TagTime with Judith Levine – Arbitration in Absentia: How to Deal with Non-participation in International Disputes*

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Author: Esther Loh**

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Arbitrators and Arbitral Tribunal

On Nov. 17, 2020, Judith Levine† discussed key issues that arise when one party, typically the respondent, refuses to participate in arbitral proceedings in the TagTime episode “Arbitration in Absentia: How to Deal with Non-participation in International Disputes.”[1]

The central tension in cases involving absent respondents is how the tribunal can continue the proceedings without compromising due process, on the one hand, and efficiency on the other. Given the consensual nature of international arbitration, instances of non-participation are still relatively rare, as parties who have agreed to submit to arbitration will presumably engage with proceedings. However, political and other factors may disincline parties from cooperating, particularly where considerable time has passed between when the consent to arbitrate was given and when the dispute arises.

Ms. Levine provided some published examples of non-participation, such as the Military and Paramilitary Activities (Nicaragua v. U.S.) case in the ICJ[2] and the South China Sea (Philippines v. China)[3] and the Arctic Sunrise(Netherlands v. Russia)[4] arbitrations in the PCA. Non-participation can take different forms of when and how a party declines to participate. In the South China Sea arbitration for instance, China refused to participate from the outset,[5]whereas in Military and Paramilitary Activities the U.S. stopped participating only after it lost on jurisdiction.[6] In the 1995 Nuclear Tests (New Zealand v. France) case in the ICJ, France took a unique approach which Ms. Levine termed non-participation via “fashion statement”: at the hearings, the French representative treated the proceedings informally by appearing in a business suit rather than the crimson ermine robes typically worn by French counsel in proceedings before the ICJ.[7]

A party may choose simply not to appear, or it may convey its stance through a diplomatic note or letter to the tribunal while formally rejecting the legitimacy of the proceedings. In the South China Sea Arbitration, China repeatedly published its position via public statements, press briefings and diplomatic notes while emphasizing it was neither accepting nor participating in the arbitration.[8] Additionally, it published a 93-paragraph position paper on jurisdiction in Dec. 2014, and its ambassador submitted six letters to the arbitrators over the course of the proceedings.[9] Ms. Levine cautioned that there may be limits to the tribunal’s discretion in considering such informal communications, in order to maintain procedural fairness and the equal treatment of both parties. For example, in the Arctic Sunrise arbitration, the tribunal refused to consider a Russian position paper that was published six months after the hearings and only shortly before the scheduled delivery of the judgment, as this would have caused undue delay to the detriment of the Netherlands.[10]

A common thread across the rules governing non-participation is that a party’s absence is neither a means to escape from its legal obligations or from a binding judgment. The ICJ has emphasized that there is no right to an automatic judgment in favor of the participant, however, the absent party must accept the consequences of non-participation, namely that the case will continue without it and that it will be bound by the eventual judgment.[11] Art. 53 of the ICJ Statute requires a court before proceeding to “satisfy itself, not only that it has jurisdiction … but also that the claim is well founded in fact and law.”[12] The UNCLOS embodies a similar sentiment.[13] This has been called the “special responsibility on the Tribunal” in situations where one party is absent.[14] Such rules seek to balance the risks of prejudice to either party, protecting the participant by ensuring that proceedings will continue while protecting the absentee by ensuring a tribunal does not simply accept the evidence and claims of the participant by default.[15]

In the South China Sea Arbitration, the tribunal discharged this “special responsibility” by sending all communications and materials to the Chinese ambassador; granting China adequate time to respond to pleadings; inviting China to comment on procedural steps and making the registry available to answer informal questions; circulating hearing transcripts to China; and reiterating that the door remained open for them to engage at any time.[16]

Similar steps have been taken in commercial and investor-state cases. The end goal of these steps is to ensure that the final award is enforceable. This goal of avoiding challenges to the award is implicit in the CIArb Guidelines on party non-participation, which recommend that the final award record all such steps taken by the tribunal.[17]

At the same time, the tribunal mitigated disadvantages to the Philippines by avoiding delay; ensuring that the Philippines were not deprived of the opportunity to address specific issues considered by the tribunal to be “inadequately canvassed”; and by making every attempt to discern China’s position on every issue (which China had often made public) in order to lessen Philippines’ expressed anxiety about the need to “second-guess” China’s counter-arguments to its claims.[18]

In order to satisfy itself of jurisdiction, the tribunal also treated China’s position paper as equivalent to a plea on jurisdiction; bifurcated proceedings to deal with these preliminary objections; and issued a separate preliminary award on jurisdiction.[19] Additionally, it appointed independent scientific experts to review evidence, Philippines’ experts and available Chinese reports, a practice which can be especially useful in the non-participation context.[20] Like other experts in the case, these independent scientists were appointed after seeking the parties’ views on utility, qualifications, candidates and draft terms of reference.[21] These measures may go beyond usual efforts and expenses and can lead to the concern that the tribunal is “over-correcting” for the absent respondent. However, taking such measures can also help to enhance legitimacy so that the Tribunal is, and is seen to be, independent.

In closing, Ms. Levine pointed out some lessons that might be learnt from situations of non-participation. In particular, courts and tribunals may start to take more pro-active roles even in situations where both parties are present. In a recent ICJ case concerning Armed Activities on the Territory of the Congo (DRC v. Uganda), the Court for instance decided to appoint four independent experts for the purpose of assessing some damages claims by the DRC.[22]

[1] Judith Levine, www.levinearbitration.com, Arbitration in Absentia: How to Deal with Non-Participation in International Disputes, TagTime (Nov. 17, 2020), available at https://member-delosdr.org/video-tagtime-judith-levine-on-arbitration-in-absentia-how-to-deal-with-non-participation-in-international-disputes/.

[2] Military and Paramilitary Activities in and Against Nicaragua (Nicar. v. U.S.), https://www.icj-cij.org/en/case/70.

[3] South China Sea Arbitration (Phil. v. China), Case No. 2013-19 (Perm. Ct. Arb. 2016), https://pca-cpa.org/en/cases/7/.

[4] Arctic Sunrise Arbitration (Neth. v. Russ.), Case No. 2014-02 (Perm. Ct. Arb. 2017), https://pca-cpa.org/en/cases/21/.

[5] Phil. v. China, Case No. 2013-19, Award on Jurisdiction and Admissibility, ¶ 83 (Perm Ct. Arb. 2015), https://pcacases.com/web/sendAttach/2579.

[6] Nicar. v. U.S., Judgment, 1986 I.C.J. 14, 17, ¶ 10 (June 27).

[7] Nuclear Tests (N.Z. v. Fr.), https://www.icj-cij.org/en/case/59.

[8] Phil v. China, Award on Jurisdiction and Admissibility, passim.

[9] Id. See also Phil. v. China, Case No. 2013-19, Award, Part IV.A (Perm Ct. Arb. 2016), https://pcacases.com/web/sendAttach/2086.

[10] Arctic Sunrise Arbitration (Neth. v. Russ.), Case No. 2014-02, Award on the Merits, ¶ 68 (Perm. Ct. Arb. 2017), https://pcacases.com/web/sendAttach/1438.

[11] Military and Paramilitary Activities in and Against Nicaragua (Nicar. v. U.S.), Judgment, 1986 I.C.J. Rep. 14, ¶ 28 (June 27).

[12] Statute of the International Court of Justice art. 53(2), 2007 I.C.J. Acts & Docs. 6, at 58, 79-81.

[13] United Nations Convention on the Law of the Sea, annex VI, art. 28, Dec. 10, 1982, 1833 U.N.T.S. 397,. Other rules such as art. 45 of the ICSID Convention grant a 60-day grace period to the absent party before the tribunal renders its award. Convention on the Settlement of Investment Disputes between States and Nationals of other States, art. 45, Oct. 17, 1966, 575 U.N.T.S. 159.

[14] South China Sea Arbitration (Phil. v. China), Case No. 2013-19, Award on Jurisdiction and Admissibility, ¶ 12 (Perm. Ct. Arb. 2015), https://pcacases.com/web/sendAttach/2579. For further discussion on discharging this ‘special responsibility’, see Judith Levine and Garth Schofield, Navigating Uncharted Procedural waters in a Rising Sea of Cases at the Permanent Court of Arbitration, in Stress Testing the Law of the Sea (Stephen Minas & Jordan Diamond eds., 2018).

[15] Id., ¶ 119.

[16] Id., passim.

[17] Party Non-Participation, Chartered Institute of Arbitrators, art. 1(5) (2016), https://www.ciarb.org/media/4204/guideline-9-party-non-participation-2015.pdf.

[18] Phil v. China, Award on Jurisdiction and Admissibility, ¶ 58.

[19] Id., passim.

[20] South China Sea Arbitration, Case No. 2013-19, Award, ¶¶ 54-59 (Perm. Ct. Arb. 2016), https://pcacases.com/web/sendAttach/2086.

[21] Id.

[22] Armed Conflicts on the Territory of the Congo (Dem. Rep. Congo. v. Uganda), Order, ¶ 16 (Sep. 8, 2020), https://www.icj-cij.org/public/files/case-related/116/116-20200908-ORD-01-00-EN.pdf.

* This post is part of a series summarizing episodes of Delos Disputes Resolution TagTime webinars. A list of past TagTime webinars is available at https://delosdr.org/index.php/past-webinars/.
** J.D./LLB Dual Degree Candidate 2022, Columbia Law School and UCL.
† Judith Levine is an independent arbitrator with extensive dispute resolution experience in public international law, foreign investment, and commercial contract cases. Judith has sat as presiding arbitrator, sole arbitrator, and co-panellist in PCA, ICC, SIAC, UNCITRAL and CAS cases and is Vice-President of the Australian Centre for International Commercial Arbitration. Now based in Sydney, Judith worked for over a decade at the Permanent Court of Arbitration in The Hague where, as Senior Legal Counsel, she administered some of the world’s most complex disputes, including the South China Sea, Abyei, Yukos and Bangladesh Accord arbitrations. Prior to joining the PCA, Judith practised at White & Case in New York and held positions with the International Court of Justice, the Australian Attorney-General, and the High Court of Australia. Judith is recognised in Who’s Who Legal for International Arbitration and was awarded “Arbitrator of the Year” at the 2020 Australian ADR Awards.