Wang Hongsong
The revisions this time cover three files of the Beijing Arbitration Commission (the “BAC”): the BAC Ethical Standards for Arbitrators (the “Ethical Standards”), the BAC Administrative Measures for the Engagement of Arbitrators (the “Administrative Measures”), and the Constitution of the BAC (the “Constitution”). Such revisions share a common goal: to ensure the independence and impartiality of BAC arbitrators, so as to strengthen the creditability of arbitrators, the BAC, and arbitration itself. Below is an introduction of the revision details.
1. It is stipulated in Article 9 of the former Ethical Standards that BAC arbitrators shall not act as a representative for any BAC arbitration cases (including applications to set aside or for non-enforcement of arbitral awards rendered by the BAC), and shall also not make inquiries regarding a case on behalf of someone else nor lavish dinners and gifts or grant favors and benefits to member(s) of the arbitral tribunal on behalf of someone else. After revision, it is provided that arbitrators shall also not make inquiries regarding a case on behalf of someone else nor lavish dinners and gifts or grant favors and benefits to member(s) of the arbitral tribunal or the case manager on behalf of someone else. It intends to emphasize that arbitrators should not make inquiries regarding arbitrations with case managers as well, and that lavish dinners and gifts made to case managers will also be against arbitrators’ ethical standards. The reason is self-evident and needless to explain..
2. It is stipulated in Article 9 of the Administrative Measures that when the BAC has evidence to reasonably doubt that such circumstances may exist, whereas to be checked up, that an arbitrator in his/her tenure may have breached the Ethical Standards or the rules on impartiality and independence stipulated in Administrative Measures, which can result in his/her dismissal, the BAC Disciplinary Board shall make an investigation. During the investigation by the Disciplinary Board, an arbitrator is suspended from being listed in the BAC Panel. During suspension, the arbitrator shall not accept being chosen by the parties, nor shall s/he be appointed by the BAC Chairman to hear new cases. The cases under hearing by the arbitrator shall be dealt with pursuant to Section 4, Article 18 of the Constitution. Such stipulations are based on the following grounds:
Firstly, since only institutional arbitration is allowed under the existing legislation in China, parties can only select arbitrators from the panel of arbitrators provided by Chinese arbitration institution. Therefore, only arbitrators with sound impartiality and independence could be trusted and selected by the arbitration commission, and then listed in the panel. If the arbitration commission itself has already had reasonable doubts as to an arbitrator’s impartiality and independence, and such suspicion temporarily could not be eliminated, the arbitration commission should not recommend the arbitrator to the parties for selection. This arbitrator then should be suspended from being listed in the panel, until the suspicion is eliminated after investigation.
Secondly, in most other jurisdictions, a panel of arbitrators is normally for recommendation only, and the parties are free to choose arbitrators from or outside the panel. An arbitration institution may dismiss an arbitrator once s/he is found unfit or incompetent to act as arbitrator. In China, however, the panel of arbitrators is somewhat compulsory, with a fixed tenure of three years for arbitrators’ engagement. Despite the situations of dismissal stipulated in the Ethical Standards and the Administrative Measures, dismissal determinations in practice will be hard to make since the investigation is usually difficult and does not always work well. Such determinations then usually can be made only during the transition of the commission board members, and cannot be done in time. Suspension from being listed in the panel, however, can solve this problem. It is a new way of preventing any corruption and partiality of the arbitrators. With the growth of its creditability, the BAC has been accepting more and more cases with fast increasing amount in dispute. It is therefore necessary to emphasize on the clean hands of arbitrators. With such a rule, the BAC is well showing its determination to prevent and eliminate any corruption and to keep the impartiality of its arbitrators, which is a full respect to clients and justice.
Thirdly, for the sake of respect to arbitrators, the BAC is cautious with the implementation of suspending any arbitrator from being listed in the panel, but requires that any suspicion must be based on evidence, rather than surmise and guess, and that the suspicion of an arbitrator’s action must be a reasonable doubt from the viewpoint of a reasonable third party. As commented by Lord Denning, in this situation, anyone with reasonable judgment will believe that the judge or the jury foreman may, whenever possible, be partial to one party at the expense of the other party’s interest. The court will not investigate whether it is a fact that s/he is partial to one party, but it will be sufficient if people with judgment ability so believe. It is simply because that justice must be originated from trust, and when reasonable people believe that the judge is impartial, such trust is suffering damages. Therefore, we believe that it is the judgment of a neutral and reasonable third party that should be the standard to determine whether an action is against the principle of independence and impartiality, rather than the self-feeling of the one who takes such action. The parties’ trust in arbitrators is the very foundation of arbitration, and if the arbitrators’ actions result in reasonable doubts by neutral third parties as to his/her impartiality, the foundation of arbitration will be seriously damaged. The adoption of such standard means, on the one hand, to reiterate the inherent features of arbitration, and on the other hand, to avoid any wrong determinations made before the conclusion of investigations because of the complexity and sensitiveness of this issue, as well as its substantive influence on arbitrators. It is to be emphasized that both dismissal and suspension from being listed in the panel are only the BAC’s internal administration of its arbitrators, a judgment as to whether an arbitrator’s action is in line with the Ethical Standards and whether s/he is trustable. Due to its complexity and diversification, and the limitation of the investigation methods and capability, any determination on an arbitrator’s action made by the BAC does not mean that parties’ charge against the arbitrator is found, nor is it any judgment on the specific case the arbitrator is hearing. The BAC has a clear mind of its own limitation of knowing about things, and so it is important to avoid any unfairness when dealing with such matters, and to maintain the balance and harmonious development of various parties concerned. In addition, strict procedures are required before making such determination, where the BAC Disciplinary Board shall make an investigation and report to the commission for approval thereafter. When suspicion is eliminated after the investigation, however, the arbitrator shall be re-listed in the BAC panel.
It is worth mentioning that the measure of suspension from being listed has started to be made and implemented early from January, 2005 (see the BAC Decision on Temporary Change of Panel of Arbitrators, which was discussed and adopted at the Second meeting of the Fourth Beijing Arbitration Commission on February 4, 2005). Nevertheless, because of its freshness, it is necessary to have a trial implementation at first. Now that it has been proven practical, it could be formally adopted into the Administrative Measures.
3. Section 4 is added in Article 18 of the Constitution. It provides that the BAC shall send written notice to an arbitrator if s/he is dismissed during the tenure of engagement, or is suspended from being listed in the panel due to circumstances under Article 9 of the Administrative Measures. Within seven days upon receipt of such notice, the arbitrator shall notify the case manager in writing her/his decision as to whether s/he withdraws from the case s/he is hearing. If the arbitrator fails to respond or decides not to withdraw from the hearing, the BAC shall inform the parties of its determinations. The dismissed or suspended arbitrator shall not participate in the hearing of any cases from the date when the updated BAC panel is officially released, but could continue to fulfill his/her duties as arbitrator until the case is concluded only if both parties so agree. The Ethical Standards and the Administrative Measures only refer to the relationship between the BAC and its arbitrators, but the arbitrators’ suspension from being listed in the Panel will have influence on the case(s) s/he is hearing, which refers to the relationship between the arbitrators and the parties. That is why Section 4 is adopted in Article 18 of the Constitution. Once an arbitrator is dismissed, or suspended from being listed in the Panel according to Article 9 of the Administrative Measures, s/he in principle shall not hear any case thereafter. However, in light of the time difference between the release of the updated BAC panel and the decision-making by the BAC, and for the purpose of minimizing the negative influence on the arbitrator, the arbitrator may take her/his own decision as to whether to withdraw from the case hearing, and if s/he disagrees to withdraw from the case hearing, the BAC shall inform the parties of its determinations. The dismissed or suspended arbitrator could continue to fulfill his/her duties as arbitrator only if both parties so agree, which is a free choice given to the parties as to whether to replace the arbitrator, reflecting the BAC’s full respect to party autonomy.
4. Both Article 22 of the former Constitution and Article 15 of the former Administrative Measures enumerates the situations under which an arbitrator shall be dismissed, but they are not exactly the same. To keep them consistent and avoid unnecessary repetition, Article 22 of the former Constitution is deleted in the revision, and is replaced with the second section added in Article 18 of the Constitution, namely, during the tenure of engagement, the BAC shall have the power to dismiss any arbitrator who has seriously breached the Ethical Standards or the Administrative Measures.
5. Article 4 is newly added in the revised Administrative Measures – the BAC shall regularly make change of the percentages of arbitrators from different occupations and industries in accordance with its business development and case statistics, and shall engage arbitrators that meet the requirements set in the Administrative Measures. If arbitrators from a specific occupation or industry have exceeded the percentage thereof, the BAC shall temporarily cease engagement of arbitrators from such occupation or industry, unless there is any special consideration by the BAC. If there are too many arbitrator applicants from a single occupation or industry that have exceeded the number to be engaged according to its percentage, the BAC board members shall nominate the arbitrators to be engaged by secret ballot. With the rapid increase of its reputation, the BAC has been receiving more and more applications for engagement as arbitrators. However, it still intends to control the scale of its arbitrators in panel, and thus there will be a difference between the number of applicants and the number of arbitrators the BAC finally engages. On the purposes of further transparency in the arbitrator recruitment and better understanding by the applicants, the BAC makes such clarifications as to the links between the engagement of arbitrators and the business development of the BAC, as well as relevant considerations thereon.
Apart from the revisions above, changes have also been made to the wording of the Ethical Standards, the Administrative Measures, and the Constitution. Since they are minor changes without putting a finger on the substantive content, there is no need to provide all the details herewith.