Abstract
An “ethics explosion” is emerging in the international investment arena in many different ways. Along with the EU’s strong desire to regulate the ethical aspects of adjudicators’ duties in its latest generation of IIAs, whether already in force or still under negotiation, a growing number of non-European IIAs and Model Agreements also contain provisions that include references to ethics and sometimes additionally provide a code of conduct for investment adjudicators. As a logical consequence of this, ICSID, hitherto the heavyweight par excellence in the investment resolution field, has also underlined the growing importance of ethical issues in the course of its on-going rule amendment process. In the same vein, since 2017, the UNCITRAL Working Group III has been reflecting on the need for and potential content of an Investor-State Dispute Settlement Reform and has devoted special attention to ISDS court members. As the winds of change are pointing towards the creation of a Multilateral Investment Tribunal, the need to count on an all-embracing code of conduct with a vocation for universality is becoming more evident. ICSID has responded to these global perspectives by partnering with UNCITRAL to present a 2020 Draft Code of Conduct for Adjudicators in Investor-State Dispute Settlement. In spite of the fact that the Code of Conduct is still at draft stage, it is worth devoting this chapter to analyzing its content and paying attention to the justifications and clarifications provided by its institutional authors. This also entails indirectly analyzing other recent codes of conduct, which are compared with the new ICSID-UNCITRAL proposal.
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Notes
- 1.
Despite the lack of express references to the ethical duties of investment adjudicators in these BITs, IIAs of this type are not completely removed from the characteristics that authorities resolving investment controversies need to have. Thus, when dealing specifically with expropriation, texts like the Philippines – United Kingdom BIT (1980), the Egypt – Korea, Dem. People’s Rep. of BIT (1997), and the Botswana – Ghana BIT (2003) stipulate that: “A national or company so affected shall have a right, under the law of the Contracting Party making the expropriation, to prompt review, by a judicial or other independent authority of that Party, of his or its investment in accordance with the principles set out in paragraph (1) of this Article” (text from the latter BIT). It must be borne in mind, however, that this reference to adjudicator independence is limited by its material scope (expropriation) and only refers to national authorities. The texts of these IIAs are available at the UNCTAD Investment Policy Hub. https://investmentpolicy.unctad.org/
- 2.
A 2015 report commissioned by the European Parliament’s Committee on International Trade stated: “Currently, only few treaties explicitly provide for such standards. In lieu thereof, the codes of conduct of the respective arbitration institution may provide guidance.” Hindelang S, Sassenrath CP (2015) The Investment Chapters of the EU’s International Trade and Investment Agreements in a Comparative Perspective. EP/EXPO/B/INTA/2015/01, September 2015, PE534.998, p. 64.
- 3.
Fach Gómez K (2019) Key duties of international investment arbitrators. A transnational study of legal and ethical dilemmas. Springer, Switzerland.
- 4.
ASEAN-Japan Comprehensive Economic Partnership Agreement. https://www.mofa.go.jp/policy/economy/fta/asean.html
- 5.
CARIFORUM-EU Economic Partnership Agreement (EPA). https://ec.europa.eu/chafea/agri/en/content/cariforum-eu-economic-partnership-agreement-epa
- 6.
Trade Agreement between the European Union and its Member States, of the one part, and Colombia and Peru, of the other part. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A22012A1221%2801%29
- 7.
This is accompanied by the following statement: “If a party to the dispute believes that an arbitrator is not adhering to the basis stated above, the parties to the dispute shall consult and if they agree, the arbitrator shall be removed and a new arbitrator shall be appointed in accordance with this Article.” https://www.mofa.go.jp/policy/economy/fta/asean.html
- 8.
Very similar wording appears in Article 304.3 of the Trade Agreement between the European Union and its Member States, of the one part, and Colombia and Peru, of the other part: “They shall be independent, impartial, shall have neither a direct nor indirect relationship with any of the Parties, and shall not receive instructions from any Party or from any organisation. The arbitrators shall comply with the code of conduct established in accordance with this Title (hereinafter referred to as “Code of Conduct”).” https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A22012A1221%2801%29
- 9.
Holtzmann HM (1977) The first code of ethics for arbitrators in commercial disputes. Bus Law 33:309; Byrne OK (2002) A new code of ethics for commercial arbitrators: the neutrality of party-appointed arbitrators on a tripartite panel. Fordham Urb Law J 30:1815; Feerick JD (1997) Toward uniform standards of conduct for mediators. S Tex L Rev. 38:455; Exon SN (2006) How can a mediator be both impartial and fair: Why ethical standards of conduct create chaos for mediators. J Disp Resol p 387.
- 10.
Free Trade Agreement between the Government of Australia and the Government of the People’s Republic of China. https://www.dfat.gov.au/sites/default/files/chafta-agreement-text.pdf
- 11.
Trans-Pacific Partnership. https://ustr.gov/trade-agreements/free-trade-agreements/trans-pacific-partnership
- 12.
Article 9.22.6 TPP: “The Parties shall, prior to the entry into force of this Agreement, provide guidance on the application of the Code of Conduct for Dispute Settlement Proceedings under Chapter 28 (Dispute Settlement) to arbitrators selected to serve on investor-State dispute settlement tribunals pursuant to this Article, including any necessary modifications to the Code of Conduct to conform to the context of investor-State dispute settlement.”
- 13.
These definitions are placed, rather surprisingly, at the end of Annex 9A of the Australia – China FTA.
- 14.
Commission Staff Working Document, Online public consultation on investment protection and investor-to-state dispute settlement (ISDS) in the Transatlantic Trade and Investment Partnership Agreement (TTIP), Brussels, 13 January 2015, SWD (2015) 3 final.
- 15.
European Commission Concept Paper, Investment in TTIP and beyond – the path for reform. Enhancing the right to regulate and moving from current ad hoc arbitration towards an Investment Court, 5 May 2015.
- 16.
European Commission News Archive, Commission proposes new Investment Court System for TTIP and other EU trade and investment negotiations, 16 September 2015. Canada had also harshly criticized the classical ISDS system. Thus, in 2012, the Standing Committee on International Trade of the Canadian House of Commons reported that the New Democratic Party opposed including investor-state arbitration in CETA and recommended that Canada follow the lead of Australia in rejecting investor-state arbitration in future trade and investment agreements. House of Commons of Canada, Negotiations Toward a Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union. Report of the Standing Committee on International Trade, March 2012, 49.
- 17.
Article 8.30, Section F (Resolution of investment disputes between investors and States), Chapter 8 (Investment) of the EU-Canada Comprehensive Economic and Trade Agreement (hereinafter, Article 8.30 CETA) (CETA provisionally entered into force on 21 September 2017, but the articles on investment dispute resolution were excluded from the provisional application’s scope); Article 3.40, Sub-Section 4 (Investment Tribunal System), Section B (Resolution of Disputes between Investors and Parties), Chapter 3 (Dispute Settlement) of the EU-Vietnam IPA (hereinafter, Article 3.40 EU-Vietnam IPA) (IPA signed on 30 June 2019); Article 3.11 Section A (Resolution of Disputes Between Investors and Parties), Chapter 3 (Dispute Settlement) of the EU-Singapore IPA (hereinafter, Article 3.11 EU-Singapore IPA) (IPA needs to be ratified by all EU Member States according to their own national procedures before it can enter into force and FTA entered into force on 21 November 2019); Article 13 of the Section [X]: Resolution of Investment Disputes of the EU-Mexico Agreement (the legal scrubbing of the whole agreement is being finalised); Article 11, Section 3 (Resolution of Investment Disputes and Investment Court System), Chapter II (Investment) Transatlantic Trade and Investment Partnership (TTIP) (hereinafter, Article 11 TTIP).
- 18.
Article 8.44 CETA, Annex 11 EU-Vietnam IPA; Annex 7 EU-Singapore IPA; Annex 1. Section 19 EU-Mexico Trade Agreement and Annex II Chapter 2 TTIP.
- 19.
What is stated in this section is directly based on an extensive analysis of Article 8.30 CETA, published by the author in: Fach Gómez K (2020) Article 8.30 CETA. In: Bungenberg M, Reinisch A (eds) CETA Investment Law. Article-by-Article Commentary, Nomos/Beck/Hart, Germany. See also Lavranos N (2020) The ICS and MIC projects: a critical review of the issues of arbitrator selection, control mechanisms, and recognition and enforcement. In Chaisse J, Choukroune L, Jusoh S (eds) Handbook of international investment law and policy. Springer, Switzerland, pp. 10–13.
- 20.
As far as this chapter is concerned, references to Members of the Tribunal must be considered to include “the Members of the Appeal Tribunal.”
- 21.
Schill S, Vidigal G (2018) Cutting the Gordian knot: investment dispute settlement à la Carte, RTA exchange. International Centre for Trade and Sustainable Development, Geneva, p 9. Jemielniak stresses the importance of this “judicialization of the role of adjudicators in ICS.” Jemielniak J (2018) How much of a court? The EU Investment Court as a hybrid mechanism. In: Chaisse J (ed) China-European Union Investment Relationships: towards a new leadership in global investment governance? Edward Elgar Publishing, UK, p 240.
- 22.
Article 8.30 establishes that: “1. The Members of the Tribunal shall be independent. They shall not be affiliated with any government (*). They shall not take instructions from any organisation, or government with regard to matters related to the dispute. They shall not participate in the consideration of any disputes that would create a direct or indirect conflict of interest. They shall comply with the International Bar Association Guidelines on Conflicts of Interest in International Arbitration or any supplemental rules adopted pursuant to Article 8.44. 2. In addition, upon appointment, they shall refrain from acting as counsel or as party-appointed expert or witness in any pending or new investment dispute under this or any other international agreement.”
2. If a disputing party considers that a Member of the Tribunal has a conflict of interest, it may invite the President of the International Court of Justice to issue a decision on the challenge to the appointment of such Member. Any notice of challenge shall be sent to the President of the International Court of Justice within 15 days of the date on which the composition of the division of the Tribunal has been communicated to the disputing party, or within 15 days of the date on which the relevant facts came to its knowledge, if they could not have reasonably been known at the time of composition of the division. The notice of challenge shall state the grounds for the challenge.
3. If, within 15 days from the date of the notice of challenge, the challenged Member of the Tribunal has elected not to resign from the division, the President of the International Court of Justice may, after receiving submissions from the disputing parties and after providing the Member of the Tribunal an opportunity to submit any observations, issue a decision on the challenge. The President of the International Court of Justice shall endeavour to issue the decision and to notify the disputing parties and the other Members of the division within 45 days of receipt of the notice of challenge. A vacancy resulting from the disqualification or resignation of a Member of the Tribunal shall be filled promptly.
4. Upon a reasoned recommendation from the President of the Tribunal, or on their joint initiative, the Parties, by decision of the CETA Joint Committee, may remove a Member from the Tribunal where his or her behaviour is inconsistent with the obligations set out in paragraph 1 and incompatible with his or her continued membership of the Tribunal.
*For greater certainty, the fact that a person receives remuneration from a government does not in itself make that person ineligible.”
- 23.
For example, a recently issued UNCITRAL Working Group III document regarding the drafting of a code of conduct emphasized that “it was generally felt that it would not be prudent to rely on voluntary compliance and that the consequences for non-compliance (sanctions) would need to be clearly set forth.” UNCITRAL Working Group III. Report on the work of its thirty-eighth session, Vienna, 14–18 October 2019, A/CN.9/1004, para. 62. This approach is likely to prevail globally.
- 24.
EU IIAs such as the EU-Vietnam IPA, EU-Singapore IPA, EU-Mexico Trade Agreement, and TTIP do not include this reference to the IBA Guidelines; instead there is a stipulation that adjudicators shall comply with their code of conduct, already included in the respective IIA Annex (Annex 11 EU-Vietnam IPA; Annex 7 EU-Singapore IPA; Annex 1. Section 19 EU-Mexico Trade Agreement and Annex II Chapter 2 TTIP). On the contrary, this obligation to comply with the IBA Guidelines has also recently been included in Annex 14-D (Mexico-United States Investment Disputes) of the United States Mexico Canada Agreement (USMCA).
- 25.
For a more detailed study of the text, Dalmaso Marques R, Marques Dal Mas F (2020) Managing conflict of interest in international arbitration: the role of the IBA guidelines. In: Chaisse J, Choukroune L, Jusoh S (eds) Handbook of international investment law and policy. Springer, Switzerland, p 1.
- 26.
Although they have been praised in a good number of cases (described as “useful references,” “instructive,” “the preeminent set of guidelines for assessing arbitrator conflicts,” “having persuasive authority,” “furnishing a useful indication,” and constituting “a most valuable source of inspiration,”) in most cases, the conclusion is that ICSID adjudicators are solely bound by the standard set out in the ICSID Convention. (“The IBA Guidelines are not binding in an ICSID challenge”; they “are not law for ICSID tribunals” but “merely indicative”). Fach Gómez K (2019) Key duties of international investment arbitrators. A transnational study of legal and ethical dilemmas. Springer, Switzerland, pp. 81–87.
- 27.
Joelson MR (2015) A critique of the 2014 international bar association guidelines of conflicts of interest in international arbitration. Am Rev. Int Arbitr 26(3):483; Cinelli Moreira NF (2014) The arbitrator’s duty of disclosure analyzed through case-law: are the IBA guidelines on conflict of interest in international arbitration enough to create consistency? Revista de Arbitragem e Mediaçao 40:115 (142); Krajewski M (2014) Modalities for investment protection and ISDS in TTIP from a trade union perspective. Friedrich Ebert Stiftung, Bonn, p 17; Rubins N, Lauterburg B (2010) Independence, impartiality and duty of disclosure in investment arbitration. In: Knahr C, Koller C, Rechberger W Reinisch A (eds) Investment and commercial arbitration. Similarities and divergences, p. 179. The ECJ recently underlined the differences between the arbitration referred to primarily in the Guidelines and the judicial nature of the CETA court: “Article 8.30 of the CETA makes reference to the power of the Committee on Services and Investment, the subject of Article 8.44 of that agreement, to adopt ‘supplemental rules’ in that regard, the use of the term ‘supplemental’ ensuring that that committee does not possess any power to diminish the effect of the prohibition on conflict of interest already contained in that agreement, but will have to confine itself, while maintaining the high standard of independence that stems from that prohibition, to adapting the rules stated in the IBA Guidelines to the realities of an investment tribunal that is primarily judicial in nature.” Opinion of the CJEU, 1/17, submitted by the Kingdom of Belgium, 30 April 2019, ECLI:EU:C:2019:341, para. 243.
- 28.
European Commission, Proposal for a Council Decision on the position to be taken on behalf of the European Union in the Committee on Services and Investment established under the Comprehensive Economic and Trade Agreement (CETA) between Canada, of the one part, and the European Union and its Member States, of the other part of the other part as regards the adoption of a code of conduct for Members of the Tribunal, the Appellate Tribunal and mediators, 11 October 2019, COM/2019/459 final.
- 29.
European Council, Draft Decision of the Committee on Services and Investment adopting a code of conduct for Members of the Tribunal, Members of the Appellate Tribunal and mediators, ST 6966 2020 INIT, 7 May 2020. It is therefore not appropriate to consider Annex 29 – B CETA (Code of conduct for arbitrators and mediators) applicable to Chapter 8 on investments, since the former is connected only to Chapter 29 (dispute settlement between the EU and Canada regarding the way in which they apply or interpret CETA).
- 30.
In light of the list of working papers distributed by the RELEX.1.A Unit of the General Secretariat of the Council to the Trade Policy Committee (Services & Investments) in the January–June 2019 period, it appears that the EU document already included Canada’s comments on this draft code of conduct. European Council, List of working papers distributed by the RELEX.1.A Unit of the General Secretariat of the Council to delegations in the period January–June 2019, 23 July 2020, 9841/20.
- 31.
On 7 May 2020, the European Council released a Draft Decision of the Committee on Services and Investment adopting a code of conduct for Members of the Tribunal, Members of the Appellate Tribunal and mediators. Consequently, Council Decision (EU) 2020/680 of 18 May 2020 stated that: “The position to be taken on behalf of the European Union in the Committee on Services and Investment as regards the adoption of a code of conduct for Members of the Tribunal, Members of the Appellate Tribunal and mediators shall be based on the draft decision of the Committee on Services and Investment.” European Council, Council Decision on the position to be taken on behalf of the European Union in the Committee on Services and Investment established under the Comprehensive Economic and Trade Agreement (CETA) between Canada, of the one part, and the European Union and its Member States, of the other part, as regards the adoption of a code of conduct for Members of the Tribunal, Members of the Appellate Tribunal and mediators, Council Decision (EU) 2020/680, 18 May 2020, L 161/5, 25 May 2020.
- 32.
Reputed scholarly voices have defended the importance of regulating these ethical issues: “Likewise, tighter and more concrete ethical standards for dispute resolvers will help ensure a more coherent habitus and adjudicatory posture, which will arguably translate into more coherent interpretations.” Schill S (2017) Authority, legitimacy, and fragmentation in the (envisaged) dispute settlement disciplines in mega-regionals. In: Griller S, Obwexer W, Vranes E (eds), Mega-regional agreements: TTIP, CETA, TiSA. New orientations for eu external economic relations. Oxford University Press, Oxford, p 139.
- 33.
ICSID and UNCITRAL, Draft Code of Conduct for Adjudicators in Investor-State Dispute Settlement, 2020, https://uncitral.un.org/en/codeofconduct
- 34.
The “pull effect” of adjudicator ethics has also reached other areas such as commercial arbitration. See, for example, the August 2020 ICCA Public Consultation Draft in regarding its Guidelines on Standards of Practice in International Arbitration.
- 35.
Dimsey M, Pramod S (2020) Selection, bias, and ethics of arbitrators in investor-state arbitration. In: Chaisse J, Choukroune L, Jusoh, S (eds) Handbook of international investment law and policy, Springer, Switzerland, pp. 25–27.
- 36.
See, for instance, Annex 14-A (Code of Conduct of Arbitrators) in the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), which entered into force on 5 July 2020. https://www.dfat.gov.au/trade/agreements/in-force/iacepa/iacepa-text/Pages/default
- 37.
See, for example, Article 20 of the 2019 Netherlands Model Investment Agreement, Article 35 of the 2019 Morocco Model BIT, Articles 18 and 19 of the 2016 India Model BIT, and Article 15 of the 2015 Norway Model Agreement. All these texts can be found at: https://investmentpolicy.unctad.org/international-investment-agreements/model-agreements
- 38.
ICSID, Working Paper 4. Proposals for amendment of the ICSID rules, Volume 1, February 2020. https://icsid.worldbank.org/resources/rules-and-regulations/icsid-rules-and-regulations-amendment-working-papers
- 39.
Working Group III UNCITRAL. Possible reform of investor-state dispute settlement (ISDS). Ensuring independence and impartiality on the part of arbitrators and decision makers in ISDS, A/CN.9/WG.III/WP.151, 30 August 2018, par. 10.
- 40.
Bungenberg M, Reinisch A (2020) From bilateral arbitral tribunals and investment courts to a multilateral investment court: options regarding the institutionalization of investor-state dispute settlement. Springer Nature, Switzerland; Howse R (2017) Designing a multilateral investment court: issues and options. Yearbook Eur Law 36:209–236.
- 41.
In the same vein, Anderson A (2018) Saving private ISDS: the case for hardening ethical guidelines and systematizing conflicts checks. Georgetown J Int Law 1143(1173).
- 42.
ICSID and UNCITRAL, Draft Code of Conduct for Adjudicators in Investor-State Dispute Settlement, 2020, https://uncitral.un.org/en/codeofconduct
- 43.
Giorgetti C (2020) “The Draft Code of Conduct for Adjudicators in Investor-State Dispute Settlement: An Important Step Forward in the Reform Process?” EJIL: Talk! 13 August 2020, https://www.ejiltalk.org/the-draft-code-of-conduct-for-adjudicators-in-investor-state-dispute-settlement-an-important-step-forward-in-the-reform-process/
- 44.
This structure starts from the systematization carried out by the UNCITRAL and ICSID Secretariats, but omits the section referring to the “appointment system” for the reasons that will be explained later.
- 45.
ICSID and UNCITRAL, Draft Code of Conduct, paragraph 5.
- 46.
With this broad definition, the Draft Code does not wish to anticipate whether in the future the ISDS will opt to keep ICSID arbitration as the main option or whether, on the contrary, permanent courts with a bilateral approach or a permanent court with a multilateral approach will be created. This is consistent with the current lack of definition regarding the way or ways in which the final version of the Code of Conduct will be implemented (as a model for new treaties, as an addendum to existing treaties, incorporated into procedural rules or incorporated into a multilateral instrument for ISDS reform). UNCITRAL and ICSID Secretariats, Overview of Draft Code of Conduct, https://icsid.worldbank.org/news-and-events/news-releases/icsid-and-uncitral-release-draft-code-conduct-adjudicators
- 47.
Professional profiles of this type, strictu sensu, do not adjudicate (in the sense that they do not “act as a judge”).
- 48.
- 49.
Other codes of conduct, however, do provide for the text to be applied to mediators. This is the case in the most recent codes of conduct that have been created under the aegis of the EU. See, for instance, the title and Article 1 of the CETA Draft Code. European Council, Draft Decision of the Committee on Services and Investment adopting a code of conduct for Members of the Tribunal, Members of the Appellate Tribunal and mediators, ST 6966 2020 INIT, 7 May 2020. https://webcache.googleusercontent.com/search?q=cache:itdOstQajH4J:https://data.consilium.europa.eu/doc/document/ST-6966-2020-INIT/en/pdf+&cd=1&hl=es&ct=clnk&gl=es
- 50.
See, for instance, Cummins T (2014) The IBA guidelines on party representation in international arbitration – levelling the playing field? Arbitr Int 30(3):429–456; Kantor M (2010) A code of conduct for party-appointed experts in international arbitration – can one be found? Arbitr Int 26(3):323–380 (also with references to commercial arbitration).
- 51.
In the same sense, the introduction to this document states: “Articles 10 and 11 on interviews and on fees apply where adjudicators are appointed by the parties, and their fees are paid by party advances, either directly or through an arbitral institution”, and the commentary on Article 10 refers to pre-appointment interview as a tool used by arbitration counsel.
- 52.
From this author perspective, this Draft Code of Conduct should maintain neutrality on these types of issues, without prioritizing an institutional structure over other possible ones.
- 53.
Elopsson N (2013) Ex parte interviews of party-appointed arbitrator candidates: a study based on the views of counsel and arbitrators in Sweden and the United States. J Int Arb 30:381; Friedman MW (2008) Regulating judgment: a comment on the chartered institute of arbitrators’ guidelines on the interviewing of prospective arbitrators. Disp Resol Int 2:288.
- 54.
Fach Gómez K (2019) Key duties of international investment arbitrators. A transnational study of legal and ethical dilemmas. Springer, Switzerland, pp. 25–121.
- 55.
Once again the comment to Article 11 seems only to envisage a system like the current one of party-appointed arbitrators, in which the adjudicators also seem to have a say in their own fees: “(it) allows the parties to replace adjudicators if they cannot agree with the rate requested.” The commentary itself recognizes the difficulty of applying the referred drafting in other contexts: “This provision would not likely apply in the context of a standing body or mechanism, assuming adjudicators would have a predetermined salary.”
- 56.
Some EU-promoted texts such as EU-Vietnam IPA, EU Singapore IPA, and EU-Mexico Trade Agreement do dedicate a specific article to expenses, but their wording is more limited than that chosen for the Draft Code of Conduct: ·“Each Member shall keep a record and render a final account of the time devoted to the procedure and of the expenses incurred” (Article 8 of the EU-Vietnam IPA).
- 57.
Fach Gómez K (2019) Key duties of international investment arbitrators. A transnational study of legal and ethical dilemmas. Springer, Switzerland, pp. 123–159.
- 58.
Fach Gómez K (2019) Key duties of international investment arbitrators. A transnational study of legal and ethical dilemmas. Springer, Switzerland, pp 131–140.
- 59.
However, the open-ended “drafting and other relevant assignments as agreed in the proceeding” could create controversy. Other Codes of Conduct have limited assistants’ tasks: “assists the member in his research or support him in his duties” (TTIP), “conducts research or provides assistance to the Member” (EU-Singapore IPA).
- 60.
The Secretariat’s commentary to Article 1 refers to “consent to arbitration” (Point 21), which might be considered as an unconscious positioning on how the future ISDS is to be shaped.
- 61.
The question arises as to whether there is any real difference between the two terms, especially when dictionaries give them as synonyms. Taking into account that most preexisting Codes use only the term duty, it would have been appropriate for the ICSID-UNCITRAL Draft Code of Conduct to have expressly clarified this terminological issue.
- 62.
For instance, Article 4 of the EU-Vietnam EPA Code of Conduct and Article 4 of the EU-Mexico Trade Agreement Code of Conduct refer to “Duties of the Members”; Article 4 of the 2019 CETA draft code of conduct is devoted to the “Independence, Impartiality and Other Obligations of Members,” and Article 3 of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) Code of Conduct provides a list of “Governing Principles.”
- 63.
This reference to “at all times,” also used in Article 3 of the Draft Code of Conduct, underlines an issue that no longer raises doubts in the academic sphere: investment adjudicators’ duties are continuous. This is expressly emphasized in Article 5.3 of the Draft Code of Conduct referring to the disclosure obligations of investment adjudicators, for example.
- 64.
Fach Gómez K (2020) Article 8.30 CETA. In: Bungenberg M, Reinisch A (eds) CETA Investment Law. Article-by-Article Commentary, Nomos/Beck/Hart, Germany.
- 65.
In the author’s opinion, it is not appropriate to leave this catch-all section (“and Other Obligations of Members”) to the end of the article. Duties like fairness, diligence, and non-delegation of responsibilities more than merit a separate article, as was the case in the 2018 CETA Draft Code of Conduct (Article 4 – “Duties of Members,” followed by an Article 5 – “Independence and Impartiality of Members”).
- 66.
The provision does not distinguish between candidates and Members, which is also typical of recent EU-IIAs. Probably because of this, the 2020 ICSID-UNCITRAL Draft Code of Conduct has no provision referring exclusively to former Members, as other codes of conduct do.
- 67.
This CETA provision, which imposes a duty of disclosure covering a specific time period (5 years) is less radical than the 5-year ban (ex-ante quarantine period) in the 2019 Netherlands Model Investment Agreement (Article 20.5: “Members of the Tribunal shall not act as legal counsel or shall not have acted as legal counsel for the last 5 years in investment disputes under this or any other international agreement.” https://investmentpolicy.unctad.org/international-investment-agreements/model-agreements), but if it is breached by CETA candidates – who are already Members – sanctions may apply (Article 8 of the 2019 CETA draft Code), resulting in disqualification, resignation, or removal of the CETA Member from the Tribunal (Articles 8.30.2, 8.30.3, and 8.30.4 CETA).
- 68.
Additionally, as the commentary itself acknowledges, it “may also create a significant burden for prospective adjudicators” (paragraph 62).
- 69.
For instance, General Standard 3 (d) of the IBA Guidelines on Conflicts of Interest in International Arbitration states that: “any doubt as to whether an arbitrator should disclose certain facts or circumstances should be resolved in favour of disclosure.” Resolution of the International Bar Association Council of 23.10.2014.
- 70.
As the commentary to Article 6 points out, there is a big difference vis-à-vis both focus and consequences between creating “an outright ban on double-hatting” and “an obligation to disclose the overlapping roles and allow the parties to challenge the adjudicator” (Point 67). If the “outright ban” approach were chosen, this would create a clear difficulty with respect to arbitrators who are the current designees of contracting states to the ICSID Panels of Arbitrators and may require the establishment of a transitory regime (a phased approach) for this group (Point 69).
- 71.
It is interpreted that this wording would make it possible to prevent the simultaneous exercise of the roles of counsel and adjudicator, for instance (in ICSID, on the CETA Tribunal, as well as in a prospective Multilateral Investment Court).
- 72.
See, for instance, Article 8.30 CETA. Fach Gómez K (2020) Article 8.30 CETA. In: Bungenberg M, Reinisch A (eds.) CETA Investment Law. Article-by-Article Commentary, Nomos/Beck/Hart, Germany.
- 73.
Dias Simoes F (2018) Hold on to your Hat! Issue conflicts in the TTIP Proposal for an Investment Court The Law and Practice of International Courts and Tribunals 17(1):98; Crook JR (2019) Dual hats and arbitrator diversity: goals in tension. AJIL Unbound 113:284; Perry S (2012) Stockholm: Arbitrator and counsel: the double-hat syndrome. Glob Arbitr Rev 7(2):43.
- 74.
Fach Gómez K (2019) Key duties of international investment arbitrators. A transnational study of legal and ethical dilemmas. Springer, Switzerland, pp 131–140.
- 75.
If the titles of Articles 7 and 8 are analyzed, the question arises as to whether there is an overlap of sorts between some of their notions: Integrity, Fairness, Competence, Availability, Diligence, Civility and Efficiency.
- 76.
Article 8.1 of the 2019 CETA draft of code of conduct underlines the interconnection between these two contexts, by stating that: “the provisions of this code of conduct shall be applied together with the obligations set out in Article 8.30.1 of the Agreement and the procedures provided for in Articles 8.30.2, 8.30.3 and 8.30.4 of the Agreement shall apply to violations of this code of conduct.” It is worth noting that the article on sanctions of the CETA draft code of conduct has no counterpart in the codes of conduct of the other EU IIAs analyzed throughout this chapter. That is, there are no articles on sanctions in the codes of conduct in: Annex 11 EU-Vietnam IPA, Annex 7 EU-Singapore IPA, Annex 1. Section 19 EU-Mexico Trade Agreement or Annex II Chapter 2 TTIP.
- 77.
Fach Gómez K (2021) Recusación de árbitros: algunas reflexiones en torno a los tribunales de inversiones internacionales. In Álvarez Zárate JM, Zenkiewicz M (eds) El Derecho Internacional de las Inversiones: Desarrollo actual de normas y principios. Universidad Externado de Colombia, Bogotá, in press.
- 78.
Note that the text of Article 12 chooses not to use the notion “sanction.” This notion is used, on the contrary, in EU IIAs such as Article 8 of the 2019 CETA draft of code of conduct, which is entitled “Sanctions.” UNCITRAL Working Group III uses the term “sanction” along with lighter terms such as “consequence for noncompliance,” “enforcement mechanism,” or “measure.”
- 79.
Until recently, only a few NGOs had raised their voices to criticize the lack of a set of sanctions in this area. Alluding specifically to cases where the adjudicator had committed double hatting, ICTUR and Greenpeace, had stated: “Moreover the consequences of any breach of these obligations are insufficient. Parties to a dispute may challenge the appointment of a Member of a Tribunal in a specific case on ‘conflict of interest’ grounds. This may lead to a disqualification of the Member from hearing that particular case, but CETA does not appear to impose any other sanctions on the Member for failing to have declared the conflict. The provisions also fail to ensure that – if the conflict of interest is confirmed and the Member disqualified – that decisions already taken by the Tribunal in that case would be annulled or even reviewed. It is also not guaranteed that such a finding will automatically lead to the removal of the Member from the Tribunal and no guarantee is provided that they might not adjudicate in further cases, even if their conduct breaches the International Bar Association Guidelines. The Ethics provisions state that the CETA Joint Committee ‘may’ remove a Member of the Tribunal, but they are not obliged to do so. Nor do these provisions bar Members who have been disqualified from reappointment. Given the gravity of concerns about ISDS to date, these provisions would not appear to deepen the integrity of the judicial system created under CETA’s investment chapter. While some ‘revolving door’ issues – concerning the ability of lawyers to work simultaneously as both counsel and adjudicator in multiple investment disputes – in the ISDS system appear to have been addressed, this has been done very lightly and the results are unconvincing.” ICTUR and Greenpeace, “Investor protection in CETA: Gold standard or missed opportunity?” 2016, https://www.greenpeace.org/eu-unit/issues/democracy-europe/1229/investor-protection-in-ceta/, p. 12.
- 80.
UNCITRAL Working Group III. Report on the work of its 38th session, Vienna, 14–18 October 2019, A/CN.9/1004, para. 62.
- 81.
UNCITRAL Working Group III. Report on the work of its 38th session, Vienna, 14–18 October 2019, A/CN.9/1004, paras. 63–64 and 77.
Acknowledgment
The author is member of Spanish research project DER2017-85585-P and of the Aragonese research group LegMIBIO.
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Fach Gómez, K. (2021). Drafting a Twenty-First Century Code of Conduct for International Investment Adjudicators. In: Chaisse, J., Choukroune, L., Jusoh, S. (eds) Handbook of International Investment Law and Policy. Springer, Singapore. https://doi.org/10.1007/978-981-13-5744-2_23-2
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DOI: https://doi.org/10.1007/978-981-13-5744-2_23-1