Marco Bronckers v. Kingdom of Spain, ICSID Case No. 246–247). Double hatting raises a number of poignant ethical and practical concerns, as a result of the unavoidable conflict of interests that arise in light of the interwoven nexus of relations which lawyers have, both in his/her role as a counsel, and as an arbitrator. [14]. Date d'introduction : 23 déc. Spain had made their case for annulment of the award on two broad grounds. The committee referred to the standard laid down in Blue Bank International v Bolivia, [3] by Chairman Kim, wherein it was stipulated that in order to determine whether an arbitrator had failed to comply with the standards of independence and impartiality, the standard should be one of whether “a third party would find an evident or obvious appearance of lack of impartiality on reasonable evaluation of the facts in this case”. Désolé, cet article est seulement disponible en Anglais Américain. Archive • 15.06.2020 • . Eiser v Spain: ICSID Award annulled on two grounds due to undisclosed ties between claimants’ appointed arbitrator and claimants’ quantum experts. [20] UNCITRAL and ICSID, Draft Code of Conduct for Adjudicators in Investor-State Dispute Settlement, Article 6 – “Adjudicators shall [refrain from acting]/[disclose that they act] as counsel, expert witness, judge, agent or in any other relevant role at the same time as they are [within X years of] acting on matters that involve the same parties, [the same facts] [and/ or] [the same treaty]”. The tribunal awarded EUR 128 million in damages to Eiser Infrastructure Limited and Energia Solar Luxembourg S.à r.l., (collectively, “Eiser”).[1]. The Respondent shall bear Claimants’ share of the costs of the arbitration proceeding as well as their legal representation costs and expenses. also Isolux Netherlands, BV v. Although Spain requested the annulment of the arbitral award on multiple grounds, the committee examined only the relationship between Alexandrov and Brattle and the extent to which his connections amounted to an improper constitution of the tribunal and to a serious departure from fundamental rules of the arbitral procedure. (“Eiser”) bring this action to enforce an … The influence that Alexandrov exercised on being a part of the tribunal, and the failure to provide Spain with an opportunity to challenge his appointment on the ground of this relationship, was invoked by Spain to claim a serious departure from a fundamental rule of procedure under Art. After the arbitral tribunal chaired by John Cook, and comprising of Stanimir Alexandrov and Campbell McLachlan, had decided the dispute between UK-based infrastructure firm Eiser Infrastructure Ltd. and the Republic of Spain in favour of the former, and ordered Spain to pay €128 million, Spain filed an application to annul the award, and to deliberate upon the same, a three-member committee comprising of Chairman Ricardo Ramírez-Hernández, Dominique Hascher and Teresa Cheng was constituted. [14] In Telekom Malaysia Berhad v Ghana (UNCITRAL Arbitration at the PCA, The Hague), Ghana challenged the presence of the arbitrator nominated by the Claimants, Prof. Emmanuel Galliard, on the ground that he was acting as counsel for Morocco in the annulment proceedings of the award rendered in RFCC v Morocco (ICSID Case No. In fact, in the preliminary identifications of possible areas of reform in investor-state arbitration by the UNCITRAL Working Group III, [17] the concern that arises from completely shifting the burden of appointments from parties to an appointing authority is a re-politicisation of the investment arbitration paradigm. 179 In any case, the Eiser Parties consider that the Tribunal looked at the economic impact of Spain's measures on the Eiser Parties' investments to determine that the Disputed Measures were disproportionate and clearly stated the … The Committee also stated that the failure on the part of Mr. Alexandrov to disclose this conflict had severe effects on the proceedings themselves, as it hampered the constitution of an independent tribunal, and also adversely affected Spain’s right to a fair arbitration. 52(1)(a), as a result of the undisclosed relationship between the nominated arbitrator of the Claimant, Stanimir Alexandrov, and one of the experts of the Brattle group that was appointed by the Claimants, Carlos Lapuerta. Horia Ciurtin, Editors The committee concluded that the absence of disclosure deprived Spain of the opportunity to challenge Alexandrov during the arbitration proceedings. v. Kingdom of Spain (ICSID Case No. Spain, in contrast, … 29 Eiser Infrastructure Ltd v Kingdom of Spain [2020] FCA 157 [145]-[173]. After Teresa Chang stepped down from the committee, she was swiftly replaced on the committee by Makhdoom Ali Khan. It also noted that “a clear and … 63). À la différence de l’affaire Charanne, ils arguaient qu’un ensemble de réglementations adoptées entre 2012 et 2014 avaient violé leurs droits au titre du TCE, entrainant une dévaluation significative de leurs investissements et forçant leurs filiales espagnoles à négocier une … ARB/13/36 Type d'affaire : Investisseur-État. The committee declared annulment of the arbitral award and indicated that there was no need to address the other grounds for annulment raised by Spain (para. [1] See Arbitral Award, ICSID Case No. [5] With respect to investment treaty arbitration, the requirement of independence and impartiality assumes much accentuated significance, as a result of the public interest element, and the political and economic ramifications of the decision on the Respondent State. This invigorated call for a reform in the prevailing paradigm has led to a number of recent developments, which also illustrate two extremely different approaches to tackling this predicament. One of the hallmarks of the arbitral process is having independent and impartial arbitrators on the tribunal to adjudicate the disputes between the parties. According to the committee, “[s]uch a waiver cannot be established without proof that the party concerned had actual or constructive knowledge of all the facts” (para. SolEs Badajoz v. Spain; 2015. Spain, however, subsequently enacted substantial changes to the special regime, culminating in its abolition in 2014, as a result of whi… 52(1)(a). v. Kingdom of Spain, ICSID Case No. 178). The duty to disclose is a corollary of the independence and impartiality requirement, as it places a positive duty upon the appointed arbitrators to disclose any and all potential and existing conflicts of interest with any of the parties, witnesses, counsel etc. After the tribunal issued a decision on rectification of the award on 29 January 2019. 254), agreeing with the approach taken by the committee in Pey Casado, where the committee concluded it has no discretion not to annul an award if a serious departure from a fundamental rule is established.[3]. She holds an LL.M. Back to Power Law Committee publications. ARB/13/36, available at https://www.italaw.com/sites/default/files/case-documents/italaw9050.pdf, [2] Principal of The Brattle Group. v. Kingdom of Spain, ICSID Case No. in international commercial arbitration from Stockholm University and a bachelor’s degree in law from the University of Malaga. Investment Arbitration Reporter Eiser and Energía Solar v. Spain Eiser Infrastructure Limited and Energía Solar Luxembourg S.à r.l. Nikos Lavranos It was soon discovered that during the proceedings themselves, Mr. Alexandrov had been acting as counsel of a reputed law firm in other arbitration proceedings, and had employed the services of the Brattle group as experts. The need for reform to combat the predicament of double hatting has been all the more pronounced as a result of the prevailing no-man’s land with respect to ethical standards that prevail in arbitration proceedings, not just for legal counsels, but also for arbitrators. Third, the Eiser Parties argue that Spain disagrees with the Tribunal's factual findings, something that is not relevant to any annulment standard in annulment proceedings. Practical Implications of the New Legal Framework for Foreign Direct Investment in the European Union. Editor-in-Chief En 2017, le tribunal de l’affaire Eiser c. l’Espagne se prononça en faveur des investisseurs de trois centrales thermiques. [6] The disclosure is also a safeguard to ensure that the arbitrator is secured from any future challenges on his/her independence or impartiality by one of the parties on the grounds which have been disclosed. One of the overarching concerns in this regard is of role confusion, which refers to the situation where arbitrators try to issue an award that would be favourable for them in a case where they are representing a different client as counsel. And. involved in the arbitration. Docket for EISER INFRASTRUCTURE LIMITED v. KINGDOM OF SPAIN, 1:18-cv-01686 — Brought to you by the RECAP Initiative and Free Law Project, a non-profit dedicated to … Eiser Infrastructure Limited and Energia Solar Luxembourg S.à.r.l v. Kingdom of Spain, ICSID Case No. Défendeur: Espagne. 5 (2020). 52(1)(a) did not prevent the committee from reviewing whether the procedural steps to constitute the tribunal had been appropriately followed at the beginning of the arbitration, as review under Art.52(1)(a) encompasses situations where an arbitrator is alleged to have lacked impartiality and independence at any time during the arbitration. EFILA Paper Regarding the Proposed [15] It also mentions that no arbitrator should have acted as a counsel in any investment arbitration proceeding in the previous five years. And it is in this context that the Eiser case has taken a firm stand. The next part of this post will explore the duty of disclosure in the context of investment arbitration, and analyse the decision of the committee from that perspective. For that, the committee adopted the Blue Bank v. Venezuela standard that determines that the relevant legal standard is an objective one “based on a reasonable evaluation of the evidence by a third party” (para. The committee found that Alexandrov’s failure to disclose could have had a material effect on the award. The jury is still out on whether the setting up of an international investment adjudicatory body is in the best interests of resolving all the problems that exist in the investor-state dispute resolution settlement mechanism, but the Eiser decision has, by taking a firm stand against any minutiae of an appearance of bias, shown that the present system is also well equipped to provide parties what they wish for: a neutral, efficient and fair result. It also noted that “a clear and unequivocal waiver” is needed to surrender a right so fundamental that it goes to the very foundation of the proper constitution of the tribunal. 2021 International Institute for Sustainable Development The committee deliberated on the first ground, and analysed the relationship between Mr. Alexandrov and the expert retained by the Claimants in great detail. The committee found that a lack of disclosure compromised the independence and impartiality of one of the arbitrators, Stanimir Alexandrov, amounting to the improper constitution of the tribunal and a severe departure from a fundamental rule of procedure. On June 11, 2020, an ICSID ad hoc committee annulled an award in its entirety on the grounds of serious departure from fundamental rules of procedure. Borderlex An agreement by a foreign state to waive its immunity under Pt II has effect to waive that immunity and the waiver may not be withdrawn except in accordance with the terms of the agreement (Immunities Act, s 10(5)). Award Name and Date: Eiser Infrastructure Limited & Energia Solar Luxembourg S.À R.I. v.Kingdom of Spain – Award – ICSID Case No. The Parties representatives and their addresses are listed above on page (i). ARB/13/36, May 4, 2017. [11] Frederick A Acomb and Nicholas J Jones, ‘Double-Hatting in International Arbitration’ (2017) 43 Litig 15. The committee also noted that given the fact that it is in the very nature of deliberations that arbitrators exchange opinions before issuing the award “it would be unsafe to hold that Alexandrov’s views and his analysis could not have had any material bearing on the opinions of his fellow arbitrators” ( paras. ARB/03/19). State liability to foreign investors in the renewable energy sector: Eiser v Spain and its implications. An issue conflict arises when an arbitrator has to adjudicate on an issue that was in contention in an earlier or ongoing case where he/she served as a counsel, or as an arbitrator. ISSN 2519-8831 (Spanish ed. [2] ICSID Rules, Article 52, “(1) Either party may request annulment of the award by an application in writing addressed to the Secretary-General on one or more of the following grounds: (a) that the Tribunal was not properly constituted; (b) that the Tribunal has manifestly exceeded its powers; (c) that there was corruption on the part of a member of the Tribunal; (d) that there has been a serious departure from a fundamental rule of procedure; or (e) that the award has failed to state the reasons on which it is based.”. Clifford Hendel In a recent decision, in Eiser Infrastructure Limited and Energia Solar Luxemburg S.À.R.L. After understanding the decision of the committee, and reconciling the same within the ICSID Rules framework, this post will explore two broader ramifications of this decision on investment arbitration; first, the importance of early disclosure of potential and existing conflicts by arbitrators, and second, the importance of this decision in understanding the double-hatting debate in international arbitration. Horia Ciurtin This legislation led companies to finance various renewable energy plants in Spain. Statut de l'affaire : Pendante (Annulation) Pays d'origine de l'investisseur : Royaume-Uni, Luxembourg. The Dutch Model BIT has employed a rather extreme approach, explicitly disallowing double hatting, and precluding arbitrators from acting as legal counsels. Pawel Sikora The ECT, to which Spain is a signatory, in Art 26(2), gives an Investor party to a dispute with a Contracting Party three options for the resolution of disputes. 3. ARB/13/36, Award, 4 May 2017. Not only does a disclosure aid the parties in raising a timely challenge to the appointment of the arbitrator if it deems so necessary, it also waives the right of the party from raising such challenge at a later date, or post the rendering of the award, in cases where they fail to make such a challenge within the stipulated time period. While the case certainly emphasised the importance of making prompt and early disclosure of conflicts of interest in Investment Arbitration, it also highlighted an issue that has garnered significant academic interest and debate for a long while: the issue of double-hatting. In this sense, the committee found that the relationship between Alexandrov and Lapuerta created a manifest appearance of bias and, therefore, Alexandrov had an obligation to disclose this relationship (paras 220-228). ARB/13/36) Expand / Collapse All 30 After the tribunal issued a decision on rectification of the award on 29 January 2019. Eiser argued that under Art. It further concluded that Alexandrov should have disclosed his relationship with Brattle and particularly with Lapuerta based on an objective assessment of the multiple professional connections and interactions between them. An annulment decision rendered in favor of Spain last June has been creating headlines in international arbitration. The committee did not find, as argued by Eiser, that it had the discretion to decide not to annul the award even if the requirements under Art. ARB/13/36 (the “Award”). v. Kingdom of Spain, Abogacia General del Estado Calle Ayala, 5 28001 - Madrid Spain Respondent. The 28 arbitral awards from Charanne v. Spain to The PV Investors v. Spain did not give a uniform answer to this question. Feldman, ‘The annulment proceedings and the finality of ICSID arbitral awards’ [1987] 2(1) ICSID Rev. Nikos Lavranos This article was first published on Kluwer Arbitration Blog on 12 July 2020, see here.. [17] UNCITRAL Working Group III: Investor-State Dispute Settlement Reform 2020. in investment treaty arbitration from Uppsala University, an LL.M. [4]. Meriam Al-Rashid Dentons, New York meriam.al-rashid@dentons.com. Practical Law Arbitration v. Spain and requiring Spain to pay over €28.2 million for violating the ECT. ARB/13/36), an International Centre for Settlement of Investment Disputes (ICSID) ad-hoc committee decided to annul an award in its entirety, the reason being a conflict of interest. This dispute relates to measures implemented by Respondent modifying the regulatory and Eiser argued that Spain had waived its right to object to the connections between Alexandrov and Brattle because Spain should have known about it since they were public domain before the arbitral award was rendered. 52(1)(b), as a result of an improper award of damages. Furthermore, in four of these proceedings, the impugned expert, Mr. Lapuerta, had been the testifying expert on behalf of the Brattle group. This publication covers legal and technical issues in a general way. [19]. According to Eiser, its decision to invest in Spain was based on RD 661/2007. ARB/13/36 (Published in 2018 in International Investment Law and Sustainable Development: Key cases from the 2010s and on this website on October 18, 2018. Subsequent to this decision, Prof. Galliard resigned from his role as the counsel of Morocco in the annulment proceedings and continued to serve as an arbitrator on the tribunal. Tethyan Copper Company Pty Ltd v Islamic Republic of Pakistan (Federal Court of Australia NSD1749/2019, commenced 17 October 2019). [10] Dennis H. Hranitzky and Eduardo Silva Romero, ‘The ‘Double Hat’ in International Arbitration’ (New York Law Journal, 14 July 2010) < https://www.law.com/newyorklawjournal/almID/1202462634101/The-Double-Hat-Debate-in-International-Arbitration/?slreturn=20200731133829> accessed 4 July 2020. First Line of Reasoning – All State Measures Frustrated Legitimate Expectations. [10] It essentially refers to the growing trend in investment arbitration, wherein lawyers who are appointed as arbitrators in particular cases continue to represent other parties as counsel in arbitration proceedings at the same time. ), © 44. Enter your email address to follow this blog and receive notifications of new posts by email. Mirjam van de Hel-Koedoot, Georges Affaki Maria Bisila Torao is an international lawyer based in London. This tension, between party autonomy in the choice of arbitrators on one hand, and ensuring the right to a fair and independent arbitration on the other, has been the crux of the academic debate surrounding double hatting. 52(1)(d) of the ICSID Rules. In its recent decision in the case of Eiser Infrastructure Limited and Energia Solar Luxemburg S.à r.l. [12] Double hatting thus increases the possibility of an occurrence of issue conflict for an arbitrator, as was evident in the case of Telekom Malaysia Berhad v Ghana, [13] and raise justifiable doubts as to the arbitrator’s impartiality and independence. Pratyush Nath Upreti The award relates to a dispute registered at ICSID under the ECT. [8]. The committee rejected this approach, concluding that for the purpose of determining whether the tribunal is properly constituted, Art. It thus held that the failure to disclose had a “material effect” on the proceedings, and thus the tribunal had seriously departed from a fundamental rule of procedure under Art. Found in: Arbitration. Prof. Loukas Mistelis 2013. [1] Eiser Infrastructre Ltd. v Republic of Spain (ICSID Case No. Notes: The ad hoc committee was composed of Prof. Ricardo Ramírez Hernández (president), Makhdoom Ali Khan (member) and Judge Dominique Hascher (member). The committee’s view was that a third party would have found an evident or obvious bias on an objective assessment of the facts at hand. Spain and Antin v. Spain cases should be rejected. Hence, the lack of disclosure constituted a serious breach that warranted annulment both under clauses (a) and (d) of paragraph (1) of Art. [16] Another radical change that the Dutch Model BIT makes is to completely do away with party-appointed arbitrators, and instil the power to appoint arbitrators solely to a competent appointing authority. ARB/00/6), where he was challenging an argument that was being relied on by Ghana in the present case. This development has come in light of the increasing concern of politicisation of Investor-State arbitrations, and how the appointment of arbitrators to constitute the tribunal accentuate this concern more than any other factor. The Eiser case also demonstrated that the wide nexus of connections that a lawyer has, and people he/she engages with in order to represent their clients, leads to a number of potential conflicts, as was observed here with the expert of the Brattle group, retained by the Claimants. ITA Law Columbia FDI Perspectives Privacy Policy, UNCITRAL tribunal dismisses claims of German aircraft leasing company against the Czech Republic while upholding its jurisdiction over the intra-EU claim, https://www.italaw.com/sites/default/files/case-documents/italaw11591.pdf, https://www.italaw.com/sites/default/files/case-documents/italaw11592.pdf, https://www.italaw.com/sites/default/files/case-documents/italaw9050.pdf, https://www.italaw.com/sites/default/files/case-documents/italaw11100.pdf, International Institute for Sustainable Development. [18] It has been stated, for example, that the influence of States on appointments would continue to exist while the investor would lose out on having any say in the appointment process.
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