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Case 16-7134, Republic of Argentina appellant versus AWG Group LTD.

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Mr. Slater for the appellant.

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Mr. Friedman for the appellee.

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Mr. Slater, good morning.

[00:00:54] Speaker 03:
May it please the Court, Matthew Slater on behalf of the Republic of Argentina, the Appellant.

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Your Honor, this case concerns the International Arbitration Award, and we're before you asking you to exercise your power under the Federal Arbitration Act to set aside the award and your authority pursuant to the New York Convention to decline enforcement of that award.

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There are a couple of different issues in the case.

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I'm going to focus my oral arguments on the issues surrounding evident partiality of an arbitrator.

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We'll rely on the briefs unless the court has questions as to the other issues.

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The binding precedent concerning evident partiality comes to this court from the Commonwealth Coatings case in the Supreme Court and this court's Al Harvey decision.

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Commonwealth Codings.

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Before you get into the various standards and so forth, can we just work through what seem to be the relevant time spans?

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Yes.

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Because it seems to me it's divisible into three.

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The period from April of 06 to November of 07, when she's unaware that there's any conflict at all.

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Your Honor, could I take it back to the earlier time frame?

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Excuse me?

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May I take it to an earlier time frame?

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So the arbitration commenced in 2004.

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Sometime in 2005, the arbitrator was approached by UBS and asked to be considered for appointment to their board.

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And sometime during that process, they engaged with her about whether she would meet the standards of director independence.

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But there was no inquiry on her part to determine whether she would meet the standards of arbitrator independence in a proceeding in a situation where she was already sitting as an arbitrator.

[00:02:40] Speaker 04:
So she may not have known of the connection with... But you aren't arguing, are you, that she was actually in a conflict before April 19?

[00:02:52] Speaker 03:
Well, I'm arguing that she was in violation of her obligations under Commonwealth codings even before April of 2006 when she was formally appointed.

[00:03:04] Speaker 04:
Let's assume that argument, though.

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That's different from evident partiality.

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It may, under some circumstances, tend to support a finding of evident partiality, but surely alone it's not.

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Yeah, but it does in this case because it put her on notice that there were a range of entanglements that this financial institution had that she needed to make inquiry about.

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or disclosed to the parties that she was not doing so, but she didn't either.

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As I understand it, as soon as, more or less contemporaneously with agreeing to serve as a director,

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She inquired and got a list of, was consisted of one, arbitrations that UBS interests were involved in.

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Oh no, Judge Williams, it's the opposite.

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When, at some point in connection with her appointment, she was asked by UBS to give UBS

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in effect, her CV, which included a list of the parties who were involved in arbitrations in front of her.

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She did not ask UBS to tell her.

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In any event, UBS responded, indicating one conflict.

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UBS asked her to resign from the America's Cup jury, which should have put her on notice that there were a range of entanglements

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between UBS and the commercial world in which she was sitting as an arbitrator.

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I guess you could know that by looking at any kind of online directory of the general scale of UBS.

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I agree that she could have looked at a lot of public sources and seen that UBS was invested.

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Can she be

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guilty of evident impartiality merely because of discussions with the firm about becoming a director during which efforts are being made, you say it's all from the UBS side, let's assume that, to make sure that there aren't conflicts.

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For a couple of reasons, I would say yes, Your Honor, under the Commonwealth Coding Framework.

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First of all, as you pointed out, it's evident that UBS's business is to make substantial investments in commercial enterprises.

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many of which have involvement in commercial international investment treaty arbitration.

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So that fact alone put her on notice that she needed to make inquiry.

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But there's the other side of it.

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This has to be mutual.

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It's not just telling UBS, but it's telling the parties to the arbitration.

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She's sitting as an arbitrator.

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This is not something that happened in the past.

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She's sitting as an arbitrator.

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She could tell the party.

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So going back to the telling and the questioning,

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What about actual conscious partiality, right?

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And it seems to me to catch up the chase that you work through the three phases that are relevant, either nothing is being decided or she's unaware, not aware of any conflict.

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During the time period, the record, under this record, during the time period up until November of 2007 when Argentina raised its challenge, she was not aware of UBS's involvement with Vivendi or Suez.

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But I don't think that that ends the inquiry under Commonwealth.

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As I said... No, in fact, in fact, Commonwealth, in Justice White's view, talks about when they are unaware of the facts, that the inquiry then is whether the relationship is trivial, right?

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Yes, sir.

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So isn't that the key inquiry for us, is whether the relationship between

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the bank and the parties is trivial.

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Now, the relationship between the arbitrator and UBS is substantial, but the inquiry is, am I not right, whether the relationship between the bank and the parties is trivial.

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Yes, at the end of his opinion, Justice White says that arbitrators should err on the side of disclosure, even what they might think to be insubstantial relationships.

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And if they do so, then if later it turns out there is something that they didn't disclose, courts will be able to determine whether those connections are so trivial as to be inconsequential.

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So triviality is the question here, right?

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Triviality could be the question if she had made disclosure.

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But I think we're in a situation where she didn't even make any disclosure.

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She didn't come to the parties and say.

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I'm quoting, if they are unaware of the facts, but the relationship is trivial.

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Anyway.

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I think we have to – the very last sentence.

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If arbitrators err on the side of disclosure as they should, it will not be difficult for courts to identify those undisclosed relationships, which are too insubstantial to warrant vacating in a war.

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Insubstantial, trivial.

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So the question for me is, is there a trivial relationship between the bank and the parties?

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And there's $2 billion involved.

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That doesn't sound trivial.

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But as a percentage of the portfolio of the bank, it is trivial.

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And they're passive investors.

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So how do you deal with that?

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Well, I'm not sure what it means to be a passive investor in this context.

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UPS was the largest investor in Vivendi.

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It was among the largest investors in Suez, so two of the claimants in this arbitration.

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So that's not trivial vis-a-vis the claimants in this case.

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UBS was also involved in making these investments on its own behalf for its own account as well as in a fiduciary capacity on behalf of its customers for whom it performed wealth management services.

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So that's not a passive activity.

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This is not just sitting around clipping coupons.

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This is not a judge, as in one of the cases, who happened to have a couple hundred shares of Exxon stock.

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This is an entity that had, as you pointed out, $2.4 billion.

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And I think that

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You just have to assume away the magnitude to say that this is more than trivial.

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And that is the issue, as you pointed out.

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Well, there's another issue, though, and that under our own precedent, you have to have specific facts of improper motive.

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And that is a pretty steep hill to climb.

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Where is any evidence of an improper motive?

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Your honor, I resigned before the award was granted.

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Yes.

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Your honor, if I can address that, that comes from Al Harvey.

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Right.

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And I think that Al Harvey was, that phrasing in Al Harvey came in a very specific context.

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And that context that's framed by the court was whether the arbitrator

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had to make inquiry of a former law firm about whether the former law firm had contacts with parties to the arbitration.

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And in that context, the court said, you've got to do something more.

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You've got to come forward with some evidence that points to improper motive in not making disclosure.

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We're dealing with a different situation.

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And we're dealing with a situation where the arbitrator is sitting on the arbitration, undertakes a new, very substantial commercial undertaking of her own, where she's being paid hundreds of thousands of dollars and being paid in UBS stock, undertaking a fiduciary responsibility to UBS.

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And she said, I'm going to tell one side of that equation, UBS, I'm not going to tell the other side, the parties to the arbitration, that this is taking place.

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So they didn't have the ability to inquire.

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So that's one indication of improper motive.

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Second, when this was brought to her attention, she again didn't make inquiry.

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All she asked was, and if you look at 684, the joint appendix, she sent a letter to UBS and said, can you confirm the data that are in the challenge from Argentina?

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And you get a letter back from UBS that simply says, oh, well, this percentage is off by 2% or 3%, or we don't keep records that way.

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And by the way, we think Argentina's all wet.

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They weren't even a party for the claim, and they were purporting to make comments on Argentina's challenge.

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And she adopted that.

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She didn't say, well, OK, can you tell me more?

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Explain to me what your relationship is.

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She just accepted wholesale what UBS told her and did not make inquiry.

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Third, at that point, she said, I'll step down.

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But I'll only step down if the interested parties who appointed me, in which UBS has an economic interest, asked me to do so.

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Not surprisingly, they didn't.

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She did not consider stepping down from UBS, for example.

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All of those things we think meet the structural elements that are embodied in the Commonwealth Coding's decision, which we think Al Harvey is pointing to, that get to improper motive.

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And proper motive can't mean actual subjective bias.

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If that was the ruling of Al Harvey, it would be directly in conflict with Commonwealth.

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where it was acknowledged that there was no actual bias, and the court rejected the idea that you have to prove it in every case since then, has rejected the idea that a party has to prove actual subjective bias.

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Isn't the sense of the competing opinions between Justice Black and Justice White, I mean, Justice Black seems to be favoring the judicial standard that we

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And that any reasonable person, you have to look at a reasonable person to see what they would think of the judge's relationship to it.

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But that's not the law for us, right?

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Justice White recognized that when you're dealing with international arbitration, you want experts who are

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connected to the field and who have, you called them entanglements, who have these relationships.

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But he was concerned if they were more than trivial, right?

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So what are we to make of the sentence of Justice White?

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Belief Bank made clear that the difference, and I think this is correct, that Justice White was rejecting the appearance of bias standard, and instead he set forth very clear standards.

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that in the case of an arbitrator who has a substantial connection with an entity that in turn has more than trivial business with a party to the arbitration, that's got to be investigated, disclosed.

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And if the parties then reject that arbitrator, the arbitrator has to step down.

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That's the only meaning I can make of those last sentences of Justice White's opinion, that in circumstances where the disclosure is made and a party says, I don't like it,

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Which is what happened here.

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In fact, Argentina said, I don't like it.

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This stinks.

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She was obligated to step down, and she didn't.

[00:14:04] Speaker 03:
And again, this is part of the pattern that we think shows that in the end of the day, the arbitrator chose to align her economic interests and her fiduciary interests with parties, and in particular, the claimants who appointed her in the arbitration that's at issue.

[00:14:20] Speaker 03:
And that's the circumstance that speaks to Commonwealth Poting and Alharvey and justifies maintaining the award in this case.

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If I can reserve my time for rebuttal?

[00:14:31] Speaker 06:
I did want to ask you one question, and that is, do you, the word evident, do you see that as synonymous with apparent, or do you see it as requiring maybe something more than the appearance, evident partiality?

[00:14:46] Speaker 03:
Well, I think that it goes beyond a mere appearance.

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And again, as an example, and I'm blanking on the case, but one of the cases, the site of the case, one of the arbitrators had a couple of hundred shares in Exxon stock that was an indirect participant in the arbitration.

[00:15:02] Speaker 03:
They said, Exxon is widely held, a few hundred shares is not a significant amount.

[00:15:08] Speaker 03:
That would be an appearance, which would preclude a judge from sitting, but it's not evident partiality within the meaning of Commonwealth Codings, which establishes the framework for understanding those words under the statute.

[00:15:20] Speaker 03:
In this circumstance, we think we have more than a trivial commercial relationship.

[00:15:26] Speaker 05:
It doesn't mean appearance or apparent.

[00:15:28] Speaker 05:
What does it mean?

[00:15:29] Speaker 05:
What does evident mean?

[00:15:30] Speaker 03:
Well, as I've tried to say, on the facts of this case, I think we have an arbitrator who has chosen to align her economic interests, her fiduciary interests, with claimants in the arbitrations before her.

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And that is sufficient to make it evident that there is a risk of partiality in the case.

[00:15:52] Speaker 06:
All right.

[00:15:52] Speaker 03:
Thank you.

[00:15:53] Speaker 06:
Thank you.

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May it please the Court, Elliot Friedman, for appellee AWG.

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And to answer the Court's most recent question, the Second Circuit answered the meaning of evident in more lies and in subsequent cases, Scandinavian reinsurance and others.

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And they said that evident partiality means the Court would have to conclude that the arbitrator was partial, would have to conclude.

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That's a high standard.

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Now, the district court found that Argentina's challenge to Professor Kaufman-Cola fell far short.

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And the district court was right.

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This is not a close case.

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To prevail, Argentina has to show that the connection between Professor Kaufman-Cola and AWG was substantial and more than trivial.

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That's the language from Commonwealth Coatings.

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that we have findings from the Arbitration Tribunal, which was made on an undisputed record that the shareholdings of UBS in Suez and Vivendi was insubstantial and was trivial in context.

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The shareholding was so fractional that the outcome of the arbitration, however it was decided, could not have had an effect on the fortunes of UBS.

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So we have findings of facts that show the exact opposite of what Argentina has to prove here.

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It shows triviality and a lack of substance.

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And that, we say, is the simple way to resolve this case.

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Now, both sides agree the cornerstone of the inquiry is materiality.

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Now consider the facts.

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Professor Kaufman-Cohler had no interest in any of the parties that were before her.

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She had no interest in AWG.

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She had no interest in Suez.

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She had no interest in Vivendi.

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Her interest was entirely derivative.

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So then you look to UBS.

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And UBS's shareholding in these parties was not 1% of its invested assets.

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It was not half a percent.

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It was 1.20%.

[00:17:52] Speaker 05:
But what percent was it of the parties?

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It was around, I believe, 2% and 3%.

[00:17:58] Speaker 02:
But the inquiry has to be from the perspective of the person, the entity that is subject to the evident partiality inquiry.

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Because you're asking, is there a possibility of bias here?

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So you ask it from the perspective of the entity that holds the shares.

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And the entity that holds the shares is holding 1.20% to 1%, the majority of which is held on behalf of its customers, not for its own benefit.

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So the shareholding is trivial in the most perfect sense.

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It couldn't be more trivial than one twentieth of one percent.

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There's no dispute that Professor Kaufman-Coller did not know of these shareholdings before the Challenger rose.

[00:18:38] Speaker 02:
There's no dispute.

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When the Challenger rose, she asked UBS to run a conflicts check.

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The conflicts check came back clear.

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She made reasonable inquiry.

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The only test that is required, even under the Ninth Circuit Morelian standard, this is in the Schmitz case, the only requirement on Professor Kaufman-Coller was to make reasonable inquiry.

[00:19:01] Speaker 02:
And she made reasonable inquiry.

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She asked UBS, do I have a conflict?

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The conflict check came back no, which stands to reason, because the shareholding was so remote.

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And the final important fact to remember is, it's a question of timing.

[00:19:17] Speaker 02:
Judge, we've been started with this.

[00:19:18] Speaker 02:
It's a question of timing.

[00:19:20] Speaker 02:
You have two decisions that are challenged before you today, the decision on liability and the final award.

[00:19:27] Speaker 02:
The decision on liability was rendered one year after Professor Kaufman Calder resigned from the tribunal, from UBS.

[00:19:37] Speaker 02:
The final award was rendered six years after Professor Kauffman called it.

[00:19:43] Speaker 04:
I think it would be more difficult if there had been material processes of the tribunal during the period in which he was aware of the conflict.

[00:19:56] Speaker 04:
Because presumably, if such processes had occurred, they would have potentially cast a shadow on the outcome.

[00:20:07] Speaker 02:
That would be a harder case, but that's not our case.

[00:20:10] Speaker 02:
That's not our case.

[00:20:11] Speaker 02:
And so the suggestion that she should have done more, it's difficult to understand what could have been this greater action than saying to UBS, tell me if I have a conflict with any of the parties to the arbitrations in front of me, and they say no.

[00:20:27] Speaker 02:
So it's difficult to understand what else she could have done, what the conduct is exactly that Argentina is complaining about.

[00:20:36] Speaker 04:
Do we know how Argentina found out about the UBS holdings?

[00:20:45] Speaker 02:
I don't think that's in the record, no.

[00:20:47] Speaker 02:
But the challenge was raised.

[00:20:48] Speaker 02:
Because it did raise the challenge for the Tribunal.

[00:20:51] Speaker 02:
It eventually found out that that was, I think, 19 months after Professor Kaufman-Coller.

[00:20:55] Speaker 02:
And by the way, also, just a few weeks after Argentina's first challenge to Professor Kaufman-Coller failed.

[00:21:02] Speaker 02:
Now, this is not an extreme situation.

[00:21:04] Speaker 02:
Argentina challenges arbitrators as a matter, of course, in the arbitrations against it.

[00:21:10] Speaker 02:
So this is not an extreme situation.

[00:21:11] Speaker 02:
This is the standard playbook of Argentina.

[00:21:13] Speaker 02:
They challenged her once for deciding a case against them.

[00:21:16] Speaker 02:
That failed.

[00:21:17] Speaker 02:
They challenged her again.

[00:21:18] Speaker 02:
That failed.

[00:21:19] Speaker 02:
And they challenged her in a variety of other cases and every other body to have considered this challenge.

[00:21:27] Speaker 02:
And there have been five of them.

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have determined that there is nothing to this challenge.

[00:21:32] Speaker 02:
The decisions are in the record.

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It's the decision of this tribunal, the decision of the lower court, the decision of the EDF tribunals, and annulment committees.

[00:21:40] Speaker 02:
Each of those decisions was well-reasoned and comprehensive.

[00:21:44] Speaker 02:
And each of those decisions had no difficulty in finding that this was a trivial challenge, that there was no possibility for a conflict in idea.

[00:21:53] Speaker 06:
Can I ask you about the district court

[00:21:58] Speaker 06:
gave alternative standards of review.

[00:22:01] Speaker 06:
But isn't the de novo review what she was bound to use rather than the deferential standard of review?

[00:22:12] Speaker 02:
I don't think so, Your Honor.

[00:22:14] Speaker 02:
OK, why?

[00:22:14] Speaker 02:
There is no situation.

[00:22:16] Speaker 02:
I mean, the Supreme Court has been clear on this for 20 years.

[00:22:19] Speaker 02:
There's no situation in which arbitral decision making, the facts found by an arbitration tribunal, received de novo review in a court.

[00:22:27] Speaker 02:
There's no situation under no limb of section 10 of the FAA do you receive de novo review.

[00:22:33] Speaker 02:
There are two situations in which de novo review is possible.

[00:22:37] Speaker 02:
This was in first options.

[00:22:39] Speaker 02:
One, where you say, I never signed this agreement.

[00:22:42] Speaker 02:
There is no arbitration clause that is binding me.

[00:22:43] Speaker 02:
That's understandable that you will receive de novo review.

[00:22:46] Speaker 02:
And the second is, I agree to arbitrate my contract claim, but you decided my family law claim.

[00:22:52] Speaker 02:
That's another instance where there might be de novo review.

[00:22:55] Speaker 02:
But if there is a decision that is within the competence, within the jurisdiction of a tribunal,

[00:23:01] Speaker 02:
And here this is, because the parties agreed that the tribunal would resolve this challenge.

[00:23:06] Speaker 02:
So if there is a decision on a matter within arbitral decision making, that always receives deferential review.

[00:23:14] Speaker 02:
And why?

[00:23:15] Speaker 02:
Because we don't want to turn arbitration into the first step of a long wave of litigation.

[00:23:20] Speaker 02:
The object of arbitration is an alternative to litigation.

[00:23:23] Speaker 02:
Now, Argentina says, you cannot fulfill your statutory mandate under Section 10A2 without de novo review.

[00:23:31] Speaker 02:
But you fulfill all of your statutory mandates under all of the subsections of Section 10 by applying deference.

[00:23:38] Speaker 02:
Yes, you are undertaking the evident partiality inquiry.

[00:23:42] Speaker 02:
But no, you're not doing it on a blank slate.

[00:23:45] Speaker 02:
You have findings of fact from the tribunal.

[00:23:47] Speaker 02:
You have a decision by arbitrators who are vested with the power to make the decision.

[00:23:51] Speaker 02:
And then it comes up to the courts.

[00:23:53] Speaker 02:
And the courts exercise deferential review in this respect as in every other respect.

[00:23:58] Speaker 02:
Now, most of the evident partiality challenges that will come before you will not have a decision already made by the Tribunal.

[00:24:06] Speaker 02:
So the issue of deference will be moot, because there will be nothing to which you should defer.

[00:24:11] Speaker 02:
But here, which is a relatively unique situation, where the parties have given the Tribunal the power to resolve this question, then you have deferential review.

[00:24:21] Speaker 04:
that the UBS holdings, the arbitration, could not have an effect on the value of UBS stock.

[00:24:34] Speaker 04:
Is that a factual finding in the normal sense of the word?

[00:24:39] Speaker 02:
I believe it is, Your Honour.

[00:24:41] Speaker 02:
This was a matter that was put before the Tribunal.

[00:24:45] Speaker 02:
We made the allegation.

[00:24:50] Speaker 04:
It's a matter of prediction.

[00:24:52] Speaker 04:
Of course, one does make predictions about matters of fact.

[00:24:56] Speaker 04:
There's no doubt about that.

[00:25:02] Speaker 04:
But maybe it is susceptible of dichotomous answer, yes or no, or just a little bit.

[00:25:13] Speaker 04:
Just a little bit is not a possible answer.

[00:25:16] Speaker 02:
It might be.

[00:25:17] Speaker 02:
But we had this debate before the tribunal.

[00:25:20] Speaker 02:
And you'll see in the tribunal's decision that Argentina had ample opportunity to address this very question.

[00:25:26] Speaker 02:
We argued that it would have no effect.

[00:25:27] Speaker 02:
One twentieth of one percent, that will have no effect.

[00:25:30] Speaker 02:
Argentina had the opportunity to respond on that.

[00:25:33] Speaker 02:
They could have introduced factual evidence.

[00:25:35] Speaker 02:
They could have introduced an expert, an economic expert, to say, this will have an impact.

[00:25:39] Speaker 02:
Look at my mold.

[00:25:40] Speaker 02:
They did none of that.

[00:25:41] Speaker 02:
And that's why this finding was based on an undisputed factual record.

[00:25:46] Speaker 02:
And it's why also this is not the proper inquiry of a district court or appeals court.

[00:25:53] Speaker 02:
Because we're talking about findings of fact to which you must give deference under Supreme Court precedent.

[00:26:02] Speaker 02:
There are no further questions.

[00:26:04] Speaker 06:
I have one, and that is out of the record.

[00:26:08] Speaker 06:
And that is, what's the status of the water supply and so forth in Buenos Aires?

[00:26:14] Speaker 06:
I mean, that seems to be a pretty important project.

[00:26:18] Speaker 02:
The findings of fact in the arbitration tribunal's decision showed that our clients improved it enormously.

[00:26:25] Speaker 02:
The supply of water to Buenos Aires, the water treatment services, and I believe that things are going well.

[00:26:31] Speaker 06:
OK.

[00:26:32] Speaker 02:
Great.

[00:26:33] Speaker 06:
Thank you.

[00:26:36] Speaker 06:
How much time does Mr. Slater have?

[00:26:39] Speaker 06:
Okay.

[00:26:40] Speaker 03:
Thank you, Your Honor.

[00:26:42] Speaker 03:
Judge Williams, if I can return to your question.

[00:26:45] Speaker 03:
There were material processes that took place during the time that Professor Kaplan-Cohler was aware of the connection between UBS and AWG, in particular the submissions and the tribunal's deliberations on the question of liability.

[00:27:00] Speaker 04:
And the decision on liability ultimately had a huge impact on- So when is the tribunal deliberating liability?

[00:27:10] Speaker 03:
Well, the decision on jurisdiction was in August of 2006, so they were deliberating jurisdiction during the time that she was embarking on her undertaking with UBS.

[00:27:22] Speaker 04:
Yeah, but that's before she's aware.

[00:27:24] Speaker 03:
Yes, and then she becomes aware in November of 2007.

[00:27:29] Speaker 03:
the decision on liability is not issued until 2010.

[00:27:32] Speaker 03:
So throughout the period 2007, until her resignation or her decision not to stand for re-election to UBS in 2009, they were receiving the party's briefs and... First receiving mean?

[00:27:47] Speaker 04:
I mean, the parties were making... We received briefs and I have to admit that they're not necessarily our first reading material on the moment of arrival.

[00:27:55] Speaker 03:
That's one of the critical differences between arbitrators and judges.

[00:27:59] Speaker 03:
They're paid to spend all of their time reading voluminous briefs, and so they do spend time quite quickly.

[00:28:05] Speaker 03:
I don't have in front of me the date of the hearing on liability, but I believe it fell during that time period.

[00:28:12] Speaker 06:
What are we paid to do?

[00:28:13] Speaker 06:
I'm sorry.

[00:28:15] Speaker 03:
You're paid to make decisions.

[00:28:16] Speaker 03:
Whoever comes before you, whatever their means are, it's a very different arrangement, and we appreciate it very much.

[00:28:25] Speaker 03:
Another thing I want to correct is there was no request by Professor Kaufman-Cohler to do a conflict check.

[00:28:31] Speaker 04:
Just to go back, where in the record will we find indication of tribunal activities

[00:28:39] Speaker 04:
in the period from November 29, 07 to April 15, 09.

[00:28:50] Speaker 03:
The decision on liability itself sets out the procedural history of the consideration of liability.

[00:28:59] Speaker 03:
So it will have all of the determinations

[00:29:05] Speaker 03:
Excuse me, all the dates of submissions as well as when the tribunal sat.

[00:29:13] Speaker 03:
And that begins at page 199 of the Joint Appendix.

[00:29:18] Speaker 03:
And the hearing on the merits took place

[00:29:31] Speaker 03:
In the October-November 2007 timeframe, that's on page 211 of the Joint Appendix.

[00:29:38] Speaker 03:
And then the deliberations continued from that time until the rendering of the award on the 30th of July of 2010.

[00:29:50] Speaker 03:
I was starting to say that the decision on liability had a profound impact on the damages as well, because there was a disagreement on the date of violation of the treaty.

[00:30:01] Speaker 03:
And under the minority view, the violation took place considerably later, and that would in effect have wiped out the damages in this case.

[00:30:11] Speaker 03:
As I said, Professor Kaufman-Cohler did not make a request for a conflict check.

[00:30:15] Speaker 03:
She responded to a request by UBS for her to tell them about her involvement so that they could make a decision about director independence.

[00:30:25] Speaker 03:
She did not ask that they inform her about their relationship to the parties.

[00:30:29] Speaker 03:
AWG here, as well as in their briefs, transposed the Commonwealth Coding Standard.

[00:30:35] Speaker 03:
The question is not whether Professor Kauffman-Cohler had a substantial relationship with AWG or with the other parties in the arbitration.

[00:30:45] Speaker 03:
The question is, is there a substantial relationship between the arbitrator and an entity which itself has business with a party to the arbitration that is more than trivial?

[00:30:56] Speaker 03:
And I think triviality in this context needs to be looked at from both sides, and certainly from the perspective of Suez and Vivendi.

[00:31:04] Speaker 03:
You can be sure that they knew that UBS had, was the largest shareholder in the case of Vivendi, and among the largest in the case of Suez.

[00:31:14] Speaker 03:
There was a suggestion that the record of the arbitration- You're beyond your time, so can you wind it up?

[00:31:19] Speaker 03:
Yes, Your Honor.

[00:31:20] Speaker 03:
I would say that international investment treaty arbitration is under a lot of stress and criticism these days because of the fact that arbitrators are largely drawn from the corporate world.

[00:31:31] Speaker 03:
And if you affirm in this case, you will be saying not only is that okay, which it is, but that an arbitrator can assume the mantle of responsibility to a substantial commercial enterprise that in turn has more than trivial business with parties to the arbitration,

[00:31:45] Speaker 03:
not disclose that fact, when called on it, not be required to step down.

[00:31:51] Speaker 03:
And we think that would send the wrong signal.

[00:31:53] Speaker 03:
We think that that constitutes evident partiality within the community of commonwealth voters.

[00:31:57] Speaker 01:
Thank you.

[00:31:57] Speaker 01:
I appreciate it.