Author: Priscila Bandeira

Codes of conduct for international arbitrators provide ethical guidelines and professional standards that arbitrators must adhere to when conducting international arbitration proceedings. These codes aim at establishing ethical and professional standards for arbitrators to ensure fairness, impartiality, and integrity in the arbitration process.

The most recent development in this matter was the announcement by Shane Spelliscy, Chair of the United Nations Commission on International Trade Law (“UNCITRAL”) Working Group III (“WGIII”), at the 45th Session of the WGIII on March 31, 2023, that a workable compromise had been reached on the issue of how to regulate double hatting[1]. Consequently, Mr. Spelliscy announced that an agreement was reached on a text of the Code of Conduct for Arbitrators in Investor-State Dispute Settlement (“ISDS”)[2] to be presented for final approval at the UNCITRAL Commission in July 2023.[3] This code of conduct had been first proposed in 2019 and it focuses heavily on disclosures obligations by arbitrators.

This is a significant announcement, as several other prominent international arbitration centers have also continuously worked on similar codes of conduct and/or guidelines. Accordingly, while different institutions and organizations may have their specific codes of conduct, there are several common principles that are generally included:

• Independence and Impartiality
• Integrity and Fairness
• Disclosure of Information
• Competence and Diligence
• Confidentiality
• Transparency and Disclosure
• Respect for Due Process
• Compliance with Applicable Laws and Rules

Of course, the codes of different arbitration institutions and organizations may include additional or more specific provisions tailored to the particularities of the institution or organization (for example in the case of ICSID due to the nature of the disputes before such institution). Additionally, some international arbitration guidelines, such as the International Bar Association (“IBA”) Guidelines on Conflicts of Interest in International Arbitration, provide detailed guidance on managing conflicts of interest and disclosure obligations for arbitrators[4]. These guidelines are widely recognized and often referenced in international arbitration practice.

Other important centers for international arbitration which have taken several initiatives to address and promote codes of conduct for their arbitrators include the International Chamber of Commerce (“ICC”) and the London Court of International Arbitration (“LCIA”). The ICC, for example, incorporates ethical and professional standards in its own standard Rules, but has adopted additional rules and guidelines such as its 2016 Guidance Note on Conflict Disclosures by Arbitrators[5] and the 2017 ICC Arbitrator Statement Acceptance, Availability, Impartiality and Independence form[6]. Similarly, the LCIA incorporates ethical and professional standards in its own Arbitration Rules (specifically, but not limited to, Rules 5, 18.5 and 18.6 & Annex), in addition to publishing the 2017 LCIA Notes for Arbitrators[7].

It is noteworthy that the evolution of codes of conduct in international arbitration will be influenced by the evolving needs and expectations of the arbitration community, as well as legal developments and societal trends. For example, current challenges related to codes of conduct for international arbitrators include challenges in diversity and inclusion within arbitral tribunals and emerging ethical issues with regard to third-party funding, cybersecurity, or the use of artificial intelligence. The specifics of future codes of conduct will depend on the actions and initiatives taken by arbitration institutions, professional organizations, and stakeholders in the field to address these and other challenges.

[1] “Double hatting” is commonly used to refer to the practice of arbitrators who also carry on other activities such as counsel or expert witness. This means that someone who acts as arbitrator in some proceedings acts “the subsequent day” (so to say) in other proceedings for example as counsel or expert witness, possibly even in front of arbitrators who have been acting as Counsel before him in the above referred to arbitral proceedings.

[2] Full text of the draft is available at: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/draft_code_of_conduct_for_arb_advance_copy.pdf

[3] See “Working Group III: Investor-State Dispute Settlement Reform”, available at: https://uncitral.un.org/en/working_groups/3/investor-state

[4] Full text of the IBA Guidelines on Conflicts of Interest in International Arbitration available at: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.ibanet.org/MediaHandler?id=e2fe5e72-eb14-4bba-b10d-d33dafee8918.

[5] See “2016 Guidance Note on Conflict Disclosures” available at: https://iccwbo.org/news-publications/news/icc-court-adopts-guidance-note-on-conflict-disclosures-by-arbitrators/

[6] See 2017 ICC Arbitrator Statement Acceptance, Availability, Impartiality and Independence form available at: https://iccwbo.org/news-publications/arbitration-adr-rules-and-tools/icc-arbitrator-statement-acceptance-availability-impartiality-independence-form/#single-hero-document

[7] See LCIA Notes for Arbitrators available at: https://www.lcia.org/adr-services/lcia-notes-for-arbitrators.aspx#:~:text=Under%20Article%205.4%20of%20the,to%20their%20impartiality%20or%20independence.

Originally promoted as a cost-efficient alternative to the public court system, International Arbitration has faced increased criticism by parties and attorneys worldwide for the increasing length and cost of arbitral proceedings. In a 2018 survey conducted by the School of International Arbitration at Queen Mary University of London (“QMUL Survey”), 67% of respondents identified cost as one of the three worst characteristics of international arbitration and 34% identified lack of speed as one of three worst characteristics[1]. Issues that were listed by respondents to this survey as possible contributing factors to the increase of the cost and length of arbitral proceedings include the lack of consequences for delay by arbitrators and/or parties and insufficient principles or guidance on the allocation of costs[2].

As a response to these concerns, arbitration institutions around the world have issued an array of new case management rules. In 2018, the International Chamber of Commerce (“ICC”), for example, issued a report on Techniques for Controlling Time and Costs in Arbitration. The ICC stated that this report “should be seen as an adjunct to the [2012 ICC] Rules” which included, among other things, additional guidance as to the mandatory initial case management conference and as to the explicit obligation on both the arbitral tribunal and the parties “to make every effort to conduct the arbitration in an expeditious and cost-effective manner.”[3]

Thereafter, in 2020 and 2021 two of the most prominent global arbitration institutions, the London Court of International Arbitration (“LCIA”) and the ICC, respectively, published new rules which both institutions announced as being designed to promote more efficient, flexible and transparent arbitrations.

Main common changes in the LCIA 2020 Rules[4] and in the ICC 2021 Rules[5]: both sets of new rules provide for (i) paperless filings and communications; (ii) remote hearings; (iii) expedited procedures; and (iv) clarification of prior rules and new rules concerning consolidation of arbitrations.

Other relevant changes in the ICC 2021 Rules: (i) ability of the tribunal to make “additional awards” where they omit to address claims in the main Award (Article 36.3); (ii) the value in dispute in order for the Expedited Procedure Rules to apply (under Appendix VI and Article 30(2)) increased from $2 million to $3 million; (iii) additional rules and transparency as to third-party funding; (iv) ICC Court discretion in “exceptional circumstances” to deviate from any agreement by the parties on the method of constitution of the arbitral tribunal and appoint the entire tribunal to avoid a significant risk of unequal treatment; and (v) more flexible joinder provisions.

Many other arbitration institutions, for example the World Bank’s International Centre for Settlement of Investment Disputes (“ICSID”) in 2022, followed suit and published similar updates to their procedural rules[6]. All of these changes are a welcome development in addressing the continuing concerns of arbitrations users as to time and cost effectiveness, especially the increased use of technology, which received an additional push after the COVID-19 Pandemic.

However, it is important to keep in mind that establishing these case management rules is not necessarily an innovation to the International Arbitration practice, but is a necessary adaptation to challenges presented by the welcome growth of use of International Arbitration to resolve cross-border disputes. Moreover, delays can start to set in from the beginning of an arbitral proceeding, especially in complex matters, and, although the flexibility of arbitration is also part of its original appeal, too much flexibility can lead to increased time and cost[7].

Accordingly, even though many International Arbitration institutions do not prescribe specific timelines in their rules for all stages of arbitration, the most prominent International Arbitration Rules have been determining mandatory case management hearings in order for the Arbitral Tribunal, with the agreement of the parties, to determine case management procedures, which is a positive feature. Similarly, the availability of specific expedited procedures, for example, is a welcome development, but there are many other changes that arbitration users would like to see, such as (i) more tailored procedures for complex and multi-party arbitrations; (ii) cost sanctions for delay by arbitrators; (iii) rules giving extensive case management powers to arbitrators including robust sanctions in relation to the behavior of parties and counsel; and (iv) limitations on length of written submissions and oral hearings on procedural issues, etc[8].

It is noteworthy that users generally still believe that International Arbitration is a better method of dispute resolution than the courts, and it is clear that institutions around the world are and should continue working on addressing concerns that this general belief might change. Although time and cost are still some of the main concerns between users of International Arbitration, in the most recent 2021 QMUL Survey, International Arbitration is still the preferred method for an overwhelming 90% of respondents to resolve cross-border disputes, either on a stand-alone basis (31%) or in conjunction with ADR (59%)[9].

As long as both, arbitration institutions and parties, maintain the focus on the original intent of International Arbitration as a flexible, time and cost-effective alternative to public court systems, new rules and updates on case management features should continue to be published for this purpose. And, of course, it is important that the parties themselves also understand the institutions and procedures best suitable for their case.

[1] See 2018 International Arbitration Survey: The Evolution of International Arbitration, available at:  www.arbitration.qmul.ac.uk/media/arbitration/docs/2018-International-Arbitration-Survey—The-Evolution-of-International-Arbitration-(2).PDF), at pg. 8.

[2] See Id. At pg. 34.

[3] See International Chamber of Commerce (ICC) Commission Report, ‘Techniques for Controlling Time and Costs in Arbitration’ (2d ed. 2018), at pg. 4.

[4] See 2020 LCIA Arbitration Rules, available at: https://www.lcia.org/Dispute_Resolution_Services/lcia-arbitration-rules-2020.aspx.

[5] See ICC Rules of Arbitration entered into force on 1 January 2021, available at: https://iccwbo.org/dispute-resolution-services/arbitration/rules-of-arbitration/.

[6] See 2022 ICSID Convention, Regulations and Rules, available at: https://icsid.worldbank.org/sites/default/files/documents/ICSID_Convention.pdf.

[7] See International Chamber of Commerce (ICC) Commission on Arbitration and ADR, “Effective Management of Arbitration: A Guide for In-House Counsel and Other Party Representatives” (1st ed. 2018), at pg. 3.

[8] See 2021 International Arbitration Survey: Adapting Arbitration to a Changing World, available at: https://arbitration.qmul.ac.uk/media/arbitration/docs/LON0320037-QMUL-International-Arbitration-Survey-2021_19_WEB.pdf, at pg. 12 

[9] See Id., at pg. 12.