Karl P. Sauvant, PhD
Resident Senior Fellow

Columbia Center on Sustainable Investment
Columbia Law School - The Earth Institute, Columbia University
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"China Moves the G20 toward an International Investment Framework and Investment Facilitation", "China Moves the G20 on Investment", "The Rise of Self-judging Essential Security Interest Clauses in IIAs", "Can Host Countries have Legitimate Expectations?", "The Next Step in Governance: The Need for Global Micro-regulatory Frameworks", "How International Investment Agreements can Protect Free Media", "The Evolving International Investment Law and Policy Regime: Ways Forward", "China's Outward FDI and International Investment Law", and  "Policy Options for Promoting FDI in the LDCs" are available at http://papers.ssrn.com/sol3/results.cfm and http://www.works.bepress.com/karl_sauvant/.

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Columbia FDI Perspectives

Perspectives on topical foreign direct investment issues
No. 196  March 27, 2017

Editor-in-Chief: Karl P. Sauvant ([log in to unmask])
Managing Editor: Matthew Schroth ([log in to unmask])
The Equal Representation in Arbitration Pledge (Pledge) was announced in May 2016.[1] It commits its signatories, mainly comprised of law firms, arbitral institutions and individuals, to improving the profile and representation of women in arbitration, including the appointment of women as arbitrators on an equal opportunity basis.   
Action on gender diversity is required. Women are underrepresented in international arbitration. But diversity is not confined to gender. Diversity includes ethnicity, race, color, functional diversity, culture, geography, political beliefs, age, religious beliefs, sexual orientation, and socio-economic status. International arbitration has failed to achieve diversity in the fullest sense. For example, while 32% of parties to International Chamber of Commerce (ICC) arbitration in 2013 were from Africa, Asia and the Pacific, less than 3% of arbitrators appointed in ICC arbitrations that year were African and less than 12% from Asia and the Pacific.[2] In 2015, there were 221 Arab parties involved in ICC cases, but there were only 54 Arab arbitrator appointments.[3] As of June 2016, only 4% of ICSID cases were arbitrated by entirely non-Anglo-European tribunals.[4]
The inclusion of individuals of varied racial, ethnic, gender, and social backgrounds in international arbitration only ought to enhance the legitimacy of the system. There should be sufficient diversity so that parties “view the tribunal as representing a cross section of the business world” (or at least, a “cross section of an idealized business world that is modern, creative and diverse”).[5] A party from a diverse background appearing before a panel where at least one member shares that background will be more likely to perceive that its arguments have been received and considered.[6] A more diverse panel of arbitrators will also provide a wider range of perspectives and experiences that are often lacking among arbitrators who have had life experiences that differ greatly from those of the parties.[7]
The lack of diversity in international arbitration and in the legal sector generally is not new. The American Bar Association, for instance, has sought for some years to “eliminate bias and enhance diversity” through “[p]romot[ing] full and equal participation in the Association, our profession, and the justice system by all persons.”[8] 
The Pledge thus does not go far enough in its coverage of a limited category of persons.
And yet, while the Pledge’s scope of application is too limited at present, it may potentially be too wide in another respect. Its signatories promise, “where they have the power to do so… [to] appoint a fair representation of female arbitrators.”  It’s not clear from the Pledge whether this duty extends to law firm signatories. If it does, it raises questions of how such firms are to balance their duty to their clients and their commitments under the Pledge.
Parties want to select the most well-known, experienced arbitrators. They are interested in winning their case—not changing the world.[9] Outside counsel’s duty is to appoint an arbitrator in the best interests of the client, not necessarily in the best interests of diversity.  This is not to suggest that the two are mutually exclusive. However, I suggest it is a role best reserved to the Pledge’s arbitral institution signatories when performing their appointment role. As Emmanuel Gaillard observed, “anecdotal evidence shows that institutions actively seek to appoint newcomers and promote diversity. It is the parties who resist change.”[10]
Aside from the unique role that arbitral institution signatories can, and should, play in the foregoing respect, all Pledge signatories should focus on implementing systematic and effective use of mentorship, pro bono, tribunal secretary, and networking opportunities, in an effort to achieve greater diversity. In addition, law firm signatories should actively suggest to clients more diverse candidates for appointments in arbitration cases, and refrain from relying exclusively on the same pool of usual appointees. These sound, practical steps will go some way to helping ensure fair representation, by creating awareness on the part of non-signatory parties of a more diverse pool of suitably-qualified arbitrators, whilst respecting their autonomy to make the final decision as to whom they wish to appoint.
The Pledge is a laudable step in the journey toward increased diversity in arbitration. The next step must be to expand the Pledge’s scope of application whilst ensuring it does not overreach. 
* The Columbia FDI Perspectives are a forum for public debate. The views expressed by the author(s) do not reflect the opinions of CCSI or Columbia University or our partners and supporters.
** John Gaffney ([log in to unmask]) is a Senior Associate with Al Tamimi & Co., specializing in international arbitration. The author is grateful to Andrea Bjorklund, Giorgio Sacerdoti and Tania Voon for their helpful peer reviews. The author also wishes to thank Malak Nassredine for her assistance in researching this Perspective. The views expressed are personal to the author and do not purport to represent the views of Al Tamimi & Co. or its clients. Columbia FDI Perspectives (ISSN 2158-3579) is a peer-reviewed series.
[1] Alison Ross, “The Pledge,” Global Arbitration Review, May 18, 2016, http://globalarbitrationreview.com/article/1036332/the-pledge.
[2] Julianne Hughes-Jennett and Rashida Abdulai, “Barriers to entry-the lack of diversity in international arbitration,” Jul. 15, 2015, http://blogs.lexisnexis.co.uk/dr/barriers-to-entry-the-lack-of-diversity-in-international-arbitration/ .
[3] “We lag behind on diversity, Ziadé warns,” Global Arbitration Review, Nov. 18, 2016, http://globalarbitrationreview.com/article/1076415/we-lag-behind-on-diversity-ziade-warns,  
[4] ICSID, The ICSID Caseload: Statistics (2016, 2nd issue), p. 30.
[5] Samaa A. F. Haridi, “Towards greater gender and ethnic diversity international arbitration,” International Arbitration Review, vol. 2 (2015), p. 308.
[6] Ibid., p. 311.
[7] Sasha A. Carbone and Jeffrey T. Zaino, “Increasing diversity among arbitrators,” NYSBA Journal, vol. 84 (2012), pp. 33-37.
[8] ABA, “Goal III report: the state of racial and ethnic diversity in the American Bar Association,” 2012, http://www.americanbar.org/content/dam/aba/administrative/racial_ethnic_diversity/REG3Rpt12_finalweb_updated3_13_12.authcheckdam.pdf (emphasis added).
[9] Monika M. Gonzalez, “Arbitration pledge for diversity met with skepticism in South Florida and Latin America,” Daily Business Review, Jun. 29, 2016, http://www.dailybusinessreview.com/id=1202761330219/Arbitration-Pledge-for-Diversity-Met-With-Skepticism-in-South-Florida-and-Latin-America?slreturn=20161128084204.
[10] Emmanuel Gaillard, “Sociology of international arbitration,” Arbitration International, vol. 31 (2015), p. 16.

The material in this Perspective may be reprinted if accompanied by the following acknowledgment: “John Gaffney, ‘The Equal Representation in Arbitration Pledge: two comments on its scope of application,’ Columbia FDI Perspectives, No. 196, March 27, 2017. Reprinted with permission from the Columbia Center on Sustainable Investment (www.ccsi.columbia.edu).” A copy should kindly be sent to the Columbia Center on Sustainable Investment at [log in to unmask].

For further information, including information regarding submission to the Perspectives, please contact: Columbia Center on Sustainable Investment, Matthew Schroth, [log in to unmask].
  • No. 195, Laza Kekic, “FDI to the UK will remain robust post-Brexit,” March 13, 2017.
  • No. 194, Ilan Strauss and Vasiliki Mavroeidi, “How India can benefit from FDI: lessons from China,” February 27, 2017.
  • No. 193, David Collins, “Investment contracts are not a substitute for investment treaties,” February 13, 2017.
All previous FDI Perspectives are available at http://ccsi.columbia.edu/publications/columbia-fdi-perspectives/

Other relevant CCSI news and announcements
  • On March 13, 2017, CCSI's Lise Johnson and Brooke Guven published an article in Investment Treaty News entitled The Settlement of Investment Disputes: A Discussion of Democratic Accountability and the Public Interest. In this article, the authors consider the threats to principles of good governance, including government accountability, respect for the rule of law, transparency, and respect for citizens’ rights and interests under domestic law and international human rights norms, that are posed by the settlement of treaty-based investor-state disputes. The authors also consider the exacerbated threats posed by the settlement of disputes that include government counterclaims, and highlight the need for the ISDS reform agenda to include a focus on these issues.
  • In March 2017, CCSI made a submission to the European Commission (EC) in response to its “Public consultation on a multilateral reform of investment dispute settlement.” CCSI’s submission consisted of a response to the form questionnaire created by the EC and a supplementary “Position Paper” to explain in greater depth CCSI’s views on the EC’s proposed Multilateral Investment Court (MIC). More information is available here.
  • On May 11-12, 2017The Asia FDI Forum III will gather top academia, government, company and civil society practitioners in Hong Kong, who will discuss regional investment trends, highlight specific features of China’s and EU’s investment treaties and policies, and explore the various legal and policy implications that the treaty currently under negotiations between them will have. Organized by the Faculty of Law of the Chinese University of Hong Kong, the Centre for Financial Regulation and Economic Development, and Tsinghua Law School, with the support of the Columbia Center on Sustainable Investment and the World Economic Forum, the Asia FDI Forum III will host a comprehensive discussion on the PRC-EU negotiations for an investment treaty, where attentive analysis and new proposals will both emerge. For more information, and to register, please go here.
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