Addressing the Inadequacies: A New Multi-Faceted Solution to Double Hatting in ISDS
| Author | Mohit Kumar Tanwar |
| Position | BA LLB (Hons) candidate at the Faculty of Law, Jamia Millia Islamia, India, '22 |
| Pages | 115-165 |
2021
LSE LAW REVIEW
115
Addressing the Inadequacies: A New Multi-Faceted
Solution to Double Hatting in ISDS
Mohit Kumar Tanwar*
ABSTRACT
In Investor-State Dispute Settlement (ISDS), ‘double hatting’, or the playing of multiple roles
by arbitrators in different ISDS proceedings as counsels, expert witnesses, or tribunal secretaries,
is a problematic phenomenon. This regrettable practice results in the monopolisation of power
and builds up suspicions regarding such arbitrators’ impartiality which, in turn, threatens the
legitimacy of the whole ISDS regime itself. Therefore, to sustain the current ISDS system as a
viable dispute resolution option for investors and states, there is a need to regulate double hatting
at the earliest. To that end, numerous solutions have been forwarded by scholars and international
bodies alike. The recently proposed Draft Code of Conduct for Adjudicators in ISDS is a
significant development in this field. However, allthese solutions are either unviable or inadequate
as they fail to account for the variations in the forms and intensities of double hatting.
To remedy this lacuna, this article analyses the existing proposals, including the Draft Code of
Conduct, and, thereafter, develops a more comprehensive solution by inculcating measures such
as compulsory disclosure requirements and temporary bans. Further, it adapts these measures to
regulate, and minimise, concurrent and successive double hatting across different classes of arbitral
proceedings. By doing so, this article adopts a novel, multi-faceted approach to overcome the
problem on a case-by-case basis, serving its aim of bringing to the table a viable and effective
solution—one that ticks the maximumnumber ofboxes—to resolve the risks posed bydouble
hatting.
*BA LLB (Hons) candidate at the Faculty of Law, Jamia Millia Islamia, India, ‘22.
116
A New Multi-Faceted Solution to Double Hatting in ISDS
Vol. VII
INTRODUCTION
Whenitcomestoethicalregulations,theInvestor-StateDisputeSettlement
orInvestor-StateArbitration(ISDS)is a ‘no-man’sland,’
1
and‘doublehatting’—
a notionlackinganyunanimouslyagreedupondefinition—isoneofitsmost
seriousproblems.
2
As a highlyconcentratedphenomenon
3
thathasgained
groundoverthepasttwodecades,
4
‘doublehatting’,forthescopeofthisarticle,
referstotheplayingofmultiplerolesbyarbitratorsindifferentISDSproceedings,
andincludesbothsequentialandsimultaneousmovementbetweenrolesas
arbitrators,counsels,expertwitnessesandtribunalsecretaries.
5
Scholarsandinternationalbodieshaveputforthmanydifferentproposals
toresolvethisproblem,includingtherecentDraftCodeofConductfor
AdjudicatorsinInvestor-StateDisputeSettlementwhichisbeingdraftedbythe
InternationalCentreforSettlementofInvestmentDisputes(ICSID)andthe
UnitedNationsCommissiononInternationalTradeLaw(UNCITRAL).
6
The
ICSIDandUNCITRALreleasedthefirstversionofthisDraftCodeofConduct
on 1 May2020,anditsupdatedversionon19April2021.
7
1
Catherine A Rogers, ‘Fit and Functional in Legal Ethics: Developing a Code of Conduct
for International Arbitration’ [2002] 23 Michigan Journal of International Law 341, 341.
2
ICSID and UNCITRAL, ‘Draft Code of Conduct for Adjudicators in Investor-State
Dispute Settlement’ (1 May 2020) para 65, 66
<https://uncitral.un.org/sites/uncitral.un.org/files/media-
documents/uncitral/en/draft_code_of_conduct.docx> accessed 25 August 2021 (Draft
Code of Conduct 2020).
3
Ariel Anderson, ‘Saving Private ISDS: The Case for Hardening Ethical Guidelines and
Systematizing Conflicts Checks’ (2018) 49Georgetown Journal of International Law 1143,
1157.
4
Malcolm Langford, Daniel Behn and Runar Hilleren Lie, ‘The Revolving Door in
International Investment Arbitration’ (2017) 20 Journal of International Economic Law
301, 326 (The Revolving Door).
5
ibid301.
6
Draft Code of Conduct 2020 (n 2) para 65.
7
ICSID and UNCITRAL, ‘Draft Code of Conduct for Adjudicators in International
Investment Disputes: Version Two’ (19 April 2021)
<https://icsid.worldbank.org/sites/default/files/draft_code_of_conduct_v2_en_final.p
df> accessed 25 August 2021 (Draft Code of Conduct V2.0).
2021
LSE LAW REVIEW
117
Toaidincombatingdoublehatting,thisarticlearguesthatthecurrently
availablesolutions,(includingtheDraftCodeofConduct)sufferfromlimitations,
andthata moreholistic,multi-dimensionalapproachisbettersuitedtoremedying
theproblem.Section I ofthearticlebeginsbyexplainingtheproblemsthatdouble
hattinggivesriseto.ItthentouchesuponthecorevaluesoftheISDSsystemthat
onemustaccountforwhileconsideringanymeasureagainstdoublehatting.
Thereafter,SectionIIanalysesfoursolutionsthatarecurrentlyavailablefor
resolvingdoublehatting.Thearticlehighlightsthelimitsofabsolutebans,
temporarybans,theMultilateralInvestmentCourt(MIC),andtheDraftCodeof
Conductaspossiblesolutions.Then,SectionIIIdevelops a novelsolutiontothe
problemathand,andgroundsitinISDSjurisprudence.Italsobrieflydiscusses
theachievementsandlimitationsofthesaidproposal.Finally,SectionIVofthe
articleconcludestheanalysiswith a note ofcautionagainstoptingforsolutions
thatareoverlybroad,overlynarrowor,simply,impractical.
I. PROBLEMS AND PRINCIPLES
Whydoublehattingisproblematic
Thediversitycrisis
Diversityis a keyvaluethatisadvantageoustoalladjudicatorysystems.
8
The
availabilityof a diversebodyofdecisionmakerstochoosefromhelpsinavoiding
cognitivebiasesandgroupthinkbyallowinginflowoffreshanddiverse
perspectives,andalsoinstrengtheningtheappearanceoflegitimacyandfairness
oftheadjudicatoryprocess.
9
Despitesuchanimportantrole,theISDSsystemis
undergoing a grave‘diversitycrisis’,asitslevelsofdiversitycontinuetoremain
8
Vanina Sucharitkul, ‘ICSID and UNCITRAL Draft Code of Conduct: Potential Ban on
Multiple Roles Could Negatively Impact Gender and Regional Diversity, as Well as
Generational Renewal’ (Kluwer Arbitration Blog, 20June 2020)
<http://arbitrationblog.kluwerarbitration.com/2020/06/20/icsid-and-uncitral-draft-
code-of-conduct-potential-ban-on-multiple-roles-could-negatively-impact-gender-and-
regional-diversity-as-well-as-generational-renewal/> accessed 21 August 2021.
9
Andrea Kay Bjorklund, ‘The Diversity Deficit in Investment Arbitration’ (EJIL:Talk!, 4
April 2019) <https://www.ejiltalk.org/the-diversity-deficit-in-investment-arbitration/>
accessed 5 July 2021.
To continue reading
Request your trialUnlock full access with a free 7-day trial
Transform your legal research with vLex
-
Complete access to the largest collection of common law case law on one platform
-
Generate AI case summaries that instantly highlight key legal issues
-
Advanced search capabilities with precise filtering and sorting options
-
Comprehensive legal content with documents across 100+ jurisdictions
-
Trusted by 2 million professionals including top global firms
-
Access AI-Powered Research with Vincent AI: Natural language queries with verified citations
Unlock full access with a free 7-day trial
Transform your legal research with vLex
-
Complete access to the largest collection of common law case law on one platform
-
Generate AI case summaries that instantly highlight key legal issues
-
Advanced search capabilities with precise filtering and sorting options
-
Comprehensive legal content with documents across 100+ jurisdictions
-
Trusted by 2 million professionals including top global firms
-
Access AI-Powered Research with Vincent AI: Natural language queries with verified citations
Unlock full access with a free 7-day trial
Transform your legal research with vLex
-
Complete access to the largest collection of common law case law on one platform
-
Generate AI case summaries that instantly highlight key legal issues
-
Advanced search capabilities with precise filtering and sorting options
-
Comprehensive legal content with documents across 100+ jurisdictions
-
Trusted by 2 million professionals including top global firms
-
Access AI-Powered Research with Vincent AI: Natural language queries with verified citations
Unlock full access with a free 7-day trial
Transform your legal research with vLex
-
Complete access to the largest collection of common law case law on one platform
-
Generate AI case summaries that instantly highlight key legal issues
-
Advanced search capabilities with precise filtering and sorting options
-
Comprehensive legal content with documents across 100+ jurisdictions
-
Trusted by 2 million professionals including top global firms
-
Access AI-Powered Research with Vincent AI: Natural language queries with verified citations
Unlock full access with a free 7-day trial
Transform your legal research with vLex
-
Complete access to the largest collection of common law case law on one platform
-
Generate AI case summaries that instantly highlight key legal issues
-
Advanced search capabilities with precise filtering and sorting options
-
Comprehensive legal content with documents across 100+ jurisdictions
-
Trusted by 2 million professionals including top global firms
-
Access AI-Powered Research with Vincent AI: Natural language queries with verified citations