The Rompetrol Group N.V. v. Romania, ICSID Case No. ARB/06/3 (Netherlands/Romania BIT) – Decision on the Participation of Counsel
The tribunal in Rompetrol v Romania was faced with a rather unique application. The Respondent sought an order requiring the Claimant to remove their from the case and to forbid him from participating any further in any way.
The application was as a result of the replacement of lead counsel for the claimant. The new lead counsel was a former member of the same law firm as a member of the arbitral tribunal. The Respondents believed that this was a conflict of interest.
The tribunal noted that the Respondent only sought disqualification of counsel and did not challenge the Tribunal itself or any of its members. That option was not available to the Claimant due to the past activity of the Tribunal.
For the Respondent to succeed it was self evident that an ICSID arbitral tribunal must have the power to control the counsel selected by one of the parties. In Hrvatska Elektropriveda d.d. v. Republic of Slovenia an ICSID tribunal held that the power could be exercised only in extraordinary circumstances which genuinely touched on the integrity of the arbitral process as assessed by the Tribunal itself.
The tribunal concluded that this was not a case where the circumstances genuinely touched on the integrity of the arbitration process. They distinguished the decision in Hrvatska on a number of grounds principally construing that it was an ad hoc sanction as a result of the wrongful lack of disclosure by the challenged party.
This is an interesting decision firstly because the tribunal seemed so desperate to say that Hrvatska was not wrongly decided, but at the end of their opinion its almost impossible to come to any other conclusion. The right of a tribunal to control the choice of counsel or to otherwise control the representation of a party is a hotly contentious issue, especially in international tribunals. In investment tribunals where the economic stakes can be monumental, its hard to understand how a tribunal can control the choice of counsel without this being challenged at annulment proceedings later down the line as a serious departure from a fundamental rule of procedure.
Secondly the rather odd remedy that the Respondent was forced to seek highlighted just how peculiar the application was. They accepted that there could be no partial order in this circumstance as was given in Hrvatska where counsel was prohibited from appearing before the tribunal but not participating in the arbitration and so the claimant’s counsel had to participate fully in the case or not be involved at all. It is a rather logical conclusion and one wonders how the tribunal in Hrvatska came to the opposite conclusion.