Non-disclosure by arbitrator: a valid ground for challenge

>>Non-disclosure by arbitrator: a valid ground for challenge

Non-disclosure by arbitrator: a valid ground for challenge

Under Iranian arbitration law, the safest way for an arbitrator to avoid any future challenge is to, upon his appointment, disclose anything that might give rise to any sort of doubt as to his/her impartiality or independence. If such disclosure is not made in due time, anything that is revealed at a later stage can be considered as a justifiable question or doubt as to his or her impartiality.

I have been recently asked by Arbitration Centre of Iran Chamber (ACIC), which I am a court member at, to express my opinion on a challenge of arbitrator in a domestic case.

The Claimant challenged the Respondent’s co-arbitrator on the basis that the Respondent’s counsel and co-arbitrator were working in one address (one common office) until 3 years ago which proves that they knew each other in advance and perhaps, they might have had (or still have) common interests. The co-arbitrator rejected the challenge alleging that they did not have any cooperation or common interest, but they were both renting different rooms of a large office, while other lawyers were also working there without any common interest and activities.

In order to decide on the matter, I first looked at Article 23 of ACIC Rules which provides as below:

The Arbitrator may be challenged if the circumstances exists that gives rise to a reasonable doubt on his independence and impartiality or if he does not have the qualifications required by the parties.

Also, I had in mind the requirements of Article 22, which provided that:

The Arbitrator shall simultaneously with acceptance of his appointment, sign and submit a declaration confirming his independence and impartiality to the Secretariat of the Arbitration Center and shall disclose any fact or circumstances that may call into question his independence and impartiality in the eyes of the parties.

I asked the Secretariat to show me the declaration of acceptance that the arbitrator signed and I noticed that nothing was disclosed there by the co-arbitrator in regards to his previous acquaintance with the counsel.

I suggested that the challenge should be accepted as below:

The co-arbitrator is correct that having one office address, per se, does not constitute common interest. Also, I understand that this is a normal practice in Iran, as well as many other countries, that some attorneys rent different rooms of an office without having any connection, cooperation or common interest. Therefore, common address and office cannot be considered as a justifiable doubt as to the impartiality and independence of the arbitrator. But the co-arbitrator’s non-disclosure should be considered as a justifiable doubt, because it raises the question that why he would have concealed such recollection. Also, three years is not that long time ago that he could not reasonably remember the name of a counsel who was also working in the same address with him. I, therefore, suggest that the challenge should be accepted.

I believe in arbitration, if any tiny matter, which by itself does not have any importance and cannot be a ground for challenge, is being concealed or not disclosed, can turn into a justifiable doubt as to the impartiality of independence of arbitrator and accordingly a ground for challenge.