 2.7 Arbitrators’DutytoInvestigate. . . . . . . . . . . . . . . . . . . . . . . . . . 60 2.8 TheRoleofArbitralInstitutionsRegardingtheDisclosureDuty. . . . 67 References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 LegalandArbitrationReferences. . . . . . . . . . . . . . . . . . . . . . . . . . . 74 xi
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