Le Quang Hung - Graduation Thesis Independence, Impartiality and Duty of Disclosure of Arbitrator

Ministry of Foreign Affairs
Diplomatic Academy of Vietnam

International Law Faculty
GRADUATION THESIS
Independence, Impartiality and Duty of Disclosure of Arbitrator:
The Varying Approaches
Instructor: Hew R. Dundas

Name: L Quang Hng
Class: LQT36A
Hanoi, May 2013

i
ACKNOWLEDGEMENT
Foremost I would like to express my deep sense of gratitude towards thy Hew R.
Dundas, whose wisdom and kindness are truly inspiring. His instructions, along with
the enthusiasm and patience in the way he instructed, are truly helpful in all the time of
research and writing this thesis.
My sincere thanks go to my seniors in Vis Moot DAV community, who taught me the
very first lesson in arbitration; and Mr. Tran Anh Dung for all his insightful lectures of
commercial arbitration.
I am also extremely grateful to Ms Pham Lan Dung, Ms Nguyen Thi Lan Anh and all
other professors and lecturers of International Law Faculty of Diplomatic Academy of
Vietnam for their motivation and immense knowledge.
Last but not least, I would like to thank my family for all the love they gave me and all
the sacrifices they made for me.
Contents
TABLE OF ABBREVIATION ...................................................................................... iii
TABLE OF AUTHORITIES ....................................................................................... viii
NATIONAL COURTS DECISION ........................................................................... viii
ARBITRAL INSTITUTIONS DECISION ...................................................................xi
INSTITUTIONAL RULES .......................................................................................... xiii
CONVENTION AND TREATIES ................................................................................ xv
I.
INTRODUCTION.................................................................................................... 1
II.
ARBITRATORS IMPARTIALITY, INDEPENDENCE AND DUTY TO
DISCLOSE: AN OVERVIEW ........................................................................................ 2

1.
Impartiality, Independence and Neutrality ......................................................... 2

a.
The Concept of Independence and Impartiality .............................................. 3
b.
Impartiality distinguished from Neutrality, Partiality distinguished
from Sympathy and Neutral Nationality .............................................................. 4

c.
Obligations of impartiality and independence in arbitration rules and
national laws........................................................................................................... 10
Arbitrators Duty to Disclose Circumstances that may Give Rise to Justifiable
2.
Doubts ........................................................................................................................ 13
a.
Time of the Disclosure .................................................................................. 14
b.
Content of the Disclosure .............................................................................. 15
c.
Duty to Investigate Potential Conflicts of Interests ...................................... 24
d.
Relation between Duty of Disclosure and Bias ............................................ 25
III.
PROBLEMATIC RIGIDITY AND DISPARITY IN APPROACHES FOR
DUTY OF DISCLOSURE ............................................................................................. 27

1.
Non-Disclosure of Situations under IBA Guidelines Green List ..................... 28

a.
Controversies in Courts Decision ................................................................ 29
b.
Diversity in Culture and Legal Background ................................................. 37
2.
Failure to Disclose in the constitution of Evident Partiality in U.S. Courts: A
Tale of Two Circuits .................................................................................................. 41

a.
Standards for Evident Partiality and Disclosure under Commonwealth
case 42
b.
Development of Evident Partiality in non-disclosure case over the years:
Disparity between Circuits ..................................................................................... 44

c.
3.
IV.
Absence of Consensus between Circuits: Time for one final approach? ...... 49
Concluding Remarks ........................................................................................ 50
TOWARDS A COHESIVE APPROACHES ...................................................... 53
1.
Establishment of Local and Binding Guidelines Based On IBA Guidelines ... 53
2.
Publication of Challenge Decisions by Institution ........................................... 54
3.
Adjustment to catch up with Internet and Social Network Era ....................... 55
BIBLIOGRAPHY .......................................................................................................... 56
Books .............................................................................................................................. 56
Articles ....................................................................................................................... 57
ii
TABLE OF ABBREVIATION
AAA
American Arbitration Association
ABA
American Bar Association
ASA
Swiss Arbitration Association
CAS
Court of Arbitration for Sport
CIArb
Chartered Institute of Arbitrators
CIETAC
China International Economic and Trade Arbitration Commission
DIS
German Institute of Arbitration
HKIAC
Hong Kong International Arbitration Centre
IBA
International Bar Association
ICAC
Moscow International Commercial Arbitration Court
ICC
International Chamber of Commerce
ICCA
International Council for Commercial Arbitration
ICDR
American Arbitration Association International Centre for Dispute

Resolution
ICSID
International Centre for the Settlement of Investment Disputes
LCIA
London Court of International Arbitration
NASD
National Association of Securities Dealers of the United States
iii
PCA
Permanent Court of Arbitration at The Hague
SCC
Stockholm Chamber of Commerce
SIAC
Singapore International Arbitration Centre
UNCITRAL United Nations Commission for International Trade Law

UNIDROIT The International Institute for the Unification of Private Law
VIAC
Vietnam International Arbitration Centre
General Abbreviations
Section
Paragraph
AAA/ABA Code AAA/ABA Code of Ethics for Arbitrators in Commercial Disputes

(1977, revised 2011)
ADRLJ
Arbitration and Dispute Resolution Law Journal
Am Rev Int Arb
American Review of International Arbitration
Arb Int
Arbitration International
Art
Article
BGG
Swiss Federal Supreme Court Act 2007
BGH
Bundesgerichtshof (Federal Court of Justice of Germany)
iv
Cir.
Circuit
Co.
Company
Corp.
Corporation
ECHR
European Convention on Human Rights
ed.
editor
edn
edition
E.D. Pa.
U.S. District Court, Eastern District of Pennsylvania
EWHC
England and Wales High Court of Justice
FAA
US Federal Arbitration Act (1925)
H.L
House of Lords
IBA Guidelines
IBA Guidelines on Conflicts of Interest in International

Commercial Arbitration (2004)
IBA
Rules
of IBA Rules of Ethics for International Arbitrators (1987)
Rules
of IBA Rules on Taking of Evidence in International Commercial
Ethics
IBA
Evidence
Arbitration (1999)
Ibid.
Ibidem
ICA
International Commercial Arbitration
IDR
International Dispute Resolution (Journal)
Inc.
Incorporation
Ins.
Insurance
Ltd.
limited
Model Law
UNCITRAL Model Law on International Commercial Arbitration

(1985) as amended in 2006
Footnote
New York
The 1958 Convention on the Recognition and Enforcement of
Convention
Foreign Arbitral Awards
No.
Number
OG
Swiss Federal Judicial Organization Act
OLG
oberlandesgericht (German Court of Appeal)
p.
Page
Rep
Report
Reins
Reinsurance
Rev Arb
Revue de l'arbitrage
RUAA
Revised Uniform Arbitration Act (2000)
vi
S.D. Tex
United States District Court for Southern District of Texas
Tex. App. Ct.
Texas Court of Appeal
UKHL
United Kingdom House of Lords (England)
UKSC
Supreme Court of the United Kingdom
UNCITRAL
United Nations Commission on International Trade Law
UNCITRAL Rules UNCITRAL Arbitration Rules (1976)

Vol.
Volume
WLR
Wisconsin Law Review
YCA
Yearbook of Commercial Arbitration
vii
TABLE OF AUTHORITIES
NATIONAL COURTS DECISION
ENGLAND
ASM Shipping Ltd of India v. TTMI Ltd of England [2006] English Court of Appeal
AT&T Corporation and another v Saudi Cable [2000] England Court of Appeal
Jivraj v Hashwani [2011] UKSC
Laker Airways Inc. v. FLS Aerospace LTD. [2000] 1WLR 113
Lawal v. Northern Spirit Ltd. [2003] UKHL
R (Cummins) v Camden LBC [2001] EWHC
R v. Bow St. Metro. Stipendiary Magistrate, [2000] 1 A.C. 119, 139 H.L
Rental Trading Ltd v Gill & Duffus SA [2000] Lloyd's Rep
The Owners of the Steamship Catalina & The Owners of the Motor Vessel Norma,
[1938] 61 Lloyds Rep. 360
FRANCE
Cour dappel [CA] [regional court of appeal] Paris, Dec. 18, 2003, RG n 2002/09750
T.A.I. v. S.I.A.P.E, CA Paris June 2 1989, 1991 REV. ARB. 87
Gemanco v. S.A.E.P.A., CA Paris June 2 1989, 1991 REV. ARB. 87
Consorts Ury v. Galeries Lafayyet case, [April 13, 1972], Cour de Cassation
Raffineries d'Homs et de Banias case, [1985] Tribunal de grande instance de Paris,
March 28
viii
GERMAN
German Bundesgerichtshof, 4 September 1999, ZIP 859 (1999)
RUSSIA
Erick van Egeraat Associated Architects B.V. v. Capital Croup LLC, Court of Appeal,
27 August 2009 No. KG-40/8155-09
OAO NK Rosneft v. Yukos Capital S.a.r.l, Supreme Arbitrazh Court; decision of 10
December 2007, No. 14955/07
SWITZERLAND
Switzerland, Federal Supreme Court, 1st Civil Chamber, Decision of 20 March 2008,
4A_506/2007
THE UNITED STATES OF AMERICA
Amoco D.T. Co. v. Occidental Petroleum Corp., 343 S.W.3d 837 (Tex. App. Ct. 2011)
Andersons, Inc. v. Horton Farms, Inc., 166 F.3d 308, 328 (6th Cir.1998)
Applied Industrial Materials Corp. v. Ovalar Makine Ticaret Ve Sanayi, A.S., No. 063297-CV, 2007 WL 1964955 (2d Cir. July 9, 2007)
Commonwealth Coatings Corp. v Continental Casualty Co. Et al, 393 U.S. 145 (US
Supreme Court 1968)
Crowe Construction v. Jeffrey M. Brown, 264 F.Supp.2d 217 (E.D. Pa. 2003)
Dealer Computer Services Inc. v. Michael Motor Co. Inc., 761 F. Supp.2d 459 (S.D.
Tex. 2010)
ix
Freeman v. Pittsburgh Glass Works, LLC, 2013 U.S. App. LEXIS 4561 (3d Cir. Mar.
6, 2013)
Gianelli Money Purchase Plan and Trust v ADM Inv. Services, Inc., 146 F3d 1309
(11th Cir. 1998)
Haworth v. Superior Court (Ossakow) (2008)164 California Court of Appeal 4th 930
Jean SCHMITZ; Leonard Schmitz v. Carlos J. ZILVETI, III; Nicholas S. Meris;
Prudential-Bache Securities Inc., aka Prudential Securities, Inc., 20 F.3d 1043 (9th Cir.
1994)
Kaiser Foundation Hospitals, Inc. v. Superior Court (1993) 19 California Court of
Appeal 4th 513
Kiernan v. Piper Jaffray Cos, 137 F.3d 588, 593-94 (8th Cir. 1998)
Montez v. Prudential Securities, Inc., 260 F.3d 980 (8th Cir. 2001)
Morelite Const. Corp. v New York City Dist. Council Carpenters Ben. Funds, 748 F2d
79, 83 (2d Cir. 1984)
New regency Productions inc v. Nippon Herald Films Inc., 05-55224 (9th Cir. 2007)
Peoples Sec. Life Ins. v. Monumental Life Ins., 991 F.2d 141, 146 (4th Cir. 1993)
Positive Software Solutions, Inc. v. New Century Mortg. Corp., 476 F.3d 278, 283, 286
(U.S. 5th Cir. 2007)
Rebmann v. Rohde, ___ (California Court of Appeal 2011)
Scandinavian Reinsurance Co. v. Saint Paul Fire and Marine Ins. Co., 668 F.3D 60
(2012)
Sunkist Soft Drinks Inc. v. Sunkist Growers, Inc., 10 F.3d 753 (11th Cir. 1993)
x
Thomas Kinkade Co. v. White, __ F.3d __, 2013 WL 1296238 (6th Cir. April 2, 2013)
Trustmark Ins. Co. v. John Hancock Life Ins. Co., 631 F.3d 869 (7th Cir. 2011)
ARBITRAL INSTITUTIONS DECISION
INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT
DISPUTES
Tidewater Inc. v. The Bolivarian Republic of Venezuela (2010) ICSID Case No
ARB/10/5
Universal Compression International Holdings, S.L.U. v. The Bolivarian Republic of
Venezuela (2011) ICSID Case No ARB/10/9
LONDON COURT OF INTERNATIONAL ARBITRATION
LCIA Decision on the Challenge to Mr. Judd L. Kessler in Case No.UN 7949
LCIA Reference No.UN3490 October 21 and December 27, 2005
LCIA Reference No.1303 (November 22, 2001)
LCIA Reference No.5660 (August 5, 2005)
LCIA Reference No. 8086
LCIA Reference No.UN9155 (November 10, 1999)
PCA
Republic of Ghana v. Telekom Malaysia Berhad, District Court of the Hague (Civil
Law Section), Decision No. HAiRK 2004.778 5 November 2004
xi
NATIONAL LAWS
ENGLAND
Arbitration Act 1996
FRANCE
New Code of Civil Procedure 1981
GERMANY
German Arbitration Act 1998
Brgerliches Gesetzbuch (Civil Code)
PEOPLE REPUBLIC OF CHINA
Arbitration Law 1995
RUSSIA
Rules on Impartiality and Independence of the Arbitrators 2010
SWEDEN
Swedish Arbitration Act
THE UNITED STATES OF AMERICA
Federal Arbitration Act 1925
Revised Uniform Arbitration Act 2002
VIETNAM
Vietnam Law on Commercial Arbitration 2010
xii
INSTITUTIONAL RULES
AMERICAN ARBITRATION ASSOCIATION
AAA/ABA Code of Ethics
AAA International Rules 2001
CHINA INTERNATIONAL AND ECONOMIC TRADE ARBITRATION
COMMISSION
CIETAC Rules
CIETAC Code of Ethics
HONG KONG INTERNATIONAL ARBITRATION CENTRE
HKIAC Rules
INTERNATIONAL BAR ASSOCIATION
IBA Guidelines on Conflicts of Interests in International Arbitration
IBA Code of Ethics
INTERNATIONAL CHAMBER OF COMMERCE
ICC Rules1998
ICC Rules 2012
INTERNATIONAL
CENTRE
FOR
SETTLEMENT
OF
DISPUTES
ICSID Rules
LONDON COURT OF INTERNATIONAL ARBITRATION
xiii
INVESTMENT
LCIA Rules 1998

NATIONAL ASSOCIATION OF SECURITIES DEALERS
NASD Code of Procedure for Arbitration
UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW
UNCITRAL Rules 1976
UNCITRAL Model Law 1986
UNCITRAL Model Law 1986 2006 amendment
WORLD INTELLECTUAL PROPERTY ORGANIZATION
WIPO Arbitration Rules 2002
VIETNAM INTERNATIONAL ARBITRATION CENTRE
VIAC Rules 2012
xiv
CONVENTION AND TREATIES

European Conventions on Human Rights
The Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958
International Centre for Settlement of Investment Disputes Convetion
xv
I.
INTRODUCTION
This thesis is related to one of, if not the most, fundamental principle in arbitration that
every arbitrator must be and remain independent and impartial of the parties. No one
should serve as referee in a game after having decided which team should win 1, nor
should anyone be the judge of his own case2. And while impartiality and independence
serve the utmost integrity of the arbitral award, the duty imposed on arbitrator to
disclose circumstances that may bring doubts as to his impartiality and independence
guarantees the integrity of the arbitral process. All parties in arbitration deserve the
fundamental rights of a fair hearing3, and the duty to disclose ensure the parties have
confidence and trust in a fair trial.
The duty of disclosure, especially the various approaches towards such duty, shall be
the main concern of this thesis. Whilst the arbitrators duty to disclose is entirely
undisputed, there are diverse approaches for disclosure i.e. what circumstance should
and should not be disclose what is the consequence of a failure to disclose; which has
constantly troubled the arbitration process. Unpredictability and Inconsistency arise as
a result, and the number of challenges of arbitrator due to his failure to disclosure may
justify the one famous outsiders complaint when there is a will, there is a lawsuit4.
The exponential growth of international law firms and multinational corporations, the
radical changes in how we communicate in the internet era, the increase in numbers of
legal organizations and legal events, etc. also address new issues regarding conflicts of
interests, and accordingly complicates the task of properly approaching the duty of
disclosure.
1
William W. Park, Rectitude in International Arbitration (2011) LCIA Arbitration International Vol.27 No.3
Special Edition on Arbitrator Challenges , p. 473.
2
The more traditional formulation of this principle is the maxim Nemo judex in parte sua, represents a
fundamental principle of natural justice which provises that no person can judge a case in which he or she
participates as a party (i.e. having legal rights and obligations) - may also be called nemo judex in sua causa or
nemo debet esse judex in propria causa.
3
See European Convention on Human Rights Art.6
4
Quote by Addison Mizner, best-known and most-discussed living American architect in 1920s.
Part II of this thesis will briefly introduce basic features of impartiality, independence
and the duty of disclosure of arbitrator. The concept, the obligation and grounds that
may give rise to doubts as to independence and impartiality will be discussed
beforehand. The duty to disclose i.e. time of disclosure, content of disclosure and the
duty to investigate information shall be mentioned subsequently.
Part III of this thesis will introduce the underlying problems from the disparity and
rigidity in standards for duty of disclosure. First, various approaches which fail to reach
a consensus between themselves, has consequently increases the inconsistency and
unpredictability (the disparity) of case law regarding duty of disclosure. Second, some
approaches, or at least some of their features, may arguably have failed to meet the
rapid growth of international business and the manner in which it is conducted (the
rigidity).
Finally, Part IV will discuss how we could proceed towards cohesive approaches for
duty to disclose of arbitrators. The writer shall adopt ideas and suggestions of
renowned scholars and practitioners within the field in order to present the best
solutions.
II.
ARBITRATORS IMPARTIALITY, INDEPENDENCE AND DUTY

TO DISCLOSE: AN OVERVIEW
1. Impartiality, Independence and Neutrality

This part shall first define the two interrelated, sometimes overlapping, but not
interchangeable concepts of independence and impartiality (a), with the main purpose
to clarify the distinction of the two concepts. Furthermore, in order to provide a more
in-depth overview, these concepts shall be discussed in comparison with the concepst
of neutrality and sympathy (b).
a. The Concept of Independence and Impartiality

The notions of independence and impartiality must be subject to interpretation. It
is generally considered that dependence refers exclusively to questions arising out of
the relationship between an arbitrator and one of the parties5, co-arbitrators or
witnesses6. Dependence is also relating to the assessments of facts whether the
arbitrator have any interests in the outcome of the disputes7. Independence, therefore,
is an objective qualification that does not concern the arbitrators state of mind. By
contrast, Impartiality is considered to be a subjective qualification it refers to the
state of mind of the arbitrator as unbiased, disinterested towards one party in an
arbitration8.
Impartiality
is
widely
recognized
as
more
abstract
than
Independence9.
Despite the fact that several trends pertaining to the interchangeability of the
independence impartiality concept exist, it should be noted that the two
qualifications, often inter-related and overlapping, are different. The minor view which
suggests the non-differentiation of the two terms is illustrated by Lord Steyn as he
stated: the two crucial words are legally synonymous. In truth there is only one
meaning, deriving its principal force from the word impartiality.10 The major view
considers that the two concepts of independence and impartiality are not
interchangeable,11 though they have virtually been used as one package in practice.12
Alan Redfern/Martin Hunter/Nigel Blackaby/Constantine Partasides, Redfern and Hunter on On International

Arbitration (5th edn Oxford 2009), 4.75; Redfern/ Hunter 2004, 4-55; See also LCIA Decision on the Challenge
to Mr. Judd L. Kessler in LCIA Case No.UN 7949, 77
6
Ibid. at Redfern/Hunter, 4.75.
7
Margaret L. Moses, The Principles and Practice of International Commercial Arbitration (Cambridge
University Press 2008), p. 130; Philippe Fouchard/ Samuel Gaillard/ Berthold Goldman, Fouchard Gaillard
Goldman on International Commercial Arbitration (Kluwer Law 1999), 1028
8
Blacklaw Dictionary Definition, See also LCIA Special Issue, p.287 (n 1)
9
Redfern/Hunter (n 5), 4.75.
10
Lord Steyn, England: The Independence and/or Impartiality of Arbitrators in International Commercial
Arbitration [2007] ICC International Court of Arbitration Bulletin Vol. 18, special supplement, 2007
11
Sam Luttrell, Bias Challenge in International Commercial Arbitration: The need for a real danger test
(Kluwer Law International 2009), p.19.
12
Redfern/ Hunter 2004 (n 5), 4-54.
The two qualifications are parallel tools for assessing the potential for actual or
apparent bias. They are rarely used on their own, individually, but are usually joined
together as a term of art.13 Prof. M. Rubino-Sammartano added the two notions are
different even if on some occasions some overlapping may occur between them.14
The conceptual difference between Independence and Impartiality can be found in
practice. It has been evident for more than once that independent arbitrator may still
possibly favor one party. For example, one independent arbitrator was disqualified for
commenting Italians are all liars in these cases and will say anything to suit their
book. But in my experience the Norwegians generally are a truthful people in a
different case.15 Another instance would be one independent arbitrator calling
respondents counsel a thief, alleging him for breaking in and stealing grapes from
arbitrators break out room.16 The list of instance may go much longer. 17 On the other
hand, one arbitrator may still stay impartial despite being dependent. Lack of
independence is only regarded one pointer to lack of impartiality, 18 especially at the
outset of one proceeding when it is difficult to have any idea of whether the
prospective arbitrator is impartial or not.
b. Impartiality distinguished from Neutrality, Partiality distinguished
from Sympathy and Neutral Nationality
The concept of independence and impartiality would not be addressed properly
without mentioning the term neutrality. This part shall briefly introduce the very
13
Ibid.
Mauro Rubino-Sammartano, International Arbitration Law and Practice (Kluwer Law International 2001), p.
330.
15
In re The Owners of the Steamship Catalina & The Owners of the Motor Vessel Norma, [1938] 61 Lloyds
Rep. 360 (Eng.).
16
LCIA Reference No.UN3490 October 21 and December 27, 2005.
17
See for e.g., LCIA Reference No.1303 (November 22, 2001), where one arbitrator being challenged for lack of
independence, and the Court found he was independent. However, after that he started to have animosity towards
one party, which made him partial.
18
Ronnie King/ Ben Giaretta, Independence, Impartiality and Challenging the Appointment of an Arbitrator
(2005) ICLG to International Arbitration Chapter 5; Art 7(1) ICC Rules 1998 it is independence that has to
serve as a basic criterion for assessment.
14
basic concept of sympathy and neutrality. The different standards for party-appointed
arbitrator and presiding arbitrator shall be further discussed in I.1(d) of this thesis.
After that, this part shall discuss the difference between one arbitrators sympathy and
partiality towards one party. To conclude this part, the nationality of one arbitrator,
whether de jure or de facto, shall be mentioned since it is one prevalent issue under the
notion of neutrality in practice19.
(i)
Impartiality and Neutrality
There are uncertainties over the terminology of neutrality.20 Professor Giorgio Bernini
suggests neutrality refers to the likelihood for arbitrator to be, and remain, wholly
equidistant in thought and action throughout the proceeding.21 Neutrality can also
be interpreted more broadly as one characteristic of whole arbitration process,
connected with not only the arbitrators but also the seat of arbitration.22 Meanwhile,
Professors Alan Redfern and Martin Hunter, joined by other scholars, limit the scope
for neutrality as merely predisposition towards one party who shares the same
cultural or legal background.23 The LCIA Courts seems to concur with this concept in
stating that the concept of neutrality involves an arbitrator taking a certain distance in
relation to his legal, political and religious culture.24 For the purpose of this thesis, the
approach of Professors Redfern and Hunter shall be used.
Despite attracting significant attention from all over the world,25 it should be noted that
the term neutrality under this approach is used mainly in the USA 26, and this is a US-
19
Fouchard (n 7), 1037.

Amina Rustanova, Neutrality of Arbitrators (Central European University 2009), p.4.
21
GiorgioBernini, Report on the Conduct of Arbitral Proceedings: Standards of Behavior of Arbitrators in The
Arbitral Process and Independence of Arbitrators (ICC Publishing 2001), p.31-32.
22
Julian M. Lew , Loukas A. Mistelis , et al., Comparative International Commercial Arbitration, (Kluwer Law
International 2003), 1-23.
23
Redfern/hunter 2004 (n 5) 4-56, See also Scott Dohaney, The Independence and Impartiality of Arbitrators
(1992) Journal of International Arbitration, Vol.9 No.4.
24
LCIA Reference No.5660 (August 5, 2005) 4.5; See also Fouchard (n 7), 1036.
25
Redfern Hunter 2004 (n 5), 4-57.
26
Ibid.
20
only circumstance relating to the existence of partisan arbitrators in the US domestic

arbitration. It has no application otherwise. Partiality, in any country, is unacceptable
for obvious reason27.
The American Bar Association/ College of Commercial Arbitrators introduce in The
Code of Ethics for Arbitrators in Commercial Disputes as follow:
it is preferable for all arbitrators including any party-appointed arbitrators
to be neutral, that is, independent and impartial, and to comply with the same
ethical standards. This expectation generally is essential in arbitrations where
the parties, the nature of the dispute, or the enforcement of any resulting award
may have international aspects. However, parties in certain domestic arbitrations
in the United States may prefer that party-appointed arbitrators be non-neutral
and governed by special ethical considerations.28 (emphasis added)
In the rest of the world, the party-appointed arbitrator must be neutral. Despite being
appointed contractually, the party-appointed arbitrator must not be the representative or
personal services of one party29 since the appointment, even when is made by one party
alone, is not a unilateral act30.
(ii)
Partiality and Sympathy
The arbitrator, as introduced above, is not allowed to be non-neutral or to be under

circumstances that give rise to justifiable doubts about his impartiality and
independence. However, parties in arbitration are allowed, and even encouraged, to
choose the arbitrator who will best understand their cases. In such cases, partiality
27
Lew/Mistelis (n 22), 11-11

AA/ABA Code of Ethics, Note on Neutrality.
29
See Raffineries d'Homs et de Banias case, Tribunal de grande instance Paris, Mar.28 [1985]; Jivraj v
Hashwani [2011] UKSC 40.
30
Consorts Ury v. Galeries Lafayyet case, Judgement of April 13, 1972, Cour de Cassation
28
should be clearly distinguished with the term sympathy31 or the so-called lack of
neutrality.
First of all, the two terms are different in definition. The sympathy towards one
partys case only means that from the legal, social and cultural background, the
arbitrator may be favorably disposed towards the appointing party. In contrast,
partiality is constituted by bias in favor of, or prejudice against, a party or its case and
encompasses a willingness to decide a case in favor of the appointing party regardless
of the merits or without critical examination of the merits32. Extensively, the concept of
Predisposition, one part of the concept sympathy, should not be mistaken with the
concept of Prejudgment or Predetermination which constitutes partiality.33
Second and most important, partiality and sympathy do have the same legal effect.
Partiality is one of the fundamental grounds that lead to the disqualification of one
arbitrator. Meanwhile, sympathy is arguably acceptable and may even be necessary
to fulfil the special functions of a party appointed arbitrator in a transnational
arbitration34. As long as the arbitrator does not let this override their professional
judgment, the qualification of such arbitrator is safeguarded35.
The fact that sympathy is acceptable and even encouraged is reasonable. In arbitration,
domestic or international, as in other aspects of business life, parties often feel most
comfortable when they are on familiar ground36. The freedom to choose an arbitrator
31
Doak Bishop & Lucy Reed, Practical Guidelines for Interviewing, Selecting and Challenging Party-Appointed
Arbitrators in Interational Commercial Arbitration [1998] 10 Arbitration International Vol. 395, p.399.
32
Ibid.
33
James Maurici, Modern Approach to Bias [2007] Judicial Review Vol. 12 (4) 251260; See also R
(Cummins) v Camden LBC [2001] EWHC at 256.
34
Lew/Mistelis (n 22).
35
Redfern/Hunter (n 5), 4-58.
36
Justin DAgostino/Martin Wallace, Impartial-Yes, Neutral-Maybe Not [2010]
http://kluwerarbitrationblog.com/blog/2010/09/14/impartial-yes-neutral-maybe-not/
accessed 16 May 2013
who shares with that party the same background, tradition and culture, should therefore
be respected. Professor Martin Hunter shared his words of wisdom:
[w]hen I am representing a client in arbitration, what I am really looking for in a
party nominated arbitrator is someone with the maximum predisposition
towards my client, but with the minimum appearance of bias.37
The willingness to accept certain level of sympathy is evident in practice, notably
in Sunkist case38. Sunkist simply acknowledges what is already accepted in
practice39: there is a difference between positive bias and general sympathy for the
party who appointed you40, such distinction between so called lack of neutrality and
neutral arbitrators is eminently sensible and reflects the prevailing thinking that a
balance should be sought between the ideal of independence and the realities of the
world of arbitration.41
(iii)
Neutral Nationality and Impartiality
This part shall focus on two questions: Is the arbitrator allowed to share the same
nationality with one party in international arbitration? and Does de facto nationality of
arbitrator count in considering such matter?
Regarding the first questions, the answer depends on the applicable For Model Law,
the answer is yes. The Model Law provides:
37
Martin Hunter, Ethics of international arbitration [1987] Arbitration Vol. 53 291-233, p. 219; See also Prof.
Hans Smit lectures at Columbia University cited in Luttrell (n 11), p.139:
Professor Hans Smit teaches his students that the only consideration for a lawyer appointing a party-arbitrator is
how sympathetic he or she is to the lawyer's client's case
38
Sunkist Soft Drinks Inc. v. Sunkist Growers, Inc., 10 F.3d 753 (11th Cir. 1993)
39
Luttrell (n 11), p.139
40
Sunskit [n 38]
41
El-Kosheri, M. & Youssef, K. The Independence of International Arbitrators: An Arbitrator's Perspective
in ICC Bulletin 2007 (Special Supplement), p.49.
No person shall be precluded by reason of his nationality from acting as an

arbitrator, unless otherwise agreed by the parties.42
However, the world is not that perfect for one party to fully trust one arbitrator who
shares the same nationality with opposing party. The UNCITRAL Rules is more
realistic in suggesting considerations of neutral nationality in composition of the
arbitral tribunal:
In making the appointment, the appointing authority shall have regard to such
considerations as are likely to secure the appointment of an independent and
impartial arbitrator and shall take into account as well the advisability of
appointing an arbitrator of a nationality other than the nationalities of the
parties.43
In contrast, The ICC Rules go further than a consideration and impose strict standard of
neutral nationality.
The sole arbitrator or the chairman of an arbitral tribunal shall be of a
nationality other than those of the parties.44
The LCIA Rules take a similar line in providing:
Where the parties are of different nationalities, a sole arbitrator or chairman of
the Arbitral Tribunal shall not have the same nationality as any party unless the
parties who are not of the same nationality as the proposed nominee all agree in
writing otherwise.45
42
UNCITRAL Model Law 2006, Art.11(1).

UNCITRAL Rules 2010, Art.6(7).
44
A proviso allows an exception to this rule in suitable circumstances and provided that neither of the parties
objects
45
LCIA Arbitration Rules 1998, 6(1).
43
The reason behind the strict requirement for nationality of the sole or presiding
arbitrator regardless of Model Laws provision is to make sure there is no appearance
of potential bias46. At the outset, it is essential that parties have confidence and trust in
the proceeding.
Regarding the questions of de facto non-neutral nationality, such qualification is indeed
imposed on arbitrator under strict standards.In an arbitration under the LCIA Rules, the
respondent challenged the LCIA-appointed sole arbitrator on the ground that, although
he was not a British national, he was a de facto British national and that this was
contrary to Article 6(1) of the LCIA Rules. The LCIA division in deciding the
challenge first held that a challenge based on nationality should be substantive and not
merely formal.47 It further acknowledged that there may be circumstances where a
personal connection to a country may be so concentrated that the arbitrator's technical
nationality does not ensure neutrality. Such acknowledgement by LCIA Division
firmly supports the theory of de facto neutral nationality. However, on the facts of the
case, the division found that the respondent's contention about the arbitrator's de
facto British nationality was groundless and the challenge was therefore dismissed48.
c. Obligations of impartiality and independence in arbitration rules and
national laws
Arbitrators have the obligation to remain impartial and independent. There can hardly
be any obligation that more central or fundamental than this.49 This mandatory
obligation is imposed by numerous arbitration municipal laws and institution rules,
though maybe explicitly or implicitly and by different wording. The controversial part
46
LCIA Reference No. 8086, 2.2

LCIA Reference No.8086, 3.8
48
See also, LCIA Reference No. UN9155 (November 10, 1999) implies paries nationalities are not affected by
nationalities of their counsel
49
See Hew R. Dundas comments on Scotland Arbitration Act r.24:
This is a mandatory rule so it is not open to the parties to agree anything else or to disapply it completely. It is
difficult to conceive of a rule which is any more fundamental to and central to the arbitral process. Arbitration
(Scotland) Act 2010 (r.24)
47
10
is how these rules and laws approach to independence i.e. whether lack of
independence to a certain extent can be acceptable.
(i)
Obligation of impartiality and independence in different wording
To begin with, the slightly different provisions in different rules and laws regarding the
obligation of independence and impartiality should be reviewed with due care.50
The England Arbitration Act 1996 does not refers to the term independence as the 1996
Act only requires an arbitrator to act fairly and impartially as between the parties.51
However, it should not be interpreted as an omission of independence requirement
since England has adopted the European Convention on Human Rights. The ECHR
entitles everyone to a fair and public hearing by an independent and impartial tribunal
established by law52 and that is also the position of Englands Court53.
Meanwhile, the Vietnam Law on Commercial Arbitration used only the term
independent,54 whilst its arbitral institution the Vietnam International Arbitration
Centre uses the term objective in parallel with impartial.55
The use of term independence or/and impartiality are used most widely. Both the
UNCITRAL Rules and the AAA International Rules allow a challenge of arbitrator on
basis of justifiable doubts as to the arbitrators impartiality or independence.56 The
LCIA Rules require an arbitrator to remain at all times impartial and independent of
the parties.57 The ICC Rules in 1998 do not specifically require an arbitrator to be
impartial but instead to be and remain independent of the parties involved in the
50
Redfern/Hunter (n 5), 4-54.

Arbitration Act 1996 (of England), 33(1)(a).
52
ECHR, Art. 6(1).
53
See for e.g., Lawal v. Northern Spirit Ltd. [2003] UKHL.
54
Vietnam Law on Commercial Arbitration 54/2010/QH12, Art. 21.
55
Vietnam International Arbitration Centre Rules 2012, Art. 14(1).
56
UNCITRAL Rules 1976, Art.10(1) and AAA International Rules 2001, Art. 8(1).
57
LCIA Rules (1998), Article 5(2).
51
11
arbitration.58 Such provision has been modified in ICC Rules 2012 into must be and
remain independent and impartial of the parties involved in the arbitration.59 One
ground for challenge under the ICC Rules 2012 is whether for alleged lack of
impartiality or independence, or otherwise.60
Though it is important to pay attention the wording of the obligation, in any case it
goes with saying that arbitrator is obliged to stay impartial. The principle is so selfevident that one can still consider arbitrator having synonymous meaning with
impartiality as in ancient Greek and Rome.61
(ii)
Lack of independence to a waivable extent
The different provisions, though expressed in different wording, all lead to same
conclusion that one arbitrator must always remain impartial. The controversial part is
how these rules and laws approach towards requirement of independence - whether it
is an absolute, non-waivable term or whether any de minimis considerations apply62.
The common assumption is that one arbitrator must be both impartial and
independence. Such assumption has gradually become less correct as now
independence lending itself to waiver up to the point where litigant actually becomes
judge of its own cause.63 This may arguably happen for good reason.64 Admittedly,
lack of independence may give rise to lack of impartiality65, however it is not always
the case and parties are allowed to let go trivial conflicts of interests if they deem fit.
58
ICC Rules 1998, Art.7(1).

60
61
Gary Born, International Commercial Arbitration (Kluwer Law International 2009), p. 1466
62
See Dundas, Commentary on Scotland Arbitration Act 2010 [n 49].
63
Park (n 1), p. 480 .
64
Park (n 1), p. 481.
65
King/Giaretta (n 30), p.27.
59
12
Independence works for the sake of the parties as a rights, and thus should be
waivable.66
2. Arbitrators Duty to Disclose Circumstances that may Give Rise to
Justifiable Doubts
If an arbitrator has a serious conflict of interest with one party, he or she should not
accept an appointment. If the arbitrator deems the possible conflict not serious, he must
disclose it to the parties and appointing authority. An arbitrator has to disclose any
circumstances that may lead the parties to question his independence and impartiality.
Such duty is imposed by every arbitration rules as well as national laws and is regarded
as the cornerstone of arbitrators duty of independence.67
Besides being of significant importance in assessing the question of an arbitrators
independence, disclose duty also help to increase the efficiency of arbitration process
by flushing out any potential problems with an arbitrator at the outset of proceedings68.
On the one hand, disclosure rule provides an opportunity for the parties to consider and
waive at the outset conflicts of interest that might otherwise provide the basis for a
losing party to challenge the award. If the arbitrator discloses a potential conflict and
no objection was filed, none of the party can challenge the award based on disclosed
circumstances69. On the other hand, one nondisclosure being discovered after the
render of the award, the losing party always finds such circumstances more doubtful70
and it is highly unlikely that they would accept their defeat and would not claim for a
vacatur. Even if some of these attempts may be frivolous and the motions are denied,
66
Judge Dominique Haschner, Independence and Impartiality of Arbitrators: 3 Issues [2011] The American
University Law Review Vol.27 No.4, p.793.
67
El-Koshari/Youssef (n 41), p. 51; Haschner (n 66), p.793; Fouchard (n 7), 1058.
68
King/ Giaretta (n 30), p.26-27.
69
See, e.g., Kiernan v. Piper Jaffray Cos, 137 F.3d 588, 593-94 (U.S. 8th Cir. 1998).
70
Philip J. Loree Jr., Arbitration Nuts & Bolts: Vacating Arbitration Awards Part III.A: Evident Partiality
(Expectations of the Parties) [8th December 2009], online academic paper
http://loreelawfirm.com/blog/arbitration-nuts-bolts-vacating-arbitration-awards-its-all-in-the-agreement/
accessed 16th May 2013
13
time and money will surely be wasted71 on a process which can be described as a
losing game for both sides.
In this part, this writer shall discuss (a) the time of disclosure, (b) the content of
disclosure, (c) the duty to investigate circumstances to disclose and (d) the relation of
disclosure and bias. The duty to disclose of arbitrator presented in this thesis should not
be mistaken with, and diluted by, the same duty to disclose imposed on the party.
a. Time of the Disclosure
Since the duty of impartiality remains throughout the whole process, the requirement of
disclosure is a continuing one. If new circumstances arise, the arbitrator is obliged to
divulge at any time of the arbitration.
It should be noted that, however, the timing of disclosure may affect the standards for
disclosing.72 In a recent American case Thomas Kinkade v. White decided by Six
Circuit Court of Appeal this April,73 disclosure at later stage of arbitration is well
described as a lose-lose situation by the appellants counsel. The primary issue was
that five years into the arbitration proceedings, after closing of hearing but before the
award, the presiding arbitrator Mr. Kowalskys law firm took on two significant new
matters from the Whites, the respondent, and their appointed arbitrator. Kowalsky
informed the parties of these new financial ties between his firm and the Whites.
Kinkade, the opposing party, request to disqualify Kowalsky but was denied by the
AAA. Courts, as well as many commentators74, never understand the peculiar logic
71
David Foster/David Edwards, Challenges to Arbitrators [2008] The European & Middle Eastern Arbitration
Review 2008 Section 3, p.2.
72
IBA Guidelines General Standard 3[d]; Redfern/Hunter (n 5), 4.81
73
Thomas Kinkade Co. v. White, __ F.3d __, 2013 WL 1296238 (U.S. 6th Cir. April 2, 2013).
74
See for e.g.,Liz Kramer, Six Circuit paints a vivid picture of Evident Partiality [2013] Leonard Street and
Deinard Arbitration Nation Blog on Appealing Arbitration Decisions
http://arbitrationnation.com/sixth-circuit-paints-vivid-picture-of-evident-partiality-sufficient-to-vacatearbitration-award/
14
behind AAAs denial as they decided otherwise. Return to the issue of disclosure in
closing stage in this case, the brilliant75 brief of Kinkade's counsel, Dana Levitt, in his
May 9, 2007 objection to the AAA, astutely sum up the situation:
...Once the disclosure was made the harm was done regardless of the outcome.
The disclosure put our clients in the awkward position of either objecting to or
appearing to approve the representation by the neutral arbitrator's firm of a party
adverse to our client in another arbitration. If we object, we run the risk of
offending the neutral; if we don't object, we appear to condone a clear conflict.
We should never have been put in this position.
Conclusively, it is of best interests to both the arbitrators and the parties that it should
be fulfilled at the earliest convenience.76
b. Content of the Disclosure
The real problem is not the existence of a duty of disclosure but determining which
facts prospective arbitrators should disclose.77 Many experts or drafters of code of
ethics have consistently expressed their concerns of errors in disclosing i.e. disclose too
little or too much. As a famous quote by former U.S. president Abraham Lincoln, half
the truth is often a whole lie, arbitrators non-disclosure or failure to disclose fully,
whether intentional or not, always raises doubts in the eyes of the parties over the
impartiality of the arbitrator and subsequently the integrity of the process. Meanwhile,
overly excessive disclosure may fuel opportunistic challenge as part of delaying
tactic.78 Parties occasionally use delaying tactic when facing possible adverse award
and challenging the divulged circumstances, regardless of its proximity, would likely
75
Kinkade (n 73), Circuit Judge Kethledges Opinion, 27.

King/ Giaretta (n 30), p.28.
77
Fouchard (n 7), 1060
78
Nathalie Allen/Daisy Mallett, Arbitrator Disclosure: No Room for Colour Blind [2011] Asian International
Arbitration Journal, Vol. 7 No. 2, Pages 118-147; Moses (n 7), p.131
76
15
be part of that tactic.79 Another frustrating result of excessive disclosure would be the
excluding of a knowledgeable arbitrator, at times just because he does not want to put
up with such challenge.80 Such conundrum has sparked off many debates over years
regarding what should one arbitrator disclose with the only general accepted point in
such situation maybe that when there is a possibility to make error in disclosing,
arbitrator should always err in favor of excessive disclose.81
In order to thoroughly address all the underlying issues, this part shall firstly introduce
the objective test and subjective test of duty to disclose whether the arbitrator should
put himself in the position of a reasonable third party or in the eyes of the parties in
dispute to divulge the circumstances. Secondly, what circumstances that may give rise
to justifiable doubts as to arbitrators impartiality and independence shall be clarified.
(i)
Objective Test and Subjective Test
The majority of institutional rules provide that an arbitrator must disclose any
circumstances likely to (or may) give rise to justifiable doubts as to his
independence82. Such provisions are considered as the objective test as it is required
that the arbitrator only have to put himself in the position of a reasonable third party to
disclose. In contrast, the ICC and ICSID Rules required the prospective arbitrator to
walk in the shoes of the parties to decide what should be disclosed. This requirement
under ICC and ICSID Rules and like-minded institution are called the subjective test.
Article 7(2) ICC Rules provides that, prior to appointment, a prospective arbitrator
must sign a statement of independence and disclose in writing any circumstances
which might be of such a nature as to call into question the arbitrators independence
79
Alain Frecon, Delaying Tactics in Arbitration [2005] Dispute Resolution Journal November 2004 January
2005 , p. 6.
80
J.J. Marshall/ M.E. Comeau/A.R. Sparkes, Six Degrees of Separation: Arbitrator Independence in
International Arbitration [2008] Transnational Dispute Settlement Vol. 5, issue 4, p.2
81
Positive Software Solutions, Inc. v. New Century Mortg. Corp., 476 F.3d 278, 283, 286 (U.S. 5th Cir. 2007)
82
See AAA International Rules 2001, Article 7(1); LCIA Rules 1998, Article 5(3); UNCITRAL Rules 1976,
Article 9; WIPO Arbitration Rules 2002, Article 22(b).
16
in the eyes of the parties. Meanwhile, the ICSID rules use the term mightbe
questioned by the parties.83
The leading applier of objective test is UNCITRAL Model Law.84 The standard for
disclosure under Model Law is circumstances likely to give rise to justifiable doubts
as to his impartiality and independence85. Under the Model Law, the only difference
between the standard of disclosure and the standard for a successful challenge is that
with regard to disclosure, the facts and circumstances are only likely to give rise to
justifiable doubts, whereas for a successful challenge, the circumstances do actually
give rise to such doubts.86 Such test is applied in countries which adopted Model Law
by statute, namely Australia, Canada, Mexico, the Netherlands, New Zealand and
Singapore. Tunisia and Germany has adopted a virtually identical rule with exclusion
of the word justifiable87.
Many institution rules also adopted the objective test under the UNCITRAL Model
Law.The LCIA provides in Article 5(3) that before appointment by the LCIA Court,
each arbitrator shall furnish to the LCIA Registrar a written resume of his past and
present professional positions, and that he shall sign a declaration to the effect that
there are no circumstances known to him likely to give rise to any justified doubts as to
his impartiality and independence, other than any circumstances disclosed by him in
the declaration. The SCC adopts the objective test with slight but notable difference88.
Article 14(2) of the SCC Rules provides that an arbitrator shall disclose any
circumstance which may give rise to justifiable doubts as to his/her impartiality or
83
ICSID Rules 2006, Rules 6(2).

Redfern/Hunter (n 5), 4.83
85
UNCITRAL Model Law 2006, Art.12(1).
86
Otto L O de Witt Wijnen/Nathalie Voser/Neomi Rao (IBA Working Group), Background Information on the
IBA Guidelines on Conflicts of Interest in International Arbitration [2004] Business Law International Vol. 5
No. 3, 3.1
87
German Arbitration Law 1998, 1036(1); See also Fouchard (n 7), 1057.
88
Karel Daele (ed), Challenge and Disqualification of Arbitrators in International Arbitration, International
Arbitration Law Library, Volume 24 (Kluwer Law International 2012) pp. xix - xxi, 1076
84
17
independence. Under the SCC Rules, circumstances that may give rise to such
doubts are to be disclosed, whereas the UNCITRAL Rules and the LCIA Rules only
require the disclosure of circumstances that are likely to give rise to such doubts. The
word may refers to a mere possibility, whereas the word likely refers to a higher
threshold of probability89. Less clearly, the SIAC Code of Ethics only requires
disclosure of close relationship90 without shedding any light on how to decide the
closeness.
Meanwhile, The Working Group for IBA Guidelines on Conflicts of interests sides
with ICC and ICSID Rules regarding the application of subjective test. The Working
Group states its reasons:
because of varying considerations with respect to disclosure the proper
standard for disclosure may be differentthe Working Group recognizes that
the parties have an interest in being fully informed about any circumstances that
may be relevant in their view.
In America, courts even take it further than the subjective test: arbitrators must disclose
all conceivable relationship, regardless of its nature and magnitude. U.S. Courts
granted parties, not arbitrators, the rights to decide what should be disclosed. The U.S.
Court of Appeal the Fifth Circuit explained:
It cannot therefore be left to the fox, who is the potential arbitrator, to guard
the arbitration henhouse, secretly identifying to himself alone all prior or
present relationships, then just as secretly deciding which are worthy of
disclosure and which are not. On the contrary, avoidance of partiality in the
selection of the arbitrator can be achieved only if, in discharging his duty of
disclosure, the potential arbitrator objectively disgorges absolutely every
89
90
Deale (n 88), 1076.

SIAC Code of Ethics for an Arbitrator 2009, 2.2.
18
conceivable fact of prior or present relationships with parties or counsel,

regardless of how tenuous or remote they might seem to him. He must leave to
the parties the value judgment as to which (if any) among those fully disclosed
facts constitutes a basis for rejecting the potential arbitrator for bias or the
appearance of bias.91
Finally, there are also tests which are hard to be listed merely as objective or
subjective including the tests applied in France, England and, to some extent,
Sweden.92 The IBA Working Group sum up situations in France and England as
followed:
France requires the disclosure of any facts encompassed by the statutory
grounds for challenge, provided that the facts involved are not common
knowledge and that they raise reasonable doubts as to the arbitrators
independence. The duty to disclose is restricted by the statutory list of grounds
for challenge.
Under English case law, an arbitrator should disclose any facts that could
arguably give rise to a real danger of bias. This exceeds a purely objective
disclosure requirement and comes close to a subjective test with regard to the
arbitrator.93
(ii)
Categorizations and Enumerations of Circumstances that give rise to

justifiable doubts
The arbitrators, before concluding any Statement of Independence, should meticulously

log in his facebook and linkedin, check out his CV, his education process, his love
91
Positive Software (n 81)

See Swedish Arbitration Act, Art.9, stating
A person who is asked to accept an appointment as arbitrator shall immediately disclose all circumstances which,
pursuant to sections 7 (legal capacity) or 8(circumstance which may diminish confidence in the arbitrator's
impartiality), might be considered to prevent him from serving as arbitrator.
93
IBA Background (n 86), 3.1
92
19
affair history, his published opinion and also his firms list of customers to find out
these kinds of circumstances that may give rise to justifiable doubts as to his
impartiality and independence. Such term, despite being used widely by both
subjective and objective test, is hard to define precisely. This part shall introduce some
circumstances classified and enumerated into types by recognized author, guidelines
and code of ethics. It should be noted, though, that it is not always as straightforward in
practice as in such categorization or enumeration - one relationship is complicated and
should be approach cumulatively.94
To begin with, Prof. William Park divides the circumstances into two categories of
concern namely problematic relationship and pre-judgment. The problematic
relationship often includes ties form financial dealings (such as business transaction
and investments), ties of a sentimental quality (such as friendship and family) and links
of group identification (shared nationality and professional or social affiliations).95
Prof. Parks categorization shares certain similarities with The IBA Guidelines Code of
Ethics 1987.96 According to this source, the following may be considered as giving rise
to justifiable doubts as to an arbitrator's impartiality or independence:
(1) a material interest in the outcome of the dispute;
(2) a position already taken in relation to the dispute;
(3) current direct or indirect (i.e., via a member of family, firm or partner) business
relationships with a party or a potentially important witness;
(4) past business relationships of such a magnitude or nature as to be likely to affect an
arbitrator's judgment; and
94
LCIA Special Volume, p. 288

Park, p. 478 [n 1]
96
IBA Code of Ethics for International Arbitrators 1987, 3.1.
95
20
(5) continuous and substantial social or professional relationships with a party or a

potentially important witness.
More thoroughly, Dr. Sam Luttrell, in his inspiring book Bias challenge in
International Arbitration: The need for a real danger test, sum up the circumstances
give rise to lack of impartiality as when arbitrator has a preference in the outcome or a
preference towards one party. According to his study, outcome preference is equivalent
to pre-judgment, and party preference is arbitrators inclination to decide in favour of
one party than the other.97 Dr. Luttrell further classified the relationship that incents
party preference into two types:
(1) the characteristics of the party (relative to the characteristics of the decision maker
(identity characteristics), which include the following: Nationality or domicile, Race
and Political persuasion/association
(2) the familiarity of the relevant party with the decision maker (party familiarity),
which includes Professional familiarity, Commercial familiarity, Social familiarity and
Representative familiarity
However, it should be noted that Dr. Luttrell approaches these circumstances as
grounds for bias challenge and based on courts decision in practice. In contrast, this
thesis approaches the circumstances as ones that should be disclosed at the
commencement of the proceeding the stage where more sensitivity are needed to
safeguard future integrity of the process. Therefore, Codes of Ethics for Arbitrator and
the IBA Guidelines on Conflict of Interests thus seem more suitable.
The ABA Code of Ethics categorized the circumstances on the basis of interests,
relationship and knowledge. Under the ABA Code, there are two kinds of interests:
direct and indirect, and there are four kinds of relationships: financial, business,
97
Luttrell (n 11), p.18.
21
professional or personal relationships.98 Prior and extended knowledge of the dispute

must also be divulged. Since the three provisions is connected with the word and,
this writer believe the relationship must be considered collectively with the interests
attached to it. ABA further proves that point in its example:
prospective arbitrators should disclose any such relationships which they
personally have with any party or its lawyer, with any co-arbitrator, or with any
individual whom they have been told will be a witness. They should also
disclose any such relationships involving their families or household members
or their current employers, partners, or professional or business associates
Rather than categorizing the circumstances based solely on their nature, The IBA
Guidelines on Conflicts of Interests also takes into account the proximity and intensity
of the circumstances. It provides a non-exhaustive enumeration of situations which,
depending on the facts of each case, may give rise to justifiable doubts as to the
impartiality and independence of the arbitrators. The Working Group divides these
situations into three lists: Red, Orange and Green List. The Red List is composed of
Non-waivable Red List, which includes situations deriving from the overriding
principle that no person can be his or her own judge, and the waivable Red List, which
encompasses situations that are serious but not as severe. Arbitrator under situations
listed in Non-Waivable Red List must not arbitrate in any case, whilst parties mutual
and expressed consent may help arbitrators who fall in Waivable Red Lists
circumstances. The Orange List is a non-exhaustive enumeration of specific situations
which in the eyes of the parties may give rise to justifiable doubts as to the arbitrators
impartiality and independence. Arbitrators in Orange situations shall be disqualified
only when a timely and expressed objection is made. Both the Orange and Red lists
address situation justifiable doubts may exist, which is if there is an identity between a
98
ABA/AAA Code of Ethics, Canon II.A.
22
party and the arbitrator, if the arbitrator is a legal representative of legal entity that is a
party in the arbitration, or if the arbitrator has a significant financial or personal interest
in the matter at stake.99 By contrast, in the Green List, no conflict of interests exists.100
The IBA Working Groups brilliance is undeniable as they continuously receive
international recognition and even won prestigious award101 for their outstanding
contribution in a minefield full of rigidity and disparity.102
One special list of circumstances that worth mentioned is from The China Arbitration
Law as well as many Codes of Conducts from Chinese arbitration institutes. Besides
familiar circumstances, they add one specific situation of when arbitrator has received
gift from one party or its agent, or accepted invitation to entertainment by one party or
its agent.103 In China, after the disclosure of circumstances named in the list, the
arbitrator is required by law to submit his/her withdrawal instantly.
As demonstrated above, there are many categorizations as well as enumerations for the
term circumstancesdoubts as to impartiality and independence. In conclusion, it
should be mentioned that in any event, the circumstances that give rise to justifiable
doubts must be approached cumulatively104 and with proper flexibility105 - as cautious
as the wording of IBA Guidelines suggests: any consideration is depending on the
facts of a given case106.
99
IBA Guidelines, General Standard 2.

IBA Guidelines Part II, 1- 9
101
At the 22nd Annual Awards Program of the CPR Institute for Dispute Resolution, the International Bar
Association (IBA) was presented with the distinguished arbitration bodys 2004 Outstanding Practical
Achievement Award.
102
Leon Trakman, The Impartiality and Independence of Arbitrators Reconsidered [2007] University of New
South Wales Faculty of Law Research Series 25, p.1
103
China Arbitration Law Art.34(4); See Jingzhou Tao , Arbitration Law and Practice in China (2nd Edn Kluwer
Law International 2008), 364.
104
LCIA Special Volume (n 1), p. 288.
105
IBA Guidelines, General Standard 2.
106
IBA Guidelines, Part II 2-6.
100
23
c. Duty to Investigate Potential Conflicts of Interests

One of the duties arise as consequence of duty to disclose by arbitrator is the duty of
investigation.107 To be more specific, the arbitrator may be obliged to investigate and
disclose any potential conflict of interests, or at least reasonably attempt to do so.
The General Standard 7(c) of the IBA Guidelines states:
An arbitrator is under a duty to make reasonable enquiries to investigate any
potential conflict of interest, as well as any facts or circumstances that may
cause his or her impartiality or independence to be questioned.
The IBA Guidelines put the same obligation of investigate on the party. The practice in
French, though, suggests that such obligation rest primarily on the arbitrator108.
In America, the ABA Code of Ethics, the RUAA109 and NASD Code110 expressly
impose such requirement in demanding the arbitrator to ascertain facts by reasonable
efforts111. Not just in the black-letter law, the duty of investigation is also widely
recognized in the U.S. Courts, especially in the Ninth Circuit.
Notably, The Ninth Circuit applies the theory of constructive knowledge situation
if the arbitrator should have known the circumstances by reasonable investigation112.
Black's Law Dictionary defines constructive knowledge as if by prudent action one
should have known a fact they are deemed to have knowledge of that fact. By virtue of
such theory, the Ninth Circuit held that an arbitrator who lacks actual knowledge of the
conflict can still have constructive knowledge of the conflicts. He shall subsequently be
107
Haschner (n 66), p. 794

Cour dappel [CA] [regional court of appeal] Paris, Dec. 18, 2003, RG n 2002/09750
109
The Revised Uniform Arbitration Act 2002
110
National Association of Securities Dealers Code of Procedure for Arbitration
111
ABA/AAA Code of Ethics, Canon II.A(2).
112
Jean SCHMITZ; Leonard Schmitz v. Carlos J. ZILVETI, III; Nicholas S. Meris; Prudential-Bache Securities
Inc., aka Prudential Securities, Inc., United States Court of Appeals, Ninth Circuit 20 F.3d 1043 (1994); New
regency Productions inc v. Nippon Herald Films Inc., United States Court of Appeals, Ninth Cirtcuit No. 0555224 (2007)
108
24
responsible for his failure to investigate, and thus failure to disclose113. The IBA
Guidelines concurs on this point, providing: Failure to disclose a potential conflict is
not excused by lack of knowledge if the arbitrator makes no reasonable attempt to
investigate.114
d. Relation between Duty of Disclosure and Bias
To understand the relation between Duty of Disclosure and Bias, this part shall
analyzed such situation in two circumstances: in case of a disclosure and in case of a
failure to disclose
(i)
In case where the duty of disclosure is fulfilled
Disclosure does not automatically mean a ground for rejection exists115, and disclosed
facts are not indication of potential bias or an admission of a conflict of interest. An
arbitrator who has made a disclosure to the parties considers himself or herself to be
impartial and independent of the parties, despite the disclosed facts, or else he or she
would have declined the nomination or resigned.116
Disclosure does not guarantee that an arbitrator is entirely impartial, either. After the
arbitrator disclosed circumstances that may give rise to justifiable doubts as to his
impartiality and independence, the parties shall consider such facts to decide whether
to file a challenge. The challenge shall be decided by the institution117 or other
appointing authority, or the arbitrator may opt to recuse himself from the process
seeing the party does not have enough confidence in his impartiality and
independence.118
113
Schmitz v. Zilveti (n 112), 1048-49

General Standard 7(c)
115
Karl-Heinz Bckstiegel/Stefan Michael Krll , et al. (eds), Arbitration in Germany: The Model Law in
Practice [2007], Kluwer Law International, p.35
116
IBA Guidelines, Explanation to General Standard 3(b).
117
See for e.g., ICC Rule Art.7(2); ZPO 1037 (1); DIS Rules 18.2.
118
See for e.g., R v. Bow St. Metro. Stipendiary Magistrate, [2000] 1 A.C. 119, 139 (H.L.) (appeal taken from
England), Lord Nolan's opinion: judge may have to disqualify himself by reason of his association with a body
114
25
(ii)
In case where the duty of disclosure is not fulfilled
The implications of a failure to disclose are measured by the same standards as other
allegations of bias119. The outcome of one failure to disclose, whether it is nondisclosure or partial disclosure, shall consequently depends on which bias test shall be
applied by the deciding authority, along with the facts of the given case120.
In countries where the law allows a successful challenge of an arbitrator if there is
reasonable suspicion or a threat of an appearance of lack of independence, failure
to disclose creates the impression of bias and thus disqualify the arbitrator.121 For
example in America, where judges tend to dig into every aspect of arbitrators personal
and professional life,122 partiality was rightfully found based on an omission of the fact
that an arbitrator, when he was a sitting judge, received a public censure by the
California Supreme Court for disparaging his female employees and colleagues based
on their physical attributes, sexuality, and ethnicity.123
Under other tests which come closer to actual bias, the non-disclosure shall be
considered cumulatively with the undisclosed fact in deciding whether or not an
arbitrator was bias.124 For instance, the Court of Appeal held in AT&T Corporation v
Saudi Cable that an inadvertent non-disclosure of a fact which might have affected the
that institutes or defends the suit, and Lord Hope of Craighead's opinion: absent waiver by both sides, judge
must recuse himself if "anything which can even by remote imagination infer a bias or interest in the judge"
exists.
119
LCIA Special Volume (n 1), p. 289.
120
121
Ibid. 11-45
122
Katarna Chovancov, Independence and Impartiality of International Arbitrators
http://www.paneurouni.com/files/sk/fp/ulohy-studentov/2rocnikmgr/extract-ind-imp-3.pdf
123
Haworth v. Superior Court (Ossakow) (2008)164 California Court of Appeal 4th 930 (U.S.); See also Kaiser
Foundation Hospitals, Inc. v. Superior Court (1993) 19 California Court of Appeal 4th 513 (U.S.), 516-517
124
LCIA Special Volume (n 1), p. 289
26
appointment process is not sufficient to lead to a real danger of bias. Consequently

the non-disclosure did not lead to a sanction.125
III.
PROBLEMATIC RIGIDITY AND DISPARITY IN APPROACHES

FOR DUTY OF DISCLOSURE
Professor William W. Park once argued that there are two courses to disrepute
arbitration: allowing service by bias arbitrator and setting unrealistic standards of
impartiality126. Many established standards have been walking the tight rope127 in
balancing the two courses. The standards for duty of disclosure, while remains
different and less complex from standards for bias, is undoubtedly affected by them
and consequently piled up with its own setbacks.128 This writer humbly contend that
approaches towards duty of disclosure have to confront with two main obstructions: its
disparity arising out of the lack of one cohesive and clear standard, and its rigidity
arising out of the inability to adjust to drastic changes in international business and the
manner in which it is conducted.
This part shall only introduce two issues: (1) debates over the inclusion of situation that
unnecessary to disclose in IBA Guidelines, and (2) the different approaches towards
non-disclosure in US Court 45 years after the Commonwealth case. Hopefully, these
two issues will well illustrate the rigidity and disparity concerning approaches for duty
of disclosure. After all, the world is of stubbornly hetero-generous legal cultures and
each country has its own view of proper conduct,129 including duty of disclosure; but in
125
AT&T Corporation and another v Saudi Cable [2000] England Court of Appeal; see also the decision of the
same effect by the German Bundesgerichtshof, 4 September 1999, ZIP 859 (1999); Rental Trading Ltd v Gill &
Duffus SA [2000] Lloyd's Rep 14 11-44.
126
Park (n 1), p. 476.
127
Ibid.
128
Karel Daele (n 88), 1-028
129
Pak (n 1), p. 475.
27
reaching a decision over this issue, transnational standards, soft law and professional
guidelines have always been more or less taken into account.130
1. Non-Disclosure of Situations under IBA Guidelines Green List
The Cautious Seldom Err
-
Confucius -
The IBA General Standard 3(c) requires any doubts as to whether an arbitrator should
disclose certain facts should be resolved in favor of a disclosure. However, in its
Explanation, the IBA remind the arbitrator the negative effect of unnecessary
disclosure:
Unnecessary disclosure sometimes raises an incorrect implication in the minds
of the parties that the disclosed circumstances would affect his or her
impartiality or independence. Excessive disclosures thus unnecessarily
undermine the parties confidence in the process131
The Green List comes along in the Practical Standard as an enumeration of situations
where disclosure is unnecessary. Nevertheless, even the IBA Guidelines Working
Group worried about the inconsistent to have the Green List on the IBA Guidelines.132
Some argued that the subjective test rendered the Green List redundant. Arbitrator must
see the potential conflicts in the eyes of the parties, and it made no sense to have a list
of situations beyond the disclosure requirement.133 Sarah Francois-Poncet, an arbitrator
and counsel in Paris, also observed that If, as an arbitrator, you have any possible
130
131
Ibid. p. 476.
IBA Guidelines, General Standard 3(c) Explanation.
IBA Background (n 86), 3.1; See also Ramon Mullerat, The IBA guidelines on conflicts
revisited: Another contribution to the revision of an excellent instrument, which needs a slight
treatment [2009] Internacional Workshop on ADR/ODRs. Building bridges: legal framework and
Universitat Oberta de Catalunya (UOC), Internet Interdisciplinary Institute (IN3), September
http://www.uoc.edu/symposia/adr/
Accessed 16th May 2013
133
IBA Background (n 86), 3.1
132
28
of interest
Daltonism
principles.
15, 2009
concern about a conflict, you sleep better at night if you disclose and though overdisclosure may open the door to abusive challengesyou cant guideline away from
bad-faith134. Ms. Nathalie Allen and Ms. Daisy Mallet even suggested the removal of
Explanation to General Standard 3(c)135 concerning excessive disclose.
Should the IBA Guidelines need such amendment? The answer should be No.136
However, the arbitrators are required to apply it with robust common sense, and among
which great sense of caution is critically needed. It is due to two main reasons:
First, national courts may not reach the same conclusion regarding the necessity of
disclosure as the Working Group.137 The practice of arbitration has seen numerous
situations where relationship, which is less serious than Green List, lead to the
disqualification of one arbitrator and/or vacatur of the award.
Second, the diverse culture and legal background should always be dealt with
cautiously in considering what should be disclosed. Despite being a set of principles
with which most international arbitrators seek to comply138, the IBA Guideline cannot
be expected to deal with such diversity flawlessly.
a. Controversies in Courts Decision
(i)
Telekom Malaysia v. Ghana139 (2005) and Urbaser v. Argentina140 (2010)

ICSID Cases: Non-disclosure of Item 4.1.1 Green List
In 2002, Telekom Malaysia commenced arbitration against the Republic of Ghana

under the investor protection provisions of the Malaysia-Ghana BIT. The parties
134
Moses (n 7), p.141

Allen/Mallett (n 78), p.135
136
137
Moses (n 7), p.140
138
Redfern/Hunter (n 5), 4.87
139
The Republic of Ghana v. Telekom Malaysia Berhad, District Court of the Hague (Civil Law Section),
Decision No. HAiRK 2004.778 5 November 2004 (PCA)
140
Urbaser and another v. Argentina, ICSID Case No ARB/07/27 (Decision on Claimants Proposal to
Disqualify)
135
29
submitted to UNCITRAL Rules arbitration at PCA in The Hague, with the Secretary
General of the PCA as designated appointing authority.
In November 2005, Ghana challenged Arbitrator Emmanuel Gaillard on the basis that
he was serving as counsel in a similar but unrelated investor-state dispute in which he
was representing RFCC, a foreign consortium, against Morocco. Ghanas challenge
was arising out of their concern of merits-prejudgment by Prof. Gaillard. Judge Von
Maltzahn of District Court of Hague sum up Ghanas case as followed:
Ghana's challenge was therefore based on a risk of merits pre-judgment by
involvement in concurrent (but unrelated) investor-state proceedings. The
question was whether a decision against Ghana would strengthen Professor
Gaillard's position as counsel for RFCC against Morocco, or as E.R. Meerdink
put it, whether by deciding for Ghana (and against Telekom Malaysia) Professor
Gaillard would be generating case law against his client's position141.
Telekom Malaysia argued that the facts of the RFCC v. Morocco arbitration were
different from the claim against Ghana, and that the situation at hand was analogous to
that dealt with in Item 4.1.1 of the Green List of the IBA Guidelines.142 Item 4.1.1
cover the situation where the arbitrator has previously published a general opinion
concerning an issue which also arises in the arbitration and such situation is deemed
to be unnecessary to disclose as it does not give rise to conflict of interest.
Judge Von Maltzahn disagreed with Telekom Malaysias argument. In upholding the
challenge, he held that:
Account should be taken of the fact that the arbitrator in the capacity of
attorney will regard it as his duty to put forward all possibly conceivable
objections against the RFCC/Morocco award. This attitude is incompatible with
141
142
Telekom Malaysia (n 139), 2.

Ibid. 4.
30
the stance Prof. Gaillard has to take as an arbitrator in the present case, i.e. to be
unbiased and open to all the merits of the RFCC/Morocco award and to be
unbiased when examining these in the present case and consulting thereon in
chambers with his fellow arbitrators. Even if this arbitrator were able to
sufficiently distance himself in chambers from his role as attorney in the
annulment proceedings against the RFCC/Morocco award, account should in
any event be taken of the appearance of his not being able to observe said
distance. Since he has to play these two parts, it is in any case impossible for
him to avoid giving the appearance of not being able to keep these two parts
strictly separated143.
Nevertheless, the case Telekom Malaysia v. Ghana cannot be said as a successful
challenge based merely on the ground of Item.4.1.1 Green List. However, it is highly
recommendable that arbitrator should be cautious with Item 4.1.1 Green List as such
Item under certain circumstances can give rise to justifiable doubt.
In another ICSID case involving Item 4.1.1, Urbaser v. Argentina, the two-member
tribunal emphasized that there is no distinction between general and specific in
describing academic work in contending scholars opinion may be a factor of influence
when it comes to considering the same or similar issues in a particular dispute. Their
reasoning was as follow:
the Two Members are not convinced that distinctions like the one based on
the notion of "general opinion" as it is used to define the attitudes to be put on
the "green list" according to the IBA Guidelines make much sense. Such a
distinction between "general" and "specific" views is of little value when it
comes to characterizing academic work. The hypothesis of research done by a
scholar on a merely "general" level is a description more caricatured than that of
143
Ibid.
31
actual academic work. As well, it is not much more convincing to draw a strict
dividing line between opinions expressed as a scholar and those to be formed as
an arbitrator. While it is correct to say that a scholars opinion might change
and is unrelated to the pattern of facts and arguments related to a particular
case, Claimants are right to the extent that they argue that such opinion may
nevertheless be a factor of influence when it comes to considering the same or
similar issues in a particular dispute144 (emphasis added)
Prof. Ramon Mullerat also voiced his concern over Item 4.1.1 Green List. He observed
that the content of the publicly published view may affect the impartiality and
independence of the arbitrator. He argued that the more extreme these views, the
greater the grounds for challenge on the basis of lack of impartiality. Furthermore, he
observed that the issue is more sensitive where there is a political or philosophical
element to the question in dispute145.
The outcome of the Telekom Malaysia v. Ghana and Urbaser v. Argentina, in addition
to Prof. Mullerats opinion, suggests that Item 4.1.1 Green List is not that unnecessary
to disclose. One arbitrator should not therefore automatically opt for a non-disclosure
in such situation. Rather, he should apply Item 4.1.1 with robust common sense and,
in this case, with caution to be exact.
(ii)
ASM Shipping v. TTMI146 (2005): non-disclosure of circumstances far

beyond the Green List
This is the case that marks an inauspicious debut in the English courts of the IBA
Guidelines on Conflicts of Interest in International Arbitration147. ASM shipping was
represented by Zaiwalla & Co (Solicitors), TTMI by Waterson Hicks & Co
144
Urbaser v. Argentina (n 140), 52.

Mullerat (n 132), p.23.
146
ASM Shipping Ltd of India v. TTMI Ltd of England [2006] English Court of Appeal
147
Steven Friel, Removal of an English arbitrator for reason of "apparent bias". A.S.M. Shipping Ltd. of India v.
T.T.M.I. Ltd. of England [2006], TDM 2 www.transnational-dispute-management.com
145
32
(Solicitors). The party-appointed arbitrators selected Mr. Duncan Matthews QC as

third arbitrator.
The circumstances that gave rise to justifiable doubts in this case involved Mr.
Matthews, Waterson Hicks and ASM's principal witness, Mr Moustakas.In an
unrelated arbitration between unrelated parties, Moustakas had been witness for
opposing party of Waterson Hicks client. Waterson Hicks in that arbitration had
accused Moustakas of fraudulent and fabricating evidence. Notably, Mr. Matthews had
briefly been an advocate instructed by Waterson Hicks in that case, though only on a
peripheral issue which is irrelevant to Moustakas alleged criminal actions. After being
challenged by ASM Shipping and Moustakas in ASM v. TTMI arbitration, Mr.
Matthews described his relationship (assume there was one) with Moustakas:
I have never met him before this hearing or had any contact with him as far as I
am aware. I do not recall making or Waterson Hicks or their clients making
any allegation of Moustakas producing fraudulent and fabricated documents
and threatening forensic investigation and there is no reference to this in the
preparatory note of oral submissions which I prepared for the hearing148
Concerning the allegation that Moustakas had produced fraudulent and fabricated
documents, Mr. Matthews emphasized:
the application raised no allegations of impropriety, let alone criminal
conduct, on the part of Moustakas that I am aware ofI have no basis for
thinking that any such allegation, even if made, was ever substantiated. . As
148
All Facts and Decisions of ASM Shipping v. TTMI used in this thesis are cited from Hew R. Dundas,
Arbitration Case in English High Court - Bias/Removal Of Arbitrator (ASM Shipping Ltd v TTMI Ltd)
[2006], TDM 2 www.transnational-dispute-management.com accessed 16th May 2013
33
far as I am concerned nothing relating to that case gives rise to any doubt in my
mind as to the propriety of Moustakass conduct149
In further clarifying his relationship with both parties, Mr. Matthew revealed that he
had acted for Waterson Hicks clients in 10 cases in a time-span of 10 years, out of the
400 cases in which he had appeared. He had met both Waterson Hicks and Sarosh
Zwailla (ASMs Counsel) personnel socially.
Mr. Matthews, therefore, refused to recuse himself. After the render of the award,
ASM Shipping requested English High Court to set aside an award on the ground of
serious irregularity pursuant to Section 68 of the English Arbitration Act. TTMI had
argued that no serious irregularity could have existed because the facts alleged to have
given rise to the serious irregularity were not enumerated in the IBA Guidelines' Red
List. The Court rejected the argument holding that the IBA Guidelines do not purport
to be comprehensive and, as the Working Party added, nor could they be. The Court
added that the Guidelines had to be applied with robust common sense and without
pedantic and unduly formulaic interpretation. The English High Court then came to
the conclusion that the circumstances in this case give rise to justifiable doubts, and
Mr. Matthews should not act as arbitrator in this dispute.150
In retrospect, the decision of English High Court was controversial, and arguably
wrong. Mr. Matthews was unlucky even to be challenged, let alone being found partial.
Indeed, he didnt know Moustakas at all at the outset. Here, The High Court was
invited to draw inferences from the non-inclusion in the Guidelines' lists of the facts
that were allegedly impairing the arbitrator's impartiality, and they applied it with
rigidity rather than common sense. Mr. Hew Dundas, in his commentary on this case,
criticized the courts decision:
149
150
Ibid.
Karel Daele (n 88), footnote 83
34
If this judgment (the High Courts judgment on the impartiality of Mr.

Matthews) is indeed correct, it could follow that no one, whether judge or
arbitrator, who has ever had any adverse involvement with any witness or party
in any capacity can sit in judgment on a case involving that person, albeit they
may not be a party in the future matter.
He first compared the Guidelines with an archery target with a red bull (centre), an
orange inner ring and a green outer ring, and went on to state:
This (the challenged circumstance) is not Green List territory but a Persil
whiteness far beyond any objective consideration of issues of bias; to return to
my archery target visualisation Owners claims regarding X (Mr. Matthews)
and bias fall well outside even the green list so miss the target completely
In conclusion, the debut of IBA Guidelines on English High Court was controversial,
though it should be note that the English High Court decision in ASM Shipping does
not represent all other England Courts view. Indeed, in A v. B and X case in 2011,
Justice Flaux of EWHC did set a high threshold for serious irregularity that a nondisclosure alone cannot reach.151 However, such controversy as in ASM Shipping
should be expected in this minefield152 of impartiality and independence, and it is
worth noting that even situation greener than the Green List can raise doubts to the
impartiality of the arbitrator. For example, one award was almost be vacated as the
arbitrator and one partys counsel had been involved in patent litigation 7 years ago
and were two of at least 34 lawyers involved, from seven different law firms. Despite
the 7 year of non-event,153 the challenge was upheld twice by the District Court and
151
Hew Dundas, Conflicts of Interest and Arbitrator Disclosure Revisited: Barristers Acting as Counsel and as
Arbitrator[2007] DundasArbitrator Newsletter
http://www.inprisys.net/hosted/hrd/news.asp
152
Leon Trakman (n 102), p.1
153
The Orange List requires the disclose of arbitrator and counsel of one party being co-counsel more than twice
in time-span of 3 years, over 3 years, such situation falls into Green List; see Moses (n 7), p.134
35
Fifth Circuit Court of Appeal, and only being overturned after one en banc where 16judge court sat together.154
(iii)
OAO NK Rosneft v. Yukos Capital S.a.r.l (Russia -2007) In Erick van

Egeraat Associated Architects B.V. v. Capital Croup LLC (Russia 2009):
Non-disclosure of academic connections in conference
In 2007, the Russian Supreme Arbitrazh (State Commercial) set aside an award
rendered in favor of the Respondent155 in the case of OAO NK Rosneft v. Yukos Capital
S.a.r.l. The reason for the annulment was a failure to disclose by the arbitrator of his
connection to the legal counsel of the other party at the time of their appointment. The
facts of the case suggested that one of the arbitrators spoke at a conference organized
and sponsored by the law firm representing the Respondent in the arbitral
proceedings156. The court ruled that such a relationship by itself does not necessarily
call into question the arbitrators impartiality and independence but may raise concerns
and should therefore at least be disclosed in order to give the parties the opportunity to
decide whether they wish to challenge the arbitrator.157 Although this decision may be
widely believed as not objectively legal, it is still worth being mentioned for raising the
issue of disclosing academic connection.
Two years later, in Erick van Egeraat Associated Architects B.V. v. Capital Croup
LLC158 the Court of Cassation of the Moscow Federal Circuit refused to set aside the
award in a comparable situation. In this case, one of the law firms represented one
party in an arbitration process had sponsored a conference at which one arbitration had
given a speech. In finding that there is not even a mere appearance of dependence, the
154
Positive Software (n 81),

The setting aside upheld by the Supreme Arbitrazh Court; decision of 10 December 2007, No. 14955/07.
156
Roman Zykov/Hannes Snellman, Russia: Impartiality Test for Arbitrators [2011] Kluwer Arbitration Blog
http://kluwerarbitrationblog.com/blog/2010/04/20/russia-impartiality-test-for-arbitrators/ accessed 16 May 2013
157
Genevieve Gagne, Impartiality and Independence of Arbitrators in Russia: The Incriminating Effect of
Speaking Engagements, [2011] Konrad & Partners Dispute Resolution News March 2011
158
27 August 2009 No. KG-40/8155-09.
155
36
court ruled that the decisive criteria in establishing potential doubts as to impartiality
and independence would be the existence of a commercial interest or dependence due
to the conference sponsorship. Regarding the duty of disclosure, the court, however,
concur with the 2007 Decision of the Supreme Court. The Court of Cassation here
reaffirmed that arbitrators are under a broad duty to disclose any circumstances that
might give the appearance of a special relationship between an arbitrator and a partys
legal counsel, which might also include academic connections.159
Academic Connections is not mentioned specifically in the IBA Guidelines, however,
being speaker at a conference sponsored by one partys representative law firm can be
described as insignificant the familiar word in the Green List of IBA Guidelines. It
is a familiar scene when international arbitration practitioners, especially renowned
ones, gave his or her speech at major academic events. Such events, in addition, are
often sponsored by well-known law firms.160 In the two abovementioned cases,
Russian Courts did set a low threshold for arbitrators disclosure in recommending
arbitrator to disclose broadly his academic connections with one party. The two
decisions once again served as a reminder of how one arbitrator should disclose
cautiously.
b. Diversity in Culture and Legal Background
The IBA itself served for the very purpose of bringing a convergence in duty of
disclosure for different national legislative. Most often, the parties are also of different
cultural
backgrounds
with
unavoidable
different
perceptions
on
particular
circumstances.161 Consequently, what one party may perceive as being problematic for
the arbitrator's independence and impartiality may be considered as ordinary by the
other party and vice versa162. Below are some instances of how cultural diversity
159
Genevieve Gagne (n 157), Zykov/Snellman (n 156).

Genevie Gagne (n 157).
161
Mullerat (n 132), p.2
162
Daele (n 88), 1-026
160
37
obstructed the task of providing a degree of unity to international approaches of

disclosure.
The first instance would be the different standards for disclosure of America and
Europe. In America, arbitrators are always required to dig into every aspects of his
relationship with one party in disclosure. In contrast, Europe does not welcome such
excessive disclosure and expresses concerns that it may encourage the assumption that
a disclosure should lead to disqualification. 163 One drafter of IBA Guidelines recalled
an arbitration where an American co-arbitrator made three pages of disclosures,
including references to congresses where he had been present with counsel for one
parties; whereas the other European arbitrator did not consider the fact that he spent
most summer vacations with counsel to one side is necessary to disclose 164.The ABA
Code of Ethics 2011 is major evidence of how broad America require for the duty of
disclosure, and it is the main difference from the IBA Guidelines. In particular, a
number of Items under the Green List of the IBA Guidelines would be required to be
disclosed under the AA-ABA Code of Ethics165. For example, Canon II(A)(2) provides
that prospective arbitrators should disclose any such relationships which they
personally have with any party or its lawyer [or] with any co-arbitrator By contrast,
under the Green List, it is not necessary for a prospective arbitrator to disclose that she
had served as co-counsel or co-arbitrator with another arbitrator or as counsel for one
of the parties.166 The main difference here arises from various perceptions from drafters
of different legal cultures. While in the mind of ABA Drafters, every disclosure, no
163
John M. Townsend, Arbitrator Neutrality and Disclosure: The End of the American Problem [2005]
Journal of International Dispute Resolution IDR; Judith Gill, The IBA Conflicts Guidelines Whos Using
Them and How? [2007] Dispute Resolution International Vol. 1 No. 1, p.69
164
Redfern/Hunter (n 5), 4.85.
165
Moses (n 7), p.143.
166
IBA Green List, Item 4.4.
38
matter how insignificant, should be communicated to the parties167 the IBA Green
List sends out a message that insignificant relationship is unnecessary to disclose.
The second instance concerns different stances of international and national authority
towards disclosure of already public information of ICSID Cases and Swiss Court.168
In one Switzerland case169, one of the parties filed an appeal with the Supreme Court
requesting the annulment of the award on the grouds of the irregular composition of the
arbitral tribunal because two arbitrators and the counsel for one of the parties belonged
to a professional organization called Rex Sport, which was composed of 26 members
and the website of which was protected by a secret access code. The Supreme Court
rejected the challenge because it found that had the claimant performed a proper due
diligence when he was informed of the identity of the arbitrators, the link between the
chairman and the arbitrators appointed by the other party would easily had been
discovered.170Meanwhile, in the ICSID Cases of Tidewater v. Venezuela171 and
Universal v. Venezuela172, the decisions reference to the scope of the duty to disclose
is relatively different from that of Swiss Court. Though willing to take into account the
public availability of information in dismissing challenges on failure to disclose, the
cases also suggest that arbitrators should include in their letter of acceptance to the
parties details of all prior appointments by an appointing party as well as details of any
professional relationships with a partys counsel, including, out of an abundance of
caution, information that is already in the public domain. Such disclosure purports to
167
ABA/AAA Code of Ethics, Canon II.

Matthias Scherer, New Case Law From Austria, Switzerland and Germany Regarding the IBA Guidelines on
Conflicts of Interest in International Arbitration [2008] Transnational Dispute Management Vol. 5, issue 4, p. 6.
169
Switzerland, Federal Supreme Court, 1st Civil Chamber, Decision of 20 March 2008, 4A_506/2007
170
See also French Courts decisions comparable to that of Swiss Court in CA Paris, June 2, 1989, T.A.I. v.
S.I.A.P.E., and Gemanco v. S.A.E.P.A., 2 decisions, 1991 REV. ARB. 87
171
Tidewater Inc. v. The Bolivarian Republic of Venezuela (2010) ICSID Case No ARB/10/5
172
Universal Compression International Holdings, S.L.U. v. The Bolivarian Republic of Venezuela (2011) ICSID
Case No ARB/10/9
168
39
ensure that parties have complete information and that the appointment process is as
transparent as possible.173
Another great example for cultural diversity and its effects on duty of disclosure would
be how English and non-English perceive the structure of English barrister chambers.
To be more specific, should an arbitrator disclose the fact that he and counsel of one
party are barristers of the same chambers? Barristers are independent practitioners who
neither work in partnership nor split profits. Nonetheless, they are organized within
barrister chambers which appear to be an integrated structure, advertising the
chambers' services, sharing premises and law clerks as a common resource and
carrying out the recruitment of new members collectively. An arbitrator being in the
same chambers as a barrister with counsel to one of the parties may not give rise to
doubts as to the arbitrator's reliability for independent judgment in the eyes of an
English party or an English counsel, as held in Laker Airways case.174 However, nonEnglish parties and counsel are far less familiar with the concept of barrister chambers
and, thus in their eyes, the membership of the same chambers of the arbitrator and a
counsel appearing in the arbitration may well give rise to doubts. Being in the same
chambers, therefore, may need to be disclosed before non-English parties..175
To conclude, multi-cultural and transnational process has been one familiar part of
international arbitration, as a result of rapid growth of international marketplace.176In
such context, duty of disclosure of arbitrator faces the tests of many kinds of diversity.
To name a few, there are diversity among nations; diversity between national court and
173
Tidewater v. Venezuela (n 171); Universal v. Venezuela (n 172); Vincent Dwyer, Better the arbitrator you
know - repeat appointments are permissible
http://www.mondaq.com/australia/x/150364/International+Courts+Tribunals/Better+the+arbitrator+you+know+r
epeat+appointments+are+permissible accessed 16th May 2013
174
Laker Airways Inc. v. FLS Aerospace LTD. [2000] 1WLR 113
175
Karel Daele (n 88), 1-026.
176
Rosabel E. Goodman-Everard, Cultural Diversity in International Arbitration - A Challenge for DecisionMakers and Decision-Making [1991] Arbitration International (Kluwer Law International 1991) Volume 7 Issue
2, pp. 155 164.
40
international court; and diversity among fields of arbitration i.e. insurance, securities,
commercial, investments, labor etc.One relationship or behaviour deemed as trivial in
Europe may be considered as substantial in Asia or America, and vice versa. Or one
circumstance that may give rise to justifiable doubts elsewhere can be considered as
ordinary in countries where the legal community is relatively small and legal
practitioners often have relations with each other, like Switzerland and Belgium.177
Hence, even under situations are in the Green List or of the same magnitude as the
Green List, arbitrator should remain cautious as he may opt to follow one simple rule:
if in doubt, disclose.178
2. Failure to Disclose in the constitution of Evident Partiality in U.S. Courts:
A Tale of Two Circuits
If the issue of unnecessary disclosure under the IBA Green Lists is about the content of
disclosure, the issue under the US Court concerns disparity and rigidity in approaches
the relationship between bias and non-disclosure. Many interpretations have been made
by U.S courts regarding evident partiality in case of failure to disclose, and if every
interpretation is a work of art, related case law in the U.S. Court in the 45 years after
landmark case of Commonwealth shall without doubt become one formidable national
gallery. US Federal Law recognized Model Law standards of impartiality,
independence and disclosure179 and the Federal Arbitration Act Section 10(a)(2) allows
for arbitral awards to be vacated where there was evident partiality or corruption in the
arbitrators. However, from the milestones decision of Commonwealth case180 in 1968
to the recent case of Thomas Kinkade v. White181 decided in 2013 April, the practice of
arbitration in the US has seen an absence of consensus on the meaning of evident
177
Bruno Manzanares Bastida, The Independence and Impartiality of Arbitrator in International Commercial
Arbitration [2007] REVIST@ e Mercatoria Vol. 6, No. 1, 2007, p.12.
178
Moses (n 7), p.144.
179
Luttrell (n 11), p. 196/357
180
Commonwealth Coatings Corp. v Continental Casualty Co. Et al 393 U.S. 145 (1968) (US Supreme Court)
181
Kinkade (n 73)
41
partiality182 for 45 years. What role does arbitrators failure to disclose play in the
constitution of arbitral bias has consequently been the subject of numerous judicial
decisions, which subsequently set forth various standards and applies them to an
extremely wide range of facts pattern.183 Overall there are two main approaches: The
Ninth Circuits (and its like-minded Circuit) approach, which comes close to
appearance of bias standard, and the Second Circuit (and its like-minded Circuits)
approach, which comes close to actual bias.
In this part, this writer shall introduce (a) Standards for evident partiality and
disclosure set out in Commonwealth case and (b) the development of the standards for
evident partiality particularly in the issue of failure to disclose. The purpose of this
part is to demonstrate the problematic disparity and rigidity of such approaches.
a. Standards for Evident Partiality and Disclosure under Commonwealth case
The confusion and uncertainty in the U.S. courts about the meaning of evident
partiality began in the U.S. Supreme Court case Commonwealth Coatings Corp. v.
Continental Casualty Co., where a 6-3 plurality decision vacated an award based on the
presiding arbitrators undisclosed business relationship with one of the parties.
However, the Court was unable to articulate a standard for evident partiality.
The dispute was between a subcontractor and a prime contractor for a painting job.
Pursuant to an arbitration agreement in their contract, each party appointed one
arbitrator and the two selected arbitrators mutually appointed the third and presiding
arbitrator. The respondent in this case the prime contractor was one of the third
arbitrators regular customers184. However, what described as a sporadic185
182
Montez v. Prudential Securities, Inc., 260 F.3d 980 (8th Cir. 2001) (U.S); Gary Born/Claudio Salas, The
Different Meanings of an Arbitrators Evident Partiality Under U.S. Law [2013] Kluwer Arbitration Blog
http://kluwerarbitrationblog.com/blog/2013/03/20/the-different-meanings-of-an-arbitrators-evident-partialityunder-u-s-law/
183
Loree Jr. (n 70).
184
Commonwealth (n 180), at 146
42
relationship by the Court had gone undisclosed and unnoticed through the whole
arbitral proceeding and was only revealed after the render of the award. The petitioner
consequently challenged the award. After the District Court and Court of Appeal both
refused a vacatur, the Supreme Court granted certiorari and reversed, thus vacating the
award. The plurality imposed on arbitrators the same standard of impartiality
applicable for Art. III judges 28 U.S.C Section 455 sets forth the judicial standard of
impartiality which is impression of bias186. Such test is deemed to be equivalent to
appearance of bias187 test. For the plurality decision, Justice Black wrote:
We can perceive of no way in which the effectiveness of the arbitration process
will be hampered by the simple requirement that arbitrators disclose to the
parties any dealings that might create an impression of possible bias.188
In the final paragraph, the Court held that the standard of evident partiality must be
based on the premise that any tribunal not only must be unbiased but also must
avoid even the appearance of bias.
Justice White concurring opinion adopted a narrower standard, finding that arbitrators
are not necessarily to be held to the standards of judicial decorum of judges189. Justice
White, in his additional remark, wrote:
Of course, an arbitrators business relationship may be diverse indeed,
involving more or less remote commercial connections with great numbers of
people. He cannot be expected to provide the parties with his complete and
unexpurgated business biography. But it is enough to present purpose to hold, as
the Court does, that where the arbitrator has a substantial interest in a firm,
185
Ibid
Commonwealth (n 180), at 149
187
Schmitz v. Zilveti (n 112), 1047-48
188
Commonwealth (n 180), 148-9
189
Commonwealth (n 180), 150
186
43
which has done more than a trivial business with a party, that fact must be
disclosed (emphasis added)
Justice Whites concurrence is the narrowest grounds for judgment, which means that it
is the holding of the Court and the pluralitys discussion of appearance is nonbinding.
Nevertheless, standards to decide substantial interest and trivial business were
untouched and have remained vague since then. In attempting to further limit the scope
of evident partiality, Justice White unfortunately190 incent various interpretation of
evident partiality by subsequent courts in reviewing this case law.
b. Development of Evident Partiality in non-disclosure case over the years:
Disparity between Circuits
Love it or hate it, U.S. Courts seems to be enthusiastic and diligent in interpreting the
standards of evident partiality after the Commonwealth case, including its relation with
failure to disclose. Prof. Gary Born sum up the trend: The U.S. federal circuit courts
are split as to which is the correct standard of evident partiality.191 The Fifth, Eighth,
Tenth and Eleventh circuits have adopted standards akin to that of the Ninth Circuit
that there exists a reasonable impression of bias. The First, Third, Fourth, Sixth and
Seventh Circuit have adopted standards akin to that of the Second Circuit that a
reasonable person would have conclude there was bias.192 However, even when
using the same standard, how each circuit approaches to duty of disclosure is so
unpredictable.
This writer shall discuss below the two main approaches of Ninth Circuit and Second
Circuit, as well as how their like-minded Circuits applied these approaches, from (i) the
appearance of bias test to (ii) closer to actual bias test
190
The wording used by Prof. Windsor based on Schmitz v. Zilveti (n 112) in Kathryn A. Windsor, Defining
Arbitrator Evident Partiality: The Catch-22 of Commercial Litigation Dispute [2009] Seton Hall Circuit Review
Vol. 6 Issue 1, p. 198.
191
Born/Salas (n 182)
192
Ibid.
44
(i)
The Reasonable Impression of Bias Standard Applied by the Ninth Circuit
The reasonable impression of bias test was first addressed by the Ninth Circuit (San
Francisco Court of Appeal) in 1994 in Schmitz v. Zilveti. In this case, one of the three
arbitrators failed to run a conflict check on the appellees parent company and failed to
disclose that his law firm had represented such company in at least nineteen cases over
thirty-five years. The appellants then challenged the arbitration award.193 The District
Court concluded that since the arbitrator was not aware of the conflict, the failure to
disclose did not establish evident partiality. The Court of Appeal overturned that
decision. It adopted the reasonable impression of partiality standard, deeming it to be
the most accurate application of the Commonwealth standard and thus sufficient in a
nondisclosure case. The Ninth Circuit noted that one party cannot appoint their
arbitrator intelligently if facts showing potential partiality are not disclosed194.
The Ninth Circuit even went as far as imposing a duty to investigate certain
circumstances that gave rise to reasonable impression of bias and even an
arbitrators constructive knowledge of a conflict is sufficient to disqualify him. The
Circuit stated that the lawyer forgot to run a conflict check or had forgotten that he
had previously represented the party is not an excuse.195 In this case, the duty to
investigate is imposed by NASD Code the applicable rule. However, even when the
NASD Code does not apply, such duty is reaffirmed several times in the Ninth Circuit.
For instance, in the case New Regency v. Nippon, the Ninth Court affirmed the vacatur
of an arbitration award as the arbitrator failed to investigate and disclose. The Circuit
held that an evident partiality can be established regardless of the actual knowledge of
a conflict196 of the arbitrator.
193
Schmitz v. Zilveti (n 112), 1044

Ibid. 1047
195
Ibid. 1048
196
New Regency (n 112), 1106.
194
45
Many circuits concurred with the Ninth Circuit in implementing the impression of
bias standard. Indeed, the Eleventh Circuits approached failure to disclose under such
standard in Middlesex Mutual Insurance Co. v. Levine in 1982. 20 years after that in
2003, one federal district court there still confirmed explicitly that evident partiality is
established when an arbitrator fails to disclose any dealings that might create an
impression of possible bias.197
However, among many circuits using the reasonable impression of bias standard, it is
still hard to find one cohesive approach towards arbitrators duty of disclosure. For
example, in the recent Ometto case, the constructive knowledge theory of the Ninth
Circuit has been expressly rejected by the Eleventh Circuit.198 Meanwhile, The Fifth
Circuit, in an en banc decision, opined that the Ninth Circuits decision in Schmitz case
was an outlier and found that nondisclosure by an arbitrator would not lead to
vacatur of an award unless it creates a concrete, not speculative impression of bias.199
The Fifth Circuit felt the need to address evident partiality practically rather than
with utmost rigor200 in spite of the fact that the Fifth Circuit still mainly applied the
impression of bias standards in approaching duty to disclose of arbitrators, as
observed by one dissenting opinion.201 The concrete impression standards thereof
lies somewhere in between the approaches of the Ninth Circuit and Second Circuit.
Nevertheless, The Fifth Circuits since Positive Software has never really met the
expectation to bridge the gap between two different approaches. In Dealer Computer
case in 2010,202 the arbitrator disclosed she had previously participated on an
arbitration panel in a dispute involving Dealer Computers. However, the arbitrator
failed to disclose the previous dispute involved an identical clause in a similar contract.
197
Crowe Construction v. Jeffrey M. Brown, 264 F.Supp.2d 217 (E.D. Pa. 2003) (U.S.).
Gianelli Money Purchase Plan and Trust v ADM Inv. Services, Inc., 146 F3d 1309 (11th Cir. 1998) (U.S.).
199
Positive Software (n 81).
200
Ibid.
201
Ibid. at 287
202
Dealer Computer Services Inc. v. Michael Motor Co. Inc., 761 F. Supp.2d 459 (S.D. Tex. 2010) (U.S.)
198
46
The Fifth Circuit then held that evident partiality may be based on nondisclosure of
information by an arbitrator if it involves a significant compromising connection to the
parties. The court found that the arbitrators prior involvement created a reasonable
impression that she had prejudged the issues in the second arbitration and thus
established evident partiality. Furthermore, in 2011, the Court of Appeal for Texas,
Houston applied an appearance of bias standard in vacating an arbitration award on
the ground that one partisan arbitrator failed to disclose that his law firm had
represented appellant prior to the arbitration and has represented several appellantaffiliated entities during the pendency of the arbitration.203
(ii)
The Reasonable Person would Conclude Standard Applied by Second

Circuit
The Second Circuit (New York Court of Appeal) in 1984 came to the conclusion that
Justice Blacks standards for evident partiality must be read as a dicta.204 Instead, the
Second Circuit, and its like-minded circuits, applied a more demanding standard: an
arbitrator is disqualified for evident partiality only when a reasonable person,
considering all of the circumstances, would have to conclude that the arbitrator was
partial to one side.205 Many clarifications to this standard have been made since then.
In 1993, The Fourth Circuits in applying this standard added the requirement that party
asserting bias must establish specific facts that indicate improper motives on the part
of an arbitrator.206 In 1998, The Sixth Circuit further contributed to clarify the
reasonable person would conclude standards in Andersons v. Horton case207 in
holding that: This standard requires a showing greater than an appearance of bias, but
203
Amoco D.T. Co. v. Occidental Petroleum Corp., 343 S.W.3d 837 (Tex. App. Ct. 2011) (U.S.)
Morelite Const. Corp. v New York City Dist. Council Carpenters Ben. Funds, 748 F2d 79, 83 (2d Cir. 1984)
(U.S.), 83-84
205
Morelite v. New York (n 204), Applied Industrial Materials Corp. v. Ovalar Makine Ticaret Ve Sanayi, A.S.,
No. 06-3297-CV, 2007 WL 1964955 (2d Cir. July 9, 2007) (U.S.), 137
206
Peoples Sec. Life Ins. v. Monumental Life Ins., 991 F.2d 141, 146 (4th Cir. 1993).
207
Andersons, Inc. v. Horton Farms, Inc., 166 F.3d 308, 328 (6th Cir.1998)
204
47
less than actual bias; and that under this standard, [t]he alleged partiality must be
direct, definite, and capable of demonstration.208 (emphasis added)
And the Second Circuit once again became the pioneer in interpreting this standard in
2012. In Re Scandinavian case, two arbitrators were accused of evident partiality due
to the fact that they were sitting on a similar reinsurance dispute to the underlying
arbitration, and they failed to disclose such fact. Applying the reasonable person
standard, the Second Circuit steered the focus away from the mere fact of
nondisclosure and toward the question of bias: The evident-partiality standard is likely
to be met where an arbitrator fails to disclose a relationship or interest that is strongly
suggestive of bias in favor of one of the parties. The Second Circuit adapted Four
factors from the Fourth Circuit in assessing whether a relationship or interest is
strongly suggestive of bias, namely:
(1) the extent and character of the personal interest, pecuniary or otherwise, of the
arbitrator in the proceedings;
(2) the directness of the relationship between the arbitrator and the party he is alleged
to favor;
(3) the connection of that relationship to the arbitrator; and
(4) the proximity in time between the relationship and the arbitration proceeding.
In this case, since overlap arbitration is not a material relationship with one party209,
and should be considered as normal in a small pool of qualified reinsurance
arbitrators210, non-disclose of such facts does not constitute evident partiality.
208
Ibid.
Scandinavian Reinsurance Co. v. Saint Paul Fire And Marine Ins. Co. 668 F.3D 60 (2012) at 74-5. See also
note 20 in which the court cites cases observing that overlapping service is inevitable in fields such as reinsurance
in which there is a limited number of qualified arbitrators.
210
See Trustmark Ins. Co. v. John Hancock Life Ins. Co., 631 F.3d 869 (7th Cir. 2011) (U.S.)
209
48
However, regarding the duty to investigate, the Second Circuit does agree with the
Ninth Circuit on imposing such duty on arbitrators, although the Second Circuit
imposes it much differently: the mere failure to investigate is not, by itself, sufficient to
vacate the award. In the recent case of Applied Industrial v. Ovalar,211 an arbitrator
who failed to disclose certain circumstances argued that he had erected a Chinese
Wall in an effort to avoid learning information that might disqualify him from serving
as an arbitrator. The Second Circuit stated:
Arbitrators must take steps to ensure that the parties are not misled into
believing that no nontrivial conflict exists. It therefore follows that where an
arbitrator has reason to believe that a nontrivial conflict of interest might exist,
he must (1) investigate the conflict or (2) disclose his reasons for believing there
might be a conflict and his intention not to investigate.
We emphasize that we are not creating a freestanding duty to investigate. The
mere failure to investigate is not, by itself, sufficient to vacate an arbitration
award. But, when an arbitrator knows of a potential conflict, a failure to either
investigate or disclose an intention not to investigate is indicative of evident
partiality212.
The Second Circuit further held that a reasonable person looking at an arbitrators
decision not to investigate and his concomitant failure to inform the parties of the
Chinese Wall would conclude that evident partiality existed.213
c. Absence of Consensus between Circuits: Time for one final approach?
As demonstrated above, different circuits have different approaches towards nondisclosure and partial disclosure. Even the duty to investigate is imposed differently
211
(n 205)
Ibid. at 138
213
Ibid.
212
49
depending on the location of the circuits214. We could not be oblivious to the fact that
the outcome of one non-disclosure case is as unpredictable as a coin toss. Indeed, in
case an arbitrator failed to disclose sensitive pattern of facts for example similarities
between two arbitrations he chaired215 - he could be found partial in San Francisco but
might stay injury free in New York, his award may be set aside in Texas but might still
be in effect in Chicago. That disparity is problematic as it increases the unpredictability
and uncertainty for arbitration process regarding impartiality and duty of disclose. To
make matters worse, many circuits stay loyal to their approaches, and such rigidity
make the damages last 45 years and still count. Relationships are much more complex
now thanks to the growth of business market and development of modern means of
communication; and a mere appearance of bias may disqualify all active and
experienced arbitrators who failed to carry on a nearly impossible task: disclosing
every single past and present relationship with one party. Moreover, although all
problems shall be solved by a full and frank disclosure,216 such disclosure cannot be
made without appropriate investigation. Unfortunately, how should one arbitrator
investigate is another subject of the disparity in different approaches of U.S Courts.
May be after 45 years of rigidity and disparity, it is now time for the U.S. Circuits to
come to terms with each other and reach one final approach on disclosing and
investigating, with some considerations spared for business reality217 and arbitration
expertise.218
3. Concluding Remarks
The two issues of Green List and Evident Partiality is specifically mentioned due to
two reasons. First, while they may not reflect the whole picture, they do relate to two of
214
Born/Salas (n 182)
Compare Dealer computer case (n 202) and Trustmark case (n 210),
216
Wm. Gerald McElroy, Jr./Christine T. Phan, Reviewing Evident Partiality After Scandinavian [2012]
Insurance Law 360.
217
Ibid.
218
Positive Software (n 81).
215
50
the most well-known practical difficulties in approaching disclosure that reflect the
disparity and rigidity of approaches towards duty of disclosure. Second, these issues, as
well as the mentioned disparity and rigidity, is amendable.
To begin with the first reason, the content to disclose under the Green List of the IBA
guidelines is in the middle of the debate between objective test and subjective test of
disclosure, with some thoughts spared for excessive disclosure. It also reflected
disparity in courts decisions over what needs to be disclosed and consequence of
failing to disclose such facts.
Meanwhile, the diversity in different approaches towards failure to disclose by the US
Courts is not only a domestic problem. Internationally, there are courts judged a nondisclosure more harshly such courts in America219, while some courts seem to deny
every challenge of arbitrator such as courts in Switzerland.220 The approach of German
law towards non-disclosure would provide a great instance of treating a non-disclosure
harshly. German Law requires arbitrators to be sanctioned if he failed to disclose and
the award was set aside or arbitration process was delayed as a consequence.221
Accordingly, failure to disclose is not only a ground for setting aside the award, it also
makes the arbitrator liable for damages. 222
Moving to the second reason, this writer presents such two issues due to the fact that it
is considered by many scholars as amendable.223 In contrast, there are many problems
that cannot be fixed that come from the parties, for e.g. unrealistic expectation and bad
219
See Karen A. Reardon/ Scott O. Reed, Disqualifying an Opposing Party-Arbitrator before the Arbitration
[2001], Mealey's Litigation Reports Reinsurance, p.2.
220
See Matthias Leeman, Challenging international arbitration awards in Switzerland on the ground of a lack of
independence and impartiality of an arbitrator [2011] ASA Bulletin 1/2011 p.10; and Pierre Lalive, LArticle
190 al. 2 LDIP a-t-il une utilit, ASA Bulletin 4/2010, p.726.
221
See Bockstiegel (n 115), p.212.
222
The damages are assessed according to the principles of 280 (1), 311 (2) and (3) Civil Code (Brgerliches
Gesetzbuch BGB)and otherwise 280 (1) BGB
223
See above III.1 III.2.
51
faith. In such situations, for the arbitrator to walk in the parties shoes may hardly be
possible.224
First of all, parties always expect judge--like behavior from the arbitrator appointed by
the opposing party, while they expect partiality from their own arbitrator. 225 Thus even
the most trivial grounds when undisclosed can make one party question independence
and impartiality of arbitrators appointed by opposing parties.
Second of all, in the eyes of a disgruntled party, everything is against its favor. Even
the most unreasonable circumstances can be grounds for a challenge. For instance, in a
2013 case, Freeman v. Pittsburgh, James Freeman who recently lost a dispute
discovered that the arbitrator had received contributions for a judicial campaign from
the defendants' minority owner. He filed a motion to vacate the arbitration award, but
he conveniently forgot that the law firm representing him had contributed a far greater
amount to the same campaign.226 In a comparable case, Cour de cassation on July 4,
2012 dismissed the fact that the undisclosed participation of an arbitrator to a meeting
organized by a party to the proceedings and during which the adverse party and its
counsel were present, could be considered as a violation of his or her obligation of
transparency.227 And the most acrimonious challenge could be that of the case
Rebmann v. Rohde.228 Rohde and his wife who are German and whose fathers were in
German Army in World War II, challenged an arbitrators failure to disclose that his
parents were German Jewish escapees who lost family and property in the Holocaust.
224
See Karel Daele (n 88), 1-028

El Kosheri/Youssef (n 41), p.47-48
226
Freeman v. Pittsburgh Glass Works, LLC, 2013 U.S. App. LEXIS 4561 (3d Cir. Mar. 6, 2013):
227
Cited in Marie Danis/Carine Dupeyron, Arbitration and impartiality of the arbitrator: The French Cour de
cassation defines the criteria applicable to the arbitrators disclosure obligation [2012] August & Debouzy
Avocats Arbitration Newsletter
http://www.august-debouzy.com/en/flash/00669-arbitration-newsletter.html
228
Rebmann v. Rohde [2011] California Court of Appeal; see Ted Folkman, Case of the day: Rebmann v.
Rohde [2011] Letters Blogatory (The Blog of Judicial Assistance)
http://lettersblogatory.com/2011/08/11/case-of-the-day-rebmann-v-rohde/
225
52
The Court of Appeal, of course, found it was insufficient ground to vacate the
arbitrators award in a commercial case that had nothing to do with the Jewish religion
or the Holocaust. Such problems as in the two examples above are something
arbitration can only try to put up with, not deal with after all, you cannot guide away
bad faith.
IV.
TOWARDS A COHESIVE APPROACHES
As argued above, some problems regarding the disparity and rigidity of approaches
towards duty of disclosure are amendable. In this part, this writer shall discuss some
brief and bold suggestions by scholars for a cohesive approach.
1. Establishment of Local and Binding Guidelines Based On IBA Guidelines
Nearly six years after the IBA promulgated its Guidelines on Conflicts of Interest in
International Arbitration, the Chamber of Commerce and Industry of the Russian
Federation (hereinafter the CCI) came up with the similar initiative. On 27
August 2010, the President of the CCI promulgated the Rules on Impartiality and
Independence of the Arbitrators (hereinafter the Rules), which takes into
account current international, foreign and national experiences in dealing with the
impartiality and independence of the arbitrators (including the IBA Guidelines).229 The
talking point is that the Rules also set up an enumeration system with two Red Lists,
Orange List and Green List as in the IBA Guidelines. Professor Leonila Guglya has
drawn an extremely helpful and detailed Table of Comparison for the Russia Rules and
the IBA Guidelines, pointing that some same fact patterns are in different lists in two
respective rules; and some situations addressed in Russia Rules are not addressed in the
IBA Guidelines and vice versa230.
229
Leonila Guglya, Conflicts of Interest in Arbitration: The News from the Russian Federation [2011] Czech (&
Central European) Yearbook of Arbitration, Vol. 1, pp. 107-122, p. 108
230
Ibid.
53
The success of such Rules still remains to be seen. However, the idea behind
establishing a local and binding version of IBA Guidelines should be welcomed
warmly. The IBA Guidelines is non-binding in accordance with the intent of its
drafters,231 and the adoption of the IBA Guidelines by each local shall both satisfy the
cultural and legal diversity in each nation, whilst keeping the basic principles the same
everywhere.
2. Publication of Challenge Decisions by Institution
The decisions of the various arbitral institutions as to the appointment, challenge and
replacement of arbitrators, despite being only administrative in character, have
considerable practical significance. However, arbitral institutions rarely publish or
otherwise disclose these decisions.232 The institutions, LCIA for example, who did
publish are greatly welcomed. It is true that arbitral decision must be confidential, and
it is also understandable for institution to avoid any further embarrassment to the
challenged arbitrator. However, greater transparency is badly needed, as it would
enhance the predictability and consistency of decisions. And though you cannot guide
away bad faith, it is believed that greater transparency would help reduce the number
of opportunistic challenges.233 With the increase of consistency and predictability, the
duty of disclosure would be easier for arbitrator to fulfil. Conclusively, institutions
should find away to publish challenge decisions without breaching the confidentiality
obligation and bring inconveniences to the challenged arbitrators.
231
IBA Guidelines, Introduction 4

Some author argues that due to non-binding nature of IBA Guidelines, its success in attempting to bring certainty
and unity to international treatment of conflicts of interest is somewhat limited See Markham Balls Probity
Deconstructed: How Helpful Really Are the New IBA Guidelines on Conflicts of Interest in International
Arbitration? [2005] 21(3) Arbitration International 323-41
232
Fouchard (n 7), 951
233
Daisy Joye/ Nathalie Allen, Institution Need to Publish Arbitrator Challenge Decisions, available at:
http://kluwerarbitrationblog.com/blog/2010/05/10/institutions-need-to-publish-arbitrator-challenge-decisions/
54
3. Adjustment to catch up with Internet and Social Network Era

Arbitrator Disclosure Standards and Codes of Ethics have not yet taken into account
the myriad of potential problems arising out of the Internet and Social Network.234
To begin with, the Internet and Social network add more complexity to content of
disclosure. Normal friendship should certainly be disclosed, but how about friendship
via Facebook, Twitter or in any forum? In the internet, one can befriend another
without knowing much about each other.235 Indeed, there are few people who can claim
they know all people from their Facebook Friend List. Furthermore, one arbitrator can
also be a famous writer on academic forum, where exchanging ideas with another
practitioners who may become counsel of one party regarding certain legal issue is
unavoidable.
In addition, the Internet may also set another challenge on the duty to investigate, both
on the parties and the arbitrators. The main concerns are about the availability of
circumstances that gave rise to challenge as can be seen in abovementioned Swiss
case and ICSID case236. On the Internet, what can be considered as available enough?
Furthermore, would be that now shall the party share the burden of investigation with
arbitrators considered that most qualified arbitrators have their information and CV
available on the internet?
All in all, the abovementioned issues should be addressed properly before, not after the
damage is done.
234
Ruth V. Glick/Laura J. Stipanowich, Arbitrator Disclosure in Internet Age: Some Guidance Concerning the
Obligation to Disclose Internet Activity and Online Relationship [2012] Dispute Resolution Journal vol. 67 no. 1
235
Ibid.
236
See above, Part III.2.
55
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56
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Le Quang Hung - Graduation Thesis Independence, Impartiality and Duty of Disclosure of Arbitrator

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Ministry of Foreign Affairs

Diplomatic Academy of Vietnam

Instructor: Hew R. Dundas

Hanoi, May 2013

ARBITRATORS IMPARTIALITY, INDEPENDENCE AND DUTY TO

DISCLOSE: AN OVERVIEW ........................................................................................ 2

Impartiality, Independence and Neutrality ......................................................... 2

The Concept of Independence and Impartiality .............................................. 3

Impartiality distinguished from Neutrality, Partiality distinguished

from Sympathy and Neutral Nationality .............................................................. 4

Obligations of impartiality and independence in arbitration rules and

Time of the Disclosure .................................................................................. 14

Content of the Disclosure .............................................................................. 15

Duty to Investigate Potential Conflicts of Interests ...................................... 24

Relation between Duty of Disclosure and Bias ............................................ 25

PROBLEMATIC RIGIDITY AND DISPARITY IN APPROACHES FOR

DUTY OF DISCLOSURE ............................................................................................. 27

Non-Disclosure of Situations under IBA Guidelines Green List ..................... 28

Controversies in Courts Decision ................................................................ 29

Diversity in Culture and Legal Background ................................................. 37

Failure to Disclose in the constitution of Evident Partiality in U.S. Courts: A

Tale of Two Circuits .................................................................................................. 41

Standards for Evident Partiality and Disclosure under Commonwealth

Development of Evident Partiality in non-disclosure case over the years:

Disparity between Circuits ..................................................................................... 44

TOWARDS A COHESIVE APPROACHES ...................................................... 53

Establishment of Local and Binding Guidelines Based On IBA Guidelines ... 53

Publication of Challenge Decisions by Institution ........................................... 54

Adjustment to catch up with Internet and Social Network Era ....................... 55

American Arbitration Association

American Bar Association

Swiss Arbitration Association

Court of Arbitration for Sport

Chartered Institute of Arbitrators

China International Economic and Trade Arbitration Commission

German Institute of Arbitration

Hong Kong International Arbitration Centre

International Bar Association

Moscow International Commercial Arbitration Court

International Chamber of Commerce

International Council for Commercial Arbitration

American Arbitration Association International Centre for Dispute

International Centre for the Settlement of Investment Disputes

London Court of International Arbitration

National Association of Securities Dealers of the United States

Permanent Court of Arbitration at The Hague

Stockholm Chamber of Commerce

Singapore International Arbitration Centre

UNCITRAL United Nations Commission for International Trade Law

Vietnam International Arbitration Centre

AAA/ABA Code AAA/ABA Code of Ethics for Arbitrators in Commercial Disputes

Arbitration and Dispute Resolution Law Journal

Am Rev Int Arb

American Review of International Arbitration

Swiss Federal Supreme Court Act 2007

Bundesgerichtshof (Federal Court of Justice of Germany)

European Convention on Human Rights

U.S. District Court, Eastern District of Pennsylvania

England and Wales High Court of Justice

US Federal Arbitration Act (1925)

IBA Guidelines on Conflicts of Interest in International

of IBA Rules of Ethics for International Arbitrators (1987)

of IBA Rules on Taking of Evidence in International Commercial

International Commercial Arbitration