Out-Law News 2 min. read
14 Mar 2024, 11:13 am
New guidelines issued by the International Bar Association (IBA) will require parties, counsels, and arbitrators to reappraise their approach to making disclosure in arbitrations, an expert has said.
The IBA recently released its 2024 Guidelines on Conflicts of Interest in International Arbitration (21 pages / 120 KB). These guidelines provide a framework for addressing conflicts of interest and are intended to promote transparency, impartiality, and independence in the arbitration process.
Mohammed Talib, arbitration expert at Pinsent Masons, said: “It is important for parties to international arbitrations to ensure that any disclosures they make or receive have been carried out against the right standard that is applicable in their proceedings, especially if these now need to be updated in light of the 2024 IBA Guidelines.”
The IBA guide is recognised internationally by almost all arbitral practitioners and many courts reflect them as the framework for best practice when faced with conflicts of interest in international arbitration. The guidelines were first published in 2004, with an update issued in 2014 reflecting an evolution to the previous framework opposed to a substantial departure from the 2004 edition. Similarly, the latest update makes some important changes despite not completely deviating from the 2014 version.
Connor Clark of Pinsent Masons said: “The IBA’s guidelines have, for some time, been the key reference point for considering potential conflicts of interest when nominating an arbitrator, or considering appointments made by others. The new guidelines serve as a reminder of the importance of considerations that should be made, and furthermore, place an increased onus on parties to carry out their own due diligence when making appointments while expanding the categories of conduct that are considered to give rise to a serious conflict.”
Generally, the guidelines have been updated for modern arbitral practice such as adjusting to the increasing sophistication of law firms and arbitrators, the increase in third party funding of arbitrations, the importance of experts and expert evidence, and responding to recent case law.
The recently updated guidelines include non-waivable red list that provides examples where arbitrators cannot act has been broadened to include instances where the arbitrator currently advises either a party, or affiliate of a party, and the arbitrator’s firm or employer derives significant income from providing that advice.
Parties are now obliged to disclose any relationship, whether direct or indirect, between arbitrators and “a person or entity over which a party has a controlling influence” or “any other person or entity it believes an arbitrator should take into consideration when making disclosures."
Additionally, the guidelines now consider that both third-party funders and insurers may have influence over proceedings and the selection of arbitrators, and that should be taken into consideration in the context of bearing the identity of a party.
Firms and arbitrators can compare the 2024 guidelines with previous versions as the IBA has published a side by side document (31 pages /357 KB) showing the updates implemented in the latest edition.