Disqualification and Removal of Conciliators - ICSID Convention Conciliation (2022)

Either party may propose the disqualification of a conciliator once the Commission has been constituted (Article 57 of the Convention and Conciliation Rule 19). A party may also propose that a conciliator be removed for incapacity or failure to perform the required duties (Article 56 of the Convention, Conciliation Rule 21).

A proposal to disqualify (or otherwise remove) a conciliator must be made within 21 days after the later of the constitution of the Commission or the date on which the filing party first knew or should have known of the facts on which the proposal is based (Conciliation Rule 19(1)(a)). Failure to object promptly will result in the rejection of the proposal.

Grounds for Disqualification

A conciliator may be disqualified on account of any fact indicating a manifest lack of the qualities required by Article 14(1) of the Convention (Article 57 of the Convention).

Article 14(1) of the Convention specifies the qualities required of all 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 Convention).

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 a Conciliator

A conciliator may also be removed for incapacity of failure to perform the duties required of an arbitrator (Article 56 of the Convention, Conciliation Rule 21). 

Procedure

The procedure applicable to a disqualification proposal will also apply to the removal of a conciliator that becomes incapacitated or fails to perform the required duties (Conciliation Rule 19 and 21).

The procedure starts with the submission by a party of a full proposal regarding one or more conciliators. The filing of a proposal suspends the proceeding, except to the extent that the parties agree to continue it (Conciliation Rule 19(2)). 

The filing party must submit the proposal within 21 days after the later of the constitution of the Commission or the date on which the filing party first knew of 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 conciliator 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 comments after the earlier of receipt of the conciliator’s statement or expiry of its time limit (Conciliation Rule 19(1)).

Decision

If one member is challenged, the decision on the proposal is usually made by the other members of the Commission (Article 58 of the Convention, Conciliation Rule 20).  However, the decision will be made by the Chair of the ICSID Administrative Council when the other members are unable to decide the proposal for any reason, or where the proposal refers to a sole conciliator or to a majority of the Commission (Article 58 of the Convention, Conciliation Rule 20).

Conciliation Rule 20(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 conciliation will resume immediately with the same Commission.

A proposal that is upheld results in a vacancy on the Commission.  A vacancy is filled using the same method by which the conciliator 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 conciliator without the consent of the other members of the Commission or
• the vacancy has not been filled 45 days after its notification (Conciliation Rule 23(3)).

As soon as the vacancy has been filled, the proceeding will resume (Conciliation Rule 23(4)).