WILMERHALE
Rachael D. Kent
+1 202 663 6976(t)
+1 202 663 6363 (f)
June 8, 2012
Mr. Mark Clodfelter
Mr. Ronald Goodman
Mr. Alberto Wray
Mr. Constantinos Salonidis
Foley Hoag LLP
1875 K Street, NW
Suite 800
Washington, D.C. 20006-1238
Dr. Diego García Carrión
Dra. Christel Gaibor
Ab. Diana Terán
Ab. Juan Francisco Martínez
Procuraduría General del Estado
República del Ecuador
Avenida Amazonas No. 477 y Roca
Edif. Río Amazonas 6to Piso, oficina 601
Quito, Ecuador
Re: Ecuador's Challenge of Judge Stephen M. Schwebel as Arbitrator in Connection with Merck
Sharp & Dohme (I.A.) Corp. v. The Republic of Ecuador - UNCITRAL Arbitration
Dear Sirs:
We write in response to your letter of June 7, 2012 requesting that Merck Sharp & Dohme (I.A.)
Corp. ("MSDIA") agree to Ecuador's most recent challenge of Judge Schwebel and/or that Judge
Schwebel withdraw as arbitrator in the above-referenced arbitration. Judge Schwebel's integrity
and impartiality are unimpeachable, and Ecuador has not asserted a credible basis for again
challenging his service in this arbitration. We therefore reject your suggestion that we withdraw
Judge Schwebel's appointment.
The standard under the UNCITRAL Rules for challenging an arbitrator – that "circumstances
exist that give rise to justifiable doubts as to the arbitrator's impartiality or independence" – is an
objective standard. That is, doubts are "justifiable" if they are reasonable to an objective
observer. Nothing in your letter of June 7 begins to establish that there are circumstances giving
rise to justifiable doubts as to Judge Schwebel's independence or impartiality.
Wilmer Cutler Pickering Hale and Dorr LLP, 1875 Pennsylvania Avenue NW, Washington, DC 20006
Beijing Berlin Boston Brussels Frankfurt London Los Angeles New York Oxford Palo Alto Waltham Washington
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Your letter refers to the fact that Judge Schwebel was appointed by Claimant's counsel, Wilmer
Cutler Pickering Hale and Dorr LLP ("Wilmer"), as an arbitrator in two prior arbitrations. Both
of those appointments, Red Sea Islands Arbitration, Eritrea/Yemen (1997) and Abyei Arbitration,
Sudan/Sudan People's Liberation Movement (2008), were made long before the present
arbitration and do not indicate "a long-standing and remunerative relationship with Claimant's
counsel." (June 7 letter, p. 2)
Judge Schewbel is widely regarded as one of the world's leading public international lawyers
and international arbitrators, and he has served as arbitrator in numerous cases.1 The fact that
Wilmer was counsel in two of those arbitrations does not indicate "a long-standing and
remunerative relationship with Claimant's counsel." To the contrary, it confirms that Wilmer
has been involved in only a very small fraction of the cases in which Judge Schwebel has acted
as an arbitrator.
Your letter cites the IBA Guidelines on Conflicts of Interest in International Arbitration. As you
know, those Guidelines include an "Orange List" which lists "specific situations which
(depending on the facts of a given case) in the eyes of the parties may give rise to justifiable
doubts as to the arbitrator's impartiality or independence," and should therefore be disclosed.
The Orange List includes as one of these circumstances that "the arbitrator has within the past
three years received more than three appointments by the same counsel or the same law firm."
(IBA Guidelines, Orange List, 3.3.7) At the time this arbitration was commenced, Judge
Schwebel had not received more than three appointments by Wilmer in the past three years. In
fact, at the time this arbitration was commenced, Judge Schwebel had not received any
appointments as an arbitrator by Wilmer in the past three years. There was therefore no
conceivable basis on which a reasonable party could have had justifiable doubts as to his
impartiality and independence, and there was no requirement for Judge Schwebel to disclose his
prior appointments.
Your letter also refers to the fact that Judge Schwebel submitted an expert opinion in two U.S.
litigations in which Wilmer was counsel. Those two cases, which were closely related, also took
place long before the present arbitration. In the first of those cases, Shell Oil Company v. Sonia
Eduarda Franco Franco et al. (2005), Judge Schwebel submitted a declaration to the United
States District Court for the Southern District of Florida, on behalf of Shell Oil, which was
represented by Wilmer in that case. In the second of those cases, Miguel Angel Sanchez Osorio
et al v. Dole Food Company, Inc., The Dow Chemical Company, Occidental Chemical
Corporation and Shell Oil Company (2008), Judge Schwebel submitted essentially the same
declaration to the United States District Court for the Central District of California, on behalf of
four corporate defendants, only one of which was represented by Wilmer. In both cases, Judge
1 A public website includes a biography of Judge Schwebel that reports that Judge Schwebel has been appointed as ↩
an arbitrator in 63 international arbitrations, and has also acted as counsel or as an expert witness in many more
proceedings. http://www.londonarbitrators.net/cvs/sschw.pdf.
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Schwebel was retained to provide testimony to the court as an expert in public international law.2
He was not acting as counsel or an arbitrator, but as a witness, with duties of honesty and
integrity to the courts. Notably, the IBA Guidelines do not include past service as an expert
witness among the circumstances that might give rise to justifiable doubts about an arbitrator's
independence or impartiality. Judge Schwebel's service as an expert witness in those cases also
does not give rise to justifiable doubts as to his independence and impartiality.
Your letter suggests that Judge Schwebel should have disclosed his prior service as arbitrator and
expert witness at an earlier stage of this arbitration. We note, preliminarily, that all three
members of the Tribunal chose to make a "Common Disclosure Statement" at the time the
Tribunal was fully constituted, in which each of them – including the arbitrator appointed by
Ecuador – disclosed matters that they had not previously disclosed. The timing of the Common
Disclosure Statement was at a preliminary stage of the arbitration and was both entirely ordinary
and entirely reasonable.
Moreover, the Common Disclosure Statement included, specifically, a statement that "Nothing in
the above [statement] affects the impartiality of the Tribunal or any of its Members or their
independence of the Parties to this Arbitration." Under Article 9 of the UNCITRAL Rules,
arbitrators are instructed to disclose "circumstances likely to give rise to justifiable doubts as to
[their] impartiality or independence." None of the matters included in the Common Disclosure
Statement is likely to give rise to such justifiable doubts, and none was therefore required to be
disclosed under the UNCITRAL Rules. The fact that the arbitrators chose, for the sake of
transparency and completeness, to disclose these matters upon constitution of the Tribunal does
not establish that the non-disclosure of the matters at an earlier stage of the arbitration was
improper or give rise to any justifiable doubts regarding the impartiality or independence of any
of the members of the Tribunal.
In short, Ecuador's challenge of Judge Schwebel's appointment has no merit, and we therefore
request that Ecuador withdraw it forthwith.
As you know, MSDIA intends to file very shortly an application seeking interim measures of
relief from the Tribunal in this arbitration. Under these circumstances, Ecuador's most recent
challenge of Judge Schwebel must not be allowed to delay the arbitral proceedings or to prevent
the Tribunal from considering MSDIA's request for interim relief in a timely manner. We
therefore request that Ecuador either withdraw its challenge or submit it immediately to the PCA
for an expedited decision.
2 Your letter suggests, in passing, that the issues in those two cases "are similar to" the issues in the present ↩
arbitration. That is not true. Judge Schwebel's opinions in those two cases involved his expert opinion regarding a
specific Nicaraguan statute, Law 364, which is not, and could not conceivably be, at issue in this arbitration.
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Sincerely,
Signature
Gary B. Born
David W. Ogden
Rachael D. Kent
cc: Sir Franklin Berman KCMG QC
Judge Stephen M. Schwebel
Judge Bruno Simma
Martin Doe