We begin by pointing out that the arbitration jurisdiction, as an alternative dispute resolution mechanism, also includes the principles necessary for the achievement of a neutral and impartial process. As we will see below, this obligation or requirement that we will analyze is contained in the main regulations of the institutions that manage these procedures, including the Regulations of the Conciliation and Arbitration Center (hereinafter CCA) of the Chamber of Commerce and Industry of Tegucigalpa (hereinafter CCIT).
Unlike what we are used to seeing in the ordinary jurisdiction, the arbitration jurisdiction offers its users a double filter, consisting of the obligations imposed on the arbitrators in two routes:
- A system of abstentions and challenges.
- An additional regime called “duty of information”, which is the subject of our brief analysis.
In this sense, we can say, by way of illustration, that the issues of challenges, in the case of both the ordinary jurisdiction and the arbitral jurisdiction, are generally legal impediments, expressly and specifically provided for, which are intended to remove or withdraw the Judge or Arbitrator from the knowledge of a specific case.
The mechanism referred to can be found precisely in the Honduran Conciliation and Arbitration Law (hereinafter the Law), in its article 49, which establishes that the arbitrators may abstain and be challenged on the same grounds established for the holders of the jurisdictional body in the Code of Civil Procedures, referring to the new Code of Civil Procedure (hereinafter CPC) and its Organic Law of the Judiciary and that, in the case of the latter, in the absence of its issuance, is currently regulated by article 188 of the Law of Organization and Organization of the Judiciary ( hereinafter the Law). 188 of the Law of Organization and Powers of the Courts, in force since 1906, also stating that they may be challenged for not meeting the conditions in accordance with the Law, or as agreed by the parties.
On the other hand, in the doctrine we find the no less important figure that converges in parallel with the issues of recusal and abstention, which constitutes the duty of information and that we can conceptualize as “an obligation of preventive nature and an additional protection that exceeds those provided for judges in the ordinary jurisdiction for these same issues, imputed or delegated in this case to the arbitrators and secretaries, whose essential purpose is that all those circumstances that may raise doubts or be considered as possible conflicts of interest be disclosed, for the benefit and benefit of the parties”.
For his part, Dr. José Carlos Fernández Rozas, Professor of Private International Law at the Complutense University of Madrid, conceptualizes this duty as: “An obligation that is configured as an authentic fundamental principle of arbitration, both domestic and international, and is a direct consequence of the general principle of good faith. It is the cornerstone of the legal regime of arbitration ethics and is widely recognized in different legal cultures, legislations and arbitration rules“[i].
Now that the main concept of the “duty to inform” is clear, it is appropriate to contrast it with the issue of challenges, since at this point their differences become evident. While the grounds for challenge give the parties the opportunity to remove the judge or arbitrator from a proceeding for specific reasons previously listed in the ordinary procedural law, the duty of information, on the other hand, generates an additional obligation for the Arbitrator or the Secretary to inform the parties, in a general and transparent manner, of any circumstance, without limitation of any grounds, that may raise doubts or be considered as possible conflicts of interest, thus generating a greater protection of the due process of arbitration.
This healthy practice can be found in the CCA Rules of the CCIT, specifically in Article 19, which imposes the following obligations on arbitrators and secretaries in paragraph “9”:
“To comply with all rules related to disqualifications, incompatibilities, conflicts of interest and duty of information, as appropriate to the nature of the functions and the position, and to bring to the attention of whom it may concern, any situation that may call into question their impartiality and independence.”
It is important to understand that this duty to inform is activated and must be externalized from the moment he/she is nominated as arbitrator or secretary, preferably in writing, so that the parties may determine his/her permanence in the process.
As we can observe in the case of the Rules of the CCA of the CCIT, no time limit is established within which, if a circumstance exists, it must be disclosed, as occurs in other Rules of other Centers which, for example, only include or require events of two years before. In the case of the CCA of the CCIT, any circumstance that is considered applicable must be disclosed to the parties, and there is no time limit for its disclosure (in terms of circumstances that occurred prior to the process).
This also implies that if at any time during the process new circumstances arise that may raise doubts about impartiality or independence or possible conflicts of interest, the arbitrator or secretary must inform the parties immediately, which ratifies that there is no time limit for the disclosure of information, since it not only extends to the circumstances prior to the process, but also covers all those that occur or are applicable during the process (in terms of circumstances occurring during the process).
This duty of information even transcends the limitation established in the final paragraph of article 49 of the Law, since in this case, it imposes on the parties that directly appoint their arbitrators only the power to challenge them immediately and for reasons arising from their appointment, unlike the duty of information that is intrinsically linked to the obligations of the arbitrators (not of the parties), since it seeks to guarantee the due arbitration process, by allowing the disclosure of circumstances that may not have been considered by the parties at the time of directly appointing their arbitrators.
We therefore confirm that the arbitrators and secretaries of the CCA of the CCIT are subject to a double examination: on the one hand of abstentions and challenges of art. 49 of the Conciliation and Arbitration Law and, on the other hand, the “duty of information ” in order to guarantee the impartiality and independence that the arbitrators of this Center must comply with, which in the latter case, and consistent with the importance that the Center imposes on this issue, clearly implies sanctions for its violation, which could entail not only suspension, but even exclusion from the lists of arbitrators and Secretaries, as we can observe in arts. 24 and 25 of the CCIT’s CCA Rules of Procedure.
Notwithstanding the aforementioned sanctions, we must take into account that the breach of the “duty to inform”, in the specific case of the arbitrators, has clear derivations in the validity of the process and consequently in the Award issued, being that it could be alleged, by the affected parties, the cause of nullity provided for in Article 74 paragraph 2, related to the illegal constitution of the Arbitral Tribunal, generating in turn scenarios of possible civil liabilities for the arbitrator.
Finally, it is important to mention the possible elements on which the arbitrators and secretaries must report, which can be found in the criteria of independence and impartiality established in art. 3 of the “Ethical Principles applicable in the Conciliation and Arbitration Center of the Chamber of Commerce and Industry of Tegucigalpa:
- Any family, friendly, business or other analogous nexus, between the parties or their attorneys-in-fact.
- Any interest that may derive from the results of the process.
- Professional relationships with any of the parties or their attorneys-in-fact.
In view of the foregoing, we must understand that, in Honduran arbitration procedural practice, the obligation to disclose a conflict of interest has gone from being a mere verification instrument to an authentic procedural requirement that has come to strengthen the due process of arbitration.
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[i] José Carlos FERNANDEZ ROZAS, Professor of Private International Law at the Universidad Complutense de Madrid, Contenido ético del deber de revelación del árbitro y consecuencias de su trasgresión.