Investment Court Judges and the “Right to an Independent Tribunal”: An Assessment of the Qualification and Ethics Rules in EU FTAs in Light of Opinion 1/17

ÜNÜVAR, Günes

doi:10.15166/2499-8249/498

Article (Scientific journals)

Investment Court Judges and the “Right to an Independent Tribunal”: An Assessment of the Qualification and Ethics Rules in EU FTAs in Light of Opinion 1/17

ÜNÜVAR, Günes

2021 • In European Papers - A Journal on Law and Integration, 6 (1), p. 757 - 777

Peer reviewed

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https://hdl.handle.net/10993/63344

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10.15166/2499-8249/498

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Keywords :

international arbitration - European Union - Canada - independence - impartiality - ethics; Law

Abstract :

[en] This Article examines an often overlooked aspect of Opinion 1/17 issued by the Court of Justice of the European Union (CJEU): the ethics and qualifications of the new CETA adjudicators. The subject was raised as an additional concern by Belgium in the context of its request for an opinion from the CJEU. More specifically, Belgium asked whether the prospective ethics and qualifications framework applicable to the newly-established investment tribunal members was compatible with the EU legal order, in particular the right to access an independent tribunal, enshrined under the EU Charter of the Fundamental Rights. After laying forth the provisions contained in the CETA, as well as the EU - Vietnam and EU- Singapore Investment Protection Agreements (IPAs), the Article analyses the Opinion text in juxtaposition with the legal ethics rules, found in treaties or guidelines worldwide, governing the domain of international adjudicator ethics. The Article in particular flags some controversies linked to the Court's analysis of the International Bar Association's Guidelines on Conflicts of Interest in International Arbitration and its (now suspended) referral in the CETA text in connection with the ethics framework governing international judges.

Disciplines :

European & international law

Author, co-author :

ÜNÜVAR, Günes ; University of Luxembourg > Luxembourg Centre for European Law (LCEL) > LCEL Research

External co-authors :

Language :

English

Title :

Investment Court Judges and the “Right to an Independent Tribunal”: An Assessment of the Qualification and Ethics Rules in EU FTAs in Light of Opinion 1/17

Publication date :

2021

Journal title :

European Papers - A Journal on Law and Integration

eISSN :

2499-8249

Publisher :

European Paper

Volume :

Issue :

Pages :

757 - 777

Peer reviewed :

Peer reviewed

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since 21 December 2024

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1 Comprehensive Economic and Trade Agreement (CETA) between Canada, of the one part, and the European Union and its Member States, of the other part [14 January 2017] 23.
2 EUVIPA Council Decision (EU) 2019/1096 of 25 June 2019 on the signing, on behalf of the Union, of the Investment Protection Agreement between the European Union and its Member States, of the one part, and the Socialist Republic of Viet Nam, of the other part 1-2.
3 EUSIPA Council Decision (EU) 2018/1676 of 15 October 2018 on the signing, on behalf of the European Union, of the Investment Protection Agreement between the European Union and its Member States, of the one part, and the Republic of Singapore, of the other part 1-2.
4 Opinion 1/17 Accord ECG UE-Canada ECLI:EU:C:2019:341.
5 This right was enshrined in art. 47 of the Charter of Fundamental Rights of the European Union [2012] (hereinafter Charter).
6 International Bar Association, Guidelines on Conflicts of Interest in International Arbitration (IBA 2014), hereinafter IBA Guidelines.
7 Art. 8.27(4) of CETA cit.
8 Ibid. art. 8.30.
9 Art. 3.9 of EUSIPA cit.
10 Ibid.
11 One such difference is that whereas EUVIPA requires “independence beyond doubt”, CETA refers to “independent”.
12 Art. 3.38 of EUVIPA cit.
13 Ibid. art. 3.40.
14 They differ with regard to the number of appointed judges, as well as their terms; however, the predetermined qualification requirements stated under art. 8.27(4) is identical to those under art. 3.38(4) EUVIPA cit.
15 European Commission, News of 11 October 2019 Commission presents procedural proposals for the Investment Court System in CETA, trade.ec.europa.eu; IBA Guidelines cit.
16 Ibid.
17 Art. 12 of the UNCITRAL Model Law on International Commercial Arbitration (hereinafterUNCITRAL Model Law) [2006].
18 GS 2 of IBA Guidelines cit.
19 The reference to “Non-Waivable” refers to parties' ability to waive any conflict of interest present for an arbitrator. Likewise, the IBA Guidelines also include a list of ”waivable” situations, which can be overlooked by the parties, if they give mutual consent.
20 GS 2 of IBA Guidelines cit.
21 This goal is express in the part II of the IBA Guidelines, entitled ”Practical Application of the General Standards”.
22 GS6 of IBA Guidelines cit.
23 Ibid. Explanation to GS6.
24 Art. 8.30 of CETA cit.
25 For a recent empirical analysis of double-hatting in investment arbitration, a phenomenon explained as "individuals [acting] sequentially and [...] simultaneously as arbitrator, legal counsel, expert witness, or tribunal secretary”, see M Langford, D Behn and R Lie, ‘The Revolving Door in International Investment Arbitration' (2017) JIEL 1.
26 Communication COM(2019) 459 final from the Commission of 11 October 2019 on the position to be taken on behalf of the EU in the Committee on Services and Investment established under CETA 2.
27 art. 4 of CETA (Code of Conduct) cit.
28 Ibid.
29 Treaty on European Union (TEU) [2009].
30 Treaty on the Functioning of the European Union (TFEU) [2009].
31 Opinion 1/17 cit. para. 1; Kingdom of Belgium Foreign Affairs, Foreign Trade and Development Cooperation Minister Reynders submits request for opinion on CETA (6 September 2017) diplomatie.belgium.be.
32 Ibid. para. 46.
33 Art. 47 of the Charter cit.
34 Opinion 1/17 cit. para. 57.
35 Ibid. para. 59.
36 Ibid. para. 61.
37 Ibid. para. 64-65.
38 Ibid. para. 67. It was known in advance that eventually, IBA Guidelines would be replaced.
39 Ibid. para. 68.
40 EU law guarantees right to an effective remedy and to a fair trial before a court. Whether or not an adjudicative body qualifies as a ‘tribunal' (and is therefore subject to art. 47 of the Charter) depends on whether it is a) established by law, b) permanent, c) independent and impartial, d) include an inter partes procedure, e) have compulsory jurisdiction, and f) apply rules of law. See, Explanations Relating to the Charter of Fundamental Rights; European Union Agency for Fundamental Rights and Council of Europe, Handbook of European law relating to access to justice (January 2016, Luxembourg) 30; Case C-377/13 Ascendi Beiras Litoral e Alta, Auto Estradas das Beiras Litoral e Alta v Autoridade Tributária e Aduaneira ECLI:EU:C:2014:1754; Case C-54/96 Dorsch Consult Ingenieurgesellschaft mbH v Bundesbaugesellschaft Berlin mbH ECLI:EU:C:1997:413 para. 23.
41 Opinion 1/17 cit. para. 191.
42 Ibid. para. 197.
43 Ibid. para. 197. The Court further deems the jurisdiction of CETA tribunals “compulsory” for the respondent as well as the claimant, only if the latter choose to rely on the provisions on CETA (paras 90 and 198) While the CETA tribunals are surely not arbitral tribunals, the ratione voluntatis or the so-called voluntary jurisdiction, largely emulates arbitration and its consent-based formation. In many IIAs, states indeed consent to arbitration and specific fora. However, this is not sufficient for establishing jurisdiction - let alone declaring that CETA has compulsory jurisdiction as is. Therefore, there is no jurisdiction whatsoever until the claimant, in this case foreign investor, chooses to bring a claim against the host state, agreeing to the jurisdictional “offer”. This contrasts an inter-state international court, where states accept jurisdiction of a court vis-à-vis disputes among themselves from the outset, thereby “completing” the voluntatis cycle. As noted elsewhere in detail, there is no jurisdiction without the submission of a foreign investor at all. Thus, deeming the CETA tribunals as having “compulsory” jurisdiction calls for further qualification of such statement. It surely can have compulsory jurisdiction when the parties both consent to it, however, there is no standing compulsory jurisdiction without a claim. UNCTAD, Dispute Settlement: International Centre for Settlement of Investment Disputes, Consent to Arbitration (United Nations 2003) unctad.org 5.
44 Opinion 1/17 cit. para. 199.
45 Ibid. para. 200.
46 The internal and external aspects of independence is well-embedded in the Court's practice. See, Case C-64/16 Associação Sindical dos Juízes Portugueses ECLI:EU:C:2018:117 paras 43-44; Case C-216/18 PPU Minister for Justice and Equality v LM (Deficiencies in the system of justice) ECLI:EU:C:2018:586 paras 63-65; Case C-619/18 Commission v Poland ECLI:EU:C:2019:531 paras 71-73.
47 Opinion 1/17 cit. para. 225.
48 Ibid. para. 234.
49 Art. 31(3) of the Vienna Convention on the Law of Treaties (1980).
50 Opinion 1/17 cit. para. 236. The issue of ex post clarifications provided by treaty parties has stirred immense controversy, particularly in the context of the July 2001 Notes of Interpretation issued by the North American Free Trade Agreement (NAFTA) Free Trade Commission while arbitrations directly relevant to the reaffirmations continued. It was noted that the “reaffirmations” by the states were so fundamental that they effectively constituted amendments. C Brower II, ‘Why the FTC Notes of Interpretation Constitute a Partial Amendment of NAFTA Article 1105' (2005) VaJIntlL 347.
51 Opinion 1/17 cit. para. 238.
52 Ibid. paras 238-239.
53 LR Helfer defines “forum-shopping“ as follows: “it is not limited to ‘an individual petitioner's strategic choice to litigate her claims in one of several available adjudicatory fora', but also ‘other consequential choices engendered by the concurrent, overlapping jurisdiction of [...] treaties and tribunals, including attempts by petitioners to litigate identical or related claims in multiple fora at the same time, and attempts to engage in sequ ential litigation of claims”. L Helfer, ‘Forum Shopping for Human Rights' (1999) UPaLRev 285; Opinion 1/17 cit. para. 240.
54 European Parliamentary Research Service, From Arbitration to the Investment Court System (ICS): The Evolution of CETA Rules (European Union 2017) 9.
55 See generally G Van Harten, Investment Treaty Arbitration and Public Law (Oxford University Press 2008).
56 This policy is part and parcel of the EU's overall position at the Working Group III proceedings, as well as its bilateral negotiations with other countries. In January 2020, in its resumed 38th session, the WGIII extensively discussed issues related to, inter alia, a permanent, mu ltilateral investment court and the envisaged appellate body that would be embedded within this court. The EU is one of the strongest proponents of more permanency, and its support for the appellate body stems from the appellate mechanism's perceived role in bolstering consistent and correct awards. See, UNCITRAL, Working Group III Submission from the European Union and Its Member States, A/CN.9/WG.III/WP.159 and Add.1 uncitral.un.org.
57 UNCITRAL, Working Group III (WGIII), Submission from the European Union Possible reform of investor-State dispute settlement (ISDS) of 12 December 2017 undocs.org.
58 C Rogers, Ethics in International Arbitration (Oxford University Press 2014) 60.
59 Ibid. 67.
60 This is a distinction flagged by Giorgetti and Abdel Wahab in their draft working paper submitted to the WGIII Academic Forum in October 2019. C Giorgetti and M Abdel Wahab, ‘A Code of Conduct for Arbitrators and Judges' (2019) www.jus.uio.no.
61 K Fach Gomez, Key Duties of International Investment Arbitrators: A Transnational Study of Legal and Ethical Dilemmas (Springer 2019) 191.
62 Ibid. 9.
63 The Chartered Institute of Arbitrators (CIArb), ‘Code of Professional and Ethical Conduct for Members' (CIArb Code) October 2009.
64 Rule 3 (Conflicts of Interest) of CIArb Code cit.
65 For a more detailed account of this discussion, see G Unuvar and T Kreft, ‘Impossible Ethics? A Critical Analysis of the Rules on Qualifications and Conduct of Adjudicators in the New EU Investment Treaties’ in G Unuvar, J Lam and S Dothan (eds) Permanent Investment Courts: The European Experiment (Special Issue European Yearbook of International Economic Law) (Springer 2020) 119.
66 Art. 16 of the Statute of the International Court of Justice (SICJ).
67 Ibid. art. 17.
68 UN Secretary-General, Report of the Secretary-General Conditions of service and compensation for officials other than Secretariat officials, Members of the International Court of Justice of 2 November 1995, UN Document A/C.5/50/18 () www.un.org paras 31-32.
69 Ibid.
70 Ibid. para. 33.
71 N Bernasconi Osterwalder and M Brauch, ‘Is “Moonlighting” A Problem? The Role of ICJ Judges in ISDS' (2017) International Institute for Sustainable Development (IISD) Commentary 1.
72 Ibid. 5.
73 Speech by H.E. Mr Abdulqawi A Yusuf, President of the International Court of Justice, on the Occasion of the Seventy-Third Session of the United Nations General Assembly, 25 October 2018 www.icj-cij.org 11.
74 GS 6 of IBA Guidelines cit.
75 Opinion 1/17 cit. para. 101.
76 Art. 7 of the ICC Code of Judicial Ethics www.icc-cpi.int.
77 Ibid. art. 10.
78 Ibid.
79 MO Hudson, ‘The Permanent Court of International Justice’ (1923) Advocate of Peace Through Justice 22 24.
80 L Malintoppi, ‘Independence, Impartiality, and Duty of Disclosure of Arbitrators' in P Muchlinski, F Ortino and C Schreuer (eds), The Oxford Handbook of International Investment Law (Oxford University Press 2008) 813.
81 Opinion 1/17 cit. para. 197.
82 Ibid. para. 199.
83 EUSIPA and EUVIPA contain identical language to CETA, save the additional “domestic laws and regulations”, as noted above.
84 IBA Guidelines cit. 3.
85 GS 1 stipulates that independence and impartiality extends “until the final award has been rendered or the proceedings have otherwise finally terminated” - given the Members of the CETA Tribunal are not ad hoc, this specification does not carry much substance in a court setting.
86 Waivable Red List of IBA Guidelines cit. 21.
87 Explanation to GS 6 of IBA Guidelines cit.
88 Ibid.
89 Opinion 1/17 cit. para. 67.
90 K Fach Gomez, Key Duties of International Investment Arbitrators: A Transnational Study of Legal and Ethical Dilemmas cit. 9; C Rogers, Ethics in International cit. 60.