Publicist

Keynote Address: The Ethics of Arbitration: Perspectives from a Practicing International Arbitrator

By

Charles N. Brower*

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I. Why do we care about ethics and transparency?

The first question that we must ask ourselves is “why do we care about ethics and transparency?” The answer, of course, is that ethics and transparency better ensure legitimacy—general public acceptance that any rule-based system is authoritative and binding. Courts require legitimacy if they are to remain stable and maintain their power.[1] If courts lose legitimacy, they will not be obeyed. If they are not heeded, they lose their power. If they lose their power—if parties abandon faith in the law—people will seek recourse in self-help, returning society to a Hobbesian state of nature.

According to Martin Shapiro, Berkeley’s resident expert on the subject, courts’ central task in maintaining legitimacy is to preserve their basic triad or triptych structure—composed of two disputants and a neutral third intervener—and to prevent it from breaking down to the point where one disputant perceives it as “two against one.” Courts have employed numerous strategies over the centuries to prevent such collapse, including ensuring that parties have consented to the triad, and the court applies truly neutral legal principles.[2] Nowadays, parties have increasingly sought private arbitration of their disputes, particularly where those disputes are international in character. Though arbitral tribunals almost are universally ad hoc adjudicating mechanisms, arbitrators and arbitral institutions also have an interest in maintaining legitimacy, both for the mutual acceptance of their awards by the parties before them and for broad public acceptance of the entire law-based system of which they are a part.

Attorney Ethics in International Arbitration

By

Richard M. Mosk*

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Introduction

A character in Kurt Vonnegut’s God Bless You Mr. Rosewater stated,

“In every big transaction . . . there is a magic moment during which a man has surrendered a treasure, and during which the man who is due to receive it has not yet done so. An alert lawyer will make that moment his own, possessing the treasure for a magic microsecond, taking a little of it, passing it on. If the man who is to receive the treasure is unused to wealth, has an inferiority complex and hopeless feelings of guilt, as most people do, the lawyer can often take as much as half the bundle, and still receive the recipient’s blubbering thanks.”[1]

I have not been involved in international arbitration cases for almost a decade. But in recent years, the impetus to promulgate codes of conduct suggests there are concerns about the conduct of those who participate in international arbitration. Arbitrators, arbitral institutions, parties and counsel vie for vast sums of money. Whenever money is at stake, there is potential for misbehavior. I evaluate the effects of adopting codes of conduct for attorneys and arbitrators, and suggest that although they may have some impact on arbitrator behavior, they are unwieldy and ineffectual in regulating counsel and can have no effect on parties’ misconduct.

Is a Connection to the “Public Interest” a Meaningful Prerequisite of Third Party Participation in Investment Arbitration?

By 

Epaminontas E. Triantafilou*

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Introduction

In recent years, investment arbitration has increasingly blurred the line between the traditionally private character of arbitration and the public nature of administrative or judicial hearings that touch upon issues of public concern. This is because investment arbitration, also known as investor-state arbitration, by definition implicates the interests of sovereign governments or government entities. In most cases, the government is in a defensive posture, standing to incur liability ranging from tens of millions to several billion dollars—funds that it is called upon to pay out of the public coffers.[1] Furthermore, investor-state tribunals determine the legality of sovereign acts under international law. To promote the public’s confidence in a system that handles such costly disputes, that may affect directly the country’s international reputation and potential as a target for foreign investment, it is desirable to make investor-state proceedings accessible to the public in some way.

Towards Transparency in Arbitration (A Cautious Approach)

By

Aníbal Sabater*

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In the age of access to information acts, comprehensive legal databases, and arbitration awards posted online almost at the same time that they are dispatched to the parties, it is only fitting that a roundtable should bear the title “Towards Transparency in Arbitration.” This proliferation of the use of the term does not mean, however, that there is agreement on what “transparency” is and to what type of “arbitration” it should apply. UNCITRAL Working Group II, which deals with international arbitration and conciliation matters, has been struggling with these issues since they were first raised in its March 2000 Vienna Session.[1] Ten years and twenty-one working sessions later, it is not yet clear whether the UNCITRAL Arbitration Rules will be modified to contain provisions on transparency; nor is it certain what the scope, optionality, and contents of any new provisions might be.[2]

For lawyers, it may be tempting to approach transparency as a legal issue only, one involving due process. It may be tempting, for instance, to think that a legal process or transaction is not transparent when it manifestly and directly affects someone that has not been given a chance to know about or participate in it.[3] The recent debate regarding transparency in arbitration, however, greatly exceeds the confines of due process and enters the realm of politics.

A Look At The Public Interest In Investment Arbitration: Is It Unique? What Should We Do About It?

By

Ruth Teitelbaum*

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The transparency movement in investment arbitration—a movement driven by non-governmental organizations (NGOs)—believes that arbitration, a private method of dispute settlement, is an inappropriate means of adjudicating disputes involving sovereigns. It therefore aims to make investor-State arbitration more public, through greater access to documents and through public access to the arbitral proceedings themselves, principally through amicus participation and public hearings.

The transparency movement has been tremendously successful. The 2006 amendments to the International Centre for Settlement of Investment Disputes (ICSID) Arbitration Rules and the transparency-enhanced procedures of new investment treaties are demonstrative of this success. ICSID Arbitration Rule 32(2), for example, provides that:

Unless either party objects, the Tribunal, after consultation with the Secretary-General, may allow other persons, besides the parties, their agents, counsel and advocates, witnesses and experts during their testimony, and officers of the Tribunal, to attend or observe all or part of the hearings, subject to appropriate logistical arrangements. The Tribunal shall for such cases establish procedures for the protection of proprietary or privileged information.