Page 2 - Alternative Dispute Resolution

S2 | MONDAY, NOVEMBER 17, 2014 | Alternative Dispute Resolution
| NYLJ.COM

2014 IBA Guidelines
BY JAMES H. CARTER
AND JOHN V.H. PIERCE
A
rbitrators and potential arbitrators
involved in international commercial On Conlicts of Interest
and investment arbitration cases may
face complex issues involving conflicts
of interest. What sorts of past or present

involvement with a party, or with one of In International
its subsidiaries or a joint venture in which
it participates, or with the law firms that
are counsel in the arbitration, must be dis-
closed? How far back in time should one go Arbitration
in searching for potential conflicts? What
basis does a party need to object to a dis-
closed connection? Are the parties free to

waive any conflicts that exist, or are there
some conflicts that are “non-waivable”? Are
some types of relationships so routine that
they need not be disclosed at all? Do the
answers vary depending on the country
where the arbitration will be held? Laws
and arbitration rules speak in generalities,
and would-be arbitrators search for more
specific guidance.

In the United States, arbitrators look
first to the American Arbitration Associ- E
ation-American Bar Association Code of MAG
Ethics for Arbitrators in Commercial Dis- R I
putes,1 first promulgated jointly by those OVE
two organizations in 1977 and later amend- K/C
ed in 2003. It offers advice in the form of TOC
a statement of general ethical principles IGS
(called “canons”), each accompanied by a B

number of elaborations of its application
to some issues that typically arise in rela-
tion to the subject of the canon, such as tory notes for each. But the Guidelines At the other extreme, the IBA Green List potential arbitrators evaluate the conflicts
disclosure. U.S. courts regularly cite the also include a separate series of lists of sets out examples of conflicts considered they might face and consider what disclo-
Code as useful in ruling on challenges to specific examples of disclosure scenarios, so minor that they normally need not even sures, if any, they should make in decid-
arbitral awards in which arbitrator disclo- divided into a Red List, an Orange List and be disclosed, such as ownership by the ing to undertake an arbitral assignment.
sure or conduct is questioned.
a Green List.
arbitrator of an “insignificant” number of In addition, the Guidelines help counsel
In 2004, the International Bar Associa- The IBA Red List contains examples of shares in a publicly listed company that and the parties they represent consider

tion published its IBA Guidelines on Con- conflicts considered so severe that they is a party to the arbitration.4
when a challenge might be made based
flicts of Interest in International Arbitra- normally would preclude service as an In between are examples on the IBA on a disclosure. The Guidelines also are
tion,2 which are intended for and are used arbitrator. But the Red List is subdivided Orange List, which describe situations available to help arbitral institutions rule
by arbitrators and counsel around the into non-waivable and waivable sections, that require disclosure and involve con- on challenges to arbitrators and to assist
world. Like the AAA/ABA Code, the IBA the latter identifying some conflicts that flicts that parties are free to waive but that courts facing arbitrator disclosure ques-
Guidelines contain a short list of “general parties to the arbitration can waive. For might or might not preclude an arbitrator tions when asked to enforce or set aside
principles” followed by a series of explana-
example, according to the 2004 Guidelines, from serving if either party objects. The awards.
current representation by an arbitrator of Guidelines stress that any Orange List The 2004 Guidelines have been referred
one of the parties or its affiliate is a waiv- conflict, in particular, must be evaluated to regularly by U.S. and other international

JAMES H. CARTER is special counsel and able conflict, unless the representation is in the context of the particular circum- arbitrators, and many consider them help-
JOHN V.H. PIERCE is a partner at Wilmer Cutler Pick- “regular” and “the arbitrator or his or her stances involved.
ful. Arbitration institutions say that they
ering Hale and Dorr in New York.
firm derives a signiicant financial income The IBA Guidelines serve multiple audi- have been useful to them to some extent,
therefrom.”3
ences. Their most valuable role is to help
as well. But institutions have not incorpo-

Inside

S4 Mediation in Securities S6 New York’s International S10 ‘Arbitration’ Deinition Under S12 Consolidation in Arbitration:

Arbitration Cases:
Arbitration Judge, One Year Later The FAA: The Unsettled Law
Limited Consent Trumps
Regain Control of the Process BY ANÍBAL SABATER
BY LAURIE E. FOSTER
Endless Controversy
BY GREGG J. BREITBART
AND MARK STADNYK
BY ABRAHAM D. SOFAER
AND GEORGE F. MEIERHOFER

• •
ALTERNATIVE DISPUTE RESOLUTION , New York Law Journal Special Report: KRIS FISCHER, Editor-In-Chief
ANGELA TURTURRO, Sections Editor MICHELLE GRUTMAN, Design | © 2014 ALM Media Properties, LLC