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17 April 2015
University of Miami's Inaugural White & Case Arbitration Lecture with Carolyn Lamm

Event Photos

Carolyn Lamm 

Students in the White & Case International Arbitration LLM Program: left to right: Ana Lombardia (from Spain, class of 2016, Nicolas Sierra (from Spain), class of 2015, Brian Vaca (from Ecuador, class of 2016), Stephanie Mazza (US, class of 2015). 
 

Carolyn Lamm, Professor Jan Paulsson and Marike Paulsson
 

Dean of the University of Miami's Law School, Patricia White with Carolyn Lamm and Marike Paulsson

Carolyn Lamm

The Inaugural White & Case Arbitration Lecture, University of Miami
“Can Process Make Up for Distrust in International Arbitration?”
Miami, 17 April 2015







Post-event report from the University of Miami

Miami Law’s International Arbitration Institute presented its first annual White & Case Lecture, which featured visiting professor Carolyn B. Lamm.

In her presentation, Professor Lamm addressed whether, and how, the arbitral process could make up for distrust in international arbitration.

Currently, criticism and debate within the arbitration community is focused on ISDS agreements. According to Lamm, many of these views give insight into the system itself. “Everyone has views on the legitimacy of ISDS,” Lamm observed.  “’Perception varies:  tribunals are not sufficiently transparent, they are self-regulating, and ISDS does not assure independent qualified and objective arbitrators’,” she listed. “Some critics even believe that Political actors induce results”.

Instead, Lamm defended ISDS by quoting Judge Stephen Schwebel.  At an earlier event at Miami’s International Arbitration Institute, Judge Schwebel remarked that “Critics must not forget the purpose of ICSID and BIT’s, which is to guarantee a certain level of protection for foreign investors, a system that facilitates international trade as it hands foreign investors trust to contract with States. Investment arbitration permits individual investors to bring claims against States. No domestic legal system would provide such an assurance.[1]

Compared to the days before ISDS, when the only dispute mechanisms for an international investor were the “biased domestic courts or the politically charged diplomatic channels of state espousal”, Lamm observed that “there is no substitute for the [present ISDS] system.” 

Lamm continued on the essential role arbitration plays in ensuring the growth of investors entering into contracts with States.  “One could not possibly obtain the same result in domestic courts.  The foreign sovereign will have a bias.”[2]

Not to endure a flagellation of the Sovereign Horse, Lamm also addressed the weaknesses of arbitration; both systematic and incidental. According to Lamm, “legitimacy concerns can be addressed through legislation and improved treaties,  for example, the U.S. new Model BIT[3]; the new IBA rules and guidelines,[4]and revised institutional rules,” such as CIETAC (2015)[5], LCIA (2014)[6], and HKIAC (2013)[7].

However, those are the solutions already en route.  Lamm additionally proposed solutions.  To do away with distrust in the system: “complementary proposals of due process must be accepted.”  Lamm urged the community to take an introverted look. “At the core of international arbitration are the actors. The arbitrator and counsel hold a duty to the parties, in both the substantive and procedural side of the system.”

She included important perspectives for consideration. “There must be respect for the entire system.  Parties must be heard and must be enabled to convey their points….  Arbitrators are the active guardians of the process. They must guarantee that witnesses are not abused or subjected to intimidation and that counsel conducts themselves appropriately.”

Lamm proposed that tribunals utilize an “arbitrator toolbox”.  Replete with amicus submissions and the active prevention of the unlawful collection of evidence, “the tribunal as a trustworthy body is required to evaluate the creditability and weight assigned to evidence”.

But what of the current perception of bias?  Lamm noted, “Tribunals must regulate their own conduct and must appear independent and unbiased.  Questions of Due Process arise during each stage that merit a responsive attitude: (a) the procedural schedule (timing and special needs of the parties), (b) addressing bad faith tactics such as frivolous challenges to arbitrator’s impartially.”

Counsel must also be responsive and call out to the Tribunal when bad-faith tactics arise. “It must be ousted at the onset and the tribunal must, in-turn, ensure transparency and state concerns to guide the parties.”

For instance, the selection of witnesses for examination; the right to be heard and the right to confront must be balanced with speed, efficiency, and prejudice against the parties.[8]  “There is a problematic trend to use written witness statements as substitutes for direct oral examination, and to focus hearings on cross-examination.  This is contrary to the original purpose of written witness statements and allows opposing party to control which witnesses the Tribunal sees ‘live’ and which topics are addressed.”

Ensuring due process would be one potential solution to the present criticism.  She demonstrated this point with examples of tribunals who maintained their duty to enforce time limits as an important part of due process. [9]  “Distrust in the system can be addressed through due process,” Lamm concluded.  “Arbitrators are the active guardians of the entire process, and Due Process is essential for the system of international arbitration”. 


[1] http://www.law.miami.edu/news/2015/april/2933.php

[2] E.g., Loewen Group, Inc. and Raymond L. Loewen v. United States of America, ICSID Case No. ARB(AF)/98/3, Award at 7.[2]

[3] http://www.state.gov/documents/organization/188371.pdf

[4] http://www.ibanet.org/publications/publications_iba_guides_and_free_materials.aspx

[5] http://www.cietac.org/index/news/478e3db85a52fb7f001.cms

[6] http://www.lcia.org/News/lcia-arbitration-rules-effective-1-october-2014.aspx

[7] http://www.hkiac.org/en/arbitration/arbitration-rules-guidelines/hkiac-administered-arbitration-rules-2013

[8] http://www.arbitration-icca.org/media/3/14246917853210/lamm_fundamental_rules_of_procedure_whose_due_process_is_it.pdf, page 15.

[9] E.g., Abaclat et al. v. Argentina, ICSID Case No. ARB/07/5, Decision on Disqualification (Feb. 4, 2014) ¶¶ 45, 48-50, 80; Procedural Order No. 23, (Feb. 7, 2014) ¶ 12 (Tribunal denied Respondent’s request for an 11-month extension to file its Rejoinder (and postponement of

the hearing) arguing that Claimants had had the same time to prepare their Reply.  Also, Glamis Gold, Ltd. v. United States of America, NAFTA/UNCITRAL, Procedural Order No. 12 (Aug. 28, 2007) ¶ 10