Vattenfall AB and others v. Federal Republic of Germany ICSID Case No. ARB/12/12 - Recommendation on the Second Proposal to Disqualify the Tribunal - 6 July 2020
Reproduced from www.worldbank.org/icsid with permission of ICSID.
1. The present recommendation (the "Recommendation") concerns the arbitration proceedings commenced in 2012 by 1. Vattenfall AB; 2. Vattenfall GmbH; 3. Vattenfall Europe Nuclear Energy GmbH; 4. Kernkraftwerk Krümmel GmbH & Co. oHG; 5. Kernkraftwerk Brunsbüttel GmbH & Co. oHG (the "Claimants"), against the Federal Republic of Germany (the "Respondent", and together with the Claimants, the "Parties") under the Energy Charter Treaty of December 17, 1994 (the "Treaty" or the "ECT"). Vattenfall AB is a Swedish company; the remaining claimants are subsidiaries of Vattenfall AB incorporated in Germany.
2. These arbitration proceedings are administered by the International Centre for the Settlement of Investment Disputes ("ICSID") pursuant to the Convention on the Settlement of Disputes between States and Nationals of Other States (the "ICSID Convention") and the Rules of Procedure for Arbitration Proceedings (the "ICSID Arbitration Rules").
3. By letter dated 8 May 2020 from Ms. Jara Mínguez Almeida, Legal Counsel at ICSID, I have been asked to provide a recommendation to ICSID on the Respondent's Application for the Disqualification of the Tribunal (the "Proposal"), submitted on 16 April 2020.
4. The Respondent's Proposal is based on allegations that:
(a) Judge Brower, as a member of the Tribunal, failed to disclose an issue conflict stemming from his 10 October 2014 Concurring and Dissenting Opinion in The PV Investors v. The Kingdom of Spain ("Judge Brower's Opinion"), concerning Article 26(7) of the Treaty ("Ground One");
(b) The Tribunal engaged in "illicit deliberations" by considering the Preliminary Award on Jurisdiction in The PV Investors v. The Kingdom of Spain and Judge Brower's Opinion, which were unknown to the Parties ("Ground Two").
(c) The Tribunal decided to hold a hearing on certain quantum matters by videoconference over the objections of the Respondent, which considers an in person hearing to be necessary ("Ground Three").
(d) The Tribunal maintained an "impossible procedural calendar" and refused the Respondent's requests for extensions in light of the challenges posed by the present public health situation of the coronavirus pandemic ("Ground Four").
5. Additionally, the Respondent considers that Judge Brower's comments on the Proposal constitute a further ground for disqualification, insofar as he "left the role of an arbitrator, `descended into the fray' and abandoned all the distance required for independent judgment"1 ("Ground Five").
156. It follows from the legal principles set out above that a party proposing the disqualification of an arbitrator must prove the existence of objective facts from which a reasonable third person may infer a manifest lack of the arbitrator's impartiality or independence. Subjective inferences or beliefs are insufficient.
157. As set out above, I do not consider that the record before me can reasonably be considered to support an inference that either Judge Brower or the Tribunal as a whole manifestly cannot be "relied upon to exercise independent judgment." Therefore, I conclude that the Respondent has not discharged its burden of proving that Judge Brower (with respect to Grounds One and Five), or any of the three members of the Arbitral Tribunal (with respect to Grounds Two to Four), manifestly lacks any of the qualities required under Article 14(1) of the ICSID Convention in relation to the four grounds on which the Proposal is based, or the fifth ground arising from Judge Brower's response to the Proposal itself.
158. For the foregoing reasons, I recommend that the proposal to disqualify the Tribunal be rejected.
Hugo Hans Siblesz, Secretary-General
Permanent Court of Arbitration
The Hague, 6 July 2020