Self-Appointment in International Arbitration

At first glance, paragraph 14 of the UNCLOS Annex VII tribunal’s Order on Provisional Measures in Enrica Lexie (Italy v. India) appears quite mundane. It states in relevant part that “on 30 September 2015, the President of ITLOS appointed … H.E. Judge Vladimir Golitsyn as arbitrator and President of the Arbitral Tribunal” (para. 14). It becomes much more interesting, however, when one realizes that on 30 September 2015, the President of ITLOS was none other than Judge Golitsyn himself.

A similar phenomenon appears to have occurred in another high-profile UNCLOS Annex VII arbitration: Ukraine v. Russia. On 23 December 2016, the Ministry of Foreign Affairs of Ukraine revealed that Judge Boualem Bouguetaia would be a member of the tribunal, “express[ing] its gratitude to the Vice-President of [ITLOS] for rapid formation of the tribunal”. The Ministry failed to note, however, that on 23 December 2016 the Vice-President of ITLOS was none other than Judge Bouguetaia himself.

If it is true that Judges Golitsyn and Bouguetaia appointed themselves to the tribunals, they should not necessarily be reprimanded. After all, these self-appointments would be in accordance with Annex VII of UNCLOS. Article 3 of Annex VII provides that the parties shall appoint three of the five members of the tribunal by agreement, but if they are unable to agree, the appointments shall be made by the President of ITLOS or, if he or she is a national of one of the parties to the dispute, the next most senior member of ITLOS. In Enrica Lexie, this power fell on President Golitsyn. And in Ukraine v. Russia, since President Golitsyn is a national of Russia, this power fell on Vice-President Bouguetaia. Nothing in Article 3 prohibits the appointing authority from appointing him or herself to the arbitral tribunal.

Three Concerns

Nevertheless, an appointing authority’s self-appointment as an arbitrator, as a general matter in international arbitration, is subject to three potential concerns.

First, the appointing authority may have a conflict of interest. For example, he or she might be called upon to decide on a challenge to him or herself. Article 12(1) of the PCA Optional Rules for Arbitrating Between Two States (the PCA Rules) and Article 13(4) of the UNCITRAL Rules grant the appointing authority the power to decide on any challenge to an arbitrator. And while Article 58 of the ICSID Convention grants such a power to the other members of the tribunal, the appointing authority has the power to decide on the challenge in cases where those members are equally divided or the challenge is to a sole arbitrator or a majority of the arbitrators.

With respect to Enrica Lexie and Ukraine v. Russia, this concern may be mitigated. Annex VII tribunals, including the Enrica Lexie and Ukraine v. Russia tribunals, typically adopt their own ad hoc Rules of Procedure. The specific Rules of Procedure adopted by the two tribunals do not seem to create any conflicts of interest, but they also do not specify how decisions on challenges would be made. As a result, should a party file a challenge, the tribunals would have to establish a procedure for deciding on the challenge, as the Annex VII tribunal did in Chagos Marine Protected Area (Mauritius v. United Kingdom) (Reasoned Decision on Challenge, para. 13).

Second, the appointing authority may have sway over a fellow arbitrator by virtue of his or her role as appointing authority. This could be the case if the appointing authority is asked to decide on a challenge to that arbitrator, as discussed above. This could also be the case if the appointing authority appointed not just him or herself, but also that arbitrator, which could occur if the appointing authority has the power to appoint more than one arbitrator. For example, under Article 7(3) of the PCA Rules, when there are five members on the tribunal and the two party-appointed arbitrators do not agree on the choice of the remaining three arbitrators, the appointing authority has the power to appoint the three arbitrators. Even when there are only three members on the tribunal, the appointing authority could find itself with the power to appoint two arbitrators if one party does not appoint an arbitrator in time.

With respect to Enrica Lexie and Ukraine v. Russia, it appears that the appointing authority indeed appointed not only himself but also two other arbitrators on the tribunal, as permitted by Article 3(d) of Annex VII. In Enrica Lexie, Judge Golitsyn appointed Judge Paik and Judge Robinson, along with himself, to the tribunal (Order on Provisional Measures, para. 14). And in Ukraine v. Russia, it appears that Judge Bouguetaia appointed Judge Paik and Judge Gómez-Robledo, along with himself, to the tribunal (Ministry of Foreign Affairs of Ukraine). Whether Judges Golitsyn and Bouguetaia actually have sway over the other arbitrators they appointed, however, is open to discussion.

Third, one can argue that an appointing authority’s self-appointment as an arbitrator contravenes the intentions of the parties. As the argument goes, the very fact that the parties only agreed, directly or indirectly, on the appointing authority and not on the arbitrators reveals that they did not intend for the appointing authority to serve as an arbitrator. In addition, the parties likely would not have intended for the two aforementioned concerns to arise. On the other hand, one can argue that the parties’ agreement on the appointing authority demonstrates that they consider the appointing authority to be an impartial figure, making him or her an appropriate arbitrator. Furthermore, had the parties not intended the appointing authority to serve as an arbitrator, they could have expressly stipulated so in the underlying treaty.

With respect to Enrica Lexie and Ukraine v. Russia, this argument appears to be quite weak, as there has been no complaint from any of the parties that the appointing authority appointed himself. Nevertheless, perhaps such complaint will only arise upon the rendering of the award.

Alternative Scenarios

Notably, the aforementioned concerns do not arise only in the scenario where the appointing authority appoints him or herself to the tribunal. They could also arise where one or both parties appoint the appointing authority to the tribunal. This has occurred at least three times in interstate arbitrations.

First, in Eritrea/Yemen, Eritrea appointed Judge Stephen Schwebel as one of its two party-appointed arbitrators (Award on Territorial Sovereignty, para. 4). Not too long after, Judge Schwebel was elected President of the ICJ, and thus became the appointing authority under Article 1(5) of the arbitration agreement. In this particular case, the aforementioned concerns were not significant. The applicable arbitration rules, enshrined in the arbitration agreement, did not provide for a challenge procedure, nor did either party challenge any member of the tribunal. And although Judge Schwebel, as the appointing authority, could have been called on to appoint a replacement for the president of the tribunal in certain circumstances under Article 3(2)(b) of the arbitration agreement, such circumstances never arose.

Second, in Guyana v. Suriname, the parties agreed to appoint Judge Dolliver Nelson as president of the UNCLOS Annex VII tribunal (Award, para. 4). At the time, Judge Nelson was serving as the President of ITLOS, so he was thus also the Annex VII tribunal’s appointing authority under Article 3 of Annex VII. Once again, the concerns raised above were not significant in this case. The Annex VII tribunal adopted its own ad hoc Rules of Procedure, which did not mention a challenge procedure, and neither party challenged any member of the tribunal. As for the power of appointment, interestingly, Article 6 of the tribunal’s Rules of Procedure provided, arguably contrary to Article 3(f) of Annex VII, that Judge Nelson would not have the sole power to appoint a substitute arbitrator in the case of death or withdrawal of any of the arbitrators.

Third, in Croatia/Slovenia, after Slovenia’s party-appointed arbitrator resigned from the tribunal, Slovenia appointed Judge Ronny Abraham to replace him (Partial Award, para. 42). At the time, Judge Abraham was serving as the President of the ICJ, and Article 2(1) of the arbitration agreement designated the President of the ICJ as the appointing authority. Unlike all the other disputes discussed in this post, the PCA Rules were the applicable arbitration rules by virtue of Article 6(2) of the arbitration agreement. As a result, the conflict of interest concern raised above could have arisen in this dispute. Furthermore, under Article 2 of the arbitration agreement, Judge Abraham could have been called upon to appoint a replacement of some of his colleagues on the tribunal. Nevertheless, these concerns ultimately did not arise because Judge Abraham resigned from the tribunal within three days of his appointment (Partial Award, para. 46).

Conclusion

In conclusion, although the aforementioned concerns could be relevant in cases where the appointing authority is appointed to the tribunal, they are not necessarily applicable. For the time being, there do not appear to be any problems with Judge Golitsyn’s or Judge Bouguetaia’s self-appointments. But the matter definitely deserves the attention of the international arbitration community.