International arbitration News, analytics and practice

14May/10Off

ICSID Panel Denies Ukraine’s Challenge to Arbitrator

On March 19, 2010 two members of an ICSID arbitral tribunal – the Honourable Davis R. Robinson (President) and Dr. Stanimir A. Alexandrov – dismissed the Ukraine’s challenge to the tribunal’s third member, Dr. Yoram Turbowicz, reported Investment Treaty News.

Arbitral proceedings between Alpha Projektholding GMBH (Alpha) and the Ukraine began in 2007 after the Austrian company alleged violations of the Austria-Ukraine BIT in relation to its investment in a hotel-development project in Kiev in the mid-1990s.

Subsequent to the tribunal already having heard the merits of the case in the spring of 2009, the Ukraine filed a formal proposal for the disqualification of Dr. Turbowicz on January 25, 2010 by raising, among other things, concerns about the relationship between Dr. Turbowicz and the claimant’s counsel.  Specifically, the Ukraine’s concerns arose after learning that both Dr. Turbowicz and the claimant’s counsel, Dr. Leopold Specht, studied at Harvard University during the late 1980s and early 1990s and the fact that Dr. Turbowicz did not disclose this shared educational experience.

For his part, Dr. Turbowicz maintained that he was not required to disclose his shared educational experience with the claimant’s counsel because that fact was not evidence of the type of relationship coming within the language of ICSID Arbitration Rule 6(2).

Under ICSID Arbitration Rule 6(2), upon accepting their appointments, arbitrators are required disclose “… (a) [their] past and present professional, business and other relationships (if any) with the parties and (b) any other circumstance that might cause [their] reliability for independent judgment to be questioned by a party.”

Ultimately rejecting all of the Ukraine’s grounds for challenge, the bulk of the tribunal’s decision is concerned with the scope of disclosure required under the ICSID Convention and its Arbitration Rules.

Applying those Rules, as informed by the International Bar Association Guidelines on Conflicts of Interest in International Arbitration (IBA Guidelines), to the facts of the case the two-person tribunal sided with their co-arbitrator and held that “…the IBA Guidelines, while not determinative in any sense, affirmatively discourage the disclosure of the shared educational experience of Dr. Turbowicz and Dr. Specht.”

Based on their analysis of those guidelines and affirming the holding in a prior ICSID case,* the tribunal concluded that an arbitrator is only required to disclose a fact under Arbitration Rule 6(2) if the arbitrator “reasonably believes that such fact would reasonably cause his or her reliability for independent judgment to be question by a reasonable person.”

Sources:

* See Suez, Sociedad General de Aguas de Barcelona S.A. and InterAguas Servicios Integrales del Agua S.A. v. The Argentine Republic, ICSID Case No. ARB/03/17, Second Decision on Disqualification, May 12, 2008, available here.

Previous ITN Reporting:

“Failed hotel deal in Ukraine leads to ICSID arbitration,” By Damon Vis-Dunbar, Investment Treaty News, 30 August 2007, available here.

Comments (0) Trackbacks (0)

Sorry, the comment form is closed at this time.

Trackbacks are disabled.