{"id":10462,"date":"2024-03-29T15:50:31","date_gmt":"2024-03-29T19:50:31","guid":{"rendered":"https:\/\/journals.law.harvard.edu\/ilj\/?p=10462"},"modified":"2024-04-11T11:30:07","modified_gmt":"2024-04-11T15:30:07","slug":"in-defence-of-the-impartiality-of-barristers-and-door-tenants-in-isds-a-call-for-departure-from-hrvatska-elektroprivreda-d-d-v-republic-of-slovenia","status":"publish","type":"post","link":"https:\/\/journals.law.harvard.edu\/ilj\/2024\/03\/in-defence-of-the-impartiality-of-barristers-and-door-tenants-in-isds-a-call-for-departure-from-hrvatska-elektroprivreda-d-d-v-republic-of-slovenia\/","title":{"rendered":"In Defence of the Impartiality of Barristers and Door Tenants in ISDS: A Call for Departure from Hrvatska Elektroprivreda d.d. v. Republic of Slovenia"},"content":{"rendered":"

*Batuhan Betin<\/strong><\/p>\n

To venture so brazenly as to critique an order promulgated by the most distinguished of tribunals, comprised of Jan Paulsson, Charles N. Brower, and David A. R. Williams QC (as he was then), presiding, may be comparable to an act of sacrilege. Alas, heresy is precisely what the tribunal\u2019s Order, dated May 6th<\/sup>, 2008, in Hrvatska Elektroprivreda d.d. v. Republic of Slovenia<\/em><\/a><\/span> provokes. In classrooms, misinformed articulations of the case garner polarizing responses from students. It prompts those educated in the institutions of the British Isles (and equally, the Commonwealth) to react viscerally, raising their hands in hopes of being called upon to clarify the particularities of the seemingly alien system of barristers\u2019 chambers\u2014much to the amusement of their contemporaries hailing from \u201cenlightened\u201d civil law jurisdictions who stubbornly refuse to distinguish barristers from the lawyers of their native lands.<\/p>\n

Despite its notoriety, the case has attracted limited academic commentary.<\/p>\n

At the crux of Hrvatska Elektroprivreda d.d. v. Republic of Slovenia <\/em>was a list communicated on April 25th<\/sup>, 2008, tabulating the members of the Respondent\u2019s representatives who would be attending the\u00a0 inaugural arbitral hearing scheduled a fortnight from then (\u00b6 3<\/a><\/span>). Amongst the constituents of the list was Mr. David Mildon QC (as he was then) (\u00b6 3<\/a><\/span>). Mr. Mildon KC (as he is now) was, and still is, a barrister operating out of Essex Court Chambers, in London (\u00b6 3<\/a><\/span>). Mr. Williams KC (as he is now) was, at the time, a \u201cdoor tenant\u201d operating out of the very same set of chambers (\u00b6 3<\/a><\/span>). The Claimant\u2019s representatives declared that they had not been aware of Mr. Mildon KC\u2019s retainer before the above-mentioned letter (\u00b6\u00b6 4-5<\/span><\/a>). They promptly requested disclosure of Mr. Mildon KC\u2019s affiliations with the presiding arbitrator (\u00b6 5<\/a><\/span>), and subsequently petitioned for Mr. Mildon KC to be removed on grounds that Mr. Williams KC could not \u2018be relied upon to \u201cjudge fairly\u201d\u2019 (\u00b6 15<\/a><\/span>).<\/p>\n

The tribunal evaluated the interrelationship between Mr. Mildon KC and Mr. Williams KC and found that there was justifiable “apprehension of partiality” (\u00b6 31<\/a><\/span>).\u00a0 It ordered that \u201cMr. David Mildon QC may not participate further as counsel in this case\u201d (\u00b6 <\/a><\/span>Ruling<\/span><\/a>). The Tribunal\u2019s decision to order the removal of Mr. Mildon KC was inspired by a medley of considerations. The seemingly most decisive<\/em> and foundational consideration was the Tribunal\u2019s finding that there was a justifiable \u201capprehension of partiality\u201d because \u201cthe London Chambers system is wholly foreign to\u201d the Claimant (\u00b6 31<\/span><\/a>). Admittedly, this was bolstered by the tardy timing of the disclosure of Mr. Mildon KC\u2019s retainer (only two weeks prior to the first hearing). Without reserving a firm position as to whether this case was wrongly decided, this article seeks to challenge the precedential value of this Order vis-\u00e0-vis <\/em>future cases where members of the same chambers are appointed as arbitrators and counsel. Even the most authoritative of arbitral treatises, much (presumably) to their editors\u2019 chagrin, cautiously cite this Order as a persuasive authority that the presence of both members serves as a basis for a serious risk of impropriety (Redfern and Hunter on International Arbitration<\/em><\/a><\/span> (7th Edition), \u00b6 4.138<\/span><\/a>).<\/p>\n

This article seeks to deconstruct two critical features of the Order<\/em><\/a><\/span>. First, it shall seek to prove that, in hindsight, the Tribunal applied an erroneous subjective standard in discerning whether there was a risk of an appearance of partiality in contradiction to Article 14(1) of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States<\/a><\/span>. Secondly, it advocates that the Tribunal could have more precisely characterized and investigated the interrelationship between Mr. Mildon KC and Mr. Williams KC. In particular, it seeks to demonstrate that the position of \u201cdoor tenant\u201d may be distinguished from that of a traditionally tenanted member of chambers. Consequently, the particularities of the former may mandate that in future disputes, tribunals should be cautious when applying principles generally applicable to \u201cinter-barrister\u201d relationships mutatis mutandis<\/em> to \u201cbarrister-door tenant\u201d relationships. To this extent, it seeks to discourage blanket recourse to the present Order.<\/p>\n

The Tribunal applied erroneous standards in assessing the appearance of partiality. As previously mentioned, it articulated firstly, and seemingly decisively,<\/em> that the Claimant had a justifiable \u201capprehension of partiality<\/em>\u201d because \u201cthe London Chambers system is wholly foreign to\u201d them (\u00b6 31<\/span><\/a>) (emphasis added). This assessment is problematic in that it endorses a subjective evaluation of the arbitrator\u2019s partiality. It essentially adopts the position articulated by the Claimant\u2019s representatives, that whereas the interrelationship \u201cmay not be cause for concern in London . . . [v]iewed from the Claimant\u2019s cultural perspective<\/em>, such concerns are justified\u201d (\u00b6 10<\/a><\/span>) (emphasis added). However, the prevailing view amongst ICSID tribunals today is that the independence of an arbitrator must be assessed, objectively, on the basis of “whether a reasonable third party, with knowledge of all the facts<\/em>, would consider that there were reasonable grounds for doubting that an arbitrator possessed the requisite qualities of independence and impartiality” (Schreuer\u2019s Commentary to the ICSID Convention<\/em><\/a> p.1570 <\/a><\/span>(emphasis added); see also<\/em> Suez and Vivendi v Argentina <\/em><\/a>\u00b6 78<\/a>; EDF v Argentina<\/em><\/a><\/span> \u00b6\u00b6 109-111<\/span><\/a>). A negative formulation of the test can also be articulated as follows: \u201ca reasonable and informed<\/em> third party would find it highly likely that the arbitrator\u2019 lacked independence and impartiality\u201d (p.1591<\/span><\/a>; see also<\/em> Caratube and Hourani v Kazakhstan<\/em><\/a> \u00b6 90<\/a><\/span>). The Tribunal deviates from objectivity in that it assesses partiality exclusively from the subjective eyes of the particular Claimant to the dispute, as opposed to the objective lenses of the reasonable third party.<\/p>\n

The Tribunal also failed to consider whether the Claimant could have become familiar with this purportedly \u2018wholly foreign\u2019 system through knowledge of all the relevant facts. Indeed, this is perplexing given that the Tribunal unequivocally acknowledged earlier in the Order that \u201c[b]arristers are sole practitioners<\/em> . . . [t]heir Chambers are not law firms\u201d (\u00b6 17<\/a><\/span>) (emphasis added). Whereas the Tribunal did caveat this statement by cautioning that \u201cth[e] practice [of barristers] is not universally understood,\u201d (\u00b6 18<\/a><\/span>) it nonetheless tacitly acknowledged how readily accessible this information was. For instance, it pointed to the website of Essex Court Chambers in which unambiguous wording declared, \u201cChambers is not a firm, nor are members partners or employees. Rather, Chambers contains the separate, self-contained offices of individual barristers each self-employed and working separately<\/em>\u201d (\u00b6 17<\/a><\/span>) (emphasis added).<\/p>\n

Nowadays there is even greater transparency regarding this phenomenon. The Bar Council of England and Wales\u2019 2014 Information Note<\/span><\/a>, and its recent 2022 Brochure<\/a><\/span>, underscore that \u201cbarristers practicing from traditional sets of chambers are self-employed and are not <\/em>[emphasis added] in partnership,\u201d and \u201c[b]arristers in the same chambers are fully independent of each other,\u201d respectively. Similar disclaimers are customarily promulgated on the websites of Chambers. In the increasingly globalized world of arbitration, where the participation of barristers is ever-increasing, there is no sound reason precluding the representatives of opposing parties from explaining the realities of this system to their clients.<\/p>\n

The tribunal also sought to caveat its earlier statement on the basis that the practice was not \u201cuniversally agreed\u201d (\u00b6 18<\/a><\/span>). This proposition is hardly palatable. The independence of barristers is one of the Ten Core Duties<\/span><\/a> promulgated by the Bar Standards Board (BSB)<\/a><\/span> (the body responsible for the ethical regulation of the profession). It is imbued in various rules codified in the readily and publicly accessible BSB Code of Conduct, which, inter alia<\/em>, underscores that \u201c[m]embers of chambers are not in partnership but are independent of one another and are not responsible for the conduct of other members\u201d (BSB Handbook v. 4.7, gC131<\/a><\/span>). Even the failure to explain to \u201cunsophisticated lay clients<\/em> [emphasis added]\u201d that \u201cmembers of the chamber are, in fact, self-employed individuals who are not responsible for one another\u2019s work,\u201d is itself considered a breach of this Code of Conduct (gC56<\/a><\/span>) (emphasis added). Consequently, any arbitrary attempt to doubt the legitimacy of this inviolable and fundamental principle must be readily rejected by future tribunals.<\/p>\n

The Tribunal ought to have more precisely characterized the interrelationship between \u201cdoor tenants\u201d and barristers.<\/p>\n

Even the most widely cited of treatises characterize the present matter as a conflict of interest between two barristers who are members of the same chambers. However, Mr. Williams KC was not a traditional member of Essex Court Chambers, nor did he practice as a litigator therein. In relation to Essex Court Chambers, his capacity was that of a \u201cdoor tenant\u201d (\u00b6 3<\/a><\/span>). He appears to have retained his practicing certificate from the Bar of New Zealand where he was a traditional tenant of Bankside Chambers<\/a><\/span>. In the absence of knowledge as to the extent and nature of his relationship with the English set, this article does not, per se<\/em>, reserve a position as to whether the Tribunal erred in treating Mr. Williams KC akin to a traditional member of chambers. Indeed, as elaborated in detail below, there may be circumstances where such treatment may be justified.<\/p>\n

The purpose of this Part is to acknowledge that, and identify why, the Tribunal conflated the roles\/capacities of traditional members of chambers and that of their door tenants. It seeks then to dissuade other tribunals from blindly conflating the two, in future disputes, in prospective reliance of the current Order.<\/p>\n

The Tribunal\u2019s reluctance to distinguish between traditional members of chambers and door tenants should be attributed to the Background Information<\/a><\/span> section of the 2004 IBA Guidelines on Conflicts of Interest in International Arbitration.\u00a0 Therein, it is asserted (without much elaboration) that for all relevant intents and purposes, the term \u201cmembers of chambers\u201d shall, because it is \u201cproper,\u201d include door tenants (pp.456-457<\/span><\/a>). However, the Background Information fails to provide any reason as to why the conflation is necessary or proper.<\/p>\n

In practice, the relationship of a door tenant vis-\u00e0-vis<\/em> a traditional member operating out of a set of chambers is not, per se<\/em>, similar to the latter\u2019s relationship with their contemporaries. One set of construction law barristers<\/a><\/span> distinguishes the former as follows: \u201cA number of individuals who are classed as \u2018door tenants\u2019 of Chambers also use the clerking and administrative services of ACL<\/em>. Door tenants are not members<\/em>, but the courtesy of displaying their name at the entrance to Chambers has been extended to them<\/em>\u201d (emphasis added).<\/p>\n

Door tenants will likely have other permanent occupations. They may be career academics; they may be \u201caffiliated to, and practice out of, another chamber<\/span><\/a>\u201d; they may even have vocations as lawyers employed full-time in traditional law firms operating out of \u201cforeign\u201d jurisdictions<\/a><\/span>. The roles of a door tenant may<\/em> also be vastly different vis-\u00e0-vis <\/em>traditional members. Some may perform purely consultative functions. Whereas, admittedly, others will take on casework<\/a><\/span>. One regional set of chambers<\/span><\/a> describes the function of their door tenants as follows: \u201cdoor tenants . . . are available . . . as advisers and consultants and they take on casework which is particular to their field of expertise.\u201d Evidently, one must not blindly conflate the two. Assessment must be made on a case-by-case basis, having regard to the specific nature and extent of the door tenant\u2019s affiliation. Otherwise, one risks arbitrarily mischaracterizing the probability of partiality.<\/p>\n

In finding a justifiable appearance of partiality, the Tribunal placed great emphasis on the basis that the promotional materials disseminated by English chambers created a real sense of partnership and collective association amongst their traditional members (\u00b6\u00b6 17-18<\/span><\/a>). To this end, the Tribunal opined, it was appropriate to treat barristers, in respect of their perception by litigants, akin to solicitors employed in traditional law firms (\u00b6 19<\/span><\/a>). However, surely, this litmus test can have a countervailing effect. The proactive efforts by chambers to distinguish between permanent members and door tenants (as exemplified for instance by the abovementioned quote from Atkin Chambers) creates a line of delimitation between the two types of tenants. It distances the latter from the former and conveys an unambiguous message that the character of the latter\u2019s affiliation with chambers is likely to be fundamentally different from that of the former.<\/p>\n

This is not to say that a \u201cbarrister-door tenant\u201d relationship may never warrant disclosure. For instance, where a career academic (Professor A), who is also a door tenant, receives extensive appointments via chambers, their relationship vis-\u00e0-vis <\/em>an ordinary tenanted member may be more akin to a traditional \u201cbarrister-barrister\u201d relationship. There, mutatis mutandis<\/em> application of principles governing the latter may be entirely warranted. However, it is submitted, that due regard must also be had to the secondary nature of a door tenant\u2019s relationship to chambers. Traditionally, a barrister\u2019s principal, if not exclusive, line of business is his self-employed vocation as a litigator, who operates out of the relevant set of chambers. On the contrary, a door tenant has a principal employer or vocation (which may be their primary source of material income). If the same hypothetical Professor A was instead a \u201chobby arbitrator,\u201d instructed in less than half a handful of cases per annum<\/em>, it would surely be less persuasive to treat them as if they were any other tenanted barrister.<\/p>\n

The failure to distinguish door tenants from traditional barristers also results in certain perplexing outcomes under the 2014 IBA Guidelines on Conflict of Interests in International Arbitration<\/span><\/a>. Professor A who is a door tenant at Chambers B, but a tenured member of the faculty at University C, would be expected to disclose their relationship with Counsel Y who is a junior tenant at Chambers B (\u00b6 3.3.2<\/a><\/span>). Nonetheless, they would be exempt from disclosing their relationship with Counsel X who is also a tenured member of the faculty at University C (\u00b6 4.3.3<\/a><\/span>). In light of Professor A\u2019s financial independence from Counsel Y, it is unclear why the risk of bias in favor of Counsel Y is deemed inherently higher than that vis-\u00e0-vis<\/em> Counsel X. Surely, in this hypothetical, the risk of bias should be greater vis-\u00e0-vis <\/em>Counsel X, as a favorable award could bolster the reputation of the faculty, which may in turn indirectly benefit Professor A.<\/p>\n

In the modern age, where information is publicly and readily accessible, no reasonable observer armed with the requisite information pertaining to the ethical regulation of barristers should have a good reason for believing that a door tenant is likely to be partial towards counsel hailing from a shared set of chambers by that connection alone. Hrvatska Elektroprivreda d.d. v. Republic of Slovenia <\/em>must not be interpreted as promulgating a presumption applicable indiscriminately, and capable of producing dispositive outcomes without consideration of the specificities of each prospective conflict. This case also illustrates the desirability of expanding the 2014 IBA Guidelines on Conflict of Interests in International Arbitration such as to provide greater elucidation as to the susceptibility of door tenants (specifically) towards certain biases, with special attention being held to the secondary nature of their vocational relationship with the set. Future tribunals should and must not rely on the present Order as legitimizing the indiscriminate conflation of the two, potentially vastly different, roles.<\/p>\n

Skepticism vis-\u00e0-vis <\/em>the Order has started to emerge outside of the investment arbitration context. In 2012, the London Court of International Arbitration (\u201cLCIA\u201d) Court engaged in perhaps the most \u201csober\u201d interpretation of the Order. In its Challenge Decision No. LCIA81116<\/em><\/a> <\/span>the Court unequivocally found that the mere fact that counsel and arbitrator operate out of the same set of chambers cannot serve as \u201ca [decisive] basis to impose upon him an obligation to disclose the activities of other barristers in his chambers; therefore, non-disclosure of such activities does not give rise to \u2018justifiable doubts\u2019\u201d (\u00b648). It rejected any contention that the collective marketing or promotion of members of chambers could ever usurp this presumption (\u00b647).\u00a0 Nonetheless, it cautioned, that the presumption of impartiality amongst barristers is neither inviolable nor irrefutable. On each occasion, it is paramount that one conducts a “fact-based enquiry” into whether that particular relationship, between those two members of the same set of chambers, meets the requisite threshold for an appearance of partiality (\u00b648). This is a most welcome development. Admittedly, this skepticism may stem from the reality that the LCIA is<\/em> an inherently English institution. The LCIA Court is constituted predominately of English and common law qualified practitioners (or of those intimately familiar with the English legal system)<\/a><\/span>. Nonetheless, the author hopes to see the LCIA Court\u2019s sobering approach proliferate and prevail amongst its more transnational investment arbitration contemporaries.<\/p>\n

[hr gap=”1″]<\/p>\n

*Batuhan Betin<\/strong> holds an LL.M from Queen Mary University of London where he graduated first overall in his cohort. He extends his sincerest gratitude to his good friend Ms. Mar\u00eda Rosario Tejada for bringing the HILJ-HIALSA Collaboration on International Arbitration to his attention.<\/p>\n

[hr gap=”1″]<\/p>\n

Cover image credit<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Batuhan 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