2024 IBA Guidelines on Conflicts of Interest in International Arbitration

In February 2024, the International Bar Association (IBA) released the most recent version of the IBA Guidelines on Conflicts of Interest in International Arbitration (2024 IBA Guidelines). The purpose of the recent revision (2024 Revision) was to modernize and clarify the Guidelines. The changes to the 2024 IBA Guidelines include updates to both the general standards (Part I) and application lists (Part II).

 

The changes implemented through the 2024 Revision are as follows:

 

■     General Standard 2 (Conflicts of Interest):

The issue of when an arbitrator should decline an appointment or may otherwise be disqualified for lack of impartiality or independence is addressed in General Standard 2 on “Conflicts of Interest.” Amendments made to the explanation to General Standard 2 state that when a justifiable doubt exists in connection with a fact or circumstance enumerated in the Non-Waivable Red List exists, the arbitrator “should decline the appointment or refuse to continue to act”. The 2024 IBA Guidelines clarify, however, that if a justifiable doubt arises with respect to a fact or circumstance described in the Waivable Red List, then the arbitrator may make a disclosure under General Standard 3.

 

■     General Standard 3 (Disclosure):

• • Impact of secrecy on arbitrators’ disclosure: New General Standard 3(e) provides that an arbitrator should not accept an appointment or should recuse himself or herself if he or she is required to disclose information that may affect his or her impartiality or independence but is prevented from doing so by rules of confidentiality or secrecy.

• • Consequences of failure to disclose: New General Standard 3(g) clarifies that failure to disclose does not necessarily indicate a conflict of interest, and that the parties and the arbitrators should consider the relevant facts and circumstances, as well as the applicable legal standards, in determining whether a conflict of interest exists.

 

■     General Standard 4 (Waiver by the Parties):

General Standard 4(a) now includes an additional paragraph stating that a party shall be deemed to have learned of any facts or circumstances under 4(a)(ii) that a reasonable enquiry would have yielded if conducted at the outset or during the proceedings. This read together with the requirement to raise an objection within 30 days of either the receipt of an arbitrator’s disclosure or the discovery of the aforementioned facts or circumstances, encourages parties to conduct a reasonable inquiry at an early stage and discourages opportunistic tactics such as delaying or withholding objections until a later stage in the proceedings.

 

■     General Standard 6 (Relationships):

• • General Standard 6 has been updated to reflect the diversity and complexity of the international legal practice structures. The law firm’s or employer’s organisational structure and mode of practice are expressly listed among the circumstances that should be considered in determining whether a potential conflict exists and whether disclosure should be made. The explanation to General Standard 6 now provides that a law firm for these purposes is any firm in which the arbitrator is a partner or with which the arbitrator is formally associated, including in the capacity of an employee of any designation, as counsel, or of counsel.
  • Third-party funders and insurers: General Standard 6 – explanation (b) has also been revised to give due consideration to whether third-party funders and insurers may have a direct economic interest in the dispute, a controlling influence over a party, or influence over the conduct of the proceedings.

 

The main changes to the Application Lists are:

 

■     Additional scenario in the Green List: The arbitrator, when acting as arbitrator in another matter, heard testimony from an expert appearing in the current proceedings. (Green List 4.5.1)

 

■     Several amendments to the Orange List: The additional scenarios include:

• • 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 (Orange List 3.1.6).
  • The arbitrator has, within the past three years, been appointed as an expert on more than three occasions by the same counsel/law firm (Orange List 3.2.9).
  • 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 (Orange List 3.2.10).
  • An arbitrator and counsel for one of the parties serving together as arbitrators in another arbitration (Orange List 3.2.12).
  • An arbitrator and their fellow arbitrator(s) currently serve together as arbitrators in another arbitration (Orange List 3.2.13).
  • The arbitrator is instructing an expert appearing in the arbitration proceedings for another matter where the arbitrator acts as counsel (Orange List 3.3.6).

 

■     Limited changes to both the Waivable and Non-Waivable Red List:3.1 of the Waivable Red List, which referred to a scenario in which the arbitrator currently represents one of the parties, has been revised to incorporate what was previously part of 2.3.7, which related to the arbitrator regularly advising one of the parties, provided that no significant income is derived from such advice. 2.3.1 after revision now treats as waivable the situation in which an arbitrator currently or regularly represents or advises a party or party affiliate, but only if the arbitrator does not derive significant financial income from the same.