In February 2024, the International Bar Association (the "IBA") released the most recent version of the IBA Guidelines on Conflicts of Interest in International Arbitration (the "2024 IBA Guidelines"). The new 2024 IBA Guidelines introduce several notable updates to the previous 2014 version of the Guidelines.1

Conflicts of interest are important. An undisclosed conflict of interest may result in the annulment of an arbitration award or an arbitration award that is unenforceable. The IBA Guidelines represent a comprehensive soft law instrument, defining a framework to ensure the impartiality and independence of the arbitrators in international arbitrations. The most recent 2024 version of the IBA Guidelines aims to strengthen further and emphasize the importance of general standards regarding impartiality, independence, and disclosure in international arbitration.

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The IBA Guidelines, as the name itself indicates ("guidelines"), is a non-binding soft law instrument. This means that they cannot override any applicable national law or arbitration rules chosen by the parties. They have, nevertheless, become widely accepted in international arbitration practice and apply to both commercial and investment arbitrations worldwide. They are also often incorporated into arbitration agreements or procedural rules agreed upon by the parties.

The Background of the 2024 Updates to the IBA Guidelines

The first, 2004 version of the IBA Guidelines was prepared by the IBA Arbitration Committee, a working group composed of 19 experts in the field of international arbitration. It was adopted by the IBA Council in 2004. The subsequent 2014 IBA Guidelines on Conflicts of Interest in International Arbitration were adopted and released in 2014, ten years later, which is consistent with the IBA Arbitration Committee's practice of assessing every ten years whether its rules and guidelines should be adapted. In February 2024, the IBA released its most recent amendments,2 based on the recommendations of a special IBA Task Force and the results of a survey carried out by its Subcommittee in 2022.

The 2022 survey revealed that the IBA Guidelines remain a useful and effective tool in international arbitration, albeit certain adjustments were warranted. The results of the survey suggested the modernization of several guidelines, inter alia, related to arbitrator disclosure, third-party funding, expert witnesses, issue conflicts, and social media.3 Following the 2022 survey, the IBA Task Force submitted an updated version of the guidelines for public consultation and provided it to hundreds of arbitration organizations worldwide. After gathering, analyzing, and taking into account various suggestions and comments, the IBA eventually adopted the final version in February 2024.

Overview of the 2024 IBA Guidelines

The 2024 IBA Guidelines retain the same structure as the previous 2014 version. Part I of the IBA Guidelines outlines the general principles regarding the impartiality and independence of arbitrators from the parties at the time of accepting appointment until the final award has been rendered or the proceedings have been otherwise finally terminated.4 Part II uses the so-called "traffic light system" of Red, Orange and Green lists to address common situations of conflicts of interest in international arbitration (see an overview of the IBA Guidelines, IBA Rules and Guidelines Regarding International Arbitration: An Overview).

The new 2024 IBA Guidelines have maintained the following structure:

Part I: General Standards Regarding Impartiality, Independence and Disclosure

  1. General Principle
  2. Conflicts of Interest
  3. Disclosure by the Arbitrator
  4. Waiver by the Parties
  5. Scope
  6. Relationships
  7. Duty of the Parties and the Arbitrator

Part II: Practical Application of the General Standards

Part II of the IBA Guidelines consists of several lists that guide arbitrators, parties, and institutions in identifying and addressing potential conflicts of interest in international arbitration proceedings, specifically:

  • Non-Waivable Red List, which contains "situations deriving from the overriding principle that no person can be his or her own judge".5 The Non-Waivable Red List enumerates specific relationships that are generally considered incompatible with serving as an arbitrator, such as current or recent appointments by one of the parties, a direct financial interest in the outcome of the arbitration, and other significant business relationships with one of the parties;
  • Waivable Red List, which includes "situations that are serious" but could be waived "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";6
  • Orange List, which consists of relationships that may give rise to justifiable doubts about an arbitrator's impartiality, such as past relationships or the involvement of the arbitrator's law firm with one of the parties;7
  • Green List, which comprises relationships that are unlikely to give rise to justifiable doubts about an arbitrator's impartiality, such as membership in professional organizations or academic advisory boards.8

Primary Changes to the 2024 IBA Guidelines

The primary changes to the 2024 IBA Guidelines include several updates to both the general standards (Part I) and application lists (Part II).9

The revisions underscore the importance of the general standards outlined in Part I, emphasizing that these standards should guide assessments of conflicts of interest and disclosure needs over the specifics outlined in Part II's "traffic light" lists. Some key amendments to the guidelines include a more uniform standard for assessing conflicts of interest, leading to greater efficiency in arbitration proceedings. Additionally, new provisions address situations such as an arbitrator's relationship with experts, co-arbitrators, publicly advocating opinions on cases, a failure to disclose, and the parties' due diligence obligations. The guidelines also highlight the importance of disclosure even when impeded by secrecy rules and recognize that a failure to disclose certain circumstances does not automatically imply a conflict of interest.

The key revisions to Part II primarily relate to the Orange List and include the following conflicts:

  • In case the arbitrator currently serves, or has acted within the past three years, as an expert for one of the parties or an affiliate of one of the parties in an unrelated matter (Item 3.1.6);
  • The relationship between an arbitrator and another arbitrator or counsel:
    • An arbitrator and counsel for one of the parties currently serve together as arbitrators in another arbitration (Item 3.2.12);
    • An arbitrator and their fellow arbitrator(s) currently serve together as arbitrators in another arbitration (Item 3.2.13);
    • 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 (Item 3.2.10); Item 3.1.4 also provides for a situation when the arbitrator has in the past three years been appointed to assist in mock trials or hearing preparation on two or more occasions by one of the parties;
  • The relationship between the arbitrator and party or others involved in the arbitration: the arbitrator is instructing an expert appearing in arbitration proceedings for another matter where the arbitrator acts as counsel (Item 3.3.6);
  • The arbitrator publicly advocating a position on the case: the arbitrator has publicly advocated a position on the case, either in a published paper, or speech, or through social media or online professional networking platforms, or otherwise (3.4.2);
  • The arbitrator participated in decisions with respect to the arbitration in an institution/appointing authority (Item 3.4.3).10

The further notable addition to the Green List is a case of contacts between the arbitrator and one of the experts, whereby the arbitrator, when acting as arbitrator in another matter, has already heard testimony from the expert appearing in the current proceedings (Item 4.5).

Relevance of the (Revised) IBA Guidelines for International Arbitration

The revised 2024 IBA Guidelines, like its previous versions, are a very important instrument in international arbitrations. First, they provide a widely accepted framework for identifying and managing conflicts of interest in international arbitration. By offering standardized criteria, they promote consistency and predictability in arbitration proceedings.

Second, conflicts of interest can undermine the impartiality and integrity of arbitration proceedings. The IBA Guidelines help ensure that arbitrators are free from conflicts that could compromise their neutrality, thereby safeguarding the fairness and legitimacy of the arbitral process. Indeed, parties to arbitration proceedings often seek reassurance that the tribunal is impartial and independent. Adhering to the IBA Guidelines enhances the party's confidence in the integrity of the arbitration process, fostering trust in the outcome.

Third, the IBA Guidelines also reflect the best practices and ethical standards of the international arbitration community. By adhering to these standards, arbitrators demonstrate professionalism and commitment to upholding the principles of fairness and justice.

Finally, while the IBA Guidelines are not legally binding, as previously indicated, they are frequently incorporated into arbitration agreements and procedural rules. Adherence to the IBA Guidelines may be enforced through challenges to arbitrators or awards based on conflicts of interest.

In conclusion, it can safely be said that the IBA Guidelines play a crucial role in promoting transparency, fairness, and integrity in international arbitration, thereby contributing to the effectiveness and credibility of the arbitral process.

Footnotes

1. For an overview of the 2014 IBA Guidelines, see IBA Rules and Guidelines Regarding International Arbitration: An Overview.

2. The 2024 IBA Guidelines on Conflicts of Interest in International Arbitration, Foreword.

3. The 2024 IBA Guidelines on Conflicts of Interest in International Arbitration, Foreword.

4. The 2024 IBA Guidelines on Conflicts of Interest in International Arbitration, Part I, (1) General Principle.

5. The 2024 IBA Guidelines on Conflicts of Interest in International Arbitration, Part II, para. 2.

6. The 2024 IBA Guidelines on Conflicts of Interest in International Arbitration, Part II, para. 2.

7. The 2024 IBA Guidelines on Conflicts of Interest in International Arbitration, Part II, para. 3.

8. The 2024 IBA Guidelines on Conflicts of Interest in International Arbitration, Part II, para. 4.

9. For a redline comparison, see "Comparison of the 2024 and 2014 versions of the Guidelines" published by the IBA.

10. Item 3.4.3 provides for a potential conflict when "[t]he arbitrator holds an executive or other decision-making position with the administering institution or appointing authority with respect to the dispute and in that position has participated in decisions with respect to the arbitration."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.