Impartiality of Arbitrators: How far does the parties’ obligation to investigate go?
In a recent decision, the Swiss Federal Supreme Court (SFSC) addressed the standard applicable to the parties’ obligation to investigate potential conflicts of interest of arbitrators. The SFSC ruled that the parties can be expected to undertake certain inquiries, in particular to conduct online searches, but they are not obliged to perform a systematic and in-depth analysis of all sources relating to an arbitrator.
Chinese world-class swimmer Sun Yang was banned from competition for eight years for violating anti-doping rules according to a ruling of the Court of Arbitration for Sport (CAS) dated 28 February 2020. A few months later, on 15 May 2020, an article appeared that referred to various tweets by the presiding arbitrator (and former Italian foreign minister) Franco Frattini, in which Frattini had condemned, among other things, a Chinese practice of slaughtering dogs, including references to the skin color of certain Chinese people. Yang appealed to the SFSC and requested the revision of the arbitral award on the grounds of bias of Frattini. The SFSC approved the request and set aside the award.
Duty to Investigate
The SFSC has so far left open the question as to whether, in the absence of a statutory provision, a party may request the revision of a decision of the arbitral tribunal if grounds for recusal are discovered subsequently and if they could not reasonably have been discovered beforehand.
Generally speaking, a party must assert the grounds for recusal as soon as it is aware of them or as soon as it should have discovered them by exercising reasonable diligence. If a party is late in asserting the ground for recusal, it shall be forfeited. According to the SFSC, a party may not be satisfied with the arbitrator’s declaration of independence and impartiality but instead must undertake certain inquiries.
The exact requirements for such inquiries depend on the specific circumstances. Although the duty to investigate is not unlimited, the parties are obliged to carry out certain investigations. They can be expected to use the main search engines and consult sources likely to provide elements revealing a possible risk of bias on the part of an arbitrator. Such sources can be the websites of the main arbitration institutions, the parties, their counsel and the law firms for which they work, the website of the law firms for which certain arbitrators work, and – particularly in the field of sports arbitration – the website of the World Anti-Doping Agency (WADA) and the sports institutions concerned. However, it would be going too far to expect the parties to systematically scrutinize all sources relating to a given arbitrator. The mere fact that information is freely accessible does not ipso facto mean that the party which is unaware of such information fails to comply with its duty to investigate. In some cases, there must be concrete, alarming indications that point to a specific conflict before a party makes certain inquiries at all. With regard to social media, the SFSC stated that prima facie, it is not excluded that a party must examine them.
In the case at hand, the applicant had undertaken a Google search and consulted arbitration decisions of the CAS. In theory, the tweets at issue could have been accessed during the arbitration proceedings but, according to the SFSC, the applicant cannot be blamed for not having carried out a search including the term “China” as this would amount to admitting that applicant had speculated on a possible lack of impartiality solely on the basis of nationality for which there had been no indications. Moreover, applicant cannot be blamed for not having discovered the disputed tweets which were published almost ten months before Frattini’s appointment. With regard to tweets published during the arbitration proceedings, applicant cannot be blamed, as a party cannot be expected to continue to undertake investigations in this regard throughout the proceedings.
Based on case law developed by the SFSC for state proceedings and by reference to the IBA Guidelines on Conflict of Interest, the SFSC ruled that condemnations of Chinese practices regarding the treatment of animals alone are not sufficient to create the appearance of bias. However, Frattini used violent language in this context on several occasions so that doubts as to the impartiality of the arbitrator were objectively justified. Accordingly, the SFSC upheld the challenge against the chair of the arbitration panel and set aside the award.
Get in touch
Robin Moser and Remo Wagner from Loyens & Loeff Switzerland LLC in Zurich regularly represent clients in arbitration proceedings. Please reach out to the Swiss Litigation & Risk Management team in case of any queries on the above or other arbitration-related topics.
Robin MoserLocal partner Attorney at law
Robin Moser, attorney at law, is a local partner in our Zurich office. He focuses on domestic and international dispute resolution and has broad experience in representing clients in court, before federal and cantonal authorities and arbitral tribunals.T: +41 43 434 67 42 M: +41 78 806 40 91 E: email@example.com