Lausanne 21 September 2018 ON CHALLENGES OF ARBITRATORS UNDER THE - - PowerPoint PPT Presentation

CAS/SAV/FSA Seminar Lausanne 21 September 2018

ON CHALLENGES OF ARBITRATORS UNDER THE CAS SYSTEM presented by O.L.O. de Witt Wijnen (version of 26 September 2018, adapted after the presentation)

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Challenges based on age:

• Too old? (2016)
• Too young? (2013)

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The IC ICAS Board Decisions

• 91 in 22 years
• First Decision in 1997
• 6 challenges upheld
• 85 dismissed
• Well-reasoned, legally and factually

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System OK?

• Arbitrators selected / proposed / appointed / removed by CAS
• The butcher testing the quality of his own meat?

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• And: transparent enough?
• AD : President appoints Chair
• OD : President proposes list of 3
• How selected?
• Still, it works:
• 91 on total caseload
• No action against Decisions

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• Note:

After my presentation I was advised that the number of challenges was greater but that not all challenges were the subject of a decision; e.g because the challenged arbitrator would withdraw voluntarily. The number of such challenges is estimated at 200/300 over the last 20 years. Even that, on an estimated caseload of 5/6000 over that period would still result in a relatively small % of challenges.

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System OK, transparent enough?

• There are concerns about the selection process. These concerns may be

unjustified but, as with challenges, such subjective feelings cannot be ignored:

• Arbitration is based on trust
• One solution: more transparency about the selection as such
• Other solutions?
• Possible change in the selection process of chairs/sole arbitrators: a gross list from

which the candidates are selected in e.g. alphabetical order

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• A further transparency aspect:
• The publication of the Decisions on challenges

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The legal fr framework

• The CAS-Code: R.33, R.34, S.18
• R.34, 1st paragraph, reads:

“An arbitrator may be challenged if the circumstances give rise to legitimate doubts over his independence or over his impartiality. The challenge shall be brought within seven days after the ground for the challenge has become known.”

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Background: S.1 .18

• (S.18)

“Arbitrators who appear on the CAS list may serve on Panels constituted by either of the CAS Divisions. Upon their appointment, CAS arbitrators and mediators shall sign an official declaration undertaking to exercise their functions personally with total

• bjectivity, independence and impartiality, and in conformity with the

provisions of this Code. CAS arbitrators and mediators may not act as counsel for a party before the CAS.”

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Background: R.3 .33, , 1st par.: .:

• (R.33)

“Every arbitrator shall be and remain impartial and independent of the parties and shall immediately disclose any circumstances which may affect her/his independence with respect to any of the parties. Every arbitrator shall appear on the list drawn up by the ICAS in accordance with the Statutes which are part of this Code, shall have a good command of the language of the arbitration and shall be available as required to complete the arbitration expeditiously.”

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To be read in the light of: f:

• 180, par. 1 lit. c) PILA
• The SPC, the SFC and the earlier IAC
• Material law and principles of international arbitration
• Notably: the IBA Guidelines on Conflicts of Interest in International Arbitration:
• Fill in the open norms of the general principles
• General standards (7)
• The Lists: Red, Waivable Red, Orange and Green (not acceptable, waivable, acceptable)

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Structure of f the Decisions

• Procedural history of the case
• Assessment in light of
• the CAS-code, and earlier CAS-jurisprudence
• art. 180 par 1 lit. c) PILA
• Relevant decisions of the SFT and legal doctrine
• The FACTS in the case at hand

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Challenge to be assessed according to the circumstances of the case:

• No absolute ground for challenges
• Circumstances that give rise to justifiable doubts as to the arbitrators independence?

(180,1,c PILA)

• Concrete facts;
• Not general / subjective assumptions which are not objectively verified
• Subjective impressions to be regarded in an objective light (TFS)
• Facts and circumstances to be checked on the IBA lists
• Any concrete evidence to any allegation made?

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The grounds for the challenges

• Mostly: independence/impartiality; or the appearance of bias
• Disclosure

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Features:

• No interest in the outcome of the case
• Risk of influence by other factors than the merits of the case
• No link to the parties / counsel / others
• directly or indirectly

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So So: No Conflict of In Interest

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Is Issues for today

• Disclosure
• Independence / impartiality
• The Specificity of Sport:
• Closed list
• Repeat Appointments
• Time limit
• Burden / Standard of Proof
• Principle cases?
• Other challenges
• Frivolous challenges?

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Note: due to time constraints not all these issues could be dealt with in my presentation. They will be dealt with in the full text, to be published on this website shortly (www.olo-de-witt-wijnen.nl)

And fu further:

• Knowledge of confidential information a ground for challenge?
• Earlier expressed opinion
• Some comments

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Disclosure / In Independence / impartiality

• Disclosure is SUBJECTIVE: in the eyes of the parties (Gen.St. 3)
• Assessment and decision are OBJECTIVE:
• reasonable third person’s point of view with knowledge of the relevant facts
• (Gen.St. 2(b) and (c)
• Disclosure is (therefore) no admission of bias (standard also in the

Decisions)

• No disclosure in Green List situations

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CAS-case law on this

• Rather lenient:
• same nationality/citizenship usually accepted
• same for common membership of organizations / networks
• The participation of an arbitrator in a similar case involving similar

parties does not per se jeopardize his independence either, etc.:

• 2008 Decision (Referring to SFT 4A-458/2009)

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In In the early years the regime was more strict:

• 2005 ; official of a national soccer team of which one party was an indirect

member (German Football League)

• Challenge upheld
• 98 ; arbitrator had no link but was counsel in another case against one of the

parties

• Challenge upheld
• See also 98 : arbitrator member of the IOC; risk of intervention
• Challenge upheld

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• Later: different Decisions:
• 2007
• 2010
• 2014
• However:
• 2016 : Challenge upheld
• Transparency on (also) such Decisions!

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Continued independence/impartiality

• S18/R33:
• “… be and remain impartial and independent”
• “… immediately disclose …”
• Sometimes embarrassing situations
• Borderline cases

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The Specificity of f Sport

• Closely related to:
• Closed list
• Repeat Appointments – by parties, counsel, co-arbitrators and by CAS itself
• Accepted, in principle, by:
• the SFT (4A.234/2010)
• the Guidelines (footnote 5)
• and by CAS: 2014 and 2018

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New?

• The other realms of arbitration:
• Maritime

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Real world and principle:

• Small pool(s) of arbitrators, also without a formal list

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Real world and principle:

• State Courts any different? (landlord/tenant-cases)

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The Risks:

• Risk of dependence
• Risk of Partiality / Tunnelvision
• The maritime experience:
• cargo-friendly/owner-friendly
• salvor-friendly/owner-friendly
• Investment arbitration

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• Tunnelvision-prone?
• incapable per se

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Possible Answers:

• Counterweight in panels
• Role of Chair, and
• Its Selection / Confirmation / Removal
• Same for sole arbitrator
• How are they selected? (see earlier slide)

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Consider:

• R40
• S18/S19 (2nd para.) R35 ?
• R35 (or R34) to be more specific on this?
• No appointment by co-arbitrators?

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Conclusion:

• Principle to be accepted indeed
• But great care to be exercised:
• (the appearance of) non-independence/impartiality never acceptable
• subjective feelings to be respected/carefully considered

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My personal experience:

• Never / Ever
• have I experienced favoritism by panels consisting of friends
• nor, inversely, a tendency in my panel(s) to favour a counsel-friend of a

party

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Back to the Decisions

• Time Limit
• Burden / Standard of Proof
• Principle cases
• Other challenges
• Frivolous challenges?

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Time limit

• 7 Days after knowledge (R34.1)
• Also during the proceedings!
• 2012 :
• only time limit referred to: “… not necessary to discuss the merits of the challenges”
• (See also 96 ; 2012)
• Questionable in light of TFS 4A-506/2007 : good faith
• Different: 2006, and others

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Burden / Standard of f Proof

• Specific facts required for a challenge to be upheld
• (2018, ATF 111 259 E.3a)
• Challenges fail because specific facts are not adduced:
• Who has the burden of proof?
• The Challenger : 2008

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Burden / Standard of f Proof

• What should be the criterion?

a) A mere balance of probability? b) Clear and convincing evidence? c) Beyond reasonable doubt? d) Comfortable Satisfaction?

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Burden / Standard of f Proof

• 2011 : “a high burden of proof”
• What generally are the criteria on the merits, and what do they mean?
• “Beweisnotstand”
• Burden to be eased / reversed?
• Drawing (adverse) interference from e.g. circumstantial evidence?

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Burden / Standard of f Proof

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(Other) ) Principle Cases?

• 2012
• Art. 10.4 WADA Code: different interpretations by 2 of the Parties and CAS

jurisprudence.

• Both Parties challenged:

“CAS should ensure ‘level playing field’ “

• Should the arbitrators sitting earlier withdraw?
• Challenge was not pursued.
• The other (not challenged) arbitrator withdrew voluntarily

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Barristers

• Green List 3.3.2 (Orange List)

“The arbitrator and another arbitrator or the counsel for one of the parties are members of the same barristers chambers.”

• Background information to the Guidelines; par. 4.5
• 2012 : challenge upheld

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Others challenges:

• 2006 (President Ordinary Division)

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Frivolous challenges?

• Almost none
• Even if dismissed, concerns (even if subjective) should be considered

seriously

• Exceptions: challenge to a counsel or co-arbitrator (2008 ; 98/208)
• (Age?)

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Some comments on the Decisions

• Obiters : a challenge is upheld but
• The ICAS Board is convinced that Mr X is a perfectly independent and

impartial arbitrator (2016)

• Appropriate?
• It is never a question of a general lack of independence/impartiality
• Decisive are the facts in the case at hand

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• “Reasonable third person” vs. ICAS Board!
• Same (often) with Parties.
• Then the Decision will note the discrepancy

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Voluntary ry withdrawal / resignation

• Ground for challenge rejected
• Nevertheless: resignation

“… in order to favour a smooth resolution of the dispute”

• 2007
• On R34: “It suffices that there are doubts … in the eyes of one of the Parties”
• Decision par. 36: R34 states that circumstances should give rise to legitimate doubts

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Voluntary ry withdrawal / resignation

• Could wreck the system. At odds with the objective, decisive test
• Better: 2007

“I would be ready to step down … but I feel that this could set a dangerous precedent because it could give the impression that the challenge on the mere basis of citizenship is acceptable, and this could negatively affect many CAS- cases.”

• Borderline: 2012

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Comments by co-arbitrators

• Some abstain, some comment
• Mostly in favour of their challenged colleague
• Not recommended:
• Etiquette
• Suppose the challenge is awarded?

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Conclusions (I (I)

• The system works reasonably well
• Specificity of Sport / Closed List / Repeat Appointments to be

accepted

• But great care / respect
• Close(r ) scrutiny by Board and co-arbitrators
• removal?
• challenge?

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• More transparency
• on the selection system
• on the Decisions on challenges

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Conclusions (I (II)