Rules governing arbitral proceedings generally provide for the replacement of arbitrators for the following reasons: death of an arbitrator; inability of an arbitrator to perform his functions due to his physical or mental incapacity; unwillingness of an arbitrator to perform the functions required; or resignation by an arbitrator from his office.² The Iran-US Claims Tribunal interpreted the UNCITRAL Rules on resignation and failure to act in a manner consistent with international law, which allowed the Tribunal to continue to function and make awards under these circumstances. Its implementation of Article 13 may, therefore, provide helpful precedents for other arbitral tribunals.

(1)  Resignation, absence and death–Article 13(1)

(p. 284) (2)  Failure to Act–Article 13(2)

(3)  Tribunal Rules, Article 13(3)

Article 13(3) of the Tribunal Rules provides for the replacement of the Tribunal President in the event of his temporary absence. Under this provision, the replacement shall be “the senior other member of the Tribunal not appointed by either of the two Governments”. The individual so appointed shall act as President of the Tribunal and Chairman of the Full Tribunal.

In 1989, during the Iranian challenge to Judge Briner in Case No. 39 and as President of the Tribunal, the Iranians alleged that Briner was acting improperly by continuing to perform his duties as President in the midst of the challenge proceedings. In a Dissent to Orders dated 11 August 1989, Judge Khalilian tried to equate the Iranian challenge to Briner with a de jure or de facto impossibility of the President's performance of his functions and called for the President to step aside and allow a replacement to perform his duties under Article 13(3).⁶¹

In response to the Iranian interpretation of Article 13(3), the Agent for the United States focused on the fact that nothing explicitly stated in either the Tribunal Rules or the UNCITRAL Rules requires the President or any arbitrator to relinquish his official duties in the face of a challenge. The Agent further noted that forcing an arbitrator to relinquish those duties prior to the resolution of a contested challenge would disrupt Tribunal proceedings and encourage abuse of the challenge mechanism.⁶²

A challenge of the President affected the entire operations of the Tribunal in a way the challenge of an arbitrator in a particular case does not. There was significant evidence that the Iranian challenge to Briner as President was made for the purpose of disrupting proceedings in significant cases. Thus if the Government of Iran achieved its goal of having Judge Briner replaced, even temporarily, they would arguably have been rewarded for their attempt to disrupt the proceedings. Nevertheless, in the event of a serious challenge to (p. 298) the President of a multi–claim institution, and certainly the Iranian challenge was regarded by many Iranian representatives as serious, applying the replacement provision of Article 13(3) could be appropriate.

(4)  Tribunal Rules, Article 13(4)

This provision requires that a substitute member appointed for a temporary period under Article 13(2) continue to serve as a member of the Tribunal for those cases in which he participated in a hearing on the merits. It operates like Article 13(5), to ensure minimal disruption of the proceedings and avoid the necessity of a re–hearing upon the return of the permanent member.

This rule does not appear to have been applied specifically at the Tribunal, however. Substitute arbitrators have been assigned to cases at the Tribunal, e.g. Mr. Salans as substitute for Mr. Brower from January to April 1987, and presumably, awards could have been rendered under the signature of a substitute who had participated in the hearing.

(5)  Tribunal Rules, Article 13(5)

Article 13(5) provides that a resigning arbitrator will continue to serve as a member of the Tribunal with respect to all cases in which he had participated in a hearing on the merits. It was added to the Tribunal Rules following the events surrounding Judge Sani's resignation in an effort to put reasonable limits on an arbitrator's right of resignation and to ensure the continuity of Tribunal proceedings.

Article 13(5) was also known as the “Mosk Rule” after Judge Mosk, the first arbitrator to which the rule applied. As Baker and Davis note: “The ’Mosk rule’ provided a common–sense rule of thumb for a resigning arbitrator in a multi–case arbitration.”⁶³

(1)  Tribunal Rules, Article 13(1)

The majority in this case [was] the Chairman and Judge Mostafavi. [ Judge] Mostafavi was the proper arbitrator to sign the Award notwithstanding the letter of resignation that he wrote to the President of the Tribunal …

Article 13 of the Tribunal Rules contemplates the possibility of the resignation of an arbitrator and establishes the procedures for appointing a successor. With respect to the resignation of J. Mostafavi, the Full Tribunal, following its previous practice, determined that (i) the resignation must be submitted to and considered by the Tribunal, (ii) the resignation is not effective until it is accepted by the Tribunal, (iii) the effective date of the resignation is not the date suggested by the resigning arbitrator, but rather a date determined by the Tribunal, and (iv) Judge Mostafavi's resignation would be effective when his successor had been appointed and was available to take up his duties. No successor had been appointed by the date on which the Award was to be signed, and, therefore, J. Mostafavi's resignation had not become effective on that date.

Finally, it is to be noted that even if J. Mostafavi's resignation had become effective by the date of the signature of the Award, he would still be the proper arbitrator to sign the award in this Case in view of Article 13, paragraph 5, of the Tribunal Rules which states that “[a]fter the effective date of a member's resignation he shall continue to serve as a member of the Tribunal with respect to all cases in which he had participated in a hearing on the merits …” This provision is not contained in the UNCITRAL Arbitration Rules on which the Tribunal Rules are based, but was added by the Tribunal in the exercise of its powers under Article II, paragraph 2 of the Claims Settlement Declaration.

Whittaker Corp. and The Islamic Republic of Iran, Award No. 301–286–1 (22 Apr 1987), Dissenting Opinion of Judge Holtzmann (27 Apr 1987), reprinted in 14 Iran-US CTR 271 n 2 (1987–I).

(2)  Tribunal Rules, Article 13(2)

D. Mr. Kashani's and Mr. Shafeiei's Resort to Violence and Threats Constitutes a Failure to Act Pursuant to the Tribunal Rules and Renders it De Facto Impossible for Them to Perform Their Functions as Arbitrators under those Rules.

Article 13(2) of the Tribunal Rules provides that an arbitrator may be challenged and replaced first if he “fails to act” or, second, “in the event of de facto or de jure impossibility of his performing his functions.” The arbitrators’ conduct at issue here justifies a challenge on both grounds.

(p. 300)

Messrs. Kashani and Shafeiei have “fail[ed] to act” in two significant respects. First, by their attack and continued threats, Messrs. Kashani and Shafeiei have repudiated basic principles of conduct governing international arbitration. “To act” as an arbitrator entails action in accordance with applicable rules and basic principles of decent conduct. Messrs. Kashani and Shafeiei have renounced those principles and violated those rules. They have thus failed to act as the Rules require.

Second, they have refused to work with Mr. Mangård, a duly appointed member of the Tribunal entitled and obligated to perform the duties of an arbitrator. Each member of the Tribunal has a duty to join with every other member as necessary in deliberations, hearings and other business of the Tribunal. Nevertheless, Messrs. Kashani and Shafeiei have refused to meet with Mr. Mangård in the performance of these required duties. Instead, they have sought to drive Mr. Mangård from the Tribunal by force. Their attack and continued threats violate and abandon their responsibilities as arbitrators. They have thus both failed to act under the first portion of Article 13(2).

Where an arbitrator's refusal to sit paralyzes a tribunal, international law requires the removal of that arbitrator. In the Franco–Tunisian Arbitration, the Tunisian Arbitrators refused to participate in Tribunal proceedings because they believed that the convention establishing the tribunal was invalid. Because the convention required the presence of at least two Tunisians on the tribunal, the refusal of the Tunisian arbitrators to sit threatened to paralyze the tribunal. Accordingly, the tribunal removed the two Tunisians, holding that the refusal of a member of a permanent arbitral tribunal to comply with a request to sit cannot, whatever the reasons given and even if his refusal to sit paralyzes the tribunal, result in dissolving the tribunal or putting an end to its mission.¹

The principle established by these authorities, that an arbitrator who paralyzes the tribunal by refusal to perform arbitral functions shall be removed, is embodied in Tribunal Rule 13(2). As is now indisputably clear, Messrs. Kashani and Shafeiei adamantly refuse to perform their functions as arbitrators. By their actions, they have served notice that they will not participate further in the Tribunal as presently, and lawfully, constituted. So long as they remain members, the Tribunal will remain paralyzed and its arbitral mission frustrated. Under these circumstances, international law requires, and Article 13(2) permits, their removal and replacement.

Even if Messrs. Kashani and Shafeiei were to apologize and agree to work with Mr. Mangård in some fashion, a second, independent ground (p. 301) for challenge under Article 13(2) is applicable. The conduct of Messrs. Kashani and Shafeiei demonstrates their incapacity and unfitness to perform–and hence de facto impossibility of performing–their functions as arbitrators. Arbitrators who physically attack their colleagues and make violent threats against them show a fundamental, irremediable incapacity and unfitness to function as arbitrators.² As the Committee Report on the UNCITRAL Arbitration Rules makes clear, Article 13(2) was drafted to cover all circumstances that make it impossible for an arbitrator to perform his functions. See Report of Committee II, 9th Sess. para 70 (A/CN.9/IX/CRP.1). The conduct displayed here shows such a fundamental defect in temperament and character, that it is impossible, de facto, for them to perform their functions as arbitrators.

Memorandum of the Agent of the United States to the Appointing Authority supporting the Initiation of the Challenge of Judges Kashani and Shafeiei, 17 Sep 1984, at 13–17 (footnote numbers added).

Mr. Richard Mosk participated in the hearing and Award in this case pursuant to Article 13(2) (as amended) of the Tribunal Rules and pursuant to an agreement between the Governments of the Islamic Republic of Iran and the United States of America.

Blount Bros and The Islamic Republic of Iran, Award No. 216–53–1 (6 Mar 1986) at 3, reprinted in 10 Iran-US CTR 95, 96 (1986–I).

taking due account of:

• –  Mr. Brower's appointment as Deputy Special Counsellor to the President of the United States of which I have been notified by a letter of Mr. Brower dated 8 January 1987;

• –  my determination that these are circumstances “of relatively short duration” in the sense of Article 13, paragraph 2 of the Tribunal Rules;

• –  the letters of the Agent of the Government of the United States of (p. 302) America dated 9 January 1987 and 21 January 1987, which acting under the Note to Article 13 of the Tribunal Rules, had appointed Mr. Carl F. Salans as well as Richard M. Mosk as substitute for Mr. Brower in Cases 155, A21, A15 I:C, 830, A19 and 423 and that Mr. Mosk would act as substitute for Mr. Brower in Case 173;

I hereby designate Mr. Salans as member of the Tribunal to act in the Full Tribunal in Cases [see above], and Mr. Mosk to act as a member of Chamber 3 in Case 173.

Presidential Order No. 51, 2 Feb 1987, reprinted in 14 Iran-US CTR 353 (1987–I).

30. Mr. Mostafavi took part in the Hearing and in three sessions of oral deliberations on various procedural issues in the Case. However, at the third session, he announced that, in view of his dissent from decisions reached by a majority of the Chamber on procedural issues, he did not wish to take part in further deliberations. The Chairman then informed Mr. Mostafavi that, in accordance with the Tribunal Rules and Tribunal practice, the Chamber could and would nevertheless continue the deliberations and prepare an Award notwithstanding his absence. Mr. Mostafavi then withdrew from further participation in the arbitration of this Case. The other two Members of the Chamber continued the deliberations and prepared the Award. This is in accordance with the established practice of the tribunal to continue its work and make awards despite the failure of one arbitrator to participate. The practice of the Tribunal in this respect is necessary to prevent disruption and frustration by one Member of the Tribunal's performance of its functions and is fully in accordance with recognized principles of international law. As Judge Stephen Schwebel has observed, “the weight of international authority, to which the International Court of Justice has given its support, clearly favors the authority of an international tribunal from which an arbitrator has withdrawn to render a valid award”. During the period while the deliberations were being conducted Mr. Mostafavi submitted his resignation which in accordance with the Tribunal's usual practice was accepted by the Tribunal effective 17 July 1987, the date on which his successor was appointed and available to take up his duties. It is noteworthy that Mr. Mostafavi had voluntarily withdrawn from deliberations more than six months before his resignation as a Member of the Tribunal became effective. Notwithstanding his resignation and the appointment of his successor, (p. 303) Mr. Mostafavi is a Member of the Tribunal for all purposes of this and certain other Cases pursuant to the provisions of Article 13, paragraph 5 of the Tribunal Rules…. Pursuant to this provision, after his resignation and return to Iran, Mr. Mostafavi participated in other Cases and signed Awards in those Cases. In accordance with the same provision he has been invited to sign this Award.

Uiterwyck and The Islamic Republic of Iran, Award No. 375–381–1 (6 Jul 1988), reprinted in 19 Iran-US CTR 107, 116–17 (1988–II) (footnotes omitted).

Finally, it is appropriate to comment briefly on Mr. Mostafavi's view that when he failed to act he should have been replaced pursuant to Article 13, paragraph 2 of the Tribunal Rules. That provision permits the challenge and replacement of an arbitrator “who fails to act or in the event of the de jure or de facto impossibility of his performing his functions.” Article 13, paragraph 2 is not, however, the exclusive procedure for dealing with the failure of an arbitrator to act. As explained in paragraph 30 of the Partial Award, the established practice of the Tribunal, which is in accord with recognized international procedures is for the majority of the arbitrators to continue their work and issue an award despite the voluntary choice of an arbitrator not to participate. In such circumstances, Article 13, paragraph 2 cannot be invoked to disrupt the orderly process of the Tribunal or to obstruct its other functions.

Uiterwyck and The Islamic Republic of Iran, Award No. 375–381–1 (6 Jul 1988), Supplemental Opinion of Judges Böckstiegel and Holtzmann (6 Jul 1988), reprinted in 19 Iran-US CTR 169, 170–71 (1988–II).

1. 3.1  As noted above, both the way you treated the facts in the Case and your unwillingness to respect recognized principles of equitable proceedings, necessarily and justifiably compelled me, by virtue of my duty to the arbitrating Parties, to refuse to participate any further in the proceedings in this Case. However, it is also clear that even if this refusal were found to be unjustified, the provisions of Article 13, paragraph 2 of the Tribunal Rules will still apply to this issue….

2. 3.2  It will be noted that the above paragraph [text of Article 13, paragraph 2] covers both justified and unjustified cases of refusal to perform an arbitrator's functions and applies both to a current arbitrator and to an arbitrator who has resigned but is still (p. 304) “considered a member of the Tribunal” pursuant to Article 13, paragraph 5 of the Tribunal Rules….

3. 4.1  I wrote in my letter of 10 April 1988, there is no way that Article 13, para 5 of the Tribunal Rules–which has been repeatedly invoked for the purpose of establishing that I am still a member of the Tribunal for the purpose of this Case–can be construed as requiring and compelling me to serve in that capacity. Furthermore, the Tribunal's records on the process whereby this paragraph was approved clearly demonstrate that the Tribunal's members were not intent on applying a dictatorial rule…. However, the more fundamental and important point which I insist be kept in mind in this connection, is that even supposing that one were to reject my abovementioned assertion–that is, supposing that Article 13, para 5 were held to be binding in this instance–all that the said paragraph will, in the end, indicate is that my resignation on 1 April 1987 did not affect those cases in which I was serving as an arbitrator at the time that I resigned, and in the hearings in which I participated before my resignation. With respect to the instant Case it is clear, first of all, that I announced my refusal to participate on 17 November 1986; and by applying the provisions of Article 13, para 2 with respect to that same date, the issue of whether to apply the rule set forth in para 5 of that same Article has been altogether extinguished. Second, and more important, Article 13, para 2 deals with an arbitrator's refusal to perform his functions; and applying Article 13, para 5 in connection with any particular case will, in the end, lead to only one conclusion– namely that notwithstanding his resignation, a resigned arbitrator is considered an arbitrator in respect of that particular case.

Letter of Judge Mostafavi (3 Jun 1988) regarding Uiterwyck and The Islamic Republic of Iran, Award No. 375–381–1 (6 Jul 1988) at 8–10, reprinted in 19 Iran-US CTR 161, 167–69 (1988–II).

I am writing to you on the basis of Article 13, paragraph 2 of the Iran- United States Claims Tribunal Rules to request you to excuse Mr. Gaetano Arangio–Ruiz from his present office as a third country arbitrator to Iran-United States Claims Tribunal, if he does not voluntarily withdraw. Mr. Arangio–Ruiz now has the post of the Chairman of Chamber Three.

The reason for this motion is that, as the facts described below will show, Mr. Arangio–Ruiz has failed to act as his demanding position requires. (p. 305) Under such circumstances, the above–referenced Provision stipulates that:

“… the procedure in respect of the challenge and replacement of an arbitrator as provided in the proceeding articles shall apply.”

This notice has been essentially prompted by the revelations made in Iranian Arbitrator's, Dr. Aghahosseini's Dissent to Order of 26 July 1991 in Cases Nos. 44, 46, 47 and 146, Shahim S. Ebrahimi et al. v. The Government of the Islamic Republic of Iran (hereinafter Dissent to Order). This document imparts the shocking news that Mr. Arangio–Ruiz for the last 12 months has been present at the Tribunal “no more than 40 working days.”

For the above reasons, the Government of the Islamic Republic of Iran believes that Article 13(2) of the Tribunal Rules concerning an arbitrator's failure to act applies to Mr. Arangio–Ruiz's course of conduct, and thus the procedure in respect of the challenge and replacement of arbitrators provided in Articles 6–12 should be followed to remedy the situation.

And wherefore copies of this letter are sent to Mr. Gaetano Arangio–Ruiz, the Chairman of Chamber Three of the Iran-United States Claims Tribunal, to the other Party (the United States of America) and other Members of the Tribunal in accordance with Article 11(2) of the Tribunal Rules.

In case the other party does not agree to this application and Mr. Arangio–Ruiz does not withdraw; you, as the Appointing Authority of the Iran-United States Claims Tribunal are requested to decide upon it pursuant to Article 12(b) of the Tribunal Rules.

The Government of the Islamic Republic of Iran stands ready to file briefs and evidence in support of the legal and factual grounds in this Application, and respond to any points the other Parties might take issue with, according to the schedule you will set for the exchange of memorials.

Letter of the Agent of Iran to the Appointing Authority initiating a Challenge of Judge Arangio–Ruiz, 8 Aug 1991, at 1, 4–5, reprinted in 27 Iran-US CTR 293–97 (1991–II).

I have this honour to advise you that I consider that my conduct does not constitute a failure to act under Article 13, paragraph 2 of the Tribunal Rules.

(p. 306)

I therefore do not intend to withdraw from my office as a third country member of the Iran-United States Claims Tribunal.

I am prepared to refute the allegations in the above–referenced letter of the Agent of the Government of the Islamic Republic of Iran whenever you so instruct me.

I await your further instructions.

By letter dated 8 August 1991, the Agent of the Government of the Islamic Republic of Iran has requested that you excuse Judge Arangio–Ruiz as a third country arbitrator of the Iran-United States Claims Tribunal on the ground that Judge Arangio–Ruiz has “fail[ed] to act” within the meaning of Article 13(2) of the Tribunal Rules.

Pursuant to Article 11(3) of the Tribunal Rules, the United States responds by stating unequivocally that it does not agree to Iran's application. This is not to say that the United States has changed in any way its consistent position that the Tribunal's chambers should expedite their work and that arbitrators should devote full time to their Tribunal responsibilities. This is, however, a matter which must be addressed by the Tribunal itself, and cannot be resolved by filings with the Appointing Authority.

Iran's letter does not set forth grounds for the removal of an arbitrator for failure to act within the meaning of Article 13(2). Analysis of Iran's allegations against Judge Arangio–Ruiz reveals that Iran is proceeding on the basis of a fundamentally flawed notion of the meaning of the phrase “fails to act” as used in Article 13(2). Furthermore, even if Judge Arangio–Ruiz had failed to act, which he has not, Iran has failed to acknowledge the procedures mandated by the last sentence of Article 13(2), which was added to establish a significant role for the President in such a situation.

The plain meaning of “fails to act” is inactivity, not activity of a type that one arbitrating party does not like. And, as set forth in the enclosed Memorandum of Law, the negotiating history of both the UNCITRAL Rules and the related provision of the UNCITRAL Model Law confirm that the “fails to act” provision was devised to address the case of an arbitrator who, while not formally resigning, had ceased all activity with respect to arbitral proceedings.

When an application is made to remove an arbitrator under Article 13(2), the sole relevant question is whether the arbitrator has in fact (p. 307) been completely inactive with respect to the arbitral tribunal for a sufficiently long period that it is appropriate to replace him. The answer would be affirmative, for example, in a situation in which an arbitrator failed entirely to attend hearings or deliberations.

There is no basis in the plain meaning or the negotiating history of Article 13(2) for an interpretation that would require or permit inquiry into the manner in which an arbitrator has performed his functions. The article does not allow considerations of whether others disagree with an arbitrator's decisions, whether others think that his working methods have been diligent, or whether he has behaved in a way that others do not approve. To the contrary, as shown in the enclosed Memorandum of Law, the negotiating history expressly rejects such an interpretation. This is not surprising because such an interpretation would violate the most basic precepts of modern arbitration practice. An arbitrator cannot be subject to review on issues such as why he has decided in a particular way or what working methods he used in reaching the decision, without ultimately undermining the principle of the independence of the arbitrator and the finality of his decisions.

Particularly in light of the plain meaning of the phrase “fails to act” in Article 13(2), Iran's letter is striking in its silence concerning the extensive activities of Chamber Three while Judge Arangio–Ruiz has been its Chairman. The activity statistics are illuminating. Since 1 January 1989, the date on which Judge Arangio–Ruiz became Chairman of Chamber Three, Chamber Three has issued a total of 36 substantive rulings in contested cases (21 awards and 15 interlocutory awards, interim awards or decisions). During the same period, Chamber Two has issued 22 (20 wards, and 2 interlocutory awards, interim awards or decisions) and Chamber One has issued 33 (27 awards and 6 interlocutory awards, interim awards or decisions).

Similar results are seen with respect to shorter periods within the overall period of Judge Arangio–Ruiz tenure.

Thus, for whatever period one considers, the activity statistics for Chamber Three simply do not support the allegations that the Chairman has “failed to act” within the meaning of Article 13(2).

Iran's allegations concerning Judge Arangio–Ruiz do not relate to whether he has “failed to act” within the meaning of Article 13(2) but rather, are criticisms of how he has acted.

(p. 308)

To summarize, Iran's application to remove Judge Arangio–Ruiz is premised on a flawed interpretation of the “fails to act” phrase in Article 13(2). Analysis of objective factors easily reveals that there has been no “failure to act” within the meaning of Article 13(2). Instead, one party–Iran-disapproves of Judge Arangio–Ruiz's manner of acting and disagrees with some of the majority decisions of his Chamber. Both the plain meaning of the “fails to act” phrase and the negotiating history show that such disapproval and disagreement do not Justify an inquiry under Article 13(2), and much less the removal of Judge Arangio–Ruiz.

Accordingly, the United States requests that you summarily reject Iran's application, and allow Chamber Three to proceed apace with the important business before it.

[The accompanying memorandum follows.]

MEMORANDUM OF LAW OF THE UNITED STATES CONCERNING ARTICLE 13(2) OF THE RULES OF THE Iran-United STATES CLAIMS TRIBUNAL

Article 13(2) of the Tribunal Rules contains the entire text of Article 13(2) of the UNCITRAL Arbitration Rules plus an additional last sentence added by the Full Tribunal pursuant to its powers under Article III, paragraph 2, of the Claims Settlement Declaration.

Proper application of Article 13(2) must take into account both the first sentence, unchanged from the UNCITRAL Rules, and the last sentence, added for the purposes of the Tribunal.

The negotiating history of Article 13 of the UNCITRAL Rules reveals clearly the context in which the “failure to act” aspect of the Rule was devised. The preliminary draft of the article that, in relevant part, became Article 13 dealt only with death, incapacity or resignation of an arbitrator. The Summary of Discussion of the preliminary draft at the Eighth Session of UNCITRAL, the first session to take up the drafting of the Rules, notes the following:

The reference in this paragraph to the “resignation” of an arbitrator was examined. It was pointed out that this term might not be sufficiently wide to cover certain situations which might arise in relation to the conduct of the arbitrator. One such situation arose where an arbitrator did not formally resign, but simply ceased to attend the arbitral hearings, or otherwise ceased to participate in the arbitral proceedings. It was suggested that an appropriate provision should be added for a presumption of resignation in such cases. Alternatively it was suggested that the phrase “failure to act” might be added to cover this situation…. (p. 309) It was also suggested that a provision be inserted to the effect that, where an arbitrator resigns or ceases to act, he must give his reasons for such action.

Following the Eighth Session, the draft was revised to include a “failure to act” provision. In the Commentary on the Revised Draft, reference was made to the inclusion of a provision on replacement for “unwillingness to perform the functions of an arbitrator.” United Nations Commission on International Trade Law, Commentary on Revised Draft– Considered at Ninth Session, U.N. Doc. A/CN.9/112/Add.1, para 1. In the same document, the “failure to perform the functions of an arbitrator.” Id., para 3.

In the discussion at the Ninth Session, the representative of Belgium stated that a time–limit for non–performance should be fixed because “otherwise it would be difficult to know at what stage an arbitrator could be judged to have ’failed to act‘.” The representative of the Philippines supported this view, stating that “ ’failure to act’ would be difficult to establish if no time–limit was stipulated.” The Chairman, however, was of the view that the appropriate authority would decide whether and when an arbitrator had failed to act and that “[e]stablishing a timelimit would lead to a lack of flexibility.” No alteration was made in the draft. United Nations Commission on International Trade Law, Summary of Discussion–Ninth Session. Committee II, U.N. Doc. A/CN.9/9/C.2/SR.5, at 5–6.

Accordingly, all the discussion of the drafters concerning the “failure to act” provision related solely to the question of the length of time that should elapse before complete non–participation in arbitral proceedings could be regarded as constituting a failure to act. There was absolutely no consideration of, much less adoption of, any proposal that would (p. 310) have endorsed the use of the provision as a test of how versus whether, an arbitrator performed his functions.

UNCITRAL revisited the subject of “failure to act” when it considered what became Article 14 of the Model Law. In the Model Law as finally adopted, the phrase was modified by the addition of the clause “without undue delay,” so that the procedures set forth in that Article would be invoked.

[i]f an arbitrator becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay …

The legislative history of the “failure to act” provision demonstrates the elements that UNCITRAL considered as the term evolved. By the Fifth Draft the wording was identical to Article 13(2) of the Arbitration Rules. Draft Text of a Model Law on International Commercial Arbitration as Adopted by the Working Group, U.N. Doc. A/CN.9/246 (Annex) (6 Mar. 1984). In connection with that Draft, the Secretariat prepared a Commentary for discussion at the next session of the Commission. In that discussion, the Commission reached somewhat different views, as reflected in its Report–and the Report is, of course, the controlling document. Recalling that, as noted above, UNCITRAL expressly stated that it intended the meaning of the Model Law on this point to be the same as in the Arbitration Rules, it is useful in understanding that meaning to analyze both the Secretariat's Commentary and the Commission's later decision, as reflected in its Report.

The Secretariat Commentary states:

It is submitted that in judging whether an arbitrator failed to act the following considerations may be relevant: Which action was expected or required of him in the light of the arbitration agreement and the specific procedural situation? If he has not done anything in this regard, has the delay been so inordinate as to be unacceptable in the light of the circumstances, including technical difficulties and the (p. 311) complexity of the case? If he has done something and acted in a certain way, did his conduct fall clearly below the standard of what may reasonably be expected from an arbitrator? Amongst the factors influencing the level of expectations are the ability to function efficiently and expeditiously and any special competence or other qualifications required of the arbitrator by agreement of the parties.

Two observations are appropriate concerning the Secretariat Commentary. First, it confirms that the “fails to act” phrase is applicable in the situation where the arbitrator “has not done anything” at which point the relevant question becomes whether the resulting delay has been “unacceptable.” In this regard, the Commentary does not go beyond the previous interpretation of the phrase in the UNCITRAL Rules. Second, the Commentary appears to support an interpretation of the phrase that could include a review of the performance of the arbitrator in certain circumstances–an analysis of whether he functioned “efficiently and expeditiously,” whether his conduct reflected his “special competence or other qualifications.” This aspect of the Commentary appears to expand upon the interpretation of the phrase as discussed in the context of the Rules, although, even in this expanded form, it is clear that the phrase would apply only where the conduct was “clearly below the standard of what may reasonably be expected from an arbitrator.”

It appears that the Secretariat Commentary provoked significant discussion at the next meeting of the Commission in June 1985. A number of representatives suggested changes adding specific language relating to performance of the arbitrator. Thus, for example, the representative of Italy suggested adding specific addition of the phrase “with appropriate speed and efficiency,” and the representative of India suggested “with due diligence” or “with due despatch.” United Nations Commission on International Trade Law, Eighteenth Session Summary Records of the 305th to 333rd Meetings, 3–21 June 1985, U.N. Doc. A/CN.9/SR.314 (7 June 1985). The Commission's disposition of the issue is summarized in its Report:

Another suggestion was to describe more precisely what was meant by the words “fails to act,” for instance, by adding such words as “with due dispatch and with efficiency” or “with reasonable speed.” It was stated in reply that the criteria of speed and efficiency, while (p. 312) important guidelines for the conduct of an arbitration, should not be given the appearance of constituting absolute and primary criteria for assessing the value of an arbitration. It was pointed out that the criterion of efficiency was particularly inappropriate in the context of Article 14 since it could open the door to court (i.e. appointing authority under the Tribunal Rule) review and assessment of the substantive work of the arbitral tribunal. There were less reservations to expressing the idea of reasonable speed, which as regarded as a concretization of the time element inherent in the term “failure to act.”

While considerable support was expressed for leaving the wording of Article 14 unchanged, which corresponded with the wording of Article 13(2) of the UNCITRAL Arbitration Rules, the Commission, after deliberation, was agreed that the expression “fails to act” should be qualified by such words as “with reasonable speed.”

Commission Report at paras138–9 (emphasis added).

Two points are significant concerning the Commission's actions as summarized in the Report. First, the addition of the phrase “without undue delay” to Article 14 of the Model Law, as explained by the commission Report, confirms that the phrase “failure to act” in Article 13(2) of the Rules is concerned only with the length of time that an arbitrator must fail to participate in arbitral proceedings before he may be replaced. Second, the Commission expressly rejected the efforts to expand the scope of the provision to include a requirement that the arbitrator perform his functions “efficiently” or “with due diligence.” Despite some sentiment for adding such a provision, and despite the Secretariat Commentary which appeared to view some such standard as implicit in the “fails to act” phrase, the Commission refused to expand the “fails to act” provision to include considerations of the manner in which an arbitrator performs his functions. It chose, instead, to maintain the phrase solely as a limitation on complete inactivity by an arbitrator, and the resultant delay.

Even in the context of delay of the proceedings, the drafters of the Model Law showed some flexibility. As the definitive commentary on the Model Law has observed:

The text finally adopted recognizes that some “delay” is to be expected in arbitration. That is, it does not mean that a court (i.e., appointing authority under the Tribunal Rules) is to ensure that the arbitration is proceeding in a manner that the court (i.e., appointing authority) deems to be “efficient.” In fact, a proposal to add the phrase “with appropriate speed and efficiency” was specifically (p. 313) rejected because it might involve the courts in reviewing whether a particular procedural step–such as an extra hearing day or a request for further briefing–was necessary. Article 14 invites review only of the question whether the arbitration is moving along, not whether the conduct of the proceedings is wise and efficacious. It is intended to catch the egregious cases and not to place a judge with a stopwatch over the shoulder of every arbitrator.

Strong policy reasons underlie UNCITRAL's refusal to make criticism of an arbitrator's efficiency or manner of working a ground for replacement under either the Rules and the Model Law. Modern arbitration practice is premised on the principle that an arbitrator cannot be challenged, and the validity of a decision cannot be questioned, based on the correctness of the arbitrator's decision on questions of facts or law. It is equally fundamental that a party cannot question the arbitrator's manner of reaching his decision. Just as the grounds for replacement must be strictly limited. To broaden the grounds for replacement to include consideration of the arbitrator's modus operandi–his working habits, his manner of conducting proceedings–in anything but an egregious case where an arbitrator fails to work at all, would be to undermine one of the foundations of contemporary arbitration.

Finally, consideration of the proper scope of Article 13(2) of the Tribunal Rules must take into account the sentence added at the end of the UNCITRAL Rule provision pursuant to Article II, paragraph 2, of the Claims Settlement Declaration. The addition bears repeating:

In applying the principles of this paragraph, if the President, after consultation with the other members of the full Tribunal, determines that the failure of a member to act or his impossibility to perform his functions is due to a temporary illness or other circumstance expected to be of relatively short duration, the member shall not be replaced but a substitute member shall be appointed for the temporary period in accordance with the same procedures as are described in Note 5 to Articles 9–12.

This sentence modifies the UNCITRAL Rule provision as it applies to the Tribunal by specifying an important role for the President of the Tribunal when an allegation of “failure to act” is made. As modified, the Article requires the President to determine, after consultations with (p. 314) the other members of the Tribunal, whether a measure short of replacement of the arbitrator will solve the problem. In a case in which the President determines that the failure to act is the result of temporary illness or other circumstances that are likely to be of short duration, the Article expressly provides for a substitute arbitrator rather than a replacement. In such a case, disruption to the Tribunal is minimized. It follows that if the President were to determine, after consultation with the other members of the Full Tribunal, that the circumstances that allegedly constituted a failure to act no longer existed, the arbitrator would not be replaced.

Letter and Memorandum of the Agent of the United States to the Appointing Authority regarding the Challenge by Iran of Judge Arangio– Ruiz, 5 Sep 1991, at 1–2, 3, 4, 6–7; 1–7 (footnotes omitted), reprinted in 27 Iran-US CTR 312–23 (1991–II).

The main point with which Iran has taken issue is as simple as this: whether an arbitrator who has made a full time commitment–as the United States also appears to concede–to work as an arbitrator at an arbitral tribunal seated in the Hague can be absent from the seat of the Tribunal for a year except for appearances of a few hours duration on 40 days? The irregularities which Iran has discussed with respect to Chamber Three's decisions are merely intended to show some tangible unfortunate results of Mr. Arangio–Ruiz's long absence from the Tribunal and neglect of his arbitral responsibilities. We do not argue– however the US wishes to make believe that we did–the manner in which Mr. Arangio–Ruiz has performed his functions: but rather, our point is that, he has not acted as his demanding position as the Chamber Chairman of the Iran-US Claims Tribunal requires.

The negotiating history of Article 13(2) as presented by the United States is not supportive of its view that “failure to act” means complete inaction. The study of the discussions leading to the formulation of that article cannot but lead one to conclude that “failure to act” is not meant to be absolute and that the level of an arbitrator's performance has to be taken into account in the light of the circumstances of every situation. The United States itself quotes the Secretariat Commentary in a controlling document, in part, as follows:

“It is submitted that in judging whether an arbitrator failed to act the following considerations may be relevant: Which action was expected or required of him in the light of the arbitration agreement and the (p. 315) specific procedural situation? If he has not done anything in this regard, has the delay been so inordinate as to be unacceptable in the light of the circumstances, including technical difficulties and the complexity of the case? If he has done something and acted in a certain way, did his conduct fall clearly below the standard of what may reasonably be expected from an arbitrator? Amongst the factors influencing the level of expectations are the ability to function efficiently and expeditiously and any special competence or other qualifications required of the arbitrator by agreement of the parties.” U.S. Memorandum of Law, p. 4.

And for the reasons stated in our application, Mr. Arangio–Ruiz, because of his uncontested absence of almost eleven months of a year from the seat of the Tribunal, has manifestly failed to act as expected or required of him as a Chamber Chairman.

[The United States] would have the absurd result that all arbitrators, party appointed and third country arbitrators alike can return to their sweet homes and ask their legal assistants to do their job. If the work of a legal assistant is as good as that of an arbitrator, there should have been no reasons for the parties to bother so much about the appointment of a right arbitrator. If a legal assistant can do everything else, there is no reason for him not to be able to replace an arbitrator at a hearing or a deliberation session.

The fact of the matter is that a legal assistant, by definition, may not be expected to do more than assist an arbitrator. He cannot practically substitute the arbitrator. The Tribunal arbitrators' power of adjudication has been delegated to them by the States parties to the Algiers Declarations and, as such, according to a settled principle of law, they cannot grant that delegated power to someone else, in the absence of a provision to the contrary. Delegata potestas non potest delegari.

The activity statistics provided by the United States to prove that not only has Mr. Arangio–Ruiz not been less active, but he has been far more productive than the Chairmen of the two other Chambers are irrelevant, misleading and erroneous.

They are irrelevant because the central point at issue is that Mr. Arangio– Ruiz has been absent from the Tribunal's seat for almost a year and thus has not sufficiently attended to his responsibilities as a Chamber's presiding arbitrator; and that, as a result, his arbitral work has been done by his legal assistants to an unacceptable measure.

(p. 316) Letter of the Agent of Iran to the Appointing Authority regarding its Challenge of Judge Arangio–Ruiz, 17 Sep 1991, at 1, 2–3, reprinted in 27 Iran-US CTR 324–27 (1991–II).

B. GROUNDS OF THE REQUEST

The letter mentioned above under A sub a of the Agent of the Islamic Republic of Iran cites a number of grounds as warranting the complaint that Mr. Arangio–Ruiz failed to act within the meaning of Article 13(2) of the Tribunal Rules. These grounds may be summarized as follows:

1. 1.  during the last 12 months Mr. Arangio–Ruiz did not spend more than 40 working days at the Tribunal, 14 days of which were spent physically participating in hearings;

2. 2.  the limited time Mr. Arangio–Ruiz did spend at the Tribunal cannot have been sufficient to read carefully the parties’ pleadings and to examine their evidence; therefore it must be assumed that he has been wholly depending on condensed and selective versions of those pleadings and evidence that his legal assistant chose to communicate to him;

3. 3.  Mr. Arangio–Ruiz failed to study properly the cases brought before his Chamber and several times demonstrated that he was insufficiently informed; the joinder question discussed in the dissenting opinion of Mr. Aghahosseini, mentioned above under A sub a, shows a “discernible vice” of an arbitrator's insufficient knowledge of the issues to be decided;

4. 4.  Mr. Arangio–Ruiz's rare attendance at the Tribunal accounts for the sluggish adjudicating process of Chamber Three, in which Chamber there is a comparatively large backlog of unresolved cases.

C. CONSIDERATIONS ABOUT ARTICLE 13(2) OF THE TRIBUNAL RULES

a. Text of paragraph 2 of the Article 13 of the UNCITRAL Rules:

In the TRIBUNAL RULES the following is added as the last sentence of paragraph 2 of Article 13 of the UNCITRAL RULES:

This addition does not prevent a party from making a request such as the present to the Appointing Authority, nor does it bar the reviewing of such a request by the latter. However, I share the view expressed in the letter of the Agent of the United States, dated 5 September 1991, mentioned above under A sub c, that, as a consequence of this addition, in the event that the Appointing Authority considers that an arbitrator has (p. 317) failed to act within the meaning of Article 13(2), the removal and replacement of that arbitrator will not be possible if the President of the Tribunal, after consultation with the other members of the Full Tribunal, determines that the failure is due to a temporary illness or other circumstance expected to be of relatively short duration.

b. The meaning of “failed to act” in Article 13(2) of the Tribunal Rules

It is clear that an arbitrator who, while not having formally resigned, has totally ceased to participate in the arbitral proceedings “fails to act” within the meaning of Article 13(2) of the Tribunal Rules.

It is also clear, in the light of the negotiating history, that the drafters of Article 13(2) of the UNCITRAL Rules were reluctant to jeopardize the independence of an arbitrator by allowing the efficiency of his working methods to be an object for review.

However, taking into account the purpose of the provision–to safeguard the regular progress of the adjudicatory process–it is reasonable to assume that the phrase “fails to act” also covers the situation in which an arbitrator, though not completely inactive, consciously neglects his arbitral duties in such a way that his overall conduct falls clearly below the standard of what may be reasonably expected from an arbitrator.

E. CONCLUSIONS

a. No conclusive evidence has been supplied that the complaints made against Mr. Arangio–Ruiz, mentioned above under B sub 2 to 4, are justified.

The only issue that remains to be decided by me is whether, taking into account all relevant circumstances, the limited number of days Mr. Arangio–Ruiz spent at the Tribunal, as mentioned above under B sub 1, in itself warrants the conclusion that he failed to act within the meaning of Article 13(2) of the Tribunal Rules.

It is not up to the Appointing Authority or to the President of the Tribunal to answer the question whether a more frequent presence of Mr. Arangio–Ruiz at its seat would have been desirable–and still is to be desired–in the interest of an efficient functioning of the Tribunal.

b. It should be noted: 1. that it appears to me that Mr. Arangio–Ruiz's absences from the Tribunal were not due to any unwillingness to perform his Tribunal duties properly, but in all probability can be attributed to his preference to prepare his cases not at his Tribunal office but at other places where he would not be disturbed, and that his dedication to important work outside the Tribunal demanded of him, while not (p. 318) prejudicing the discharge of his duties as arbitrator of the Tribunal, also required his frequent presence elsewhere than in the Hague; 2. that the absence of arbitrators and of chairmen of a Chamber of the Tribunal for substantial periods of time has not been exceptional and may have appeared to be a regular feature of the Tribunal; 3. that while it is one of the primary responsibilities of a Tribunal President to safeguard the proper functioning of the Tribunal, apparently no President of the Tribunal found sufficient reason to require a more frequent presence of Mr. Arangio–Ruiz at the Tribunal.

For these reasons I must come to the conclusion that Mr. Arangio–Ruiz has not consciously neglected his arbitral duties in such a way that his overall conduct as an arbitrator and chairman of one of the Tribunal's Chambers falls clearly below the standard of what may be reasonably expected of an arbitrator and chairman in a Tribunal such as the Iran- United States Claims Tribunal, and that therefore he cannot be said to have failed to act within the meaning of Article 13(2) of the Tribunal Rules.

Decision of the Appointing Authority on the Challenge of Judge Arangio– Ruiz, 24 Sep 1991 at 3–5, 7–8, reprinted in 27 Iran-US CTR 328–36 (1991–II).

(3)  Tribunal Rules, Article 13(3)

I dissent to the above–mentioned orders canceling the hearings in the three captioned Cases, because of the improper procedure through which they have been issued … Having been recently challenged by the Government of the Islamic Republic of Iran, he [Briner] has obviously forfeited all competence to handle any of the Tribunal's judicial or administrative affairs including issuance of the aforementioned orders …

1. 8.  Nor should the fact that Mr. Briner is the Tribunal President be construed as conferring upon him the privilege of an interpretation of the Rules which is contrary to the challenge mechanism. A de jure or de facto impossibility (which may be permanent) of the presiding Member's performance of his functions, is at least a case which is obviously analogous to the president's temporary absence. For this latter case, the Rules have provided as follows:

   “In the event of the temporary absence of the President, the senior other member of the Tribunal not appointed by either of the two (p. 319) Governments shall act as President of the Tribunal and as Chairman at the meetings of the Full Tribunal. Article 13(3).”

This situation could have been applied in the instant case without disrupting the Tribunal's current proceedings.

Dissenting Opinion of Judge Khalilian with Respect to the Orders, dated 11 Aug 1989, in Case Nos. B1 (Claim 1), 197 and 476, 22 Aug 1989, reprinted in 21 Iran-US CTR 279 (1989–I).

(4)  Tribunal Rules, Article 13(4)

No relevant practice.

(5)  Tribunal Rules, Article 13(5)

Provisionally applied by decision of the Tribunal on 7 October 1983 at its 86th meeting (FTM 86, paragraph 9) and definitively adopted as an amendment to the Tribunal Rules by decision of the Tribunal on 7 March 1984 at its 90th meeting (FTM 90, paragraph 14). The following is the text as issued by the Tribunal:

Article 13 of the Tribunal Rules is amended by the addition of a new paragraph as follows: [See above section 2, paragraph 5 of Article 13 of the Tribunal Rules].

Following the Hearing, the member of the Tribunal appointed by the Islamic Republic of Iran resigned. A new member was appointed. The Tribunal has hereby determined not to repeat the prior hearing (see Article 14 of the Tribunal Rules). As from 15 January 1984, the member appointed by the United States also resigned. Pursuant to an amendment to Article 13 of the Tribunal Rules, provisionally adopted on 7 October 1983 and definitively adopted on 7 March 1984 [Article 13, paragraph 5], the resigned member participated in the Award.

Morrison–Knudsen Pacific Ltd and Ministry of Roads and Transportation, Award No. 143–127–3 (13 Jul 1984) at 4, reprinted in 7 Iran-US CTR 54, 56 (1984–III).

Pursuant to Article 13, paragraph 5, of the Tribunal Rules, a member who had resigned after the Hearing on the merits of this claim participated in this Award.

Harnischfeger Corp. and Ministry of Roads and Transport, Award No. 144–180–3 (13 Jul 1984) at 4, reprinted in 7 Iran-US CTR 90, 92 (1984–III).

(p. 320)

One of NIOC's allegations of procedural error contains a factual error which warrants comment, however. NIOC states that Judge Mangård was “not competent” to participate in the issuance of the Award under Article 13, paragraph 5 of the Tribunal Rules, since before his resignation from the Tribunal he had not participated in a Hearing on the merits of the Case but only in a pre–Hearing Conference. In fact, the final Hearing in this Case was held on 21–23 June 1985, before Judge Mangård's resignation took effect on 1 July 1985.

Sedco Inc. and The Islamic Republic of Iran, Decision No. DEC 64–129–3 (18 Sep 1987) at 3, n 1, reprinted in 16 Iran-US CTR 282, 284 n 8 (1987–III).

Having now determined that the aforesaid circumstances expected to be of relatively short duration terminated with effect from 6 April 1987; I hereby order that, without prejudice to the application, as appropriate, of Article 13, paragraph 5 of the Tribunal Rules, Presidential Order No. 51 shall cease to have effect today.

Noting that Article 13, paragraph 5, constitutes a derogation from the normal composition of Chambers (Article III, paragraph 1, Claims Settlement Declaration, Article 5 and Article 13, paragraph 1 of the Tribunal Rules), and noting further that in the Full Tribunal no majority could be found either for or against the applicability of Article 13, paragraph 5, to Mr. Mangård in Case No. 48, it appears to me that Article 13, paragraph 1, should be considered to prevail and that Chamber 3 in its present composition with Mr. Virally as Chairman should further deal with this case.

Letter of the President regarding American Bell International Inc. and The Islamic Republic of Iran (12 Sep 1985), reprinted in 9 Iran-US CTR 409 (1985–II).

Accepting arguendo the President's premise that Article 13(5) “constitutes a derogation” from the “normal composition” of Chambers …, whatever validity there might have been to the conclusion that such “derogation” not prevail was lost when Chamber Three decided in 1984 thenceforward to apply such “derogation” itself as “the normal composition” in this Case.

… Thus it is the exclusion of Judge Mangård from further proceedings (p. 321) in this Case (and not his inclusion) that constitutes a “derogation” from the presently established norm. Accordingly, the conclusion that an even division of opinion in the Full Tribunal leaves the status quo intact should lead to confirmation of Judge Mangård's further participation rather than its curtailment.

… The exclusion of Judge Mangård from completing this Case can mean only one of two things: Either it constitutes an interpretation of Article 13(5) at variance with that previously made by Chamber Three, in which case the previous Award would be called into question; or it means that Article 13(5) thereby is changed, presumably to make its application discretionary (which was not the Tribunal's intention in adopting it). The latter possibility would have the additional problem that a change of Article 13(5) was never discussed in the Full Tribunal, a fact which in turn would cast doubt on the character of the Tribunal deliberations if not on the validity of the amendment itself. Either result would leave the Tribunal undeservedly blemished.

The only course open to the President that would not have impaired our institutional integrity would have been (1) either to note officially that the Tribunal had failed to disaffirm the application of Article 13(5) to Case No. 48 by Chamber Three or (2) in the exercise of his powers under Article 31(2) to confirm such application.

Dissent by Charles N Brower to the Letter of the President regarding American Bell International and The Islamic Republic of Iran, reprinted in 9 Iran-US CTR 410 (1985–II).

Mr. Karl–Heinz Böckstiegel, whose resignation took effect on 15 December 1988, continued to participate in the Award in this case in accordance with Article 13, paragraph 5 of the Tribunal Rule.

Jimmie B Leach and The Islamic Republic of Iran, Award No. 440–12183–1 (6 Oct 1989) at 2, para 3, reprinted in 23 Iran-US CTR 233, 234 (1989–III).