Challenge The Presiding Arbitrator.

Introduction

The presence of Dr Mercado as a legal counsel raises the question of impartiality in determining the case between claimant (Elite) and respondent (Control Systems) because of the close relationship between the Dr Mercado and the Presiding Arbitrator. In addition, in the cases where Dr Mercado has appeared as a counsel before the Presiding Arbitrator, the Presiding Arbitrator has always ruled in Dr Mercado’s favour. There is thereby doubt on whether the presence of Dr Mercado would influence the ruling of the Presiding Arbitrator in favour of Dr Mercado’s client. It is on this basis that the respondent is seeking the removal of Dr Mercado as legal counsel representing the claimant. However, should the claim to remove Dr Mercado as legal counsel fail, would the respondent have grounds to challenge the Presiding Arbitrator? This paper will analyse whether the respondent have ground to challenge the Presiding Arbitrator.

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Analysis

The respondent has grounds to challenge the Presiding Arbitrator. There are a number of reasons as to why this is the case. One of them is the personal relationship between Dr Mercado and the Presiding Arbitrator. As revealed by the respondent, Dr Mercado has a personal relationship with the Presiding Arbitrator who is acting as the legal counsel for the claimant. The personal relationship is thereby likely to influence the judgment by the Presiding Arbitrator.

Another reason why the respondent has grounds to challenge the Presiding Arbitrator should the claim to remove Dr Mercado as legal counsel fail is the outcomes of the previous cases that have involved both Dr Mercado and the Presiding Arbitrator. As pointed out by the arbitrator, Dr Mercado has appeared three times before the Presiding Arbitrator where she acted as the legal counsel to clients. In two of the three arbitrators, the tribunal unanimously ruled in her client’s favour. However, in the third arbitration, the tribunal ruled in favour of Dr Mercado’s opponent with the Presiding Arbitrator the only providing a dissenting opinion. This implies that in all three cases, the Presiding Arbitrator ruled in favour of Dr Mercado’s client. While the two previous arbitrations that attracted unanimous ruling in favour of Dr Mercado do not reveal anything about the possible bias of the Presiding Arbitrator, the third arbitration shows that it is possible that the Presiding Arbitrator’s judgment is influenced by the close relationship he shares with Dr Mercado.

Another reason is the possible conflict of interest when Dr Mercado is involved. The personal relationship that the Presiding Arbitrator shares with Dr Mercado makes him to have some sort of personal interest in the arbitration and a desire to help his friend win the case for her client. This implies that there is need for the Presiding Arbitrator to remove himself from the arbitration due to the possible conflict of interest.

The IBA guidelines provide that an arbitrator should decline an appointment or refuse to continue acting as an arbitrator if they have doubts concerning their ability to be independent or impartial. According to IBA guidelines, this principle also applies if circumstances arise during the arbitration that brings to doubt the impartiality and independence. Based on this guideline, it is realized that due to the personal relationship between Dr Mercado and the Presiding Arbitrator, it is difficult for the Arbitrator to act independently and impartially should Dr Mercado be retained as legal counsel for the claimant. The doubts with respect to the ability of the Presiding Arbitrator to be impartial and independent thereby provide grounds for the respondent to challenge the suitability of the Presiding Arbitrator.

It can be argued the IBA guidelines do not provide a legal basis that can provide grounds for the respondent to challenge the Presiding Arbitrator. While this is true, there are actually laws that the respondent can use to challenge the Presiding Arbitrator. For example, Article 30 of the CIETAC Arbitration Rules provides if a party involved in arbitration has justifiable doubts with regard to the independence or impartiality of the arbitrator, then it can challenge the arbitrator. The question that arises is thereby whether the respondent in this arbitration has justifiable doubts in the impartiality and independence of the Presiding Arbitrator. From the evidence provided by the respondent, there are justifiable doubts about the impartiality and independence of the Presiding Arbitrator. As pointed out before, the Presiding Arbitrator has a close and personal relationship with Dr Mercado. In addition, the Presiding Arbitrator has never ruled against Dr Mercado in previous arbitrations.

In this arbitration, the tribunal can exercise its power and remove Dr Mercado since her participation impairs the impartiality and independence of the tribunal. To secure a fair hearing, Dr Mercado or the Presiding Arbitrator needs to be barred from taking part in this arbitration. However, when efficiency, immutability, and other policy perspectives are taken into consideration, then the termination of Dr Mercado’s role in the arbitration takes priority. However, in case the tribunal refuses to remove Dr Mercado, then the removal of the Presiding Arbitrator should be considered in order to ensure that the hearing would unbiased, impartial and independent of any form of influence. This also provides grounds for the respondent to challenge the suitability of the Presiding Arbitrator in taking part in the arbitration.

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Conclusion

Basically, the presence of Dr Mercado as a legal counsel raises the question of impartiality in determining the case between claimant (Elite) and respondent (Control Systems) because of the close relationship between the Dr Mercado and the Presiding Arbitrator. It is on this basis that the respondent is seeking the removal of Dr Mercado as legal counsel representing the claimant. The respondent has grounds to challenge the Presiding Arbitrator should the claim to remove Dr Mercado. This is because the Presiding Arbitrator has a personal relationship with Dr Mercado which may influence his judgment. In addition, in previous arbitrations, the Presiding Arbitrator has always ruled in favour of Dr Mercado’s clients. This indicates that there is a possibility of bias on the part of the Presiding Arbitrator when handling cases involving Dr Mercado.

Bibliography

  • China Chamber of International Commerce, China International Economic and Trade Arbitration Commission CIETAC Arbitration Rules (China Chamber of International Commerce 2015)
  • Emilia Onyema, International Commercial Arbitration and the Arbitrator’s Contract, (Routledge, 2010)
  • International Commercial Arbitration Moot, Nineteenth annual Willem C. Vis International Commercial Arbitration Moot (International Commercial Arbitration Moot 2012)
  • Moses, M L, The principles and practice of international commercial arbitration (Cambridge University Press 2017)
  • Rashda Rana and Michelle Sanson. "International Commercial Arbitration." [2011] 6 CONSTRUCTION LAW INTERNATIONAL 39.
  • Simon Greenberg and others, International commercial arbitration: an Asia-Pacific perspective, (Cambridge University Press, 2011).
  • William W Park, Arbitration of international business disputes: studies in law and practice, (OUP Oxford, 2012).

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