Of the many varied functions performed by the ICC International Court of Arbitration (the 'ICC Court') in the arbitral process, its role in resolving challenges to an arbitrator based on a lack of independence or impartiality pursuant to Article 14 of the Rules of Arbitration of the International Chamber of Commerce (the 'ICC Rules') is one of the most critical. Only a rigorous and principled enforcement of fundamental ethical standards can safeguard adequately the legitimacy of arbitration as a mode of dispute resolution and, of more immediate concern to disputing parties, preserve the integrity of any arbitral award that is ultimately rendered. The process of resolving challenges is also perceived, not least by the ICC Court and its Secretariat, as an especially taxing one.

During his tenure of over six years at the helm of the ICC Court, John Beechey has presided over countless debates in the monthly plenary sessions of the ICC Court regarding challenges, including a sizeable number of especially thorny cases in which starkly opposing views were being voiced within the ICC Court. Arguably, John was at his very best during these debates. Combining a wealth of practical experience, a characteristically thorough and detailed preparation, the highest ethical standards and eminent pragmatism, he skilfully and safely navigated the ocean liner that is the ICC Court between the rocks and the hard places posed by such challenges. John never imposed his views on others, but more often than not convinced many members of the ICC Court – most of whom are not known for being easily persuaded to change their minds. Only rarely, but then graciously, did John have to accept the majority view of others. Perhaps more than anyone present at these plenary sessions of the ICC Court, John would consistently and meticulously emphasise the all-important detailed factual circumstances and nuances that often do make a world of difference. Both authors consider it a special honour and privilege to have been part of such Beechey-led debates.

The present chapter endeavours to explain the basis for the perception that challenges are both one of the most critical and one of the most taxing functions of the ICC Court. First, we examine one truth that is widely held to be self-evident, namely that challenges in international arbitration are a growth industry (1). We proceed to consider two challenges in a topical area that appear superficially similar, but may lead to diametrically opposed decisions from the ICC Court, to illustrate the tensions inherent in an intensely fact-driven process (2). Staying within the same topical area, we finally evaluate the potential impact the ICC Court can have outside the narrow confines of deciding a specific challenge to shape policy and stimulate self-regulation in response to legitimate concerns of users of international arbitration (3).

1. A growth industry?

The customary starting point of the chapter or section dealing with challenges of arbitrators in the standard arbitration textbooks still appears to be the claim that challenges have become (much) more frequent in recent years.2 A quick glance at the statistics published by the ICC Court on an annual basis appears to lend credence to this view.3

Figure 1

As Figure 1 shows, the number challenges has varied to a considerable degree in absolute terms on a year-to-year basis over the sixteen years from 1999 to 2014, with a low of 17 in 2002 and a high of 66 in 2013. In the long term, the absolute number of challenges appears to have grown consistently and appreciably, as the linear trend line in Figure 1 shows. That impression is confirmed by considering the average number of challenges for the four four-year spans within this period, with the ICC Court receiving just under 28 challenges on average in the quadrennial from 1999 to 2002 and just over 56 challenges on average in the quadrennial from 2011 to 2014.

The undeniably sharp increase in the absolute number of challenges is, however, meaningless when viewed in complete isolation. Three phenomena suggest that this prima facie evidence of the buoyant growth in the number of challenges ought to be approached with some caution.

First, it has taken place in the context of a similarly buoyant (if not quite as explosive) growth in the number of arbitrations filed, and thus in the number of pending arbitrations and of arbitrators confirmed or appointed, over the same period, as Figure 2 shows.

Figure 2

Merging these data series permits a more meaningful appreciation of the growing number of challenges relative to the rising number of arbitrations handled and arbitrators appointed or confirmed by the ICC. As Figure 3 demonstrates, the ratio of pending arbitrations and challenges has oscillated over the years around an average of 3.1%, with a standard deviation of 0.81. A few extreme outliers in 2002, 2003 and 2013 aside, the ratios for most years are scattered relatively snuggly around the average and fall well within the corridor of one standard deviation. Notably, the ratios for 2004 and 2005 (3.3% and 3.4%, respectively) are not of a wholly different order of magnitude than the ratios for 2009 or at the end of the period in 2014 (3.9%).

Figure 3

A similar result obtains when the number of newly filed (rather than pending) arbitrations is chosen as comparator, which confirms that no substantial or systematic corrections are required to account for the time lag usually observed between the commencement of an arbitration and the filing of a challenge. Figure 4 confirms the outlier status of 2002, 2003 and 2013, with the annual ratios of the number of challenges to the number of new arbitrations falling within one standard deviation (of 1.6) around the long-term average (of 6.1%). Again, the ratios observed in 2004 and 2005 (6.6% and 7.7%, respectively) are in a similar quantitative sphere as those for 2009 (7.0%) and 2014 (7.6%).

Figure 4

Finally, and perhaps most relevantly, a comparison of the total number of challenges to the total number of arbitrators confirmed or appointed by the ICC Court yields a similar result, as depicted in Figure 5. The long-term average ratio is 3.6%, with a standard deviation of 0.9, and it is once more only in 2002, 2003 and 2013 that the observed ratios differ clearly by more than one standard deviation from the average.

Figure 5

Accordingly, when viewing these developments in context across the entire 16-year period, it is apparent that the increase in the (absolute) number of challenges can be explained, at least to a significant degree, by the increase in the (absolute) number of pending arbitrations, new arbitrations and arbitrators confirmed or appointed by the ICC Court. Contrary to popular belief, then, the ICC has not witnessed a truly disproportionate or unnaturally steep increase in the number of challenges filed.

Second, the (still) relatively small number of challenges filed in any given year is prone to yield erratic and deceptive results that may also distort the long-term perspective and insinuate growth where there is none. To give but one example, in 2009, 23 of the 57 challenges were filed in a single (!) case (and were largely repetitive challenges filed by the same party against the same arbitrators), which more than explains the superficially sharp increase in the overall number of challenges from 2008 to 2009.4

Third, the ICC Court and its Secretariat have undergone transformative institutional change in the last decade and a half, not least in response to their ever-expanding caseload and the increasingly complex and demanding nature of the work. Thus, while towards the beginning of the period the ICC Court counted a Chairman, 10 Vice-Chairmen and some 120 members,5 the ICC Court has grown to 17 Vice-Presidents (as they are now called) and over 130 members by 2015. Similarly, while some 30 lawyers in seven case management teams of the Secretariat in Paris (representing some 20 nationalities and speaking some 20 languages) handled the 20 challenges filed in 2003,6 almost 40 lawyers in nine case management teams of the Secretariat based in Paris, Hong Kong and New York (speaking more than 25 languages) assisted the ICC Court with the 60 challenges submitted in 2014.

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Footnotes

1 Marnix A. Leijten is a partner with De Brauw Blackstone Westbroek N.V., Amsterdam, and Vice-President of the ICC International Court of Arbitration; marnix.leijten@debrauw.com. Matthias L. Kuscher is a senior associate with De Brauw Blackstone Westbroek N.V., Amsterdam, and formerly Counsel and Deputy Counsel at the Secretariat of the ICC International Court of Arbitration; matthias.kuscher@debrauw.com.

2 See e.g. G.B. Born, International Commercial Arbitration, 2d ed. (Kluwer, 2014) at 1913; J.D.M. Lew et al., Comparative International Commercial Arbitration (Kluwer, 2003), § 13-7.

3 For the raw data underlying Figures 1 and 2, see the Statistical Reports published annually by the ICC in the ICC International Court of Arbitration Bulletin, which was relaunched in 2015 as the ICC Dispute Resolution Bulletin.

4 See S. Greenberg, 'Tackling Guerrilla Challenges Against Arbitrators: Institutional Perspective' (2010) 7:2 Transnational Dispute Management Journal.

5 See (2001) 12:1 ICC International Court of Arbitration Bulletin 14.

6 See (2004) 15:1 ICC International Court of Arbitration Bulletin 7.

Previously published in International Arbitration Under Review, the liber amicorum for John Beechey.

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