INTRODUCTION
Since its first edition in 2004, the International Bar Association (IBA) Guidelines on Conflict of Interest in International Arbitration have been the go-to guide for Arbitrators, Counsel, and Arbitral Institutions in identifying conflicts of interest and assessing the need for disclosure. 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 Guideline")1. The 2024 IBA Guidelines are the product of over a year of broad public consultations and surveys conducted at the IBA annual meeting and in other meetings around the world, led by a Task Force responsible for revising the 2014 IBA Guidelines. It is trite that, conflict of interest goes to the root of international arbitration practice as it can be a ground for the nullification of an arbitration proceeding, the disqualification of an Arbitrator, and the challenge of an arbitral award. For this reason, the 2024 IBA Guidelines are significant because, among other things, they place a particular emphasis on the need for a concerted effort to ensure that the arbitration proceedings are conducted transparently, impartially, and independently thereby retaining arbitration as the suitable and reliable dispute resolution mechanism for users. This piece seeks to examine the provision of the guidelines and makes effective recommendations on best practices for identifying conflicts of interest as well as disclosing the same in international arbitration.
REVIEW OF THE 2024 IBA GUIDELINES
Just like the 2004 and the 2014 IBA Guidelines, the 2024 IBA Guidelines continue to be organized in two parts which consist of general standards that must always be considered by Arbitrators and Parties to international arbitration, and practical scenarios for the application of the general standards. The parts are discussed below:
PART I: General Standards Regarding Impartiality, Independence and Disclosure.
As a general principle, every Arbitrator is obligated to be impartial and independent of the Parties at the time of accepting an appointment to serve, and shall remain so during the entire course of the arbitration proceeding and until the final award has been rendered or the proceedings have otherwise been finally terminated. However, this obligation does not extend to the period during which the award may be challenged before any relevant Courts or bodies. However, if after setting aside the arbitral award or other proceedings in respect of the dispute, the dispute is referred to the same Arbitral Tribunal, a fresh round of disclosure and review of potential conflicts of interest will be necessary.
- Determining Conflicts of Interest
Conflicts of interest are a crucial consideration in international arbitration proceedings. Where this is disregarded, it may nullify the entire arbitration proceedings and serve as a ground to challenge the arbitral award. In determining what constitutes conflicts of interest, the 2024 IBA Guidelines adopted the provisions of Article 12(2) of the UNCITRAL Model Law which provides an objective test (a reasonable third-person test), using an appearance test based on justifiable doubts as to the impartiality or independence of the Arbitrator. In deciding whether to decline an appointment or refuse to continue to act, the Arbitrator should bear in mind the objective standard to evaluate the relevant facts or circumstances. Under the 2024 IBA Guidelines, an Arbitrator shall decline an appointment or, if the arbitration has already been commenced, refuse to act as an Arbitrator, if the Arbitrator has any doubts as to his or her ability to be impartial or independent. This is also the case where in the view of a reasonable third party having knowledge of facts and circumstances will give rise to justiciable doubts as to the Arbitrator's impartiality or independence unless there is a waiver by the parties after full disclosure by the Arbitrator. To wit, where facts and circumstances fall under the Non-waivable Red List2 , the Arbitrator must decline appointment or resign where the Arbitrator has already been appointed. However, where the facts or circumstances fall under the Waivable Red List3 , or the Orange List4 , the Arbitrator is mandated to make a disclosure for the Parties to exercise their discretion to waive the potential conflict and give their consent to the appointment of the Arbitrator.
- Disclosure by the Arbitrator
An Arbitrator has a continuing duty, irrespective of the stage of the arbitration proceeding to disclose to the Parties, co-arbitrators (if any), and Arbitral Institutions or other appointing authority (if any, and if so, required by the appliable institutional rules) facts or circumstances which may in the eyes of the Parties, give rise to doubts as to the Arbitrator's impartiality or independence prior to accepting an appointment. This duty to disclose still stands even where there is an advance declaration or waiver by the parties in relation to possible conflicts. However, where an Arbitrator fails to exercise the duty of disclosure, it does not necessarily give rise to the arbitrator's impartiality or independence neither does it necessarily mean that a conflict of interest exists, or that a disqualification should ensue. On the flip side, the disclosure of facts or circumstances by an Arbitrator does not imply the existence of a conflict of interest. This is because the question of whether a conflict of interest exists by reason of the non-disclosure is subjected to an objective test and not the Arbitrator's failure to disclose.
The 2024 IBA Guidelines also recognize instances where an Arbitrator may be prevented by rules of professional conduct to disclose certain facts and circumstances. In this case, the Arbitrator is mandated to decline appointment or resign, if appointed. Although, under the 2024 IBA Guidelines, where the Arbitrator is in doubt as to whether to disclose or not, such doubt should be resolved in favour of the duty to disclose.
- Waiver by the Parties
Parties to an international arbitration proceeding will be deemed to have waived their right to raise an objection on any potential conflict of interest in respect of an Arbitrator if within 30 days after the receipt of full disclosure by the Arbitrator or within 30 days after a Party learns of facts or circumstances that could constitute a potential conflict of interest for the Arbitrator, no objection is raised. However, this does not include circumstances described under the Non-waivable Red List as it is not capable of being waived. By this, Parties are mandated to timely raise objections as to the impartiality or independence of an Arbitrator upon learning of relevant facts or circumstances, or upon disclosure by the Arbitrator. This also enhances the expeditious process of international arbitration proceedings
- Duties of Parties and the Arbitrator
Parties are required to disclose at the earliest opportunity, any relationship with the Arbitrator, including persons over which a party has controlling influence. This duty of disclosure extends to identifying all counsel advising on as well as appearing in the arbitration inclusive of all members of that Party's counsel team from the commencement of the arbitration proceedings. An Arbitrator is equally under a duty to make reasonable inquiries to identify any conflict of interest, as well as any facts or circumstances that may reasonably give rise to doubts as to the Arbitrator's impartiality or independence. It is envisaged that by so doing, the risk of unmeritorious challenge of an Arbitrator's impartiality or independence will be reduced hence, aiding an efficient arbitration proceeding.
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