4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM FINALITY, FAIRNESS, AND CONSISTENCY: STRIKING A BALANCE IN ICSID ANNULMENT PROCEEDINGS CONCERNING ARBITRATOR BIAS Andrew T. Connery* A unique feature of the ICSID framework is the built-in con- trol mechanism that allows parties to seek annulment of an otherwise final award via Article 52 of the Convention. Unlike arbitration in other contexts, this mechanism is the exclusive means for review of an ICSID award. While scholars and prac- titioners regard this as one of the most innovative features of the ICSID regime, many of the grounds for annulment remain underdeveloped. In particular, annulment committees have applied the “serious departure from a fundamental rule of pro- cedure” ground inconsistently. Especially because challenges to arbitrators can occur dur- ing the appointment phase, during the arbitration itself, or during annulment proceedings, the proper standard for deter- mining bias remains convoluted. Accordingly, this Note exam- ines how different approaches to assessing arbitrator bias un- fold in annulment proceedings applying the “fundamental rule of procedure” ground. It argues that these differences have con- tributed to a greater number of unpredictable outcomes, under- mining a central purpose of ICSID. Two recent decisions—the Azurix and EDF annulments—highlight the divergent ap- proaches ad hoc committees have taken in addressing * J.D. Candidate 2020, Columbia Law School; M.A. 2013, Yale University; B.A. 2013, Yale University. I want to extend my sincerest gratitude to Profes- sor George Bermann for his contributions and comments, the members of the Columbia Business Law Review editorial staff for their work preparing this piece for publication, and the Columbia Jessup team for continued camarade- rie and inspiration. Finally, I wish to express deep thanks to my friends and family for their unwavering support throughout law school. 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 288 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 allegations of bias. This Note concludes by identifying the EDF approach as the most appropriate standard of review and dis- cusses possible routes for resolving differences in ICSID annul- ment decisions. I. Introduction ...................................................................... 289 II. Arbitration & Annulment Under the ICSID Convention .................................................................................... 291 A. The ICSID Convention & Arbitral Procedure....... 292 1. The Creation and Purpose of ICSID ............... 292 2. Procedure for Initiating Arbitration and Annulment Proceedings ................................. 294 3. Ad hoc Committee Sources of Law & Precedent ........................................................ 297 B. Scope of Review and Grounds for Annulment Under the ICSID Convention ......................................... 298 1. Scope of Review ............................................... 299 2. Grounds for Annulment .................................. 300 i. Independence and Impartiality of Arbitrators as a Fundamental Rule ............................ 302 ii. Lack of Independence or Impartiality Distinct from Corruption .......................... 305 III. Conflicting Standards for Assessing Arbitrator Bias ... 306 A. Challenging and Disqualifying Arbitrators .......... 306 1. Challenging an Arbitrator under the ICSID Rules ............................................................... 307 2. Competing Standards for Resolving Arbitrator Challenges .................................... 308 B. How Serious is “Serious?” ..................................... 312 C. Three Approaches to Reviewing Disqualification Decisions .............................................................. 316 IV. Resolving the Annulment Committee Approaches ....... 322 A. The Need for Consistency ...................................... 322 B. Reconciling the Conflicting Approaches ............... 325 1. The Azurix Approach is Overly Restrictive..... 326 2. The EDF Approach Best Balances Annulment Committee Goals ......................... 328 i. Consistency with the ICSID Convention’s Mandates .................................................. 328 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 289 ii. Minimizing Unpredictability & Uncertainty ................................................................... 330 C. Implementing a Consistent Approach .................. 333 V. Conclusion ....................................................................... 335 I. INTRODUCTION Since its creation more than fifty years ago,1 the Interna- tional Centre for Settlement of Investment Disputes (“ICSID”) has grown from the brainchild of a group of World Bank econ- omists to the dominant institution for investor-state arbitra- tion.2 Claims before ICSID tribunals frequently involve high- profile corporations and billions of dollars in damages.3 Such claims typically arise when an investor alleges a state breached a contract or violated an applicable investment treaty, often by expropriating assets or failing to treat an in- vestor fairly and equitably.4 A unique feature of the ICSID framework is the built-in control mechanism that allows par- ties to seek annulment of an otherwise final award via Article 52 of the Convention.5 While drafters of the relevant provision 1 See Convention on the Settlement of Investment Disputes between States and Nationals of Other States, Mar. 18, 1965, 17 U.S.T. 1270 [here- inafter ICSID Convention]. 2 See ANTONIO R. PARRA, THE HISTORY OF ICSID 267 (2d ed. 2017); see also GUS VAN HARTEN, INVESTMENT TREATY ARBITRATION AND PUBLIC LAW 27 (2007). 3 See, e.g., TransCanada Corp. v. United States, ICSID Case No. ARB/16/21, Request for Arbitration, ¶¶ 1, 91 (June 24, 2016) (seeking dam- ages of more than $15 billion after the United States refused to approve TransCanada’s application for the Keystone XL pipeline); Occidental Petro- leum Corp. v. Republic of Ecuador, ICSID Case No. ARB/06/11, Decision on Annulment of the Award, ¶¶ 585–86, 590 (Nov. 2, 2015) (partially annulling an award of more than $2 billion). 4 See LUCY REED ET AL., GUIDE TO ICSID ARBITRATION 74–75, 88–89 (2d ed. 2010); Irene M. Ten Cate, International Arbitration and the Ends of Ap- pellate Review, 44 N.Y.U. J. INT’L L. & POL. 1109, 1112 (2012) (noting that investment arbitration disputes, as opposed to disputes in commercial arbi- tration, “involve claims against state party respondents concerning their in- terference with investments made by foreign investors”). 5 Hi-Taek Shin, Annulment, in BUILDING INTERNATIONAL INVESTMENT LAW: THE FIRST 50 YEARS OF ICSID 699, 699 (Meg Kinnear et al. eds., 2016). 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 290 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 viewed inclusion of this mechanism as essential to reconciling finality with a need to prevent flagrant cases of injustice,6 the mechanism has proved controversial since its inception. Con- flicts over the annulment mechanism became especially pro- nounced after an ad hoc committee nullified an award for the first time in the 1980s.7 One ground for annulment, the “serious departure from a fundamental rule of [arbitral] procedure,”8 is generally under- studied. While scholars have vigorously debated the appropri- ate level of annulment review more broadly, and specifically the scope of merits review during annulment,9 the question of how “serious” a departure must be to warrant annulment has received less attention. This is particularly so with respect to annulment sought on the basis of an impermissible level of arbitrator bias. In the past thirty years, ad hoc committees have not developed a consistent approach to interpreting Ar- ticle 52.10 These differences in interpretation have contributed to unpredictable outcomes which have generated significant controversy, undermining a central purpose of ICSID.11 Fu- ture committees should take note of these emerging inconsist- encies and seek to provide a greater degree of certainty. In- deed, some have suggested that ad hoc committees themselves are best situated to adjust standards of review, change inter- pretations over time, and provide a greater degree of certainty 6 Silvia M. Marchili & Sara McBrearty, Annulment of ICSID Awards: Recent Trends, in ICSID CONVENTION AFTER 50 YEARS: UNSETTLED ISSUES 427, 427 (Crina Baltag ed., 2017). 7 See W. Michael Reisman, The Breakdown of the Control Mechanism in ICSID Arbitration, 4 DUKE L.J. 739, 760–61 (1989); Aron Broches, Obser- vations on the Finality of ICSID Awards, 6 ICSID REV. 321, 321 (1991); Christoph Schreuer, From ICSID Annulment to Appeal: Half Way Down the Slippery Slope, 10 LAW & PRAC. INT’L CTS. & TRIBUNALS 211, 212–13, 215–17 (2011); R. DOAK BISHOP & SILVIA M. MARCHILI, ANNULMENT UNDER THE IC- SID CONVENTION ¶¶ 4.15–4.18 (2012). 8 ICSID Convention, supra note 1, art. 52. 9 See Schreuer, supra note 7, at 215–21. 10 Nikolaos Tsolakidis, ICSID Annulment Standards: Who Has Finally Won the Reisman v. Broches Debate of Two Decades Ago?, in RESHAPING THE INVESTOR-STATE DISPUTE SETTLEMENT SYS.: JOURNEYS FOR THE 21ST CEN- TURY 828, 849 (Jean E. Kalicki & Anna Joubin-Bret eds., 2015). 11 See Reisman, supra note 7, at 749–50. 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 291 for parties.12 By doing so, ad hoc committees can promote sta- bility in the way awards are assessed and provide a greater level of reliability to states and investors. This Note proceeds in five parts. Part II of this Note exam- ines the steps parties must take to initiate ICSID review pro- ceedings and discusses the grounds for annulment, including a “serious departure from a fundamental rule of [arbitral] pro- cedure,” as listed in Article 52 of the ICSID Convention.13 Part III contextualizes the open questions relating to the appropri- ate ICSID standard of review in decades-old debates, and dis- cusses several distinct approaches to determining what con- stitutes a “serious departure” with respect to arbitrator bias.14 Part IV argues inconsistent standards of review undermine predictability and stability in investment arbitration and an- alyzes possible mechanisms for resolving the differences be- tween the standards. Finally, Part V offers concluding thoughts. II. ARBITRATION & ANNULMENT UNDER THE ICSID CONVENTION This Section begins by reviewing the origins and purposes of the ICSID Convention. It next briefly traces the procedural mechanisms by which arbitration and annulment take place when conducted pursuant to ICSID rules. It then outlines the limited bases for annulling an arbitral award and details the unique features of arbitration conducted under ICSID auspi- ces. 12 See Tsolakidis, supra note 10, at 851. 13 ICSID Convention, supra note 1, art. 52. 14 Although there are many procedural elements of arbitration for which these questions are relevant, this Note focuses only on arbitrator bias. 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 292 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 A. The ICSID Convention & Arbitral Procedure 1. The Creation and Purpose of ICSID In 1965, World Bank staff completed work on the Conven- tion on the Settlement of Investment Disputes between States and Nationals of Other States (“the Convention”), which cre- ated ICSID.15 By October of the following year, twenty nation- states had ratified the Convention and it entered into force.16 Today, more than 150 states are members of ICSID,17 now a cornerstone of international investment arbitration and de- scribed as “the premier international investment arbitration facility in the world.”18 In large part, the creators of ICSID sought to establish an independent and neutral mechanism for resolving competing legal claims in investment disputes.19 The ICSID Convention is the most common framework for investor-state arbitration.20 More than 60% of all such 15 INT’L CTR. FOR SETTLEMENT OF INV. DISPUTES, 1 HISTORY OF THE IC- SID CONVENTION 2, 8–10 (1970). 16 Id. at 10. 17 See Database of ICSID Member States, INT’L CTR. FOR SETTLEMENT INV. DISP. (Nov. 12, 2019), https://icsid.worldbank.org/en/Pages/about/Data- base-of-Member-States.aspx [https://perma.cc/8S8Q-PTPT]. Nine states have signed but not ratified the Convention. Id. 18 PARRA, supra note 2, at 267 (internal quotation marks omitted) (foot- note omitted). 19 Catherine A. Rogers, The Politics of International Investment Arbi- trators, 12 SANTA CLARA J. INT’L L. 223, 226 (2013); Stephan W. Schill, Pri- vate Enforcement of International Investment Law: Why We Need Investor Standing in BIT Dispute Settlement, in THE BACKLASH AGAINST INVESTMENT ARBITRATION: PERCEPTIONS AND REALITY 29, 31 (Michael Waibel et al. eds., 2010); MARIA NICOLE CLEIS, THE INDEPENDENCE AND IMPARTIALITY OF ICSID ARBITRATORS: CURRENT CASE LAW, ALTERNATIVE APPROACHES, AND IMPROVE- MENT SUGGESTIONS 3 (2017). 20 See U.N. Comm’n on Int’l Trade Law (UNCITRAL), Possible Reform of Investor-State Dispute Settlement (ISDS), U.N. Doc. A/CN.9/WG.III/WP.143, ¶ 1 (2017), http://www.uncitral.org/pdf/eng- lish/workinggroups/wg_3/WGIII-34th-session/143-e.pdf [https://perma.cc/C3MQ-34EB] (noting the percentage may be as high as seventy percent); Investment Dispute Settlement Navigator, UNITED NA- TIONS CONF. TRADE & DEV. (UNCTAD) INV. POL’Y HUB (Apr. 22, 2019), https://investmentpolicyhub.unctad.org/ISDS/FilterByRulesAndInstitution 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 293 arbitrations take place under ICSID auspices,21 while the next most frequently used set of rules, the United Nations Com- mission on International Trade Law (“UNCITRAL”) Arbitra- tion Rules, are used only about half as often.22 The Permanent Court of Arbitration (the “PCA”) and Stockholm Chamber of Commerce (the “SCC”) are active in arbitration generally, but do not administer nearly as many investor-state disputes as ICSID.23 By its very nature, ICSID offers an attractive forum for in- vestors and states alike. For one, ICSID is a specialized facil- ity tailored to investment disputes.24 ICSID provides the effi- ciency and finality private entities seek when taking recourse to arbitration, with the added benefit of possessing a self-con- tained control mechanism.25 Since domestic courts cannot an- nul or otherwise review ICSID awards,26 parties to ICSID [https://perma.cc/VBS7-T438] (indicating, as of April 2020, that more than 600 of about 1,000 arbitrations—slightly more than sixty percent of inves- tor-state arbitrations—took place pursuant to ICSID or ICSID Additional Facility rules). 21 Of the roughly 850 known Investor-State Dispute Settlement cases, more than 500 have been registered under ICSID. Compare UNCTAD, IN- VESTOR-STATE DISPUTE SETTLEMENT: REVIEW OF DEVELOPMENTS IN 2017 2, 2 fig.1 (2018), with INT’L CTR. FOR SETTLEMENT OF INV. DISPUTES (ICSID), UP- DATED BACKGROUND PAPER ON ANNULMENT FOR THE ADMINISTRATIVE COUN- CIL OF ICSID ¶ 31 (2016) [hereinafter UPDATED BACKGROUND PAPER]. 22 See Investment Dispute Settlement Navigator, supra note 20 (indi- cating roughly 310 of about 980 arbitrations—or about thirty percent—take place using UNCITRAL rules). 23 See id. (indicating roughly 50 of about 980 arbitrations—or about five percent—take place using PCA and SCC rules). 24 Crina Baltag, The ICSID Convention: A Successful Story – The Ori- gins and History of the ICSID, in ICSID CONVENTION AFTER 50 YEARS: UN- SETTLED ISSUES 1, 22–23 (Crina Baltag ed., 2017). 25 Reisman, supra note 7, at 750–55. 26 Albert Jan van den Berg, Should the Setting Aside of the Arbitral Award be Abolished?, 29 ICSID REV. 263, 283–84 (2014). Although the Mic- ula case has recently generated controversy with respect to the enforcement of awards in the European Unions, such issues are outside the scope of this Note. See generally Christian Tietje & Clemens Wackernagel, Enforcement of Intra-EU ICSID Awards: Multilevel Governance, Investment Tribunals and the Lost Opportunity of the Micula Arbitration, 16 J. WORLD INV. & TRADE 205 (2015). 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 294 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 arbitration have a greater degree of certainty regarding a tri- bunal’s decision. Particularly for investors, the fact that the Convention contains no requirement to exhaust local reme- dies sets the framework apart from alternatives.27 Addition- ally, the Convention allows parties to enforce awards in any Contracting State,28 providing an even greater degree of final- ity and efficiency than might be expected in commercial arbi- tration.29 Practically speaking, the increasing reliance on IC- SID is also due to a greater number of bilateral investment treaties explicitly providing for arbitration administered by ICSID.30 2. Procedure for Initiating Arbitration and Annulment Proceedings Of course, annulment cannot take place without an award to nullify. Accordingly, it is necessary to recount the basic steps in undertaking arbitration in the ICSID framework.31 Arbitration begins when either a state or a national of a con- tracting state requests to institute proceedings, the Secretary- General of ICSID duly registers the request, and a tribunal (usually consisting of three members) is constituted.32 Pro- ceedings before the tribunal usually include two rounds of written pleadings followed by a round of oral proceedings.33 27 Helnan Int’l Hotels A/S v. Arab Republic of Egypt, ICSID Case No. ARB/05/19, Decision of the Ad Hoc Committee, ¶ 9 (June 14, 2010) (“An IC- SID tribunal may not decline to make a finding of breach of treaty on the ground that the investor ought to have pursued local remedies . . . .”). 28 A Contracting State is a State that has ratified the ICSID Conven- tion. See ICSID Convention, supra note 1, preamble. 29 See Baltag, supra note 24, at 22. 30 Andrew P. Tuck, Investor-State Arbitration Revised: A Critical Anal- ysis of the Revisions and Proposed Reforms to the ICSID and UNCITRAL Arbitration Rules, 13 LAW & BUS. REV. AM. 885, 886 (2007). 31 For a thorough account of instituting and completing an arbitration under ICSID rules, see REED ET AL., supra note 4, at 123–57. 32 See ICSID Convention, supra note 1, arts. 36–40. 33 Written Procedure — ICSID Convention Arbitration, INT’L CTR. FOR SETTLEMENT OF INV. DISPS., https://icsid.worldbank.org/en/Pages/pro- cess/Written-Procedure-Convention-Arbitration.aspx [https://perma.cc/RJ7M-ALKY]; Oral Procedure — ICSID Convention 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 295 Hearings officially end when the tribunal declares a formal closure, though in many cases parties submit post-hearing briefs to elaborate on relevant arguments.34 After delibera- tions, the tribunal reaches its decision by majority vote and renders a final, non-appealable award.35 Though the ICSID Convention precludes appealing an award, some recourse is available through annulment pro- ceedings; this form of relief, however, is often characterized as an exceptional remedy.36 As professor and arbitral expert Christoph Schreuer put it, annulment “is fundamentally dif- ferent from appeal . . . [in that it is] not concerned with its substantive correctness” and instead is “based on a limited number of fundamental standards.”37 Either party may seek this remedy by submitting an application for annulment.38 Notably, parties may not request annulment of any aspect of the award, including decisions on jurisdiction or arbitrator disqualification requests, until the tribunal issues the final award.39 With one exception, the party requesting annulment must file an application with the ICSID Secretary-General Arbitration, INT’L CTR. FOR SETTLEMENT OF INV. DISPS., https://ic- sid.worldbank.org/en/Pages/process/Oral-Procedure-Convention-Arbitra- tion.aspx [https://perma.cc/G3FK-VG4S]. 34 Joongi Kim, Streamlining the ICSID Process: New Statistical In- sights and Comparative Lessons from Other Institutions, in RESHAPING THE INVESTOR-STATE DISPUTE SETTLEMENT SYSTEM: JOURNEYS FOR THE 21ST CEN- TURY 718, 724–25 (Jean E. Kalicki & Anna Joubin-Bret eds., 2015). 35 ICSID Convention, supra note 1, arts. 48, 53; INT’L CTR. FOR SETTLE- MENT OF INV. DISPUTES (ICSID), ICSID CONVENTION, REGULATIONS, AND RULES, 99, 127, ICSID Doc. ICSID/15 (2006) [hereinafter ARBITRATION RULES]. 36 See AES Summit Generation Ltd. v. Republic of Hung., ICSID Case No. ARB/07/22, Decision of the Ad Hoc Committee on the Application for Annulment, ¶ 17 (June 29, 2012) (“[A]nnulment is an exhaustive, excep- tional and narrowly circumscribed remedy and not an appeal.”); Sundra Ra- joo, Annulment of Investment Arbitration Awards, in INVESTMENT TREATY ARBITRATION REVIEW 211, 211 (Barton Legum ed., 2d ed. 2017). 37 Schreuer, supra note 7, at 212. 38 ICSID Convention, supra note 1, art. 52. 39 UPDATED BACKGROUND PAPER, supra note 21, ¶ 30; Aron Broches, Observations on the Finality of ICSID Awards, in SELECTED ESSAYS: WORLD BANK, ICSID, AND OTHER SUBJECTS OF PUBLIC AND PRIVATE INTERNATIONAL LAW 295, 302 (1995). 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 296 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 within 120 days of the date of the relevant award.40 Parties must “state in detail” the grounds of an application, with ref- erence to Article 52 of the Convention.41 The singular excep- tion to this procedure applies when a party invokes corruption as a ground for annulment, as explained in more detail be- low.42 Once either party successfully registers an application, the Chairman of the Administrative Council will appoint a three- member ad hoc committee from the ICSID Panel of Arbitra- tors.43 Once annulment proceedings commence, the ad hoc committee operates under the same rules as the preceding ar- bitration, with the ICSID Arbitration Rules applied mutatis mutandis.44 Typically, annulment procedures mirror those of the initial arbitration, with preliminary discussions of proce- dural matters, filing of memorials and counter-memorials, oral hearings, and a subsequent decision by the committee.45 Once rendered, an annulment decision is final and binding, and no party may appeal the decision or seek further annul- ment proceedings.46 Importantly, state courts cannot inter- vene in proceedings under ICSID auspices or set aside ICSID awards—the ad hoc committee possesses exclusive authority to annul an award.47 40 See ICSID Convention, supra note 1, art. 52(2). 41 ARBITRATION RULES, supra note 35, at 124. 42 See infra Section II.B.2.ii. 43 ICSID Convention, supra note 1, art. 52(3). For details as to who may be appointed to the Panel of Arbitrators, and how long they may serve see id. arts. 12–16. The Administrative Council is the governing body of IC- SID and the Panel of Arbitrators is a limited group of arbitrators deter- mined to possess the necessary qualifications for serving on tribunals and ad hoc Committees. Id. arts. 3–7, 12–14. 44 ARBITRATION RULES, supra note 35, at 126. In other words, the same procedural rules generally apply in arbitration proceedings and annulment proceedings, taking into account necessary adjustments. 45 UPDATED BACKGROUND PAPER, supra note 21, ¶¶ 50–51, 59–62. 46 See ICSID Convention, supra note 1, art. 53. 47 See id. arts. 53–54. For background on this prohibition on state court intervention, see Reisman, supra note 7, at 750–51 (noting one of the driving forces of the ICSID regime was avoiding national court systems). 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 297 3. Ad hoc Committee Sources of Law & Precedent In formulating decisions, ad hoc committees must consider whether the arbitral tribunal ran afoul of any grounds in Ar- ticle 52 of the Convention. To do so requires answering com- plicated legal questions and in turn, often requires commit- tees to evaluate vague terms like “serious” and “fundamental.”48 While national courts in common law juris- dictions may be required to abide by precedent, no such re- striction exists for either ICSID arbitration tribunals or ad hoc committees.49 However, ICSID ad hoc committees reference “judicial de- cisions” to determine applicable rules of law, just as the Inter- national Court of Justice (the “ICJ”) does pursuant to Article 38(1)(d) of its statute.50 In an implicit reference to the ICJ’s statute, the ICSID Convention calls upon tribunals (and ad hoc committees, mutatis mutandis) to apply “rules of interna- tional law” in the absence of agreement by the parties.51 In many instances, tribunals and ad hoc committees have called for the consistent application of case law and convergence of investment case law.52 Some arbitral tribunals have even ex- plicitly made decisions to stay in line with important prece- dents of previous ICSID tribunals.53 As one scholar noted, “core legal concepts of international investment law . . . only 48 See ICSID Convention, supra note 1, art. 52(1)(d). 49 Alain Pellet, 2013 Lalive Lecture: The Case Law of the ICJ in Invest- ment Arbitration, 28 ICSID REV. 223, 227 (2013). 50 Id.; Statute of the International Court of Justice, art. 38(1)(d), June 26, 1945, 59 Stat. 1055, 33 U.N.T.S. 933. 51 ICSID Convention, supra note 1, art. 42(1); Pellet, supra note 49, at 227. 52 Saipem SpA v. People’s Republic of Bangl., ICSID Case No. ARB/05/07, Award, ¶ 90 (June 30, 2009); Quiborax S.A. v. Plurinational State of Bol., ICSID Case No. ARB/06/2, Decision on Jurisdiction, ¶ 46 (Sept. 27, 2012). 53 See Tai-Heng Cheng, Precedent and Control in Investment Treaty Ar- bitration, 30 FORDHAM INT’L L.J. 1014, 1016 (2007); see also El Paso Energy Int'l Co. v. Argentine Republic, ICSID Case No. ARB/03/15, Decision on Ju- risdiction, ¶ 82 (Apr. 27, 2006); Pan American Energy LLC v. Argentine Re- public, Decision on Preliminary Objections, ICSID Case No. ARB/04/8, ¶ 110 (July 27, 2006). 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 298 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 assume a more concretized meaning over time because of the interpretations [of] investment treaty tribunals.”54 Nonetheless, as the tribunal in SGS Société Générale de Surveillance SA v. Republic of the Philippines pointed out, even with an eye toward consistency, different bilateral or multilateral investment treaties will determine the applicable law for different tribunals, and accordingly, each tribunal must make its own independent determinations.55 As the same tribunal went on to note, “there is no doctrine of prece- dent in international law . . . There is no hierarchy of interna- tional tribunals, and . . . there is no good reason for allowing the first tribunal in time to resolve issues for all later tribu- nals.”56 B. Scope of Review and Grounds for Annulment Under the ICSID Convention As of May 2016, a party sought annulment of an award, either in whole or in part, in ninety instances, or nearly 40% of cases.57 However, only fifteen awards—or roughly 6.5%— have been annulled either in full or in part in ICSID’s fifty year history.58 Since May 2016, ad hoc committees have ren- dered annulment decisions in roughly twenty cases, only a fraction of ICSID’s overall caseload.59 54 Stephan W. Schill, System-Building in Investment Treaty Arbitra- tion and Lawmaking, 12 GERMAN L.J. 1083, 1092 (2011). 55 SGS Société Générale de Surveillance SA v. Republic of the Phil. (SGS Philippines), ICSID Case No ARB/02/6, Decision of the Tribunal on Objections to Jurisdiction, ¶ 97 (Jan. 29, 2004), https://www.italaw.com/sites/default/files/case-documents/ita0782.pdf [https://perma.cc/PD6C-ASKF]. 56 Id. 57 See UPDATED BACKGROUND PAPER, supra note 21, ¶ 31. 58 Id. ¶ 111. Five awards have been annulled in full and ten have been partially annulled. Id. 59 Compare id., with Decisions on Annulment, INT’L CTR. FOR SETTLE- MENT OF INV. DISPS. (Jan. 23, 2019), https://ic- sid.worldbank.org/en/Pages/Process/Decisions-on-Annulment.aspx [https://perma.cc/P6YJ-QDHX]. 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 299 1. Scope of Review Article 51 of the Convention allows parties to request revi- sion of an award, but only when a party discovers previously unknown facts that would decisively affect the award.60 By implication, annulment is not meant to correct factual inaccu- racies that may have affected the award; rather, annulment is meant to cure problems related to the underlying fairness of the proceedings. Importantly, seeking annulment is not tantamount to seeking an appeal, as in the domestic courts of many states. As one recent ad hoc committee noted in its annulment deci- sion, a committee’s mandate “is strictly circumscribed by the five grounds for annulment listed under the ICSID Conven- tion and it may not . . . reverse an award on the merits.”61 Some ad hoc committees have even found that annulment does not function as a cure for an “incorrect” decision, and that Article 52 does not provide a mechanism to annul an award based on the merits.62 In the wake of the earliest ad hoc com- mittee annulment decisions, scholars such as Michael Reis- man noted Article 52 should not provide a “hair-trigger” for annulment, requiring an ad hoc committee to automatically annul a defective award “without regard to the magnitude of the defect.”63 The notion that a committee has discretion to decline to annul an award even if it finds one of the Article 52 grounds satisfied is now regarded as settled law.64 The inclusion of a mechanism explicitly created to seek an- nulment of an award for a potential substantive or procedural defect—as opposed to simple typographical or unintentional errors—sets the ICSID framework apart.65 While the UN- CITRAL Arbitration Rules provide a comprehensive set of 60 ICSID Convention, supra note 1, art. 51(1). 61 TECO Guat. Holdings, LLC v. Republic of Guat., ICSID Case No. ARB/10/23, Decision on Annulment, ¶ 73 (Apr. 5, 2016). 62 Maritime Int’l Nominees Establishment v. Republic of Guinea (MINE), ICSID Case No. ARB/84/4, Decision on the Application by Guinea for Partial Annulment, ¶ 5.08 (Dec. 14, 1989), 5 ICSID REV. 95 (1990). 63 Reisman, supra note 7, at 762. 64 Tsolakidis, supra note 10, at 847–48. 65 See Reisman, supra note 7, at 753–54. 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 300 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 procedural rules, they contain no provisions analogous to the ICSID Convention’s Article 52. Instead, the UNCITRAL rules allow parties to seek annulment in the seat of arbitration.66 Notably, the UNCITRAL Model Law, which serves as a guide for states implementing rules for international commercial ar- bitration, includes provisions more specific than ICSID’s Arti- cle 52.67 The UNCITRAL Model Law’s provision most analo- gous to ICSID’s Article 52(1)(d) indicates an award may be set aside if “arbitral procedure was not in accordance with the agreement of the parties.”68 Like the UNCITRAL Arbitration Rules, the rules of other major international arbitration cen- ters lack language similar to ICSID’s Article 52.69 2. Grounds for Annulment The Convention allows for five grounds on which parties can seek annulment of an award: (a) the tribunal was improp- erly constituted; (b) the tribunal manifestly exceeded its pow- ers; (c) there was corruption on the part of a member of the tribunal; (d) there was a serious departure from a fundamen- tal rule of procedure; or (e) the tribunal failed to state the rea- sons for its award.70 These grounds comprise the exhaustive 66 G.A. Res. 31/98, art. 36 (Dec. 15, 1976). 67 Compare U.N. COMM’N ON INT’L TRADE LAW (UNCITRAL), UN- CITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL ARBITRATION, art. 34(2), U.N. Sales No. E.08.V.4 (2008), with ICSID Convention, supra note 1, art. 52(1). 68 ICSID Convention, supra note 1, art. 34(2)(a)(iv). 69 See, e.g., PERMANENT COURT OF ARBITRATION, ARBITRATION RULES 2012, art. 38 (2012), https://pca-cpa.org/wp-content/up- loads/sites/6/2015/11/PCA-Arbitration-Rules-2012.pdf [https://perma.cc/AC3K-CDA7]; ARBITRATION INST. OF THE STOCKHOLM CHAMBER OF COMMERCE, 2010 ARBITRATION RULES, art. 41 (2010), https://sccinstitute.com/media/40120/arbitrationrules_eng_webbver- sion.pdf [https://perma.cc/9Q63-Y8HR]; INT’L CHAMBER OF COMMERCE, ARBI- TRATION RULES & MEDIATION RULES, art. 36 (2019), https://cdn.ic- cwbo.org/content/uploads/sites/3/2017/01/ICC-2017-Arbitration-and-2014- Mediation-Rules-english-version.pdf [https://perma.cc/2RCQ-J5GQ]. 70 ICSID Convention, supra note 1, art. 52(1). 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 301 list of permissible grounds for annulment.71 In practice, par- ties seeking annulment often invoke multiple grounds in a single annulment request.72 Specifically in alleging a serious departure from a fundamental rule of arbitral procedure, a party aware of such a violation must react promptly by raising an objection to the practice; failing to do so will waive the party’s right to raise such a claim in later annulment proceed- ings.73 While initial drafts of the Convention contained no such provisions, later versions drew on the 1953 draft of what would become the International Law Commission’s (the “ILC”) Model Rules for Arbitral Procedure.74 In part, this his- tory of Article 52 helps explain why ICSID ad hoc committees have frequently looked to the jurisprudence of the ICJ, other international courts, and the ILC when determining how best to resolve procedural questions in annulment proceedings.75 71 CEAC Holdings Ltd. v. Montenegro, ICSID Case No. ARB/14/08, De- cision on Annulment, ¶ 83 (May 1, 2018); see also Markus Burgstaller & Charles B. Rosenberg, Challenging International Arbitral Awards: To IC- SID or Not to ICSID?, 27 ARB. INT’L 91, 93 (2011). 72 CHRISTOPH H. SCHREUER ET AL., THE ICSID CONVENTION: A COMMEN- TARY 933 (2d ed. 2009) (“One of the most widely accepted strategic principles of litigation is to seek a remedy not by a single shot method but by a shrap- nel tactic whereby a multitude of arguments is fired off simultaneously in the hope that at least one of them will score a hit. Although one of the grounds listed in Art. 52(1) [of the ICSID Convention] would be sufficient to cause the award’s annulment, the applicants typically list several of them.”). 73 RUDOLF DOLZER & CHRISTOPH SCHREUER, PRINCIPLES OF INTERNA- TIONAL INVESTMENT LAW 283–84 (2008); Klöckner v. Republic of Cameroon (Klöckner I), ICSID Case No. ARB/81/2, Decision of the Ad Hoc Committee, ¶ 88 (May 3, 1985), 1 ICSID REV. 89 (1986). 74 U.N. INT’L LAW COMM’N, DOCUMENTS OF THE FIFTH SESSION INCLUD- ING THE REPORT OF THE COMMISSION TO THE GENERAL ASSEMBLY, at 211, U.N. Doc. A/CN.4/SER.A/1953/Add.1, U.N. Sales No. 59.V.4.Vol.II (1959). Vari- ous drafts of the ICSID Convention also drew on debate of the ILC Model Rules and the accompanying commentary. See UPDATED BACKGROUND PA- PER, supra note 21, ¶¶ 7–9. 75 See Pellet, supra note 49, at 230. See, e.g., Klöckner I, ICSID Case No. ARB/81/2, ¶ 61 (referring to arguments made before the International Court of Justice in Arbitral Award Made by the King of Spain on 23 Decem- ber 1906 (Hond./Nicar.), Judgment, 1960 I.C.J. REP. 192 (Nov. 18)). 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 302 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 For instance, decisions of interstate arbitral bodies, such as the high profile 2016 Croatia-Slovenia arbitration and its rul- ing on jurisdictional challenges in the wake of a scandal re- lated to arbitrator impartiality,76 have greatly influenced the thinking of international arbitrators.77 i. Independence and Impartiality of Arbitrators as a Fundamental Rule While considerable attention has been devoted to the “ex- cess of powers” ground for annulment in Article 52(1)(b), the “serious departure from a fundamental rule of procedure” ground in Article 52(1)(d) has attracted less discussion, at least in the context of impermissible arbitrator bias.78 Though “fundamental rules” are slippery concepts, multiple ad hoc committees have dealt with the term and indicated fundamen- tal rules are those that relate to the “essential fairness” of ar- bitration.79 As one committee described them, “[f]undamental rules of procedure are procedural rules that are essential to the integrity of the arbitral process and must be observed by all ICSID tribunals.”80 ICSID tribunals and ad hoc committees have described the equal treatment of the parties, the right to be heard, the right to rebuttal, the deliberation of tribunal 76 See The Republic of Croat. v. The Republic of Slovn. (Croat. v. Slovn.), PCA Case No. 2012-04, Partial Award on Jurisdiction (Perm. Ct. Arb. 2016), https://pcacases.com/web/sendAttach/1787 [https://perma.cc/5HVY-8WW5]. 77 Judith Levine, Ethical Dimensions of Arbitrator Resignations: Gen- eral Duties, Specific Quandaries, and Sanctions for Suspect Withdrawals, 18 LAW & PRAC. INT’L CTS. & TRIBUNALS 55, 69 (2019) (noting one commen- tator’s praise of the Croatia-Slovenia tribunal for the steps it took to salvage its legitimacy). 78 See supra notes 5–11 and accompanying text. 79 CDC Group plc v. Republic of Sey. (CDC), ICSID Case No. ARB/02/14, Annulment Decision, ¶ 49 (June 29, 2005); see also Daimler Fin. Servs. A.G. v. Republic of Arg., ICSID Case No. ARB/05/1, Decision on An- nulment, ¶ 265 (Jan. 7, 2015) (noting fundamental rules are principles of natural justice). 80 Victor Pey Casado, ICSID Case No. ARB/98/2, Decision on the Ap- plication for Annulment of the Republic of Chile, ¶ 73 (Dec. 18, 2012). 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 303 members, and the proper handling of evidence, among others, as fundamental rules of procedure.81 The right to impartial and independent adjudicators is un- questionably a fundamental rule of arbitral procedure that has arisen before ICSID ad hoc committees and other interna- tional arbitral tribunals.82 This principle is partially reflected in Article 14 of the ICSID Convention, which sets out stand- ards for arbitrator qualifications.83 Scholars generally define “independence” as the absence of an actual, identifiable rela- tionship with one of the disputing parties.84 “Impartiality,” as a distinct concept, requires arbitrators to lack any subjective predisposition toward one party or its argument.85 While some decisions interpret the two concepts as functionally “equiva- lent,”86 the consensus is that the two are distinct.87 Historically, there was some expectation that party-ap- pointed arbitrators would serve as advocates for the relevant 81 See, e.g., Total S.A. v. Argentine Republic, ICSID Case No. ARB/04/01, Decision on Annulment, ¶¶ 309, 314 (Feb. 1, 2016); Malicorp Ltd. v. Arab Republic of Egypt, ICSID Case No. ARB/08/18, Decision on the Application for Annulment of Malicorp Limited, ¶ 36 (July 3, 2013); Tulip Real Estate & Dev. Neth. B.V. v. Republic of Turk., ICSID Case No. ARB/11/28, Decision on Annulment, ¶¶ 80, 145 (Dec. 30, 2015). 82 See Wena Hotels Ltd. v. Arab Republic of Egypt (Wena Hotels), IC- SID Case No. ARB/98/4, Decision on the Application by the Arab Republic of Egypt for Annulment, ¶ 57 (Feb. 5, 2002), 41 I.L.M. 934 (2002); Victor Pey Casado, ICSID Case No. ARB/98/2, ¶ 333. 83 ICSID Convention, supra note 1, art. 14. 84 See Lars Markert, Challenging Arbitrators in Investment Arbitra- tion: The Challenging Search for Relevant Standards and Ethical Guide- lines, 3 CONTEMP. ASIA ARB. J. 237, 243 (2010); Noah Rubins & Bernhard Lauterburg, Independence, Impartiality and Duty of Disclosure in Invest- ment Arbitration, in INVESTMENT & COMMERCIAL ARBITRATION – SIMILARI- TIES AND DIVERGENCES 153, 155 (Christina Knahr et al. eds., 2010). 85 CLEIS, supra note 19, at 21. 86 See, e.g., Urbaser S.A. v. Argentine Republic, ICSID Case No. ARB/07/26, Decision on Claimants’ Proposal to Disqualify Professor Camp- bell McLachlan, Arbitrator, ¶ 38 (Aug. 12, 2010). 87 See, e.g., OPIC Karimum Corp. v. Bolivarian Republic of Venez., IC- SID Case No. ARB/10/14, Decision on the Proposal to Disqualify Professor Philippe Sands, Arbitrator, ¶ 44 (May 5, 2011); Suez v. Argentine Republic (Suez I), ICSID Case No. ARB/03/19, Decision on the Proposal for the Dis- qualification of a Member of the Arbitral Tribunal, ¶ 29 (Oct. 22, 2007). 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 304 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 appointing party.88 However, in both the investor-state and commercial contexts, that view lost support by the second half of the twentieth century.89 Accordingly, an elaborate set of procedures has evolved for assessing potential arbitrator bias, with the possibility of challenging and disqualifying a poten- tial tribunal member if a party can present sufficient evi- dence.90 Even so, there remains uncertainty in how “serious” a departure related to the independence or impartiality of an arbitrator must be to warrant annulment. Some ad hoc com- mittees have interpreted the requirement that arbitrators be impartial as guarding only against misconduct that caused the tribunal to reach a substantially different result,91 while other ad hoc committees have indicated impartiality requires avoiding even the appearance of bias.92 In other cases, ad hoc committees have found a tribunal could cure defects related to arbitrator bias on its own.93 88 W. MICHAEL REISMAN, NULLITY AND REVISION: THE REVIEW AND EN- FORCEMENT OF INTERNATIONAL JUDGMENTS AND AWARDS 478–79 (1971). 89 See Doak Bishop & Lucy Reed, Practical Guidelines for Interviewing, Selecting and Challenging Party-Appointed Arbitrators in International Commercial Arbitration, 14 ARB. INT’L 395, 396, 405–06 (1998); REISMAN, su- pra note 88, at 479 (“[T]he presence of an ‘interested party’ on an interna- tional tribunal is in conflict with widely held notions about the judicial pro- cess.”). 90 See ICSID Convention, supra note 1, arts. 56–58. 91 See Wena Hotels, ICSID Case No. ARB/98/4, Decision on the Appli- cation by the Arab Republic of Egypt for Annulment, ¶ 58 (Feb. 5, 2002), 41 I.L.M. 934 (2002). 92 EDF International S.A. v. Argentine Republic, ICSID Case No. ARB/03/23, Decision on Annulment, ¶ 111 (Feb. 5, 2016) (discussing and adopting an “appearance of bias” standard). 93 Victor Pey Casado, ICSID Case No. ARB/98/2, Decision on Annul- ment, ¶¶ 333–37 (Dec. 18, 2012) (deciding that when an arbitrator imper- missibly shared tribunal materials with one party, the defects in procedure were sufficiently cured once the tribunal dismissed the arbitrator and dis- closed the relevant materials to the other party); see also The Republic of Croat. v. The Republic of Slovn. (Croat. v. Slovn.), PCA Case No. 2012-04, Partial Award on Jurisdiction, ¶¶ 192–95 (Perm. Ct. Arb. 2016) (detailing steps the tribunal took to cleanse itself of bias once arbitrators who engaged in improper behavior had resigned). 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 305 ii. Lack of Independence or Impartiality Distinct from Corruption Finally, it is necessary to point out that whether corruption tainted a tribunal and whether a breach of a fundamental rule occurred due to bias are separate inquiries.94 This is so despite the fact that scholars and practitioners often use “corruption” as shorthand to refer to both conflicts of interest and failures to make appropriate disclosures.95 This difference may seem counterintuitive given the corruption ground for annulment specifically references tribunal members while the fundamen- tal rule ground does not, but no ad hoc committee has ever dealt with corruption as a possible ground for annulment.96 In one instance the corruption of arbitrators was so apparent the tribunal disbanded before rendering an award.97 However, that instance is the exception, not the norm. Importantly, and only for the ground of corruption, the Convention allows a party to apply for annulment up to 120 days after the discovery of the corruption, provided this is no longer than three years after the tribunal rendered the final award.98 However, no party has yet invoked corruption as a ground for annulment in proceedings before an ad hoc com- mittee.99 94 See ICSID Convention, supra note 1, arts. 52(1)(c)–(d). 95 See, e.g., Lawrence W. Newman & David Zaslowsky, When Arbitra- tors Stray: Ex Parte Communications; International Dispute Resolution, N.Y. L.J. ONLINE (Sept. 25, 2015), https://www.law.com/newyorklawjour- nal/almID/1202738088991/When-Arbitrators-Stray-Ex-Parte-Communica- tions/ [https://perma.cc/LU6G-9BJ6]. 96 See ICSID Convention, supra note 1, arts. 52(1)(c)–(d); UPDATED BACKGROUND PAPER, supra note 21, ¶¶ 95–97. 97 J. B. Kelly, The Buraimi Oasis Dispute, 32 INT’L AFF. 318, 320 (1956). 98 ICSID Convention, supra note 1, art. 52(2). 99 UPDATED BACKGROUND PAPER, supra note 21, ¶¶ 96–98. 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 306 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 III. CONFLICTING STANDARDS FOR ASSESSING ARBITRATOR BIAS This Section proceeds in three steps. First, it discusses the basic standards for challenging arbitrators for bias (i.e., a lack of independence or impartiality) and how those standards in- fluence annulment proceedings. Next, it analyzes the conflict- ing standards ad hoc committees have applied when deter- mining whether a departure from a fundamental rule is sufficiently serious to justify annulling an award. Third, it considers these standards and conflicting committee ap- proaches in determining the appropriate standard of review in the context of whether an arbitrator lacked independence and impartiality. A. Challenging and Disqualifying Arbitrators Parties seeking to enforce the requirements of independ- ence and impartiality can do so during the appointment stage, during the actual proceedings, or via annulment proceedings after the arbitration has ended.100 Though this Note focuses on independence and impartiality at the annulment phase, the standards used during the appointment stage and actual arbitration proceedings merit some discussion given that they present the first opportunity to enforce arbitrator obligations of independence and impartiality and can affect which Article 52 grounds are available as a basis for annulment.101 In con- trast, annulment proceedings are a “last resort” and 100 ICSID Convention, supra note 1, arts. 52, 57; CLEIS, supra note 19, at 15. 101 CLEIS, supra note 19, at 15–16. In particular, the standards applied at the appointment stage and during the arbitration can affect whether a party is later able to seek annulment based on improper constitution of the tribunal, an excess of authority, failure to possess the requisite independ- ence and impartiality, or some combination of those grounds. For an illus- trative example, see EDF International S.A. v. Argentine Republic (EDF), ICSID Case No. ARB/03/23, Decision on Annulment, ¶¶ 45–47, 86 (Feb. 5, 2016). 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 307 accordingly are subject to stricter requirements than initial challenge proceedings.102 1. Challenging an Arbitrator under the ICSID Rules Article 14(1) of the ICSID Convention requires that arbi- trators possess “high moral character” and “be relied upon to exercise independent judgment.”103 Article 57, which governs arbitrator challenges, allows a party to challenge an arbitra- tor’s appointment “on account of any fact indicating a mani- fest lack of the qualities required” by Article 14(1).104 In other words, Article 14 establishes standards arbitrators must meet and Article 57 provides the mechanism to challenge an arbi- trator who allegedly lacks the requisite qualities. Once a party has initiated a challenge,105 the other arbitrators on the tribu- nal decide whether to disqualify the challenged member.106 If the remaining members are equally divided or if the proposal concerns either a sole arbitrator or a majority of the tribunal, the Chairman of the ICSID Administrative Council resolves the matter.107 Rule 9 of the ICSID Arbitration Rules addition- ally requires any party challenging an arbitrator to do so “promptly” and at the very least “before the proceeding is de- clared closed.”108 The requirement for a “manifest lack” of independence or impartiality is unique among arbitral body rules.109 As one set of unchallenged arbitrators dealing with a disqualification 102 CLEIS, supra note 19, at 16. In this context, it is especially important to keep in mind that challenge proceedings and annulment proceedings op- erate with different standards. See ICSID Convention, supra note 1, arts. 52(1), 57. 103 ICSID Convention, supra note 1, art. 14(1). 104 Id. art. 57. 105 The terms “challenge,” “challenge proposal,” and “disqualification proposal” are used interchangeably throughout this Note. 106 ICSID Convention, supra note 1, art. 58. 107 Id. 108 ARBITRATION RULES, supra note 35, at 107. 109 SAMUEL ROSS LUTTRELL, BIAS CHALLENGES IN INTERNATIONAL ARBI- TRATION: THE NEED FOR A ‘REAL DANGER’ TEST 247 (2009). 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 308 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 proposal noted in 2010, Article 57 standard is distinct from (and more forgiving than) the “justifiable doubts” standard adopted in the International Bar Association Guidelines on Conflicts of Interest in International Arbitration.110 Though there was some debate concerning the interpretation of the word “manifest,” the modern consensus is that it concerns the ease of perceiving an alleged lack of independence or impar- tiality, not the actual failure to possess those qualities.111 2. Competing Standards for Resolving Arbitrator Challenges In the past thirty-five years, the standard for challenging and disqualifying arbitrators has undergone considerable change.112 The first challenge to an arbitrator took place in Amco Asia Corp. v. Republic of Indonesia (“Amco Asia”), with the decision on disqualification issued in 1982.113 In those pro- ceedings, the deciding arbitrators determined the “mere ap- pearance” of partiality constituted insufficient grounds for 110 Tidewater Inv. v. Bolivarian Republic of Venez. (Tidewater), ICSID Case No. ARB/10/5, Decision on Claimants’ Proposal to Disqualify Professor Brigitte Stern, Arbitrator, ¶ 43 (Dec. 23, 2010). The IBA Guidelines have since been updated, though not with respect to the provisions considered in Tidewater. See INT’L BAR ASS’N, IBA GUIDELINES ON CONFLICTS OF INTEREST IN INTERNATIONAL ARBITRATION (2014). 111 Blue Bank Int’l & Trust (Barb.) Ltd. v. Bolivarian Republic of Venez. (Blue Bank), ICSID Case No. ARB/12/20, Decision on the Parties’ Proposals to Disqualify a Majority of the Tribunal, ¶ 61 (Nov. 12, 2013); see also SCHREUER ET AL., supra note 72, at 938–39 (discussing conflicting inter- pretations of the word “manifest” in Article 52(1)(b) ground for annulment). 112 See Baiju S. Vasani & Shaun A. Palmer, Challenge and Disqualifi- cation of Arbitrators at ICSID: A New Dawn?, 30 ICSID REV. 194, 197 (2015) (“[T]ribunals have had considerable difficulty developing a single standard of disqualification . . . .”). 113 See Amco Asia Corp. v. Republic of Indon. (Amco Asia I), ICSID Case No. ARB/81/1, Decision on the Proposal to Disqualify an Arbitrator (June 24, 1982) (unreported). Though the actual decision on disqualification was unpublished, W. Michael Tupman subsequently detailed the relevant facts and the decision’s analysis. See W. Michael Tupman, Challenge and Disqualification of Arbitrators in International Commercial Arbitration, 38 INT’L & COMP. L.Q. 26, 44–45 (1989). 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 309 disqualification.114 The tribunal members concluded an arbi- trator’s lack of independence or impartiality must be “mani- fest,” which they defined as “highly probable, not just possible or quasi-certain.”115 The Amco Asia decision drew significant criticism.116 In- deed, the next time an arbitrator challenge arose the tribunal members making the decision took a different approach.117 That occurred in annulment proceedings of Compañía de Aguas del Aconquija S.A. v. Argentine Republic (“Vivendi I”), where ad hoc committee members dismissed a challenge to the committee president.118 The committee members viewed Arti- cle 57 as requiring the challenging party to establish facts raising “some reasonable doubt as to the impartiality of the arbitrator or [ad hoc committee] member.”119 Though the com- mittee members determined a challenge could not be upheld based on “mere speculation or inference[,]” they did not adopt a standard of proof requiring a challenger to demonstrate the actual bias of an arbitrator or ad hoc committee member.120 Similarly, in SGS Société Générale S.A. v. Islamic Republic of Pakistan (“SGS Pakistan”), the tribunal members concluded that a challenging party was required to establish facts that “reasonably . . . give rise to the inference that the person chal- lenged clearly may not be relied upon to exercise independent judgment.”121 That is, an Article 57 challenge would fail if it 114 Tupman, supra note 113, at 45. 115 Id. (citing Amco Asia I, ICSID Case No. ARB/81/1) (internal quota- tion marks omitted). 116 Tupman, supra note 113, at 50–51. 117 LUTTRELL, supra note 109, at 250. 118 Compañía de Aguas del Aconquija S.A. v. Argentine Republic (Vi- vendi I), ICSID Case No. ARB/97/3, Decision on the Challenge to the Presi- dent of the Committee, ¶ 28 (Oct. 3, 2001). In that instance, the Respondent challenged an arbitrator after he disclosed that a partner in his law firm had previously advised the Claimant on a question of tax, even though the work was unrelated to the instant case and the arbitrator in question had no involvement in the work. Id. ¶¶ 14–15. 119 Id. ¶ 25. 120 Id. 121 SGS Société Générale S.A. v. Islamic Republic of Pak. (SGS Paki- stan), ICSID Case No. ARB/01/13, Decision on Claimant's Proposal to Dis- qualify Arbitrator, ¶ 20 (Dec. 19, 2002), 8 ICSID REP. 398. In that case, 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 310 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 were “a result of inferences which themselves rest merely on other inferences.”122 In the years since the disqualification decisions in Vivendi I and SGS Pakistan, challenge decisions have adopted stand- ards inconsistently, in some instances applying the stricter test of Amco Asia, in others applying the standard of Vivendi I and SGS Pakistan, and in certain cases referencing both standards but dismissing challenges.123 These differences have contributed to further inconsistency when annulment committees are called upon to determine whether any serious departures from fundamental rules of procedure occurred in tribunal proceedings. Of particular note is the 2013 Blue Bank International & Trust v. Bolivarian Republic of Venezuela (“Blue Bank”) deci- sion, in which the ICSID Chairman determined for annulment it would be sufficient to only establish the appearance of bias or dependence.124 However, the Chairman noted arbitrators or ad hoc committee members making these determinations should use an objective test.125 In the view of the Chairman, the relevant decision maker should base such an objective test on “a reasonable evaluation of the evidence by a third party.”126 Under this test, it would be inadequate that the challenging party alone perceived a lack of independence and Pakistan had appointed J. Christopher Thomas as an arbitrator. Id. ¶ 1. When he was appointed, Thomas disclosed that his firm was on retainer with Mexico and had represented it in several arbitrations before the ICSID Additional Facility. Id. ¶ 6. As the case proceeded, developing facts in an unrelated case made it necessary for the tribunal to resolve the challenge to Thomas’ appointment. See id. ¶¶ 9–10. Specifically, Thomas disclosed that his firm would appear as counsel before a tribunal that included Jan Pauls- son as an arbitrator. Id. Because Paulsson also represented Pakistan as counsel in the instant case, SGS challenged the appointment of Thomas. Id. The tribunal concluded the established facts were not “of such a nature as reasonably to give rise to the inference” necessary to disqualify Thomas as an arbitrator. Id. ¶ 25. 122 Id. ¶ 20. 123 CLEIS, supra note 19, at 35–52. 124 Blue Bank, ICSID Case No. ARB/12/20, Decision on the Parties’ Proposals to Disqualify a Majority of the Tribunal, ¶ 59 (Nov. 12, 2013). 125 Id. ¶ 60. 126 Id. 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 311 impartiality; a reasonable third party would need to agree with the challenging party.127 That position is consistent with the Vivendi I decision and other previous challenge deci- sions.128 Beginning with Blue Bank, a series of eight Article 57 chal- lenges indicated tribunals considering questions of bias were increasingly coalescing around the reasonable doubts stand- ard first articulated in Vivendi I.129 In addition to Blue Bank, two more of these eight decisions resulted in the actual dis- qualification of arbitrators due to an impermissible appear- ance of bias.130 This trend was perhaps in part due to the fact that the ICSID Chairman wrote six of those opinions, clearly applying the same standard and using highly similar lan- guage.131 Subsequent challenge decisions, beginning with the 2015 decision in the Total S.A. v. Argentine Republic annul- ment proceedings,132 have gravitated toward making disqual- ification more difficult and have emphasized that the stand- ard of review under Article 57 is relatively high.133 However, a majority of the challenge decisions since 2015 have involved the same arbitrator and the same arguments for the existence of bias,134 so it is unclear whether the most recent decisions are aberrational or truly represent a trend. 127 Id. 128 See Vivendi I, ICSID Case No. ARB/97/3, Decision on the Challenge to the President of the Committee, ¶ 25 (Oct. 3, 2001); Suez v. Argentine Republic (Suez I), ICSID Case No. ARB/03/19, Decision on the Proposal for the Disqualification of a Member of the Arbitral Tribunal, ¶¶ 40–41 (Oct. 22, 2007). 129 CLEIS, supra note 19, at 49–50. 130 See Burlington Res., Inc. v. Republic of Ecuador (Burlington), IC- SID Case No. ARB/08/5, Decision on the Proposal for Disqualification of Pro- fessor Francisco Orrego Vicuña, ¶ 80 (Dec. 13, 2013); Caratube Int’l Oil Co. LLP v. Republic of Kaz. (Caratube), ICSID Case No. ARB/13/13, Decision on the Proposal for Disqualification of Mr. Bruno Boesch, ¶¶ 110–11 (Mar. 20, 2014). 131 CLEIS, supra note 19, at 49–50. 132 See id. at 47–48 (discussing Total S.A. v. Argentine Republic, ICSID Case No. ARB/04/01, Decision on Argentine Republic’s Proposal to Disqual- ify Ms. Teresa Cheng, ¶ 105 (Aug. 26, 2015)). 133 See id. 134 Id. at 50 n.247. 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 312 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 Accordingly, the appropriate threshold for assessing the independence and impartiality of arbitrators remains unclear. Parties opting for ICSID arbitration face significant uncer- tainty when anticipating what standard—or even combina- tion of standards—unchallenged arbitrators may apply to ad- judicate disqualification proposals. A possible exception may be those cases in which parties select repeat arbitrators for their tribunals. That is, instances in which parties appoint ar- bitrators who have previously issued decisions (usually either in challenge proceedings or annulment proceedings) touching on the appropriate standard. However, such a consideration seems unlikely to be a primary concern for a party considering the composition of a high-stakes tribunal. While some schol- ars have criticized repeat appointments, 135 they typically do not focus on determining the appropriate standard for as- sessing bias. Even so, selecting an arbitrator specifically be- cause of past decisions on disqualification standards would only fuel already pronounced concerns with repeat appoint- ments and the relatively small size of the pool of potential ar- bitrators.136 B. How Serious is “Serious?” In any case, parties seeking annulment in instances involv- ing a biased arbitrator face even more uncertainty. While com- mittees in recent years have demonstrated restraint in 135 See, e.g., Carly Coleman, How International is International Invest- ment Dispute Resolution? Exploring Party Incentives to Expand ICSID Ar- bitrator Demograaphics, 26 TRANSNAT’L L. & CONTEMP. PROBS. 121, 129–30 (2016); Chiara Giorgetti, Who Decides Who Decides in International Invest- ment Arbitration?, 35 U. PA. J. INT'L L. 431, 458 (2013). 136 Daphna Kapeliuk, The Repeat Appointment Factor: Exploring Deci- sion Patterns of Elite Investment Arbitrators, 96 CORNELL L. REV. 47, 49–50 (2010). But see Susan D. Franck, Empirically Evaluating Claims About In- vestment Treaty Arbitration, 86 N.C. L. REV. 1, 77 (2007) (presenting evi- dence to rebut the claim that repeat appointments make arbitration a “ma- fia”). In any case, recent challenges to arbitrators based on repeat appointments have been rejected. See e.g., Universal Compression Int’l Holdings, S.L.U. v. Bolivarian Republic of Venez., ICSID Case No. ARB/10/9, Decision on the Proposal to Disqualify Prof. Brigitte Stern and Prof. Guido Santiago Tawil, Arbitrators, ¶¶ 77, 107 (May 20, 2011). 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 313 annulling awards,137 a lack of clarity remains. When a chal- lenge has been previously considered and rejected, ad hoc committees must determine how much deference, if any, to give the unchallenged arbitrator’s determinations and whether the standard used in any challenge decision affects that determination. In instances when the facts relating to an arbitrator’s independence or impartiality either were un- known or did not exist when proceedings closed, ad hoc com- mittees must determine whether to review the relevant con- cerns de novo, and if so, which of the competing Article 57 standards to apply. As noted above,138 to annul an award on Article 52(1)(d) grounds, a party must show: (1) that there was a departure from a fundamental rule and (2) that the departure was seri- ous.139 Ad hoc committees and scholars have consistently in- terpreted the language of Article 52 to impose this “double limitation.”140 Though the ICSID Convention’s drafting his- tory includes some discussion of what constitutes a fundamen- tal rule of procedure, the delegates were silent on what might constitute a “serious” departure.141 The fact that a departure must be serious to warrant annulment necessarily implies that not every departure will justify annulling an award, fur- ther complicating the line-drawing exercise for determining just how serious a departure must be. Ad hoc committees have two distinct lines of precedent bearing on how serious a departure must be to annul an award.142 Though both approaches necessarily agree that any departure must be “more than minimal” and at least “substan- tial,” they differ with respect to whether the departure must have caused the tribunal to reach a different result from what 137 NIGEL BLACKABY & CONSTANTINE PARTASIDES ET AL., REDFERN AND HUNTER ON INTERNATIONAL ARBITRATION 649–50 (6th ed. 2015). 138 See supra Section II.B.2. 139 See ICSID Convention, supra note 1, art. 52(1)(d). Note that the meaning of “serious” in this context is different from the meaning of the word “manifest” discussed supra in Section III.A.1. 140 Broches, supra note 39, at 329. 141 Id. at 329–30. 142 Victor Pey Casado, ICSID Case No. ARB/98/2, Decision on the Ap- plication for Annulment of the Republic of Chile, ¶ 76 (Dec. 18, 2012). 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 314 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 it would have otherwise.143 One approach, beginning with the 1988 Maritime Int’l Nominees Establishment v. Republic of Guinea (“MINE”) annulment decision, requires the party seeking annulment to demonstrate the departure was “such as to deprive a party of the benefit . . . the rule was intended to provide.”144 The contrasting approach imposes a higher bar, requiring the relevant rule to relate to an outcome-determina- tive issue, the violation of which must have “caused” the tri- bunal to reach a substantially different result.145 In some sense, the language of the Klöckner v. Republic of Cameroon (“Klöckner I”) committee could be interpreted as a third, even lower standard. There, the committee noted “any sign of par- tiality” in the tribunal would constitute grounds for annul- ment.146 However, that decision was widely criticized and ad hoc committees typically refrain from applying its signifi- cantly lower bar.147 To some extent, the application of these standards has also coincided with what have been termed the different “gen- erations” or “waves” of ICSID annulment jurisprudence.148 The Klöckner I and Asia Amco annulment decisions represent 143 Id. ¶¶ 76–77. 144 MINE, ICSID Case No. ARB/84/4, Decision on the Application by Guinea for Partial Annulment, ¶ 5.05 (Dec. 14, 1989), 5 ICSID REV. 95 (1990). 145 Wena Hotels, ICSID Case No. ARB/98/4, Decision on the Applica- tion by the Arab Republic of Egypt for Annulment, ¶ 58 (Feb. 5, 2002), 41 I.L.M. 934 (2002); Repsol YPF Ecuador, S.A. v. Empresa Estatal Petróleos del Ecuador, ICSID Case No. ARB/01/10, Decision on the Application for Annulment, ¶ 81 (Jan. 8, 2007). 146 Klöckner I, ICSID Case No. ARB/81/2, Decision of the Ad Hoc Com- mittee, ¶ 95 (May 3, 1985), 1 ICSID REV. 89 (1986). 147 KATHARINA DIEL-GLIGOR, TOWARDS CONSISTENCY IN INTERNATIONAL INVESTMENT JURISPRUDENCE: A PRELIMINARY RULING SYSTEM FOR ICSID AR- BITRATION 252–53 (2017). 148 Christoph Schreuer, Three Generations of ICSID Annulment Pro- ceedings, in ANNULMENT OF ICSID AWARDS 17, 17–19 (Emmanuel Gaillard & Yas Banifatemi eds., 2004); DIEL-GLIGOR, supra note 147, at 251–52. But see Benjamin M. Aronson, A New Framework for ICSID Annulment Juris- prudence: Rethinking the ‘Three Generations’, 6 VIENNA J. INT'L CONST. L. 3, 30–39 (2012) (arguing the divergent methodologies of ad hoc committees ne- cessitates re-conceptualizing the “generations” framework). 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 315 the first wave in which ad hoc committees elicited significant backlash for taking overly interventionist approaches.149 The MINE and Wena Hotels Ltd. v. Arab Republic of Egypt (“Wena Hotels”) decisions, respectively, represent the second and third waves in which ad hoc committees took more moderate approaches, albeit with some differences in the appropriate level of review.150 Since the early 2000s, many annulment de- cisions seemed to adopt more consistent approaches as to the appropriate level of review.151 In 2006, however, the Patrick Mitchell v. Democratic Republic of the Congo (“Patrick Mitch- ell”) decision sparked an outcry that the ad hoc committee had overstepped its authority in annulling the award.152 Similarly, a string of decisions in 2010 caused many in the investment arbitration community to question whether reviewing norms had truly solidified.153 Since then, most ad hoc committees have applied the more rigorous standards for seriousness de- veloped in MINE and Wena Hotels.154 In one instance, the Compañía de Aguas del Aconquija S.A. v. Argentine Republic (“Vivendi II”) ad hoc committee indicated that a unanimous 149 DIEL-GLIGOR, supra note 147, at 252–56. 150 Id. at 256–58. Diel-Gligor includes the Vivendi I annulment deci- sion as part of the third generation. Id. at 257–58. 151 See PARRA, supra note 2, at 266–67 (noting a low rate of annulment from 2000–2010). 152 See BLACKABY & PARTASIDES ET AL., supra note 137, at 649 n.206 (noting the widespread criticism of Patrick Mitchell v. Dem. Rep. Congo, ICSID Case No ARB/99/7, Decision on the Application for Annulment of the Award (Nov. 1, 2006)). 153 See Int’l Ctr. for Settlement of Inv. Disputes, Background Paper on Annulment for the Administrative Council of ICSID, 27 ICSID REV. 443, 445–446 (2012) (discussing Fraport AG Frankfurt Airport Services World- wide v. Republic of the Phil. (Fraport I), ICSID Case No. ARB/03/25, Deci- sion on the Application for Annulment of Fraport AG Frankfurt Airport Ser- vices Worldwide (Dec. 23, 2010) as the catalyst to study ICSID annulment decisions more broadly). 154 DIEL-GLIGOR, supra note 147, at 271–74 (discussing Duke Energy Int’l Peru Investments No. 1 Ltd v. Republic of Peru, ICSID Case No. ARB/03/28, Decision of the Ad hoc Committee on Annulment (Mar. 1, 2011)), Togo Electricité v. Republic of Togo, ICSID Case No. ARB/06/7, Decision of the Ad hoc Committee on Annulment (Sept. 6, 2011), and Victor Pey Casado, ICSID Case No. ARB/98/2, Decision on the Application for Annulment of the Republic of Chile (Dec. 18, 2012)). 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 316 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 tribunal decision might sufficiently mitigate the potential im- pact a biased arbitrator may have on an award,155 but no ad hoc committee has subsequently adopted that position. This move toward the MINE and Wena Hotels approaches, to some extent, allays concerns about activist ad hoc committees. Nonetheless, it remains to be seen whether the 2010 decisions were merely aberrational or indicative of a return to more wide-ranging review like that observed in Patrick Mitchell.156 C. Three Approaches to Reviewing Disqualification Decisions In the past ten years, ad hoc committees have developed divergent approaches to reviewing disqualification decisions. This should come as no surprise given that continued uncer- tainty exists regarding the appropriate standards for deter- mining whether an arbitrator is impermissibly biased in tri- bunal proceedings, and whether a departure from a fundamental rule was sufficiently serious to justify annul- ment. Especially as the number of arbitrator challenges in- creases,157 opportunities for parties to invoke potential errors in challenge decisions in annulment proceedings can only be- come more likely. This possibility is much more than theoret- ical, as seeking annulment has “become a routine step for los- ing parties.”158 The Azurix Corp. v. Argentine Republic (“Azurix”)159 and EDF International S.A. v. Argentine Republic (“EDF”)160 155 See Compañía de Aguas del Aconquija S.A. v. Argentine Republic (Vivendi II), ICSID Case No. ARB/97/3, Decision on the Argentine Repub- lic’s Request for Annulment of the Award Rendered on 20 August 2007, ¶ 235 (Aug. 10, 2010). 156 See Patrick Mitchell, ICSID Case No. ARB/99/7, Decision on the Ap- plication for Annulment of the Award (Nov. 1, 2006). 157 Sam Luttrell, Testing the ICSID Framework for Arbitrator Chal- lenges, 31 ICSID REV. 597, 603 (2016). 158 Schreuer, supra note 7, at 213. 159 Azurix Corp. v. Argentine Republic (Azurix), ICSID Case No. ARB/01/12, Decision on the Application for Annulment of the Argentine Re- public (Sept. 1, 2009). 160 EDF International S.A. v. Argentine Republic (EDF), ICSID Case No. ARB/03/23, Decision on Annulment (Feb. 5, 2016). 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 317 annulment decisions exemplify the conflict between varying approaches to ad hoc Committee review of challenge decisions. In Azurix, the ad hoc committee considered allegations that one member of the arbitral tribunal lacked the requisite inde- pendence and impartiality.161 Specifically, Argentina alleged conflicts of interest existed for one member of the arbitral tri- bunal such that there had been a serious departure from a fundamental rule of procedure.162 Argentina maintained this position despite the fact that unchallenged members of the tri- bunal previously rejected its challenge to the arbitrator in question, Dr. Rigo Sureda.163 During the initial proceedings, Argentina alleged the appointment of Dr. Sureda should be disqualified both because of his actual bias and because his appointment gave rise to the appearance of bias. The tribunal rejected both arguments.164 At the annulment stage, Argen- tina advanced arguments that the tribunal had incorrectly as- sessed the independence and impartiality of Dr. Sureda,165 who subsequently issued procedural orders that allegedly worked to Argentina’s detriment.166 The ad hoc committee rejected Argentina’s arguments.167 The committee noted first that Article 52 does not include “any fact indicating a manifest lack of the qualities required by . . . Article 14” may serve as grounds for annulment.168 161 See Azurix, ICSID Case No. ARB/01/12, Decision on the Application for Annulment of the Argentine Republic, ¶¶ 286–87, 293. 162 Id. ¶ 293. Specifically, Argentina contended that the tribunal was not properly constituted and in doing so, invoked Article 52(1)(a), which it considered a specific instance of a serious departure from a fundamental rule of procedure under Article 52(1)(d). Id. ¶¶ 249–53. Accordingly, the ad hoc Committee conducted most of its analysis regarding whether a serious departure had occurred under Article 52(1)(d) in conjunction with Article 52(1)(a). See id. ¶¶ 274–84, 286–92. 163 Id. ¶ 35 (citing Azurix Corp. v. Argentine Republic, ICSID Case No. ARB/01/12, Decision on the Challenge to the President of the Tribunal, ¶¶ 7–8 (Feb. 25, 2005)). 164 Azurix, ICSID Case No. ARB/01/12, Decision on the Application for Annulment of the Argentine Republic, ¶ 260. 165 Id. ¶¶ 249, 272. 166 Id. ¶ 267. 167 Id. ¶¶ 292–93. 168 Id. ¶ 279 (citing ICSID Convention, supra note 1, art. 57). 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 318 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 Accordingly, the committee reasoned that Article 52 did not provide parties with a mechanism to bring a de novo challenge to members of the tribunal under the guise of annulment.169 Thus, the ad hoc committee determined that it was limited to annulling an award in instances when “there had been a fail- ure to comply properly with the procedure for challenging members of the tribunal.”170 In even stronger language, the committee noted that reconsidering a challenge decision at the annulment level, to any extent, would be “tantamount to an appeal” and therefore beyond the scope of an ad hoc com- mittee’s power.171 However, the committee did leave the door open for challenges, at least through some mechanism, when new evidence comes to light after a tribunal issued a challenge decision.172 Six years later in EDF, the ad hoc committee considered an arbitral award with a similar set of facts.173 The claimant, who had received a favorable award from the tribunal, at- tempted to advance the approach of the Azurix ad hoc commit- tee when the respondent alleged a serious departure from a fundamental rule of procedure had occurred.174 In the initial proceedings, the respondent Argentina challenged EDF’s party-appointed arbitrator.175 However, in rejecting the chal- lenge, the unchallenged arbitrators essentially adopted the standard of review for arbitrator challenges used in Vivendi I, as discussed above.176 After the final award was rendered in 169 Id. ¶ 280. 170 Id. 171 Id. ¶ 282. 172 Id. ¶ 281. The Committee identified revision, via Article 51, as the appropriate mechanism. Id. Though the EDF Committee disagreed, that particular point is beyond the present discussion. EDF, ICSID Case No. ARB/03/23, Decision on Annulment, ¶¶ 118, 125 (Feb. 5, 2016). 173 See EDF, ICSID Case No. ARB/03/23, Decision on Annulment, ¶¶ 18–24. 174 See id. ¶ 98. 175 EDF, ICSID Case No. ARB/03/23, Challenge Decision Regarding Professor Gabrielle Kaufman-Kohler, ¶ 1 (June 25, 2008). 176 See supra Section III.A.2. 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 319 favor of the claimants, the respondents sought annulment on several grounds.177 Relying on the annulment decision in Azurix, the EDF claimants initially argued that when an arbitrator challenge has been made and rejected, an award could be annulled only if the process for assessing arbitrator bias were defective.178 This approach would, as in Azurix, limit the grounds on which a committee could annul an award such that considering anew an arbitrator’s independence or impartiality would exceed the permissible scope of a committee’s power. Additionally, the claimant contended the respondent would need to demon- strate that any lack of independence or impartiality had “a material effect on the outcome of the [arbitral] proceedings.”179 The EDF ad hoc committee rejected that approach.180 Even the claimant, perhaps under pressure or questioning from members of the ad hoc committee, eventually altered its argu- ment in oral proceedings such that the committee’s ultimate determinations were consistent with the claimant’s posi- tion.181 The ad hoc committee believed it must have some role in adjudicating questions of whether an arbitrator had been impermissibly biased.182 It reasoned that ad hoc committees, generally, are “the guardian[s] of the integrity of the arbitral procedure” and that the independence and impartiality of ar- bitrators “go[] to the very heart” of that issue.183 The commit- tee also considered the importance of the finality of awards and noted that annulment proceedings do not—and should not—operate as an appeal.184 Accordingly, the committee adopted a “no reasonable deci- sion-maker” standard for reviewing the challenge decisions of 177 EDF, ICSID Case No. ARB/03/23, Decision on Annulment, ¶¶ 43– 44. 178 Id. ¶ 96. 179 Id. ¶ 97. 180 Id.¶ 134. 181 Id. ¶¶ 97, 141. 182 See id. ¶¶ 144–45. 183 Id. ¶ 140. 184 Id. ¶ 143. 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 320 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 arbitral tribunals.185 Thus, the ad hoc committee concluded it would have a role in ensuring that the challenge decision was reasonable, or at the very least that some reasonable decision- maker could come to the same conclusion.186 After examining the analysis of the challenge question and comparing the chal- lenge decision to similar decisions by other ad hoc committees, the EDF committee concluded the tribunal’s original conclu- sion was not unreasonable.187 In addition to the views the Azurix and EDF committees adopted, a third approach would enable ad hoc committees to review challenge decisions de novo. The respondent in the EDF annulment proceedings unsuccessfully argued for this standard.188 However, as the EDF ad hoc committee consid- ered, this approach would effectively render Articles 57 and 58 moot, and would be inconsistent with the Convention’s stated purpose of giving parties to an arbitration a sense of finality after an award has been rendered.189 This approach is not widely held and has never been adopted by an ad hoc com- mittee. Ultimately, the Azurix and EDF ad hoc committees took different approaches to assessing the appropriate balance be- tween assuring finality of awards and guaranteeing a com- pletely fair arbitral process. For its part, the Azurix committee took a more absolutist approach to Article 52(1),190 maintain- ing its view of the ad hoc committee’s role in annulment pro- ceedings would provide parties with clear expectations con- cerning review of challenge decisions. The EDF committee was more explicitly concerned with balancing the competing aims of annulment proceedings—preserving the integrity of 185 Id. ¶ 145. In resolving a separate question in the same annulment proceeding, the EDF Committee noted a de novo standard of review would be appropriate when new facts came to light, either after a tribunal issued a challenge decision or after the close of the tribunal’s proceedings. See id. ¶ 130. 186 Id. ¶ 145. 187 Id. ¶ 164. 188 Id. ¶ 88. 189 Id. ¶¶ 142–43. 190 See Azurix, ICSID Case No. ARB/01/12, Decision on the Application for Annulment of the Argentine Republic, ¶¶ 280–82 (Sept. 1, 2009). 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 321 the arbitration while ensuring the finality of awards.191 The EDF committee was more willing to look beyond the precise text of the ICSID Convention and introduced a new standard of review for considering the competing interests of the overall ICSID system.192 The difference in approaches also reflects differing views on the level of deference ad hoc committees should afford tri- bunal decisions. While the Azurix committee was more willing to completely defer to the arbitrators, the EDF committee sought to establish at least some level of oversight over the tribunal’s procedural decisions. Interestingly, neither commit- tee considered the implications of any particular standard in instances when parties disagree regarding the correct stand- ard for assessing bias under Articles 57 and 58.193 Though the EDF committee devoted considerable space to assessing the challenge decision’s approach to determining independence and impartiality, it gave scant attention to the challenge deci- sion’s determination regarding which standard for bias to ap- ply.194 For instance, it did not consider the implications of its standard of review in circumstances when the ad hoc commit- tee disagrees with the tribunal on the correct standard for evaluating the independence and impartiality requirements of Article 14(1).195 That future committees may approach this question differently fell outside the scope of the EDF commit- tee’s analysis.196 191 See id. ¶¶ 139–43. 192 See id. ¶¶ 139–41, 145–46. 193 See Azurix, ICSID Case No. ARB/01/12, Decision on the Application for Annulment of the Argentine Republic; EDF, ICSID Case No. ARB/03/23, Decision on Annulment. In EDF, the parties generally agreed appearance of bias could be a relevant factor for assessing independence and impartial- ity. Id. ¶¶ 110–11. However, the Claimant indicated this was not an entirely settled point, especially with regard to the approaches tribunals have taken after the Blue Bank decision. Id. ¶ 111. 194 See id. ¶¶ 112–145. 195 See id. 196 See id. 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 322 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 IV. RESOLVING THE ANNULMENT COMMITTEE APPROACHES Though neither the Azurix approach nor the EDF approach represents an untenable standard for review of arbitrator challenges, neither approach is without its problems. This Section begins by discussing the need for ad hoc committees to consistently apply a single standard for reviewing arbitra- tor challenge decisions. It then considers the potential bene- fits and drawbacks of the Azurix and EDF standards, con- cludes that a version of the EDF standard—if strictly applied—represents the best approach for future ad hoc com- mittees, and analyzes how ad hoc committees can bring about a greater degree of consistency in ICSID annulment proceed- ings. A. The Need for Consistency As the ICSID caseload continues to grow,197 maintaining consistency across tribunals and ad hoc committees has be- come more difficult.198 As a recent report to the U.N. General Assembly reveals, inconsistent results at either the initial ar- bitration phase or the annulment phase undermine a core pur- pose of the system.199 ICSID arbitration is desirable because of the predictability and finality it provides parties,200 though inconsistent results risk eroding that predictability and final- ity. This is particularly so at the annulment phase, when 197 In the past five years, ICSID has registered dozens of new cases each year and has more than 200 cases pending at any given time, a case- load that vastly outnumbers what ICSID saw at the turn of the century. See Julien Fouret & Dany Khayat, International Centre for Settlement of Invest- ment Disputes (ICSID) Case Law Review, 15 LAW & PRAC. INT’L CTS. & TRI- BUNALS 555, 556, 556 n.2 (2016). 198 Daniel Kalderimis, The Future of the ICSID Convention: Bigger, Better, Faster?, in ICSID CONVENTION AFTER 50 YEARS: UNSETTLED ISSUES 553, 577 (Crina Baltag ed., 2017). 199 U.N. Comm’n on Int’l Trade Law, Possible Reform of Investor-State Dispute Settlement (ISDS): Consistency and Related Matters, U.N. Doc. A/CN.9/WG.III/WP.150, ¶ 5 (2018). 200 See Reisman, supra note 7, at 750. See generally supra Section II.A.1. 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 323 committee members must make their own procedural deter- minations and evaluate the decisions of the initial tribunal members.201 Consistency concerns are even more pronounced in the con- text of arbitrator bias since ad hoc committees reviewing chal- lenge decisions must determine both the appropriate standard for applying Article 57 and whether any alleged departure from a fundamental rule was sufficiently serious. In the first place, whether tribunals should use an “appearance of bias” standard or an “actual bias” standard remains an open ques- tion.202 This complicates an ad hoc committee’s task when re- viewing any of the tribunal’s determinations on arbitrator challenges. To the extent an ad hoc committee regards one standard or the other as the “proper law,” any reconsideration of a tribunal’s challenge decision could amount to a full ap- peal.203 Accordingly, the consistent application of a single standard of review by ad hoc committees is necessary to en- sure a greater degree of certainty for both tribunal members and parties to arbitration. In practice, consistent application of either the EDF stand- ard or the Azurix standard would alleviate this problem. In the first instance, both approaches decrease the incentive for parties to delay or otherwise derail proceedings because an- nulment remains relatively difficult under either approach.204 Already, parties have an incentive to challenge arbitrators so they can preserve a lack of independence or impartiality as a possible basis for annulment.205 If parties know they can seek annulment on the basis of a challenge decision in the event of 201 Kalderimis, supra note 198, at 577. 202 See supra Section III.A.2. 203 See Schreuer, supra note 7, at 225. 204 See Azurix, ICSID Case No. ARB/01/12, Decision on the Application for Annulment of the Argentine Republic, ¶¶ 280–81 (Sept. 1, 2009); EDF, ICSID Case No. ARB/03/23, Decision on Annulment, ¶ 145 (Feb. 5, 2016). See generally supra Section III.C. 205 See LUTTRELL, supra note 109, at 4–7 (noting “the Black Art of bias challenge[s]” as a tactical maneuver); Stephan Wilske, Crisis? What Cri- sis?—The Development of International Arbitration in Tougher Times, 2 CONTEMP. ASIA ARB. J. 187, 204 (2009) (noting unmeritorious challenges have emerged as a standard tactic in international arbitration). 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 324 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 an unfavorable award, they could be more likely to raise stra- tegic challenges without serious bases. The limited ap- proaches of both the Azurix and EDF committees thus directly address this worry and circumscribe potential harm. However, the Azurix approach, which allows for minimal review, may indicate to tribunal members that their challenge decisions are virtually immune from review. In the other di- rection, the standard proffered by the EDF committee may prove difficult to apply in practice. In its analysis alone, the EDF committee spent nearly twenty paragraphs considering the tribunal’s analysis and comparing it to that of other ad hoc committees and tribunals considering questions of chal- lenges.206 Future ad hoc committees could easily purport to take a similar approach while in reality engaging in a sub- stantive review of the tribunal’s decision on challenge. How- ever, were a future committee to do so, it would exceed its au- thority and ignore the finality that even the EDF committee considered important.207 Likewise, such action would run counter to the very purposes of ICSID and its annulment mechanism.208 Accordingly, choosing which approach best balances com- peting goals is no easy task. The Azurix approach, which al- lows for maximal deference, would enable ad hoc committees to avoid dodging questions of which standard a tribunal properly should have applied.209 Despite this, there could still be concern that the Azurix view would unduly limit an ad hoc committee’s review. At least on its surface, the EDF commit- tee would allow for deference to either bias standard tribunals apply.210 Nonetheless, the “no reasonable decision-maker” standard may in practice operate more like an appeal system than the committee truly intended. 206 See EDF, ICSID Case No. ARB/03/23, Decision on Annulment, ¶¶ 147–64. 207 See id. ¶ 144. 208 See Schreuer, supra note 7, 212–13. 209 See Azurix, ICSID Case No. ARB/01/12, Decision on the Application for Annulment of the Argentine Republic, ¶¶ 280, 282. 210 See EDF, ICSID Case No. ARB/03/23, Decision on Annulment, ¶ 145. 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 325 B. Reconciling the Conflicting Approaches Despite the appeal of the clear, rules-like approach of the Azurix committee, that standard would be overly demanding and risk leaving justified concerns unaddressed. As the EDF committee pointed out, the Azurix approach would apply only rarely, and would disallow annulment even when a party pro- vided facts demonstrating an arbitrator lacked the requisite qualities of independence and impartiality.211 In contrast, the EDF standard offers a more balanced approach enabling some level of ad hoc committee review. However, adopting a loose interpretation of the EDF approach could lead future commit- tees to depart from the text of the ICSID Convention itself and exacerbate uncertainty regarding the finality of awards. Es- pecially since many legal systems allow limited court review for abuse of discretion or irrational reasoning,212 the idea that an arbitral tribunal appeared to lack the requisite qualities can seem to strike an appropriate balance. However, arbitral tribunals, and particularly those taking place under the aus- pices of the self-contained ICSID system, do not function like domestic courts. Given the dangers of both the Azurix and EDF approaches, future ad hoc committees should adopt the EDF approach when reviewing challenge decisions, but do so in a strictly limited manner that looks to signs of procedural departures more serious than an appearance of bias. 211 Id. ¶ 118. The Azurix approach would also be inappropriate when new evidence came to light after the challenge or after the close of proceed- ings, but before the tribunal renders an award. See id. ¶¶ 130–31. In EDF, Argentina challenged one of the arbitrators on precisely this basis and the ad hoc committee reviewed bias concerns for that arbitrator de novo. Id. ¶ 132. 212 See, e.g., Administrative Procedure Act, 5 U.S.C. § 706(2)(A) (2018); Administrative Decisions (Judicial Review) Act 1977 (Cth) ss 5–6 (Austl.). See also Maciej Bernatt, Transatlantic Perspective on Judicial Deference in Administrative Law, 22 COLUM. J. EUR. L. 275, 291–92 (2016) (discussing review standards in the U.K. and the requirements that the European Court of Human Rights imposes on countries subject to its jurisdiction). 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 326 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 1. The Azurix Approach is Overly Restrictive Under the Azurix view, annulment committees would op- erate with essentially no possibility of review. The Azurix com- mittee approach shifts the relevant analysis from an inquiry regarding the bias of a challenged arbitrator to an inquiry re- garding the sufficiency of process for challenging that arbitra- tor. But these are distinct questions and ad hoc committees addressing similar questions in the future should regard them as such. While the Azurix standard would provide the greatest assurance of finality, this cannot be the only metric in select- ing the appropriate standard for ad hoc committee review.213 That the annulment committee must have regard for both finality and procedural fairness is well-settled and goes to the core of an ad hoc committee’s purpose.214 In effect, the Azurix committee approach would leave no role for an ad hoc commit- tee discretion in considering annulment. This near-complete lack of discretion is inconsistent with the role of the ad hoc committee as the “guardian” of fairness and arbitral proce- dure.215 Even assuming an ad hoc committee placed an espe- cially high premium on the finality of the award, the Azurix approach would leave it with insufficient discretion to review potentially problematic tribunal procedures. Additionally, there is some point at which failing to review a challenge decision would draw significant criticism. That is, an annulment committee may have to deal with a situation involving a “grossly aberrant decision” by a tribunal.216 How 213 See Hussein Nuaman Soufraki v. The United Arab States (Sou- fraki), ICSID Case No. ARB/02/7, Decision of the Ad hoc Committee on the Application for Annulment of Mr. Soufraki, ¶ 24 (June 5, 2007) (“An ad hoc committee is responsible for controlling the overall integrity of the arbitral process . . . .”). 214 See UPDATED BACKGROUND PAPER, supra note 21, ¶ 98; Alapli El- ektrik B.V. v. Republic of Turk., ICSID Case No. ARB/08/13, Decision on Annulment, ¶ 32 (July 10, 2014). 215 See EDF, ICSID Case No. ARB/03/23, Decision on Annulment, ¶ 140. 216 David D. Caron, Reputation and Reality in the ICSID Annulment Process: Understanding the Distinction Between Annulment and Appeal, 7 ICSID REV. 21, 54 (1992). To date, no ad hoc committee has explicitly 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 327 could it approach making a decision if limited by the Azurix framework? One answer is that if the decision making process for the challenge decision itself truly were biased, such bias in the decision would constitute grounds for annulment, so long as it constituted a serious departure by materially affecting the award.217 After all, the Azurix committee explicitly left open this avenue of challenge.218 Though the possibility of such a circumstance is slight, it may arise if a proper chal- lenge was never decided before the tribunal issued an award, if a person or body other than the one prescribed by Article 58 made the disqualification decision, or if arbitrators engaged in the decision making process for their own challenges.219 How- ever, this level of oversight would not correct any potential in- justice caused by the presence of an impermissibly biased ar- bitrator in the absence of other procedural defects. It would also leave a committee with little leeway to look to the actual circumstances of a particular arbitration, unduly limiting the committee’s role as a guardian of integrity. A second potential response is that the ad hoc committee has bases for annulment available other than the Article 52(1)(d) ground of a serious departure from a fundamental rule. If the circumstances warrant doing so, the committee could draw on the grounds of corruption, manifest excess of powers, or even failure to state reasons.220 In instances where these grounds overlap based on the same arbitrator’s conduct, the committee could still consider the relevant conduct, though through the lens of the particular standards or meth- odologies that exist for each of the different annulment grounds. However, resorting to alternative grounds of annul- ment for addressing arbitrator bias would essentially render the ground of serious departure pointless in this context. If the described relevant conduct that led to annulment as “grossly aberrant.” See generally UPDATED BACKGROUND PAPER, supra note 21. 217 And it necessarily would, given that the lack of that bias would have tainted the challenge decision, and every subsequent decision, of the tribu- nal. 218 Azurix, ICSID Case No. ARB/01/12, Decision on the Application for Annulment of the Argentine Republic, ¶ 284. 219 Id. ¶ 282 (noting the first two examples). 220 See ICSID Convention, supra note 1, art. 52(1). 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 328 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 serious departure ground is to have any force in its own right, a more flexible approach than the Azurix committee’s is nec- essary. 2. The EDF Approach Best Balances Annulment Committee Goals Despite the need for more flexibility than the Azurix ap- proach offers, annulment is still an “exceptional” remedy that “implies a severe censure of the tribunal.”221 While EDF’s more malleable standard provides ad hoc committees a greater degree of discretion, its approach carries with it the risk that future committees will stray from the Convention’s mandate and create a greater level of uncertainty in annul- ment jurisprudence. On balance, however, the EDF approach best reconciles the competing goals of finality and procedural fairness. Identifying and applying the best standard neces- sarily involves accounting for a totality of factors.222 Accord- ingly, future ad hoc committees should apply EDF’s “no rea- sonable decision-maker” standard, but do so judiciously with a strong presumption against annulment. i. Consistency with the ICSID Convention’s Mandates Perhaps most importantly, ad hoc committee decisions must operate differently from the decisions of tribunals them- selves. What may be an appropriate decision during arbitral proceedings—when opportunities still exist for replacing arbi- trators or remedying any wrongdoing223—may not be appro- priate during annulment proceedings. Especially given the significant level of time and resources that parties devote to 221 Schreuer, supra note 7, at 212. 222 Caroline Henckels, The Role of the Standard of Review and the Im- portance of Deference in Investor–State Arbitration, in DEFERENCE IN INTER- NATIONAL COURTS AND TRIBUNALS: STANDARD OF REVIEW AND MARGIN OF AP- PRECIATION 113, 120 (Lukasz Gruszczynski & Wouter Werner eds., 2014). 223 See The Republic of Croat. v. The Republic of Slovn. (Croat. v. Slovn.), Case No. 2012-04, Partial Award on Jurisdiction, ¶ 194 (Perm. Ct. Arb. 2016), https://pcacases.com/web/sendAttach/1787 [https://perma.cc/2HJQ-RU8A]. 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 329 arbitration, the balance of interests at stake shifts once a tri- bunal renders a final award.224 Article 52 reflects this princi- ple. The text of the article itself narrowly circumscribes the grounds for annulment, employing language such as “mani- fest[]” and “serious.”225 Additionally, the limited timeframe for parties to apply for annulment—120 days after the award is rendered226—indicates the Convention places a premium on preserving the finality of the award. Even for annulment sought on the basis of corruption, the Convention places a maximum timeframe of three years, even if evidence of cor- ruption isn’t discovered until that timeframe has passed.227 Moreover, the Convention already provides a means to re- move arbitrators if parties have valid concerns about the in- dependence or impartiality of an arbitrator. That mechanism is a challenge pursuant to Articles 57 and 58.228 That the Con- vention imposes requirements such as promptness for chal- lenges further indicates that any remedy for arbitrator par- tiality or dependence must be limited.229 Though removing a requirement for prompt challenges might, on balance, provide an additional assurance of fairness, it risks undermining pro- cedural efficiency and finality, a sacrifice the Convention drafters were evidently unwilling to make.230 Aware of this tradeoff, the EDF committee considered the importance of the fact that other members of the tribunal are the designated de- cision makers for resolving challenges.231 However, the EDF approach still leaves the door open for future ad hoc commit- tees to second-guess the decisions of tribunal members.232 Re- gardless of how thorough the tribunal was in considering a 224 See Cate, supra note 4, at 1203–04 (discussing the relationship be- tween the balance of party interests and appeal in the arbitration context). 225 ICSID Convention, supra note 1, art. 52(1); Schreuer, supra note 7, at 215. 226 ICSID Convention, supra note 1, art. 52(2). 227 Id. 228 See id. arts. 57–58. 229 See ARBITRATION RULES, supra note 35, at 107. 230 See id.; ICSID Convention, supra note 1, arts. 57–58. 231 See EDF, ICSID Case No. ARB/03/23, Decision on Annulment, ¶ 144. 232 See id. ¶ 145. See generally supra Section III.C. 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 330 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 challenge, the ad hoc committee has the final say on any ques- tion a tribunal already fully considered in its challenge deci- sion.233 This type of review, though limited, resembles pre- cisely the type of merits review that is meant to be unavailable under the ICSID framework.234 Accordingly, future commit- tees must take care not to exceed the ad hoc committee man- date by adjudicating anew a decision the tribunal has already rendered. ii. Minimizing Unpredictability & Uncertainty Additionally, one interpretation of the EDF committee’s conclusions is that the committee essentially imported an “ap- pearance of a departure from a fundamental rule of proce- dure” standard into the Article 52 “serious departure” stand- ard. If widely applied, this interpretation would undermine the force of the word “serious” in the context of Article 52. In light of the continuing questions regarding whether the MINE and Wena Hotels standard has solidified,235 an unduly broad version of the EDF approach could result in problematic ap- plications. The Vivendi II committee indicated that any rela- tionship indicating a lack of independence or impartiality must have had a “material effect on the final decision of the Tribunal” to justify annulment.236 Loosely interpreted and ap- plied, the EDF approach would effectively incorporate into Ar- ticle 52 a lower standard than Vivendi II’s “material effect” standard, because under that version of the EDF standard, a committee need only find that a challenge decision erred in its assessment of the appearance of bias.237 It is difficult to imag- ine how the appearance of bias, even from an objective third party viewpoint, could in fact have any effect on an award’s 233 See EDF, ICSID Case No. ARB/03/23, Decision on Annulment, ¶ 145. See generally supra Section III.C. 234 INT’L CTR. FOR SETTLEMENT OF INV. DISPUTES, supra note 15, at 22. 235 See supra Section III.B. 236 Vivendi II, ICSID Case No. ARB/97/3, Decision on the Argentine Republic’s Request for Annulment of the Award Rendered on 20 August 2007, ¶¶ 235, 238–42. 237 See EDF, ICSID Case No. ARB/03/23, Decision on Annulment, ¶¶ 109, 145. 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 331 outcome, let alone a serious one. Though perhaps caused by similar underlying factors, whether an arbitrator appeared bi- ased is a distinct question from whether an arbitrator was in fact biased and consequently improperly influenced the out- come of a tribunal’s decision. Additionally, such complexities could always arise as to whether the tribunal initially adopted the “correct” standard for assessing bias in the first place. That is, whether tribunal members used the appropriate standard could always have downstream effects on the rest of the award. Therefore, when unchallenged tribunal members adopt a more rigorous “actual bias” standard for challenge proceedings, there could always be a chance that the decision not to adopt a more lenient “ap- pearance of bias” standard could have affected the award. However, the EDF committee itself addressed the forego- ing concerns. Since multiple reasonable tribunals have ap- plied varying standards for arbitrator challenges, deciding to adopt one or the other could not be “so plainly unreasonable that no reasonable decision-maker could have come to such a decision.”238 Thus, properly applied, the EDF standard allows ad hoc committees to avoid passing judgment on which stand- ard for arbitrator challenges is most appropriate. Addition- ally, this view of EDF is consistent with the “material effect” standard of Vivendi II, because annulling an award with the EDF standard would likely take clear evidence of actual arbi- trator bias. Alternatively, exceedingly clear evidence of arbi- trator bias that tribunal members ignored when resolving a challenge decision may also suffice for an ad hoc committee to annul an award.239 In either instance, the annulment outcome would be the same regardless of the bias standard a tribunal applied. For example, the tribunal in Caratube International Oil Co. v. Republic of Kazakhstan (“Caratube”) concluded a challenged arbitrator should be removed because his presence created an appearance of bias, even though no facts indicated 238 Id. ¶ 145. 239 See id. ¶¶ 144–45. 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 332 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 the arbitrator in fact lacked independence or impartiality.240 Had the Caratube tribunal hypothetically decided differently, an ad hoc committee reviewing the decision under the EDF standard should not rehash the tribunal’s decision, but in- stead determine whether no decision-maker could have come to the same conclusion. Such a result would very likely require evidence of actual bias, not just the appearance of bias, since reasonable tribunal members could more easily disagree about what constitutes a mere appearance of bias. Similarly, future ad hoc committees must be cognizant of the fact that the EDF approach does not enable them to insert their own factual analysis into their review of the tribunal de- cisions. Even so, if future committees are less judicious than the EDF committee, there exists a risk that future decisions will take the form of those, such as Patrick Mitchell and Klöck- ner I, which drew heavy criticism.241 Merits review for arbitral committee determinations do not operate with a “no reasona- ble decision-maker” standard.242 However, given the funda- mental importance of unbiased arbitrators, this highly tai- lored level of review would be appropriate for determining the impact of significant procedural decisions. A final potential downside of the EDF approach is that it simply requires ad hoc committees to review a greater number of aspects of the tribunal’s reasoning, which creates more op- portunities for inconsistency. Admittedly, the Azurix ap- proach would prevent much of this inconsistency from enter- ing the annulment stage of proceedings, as ad hoc committees would apply a clear rule that forecloses any substantive re- view of challenges. Under the Azurix approach, there would be limited second-guessing by ad hoc committees, and parties 240 Caratube Int’l Oil Co. v. Republic of Kaz., ICSID Case No. ARB/13/13, Decision on the Disqualification of Mr. Bruno Boesch, ¶¶ 89–90 (Mar. 20, 2014). 241 See, e.g., Reisman, supra note 7, at 760–61 (criticizing the Klöckner I ad hoc committee’s reasoning); BLACKABY & PARTASIDES ET AL., supra note 137, at 649 n.206 (noting the significant criticism of Patrick Mitchell). 242 Thomas W. Walsh, Substantive Review of ICSID Awards: Is the De- sire for Accuracy Sufficient to Compromise Finality?, 24 BERKELEY J. INT'L L. 444, 454–55 (2006) (distinguishing the standard of review in annulment from standards of review in a theoretical ICSID Appeals Facility). 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 333 would have a lower incentive to seek annulment with the sim- ple hope they get a second chance to persuade an ad hoc com- mittee that an arbitrator is biased. Avoiding these scenarios would be especially important if there were an indication the ad hoc committee may apply a standard more favorable to the party seeking annulment, regarding either initial bias deter- minations or seriousness determinations at the review stage. Especially given longstanding concerns of the finality of arbi- tral awards,243 committees applying the EDF standard should seek to emphasize that their review is limited and annulment remains an exceptional remedy. Future committees must re- frain from engaging in substantive review of tribunal deci- sions on challenges and limit themselves to solely resolving whether any reasonable actor could have made the same deci- sion. Properly applied, the EDF approach captures the bene- fits of the Azurix approach while providing a vital means to review instances of gross procedural departures. This balance is precisely what the Convention drafters had in mind when they sought to create a system that would provide finality but simultaneously check “flagrant cases” of injustice.244 C. Implementing a Consistent Approach Given the lack of binding precedent for ad hoc commit- tees,245 adopting any particular standard of review—whether for procedural or substantive questions—is difficult. Amend- ing the ICSID Convention itself is nearly impossible because of a requirement that “all Contracting States” agree to any changes.246 Though formal amendment is in theory possible, crafting an agreement among the more than 150 parties would present significant challenges.247 ICSID formally con- sidered and adopted changes to the Arbitration Rules in 2006 and did not include substantive changes to the standard of 243 See Mark B. Feldman, The Annulment Proceedings and the Finality of ICSID Arbitral Awards, 2 ICSID REV. 85, 86–87 (1987). 244 Marchili & McBrearty, supra note 6, at 428. 245 See supra Section II.A.3. 246 ICSID Convention, supra note 1, art. 66(1). 247 DIEL-GLIGOR, supra note 147, at 374. 4_2020.1_CONNERY (DO NOT DELTE) 9/24/2020 4:02 AM 334 COLUMBIA BUSINESS LAW REVIEW [Vol. 2020 review or related questions.248 While there have been pro- posals to introduce an appeals mechanism,249 primarily in re- sponse to concerns of inconsistency across awards, ICSID states have rejected such proposals.250 More recently, the IC- SID Secretariat circulated a new proposal for arbitration rule updates, though none of the proposed updates address con- cerns of arbitrator bias at the annulment stage in particu- lar.251 Even so, changes in the arbitration rules themselves likely do not represent the proper mechanism for implementing changes to the standards of review ad hoc committees use to review challenges. Absent a major change in ICSID, the most realistic mechanism for adopting consistent approach for re- viewing challenge decisions will be the decisions of ad hoc committees themselves. Though ICSID tribunals and ad hoc committees lack a formal system of precedent, arbitrators in- creasingly take previous decisions into account.252 As noted above, arbitrators often attempt to maintain consistency over time and across different sets of decision makers.253 Particu- larly if ad hoc committees take care to stay consistent with previous decisions and make conscious efforts to bring about “convergence,” a move towards a more predictable set of standards is not out of reach.254 That standard should closely 248 See ARBITRATION RULES, supra note 35. For a discussion of the amendments before they were adopted, see Int’l Ctr. for Settlement of Inv. Disputes Secretariat, Suggested Changes to the ICSID Rules and Regula- tions 4 (May 12, 2005) (unpublished working paper). 249 Id. 250 Anne van Aaken, Control Mechanisms in International Investment Law, in THE FOUNDATIONS OF INTERNATIONAL INVESTMENT LAW: BRINGING THEORY INTO PRACTICE 409, 428 (Zachary Douglas et al. eds., 2014). 251 Int’l Ctr. for Settlement of Inv. Disputes Secretariat, Proposals for Amendment of the ICSID Rules—Working Paper, 154–55 (Aug. 2, 2018) (unpublished working paper) (on file with author). 252 Gabrielle Kaufmann-Kohler, Arbitral Precedent: Dream, Necessity or Excuse?, 23 ARB. INT’L 357, 367–68 (2007). 253 See supra Section II.A.3. 254 For examples of arbitrators behaving in this way, see El Paso En- ergy Int'l Co. v. Argentine Republic, ICSID Case No. ARB/03/15, Decision on Jurisdiction, ¶ 82 (Apr. 27, 2006); Pan Am. Energy LLC v. Argentine 4_2020.1_CONNERY (DO NOT DELETE) 9/24/2020 4:02 AM No. 1:287] FINALITY, FAIRNESS, AND CONSISTENCY 335 resemble the test announced in EDF, with future committees keeping in mind the critical need to avoid reviewing the merits of tribunal decisions. In this way, the ICSID system must con- tinue to rely on future tribunals and ad hoc committees to give “concretized meaning” to the Convention by offering greater predictability in the applicable standard of review.255 V. CONCLUSION Despite the aims of ICSID to provide parties with a greater degree of certainty, the current annulment system operates on the basis of tribunals and ad hoc committees that apply significantly different standards at multiple stages of proceed- ings. This lack of consistency, both for assessing bias chal- lenges in arbitral proceedings and reviewing those challenges in annulment proceedings, undermines the predictability and consistency of ICSID proceedings. If ICSID is to remain the preeminent arbitral facility in the world, it must address this continued lack of certainty. Though completely solving ques- tions of the right level of review may require a more extensive overhaul of either arbitral rules or the Convention itself, ad hoc committees have at least some power to affect the course of future proceedings. Particularly as concerns emerge as to committees’ review of challenges to arbitrators, ad hoc committees should take an approach that limits the possibility of unpredictable outcomes and preserves the finality of awards. Though ad hoc commit- tees have taken divergent approaches to these questions in the past decade, future ad hoc committees should, first and foremost, adopt a consistent approach. In particular, ad hoc committees should seek to solidify the EDF approach to re- viewing bias challenges. Republic, ICSID Case No. ARB/04/8, Decision on Preliminary Objections, ¶ 110 (July 27, 2006). 255 See Stephan W. Schill, System-Building in Investment Treaty Arbi- tration and Lawmaking, 12 GERMAN L.J. 1083, 1092 (2011).