Showing posts with label investment treaty arbitration. Show all posts
Showing posts with label investment treaty arbitration. Show all posts

Wednesday, January 22, 2014

A BIT of a Secret: Op-Ed in The Indian Express.

The Indian Express today carried an Op-Ed piece written by me together with Anirudh Wadhwa.  It is on increasing transparency in Investment Treaty Arbitrations which arise out of Bilateral Investment Treaties. The piece argues the case for the need of transparency and in addition discusses introduction of the UNCITRAL’s Transparency Rules in Indian BITs . These Rules are slated to take effect from the 1st of April, 2014.  It also discusses other international developments that have ensued to increase transparency worldwide, such as by USA and Canada.
The link to the piece is here: http://epaper.indianexpress.com/c/2256799

Friday, November 1, 2013

Breaking: A New Treaty Claim against India. Yet Again!

This time it is Germany's Deutsche Telekom which has filed a treaty claim against India under the India-Germany Bilateral Investment Protection Agreement aka Bilateral Investment Treaty (BIT). The claim has been filed over the cancelled satellite venture which has earlier led to two separate arbitrations at ICC and PCA under the UNCITRAL Rules between Devas and Antrix which is the marketing arm of the Indian Space Research Organization. Interestingly, this latest development has not yet come to the knowledge of Indian media and hopefully shall be taken from here on. Is it lack of transparency by the government or has just been ignored by the media remains a question. The former seems to be more probable. 

Few months back Antrix had reached the Supreme Court to halt the earlier arbitration which was rejected. More on this here and here. 

The notice for this fresh treaty claim was filed on September 2, 2013. According to external sources, this arbitration is slated to use the ICSID additional facility rules since India is not a party to the ICSID Convention. The most intriguing point is that the India-Germany BIT does not stipulate resolving dispute through ICSID additional facility Rules at all. It is not clear how Deutsche Telekom would pursue it unless it is going to claim some sort of MFN treatment as other Indian BITs do carry a provision of dispute getting resolved through ICSID additional facility rules. Such measure, if taken would be quite interesting. 

According to an earlier report in the Mint which was released during the SC trial, Deutsche Telekom holds a 20% stake in Devas, while Columbia Capital and Telcom Ventures each hold around 17%. The rest is held by the founders of Devas including Ramachandran Vishwanathan, chief executive of the firm. 

The project was to give Devas bandwidth to offer broadband services to consumers in India. The newspaper reported that “The cabinet committee on security called off the deal in 2011 after questions arose on whether the procedure followed by Antrix to allocate the air waves was the most economically favourable possible for the exchequer. The committee scrapped the deal on the grounds that it was not in the security interest of the country.” 

Deutsche Telekom had written to India’s Prime Minister Manmohan Singh last year threatening arbitration but the amount was not disclosed. An indication of Deutsche Telekom filing an investment treaty claim before it actually did was reported in April (See here). 

Int' Arbitrations Hijacking Domestic Judicial System, Says FM.

According to this report  in Business Standard earlier this month, India’s finance minister P Chidambaram gave a statement to a very well-known think tank in the USA that international arbitration was hijacking the domestic judicial system.  He told that this opinion was also shared by the Australian Treasurer, Joe Hockey who he met during the annual plenary meeting of the International Monetary Fund and the World Bank. 

Following are the excerpts of what he said:

"We think that international arbitration is hijacking the domestic judicial system. There are two major concerns. Commercial arbitrations between Party A and Party B, sovereign is being dragged into quite unnecessarily and unjustified,"

"The second concern is that the judgments of the highest court in the country are being made subject to international arbitration,"

“We believe in efficacy of bilateral investment protection agreements. We want such international agreements. But we want to guard against the ingeniously interpreted to enlarge the jurisdiction of international arbitrations. And you would agree with me that there are numerous cases of jurisdiction hopping and jurisdiction shopping in international arbitration today"

I understand his statements are more in context of the White Industries Case where a commercial arbitration eventually turned into an investment arbitration. The worried tone also refers to the deluge of investment treaty claims that India faces today.  However, “hijacking the domestic judicial system” is not quite an apt phrase which should be used in this context.  On a policy level it only shows that the government is turning obstinate and defensive rather than taking active corrective measures. Anyone wanting to read my detailed analysis of White Industries Case in Kluwer's Journal of International Arbitration can let me know and I will be happy to share it. The abstract of the article at the end of this post. 

Thursday, October 3, 2013

An Indian Company Goes Treaty Shopping…

The following is a guest post by Shashank P. Kumar, originally published on the International Law Curry blog. 

Amidst reports of yet another investment treaty arbitration against India over the cancellation of 2G licenses by the Indian supreme court (ToI, IE, Also see this post), the ICSID has registered an arbitration that may well represent the first time an Indian TNC has gone treaty shopping.

According to its website, on 27 September 2013, the ICSID registered an arbitration proceeding initiated by Spentex Netherlands, B.V., against the Republic of Uzbekistan (ICSID Case No. ARB/13/26). A quick Google search reveals that the Claimant in this case, Spentex Netherlands, B.V., is actually a subsidiary of Spentex Industries Ltd., a textile company registered and incorporated in New Delhi and managed by Indian nationals. The 2012-13 Annual Report of Spentex Industries Ltd. provides some insight on the relationship between the Indian parent and the Dutch and Uzbek subsidiaries. Note 42 of the Financial Statement states that:

The Company [Spentex Industries Ltd.] has an investment of Rs. 56,10,11,339 [approx. USD 89,83,362] and Rs. 93,23,779 [USD 1,49,301] in its subsidiary Spentex Netherlands B. V. (SNBV) and its step down subsidiary Spentex Tashkent Toytepa LLC (STTL) respectively. Further it has Rs. 7,00,12,404 as export receivable from STTL and advances of Rs. 9,50,70,902 in SNBV as on March 31, 2013.



The ICSID website does not yet give any further details about the arbitration, except that its subject matter relates to the “Textile Industry.” Spentex India’s statements provide some insight on the details of the dispute. Spentex India describes its version of the developments in Uzbekistan in a press release (apparently) dated 31 May 2012:

An Indian investor SIl (Spentex) through its project company STTL invested and commenced its business in Uzbekistan in right earnest and made investment vide Investment Agreement dated 26th September 2006 entered between the Government of Uzbekistan and Spentex (investor). However, in the midst of term of the Investment Agreement certain changes in legal provisions, economic and business conditions and policies were adversely changed by the authorities in Uzbekistan. These changes being contrary to the provisions of Investment Agreement jeopardized the legal stability of its project company and its business became completely unviable. Spentex made many representations to Uzbek authorities and its financers for rectifying the situation but the same went unheard and ultimately project company was forced to shut down all its factories in Uzbekistan and bankruptcy was thrust upon it. Harassment by tax authorities and prosecutors was another reason which never allowed STTL to function normally as arbitrary penalties were imposed and pressure from the prosecutor was a common feature

The arbitration proceeding also finds a mention in Spentex India’s 2012-13 Annual Report:

During the period of investment Government of Uzbekistan changed certain laws and policies by breaching the investment agreement and rendered operation of STTL unviable. Since treaties entered between the Governments of India and Uzbekistan and the Investment agreement entered between Govt. of Uzbekistan and STTL were breached, company has issued notice claiming in excess of USD 100 Mn. towards protection of investment and payment of dues & compensation for the losses suffered by the company.

Interestingly, although the above quote from the Annual Report refers to the the bilateral investment treaty (BIT) between India and Uzbekistan being breached, the claimant in the arbitration proceeding is the Dutch subsidiary of Spentex India, suggesting that the claimant has sought protection under the Netherlands-Uzbekistan BIT. This is not unusual, as transnational corporations investing in foreign countries often structure their investments through a subsidiary in The Netherlands in order to avail the benefits of the vast network of Dutch BITs. The IISD, in a critical piece, notes that Dutch BITs “invite[] ‘treaty shopping,’ – i.e. routing investments through third countries to acquire the protection of investment treaties that investors would not, otherwise, have in their home state jurisdiction.” Even though the merits of the practice continue to be debated, there is no general international legal rule prohibiting investors from structuring their investments in a manner that allows them to avail of the greater protection available under certain treaties.

This development is interesting because it, once again, shows the blurring of the traditional capital-importing/capital-exporting dichotomy in the discussions on investment treaties and investment arbitration. While investment treaties and investment arbitration may initially have emerged in a world where capital exporting countries primarily sought to protect their investors operating in capital importing countries, the scenario today does not allow for such a clear and easy distinction to be drawn as traditional capital exporting countries gradually find themselves fending off claims by foreign investors today. This, for example, is reflected in the evolution of the United States BIT program, which was focused mainly at investment protection abroad in its early days. In recent times, however, as the flow of investments into the United States has increased, its BITs have evolved to take into account not just the need for protecting investments abroad, but also the impact of such treaties and claims by foreign investors on the domestic regulatory space available to the government.

Faced with several claims by foreign investors under different BITs, there has been widespread criticism of the Indian BIT program as being too “pro-investor.” The Indian government has gone back to the drawing board and is currently reviewing its BITs. Cornered by the many treaty claims it faces, the government may well see BITs and investment arbitration as liabilities that expose it to unnecessary international litigation. However, as the Spentex case well illustrates, Indian investors are also increasingly investing abroad. Given the reciprocal basis of BITs generally, if India dilutes the standards of substantive and procedural protection in its BITs in immediate response to the claims filed against it, this would also weaken the protection available to Indian investors abroad. Therefore, as India undertakes to review and rationalize its BIT program, it must strike a careful balance between its domestic regulatory interests, on the one hand, and the interests of the Indian investor abroad, on the other. In its attempt to shield itself from claims by foreign investors, India should not deprive its own investors the benefits and protection promised by BITs.

Hat-tip to Aditya Singh for the alert about the Spentex arbitration.

Tuesday, October 1, 2013

India in Investment Arbitration LOOP.

A news report in the Indian Express here reports that Khaitan Holdings (Mauritius) Limited (KHML), a Mauritius based investor in Loop Telecom has initiated investment arbitration under the India-Mauritius BIT seeking damages over USD 1 billion for cancellation of its investment in 2G licenses which were cancelled by the Supreme Court of India.  To quote from the report: 

“KHML in the notice said that Supreme Court judgement has held Indian government process to issue licence "seriously flawed and legally untenable, as well as its policy being inherently arbitrary," and neither KHML nor Loop were blamed for this. ‘Despite this, neither adequate or any compensation has been paid to KHML and the spectrum has been subsequently re-bid,’ the notice said.”   

India now features as one of the top nations against which investment treaties claims lie. It all began with the success of White industries’ investment claim against India. Readers who wish to have a detailed analysis of the White Industries’ case may read my article in Kluwer’s Journal of International Arbitration. The abstract along with the citation is: 

“The Indian arbitration landscape is set for a completely new twist in the wake of the first investment arbitration award rendered against India. The decision was rendered in the matter between White Industries Australia Ltd. and the Republic of India in an United Nations Commission on International Trade Law (UNCITRAL) arbitration. This article examines the case, observes the questions which were considered by the tribunal, and discusses the rationale of the tribunal in arriving at its decision. Apart from an analysis of the case, the article also discusses its ripple effect which has already set in.
Ashutosh Ray, 'White Industries Australia Ltd. v. Republic of India: A New Lesson for India' (2012) 29 Journal of International Arbitration, Issue 5, pp. 623–635”

Sunday, March 4, 2012

India - Russia headed towards investment arbitration?

Following the cancellation of the 2G licenses of Sistema Shyam TeleServices, the Russian conglomerate Sistema JSFC, majority shareholder in Sistema Shyam, has invoked Article 9.1 of the India-Russia Bilateral Investment Treaty ("BIT") to protect its investment. 

The Russian investor has sent letters to the Ministry of External Affairs, the Finance Ministry and Ministry of Communications and IT, Government of India, apart from the Indian embassy in Moscow, informing them of its intention to commence arbitration proceedings if the problem was not resolved by 28 August 2012. 

Sistema is of the opinion, according to a statement issued by the company, that the cancellation of Sistema Shyam's licenses following Sistema's investment of billions of dollars into the Indian cellular sector is contrary to India's obligations under the BIT, including obligations to provide investments with full protection and security and obligations not to expropriate investments. 

The Indian company is also resorting to other kinds of legal recourse, more details on which may be found here.

More information on the status of this dispute will be put up as the story unfolds.



Update: Read about this upcoming dispute and investment arbitration involving India, here, here and here.

Tuesday, February 7, 2012

DIPP proposes exclusion of arbitration clause in Indian Investment Agreements

Live Mint reports here that the Department of Indsutrial Policy and Promotion ("DIPP") has proposed that India should not include Investor - State Dispute Settlement Mechanisms in its future economic treaties. The timing of the suggestion is interesting given that the decision in White Industries Arbitration is expected to come out soon. This could be a reflection of government's expectations on how the award will go.

The Mint report quotes an official of DIPP who gives the following reasoning for the suggestion - “This is now the view worldwide that the state should not get drawn into private disputes”. This characterisation of investment disputes as "private disputes" is erraneous. What is being adjudicated upon in an investment arbitration is obligations undertaken by a sovereign State in its treaty relationship with another Sovereign State. Hence, while the dispute is with a "private party", the dispute itself is far from "private".

It is true that we have seen a few withdrawals from the ICSID investor-State dispute resolution mechanism in the recent past and that there are concerns about the impact of investor-State arbitration on regulatory freedom of States. However, given the number of BITs and other economic agreements currently in force with a dispute resoltution clause, this cannot possibly prevent India from being 'dragged into' investment disputes in the future.

Additionally, if adequate care is not taken in the redrafting of our BIT templates in accordance with this suggestion, there could be situations where investors claim a right to access such dispute settlement mechanisms, though not provided for under a BIT, relying on the Most Favoured Nation Clause in the BIT and the availability of such mechanisms to third State investors.

I will soon be back with more thoughts on this issue.

Thanks to Mr. Luke Eric Peterson for drawing my attention to the issue and  discussing a few aspects in relation to the same.

Monday, October 31, 2011

Canadian investor devices novel strategy to fund its investment arbitration with Venezuela

Canadian mining company Crystallex, which is engaging in a legal battle with Venezuela over the treatment of its investments in Las Cristinas gold project has announced a novel strategy to fund the investment arbitration. Unable to finance its outstanding debts and the costs of arbitration consequent to measures adopted by Venezuela, Crystallex is issuing securities worth US$120 million linked to the proceeds of a future ICSID win against Venezuela.

Further details of the securities, which are currently being sold through private placements, can be found here.

Friday, October 21, 2011

More on White Industries Arbitration: When did it start and who are the real players?

In a previous post, I shared a piece written by Mr. Prabhash Ranjan and me on the White Industries investment arbitration. However, there is much that is not really known in India about this arbitration. For instance, I was surprised when Bar & Bench reported that Additional Solicitor General Mr. Vivek Tankha represented India at the proceedings, as investment arbitration is a complex area of law which cannot be handled by a lawyer specializing in domestic laws, however eminent he may be (Palkhivala's arguing before the ICJ on substantive points is an exception, like Palkhivala himself is). Further, no one really seemed to know when the request for arbitration was filed and who the arbitrators were.

Last night, I had the opportunity to have a chat with Mr. Luke Eric Peterson, a legal journalist reporting on investment arbitration proceedings at IA Reporter. Surprisingly, he had many more details on this case than that have been reported in India. It was he who first reported the existence of the dispute on July 7, 2011. He was kind enough to agree that he would remove the "pay wall" on that article and make it freely accessible here. The article discusses the complete details of the panel, the legal teams, etc. Please note that the article mentions Singapore as the venue which was subsequently shifted to London.

Thanks Luke!

This raises a larger question. In India is there any obligation on the government to inform the public or their representatives in the Parliament when the country is involved in an international dispute? Will cover that in a later post.

Monday, October 17, 2011

On the White Industries investment arbitration

Today's Financial Express has a piece co-authored by Mr. Prabhash Ranjan and me on the ongoing investment arbitration between India and the Australian investor White Industries. The piece, titled 'BIT of a problem down under' can be accessed here.

Friday, May 27, 2011

Enforceability of Investment Treaty Arbitration Awards in India

The latest issue of the Asian Journal of Comparative Law (Vol. 6, Issue 1, 2011) contains an article critically reviewing the enforceability of investment treaty arbitration awards in India. The paper is titled "The Enigma of Enforceability of Investment Treaty Arbitration Awards in India" and is co-authored by Mr. Prabhash Ranjan, Assistant Professor at National University of Juridical Sciences, Kolkata (currently on leave to read for PhD at King's College, London) and Mr. Deepak Raju, my co-blogger on lexarbitri.
This paper first discusses relevant provisions of arbitration law in India and its interpretations by the Indian judiciary to understand the ramifications of Indian law for the enforcement of investment treaty arbitration awards against India. Further, the paper discusses proposed amendments to Indian arbitration law and its effect on investment treaty arbitration.
This issue of enforcement of investment treaty arbitration awards is of importance today due to India's large international investment treaty programme wherein each treaty provides for investor-state treaty arbitration to settle disputes between India and individual investors. There is also a growing observation that enforcement of foreign commercial awards has become increasingly difficult in India especially after the case of Venture Global v. Satyam Computers. For this reason, too, India is seeking to modify its arbitration law, so as to alter this perception. The above paper puts forth the proposition that in spite of proposed amendments, enforcement of investment treaty arbitration awards may nevertheless face several hurdles.
In conclusion, the paper suggests that India must address the issue of enforceability of investment treaty arbitration awards give its large investment treaty arbitration programme aimed at attracting foreign investment.

Saturday, April 23, 2011

Non-enforcement of arbitral awards: ICSID takes a U-turn

Enforcement of arbitral awards under bilateral investment treaties has been a complex matter. Unlike the Iran - US claims tribunal awards against Iran which are satisfied from an initial deposit made by Iran at the time of the formation of the tribunal, BIT awards enjoy no such certainty of enforcement. While common sense dictates that a BIT that provides investors a right to arbitration of disputes should also, impliedly, provide a right to have an award enforced, enforcement mechanisms are mostly left to the procedural laws of the respondent State.

Recently, Mr. Prabhash Ranjan and I co-authored an article (pending publication in the Asian Journal of Comparative Law) arguing that the enforcement framework of the New York Convention is inept for the enforcement of BIT awards. We argued this from the Indian experience. The evolution of the the definition 'public policy' in India, from the narrower to the broader view, is well known and has been covered elsewhere in this blog. We argued that even under the narrower view, an award which is against the 'interests of India' will be considered to be against public policy and hence non-enforceable. A BIT award rejecting a position advocated by the Republic of India - say, in a matter of regulatory expropriation - will be considered to be against the 'interests of India' and hence non-enforceable on public policy considerations.

A safeguard against such non-enforcement of adverse awards by States was introduced into the framework of BIT arbitration by the ICSID award in Sapiem v. Bangladesh. In that case, the refusal by the High Court Division of the Supreme Court of Bangladesh to enforce an ICC award in favour of Sapiem and against a government company amounted to expropriation. This sent a warning to States against over-use of the power to refuse enforcement.

However, on March 31, 2011, the ICSID award in GEA v. Ukraine took a U-turn in this matter. The award held that an ICC award was not a protected 'investment' under the Germany-Ukraine BIT or the ICSID Convention and hence its non-enforcement did not amount to expropriation.

While both Sapiem and GEA concerned non-enforcement of awards arising out of commercial contracts, not BIT arbitrations, Sapiem gave out the signal that non-enforcement of an arbitral award could be dealt with by another arbitral proceeding which would characterise the first non-enforcement as a violation of the BIT. GEA undoes this hope.

The silver lining is that it is possible to argue that the non-enforcement of an adverse BIT award, as opposed to an award in a commercial arbitration, amounts to a situation where a breach is adjudicated and yet, no reparation is made, which is a continuing breach of the BIT obligations and a breach of the customary norms of reparation codified in the Articles on State Responsibility [See Art. 28-39].

Still, the point remains that it is too risky to leave enforcement of BIT awards either to the discretion of the respondent States, or the New York Convention framework. An alternative framework for enforcement of BIT awards needs to emerge multilaterally or bilaterally.

Monday, November 22, 2010

International Arbitration, In Brief!

Here is an intersting and concise write-up on International Arbitration which has been prepared by Kathryn Helne Nickerson for Office of the Chief Counsel for International Commerce (OCC-IC), United States. The readers can always come back and refer this write up occasionally to see for any new development.(As the header of the article says it would be continously updated, however the last update was in 2005).

Monday, June 14, 2010

Camel's nose under the tent: should courts interfere with arbitrations under BITs?

In the previous post, I had promised I would deal with this topic soon. In the meanwhile, Mr. Prabhash Ranjan and Mr. Daniel Mathew have published a post on Law and Other Things as to how the proposed amendments do not serve to protect investment arbitration in India from interference by courts. In this post, I examine the more fundamental question of whether domestic courts in India, which have taken an expansionist view of their own powers in respect of arbitration in general, should extend that stand to investment treaty arbitrations too.

Thursday, June 3, 2010

Country-wise statistics on investment treaty arbitration

UNCTAD has released an "IIA Issue Note" titled "Latest Developments in Investor–State Dispute Settlement". A  summary of the Note can be found at the Kluwer Arbitration Blog.

What interests me the most in this report is a respondent country-wise tabulation on the number of "known - investment treaty claims". Argentina tops the list with 51 claims having been initiated against it so far. Mexico comes second with 19 claims and Czech Republic third with 16 claims. The first time a developed country appears in the list is Canada and United States on the fifth position with 14 cases each. There have been 9 cases against India. The statistics may indeed lend some support to the concerns raised by developing nations that investment treaty arbitration is increasingly being used to their prejudice.

We will soon try to tabulate these cases based on whether the respondent was a developed country or a developing country and what the outcome of the arbitration was.

Friday, May 7, 2010

Does having been classmates with a party’s counsel undermine impartiality and independence of an arbitrator? ICSID says no.

During the course of an arbitral proceeding if counsel for one of the parties chances upon a twenty-something year old graduation photograph of a particular batch of a reputed law school depicting one of the arbitrators standing next to the counsel for his adversary, can he challenge the arbitrator on account of lack of independence? Does the fact of not having disclosed the “shared educational experience” warrant removal of the arbitrator?

An ICSID tribunal was recently faced with similar fact situations in Alpha Projektholding GmbH v Ukraine [ICSID Case No. ARB/07/16]. In this case Dr. Yoram Turbowicz, an arbitrator of Israeli nationality, appointed by claimant had submitted a declaration in accordance with Rule 6(2) of the ICSID Rules inter alia stating “[a]ttached is a statement of (a) my past and present professional and other relationships (if any) with the parties and (b) any other circumstances that might cause my reliability for independent judgment to be questioned by a party”. After the commencement of the arbitral proceedings, the counsel for the Respondent, in a letter addressed to the Secretariat of the ICSID alleged: “Dr. Yoram Turbowicz and Counsel for the Claimant Dr. Leopold Specht maintain personal relations, which have arisen in the course of their studies in the Harvard University, where Dr. Turbowicz and Dr. Specht were together enrolled in LLM (1987-1988) and SJD programs (Dr. Turbowicz in 1988-1990 and Dr. Specht in 1988-1992)”. Further it was argued for the respondent that the non-disclosure of this relationship between the arbitrator and the counsel for claimant constituted a violation of Rule 6.2 of the ICSID Arbitration Rules which required the arbitrator to disclose “past and present professional, business and other relationships (if any) with the parties” and “any other circumstance that might cause [his] reliability for independent judgment to be questioned by a party”. Additionally it was argued that publicly available material did not establish that the arbitrator had sufficient experience in transnational investment or commercial arbitration and hence the only feasible explanation for the claimant’s choice of arbitrator was the personal relationship. The arbitrator admitted that he had studied at Harvard together with the claimant’s counsel. However, he emphatically asserted that they shared no personal or professional relationship that required to be disclosed under Rule 6(2).

The other two members of the Tribunal deciding on the challenge stated that the “reliability to exercise independent judgment”, as required by the ICSID rules entailed two concepts – impartiality and independence. They observed that the two concepts had to be considered independent of each other and stated the difference between the two observing: 
“It is generally considered that “[in]dependence” is concerned exclusively with questions arising out of the relationship between an arbitrator and one of the parties, whether financial or otherwise [...] By contrast the concept of “impartiality” is considered to be connected with actual or apparent bias of an arbitrator – either in favour of one of the parties or in relation to the issues in dispute.”
On the standard to be met for a successful challenge to an arbitrator, the other two members of the Tribunal quoted the award in SGS Société Générale de Surveillance S.A. v. Islamic Republic of Pakistan [ICSID Case No. ARB/01/13] which held:
“An arbitrator cannot, under Article 57 of the [ICSID] Convention, be successfully challenged as a result of inferences which themselves rest merely on other inferences […]. The facts established or undisputed must, in the circumstances of the particular case, be plainly capable of giving rise to the inference claimed to be derived from such facts. The inference resulting from the facts must be that, manifestly, that is, clearly, the person challenged is not to be relied upon for independent judgment, or that a readily apparent and reasonable doubt as to that person’s reliability for independent judgment has arisen from the facts established or not disputed.”
On the facts of the dispute, it was held that the respondent had not divulged the source of or given evidence in support of its allegation that that the arbitrator continued to maintain personal relationship with the claimant’s counsel and hence this aspect of the allegation had to be disregarded. Coming to the question of whether having attended Harvard as batch-mates affected independence of the arbitrator, the other two members observed: 
“The Two Other Members are aware of no case and of no scholarly learning that holds, or even argues, that long-ago encounters at an educational institution, standing alone, provide objective grounds, either real or perceived, for justifying an obvious misgiving as to impartiality or for demonstrating an evident lack of reliability as to independence”. 
Further, it was held that the non-disclosure of the shared education experience did not warrant removal of the arbitrator as the facts presented by the respondent did not cross the de minimis threshold.

It is interesting to note that what was held was that shared educational experience alone did not warrant disqualification. What would be the outcome if the respondent was able to establish that during the Harvard days, the arbitrator and the counsel shared something more than mere acquaintance, say a friendship? Would the fact that twenty years of no contact have passed exempt these facts too from disclosure?  Or what if the claimant's counsel had filed an objection to the arbitrator stating they had unpleasant encounters while in college? Can these ghosts of their law school past haunt the arbitrators decades later in their professional lives? The position is unclear.
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