Wednesday, January 15, 2014

ALBERT MEDINA: TRIBUNAL POWER VS. PARTY AUTONOMY: THE STATUS OF COUNSEL IN INTERNATIONAL ARBITRATION PROCEEDINGS

When it comes to the independent powers of international arbitral tribunals in structuring and directing arbitral proceedings pursuant to the majority of the international arbitral Conventions and Guidelines that currently exist, there can be no doubt in anyone's mind as to the relatively high degrees of managerial autonomy and legal unilateralism that such tribunals can legitimately wield.

For instance, in stark contrast to the more-limited powers typically vested in judges from most domestic legal systems, the ICSID Convention declares that arbitral tribunals in international investment disputes "are to be the judges of their own competence." As another example, the ICSID Convention even states that if the parties to the arbitral proceedings fail to agree on the rules of procedure that are to apply in those proceedings, then the rules of procedure to be used will be those rules that the arbitral tribunal independently chooses to apply on its own. While these provisions specifically pertain to the ICSID Convention, similar provisions can be found in different variations within most other Conventions, Rules and Guidelines on international arbitration in other arbitral contexts such as commercial arbitration or the enforcement of arbitral awards.


Nevertheless, these international arbitral regimes are all still lacking with respect to a whole host of still-unsettled but largely-important subject areas concerning the comparative powers of the tribunal, the parties and counsel for the parties with respect to the designing and managing of arbitral proceedings. With that in mind, one particular topic that the majority of existing arbitration Rules and Guidelines glaringly fail to enumerate any measures for concerns the removal of counsel when the integrity of the arbitral process is jeopardized (ie: when there are circumstances that would warrant the removal of counsel such as when a conflict of interest is created near the beginning of the arbitral proceedings with the deliberate intent to "derail" the applicable proceedings).


This of course presents us with a significant, unresolved issue: If the various international arbitral Rules and Guidelines eventually go on to expressly adopt such provisions, just who in the applicable proceedings should be able to wield this power, and on what basis?


Given the incredibly broad powers that already inhere within international arbitral tribunals in relation to the parties and counsel with regard to the construction and direction of the relevant proceedings, it would seem that the most logical choice, at a glance, would be the tribunals rather than the parties or their respective counsel.


At the same time however, the notion of expressly granting arbitral tribunals such a significant and exclusive degree of power to remove counsel when the process is jeopardized must necessarily be balanced against the right of the parties involved to their own choice of counsel; after all, the concept of "party autonomy" (which is the idea that the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings) is one of the most defining foundational principles contained within the overall international arbitral system currently in place. That being said, the greater right between the parties' right to choice of counsel and the parties' right to a fair and efficient process would certainly not be as clear-cut as one would think it might appear when the parties to an international arbitral proceeding or their counsel seek to abuse the process and derail the arbitration proceedings.


Taking all of this into account, and speaking generally, I'm of the opinion that perhaps the soundest solution as to who should hypothetically be imbued with the power to remove counsel when the integrity of the process is jeopardized would be a joint one, whereby the parties to the proceedings and the prevailing arbitral tribunal collectively work together in pursuing an efficient course of action. To me, allowing both the parties and the corresponding tribunal to procedurally work in tandem and to in effect share this power in some reasonable, fairly-balanced fashion would be much more in line with the central tenets and principles of our current international arbitral regime overall than granting this power either exclusively to the parties or exclusively to the tribunal. That is, such an ideal sharing of power, I feel, would serve to effectively balance the significant, fundamental need for "party autonomy" with the equally-important, fundamental right of the parties to a fair and efficient international arbitral process in this particular context.


However, in light of all of the competing legal and policy-based interests mentioned above (together with the many intricacies that comprise the complex relationships between each of them), I think it is also safe to say that the process of coming up with such an ideal and reasonably-effective power-sharing provision, as well as the actual power-sharing provision in and of itself, would be incredibly complicated and fairly cumbersome.


Even still, if and until the currently-existing international arbitration regimes ever explicitly add such measures to their respective provisions, we still have yet to know just how any such provisions would actually be interpreted and carried out during relevant arbitral proceedings in spite of whatever legal text might ultimately be used.


That, however, is another can of worms.


*For those of you who would like to view other opinions on this matter, a detailed summary of an intriguing debate on this very same topic that was held at the ADR in Asia Conference in October of 2013 can be found here: http://www.conventuslaw.com/adr-in-asia-conference-debate-every-arbitral-tribunal-should-have-the-power-to-remove-counsel-when-the-integrity-of-the-process-is-jeopardized/#      

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