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Part II Arbitral Procedures to Control the Selection and Conduct of Arbitrators, Ch.5 The Challenge of Arbitrators

From: The UNCITRAL Arbitration Rules: A Commentary (2nd Edition)

David D Caron, Lee M Caplan

From: Investment Claims (http://oxia.ouplaw.com). (c) Oxford University Press, 2021. All Rights Reserved.  Subscriber: null; date: 23 September 2021

Subject(s):
Settlement of disputes — Challenge to appointment of arbitrator — UNCITRAL Arbitration Rules

(p. 174) (p. 175) Chapter 5  The Challenge of Arbitrators

  1. 1.  Introduction 177

    1. A.An Overview of Challenges before Investment and other Tribunals 178

      1. ()Challenge decision of April 15, 1993 178

      2. ()Challenge decision of January 11, 1995 179

      3. ()Challenge decision by a Division of the LCIA—October–December 2005 179

      4. ()The US Government challenge of Professor James Anaya in the Grand River arbitration—2007 180

      5. ()The Argentine Government's challenge of Mr Judd L Kessler in the National Grid arbitration—2007 180

      6. ()The Argentine Government's challenges of Professor Gabrielle Kaufmann-Kohler in the AWG Group arbitration—2007–2008 181

        1. ()The Argentine Government's first challenge—2007 181

        2. ()The Argentine Government's second challenge—2008 181

      7. ()The Argentine Government's challenge of Mr Stanimir Alexandrov in the ICS arbitration—2009 182

      8. ()The claimant's challenge to Mr J Christopher Thomas in the Gallo arbitration—2009 182

    2. B.An Overview of the Challenges before the Iran–US Claims Tribunal 183

      1. ()The Iranian Government challenge of Nils Mangård—1982 183

      2. ()The US Government challenge of Judges Kashani and Shafeiei—1984 184

      3. ()The first Iranian Government challenge of Judge Briner in Case No 55, Amoco Iran and Islamic Republic of Iran—1988 184

      4. ()The second Iranian Government challenge of Judge Briner—1989 184

      5. ()The third Iranian Government challenge of Judge Briner—1989 185

      6. ()The US claimant's challenge of Judge Noori in Case No 248, Carlson and Melli Industrial Group—1990 186

      7. ()The Iranian Government challenge of Judge Arangio-Ruiz—1991 186

      8. ()The Iranian Government challenges of Judge Krzysztof Skubiszewski—1999 186

      9. ()The US Government challenge of Judge Bengt Broms—2001 187

      10. (10 )The US claimant's challenge of Judge Bengt Broms in connection with Case No 485, Frederica Lincoln Riahi—2004 187

      11. (11 )The US Government challenge of Judges Assadollah Noori, Koorosh Ameli, and Mohsen Aghahosseini—2005–2006 188

      12. (12 )The Iranian Government Challenge of Judge Krzysztof Skubiszewski and the US Government Challenge of Judge Hamid Reza Oloumi Yazdi—2007 188

      13. (13 )The Iranian Government challenge of Judge Krzysztof Skubiszewski and Judge Gaetano Arangio-Ruiz—2009 189

      14. (14 )The US Government challenge of Judge Seyed Jamal Seifi—2010 190

      15. (15 )The Iranian Government challenge of Judge Charles Brower—2010 190

    3. C.The Exclusivity of the UNCITRAL Challenge Procedure 191

  2. (p. 176) 2.  The Duty to Disclose—Article 11 194

    1. A.Text of the 2010 UNCITRAL Rule 194

    2. B.Commentary 195

      1. ()The duty to disclose 195

      2. ()Model statements of independence 198

      3. ()Disclosure guidelines of the Iran–US Claims Tribunal 200

    3. C.Extracts from the Practice of Investment Tribunals 201

    4. D.Extracts from the Practice of the Iran–US Claims Tribunal 202

      1. ()General 202

      2. ()Disclosure by the US Arbitrators 205

  3. 3.  The Grounds for Challenge—Article 12 207

    1. A.Text of the 2010 UNCITRAL Rule 207

    2. B.Commentary 208

      1. ()Challenge on the ground of justifiable doubts as to impartiality or independence—general remarks on Article 12(1) 208

        1. ()The standard for impartiality and independence is objective 208

        2. ()The same standard applies to party-appointed and non-party appointed arbitrators 209

        3. ()Criteria regarding and examples of justifiable doubts 211

      2. ()Challenge on the ground of justifiable doubts as to impartiality or independence 212

        1. ()The meaning of “impartiality” and “independence” 213

        2. ()When are doubts as to impartiality or independence justified? 213

        3. ()The standard of independence and impartiality does not vary according to the stage of the proceedings 225

        4. ()A failure to disclose under article 11 may give rise to, but does not per se establish, justifiable doubts as to impartiality or independence 226

        5. ()Are there any limitations on the circumstances which may be used as the basis for justifiable doubts? 228

      3. ()Article 12(1) as providing the exclusive grounds for challenge 228

      4. ()When may a party challenge the arbitrator it has appointed—Article 12(2) 230

    3. C.Extracts from the Practice of Investment and otherTribunals 231

    4. D.Extracts from the Practice of the Iran–US Claims Tribunal 235

      1. ()Tribunal Rules (1983), Article 10(1) 235

      2. ()Tribunal Rules (1983), Article 10(2) 240

  4. 4.  The Initiation of the Challenge and the Potential for Agreement to the Challenge—Article 13 241

    1. A.Text of the 2010 UNCITRAL Rule 241

    2. B.Commentary 241

      1. ()When notice of challenge must be made—Article 13(1) 241

        1. (p. 177) ()General comments on the travaux préparatoires 241

        2. ()When circumstances “became known” to the challenging party 243

      2. ()To whom should notice be sent; what form should notice take; sufficiency of the notice; who may send notice—Article 13(2) 248

      3. ()Procedure if challenge is accepted by all parties or challenged arbitrator withdraws—Article 13(3) 253

      4. ()Timeline for seeking a decision on a challenge—Article 13(4) 256

    3. C.Extracts from the Practice of Investment Tribunals 256

    4. D.Extracts from the Practice of the Iran–US Claims Tribunal 257

      1. ()Tribunal Rules (1983), Article 11(1) 257

      2. ()Tribunal Rules (1983), Article 11(2) 263

      3. ()Tribunal Rules (1983), Article 11(3) 267

  5. 5.  The Resolution of the Challenge 268

    1. A.Text of the 2010 UNCITRAL Rule 268

    2. B.Commentary 268

      1. ()Which authority shall make the decision on the challenge if the other party does not agree to the challenge or the challenged arbitrator does not withdraw? 268

      2. ()When may a party seek the assistance of the PCA Secretary-General in designating an appointing authority? 270

      3. ()What procedures the appointing authority may follow in deciding the challenge 271

      4. ()Limitations on the powers of the appointing authority 272

    3. C.Extracts from the Practice of Investment Tribunals 272

    4. D.Extracts from the Practice of the Iran–US Claims Tribunal 273

      1. ()Tribunal Rules (1983), Article 12(1) 273

      2. ()Tribunal Rules (1983), Article 12(2) 274

  6. 6.  Comparison to the 1976 UNCITRAL Rules 274

1. Introduction

The challenge is a device to maintain minimal standards of independence and impartiality in arbitrators. Challenge is an exceptional and serious mechanism. It is a process that is infrequently initiated; it may be used more today than in the past, but that conclusion is difficult to assert with confidence given the rareness of published decisions. A challenge may be lodged in response to the appointment of an arbitrator at the commencement of an arbitration or at any time throughout the arbitration when, for example, new circumstances give rise to justifiable doubts as to an arbitrator's impartiality or independence or because of an arbitrator's failure to perform. The UNCITRAL Rules address the challenge process in Articles 11 through 13, the subject of this chapter.1 Article 14, the subject of Chapter 6, among other things, addresses the process for replacing an arbitrator who has been successfully challenged or is found to have failed to perform.

(p. 178) A. An Overview of Challenges before Investment and other Tribunals

The fields of commercial and investor–state arbitration have increasingly yielded publicly available challenge decisions arising in connection with UNCITRAL proceedings.2 Throughout this chapter, these challenge incidents are used to gain insights into the process of challenge in general and the UNCITRAL challenge process in particular. All of these incidents arose under the 1976 UNCITRAL Rules, though they remain relevant to the application of the 2010 UNCITRAL Rules, which contain identical standards of conduct. These challenge incidents are summarized briefly below.

() Challenge decision of April 15, 1993

The dispute giving rise to this challenge involved a contract between the claimant, an Italian contractor, and the respondent, a state agency, for the construction of an embassy building for the respondent in a third country. A disagreement over payment terms was ultimately put to arbitration in Paris, under the 1976 UNCITRAL Rules. According to Article 7(1) of the Rules, each party appointed an arbitrator and the two party-appointed arbitrators appointed the presiding arbitrator.

The respondent's challenge to the claimant-appointed arbitrator eventually prompted both party-appointed arbitrators to resign, and the parties appointed new replacement arbitrators. Thereafter, the respondent challenged the presiding arbitrator, arguing that he lacked legitimacy “because he was elected with the help of a Party Arbitrator too closely connected with the claimant; and [was] inescapably influenced by too close cooperation with the same in the Tribunal's work and decisions.”3 The presiding arbitrator refused to resign.

The Secretary-General of the Permanent Court of Arbitration designated Pierre Pescatore as appointing authority to adjudicate the challenge. Pescatore dismissed the challenge, ruling that “the respondent cannot avail itself of the reasons adduced against the claimant's first Party Arbitrator to put into question indirectly the status of the Presiding Arbitrator.”4 Indeed, the simultaneous withdrawal of the two party-appointed arbitrators “left untouched the existence and identity of the arbitral tribunal and the office of the Presiding Arbitrator.”5

(p. 179) Following the appointing authority's decision, the tribunal, composed of the original presiding arbitrator and the two replacement party arbitrators, rendered a final award on the merits. The respondent's subsequent challenge of the award in the French court on this same basis was denied.6

() Challenge decision of January 11, 1995

This challenge arose out of a dispute over a five-year sales contract between the claimant, Country X, and the respondent, Company Q, for the purchase of agricultural products. The claimant challenged the respondent-appointed arbitrator on grounds that justifiable doubts existed as to his impartiality, because he had served as a legal advisor to Country A during a period of hostility with Country X, the claimant, and had served as legal counsel to a government official of Country A in connection with an investigation of Country A's military activities in Country X.

Although the appointing authority, whose identity is unknown, recognized the important “political overtones” of the dispute, he dismissed the challenge. He concluded, in particular, that the evidence, a legal opinion and brief drafted by the respondent-appointed arbitrator in his governmental capacities, did not demonstrate a direct link between the political background and the alleged partiality on the part of the challenged arbitrator.7

() Challenge decision by a Division of the LCIA—October–December 2005

This challenge arose in connection with a dispute arising out of a shareholders’ agreement providing for arbitration in London under the 1976 UNCITRAL Rules before a sole arbitrator appointed by the LCIA. The challenge was decided by a Division of the LCIA comprised of Dr Laurent Lévy, Professor Bernard Hanotiau, and J William Rowley QC.8

The Division upheld the challenge, deciding on three grounds that the conduct of the sole arbitrator gave rise to an appearance of bias, if not the real possibility of actual bias. First, the arbitrator inappropriately met with claimant's counsel in private on two occasions. Not only did the arbitrator provide inconsistent explanations of the substance of the first meeting, but the substance of the second meeting, whether the respondent had committed a breach of confidentiality, related to issues material to the arbitration.9 Second, the arbitrator inappropriately ordered the deletion of a portion of the transcript reflecting an exchange between opposing counsel about costs, in disregard of the arbitrator's duty under the UNCITRAL Rules to maintain a record of the proceedings.10 Third, the arbitrator made accusations of lying and trespassing against one of the respondent's counsel, which regardless of their veracity, were incompatible with the conduct expected of the arbitrator.11

(p. 180) () The US Government's challenge of Professor James Anaya in the Grand River arbitration—2007

The US Government challenged Professor James Anaya, who was appointed by the claimants, certain Native American persons, in the Grand River arbitration brought against the United States under NAFTA Chapter Eleven. The circumstances underlying the US government challenge was that Professor Anaya was simultaneously serving as claimant-appointed arbitrator in the Grand River arbitration on behalf of certain Native American persons and representing or assisting the same or other Native American persons before the Inter-American Commission on Human Rights and before the United Nations Committee on the Elimination of Racial Discrimination (“CERD”). Given the “basic similarity” of the two proceedings—in which the United States’ compliance with its international commitments was at issue—the appointing authority, The ICSID Secretary-General, found that Professor Anaya's continued representation or assistance was “incompatible with simultaneous service as arbitrator in the NAFTA proceeding.”12 Consequently, Professor Anaya was given the choice either to continue to represent or assist parties in the non-NAFTA procedures or resign as arbitrator.13

Professor Anaya agreed to cease his involvement in the non-NAFTA proceedings and at the same time notified the appointing authority that he was also currently instructing law students in a clinical course in connection with their work concerning certain Native-American persons and the CERD. The appointing authority found that such instruction did not give rise to doubts as to Professor Anaya's impartiality and independence.14

() The Argentine Government's challenge of Mr Judd L Kessler in the National Grid arbitration—2007

In the National Grid arbitration, Argentina challenged Mr Kessler, the claimant-appointed arbitrator, as a result of an intervention that he made in Spanish during cross-examination of the claimant's expert witness. The portion of the intervention on which Argentina based its challenge was Mr Kessler's statement: “We know the facts generally speaking that there was major harm or major change in the expectations of the investment.” According to Argentina, this statement evidenced Mr Kessler's prejudgment of the key issue of Argentina's alleged liability and thus the final outcome of the arbitration. The claimant disagreed, arguing that the intervention by Mr Kessler, whose native language is English, was misinterpreted by Argentina and was meant only to facilitate cross-examination by suggesting that the witness be asked hypothetical questions.15

The appointing authority, a Division of the LCIA, dismissed the challenge. The Division found it was inappropriate to view Mr Kessler's statement in isolation, because immediately after his statement Mr Kessler explained his intent and proposed examples of hypothetical questions that could be posed to the expert witness. This context, along with the (p. 181) fact that Mr Kessler was not a native Spanish speaker, eliminated any concerns raised by Mr Kessler's statement in question.16

() The Argentine Government's challenges of Professor Gabrielle Kaufmann-Kohler in the AWG Group arbitration—2007–2008

Argentina challenged Professor Gabrielle Kaufmann-Kohler, claimant-appointed arbitrator, on two occasions during a consolidated arbitration between Argentina and claimants Suez, Sociedad General de Aguas de Barcelona S.A. and Vivendi Universal S.A., (“Vivendi”), Suez, Sociedad General de Aguas de Barcelona S.A. and InterAguas Servicios Integrales del Agua (“InterAguas”), and AWG Group Ltd (“AWG”), all of which did business in Argentina's water sector. By agreement of the parties, the claims of Vivendi and InterAguas were to be arbitrated pursuant to the ICSID Convention and the ICSID Arbitration Rules, whereas the claims of AWG were to be arbitrated pursuant to the 1976 UNCITRAL Arbitration Rules. The consolidated proceedings were administered by the ICSID Secretariat. Argentina's two challenges in relation to the AWG proceedings are described below.

() The Argentine Government's first challenge—2007

Argentina first challenged Professor Kaufmann-Kohler because she had participated as a member of the ICSID tribunal in the case of Compañia de Aguas del Aconquijo S.A. and Vivendi Universal S.A. v Argentine Republic, which rendered an award against Argentina on August 20, 2007.17 According to Argentina, the award in that case was so flawed that Professor Kaufmann-Kohler's very participation in the decision-making process “reveals a prima facie lack of impartiality.”18

Pursuant to the agreement of the parties, the two members of the arbitral tribunal other than Professor Kaufmann-Kohler decided the challenge and, in relation to the AWG arbitration, applied the UNCITRAL Rules.19 The two members dismissed the challenge as untimely as Argentina failed to lodge its proposal for disqualification until well after the 15-day time limit for initiating a challenge.20

() The Argentine Government's second challenge—2008

Argentina challenged Professor Kaufmann-Kohler a second time based on her election to the board of directors of the UBS Group (“UBS”), a large financial services firm, two years after the arbitral tribunal was constituted. According to Argentina, Professor Kaufman-Kohler had an inappropriate financial relationship with certain claimants; as a UBS director, she was a shareholder in the firm which, in turn, held shares in two of the claimants, Suez, Sociedad General de Aguas de Barcelona S.A. (“Suez”) and Vivendi Universal S.A., (“Vivendi”). Argentina alleged that Professor Kaufmann-Kohler breached her duty to disclose these relationships.21

(p. 182) The truncated tribunal that decided the challenge recognized that UBS was not a shareholder in AWG. Therefore, it observed that the only “circumstance” that could give rise to justifiable doubts as to Professor Kaufmann-Kohler's impartiality and independence was that fact that she was a UBS director and that UBS conducted research and developed financial products related to the water sector. However, the truncated tribunal found Professor Kaufmann-Kohler's alleged connection with AWG to be “too remote and tenuous as to hardly be called a connection or relationship at all.”22 On the question of the failure to disclose her position as UBS director, the truncated tribunal found that because Professor Kaufmann-Kohler's election as UBS director did not give rise to justifiable doubts as to her impartiality or independence, she was not required to disclose such circumstance. On these grounds, the truncated tribunal dismissed Argentina's challenge.23

() The Argentine Government's challenge of Mr Stanimir Alexandrov in the ICS arbitration—2009

In the case of ICS Inspection and Control Services Ltd (“ICS arbitration”), Argentina challenged Mr Stanimir Alexandrov, claimant-appointed arbitrator. Upon his appointment, Mr Alexandrov had disclosed, among other information, that he and his law firm were representing other private claimants in another arbitration against Argentina (Compañia de Aguas del Aconquija S.A. and Vivendi S.A. v Argentine Republic (“Vivendi arbitration”)),24 but stated that he did not believe these circumstances affected his impartiality and independence as arbitrator in the ICS arbitration.25

Thereafter Argentina challenged the appointment of Mr Alexandrov on the basis of his participation in the Vivendi arbitration. The appointing authority, Mr Jernej Sekolec, upheld the challenge. While the claimant argued that the Vivendi arbitration may soon come to a close and was unrelated to the ICS arbitration, the appointing authority emphasized that Mr Alexandrov's participation in the Vivendi arbitration was “not merely a case in which the arbitrator's firm is acting adversely to one of the parties in the dispute, but rather a case where the arbitrator has personally and recently acted adversely to one of the parties to the dispute.”26

() The claimant's challenge to Mr J Christopher Thomas in the Gallo arbitration—2009

In a case pursued under Chapter Eleven of the NAFTA, the claimant challenged Mr J Christopher Thomas, who was appointed by the respondent, the Canadian Government. Upon the appointment of Mr Thomas, the respondent provided the claimant with a copy of his curriculum vitae, which indicated that he was currently a managing partner of his firm but was due to retire from counsel work and withdraw from his firm by a certain date in the near future. Several months later, Mr Thomas became engaged again in counsel work as independent counsel to a new law firm, which the partners of his old firm had joined. Mr Thomas sought to inform the parties about his change in status in an email letter, including in particular that Mexico had retained his new law firm and wished for him to provide (p. 183) advice on certain legal matters. Due to a technical error, however, Mr Thomas's letter was not received by the parties until several months after it was sent.27

In response, the claimant asked Mr Thomas to clarify whether any work that he had performed for Mexico involved the “provision of legal research, advice or representation with respect to the interpretation or application of the provisions of NAFTA Chapter 11, or similar provisions in Mexico's Bilateral Investment Treaties.” Mr Thomas responded that while he had not performed work of this specific nature, he had done a small amount of work for his new law firm “consisting principally of reviewing its advice in respect of matters that fall within the rubric of international trade and investment law.” This response prompted the claimant to challenge Mr Thomas.28

The appointing authority, the Deputy Secretary-General of ICSID, dismissed the claimant's challenge conditionally. Of greatest concern was the fact that Mr Thomas was currently advising Mexico, a NAFTA Party, which had a legal right under the NAFTA to intervene in the current arbitration to provide views on the proper interpretation of the NAFTA's provisions.29 This situation led the appointing authority to conclude that Mr Thomas could not avoid “the appearance of an inability to distance himself from the interests of Mexico.” The appointing authority rejected the claimant's challenge, however, providing Mr Thomas the opportunity to choose either to advise Mexico or continue to serve as an arbitrator in the current arbitration.30

B. An Overview of the Challenges before the Iran–US Claims Tribunal

Although the number of challenges in the context of commercial and investor–state arbitration continues to grow, the Iran–US Tribunal remains the most significant source of challenge practice. Throughout this chapter, the numerous challenge incidents before the Tribunal are used to gain insights into the process of challenge in general and the UNCITRAL challenge process in particular. In this section, we provide a very brief overview of these incidents so that they may be discussed in perspective later.

() The Iranian Government challenge of Nils Mangård—1982

During a meeting of the arbitrators in Chamber Three near the end of 1981, Nils Mangård made an informal remark whose content is disputed but which resulted in a request by Iran for his resignation.31 The Iranian arbitrator, Seyyed Hossein Enayad believed the remark to be critical of the Iranian judicial system32 and the executions that were then taking place in Iran.33 Judge Mangård later stated that the remark was misunderstood.34

(p. 184) Within a month's time, the Iranian Government sent a letter to Judge Mangård informing him that “the Islamic Republic of Iran hereby disqualifies Your Honour as a ‘neutral’ arbitrator … ”35 Ultimately, the Iranian action resulted in the designation of Charles M J A Moons, then Chief Justice of the Hoge Raad, the Supreme Court of the Netherlands, as the Appointing Authority for the Iran–US Claims Tribunal. Justice Moons ultimately disagreed with Iran, albeit for different and more cogent reasons, that its letter did not constitute a challenge under the 1976 UNCITRAL Rules and that no further action was therefore required.

() The US Government challenge of Judges Kashani and Shafeiei—1984

On September 3, 1984, Mahmoud Kashani and Shafie Shafeiei, Iranian arbitrators, physically assaulted a fellow member of the Iran–US Claims Tribunal, Nils Mangård. This act was followed by continued threats of violence by Judges Kashani and Shafeiei. A challenge against Judges Kashani and Shafeiei was filed by the US Government on September 17, 1984.36

The work of the Tribunal came to a halt. At the urging of Iran, the US Government did not press for an immediate resolution of the challenge by the Appointing Authority. Toward the end of 1984, the Iranian government withdrew and, not long after, replaced Judges Kashani and Shafeiei.

() The first Iranian Government challenge of Judge Briner in Case No 55, Amoco Iran and Islamic Republic of Iran—1988

On September 13, 1988, the Government of Iran initiated a challenge against Judge Briner in regard to his participating in the arbitration of Case No 55, Amoco and Islamic Republic of Iran. Iran alleged that Briner had a past relationship with the Swiss subsidiary of Morgan Stanley, an important expert witness for the Claimant in the case, and that he had failed to disclose that relationship. The Iranians were concerned because Morgan Stanley's testimony was heavily relied upon by the Claimant in quantifying the relief it sought and because an “arbitrator related to an expert witness cannot be assumed to be impartial in the treatment of such a witness vis-à-vis other witnesses.”37 On December 6, 1988, Judge Briner withdrew from Case No 55 under protest, approximately three months after the challenge was formally made by the Iranians.38

() The second Iranian Government challenge of Judge Briner—1989

On July 28, 1989, the Iranians again raised a challenge to Judge Briner. This time the challenge, although arising in part out of a specific case, was directed generally at Judge Briner's continued service in the Tribunal. The basis for the challenge was Judge Briner's handling of Case No 39, primarily the manner in which the amount of the Award was determined: (p. 185) “The circumstances warranting a challenge under the 1983 Tribunal Rules, Article 10, are Mr. Briner's totally improper course of conduct in the proceedings of Case No 39, Phillips Petroleum Company Iran and The Islamic Republic of Iran and the National Iranian Oil Company.”39

The Government of Iran claimed that Judge Briner had used a secret memorandum given to him by the American arbitrator, Judge Aldrich, to determine the amount of the Award and then withheld that same memorandum from the Iranian arbitrator in the case. Other charges leveled against Judge Briner were that he used the disputed testimony of Morgan Stanley from Case No 55; that the Award was tainted with efforts to conceal and slant evidence in the Claimant's favor; that there were significant inaccuracies in the Award which served to increase the amount awarded to the Claimant; and finally, that Judge Briner had ignored Tribunal practice and made inconsistent decisions during the course of the proceedings without any explanation and which served mainly to benefit the Claimant.40

The challenge was brought by the Iranians after the majority had signed the English Award. The timing of the challenge suggested that the Iranians were trying to circumvent Article 32(2), which made all Tribunal Awards final and binding, and were attempting to use the challenge mechanism as a means in essence to appeal the Award.

On September 19, 1989, the Appointing Authority, Justice Moons, delivered a decision dismissing the challenge largely on technical grounds. First, because the Iranians did not meet the 15-day deadline established under Article 11(1). Second, because much of the material Iran wanted to use to support its challenge came from in camera deliberations which are considered confidential under Article 31 and which, therefore, generally should not be examined by the appointing authority in making a decision on the merits of a challenge.41

() The third Iranian Government challenge of Judge Briner—1989

The third challenge of Judge Briner was in many ways an extension of the second. On September 11, 1989, just days prior to the Appointing Authority's decision on the second challenge, the Iranian government initiated a further challenge on the ground that Iran had just learned of possible violations of India's foreign exchange laws by Judge Briner.42 Iran also argued that these alleged violations should bear on the Appointing Authority's decision in the then still-pending second challenge. The Appointing Authority decided this challenge in his decision of September 25, 1989, finding that Judge Briner, regardless of whether there “theoretically” was a violation, had acted in good faith and that the act did not thus raise “justifiable doubts as to Mr. Briner's impartiality or independence.”43

(p. 186) () The US claimant's challenge of Judge Noori in Case No 248, Carlson and Melli Industrial Group—1990

The US claimant in Case No 248 challenged the participation of Judge Noori, the Iranian-appointed member of the Chamber, who had earlier served as general counsel of the parent corporation of the respondent.44 The Appointing Authority denied the challenge, concluding that even if “his service as Head of the NIOI legal office [the parent corporation of the Respondent] and his failure to disclose this to the President of the Tribunal were true, I do not feel this doubt can be termed justifiable doubt.”45

() The Iranian Government challenge of Judge Arangio-Ruiz—1991

On August 8, 1991, the Iranian Government challenged Judge Arangio-Ruiz, alleging a failure to act on his part. Iran did not allege that Judge Arangio-Ruiz was totally inactive, but that his neglect of his duties constituted a failure to act. The Appointing Authority upon review of the evidence concluded on September 24, 1991 that “Mr. Arangio-Ruiz has not consciously neglected his arbitral duties in such a way that his overall conduct as an arbitrator and chairman of one of the Tribunal's Chambers falls clearly below the standard of what may be reasonably expected of an arbitrator in a Tribunal such as the Iran-United States Claims Tribunal.”46

() The Iranian Government challenges of Judge Krzysztof Skubiszewski—1999

Iran based two related challenges against Judge Skubiszewski on events surrounding an inquiry by the Tribunal's Deputy Secretary-General into the balance of the Security Account, which Iran is required by the Algiers Accords to maintain at a minimum level.

On May 20, 1999, Iran raised its first challenge. It alleged partiality and prejudgment of the issues by Judge Skubiszewski for collecting evidence on a “central issue” in Case No A/28, which dealt with Iran's obligation to maintain the Security Account at US $500 million. Iran's second challenge raised on June 3, 1999 alleged that Judge Skubiszewski lied when denying that he instructed the Tribunal's Deputy Secretary-General to inquire into the account balance.

On August 30, 1999, the Appointing Authority, Sir Robert Jennings, dismissed both challenges. He found not only that the inquiry into the account balance was proper to update information relating to a pending case, regardless of who directed it, but also that Iran presented no credible evidence that Judge Skubiszewski had directed or was complicit in making the inquiry, or that he lied about any involvement.47

(p. 187) () The US Government challenge of Judge Bengt Broms—2001

On January 4, 2001, the US Government challenged Judge Broms based on his concurring and dissenting opinion in Case No A/28, which contained revelations about the secret deliberations of the Tribunal.48 The US Government argued that Judge Broms's opinion “intentionally and repeatedly undercut the legitimacy of those portions of the Tribunal's ruling favorable to the United States, demonstrate[d] his favorable disposition towards Iran, and strip[ped] those arbitrators who had voted in favor of the United States from the protections and respect accorded by the requirement of confidentiality of deliberations.”49

On March 10, 2001, the US Government renewed its request for challenge based on responsive submissions by Judge Broms that, according to the US Government, “exacerbate[d] his wrongful conduct both by compounding his original disclosures of confidential deliberations and by gratuitously exhibiting anti-American bias in a surprisingly raw manner.”50

On May 7, 2001, the Appointing Authority, Sir Robert Jennings, dismissed the US Government's applications for challenge.51

(10 ) The US claimant's challenge of Judge Bengt Broms in connection with Case No 485, Frederica Lincoln Riahi—2004

On March 28, 2003, the US claimant requested that the Tribunal reopen Case No 485, presided over by Judge Bengt Broms, on grounds that the award rendered in that case was fundamentally biased and unfair. On July 2, 2003, the claimant reaffirmed her request and asked that Judge Broms recuse himself from any further involvement in the matter because his conduct of the proceedings and exercise of judgment in rendering the award were central issues raised by her application. On January 26, 2004, the US claimant challenged Judge Broms, for his continued participation in the claimant's post-award application.

The Appointing Authority, Sir Robert Jennings, rejected the challenge as untimely since the circumstances giving rise to the challenge were set forth in the claimant's July 2003 application, but the challenge was not formally raised until January 2004, well after the 15-day time limit had expired.52

(p. 188) (11 ) The US Government challenge of Judges Assadollah Noori, Koorosh Ameli, and Mohsen Aghahosseini—2005–2006

On December 21, 2005, the US Government challenged all three Iranian arbitrators, Judges Assadollah Noori, Koorosh Ameli, and Mohsen Aghahosseini.53 The challenge was submitted on the basis of a statement made by Judge Noori on December 6, 2005, in a Full Tribunal meeting on the subject of a new Tribunal budget. In that meeting Judge Noori stated that any increase in arbitrator salaries would not affect the personal situation of the Iranian arbitrators substantially because they remit a portion of their remuneration to the Iranian Government. The United States argued that this statement proved that the Iranian arbitrators were financially dependent on Iran, as Iran had the power to reward or sanction the conduct of Iranian arbitrators by adjusting the level of income that they were allowed to keep.54

The Iranian arbitrators and Iran argued that the US challenge was untimely because the practice of remitting arbitrator payments was made known to the United States in the early days of the Tribunal.55 The Iranian arbitrators and Iran also argued that the payments in question were not illicit, but rather made pursuant to Iranian tax law.

On April 19, 2006, after holding individual fact-finding meetings with the three Iranian arbitrators and the Secretary-General of the Tribunal, the Appointing Authority, Judge W E Haak, dismissed the US challenge as untimely. His decision was based on two pieces of evidence which he believed demonstrated that the United States had prior knowledge of the Iranian practice: handwritten notes of the Secretary-General from a 1984 budget meeting, according to which a former Iranian arbitrator explained the Iranian practice in the presence of the US Agent; and a 2006 letter from a former Iranian arbitrator stating that a US arbitrator suggested in a 1981 Tribunal meeting, in which the US Agent was present, that the Iranian arbitrators may wish to return the portion of their salaries that Iran found to be objectionable.56 Judge Haak also found that even were the challenge timely, he would have rejected it on the merits because the United States failed to prove that the payments to Iran were anything other than legal contributions, pursuant to Iranian tax law.57

(12 ) The Iranian Government Challenge of Judge Krzysztof Skubiszewski and the US Government Challenge of Judge Hamid Reza Oloumi Yazdi—2007

The challenges of Judges Skubiszewski and Oloumi arose out of the same general factual background. In November 2006, Judge Noori, an Iranian arbitrator, submitted his resignation, effective on the day after the hearings in Case No B61 were concluded and refused to participate in the deliberations of that case.58 Judge Oloumi ultimately replaced Judge (p. 189) Noori and by a decision dated May 1, 2007, the Full Tribunal decided that “Mr. Oloumi Yazdi will be afforded the time he requires fully and adequately to prepare for deliberations in Case No B61.” Citing the May 1, 2007 decision, Judge Oloumi submitted a memorandum to the President of the Tribunal on November 23, 2007, formally requesting a rehearing of certain issues in the case and a postponement of all deliberations in the case until April 2008 to allow him adequate time to prepare for further deliberations.

On November 30, 2007, Iran challenged Judge Skubiszewski, alleging that the President “virtually eliminated Judge Oloumi from deliberations of Case B61” by turning down his request for a postponement of deliberations through “most irregular action committed clandestinely with obvious prejudice” to Iran.59 Iran further argued that the Full Tribunal's decision of May 1, 2007, as formulated, denied the President any discretion to reverse that decision. In response, the United States challenged Judge Oloumi on December 10, 2007, alleging that he disclosed to Iran and the United States the substance of confidential discussions on the possible postponement of Case B61 in breach of Article 31, Note 2 of the 1983 Tribunal Rules. The breach, the United States argued, “appear[ed] to be calculated to enable the party that appointed him, Iran, to seek to influence the Tribunal's ongoing deliberations in Case B61 and alter the composition of the Tribunal in the midst of deliberations.”60 On April 2, 2008, the Appointing Authority, Judge W E Haak, dismissed both challenges in a joint decision, finding that Judge Skubiszewski appeared to have appropriately submitted Judge Oloumi's request to the Full Tribunal for decision and that while Judge Oloumi did breach the Tribunal's confidentiality rules, he did not do so in bad faith.

(13 ) The Iranian Government challenge of Judge Krzysztof Skubiszewski and Judge Gaetano Arangio-Ruiz—2009

On August 5, 2009, shortly after the Tribunal had rendered its partial award in Case No B61, Iran submitted a request to revise the partial award and a challenge against Judge Skubiszewski, President of the Tribunal, and Judge Gaetano Arangio-Ruiz, third-country arbitrator. The challenge alleged that the two arbitrators had been involved in “a calculated scheme to covertly and illegally revise the Tribunal's partial award” in Case No A15(II:A & II:B) on which Iran argued it had based many of its representations in Case No B61. Thus, according to the Iranian Government, it therefore had not been given the opportunity to present its case on the issues on which the B61 partial award was decided.61 Iran further argued that the refusal of Judges Skubiszewski and Arangio-Ruiz to recuse themselves from deciding the request for revision created additional doubts as to their impartiality and independence.62 The Appointing Authority, Judge W E Haak, disagreed, dismissing the challenge based on a combination of grounds.63

(p. 190) These grounds included: that while Iran had timely lodged its challenge within 15 days of the issuance of the B61 partial award, any “other circumstances” leading up to that decision which gave rise to Iran's doubts in Case No B61 would have occurred beyond that time period;64 that Iran's “calculated scheme” allegation had not been sufficiently substantiated, leaving as Iran's principal claim that the challenged arbitrators illegally revised the prior partial award in Case No A15(II:A & II:B) in violation of the principle of res judicata;65 that neither the challenged arbitrators’ defense of themselves in the challenges, nor their refusal to recuse themselves from deciding Iran's request for revision or to step down entirely, in any way provide additional grounds for challenge;66 that by choosing to challenge only two arbitrators, as opposed to all arbitrators who formed the majority behind the B61 partial award, Iran “fatally weakened” its challenge because it would require the appointing authority to agree to hold the party-appointed arbitrator to a lower standard of impartiality and independence;67 that since the appointing authority does not serve as an appellate body, he must approach an alleged res judicata violation with special caution, having authority only to sustain a challenge where (as was not the case here) “the two awards are so clearly divergent on their face” as to demonstrate a lack of impartiality and independence.68

(14 ) The US Government challenge of Judge Seyed Jamal Seifi—2010

On April 22, 2010, the US Government challenged Judge Seifi on the basis of his prior involvement as an arbitrator in an ICC arbitration between Iran and Cubic Corporation, a US corporation. The ICC tribunal rendered its award in 1997. The US Government alleged that both Iran's claims in the ICC arbitration and one of its claims in Case No B61 related to the same sale and installation of military equipment under contracts between Iran and Cubic. The US Government therefore claimed that Judge Seifi impermissibly failed to disclose his prior participation in the ICC arbitration, which was likely to influence his participation in any future proceedings in Case No B61. The Appointing Authority, Judge W E Haak, dismissed the challenge, finding that Judge Seifi did not have a duty to disclose his prior involvement in the ICC arbitration given the differences in the legal bases of the two proceedings and that the US Government was time-barred from bringing the challenge since it had relied upon Judge Seifi's dissent in the ICC arbitration in its 2009 pleadings in Case No B61.69

(15 ) The Iranian Government Challenge of Judge Charles Brower—2010

On May 10, 2010, Iran challenged Judge Charles Brower, a US-appointed arbitrator, for his allegedly unauthorized interference with the functions of the appointing authority in appointing a new third-country arbitrator. At issue was Judge Brower's phone call to Professor Pierre-Marie Dupuy to explain the various aspects of the position placed after the appointing authority had selected Professor Dupuy as third-country arbitrator with the support of both the United States and Iran. Iran alleged that Judge Brower's phone call was (p. 191) inconsistent with the Tribunal Rules, contravened the orders of the Appointing Authority and was pursued on behalf of the United States. The Appointing Authority dismissed the challenge on September 3, 2010 rather summarily, finding no breach of the appointment procedures and no violation of the standard of impartiality and independence.70

C. The Exclusivity of the UNCITRAL Challenge Procedure

Before discussing the challenge mechanism provided for in the UNCITRAL Rules, one must consider whether the bases and means for removal of an arbitrator are exclusively provided by the UNCITRAL Rules or whether other grounds or indeed other mechanisms exist independently of the Rules.71 Iran asserted a basis for removal of an arbitrator outside the Rules in its “challenge” of Nils Mangård in January, 1982.

On December 28, 1981, Mohammed K Eshragh, the Agent of the Islamic Republic of Iran delivered a letter to Judge Mangård in Stockholm stating:

Neutrality and impartiality of the jurists composing the Iran-United States Claims Tribunal has been the most significant condition upon which the Islamic Republic of Iran has submitted its disputes to adjudication by this Tribunal. The Islamic Republic of Iran requires the complete neutrality and independence and lack of the slightest political prejudice from the arbitrators of this Tribunal, particularly from those commonly appointed as “neutral.”

It has come to our attention that despite the responsibility of neutral arbitrators to disassociate themselves from unsound political propaganda, you have unfortunately taken a position accusing the Islamic Republic of Iran of condemning executions. [sic] The obvious implication of such statement is nothing but a groundless prejudgment against a political system whose acts will be brought before you for evaluation and neutral decision.

Such political approach on your part morally and legally disqualifies you from rendering any fair judgment in connection with acts attributed to the Islamic Republic before this Tribunal …

For these reasons and for avoiding recourse to challenge procedure by the Islamic Republic of Iran, it is respectfully suggested that you opt to resign from the membership of the Tribunal, so that the Islamic Republic and the United States be able to select another arbitrator and hopefully to resolve their disputes smoothly and in the best interests of their nations. To respect you as an international arbitrator, the content of this letter will be considered confidential should you, by your resignation, relieve the Islamic Republic of Iran from the unpleasant task of disqualification procedure, which as you are aware is quite substantial in this case.72

(p. 192) The Iranian Agent, in a further letter to Mangård dated January 1, 1982, emboldened the position of Iran. No longer was Mangård “suggested” to resign and thereby relieve all “from the unpleasant task of disqualification procedure.” Now quite simply the Agent wrote: “[w]ith utmost regret I have been instructed to notify you that the Islamic Republic of Iran hereby disqualifies Your Honour as a ‘neutral’ arbitrator ….”73 A copy of the letter was sent to the other members of the Tribunal and the Agent of the United States.

The UNCITRAL Rules, in addressing the question of challenge of an arbitrator, provide that ultimately a challenge will be decided by a third party called an “appointing authority.” The Government of Iran, however, asserted that it possessed the power to unilaterally disqualify a third-country arbitrator.

Although ostensibly a challenge is not a matter for a tribunal to consider under the UNCITRAL Rules,74 the Iran–US Claims Tribunal was forced to address the “disqualification” in part because the Agent of Iran requested that no meeting be held until Judge Mangård had been replaced.75

The Agents of the two governments submitted their views in writing76 and by oral argument77 to the Tribunal. Iran argued that it had exercised its sovereign right to disqualify Judge Mangård; that “the disqualification by Iran is above and outside the procedure laid down in the [1976] UNCITRAL Rules; and the challenge procedure provided for in Articles 11 and 12 of the [1976] UNCITRAL Rules is not applicable.”78 The United States, on the other hand, argued that neither state party had the legal capacity to unilaterally disqualify a member of the Tribunal and that the only procedure provided for removal of a member was that set forth in the UNCITRAL Rules.

Considering Iran's sovereign rights argument, the Tribunal stated:

Iran has not submitted any reference to international law, precedents, the Agreements between Iran and the United States or any other source of law in support of its position. Indeed, there is no such support. On the contrary, it is an element of absolutely fundamental importance in international law that sovereign States must respect the international agreements to which they have become Parties.79

The Tribunal went on to conclude:

Neither the Claims Settlement Declaration nor any of the other instruments relating to the settlement of disputes between Iran and the United States contains anything that can be interpreted as indicating that alternative means for removing an arbitrator exist. Thus, Article III, paragraph 2 of the Claims Settlement Declaration makes it abundantly clear that the only method by which an arbitrator may be removed from office is through challenge by a party and decision by the Appointing Authority pursuant to Article 11 and 12 of the [1976] UNCITRAL Rules.80

(p. 193) The Tribunal's Decision is an obviously correct one. As noted by the Tribunal, to have decided otherwise and granted a unilateral disqualification right “would seriously impair the integrity of the arbitration process and would be contrary to all general principles of justice.”81

Charles M J A Moons, the Appointing Authority, ultimately agreed with the Tribunal in his March 5, 1982 “Decision on the objections to Mr. N. Mangård as a Member of the Iran-United States Claims Tribunal, lodged by the Islamic Republic of Iran”:

4.2  If the High Contracting Parties wish to remove a duly Appointed arbitrator from office, the only option open to them under the agreement [Claims Settlement Declaration] is to use the challenge procedure provided for in articles 10 to 12 of the [1976] UNCITRAL rules.

It has been contended on behalf of the Islamic Republic of Iran that in addition to the power to challenge an arbitrator on the ground of circumstances that “give rise to justifiable doubts as to the arbitrator's impartiality of independence”, Iran also has the right as a sovereign state to disqualify a duly appointed arbitrator if he has lost the confidence of Iran. This proposition cannot be accepted as correct.

It is inconsistent with the provision of Article III, paragraph 2, of the Claims Settlement Agreement set out above under 3.1, which cannot reasonably be interpreted in any other way than as meaning that the High Contracting Parties thereby agreed that a duly appointed arbitrator could be removed from office only in accordance with the challenge procedure provided for in Articles 10 to 12 of the [1976] UNCITRAL Rules. Furthermore, neither the Claims Settlement Declaration nor any of the other instruments relating to the settlement of disputes between Iran and the United States contains anything which could justify the conclusion that, contrary to the foregoing, the Islamic Republic of Iran reserved itself the right referred to in the above-mentioned proposition.

The independence of the arbitrators, which is aimed at by the Claims Settlement Agreement, is also scarcely reconcilable with the notion that the arbitrators can be disqualified by a unilateral statement by one of the High Contracting Parties that it no longer has confidence in them.

4.3  It is an established fact that the three members of the Iran-United States Claims Tribunal appointed by Iran and the three members appointed by the United States, acting within the framework of the Declaration referred to under 3.1, mutually agreed on 4 June 1981 to appoint Gunnar Lagergren, Pierre Bellet and Nils Mangård as the remaining three members of the Tribunal.

Since the [1976] UNCITRAL Rules, which are applicable in the present matter by virtue of Article III, paragraph 2, of the Claims Settlement Agreement, do not provide that the power of the six party-appointed arbitrators to designate the remaining three arbitrators by mutual agreement is subject in any way to the consent of one or more of the High Contracting Parties and allocate no role to such Parties in regard to the exercise of such power, the appointment of Mr. Mangård, which took place as described above, cannot be nullified by a later withdrawal of such consent.82

Although obvious from the above decision, it is worth emphasizing that a party does not even have the right to recall the arbitrator it appointed. Indeed, even both parties cannot force the resignation of an arbitrator, although such a result could be achieved by termination of the entire proceedings or by challenge by one party and the agreement of the other party to the challenge.83

(p. 194) 2. The Duty to Disclose—Article 11

Article 11 addresses the duty of a prospective arbitrator or an appointed or chosen arbitrator to disclose circumstances “likely to give rise to justifiable doubts as to his impartiality or independence.”84 As Professor Sanders stated in his commentary to the almost identical provision in the preliminary draft of the 1976 UNCITRAL Rules, “[n]o one knows better than the arbitrator himself whether such circumstances exist.”85

A. Text of the 2010 UNCITRAL Rule86

Article 11 of the 2010 UNCITRAL Rules provides:

When a person is approached in connection with his or her possible appointment as an arbitrator, he or she shall disclose any circumstances likely to give rise to justifiable doubts as to his or her impartiality or independence. An arbitrator, from the time of his or her appointment and throughout the arbitral proceedings, shall without delay disclose any such circumstances to the parties and the other arbitrators unless they have already been informed by him or her of these circumstances.

Model statements of independence pursuant to article 11 of the Rules87

No circumstances to disclose

I am impartial and independent of each of the parties and intend to remain so. To the best of my knowledge, there are no circumstances, past or present, likely to give rise to justifiable doubts as to my impartiality or independence. I shall promptly notify the parties and the other arbitrators of any such circumstances that may subsequently come to my attention during this arbitration.

Circumstances to disclose

I am impartial and independent of each of the parties and intend to remain so. Attached is a statement made pursuant to article 11 of the UNCITRAL Arbitration Rules of (a) my past and present professional, business and other relationships with the parties and (b) any other relevant circumstances. [Include statement.] I confirm that those circumstances do not affect my independence and impartiality. I shall promptly notify the parties and the other arbitrators of any such further relationships or circumstances that may subsequently come to my attention during this arbitration.

Note. Any party may consider requesting from the arbitrator the following addition to the statement of independence:

I confirm, on the basis of the information presently available to me, that I can devote the time necessary to conduct this arbitration diligently, efficiently and in accordance with the time limits in the Rules.

(p. 195) B. Commentary

() The duty to disclose

The duty to disclose arises in two stages. First, a prospective arbitrator has a duty of disclosure to those who approach him or her in regard to possible appointment.88 Second, the arbitrator, once appointed, bears the same duty of disclosure to the parties he or she has not already informed. Thus in the case of one party having approached a prospective arbitrator, all other parties must be disclosed to following the appointment of that arbitrator. When an appointing authority has approached the prospective arbitrator, then all parties should later be provided the disclosure. In this sense, the duty to disclose in the first stage is to whomsoever may approach the prospective arbitrator and thus may include even a non-party such as the appointing authority.

During the second stage, however, the duty to disclose is limited to the parties to the arbitration and the other members of the tribunal.89 There is, of course, “no corollary obligation upon the non-appointing party [or parties] to conduct independent research into the background and experience of the nominated arbitrator.”90

Disclosure at both the pre- and post-appointment stages helps avoid selection of an arbitrator who may be successfully challenged later and thereby avoids interruption of arbitral proceedings.91 Disclosure to all parties is also important for reasons of estoppel. Acceptance of arbitrators in the face of circumstances likely to give rise to justifiable doubts as to impartiality or independence lays the basis for possible estoppel of the accepting party later seeking to challenge the arbitrator on the basis of the same circumstances (see Article 12(2)) or to challenge the award in the appropriate municipal court.92

Article 11 places on the arbitrator a duty to disclose circumstances “from the time of his or her appointment and throughout the arbitral proceedings,” thus expressly establishing a continuing duty to disclose. Corresponding Article 9 of the 1976 UNCITRAL Rules referred only to the duty of disclosure “once [the arbitrator was] appointed or chosen.” (p. 196) Although not expressly stated in that provision, such a continuing duty is indicated in the travaux préparatoires of the 1976 UNCITRAL Rules,93 is consistent with disclosure requirements in other rules of arbitral procedure,94 and is consistent with policies underlying the rule.95 The Working Group that revised the Rules added the new language to Article 11 “in order to put that matter [of the continuing duty to disclosure] beyond doubt and in the interests of achieving consistency with [Article 12(1) of] the Model Law.”96

Likewise, although not express, the Article 11 pre-appointment duty to disclose exists not only at the moment the prospective arbitrator is first approached, but rather up to the point that the arbitrator is or is not appointed. Thus a prospective arbitrator has a duty to disclose, to those who approach him, circumstances likely to give rise to justifiable doubts, even when those circumstances arise after he is initially approached but before he is appointed or chosen.

The circumstances which should be disclosed are those which are “likely” to give rise to “justifiable doubts as to his impartiality or independence,” and thus constitute a basis for challenge under Article 12(1) of the Rules.97 Article 11 thus implicitly recognizes that although there can be many relationships between the arbitrator and the parties, the duty to disclose does not require disclosure of all circumstances which might support a challenge under Article 12. Rather the duty extends only to those circumstances which more likely than not would support a challenge.98 When in doubt, it is often good practice for an arbitrator to disclose particular facts about his or her background to the fullest extent possible in order to “build confidence between an arbitrator and the Parties.”99

Importantly, the standards for disclosure under Article 11 and for sustaining a challenge under Article 12 are not identical. On the contrary, while Article 11 requires an arbitrator to disclose any circumstances “likely” to give rise to justifiable doubts, an arbitrator can be disqualified under Article 12 if such circumstances, in fact, “exist.” Thus, an arbitrator may (p. 197) have a duty under Article 11 to disclose circumstances which he or she believes more likely than not would support a challenge but that, in fact, do not cause a party to bring a challenge or, if a challenge is brought, are not found by the appointing authority to give rise to justifiable doubts under Article 12. If the standards in Articles 11 and 12 were coterminous, every disclosure under Article 11 would necessarily result in the disqualification of the disclosing arbitrator, unless all parties were to agree nevertheless to allow an arbitrator to serve on the arbitral tribunal. As discussed in the following section, the model statement of independence to be used in cases of disclosure contemplates the possibility that a person chosen to be an arbitrator may disclose circumstances “likely” to give rise to justifiable doubts, but simultaneously believe that he or she can still serve as an impartial and independent arbitrator.

The decision on the challenge to Professor Gabrielle Kaufmann-Kohler in the AWG arbitration underscores the complexity in applying the two similar, but distinct standards.100 In that situation, Professor Kaufmann-Kohler, the claimant-appointed arbitrator, had been recently elected to the board of the UBS Group (“UBS”), which held nominal shareholdings in two of the three claimants in the consolidated arbitration, Suez and Vivendi, but not in the third, AWG Group. Unlike the others, AWG Group's arbitration was proceeding pursuant to the 1976 UNCITRAL Rules.101 Professor Kaufmann-Kohler did not inform the parties or her co-arbitrators of her new position. Upon learning of her appointment, the Argentine Government challenged Professor Kaufmann-Kohler on the basis of not only an alleged conflict of interest, but also her failure to disclose her new position as board member.

On the question of whether Professor Kaufmann-Kohler had a duty to disclose her position as UBS director, the truncated tribunal interpreted corresponding Article 9 of the 1976 UNCITRAL Rules as requiring disclosure of facts that “if disclosed might give rise to justifiable doubts as to the impartiality.”102 At the same time, it found that because Professor Kaufmann-Kohler's appointment, in fact, did not give rise to justifiable doubts, she therefore had no obligation to disclose this fact to the parties.103

In our view, this decision does not adequately recognize the distinction between the disclosure requirements and justifiable grounds for challenge under the Rules. In fact, a person chosen to be an arbitrator may in some situations have a duty to disclose a particular circumstance, even though that circumstance is later determined by the appointing authority not to give rise to justifiable doubts.

The challenge to Professor Kaufmann-Kohler is useful, nevertheless, in demonstrating the appropriate due diligence to be performed by an arbitrator when assessing whether circumstances exist that are likely to give rise to justifiable doubts. For example, when nominated for the position of UBS director, Professor Kaufmann-Kohler submitted to UBS a list of the arbitrations in which she was involved and was informed by the company that no conflicts of interest existed.104 In addition, she understood that, according to Swiss banking law, the position for which she was nominated was independent from the (p. 198) management of UBS, including its investment decisions, and thus her responsibilities would be limited to supervision and control only.105 These steps enabled Professor Kaufmann-Kohler to reach in good faith the conclusion that her appointment would not affect her impartiality and independence as an arbitrator and helped reduce her exposure to disqualification.106

Unaddressed by the Rules is the issue of what consequences flow from a failure to disclose. In particular, should a failure to disclose be taken to support the existence of “justifiable doubts as to … impartiality or independence” and thus summarily support a challenge? This question is considered below in our discussion of Article 12.

() Model statements of independence

The Annex to the 2010 UNCITRAL Rules includes two “model statements of independence pursuant to Article 11 of the Rules.” According to the travaux préparatoires, these statements offer “guidance” as to “the required content of disclosure.”107 The model statements of independence are a new addition to the UNCITRAL Rules, though the use of disclosure statements has been common practice in international arbitration for many years.108

The model statements of independence contemplate two distinct situations that a prospective arbitrator might face. Use of the first statement conveys the prospective arbitrator's decision against disclosure because of the belief that “there are no circumstances, past or present, likely to give rise to justifiable doubts” as to his or her impartiality or independence. Use of the second statement indicates the prospective arbitrator's wish to disclose certain “past and present professional, business and other relationships with the parties” or “any other relevant circumstances,” while maintaining the view that “those circumstances do not affect [his or her] independence and impartiality.” Thus, the use of both model statements is predicated on a prospective arbitrator's express conviction: “I am impartial and independent of the parties and intend to remain so.” Were a prospective arbitrator to feel otherwise, he or she should decline the request for appointment altogether.

Whether to disclose under the second model statement, however, depends not on a prospective arbitrator's subjective opinion as to his or her ability to serve ethically, but on the disclosure requirements of Article 11. That provision requires disclosure of any circumstances “likely,” but not necessarily, to give rise to justifiable doubts as to an arbitrator's impartiality and independence, which requires an objective assessment of the relevant circumstances. Thus, where the second statement is used, the prospective arbitrator has decided to disclose “past and present professional, business and other relationships with the parties and … any other relevant circumstances” not because that person believes that he or she cannot satisfy the standard for impartiality and independence under the Rules, but because one of the parties to the arbitration might reasonably disagree with that conclusion.

(p. 199) The travaux préparatoires confirm the strict symmetry between the second model statement and the disclosure requirements of Article 11. Early drafts of the second statement that failed to achieve this aim were rejected. For example, one draft required disclosure of any circumstance that “might cause a party to question [the arbitrator's] impartiality or independence.”109 When criticized as inconsistent with Article 11, which uses the different formulation “likely to give rise to,” it was proposed to add a sentence to the provision following a description of the circumstances disclosed by the arbitrator: “Nevertheless, I do not regard such circumstances as likely to give rise to justifiable doubts as to my impartiality or independence.”110 The addition of that sentence, however, only further confused the issue by suggesting that a prospective arbitrator was disclosing circumstances even though he or she believed disclosure was not required under Article 11. Consequently, the final version of the second statement omits this sentence, along with the “might cause” phrase, in the interest of maintaining parity between the second model statement and the disclosure requirements of Article 11.111

The last sentence of both model statements references the continuous duty of disclosure contained in Article 11. Under both statements, the prospective arbitrator undertakes, respectively, to notify the parties and the other members of the tribunal promptly of “any … circumstances,” if the arbitrator did not initially make a disclosure, or “any … further relationship or circumstances,” if the arbitrator has already disclosed, that are likely to give rise to justifiable doubts as to the arbitrator's impartiality or independence and that “subsequently come to [the arbitrator's] attention during this arbitration.”

Neither the model statements nor Article 11 itself indicates when a statement of independence should be made. The Working Group appears to have preferred to leave the issue open in order to avoid placing undue restrictions on the use of the statements.112 Statements are most efficiently used when they are made at the time a person accepts an appointment as arbitrator, or shortly thereafter, to allow any party that wishes to challenge the appointment an opportunity to do so early in the arbitral proceedings before substantive consideration of the issue has begun. A statement may also be used later in an arbitration if new circumstances arise that are likely to raise doubts as to an arbitrator's impartiality and independence.113

(p. 200) Finally, the Annex to the UNCITRAL Rules includes text that “[a]ny party may consider requesting from the arbitrator” in addition to a statement of independence: “I confirm, on the basis of the information presently available to me, that I can devote the time necessary to conduct this arbitration diligently, efficiently and in accordance with the time limits in the Rules.” This addition reflects a growing concern in the arbitration community with the possibility that a prospective arbitrator will accept an appointment even though he or she cannot perform in a timely fashion because of other commitments. This possibility certainly bears on the wisdom of any particular appointment, but delays due to conflicts do not themselves necessarily provide grounds for a challenge under Article 12. Rather, this additional confirmation reflects a broader functional scope for the prospective arbitrator's statement, which concerns not only disclosure, but also pledges as to performance that were previously thought to be implicit in acceptance of the appointment.

() Disclosure guidelines of the Iran–US Claims Tribunal

For at least the initial appointments made to the Iran–US Claims Tribunal in 1981, pursuant to a rule very similar to Article 11, “disclosure guidelines” were used by the prospective arbitrators.114 For the three Iranian arbitrators, this statement of guidelines was used directly as a “form” for disclosure. The guidelines were also the point of departure for the drafting of a disclosure letter for the initial three American arbitrators.

In the case of the US party-appointed arbitrators, a general disclosure was made on behalf of these arbitrators following appointment by the Agent for the United States in fairly detailed letters to the Agent for Iran and to the President of the Tribunal.115 In the case of the appointment of Charles Brower by the United States, the Agent for Iran requested additional information.116 Such additional information was provided “as a matter of courtesy” given that “the initial 15 day challenge period with respect to Mr. Brower's appointment ha[d] run” and the “earlier disclosure … was thorough, candid and more than sufficient to satisfy … the rules.”117

As with Iran's initial appointments, the guidelines were used as a “form” by Judge Mostafa Jahangir Sani in 1982. The disclosure statements for Iranian arbitrators (p. 201) appointed following Judge Sani were provided by the Agent of Iran. As mentioned above, these statements were relatively brief and occasionally were objected to on that basis by the Agent for the United States.118

The Tribunal's addition to Article 9 of the 1976 UNCITRAL Rules reflects the multi-claim nature of the Tribunal and a related decision of the Tribunal. Specifically, a challenge seeking to remove an arbitrator entirely from the Tribunal might be initiated only by one of the state parties, while a challenge of an arbitrator's hearing of a particular case might be raised by both the particular parties to the case in question and the state parties.119 The addition to Article 9 placed the President of the Tribunal in the position of gatekeeper as to whether the disclosure made by an arbitrator to the two governments should also be made to the particular parties involved.120

C. Extracts from the Practice of Investment Tribunals

AWG Group Ltd and Argentine Republic, Decision on a Second Proposal for the Disqualification of a Member of the Arbitral Tribunal (May 12, 2008) (ICSID administered, 1976 UNCITRAL Rules, UK-Argentina BIT) (footnotes omitted), at 13–14:

  1. 25. The Respondent also alleges that Professor Kaufmann-Kohler had a duty to disclose to the parties in the AWG Case that she was a director of UBS and that UBS carried out certain activities relating to the international water sector. Does her failure to disclose these facts also create a “circumstance” that raises a justifiable doubt as to her impartiality or independence? Article 9 of the [1976] UNCITRAL Arbitration Rules states an arbitrator's obligations of disclosure to the parties. It provides: “A prospective arbitrator shall disclose to those who approach him in connexion with his possible appointment any circumstances likely to give rise to justifiable doubts as to his impartiality or independence. An arbitrator, once appointed or chosen, shall disclose such circumstances to the parties unless they have already been informed by him of these circumstances.” Thus, Article 9 makes clear that Professor Kaufmann-Kohler, once appointed in the AGW Case, had a continuing obligation to disclose to the parties any circumstances that may subsequently arise, which would be likely to give rise to justifiable doubts as to her impartiality.

  2. 26. We interpret Article 9 to require disclosure of such facts that if disclosed might give rise to justifiable doubts as to impartiality and that an arbitrator has no obligation to disclose facts which do not meet this test. Having decided that Professor Kaufmann-Kohler's appointment as a director of UBS did not create a circumstance giving rise to justifiable doubts as to her impartiality or independence in the AWG Case, because of the lack of any business relationship between UBS or Professor Kaufmann-Kohler on the one hand and AWG Group Limited on the other, we also conclude that she had no obligation under Article 9 of the [1976] UNCITRAL Arbitration Rules to disclose the fact of her directorship in UBS to the parties in the AWG Case. In view of the foregoing, the remaining members of the Tribunal have (p. 202) concluded that the Respondent has not established the existence of circumstances in the AWG Case that give rise to justifiable doubts as to Professor Kaufmann-Kohler's impartiality and independence and that Respondent's proposal to disqualify her as an arbitrator in that case must be dismissed.

Permanent Court of Arbitration, Arbitrator's Declaration of Acceptance and Statement of Impartiality and Independence for Cases Under the UNCITRAL Arbitration Rules:

Pca Case No _____
Arbitrator’s Declaration of Acceptance
And Statement of Impartiality and Independence
For Cases Under the Uncitral Arbitration Rules

(Please check the relevant box or boxes)

I, the undersigned,

Last Name: _________________________ First Name: _________________________

NON-ACCEPTANCE

❏ hereby declare that I decline to serve as arbitrator in the subject case. (If you wish to state the reasons for checking this box, please do so.)

ACCEPTANCE

❏  hereby declare that I accept to serve as arbitrator under the UNCITRAL Arbitration Rules (“UNCITRAL Rules”) in the instant case. In so declaring, I confirm that I have familiarized myself with the requirements of the UNCITRAL Rules and am able and available to serve as an arbitrator in accordance with all of the requirements of those Rules.

IMPARTIALITY AND INDEPENDENCE

(If you accept to serve as arbitrator, please also check one of the two following boxes. The choice of which box to check will be determined after you have taken into account, inter alia, whether there exists any past or present relationship, direct or indirect, with any of the parties or their counsel, whether financial, professional or of another kind and whether the nature of any such relationship is such that disclosure is called for pursuant to the criteria set out below. Any doubt should be resolved in favor of disclosure.)

❏ I am impartial and independent with respect to each of the parties and intend to remain so; to the best of my knowledge, there are no facts or circumstances, past or present, that need be disclosed because they are likely to give rise to justifiable doubts as to my impartiality or independence.

OR

❏ I am impartial and independent with respect to each of the parties and intend to remain so; however, in consideration of the UNCITRAL Rules, I wish to call your attention to the following facts or circumstances which I hereafter disclose because they might be of such a nature as to give rise to justifiable doubts as to my impartiality or independence. (Use separate sheet.)

Date: _________________________ Signature: _________________________

D. Extracts from the Practice of the Iran–US Claims Tribunal

() General

During at least the initial establishment period of the Tribunal in 1981, the following disclosure guidelines were used: (p. 203)

GUIDELINES FOR WRITTEN STATEMENT TO BE FURNISHED BY EACH MEMBER OF THE TRIBUNAL

  1. 1. Name

  2. 2. Place and Date of Birth

  3. 3. Citizenship

  4. 4. Place of Residence

  5. 5. List of all Academic Degrees, stating

    • —  degree

    • —  institution

    • —  year degree granted

  6. 6. Description of present employment, stating

    • —  name of present employer

    • —  date present employment began

    • —  title or function with present employer

    • —  whether the Member, or any law firm with which he is associated has acted or is acting as lawyer, adviser or representative on any claim, counterclaim or dispute intended to be presented to the Iran–U.S. Claims Tribunal

  7. 7. Description of other major professional, business or governmental organization

    • —  name of the professional, business or governmental organization

    • —  title or function

  8. 8. Description of past employment, stating

    • —  name of each past employer

    • —  years of each past employment

    • —  title or function with each past employer

  9. 9. Knowledge of any claim, counterclaim or dispute intended to be presented to the Iran–U.S. Claims Tribunal by any business entity in which the Member has an investment or financial interest.

This statement of guidelines was used directly as a form for disclosure by the initial three Iranian arbitrators, in part used directly as a form by the initial three third-country arbitrators, and used directly as a form in 1982 by the Iranian arbitrator, Judge Mostafa Jahangir Sani. This statement was used as a guideline for the drafting of a disclosure letter for the initial three American arbitrators and in part used in the same manner by the initial third-country arbitrators. The form does not appear to have been directly used or referred to following these disclosures early in the life of the Tribunal.

Decision of the Appointing Authority, W E Haak, in the Challenge of Judge Bengt Broms (September 30, 2004), reprinted in (October 2004) 19(10) Mealey's Intl Arb Rep B-1, B-2 (emphasizing the general and foundational observation that the duties contained in Article 9 of the Tribunal Rules are directed at the arbitrator):

29. In the present case … Ms. Riahi and her counsel elected to invoke Article 9 of the Tribunal Rules, requesting that Judge Broms disqualify himself, and asking for a preliminary decision of this recusal. That article, however, deals with the situation in which an arbitrator, rather than a party, obtains knowledge of circumstances likely to give rise to justifiable doubts as to his impartiality or independence in a particular case. It focuses primarily on the disclosure of these circumstances, initially to the Tribunal's President. While the arbitrator is directed, if appropriate, to disqualify himself as to that case, this appears to be discretionary. There is no time limit provided for such recusal, and no procedure prescribed whereby a party to the arbitration may seek recusal or object to an arbitrator's failure to resign. As set forth in the Tribunal Rules, challenge [is] the proper procedure for dealing with a party's justifiable doubts concerning an arbitrator.

(p. 204) Decision of the Appointing Authority, Judge W E Haak, in the Challenge of Judges Assadollah Noori, Koorosh Ameli, Mohsen Aghahosseini, April 19, 2006:

  1. 24. Iran and the Iranian arbitrators claim that the payments have occurred since the creation of the Tribunal and that the United States has been aware of such payments since 1981. The United States argues that it only became aware of the payments from Judge Noori's statement of 6 December 2005. The United States further argues that actual prior knowledge of the facts (as opposed to constructive knowledge) is required to be shown. The United States asserts that in the present case, only “vague statements or rumors” existed prior to Judge Noori's statement of 6 December 2005 (Letter of the United States dated 10 March 2006).

  2. 25. The United States is correct in stating that evidence of actual prior knowledge on the part of the challenging party of circumstances giving rise to a challenge must be shown. Whether such actual knowledge existed or not is a matter for me as appointing authority to determine on the basis of evidence submitted. In the past history of the Tribunal such evidence has included, for example, a prior statement made by the challenging party (Decision of the appointing authority in the challenge of Judge Briner, 19 September 1989).

  3. 26. In the present case, the evidence submitted to me includes a Statement by Secretary-General Pinto that he and the Tribunal had been aware for more than twenty years that the Iranian arbitrators made payments to Iran. Mr. Pinto supported his declaration with handwritten notes from a meeting of the Committee on Administrative and Financial Questions on 26 April 1984, where a then Iranian appointed arbitrator, Mr. Kashani, stated in the presence of the Agent of the United States that the Iranian arbitrators returned part of their salaries to Iran.

  4. 27. In addition to Mr. Pinto's statement, the appointing authority was also provided with a letter dated 1 February 2006 from Dr. Seyyed Hossein Enayat, a former Iranian arbitrator, indicating that during a meeting of the Tribunal in 1981, an arbitrator appointed by the United States suggested that Iranian arbitrators may wish to return part of their salaries to Iran, should Iran deem the salaries to be too high. Dr. Enayat states that the United States Agent, who was present at the meeting, did not object to this proposal.

  5. 28. This evidence is sufficient to convince me that the United States had actual knowledge of payment by the Iranian arbitrators of a part of their salaries to Iran since at least 1984. Consequently, the Challenge brought by the United States on 21 December 2005 was made well after the time limit set out in Article 11(1) of the [1983] Tribunal Rules, and the Challenge, having failed to comply with this time limit, shall be declared inadmissible.

Decision by the Appointing Authority, Judge W E Haak, on the Challenge against Judge Seyed Jamal Seifi, September 3, 2010, at 6–7, 9–10, para 24, 26–27, 31:

  1. 24. Given this purpose, arbitrators should, as a general principle, resolve all doubts about whether or not to disclose particular facts in favor of disclosure. The fullest possible disclosure is far more likely to build confidence between an arbitrator and the Parties than a selective or incomplete disclosure of the arbitrator's personal details and experience. Indeed, full disclosure of an arbitrator's past cases in which he or she acted as either counsel or arbitrator (to the extent allowed by confidentiality obligations) has evolved into a “best practices” standard in modern arbitral proceedings, precisely in order to help forestall doubts on the part of parties and, equally important, to resolve potential conflicts of interest decisively at the soonest possible time to ensure a minimal disruption of proceedings.

  2. 26. As discussed above, arbitrators should as a general rule err on the side of caution and disclose any and all prior professional activities and other circumstances that might lead any of the parties to harbor justifiable doubts as to their impartiality or independence. Indeed, the present Challenge might have been avoided or at least been dealt with earlier had disclosure of the Cubic Arbitration been made at the time Judge Seifi first took office in August 2009. Following the practice of full disclosure would thus have precluded or greatly simplified these proceedings.

  3. 27. That said, Article 9 of the Tribunal Rules does not impose such a thorough level of disclosure as a legal requirement, stating only that an arbitrator shall disclose “any circumstances likely (p. 205) to give rise to justifiable doubts as to his impartiality or independence.” Even interpreting Article 9 in the manner most conducive to full disclosure, one cannot reasonably argue that it provides for a legal obligation on the part of arbitrators to disclose every previous professional engagement. If an arbitrator does not think that something he or she has done in the past meets the justifiable doubts standard, to what extent should a decision not to disclose that activity be considered consistent with the Tribunal Rules’ disclosure obligation? This is not a question that easily lends itself to general formulae; every instance must be decided based on the specific circumstances alleged by the challenging party. In this case, an analysis of the extent to which an actual issue conflict exists due to Judge Seifi's membership in both the Tribunal (which will decide the remaining issues in Case B/61) and the ICC Tribunal (which decided the Cubic Arbitration) is unavoidable.

  4. 31. … I am not convinced that Judge Seifi had an obligation to disclose his participation in the Cubic Arbitration, as those proceedings have not created a conflict in a manner that would lead to justifiable doubts as to Judge Seifi's capacity to decide Case B/61 in an independent and impartial manner. It is clear from a cursory reading of the Cubic Arbitration award and Case B/61's partial award that the legal bases of the cases are different – unlike the Cubic Arbitration which was a contractual claim focused on the performance of contracts related to the sale of goods and services, Case B/61 concerns the United States’ obligation under the Algiers Declarations to arrange for the return of certain Iranian properties and focuses on the alleged losses suffered by Iran as the result of the United States’ non-export of Iranian properties. While Judge Seifi is undoubtedly familiar with the facts and arguments leading up to the Cubic Arbitration award in 1997, the United States has not provided sufficient evidence to demonstrate that Judge Seifi would be influenced by his experience in that arbitration when hearing the remaining issues contained in Case B/61. That common facts may exist in the two cases cannot, of itself, justify the Challenge. Given the significant differences between the two proceedings, Judge Seifi's membership in the ICC Tribunal is insufficient to disqualify him from Case B/61.

() Disclosure by the US Arbitrators

Following appointment, a general disclosure was made on behalf of the US party-appointed arbitrators and substitute arbitrators by the Agent for the United States in letters to the Agent for Iran and to the President of the Tribunal.121

We are aware of Iranian comments upon these disclosures only in respect of Charles N. Brower; the relevant correspondence follows. Mr. Brower's original appointment as a substitute arbitrator was briefly announced March 7, 1983. A further detailed letter was sent on April 20, 1983; this letter is in a format typical of the American disclosure statement:

With reference to Article 9 of the Provisionally Adopted Tribunal Rules, I am pleased to provide the following information concerning Charles N. Brower, recently appointed by the United States as a substitute Arbitrator on the Iran-United States Claims Tribunal.

Mr. Brower was born in Plainfield, New Jersey, in 1935. He is a citizen of the United States and resides in Bethesda, Maryland.

His academic degrees are: Bachelor of Arts, Harvard College, 1957; Doctor of Jurisprudence, Harvard Law School, 1961 …

Mr. Brower is a lawyer. Since 1961, he has been with the law firm of White & Case, with the exception of his government service during 1969–73.

Mr. Brower is past Chairman of the Section of International Law and Practice of the American Bar Association, a member of the Executive Committee, American Branch of the International Law Association, and a member of the Executive Council of the American Society of International Law.

(p. 206) He is also a member of the Panel of Arbitrators of the American Arbitration Association, the Committee on Arbitration for the United States Council for International Business, the American Law Institute, and various other professional organizations.

During 1969 to 1973, Mr. Brower held a number of senior positions in the Office of the Legal Adviser of the Department of State, including service as Acting Legal Adviser. In that capacity, he participated in numerous international negotiations and conferences … He has served as … Chairman of the Interagency Task Force on the Law of the Sea.

Over the course of 17 years of private practice Mr. Brower has represented a wide variety of diverse interests. The law firm in which Mr. Brower practices works with and against various individuals, entities and other law firms …

Mr. Brower has had no responsibility in either his private practice or government service for the negotiations or implementation of the Declaration of Algiers of January 19, 1981 or the preparation or presentation of any claim by or against the United States thereunder. Mr. Brower has not appeared for any U.S. national before the Tribunal. Other members of Mr. Brower's law firm represent four U.S. nationals in claims before the Tribunal, and the firm has advised three clients with respect to such claims but has not acted for them at the Tribunal. Mr. Brower has from time to time in the past been consulted with respect to certain of those claims. (A list of these clients is attached.) Other clients of the firm have or may have presented claims to the Tribunal as to which Mr. Brower's firm has not been consulted, but Mr. Brower has no knowledge as to the details of such claims. Mr. Brower will not act as substitute Arbitrator with regard to any matter involving a client of his law firm.

Mr. Brower is not aware that he or any member of his immediate family has any investment in any entity which is a party before the Tribunal.

Mr. Brower's appointment as the Arbitrator to succeed Richard Mosk was made on October 31, 1983, in a letter which incorporated by reference the previous disclosure statement.

The Agent for Iran in a letter to the Agent for the United States dated December 13, 1983, among other things, posed the following questions:

I would like to have the following information and disclosures about Mr. Charles Nelson Brower for review and consideration by my Government.

  1. 1. Although not indicated in your or Mr. Rovine's letters, it appears that the Inter-Agency Task Force on the Law of the Sea, of which Mr. Brower has been chairman, has been part of the National Security Council of the Government of the United States. You are requested to furnish us with detailed information in that respect including the exact date, extent of period and the nature of his engagement with the United States National Security Council.

  2. 2. Likewise, although you or Mr. Rovine's letters do not indicate, it appears that Mr. Brower has been a member of the Council on Foreign Relations. You are also requested to give full information about the functions of that Council and the period of Mr. Brower's membership as well as the extent, the role and the nature of Mr. Brower's engagement there.

  3. 3. You are requested to provide details of the cases that Mr. Brower or his firm advocated before the United States courts against Iran or Iranian entities, including copies of the pleadings, briefs and documents that Mr. Brower or his firm had or has filed in such cases.

  4. 4. You are requested to give the names of other American or non-American firms and persons in partnership or association with Mr. Brower or his firm … and the extent and nature of their works (if any—in connection with Iranian persons or entities in this Tribunal or elsewhere).

  5. 5. All articles and papers circulated and lectures given by Mr. Brower on the Algiers Accords, the functioning of the Tribunal, the subjects to be dealt with by the Tribunal, or how United States parties may act vis-à-vis the Government of Iran are also requested to be provided.

(p. 207) Additional information may be requested to enable the Government of the Islamic Republic of Iran to determine whether Mr. Brower is legally qualified to replace Mr. Mosk.

The Agent for the United States replied to this request in a letter dated January 5, 1984 which reads:

Mr. Brower's earlier disclosure of the circumstances bearing upon his service as an arbitrator was thorough, candid, and more than sufficient to satisfy Part II of the Rules. Mr. Brower has asked, however, that as a matter of courtesy, I provide the following further information.

  1. () As indicated in Mr. Rovine's letter of April 20 (which was attached to my October 31 notification to you), Mr. Brower served as Acting Legal Adviser of the Department of State for eight months, from January 2 through August 31, 1973. During that period, he also served as Chairman of the United States Interagency Task Force on the Law of the Sea … The group was not itself part of the National Security Council, which is a statutory body of limited membership.

  2. () Mr. Brower is a member of the Council on Foreign Relations. The Council is a private, not-for-profit body concerned about foreign policy questions. It has no official responsibility or functions. Mr. Brower is also a member of several other clubs and associations but does not believe that such memberships are material to service as an arbitrator.

  3. () Mr. Brower or his firm have appeared as counsel in the following cases in United States Courts against Iran or Iranian entities: … Copies of the pleadings, briefs and other-documents filed in such cases are available to the public for inspection at the courts and under the docket numbers indicated.

  4. () There are no other American or non-American persons in partnership or employment relations with Mr. Brower or his firm having any “works … in connection with Iranian persons or entities in this Tribunal or elsewhere” except as already disclosed by Mr. Brower through Mr. Rovine's letter of April 20 and my letter of October 31.

Finally, Mr. Brower asked that I give to you the enclosed bibliography of his writings.

3. The Grounds for Challenge—Article 12

To protect the integrity of the arbitral proceedings, parties to those proceedings must have confidence that the presiding arbitrator or arbitrators will make every effort to reach a fair and timely result. Therefore, the requirements that the arbitrators be impartial and independent and that they not fail to act are essential if the institution of arbitration is to maintain the respect needed to be an effective means of settling international commercial disputes.

Article 12(1)–(2) defines which arbitrators may be challenged and the grounds for challenge based on lack of impartiality or independence under the UNCITRAL Rules. Article 12(3) also provides that arbitrators may also be removed under the challenge procedure for failure to act or in the event of de jure or de facto impossibility to perform, a topic addressed in Chapter 6.

A. Text of the 2010 UNCITRAL Rule122

Article 12(1)–(2) of the 2010 UNCITRAL Rules provides:

(p. 208)

  1. 1. Any arbitrator may be challenged if circumstances exist that give rise to justifiable doubts as to the arbitrator's impartiality or independence.

  2. 2. A party may challenge the arbitrator appointed by it only for reasons of which it becomes aware after the appointment has been made.

  3. 3. … [This provision is addressed in Chapter 6]

B. Commentary

() Challenge on the ground of justifiable doubts as to impartiality or independence—general remarks on Article 12(1)

Article 12(1) provides that: “Any arbitrator may be challenged if circumstances exist that give rise to justifiable doubts as to the arbitrator's impartiality or independence.” Several issues emerging out of the drafting of the rule and its application by international tribunals are noteworthy.

() The standard for impartiality and independence is objective

The inclusion of the word “justifiable” in Article 12(1), to define the kind of doubt required to sustain a challenge, reflects UNCITRAL's clear intention of establishing an objective standard for impartiality and independence. While a party's subjective concerns about an arbitrator's bias may prompt a challenge, it is the objective reasonableness of these concerns that is ultimately determinative. The appointing authority in the Challenge Decision of January 11, 1995 aptly explained the standard:

If the doubt had merely to arise in the mind of a party contesting the impartiality of an arbitrator, “justifiable” would have been almost redundant. The word must import some other standard—a doubt that is justifiable in an objective sense. In other words, the claimant here has to furnish adequate and solid grounds for its doubts. Those grounds must respond to reasonable criteria. In sum, would a reasonably well informed person believe that the perceived apprehension—the doubt—is justifiable? Is it ascertainable by that person and so serious as to warrant the removal of the arbitrators?123

In short, “the test to be applied is that the doubts existing on the part of the [party raising the challenge] must be ‘justifiable’ on some objective basis.”124 More recent decisions resolving challenges raised in the context of investment arbitration confirm this interpretation of Article 12(1).125

(p. 209) () The same standard applies to party-appointed and non-party-appointed arbitrators

Discussions on the preliminary draft of Article 10(1) of the 1976 UNCITRAL Rules (corresponding and identical to Article 12(1) of the 2010 UNCITRAL Rules) concerned whether the rule on impartiality and independence of arbitrators should apply to both party-appointed arbitrators and non-party-appointed arbitrators (eg sole or presiding arbitrators).126

The issue arose in part because of differences in state practice in this regard. In the United States, for example, the prevailing practice had been that the parties could agree that party-appointed arbitrators will be subject to the same standard as the non-party-appointed arbitrators or be subject to a lesser standard, implicitly recognizing the different position of the party-appointed arbitrator.127

In contrast, most other countries, including most European countries, employ a single standard of conduct for both party-appointed and non-party-appointed arbitrators.128

During the drafting of the 1976 UNCITRAL Rules, some argued that requiring impartiality of all arbitrators (1) would lead the institution of arbitration to gain greater respect, (2) was in accord with the arbitration laws of many countries, and (3) would therefore be widely acceptable and would not conflict with applicable laws governing the arbitration.129 The main argument raised against requiring a party-appointed arbitrator to be neutral was that it was impractical and unrealistic to impose such an obligation, if for no other reason than that such arbitrators were dependent on the party who appointed him for fees.130

In the end, the UNCITRAL drafters concluded that the rule embodied in Article 10(1) of the 1976 UNCITRAL Rules as to arbitrator impartiality and independence should apply to every arbitrator.131 The same rule holds for identical Article 12(1) of the 2010 (p. 210) UNCITRAL Rules. Since this basis for challenge has general application, a party-appointed arbitrator on a three-member arbitral tribunal can be challenged on the ground that circumstances exist that give rise to justifiable doubts as to such arbitrator's impartiality or independence, even if such doubts are due to his relationship to the party who appointed him.

Of course, the decision to adopt a single standard does not alter the fact that the party-appointed arbitrator is appointed by a party who has made their selection strategically and often after much research into the prospective arbitrator's background. Moreover, it has been argued that the party-appointed arbitrator has the additional ethical duty of ensuring that the case of the party that appointed him or her has been fully considered by the tribunal. In our opinion, however, each arbitrator has the duty to ensure that the case of each party has been fully considered.

The fact that there is tolerance of some party-appointed arbitrators who exhibit a degree of partiality toward, or dependence on, the party that appointed him or her does not alter the fact that there is only one standard applicable. Instead, such tolerance should be viewed as either evidence of a strategic decision of a party to not challenge or as a characteristic of an institution such as the Iran–US Claims Tribunal.

At the Iran–US Claims Tribunal, most, but not all, challenges involved the third-country arbitrators. Given that the US government and the US claimant community viewed the Iranian arbitrators for the most part as not independent or impartial, this practice arguably reflects a tolerance of some partiality or dependence on the part of those party-appointed arbitrators. The practice possibly also reflected the strategic judgment of the US agent and US claimant community that (1) a challenge against an Iranian party-appointed arbitrator would be pointless because it would be time-consuming and, even if successful, would result only in Iran's appointment of another equally objectionable person, and (2) the belief that arbitrators obviously lacking independence and impartiality tend not to be particularly effective in deliberations. Of course, such a strategic judgment necessarily also involves a failure to raise a challenge in a timely manner and therefore a loss of the right to do so on the particular basis involved.

Over time, as indicated above, the disclosure statements from Iranians were relevant primarily for identifying the cases they had directly worked on as counsel. Often these cases were limited to those where their involvement would have been reported by others in any event. This became evident in the context of a challenge to Judge Noori for serving (but not disclosing his role) as General Counsel of the parent corporation of the respondent. In 1999, Judge Briner, then President of the Tribunal, stated to the appointing authority that Tribunal practice was for arbitrators to disclose “one's previous participation as counsel or advocate for one of the parties in a particular case pending before the Tribunal.”132 The appointing authority, citing this narrow disclosure requirement, found both that Judge Noori's earlier position did not give rise to justifiable doubts and that Judge Noori “has been wrongly accused of having infringed Article 9.”133

(p. 211) In our view, the appointing authority's reasoning should not be taken as an accurate interpretation of corresponding Article 10 of the 1976 UNCITRAL Rules, but rather as a decision confined to the facts of a particular case and institution. As Baker and Davis note: “Is there any doubt that if Judge Briner had concealed a past position as, for example, general counsel of Amoco Iran's parent company he would not have been permitted to decide the case?”134

More recently, the Appointing Authority, Judge W E Haak, has taken an admirably principled view on the matter. In the challenges of Judges Skubizsewski and Arangio-Ruiz, Judge Haak strongly criticized Iran's decision to challenge only the two third-country arbitrators, but not the party-appointed arbitrators, who joined in the majority in the partial award in Case No B61. Iran had argued that “a challenge against party-appointed arbitrators even if sustained may not ultimately bring any real changes to the Tribunal or its decisions.”135 Judge Haak rejected this assertion on principle, finding that it would be “tantamount to the Appointing Authority agreeing to hold party-appointed arbitrators to a lower standard of impartiality than third-country arbitrators,” a situation not contemplated under the UNCITRAL Rules.136

() Criteria regarding and examples of justifiable doubts

Concerned that the language of [corresponding] Article 10(1) of the 1976 UNCITRAL Rules alone would not provide sufficient guidance, the original drafters of the Rules considered adding an additional paragraph to make the grounds for challenge of arbitrators more explicit. They attempted to create a list of examples of possible partiality or dependence which would give rise to “justifiable doubt.” Their discussion focused on two specific examples which seemed clearly to raise justifiable doubts: a financial or personal interest in the outcome of the arbitration, or family or commercial ties with either party or with a party's counsel or agent.137 The drafters concluded, however, that the creation of such a list was fraught with difficulties. The list would need to be exhaustive, an impossible task.138 There was always a chance that cases might fall outside the list, yet nonetheless raise justifiable grounds for challenge.139 The other main concern with such a list was how to define exactly what types of commercial ties would prove disqualifying. Arbitrators often have some relationship with one or both of the parties and many of these relationships, even when commercial, could be trivial and not raise justifiable doubts as to impartiality or independence.140

As an alternative to creating a list, some members of the original Drafting Committee recommended the creation of categories of circumstances giving rise to justifiable doubts. “Absolute” grounds would only include a direct financial or personal interest in the (p. 212) outcome of the dispute and certain specified close ties, such as close family ties, between the arbitrator and a party. Proof of these grounds would result automatically in a successful challenge.141 “Relative” grounds would include all other grounds for challenge. For a challenge on “relative” grounds to succeed, it would be necessary to prove not just that the grounds existed, but that they gave rise to justifiable doubts as to the impartiality or independence of any arbitrator.142 A problem with this type of categorization was that it did not really help in defining the type of circumstances that would be required to sustain a challenge, since the challenging party often would still need to prove into which category the circumstances fit.

In the end, but not without dissent,143 the Drafting Committee agreed to delete the proposed paragraph 2 of the Preliminary Draft, which included specific grounds for challenge, and to retain the general statement in paragraph 1 as the standard for determining the validity of a challenge.144 The difficulties in defining, in the time available, what relationships to the dispute or parties would be disqualifying, without also complicating the identification of competent arbitrators overwhelmed the attempt to define more specific criteria. The result is that the content of Article 10(1) of the 1976 UNCITRAL Rules, and corresponding Article 12(1) of the 2010 UNCITRAL Rules, is to be determined in practice by the parties, arbitrators, and, ultimately, the appointing authority. The practice of the Iran–US Claims Tribunal shows that the decision to leave the language of Article 10(1) of the 1976 UNCITRAL Rules sufficiently broad to encompass a wide variety of situations was wise. A variety of circumstances not envisioned or considered by the original drafters have been addressed during challenge procedures at the Tribunal and in investment arbitration.

() Challenge on the ground of justifiable doubts as to impartiality or independence

Although the grounds for challenge in Article 12(1), like in corresponding Article 10(1) of the 1976 UNCITRAL Rules, appear quite encompassing, they leave a great deal to interpretation.

Given the general objective of ensuring that arbitrators are impartial and independent, how is a lack of impartiality or independence to be established? Article 12(1) provides that any arbitrator can be challenged on the basis of “circumstances which give rise to justifiable doubts” as to impartiality or independence. A party therefore needs to (1) establish the existence of certain “circumstances” and (2) establish that these circumstances “give rise to justifiable doubts” as to impartiality or independence. The challenging party need not establish a lack of impartiality or independence, but only justifiable doubts regarding those qualities. The following sections address five issues: (a) what is meant by “impartiality” and “independence”; (b) when are doubts as to impartiality or independence “justified”; (c) does the stage of the proceeding at which the challenge is raised bear on the standard to be employed in evaluating whether doubts as to impartiality or independence are justified; (d) does a failure to disclose under Article 11 per se establish justifiable doubts as to (p. 213) impartiality or independence; and (e) are there any limitations on the “circumstances” which may be used as the basis for justifiable doubts?

() The meaning of “impartiality” and “independence”

What does it mean for an arbitrator to be impartial and independent? In general, impartiality means that an arbitrator will not favor one party more than another, while independence requires that the arbitrator remain free from the control of either party. Impartiality thus refers to the arbitrator's internal disposition, while independence refers to external control over the arbitrator. Impartiality is a state of mind and thus somewhat elusive, while independence involves some relationship and is thus much more a question of fact. There is, however, no strict division between the two concepts, as external factors or conditions—although not necessarily sufficient to put in question the arbitrator's independence—might strengthen the objective justifiability of the doubts expressed by a party about an arbitrator's impartiality.145 The distinction in concepts has been recognized in the practice of arbitral tribunals.146

() When are doubts as to impartiality or independence justified?

How, and on what basis, is the appointing authority to decide that doubts as to impartiality and independence are justified (ie, would a reasonable person find the doubts to be justified)? Application of a “reasonable person” standard in a multi-cultural setting would be difficult. Yet, although the parties may represent a multi-cultural context, it is also true that the community of international commercial arbitrators have many shared values. For example, the circumstances thought to provide “absolute” grounds for challenge are sufficiently shared to be a basis for impartiality or independence. In addition, the shared values of the international arbitration community are reflected in codes of ethics such as those issued by the International Bar Association.147 Although these codes of ethics are not mandatory for most tribunals, their invocation by disputing parties and their citation by appointing authorities and tribunals in practice suggests that such ethical rules may provide particularly important guideposts as to whether certain circumstances should be viewed as giving rise to justifiable doubts.148 Yet other circumstances will be more difficult (p. 214) to evaluate and, ultimately, it will be up to the appointing authority to decide whether doubts based on such other circumstances are justified.

Another issue to be addressed is: against what degree of knowledge of the circumstances is the justifiability of the doubts to be assessed? In the second challenge by Iran of Judge Briner, the parties argued two different notions of how a reasonable person standard should be applied in challenge proceedings. For Amoco, the test was whether a reasonable person, after reviewing the evidence adduced in support of the challenge, would conclude that justifiable doubts existed. For the Iranians, “the controlling term ‘doubt’ is formed on the basis of appearances, not as a result of the careful analysis of the evidence.”149 Clearly, the more objective view proposed by Amoco must be accepted given that the Iranian view can result in easy manipulation by the challenging party. Thus in his decision on the second Briner challenge, the appointing authority drew a distinction between challenges based on serious doubts and justifiable doubts, ie, the fact that one side has its own doubts does not mean those doubts are justifiable. In drafting corresponding Article 10 of the 1976 UNCITRAL Rules, the Committee also discussed the distinction between serious and justifiable doubts.150 The Mexican representative did not find it appropriate to speak of serious doubts since a party would always consider its doubts serious.151 The United States representative agreed and emphasized the importance of the term “justifiable” as a limitation on areas of challenge: “omission of the word ‘justifiable’ could open up too many areas for challenge.”152

Finally, sustaining a challenge of an arbitrator under Article 12 does not necessarily require proof of an arbitrator's actual lack of impartiality or independence. The appearance of these deficiencies may alone suffice in certain circumstances to disqualify an arbitrator. Article 12 notably requires only that “doubts” as to an arbitrator's impartiality or independence be proven to be justifiable, not that an arbitrator is, in fact, biased or dependent on a party. Article 12 thus establishes a standard with sufficient flexibility to address situations which, even in the absence of actual bias or dependence, nevertheless create a sufficiently negative perception about an arbitrator's impartiality and independence to justify his or her removal.153

Appointing authorities, arbitral tribunals, and parties have considered several circumstances that could potentially justify doubts as to an arbitrator's impartiality and independence, such as an arbitrator's (1) relationship with a witness; (2) financial relationship with a party through shareholdings; (3) financial relationship with a party through potential control over arbitrator salaries; (4) previous employment by the parent corporation of a party; (5) representation in another forum that is adverse to a party; (6) previous advocacy on behalf of a country formerly adverse to a sovereign party; (7) representation of a third party with a right to intervene in the proceedings; (8) handling of the proceedings; (9) (p. 215) statement regarding a party or the dispute; (10) decision-making; (11) breach of the confidentiality of deliberations; (12) physical assault of a fellow arbitrator.

() An arbitrator's relationship with a witness

The first Iranian challenge of Judge Briner over his participation in Case No 55 raised the question of whether a past professional relationship with an expert witness gave rise to justifiable doubts.154 The preparatory work for the 1976 UNCITRAL Rules did not discuss this as a category of circumstances, in part because the original drafters focused exclusively on relationships that arbitrators might have with the parties. There was never any mention by the drafters of an arbitrator's relationship with a witness as a circumstance giving rise to justifiable doubts. However, as two commentators have pointed out, “there can be no doubt that in some cases close family or financial ties to an important witness could be legitimate concern—especially if the nature of the relationship renders the arbitrator incapable of assessing the witness's credibility with objectivity.”155 Indeed, both the Iranian and Amoco memoranda agreed that in some cases an arbitrator's relationship with a witness could give rise to justifiable doubts as to impartiality and independence, even though neither party could find a case of an arbitrator being disqualified for a relationship with an expert witness.

The two parties disagreed vehemently, however, as to whether Judge Briner's relationship with Morgan Stanley was the type that would give rise to justifiable doubts. Amoco argued that relationships between arbitrators and witnesses should rarely if ever be considered disqualifying. Amoco looked to national statutes and rules of arbitration associations and concluded that:

the fact that relations of arbitrators with parties are always specifically mentioned, while relations with witnesses almost never are, has at least three implications: (1) a relation with a witness is much less likely to be considered disqualifying than a relation with a party; (2) in fulfilling a disclosure obligation, an arbitrator will quite naturally and reasonably focus on his relations with parties rather than with witnesses; (3) in assessing whether a relationship is significant enough to require disclosure or disqualification, a reasonable man will conclude that a relation with a witness need not lead to these results unless it is considerably more extensive and significant than a relation with a party that may produce one or both of these results.156

Iran, on the other hand, relied heavily on the ethical standards on disclosure set forth in the IBA and the AAA Rules to show that an arbitrator's relations with a witness could give rise to justifiable doubts as to impartiality and independence. Paragraph 3.3 of the Draft Guidelines of the IBA on Ethics for Arbitrators, for example, provided: “Any current direct or indirect business relationship between an arbitrator and a party, or with a person who is known to be a potentially important witness, will normally give rise to justifiable doubts as to a prospective arbitrator's impartiality or independence.”157

(p. 216) By what measure should an appointing authority decide whether an arbitrator's past relationship with a multinational corporation currently acting as an expert witness is trivial or substantial? Judge Briner noted that, although he was a director of Morgan Stanley's inactive Swiss affiliate, he had very little contact with Morgan Stanley personnel and none with the individuals responsible for the valuation of the claim in Case No 55. He therefore considered his relationship not significant and not even subject to the disclosure requirement under Article 9 of the Tribunal Rules. Such an attenuated relationship was, in his view, not even likely to give rise to, never mind support, justifiable doubts about his impartiality or independence. Needless to say, Iran did not accept this view and argued instead that as a former director and employee of a part of the corporation now serving as a key expert witness, Judge Briner's relationship did give rise to justifiable doubts. There does not appear to be any clear answer to whether an arbitrator's relationship with a subsidiary or affiliate of a large multinational corporation acting as an expert witness or even as a party would be disqualifying. The spirit of the UNCITRAL Rules suggests that such a relationship would not be automatically disqualifying, given the interest in finding experienced arbitrators and the varied business contacts of many arbitrators. On the other hand, the relationship of an arbitrator with one part of a company could affect his ability to judge objectively the credibility of another.

Upon withdrawing from the case, Judge Briner mentioned his concern for avoidance of further delay to the claimant. Implicitly, his withdrawal also suggests that he was at least somewhat concerned that the basis for the challenge might be sustained. This concern, however, either could reflect an assessment of the merits or Judge Briner's conclusion that, as in other areas of Tribunal procedure, concerns for upholding the legitimacy of the Tribunal's authority in the face of Iranian protests would lead to an overly strict application of the standard of impartiality and independence in his case.

() An arbitrator's financial relationship with a party (shareholding)
In the AWG arbitration against Argentina, Professor Kaufmann-Kohler was challenged because of her appointment as a director of the UBS Group (“UBS”).158 After constitution of the arbitral tribunal, it became known that Professor Kaufmann-Kohler was serving as director and that UBS held nominal shareholdings in two of the claimants involved in the consolidated proceedings, though not in the third, AWG Group Ltd. Thus, the two arbitrators deciding the challenge as a truncated tribunal observed that “the only connection, if one may call it that, between Professor Kaufmann-Kohler and the Claimant AWG Group Ltd is the fact that she is a director of UBS and that UBS, among its many other activities and interests through the world, conducts research and develops financial products related to the water sector.”159 On the question of whether that situation justified sustaining the challenge, the truncated tribunal found:

The existence of such purported connection is not enough to establish a “circumstance” giving rise to justifiable doubts as to an arbitrator's independence and impartiality. Such a connection must be significant and direct, such as an economic relationship causing an arbitrator to be dependent in (p. 217) some way on a party. Such Connection between Professor Kaufmann Kohler and AWG Group Limited, as suggested though not specifically alleged by the Respondent, is too remote and tenuous as to hardly be called a connection or relationship at all.160

() An arbitrator's financial relationship with a party (salary)
After one Iranian arbitrator, Judge Noori, mentioned at a budget meeting of the Full Tribunal that the Iranian arbitrators remit a portion of their salaries back to Iran, the United States challenged all three of them.161 The United States argued that the Iranian arbitrators were impermissibly “financially dependent” on Iran because Iran “effectively determines the income received by each of its appointed arbitrators.”162 In a subsequent submission, the United States elaborated on its concern:

In such circumstances, a party-appointed arbitrator, especially one for whom his service as a Tribunal member is his sole or main support, is completely at the mercy of the Party that appointed him for the quality of his life and the well-being of his family. That Party can lower the authorized base amount to punish, or raise it to reward, the behaviour of the arbitrator.163

If it were proven that the Iranian payments functioned as illicit “kickbacks,” as the United States argued, such an arrangement of significant financial dependency would most likely give rise to justifiable doubts as to an arbitrator's impartiality and independence under prevailing practice. However, the appointing authority dismissed the US challenge in light of explanations provided by Iran and the Iranian arbitrators that the payments in question were made legitimately pursuant to Iranian tax law, a process which they argued deprived Iran of any undue power over the arbitrators who it appointed to the tribunal.164

() An arbitrator's previous employment by the parent corporation of a party

In Case No 248 before the Iran–US Claims Tribunal, Judge Noori was challenged for his failure to disclose that he had earlier served as general counsel of the parent corporation of the respondent. In this challenge, the appointing authority applied a quite different standard. The appointing authority concluded that even if “his service as Head of the NIOI legal office [the parent corporation of the Respondent] and his failure to disclose this to the President of the Tribunal were true, I do not feel this doubt can be termed justifiable doubt.”165 Justice Moons dismissed this circumstance much too readily and, in this sense, we view his decision primarily as reflecting the low expectations of impartiality that came to be placed on the Iranian-appointed arbitrators.

(p. 218) () An arbitrator's representation in another forum that is adverse to a party
Upon appointment by the claimant as arbitrator in the ICS arbitration against Argentina, Mr Stanimir Alexandrov disclosed that his law firm and he personally represented two different claimants in another arbitration against Argentina. The Appointing Authority found that:

this puts Mr. Alexandrov in a situation of adversity towards Argentina, a situation that is often a source of justified concerns and that I believe in principle should be avoided, except where circumstances exist that eliminate justifiable doubts as to the arbitrator's impartiality or independence.166

In sustaining Argentina's challenge request, the Appointing Authority found support in two sections of the “Orange List” of the IBA Guidelines on Conflicts of Interest in International Arbitration: Section 3.1.2 addressing circumstances in which “[t]he arbitrator has within the past three years served as counsel against one of the parties or an affiliate of one of the parties in an unrelated matter and Section 3.4.1 covering circumstances in which “[t]he arbitrator's law firm is currently acting adverse to one of the parties or an affiliate of one of the parties.”167 The Appointing Authority emphasized that “this is not merely a case in which the arbitrator's law firm is acting adversely to one of the parties in the dispute, but rather a case where the arbitrator has personally and recently acted adversely to one of the parties to the dispute.”168

A similar situation arose in the Grand River arbitration, in which the US Government challenged Professor James Anaya, who was appointed as arbitrator by Native American persons in the NAFTA Chapter Eleven proceeding against the United States, while simultaneously representing or assisting other Native American persons in procedures before the Inter-American Commission on Human Rights and the UN CERD. The Appointing Authority found these circumstances would justify the US Government's challenge, unless Professor Anaya ceased his non-NAFTA work, which he agreed to do. At the same time, the Appointing Authority found that Professor Anaya's continued instruction of his law students in a clinical course involving work concerning Native American peoples and the CERD. As justification, the Appointing Authority reasoned:

A reasonable distinction can be made between: (i) representing parties in international fora where the underlying aim is similar to the aim of the current arbitration (i.e., assessing whether the United States is in compliance with its international legal obligations); and (ii) supervising students as part of a clinical course. The former requires advocacy of a position; the latter involves instruction and mentoring.169

() An arbitrator's previous advocacy on behalf of a country formerly adverse to a sovereign party

In the challenge decision of January 11, 1995, published anonymously,170 the claimant, Country X, challenged the arbitrator appointed by the respondent, Company Q, on (p. 219) grounds that justifiable doubts existed as to his impartiality. The claimant alleged that the respondent's arbitrator had served as a high-ranking legal advisor to Country A during a period of demonstrably hostile relations with Country X. The claimant also alleged that the respondent's arbitrator had served as legal counsel to an official of Country A in connection with Country A's military activities in Country X.171 The upshot of the challenge was thus the concern that the respondent's arbitrator would be partial since his previous advocacy on behalf of Country A had aligned him so closely with the policies of Country A, which historically were adverse to Country X. Of significant concern was the fact that “some of the underlying questions in the arbitration, ha[d] to do with the actions of the claimant government [Country X] and its Ministers whose credibility … will be in issue.”172

The challenge was adjudicated by an Appointing Authority designated by the Secretary-General of the Permanent Court of Arbitration pursuant to Articles 6 and 12(1)(c) of the 1976 UNCITRAL Rules. In support of its challenge, the claimant, Country X, submitted a legal opinion and a brief written by the respondent's arbitrator in his respective capacities as legal advisor and legal counsel.

The Appointing Authority recognized that the unique political backdrop between Country X and Country A distinguished the dispute from the typical commercial arbitration. The Appointing Authority thus concluded that the standard for resolving the challenge “cannot … be a uniquely commercial one in a case such as this” and that the “general political factors” require “a most careful weighing of all elements.”173 Though highly relevant, the politics surrounding the case were not dispositive. The Appointing Authority rightly concluded that the real test was whether there was “some direct relationship, something of real substance, that establishes a link on the record in the case, with that [political] background and that points to possible eventual partiality on the arbitrator's part.”174

A review of the evidence demonstrated no signs of partiality on the part of the respondent's arbitrator. The Appointing Authority found the legal brief drafted on behalf of an official of Country A to be nothing more than “a robust defence of his client's position,” which properly cast “his [client's] position in as persuasive and as forceful terms as possible.”175 According to the Appointing Authority, the legal opinion was also innocuous because: it addressed “a peripheral but not directly related issue”; it contained “no evidence whatsoever of the arbitrator's personal views on the matter … [nor] evidence of his involvement in policy making for Country X”; it was given in “the discharge of his duties as legal counsel” in which he was required to consider “the important legal, as distinct from the policy, questions”; and the “legal issues [were] unconnected with the arbitration at hand.” Accordingly, the Appointing Authority dismissed the challenge.

() An arbitrator's representation of a third party with a right to intervene in the proceedings

In the NAFTA Chapter Eleven case between Mr Vito Gallo and Canada, Mr J Christopher Thomas, appointed by Canada, disclosed to the parties upon his appointment a significant (p. 220) amount of prior and current work for Mexico. At the same time, Mr Thomas informed the parties of plans to retire from counsel work and withdraw from his law firm by a certain date in the near term. Later, it became known that Mr Thomas's plans had changed and that he had joined a new law firm as independent counsel where he had and might continue to provide Mexico legal advice on matters affecting “international trade and investment law.”176 Subsequently, the claimant challenged Mr Thomas.

The Appointing Authority found that the circumstances, while not entirely ripe for decision, could give rise to justifiable doubts as to Mr Thomas's impartiality and independence. The fact that Mr Thomas changed his mind about performing counsel work was not per se problematic as acting as arbitrator in one case and counsel in another was insufficient to disqualify an arbitrator, absent other evidence of an ethical conflict.177 However, Mr Thomas's representation of Mexico raised significant concerns since Mexico, as a NAFTA Party, had a legal right to participate in the current proceedings on any matter of interpretation of the NAFTA.178 The Appointing Authority found:

In an arrangement like the one presently at issue, the arbitrator could be perceived as attentive to the interests of the advised State Party [Mexico]. His judgment may appear to be impaired by the potential interest of the advised State Party [Mexico] in the proceedings. Moreover, if the advised State Party [Mexico] were formally to intervene under Article 1128, this would necessarily lead to the reconstitution of the tribunal.179

Because of “the appearance of an inability to distance himself from the interests of Mexico,” the appointing authority required Mr Thomas either to resign as arbitrator or discontinue his work with Mexico.180

() An arbitrator's handling of the proceedings

Iran's second challenge of Judge Briner pointed to his handling of the proceedings in Case No 39 as the “circumstances” giving rise to justifiable doubts. Even though the Appointing Authority dismissed the case on largely technical grounds, Justice Moons’ decision also addressed Iran's specific allegations against Briner. His comments are helpful in demonstrating how challenges based solely on an arbitrator's conduct of arbitral proceedings are likely to fail, unless the conduct is obviously inappropriate.

Justice Moons’ decision indicates that challenges based on an arbitrator's choices in admitting and evaluating evidence will almost necessarily fail:

The appointing authority is not competent to assess the correctness of the arbitrator's judgment whether evidence is or is not convincing nor of their decision to accept some evidence as a basis for their award and put other evidence aside … Given the freedom granted arbitrators … to make their awards to the best of their knowledge and conviction, it cannot be concluded from an arbitrator's choices in this area that he is not impartial or independent.181

However, Justice Moons also recognized that there may be some grounds for challenge if the admission of the evidence produces a blatantly biased result. In addressing the Iranians’ (p. 221) allegation that Judge Briner used testimony provided by Morgan Stanley in Case No 55 about the Chase Econometrics Forecast for the Award in Case No 39, Moons states:

This allegation can serve as support for the contention that justifiable doubts within the meaning of Article 10 … have arisen, only if it is established beyond doubt that consideration in Case No 39 of testimony provided in Case No 55 intended to be or had for result either an impediment of the Respondent's position or possibilities in legal proceedings or an unjustified favoring of the Claimant.182

Challenges based on infringement or misapplication of the rules can succeed only if “the infringement or misapplication admits of no other explanation than that it has its cause in lack of impartiality or independence on the part of the challenged arbitrator and that any other cause, such as an error or misunderstanding … can be ruled out.”183 Thus one can conclude from Moons’ analysis that an attempt to appeal an arbitral award that is considered final and binding under the Rules by resorting to the challenge mechanism generally should not be considered unless evidence of bias is substantial.

The line between appropriate and inappropriate conduct of an arbitrator was carefully drawn by a Division of the LCIA upholding a challenge against a sole arbitrator brought under the UNCITRAL Rules. In that instance, the arbitrator had twice met privately with claimant's counsel and had discussed matters relevant to the arbitration on at least one of these occasions. While recognizing that “courtesy may move an arbitrator to greet an uninvited Counsel entering his private retiring room,” the Division concluded that ex parte communications are generally not recommended as they may cause suspicions about the arbitrator's lack of impartiality.184 On the facts before it, the Division found that “accepting a meeting behind closed doors and addressing live issues in the arbitration was a step too far and would, indeed, raise suspicions of unequal treatment between the parties.”185

The arbitrator's order to strike an oral exchange between opposing counsel regarding costs from the record of the hearing was also problematic. The Division found such conduct to be inconsistent with the arbitrators’ duty to maintain a record of the proceedings under the UNCITRAL Rules.186 Moreover, consistent with Moons’ approach in the second challenge of Judge Briner, discussed above, the Division was unable to discern any basis for the arbitrator's conduct other than a lack of impartiality and independence. Thus, because the arbitrator's discretion “did not extend to allowing him to decide unilaterally that certain parts of the hearing simply never existed,” the Division concluded his behavior gave rise to an appearance of bias, if not the real possibility that he was biased.187

Finally, accusations aimed at counsel by an arbitrator crossed the line. Part of the exchange was made in jest, that respondent's counsel entered his retiring room uninvited to steal his grapes. But “[a]lthough acknowledging that humour was not reprehensible and that the theft of the grapes may have been tantamount to a joke having turned sour,” the Division found “what could not be taken lightly was the arbitrator's heated controversy with Counsel, accusing her of lying and trespassing, and maintaining these accusations (p. 222) notwithstanding the fact that their veracity had been vehemently disputed.”188 Thus, the Division concluded that such conduct was “incompatible with the expected behaviour of an arbitrator.”189

() An arbitrator's statement regarding a party or the dispute

In its decision on the challenge of Mr Kessler in National Grid PLC and Republic of Argentina, the LCIA observed that given a statement by Mr Kessler during the examination of a witness “a reasonable third person might indeed gain the impression that Mr Kessler had already taken a firm view on issues which are key to the final result of the arbitration.”190 The LCIA took the position, correct in our view, that “it would be inappropriate under a reasonable third person test to determine Mr Kessler's impartiality by looking at the challenged statement in isolation without considering Mr Kessler's intervention as a whole and the context of the intervention.”191 In particular, the LCIA examined the statements that immediately followed and concluded that “any appearance of bias which may have been created by the challenged sentence was eliminated.”192

A statement certainly may be evidence of a lack of partiality, but it must be evaluated in context.

(10 ) An arbitrator's decision-making

The Iranian Government's challenge of Judges Skubiszewski and Arangio-Ruiz raised the question of whether an arbitrator's decision to join a voting majority in rendering an award that, according to Iran, had “illegally revised” a prior Tribunal decision in violation of the principle of res judicata could raise justifiable doubts as to those arbitrators’ impartiality and independence.193

As an initial matter, the Appointing Authority, Judge W E Haak, was careful to acknowledge the limitations on his authority in this area:

[T]he Appointing Authority's role in challenge proceedings is not to assess the correctness of the arbitrators’ decision, nor to assume the functions of an appellate magistrate in review of the procedural and substantive matters surround the issuance of [an award]. The Parties’ consent, as expressed through the Tribunal Rules, simply does not vest this function to the Appointing Authority.194

Judge Haak therefore concluded that he “will not consider any grounds alleged by the Parties in favor or against the Challenge that would effectively substitute an arbitrator's judgment with my own.”195

As to the Iranian Government's challenge, Judge Haak noted that Iran had only challenged two members of the Tribunal's majority—the two it argued “ha[d] a decisive role in forming [the] narrow majority [in the award].” To Judge Haak, this fact “fatally weakened” Iran's case by placing him in the untenable position of having to “agree[] to hold party-appointed arbitrators to a lower standard of impartiality than third-country arbitrators.”196(p. 223) But even assuming arguendo that the challenge could proceed, Judge Haak found on the facts before him it nonetheless would have been without merit because, as a general matter,“[t]he appointing authority is not competent to judge whether and to what extent arbitrators have rightly departed from previous Tribunal awards.”197

At the same time, Judge Haak observed that in exceptional circumstances he would be empowered to sustain a challenge based on an alleged res judicata violation:

Only if the two awards are so clearly divergent on their face as to demonstrate that the only way [the award] could have been decided in that manner is that the Challenged Arbitrators lack independence and impartiality.198

(11 ) An arbitrator's breach of the confidentiality of deliberations

The US Government's challenge of Judge Broms was based primarily on his concurring and dissenting opinion in Case No A/28.199 In that case, the majority ruled that Iran was expected to replenish the Security Account (from which awards against Iran are paid) to the amount of US $500 million, consistent with its obligations under the Algiers Declarations.200 Despite voting with the majority, Judge Broms filed a separate opinion in which in the course of criticizing the majority's decision he disclosed information on the method and substance of Tribunal deliberations. In particular, the opinion revealed that Judge Broms (and other members of the minority) had argued strenuously for deferring treatment of the replenishment question until the related issue of the Tribunal's jurisdiction over the US counterclaim in Case No B1 could be resolved.201

The US Government argued that Judge Broms's opinion not only breached the rule of confidentiality of deliberations, but also raised serious doubts about Judge Broms's independence and impartiality.202 According to the US Government, the opinion affirmatively (p. 224) encouraged non-compliance with the remedy of replenishment afforded the US. It also allegedly contained statements that prejudged the issue of the Tribunal's jurisdiction over the counterclaim in Case No B1, raising questions about Judge Broms's impartiality in future matters before the Tribunal.

While recognizing the serious nature of Judge Broms's breaches of confidentiality, Sir Robert Jennings assigned only limited weight to them; they were “a factor” to be considered in the challenge decision.203 The key inquiry, according to Sir Robert, was whether those breaches were “consciously and intentionally deployed so as to assist the calling in question of the fairness of the Tribunal's decision.” Sir Robert found that the evidence before him could not support an affirmative answer. Rather, he concluded that Judge Broms's breaches of confidentiality most likely were motivated by the arbitrator's inability in the face of successful opposition “to resist the temptation to continue arguing with his colleagues.”204

Sir Robert also was unable to conclude that the US Government's doubts about Judge Broms's independence and impartiality were justified. The evidence did not indicate that Judge Broms was “so beholden in some way to the Iranian Government such that he has lost his independence of thought and action.”205 Nor did it suggest that Judge Broms's convictions in favor of Iran had exceeded the level of partiality to be expected of an arbitrator with views in opposition to the majority's. According to Sir Robert, it was within Judge Broms's rights as an arbitrator to favor one side in the dispute ultimately and to criticize—even dissent from—the majority's decision if he disagreed with its reasoning.

The significance of an arbitrator's breach of confidentiality arose again in the context of the US Government's challenge of Judge Oloumi. The US Government argued that Oloumi's disclosure of the circumstances relating to his request for the postponement of deliberations, and the denial of that request, in Case No B61 not only breached the rule of confidentiality, but also was “intended to give the party that appointed him—Iran—the opportunity to seek to alter the course of deliberations, change the composition of the Tribunal or, by seeking to force a rehearing of select position portions of Case B61, possibly even change the outcome of the case.”206 Judge Oloumi's disclosures caused Iran to challenge Judge Skubizsewski, the President of the Tribunal, on the alleged basis that the President had inappropriately denied Judge Oloumi's request for a postponement. The Appointing Authority, Judge Haak, agreed with the United States that Judge Oloumi's disclosures breached the rule of confidentiality in Article 21, Note 2 of the 1983 Tribunal Rules. However, he found that this breach did not give rise to justifiable doubts as to Judge Oloumi's impartiality and independence in the absence of compelling evidence that his disclosure was intended to create the opportunity to challenge Judge Skubizsewski. Rather, the appointing authority found that the evidence indicated at most that Judge Oloumi's conduct was based on a mistake or misunderstanding about his right to a postponement of deliberations in Case B61 and the scope of Tribunal deliberations in general.207

(p. 225) (12 ) An arbitrator's physical assault of a fellow arbitrator
In the US challenge of Judges Kashani and Shafeiei for their assault on Judge Mangård, the US Agent argued that:

A violent physical attack by two arbitrators upon a third who, in their view, is opposed to the interests of the party that appointed them, demonstrates a total lack of the necessary impartiality and independence envisioned by Article 10 [of the Tribunal Rules]. …

Mr. Kashani and Mr. Shafeiei assert in their September 6 communication to President Lagergren that Mr. Mangård “has totally hostile feelings specifically directed against the Islamic Republic of Iran.”

This conduct shows that Mr. Kashani and Mr. Shafeiei identify themselves so completely with what they consider to be the interests of the Islamic Republic of Iran that they will resort to unprecedented physical violence to protect those interests … Arbitrators who resort to physical violence in order to protect the interests of the party that appointed them demonstrate such a deep-seated bias that they must be presumed to display similar partisanship in all matters in the future.208

Although Iran withdrew Judges Kashani and Shafeiei before a decision on the challenge, the argument of the US Agent appears correct, particularly when, as in the case of the assault on Judge Mangård, statements indicate that the assault is motivated by an apparent identity of interests between the arbitrator and the party who appointed the arbitrator.

() The standard of independence and impartiality does not vary according to the stage of the proceedings

In response to the first Iranian challenge of Judge Briner, Amoco argued that challenges brought at a late stage of the proceeding should be subject to a higher standard for success than challenges brought at the outset. The rationale for the higher standard is that late challenges are more likely to “create delay, disruption and therefore injustice.” Amoco quoted AAA practice to support its argument:

Given the serious consequences resulting from the disqualification of an arbitrator after hearings have commenced, the approach employed by the AAA at this stage of the process is less liberal—an arbitrator will only be disqualified if the disclosed information reflects, or a party demonstrates, such an interest on the part of the arbitrator as would justify judicial vacatur of the arbitral award. In this regard, the courts have generally held that an arbitration award will not be set aside for allegations of arbitrator bias unless such bias is adequately proven.209

Conversely, in Challenge Decision of January 11, 1995, the claimant suggested that the standard for impartiality was lower at the inception of the proceedings.210 The Appointing Authority recognized the “natural tendency to protect the [arbitral] process at the outset rather than having to support it at its conclusion.”211 He noted that “[p]articular prudence” was required when making threshold decisions on partiality, and that “if matters are evenly balanced, there may be reasons … for great caution and possible admission of the challenge.”212

(p. 226) Still the language of Article 12 does not allow for a differentiation in the standard of independence or impartiality based on the stage of the proceeding. Indeed, as the appointing authority in the Challenge Decision of January 11, 1995 concluded, “The standard to be applied … and the proof required … should, in theory, be no different according to whether the issue is raised at the threshold or at the conclusion of the proceedings.”213 To conclude otherwise would only serve to “muddle the standard for arbitrator impartiality.”214

() A failure to disclose under article 11 may give rise to, but does not per se establish, justifiable doubts as to impartiality or independence

It is not always an easy task to establish the grounds for challenge. Much of the information that would be most helpful in the most egregious cases will be in the control of the arbitrator and not the parties. That the arbitrator may know better than any other of likely grounds for challenge, returns us to the importance and desirability of the early disclosure required by Article 11. Although arbitrators cannot be forced to provide the required disclosure, sanctions for failure to do so could encourage them to disclose. A claimant with an interest in speedy and unassailable proceedings may encourage the arbitrator appointed by it to provide a full disclosure, as well as seek an arbitrator not subject to potential challenge. The interest of the presiding arbitrator in maintaining a reputation for professionalism likewise motivates disclosure. A problem arises, however, with the arbitrator appointed by the respondent. A difficult respondent, for one reason or another, may appoint an objectionable arbitrator. The possibility of a lengthy challenge of the arbitrator will not deter such conduct; indeed the delays involved in a challenge might do just the opposite. In such instances, the claimant faces the dilemma of proceeding with the arbitration despite the presence of a possibly objectionable arbitrator or initiating a potentially lengthy challenge which may ultimately just result in the appointment of a new, but equally objectionable arbitrator.215 The reluctance to challenge stems from a desire to avoid lengthy ancillary proceedings, the fear that ultimately nothing will be gained, and the simple fact that without disclosure it may be very difficult to articulate the basis for challenge.

All of these objections are avoided, however, if the failure to provide a disclosure statement or to respond to reasonable inquiries from the other party is treated as a circumstance not only potentially giving rise to justifiable doubts as to the arbitrator's impartiality or independence, but rather as establishing such lack of impartiality or independence. The failure to disclose would thus itself be the basis for the challenge, would result in a rather summary challenge procedure, and perhaps ultimately would encourage disclosure by arbitrators.

The Iran–US Claims Tribunal twice confronted a failure to disclose, although the appointing authority did not ultimately decide the issue in either instance. In a more recent investment arbitration, the issue was addressed more directly, but without fully resolving when a failure to disclose is problematic. In our view, a failure to disclose may give rise to justifiable doubts, depending on the circumstances, but does not, per se, establish such justifiable doubts.

(p. 227) In the first Briner challenge, the Iranians claimed that Judge Briner's failure to disclose his relationship with Morgan Stanley should disqualify him even if the relationship itself did not warrant disqualification. While there may be instances where nondisclosure would give rise to justifiable doubts, such a per se rule is not supported by the text of the rules. The duty to disclose circumstances “likely” to give rise to justifiable doubts involves an element of judgment on the part of the arbitrator.216 A failure to disclose is not in itself a ground for challenge in addition to those set forth expressly in the UNCITRAL Rules. As stated in the Amoco memorandum, the “UNCITRAL/Tribunal Rules contain no such provision; they provide only that an arbitrator may be disqualified on grounds of lack of impartiality or independence, not failure to disclose.”217 As noted by Baker and Davis:

Failure to disclose may nonetheless give rise to doubts as to an arbitrator's impartiality under Article 10 [of the 1976 UNCITRAL Rules]. Whether nondisclosure raises such doubts depends on whether the failure to disclose was inadvertent or intentional, whether it was the result of an honest exercise of discretion, whether the facts that were not disclosed raised obvious questions about impartiality and independence, and whether the nondisclosure is an aberration on the part of a conscientious arbitrator or part of a pattern of circumstances raising doubts as to impartiality.218

The conclusion is strengthened when one considers whether the Iranians would have challenged Judge Briner at the time of his appointment had he disclosed his relationship with Morgan Stanley. In making a determination as to what was likely to give rise to justifiable doubts, it was, at a minimum, reasonable for Judge Briner to assume that the Iranians would not object to his relationship with a witness. Unfortunately, the issue was never addressed by the Appointing Authority because of Judge Briner's withdrawal.

A failure to disclose also arose in the context of the claimant's challenge of Judge Noori in Case No 248. In this instance, Judge Noori had failed to disclose that he had earlier served as general counsel of the parent corporation of the respondent. Although the challenging party repeatedly stated that Judge Noori violated Article 9 of the 1976 UNCITRAL Rules, the challenging party did not expressly assert that the failure to disclose was an independent ground for challenge. Rather, the challenging party argued that Judge Noori's “position as head of the NIOI's legal department gives rise to justifiable doubts as to his impartiality or independence.”219 The appointing authority concluded that even if “his service as Head of the NIOI legal office and his failure to disclose this to the President of the Tribunal were true, I do not feel this doubt can be termed justifiable doubt.”220 This conclusion supports the view of Amoco that although a failure to disclose may give rise to doubts, it does not, per se, establish a basis for justified doubts.221

(p. 228) () Are there any limitations on the circumstances which may be used as the basis for justifiable doubts?

Finally, Justice Moons’ decision on Iran's second challenge of Judge Briner suggests that certain circumstances, at least as a general matter, may not give rise to justifiable doubts. In particular, Justice Moons’ reluctance to refer to the circumstances of deliberations constitutes one such category:

b. Article 31 of the Tribunal Rules … prescribes that deliberations in camera are confidential and must remain so.

In the interest of a proper functioning of the Tribunal this rule should be strictly observed, so that every Arbitrator may put forward his opinions and arguments in camera in full freedom, without fear of being called upon by the parties to account for them.

To my mind it would not be consonant with this interest if an appointing authority, as provided for in the Tribunal Rules, were to consider in deciding a challenge, also information which should have remained confidential pursuant to the said Article 31.222

We agree with Justice Moons’ analysis, although we note that his juxtaposition of interests also suggests that there might be some extreme circumstance in deliberations so egregious that it should be allowed to form the basis for a challenge.

() Article 12(1) as providing the exclusive grounds for challenge

An issue more subtle than whether the UNCITRAL Rules provide the exclusive mechanism for challenge of a member223 is whether they delimitate the exclusive grounds for challenge. The question of whether a challenge could be based on a general duty “to adhere to proper judicial decorum and demeanor” and on Article 13 of the 1976 UNCITRAL Rules has arisen in two situations before the Iran–US Claims Tribunal.

The first situation involved the US challenge of Judges Kashani and Shafeiei in September 1984. On September 3, 1984, Mahmoud Kashani and Shafie Shafeiei, members of the Iran–US Claims Tribunal, physically assaulted a fellow member of the Tribunal, Nils Mangård. This act was followed by continued threats of violence by Judges Kashani and Shafeiei. At this point there was intense consideration as to the scope of the grounds for challenge under Articles 10(1) and 13(2) of the Tribunal Rules.224 Does physical assault give rise to justifiable doubts as to impartiality or independence? Judges Kashani and Shafeiei were still reporting daily for work at the Tribunal: was there failure to act or impossibility of doing so? What would be the effect on any existing basis for challenge, if Judges Kashani and Shafeiei rendered a formal, perhaps even ambiguous apology? A challenge against Judges Kashani and Shafeiei was filed by the US Government on September 17, 1984.

The US Memorandum setting forth the legal basis for challenge and summarizing the position of the US notably contended that Judges Kashani and Shafeiei violated Article 10(1), Article 13(2) of the Tribunal Rules and the duty “to adhere to proper judicial decorum and demeanor,” a part of “civilized behavior and a basic respect for law.”225 The (p. 229) memorandum separately addressed each of these sources of challenge, the last source being treated in a section entitled “The Attack and Continuing Threats Violate Fundamental Legal Principles Governing International Arbitration.” In citing “broader and more fundamental principles [‘due process, fairness and justice’], which also entail the attributes of arbitrator impartiality and independence,” the US Government in essence argued that this source of challenge based on “fundamental legal principles” is broader than and encompasses within it Article 10(1).226

As precedent for its position, the US Government cited the arbitration between Bengtson and Federal Republic of Germany.227 In Bengtson, the Arbitral Commission on Property, Rights and Interests in Germany in Plenary Session was presented with an appeal of the decision of the Second Chamber to reject an application for disqualification of a commissioner for fear of partiality, given the past employment of that commissioner with the defendant in the case. The Commission dismissed the appeal, holding that disqualification could not be based on “the Commission's Charter or on the general principles of international law.”228 The US Government cited this holding as support for general principles of international law as a residual independent source of grounds for challenge.229 The reasoning in Bengtson in support of this holding, however, reveals that recourse was made to general principles of international law not because that is always an independent source for challenge or disqualification but rather because Article 8(1) of the Charter directed the Commission to do so. This Article provides:

In arriving at its decisions, the Commission shall apply the provisions of the Convention … Where necessary to supplement or interpret such provisions, or in the absence of any relevant provisions, it shall apply the general principles of international law and of justice and equity.230

As a matter of policy, denying a source for challenge outside Articles 12(1) and 12(3) is appropriate. The challenge process is time-consuming and confusing enough without expanding the bases for asserting a challenge to general sources of law. Even if challenges might be sustained under a broader residual source, the parties could very well desire instead to operate under a narrow, more limited enumeration of the basis for challenges.231 Having said this, one must note that Articles 12(1) and 12(3) are on their face very broad in scope232(p. 230) and that they alone would have likely supplied a basis for the US challenge of Judges Kashani and Shafeiei. In this sense, the position of the US Government as to this general source for challenge is better viewed as the product of a thorough litigator rather than a correct statement of law. “The Tribunal's Rules governing challenges exist to safeguard against unfairness and injustice, and to ensure that the arbitration process is not frustrated or tainted by arbitrators who are unwilling to perform, or incapable of performing, their functions.”233 Given this accurately described scope, there is, if nothing else, little need for a general source of grounds for challenge outside the UNCITRAL Rules.

The second situation involved the US challenge of Judge Broms in 2001 in connection with his dissenting opinion in Case No A/28. The US Government maintained that the opinion contained revelations about the confidential deliberations of the Full Tribunal, which, among other things, undermined the remedy afforded the US by the majority of the Tribunal.234 One of the arguments in the US challenge was that Judge Broms's disclosures, in addition to showing his partiality, demonstrated his failure to perform his function as an arbitrator and his desire to hinder the work of the Tribunal in subsequent related cases. According to the US Government, Judge Broms's conduct, particularly in light of the Tribunal's institutional setting, made him subject to challenge pursuant to Article 13(2) of the Tribunal Rules.

The Appointing Authority, Sir Robert Jennings, found that argument unpersuasive. In his decision dated May 7, 2001, he concluded that Article 13(2) of the Tribunal Rules was meant to address the “actual,” rather than the “metaphorical” failure or impossibility to act, such as when an arbitrator is temporarily ill or absent from the proceedings.235 Accordingly, he rejected the US interpretation of Article 13 because that provision “was not intended to be used to supplement or qualify the meanings of ‘independence’ and ‘impartiality’ in Articles 9 to 12.”236 The same analysis should apply with respect to corresponding Articles 11 through 13 of the 2010 UNCITRAL Rules.

() When may a party challenge the arbitrator it has appointed—Article 12(2)

Should a party be able to challenge the arbitrator it has nominated or only the arbitrator nominated by the other party? According to the UNCITRAL drafters: “The prevailing view … was that a party should be permitted to challenge even the arbitrator nominated by him. For circumstances unknown at the time of the nomination may emerge thereafter revealing that the arbitrator had a bias against the party nominating him, or in favor of the other party.”237

Tribunal practice indicates that in at least one case, a party exercised this right. In the Walter Bau arbitration, the respondent challenged the arbitrator it had appointed on grounds that he had previously provided advice to and had nominal equity holdings in a company connected with the investment project at issue in the case.238

(p. 231) C. Extracts from the Practice of Investment and other Tribunals

Challenge Decision of April 15, 1993, reprinted in part in (1997) XXII Ybk Commercial Arb 222, 224:

[1]  My decision calls for a preliminary clarification of a point of terminology which was raised by the claimant and which covers an important matter of substance. I have to refer throughout this decision to “Party Arbitrators” according to the general use in arbitral matters, adopted also by the parties. It must however be made clear that this expression refers exclusively to the mode of appointment of the said arbitrators and that it may not be understood as conveying any idea of dependency, allegiance or accountability of an arbitrator in relation to the appointing party. Party Arbitrators appointed in conformity with the requirement of Art. 9 of the [1976] UNCITRAL Rules must therefore be considered to have the same status of independence as a single arbitrator or the presiding arbitrator, as the case may be. This status must be recognized and respected by all concerned as long as a possible lack of impartiality or independence has not been established by a competent authority.

Challenge Decision of January 11, 1995, reprinted in part in (1997) XXII Ybk Commercial Arb 227, 230–31:

B. Standards for Party Appointed Arbitrators

[8]  The first bench mark or guidepost has to do with whether different standards with respect to impartiality apply to party appointed arbitrators. The matter, as far as I am concerned, is clear. The criteria mandated by the [1976] UNCITRAL Arbitration Rules apply equally to all arbitrators. There is no lesser standard for party nominated arbitrators than for a neutral arbitrator. I detect no dispute whatsoever between the parties on this point. In this regard, authorities which are predicated on different standards and régimes are largely irrelevant to this enquiry. …

C. Effect of the Timing of the Challenge or Its Disposition

[9]  The next guidepost involves the timing of the challenge to an arbitrator. Does the standard of impartiality take on a shifting or ambulatory character depending on the stage of the proceeding? The standard to be applied for impartiality and the proof required to establish a lack thereof should, in theory, be no different according to whether the issue is raised at the threshold or at the conclusion of the proceedings. …

[10]  It must nevertheless, be conceded that there may be a natural tendency to protect the process at the outset rather than having to support it at its conclusion. … As a practical matter, if a reviewing judicial authority at the conclusion of proceedings were to disagree with a threshold conclusion that an arbitrator is not partial, the entire arbitration is at risk. Particular prudence is, therefore, called for in making a threshold decision on partiality as well as a scrupulously fair appreciation of all of the circumstances that may bear on the assessment.

[11]  While the claimant applied inferentially to advance in its Challenge the view that somehow the standard is more relaxed at the inception of proceedings, I believe that the most one can say is that, if matters are evenly balanced, there may be reasons … for great caution and possible admission of the challenge ….

[12]  In a parallel submission, the claimant also argued with considerable persuasiveness that the arbitration process could, and should here, be safeguarded at the threshold. The way to do this was to reject the respondents’ arbitrator. There are, they suggested, many other experienced, and no doubt willing, candidates available. While many of the reasons advanced in support of this position may in themselves be unobjectionable, the test which I must apply is not a pragmatic or discretionary one, but rather one based on whether there are justifiable doubts as to the arbitrator's impartiality. I cannot supplant the standard in the [1976] UNCITRAL Arbitration Rules with a largely subjective view based on essentially peripheral considerations which, although possibly otherwise cogent, may be shifting in character and unrelated to that objective criterion. I should also add here that a challenge should not be upheld simply to avoid controversy. Otherwise challenges would be resorted to for their in terrorem effect.

(p. 232) National Grid PLC and Republic of Argentina, Decision on the Challenge to Mr Judd L Kessler (December 3, 2007) (LCIA administered, 1976 UNCITRAL Rules, UK-Argentina BIT), at 22–23:

  1. 92. Taking the statement quoted by Argentina in its Challenge in isolation, i.e., in particular that “[…] and it is not hypothetical because everyone present here knows the facts in general, that there has been an important damage or a very important change in the expectations of the investment”, the Division admits that a reasonable third person might indeed gain the impression that Mr Kessler had already taken a firm view on issues which are key to the final result of the arbitration.

  2. 93. However, the Division is of the opinion that it would be inappropriate under a reasonable third person test to determine Mr Kessler's impartiality by looking at the challenged statement in isolation without considering Mr Kessler's intervention as a whole and the context of the intervention.

  3. 94. The transcript shows that Mr Kessler started his intervention by suggesting, in Spanish, to Mr Guglielmino that he pose to the expert witness hypothetical questions. The preceding pages of the transcript show that this suggestion was triggered by a discussion between counsel and the Tribunal as to whether certain questions were factual and thus improper to be put to a legal expert.

  4. 95. It is true that this suggestion by Mr Kessler was followed by the challenged statement that “[…] and it is not hypothetical because everyone present here knows the facts in general, that there has been an important damage or a very important change in the expectations of the investment”. However, immediately after this statement, and before being asked by Mr. Guglielmino for clarification, Mr Kessler went on to explain his suggestion by formulating examples for hypothetical questions to be posed to the expert.

    “If you want to ask him questions. If there were major harm, what would the result be under Argentine law? Is there protection? Is there not protection?

    Does the law apply? Does it not apply? I state this merely as a suggestion”.

  5. 96. From a reasonable point of view, by formulating such questions, any appearance of bias which may have been created by the challenged sentence was eliminated. Even if one were to admit remaining doubts, they were then clearly eliminated by Mr Kessler's clarification in response to Mr. Guglielmino's question.

  6. 97. Following Mr Kessler's intervention, Argentina's counsel Mr Guglielmino sought immediate clarification and asked:

    “You state that at this stage we already know that there was harm?” 36

  7. 98. Mr Kessler responded:

    “I merely say that we are here because there is an allegation of harm of a change in the contract that caused problems to the investor. As we were saying before, we are not speaking in abstract. I don’t know. I’m trying to help, but perhaps what I have had to say isn’t all that helpful”.

  8. 99. Thus, by stating that the subject of the arbitration was “an allegation of harm of a change in the contract that caused problems to the investor”, Mr Kessler made clear beyond any reasonable doubt that he was not prejudiced.

AWG Group Ltd and Argentine Republic, Decision on a Second Proposal for the Disqualification of a Member of the Arbitral Tribunal (May 12, 2008) (footnotes omitted), (ICSID administered, 1976 UNCITRAL Rules, UK-Argentina BIT), at 12–13:

  1. 23. What then is the “circumstance” in the case of AWG Group Limited v. The Argentine Republic that the Respondent alleges gives rise to a justifiable doubt as to the impartiality or independence of Professor Kaufmann-Kohler? The Respondent's submissions, which it must be (p. 233) acknowledged tend to focus more heavily on the circumstances in the other two cases, point to the fact that Professor-Kauffman-Kohler is a director of UBS and that UBS has engaged in certain research activities in the water sector and has developed financial products to allow its clients to invest in the water sector. At paragraph 29 of its Second Proposal, the Respondent refers to one such product, the UBS Global Water Utilities Index TR-Index-Zertificat (UBOWAS), which includes “ … 12 companies, mostly British … ”; however, the Respondent does not allege that AWG Group Limited is among the twelve or even that companies in which UBS conducts research or the financial products developed by UBS include investments in AWG Group Limited. Indeed, the Respondent does not specifically allege the existence any sort of a business relationship, direct or indirect, between UBS and AWG Group Limited. In particular, the Respondent does not assert that UBS owns shares in or has any other type of financial connection to AWG Group Limited. Moreover, as will be discussed more extensively below, Professor Kaufmann-Kohler states that as a director of UBS she is not involved in the management of UBS business, does not participate in the development and management of the company's financial products or its research activities, and indeed was unaware of its activities with respect to the water sector. The Respondent offers no evidence to the contrary.

  2. 24. Thus the only connection, if one may call it that, between Professor Kaufmann-Kohler and the Claimant AWG Group Limited is the fact that she is a director of UBS and that UBS, among its many other activities and interests throughout the world, conducts research and develops financial products related to the water sector. The existence of such purported connection is not enough to establish a “circumstance” giving rise to justifiable doubts as to an arbitrator's independence and impartiality. Such a connection must be significant and direct, such as an economic relationship causing an arbitrator to be dependent in some way on a party. Such connection between Professor Kaufmann-Kohler and AWG Group Limited, as suggested though not specifically alleged by the Respondent, is too remote and tenuous as to hardly be called a connection or relationship at all. An objective analysis of the facts as alleged by the Respondent does not establish a circumstance that would lead a reasonable, informed person to conclude that a justifiable doubt exists as to Professor Kaufmann-Kohler's impartiality or independence in the case of AWG Group Limited v. The Argentine Republic.

Vito G Gallo and Government of Canada, Decision on the Challenge to Mr J Christopher Thomas, QC (October 14, 2009) (ICSID administered, 1976 UNCITRAL Rules, NAFTA Chapter Eleven), at 9–11:

  1. 29. It would have been preferable for Mr. Thomas not to have stated in a CV provided to the parties that he intended to retire as counsel if his intentions were not entirely certain. As things stand today, and irrespective of the advisability of such a situation, one may as a general matter be simultaneously an arbitrator in one case and a counsel in another. There is no need to disavow the possibility of assuming either role. The fact that one makes such a statement and then changes one's mind is therefore hardly sufficient to sustain a challenge absent other evidence of a conflict. Thus, the Claimant's assertion that it relied on Mr. Thomas’ statement in his CV in evaluating his acceptability as an arbitrator does not by itself sustain the challenge raised against Mr. Thomas.

  2. 30. The real issue is that Mr. Thomas is presently advising Mexico, a State Party to the NAFTA and a potential participant in this case pursuant to NAFTA Article 1128. In his letter of June 22, 2009, Mr. Thomas stated that he had not since March 2009 represented Mexico “in respect of the interpretation or application of the provisions of NAFTA Chapter 11 or similar provisions in Mexico's Bilateral Investment Treaties,” but has done “a small amount of work for BLG on Mexico-related matters, consisting principally of reviewing its advice in respect of matters that fall within the rubric of international trade and investment law.”

  3. (p. 234) 31. In the particular context of NAFTA Article 1128, this is too fine a distinction to dispel doubt. By serving on a tribunal in a NAFTA arbitration involving a NAFTA State Party, while simultaneously acting as an advisor to another NAFTA State Party which has a legal right to participate in the proceedings, an arbitrator inevitably risks creating justifiable doubts as to his impartiality and independence.

  4. 32. The Respondent opines that there can be no conflict of interest since the amount of legal advice provided by Mr. Thomas to Mexico is de minimis. The Respondent misses the point, however. Where arbitral functions are concerned, any paid or gratis service provided to a third party with a right to intervene can create a perception of a lack of impartiality. The amount of work done makes no difference. What matters is the mere fact that work is being performed.

  5. 33. Mr. Thomas’ personal integrity is unquestioned, and he is to be commended for disclosing his advisory services to Mexico in a forthright manner. Nevertheless, in an arrangement like the one presently at issue, the arbitrator could be perceived as attentive to the interests of the advised State Party. His judgment may appear to be impaired by the potential interest of the advised State Party in the proceedings. Moreover, if the advised State Party were formally to intervene under Article 1128, this would necessarily lead to the reconstitution of the tribunal. In any event, the arbitrator's involvement is problematic.

  6. 34. The Claimant demands Mr. Thomas’ disqualification on the basis that “there is no way to ‘un-ring’ the bell.” But the bell has not yet actually been rung. Mexico has not stated an interest in this case by participating under Article 1128, or otherwise. Had Mexico intervened, this would have required Mr. Thomas’ immediate disqualification. The fact is, however, that Mexico has not yet done so. The claimant's request must therefore be rejected.

  7. 35. Nevertheless, because Mexico has the immanent right under Article 1128 formally to state its interest by participating in the case, an apparent conflict of interest is perceptible. Even if Mexico were not in the end to intervene, the arbitration would have had to proceed under the shadow of this possibility. The parties would inevitably be in a distracting and unsettled situation. It would be next to impossible for Mr. Thomas to avoid altogether, in his work as an arbitrator, the appearance of an inability to distance himself fully from the interests of Mexico, the advised NAFTA State Party and a potential participant in the present case.

  8. 36. In the instant case, from the point of view of a “reasonable and informed third party” (General Standard 2(c) of the IBA Guidelines on Conflicts of Interest in International Arbitration), i.e., a “fair minded, rational, objective observer” (Challenge Decision of 11 January 1995, op. cit. at 236), there would be justifiable doubts about Mr. Thomas’ impartiality and independence as an arbitrator if he were not to discontinue his advisory services to Mexico for the remainder of this arbitration. Mr. Thomas must therefore now choose whether he will continue to advise Mexico, or continue to serve as an arbitrator in this case. Mr. Thomas shall inform me of his choice (with copies being sent to the parties, the two other arbitrators and the PCA) within seven (7) days of his receipt of the present decision.

ICS Inspection and Control Services Ltd and Republic of Argentina, Decision on Challenge to Arbitrator (December 17, 2009) (Ad Hoc Proceeding, 1976 UNCITRAL Rules, UK-Argentina BIT), at 4–5:

  1. 1. In his disclosure, Mr. Alexandrov indicates that he and his law firm currently represent the claimants in the long-running investment treaty proceedings, Compania de Aguas del Aconquija S.A. and Vivendi S.A. v. Argentine Republic (the “Vivendi” case). This puts Mr. Alexandrov in a situation of adversity towards Argentina, a situation that is often a source of justified concerns and that I believe should in principle be avoided, except where circumstances exist that eliminate any justifiable doubts as to the arbitrator's impartiality or independence.

  2. 2. It is noted that, in their submissions on the challenge, both Parties have referred to the IBA Guidelines on Conflicts of Interest in International Arbitration (the “IBA Guidelines”). Although the IBA Guidelines have no binding status in the present proceedings, they reflect international best practices and offer examples of situations that may give rise to objectively (p. 235) justifiable doubts as to an arbitrator's impartiality or independence. Specifically, in support of its challenge, the Respondent relied on the scenario set forth at section 3.4.1 of the “Orange List” of the IBA Guidelines which provides that circumstances in which “[t]he arbitrator's law firm is currently acting adverse to one of the parties or an affiliate of one of the parties” may give rise to justifiable doubts as to the arbitrator's impartiality or independence. I also note that the scenario posited at section 3.1.2 of the “Orange List” provides that circumstances in which “[t]he arbitrator has within the past three years served as counsel against one of the parties or an affiliate of one of the parties in an unrelated matter” may give rise to justifiable doubts as to the arbitrator's impartiality or independence. Given that the facts underlying Mr. Alexandrov's disclosure are reflected in both of theses scenarios, I am of the opinion that the conflict in question is sufficiently serious to give rise to objectively justifiable doubts as to Mr. Alexandrov's impartiality and independence.

  3. 3. It has been argued in opposition to the challenge, inter alia, that the Vivendi case may soon come to a close and is unrelated to the present case. However, I do not consider that these circumstances resolve all justifiable doubts. While no more action appears to be required from Mr. Alexandrov in the current annulment proceedings in the above case, I do not consider that this possibility entirely negates Mr. Alexandrov's conflict as envisaged in section 3.4.1 of the IBA Guidelines inasmuch as the possibility exists that the case may continue in some form and engage Mr. Alexandrov's firm's continued representation.

  4. 4. As to the relation between the cases, I note again that this is not merely a case in which the arbitrator's law firm is acting adversely to one of the parties in the dispute, but rather a case where the arbitrator has personally and recently acted adversely to one of the parties to the dispute. The scenario set forth in section 3.1.2 of the IBA Guidelines provides that past, personal representation against one of the parties “in an unrelated matter” can be sufficient to give rise to justifiable doubts. Moreover, while the Claimant has argued that the cases are unrelated and there are technical differences between the issues raised in the two cases, they are not entirely dissimilar. Both matters are investment protection actions of considerable magnitude which raise broadly similar concerns against the same State party in a manner that reinforces any justifiable doubts as to the arbitrator's impartiality or independence.

D. Extracts from the Practice of the Iran–US Claims Tribunal

() Tribunal Rules (1983), Article 10(1)

Letter of the Agent of the United States to the Appointing Authority initiating the Challenge of Judges Kashani and Shafeiei, September 17, 1984 (footnote omitted), reprinted in Intl Arb L Rev 9344:

A violent physical attack by two arbitrators upon a third who, in their view, is opposed to the interests of the party that appointed them, demonstrates a total lack of the necessary impartiality and independence envisioned by Article 10 [of the 1983 Tribunal Rules]. Further, such conduct compels strong doubts as to whether the two attackers can in the future act with impartiality or independence.

Mr. Kashani and Mr. Shafeiei assert in their September 6 communication to President Lagergren that Mr. Mangård “has totally hostile feelings specifically directed against the Islamic Republic of Iran.” Their memorandum goes on to criticize Mr. Mangård for deciding cases against Iranian respondents. The response of Messrs. Kashani and Shafeiei to this asserted hostility on the part of Mr. Mangård was to attack him physically.

This conduct shows that Mr. Kashani and Mr. Shafeiei identify themselves so completely with what they consider to be the interests of Islamic Republic of Iran that they will resort to unprecedented physical violence to protect those interests. As Lord Denning ruled, in deciding on the disqualification of an arbitrator, the key consideration is confidence in “his ability to come to a fair and just conclusion.” Modern Engineering v. Miskin, [1981] Lloyd's L. Rep. 135, 138 (per Lord Denning, M.R.). Arbitrators who resort to physical violence in order to protect the interests of the (p. 236) party that appointed them demonstrate such a deep-seated bias that they must be presumed to display similar partisanship in all matters in the future.

Impartiality requires that an arbitrator listen carefully to contending arguments and weigh them thoughtfully with due regard for applicable principles of law and proper procedure.

The conduct involved here is the antithesis of such impartiality. Instead of demonstrating evenhandedness and reasoned deliberation, Mr. Kashani and Mr. Shafeiei have resorted to threats and violence against those whom they consider the enemies of the party that appointed them. They have thereby compelled doubts as to their future impartiality and independence. These doubts would persist even if Messrs. Kashani and Shafeiei, in the face of this challenge, were now to apologize and agree to refrain from violence in the future.

Letter of the Agent of the Government of Iran to the Appointing Authority initiating the First Challenge by Iran of Judge Briner, September 13, 1988, at 3, reprinted in 20 Iran-US CTR 182, 183 (1988–III):

Mr. Briner's relationship with Morgan Stanley, given the circumstances, obviously raises justifiable doubts as to his impartiality and independence, and is, thus, a ground for challenge according to the Tribunal's Rules and fundamental legal principles governing international arbitration. Mr. Briner's failure to fulfill his disclosure obligation is also an additional basis for challenge. For these reasons, the Government of the Islamic Republic of Iran, for itself and on behalf of other Respondents in Case No 55, hereby challenges Mr. Briner … according to Article 10 of the [1983] Tribunal Rules.

Memorandum of Amoco Iran Oil regarding the Challenge by Iran of Judge Briner in Case No 55, November 2, 1988, reprinted in 20 Iran-US CTR 233, 241 (1988–III):

Under the [1983] Tribunal Rules, the test for disqualification is whether circumstances exist that give rise to justifiable doubts as to the arbitrator's impartiality or independence (Article 10(1)). The challenging party, in this case Iran, bears the burden of proof on this issue. The standard is an objective one: whether a reasonable man would conclude, after reviewing the evidence, that justifiable doubts exist. The standard is not whether the challenging party itself doubts the arbitrator's impartiality or independence, but whether a reasonable man would do so.

Letter of the Agent of Iran to the Appointing Authority initiating the Second Challenge by Iran of Judge Briner, July 28, 1989 at 1–2, reprinted in 21 Iran-US CTR 318 (1989–I):

This challenge is made of respect to all functions he presently performs either as an arbitrator or as the President of the Iran-US Claims Tribunal in regard to any and all cases, inasmuch as the circumstances prompting the challenge raised such serious doubts about his impartiality and independence that he is no more worthy of trust by any standards, and therefore no longer fit to serve as the President of the Tribunal or as a member of it.

The circumstances warranting a challenge under the [1983] Tribunal Rules, Article 10, are Mr. Briner's totally improper course of conduct in the proceedings of Case No 39, Phillips Petroleum Co. Iran v. The Islamic Republic of Iran and National Iranian Oil Co.

Letter of the Agent of Iran to the Appointing Authority initiating the Second Challenge by Iran of Judge Briner, August 29, 1989 at 2, reprinted in 21 Iran-US CTR 355 (1989–I):

As to the merit of the Challenge, it should be borne in mind that all challenging party has to prove is that “circumstances exist that give rise to justifiable doubts as to the arbitrator's impartiality or independence”. Such is the criterion to uphold a challenge under the [1983] Tribunal Rules, Article 10(1). According to that standard, no actual bias, but simple uncertainty or doubts (p. 237) engendered in the mind of a reasonable man because of no matter what circumstances would suffice for the success of the challenge.

Decision of the Appointing Authority on the Second Challenge by Iran of Judge Briner, September 19, 1989 at 4–6, 8–9, reprinted in 21 Iran-US CTR 384, 387–91 (1989–I):

C. General Considerations

  1. a. Under the Tribunal Rules, an Arbitrator can be challenged not on the ground of circumstances which have given rise to serious doubts about that Arbitrator's impartiality and independence, but solely on the ground of circumstances which give rise to justifiable doubts on that score.

  2. c. The appointing authority is not competent to assess the correctness of the arbitrators’ judgment whether evidence is or is not convincing nor of their decision to accept some evidence as a basis for their award and put other evidence aside … Given the freedom granted the arbitrators … to make their awards to the best of their knowledge and conviction, it cannot be concluded from an arbitrator's choices in this area that he is not impartial or independent.

  3. d. … Complaints alleging infringement or misapplication of the rules of procedure can succeed only if the alleged infringement or misapplication justifies doubts about the impartiality or independence of the arbitrator concerned. This can only be so if the infringement or misapplication admits of no other explanation than that it has its cause in lack of impartiality or independence on the part of the challenged arbitrator and that any other cause, such as an error or misunderstanding—which, as experience has taught, may happen to the most conscientious judge—can be ruled out.

As to the allegation mentioned above under B.2 [that Mr. Briner used the testimony provided in Case No 55 by Morgan Stanley about the Chase Econometrics Forecast for the award in Case No 39].

This allegation can serve as support for the contention that justifiable doubts within the meaning of Article 10 of the Tribunal Rules have arisen, only if it is established beyond doubt that consideration in Case No 39 of testimony provided in Case No 55 by Morgan Stanley about the Chase Econometric Forecast—…—intended to be or had for result either an impediment of the Respondent's position or possibilities in legal proceedings or an unjustified favoring of the Claimant.

To my mind this condition is not fulfilled.

As to the allegation mentioned above under B.4 …

The mistakes and inaccuracies in the Award … have been found not to be of such a nature as to warrant the conclusion that they provide grounds for justifiable doubts about Mr. Briner's impartiality and independence.

Letter of the Agent of the United States to the Appointing Authority concerning the Third Challenge by Iran of Judge Briner, September 15, 1989, at 1, reprinted in 21 Iran-US CTR 383 (1989–I):

The newspaper articles, in which President Briner is mentioned only peripherally, contain assertions that he made a loan for the purchase of certain equipment. Even if one were to accept the statements made in these newspaper articles as true, there is nothing in them to suggest impropriety on the part of President Briner as alleged … Most important for present purposes, these materials could not possibly form the basis of a challenge, since they contain nothing to suggest the existence of circumstances “that give rise to justifiable doubts as to [President Briner's] impartiality or independence”. ([1983] Tribunal Rules of Procedure, Article 10, paragraph 1).

(p. 238) Letter of the Agent of the United States to the Appointing Authority concerning the Third Challenge by Iran of Judge Briner, September 19, 1989 at 1, reprinted in 21 Iran-US CTR 395 (1989–1):

While consideration of this “whole context” could not in any case lend substance to this meritless challenge, Mr. Nobari's suggestion should be seen for what it is—an effort to circumvent the Tribunal Rules of Procedure. Article 10, paragraph 1 of the [1983] Tribunal Rules provides that an arbitrator may be challenged “if circumstances exist that give rise to justifiable doubts as to the arbitrator's impartiality or independence”. Article 11, paragraph 1 requires that a party who intends to challenge an arbitrator send notice of the challenge “within 15 days after the circumstances mentioned in articles 9 and 10 become known to that party”. These provisions simply afford no basis for consideration of various alleged circumstances of which Iran has been aware for more than 15 days.

Decision of the Appointing Authority on the Third Challenge by Iran to Judge Briner, September 25, 1989 at 2, 3, reprinted in 21 Iran-US CTR 396, 397–98 (1989–I):

a. Only questions of fact, not mere qualifications or presumptions can properly form the basis of a challenge.

In view of these circumstances, and satisfied as I am that Mr. Briner acted in good faith, the advance payment, even if theoretically it could be shown to have breached the Indian Foreign Exchange Regulations Act, cannot give rise to justifiable doubts as to Mr. Briner's impartiality or independence as an Arbitrator or as President of the Tribunal.

Decision of the Appointing Authority on the Challenge to Judge Noori, August 31, 1990 at 13–14, reprinted in 24 Iran-US CTR 314, 324 (1990–I):

… even if for the sake of argument it were assumed that this claim and the other grounds put forward in the challenge for doubting Mr. Noori's impartiality and independence—to wit his service as Head of the NIOI Legal Office and his failure to disclose this to the President of the Tribunal—were true, I do not feel that, in connection with the circumstances to be mentioned hereafter, this doubt can be termed justifiable doubt within the meaning of Article 10 of the [1983] Tribunal Rule:

  1. 1. The circumstances that Mr. Noori served with NIOI as Head of the Legal Office a long time ago—from mid–1980 to mid–1982—and was in that capacity a member of the NIOI Council for a few months only during that period;

  2. 2. The circumstances that … MIG was falling under the purview of NIOI as only one of very many companies;

  3. 3. The circumstances that Mr. Noori's duties as a member of the NIOI Council were limited to providing legal advice to the NIOI authorities only on internal legal matters and, as Head of the NIOI Legal Office, to provide services in connection with internal legal works;

  4. 4. The circumstances that Mr. Noori, prior to his appointment as an Arbitrator in the Tribunal, had in no way been involved in Case No 248, especially not as Head of the NIOI Legal Office or as counsellor or advisor to any of the respondents in this Case;

  5. 5. The circumstances that NIOI is not a party to Case No 248 nor has ever been one.

Decision of the Appointing Authority Sir Robert Jennings on the Challenge by the United States to Judge Broms, May 7, 2001 at 3–4, 11:

… The United States describes Judge Broms having by his conduct made it de jure and de facto impossible for him to act as an arbitrator, thus, in the view of the United States bringing into operation the Article 13 [of the 1983 Tribunal Rules] provisions for “replacement of a member”.

(p. 239) This suggested device and its effect appears in several places in the Memorandum attached to the challenge, and is conveniently summarized in the Agent for the United States’ Notice of Challenge, dated 4 January, when he says that, besides the lack of independence and impartiality, Judge Broms ‘in addition [emphasis supplied] demonstrates his unfitness to continue as a member of the Tribunal because of his failure to act and the de facto impossibility of his performing his functions’.

This argument is unpersuasive. In the circumstances described in Article 13, of an impossibility of an arbitrator performing, the resulting problem of the need for a substitute arbitrator is dealt with by a simple cross-reference to the procedures of substitution set out in Articles 9 to 12. But it does not follow that lack of independence or impartiality can also be used to activate the triggering provisions of Article 13. Justifiable doubts about impartiality and about lack of independence are adequately dealt with under Articles 9–12.

Moreover, paragraphs 3, 4, and 5, of Article 13 of the [1983] Tribunal's Rules—that is to say the ones that are additional to the original [1976] UNCITRAL Article 13—are clearly intended to deal with what should be done in the event of actual failure to act, or “the impossibility of his performing his functions”, rather than a metaphorical failure or impossibility inferred from his views expressed when acting. Thus they provide inter alia for a “temporary illness” and for a “temporary absence”, which suggests that Article 13 was not intended to be used to supplement or qualify the meanings of “independence” and “impartiality” in Articles 9 to 12 but to provide for a quite different situation that clearly needs to be provided for.

Accordingly I am not persuaded to regard Judge Broms as having behaved in such a way as to amount to failure to act or to a de jure or de facto impossibility of performing his functions within the meaning of Article 13.

One ought to resist an assumption that the independence and the impartiality of the Members of the Tribunal who are nominated by a party are different in their juridical nature from the requirements for one of the “neutral” judges. No such distinction in made in the [1983] Rules governing challenges.

Decision of the Appointing Authority, W E Haak, in the Challenge of Judges Assadollah Noori, Koorosh H Ameli, Mohsen Aghahosseini, April 19, 2006:

  1. 29. … [T]he United States fails to demonstrate that the payments made to Iran by the Challenged Arbitrators constitute a circumstance giving rise to justifiable doubts about these arbitrators’ Independence or impartiality. The United States has not convinced me that these payments, said to currently amount to approximately forty percent of the remuneration of the Challenged Arbitrators, are anything other than legally made contributions, required by Iranian tax law. At any rate, I cannot find any evidence supporting the United States’ theory that these payments should be labeled as illicit “kickbacks”.

  2. 30. The United States bases its Challenge on the statement made by Judge Noori on 6 December 2005. The United States asserts in its Notice of Challenge that this statement demonstrates that the Iranian arbitrators are financially dependent on the Government of Iran, which “effectively determines the income received by each of its appointed arbitrators”. The United States claims that this gives rise to “justifiable doubts” as to the impartiality and independence required of arbitrators under Article 10 of the [1983] Tribunal Rules. In later submissions, the United States refers to the payments as “Party-mandated arbitrator kickbacks”.

  3. 31. Iran and the Challenged Arbitrators concede that payments were made to Iran. They explained that these payments constitute income tax payments made pursuant to Iranian law. During the individual fact-finding meetings held on 6 February 2006, the Iranian arbitrators provided practical explanation. on how the payments are made, through a representative of the Ministry of Finance at the Iranian Centre for International Legal Affairs in The Hague. Some relevant provisions of Iranian tax law were provided by the Agent of Iran to the appointing authority on 17 February 2006.

  4. (p. 240) 32. It therefore falls to the United States to demonstrate that the payments are not legal contributions, but rather “illicit kickbacks” as it alleges.

  5. 39. … [T]he United States does not show that the payments made by the Iranian arbitrators to Iran are anything other than what Iran and the Challenged Arbitrators assert they are: regular periodical payments under Iranian income tax law. The United States does not assert that normal payments under ordinary income tax law would result in a breach of the arbitrators’ obligation of impartiality and independence.

  6. 40. Neither do I believe that ordinary tax payments should be considered to give rise to justifiable doubts as to an arbitrator's independence, because payment of taxes to the state conforms to legally established rules equally applicable to all taxpayers in an identical situation; nor does it give rise to justifiable doubts as to an arbitrator's impartiality, as payment of taxes is neither likely to prejudice an arbitrator in favor of the state to which it pays taxes; nor against it, since taxation will occur in any event. From the foregoing it should be clear that I am of the opinion that there is no ground for any appearance of bias whatsoever.

Joint Decision by the Appointing Authority, Judge W E Haak, on the Challenges against Judge Krzysztop Skubiszewski and Judge Hamid Reza Oloumi Yazdi, April 2, 2008, at 25:

The United States did argue that “the only explanation for Judge Oloumi's disclosure is that he intended to give the party that appointed him – Iran – the opportunity to seek to alter the course of deliberations, change the composition of the Tribunal or, by seeking to force a rehearing of select portions of Case B61, possibly even change the outcome of a case” (United States’ submission of February 1, 2008, p. 8). According to the United States, such a serious breach of the Rules would warrant Judge Oloumi's withdrawal from the Tribunal.

It may well be that if there were compelling evidence that an arbitrator intentionally disclosed confidential information in order to provide ammunition for a party to challenge another arbitrator, such disclosures would amount to circumstances giving rise to justifiable doubts within the meaning of article 10 of the Rules. However, having reviewed the file carefully, I have not found any proof that Judge Oloumi ever intended to create an opportunity for Iran to challenge President Skubiszewski. Judge Oloumi has constantly stated that he honestly believed that the issues discussed in his memorandum were not confidential Judge Oloumi's disclosures should rather be seen as the fruit of an error or a misunderstanding as to the interpretation of the May 1, 2007 Full Tribunal Decision and the scope of the deliberations.

The breach is thus not as serious as the United States claims, due to the lack of intention to disclose confidential information and to the vagueness of Judge Oloumi's statements. Nevertheless, it has had highly regrettable consequences for the integrity and the prosperity of the Tribunal's proceedings. While Judge Oloumi's unfortunate initiative cannot be analyzed as a circumstance giving rise to justifiable doubts as to Judge Oloumi's impartiality or independence, much greater care should be taken in the future in order to comply with this fundamental rule of procedure and avoid the harmful effects of forbidden disclosures.

() Tribunal Rules (1983), Article 10(2)

Reply Memorandum of the Islamic Republic of Iran regarding the Challenge of Judge Briner in Case No 55, November 28, 1988, reprinted in 20 Iran-US CTR 260, 315 (1988–III):

… Article 10(2) states that “(A) party may challenge the arbitrator appointed by him only for reasons of which he becomes aware after the appointment has been made”. Thus, for party-appointed arbitrators, there may be an implied burden of proof of the kind proposed by Amoco to show that prior to the appointment such reasons were unknown. Indeed, Amoco's reference to the oeuvres préparatoires of the [1976] UNCITRAL Rules confirms this implication. However, Mr. Briner is not a party-appointed arbitrator but a neutral arbitrator appointed by the 2 party-appointed arbitrators. There is no suggestion whatsoever that such a rule applies in the cases of a neutral arbitrator so appointed. Indeed, the inclusion of such a specific provision in the [1976] (p. 241) UNCITRAL Rules relating only to party-appointed arbitrators implies that the opposite is true in the case of neutral arbitrators.

4. The Initiation of the Challenge and the Potential for Agreement to the Challenge—Article 13

Challenges are a serious matter which may greatly delay arbitral proceedings. For this reason, Article 13 of the UNCITRAL Rules sets forth several formal requirements intended to prevent untimely or unsubstantiated challenges. Similarly, it specifies how the agreement of a party or the arbitrator challenged may resolve the challenge.

A. Text of the 2010 UNCITRAL Rule239

Article 13 of the 2010 UNCITRAL Rules provides:

  1. 1. A party that intends to challenge an arbitrator shall send notice of its challenge within 15 days after it has been notified of the appointment of the challenged arbitrator, or within 15 days after the circumstances mentioned in articles 11 and 12 became known to that party.

  2. 2. The notice of challenge shall be communicated to all other parties, to the arbitrator who is challenged and to the other arbitrators. The notice of challenge shall state the reasons for the challenge.

  3. 3. When an arbitrator has been challenged by a party, all parties may agree to the challenge. The arbitrator may also, after the challenge, withdraw from his or her office. In neither case does this imply acceptance of the validity of the grounds for the challenge.

  4. 4. If, within 15 days from the date of the notice of challenge, all parties do not agree to the challenge or the challenged arbitrator does not withdraw, the party making the challenge may elect to pursue it. In that case, within 30 days from the date of the notice of challenge, it shall seek a decision on the challenge by the appointing authority.

B. Commentary

() When notice of challenge must be made—Article 13(1)

() General comments on the travaux préparatoires

Article 13(1) establishes the period within which a challenge must be made. Under this provision, a notice of challenge must be sent within fifteen days after the appointment of the challenged arbitrator has been notified to the challenging party, or fifteen days after the (p. 242) circumstances constituting the basis for the challenge first become known to the challenging party. If, for example, facts believed to constitute a ground for challenge become known for the first time via disclosure in accordance with Article 11 and disclosure occurs after appointment, then the 15-day period runs from the date of disclosure to the challenging party and not the date of appointment. The 15-day period can never commence before the appointment of the challenged arbitrator, given that only an “arbitrator” may be challenged.

The drafters of the 1976 UNCITRAL Rules wanted to ensure that challenges were made at the earliest possible stage of the arbitral proceedings due to the high costs of challenges made once proceedings are well under way. Challenges result in the interruption of the course of proceedings, and a successful challenge creates serious delays because a substitute must be appointed and there may be a need to repeat hearings.240 This is particularly so where a sole arbitrator is challenged.

The preliminary draft of Article 11(1) of the 1976 UNCITRAL Rules set a time limit of 15 days for making notice of a challenge. There was some discussion of whether to extend the limit to 30 days or reduce it to immediate notification. A limit of 15 days was finally agreed upon as fair, since it gave the challenging party some time to consider what actions to take without allowing the proceedings to progress too far. In other words, it served “to avoid the possibility of a party awaiting the completion of the arbitration procedure before making his challenge.”241

Discussion of the preliminary draft of Article 11 of the 1976 UNCITRAL Rules apparently provoked a question of whether a time limit was needed at all, since “the time within which a challenge should be made would be determined under applicable municipal law and under the arbitration laws of many countries, a challenge was permissible at any stage of the hearing.”242

However, the decision was made to keep the time limit for two reasons. First, it was argued that municipal law would not adequately govern challenges in all cases. Second, the drafters agreed that parties should be permitted to contractually agree to time limits for the challenge of arbitrators.243

The drafters made it clear that after 15 days the right to challenge was waived.244 Again, the purpose was to prevent parties from abusing the challenge mechanism by bringing up areas of concern of which they had been aware for some time, just to delay proceedings that appeared to be going against them.

The final issue addressed by the drafting Committee was whether the 15-day limit should be based on the sending or receipt of the notice of challenge. The preliminary draft of Article 11(1) of the 1976 UNCITRAL Rules said the challenge “should be made” within 15 days. The German representative stated that this implied that the notice of challenge should be received within 15 days, especially since Article 2 of the 1976 UNCITRAL Rules (p. 243) established the general rule that all notifications were effective on receipt. Although it was argued that clarification was needed, the Committee in the end decided to require only that the challenging party “send” notice within 15 days, on the theory that the time limit “was important not so much for the party receiving notification of challenge, but for the challenging party.”245 In other words, the purpose of the 15-day rule was to ensure that the challenging party acts expeditiously, a purpose fulfilled by proof of sending. Corresponding Article 13(1) of the 2010 UNCITRAL Rules, which is identical to Article 11(1) of the 1976 UNCITRAL Rules in substance, is subject to the same policy.

() When circumstances “became known” to the challenging party

Determining when the circumstances underlying a challenge “became known” to the challenging party is often a simple task when the information about those circumstances is based on some widely known event or circumstance. Such was the case with the first challenge in the AWG arbitration in which the Argentine Government challenged an arbitrator for serving on another tribunal that had rendered an award against Argentina. The challenge was dismissed as untimely because the date on which Argentina received the adverse award was undisputed, and Argentina filed its notice of challenge several days after the 15-day limit had expired.246 Other situations may not be as straightforward, however, such as where an arbitrator's general or recurring conduct is questioned.

The practice of the Iran–US Claims Tribunal and investment tribunals is illuminating with respect to two important questions related to the 15-day limit on challenges: (1) who bears the burden of proving when circumstances “became known” to a challenging party; and (2) what constitutes actual prior knowledge of the circumstances giving rise to the challenge.247

() Burden of proof

In Iran's challenge of Judge Briner in Case No 55, one of the key areas of disagreement between Iran and Amoco was whether or not Iran knew of Briner's relationship with Morgan Stanley's Swiss subsidiary long before it decided to bring a challenge.248

The memoranda of the two parties addressed the question of who should bear the burden of proving when a challenging party becomes aware of the circumstances on which the challenge is based. Amoco argued that Iran “has the burden of proof in establishing that it has standing to bring the challenge—that is, that it learned of the circumstances that gave rise to the challenge no more than 15 days before acting on that information.”249 The (p. 244) Iranians replied that Article 11(1) of the Tribunal Rules “says nothing about having to fulfill any alleged burden of proof.”250 Inasmuch as Judge Briner withdrew from Case No 55, the appointing authority did not have the opportunity to address the issue.

While the rules do not explicitly address the question of burden of proof in the context of a challenge,251 Article 27(1) provides that “each party shall have the burden of proving the facts relied on to support his claim or defence.”252 Given the serious consequences of a challenge and the concern of the UNCITRAL drafters that the procedure not be abused, it seems appropriate that the party bringing a challenge should be required, analogously to Article 27(1), to make some showing that its awareness of the circumstances forming the basis of the challenge arose within the 15-day limit.253 As the attorney for Amoco pointed out in a letter to the appointing authority: “when the facts are wholly within the possession of one party and inaccessible to the other party, it is the first party that should bear the burden of proof.”254

The party resisting a challenge as untimely bears the burden of proving that the notice of challenge was submitted beyond the 15-day time limit. This issue arose during the challenge to Mr Christopher Thomas in a NAFTA Chapter Eleven arbitration between a US claimant and Canada. Upon his appointment, Mr Thomas disclosed his plans to discontinue his counsel work by a certain specified date. Sometime later, he informed the parties that he had returned to counsel work and, in particular, had performed legal work for the Mexican Government. In a later disclosure, Mr Thomas stated that he had advised the Mexican Government on “matters that fall within the rubric of international trade and investment law,” though not “in respect of the interpretation or application of the NAFTA Chapter 11 or similar provisions in Mexico's Bilateral Investment Treaties.”255 Within 15 days of the second disclosure, the claimant filed its notice of challenge against Mr Thomas.

Canada argued that the challenge was untimely because Mr Thomas had returned to counsel work well before his disclosures were received by the parties, a fact which the claimant knew or should have known. In assessing Canada's claim, the Appointing Authority found: “While the Claimant as the party raising the challenge must show that justifiable doubts exist as to the arbitrator's impartiality or independence, the burden of proving the Claimant knew of relevant circumstances more than fifteen days prior to bringing the challenge falls upon the Respondent.”256

(p. 245) We agree with the Appointing Authority that the party resisting a challenge bears the burden of proving that the challenge was untimely. At the same time, in many circumstances it may also be necessary for the challenging part to establish the timeliness of its notice of arbitration. Such proof was not necessary in the challenge to Mr Thomas because it was undisputed that the claimant filed its challenge within 15 days of Mr Thomas's second disclosure. Nevertheless, consistent with Article 27(1), the challenging party not only must demonstrate its justifiable doubts, but must also prove that its challenge request was filed within 15 days of becoming aware of the circumstances underlying the challenge. A failure to do so would result in dismissal of the challenge, regardless of whether the resisting party has proven that the challenge was untimely.

One example of a challenging party failing to satisfy its burden of proof is the third challenge to Briner in which Iran alleged that Briner violated India's foreign exchange laws.257 The Appointing Authority dismissed the challenge because, among other reasons, Iran based the challenge on information in articles which appeared in India Today in 1987, two years before the challenge:

b. It is not consistent with the system of the Tribunal Rules that the Appointing Authority, deciding on a challenge, should take into account circumstances that came to the knowledge of the challenging party earlier than the beginning of the period of 15 days mentioned in article 11 of those rules.258

The prior publication of the newspaper articles therefore appears to have raised sufficient doubts as to whether Iran had demonstrated that it gained knowledge of the situation more recently and, thus, within 15 days of submitting its challenge request.259

() Actual prior knowledge
Article 13(1) requires that a party send notice of challenge within 15 days after the circumstances underlying the challenge “became known” to that party. The provision could have, but notably does not include, the phrase “should have known” or “ought to have known.”260(p. 246) In the challenge by the United States of the three Iranian arbitrators on the Iran–US Claims Tribunal, the Appointing Authority interpreted corresponding Article 11 of the Tribunal Rules as requiring “evidence of actual prior knowledge.”261 The Appointing Authority, Judge Haak, thus accepted the US position that Article 11 of the Tribunal Rules did not contain a standard of constructive knowledge, which could result in a party waiving its right to challenge too easily. The United States noted that Article 30 of the Tribunal Rules on waiver contained the same standard of actual knowledge (“knows”), and that the drafters of the Rules carefully considered and rejected additional language on constructive knowledge (“should have known”) in that provision.262 Further, the United States persuasively argued:

The UNCITRAL drafters were appropriately cautious about depriving a party of its right to object under Article [30 of the 1976 UNCITRAL Rules], which was intended to address “minor violations of the procedure.” Article 11(1), in contrast, deals with a party's fundamental right to an impartial and independent tribunal. Accordingly, where deprivation of a party's fundamental – as opposed to minor—rights are at risk, a constructive waiver test is, a fortiori, unwarranted and inappropriate.263

The Appointing Authority who decided the challenge to Mr Thomas in the Gallo arbitration also applied an actual knowledge test. In that challenge, the respondent, the Canadian Government, argued that the claimant should have known that Mr Thomas had resumed his counsel work because news of Mr Thomas's association with a new law firm had been reported in the Canadian press.264 The appointing authority rejected the Canadian Government's assertion that claimant's counsel was “almost certainly aware” of Mr Thomas's new status because “[s]uch speculative statements cannot replace proof of actual knowledge.”265

What type of evidence then is sufficient to establish actual knowledge beyond the 15-day time limit? In its challenge to the three Iranian arbitrators, the United States argued that the only sufficient evidence was “conclusive evidence (usually in the form of written documents) that the challenging party had full and accurate knowledge of the circumstances giving rise to a challenge.”266 The practice of appointing authorities generally confirms that the standard for establishing actual knowledge is generally high. In two leading cases, the appointing authorities respectively found a challenge request to be untimely only when the challenging party had directly received the information that formed the basis for the challenge more than 15 days before the notice of challenge was submitted.

In the US challenge to the three Iranian arbitrators, Iran and the Iranian arbitrators argued generally that the United States knew of the Iranian arbitrators’ practice of (p. 247) remitting a portion of their salary to the Iranian government long before it submitted its notice of challenge.267 In response to this allegation, the United States noted that it had “long harbored doubts” about the impartiality and independence of the Iranian arbitrators and had been “aware of rumors” about the Iranian practice.268 However, it argued that nevertheless “doubts, beliefs and rumors alone are not sufficient to sustain a challenge, which requires that doubts be justifiable.”269 The Iranian arbitrators and Iran immediately cited the US response as proof of prior knowledge of the Iranian practice.

The Appointing Authority rejected the Iranian position. In defining what evidence of actual knowledge entails, the Appointing Authority observed that, according to Tribunal practice, such evidence has included more conclusive evidence, such as “a prior statement by the challenging party.”270 The Appointing Authority's decision in the specific challenge before him rested on two pieces of evidence to which he assigned significant probative value: (1) a recent statement by the Tribunal's Secretary-General and his handwritten notes from a 1984 meeting indicating that a former Iranian arbitrator had stated in the presence of the US Agent that the Iranian arbitrators returned part of their salaries to Iran; and (2) a recent letter from a former Iranian arbitrator stating that a US arbitrator suggested at a 1981 Tribunal meeting that Iranian arbitrators may wish to return part of their salaries to Iran, if Iran deemed the salaries to be too high, and that the US Agent present at the meeting did not object to this proposal.271 Thus, in dismissing the US challenge as untimely, the Appointing Authority emphasized the evidence that he concluded demonstrated that the United States had been directly informed of the circumstances underlying the challenge.

In the challenge to Mr Thomas in the Gallo arbitration, the Canadian Government, the party resisting the challenge, argued that the claimant knew or should have known about the resumption of Mr Thomas's counsel work. In that case, Mr Thomas informed the parties that he was retiring from counsel work and withdrawing from his current law firm, Thomas & Partners, but later joined a new firm where he continued his work as counsel. Canada noted that, after Mr Thomas's disclosure of his planned retirement, the claimant continued to send submissions to him at the address of his prior law firm, that a procedural order of the tribunal listed the same address as his contact information, and that when Mr Thomas later notified the parties of his change of address, he referred to his “former office premises.”272 Thus, the Canadian Government argued that the claimant was on notice of (p. 248) Mr Thomas's continued counsel work well before it submitted its notice of challenge.273 The Appointing Authority did not find this evidence to be conclusive: “Merely maintaining an address at a law firm for some months after a declared date of departure does not by itself indicate continuing work as to counsel.”274

The Canadian Government also argued that the claimant should have known about Mr Thomas's continued counsel work because of press coverage of what Canada described as the “merger” between Mr Thomas's old law firm and a new law firm with which he became associated. The Canadian Government further argued that because of the modest size of the Canadian trade and investment bar, the claimant should have known of Mr. Thomas's status. As noted above, the Appointing Authority rejected the notion that the Rules contained a test of constructive knowledge of the circumstances underlying the challenge.275

() To whom should notice be sent; what form should notice take; sufficiency of the notice; who may send notice—Article 13(2)

Article 13(2) establishes who should be notified in the event of a challenge, as well as the form and contents of the notification. It requires that notice be sent to all other parties, to the arbitrator being challenged, and to the other members of the arbitral tribunal.

Article 13(2) also specifies that the notice of challenge must state the reasons for the challenge. The form in which notice of challenge should be communicated is not expressly addressed in the rule, but like all communications, this issue is governed by Article 2 of the Rules.276 Thus, a notice may be communicated “by any means of communication that provide a record of its transmission.” Oral challenges, even if capable of meeting this standard, are too easily made and thus not advisable; the act is serious and deserves the time for reflection provided by reduction to writing. Nor may a challenge be vague. The notice must state the reasons, although not necessarily providing the evidence justifying the challenge, or the challenge will be declared inadmissible.277

As far as the drafters of the 1976 UNCITRAL Rules were concerned, the purpose of the notice is to enable the other party to decide whether it will agree to the challenge and the challenged arbitrator to decide whether he will withdraw from office.278

The Iran–US Claims Tribunal and its appointing authority offer extensive practice in evaluating whether different notices of challenge presented to the Tribunal meet the formalities required under Article 11(2) of the Tribunal Rules, which is substantively identical to Article 13(2) of the 2010 UNCITRAL Rules.279

(p. 249) The challenge of Judges Kashani and Shafeiei, for example, appeared to meet all of these formal requirements. The Agent for the US wrote to the Appointing Authority on September 17, 1984, stating “[w]e have waited the full fifteen day period provided in the Rules. … ”280 The challenge was “notified” to the other party, the challenged arbitrators, and the other members of the Tribunal by the delivery of copies. That the letter was addressed to the Appointing Authority is not contrary to the Rules and was appropriate, given that Article 12(1)(6) of the Tribunal Rules provided for the Appointing Authority to decide upon the challenge. The operative paragraph of the cover letter stated:

[T]he Government of the United States, in accordance with Article III of the Claims Settlement Declaration and Articles 9–13 of the Tribunal Rules, is compelled to, and hereby does, challenge Arbitrators Kashani and Shafeiei. In the event that the Government of Iran does not expeditiously agree to the challenge, or that the challenged arbitrators do not quickly withdraw voluntarily, the United States requests, pursuant to Article 12(1)(6) of the Tribunal Rules, that you decide and sustain the challenge.281

Attached to this cover letter was a 17-page memorandum setting forth the factual and legal basis for the challenge. The three challenges by Iran of Judge Briner, the challenge by Iran of Judge Arangio-Ruiz, and the claimant's challenge of Judge Noori in Case No 248 likewise all met the formal requirements of a challenge in Article 11.

In stark contrast to these challenges is the January 1, 1982 letter from the Government of Iran to Nils Mangård objecting to his continued service as an arbitrator. The status of this letter was considered both by the Tribunal and the appointing authority.

The Tribunal having, as described above, resolved the problem of the merits of the Iranian objection to the Tribunal proceeding with its work as long as Judge Mangård remained a member, the Tribunal with little explanation set itself a new task: deciding whether the Iranian letter of January 1, 1982 to Judge Mangård constituted a challenge under Article 11 of the 1976 UNCITRAL Rules. The lack of any need for the Tribunal to take up this question, given its holding rendered on the first question, is clear. Moreover, the question of whether the January 1, 1982 letter constituted a challenge under the UNCITRAL Rules was clearly for the appointing authority to decide. Nonetheless, the Tribunal addressed the question briefly and concluded “that the letter of January 1, 1982, and its attachment constitute a challenge pursuant to Article 11 of the UNCITRAL Rules.”282 In contrast, Justice (p. 250) Moons later concluded that the notification was not intended as a challenge and cannot “be said to state the reason for the challenge within the meaning of Article 11 of the [1976] UNCITRAL Rules.”283

Justice Moons established a two-step test when considering whether a challenge is made:

objections lodged by a High Contracting Party to a duly appointed arbitrator will be admissible only if they satisfy inter alia the following conditions:

  1. () the High Contracting Party must intend to use the legal remedy of a challenge as provided for in the UNCITRAL Rules;

  2. () the regulations contained in Article 11 of the [1976] Rules must have been observed.284

Thus to be admissible the objections must be intended to be a challenge under the UNCITRAL Rules and must meet the formalities of a challenge required by the UNCITRAL Rules.

As to the first requirement, Justice Moons noted a letter of the Agent of Iran dated February 3, 1982:

My letter of January 1, 1982 and the enclosure in clear terms stated the position of my Government that due to Mr. Mangård's lack of neutrality, the Islamic Republic of Iran disqualified him and requested his resignation. In taking that position the Islamic Republic of Iran would see no relevance to Article 11 of the [1976] UNCITRAL Rules.285

Justice Moons concluded that the Government of Iran had not intended by its January 1, 1982 letter to initiate the UNCITRAL challenge procedure.286

The Appointing Authority also concluded that the formalities required to initiate a challenge had not been fulfilled. In his view these formalities, including the statement of reasons for the challenge, are intended to provide an opportunity:

  1. () to the other party: to determine whether there is any reason for it to agree to the challenge;

  2. (ii ) to the challenged arbitrator: to determine whether there is any reason for him to withdraw from his office;

  3. (iii ) to the Appointing Authority: to determine whether the notification of the challenge was made in good time and whether what is set out in the notification can be construed as an allegation that the circumstances referred to in Article 10(1) [of the 1976 UNCITRAL Rules] have been satisfied.287

(p. 251) Finding that the January 1, 1982 letter and its enclosure “contain neither a sufficiently clear description of the circumstances giving rise to the accusation against Mr. Mangård …, nor any indication of the dates on which the actual event on which the disqualification is based … and on which this event came to the knowledge of the party alleging disqualification,” the Appointing Authority concluded that the letter was not admissible as a challenge under the 1976 UNCITRAL Rules.288

The Appointing Authority, Judge Haak, would closely examine whether Iran had provided adequate reasons in its notice of challenge in the challenge of Judge Krzysztof Skubiszewski, President of the Tribunal. In that context, the Appointing Authority faced a notice strongly insinuating that the President had unilaterally and secretly acted to deny a request from Judge Oloumi to postpone deliberations in Case No B61, with prejudice to Iran. In view of the seriousness of the accusations, the Appointing Authority emphasized that:

Filing a notice of challenge is not an initiative that should be taken lightly. Challenge proceedings disrupt the normal activities of the Tribunal. The reasons why it is made must therefore readily and clearly appear to the recipients of the notice of challenge.289

Further, in reviewing Iran's notice of challenge, the Appointing Authority found that certain basic information was lacking, such as when Judge Oloumi's request for postponement was made and the precise date on which it was rejected, as well as how the decision to reject his request was made and who took the decision.290 On that basis, the Appointing Authority dismissed Iran's notice of challenge as “too vague.”291

In subsequent challenge proceedings, Judge Haak, as Appointing Authority, would articulate the sufficiency standard as follows:

A Notice of Challenge must contain “a sufficiently clear description of the circumstances that allegedly gave rise to justifiable doubts as to impartiality and independence of the challenge arbitrators” and the grounds for a challenge are admissible where the respondent party could not reasonably say that they were not sufficiently appraised of the allegations underlying the challenge. Allegations in the Notice of Challenge must therefore contain a sufficiently clear description of the circumstances complained of and of the dates on which those circumstances came to the knowledge of the challenging party.292

Thus, the US Government's notice of challenge of Judge Seifi was sufficient because in asserting that the Iranian judge's prior participation in a commercial arbitration would substantially influence his participation in any future proceedings in Case No B61, the notice clearly identified the “purported issue conflict that forms the essence of” the US challenge.293 Similarly, the subsequent notice of challenge of Judge Brower was adequate because Iran had clearly identified the undisputed fact which purportedly gave rise to (p. 252) justifiable doubts, a phone conversation between Judge Brower and a candidate for the position of third country arbitrator on the Tribunal.294

The central question raised and eventually sidestepped by the drafters of the 1976 UNCITRAL Rules was whether or not some evidentiary material should be provided with the notice to substantiate the statement of reasons for the challenge. In fact, the Ninth Drafting Committee Session seemed to be in general agreement that “[t]he provision that the notification of challenge should simply state the reasons for challenge did not seem adequate.”295 The only dissent came from the German representative who was concerned that requiring documentary evidence might unfairly limit the acceptable reasons for challenge.296 Ultimately, the drafters did not require the submission of documentary evidence, a decision which appears to have been a consequence of their adoption of the strict 15-day rule on the raising of the challenge. Namely, it would be counterproductive to strictly require not only the notice of challenge, but also the assembly of supporting evidence within fifteen days.

In the challenge to Judge Briner in Case No 55, the Appointing Authority dealt with the question of whether supporting evidence or other supplementary materials would be allowed under Article 11 of the 1983 Tribunal Rules. In the notice of challenge sent to the Appointing Authority and to all the necessary parties, the Iranians requested that they be allowed to supplement their notice of challenge with a “memorandum together with evidence in support of the relevant factual and legal issues.”297 Judge Briner's response to the notice of challenge addressed the Iranian request by suggesting that the Tribunal Rules did not allow the submission of any further memoranda or evidence and that the notice of challenge itself should include all the material necessary to allow the other party and the challenged arbitrator to make a determination on the challenge.298

The Appointing Authority disagreed with Judge Briner's reasoning and granted the Iranians’ request:

in my opinion Article 11, paragraph 2, of the Tribunal Rules does not oppose your sending me a Memorandum to complement the Notice of Challenge of Mr. Briner with respect to Case No 55 dated 13 September 1988, in which the reasons for this challenge set out in the above Notice will be further developed and in which evidence will be put forward to support these reasons.299

Justice Moons’ decision makes perfect sense in our view. The 15-day limit and the decision not to require evidence, along with the notice of challenge, indicate the UNCITRAL drafters’ awareness that the notice might not include all the information necessary to determine the validity of a challenge.

Lastly, there is the question of who may initiate a challenge. Although not expressly excluding other initiators, the UNCITRAL Rules only provide that a challenge may be (p. 253) made by a party to the arbitration.300 This view was supported by the Tribunal in its decision on Iran's challenge of Judge Mangård in 1982: “the only method by which an arbitrator may be removed from office is through challenge by a High Contracting party … ”301 If one or two members of a panel find their colleague objectionable, yet such colleague is not challenged by a party, the one or two members of the panel have no recourse but to continue with the status quo or resign.302

() Procedure if challenge is accepted by all other parties or challenged arbitrator withdraws—Article 13(3)

Article 13(3) sets forth the process for appointing a substitute arbitrator if either all parties agree to the challenge or the challenged arbitrator voluntarily withdraws. There were essentially two issues that arose in the drafting of Article 11(3) of the 1976 UNCITRAL Rules, which is substantially similar to Article 13(3) in many respects. The first entailed defining exactly what procedures would be used to appoint the substitute arbitrator. The preliminary draft of the rule stated simply that “a substitute arbitrator shall be appointed pursuant to the procedure applicable to the initial appointment.”303 There was some confusion among the delegates as to whether this meant that the parties could only use the procedure already used to appoint the challenged arbitrator, eg if the appointing authority had designated the arbitrator then only the appointing authority could appoint the new arbitrator, or whether they could use any procedure available under the relevant rules.304

According to the principal drafter of the original language of the rule, Professor Sanders, the appointing authority should choose the new arbitrator for a simple reason. The fact that the appointing authority had been called upon to make the original appointment meant that the party associated with the challenged arbitrator had not cooperated in the first place by making a nomination of his own.305 The Committee rejected this thinking on the grounds that the parties should not be penalized for failing to make the appointment in the first place, especially in light of the fact that it was the appointing authority who had chosen the challenged arbitrator.306 The adopted language makes it clear that if the other party agrees to the challenge or the challenged arbitrator withdraws, the original procedures on appointment of arbitrators—under Article 8 in the event of a sole arbitrator or Article 9 in (p. 254) the case of a three member panel—should be followed, including the right of each party to appoint an arbitrator.307

The second issue addressed by the Drafting Committee involved safeguarding a challenged arbitrator's reputation in the event that the challenge was accepted under Article 11(3) of the 1976 UNCITRAL Rules (now Article 13(3) of the 2010 UNCITRAL Rules). For example, the Mexican representative expressed concern that if one party challenged the other party's arbitrator and the other party accepted a reason for the challenge which the arbitrator contested, “the arbitrator's honor would be compromised.”308 The text of Article 11(3) of the 1976 UNCITRAL Rules was therefore modified “in order to remove any implication of dishonor from the voluntary withdrawal of an arbitrator or the removal of an arbitrator by the mutual agreement of the parties.” In other words, upon the resignation or withdrawal of a challenged arbitrator there would be no implication of acceptance or acknowledgment that the reasons for the challenge were valid.309

Article 13(3) differs from original Article 11(3) of the 1976 UNCITRAL Rules in one important respect. Pursuant to Article 13(3), a challenge is effective if agreed to by “all parties,” whereas corresponding Article 11(3) of the 1976 UNCITRAL Rules requires agreement only by “the other party.” While the revised language was proposed, in part, to account for the possibility of multi-party arbitration,310 the Working Group quickly realized that the revision raised the broader question of whether “all parties should be given a right to oppose the challenge, or whether that right should be limited to the party that appointed the challenged arbitrator.”311 Delegates were divided on the answer.

(p. 255) Those opposing the requirement of unanimous agreement raised concerns that a party's right to object to the challenge could be abused, particularly where “a respondent would have tactical reasons to delay the arbitral proceedings by forcing a lengthier challenge process.”312 According to the travaux préparatoires:

[I]t was said that in a case with two respondents, if one of them challenged the arbitrator appointed by a single claimant, the effect of requiring all parties to agree would be to give the second respondent a provisional veto over the challenge. This would force the challenging party to bring its challenge before an appointing authority, despite the willingness of the claimant that had appointed the challenged arbitrator to accept the challenge.313

Other members of the Working Group strongly favored the requirement of unanimous agreement. They believed that once a party appointed an arbitrator, that party “should not retain a greater stake [than any other party] in the future service of that arbitrator in the proceedings.”314 Thus, they maintained that “differentiating among the arbitrators based on who appointed them would run contrary to the fundamental principle whereby all arbitrators were equally appointed for the overall purpose of the arbitration.”315 Proponents also noted that this approach was consistent with the 1976 UNCITRAL Rules, where “the other party” was required to agree.316

Article 13(3), as adopted, thus gives any party the right to oppose a challenge of an arbitrator, though in practice it is the agreement of the party with the right to appoint the arbitrator that in most cases will cast the deciding vote.

Article 13(3) does not expressly address the legal effect of all the parties’ agreement to support the challenge of an arbitrator. During Working Group discussions, a proposal was made to state in the rule that unanimous agreement of the parties would terminate the mandate of the challenged arbitrator whether or not the challenged arbitrator agreed to withdraw.317 That proposal was seen as providing an opportunity to better clarify the date when the arbitrator's removal would take effect. It was observed that that question was important in practice, namely when the challenge occurred during the arbitral proceedings, when, for instance, provisional measures were to be taken by the arbitral tribunal.318

Objections to the proposal were raised on the ground that “in certain jurisdictions, the applicable law included statutory provisions on the mandate of the arbitrators, which could not be merely terminated by agreement of the parties.”319 Considering this objection, and recognizing that the absence of such an express provision in the 1976 UNCITRAL Rules had not created difficulties in practice, the Working Group rejected the proposal for the additional language.320 Thus, on the important question of termination of the arbitrator's mandate, Article 13(3) defers to the governing arbitration law.

(p. 256) () Timeline for seeking a decision on a challenge—Article 13(4)

Article 13(4) establishes a two-tiered timeline for seeking a decision on the challenge by the appointing authority. Within fifteen days of the date of the notice of challenge, all the parties may agree to the challenge or the challenged arbitrator may withdraw. In either situation, the challenge is resolved and the appointing authority need not be approached for a decision. However, in the absence of agreement or withdrawal, the challenging party may seek a decision on the challenge within 30 days from the date of the notice of challenge. The 30-day time period is, of course, only the outer limit on when a party may seek a decision from the appointing authority. If before expiration of the initial 15-day time period, one of the parties indicates that it does not agree to the challenge or the challenged arbitrator communicates that he or she will not withdraw, the challenging party may immediately enlist the services of the appointing authority to resolve the challenge. After expiration of the 30-day time period, a challenging party's right to seek a decision on the challenge, unless otherwise agreed, is waived.

The timetable on seeking a decision on a challenge is new to the 2010 UNCITRAL Rules, but raised no significant concerns among Working Group delegations.321

C. Extracts from the Practice of Investment Tribunals

Methanex Corp and United States of America, Award, (August 3, 2005) (ICSID administered, 1976 UNCITRAL Rules, NAFTA Chapter Eleven), Part II, Chapter E, at 19:

32  …. Mr. Christopher's resignation was voluntary; and his resignation cannot be treated as an admission of Methanex's factual allegations. To the contrary, Article 11(3) of the [1976] UNCITRAL Rules expressly provides that resignation “does not imply acceptance of the validity of the grounds for the challenge”.

Challenge Decision of April 15, 1993, reprinted in part in (1997) XXII Ybk Commercial Arb 222, 224–25:

  1. [3]  It is to be recalled that the claimant's first Party Arbitrator was appointed by the claimant and that his independence had been duly recognized by the respondent's first Party Arbitrator as also by the respondent itself, with a full knowledge of the background of the claimant's first Party Arbitrator's position. The challenge raised later on against the claimant's Party Arbitrator by the respondent, for alleged facts preceding his appointment, could therefore not affect in any way his status as long as no competent authority had removed him from office. The respondent had the possibility of seeking his removal under Arts. 10, 11 and 12 of the [1976] UNCITRAL Rules, but it refrained from doing so.

  2. [4]  It follows that claimant's first Party Arbitrator held his office properly throughout, from the moment of his appointment to the moment of his resignation. The resignation in itself cannot be considered to be a recognition of the challenge brought earlier by the respondent against the claimant's first Party Arbitrator. This results explicitly from Art. 11(3) of the [1976] UNCITRAL Rules which provides in this respect that an arbitrator subject to a challenge may “after the challenge, withdraw from his office,” but that, in no case, “does this imply acceptance of the validity of the grounds for the challenge.”

(p. 257) D. Extracts from the Practice of the Iran–US Claims Tribunal

() Tribunal Rules (1983), Article 11(1)

Letter of the Agent of the United States to the Appointing Authority initiating the Challenge of Judges Kashani and Shafeiei, September 17, 1984, reprinted in Intl Arb L Rev 9344:

We have waited the full fifteen day period provided in the Rules before bringing this challenge in order to give the Government of Iran and the President of the Tribunal the fullest opportunity to take appropriate action in response to the (3 September 1984) violent conduct by Messrs. Kashani and Shafeiei.

Memorandum of Amoco Iran Oil regarding the Challenge by Iran of Judge Briner in Case No 55, November 2, 1988, reprinted in 20 Iran-US CTR 233, 234, 237 (1988–III) (footnotes omitted):

Article 11 of the [1983] Tribunal Rules provides that a challenge to an arbitrator must be presented “within 15 days after the circumstances mentioned in articles 9 and 10 become known to that party”. This time limit is jurisdictional; if it has not been observed, the challenge may not be considered. And, just as Iran has—the burden of proof in establishing that its challenge is justified, so also it has the burden of proof in establishing that it has standing to bring the challenge—that is, that it learned of the circumstances that gave rise to the challenge no more than 15 days before acting on that information.

5. The reasons for the 15-day requirement of Rule 11, and its mandatory nature are apparent. First, a party processing information that could lead to a challenge may be tempted to wait until the proceeding is far enough advanced that he has some feeling for (or information about) its likely result; allowing him to make the challenge at that point is obviously unfair and a perversion of the arbitral process. Second, a party whose purpose is delay may find it in his interest to make a challenge at a time when it will cause the maximum disruption and delay in the arbitral proceedings and, consequently, maximum prejudice to the other party.

Letter of the Appointing Authority, Ch M J A Moons, to the Agent of the Government of Iran, Mohammad K Eshragh, November 10, 1988, at 1:

I have the honour to confirm herewith the verbal agreement we made on 9 November last to the effect that:

  1. () On or before November 28, 1988 you will produce evidence that with respect to the challenge of Mr. Briner the time limit provided in Article 11 of the [1983] Tribunal Rules has been observed; …

Reply Memorandum of Iran regarding the Challenge of Judge Briner in Case No 55, November 28, 1988 at 6–9 and Exhibit No 4, reprinted in 20 Iran-US CTR 260, 266–67, 314–16, 319 (1988–III) (footnotes omitted):

A. Amoco, not Iran, Has to Carry the Burden of Showing that Iran Had Acquired Knowledge of the Relationship Over 15 Days Before Challenge

  1. 15. Amoco, for the first time in its Memorandum of 2 November 1988, has come up with the idea that Iran, as a requirement of establishing its “standing to bring the challenge,” has to show that it did not know about the connection between Mr. Briner and Morgan Stanley earlier than 15 days before it brought the challenge. Legal Memorandum at 2. This issue, in Iran's view, has nothing to do with the standing, or locus standi, in stricto sensu, to bring the challenge. All there is to prove as a matter of locus standi is that the right party, or parties, have (p. 258) brought the challenge. As stated in the Notice of Challenge, and further explained in the Memorandum, the challenge has been made by the Government of the Islamic Republic of Iran and other Respondents to Case No 55 pursuant to the [1983] Tribunal Rules, Articles 9–12, and note 1 thereto. This is all there is to show in regard to the standing to bring the challenge and Amoco does not, and cannot possibly, contest the issue of locus standi.

  2. 16. What Amoco, in fact, means—but does not clearly say it to avoid the burden of proof—is that the issue is not justifiable because the right to challenge has been time-barred, or waived. Amoco alleges, but fails to prove, that Iran acquired knowledge of Mr. Briner-Morgan Stanley's relationship more than 15 days before it brought the challenge, and thus the right to challenge is time barred, or waived in view of 15-day time limit provided in Article 11(1) of the [1983] Tribunal Rules.

  3. 17. Once the issue raised by Amoco is rightly named, and put in proper context, it becomes clear that what Amoco is trying to do, though in a contorted manner, is to place the burden of proof for its affirmative assertion on the shoulder of the other party denying the allegation. The general rule governing the burden of proof is that it lies on him who affirms a fact—as Amoco does—not on him who denies it, which is Iran's position. This rule is based on a latin maxim, fundamental to every system of law and justice: ei qui affirmat, non ei qui negat, incumbit probatio.

  4. 18. This principle, a dictate of common sense, is universally observed at national and international levels. According to Sandifer:

    The broad basic rule of burden of proof adopted, in general, by international tribunals resembles the civil law rule and may be simply stated: that the burden of proof rests upon him who asserts the affirmative of a proposition that if not substantiated will result in a decision adverse to his contention. (Footnote omitted.) D. Sandifer, Evidence Before International Tribunals, Revised Ed. 1975, p. 127.

  5. 19. The rule of law specifically dealing with the question at hand is fully in accord with that general principle. The burden of proving a case of waiver and acquiescence is on the person who suggests it. Lord Selbors speaking for the Privy Council in Holland v. Cassidy (1888) 13 App. Cas. 170 at 178. The authorities provided by Amoco in support of its assertion that Iran carries the burden of proving that it did not know of the relationship earlier than 15 days before the challenge was brought, are too scanty to establish that the general rule of burden of proof is reversed when it comes to the challenge procedure. It follows, therefore, that the Appointing Authority should take a decision adverse to Amoco's contention, and dismiss its claim that Iran's right to challenge has been time barred or waived.

    Amoco's argument on the issue of burden of proof is irrelevant for a number of legal reasons, as will be shown below. Amoco contends that Iran has a burden of proof under Rule 11(1) of the [1983] Tribunal Rules to show that it learned of the circumstances that gave rise to the challenge no more than 15 days before acting on that information. Amoco contends that this is a jurisdictional requirement which, if not fulfilled, precludes Iran from having the standing to bring the challenge. This argument is wrong and irrelevant.

    It is wrong, first, because it misreads the [1983] Tribunal's Rules, Article 10(2) states that “(A) party may challenge the arbitrator appointed by him only for reasons of which he becomes aware after the appointment has been made” (emphasis added). Thus, for party-appointed arbitrators, there may be an implied burden of proof of the kind proposed by Amoco to show that prior to the appointment such reasons were unknown. Indeed, Amoco's reference to the oeuvres préparatoires of the [1976] UNCITRAL Rules (see p. 5fn. 4 of Amoco's Response) confirms this implication. However, Mr. Briner is not a party-appointed arbitrator but a neutral arbitrator appointed by the two party-appointed arbitrators. There is no suggestion whatsoever that such a rule applies in the case of a neutral arbitrator so appointed. Indeed, the inclusion of such a specific provision in the [1976] UNCITRAL Rules relating only to party-appointed arbitrators implies that the opposite is true in the case of neutral arbitrators.

    (p. 259) The assumption made by Amoco that the Government of Iran was involved with the appointment of Mr. Briner because he was appointed “by agreement between the United States and Iranian arbitrators” and that “(I)t stands to reason that Iran would have investigated his (Mr. Briner's) activities thoroughly before agreeing to his appointment” (see Amoco's Response pp. 7–8) is simply wrong. It is a clear rule of law that a party-appointed arbitrator does not act as the agent of the party who appointed him in relation to such questions, especially where the neutrality of party-appointed arbitrators is considered as an important rule of international arbitration, a point which Amoco itself has stressed.

    Finally, it would be quite extraordinary if the 15-day limit were a jurisdictional bar of the kind suggested by Amoco, especially where, as here, the Respondents have no specific right to challenge the award under the Algiers Declarations. To see this time-limit as jurisdictional and to make no provision warning a party that failure to meet such a time-limit would deprive that party of all its rights would be an extraordinary conclusion to reach. As comparison, if one looks at time-limits for filing appeals against judgments, they all put a party on notice of the loss of right entailed if the time-limit is not met.

    Institutional arbitration bodies want to see the values of arbitration upheld. To effect this they have an administrative discretion quite unlike that in the judicial system. It is for this reason that the General Counsel of the ICC commented on Article 2(8) of the ICC Rules as follows:

    Naturellement, la cour dispose d’un pouvoir d’appréciation des difficultés qui pourrait résulter de l’application du délai pour la recusation d’un arbitre fondée sur des motifs survenus en cours de procedure.

    An officer of the ICC would not have expressed such a view if the time-limit for the challenge were to be considered as being jurisdictional in nature. Two German authors commenting on Article 11 of the [1976] UNCITRAL Rules, and Article 13 of the UNCITRAL Model Law have come to the same conclusion.

    All the [1983] Tribunal Rules say in regard to the challenge of a neutral arbitrator is that within 15 days of the circumstances giving rise to justifiable doubts becoming known to a party he shall make a challenge stating the reasons for the challenge. The relevant circumstances became known on and after 1 September with Mr. Briner's disclosures. Indeed the 15 day limit is precisely to prevent parties being dilatory in objecting to such disclosures, the disclosure itself being what triggers the time limit. This being said it will be noted that all the challenger has to do is state the “reasons for challenge”, it says nothing about having to fulfill any alleged burden of proof.

Letter of Attorney for Amoco Iran Oil, Mr Brice M Clagett, to the Appointing Authority regarding the Challenge by Iran of Judge Briner in Case No 55, December 1, 1988, at 1–2, reprinted in 20 Iran-US CTR 325 (1988–III):

1. Iran argues elaborately, but wholly unpersuasively, that the burden of proof is on Amoco to show that Iran had prior knowledge of the basis for its challenge. Iran ignores the elementary principle, that, when the facts of a matter are wholly within the possession of one party and inaccessible to the other party, it is the first party that bears the burden of proof … That principle is based on considerations of fairness and practicality that are too obvious to need explanation.

Letter of Judge Robert Briner to the Appointing Authority, Ch M J A Moons, August 3, 1989, at 2, reprinted in 21 Iran-US CTR 348 (1989–I):

I should furthermore like to mention that the fifteen days time limit of Article 11, paragraph 1 of the [1983] Tribunal Rules do not seem to have been respected as all allegations made in the challenge of 28 July 1989 are based either on the award in Case No 39 (document 389) filed on 29 Jun 1989, or on the “Statement by Judge Khalilian as to why it would have been prevented to sign the Award and its annexes (Document 391) filed on 30 June 1989.”

Decision of Appointing Authority on the Second Challenge by Iran of Judge Briner, September 19, 1989, at 9–12, reprinted in 21 Iran-US CTR 384, 391–94 (1989–I): (p. 260)

Under Article 11[1] of the [1983] Tribunal Rules … a party can file a notice of challenge to good effect only within fifteen days after the circumstances mentioned in Articles 9 and 10 of the Tribunal Rules “become known to the party”.

The question that arises is at what time should this be deemed to have been so.

With the exception of the allegation that Mr. Briner, after the discovery of computational error in the DCF calculation … arbitrarily reduced the amount of money to be awarded to the claimant by only $10 million and then threatened to increase the amount of gain, all the allegations on which the challenge is based are mentioned in Mr. Khalilian's statement of 30 June 1989, which was received by the Agent of the Islamic Republic on 5 July 1989, and/or the English version of the Award, dated 29 June 1989, which was received by the Agent of the Islamic Republic on 30 June 1989.

The notice of challenge is dated 28 July 1989 and was received in my office on that date.

Hence the notice of challenge—to the extent that the challenge set forth in it is based on the last-mentioned allegations—was not presented within in the period set for that purpose by Article 11 of the [1983] Tribunal rules, so that it cannot to that extent be entertained.

Letter of the Agent of the Government of the United States to the Appointing Authority, September 19, 1989, reprinted in 21 Iran-US CTR 395 (1989–I):

While consideration of this “whole context” could not in any case lend substance to this meritless challenge, Mr. Nobari's suggestion should be seen for what it is—an effort to circumvent the Tribunal Rules of Procedure. Article 10, paragraph 1 of the [1983] Tribunal Rules provides that an arbitrator may be challenged “if circumstances exist that give rise to justifiable doubts as to the arbitrator's impartiality or independence.” Article 11, paragraph 1 requires that a party who intends to challenge an arbitrator send notice of the challenge “within 15 days after the circumstances mentioned in articles 9 and 10 become known to that party.” These provisions simply afford no basis for consideration of various alleged circumstances of which Iran has been aware for more than 15 days.

Decision of Appointing Authority on the Third Challenge by Iran of Judge Briner, September 25, 1989, at 3, reprinted in 21 Iran-US CTR 396, 398 (1989–I):

b. It is not consistent with the system of the [1983] Tribunal Rules that the Appointing Authority, deciding on a challenge, should take into account circumstances that came to the knowledge of the challenging party earlier than the beginning of the period of 15 days mentioned in article 11 of those rules. This prevents me from complying with the request mentioned above under A.d. [that “since the challenge has been made on general grounds, Mr. Briner's participation in the ‘money laundering offence’ in India should not be considered an isolated incident, but must be related in the whole context of Mr. Briner's past behaviour”].

Decision of the Appointing Authority on the Challenge of Judge Bengt Broms, September 30, 2004, reprinted in (October 2004) 19(10) Mealey's Intl Arb Rep B-1:

30. Nor is there anything in the [1983] Tribunal Rules or in the facts and arguments presented by Ms. Riahi and her counsel to suggest that the request for Judge Broms’ recusal somehow stopped the running of the fifteen-day time limit for giving notice of challenge. The [1983] Rules do not give a party the option of either seeking recusal or initiating a challenge. It is clear from the record that Ms. Riahi and her counsel were aware, as early as July 2, 2003, of circumstances likely to give rise to the justifiable doubts as to Judge Broms’ impartiality or independence with respect to the consideration of the application. Judge Broms’ failure to disqualify himself from participating in the review of the application, and his refusal even to respond to the recusal request do not constitute new or independent circumstances giving rise to justifiable doubts as to his impartiality and independence. The [1983] Tribunal Rules place him (p. 261) under no obligation to disqualify himself or to respond to the request. Ms. Riahi and her counsel cannot therefore argue that prior to January 13, 2004, there were no grounds for challenging Judge Broms, because he might have decided to withdraw voluntarily. The grounds for challenging Judge Broms were those set out in the request of July 2, 2003, in support of his recusal. More than six months elapsed before the notice of challenge was issued on January 26, 2004. This far exceeds the fifteen-day time limit set forth in Article 11(1) of the [1983] Tribunal Rules, and the challenge must be therefore … declared inadmissible for failure to comply with this time limit.

Letter from the US Agent, Mr Clifton Johnson, to the Appointing Authority, Mr W E Haak, March 10, 2006, at 15–17 (footnotes omitted):

The Tribunal Rules require actual prior knowledge, as opposed to constructive prior knowledge, of the circumstances giving rise to a challenge as a prerequisite for waiver.

A plain reading of the [1983] Tribunal Rules demonstrates the very high standard for proving prior knowledge of circumstances that would waive a party's right to bring a challenge. Article 11(1) requires a party to bring a challenge within 15 days after the circumstances giving rise to its justifiable doubts “became known” to that party. The inclusion of the phrase “became known,” as opposed to “should have known” or “could have known” is of key significance. It establishes that the 15-day time period within which to bring a challenge begins to run only after a party has obtained actual knowledge of the relevant circumstances giving rise to the challenge.

An analysis of Article 29 of the [1983] Tribunal's Rules, which addresses the same concepts of knowledge and waiver, confirms this conclusion. Article 29 provides that a party who “knows” of an incident of noncompliance with the Rules, yet proceeds with the arbitration without objecting, waives the right to object. According to the travaux préparatoires of the UNCITRAL Arbitration Rules, upon which the Tribunal Rules are based, early drafts of Article 29 contained the phrase “knows or should have known.” However, after careful deliberation, UNCITRAL removed the phrase “should have known,” resolving affirmatively “not to add a provision dealing with constructive waiver.”

Nor should a constructive waiver test be read into Article 11(1) of the [1983] Tribunal Rules. The UNCITRAL drafters were appropriately cautious about depriving a party of its right to object under Article 29, which was intended to address “minor violations of the procedure.” Article 11(1), in contrast, deals with a party's fundamental right to an impartial and independent tribunal Accordingly, where deprivations of a party's fundamental—as opposed to minor—rights are at risk, a constructive waiver test is, a fortiori, unwarranted and inappropriate.

The practice of the Appointing Authority regarding waiver is to require conclusive evidence of a party's actual knowledge of the circumstances giving rise to a challenge prior to the 15-day period.

Throughout the life of the Tribunal, the Appointing Authority, whenever called upon to decide a challenge, has carefully confronted claims that a party has waived its right to raise a challenge. The practice in this regard demonstrates the clear rule that, before a party may be deprived of its right to bring a challenge, there must be conclusive evidence (usually in the form of written documents) that the challenging party had full and accurate knowledge of the circumstances giving rise to a challenge more than 15 days before the challenge was brought.

Iran's challenge of former Tribunal President Briner, for example, was dismissed as untimely because Iran was undeniably found to have had prior knowledge through the filing of documents with the Tribunal's Registry that pre-dated the 15-day time limit. Iran's challenge, which was filed on July 28, 1989, claimed that Mr. Briner was responsible for numerous procedural irregularities with respect to the rendering of the award in Case No 39. Nearly a month earlier, however, on June 30, 1989, Iranian Arbitrator Khalilian had filed a statement with the Registry entitled “Why It Would Have Been Premature to Sign the Award,” which outlined in detail his concerns with Chamber Two's resolution of Case No 39.

In dismissing most allegations comprising the challenge as untimely, the Appointing Authority found that, with the exception of one allegation:

(p. 262) all the allegations on which the challenge is based are mentioned Mr. Khalilian's statement of 30 June 1989, which was received by the Agent of the Islamic Republic of Iran on 5 July 1989 and/or the English version of the Award, dated 29 June 1989, which was received by the Agent of the Islamic Republic on 30 June 1989.

Iran was deemed to have waived its right to bring the challenge only on conclusive evidence—the filing and subsequent transmittal to the Agent for Iran of Mr. Khalilian's statement—that Iran had prior actual knowledge of the circumstances giving rise to the challenge.

This rule was again applied in the February 20, 1999, challenge of Mr. Noori on the basis that he had a conflict of interest arising from his prior employment as head of the National Industries Organization of Iran (“NIOI”), which allegedly controlled the respondent in Case No 248. The claimant said he had first obtained knowledge of Mr. Noori's alleged conflict of interest on February 18, 1999. Mr. Noori, the Agent for Iran, and the respondent disputed the timeliness of the challenge based on the short time between the dates on which the challenging party claimed to have obtained knowledge and on which the challenge was filed. They argued that it was unlikely that the claimant had not been aware of Mr. Noori's position with NIOI sooner because his others were aware of Mr. Noori's position.

The Appointing Authority rejected Iran's timeliness claim observing:

Failing adequate refutation of the prima facie evidence of [the claimant's] ignorance of Mr. Noori's aforesaid position with NIOI up to 18 February 1990, I cannot but assume that the challenge was filed within the time limit of article 11 of the [1983] Tribunal Rules.

Notably, the appointing authority rejected Iran's theory of constructive knowledge, again adhering to the rule that absent conclusive proof that the challenging party had prior knowledge of a full and accurate nature, he cannot be deemed to have waived his right to bring the challenge.

The challenge of Mr. Skubiszewski on May 20, 1999, also confirms this rule. Iran accused Mr. Skubiszewski of inappropriate conduct in connection with his legal assistant's efforts to obtain information relevant to Case No A/28 from a Dutch Bank. The United States argued that Iran was most likely aware of the facts underlying the challenge prior to a letter dated May 6 from the Bank which included a copy of the letter in response to inquiries made by Mr. Skubiszewski's legal assistant.

The Appointing Authority found:

It seems that on both sides of the argument there are matters of speculation and that it would be a doubtful task to try to establish the degree of necessary knowledge in the mind of the Iranian Agent or his colleagues on a particular day of the fifteen available. I therefore take the view that it would be wrong in this case to reject the First Challenge on the basis of speculations about its timeliness?

Thus, “speculations,” like general concerns, doubts, or rumors, do not suffice to establish a challenging party's prior actual knowledge.

A final example of application of this rule was the challenge of Judge Broms on January 13, 2004. The appointing authority dismissed the challenge as untimely, finding that claimant's application filed with the Tribunal on July 2, 2003—several months before the challenge—contained clear and unequivocal statements demonstrating her prior knowledge of the circumstances giving rise to her challenge. Referencing the assertions in the application that tracked the assertions in the challenge, the appointing authority ruled that these assertions “leave[] little doubt that at least as early as July 2, 2003, [the claimant] and her counsel were aware of circumstances likely to give rise to justifiable doubts. … ”

Thus, over the life of the Tribunal, when called upon to resolve a party's challenge, the appointing authority, recognizing the seriousness of depriving a party of its right to challenge an arbitrator, has only dismissed a challenge for lack of timeliness when presented with conclusive evidence establishing that the challenging party had obtained actual knowledge of all relevant circumstances giving rise to the challenge more than 15 days before the challenge was filed. As demonstrated in the following section, the evidence Iran relies on to show that the United States has waived its right to bring the present challenge falls far short of this standard.

(p. 263) Decision of the Appointing Authority, W E Haak, in the Challenge of Judges Assadollah Noori, Koorosh H Ameli, Mohsen Aghahosseini, April 19, 2006:

  1. 24. Iran and the Iranian arbitrators claim that the payments have occurred since the creation of the Tribunal and that the United States has been aware of such payments since 1981. The United States argues that it only became aware of the payments from Judge Noori's statement of 6 December 2005. The United States further argues that actual prior knowledge of the facts (as opposed to constructive knowledge) is required to be shown. The United States asserts that in the present case, only “vague statements or rumors” existed prior to Judge Noori's statement of 6 December 2005 (Letter of the United States dated 10 March 2006).

  2. 25. The United States is correct in stating that evidence of actual prior knowledge on the part of the challenging party of circumstances giving rise to a challenge must be shown. Whether such actual knowledge existed or not is a matter for me as appointing authority to determine on the basis of evidence submitted. In the past history of the Tribunal such evidence has included, for example, a prior statement made by the challenging party (Decision of the appointing authority in the challenge of Judge Briner, 19 September 1989).

  3. 26. In the present case, the evidence submitted to me includes a Statement by Secretary-General Pinto that he and the Tribunal had been aware for more than twenty years that the Iranian arbitrators made payments to Iran. Mr. Pinto supported his declaration with handwritten notes from a meeting of the Committee on Administrative and Financial Questions on 26 April 1984, where a then Iranian appointed arbitrator, Mr. Kashani, stated in the presence of the Agent of the United States that the Iranian arbitrators returned part of their salaries to Iran.

  4. 27. In addition to Mr. Pinto's statement, the appointing authority was also provided with a letter dated 1 February 2006 from Dr. Seyyed Hossein Enayat, a former Iranian arbitrator, indicating that during a meeting of the Tribunal in 1981, an arbitrator appointed by the United States suggested that Iranian arbitrators may wish to return part of their salaries to Iran, should Iran deem the salaries to be too high. Dr. Enayat states that the United States Agent, who was present at the meeting, did not object to this proposal.

  5. 28. This evidence is sufficient to convince me that the United States had actual knowledge of payment by the Iranian arbitrators of a part of their salaries to Iran since at least 1984. Consequently, the Challenge brought by the United States on 21 December 2005 was made well after the time limit set out in Article 11(1) of the [1983] Tribunal Rules, and the Challenge, having failed to comply with this time limit, shall be declared inadmissible.

() Tribunal Rules (1983), Article 11(2)

Decision of the Appointing Authority, Ch M J A Moons, on the Objections by Iran to Judge Mangård, March 5, 1982, at 12–14, reprinted in 1 Iran-US CTR 509, 517–18 (1981–82):

  1. 4.4  The consequence of the above consideration is that the objections lodged by a High Contracting Party to a duly appointed arbitrator will be admissible only if they satisfy inter alia the following conditions:

    1. () the High Contracting Party must intend to use the legal remedy of a challenge as provided for in the [1976] UNCITRAL Rules;

    2. () the regulations contained in Article 11 of the Rules must have been observed.

  2. 4.5  In view of the documents lodged with Us, particularly the letter of the Agent of the Islamic Republic of Iran dated 3 February 1982 which contains the following passage: My letter of January 1, 1982 and the enclosure in clear terms stated the position of my Government that due to Mr. Mangård's lack of neutrality, the Islamic Republic of Iran disqualified him and requested his resignation. In taking that position the Islamic Republic of Iran would see no relevance to Article 11 of the [1976] UNCITRAL Rules,” We consider that the requirement referred to at (a) above cannot be said to have been satisfied.

  3. (p. 264)
  4. 4.6  Nor has the requirement referred to at (b) above been satisfied. This view is based on the following grounds. The relevant provisions of Article 11 read as follows:

    1. 1. A party who intends to challenge an arbitrator shall send notice of his challenge … within fifteen days after the circumstances mentioned in Article … 10 became known to that party.

    2. 2. The challenge shall be notified to the other party, to the arbitrator who is challenged and to the other members of the arbitral tribunal. The notification shall be in writing and shall state the reasons for the challenge.

    3. 3. When an arbitrator has been challenged by one party, the other party may agree to the challenge. The arbitrator may also, after the challenge, withdraw from his office. …

      Article 12 also provides that a decision on the challenge will be made “if the other party does not agree to the challenge and the challenged arbitrator does not withdraw.”

  5. 4.7  In view of this body of rules and the provisions of Article 10(1), it must be assumed that the regulation that the notification must state the reasons for the challenge is intended to provide an opportunity:

    1. () to the other party: to determine whether there is any reason for it to agree to the challenge;

    2. (ii ) to the challenged arbitrator: to determine whether there is any reason for him to withdraw from his office;

    3. (iii ) to the Appointing Authority: to determine whether the notification of the challenge was made in good time and whether what is set out in the notification can be construed as an allegation that the circumstances referred to in Article 10(1) have been satisfied.

  6. 4.8  The contents of the letter of the Agent of the Islamic Republic of Iran of 1 January 1982 (with enclosure) offer insufficient opportunity to determine any of the above matters.

These documents contain neither a sufficiently clear description of the circumstances giving rise to the accusation levelled against Mr. Mangård of a “lack of neutrality,” nor any indication of the dates on which the actual event on which the disqualification is based took place and on which this event came to the knowledge of the party alleging disqualification.

This notification cannot therefore be said to state “the reason for the challenge” within the meaning of Article 11 of the [1976] UNCITRAL Rules.

Letter of the Agent of the United States to the Appointing Authority initiating the Challenge of Judges Kashani and Shafeiei, September 17, 1984, reprinted in Intl Arb L Rev 9344:

In accordance with Article 11 of the [1983] Tribunal Rules, I have today sent notice of this challenge to the Government of Iran, to the Challenged arbitrators, and to the other members of the Tribunal.

Letter of the Agent of the Government of Iran to the Appointing Authority initiating the First Challenge by Iran of Judge Briner, September 13, 1988 at 3, reprinted in 20 Iran-US CTR 181, 183 (1988–III):

The Notice of Challenge was sent today to the other party, to the challenged arbitrator and to the other members of the Tribunal pursuant to the [1983] Tribunal Rules, Article 11 and note 1 to Articles 9–12.

Letter of Judge Robert Briner to the Appointing Authority, Ch M J A Moons, September 14, 1988 at 1–2, reprinted in 20 Iran-US CTR 184 (1988–III):

In my opinion, the [1983] Tribunal Rules, with which I know you are familiar, do not provide for any further memorandum and evidence. Under Article 11, paragraph 2, the challenge shall be (p. 265) in writing and shall state the reasons for the challenge. This is obviously necessary in order to allow, under Article 11, paragraph 3 of the [1983] Tribunal Rules, the other party and arbitrator to determine themselves on the challenge. All material necessary for such a determination therefore has to be first notified to the challenged arbitrator and the other party to the arbitration.

Letter of the Appointing Authority, Ch M J A Moons, to the Agent of the Government of Iran, September 21, 1988, at 1, reprinted in 20 Iran-US CTR 187 (1988–III):

… in my opinion Article 11, paragraph 2, of the [1983] Tribunal Rules does not oppose your sending me a Memorandum to complement the Notice of Challenge of Mr. Briner with respect to Case No 55 dated 13 September 1988, in which the reasons for this challenge set out in the above Notice will be further developed and in which evidence will be put forward to support these reasons.

Letter of the Agent of the Government of Iran to the Appointing Authority, Ch MJA Moons, September 27, 1988, at 2, reprinted in 20 Iran-US CTR 188–89 (1988–III):

As expressly stated in the [1976] Rule in question [Article 11(2)], the notification is only required to “state the reasons for challenge”. Not to adduce, but to state, reasons; and not a word about documents or evidence in support of stated reasons. If this clear language should still leave any doubt, a short reference to the preparatory work of the Article in question would dispel it. There it will be noticed that a suggestion to include a new provision to Article 11 requiring the notification to contain evidence and supporting documents did not find favour with the members of the UNCITRAL drafting committee.

Letter of the Appointing Authority, Ch M J A Moons, to the Agent of the Government of Iran, Mohammad K Eshragh, November 10, 1988, at 1:

I have the honour to confirm herewith the verbal agreement we made on 9 November last to the effect that:

  1. () …;

  2. () Up to November 28, 1988 you will have the opportunity to carry out your intention to submit further explanatory comment on the challenge.

Letter of the Agent of Iran to the Appointing Authority initiating the Second Challenge by Iran of Judge Briner, July 28, 1989, at 1, reprinted in 21 Iran-US CTR 318 (1989–I):

On the instructions of the Government of the Islamic Republic of Iran (hereafter “The Islamic Republic”) and on behalf of the National Iranian Oil Company (“NIOC”), I am writing to you in your capacity as the AA to the Iran-United States Claims Tribunal to challenge Mr. Robert Briner, the third country arbitrator and the President of the Iran-United States Claims Tribunal. Copies of this letter, as a notice of challenge, are being simultaneously notified to Mr. Briner and other concerned parties pursuant to the [1983] Tribunal Rules, Article 11 and note 1 to Articles 9–12.

Joint Decision of the Appointing Authority, Judge W E Haak, on the Challenges to Judge Krzysztof Skubiszewski and Judge Hamid Reza Oloumi Yazdi, April 2, 2008, at 10, 11–12:

In the present case, it is impossible to determine precisely, on the basis of Iran's Notice of Challenge and the exhibits attached to it, when Judge Oloumi's request was made and when its alleged rejection took place. The Notice and its exhibits contain no clear indication either as to how the decision to allegedly reject his request was made. In addition, and most importantly, it is equally impossible to determine with any certainty, on the basis of those documents, who took that decision and what was the exact content of that decision (see Judge Skubiszewski's submission of January 8, 2008, paragraph 10).

(p. 266) The review of the Notice of Challenge and its exhibits reveal that basic information with respect to the timing of the request and its alleged rejection is lacking. In his memorandum, Judge Oloumi does not mention the date of his request, nor the date of the alleged rejection of his request. These dates are not provided either in the Notice of Challenge. The only thing that is clear is that the request was made and allegedly rejected during the Full Tribunal's deliberative sessions.

It is also impossible to determine, on the basis of Judge Oloumi's statement, how the decision to allegedly reject his request was made and who took the decision. While Judge Oloumi addresses his memorandum to the President of the Arbitral Tribunal, he does not state whether the President took a decision on his own; he states in rather nebulous terms that the President “dealt with [his request] in a way that it met with a negative outcome” (emphasis added). The meaning of this sentence is unclear and in any event it is quite different from stating that the President decided on his own to reject Judge Oloumi's request.

… The Notice does not state either whether the Tribunal authorized the president to render a decision on his own. It does not state whether the Tribunal sought to exercise its power to revise the decision or whether there was any request for revision, by any Member of the Tribunal, including in particular Judge Oloumi. In other words, the Notice of Challenge and Judge Oloumi's memorandum are not sufficiently specific to allow me to verify how the provisions of article 31(2) of the Rules were applied and which of the different decision-making procedures contemplated in this article was followed.

This further confirms that the notice of challenge fails to state sufficiently specific reasons that would enable one to determine how the decision to allegedly reject Judge Oloumi's request was made and who took that decision.

The precise content of the decision that allegedly denied Judge Oloumi's request remains unknown. Judge Olowni merely states that his request was “unexpectedly rejected” and that the President “questioned the merit” of his request. As pointed out by Judge Skubiszewski, neither the Notice nor the memorandum state whether the alleged rejection was complete and definite or only partial (see Judge Skubiszewski's final submission of March 12, 2008, paragraph 8). They do not state what the alleged criticism of that request was thereby preventing any proper assessment of the justifications of the decision.

On the basis of the above, it must be held that the notice of challenge is too vague and that it fails to state reasons for the challenge.

Decision of the Appointing Authority, Judge W E Haak, on the Challenge to Judge Seyed Jamal Seifi, September 3, 2010, at 6 (citations omitted):

20. In my view, the United States met the specificity requirement by alleging at the inception of the Challenge that Judge Seifi's experience as a member of the ICC Tribunal could influence his participation in any future proceedings in Case B/61 despite his obligations to consider the merits of Case B/61 only as presented by the Parties to the Tribunal. The United States alleged in its second submission that any Iranian claim for loss in Case B/61 would necessarily require examination of the same facts and arguments at issue with the Cubic Arbitration, which, in its view, gives rise to justifiable doubts about Judge Seifi's impartiality due to his prior consideration and decision of those issues in the Cubic Arbitration. These statements point toward a purported issue conflict that forms the essence of the United States’ challenge against Judge Seifi. In addition, the date in which the United States claimed to first have had actual knowledge of the purported issue conflict—the conversation between Justice Richard Mosk and Ms. Lisa Grosh on April 7, 2010—was clearly indicated in the Notice of Challenge. It cannot reasonably be said that either Iran or Judge Seifi were not sufficiently appraised of the allegations and evidence supporting the Challenge.

Decision of the Appointing Authority, Judge W E Haak, on the Challenge to Judge Charles Brower, September 3, 2010, at 6 (citation omitted):

  1. 15. In my view, Iran's reasons for challenging Judge Brower, as contained in the Notice of Challenge, were sufficiently clear to enable the United States to arrive at a position on whether (p. 267) there is any reason to agree to the Challenge, and for Judge Brower to determine whether there is any reason for him to withdraw from office. Iran has in large measure challenged Judge Brower because of the fact that he conversed with Professor Dupuy regarding the potential appointment (regardless of the content of their discussion), which is not disputed. This fact is relied upon as basis for Iran's allegations, and evidence of that fact was presented in the Notice of Challenge through a reprint of Professor Dupuy's e-mail communication of May 3, 2010 (and has not been contested by the United States or Judge Brower). The link between this fact and Iran's allegations of lack of impartiality or independence was stated in sufficient detail, to my mind.

  2. 16. That said, I note that Iran did not confine itself to this ground for challenge alone and made further allegations that are far more speculative and unproven, such as Judge Brower's possible motives for contacting Professor Dupuy, and the allegation that Judge Brower acted as an agent of the United States. I shall deal with all these grounds for challenge in turn.

() Tribunal Rules (1983), Article 11(3)

Letter of Judge Robert Briner to the Appointing Authority, Ch M J A Moons, December 6, 1988, regarding the Challenge by Iran to his participation in Case No 55, reprinted in 20 Iran-US CTR 329 (1988–III):

This is to inform you that I have decided to withdraw from Case No 55 and I have so informed the President of the Iran-United States Claim Tribunal in order that he can take the necessary dispositions.

I should like to stress that this action does in no way imply an acceptance of the validity of the grounds put forward for my challenge …

Letter of Judge Robert Briner, President of the Tribunal, to the Agent of the Government of Iran, Mohammad K Eshragh, March 7, 1989 at 1–2:

I agree with your view that note 4 to Articles 9–12 of the [1983] Tribunal Rules is relevant in determining which chamber should deal with Case No 55 following my withdrawal from that Case. However, I thought it my duty to ensure that action taken in conformity with that provision should follow any relevant practice of the Tribunal and seek to cause as little disruption as possible in the work of the Tribunal as a whole.

While there has been no previous instance of withdrawal by a Member following a challenge, a practice has been established in cases where a Member disqualified himself pursuant to Article 9 of the Tribunal Report—a situation which you yourself had reasoned in your letter No 21402 of 25 March 1988 was analogous to that where a Member has withdrawn following a challenge. You would recall that in regard to Cases Nos 20 and 21, the Tribunal, following an extensive discussion of the issues involved, implicitly recognized the previous practice of replacing a Party-appointed Member who had disqualified himself, by a Member appointed by the same Party from another Chamber rather than transferring those cases to another chamber which had its own full schedule, and thus increasing the risk of disrupting the orderly functioning of the Tribunal.

The result of such action is, in effect the constitution of a new ad hoc chamber composed of two regular Members of the Chamber and one from outside it, and the transfer to it of the case concerned. On the other hand, this procedure would only produce minor consequences elsewhere in the tribunal, and was therefore to be preferred to transfer of the case to another regular Chamber with the attendant disruption of the latter's schedule.

Accordingly, the designation of Mr. Broms to act as Chairman of Chamber Two for Case No 55 was entirely in conformity with the letter and intent of note 4 to Articles 9–12 of the [1983] Tribunal Rules, as interpreted through Tribunal practice, and within the scope of the powers conferred on me as President of the Tribunal pursuant to Article III of the Claims Settlement Declaration. While the Chamber which, pursuant to Presidential Order No 67, will now deal with Case No 55 would be referred to as “Chamber Two”, it differs from Chamber Two as regularly composed, and is, in fact, another Chamber.

(p. 268) 5. The Resolution of the Challenge

In the case where a party's challenge to an arbitrator is not accepted by all the parties or the challenged arbitrator does not withdraw within 15 days of the date of the notice of arbitration, as discussed above, the challenging party may seek within 30 days of the date of the notice of challenge a decision on the challenge by the appointing authority. If the challenge is sustained, Article 14 (discussed in chapter 6) provides the procedure for appointment of a substitute arbitrator.

Once the decision on the challenge has been turned over to the appointing authority, the UNCITRAL Rules are silent as to the process for deciding the challenge.322

A. Text of the 2010 UNCITRAL Rule

For the text of Article 13 of the 2010 UNCITRAL Rules, see Section 4(A) above.

B. Commentary

() Which authority shall make the decision on the challenge if the other party does not agree to the challenge or the challenged arbitrator does not withdraw?

Article 13(4) establishes the rule that an appointing authority will decide a challenge in those cases where the parties do not agree to the challenge or the challenged arbitrator chooses not to withdraw.323 In this respect, Article 13(4) parallels Article 12(1) of the 1976 UNCITRAL Rules, despite the omission of specific provisions outlining three scenarios for determining how to designate the appointing authority with responsibility for deciding the challenge.324 Article 12(1) of the 1976 UNCITRAL Rules contained three provisions which the 2010 Rules do not. Under Article 12(1), subsection (a), if an appointing authority made the original appointment of the challenged arbitrator, the challenge will be decided by that authority. Under subsection (b), if an appointing authority did not appoint the challenged arbitrator, but an appointing authority has already been designated by the parties, that authority will make the decision.325 Finally, subsection (c) covers the remaining cases in (p. 269) which an appointing authority will be designated according to the procedures of Article 6(2) of the 1976 UNCITRAL Rules. The travaux préparatoires of the 1976 UNCITRAL Rules nevertheless remain instructive as to the interpretation of the 2010 UNCITRAL Rules.

The primary concern of the UNCITRAL drafters in drafting Article 12(1) of the 1976 UNCITRAL Rules was to ensure that the authority called upon to decide the challenge be an impartial and independent party. In this context, representatives to UNCITRAL expressed some of the same concerns that arose in the discussion of Article 11 of the 1976 UNCITRAL Rules (now Article 13 of the 2010 UNCITRAL Rules) regarding whether the appointing authority who made the original appointment could be trusted to make an impartial decision.326 As a result, they considered several other possibilities for an authority to decide the challenge. The first was to have the other two members of the arbitral tribunal decide the challenge.327 The second and more seriously considered possibility was to allow the court of first instance at the place of arbitration to decide the challenge. This possibility was based on the assumption that this court would most likely possess the necessary jurisdiction and competence328 and in some countries would be required by law to make the final decision on the challenge, or at a minimum have a right to review the challenge decision.329 If this court did not have the requisite jurisdiction, the president of the chamber of commerce at the place of arbitration could make the decision.330

Strong arguments were raised in favor of allowing national courts to decide challenges. Discussion of the Committee considering the Revised Draft of Article 12 of the 1976 UNCITRAL Rules made it clear that the national laws in some key countries ran contrary to the text of the rule as proposed. For example, it was argued that under then Austrian law no person other than a judge was permitted to decide a challenge.331 Likewise, it was said that under German law the final decision on a challenge must be made by a municipal court judge.332 While the representatives from these countries did not object to the rule's grant of decision-making authority to an independent appointing authority, they thought that parties subject to arbitration should examine local laws to determine which authority will make the final decision.

Ultimately, the representatives were satisfied that even if the appointing authority who made the original appointment would decide the challenge under Article 12(1)(a) of the 1976 UNCITRAL Rules, the assumption of neutrality and impartiality could be maintained: “[E]xperience had shown that arbitral institutions and appointing authorities acted with complete impartiality even when one of their appointees was challenged. Such institutions and appointing authorities were deeply concerned with preserving their reputation for integrity. … ”333 Safeguards for neutrality were also provided under Article 12(1)(b) (p. 270) since the parties themselves would presumably only appoint an appointing authority they considered neutral,334 and if the parties failed to agree on a choice of appointing authority, Article 12(1)(c) provides for the Secretary-General of the Permanent Court of Arbitration in The Hague to make the appropriate appointment.

Nothing in the 2010 UNCITRAL Rules suggests that the appointing authority should have any different duties and responsibilities. Under the revised Rules, the appointing authority that made the initial appointment of a challenged arbitrator may decide the challenge and in all cases the appointing authority should act with impartiality and independence. However, it is also clear that the tasks of appointment and challenge are fundamentally different. Appointment is not a particularly legal task, but rather involves knowledge of potential arbitrators and appreciation for the importance of the place of arbitration. Deciding upon a challenge, in contrast, is distinctly legal and judicial requiring both application of the law, assessment of evidence and fair, yet firm, administration of procedure. It may be the case that the institution or person that served as the appointing authority making the original appointment also possesses the skills necessary to decide upon a challenge, but that is not necessarily always the case.

() When may a party seek the assistance of the PCA Secretary-General in designating an appointing authority?

In the challenge to Judge Mangård, Iran claimed that the procedures established under Articles 6335 and 12 of the 1983 Tribunal Rules for the designation of an appointing authority to decide the challenge were not observed. Specifically, Iran charged that the United States had requested that the Secretary-General designate an appointing authority before attempting to reach an agreement on an appointing authority with the Iranians.336

On its face, Article 6(2) of the Tribunal Rules does seem to indicate that parties should try to reach an agreement before making a request for the Secretary-General to designate an appointing authority. However, in practical terms, a strict reading of Article 6(2) appears inappropriate in the context of a challenge. If the parties failed to reach an agreement on an appointing authority at the start of the arbitral proceedings, they are unlikely to reach agreement in the tense atmosphere of a challenge.337

Justice Moons, the Appointing Authority chosen by the Secretary-General to decide the challenge to Judge Mangård, adopted this more pragmatic reading of Article 6 of the Tribunal Rules. He rejected the Iranian interpretation of Articles 12(1) and 6:

The clear intention of this rule [Article 12 of the Tribunal Rules] is to ensure that a speedy decision can be taken on the challenge.

In the light of this, it must be assumed that the rule contained in Article 12(1)(c) is also intended to make it possible in the cases referred to therein to designate an Appointing Authority to decide on the challenge as quickly and as simply as possible.

Therefore, the rule which Article 12(1)(c) contains to the effect that the designation of the Appointing Authority must be “in accordance with the procedure for designating an appointing (p. 271) authority as provided for in Article 6” has to be interpreted as meaning that except in cases in which the Parties have agreed upon an Appointing Authority in the context of the procedure relating to the appointment of an arbitrator, the Secretary-General of the Permanent Court of Arbitration at the Hague is empowered to designate an Appointing Authority to decide on a challenge, if he receives a request to that effect from one of the Parties.338

() What procedures the appointing authority may follow in deciding the challenge

The UNCITRAL Rules do not define the appointing authority's decision-making process. For example, there is nothing in the Rules to suggest whether parties and the challenged arbitrator have the right to file briefs or to demand a hearing. The drafters of the UNCITRAL Rules apparently chose to leave these issues up to the discretion of the appointing authority, presumably to ensure sufficient flexibility so the process could be tailored to the circumstances of each arbitration and could avoid taking on a life of its own.339 In practice, appointing authorities have enjoyed wide latitude in developing the terms of procedure for resolving a challenge, including by establishing a schedule for receiving submissions and responses from the parties pursuing and resisting the challenge, as well as from the challenged arbitrator,340 by conducting individual fact-finding meetings with the challenged arbitrator and other relevant individuals,341 and by holding hearings, if necessary, to resolve more complicated factual and legal matters related to the challenge.342 In practice, but less so in recent years, appointing authorities have also decided upon challenges in a manner less formal than the arbitration to which it is related.

In the challenge of Judge Mangård, for example, the first challenge under the 1976 UNCITRAL Rules as modified by the Iran–US Claims Tribunal, the decision process was somewhat informal and expedited. In particular, the Appointing Authority, Justice Moons, on January 25, 1982 requested the views of the Agents of the two state parties and Judge Mangård on specified issues. All three submitted their views in succinct letters in the first part of February. The Agents met with Justice Moons and explained their view orally on February 17, 1982. These statements were summarized and supplemented in further letters sent by the Agents in late February. Justice Moons rendered his decision very shortly thereafter on March 5, 1982. Although the proximity of the appointing authority to the parties may have been a factor, his rapid decision generally reflects the fact that the challenge was denied on a very preliminary issue—that of admissibility.

Several guiding principles should be followed in handling challenges. First, the potential for abuse of the challenge proceedings is great and thus manifestly deficient challenges (p. 272) should simply and quickly be declared inadmissible. Second, the challenge exists to further the arbitration. As a result, the decision process must not become so formal and structured that the task of deciding the challenge takes on a life of its own at the cost of the arbitration. We therefore endorse informal investigations that lead to the expeditious resolution of a challenge, as were sometimes pursued in challenges before the Iran–US Claims Tribunal. In the case of a panel of three arbitrators, expedited challenge proceedings theoretically do not substantially prejudice the interests of the party who appointed the challenged arbitrator, for even if the challenge is sustained, that party may appoint a replacement. Moreover, although the challenged arbitrator has a direct and significant interest in his or her reputation, the UNCITRAL Rules protect this interest by providing for withdrawal without prejudice. In fact, given the provisions for agreement and withdrawal, it seems unlikely that a meritorious challenge would ever reach the point of decision.

() Limitations on the powers of the appointing authority

Though largely unregulated by the UNCITRAL Rules, the powers of the appointing authority are not limitless. The appointing authority's discretion necessarily ends where the arbitral tribunal's begins. Thus, whereas the appointing authority has sole authority to determine the existence of justifiable doubts as to the impartiality or independence of an arbitrator, unless otherwise agreed by the parties, the appointing authority may not decide the merits of the underlying dispute or any other matters solely within the discretion of the arbitral tribunal. For example, appointing authorities have appropriately declined to rule on requests to apportion the costs of challenge proceedings because, as one appointing authority observed, under the UNCITRAL Rules “the power to fix and apportion costs, including the fees and expenses of the appointing authority and other costs associated with the challenge, is reserved to the arbitral tribunal.”343 In addition, the appointing authority is well advised to adhere to (although technically not bound by) the guiding principles of UNCITRAL Rules on the conduct of the arbitral proceedings, such as equal treatment of the parties, avoidance of unnecessary delay and expense, and fair and efficient process.344

C. Extracts from the Practice of Investment Tribunals

Methanex Corp and United States of America, Award (August 3, 2005) (ICSID administered, 1976 UNCITRAL Rules, NAFTA Chapter Eleven), Part II, Chapter E, at 19:

34. Turning next to the impact of Mr. Christopher's resignation, the Tribunal notes that under the [1976] UNCITRAL Rules it has no role (unlike an ICSID tribunal) to decide upon any challenge by a party to any of the arbitrators. All decisions on challenges to members of this Tribunal are reserved to the appointing authority pursuant to Article 12(1) of the [1976] UNCITRAL Rules, in this case the Secretary-General of ICSID or his designated alternate. The Tribunal has therefore no jurisdiction to decide that an undisclosed relationship did or not exist between an arbitrator and a party, as Methanex has alleged. In the Tribunal's view, it likewise lacks any jurisdiction to decide Methanex's further contentions that US law requires reconsideration in such cases and that there is or is not a three month's time-limit under US law ….

(p. 273) D. Extracts from the Practice of the Iran–US Claims Tribunal

() Tribunal Rules (1983), Article 12(1)

Decision of the Appointing Authority, Ch M J A Moons, on the Objections by Iran to Judge Mangård, March 5, 1982 at 7–9, reprinted in 1 Iran-US CTR 509, 513–14 (1981–82):

The contention that pursuant to the provisions of Article 12(1)(c), in conjunction with Article 6, of the [1976] UNCITRAL Rules, the Secretary-General of the Permanent Court of Arbitration at the Hague is not empowered to designate an Appointing Authority until the Parties have been unable to reach agreement on the designation by them in mutual consultation of an Appointing Authority is based on an incorrect interpretation of the provisions in question. The arrangement provided for in Article 12(1)(a) and (b) relates to cases in which the appointment of the challenged arbitrator was made by an Appointing Authority or, alternatively, in which an Appointing Authority was designated during the procedure leading to the appointment of the challenged arbitrator.

Article 12 provides that in such cases the decision on the challenge shall be made by the Appointing Authority. The clear intention of this rule is to ensure that a speedy decision can be taken on the challenge.

In light of this, it must be assumed that the rule contained in article 12(1)(c) is also intended to make it possible in the cases referred to therein to designate an Appointing Authority to decide on the challenge as quickly and as simply as possible.

Therefore, the rule which Article 12(1)(c) contains to the effect that the designation of the Appointing Authority must be “in accordance with the procedure for designating an appointing authority as provided for in Article 6” has to be interpreted as meaning that except in cases in which the Parties have agreed upon an Appointing Authority in the context of the procedure relating to the appointment of an arbitrator, the Secretary-General of the Permanent Court of Arbitration at the Hague is empowered to designate an Appointing Authority to decide on a challenge, if he receives a request to that effect from one of the Parties.

This interpretation is supported by the history of the proceedings leading to the adoption of the [1976] UNCITRAL Rules. At the conference which adopted the rules, a draft of Article 6 prepared by the Secretariat requiring that the Parties endeavor to reach agreement on the choice of an Appointing Authority, was rejected in favour of a Belgian proposal in which there was no requirement to seek agreement …

Letter of the Agent of the United States to the Appointing Authority initiating the Challenge of Judges Kashani and Shafeiei, September 17, 1984, reprinted in Intl Arb L Rev 9344:

In the event that the Government of Iran does not expeditiously agree to the challenge, or that the challenged arbitrators do not quickly withdraw voluntarily, the United States requests, pursuant to Article 12(1)(b) of the Tribunal Rules, that you decide and sustain the challenge.

Letter of the Agent of the Government of Iran to the Appointing Authority initiating the First Challenge by Iran of Judge Briner, September 13, 1988 at 1, 3, reprinted in 20 Iran-US CTR 181, 183 (1988–III):

On the instructions of my Government and the other Respondents to Case No 55 pending before the Iran-United States Claims Tribunal, I am writing to you in your capacity as the Appointing Authority to the Iran-United States Claims Tribunal. The purpose of this letter is to challenge Mr. Robert Briner, the third country arbitrator of Chamber Two, Iran-United States Claim Tribunal with respect to the above-mentioned case and to request you to decide the challenge pursuant to Article 12(1)(b) of the [1983] Tribunal Rules.

(p. 274) The Notice of Challenge was sent today to the other party, to the challenged arbitrator and to the other members of the Tribunal, pursuant to the [1983] Tribunal Rules, Article 11 and note 1 to Articles 9–12. You are, therefore, requested to decide the challenge if the other party does not agree to the challenge, or Mr. Briner does not withdraw, as is the rule of Article 12 of the [1983] Tribunal Rules.

Letter from the Agent of the Government of Iran to the Appointing Authority for the Iran–US Claims Tribunal, Ch M J A Moons, entitled “Application to Excuse Mr. Gaetano Arangio-Ruiz From His Office for Failure to Perform his Arbitral Functions,” August 8, 1991 at 4, reprinted in 27 Iran-US CTR 293, 297 (1991–II):

In case the other party does not agree to this application and Mr. Arangio-Ruiz does not withdraw, you, as the Appointing Authority of the Iran-United States Claims Tribunal are requested to decide upon it pursuant to Article 12(b) of the [1983] Tribunal Rules.

() Tribunal Rules (1983), Article 12(2)

No practice is being extracted in this area.

6. Comparison to the 1976 UNCITRAL Rules

Articles 11 through 13 establishes a process for resolving challenges to arbitrators that contains the same standard of arbitrator conduct as found in corresponding Articles 9 through 12 of the 1976 UNCITRAL Rules. The 2010 UNCITRAL Rules are more streamlined, however, and eliminate the redundancies and superfluity of the original articles, while adding new features, such as a model disclosure statement and new deadlines to regulate the time between the submission of a notice of challenge and the request for a decision by the appointing authority.

The first sentence of Article 11 retains the same standard for disclosure as in corresponding Article 9 of the 1976 UNCITRAL Rules: “disclose any circumstances likely to give rise to justifiable doubts as to his [or her] impartiality or independence.” Replacement of the term “prospective arbitrator” in the old rule with “a person [who] is approached in connection with his or her possible appointment as an arbitrator” in the revised rule is immaterial to the application of the provision. The second sentence of Article 11 states the rule of the arbitrator's continuing obligation to disclose. Article 11 clarifies that the duty of disclosure continues beyond the time of appointment and applies “throughout the arbitral proceedings.” It thus remedies certain drafting deficiencies in Article 9 of the 1976 UNCITRAL Rules, which only requires disclosure by an arbitrator “once appointed or chosen.” (However, as mentioned above, we believe the drafting history and policies underlying the original rule favor reading in a continuing duty of disclosure). Article 11 contains the new condition that any disclosure be made “without delay,” which complements the goal of arbitral efficiency.

Article 12(1) retains the core standard of arbitrator conduct originally established in the corresponding Article 10(1) of the 1976 UNCITRAL Rules: “if circumstances exist that give rise to justifiable doubts as to the arbitrator's impartiality or independence.” Article 12(2) states the identical rule as in original Article 10(2) on a party challenging its own arbitrator. As a result of a re-organization of the Rules, Article 12(3) now contains the identical rule on the procedure for an arbitrator's failure to act that was originally contained in Article 13(2) of the 1976 UNCITRAL Rules.

(p. 275) Without minor revision, Article 13(1) through (3) contains the same rules on providing notice of challenge as originally included in Article 11(1) through (3) of the 1976 UNCITRAL Rules. While the term “notification” in the original rule has been replaced by “notice of challenge” and minor grammatical revisions have been made, these do not change the manner in which the article functions. However, Article 13 does not incorporate the last sentence of original Article 11(3), which largely restates what is already known: that after the parties agree to accept the challenge or the arbitrator withdraws the procedures for appointment of arbitrators under the Rules apply. Notably, Article 13(4) adds two new time periods following the date of the notice of challenge: 15 days for the parties to agree on a challenge or for the challenged arbitrator to withdraw; and 30 days for the challenging party to seek a decision by the appointing authority. In the absence of such time limits in the 1976 UNCITRAL Rules, the Secretary-General of the PCA or the appointing authority, if one has been appointed, has discretion to determine how long the parties should have to reach agreement on the challenge and the arbitrator has to withdraw.345

That provision also departs slightly from the formulation of the general prerequisites for seeking a decision on the challenge by the arbitrator. Whereas Article 12(1) of the 1976 UNCITRAL Rules provided “If the other party does not agree and the challenged arbitrator does not withdraw,” Article 13(4) now provides “If … all parties do not agree to the challenge or the challenged arbitrator does not withdraw.”346 According to the travaux préparatoires, without the revision the provision “might create a risk that, in the exceptional situation where an arbitrator would refuse to withdrawal despite the parties having agreed on the challenge, such refusal would prevent the parties from pursuing the challenge.”347

The specific directions on designating an appointing authority that were originally contained in Article 12(1) and (2) of the 1976 UNCITRAL Rules have been omitted, presumably because the Working Group viewed them as largely redundant of other provisions under the Rules.

Footnotes:

1  Articles 9 through 12 of the 1976 UNCITRAL Arbitration Rules and the Iran–US Claims Tribunal's experience with the subjects discussed in those articles has been discussed elsewhere. The main works to be consulted are S Baker and M Davis, The UNCITRAL Rules in Practice: The Experience of the Iran-United States Claims Tribunal (1992) 37–74; and C Brower, “The Iran-United States Claims Tribunal,” (1990–V) 224 Recueil des Cours 200–11. Other works include I Dore, The UNCITRAL Framework for Arbitration in Contemporary Perspective (1993) 59–65; J van Hof, Commentary on the UNCITRAL Arbitration Rules: The Application by the Iran-U.S. Claims Tribunal (1991) 58–89; R Mosk, “The Role of Party-Appointed Arbitrators in International Arbitration,” (1988) 1 Transnatl Lawyer 253; R Teitelbaum, “Challenges of Arbitrators at the Iran-United States Claims Tribunal: Defining the Role of the Appointing Authority” (2006) 23(6) J Intl Arb 547.

This chapter originally drew upon D Caron, The Iran-United States Claims Tribunal and The Intl Arbitral Process, 119–206 (unpublished dissertation, Dr. jur, Leiden University, 1990).

2  Other challenges pursuant to the UNCITRAL Rules have not resulted in decisions because the challenged arbitrator resigned. See, eg, Walter Bau AG and Kingdom of Thailand, Award (July 1, 2009) (Ad Hoc Proceeding, 1976 UNCITRAL Rules, Germany-Thailand BIT), at paras 1.36–1.42 (Dr Suvarn Valaisathien resigned after challenged based on his alleged nominal shareholdings of a company that was a member of a consortium of companies in which the investment company was also a member); Methanex Corp and United States of America, Award (August 3, 2005) (ICSID administered, 1976 UNCITRAL Rules, NAFTA Chapter Eleven), Part II, Chapter E, at 19 (Mr Warren Christopher resigned after challenged based on his law firm's representation of the State of California in other matters). For another example arising in Canfor Corp and United States, an UNCITRAL arbitration under NAFTA Chapter Eleven, see B Legum, “Investor-State Arbitrator Disqualified for Pre-appointment Statements on Challenged Measures,” (November 2, 2005) 21 Arb Intl 241.

3  Challenge Decision of April 15, 1993, reprinted in part in (1997) XXII Ybk Commercial Arbitration 222, 224, para 2 (argument summarized by the appointing authority). Extracts reprinted in sections 3(C) and 4(C).

4  Challenge Decision of April 15, 1993, n 3, para 5.

5  Challenge Decision of April 15, 1993, n 3, para 7.I.

6  Challenge Decision of April 15, 1993, n 3, at 222 (summary of facts).

7  Challenge Decision of January 11, 1995, (1997) XXII Ybk Commercial Arb227, 238, paras 37–38. Extract reprinted section 3(C).

8  An abstract of the challenge decision appears in “LCIA Court Decisions on Challenges to Arbitrators” Reference No UN3490, October 21, 2005 and December 27, 2005, summarized in 27(3) Arb Intl 377.

9  “LCIA Court Decisions,” n 8, at 388.

10  “LCIA Court Decisions,” n 8, at 389.

11  “LCIA Court Decisions,” n 8, at 389.

12  Grand River Enterprises, Six Nations Ltd, et al, and United States of America, Letter from Ms. Ana Palacio, ICSID Secretary-General, to Professor James Anaya (November 28, 2007) (ICSID administered, 1976 UNCITRAL Rules, NAFTA Chapter Eleven), at 1.

13  Grand River Enterprises (1976 Rules), Letter, at 1.

14  Grand River Enterprises (1976 Rules), Letter, at 2.

15  National Grid PLC and Republic of Argentina, Decision on the Challenge to Mr Judd L Kessler (December 3, 2007) (LCIA administered UN 7949, 1976 UNCITRAL Rules, UK-Argentina BIT), at 7–13. Extract reprinted in section 3(C).

16  National Grid PLC (1976 Rules), at 22–4.

17  ICSID Case No ARB/97/3.

18  AWG Group Ltd and Argentine Republic, Decision on the Proposal for the Disqualification of a Member of the Arbitral Tribunal (October 22, 2007) (ICSID administered, 1976 UNCITRAL Rules, UK-Argentina BIT), at 7.

19  ICSID Arbitration Rule 9(4) was applied.

20  AWG Group Ltd and Argentine Republic, Decision on the Proposal for the Disqualification of a Member of the Arbitral Tribunal (October 22, 2007) (ICSID administered, 1976 UNCITRAL Rules, UK-Argentina BIT), at 9–10.

21  AWG Group Ltd and Argentine Republic, Decision on a Second Proposal for the Disqualification of a Member of the Arbitral Tribunal (May 12, 2008) (ICSID administered, 1976 UNCITRAL Rules, UK-Argentina BIT), at 5–10. Extracts reprinted in sections 2(C) and 3(C).

22  AWG Group Ltd (1976 Rules), Decision on a Second Proposal at 13.

23  AWG Group Ltd (1976 Rules), Decision on a Second Proposal at 13–14.

24  ICSID Case No ARB/97/3.

25  ICS Inspection and Control Services Ltd and Republic of Argentina, Decision on Challenge to Arbitrator, Jernej Sekolec, Appointing Authority (December 17, 2009) (PCA administered, 1976 UNCITRAL Rules, UK-Argentina BIT), at 4–5. Extract reprinted in section 3(C).

26  ICS Inspection and Control Services Ltd (1976 Rules), at 4–5.

27  Vito G Gallo and Government of Canada, Decision on the Challenge to Mr J Christopher Thomas, QC, (Nassib G Ziadé, ICSID Deputy Secretary-General, Appointing Authority) (October 14, 2009) (ICSID administered, 1976 UNCITRAL Rules, NAFTA Chapter Eleven), at 2–3. Extract reprinted in section 3(C).

28  Vito G Gallo (1976 Rules), at 3–4.

29  Article 1128 of the NAFTA entitles the Parties to “make submissions to a Tribunal on a question of interpretation of this Agreement.”

30  In his letter of October 21, 2009 to Mr Nassib G Ziadé, Deputy Secretary-General of ICSID, Mr Thomas resigned from the arbitral tribunal.

31  The events described in this section are primarily based upon the Decision of the Appointing Authority, Ch M J A Moons, on the Objections by Iran to Judge Mangård, March 5, 1982, reprinted in 1 Iran-US CTR 509 (1981–82) and Intl Arb L Rev 4399 (March 19, 1982).

32  See Intl Arb L Rev 4235 (February 19, 1982).

33  See Letter of the Iranian Government to Nils Mangård, delivered by M K Eshragh in Stockholm on December 28, 1981, attached to the letter of the Agent of the Government of Iran's letter to Nils Mangård of January 1, 1982, reprinted in Decision of the Appointing Authority, n 31, at para 4.1.

34  Intl Arb L Rev 4235 (February 19, 1982).

35  Reprinted in Decision of the Appointing Authority on the Objections by Iran to Judge Mangård, n 31, at para 4.1; also reprinted in section 1(C).

36  Letter and Memorandum of the Agent of the United States to the Appointing Authority initiating the Challenge of Judges Kashani and Shafeiei, September 17, 1984, reprinted in Intl Arb L Rev 9344, reprinted in section 3(D)(1). Also see discussion in section 3(B)(2)(b)(12).

37  Letter of the Agent of the Government of Iran to the Appointing Authority initiating the First Challenge by Iran of Judge Briner, September 13, 1988, reprinted in 20 Iran-US CTR 181, 182 (1988–III). See also extract reprinted in sections 3(D)(1) and 4(D)(2).

38  Letter of Judge Robert Briner to the Appointing Authority, December 6, 1988, reprinted in 20 Iran-US CTR 329–30 (1988–III).

39  Letter of the Agent of Iran to the Appointing Authority initiating the Second Challenge by Iran of Judge Briner, July 28, 1989, reprinted in 21 Iran-US CTR 318 (1989–I). For additional context, see also Letter (of Agent of Iran), dated August 29, 1989; extracts from both reprinted in sections 3(D)(1) and 4(D)(2).

40  Letters dated July 28 and August 29, 1989, n 39.

41  Decision of the Appointing Authority on the Second Challenge by Iran of Judge Briner, September 19, 1989, reprinted in 21 Iran-US CTR 384 (1989–I). See also extract reprinted in section 3(D)(1).

42  Letter of the Agent of the Government of Iran to the Appointing Authority initiating the Third Challenge by Iran of Judge Briner, September 11, 1989, reprinted in 21 Iran-US CTR 380 (1989–I). See also extract reprinted below, section 3(D)(1).

43  Decision of the Appointing Authority on the Third Challenge by Iran to Judge Briner, September 25, 1989, reprinted in 21 Iran-US CTR 396, 398 (1989–I) and (October 13, 1989) 4(17) Mealey's Intl Arb Rep A–3. See also extract reprinted in sections 3(D)(1) and 4(D)(1). S Baker and M Davis, The UNCITRAL Rules in Practice, n 1, 45, incorrectly suggest that the Appointing Authority decided the third challenge in his decision regarding the second challenge. For additional context, see also letters from Agent of United States, dated September 15, 1989 and September 19, 1989; extracts reprinted in section 3(D)(1).

44  Letter of Claimant in Case No 248 to the Appointing Authority, Ch M J A Moons, initiating the challenge of Judge Noori in Case No 248, February 20, 1990, reprinted in 24 Iran-US CTR 309 (1990–I).

45  Decision of the Appointing Authority on the Challenge of Judge Noori, August 31, 1990, reprinted in 24 Iran-US CTR 314, 324 (1990–I). See also extract reprinted in section 3(D)(1).

46  Decision of the Appointing Authority on the Challenge by Iran of Judge Arangio-Ruiz, September 24, 1991, reprinted in 27 Iran-US CTR 328, 336 (1991–II).

47  Decision of the Appointing Authority on the Challenge of Judge Skubiszewski, August 30, 1999, reprinted in 14 Mealey's Intl Arb Rep A/1 (No 9, September 1999).

48  See Memorandum in Support of the Challenge by the US of Mr Bengt Broms, Member and Chairman of Chamber One of the Iran-US Claims Tribunal, January 4, 2001. Also see discussion in section 3(B)(2)(b)(11).

49  Letter from the US Agent to the Appointing Authority, Sir Robert Jennings, January 4, 2001, at 1. The US Government also argued that the opinion demonstrated that Judge Broms had violated Article 33 of the Tribunal Rules and Article V of the Settlement Declaration, because he failed to decide Case No A/28 on the applicable law.

50  Reply of United States to the Submission of Iran and Mr Bengt Broms Concerning the Challenge by the United States of Mr Broms, March 10, 2001, at 1.

51  See Decision of the Appointing Authority on the Challenge of Judge Bengt Broms, May 7, 2001, reprinted in 38 Iran-US CTR 386. See also extract reprinted below, section 3(D)(1).

52  Decision of the Appointing Authority on the Challenge of Judge Bengt Broms, September 30, 2004, reprinted in (No October 10, 2004) 19 Mealey's Intl Arb Rep B-1; 38 Iran-US CTR 398, also reprinted in section 2(D)(1). See also “Challenge of Iran-U.S. Claims Tribunal Judge Bengt Broms” in “Contemporary Practice of the United States,” (2001) 95 AJIL 895.

53  Letter from the US Agent, Mr Clifton Johnson, to the Appointing Authority, Judge W E Haak, regarding notice of challenge of Arbitrators Assadollah Noori, Koorosh H Ameli, Mohsen Aghahosseini, December 21, 2005.

54  Letter from the US Agent, n 53, at 1. See also Letter from the US Agent, Mr Clifton Johnson, to the Appointing Authority, Judge W E Haak, regarding the challenge of Mr Assadollah Noori, Mr Koorosh H Ameli, and Mr Mohsen Aghahoseeini, February 3, 2006, at 7.

55  For a more detailed discussion on this aspect, see section 4(B)(1)(b).

56  Decision by the Appointing Authority, Judge W E Haak, on the Challenge against Judges Assadollah Noori, Koorosh H Ameli, and Mohsen Aghahosseini, April 19, 2006, at 4–5, paras 26–28. See also extracts reprinted in sections 2(D)(1) and 3(D)(1).

57  Decision by the Appointing Authority, n 56, at 5, para 29.

58  As discussed in Chapter 6, section 2, Judge Noori's conduct was inconsistent with Article 13(5) of the 1983 Tribunal Rules, also known as the “Mosk Rule.”

59  Joint Decision of the Appointing Authority, Judge W E Haak, on the Challenges of Judges Krzysztof Skubiszewski and Hamid Reza Oloumi Yazdi, dated April 2, 2008, at 9 (citing Iran's Notice of Challenge dated November 30, 2007). See also extracts reprinted in sections 3(D)(1) and 4(D)(1), and discussion in section 3(B)(2)(b)(11).

60  Joint Decision of the Appointing Authority, n 59, at 24–5.

61  Decision of the Appointing Authority, Judge W E Haak, on the Challenges against Judges Krzysztof Skubiszewski and Gaetano Arangio-Ruiz, March 5, 2010, at 1, para 2.1 (citing Iran's challenge letter). See also discussion at section 3(B)(2)(b)(10).

62  Decision of the Appointing Authority, n 61, at 1, para 2.1.

63  In the course of the challenge, Judge Skubiszewski sadly passed away, though the Appointing Authority continued to decide the challenge against the former President in the absence of agreement between the United States and Iran that the matter was moot. Decision of the Appointing Authority, n 61, at 7, paras 28–31.

64  Decision of the Appointing Authority, n 61, at 11, para 47.

65  Decision of the Appointing Authority, n 61, at 12, para 54.

66  Decision of the Appointing Authority, n 61, at 14–15, paras 58–62.

67  Decision of the Appointing Authority, n 61, at 16, para 68.

68  Decision of the Appointing Authority, n 61, at 21–2, paras 86–87.

69  Decision by the Appointing Authority, Judge W E Haak, on the Challenge against Judge Seyed Jamal Seifi, September 3, 2010, reprinted in section 2(D)(1).

70  Decision of the Appointing Authority, Judge W E Haak, on the Challenge of Judge Charles Brower, September 3, 2010.

71  Of course the mechanisms provided for in the UNCITRAL Rules are always subject to the municipal law at the place of arbitration. The Summary of Discussion on the Preliminary Draft, 8th Session, paragraph 77, noted that the question of challenge of arbitrators ultimately is regulated by the provisions of the applicable municipal law. UN Doc A/10017 (1975), reprinted in (1975) VI UNCITRAL Ybk 24, 33. As stated in the Commentary on the Revised Draft, 9th Session, paragraph 1, “provisions contained in this article are subject to the mandatory rules relating to these issues contained in the applicable national law.” UN Doc A/CN.9/112/Add.1 (1975), reprinted in (1976) VII UNCITRAL Ybk 166, 170 (Commentary on Draft Article 9). In practice, municipal law, however, places few restrictions on the challenge mechanism in the UNCITRAL Rules. Yet, as Richard Mosk notes: “The ICC has the authority to disapprove a party-appointed arbitrator on the basis of lack of independence, but the parties may agree to waive the requirement of independence of party-appointed arbitrators. Such express agreements are ‘rare in ICC practice,’ which could reflect the fact that impartiality of party appointed arbitrators may be required by local law.” R Mosk, “The Role of Party-Appointed Arbitrators,” n 1, 261.

72  Reprinted in Decision of the Appointing Authority on the Objections by Iran to Judge Mangård, n 31, para 4.1.

73  Decision of the Appointing Authority, n 31, para 4.1.

74  Exceptions are possible where the parties mutually agreed to such an arrangement, as was the case in the AWG Group arbitration in which the parties agreed the challenge would be decided by the two remaining unchallenged arbitrators, pursuant to ICSID Arbitration Rule 9(4). See also above discussion in section 1(A)(6).

75  See Section IV of the Majority Decision of the Full Tribunal, January 15, 1982 (hereinafter cited as “Tribunal Decision”), referring to the January 11, 1982 Letter of the Agent of the Government of Iran to the Tribunal.

76  Letter of the Agent of the Government of the United States, January 7, 1982; Letter of the Agent of the Government of Iran, January 11, 1982.

77  The Full Tribunal heard oral argument on January 11, 1982.

78  Tribunal Decision, n 31, Section II (emphasis added).

79  Tribunal Decision, n 31, Section V.

80  Tribunal Decision, n 31, Section V.

81  Tribunal Decision, n 31, Section V.

82  Decision of the Appointing Authority on the Objections by Iran to Judge Mangård, n 31, para 4.2.

83  An unanswered question raised by the physical attack of Judges Shafeiei and Kashani on Judge Mangård was whether the Tribunal had the express, implied or inherent power to either expel the Iranian arbitrators, declaring their seats to be vacant, or expel the Iranian arbitrators from the premises of the Tribunal unless assurances as to their future conduct were given. See Memorandum to President Lagergren from D Caron and R Lahne, American Legal Assistants, “The Power of the Tribunal and Its President to Take Such Steps as May Be Necessary to Restore the Tribunal to Proper Functioning,” dated September 11, 1984, reprinted in Intl Arb L Rev (September 28, 1984) 9374.

84  Similar provision may be found in other arbitral rules. See, eg, 2002 Inter-American Commercial Arbitration Commission Rules of Procedure, art 6; 2010 ICDR International Arbitration Rules, art 7; 2012 ICC Arbitration Rules, art 11.

85  Report of the Secretary-General on the Preliminary Draft Set of Arbitration Rules, UNCITRAL, 8th Session, UN Doc A/CN.9/97 (1974), reprinted in (1975) VI UNCITRAL Ybk. 163, 171 (Commentary on Draft Article 8(3)).

86  Corresponding Article 9 of the 1976 UNCITRAL Rules provides:

A prospective arbitrator shall disclose to those who approach him in connexion with his possible appointment any circumstances likely to give rise to justifiable doubts as to his impartiality or independence. An arbitrator, once appointed or chosen, shall disclose such circumstances to the parties unless they have already been informed by him of these circumstances.

87  The Model statements of independence pursuant to article 11 are found in the annex to the Rules.

88  P Sanders, “Procedures and Practices under the UNCITRAL Rules,” (1979) 27 American J Comparative L 453, 458.

89  The UNCITRAL Working Group that revised the Rules added the words “and the other members of the arbitral tribunal” after the word “parties” in the second sentence of corresponding Article 9 of the 1976 UNCITRAL Rules to clarify that an arbitrator should disclose not only to the parties, but also to the other members of the arbitral tribunal. Report of Working Group II (Arbitration and Conciliation) on the Work of its Forty-Ninth Session (Vienna, September 15–19, 2008), UNCITRAL, 42nd Session, UN Doc A/CN.9/665, at 15, para 74 (2008). The Preliminary Draft of the 1976 UNCITRAL Rules included a duty to disclose upon appointment to “the arbitral institution,” assuming that the institution had not already been informed. Report of the Secretary-General on the Preliminary Draft Set of Arbitration Rules, UNCITRAL, 8th Session, UN Doc A/CN.9/97 (1974), reprinted in (1975) VI UNCITRAL Ybk 163, 171 (Draft Article 8(3)). The term, however, was deleted from the Revised Draft of the 1976 UNCITRAL Rules, which generally dropped references to arbitration administered by an arbitral institution.

90  Decision by the Appointing Authority, Judge W E Haak, on the Challenge against Judge Seyed Jamal Seifi, September 3, 2010, at 6, para 23.

91  Disclosure and challenge are mutually exclusive mechanisms for an arbitrator and a party, respectively. A violation of corresponding Article 9 of the 1976 Rules was found to be not in and of itself a basis for disqualifying an arbitrator. See Decision of the Appointing Authority in the Challenge of Judge Bengt Broms, para 29 (September 30, 2004), reprinted in section 2(D)(1).

92  The US Supreme Court in setting aside an award because of the appearance of bias stated: “We can perceive no way in which the effectiveness of the arbitration process will be hampered by the simple requirement that arbitrators disclose to the parties any dealings that might create an impression of possible bias.” Commonwealth Coatings v Continental Casualty, 393 US 145, 148–9 (1968).

93  See Report of the Secretary-General on the Preliminary Draft Set of Arbitration Rules, UNCITRAL, 8th Session, UN Doc. A/CN.9/97 (1974), reprinted in (1975) VI UNCITRAL Ybk 163, 171.

94  Such a continuing obligation is clearly provided for in, for example, Article 7 of the 2010 ICDR International Arbitration Rules, Article 11 of the 2012 ICC Arbitration Rules and Article 5.3 of the 1998 LCIA Arbitration Rules, as well as Article 12 of the UNCITRAL Model Law, as amended. On the latter, see H Holtzmann and J Neuhaus, A Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History and Commentary (1989) 390.

95  Other commentators agree that the obligation is continuing. S Baker and M Davis, The UNCITRAL Rules in Practice, n 1, 46; I Dore, The UNCITRAL Framework for Arbitration, n 1, 11–12. Stressing the wording of the article, Blessing asserts there is not a continuing obligation. M Blessing, “The Major Western and Soviet Arbitration Rules: A Comparison of the Rules of UNCITRAL, UNCITRAL Model Law, LCIA, ICC, AAA, and the Rules of the USSR Chamber of Commerce and Industry,” (1989) 6(3) J Intl Arb 7, 38. In addition, J van Hof, without a clear conclusion, questions the adequacy of the support of the drafting history as to whether there is a continuing obligation. J van Hof, Commentary on the UNCITRAL Arbitration Rules, n 1, 58 n 97.

96  Report of the Working Group on Arbitration and Conciliation on the Work of its Forty-Fifth Session (Vienna, September 11–15, 2006), UNCITRAL, 40th Session, UN Doc A/CN.9/614, at 14–15, para 64 (2007).

97  This conclusion is supported by the parallel wording of Articles 11 and 12(1) and the fact that these two provisions were originally proposed respectively as paragraphs 1 and 3 of Article 8 of the Preliminary Draft of the 1976 UNCITRAL Rules.

98  Sanders provides such an example: “[I]f a lawyer has been appointed as arbitrator and his law firm merges with another law firm of which one of the partners acts as lawyer of one of the parties, this circumstance should immediately be disclosed.” P Sanders, The Work of UNCITRAL on Arbitration and Conciliation (2001) 5. On the other hand, the passage of extended time may weigh against the need to disclose. See Decision by the Appointing Authority, Judge W E Haak, on the Challenge against Judge Seyed Jamal Seifi (September 3, 2010), at 10, para 32, (noting that the passage of 13 years between an arbitrator's involvement in a prior arbitration “should, by any reasonable measure, reduce the expectation of disclosure”).

99  Decision by the Appointing Authority, n 98, para 24, reprinted in section 2(D)(1).

100  For an extract from the decision, see infra section 2(C). See also discussion in section 1(A)(6) and section 2(B)(2)(b)(2)

101  For a more detailed explanation of the proceedings, see section 1(B)(6).

102  Decision by the Appointing Authority, n 98, at 13.

103  Decision by the Appointing Authority, n 98, at 13–14.

104  Decision by the Appointing Authority, n 98, at 7, 9.

105  Decision by the Appointing Authority, n 98, at 7, 9–10.

106  Decision by the Appointing Authority, n 98, at 7, 10.

107  Report of the Working Group on Arbitration and Conciliation on the Work of its Forty-Sixth Session (New York, February 5–9, 2007), UNCITRAL, 40th Session, UN Doc A/CN.9/619, at 20, para 96 (2007).

108  See 1987 IBA Rules of Ethics for International Arbitrators; 2004 IBA Guidelines on Conflicts of Interest in International Arbitration. The PCA has incorporated the model statements of independence into its procedures for administering UNCITRAL arbitration. See Arbitrator's Declaration of Acceptance and Statement of Impartiality and Independence, reprinted in section 2(C).

109  Settlement of Commercial Disputes: Revision of the UNCITRAL Arbitration Rules, Note by the Secretariat, UNCITRAL, UN Doc A/CN.9/WG.II/WP.151 at 11–12, para 23 (2008) (Draft model statement of independence). An even earlier formulation contained the phrase: “that might cause [the arbitrator's] reliability for independent and impartial judgment to be questioned by a party.” Settlement of Commercial Disputes: Revision of the UNCITRAL Arbitration Rules, Note by the Secretariat, UNCITRAL, UN Doc A/CN.9/WG.II/WP.145 at 16–17, para 50 (2006) (Draft model statement of independence).

110  UNCITRAL, 42nd Session, UN Doc A/CN.9/665, n 89, at 15–16, paras 78–79.

111  According to the UNCITRAL Secretariat's note: “The purpose of the second statement of independence is to allow parties to decide whether there are actually circumstances that give rise to justifiable doubts as to the arbitrator's impartiality or independence. The modifications made to the second statement of independence aim at ensuring consistency of the statement with article 11.” Settlement of Commercial Disputes: Revision of the UNCITRAL Arbitration Rules, Note by the Secretariat, UNCITRAL, UN Doc A/CN.9/WG.II/WP.154 at 12, para 29 (2008).

112  A suggestion was made that the point in time when the arbitrator should provide a statement should be clarified. That suggestion did not receive support. UNCITRAL, 40th Session, UN Doc A/CN.9/619, n 107, at 20, para 98.

113  N Blackaby and C Partasides with A Redfern and M Hunter, Redfern and Hunter on International Arbitration (5th edn 2009) 268–9. See also in context of a similar continuing duty to disclose under Article 11(3) of the 2012 ICC Rules. See M Buhler and S Jarvin, “The Arbitration Rules of the International Chamber of Commerce (ICC),” in F Weigand (ed) Practitioner's Handbook on International Commercial Arbitration (2nd edn 2009) 1209–10 (discussing comparable Article 7(3) of the 1998 ICC Rules).

114  Reprinted in section 2(D).

115  See, eg, Letter of the Agent for the Government of the United States, Arthur W Rovine, to the Agent for the Government of Iran, M K Eshragh, May 24, 1981 (information concerning Howard M Holtzmann, Richard M Mosk, and George H Aldrich, arbitrators); Letter of Agent for the Government of the United States, Arthur W Rovine, to the President of the Tribunal, Gunnar Lagergren, April 20, 1983 (information concerning Charles N Brower, arbitrator), reprinted in section 2(D)(2); Letters of the Agent for the Government of the United States, John R Crook, to the Agent for the Government of Iran, Mohammad K Eshragh, and to the President of the Tribunal, Gunnar Lagergren, both dated October 31, 1984 (information concerning Richard M Mosk, substitute arbitrator); Letters of the Agent for the Government of the United States, John R Crook, to the Agent for the Government of Iran, Mohammad K Eshragh, and to the President of the Tribunal, Gunnar Lagergren, both dated February 17, 1984 (information concerning Carl F Salans, substitute arbitrator); and Letters of the Agent for the Government of the United States John R Crook, to the Agent for the Government of Iran, Mohammad K Eshragh, and to the President of the Tribunal, Gunnar Lagergren, both dated March 14, 1984 (information concerning William H Levit, Jr, substitute arbitrator). See also R Mosk, “The Role of Party-Appointed Arbitrators,” n 1, at 267 (describing US government's questioning of prospective arbitrators as to “any connection with prospective American claimants or claims” and the internal disqualification of one candidate for the existence of such connections).

116  See Letter of the Agent of Iran to the Agent of the United States, December 13, 1983, cited in Letter of the Agent of the United States to the Agent of Iran, January 5, 1984, both reprinted in section 2(D)(2).

117  Letter of the Agent of the Government of the United States to the Agent of the Government of Iran, January 5, 1984, reprinted in section 2(D)(2).

118  See Letters of the Agent of the United States to the Agent of Iran, September 16, 1983 and December 5, 1983. A special issue beyond the scope of this Chapter is the disclosure requirements of legal secretaries to a tribunal or, in the case of the Tribunal, legal assistants to the arbitrators. In this regard the authors will only note that (1) it was generally believed at the Tribunal that legal assistants should provide disclosure to the arbitrator they served and recuse themselves from cases with which they had a possible conflict of interest and that (2) because the legal assistant is not the arbitrator, disclosure of possible conflicts to a small degree can cure such conflicts because the arbitrators can incorporate such circumstances in their evaluation of the work of the assistant.

119  See note 1 of Articles 9 to 12 of the 1983 Rules of Procedure of the Iran–US Claims Tribunal, reprinted in Appendix 5.

120  For a discussion of this role, see I Dore, The UNCITRAL Framework for Arbitration, n 1, at 59–61.

121  See n 115.

122  Corresponding Article 10 of the 1976 UNCITRAL Rules provides:

  1. 1. Any arbitrator may be challenged if circumstances exist that give rise to justifiable doubts as to the arbitrator's impartiality or independence.

  2. 2. A party may challenge the arbitrator appointed by him only for reasons of which he becomes aware after the appointment has been made.

123  Challenge Decision of January 11, 1995, para 23, reprinted in (1997) XXII Ybk Commercial Arb227, 234. Additional text from the decision is reprinted in section 3(C).

124  Challenge Decision of January 11, 1995, n 123, para 30. The appointing authority's conception of the “objective observer” was a “well informed but disinterested commercial person assessing the matter without specific expertise but aware of the political background against which the matter arises and of the nature of a lawyer's professional services.” Para 31.

125  See National Grid PLC and Republic of Argentina, Decision on the Challenge to Mr Judd L Kessler (December 3, 2007) (LCIA Case No UN 7949, 1976 UNCITRAL Rules, UK-Argentina BIT), at 18–19, paras 75–87 (applying an objective test, “pursuant to which it has to be determined whether a reasonable, fair-minded and informed person has justifiable doubts as to the arbitrator's impartiality”); Vito G Gallo and Government of Canada, Decision on the Challenge to Mr J Christopher Thomas, QC (October 14, 2009) (ICSID administered, 1976 UNCITRAL Rules, NAFTA Chapter Eleven Proceeding), at 6, para 19 (finding the standard is objective as it “requires not only doubt, but doubt that is justifiable”); AWG Group Ltd and Argentine Republic, Decision on the Second Proposal for the Disqualification of a Member of the Arbitral Tribunal (May 12, 2008) (ICSID administered, 1976 UNCITRAL Rules, UK-Argentina BIT), at 11, para 22 (finding the operative question to be: “Would a reasonable, informed person viewing the facts be led to conclude that there is a justifiable doubt as to the challenged arbitrator's independence and impartiality?”); all reprinted in section 3(C). See also “LCIA Court Decisions on Challenges to Arbitrators Reference No UN 3490, October 21, 2005 and December 27, 2005,” summarized in 27(3) Arb Intl 377, 384–6 (recognizing a reasonable man test).

126  UN Doc A/10017, n 71, paras 65–69, reprinted in (1975) VI UNCITRAL Ybk 24, 32.

127  The situation has since reversed. See P Rutledge, R Kent and C Henel, “United States”, in F Weigand (ed) Practitioner's Handbook on International Commercial Arbitration (2nd edn 2009) 897. See also AAA/ABA Code of Ethics, Note on Neutrality (effective March 1, 2004), AAA Commercial Rules, R-12,17; CPR International Rules, r 7.1; JAMS International Rules, Article 8.1. See also J Poudret and S Besson, Comparative Law of International Arbitration (2nd edn 2007) 346.

128  See R Mosk, “The Role of Party-Appointed Arbitrators,”n 1, 260 (“Most rules for institutional international arbitrations and European arbitration laws make no distinction between party-appointed and non-party-appointed arbitrators for purposes of their independence and impartiality”). See also J Poudret and S Besson, Comparative Law, n 127.

129  UN Doc A/10017, n 71, para 68, reprinted in (1975) VI UNCITRAL Ybk 24, 32.

130  UN Doc A/10017, n 71, para 69.

131  See Report of the Secretary-General on the Revised Draft Set of Arbitration Rules, UNCITRAL, 9th Session, Addendum 1 (Commentary), UN Doc A/CN.9/112/Add.1 (1975), reprinted in (1976) VII UNCITRAL Ybk 166, 170 (Commentary on Draft Article 9(1)). See also Decision of the Appointing Authority on the Challenge of Judge Broms, May 7, 2001, at 11, reprinted in section 3(D)(1); Challenge of April 15, 1993 para 1, and Challenge of January 11, 1995, para 8, both reprinted in section 3(C).

132  Decision of the Appointing Authority on the Challenge of Judge Noori, August 31, 1990, n 45, at 317. Note the President did not say that this was all that was thought required in disclosure by arbitrators, but rather implicitly that it was all that had come to be expected of the Iranian arbitrators.

133  Decision of the Appointing Authority, n 45, at 324.

134  S Baker and M Davis, The UNCITRAL Rules in Practice, n 1, at 56.

135  Decision of the Appointing Authority, Judge W E Haak, on the Challenges against Judges Krzysztof Skubiszewski and Gaetano Arangio-Ruiz, March 5, 2010, at 16, para 67 (citing Iran's Second Submission dated October 22, 2009, at 6 n 4). See also generally n 61.

136  Decision of the Appointing Authority, n 135, at 16, para 67.

137  Report of the Secretary-General on the Preliminary Draft Set of Arbitration Rules, UNCITRAL, 8th Session, UN Doc A/CN.9/97 (1974), reprinted in (1975) VI UNCITRAL Ybk 163, 171 (Commentary on Draft Article 8(2)); UN Doc A/10017, n 71, paras 70–72, reprinted in (1975) VI UNCITRAL Ybk 24, 32 (Commentary on Draft Article 8(2)).

138  See UNCITRAL, 8th Session, UN Doc A/CN.9/97, n 137, para 73.

139  UNCITRAL, 8th Session, UN Doc A/CN.9/97, n 137, para 73.

140  UNCITRAL, 8th Session, UN Doc A/CN.9/97, n 137, para 73.

141  UNCITRAL, 8th Session, UN Doc A/CN.9/97, n 137, para 73.

142  UNCITRAL, 8th Session, UN Doc A/CN.9/97, n 137, para 73.

143  See Summary Record of the 3rd Meeting of the Committee of the Whole (II), UNCITRAL, 9th Session, UN Doc A/CN.9/9/C.2/SR.3, at 3, para 17 (1976) (Comment by Mr Holtzmann, United States).

144  Summary Record, n 143, at 4.

145  See generally section 3(B)(1)(a). In its case law regarding the independence and impartiality of a tribunal (under Article 6 of the European Convention on Human Rights), the European Court of Human Rights (ECHR) has on many occasions recognized the difficulty in separating the two concepts. For example, this was the case in Holm v Sweden involving a freedom of speech trial with a jury largely consisting of members of one political party. The Court examined the issues of independence and impartiality together and concluded that “the independence and impartiality of the District Court were open to doubt and that the applicant's fears in this respect were objectively justified.” Holm, ECHR (1993), Series A, Vol 279-A, para 33. For the sake of clarity, it should be noted that the requirements of Article 6 do not apply fully to arbitration. Within certain limits it is possible to waive Convention rights, and the conclusion of an arbitration agreement can be regarded as such a waiver. See, eg, Nordström-Janzon v Netherlands 528101/95), Decision of the European Commission of Human Rights (November 27, 1996) DR 87-A, 112. See also N Blackaby and C Partasides, Redfern and Hunter on International Arbitration, n 113, 266–8, 274–7.

146  See, eg, National Grid PLC and Republic of Argentina, Decision on the Challenge to Mr Judd L Kessler (December 3, 2007) (LCIA administered UN 7949, 1976 UNCITRAL Rules, UK-Argentina BIT), at 18, paras 76–77.

147  See 2004 IBA Guidelines on Conflicts of Interest in International Arbitration.

148  See Decision of the Appointing Authority, Judge W E Haak, on the Challenges against Judges Krzysztof Skubiszewski and Gaetano Arangio-Ruiz, March 5, 2010, at 10, para 43 (finding that “[t]ogether with the case precedents of the Tribunal established through past challenges, the IBA Guidelines will inform my analysis in this Challenge”).

149  Reply Memorandum of Iran regarding the Challenge of Judge Briner in Case No 55, November 28, 1988, reprinted in 20 Iran-US CTR 260, 273 (1988–III). See also, extract reprinted in section 3(D)(2).

150  See Decision of the Appointing Authority on the Second Challenge by Iran of Judge Briner, September 19, 1989 at 4–6, 8–9, reprinted in 21 Iran-US CTR 384, 387–91 (1989–I). See also discussion at section 1(B)(4) and extract reprinted in section 3(D)(1)

151  See Summary Record of the 15th Meeting of the Committee of the Whole (II), UNCITRAL, 9th Session, UN Doc A/CN.9/9/C.2/SR.15, at 7, para 65 (1976) (Comment by Mr Mantilla-Molina).

152  Summary Record, n 151, para 63 (Comment by Mr Holtzmann, United States).

153  See section 1(A)(8), for a discussion of the appointing authority's decision in the challenge to Mr Christopher Thomas in the Gallo arbitration.

154  See also discussion at section 1(B)(3).

155  See S Baker and M Davis, The UNCITRAL Rules in Practice, n 1, 49.

156  Memorandum of Amoco Iran Oil regarding the Challenge of Judge Briner in Case No 55 by Iran, November 2, 1988, reprinted in 20 Iran-US CTR 233, 250 (1988–III). See also extracts reprinted in section 3(D)(1).

157  Cited in Memorandum of Iran regarding its Challenge of Judge Briner in Case No 55, September 28, 1988, reprinted in 20 Iran-US CTR 190, 212 (1988–III). The IBA Rules of Ethics for International Arbitrators, adopted in 1987, were reprinted in (1987) 15 Intl Business Lawyer 332. For a later related effort, see the 2004 IBA Guidelines on Conflicts of Interest in International Arbitration.

158  For a discussion, see section 1(A)(6).

159  Decision on a Second Proposal for the Disqualification of a Member of the Arbitral Tribunal, May 12, 2008, at 12–13, Suez, Sociedad General de Aguas de Barcelona SA and Vivendi Universal SA and Argentina Republic, Suez, Sociedad General de Aguas de Barcelona SA and InterAguas Servicios Integrales del Agua and Argentine Republic, and AWG Group Ltd and Argentine Republic. For additional text from the decision, see section 3(C).

160  Decision on a Second Proposal for the Disqualification of a Member of the Arbitral Tribunal, n 159, at 13.

161  For a discussion, see also section 1(B)(11).

162  Letter from the US Agent, Mr Clifton Johnson, to the Appointing Authority, Judge W E. Haak, regarding Notice of Challenge of Mr Assadollah Noori, Mr Koorosh H Ameli, and Mr Mohsen Aghahoseeini, December 21, 2005, at 1.

163  Letter from the US Agent, Mr Clifton Johnson, to the Appointing Authority, Judge W E Haak, regarding the Challenge of Mr Assadollah Noori, Mr Koorosh H Ameli, and Mr Mohsen Aghahoseeini, February 3, 2006, at 7. For additional text of the decision, see section 3(D)(1).

164  Decision by the Appointing Authority, Judge W E Haak, on the Challenge against Judges Assadollah Noori, Koorosh H Ameli, and Mohsen Aghahosseini, at 5–6, paras 31–33. For the text of the decision, see section 3(D)(1).

165  Decision of the Appointing Authority on the Challenge of Judge Noori, n 56, at 324.

166  ICS Inspection and Control Services Ltd and Republic of Argentina, Decision on Challenge to Arbitrator (Jernej Sekolec, Appointing Authority) (December 17, 2009), at 4 (PCA administered, 1976 UNCITRAL Rules, UK-Argentina BIT). For additional text of the decision, see section 3C.

167  ICS Inspection and Control Services Ltd (1976 Rules), at 4.

168  ICS Inspection and Control Services Ltd (1976 Rules), at 5. For a discussion, see also section 1(A)(7).

169  Letter from Ms Ana Palacio, ICSID Secretary-General, to Professor James Anaya (November 28, 2007), n 12, at 2. For a discussion, see also section 1(A)(4).

170  For a discussion, see also section 1(A)(2). See Challenge Decision of January 11, 1995, reprinted in part, in (1997) XXII Ybk Commercial Arb 227.

171  The claimant also alleged that the arbitrator “had a recent connection with a matter relevant to the underpinnings of the dispute in his capacity as one of the attorneys for a former government official.” Challenge Decision, n 170, para 3.

172  Challenge Decision, n 170, para 35.

173  Challenge Decision, n 170, paras 37–38.

174  Challenge Decision, n 170, paras 37–38.

175  Challenge Decision, n 170, para 44.

176  Vito G Gallo and Government of Canada, Decision on the Challenge to Mr J Christopher Thomas, QC (Nassib G Ziadé, ICSID Deputy Secretary-General, Appointing Authority) (October 14, 2009) (ICSID administered, 1976 UNCITRAL Rules, NAFTA Chapter Eleven). For a partial text of the decision, see section 3(C).

177  Decision on the Challenge to Mr J Christopher Thomas, n 176, at 9. For additional discussion, see also section 1(A)(8).

178  NAFTA, art 1128.

179  Decision on the Challenge to Mr J Christopher Thomas, n 176, at 10.

180  Decision on the Challenge to Mr J Christopher Thomas, n 176, at 11.

181  Decision of the Appointing Authority on the Second Challenge by Iran of Judge Briner, n 41, at 387.

182  Decision of the Appointing Authority, n 41, at 390.

183  Decision of the Appointing Authority, n 41, at 388.

184  Abstract of decision found in “LCIA Court Decisions on Challenges to Arbitrators Reference No UN3490, October 21, 2005 and December 27, 2005,” summarized in 27(3) Arb Intl 377, 388, para 6.6.

185  LCIA Court Decisions on Challenges, n 184, at para 6.7.

186  LCIA Court Decisions on Challenges, n 184, at para 6.11.

187  LCIA Court Decisions on Challenges, n 184, at para 6.10.

188  LCIA Court Decisions on Challenges, n 184, at para 6.13.

189  LCIA Court Decisions on Challenges, n 184, at para 6.13.

190  National Grid PLC and Republic of Argentina, Decision on the Challenge to Mr Judd L Kessler (December 3, 2007) (LCIA administered, 1976 UNCITRAL Rules, UK-Argentina BIT), at 22–3, para 92.

191  Decision on the Challenge to Mr Judd L Kessler, para 93.

192  Decision on the Challenge to Mr Judd L Kessler, para 96.

193  For a more detailed description of the challenge, see section 1(B)(13).

194  Decision of the Appointing Authority, Judge W E Haak, on the Challenges against Judges Krzysztof Skubiszewski and Gaetano Arangio-Ruiz, March 5, 2010, at 8, para 33.

195  Decision of the Appointing Authority, n 194, at 8, para 33.

196  Decision of the Appointing Authority, n 194, at 16, para 67.

197  Decision of the Appointing Authority, n 194, at 21, para 85 (citing Decision of the Appointing Authority, Justice Ch M J A Moons, on the Challenge against Judge Briner, September 19, 1989, at 5, reprinted in 21 Iran-US CTR 384, 388).

198  Decision of the Appointing Authority, n 194, at 22, para 87. Similarly, Justice Moon as Appointing Authority found:

Complaints alleging infringement or misapplication of the rules of procedure can succeed only if the alleged infringement or misapplication justifies doubts about the impartiality or independence of the arbitrator concerned. This can only be so if the infringement or misapplication admits of no other explanation than that it has its cause in lack of impartiality and independence on the part of the challenged arbitrator and that any other cause, such as an error or misunderstanding which, as experience has taught, may happen to the most conscientious judges, can be ruled out.

Decision of the Appointing Authority, Justice Ch M J A Moons, on the Challenge against Judge Briner, September 19, 1989, at 5–6, reprinted in 21 Iran US CTR 384, 388.

199  See Memorandum in Support of the Challenge by the United States of Mr Bengt Broms, Member and Chairman of Chamber One of the Iran-United States Claims Tribunal dated January 4, 2001. See also discussion at section 1(B)(9).

200  See The United States, et al and the Islamic Republic of Iran, et al (Case No A/28), Decision No DEC 130-A28-FT (December 19, 2000), para 95.

201  Dissenting Opinion by Judge Broms, para 1. The minority view in deliberations, according to which an order for replenishment might be unnecessary, given the small size of private claims pending against Iran, if it was proven that the Tribunal did not have jurisdiction over the US Government's largest remaining claim against Iran, the counterclaim in Case No B1 for over US $1 billion. Judge Broms’ opinion also alleged improprieties in the manner in which negotiation of the decision's operative replenishment language took place.

202  The US Government simultaneously argued that Judge Broms’ alleged misconduct served as a basis for challenge under Article 13(2) of the Tribunal Rules for failure to act. Sir Robert rejected these grounds. Decision of the Appointing Authority, Sir Robert Jennings, on the challenge of Judge Bengt Broms (May 7, 2001), at 4 (“Article 13 was not intended to be used to supplement or qualify the meanings of ‘independence’ and ‘impartiality’ in Articles 9 to 12 … ”).

203  Decision of the Appointing Authority, Sir Robert Jennings, n 202, at 11. Given the Tribunal's unique institutional setting, Sir Robert noted, however, that “any sign of a repetition [by Judge Broms] might change the balance of a decision in respect of any further challenge.”

204  Decision of the Appointing Authority, Sir Robert Jennings, n 202, at 6.

205  Decision of the Appointing Authority, Sir Robert Jennings, n 202, at 8.

206  Joint Decision by the Appointing Authority, Judge W E Haak, on the Challenges against Judge Krzysztof Skubiszewski and Judge Hamid Reza Oloumi Yazdi, April 2, 2008, at 25.

207  Joint Decision by the Appointing Authority, Judge W E Haak, n 206, at 25. See also discussion at section 1(B)(12).

208  Letter and Memorandum of the Agent of the United States to the Appointing Authority initiating its Challenge of Judges Kashani and Shafeiei, n 36. See also discussion at section 1(B)(2).

209  Memorandum of Amoco Iran Oil regarding the Challenge of Judge Briner in Case No 55 by Iran, November 2, 1988 (quoting from a speech by M Hoellering), n 156, at 248. See also extracts reprinted in sections 3(D)(1) and 4(D); and discussion at section 1(B)(3).

210  Challenge Decision of January 11, 1995, para 11, reprinted in section 3(C). See also discussion at section 1(A)(2).

211  Challenge Decision of January 11, 1995, para 10. See also S Baker and M Davis, The UNCITRAL Rules in Practice, n 1, 51 (“A prudent appointing authority may be tempted to sustain an early challenge simply to be on the safe side and avoid the potential for delay and disruption later.”).

212  Challenge Decision of January 11, 1995, paras 10–11, reprinted in section 3(C).

213  Challenge Decision of January 11, 1995, para 9, n 210.

214  S Baker and M Davis, UNCITRAL Rules in Practice, n 1, 51.

215  As mentioned above, this choice was presented to the Agent of the United States on several occasions, by Iran's appointment of attorneys as arbitrators with Iran's Bureau of International Legal Services, the organization representing Iran before the Tribunal. In each case, very summary disclosure statements or no statements were provided. The response of the United States was to object to the lack of full disclosure, but not to challenge such arbitrators.

216  See S Baker and M Davis, UNCITRAL Rules in Practice, n 1, 50 (“The decision whether to disclose is left to the arbitrator's good faith discretion, after all, and there is room for necessarily an honest difference of opinion about whether a particular relationship should have been disclosed”).

217  Memorandum of Amoco Iran Oil regarding the Challenge by Iran of Judge Briner in Case No 55, November 2, 1988, n 209, at 255.

218  S Baker and M Davis, UNCITRAL Rules in Practice, n 1, 50.

219  Letter of Claimant in Case No 248 to the Appointing Authority initiating the Challenge of Judge Noori in Case No 248, February 20, n 44. See also discussion at section 1(B)(6).

220  Decision of the Appointing Authority on the Challenge of Judge Noori, n 45, at 324.

221  The inexplicable aspect of the decision is the Appointing Authority's wording of his holding—“Mr. Noori has wrongly been accused of having infringed article 9 … the challenge ought to be dismissed”—which implies that the issue was the alleged failure to disclose rather than whether, first and foremost, the earlier position of Judge Noori and, secondarily, his failure to disclose that position, gave rise to justifiable doubts.

222  Decision of the Appointing Authority on the Second Challenge by Iran of Judge Briner, n 39, at 387. See also discussion at section 1(B)(4).

223  See section 1(C).

224  These provisions correspond to Articles 12(1) and 12(3) of the 2010 UNCITRAL Rules.

225  “Memorandum Re: Challenge to Arbitrators Kashani and Shafeiei by the Government of the United States of America” at 8, attached to Letter of the Agent of the United States to the Appointing Authority, n 36, at 9347–8.

226  Memorandum Re: Challenge to Arbitrators Kashani and Shafeiei,” n 225, at 9 (emphasis added).

227  Case No 60, II Decision of the Arbitral Commission 216 (Wickstrom, Sauser-Hall, Lagergren, Euler, Arndt (CO) Marion, Phenix (CO) comms, 1959), reprinted in (1963) 28 ILR 549.

228  Intl L Rep, n 227, 552 (emphasis added).

229  Memorandum, n 225, at 8.

230  But see Separate Opinion of Mr Phenix concurring in the result but contending that Article 4(2) is exhaustive and that Article 8(1) may not be used to expand Article 4(2).

231  See Bengtson, n 227, at 554:

… [T]he question might be put whether a strict interpretation of the Charter does not show that the Signatories to the Settlement Convention had intended to recognize only the narrowly defined reasons laid down in Article 4, paragraph 2, of the Charter, because, taking into consideration the special composition of the Commission, neither of the parties should be given the power of obstructing the work of the Commission by applying for disqualification. In fact, in national jurisdictions, a challenged judge may be replaced immediately, whereas the replacement of a non-German member of the Commission would necessitate the appointment of a new member by the Power which had appointed him or, in the case of a neutral member, an agreement between the four Signatories to the Settlement Convention a replacement procedure which would, in each case take up a great deal of time.

232  Indeed, Article 13(2) of the 1976 UNCITRAL Rules was intended to cover all circumstances that make it impossible for an arbitrator to perform his functions. Report of the UNCITRAL on the Work of its Ninth Session, UN GAOR, 31st Session, Supp No 17, UN Doc A/31/17, para 70 (1976), reprinted in (1976) VII UNCITRAL Ybk 66, 71.

233  Memorandum, n 225, at 9.

234  See generally US Notice of Challenge of Arbitrator Bengt Broms from the Agent of the United States to the Appointing Authority (January 4, 2001).

235  Decision of the Appointing Authority, Sir Robert Jennings, on the challenge of Judge Bengt Broms, May 7, 2001, at 4.

236  Decision of the Appointing Authority, Sir Robert Jennings, n 235, at 4. For the text of the decision relating to Article 13, see section 3(D)(1).

237  UN Doc A/10017, n 71, para 67, reprinted in (1975) VI UNCITRAL Ybk 24, 32.

238  Walter Bau AG and Kingdom of Thailand, Award (July 1, 2009) (Ad Hoc Proceeding, 1976 UNCITRAL Rules, Germany-Thailand BIT), at paras 1.36–1.42. The arbitrator ultimately resigned. Para 1.42.

239  Corresponding Article 11 of the 1976 UNCITRAL Rules provides:

  1. 1. A party who intends to challenge an arbitrator shall send notice of his challenge within fifteen days after the appointment of the challenged arbitrator has been notified to the challenging party or within fifteen days after the circumstances mentioned in articles 9 and 10 became known to that party.

  2. 2. The challenge shall be notified to the other party, to the arbitrator who is challenged and to the other members of the arbitral tribunal. The notification shall be in writing and shall state the reasons for the challenge.

  3. 3. When an arbitrator has been challenged by one party, the other party may agree to the challenge. The arbitrator may also, after the challenge, withdraw from his office. In neither case does this imply acceptance of the validity of the grounds for the challenge. In both cases the procedure provided for in article 6 or 7 shall be used in full for the appointment of the substitute arbitrator, even if during the process of appointing the challenged arbitrator a party had failed to exercise his right to appoint or to participate in the appointment.

240  Accord Report of the Secretary-General on the Revised Draft Set of Arbitration Rules, UNCITRAL, 9th Session, Addendum 1 (Commentary), UN Doc A/CN.9/112/Add.1 (1975), reprinted in (1976) VII UNCITRAL Ybk 166, 170.

241  Summary Record of the 3rd Meeting of the Committee of the Whole (II), UNCITRAL, 9th Session, UN Doc A/CN.9/9/C.2/SR.3, at 4–5, para 25 (1976) (Comment by Mr Pirrung, Federal Republic of Germany).

242  UN Doc A/10017, n 71, para 78, reprinted in (1975) VI UNCITRAL Ybk 24, 33.

243  Report of the UNCITRAL, 8th Session, n 242, para 79.

244  Report of the Secretary-General on the Revised Draft Set of Arbitration Rules, UNCITRAL, 9th Session, Addendum 1 (Commentary), UN Doc A/CN.9/112/Add.1 (1975), reprinted in (1976) VII UNCITRAL Ybk 166, 170 (Commentary on Draft Article 10(1)).

245  Summary Record of the 15th Meeting of the Committee of the Whole (II), UNCITRAL, 9th Session, UN Doc A/CN.9/9/C.2/SR.15, at 8, para 70 (1976) (Comment by the Chairman).

246  Decision on the Proposal for the Disqualification of a Member of the Arbitral Tribunal Suez, Sociedad General de Aguas de Barcelona SA and Vivendi Universal SA and Argentina Republic, Suez, Sociedad General de Aguas de Barcelona SA and InterAguas Servicios Integrales del Agua and Argentine Republic, and AWG Group Ltd and Argentine Republic (October 22, 2007), at 9–10.

247  As to challenges raised in proceedings before the Iran–US Claims Tribunal, Note 2 to Articles 9 through 12 of the 1983 Tribunal Rules explains how Article 11(1) of the 1976 UNCITRAL Arbitration Rules is applied in this specific setting. For the Tribunal, the period for making a challenge to a member of the Chamber to which the case has been assigned is 15 days after the challenging party is given notice of the Chamber to which the case has been assigned, or 15 days after circumstances giving rise to the challenge become known.

248  Recall that the challenge involved whether Judge Briner's failure to disclose his relationship, given the Claimant's use of Morgan Stanley as an expert witness in the case, gave rise to justifiable doubts as to his impartiality or independence.

249  Memorandum of Amoco Iran Oil regarding the Challenge of Judge Briner in Case No 55 by Iran, n 156, at 234; reprinted in section 4(D)(1).

250  Reply Memorandum of Iran regarding the Challenge of Judge Briner in Case No 55, n 149, at 319; reprinted in section 4(D)(1).

251  See Summary Record of the 3rd Meeting of the Committee of the Whole (II), UNCITRAL, 9th Session, UN Doc A/CN.9/9/C.2/SR.3, at 4–6 (1976).

252  See Chapter 18.

253  The 15-day limit has typically been followed strictly. See also Decision of the Appointing Authority on the Challenge of Judge Bengt Broms, n 51, Letter of the Agent of the Government of the United States to the Appointing Authority, n 43; both reprinted in section 4(D)(1).

254  Letter of Attorney for Amoco Iran Oil, Mr Brice M Clagett, to the Appointing authority regarding the Challenge by Iran of Judge Briner in Case No 55, December 1, 1988, at 1–2, reprinted in 20 Iran-US CTR 325 (1988–III); reprinted in section 4(D)(1).

255  Vito G Gallo and Government of Canada, Decision on the Challenge to Mr J Christopher Thomas, QC, (Nassib G Ziadé, ICSID Deputy Secretary-General, Appointing Authority) (14 Oct 2009) (ICSID administered, 1976 UNCITRAL Rules, NAFTA Chapter Eleven), at 4, para 11 (citing Mr Thomas's reply of 22 June 2009).

256  Decision on the Challenge to Mr J Christopher Thomas, at 7.

257  See section 1(B)(5).

258  Decision of the Appointing Authority on the Challenge by Iran of Judge Briner, September 25, 1989, reprinted in 21 Iran-US CTR 398 (1989–I); reprinted in section 4(D)(1).

259  In spite of the strict application of the 15-day limit in the two Briner decisions, Tribunal practice implicity suggests that extensions of the time limit may be granted in some instances. Baker and Davis point, for example, to the instance involving Judge Virally:

… President Böckstiegel refused a request by Iran for a two month extension of time within which to bring a possible challenge to Virally as to a particular case, stating that in view of the 15-day time limit there was “no room for extensions.” This would appear to support a view of the time limit as absolute and nonextendable, except that President Böckstiegel had already permitted the parties much more than 15 days. Judge Virally's disclosure statement containing the professional relationships in question was made available to the Iranian agent no later than May 22, 1985, but President Böckstiegel stated that he would accept comments or objections until June 28, 1985. Because no challenge was ultimately made, the issue whether the 15-day limit is jurisdictional and nonextendable was never specifically addressed, but President Böckstiegel's action suggests that he at least believed the 15-day limit could be extended in proper circumstances.

S Baker and M Davis, The UNCITRAL Rules in Practice, n 1, 63–4. Of course, the other party can waive the time limit, since by agreement of the parties any provision of the rules can be modified.

260  In discussions to revise the Rules, members of the Working Group considered the addition of a provision that granted the appointing authority discretion to dismiss a challenge if the challenging party “ought reasonably to have known the grounds for challenge at an earlier stage of the procedure.” Settlement of Commercial Disputes: Revision of the UNCITRAL Arbitration Rules, Note by the Secretariat, UNCITRAL, UN Doc A/CN.9/WG.II/WP.151 at 13, para 28 (2008) (Draft Article 12(2)). The proposed language was rejected, among other reasons as it would create a standard of “imputed knowledge that would constitute a novelty in the Rules.” UNCITRAL, 42nd Session, UN Doc A/CN.9/665, n 89, at 19, para 101.

261  Decision by the Appointing Authority, Mr W E Haak, on the US Challenge to the three Iranian Arbitrators, April 19, 2006, para 25 at 4. Extracts of the decision are found in section 4(D)(1).

262  Letter from the US Agent, Mr Clifton Johnson, to the Appointing Authority, Mr W E Haak, March 10, 2006, at 14–15. For excerpts of the letter, see section 4(D)(1).

263  Letter from the US Agent, Mr Clifton Johnson, n 262, at 15.

264  Vito G Gallo and Government of Canada, Decision on the Challenge to Mr J Christopher Thomas, QC (Nassib G. Ziadé, ICSID Deputy Secretary-General, Appointing Authority) (October 14, 2009) (ICSID administered, 1976 UNCITRAL Rules, NAFTA Chapter Eleven), at 7, para 23.

265  Decision on the challenge to Mr J Christopher Thomas at 8, para 24. The appointing authority also found that “[a]llowing the Respondent to invoke evidence of constructive knowledge (even if reasonably proved) would relieve the arbitrator of the continuing duty to disclose. This would unfairly place the burden on the Claimant to seek elsewhere the notice it should have received from the arbitrator.”

266  Letter from the US Agent, Mr Clifton Johnson, to the Appointing Authority, Mr W E Haak (March 10, 2006), at 15–16. An excerpt of the letter canvassing Tribunal practice is included at section 4(D)(1).

267  Decision by the Appointing Authority, Judge W E Haak, on the Challenge against Judges Assadollah Noori, Koorosh H Ameli, and Mohsen Aghahosseini, April 19, 2006, at 4–5, paras 26–28, n 56.

268  Letter from the US Agent, Clifton Johnson, to the Appointing Authority, Judge W E Haak, regarding the Challenge of Arbitrators Assadollah Noori, Koorosh H Ameli and Mohsen Aghahosseini (February 3, 2006), at 9.

269  Letter from the US Agent, Clifton Johnson, n 268, at 9.

270  Decision by the Appointing Authority, Mr W E Haak, on the Challenge against Judges Assadollah Noori, Koorosh H Ameli, and Mohsen Aghahosseini (April 19, 2006), at 4, para 25.

271  Decision by the Appointing Authority, Mr W E Haak, n 270, at 5, paras 26–27. The decision cites the appointing authority's decision of September 19, 1989, on the second challenge to Judge Briner. In that, the Appointing Authority, Judge Moons, rejected the challenge based on Briner's handling of Case No 39 as untimely. Moons calculated the relevant time period based on the fact that “all the allegations on which the challenge is based are mentioned in Mr. Khalilian's statement of June 30, 1989,” which exceeded the 15-day time limit.” Decision of the Appointing Authority on the Second Challenge by Iran of Judge Briner, September 19, 1989, n 41, at 394.

272  Vito G Gallo and Government of Canada, Decision on the Challenge to Mr J Christopher Thomas, QC, (Nassib G. Ziadé, ICSID Deputy Secretary-General, Appointing Authority) (14 Oct 2009) (ICSID administered, 1976 UNCITRAL Rules, NAFTA Chapter Eleven), at 7 para 21.

273  Decision on the challenge to Mr J Christopher Thomas, at 7, para 21.

274  Decision on the challenge to Mr J Christopher Thomas, at 7, para 22.

275  Decision on the challenge to Mr J Christopher Thomas, at 7–8, paras 22–23.

276  Article 13(2) omits the writing requirement found in corresponding Article 11(2) of the 1976 UNCITRAL Rules because “the manner in which the information should be exchanged is already dealt with under article 2.” Settlement of Commercial Disputes: Revision of the UNCITRAL Arbitration Rules, Note by the Secretariat, UNCITRAL, UN Doc A/CN.9/WG.II/WP.151 at 13, para 26 (2008).

277  See, eg, Letter of the Agent of the Government of Iran to the Appointing Authority, Ch M J A Moons, September 27, 1988, at 2, reprinted in 20 Iran-US CTR 188–9 (1988–III); reprinted in section 4(D)(2).

278  Report of the Secretary-General on the Revised Draft Set of Arbitration Rules, UNCITRAL, 9th Session, Addendum 1 (Commentary), UN Doc A/CN.9/112/Add.1 (1975), reprinted in (1976) VII UNCITRAL Ybk 166, 170 (Commentary on Draft Article 10(2)).

279  See, eg, Letter of the Agent of Iran to the Appointing Authority initiating the Second Challenge, n 39, reprinted in section 4(D)(2).

280  Letter from the US Agent to the Appointing Authority dated September 17, 1984, at 3; reprinted in section 4(D)(2). Applying Article 2(2) of the UNCITRAL Rules, the 15 days “shall begin to run on the day following the day” that the circumstances become known to the challenging party. Therefore, because the attack occurred on September 3, the 15-day period commenced on September 4 and would have run to the end of business on September 18.

281  Letter from the US Agent, n 280, at 2.

282  Letter from the US Agent, n 280, at 2. Inasmuch as the Secretary-General of the Tribunal forwarded a copy of the Decision to the appointing authority on January 15, it might be thought that the Tribunal was merely attempting to decide internally whether the letter of January 1 was one they should refer to the appointing authority. If this was the case, however, then it is strange that the Tribunal did not consider that 1976 UNCITRAL Rule 11 speaks only of a party raising a challenge and does not address the power of the Tribunal to do so. In short, we must agree with the dissent of Judges Kashani and Shafeiei when they wrote “no mandate has been envisaged for this Tribunal either under the Declarations or even the UNCITRAL Rules in connection with the question of challenge or disqualification of the arbitrators.” Letter of Mahmoud M Kashani and Shafie Shafeiei, January 18, 1982. The Tribunal certainly was within its rights to inform the appointing authority of the first portion of its decision, but it need not have decided the status of the January 1 letter in order to do so.

If anything, it appears that the Tribunal may have decided that the January 1 letter constituted a challenge in order to indirectly help preserve the rights of Iran, the Agent of Iran having argued before the Tribunal that “although the [1976] UNCITRAL Rules are not needed, no rights should be taken away from it.” Tribunal Decision, Section II. Thus the Tribunal states at the end of its Decision: “In view of the decision by the Tribunal that the [1976] UNCITRAL Rules provide the only means by which a member of the Tribunal may be challenged [and given the 15-day limit] to hold [other than that the letter of January 1 constitutes a challenge] would deprive Iran of the only means of challenge available to it.” Tribunal Decision, Section V.

The later decision of the appointing authority does not state that this holding of the Tribunal was unauthorized but does state that it was unnecessary. Justice Moons writes that “it is not relevant whether the said Tribunal was competent to give the decision referred to above…”. Decision of the Appointing Authority on the Objections by Iran to Judge Mangård, n 31, para 3.5.

283 Decision of the Appointing Authority, n 31, para 4.8.

284  Decision of the Appointing Authority, n 31, para 4.4; reprinted in section 4(D)(2).

285  Decision of the Appointing Authority, n 31, para 4.5 (italics removed).

286  Decision of the Appointing Authority, n 31, para 4.5.

287  Decision of the Appointing Authority, n 31, para 4.7.

288  Decision of the Appointing Authority, n 31, para 4.8.

289  Joint Decision by the Appointing Authority, Judge W E Haak, on the Challenges against Judge Krzysztof Skubiszewski and Judge Hamid Reza Oloumi Yazdi, April 2, 2008, at 9.

290  Joint Decision by the Appointing Authority, n 289, at 10–11, reprinted below, section (4)D(2).

291  Joint Decision by the Appointing Authority, n 289, at 10–11.

292  Decision by the Appointing Authority, Judge W E Haak, on the Challenge against Judge Seyed Jamal Seifi, September 3, 2010, at 5–6, para 19 (citing Joint Decision by the Appointing Authority, Judge W E Haak, on the Challenges to Judge Skubiszewski and Judge Oloumi, April 2, 2008, at 8).

293  Decision by the Appointing Authority, n 292, at 6, para 20, reprinted in section 4(D)(2).

294  See Decision of the Appointing Authority, Judge W E Haak, on the challenge to Judge Charles Brower, September 3, 2010, at 6, para 15, reprinted in section 4(D)(2).

295  Summary Record of the 3rd Meeting of the Committee of the Whole (II), UNCITRAL, 9th Session, UN Doc A/CN.9/9/C.2/SR.3, at 5, para 33 (1976) (Comment by the Chairman).

296  Summary Record, n 295, para 39 (Comment by Mr Pirrung, Federal Republic of Germany).

297  Letter of the Agent of the Government of Iran to the Appointing Authority initiating the First Challenge by Iran of Judge Briner, n 37, at 183; reprinted in section 4(D)(2).

298  Letter of Judge Briner to the Appointing Authority, Ch M J A Moons, September 14, 1988, reprinted in 20 Iran-US CTR 184 (1988–III); reprinted in sections 4(D)(1) and 4(D)(2).

299  Letter of the Appointing Authority, Ch M J A Moons, to the Agent of the Government of Iran, September 21, 1988, reprinted in 20 Iran-US CTR 187 (1988–III); reprinted in section 4(D)(2).

300  Article 11(1) (“A party who intends to challenge … ”) (emphasis added).

Under the Tribunal Rules and reflecting the Tribunal's multi-claim nature, a distinction is drawn between the role of the two governments in the institution and the arbitrating parties in a particular case. Only one of the two governments or High Contracting Parties may bring a challenge against an arbitrator on general grounds seeking to remove the arbitrator from the Tribunal entirely. However, the private parties arbitrating particular cases could challenge an arbitrator on the basis of circumstances giving rise to justifiable doubts about his impartiality or independence with regard to their particular case.

301  Tribunal Decision, n 31, Section VI.

302  Thus in the Buraimi Oasis case where no provision at all for challenge existed, the British-appointed judge, Sir Reader Bullard, finding the Saudi-appointed judge objectionable, concluded that “the only step I can take which is consistent with my own independence and honour is to tender my resignation.” See J Wetter, The International Arbitral Process: Public and Private (1979) vol III, 372.

303  See, eg, Report of the Secretary-General on the Preliminary Draft Set of Arbitration Rules, UNCITRAL, 8th Session, UN Doc A/CN.9/97 (1974), reprinted in (1975) VI UNCITRAL Ybk 163, 171 (Draft Article 9(3)).

304  See Summary Record of the 3rd Meeting of the Committee of the Whole (II), UNCITRAL, 9th Session, UN Doc A/CN.9/9/C.2/SR.3, at 4, 5, paras 26–30, 32 (1976).

305  UN Doc A/CN.9/9/C.2/SR.3, n 304.

306  UN Doc A/CN.9/9/C.2/SR.3, n 304, at 5.

307  See S Baker and M Davis, The UNCITRAL Rules in Practice, n 1, 127 (discussing ambiguities in Article 6 of the 1976 Rules).

308  Summary Record of the 3rd Meeting of the Committee of the Whole (II), UNCITRAL, 9th Session, UN Doc A/CN.9/9/C.2/SR.3, at 6, para 43 (1976) (Comment by Mr Mantilla-Molina, Mexico).

309  Report of the UNCITRAL on the Work of its Ninth Session, UN GAOR, 31st Session, Supp No 17, UN Doc A/31/17, para 65 (1976), reprinted in (1976) VII UNCITRAL Ybk 66, 71. See also Methanex Corp (1976 Rules), reprinted in section 4(C), and Challenge of April 15, 1993 (1976 Rules), reprinted in section 4(C). See also, Letter of Judge Robert Briner to the Appointing Authority, Ch M J A Moons, December 6, 1988, regarding the Challenge by Iran to his participation in Case No 55, reprinted in 20 Iran-US CTR 329 (1988–III), March 7, 1989, reprinted in section 4(D)(3).

Judge Briner has been the only arbitrator at the Iran-US Claims Tribunal to withdraw from a case in the face of a challenge. Because of its multi-claim nature, the Tribunal developed formal mechanisms to deal with withdrawal from cases by arbitrators. The Tribunal adopted one such mechanism, transfer of the case to another Chamber, early in its life as note 4 to Articles 9–12 of the Tribunal Rules demonstrates. note 4 states that “in the event that a member of a Chamber is challenged with respect to a particular case and withdraws or if the challenge is sustained, the President will order the transfer of the case to another Chamber.” In practice, however, the Tribunal came instead, for efficiency reasons, to leave the case in the Chamber and employ a substitute arbitrator. The possible conflict between a formal and informal mechanism became apparent in the withdrawal by Judge Briner.

Shortly after withdrawing from Case No 55, Judge Briner was appointed President of the Tribunal by Justice Moons—under vigorous protest by the Iranians. In his first Presidential Order, Briner appointed Judge Broms as his replacement in Chamber Two for Case No 55. (See Presidential Order No 67.) The Iranians strongly protested this move, arguing that Briner had disregarded the Tribunal Rules by not transferring the Case to another Chamber as note 4 requires. Judge Briner responded by referring to the evolution of the practice of the Tribunal. (See Letter of President Briner to the Agent of Iran, March 7, 1989, reprinted in section 4(D)(3)). It is interesting to note that Iran in its Reply Memorandum in the Challenge to Judge Briner in Case No 55 stated that “the proceeding in a case when a challenge is brought, may only be delayed if the challenge is sustained. It is only then that the case is transferred to another chamber.”

310  UNCITRAL, 42nd Session, UN Doc A/CN.9/665, n 89, at 16, para 85.

311  Settlement of Commercial Disputes: Revision of the UNCITRAL Arbitration Rules, Note by the Secretariat, UNCITRAL, UN Doc A/CN.9/WG.II/WP.151 at 13, para 27 (2008). See also UNCITRAL, 42nd Session, UN Doc A/CN.9/665, n 89, at 16, para 85.

312  UNCITRAL, 42nd Session, UN Doc A/CN.9/665, n 89, at 16–17, para 86. In addition, “It was said that there might be a need to provide for additional language to deal with the case where the challenged arbitrator was either the sole or presiding arbitrator.” Para 86.

313  UNCITRAL, 42nd Session, UN Doc A/CN.9/665, n 89, at 16–17, para 86.

314  UNCITRAL, 42nd Session, UN Doc A/CN.9/665, n 89, at 17, para 87.

315  UNCITRAL, 42nd Session, UN Doc A/CN.9/665, n 89, at 17, para 87.

316  UNCITRAL, 42nd Session, UN Doc A/CN.9/665, n 89, at 16, para 85.

317  UNCITRAL, 42nd Session, UN Doc A/CN.9/665, n 89, at 17, para 89.

318  UNCITRAL, 42nd Session, UN Doc A/CN.9/665, n 89, at 17, para 89.

319  UNCITRAL, 42nd Session, UN Doc A/CN.9/665, n 89, para 90.

320  UNCITRAL, 42nd Session, UN Doc A/CN.9/665, n 89, para 90.

321  The only significant question was how long the new time periods should be. An early proposal recommended 15 or 30 days and 60 days for the respective time periods, Settlement of Commercial Disputes: Revision of the UNCITRAL Arbitration Rules, Note by the Secretariat, UNCITRAL, UN Doc A/CN.9/WG.II/WP.145 at 18, para 53 (2006) (Draft Article 12(1)), but was ultimately rejected in favor of shorter time periods. UNCITRAL, 40th Session, UN Doc A/CN.9/619, n 107, at 21, para 102.

322  Article 12 of the 1976 UNCITRAL Rules provides:

  1. 1. If the other party does not agree to the challenge and the challenged arbitrator does not withdraw, the decision on the challenge will be made:

    1. () When the initial appointment was made by an appointing authority, by that authority;

    2. () When the initial appointment was not made by an appointing authority, but an appointing authority has been previously designated, by that authority;

    3. () In all other cases, by the appointing authority to be designated in accordance with the procedure for designating an appointing authority as provided for in article 6.

  2. 2. If the appointing authority sustains the challenge, a substitute arbitrator shall be appointed or chosen pursuant to the procedure applicable to the appointment or choice of an arbitrator as provided in articles 6 to 9 except that, when this procedure would call for the designation of an appointing authority, the appointment of the arbitrator shall be made by the appointing authority which decided on the challenge.

323  For application of a similar rule under the 1976 UNCITRAL Rules (art 12(1)), see Methanex Corp (1976 Rules), reprinted in section 5(C) (finding that the tribunal has no jurisdiction to decide upon any aspects of a party's challenge).

324  Under Article 12(a) of the 1976 UNCITRAL Rules, if an appointing authority made the original appointment of the challenged arbitrator, the challenge will be decided by that authority. Under Article 12(b), if an appointing authority did not appoint the challenged arbitrator, but an appointing authority has already been designated by the parties, that authority will make the decision. Finally, Article 12(c) covers the remaining cases in which an appointing authority will be designated according to the procedures of Article 6(2).

325  For practice under the original rule, see, eg, Letter of the Agent of the United States to the Appointing Authority initiating the Challenge of Judges Kashani and Shafeiei, September 17, 1984, reprinted in Intl Arb L Rev 9344; and Letter of the Agent of the Government of Iran to the Appointing Authority initiating the First Challenge, n 37; both reprinted in section 5(D)(1).

326  UN Doc A/10017, n 71, para 83, reprinted in (1975) VI UNCITRAL Ybk 24, 33.

327  Report of the UNCITRAL, 8th Session, n 326, para 85. This is the practice followed, for example, under the ICSID arbitration rules.

328  Report of the UNCITRAL, 8th Session, n 326, para 85.

329  See Summary Record of the 5th Meeting of the Committee of the Whole (II), UNCITRAL, 9th Session, UN Doc A/CN.9/9/C.2/SR.5, at 4, paras 22–23 (1976) (Comments by the Chairman and Mr Pirrung, Federal Republic of Germany).

330  UN Doc A/10017, n 71, para 85, reprinted in (1975) VI UNCITRAL Ybk 24, 34.

331  Summary Record of the 5th Meeting of the Committee of the Whole (II), UNCITRAL, 9th Session, UN Doc A/CN.9/9/C.2/SR.5, at 4, para 22 (1976) (Comment by the Chairman).

332  Summary Record of the 5th Meeting, n 331, para 23 (Comment by Mr Pirrung, Federal Republic of Germany).

333  UN Doc A/10017, n 71, para 84, reprinted in (1975) VI UNCITRAL Ybk 24, 33.

334  Report of the Secretary-General on the Revised Draft Set of Arbitration Rules, UNCITRAL, 9th Session, Addendum 1 (Commentary), UN Doc A/CN.9/112/Add.1 (1975), reprinted in (1976) VII UNCITRAL Ybk 166, 171 (Commentary on Draft Article 11(1)(b)).

335  See discussion of Article 6(2) in Chapter 4.

336  Decision of the Appointing Authority on the Objections by Iran to Judge Mangård, n 31, at 513–14.

337  See S Baker and M Davis, The UNCITRAL Rules in Practice, n 1, 66.

338  Decision of the Appointing Authority on the Objections by Iran to Judge Mangård, n 31, at 514, reprinted in section 5(D)(1).

339  See Summary Record of the 5th Meeting of the Committee of the Whole (II), UNCITRAL, 9th Session, UN Doc A/CN.9/9/C.2/SR.5, at 4–5 (1976). In the Committee discussions on Article 12 of the 1976 UNCITRAL Rules, the Soviet representative once again, as he had in the discussions on Article 11 of the 1976 UNCITRAL Rules, raised the issue of the types of evidence which should be permitted when an arbitrator was challenged. Nevertheless, the issue remained unaddressed.

340  See, eg,Vito G Gallo and Government of Canada, Decision on the Challenge to Mr J Christopher Thomas, QC (October 14, 2009) (ICSID administered, 1976 UNCITRAL Rules, NAFTA Chapter Eleven), at 5, para 16.

341  Decision by the Appointing Authority, Judge W E Haak, on the Challenge against Mr Assadollah Noori, Koorosh H Ameli, Mohsen Aghahosseini (April 19, 2006), n 56, at 2, para 8; reprinted in section 4(D)(1).

342  National Grid PLC and Republic of Argentina, Decision on the Challenge to Mr Judd L Kessler (December 3, 2007) (LCIA administered, 1976 UNCITRAL Rules, UK-Argentina BIT), at 7, para 26.

343  Decision on Challenge to Arbitrator, December 17, 2009, at 5, para 7. See also National Grid PLC and Republic of Argentina, Decision on the Challenge to Mr Judd L Kessler (December 3, 2007) (LCIA administered, 1976 UNCITRAL Rules, UK-Argentina BIT), at 24, para 104. But see Vito G Gallo and Canada, Decision on the Challenge to Mr J Christopher Thomas, QC (October 14, 2009) (ICSID administered, 1976 UNCITRAL Rules, NAFTA Chapter Eleven), at 11, para 37.

344  See 2010 UNCITRAL Rules, art 17(1).

345  For example, in the case of the Iranian Government challenge of Judge Mangård initiated on January 1, 1982, the Agent for the United States wrote to the Secretary-General of the Permanent Court of Arbitration, Jacob Varekamp, on January 8, 1982, stating that the US Government did not agree to the challenge and requesting that an appointing authority be designated. This designation was made five days later on January 13, 1982. Such speed no doubt reflects in large part the fact that the Tribunal and the Permanent Court of Arbitration are both located in The Hague and thus the Secretary-General of the Permanent Court was intimately familiar with individuals and institutions who could ably serve as appointing authority. In the case of a request for designation of an appointing authority for an ad hoc arbitration, such designation may take considerably longer. There is no reason to suppose, however, that the Permanent Court of Arbitration will not handle the matter expeditiously under these circumstances.

346  Emphases added.

347  UNCITRAL, 42nd Session, UN Doc A/CN.9/665, n 89, at 18, para 94.