INTERNATIONAL ARBITRATION 1/3LY
IN CONVERSATION WITH NASSIB ZIADÉ 13
REFORM, ETHICS, DISCLOSURE AND SELF-REGULATION
ALEC Of course, he was also honoured at GAR Live in Paris earlier this year: he’s effectively the grandfather of arbitration in the Arab world, and a very impressive man. NASSIB Agreed! And it really is time to start honouring Arab practitioners in the Arab region, instead of waiting for institutions elsewhere to do so. Historically, the most renowned Arab practitioners were found and promoted by western arbitration institutions; now is the time for the Arab regional institutions to acknowledge and promote their good work also. A final goal is to continue strengthening the perception that BCDR-AAA is a truly independent body. In the last few months, I’ve finalised a co-operation agreement with the Permanent Court of Arbitration (PCA) so that hearings can be held in Bahrain, and at the Peace Palace in The Hague. My hope is t hat we’ll also start some joint education and training programmes with them. ARAB COUNTRIES DENOUNCING INTERNATIONAL LAWS AND OPTING OUT ALEC So, how do you see arbitration in the Arab world as it is now; and how you would like to see it move forward? NASSIB Well, many Arab countries have liberal arbitration legislations derived from French or Swiss law, or from the UNCITRAL Model Law on International Commercial Arbitration. I don’t see any of these countries, even those that have undergone regime change, altering these laws because their ultimate goal is to promote arbitration and the flow of investment into their countries. Although many Arab arbitration laws were enacted by old regimes, I think they’ll remain in place. I also don’t envisage any change in the work of regional arbitration institutions; in fact, I think the changes to date are likely to result in more commercial and investment arbitration cases.
I do, however, see future problems arising from the relationships between Arab countries and western arbitral institutions, such as the International Centre for Settlement of Investment Disputes (ICSID); especially since a number of countries are being sued because of changes made by their new regimes, leading to disputes between states and investors. Unless the situation is handled with great care, I can see developments similar to the ‘Latin American syndrome’ taking place: we could find Arab countries denouncing the Washington Convention, and opting out of ICSID, if they are dissatisfied with the process and its results, as Latin American countries have already done. ALEC Egypt’s had a number of ICSID cases started against it because the Morsi Government questioned the basis of past deals. Of course, we don’t know what’s going to happen with the current regime but it’ll be interesting to watch because many of those cases were brought about by Middle Eastern investors, rather than western investors – so there’s a fair amount of inter- Middle Eastern investment. Perhaps the end result may be that the current perception of ICSID, as a western institution with western values, will change if Middle Eastern investors are using it to sue Middle Eastern states. What’s your view on that? NASSIB ICSID has registered at least five cases brought by Arab investors against Arab states, on the basis of bilateral investment treaties. But it doesn’t change the fact that when a state loses a number of cases before a western arbitration institution, it starts questioning the institution’s neutrality – whether legitimate or otherwise. But there are some steps that might improve this situation. First: I think ICSID should be more attentive to the unique needs of the states undergoing important changes in procedural matters, particularly around the strictness of timelines. Secondly: in cases involving the region, western institutions should make efforts to appoint arbitrators familiar with Arab cultures and who know the region. Finally: and a topic close to my heart, is that I believe that it’s time for an institution like ICSID to start a process of reform, especially on issues of conflicts of interest.
ALEC Fully agree. In that respect, do you think distinctions should be drawn between international commercial arbitration and bilateral investment treaty or investor / state arbitration? Should different tests be applied? NASSIB There should definitely be different tests but the requirements for reform are similar. Based on my own experience, reform is one of the things that states always request because essentially they’re told “Look, we don’t trust your judicial system. We don’t want to go to your courts, come to arbitration”. So they go to arbitration, they see some problematic relationships with counsel and arbitrators, and their reaction is to say, “Look, you tell us that our courts have problems, but what about the lack of transparency and inclusiveness we’re witnessing there?”. A typical problem that continually arises in commercial cases is that legal counsel can sit together as counsel and arbitrator, and as co-arbitrators; although the cases are totally unrelated, there’s still a problem, both a question of appearance and one of substance. Sitting together as co-arbitrators increases exposure to insight which may, in turn, be used to counsel’s advantage in appearing before an arbitrator of whom they have a prior knowledge. There should be proper disclosure; and, on occasion, arbitrators should stand down. ALEC That’s a particularly salient example, because a lot of arbitration practitioners who act as party counsel are also arbitrators but don’t view it to be a problem, and may not even think to disclose it. I seem to spend half my life dealing with conflicts, and I’m conflicted in about two thirds of the arbitrations that people want to appoint me in... There are also plenty of other potential conflicts, in addition to those you mentioned. Although the current IBA Guidelines help, we all know they’re being revised.
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