On 19 April 2021, the United Nations Commission on International Trade Law (“UNCITRAL”) and the International Centre for Settlement of Investment Disputes (“ICSID”) released an updated version of the draft Code of Conduct for Adjudicators (the “Draft Code”), following feedback and recommendations from State representatives and other stakeholders. This marks the latest effort to provide principles and rules governing issues such as adjudicators’ independence and impartiality, as well as their duty to conduct proceedings with integrity, fairness, efficiency and civility.
The Draft Code has been developed in the context of UNCITRAL Working Group III reforms on investor-State dispute settlement and proposed amendments to ICSID’s procedural rules. The first version of the Draft Code, adopted on 1 May 2020, addressed issues such as arbitrator conflicts of interest, limits on multiple roles and the number of cases that can be heard simultaneously, confidentiality, and sanctions for unethical behaviour.
First, as regards scope, the updated Draft Code now clarifies that it extends to State-to-State dispute settlement (Article 1.5) as well as investor-State disputes.
Second, the general duty of diligence now requires adjudicators “to be reasonably available” to the parties and the administering institution during the proceeding (Article 5.1). The former version suggested specific limitations on the number of cases that adjudicators could concurrently handle. This has been deleted following comments noting that the number of cases an adjudicator can reasonably address depends on many variable factors, including the stage of the case, its complexity, and the role of the adjudicator (presiding or wing). More generally, adjudicators are obliged to be “independent and impartial”, and must “take reasonable steps to avoid bias, conflict of interest, impropriety, or apprehension of bias” (Article 3.1). Adjudicators are also required to take “reasonable” steps (rather than “appropriate”, under the previous version) to ensure that their assistants are aware of, and comply with, the Draft Code.
Third, most provisions will apply only for the duration of the proceeding (Article 2), though some will apply indefinitely. As with the previous version, adjudicators are permanently prohibited from having “ex parte contacts with a party outside those contemplated by rules applicable to the proceeding or consent by the parties” (Article 7.3). Certain confidentiality obligations will also apply indefinitely. Under the latest version, arbitrators must not “disclose or use any non-public information concerning, or acquired in connection with, a proceeding except for the purposes of that proceeding” (Article 8.1.a).
Fourth, as regards “multiple roles” (known as “double-hatting”), adjudicators are prohibited from acting “concurrently as counsel or expert witness in another international investment dispute” (Article 4). In light of conflicting comments, the precise scope of this provision remains to be determined – in particular, whether it would only extend to concurrent adjudicator roles “involving the same factual background and at least one of the same parties or their subsidiary, affiliate or parent entity”. To reflect “the suggestion that double-hatting could be acceptable with informed consent of the disputing parties”, the restriction now applies “unless the disputing parties agree otherwise”.
Fifth, as regards disclosure obligations, adjudicators must disclose “any interest, relationship or matter that may, in the eyes of the parties, give rise to doubts as to their independence or impartiality, or demonstrate bias, conflict of interest, impropriety or an appearance of bias” (Article 10.1). Such a disclosure would cover any relationship with the parties, their counsel, other adjudicators in the proceeding, and any third-party funder, as well as any financial or personal interest in the outcome of the proceeding or any other proceeding involving the same factual background and at least one of the parties. The temporal scope for this provision remains unclear, as disclosure within “the past five years” is marked in bracketed text. Lastly, the Draft Code does not prohibit the repeat appointment of adjudicators, though the commentary states that it would not be permissible where “it rises to the level of a lack of independence or impartiality under Article 3”.
Sixth, and finally, in terms of enforcement, it is proposed that adjudicators can be challenged or removed for failing to comply with the Draft Code, save for those provisions on fees and expenses and disclosure duties (Article 11). This limitation has been introduced “to avoid numerous or strategic challenges based on requirements that are not strictly related to ethics”, but the Draft Code is clear that the full scope of this provision remains under review.
A paper addressing the Draft Code’s potential implementation will be published separately.
The text of the newly-released Draft Code is available here.
ICSID’s and UNCITRAL’s announcements on publication of the Draft Code and background information are available here and here, respectively.
The previous version of the Draft Code is available here.