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Arbitration Can Be Dangerous

posted 4 years ago

There are countries, some of them highly democratic, where one cannot enforce a foreign arbitral award if it “runs contrary to the national interest of the State.” Can the arbitrator who has rendered such an award feel safe?

I know of a case in international arbitration, where following the arbitrators’ deliberations, one of the arbitrators was arrested and imprisoned for “acting contrary to the interest of the State.” That happened in the arbitrator’s own country. The arbitration institution had to replace him, to get the arbitration completed. 

It is common knowledge that another arbitrator was kidnapped by secret service agents from his country of origin. The incident occurred at a great international airport located in a different country and on a different continent. There have been cases in which courts issued anti-suit injunctions forbidding arbitrators entering the place of arbitration or levying multi-million fines for continuing to conduct an arbitration. 

The sheer number of dissenting opinions in BIT arbitrations is not amazing. It’s hardly surprising that an arbitrator coming back to his home country losing the dispute files a dissenting opinion to forestall possible reprisals upon his return. After all, his name hits the headlines, and the press does much to stir up strong emotions. Whenever great investment disputes are arbitrated, the press speculates on how much money a possible loss would cost the “average taxpayer.” The “average taxpayer” in question may hold a grudge against the arbitrator who was on the arbitral tribunal rendering the award. Should the arbitrator be afraid to come back home the way a football referee dreads facing enraged fans? 

Whether the arbitrators are protected by any immunity is a matter of national law and the approach adopted by various countries differs significantly. The arbitrators are private persons. They remain so even when they resolve a multi-million dollar dispute or make a decision that is crucial for the national economy of one of the parties. Sometimes the decision may be important for national defense or the safety of its energy sector, etc. Meanwhile, an arbitrator can be assaulted, insulted and have the case record stolen from him. A judge in a court of law is protected by special laws in such cases. In every country, assault and battery or contempt of court are even more serious than assault and battery of a police officer, municipal security guard, court enforcement officer or even a “person appointed to assist the same”. However, assaulted, hit, or insulted while discharging his duties or in connection therewith, an arbitrator would have to search for and sue the perpetrators by himself in a civil or private action.

The arbitrator’s personal safety is a matter of great importance. Many arbitrators have had funny, sometimes ridiculous, sometimes unpleasant adventures. One night, while at a certain Asian airport, I was confronted by three “sad-looking gentlemen” (as secret agents are referred to in Poland). They were intent on “talking to me.” They wanted to know why someone who had come all the way from Poland and paid so much for a first-class ticket would want to stay for less than 24 hours. They did not tell me who they were. With anxiety, I recalled that I had documents regarding supplies of military equipment in my carry-on bag. I thought that if the “sad-looking gentlemen” order me to open the bag, I had better refuse. But what if they check the bag themselves? Would I make it to the plane on time if they see what is inside the bag? Would I even leave that country that night? What if they were agents from a neighboring country involved in a military conflict for a long time? I was assailed by all kinds of gloomy thoughts. 

Suddenly, out of the corner of my eye I saw a well-known arbitrator standing in a crowd of passengers. There was nothing strange to it – well-known arbitrators are easy to meet at international airports. He smiled when he saw me, waved to me and came up to greet me. “Please stay here until they let me go!” – I asked my colleague. It is so good to meet a colleague at a time like that! Finally, the “sad-looking gentlemen” let me go. They took a long time inspecting my business card with the “President of the Court of Arbitration at the Polish Chamber of Commerce” on it. It helped. But dark thoughts about how that mysterious encounter could have played out differently have remained with me.

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