UNCITRAL adopts Code of Conduct for Adjudicators in Investor-State Dispute Settlement

The United Nations Commission on International Trade Law (UNCITRAL) has adopted the Code of Conduct for Adjudicators (Code). Ciarb attended UNCITRAL Working Group III (WG III) in its capacity as observer to facilitate discussions about the Code of Conduct for Adjudicators (Code)throughout the multi-year development of the instrument. Ciarb was represented by Mercy McBrayer FCIArb, Ciarb’s Head of Arbitration Professional Practice. The WG III’s current mandate is to address Investor-State Dispute Settlement (ISDS) system reform.  

 The Code in Investor-State Dispute Settlement was first proposed by UNCITRAL in 2019. The Code aims to establish ethical and professional standards for arbitrators in investor-state dispute settlement (ISDS) by increasing transparency and accountability in the system.  It was jointly drafted with the International Centre for Settlement of Investment Disputes (ICSID). The Code underwent numerous rounds of consultations and revisions and the work continued despite significant interruptions caused by the Covid 19 global pandemic.  

On 7 December 2023, the UN General Assembly has adopted a resolution on the Code., which is the first work product of the ISDS reform by the WG III. The Code is comprised of two versions, one for arbitrators, containing 12 articles, with regards to ISDS disputes, and the other, containing 10 articles, applies to judges who would be members of the European Union’s proposed standing Multilateral Investment Court (Standing Mechanism) should it ever materialise.   

The Code aims to standardise the existing best practices surrounding neutrality requirements and ethical obligations, such as ensuring adjudicator’s impartiality, independence, disclosure mechanism, and multiple roles. Adjudicators in disputes where the Code has been adopted would be required to apply the highest standards of integrity and diligence. Such a standard instrument is intended to be helpful in supporting existing applicable instruments, including ICSID Convention, investment treaties, and other applicable rules and guidelines. It is hoped that a concrete statement of obligations will prove useful the current ISDS regime., As the public impact of ISDS disputes can be significant, it is also hoped that adoption of the Code may improve public confidence in the effectiveness of the ISDS system.   

In its capacity as observer, Ciarb proactively provided comments during the sessions on double-hatting, the appointment of adjudicators to ensure impartiality and independence, disclosure obligations, and compliance mechanisms. Additionally, Ciarb’s members and stakeholders actively participated in discussions about relevant issues raised during the Code’s development, as well as gave input to various state delegations seeking expert views under Ciarb’s facilitation. Ciarb itself was able to also provide its perspective and experience based on the implementation of its own Code of Professional and Ethical Conduct for its members.   

While the Code provides the unique and novel feature of an adoptable uniform requirements for arbitrators and judges in ISDS disputes. Further, it could also be used by governments and stakeholders' in various roles by incorporating it into their investment treaties. Disputing parties' may agree on the application of the Code on a voluntary basis post dispute. Parties may also agree to specific provisions in lieu of the entire Code, such as consequences and sanctions of non-compliance by arbitrators and judges, and other means of ensuring its implementation and enforcement. There remains uncertainty in regards to the application of the Code for judges since it will be heavily reliant on the proposed establishment of the Standing Mechanism, which would inevitably have its own rules. This has raised questions and differing views as to the value of the work in drafting the Code to be applicable to judges. Further considerations on the development of a standing MIC is slated for future WG III work sessions. Meanwhile, the WG III has already begun work on its priority projects, including the development of an advisory centre, providing a framework for ADR mechanisms in ISDS, and drafting a multilateral instrument on agreed procedural and substantive requirements in ISDS disputes.