Commercial Litigation and Dispute Resolution Blog

The International Bar Association (the “IBA”) recently published an updated version of the Guidelines on Conflicts of Interest in International Arbitration (the “Guidelines”).

The 2024 updates to the Guidelines address an arbitrator’s relationship with experts and co-arbitrators, public statements related to cases, failure to disclose conflicts, a party’s due diligence obligations, and the interplay between professional secrecy rules and disclosure obligations.

Background: What are the Guidelines?

The Guidelines are a soft law instrument that set out international standards for the impartiality and independence of arbitrators. While they cannot override national law, the Guidelines have become widely used in commercial and investment arbitrations.

The Guidelines were initially published in 2004 and updated in 2014. The 2024 update retains the same two-part organization.

Part I contains seven general standards for impartiality, independence and disclosure that should always be considered. Each general standard includes an explanation section that provides further guidance.

Part II contains a “traffic light system” of red, orange and green lists addressing situations that commonly arise in practice. This system is intended to assist with practical applications of the general standards.

Key Changes to Part I

The updates to Part 1 include:

• Disclosure and secrecy rules: The new General Standard 3(e) provides that arbitrators should not accept an appointment, or resign, if they should make a disclosure, but professional secrecy or other rules prevent such disclosure.
• Failure to disclose and disqualification: The new General Standard 3(g) provides that a failure to disclose certain circumstances that may give rise to doubts as to impartiality or independence does not necessarily mean that a conflict of interest exists or that an arbitrator is disqualified.
• Deemed knowledge of potential conflict: Under General Standard 4(a), a party may be deemed to know any circumstances potentially constituting a conflict of interest that a reasonable enquiry would have yielded.
• What constitutes a “law firm”: General Standard 6(a) contains a modernized concept of law firm. Arbitrators will still be considered to bear the identity of their law firm or employer. However, under the 2024 Guidelines, a law firm includes any firm with which the arbitrator is formally associated. The structures through which different law firms cooperate or share profits also may provide a basis for deeming an arbitrator to bear the identity of a firm.
• Controlling influence of a party: The new General Standard 6(c) provides that any legal entity or natural person over which a party has controlling influence may be considered to bear the identity of such a party.

Key Changes to Part II

The “traffic light” system in Part II of the Guidelines is based on the three categories of situations:

1. The Red List addresses out circumstances where a conflict of interest is understood to exist, and it is broken down into waivable and non-waivable situations.
2. The Orange List contains a non-exhaustive list of specific situations that may give rise to doubt the arbitrator’s impartiality or independence. An arbitrator has a duty to disclose situations falling within the Orange List.
3. The Green List situations are understood not to give rise to such doubt.

There are no significant updates to the Red List.

The 2024 updates to the Guidelines add the following situations to the Orange List:

• Relationship with expert: The arbitrator has, within the past three years, been appointed as an expert on more than three occasions by the same counsel, or the same firm.
• Instructing expert as counsel: The arbitrator is instructing an expert appearing in the arbitration proceedings for another matter where the arbitrator acts as counsel.
• Mock trials and hearing preparation: The arbitrator has, within the past three years, been appointed to assist in mock-trials or hearing preparations on more than three occasions by the same counsel, or the same law firm.
• Arbitrator and counsel serving together: An arbitrator and counsel for one of the parties currently serve together as arbitrators in another arbitration.
• Arbitrators serving together: An arbitrator and their fellow arbitrators currently serve together as arbitrator in another arbitration.
• Public statements related to case: The arbitrator has publicly advocated a position on the case, whether in a published paper or speech, through social media or on-line professional networking platforms, or otherwise.

The only update to the Green List clarifies that no doubt arises where the arbitrator, when acting as arbitrator in another matter, heard testimony from an expert appearing in the current proceedings.

If you have any questions about the Guidelines, or would like to speak to us about an arbitration matter, please contact Craig Ferris, KC, FCIArb. or Scott Lucyk, FCIArb.