On 16 November 2016, Professor Bernardo M. Cremades FCIArb addressed CIArb members and delegates at the Institute’s annual Alexander Lecture in London.
In his speech entitled: The Use and Abuse of Due Process in International Arbitration, Professor Cremades discussed the origins of due process, it’s role in international arbitration and the need for strong arbitral tribunals.
Introducing the topic for discussion, Professor Cremades opined:
The demands of due process are present in relation to any decision made by an arbitrator during the processing of arbitral proceedings. However, relatively frequently lawyers representing the parties raise questions of due process in a threatening way, suggesting that if the arbitrator does not accept their procedural proposals the result would be a breach of due process. Therefore, it is of great interest to analyse and distinguish when it is justified to raise questions of due process.
He emphasised that in arbitral proceedings, the basic rule consists of submitting to the principles of equality, fair hearing and the right of contradiction. Parties ought to be treated equally and given sufficient opportunity to present their case. Due process in international arbitration also requires the arbitrators to conduct proceedings and draft their awards so that the final decision is enforceable. Referring to the requirements of due process in arbitral proceedings, Professor Cremades concluded: “In short, the content of due process can be summed up in two fundamental points: Access to justice and reasonableness of the proceedings.”
Speaking on breach of due process, he further stated:
Rarely is the arbitrator subject to actions of responsibility for failing to perform his duties. The Spanish Constitutional Court has found that arbitration is a jurisdictional equivalent and, therefore, the arbitrator enjoys certain immunity in performing his jurisdictional activity. It is true that the arbitrator originally performs his duties under an arbitral agreement and, therefore, is required to fulfil his contractual obligations vis-à-vis the parties. Nowadays, judicial decisions holding the arbitrator liable when he has breached his purely contractual obligations (for instance, accepting the appointment without disclosing a conflict of interest with a consequent annulment of the award) are becoming widespread.
Professor Cremades put forward the point that challenges to arbitrators are being used as a ‘strategic weapon’, and claims for compensation against arbitrators or arbitral institutions, as well as criminal prosecutions of arbitrators for declaring jurisdiction at the initial stage of arbitral proceedings, are becoming increasingly frequent in international arbitration. He argued that arbitrators who perform their duties against the State in the place of the arbitration are sometimes exposed to ‘inadmissible pressure’.
The use of public opinion as a weapon of pressure against the arbitral tribunal is unacceptable. It is general practice of many law firms to have an important communications department, generating news items which are not always to the benefit of the necessary neutrality of arbitrators' activity. Arbitrators are criticised excessively, and are made responsible for the defects of the large industry of arbitration. However, nothing is mentioned about the excessive length of the time limits fixed by the lawyers in the procedural timetable…at many of these hearings dozens and dozens of lawyers meet around the tribunal's table, but their presence is not justified over the weeks that the hearing might last. The excessive presentation of witnesses is often unnecessary, and there is the proliferation of experts who sometimes do nothing but confuse the tribunal.
I understand that all these excesses can constitute a real breach of ‘due process’ for which only the professionals representing the parties should be held responsible. The arbitrator has to put a gargantuan amount of effort into doing what the parties' representatives ought to have done: present crystal clear and concisely documented conclusions. As a result, arbitration costs have rocketed.
Professor Cremades suggested that this therefore raises the problem as to whether it is becoming impossible for parties to access justice. He concluded that ultimately, like all fields, international arbitration ought to accept constructive criticism in order to improve. With regard to arbitral proceedings, he emphasised the need for the correct use of due process, and to identify the abuses to be avoided. He maintained however, that it would be unacceptable to single out arbitrators for criticism, whilst overlooking the abuses committed by many professionals participating in international arbitration.
A full transcript of the speech can be found below:
Use and Abuse of Due Process in International Arbitration