ICSID tribunal affirms power to exclude counsel, but declines to do so
By Elizabeth Whitsitt
February 14, 2010
An ICSID tribunal, composed Sir Franklin Berman, Mr. Donald Donovan and Mr. Marc Lalonde, has determined that Mr. Barton Legum, a partner with Salans & Associés, can continue to represent Dutch firm Rompetrol N.V. in its arbitration against Romania. Mr. Legum formally took over as counsel for Rompetrol in the summer of 2009 after his colleague, Ms. François-Poncet, announced her departure from private practice.
In August 2009, Romania sought “to remove Mr. Legum from the case and to forbid him from participating in it in any way” after learning that Mr. Legum would be taking over legal representation of Rompetrol’s case. Of concern to Romania was the fact that Mr. Legum and Mr. Donald Donovan, a member of the tribunal, had both worked at Debevoise and Plimpton LLP from 2004-2008.
In a rare maneuver, Romania elected to challenge Mr. Legum’s position, rather than to challenge the tribunal itself or any of its members. Neither the ICSID Convention nor the ICSID Arbitration Rules explicitly provide for challenges to the appointment of counsel in arbitral proceedings. As a result, Romania grounded its challenge on the inherent general powers of ICSID tribunals to “police the integrity of [their] proceedings.”
As support for its position, Romania relied upon the 2008 decision of an ICSID tribunal in Hrvatska Elekropriveda d.d. v. Republic of Slovenia. In its ruling the Hrvatska tribunal excluded the participation of counsel in arbitral proceedings after the Republic of Slovenia announced its appointment of Mr. David Mildon QC as co-counsel shortly before hearings in the arbitration were to begin. In that case, concerns about the existence of a conflict of interest were raised when Hrvatska learned that Mr. Mildon QC and a member of the tribunal, Mr. David Williams QC, were members of the Essex Court Chambers in London.
In its decision of January 14, 2009, the Rompetrol tribunal ultimately rejected Romania’s position. In so doing, the tribunal observed that “[a] power on the part of a judicial tribunal of any kind to exercise a control over the representation of the parties in proceedings before it is by definition a weighty instrument…” Moreover, the tribunal concluded that the power to exclude counsel should only be used when there is an “overriding and undeniable need to safeguard the essential integrity of the entire arbitral process.”
Considering the facts of the case (i.e. that the association between Mr. Legum and Mr. Donovan had ceased), the tribunal determined that it should not interfere with Rompetrol’s choice of legal counsel because the integrity of the arbitral process was not an issue.
Apparently concerned about reconciling its decision with the Hrvatska ruling, the Rompetrol tribunal was careful to point out that its analysis should not be seen as second-guessing the assessment of the Hrvatska tribunal. Rather, the Rompetrol tribunal suggested that the Hrvatska tribunal’s decision was materially influenced by Slovenia’s late announcement regarding the appointment of a new lawyer in the arbitration. As a result, the Rompetrol tribunal considered that “…the Hrvatska [d]ecision might better be seen as an ad hoc sanction for the failure to make proper disclosure in good time than as a holding of more general scope.”
Undoubtedly, the Rompetrol tribunal’s re-casting of the Hrvatska decision may well provoke further comment about the power to exclude counsel in arbitral proceedings.
Sources:
Decision of the Tribunal on the Participation of a Counsel in Rompetrol Group N.V. v. Romania is available here: http://ita.law.uvic.ca/documents/RompetrolParticipation.pdf
Related ITN Reporting:
“Arbitrators clash on question of interpretation in Hrvatska Electroprivreda d.d. v. The Republic of Slovenia,” By Elizabeth Whitsitt, Investment Treaty News, 15 July 2009, available here: