Three arbitrator challenge decisions in ICSID arbitrations | Practical Law

Three arbitrator challenge decisions in ICSID arbitrations | Practical Law

An update on three recent decisions on arbitrator challenges in ICSID arbitrations.

Three arbitrator challenge decisions in ICSID arbitrations

Practical Law Legal Update 6-501-0393 (Approx. 3 pages)

Three arbitrator challenge decisions in ICSID arbitrations

by PLC Arbitration
Published on 16 Dec 2009International, USA
An update on three recent decisions on arbitrator challenges in ICSID arbitrations.
Three decisions have recently been published dealing with the issue of arbitrator challenges in ICSID arbitration, each of which highlights different points of interest:
  • In Perenco Ecuador Limited v Republic of Ecuador and Empresa Estatal Petroleos del Ecuador (ICSID Case No ARB/08/16), the challenge was based on comments made by one of the arbitrators in an interview. Although the arbitrator did not refer specifically to the parties or the arbitration, the Secretary-General of the Permanent Court of Arbitration applied the "appearance of bias" test in the IBA Guidelines and held that a reasonable third person would find that the comments gave rise to justifiable doubts as to the arbitrator's impartiality or independence. Read more.
  • In Participaciones Inversiones Portuarias SARL v Gabonese Republic (ICSID Case No ARB/08/17), the challenge was made on the grounds that one of the arbitrators had been the president of a tribunal in another ICSID arbitration against the same respondent, raising similar legal issues, which gave rise to a risk of prejudice. The challenge was decided by the Chairman of ICSID's Administrative Council, as the two remaining members of the tribunal were in deadlock. Applying the ICSID Convention, the challenge was rejected. Read more.
  • In Cemex Caracas Investments BV and another v Bolivarian Republic of Venezuela (ICSID Case No ARB/08/15), the tribunal had to decide whether a challenge by Venezuela to one of the arbitrators had been brought "promptly", as required by ICSID Arbitration Rule 9(1). It held that the challenge had not been brought in time and that Venezuela had therefore waived its right to object. Read more.
These three decisions highlight the key distinctions between the procedures and tests for arbitrator challenges in ICSID arbitration, on the one hand, and under other international commercial arbitration rules, on the other. PIP SARL v Gabonese Republic in particular has given rise to a great deal of discussion about the ICSID challenge procedure and the test for disqualification, which some consider are weighted against the challenging party.