Canadian Arbitration Blog

Just in: IBA updates 2024 Guidelines on Conflicts of Interest in International Arbitration

Mar 12, 2024 3 MIN READ
Authors
Lauren Tomasich

Partner, Disputes, Toronto

Sonia Bjorkquist

Partner, Disputes, Toronto

Andrea Korajlija

Associate, Disputes, Toronto

Stephanie Clark

Associate, Disputes, Calgary

The IBA Guidelines on Conflict of Interest in International Arbitration are the leading global soft law instrument to help parties, counsel, arbitrators, institutions and courts deal with important conflicts questions in the interests of safeguarding impartiality and independence of arbitrators. Among other things, these principles provide important guidance on identifying, assessing and disclosing possible conflicts of interests through a “traffic light” system, which provides examples of situations that may or may not constitute conflicts of interest and the level of disclosure required in each situation.

Originally established in 2004 and updated in 2014, the non-binding Guidelines received a refresh in 2024 following broad public consultation. This most recent update expands the “Orange List,” which are situations that may give rise to a conflict in the eyes of the parties depending on the circumstances and, if so, must therefore be disclosed.

2024 changes

Part I of the Guidelines, General Standards Regarding Impartiality, Independence and Disclosure, contains the seven principles that must always be considered. The changes to Part I include

  • clarifying what an arbitrator should consider in deciding whether to decline an appointment, refuse to continue to act, or make a disclosure (see Explanation to General Standard 2(b)-(c))
  • providing guidance for arbitrators where the need for disclosure conflicts with other professional rules that may prevent disclosure (see General Standard 3(e))
  • recognizing that, while the arbitrator in principle bears the identity of his or her law firm or employer, each case must be considered on its own facts as the activities of the arbitrator’s law firm or employer does not necessarily constitute a conflict or require disclosure (see General Standard 6(a))
  • introducing the concept that any legal entity or natural person over which a party has a controlling influence may be considered to bear the identity of such party, which may implicate third party funders and insurers, corporate parents and subsidiaries, and state entities (see General Standard 6(c))

Part II of the Guidelines, Practical Application of the General Standards, contains the “traffic light” system, which provides examples of situations that may or may not constitute conflicts of interest and the level of disclosure required in each situation. Read together with Part I, the Guidelines reflect the framework for expected disclosure.

Orange List

As noted above, the 2024 Guidelines expand the “Orange List,” which represents a non-exhaustive list of situations that, depending on the facts of a case, may, in the eyes of the parties, give rise to doubts as to the arbitrator’s impartiality or independence (see sections 3.2.8 – 3.2.13). This list sets out situations that fall into the broad categories of

  1. services for one of the parties or other involvement in the case
  2. the relationship between an arbitrator and another arbitrator or counsel
  3. the relationship between an arbitrator and a party and/or others involved in the arbitration
  4. other circumstances

The 2024 revisions to the Guidelines reflect modern developments in arbitral practice and current best practices in international commercial arbitration. The 2024 Guidelines also provide helpful guidance on challenging conflict of interest issues given that conflicts may be subjective and/or situation dependent.