Arbitrator’s Lack of Discipline Earns Removal from International Tribunal

In a ruling on December 13, the Chairman of the Administrative Council at the International Centre for Settlement of Investment Disputes (ICSID) has upheld a challenge to an arbitrator in the Burlington Resources v. Ecuador case. The ruling serves to remove Chilean arbitrator Professor Francisco Orrego Vicuna from the arbitration, which is currently at the damages phase of the proceedings. 
 
Ecuador’s challenge was based on three grounds: 1) Ecuador’s perception that the Chilean arbitrator had been appointed by the law firm Freshfields Bruckhaus Deringer in an “unacceptably high number of cases”; 2) that Prof. Orrego Vicuna had allegedly breached his continuing obligation to disclose any circumstance — particularly other appointments by Freshfields — that might cause his reliability for independent judgment to be questioned; and 3) that Mr. Orrego Vicuna appeared to have shown a “blatant lack of impartiality to the detriment of Ecuador” in communications relating to the challenge itself.
 
For the most part, the facts supporting these grounds — including a myriad of earlier appointments of Prof. Orrego Vicuna in other cases by Freshfields — were deemed by the Chairman of the Administrative Council to have been known to Ecuador “well before” it filed its challenge on July 24, 2013. As such, the first two grounds for disqualification were rejected.

However, the third ground, which focused on a set of written observations filed by Mr. Orrego Vicuna on July 25 in response to the challenge filed by Ecuador some days earlier, hit the mark. Specifically, in these remarks, Prof. Orrego Vicuna raised questions about the ethics of counsel for Ecuador (the Dechert law firm) in handling certain confidential information relating to the challenge. In relation to these remarks, the Chairman noted that the key paragraph of Prof. Orrego Vicuna’s observations appeared to serve “no purpose” in addressing the challenge, and that, moreover, a third party reading such observations “would conclude that the paragraph quoted above manifestly evidences an appearance of lack of impartiality with respect to the Republic of Ecuador and its counsel.” On this basis, the challenge of Prof. Orrego Vicuna was upheld, and he was removed from the panel.

To read the decision, click here.