INTERNATIONAL ARBITRATION 1/3LY
IN CONVERSATION WITH NASSIB ZIADÉ 13
REF ORM, E T HI C S , D I S C L OSURE A ND SEL F - REGUL AT I ON
ALEC Of course, he was also honoured at GAR Live in Paris earlier this year: he’s effectively the grandfather of arbitration in the Arabworld, and a very impressiveman. NA SS IB 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, themost renowned Arab practitioners were found and promoted bywestern arbitration institutions; now is the time for the Arab regional institutions to acknowledge and promote their goodwork also. A final goal is to continue strengthening the perception that BCDR-AAA is a truly independent body. In the last fewmonths, 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. A R A B C OUN T R I E S DENOUNC ING IN T ERN AT I ON A L L AWS A ND OP T ING OU T ALEC So, howdo you see arbitration in the Arabworld as it is now; and howyouwould like to see it move forward? NA SS IB Well, many Arab countries have liberal arbitration legislations derived fromFrench or Swiss law, or from the UNCITRALModel 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. Althoughmany 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 inmore commercial and investment arbitration cases.
I do, however, see future problems arising from the relationships between Arab countries andwestern arbitral institutions, such as the International Centre for Settlement of Investment Disputes (ICSID); especially since a number of countries are being sued because of changesmade by their new regimes, leading to disputes between states and investors. Unless the situation is handledwith great care, I can see developments similar to the ‘Latin American syndrome’ taking place: we could find Arab countries denouncing theWashington 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 theMorsi Government questioned the basis of past deals. Of course, we don’t knowwhat’s going to happenwith the current regime but it’ll be interesting to watch becausemany of those cases were brought about byMiddle Eastern investors, rather thanwestern 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 awestern institutionwithwestern values, will change if Middle Eastern investors are using it to sueMiddle Eastern states. What’s your view on that? NA SS IB 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 awestern 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 bemore 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 shouldmake efforts to appoint arbitrators familiar with Arab cultures andwho know the region. Finally: and a topic close tomy 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? NA SS IB There should definitely be different tests but the requirements for reformare similar. Based onmy 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 whichmay, 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, andmay not even think to disclose it. I seem to spend half my life dealing with conflicts, and I’mconflicted 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 youmentioned. Although the current IBA Guidelines help, we all know they’re being revised.
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