Given my concerns about ISDS and its effects on the policy space of states, sometimes people are surprised to learn that I have consulted to the investor's counsel in a number of these disputes. The fact is, though, that sometimes the investor happens to be the good guy, and has really suffered treatment at the hands of the state that is grossly abusive and unfair. But are good guys likely to get justice in ISDS? Sometimes they win-but... I'm now working on a longer piece on a case that is a remarkable tale of how the insider arbitrator/counsel elite has frustrated for decades the attempt of a victim of the military coup of General Pinochet in Chile to obtain redress for the seizure of his newspaper, which was associated with the prior democratically-elected Allende regime.
Casado brought his case to an ICSID tribunal first in 1999.Each attempt at recovery for this pretty egregiously illegal expropriation was rebuffed at one stage or another, with some device or other. At one point the outstanding human rights barrister and now best-selling author Philippe Sands appears to have had his arm twisted to resign from the tribunal. There was an annulment, with the President of the Annulment Committee being Yves Fortier (the same arbitrator who later in Yukos, expert evidence showed, had his opinion largely ghost-written by a research assistant; Fortier apparently billed the parties $1.7 million for the assistant; the award was set aside by a Dutch court, though on other grounds). In 2016, finally, after starting a new claim subsequent to the annulment, Casado was granted a Pyrrhic victory. The tribunal found Chile liable but through tortured and unprincipled reasoning entirely denied Casado's claim for reparations. Naturally, Casado is seeking further remedies under the ICSID Convention. The claimant also discovered that the law chambers of 2 of the 3 arbitrators in the case (Frank Berman and V.V. Veeder) had been receiving significant business from the Chilean government. Understandably. Casado requested to ICSID that Berman and Veeder be disqualified from the tribunal for purposes of the rectification proceedings.
On February 21, 2017, ICSID denied the request for disqualification. The sole grounds was that the claimant should have known from reading the news media that Essex Chambers was representing Chile in other matters, and that the request of disqualification was not timely.
End of story? Not exactly. Two days later, the claimant filed a further submission to ICSID, presenting evidence that Veeder had lied during the disqualification proceedings. The claimant had deposed Veeder regarding his behavior in a previous case where he had failed to disclose a conflict of interest. Veeder replied that he only became aware of the conflict once the case was at the hearing phase, at which point he promptly resigned. (The conflict was this: one of the counsel for the claimant was also Veeder's co-counsel in another case at the same time-you get it, what an incestuous little world!). According to documents cited in Casado's submission, the Tribunal was, however, informed and aware of the conflict around 2 weeks before the hearing and it had already become a concern for Veeder's fellow arbitrators.
Will ICSID eventually give Casado justice, assuming that documentary evidence has indeed now exposed Veeder as a liar? I'm skeptical (and we don't yet know what Veeder's reply is to these allegations). But a positive development in another case suggests a different avenue may be possible for holding arbitrators accountable for unethical conduct. In the Puma decision, which happened coincidentally almost the same day as this last episode in the Casado claim, the Spanish Supreme Court awarded damages to the plaintiff in a tort suit against two of the arbitrators; these arbitrators had apparently excluded their colleague, the third arbitrator, from key deliberations (the arbitration in question was a commercial arbitration not investor-state). Often domestic jurisdictions provide arbitrators with immunity from tort liability with respect to their decision-making, but the immunity provisions in question also may make exceptions in cases of bad faith or grossly negligent or irresponsible conduct. Casado, who hails from Spain, may yet get justice in some forum, and perhaps the high court of his native country has paved the way.
