New 2024 IBA Guidelines on Conflicts of Interest in International Arbitration

In February 2024, the International Bar Association (IBA) Arbitration Committee published its reviewed Guidelines on Conflicts of Interest in International Arbitration. The new text modernizes the previous version of the Guidelines dating from 2014, although without modifying them in their main aspects, and promises to remain an essential reference in international arbitration.

 

The IBA Guidelines are an instrument that, although soft law and therefore non-binding, is widely used by parties, arbitrators, and institutions in arbitration. They provide internationally accepted standards on key issues such as arbitrators’ disclosure and requirements of impartiality and independence.

 

Originally published in 2004, the 2024 version is the second update the IBA issues, after the 2014 version. It comes as part of the review the IBA Arbitration Committee conducts every ten years. This process involved the participation of various arbitration professionals who, while highlighting that the Guidelines continue to be a useful and effective tool, proposed changes in topics such as arbitrators’ disclosures, third-party funding, issue conflicts, expert witnesses, non-lawyer arbitrators, and social media, among others. For prompt reference of arbitration practitioners, the IBA published a useful comparison between the 2014 and 2024 Guidelines.

 

The 2024 Guidelines, like the 2014 ones, are divided into two parts. Part I includes General Standards regarding impartiality, independence, and disclosure. Part II includes the practical application of the General Standards, which divides the different situations into four categories: green, orange, waivable red, and non-waivable red. Below we discuss the main changes in both parts of the 2024 Guidelines.

 

Changes in Part I: “General Standards”

 

• General Standard 3: “Disclosure by the Arbitrator.” The 2024 Guidelines confirm that the arbitrator’s duty of disclosure is governed by a subjective test, under which consideration should be given to whether circumstances or facts may “in the eyes of the parties, give rise to doubts as to the arbitrator’s impartiality or independence.” Among the new provisions, the 2024 Guidelines clarify that, to determine this, the arbitrator must carry out the investigation under General Standard 7(d) and consider “all facts and circumstances known to the arbitrator.” It is also provided that failure to disclose certain circumstances that might raise doubts as to the arbitrator’s impartiality or independence does not necessarily mean there exists a conflict of interest.

 

• General Standard 4: “Waiver by the parties.” This standard provides that a party waived its right to object to facts or circumstances that might be a potential conflict of interest for an arbitrator if it fails to do so within 30 days of becoming aware of such facts or circumstances. Now, under the 2024 Guidelines, such party is deemed to have had knowledge of such facts or circumstances if a “reasonable enquiry” would have revealed them.

 

• General Standard 6: “Relationships.” The 2024 Guidelines expanded the scope of this standard to reflect the evolving law firm structure and mode of international legal practice. Specifically, this standard now includes a broad reference to the arbitrator’s employer (not just “law firm”) and establishes a standard whereby any legal entity or natural person over which a party exercises a “controlling influence” is deemed to bear the identity of that party. For example, where a parent company is a party to the proceedings, its subsidiary may be deemed to bear the identity of the parent company where the parent company exercises a controlling influence over it.

 

• General Standard 7: “Duty of the Parties and the Arbitrator.” The 2024 Guidelines expanded the parties’ obligation to inform arbitrators, other parties, and the arbitral institution or other appointing authority (if any) of any relationship, direct or indirect, between the arbitrator and other parties who may be directly or indirectly involved or otherwise interested in the dispute. Examples include the obligation to disclose the identity of counsels who advise but do not appear in the arbitration.

 

Changes in Part II: “Practical Application of the General Standards”

 

Part II of the IBA Guidelines includes a “traffic-light” system that analyzes, in a non-exhaustive manner, the various specific situations likely to create justifiable doubts as to the arbitrator’s impartiality and independence, according to the following four categories:

 

1. Green List, for situations in which it is understood that there is no conflict of interest or appearance thereof.

 

2. Orange List, for situations that, based on the facts of a particular case, may raise a doubt and, therefore, should be disclosed.

 

3. Non-Waivable Red List, for situations where it is understood that there is a conflict of such gravity that parties cannot waive it.

 

4. Waivable Red List, for situations where it is understood that a conflict of interest exists, albeit of a lesser severity, which the parties can waive.

 

The Red and Green Lists did not undergo substantial changes in the 2024 Guidelines. The most relevant changes were in the Orange List, to which the following circumstances were added:

 

• The appointment of an arbitrator as a current or former expert witness for a party or affiliate in unrelated matters within the last three years (article 3.1.6).

 

• The appointment of an arbitrator as an expert on more than three occasions by the same lawyer or firm within the last three years (article 3.2.9).

 

• The appointment of the arbitrator on more than three occasions in the last three years by the same lawyer or firm to assist in mock-trials or hearing preparations (article 3.2.10).

 

 

• The joint performance of an arbitrator and counsel for one of the parties, and an arbitrator and his or her fellow arbitrator(s), respectively, as arbitrators in another arbitration (articles 3.2.12 and 3.2.13).

 

• The instruction of an expert in the arbitration by the arbitrator arising out of another matter in which the arbitrator acts as counsel (article 3.3.6).

 

• Public advocacy of a position through social media or professional networking platforms by an arbitrator (article 3.4.2).

 

 

Conclusions

 

The 2024 Guidelines did not undergo substantial changes in relation to the 2014 Guidelines. However, they introduced novel issues that reflect the constant evolution of international arbitration and the IBA’s willingness to keep the Guidelines up to date in that evolving context, to continue to fulfill the purpose of the Guidelines: to establish internationally accepted ethical standards and principles that promote and ensure the integrity, fairness, reputation, and effectiveness of international arbitration. We believe that the 2024 Guidelines will continue to be a useful and widely used tool in our practice.