Wang Hongsong, Secretary-General of Beijing Arbitration Commission
Beijing Arbitration Commission (“BAC”) has been committed to the team building of arbitrators since its inception. It not only actively selects excellent talents, but also strives to explore and improve the system for selection and management of arbitrators and continuously improve the purity and professionalism of the team of arbitrators. The Beijing Arbitration Commission Ethical Standards for Arbitrators amended and adopted at the first meeting of the second session of Beijing Arbitration Commission on September 5, 1998 (the “Ethical Standards”) and the Criteria for Engagement (Reengagement) of Arbitrators of Beijing Arbitration Commission (the “Criteria”) have played a positive role in ensuring the quality and efficiency of arbitration. However, with the growth of the team of arbitrators and the increasingly higher expectations of the parties on arbitrator, the arbitrators, some problems in the team of arbitrators are being exposed in the new context. For example, a few arbitrators lack the sense of responsibility, handle cases in low efficiency, and fail to meet the expectations of the parties and the requirements of BAC in terms of the skills and competence in case handling; and a handful of arbitrators show the tendency of favoritism. These problems, if left unsolved, will become obstacles and hazards in the development of BAC, and therefore we must be highly vigilant against them. To tackle this, we amended the Ethical Standards and the Criteria and renamed the Criteria to the Administrative Measures for the Engagement of Arbitrators of the Beijing Arbitration Commission (the Administrative Measures) with reference to the ethical standards of arbitrators in foreign arbitration institutions and the provisions of the Supreme People’s Court on the management of judges. The opinions of some arbitrators were solicited and discussions were carried out with the Disciplinary Committee on the amended version. The relevant matters are explained as follows:
On the Amendment to the Ethical Standards
The new Ethical Standards are extended from the original nearly 2,000 characters in 20 articles to over 3,500 characters in 26 articles, with many contents revised. The amendment mainly involves the following aspects:
I. On the Impartiality of Arbitration (See Articles 3, 7, 8, 13, 20, 21 and 22)
Arbitrators “impartiality” should not be limited to self-discipline and declining invitations to dinner and gifts, but should also include the arbitrators’ deep understanding of the rule of law and their sense of justice and responsibility to consciously protect the dignity of the law and practice the principles of fairness and justice. Francis Bacon said: “once unjust judge, and its consequences more than ten crimes. Crime is just breaking the law, like dirty water, while the referee was unfair to destroy the law, like the pollution of the water.”Although arbitration is different from litigation in nature, an arbitration award involves the immediate interests of the parties and has the effect of enforcement. Therefore, we should be aware that an unfair ruling equals to crime, stop those acts and phenomena contrary to the principles of justice, and give full play to the function and role of the supervisory and competition mechanisms to institutionally limit the causes for these phenomena. In this term, the specific measures specified in the new Ethical Standards include:
1. Article 3 of the amended version adds a sentence, that is, arbitrators “shall not allow any pressures or vested interests to influence the arbitral award”, to require that arbitrators should not only resist the temptation of their personal interests, but also have the courage and determination to uphold justice when exercising the power of arbitration.
2. The new Ethical Standards add the provisions on the signing of a written statement. This is to match the relevant provisions in the Beijing Arbitration Commission Arbitration Rules (the “Rules”). The signing of a statement by arbitrators has long been practiced in BAC but was not standardized. According to the current Rules and amended version of the Ethical Standards, the statement shall be forwarded to the parties by the Secretary, and the contents of the statement are expanded to include a promise of the arbitrators to arrange sufficient available time to handle the case carefully, diligently and efficiently. Such a requirement is not only to improve the transparency of the ethical standards of arbitrators and facilitate the supervision from the parties and their authorized representatives but also to help arbitrators to have stronger sense of responsibility and self-discipline. By signing the statement the arbitrators make a solemn commitment to the parties and BAC. Arbitrators should make careful consideration before making the commitment and abide by it once it is made, otherwise they will lose their credibility. It is also an indirect performance of the disclosure obligation of the arbitrators, which is a common practice in the international community, and helps enhance the confidence of the parties in the arbitral tribunal.
3. In term of the circumstances requiring withdrawal of arbitrators, the original text “has received benefits from case recommendation” is amended to “has recommended or introduced a representative(s) or defender(s) to one of the parties or recommend a lawyer or any other person to handle the case”. The precondition of having “received benefits” is canceled. Meanwhile a circumstance “has acted as witness, appraiser, inspector, defender or agent ad litem in the case in question or in other related cases” is added (see Article 8). These are stricter than the provisions in the original Ethical Standards.
4. In the provisions forbidding arbitrators to meet privately with any of the parties or its representatives, it is specified in the new Ethical Standards that “arbitrators are also forbidden to discuss any matter related to the case by any means of contact (including direct or indirect contact by telephone, facsimile, telex, or email) with any of the parties or its representatives.” (see Article 13) This is a revision according to the opinions of some arbitrators and is much more precise than the original provisions.
5. The new Ethical Standards regulate the conduct of arbitrators to act as representatives for any of the parties in cases under the jurisdiction of BAC. Opinions vary on whether an arbitrator may act as a representative of any party in the cases under the jurisdiction of BAC. Opponents argue that an arbitrator acting as a representative will take advantage of his/her dominant position as an arbitrator to influence the tribunal, and this is not conducive to an impartial hearing; while according to supporters, the impartiality of hearing depends on the quality of the members of the tribunal instead of any representative, and this is no international practice to prohibit arbitrators to act as representatives in arbitration cases. Taking into consideration the above opinions, the amended version regulates the conduct of arbitrators (see Article 21) to act as representatives in cases instead of simply prohibiting it. This actually includes the arbitrators’ acting as representatives in the scope of their appraisal. Together with the provisions in Article 20, which forbid arbitrators to provide any information about a case they are not connected with or offer hospitality, give gifts or provide benefits to other arbitrators on behalf of other parties, this article can well address the abovementioned concerns.
6. The new Ethical Standards define the breaches of impartiality (see Paragraph 4 of Article 22). It is a complex and inexplicable question on how to judge whether a behavior is a breach of impartiality. There are no provisions in this regard in the arbitration rules and code of conducts of arbitrators of other arbitration institutions (both domestic and foreign). However, without such a definition, the Ethical Standards will not be operable and will be unable to play the role of curbing these breaches. Moreover, without such a definition, it is likely to expand the scope of such breaches, leading to disagreements in the arbitral tribunal, where members suspect each other’s partiality motives and neglect the value of the opinions of others. Therefore we attempt to summarize the frequently occurring breaches in practice in a way like groping forward by feeling for stones to cross a river. Whether this summary is accurate and comprehensive and whether it can achieve the expected goal are to be tested by the future practice.
II. On the Efficiency of Arbitration (see Articles 2, 6, 9, 11, 12, 16, 17, 18 and 21).
The improvement of the efficiency of arbitration is involved in most of the amended contents. This is based on the following ideas: The efficiency of arbitration is the precondition and basic guarantee for the impartiality of arbitration, and the advantage of arbitration lies in the efficiency and effectiveness brought to the parties by the system of “one arbitration as final”. For the parties, when the case is closed earlier, they can relax earlier, see more possibility to have the award executed and suffer fewer losses. Justice delayed is justice denied. For BAC, if the advantage in efficiency is not reflected in hearings, it will lose its popularity. Especially in the context that the efficiency of the court system is improving with the national trial reform, a low efficiency means slow suicide for arbitration. We should be fully aware of this and have a sense of crisis and urgency. Although there are some provisions on improving efficiency in the original Ethical Standards, they are rather general and inoperable, making it impossible for supervision. The amended version makes the following specific provisions:
1. Article 2 of the new Ethical Standards adds the provision that arbitrators “shall endeavor to conclude cases in a timely manner within the time limit stipulated by the Rules.”This provision emphasizes on the time limit to be met by arbitrators according to the arbitration rules and requires that arbitrators should conclude cases within instead of beyond the time limit.
2. The new Ethical Standards impose restrictions on the nomination and appointment of arbitrators. For example, Paragraph 1 of Article 6 lists “lack of familiarity with the professional field(s) related to the case” as a circumstance where arbitrators shall refuse to accept their nomination or appointment. The “professional field(s) related to the case” include not only professional knowledge but also the related legal knowledge. This provision is with reference to the Chartered Institute of Arbitrators Code of Professional and Ethical Conduct for Members. “Case handling by experts” is a feature of arbitration . In the modern society where various professions are growing more complex and more sophisticated, if arbitrators are not familiar with the professional fields involved in the cases, they will be unable to make analysis and judgment as experts or play their due role in the arbitration, and thus the quality and efficiency of arbitration is bound to be affected. When the arbitrators are outsiders, reluctant to learn with an open-mind and opinionated, the consequences will be worse. Therefore, refusing to take cases involving unfamiliar professional fields indicates the responsibility to the parties and BAC.
In order to help the parties to learn about the professions of arbitrators, BAC plans to further investigate the details of the arbitrators’ professional backgrounds and put the results in the computer query system for inquiries of the parties. To help arbitrators determine whether they are familiar with the professional fields involved in cases, the secretaries for case handling should give as many details as possible on the those fields when introducing cases to arbitrators.
Paragraphs 2 to 5 of Article 6 list the questions to be seriously considered by arbitrators before accepting a nomination or appointment. Arbitrators should first consider whether they have enough time and energy before accepting a nomination or appointment. When too occupied with work or personal affairs, they may refuse to accept the nomination or appointment, but once accepting it, they should not delay the case hearing at the excuse of being too busy, as “one should try his best to do what was entrusted to him by others.” Otherwise, not only the hearing will be delayed, but the credibility of them and BAC will be damaged. Paragraph 6 is the restriction on the number of cases handled by an arbitrator at the same time. As no one has boundless energy, with too many cases in hands, the arbitrator will not be able to pay enough attention to every case and thus will affect the quality of case handling. Moreover, the arbitration of a case involves the times of more than one arbitrator. Too many cases in the hands of an arbitrator will also lead to conflicts with other arbitrators in time arrangement.
In order to eliminate the arbitrators’ misgivings about refusing to take cases, the amended version deletes “refusing to accept the nomination of the parties or the appointment of BAC without any justifiable reason for three times within the tenure of office from the circumstances for dismissal of an arbitrator.
3. The new Ethical Standards provide for the obligation of arbitrators to actively provide information on their available times. For example, Article 9 of the amended version provides that upon accepting nomination by the parties involved or appointment by the Chairman of Arbitration Commission, arbitrators shall actively inform the secretary of the times when he/she is available to handle the case. Article 11 provides that“in the event that an arbitrator is able to or should be able to foresee that he/she cannot be present for a hearing, he/she shall notify both the presiding arbitrator and the secretary of the tribunal seven days prior to the opening of the first hearing (or three days in the case of additional hearings), and make reasonable alternative arrangement and “failure to comply with the provisions of the previous paragraph shall be considered as being an absence from the hearing without any justifiable reason.”Article 22 lists the “failure to be present at an arbitration hearing without any justifiable reason” as one of the circumstances for dismissal of an arbitrator. According to the Arbitration Rules, after the date for the first hearing is fixed, “a party may request a postponement of the date at least 7 days before the hearing”, if there are grounds justifying a postponement, and the failure to meet the time limit may lead to the consequence of “withdrawal of the application for arbitration” or “hearing without the presence of the party”. Therefore, out of the respect to the parties, arbitrators should also make a notification in advance when they cannot be present for a hearing. Article 12 provides that “if an arbitrator must be out of town for more than one week and such absence may adversely affect the hearings, private sittings of the tribunal or the formulation of the arbitral award, the arbitrator shall notify the presiding arbitrator or the secretary of the tribunal of the situation”, and if failure to comply with the aforementioned provisions results in delays in the hearings, private sittings of the tribunal or the formulation of the arbitral award, the arbitrator shall be considered as “having delayed the arbitral procedures without any justifiable reasons.” The obligation to actively provide information of arbitrators also includes providing their contact information, such as telephone, fax, E-mail, etc., to ensure timely communications among the members of the tribunal and to prevent the case hearing from being delayed when an arbitrator has to go for a business trip.
4. The new Ethical Standards specify the specific times for the hearing of the arbitral tribunal and the formulation of the arbitral award. Article 9 of the amended version specifies the times for the first hearing (within 30 days after its formation in the case of domestic disputes or within 45 days in the case of disputes involving foreign matters) and the second hearing (within 30 days after the closing of the first hearing). Articles 16 and 17 provides for the time limits on the private sitting (within one week) of the arbitral tribunal from the date of its last hearing, the award drafting (7 days) and the review of draft award (2 days), as well as the total time for the formulation of the award (20 days). These provisions have three benefits: first, to help arbitrators to predict the time to be taken in case handling and accordingly decide whether to accept the nomination or appointment; second, to improve the efficiency of case handling; and third, to improve the quality of case handling. When time intervals between hearings and the formulation of award are too long, arbitrators are likely to forget the case facts, affecting the quality of the award. A prolonged case hearing is vulnerable to unexpected situations and thus is not conducive to successful conclusion of the case.
5. Article 15 of the amended version provides that during the hearings, or in the course of investigation procedures, arbitrators shall not “check or use mobile phones or pagers. They shall not arbitrarily leave the arbitration courtroom or engage in activities not related to the hearings.”These behaviors not only affect the hearings but also disrespect the parties and other arbitrators. They are detrimental to the image of the arbitral tribunal and therefore should be prohibited.
6. The new Ethical Standards add the provisions on urging conclusion of cases by the Secretary General. Article 18 provides that “in the event that the presiding arbitrator or the sole arbitrator fails to conclude the arbitration case within the stipulated time without any justifiable reason, the Secretary General of the BAC may send a letter urging him/her to conclude the case and may set an additional time limit for compliance. If the case is not concluded within this time limit, such breach will be considered as a serious delay of the case.” Article 22 lists the “serious delay of the case” as one of the circumstances for the dismissal of an arbitrator. The failure of arbitrator to conclude a case within the stipulated time limit means that the arbitrator fails to perform his/her duties of conscientiousness and diligence. If a case cannot be concluded within the prescribed time limit, the rights and interests of the parties as well as the reputation of the Arbitration Commission. In the UK, parties applied to the court for dismissal of the arbitrators who delayed case hearings on the ground that the arbitrators had “bad behaviors”. This provision is to draw the attention of arbitrator to the time limit on case hearing. A “justifiable reason” shall be a special situation beyond the control of the arbitrator. Being too occupied with work or personal matters is a question to be considered before accepting the nomination or appointment and is not a justifiable reason for the delay of case conclusion. The provision is targeted to presiding or sole arbitrators because they have the initiative to promote the progress of the arbitral hearing. If the hearing is delayed due to the breach of the Ethical Standards by an arbitrator other than the presiding one, the arbitrator concerned instead of the presiding arbitrator shall be held liable. This has been specified in the Administrative Measures.
III. On the Obligation of Confidentiality of Arbitrators (See Article 19)
As “non-public hearing” is an important characteristic of arbitration, arbitrators shall have a sense of confidentiality. Any intentional or unintentional disclosure of secrets in arbitration by an arbitrator is a breach of the professional ethics of arbitrators. To strengthen the arbitrators’ awareness on confidentiality, Article 19 of the new Ethical Standards provides that “without the consent of BAC, arbitrators may not conduct private discussions concerning a case still under arbitration with any persons not connected with the case; nor are they allowed to discuss the case in public forums such as conferences, lectures or on the Internet.”
IV. On the Mutual Respect and Cooperation of Arbitrators in Arbitration (See Article 5)
The new Ethical Standards make a general provision on the respect and cooperation among arbitrators. “Respect” in the provision mainly mains that arbitrators should respect the rights of other arbitrators to give opinions on the case, understand and accept disagreements with an open mind and freely discuss and sincerely communicate with other arbitrators on the basis of mutual respect. The “cooperation” and “support” in the provision do not mean to make any compromise and accommodation contrary to the principle of impartiality, but that the members of an arbitral tribunal should understand and cooperate with each other in time arrangement, jointly make efforts and perform obligations in the process of hearing and formulation of arbitral awards, and put forward solutions together with questions.
On the Amendment to the Criteria for Engagement (Reengagement) of Arbitrators
The amendment to the Criteria is corresponding to that of the Ethical Standards. The Ethical Standards as regulations on the professional ethics and conducts of arbitrators contain comprehensive provisions mainly on the dos and don’ts of arbitrators. The Administrative Measures mainly cover the engagement, examination and management of arbitrations and provide on the consequences of arbitrators’ failure to comply with the Ethical Standards or meet the criteria for arbitrators. They are more operable in terms of the engagement (reengagement) of arbitrators. The amendment mainly involves the following aspects:
I. The title of the Criteria is changed into the Administrative Measures for the Engagement of Arbitrators of the Beijing Arbitration Commission. The amended version covers the criteria and procedures for the engagement and reengagement of arbitrators and their examination, non reengagement and dismissal. Therefore the new title better matches the contents.
II. The amended version adds procedural provisions on the engagement and dismissal of arbitrators. See Articles 3, 4, 5 and 10. Article 10 provides that “in the event that BAC decides not to re-engage an arbitrator , it shall notify the arbitrator of such in writing”; and “in the event that BAC decides to dismiss an arbitrator, it shall notify the arbitrator of such in writing and explain the reasons for its action”. The contents in the notification to an arbitrator not to be reengaged and that to one to be dismissed are different. This is because arbitrator is not a career or right, and the engagement of an arbitrator depends on the considerations of an arbitration commission according to the needs in its work. The criteria for the engagement of arbitrators are not absolute and immutable, but are constantly evolving with the improvement of the legal awareness of the public and the updating of laws, regulations and knowledge. Meeting the criteria in the past does not mean meeting the current criteria. Therefore it is normal not to re-engage an arbitrator. One that is not an arbitrator does not mean that he/she is not an expert and scholar in a professional field. In contrast, the dismissal of an arbitrator requires prudence as it will affect the reputation of the arbitrator concerned. Therefore the arbitration commission should not only explain reasons but also go through certain procedures of review and approval when dismissing an arbitrator.
III. Corresponding to the amendment to the Ethical Standards, the Administrative Measures adjust the original Paragraph 3 of Article 9. First, quantitative standards are made on those quantifiable behaviors. For example, Items 2, 4, 5 and 7 specify the times of arriving late and leaving early as well as the number of days of delay. Second, the original time limit is shortened. For example, the text “causing an arbitration case to exceed the stipulated time limit by 3 months without any justifiable reason” in Item 8 is amended to “causing an arbitration case to exceed the stipulated time limit by 2 months or more without any justifiable reason”. Third, the amended version adds provisions on the breaches of the Ethical Standards that are not in the circumstances requiring dismissal. For example, checking or using a mobile phone or pager during hearing (Item 3), failure to inform absence as required (Item 6,), and failure to attend, without any justifiable reason, case-related activities such as private sittings of the tribunal or investigations (Item 11,). In the original circumstances of “lack of skills and competence of case handling”, the circumstance of “failing to play a normal role in the tribunal due to lack of familiarity with the law or the technical knowledge relating to the case” is added. This is a constraint corresponding to the breaches of Paragraph 1, Article 6 of the new Ethical Standards. Of course, this also requires the secretary to give as many details as possible on the professional issues involved when introducing the case to an arbitrator, so that the arbitrator may consider them.