A Milestone in Dispute Resolution: UN Adopts Code of Conduct for Investment Dispute Arbitrators

During its 56th annual session in Vienna, the United Nations Commission on International Trade Law ("UNCITRAL") achieved a long-awaited milestone by formally adopting the Code of Conduct for Arbitrators in International Investment Disputes (the "Code"), marking a significant step forward in the realm of investment dispute resolution.

Algeria proposed the Code's inception in 2015, and since UNCITRAL's endorsement, it has been under development since 2017. Collaboratively, the Secretariats of UNCITRAL and the International Centre for Settlement of Investment Disputes ("ICSID") have worked on the Code throughout the period. Drawing from an extensive review of standards found in codes of conduct in investment treaties and arbitration rules applicable to Investor-State Dispute Settlement ("ISDS") and international courts, the Code aims to set new benchmarks for arbitration ethics and conduct.

ICSID announced that the final draft of the Code will be published after the conclusion of UNCITRAL's 56th annual session on July 21, 2023.

Highlights of the Code

• Independence and Impartiality: The Code reinforces the duty of arbitrators to maintain independence and impartiality. To address concerns of potential bias, it strictly regulates "double-hatting," disallowing arbitrators from acting as legal representatives or expert witnesses in any ISDS case or related proceeding involving the same matter for a specified period. The issue of double-hatting has been a subject of debate, with critics arguing it undermines the neutrality of arbitrators, while defenders contend that counsel experience provides a broader perspective. However, the Code strives to strike a balance between these viewpoints.
• Tribunal Assistants and Unethical Behaviour: The Code sets out guidelines on the role and duties of tribunal assistants while also outlining sanctions for unethical conduct by arbitrators. These measures aim to enhance the integrity and fairness of the arbitration process.
• Confidentiality, Caseload, and Reasonable Fees: The Code establishes obligations related to maintaining the confidentiality of proceedings and sets limits on the number of cases that arbitrators can simultaneously handle to ensure effective case management. Additionally, it provides guidelines on reasonable fees and expenses to maintain transparency and fairness.
• Applicability: The Code will apply to arbitration proceedings by mutual consent of the parties or as required in the instrument of consent to arbitral proceedings. ICSID intends to engage in further consultations with its member states to explore the potential application of the Code in ICSID proceedings.

In addition to adopting the Code, UNCITRAL also embraced guidelines governing the utilization of mediation in investor-state dispute settlement, with specific reference to ICSID's rules for investor-state mediation.

Ultimately, the adoption of the Code signifies a significant advancement in the ongoing efforts to reform Investor-State Dispute Settlement, exemplifying a transparent and comprehensive process that promotes equity, efficiency, and credibility in resolving international investment disputes.