Disqualification of Arbitrators - ICSID Convention Arbitration (2022 Rules)

Either party may propose the disqualification of a Tribunal member once the Tribunal has been constituted (Article 57 of the ICSID Convention, Arbitration Rule 22).  A party may also propose that a Tribunal member be removed for incapacity or failure to perform the required duties (Article 56 of the ICSID Convention, Arbitration Rule 24).

A proposal to disqualify (or otherwise remove) an arbitrator must be made within 21 days after the later of the constitution of the Tribunal or the date on which the filing party first knew or should have known of the facts on which the proposal is based (Arbitration Rule 22(1)(a)). Failure to observe this deadline will result in the rejection of the proposal. ​

Grounds for Disqualification

An arbitrator may be disqualified on account of any fact indicating a manifest lack of the qualities required by Article 14(1) of the ICSID Convention or on the ground that the arbitrator was ineligible for appointment to the Tribunal under Articles 37 to 40 of the ICSID Convention (see Article 57 of the ICSID Convention).

Article 14(1) of the ICSID Convention specifies the qualities required of Panel members.  They must possess high moral character, recognized competence in the fields of law, commerce, industry or finance, and reliability to exercise independent judgment. These qualities must also be met by candidates appointed from outside the Panel (Article 40(2) of the ICSID Convention).

Articles 37 through 40 of the ICSID Convention address the constitution of the Tribunal and contain nationality requirements.  Ineligibility for appointment under these provisions constitutes the second ground for disqualification under Article 57 of the ICSID Convention.

The most frequently proposed ground for disqualification of a member of a Tribunal is alleged lack of reliability to exercise independent or impartial judgment.

The applicable legal standard for disqualification is an objective one, based on how a reasonable third party would evaluate the evidence. The subjective belief of the party proposing the disqualification does not satisfy the legal standard under the ICSID Convention.  While the IBA Guidelines on Conflicts of Interest are not binding, they may serve as useful references in a challenge under the ICSID Convention.  

Other Grounds for the Removal of an Arbitrator

An arbitrator may also be removed for incapacity or failure to perform the duties required of an arbitrator (ICSID Convention Article 56, Arbitration Rule 24). 

Procedure

The procedure applicable to a disqualification proposal will also apply to the removal of an arbitrator that becomes incapacitated or fails to perform the required duties (Arbitration Rules 22 and 24).

The procedure starts with the submission by a party of a full proposal regarding the member(s) of the Tribunal proposed for disqualification. The filing of a proposal suspends the proceeding, except to the extent that the parties agree to continue it (Arbitration Rule 22(2)). 

The filing party must submit the proposal within 21 days after the later of the constitution of the Tribunal or the date on which the filing party first knew or should have known of the facts on which the proposal is based. The other party must file a response within 21 days of receipt of the proposal.  Any statement by the arbitrator to whom the proposal relates must be filed within five days after the earlier of receipt of the response or expiry of its time limit. The parties may file final simultaneous comments after the earlier of receipt of the arbitrator’s statement or expiry of its time limit (Arbitration Rule 22(1)).

Decision

If one member is challenged, the decision on the proposal is usually made by the other members of the Tribunal (Article 58 of the ICSID Convention, Arbitration Rule 23).  However, the decision will be made by the Chair when the other members are unable to decide the proposal for any reason, or where the proposal refers to a sole arbitrator or to a majority of the Tribunal.

Arbitration Rule 23(3) contains a best-efforts obligation to issue a decision within 30 days.

Resumption of the Proceeding

The decision will either reject or uphold the proposal.  If the proposal is rejected, the proceeding will resume immediately with the same Tribunal.

A proposal that is upheld results in a vacancy on the Tribunal.  A vacancy is filled using the same method by which the arbitrator had been appointed, except that the appointment will be made by the Chair when

• the vacancy was caused by the resignation of a party-appointed arbitrator without the consent of the other members of the Tribunal
• the vacancy has not been filled 45 days after its notification (Rule 26(3)).

As soon as the vacancy has been filled, the proceeding will resume (Arbitration Rule 26(4)).

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