The International Bar Association’s Arbitration Committee has released new Guidelines on Conflicts of Interest in International Arbitration (“IBA Guidelines”). The IBA Guidelines are a "soft law" instrument setting out expected standards for maintaining impartiality and independence of arbitrators as well as for disclosure. Although they are not binding without the consent of the parties, they are considered international best practice and are widely used in arbitration for assessing conflicts of interest and the need for disclosure.
The new IBA Guidelines update the 2014 version without changing its core principles. This update introduces some important changes to both to the “General Standards” and to the list of practical applications of these standards, also known as the “Traffic Light System”. Our article provides an overview of the main changes.
Key changes to the General Standards
Part I of the IBA Guidelines contains seven general standards that must alwaysbe considered when assessing conflicts of interest and the need for disclosure.
Some of the key changes and clarifications to these standards in the update include:
Disclosures and non-disclosures by the arbitrator: If an arbitrator considers that he/she should make a disclosure but is prevented from doing so by rules of professional secrecy or other rules of practice or conduct, the new General Standard 3(e) provides that the arbitrator shall not accept the appointment or, if already appointed, shall resign. The new General Standard 3(g) explicitly acknowledges that a failure to disclose certain facts and circumstances which may raise doubts in the minds of the parties as to an arbitrator's impartiality or independence does not necessarily mean that there is a conflict of interest or that the arbitrator should be disqualified.
Parties’ duty to enquire: The new General Standard 4(a) includes a presumption that a party has learned of a fact or circumstance which a reasonable investigation at the outset or during the proceedings would have disclosed and has waived any defense based on that fact or circumstance if it is not raised within 30 days.
Relationships: The new General Standard 6 has been updated, in particular with respect to the definition of "law firm", to bring it into line with the evolving landscape and practices of international legal institutions. It also clarifies that (i) an arbitrator is deemed to bear the identity not just of their law firm but also their employer and (ii) any legal entity or natural person over which a party has a controlling influence may be considered to bear the identity of that party.
Duration of obligation to stay independent and impartial: The Guidance to General Standard 1 has been amended to clarify that the arbitrator’s obligation of independence and impartiality ends once the final award is rendered. It does not extend to the period during which the award may be challenged before courts or other bodies.
Key changes to the Traffic Light System
Part II of the IBA Guidelines contains a practical guide listing issues that parties and arbitrators faced with a potential conflict of interest may consider. It is set up as a “Traffic Light System” and divided into three categories: the Green List, the Orange List and the (non-waivable and waivable) Red List. However, this list cannot cover every situation. Therefore, in all cases, the general standards should take precedence over the illustrative application list.
There have been no substantive changes to the Red List (both waivable and non-waivable) or the Green List. The Orange List has undergone the most changes, including the following:
Experts: A new item has been added (3.1.6) which applies to situations where an arbitrator currently acts or has acted within the last three years as an expert for one of the parties, or an affiliate of one of the parties in an unrelated matter. Disclosure should also be made if the arbitrator has, within the last three years, been appointed as an expert on more than three occasions by the same lawyer or law firm (3.2.9). At the same time, it is clarified that if the arbitrator, acting as an arbitrator in another matter, has heard the testimony of an expert in the current proceeding, this falls under the Green List (4.5.1).
Mock trials: The new item 3.2.10 states that disclosure should be made if 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. The same applies if the arbitrator has been appointed to assist in mock trials or hearing preparations by one of the parties on two or more occasions within the past three years (item 3.1.4).
Co-arbitrators: Under the new items 3.2.12 and 13, disclosure must be made where an arbitrator and counsel for one of the parties are currently serving jointly as arbitrators in another arbitration, or where an arbitrator and their fellow arbitrator(s) currently serve together as arbitrators in another arbitration.
Social Media: If the arbitrator has publicly taken a position on the case, this should be disclosed in accordance with the new item 3.4.2, which now expressly includes social media and online professional networking platforms.
Relationship between arbitrator and expert: According to the revised point 3.4.3, disclosure should be made if an arbitrator holds a decision-making position with the administering institution or the appointing authority in relation to the dispute and in that position has participated in decisions with respect to the arbitration.
(The International Bar Association has published a comparison document between the 2014 and 2024 versions, which is a useful guide to all of the latest changes: See it here)
The subtle but important adjustments reflect changes to modern legal practice and an endeavor to provide arbitrators and arbitration practitioners with additional guidance on issues such as the disqualification of arbitrators and disclosure obligations.
Do you have any questions about the updated IBA Guidelines? Are you unsure of the impact the changes may have on your selection of arbitrators or potential challenges to arbitrators? Our arbitration team will be happy to help you.
