IBA Conflict IBA Guidelines on Conflicts of Interest in International Arbitration (2024)
IBA Conflict
IBA Guidelines on Conflicts of Interest in International Arbitration (2024)
- To have an important practical influence, the Guidelines address situations that are likely to occur in today’s arbitration practice in the Application Lists. However, these lists cannot cover every situation, and in all cases, the General Standards should control the outcome; in other words, the General Standards govern over the illustrative Application Lists.
- The Red List consists of two parts: a ‘Non-Waivable Red List’ (see General Standards 2(d) and 4(b)); and a ‘Waivable Red List’ (see General Standard 4(c)). These lists are non-exhaustive and detail specific situations that, depending on the facts of a given case, give rise to justifiable doubts as to the arbitrator’s impartiality and independence. That is, in these circumstances, a conflict of interest exists from the point of view of a reasonable third person having knowledge of the relevant facts and circumstances (see General Standard 2(b)). The Non-Waivable Red List includes situations deriving from the overriding principle that no person can be their own judge. Therefore, acceptance of such a situation cannot cure the conflict. The Waivable Red List covers situations that are serious but not as severe. Because of their seriousness, unlike circumstances described in the Orange List, these situations should be considered waivable, but only if and when the parties, being aware of the conflict of interest situation, expressly state their willingness to have such a person act as arbitrator, as set forth in General Standard 4(c).
- The Orange List is a non-exhaustive list of specific situations that, depending on the facts of a given case, may, in the eyes of the parties, give rise to doubts as to the arbitrator’s impartiality or independence. The Orange List thus reflects situations that would fall under General Standard 3(a), with the consequence that the arbitrator has a duty to disclose such situations. In all these situations, the parties are deemed to have accepted the arbitrator if, after disclosure, no timely objection is made, as established in General Standard 4(a).
- Disclosure does not imply the existence of a conflict of interest; nor should it by itself result either in a disqualification of the arbitrator, or in a presumption regarding disqualification. The purpose of the disclosure is to inform the parties of a situation that they may wish to explore further in order to determine whether objectively – that is, from the point of view of a reasonable third person having knowledge of the relevant facts and circumstances – there are justifiable doubts as to the arbitrator’s impartiality or independence. If the conclusion is that there are no justifiable doubts, the arbitrator can act. Apart from the situations covered by the Non-Waivable Red List, the arbitrator can also act if there is no timely objection by the parties or, in situations covered by the Waivable Red List, if there is a specific acceptance by the parties in accordance with General Standard 4(c). If a party challenges the arbitrator, the arbitrator can nevertheless act, if the authority that rules on the challenge decides that the challenge does not meet the objective test for disqualification described in the Explanation to General Standard 2.
- A later challenge based on the fact that an arbitrator did not disclose such facts or circumstances should not result automatically in non-appointment, later disqualification, or a successful challenge to any award. As provided in General Standard 3(g), nondisclosure cannot by itself make an arbitrator partial or lacking independence: only the facts or circumstances that the arbitrator failed to disclose can do so.
- In respect of situations not listed in the Orange List or falling outside the time limits used in parts of the Orange List, there is no presumption that a disclosure should be made. However, the arbitrator needs to assess on a case-by-case basis whether a given situation, even though not mentioned in the Orange List, is nevertheless such as to give rise to doubts in the eyes of the parties as to the arbitrator’s impartiality or independence. Because the Orange List is a non-exhaustive list of examples, there may be situations not mentioned, which, depending on the circumstances, may need to be disclosed by an arbitrator. Such may be the case, for example, in the event of repeat past appointments by the same party or the same counsel beyond the three-year period provided for in the Orange List, or when an arbitrator concurrently acts as counsel in an unrelated matter in which similar issues are raised. Likewise, an appointment made by the same party or the same counsel appearing before an arbitrator, while the case is ongoing, may also have to be disclosed, depending on the circumstances. While the Guidelines do not always require disclosure of the fact that an arbitrator has in the past served on the same tribunal with another member of the Arbitral Tribunal, or with one of the counsel in the current proceedings, an arbitrator should assess on a case-by-case basis whether the fact of having frequently served as counsel with, or as an arbitrator on, tribunals with another member of the Arbitral Tribunal may create, in the eyes of the parties, a perceived imbalance within the Arbitral Tribunal that may, depending on the facts and circumstances of the case, give rise to doubts as to an arbitrator’s impartiality or independence. If the conclusion is ‘yes,’ the arbitrator should make a disclosure.
- The Green List is a non-exhaustive list of specific situations where no appearance and no actual conflict of interest can exist either under the subjective or the objective standard. Thus, the arbitrator has no duty to disclose situations falling within the Green List. As stated in the Explanation to General Standard 3(a), the Green List reflects the fact that there is a limit to the duty to disclose, based on reasonableness.
- The borderline between the categories that comprise the Lists can be thin. It can be debated whether a certain situation should be on one List instead of another. Also, the Lists contain, for various situations, general terms such as ‘significant’ and ‘relevant’. The Lists reflect international principles and best practices to the extent possible. Further definition of the norms, which are to be interpreted reasonably in light of the facts and circumstances in each case, would be counterproductive.
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