Ethical Rules for International Arbitrators - 3

Ethical Rules for International Arbitrators - 3

Ramon Mullerat OBE

III. Independence and impartiality

Independence and impartiality are the most essential features of the adjudicatory function. Resolution 1999/31 of the UN Commission on Human Rights provides:

" independent and impartial judiciary ... are essential prerequisites for the protection of human rights and for ensuring that there is no discrimination in the administration of justice"

The main duty for arbitrators is also to be independent and impartial. Independence and impartiality is something essential to arbitration proceedings. Only if the arbitrators are independent and impartial and the parties treated with equality can a fair award be made 10.

Questions arise as to whether the same standards of independence and impartiality applied to judges should be applied to arbitrators and how those standards can be applied across the many jurisdictions in which international arbitrations take place. In the international sphere, it is accepted that arbitrators must exercise their functions impartially. In many jurisdictions the notion of independence is considered the best yardstick to measure perceived impartiality. In most international arbitrations, an arbitrator will be required to be independent, either by the law to which the arbitration procedure is subject or the rules of arbitration agreed by the parties. Typically, such arbitration laws and rules require that the person wishing to be appointed as an arbitrator disclose any doubts about his independence both at the time of appointed and throughout the duration of the arbitration (sec III.8).

1. Independence

Independence should not be confused with impartiality. Independence is a situation of fact, impartiality is a state of mind that may only be verified through facts. However, independence is based on a presumption on impartiality.

Independence is the quality of being free from the influence, guidance or control of others. The term independence implies no interest of or pressure on the arbitrator which may influence the free decision of the arbitrator.

At least the following circumstances result in a lack of independence: material interest in the resolution of the case; previous commercial relations; continue family relationship or important social, professional or business relationship with one of the parties' lawyer or witness; enmity with a party; making his position public in regards to the case.

2. Impartiality

Partiality arises when an arbitrator somehow favours one of the parties, or when he is prejudiced in relation to the subject matter of the dispute.

Impartiality means freedom from favouritism or bias either by word or by action, and a commitment to serve all parties as opposed to a single party 11. Impartiality is a more abstract concept than independence in the sense that it implies a state of mind, which is difficult to measure and quantify.

Impartiality has been especially studied in relation to judges. Fairness and impartiality must be both subjectively present and objectively demonstrated to the informed and reasonable observer. The trial will be rendered unfair if the words or actions of the judge give rise to a reasonable apprehension of bias to the informed and reasonable observer. Judges must be particularly sensitive to the need not only to be fair but also to appear to all reasonable observers to be fair.

The apprehension of bias must be a reasonable one held by reasonable and right-minded persons, applying themselves to the question and obtaining thereon the required information. The test is what would an informed person, viewing the matter realistically and practically-and having thought the matter through conclude. This test contains a two-fold objective element: the person considering the alleged bias must be reasonable and the apprehension of bias itself must also be reasonable in the circumstances of the case. Further the reasonable person must be an informed person, with knowledge of all the relevant circumstances, including the traditions of integrity and impartiality that form a part of the background and apprised also of the fact that impartiality is one of the duties the judges swear to uphold.

A real likelihood or probability of bias must be demonstrated and a mere suspicion is not enough. The existence of a reasonable apprehension of bias depends entirely on the facts. The threshold for such a finding is high and the onus of demonstrating bias lies with the person who is alleging its existence. The test applies equally to all judges, regardless of their background, gender, race, ethnic origin, or any other characteristic.

3. Appearance of impartiality or bias

Impartiality can be described as a state of mind in which the adjudicator is disinterested in the outcome and is open to persuasion by the evidence and submissions. In contrast, bias denotes a slate of mind that is in some way predisposed to a particular result or that is closed with regard to particular issues. Whether a decision-maker is impartial depends on whether the impugned conduct gives rise to a reasonable apprehension of bias. Actual bias need not be established because it is usually impossible to determine whether the decision-maker approach the matter with a truly biased state of mind.

Arbitrators also must not only be independent and impartial, but must be perceived as sueh, following Lord Hewitt's famous statement: "justice should not only be done but should manifestly and undoubtedly be seen to be done" 12 13. Most jurisdictions also confirm that arbitrators should be free from the perception as well as the actuality of bias.

Many regulations refer to the need to disclose not only any interest or relationship likely to affect impartiality but also any interest or relationship which might create an appearance of partiality or bias (Canon II, AAA/ABA Code).

4. Relationship between.independence and impartiality

It might be helpful to focus on the relationship between independence and impartiality. Some say that, while both principles in the abstract are frequently invoked, there tends to be an overemphasis on the former (independence) at the expense of the latter (impartiality). They take as their major premise the principle of judicial independence. In other words, they tend to consider judicial independence to be an end in itself and this, in turn, renders all other principles such as impartiality and accountability second order. While the importance of judicial independence cannot be gainsaid, there is a danger in treating it as an end in itself. The primary goal that we should be aiming for is ethical, fair and responsible decisionmaking. In other words, impartiality is considered to be the end to be achieved and independence is a means - a crucial means - to that end, but not and end in itself.

In my view, however, independence, as a matter of fact, comes first and impartiality, as a matter of mind, comes later. A judge as an arbitrator can be independent - inexistence of physical, mental or economic dependence and absence of pressure - but they can be biased. So I think that the order to consider both principles is first independence and second impartiality.

10 Francisco González de Cossio, "Independencia, imparcialidad y apariencia de imparcialidad de los árbitros". back
11 Daniel Bent, Ethical Rules of Mediation and Arbitration. Fair Mediation and Ethical Standards of Professional Responsibility. back
12 Lord Hewitt, R. v, Sussex Justices, ex parte Mc Carthy. 1924. Machiaveli said the same about the wife of the Caesar. back
13 Jacqueline F. Drucker, "Ethics in labor and employment arbitration", 2003, American Bar Association. back