Disqualification standards in international investment arbitration

Ensuring the independence and impartiality of arbitrators is one of the key elements safeguarding due process and the fair outcome of arbitration proceedings, as is the case in international investment arbitration. Independence and impartiality are two distinct but closely related concepts. Independence requires the lack of relations with any party that might influence an arbitrator’s decision. Impartiality requires the absence of any bias or predisposition towards one of the parties, which is a more subjective and abstract concept.

The arbitration mechanism under the International Centre for Settlement of Investment Disputes (ICSID), established under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, plays an important role in resolving investor-state disputes. Most of the international investment arbitration cases are governed by the above-mentioned convention.

Under article 57 of the convention, a party proposing the disqualification of an arbitrator shall prove a “manifest lack” of the arbitrator’s qualities and competence required by article 14 (1). The English and French versions of article 14 refer only to “independent”, but the Spanish version refers to “impartiality”. It is thus deemed that both requirements of an arbitrator’s independence and impartiality are implicitly embodied in this provision. According to the above two provisions, in ICSID cases, the standard for determining whether an arbitrator has an issue of independence or impartiality sufficient to cause his or her disqualification is “manifest lack”.