The Court of Arbitration of the International Chamber of Commerce (ICC) has issued guidance as part of its updated "Note to parties and arbitral tribunals on the conduct of the arbitration under the ICC Rules of Arbitration" to provide clarification on the circumstances in which an arbitrator should opt to disclose possible conflicts of interest. The Court hopes that the Note will assist arbitrators in knowing when to make a disclosure and ensure arbitrators are "forthcoming and transparent in their disclosure of potential conflicts".
Whilst the guidance does not impose any specific obligations on arbitrators, and leaves it up to the individual arbitrator to decide whether disclosure of a potential conflict is required, it does outline a number of specific situations that may raise questions about an arbitrator's impartiality.
Included in the list of situations that arbitrators should consider disclosing are if the prospective arbitrator, arbitrator, or his or her law firm:
- represents or advises, or has represented or advised, one of the parties or one of its affiliates;
- acts or has acted against one of the parties or one of its affiliates;
- has a business relationship with one of the parties or one of its affiliates, or a personal interest of any nature in the outcome of the dispute; or
- acts or has acted on behalf of one of the parties or one of its affiliates as director, board member, officer, or otherwise.
Other potential disclosures specific to the prospective arbitrator or arbitrator are if he or she:
- is or has been involved in the dispute, or has expressed a view on the dispute in a manner that might affect his or her impartiality;
- has a professional or close personal relationship with counsel to one of the parties or the counsel’s law firm;
- acts or has acted as arbitrator in a case involving one of the parties or one of its affiliates;
- acts or has acted as arbitrator in a related case; or
- has in the past been appointed as arbitrator by one of the parties or one of its affiliates, or by counsel to one of the parties or the counsel’s law firm.
The Note also specifies that an arbitrator's duty of disclosure is on-going throughout the course of an arbitration and that they must make reasonable enquiries to ascertain any potential conflicts.
The Note is part of a general move by the ICC to improve the transparency of its arbitration process. In January 2016, the Court set out plans to provide limited information on arbitrators sitting on ICC cases, including publishing arbitrator's names, their nationality and whether their appointment was made by the court or the parties on the ICC website.
Prior to the introduction of this guidance, the IBA Guidelines on Conflicts of Interests (the IBA Guidelines) have been widely acknowledged as the go-to source for arbitrators and practitioners seeking guidance on potential conflicts. While the IBA Guidelines are not binding (absent agreement), they have been relied upon and considered persuasive by a number of arbitral institutions in considering arbitrator challenges.
This new guidance from the ICC takes a far broader approach to arbitrator disclosure than the more specific, time-limited, traffic light system of the IBA Guidelines. The ICC guidance asks that arbitrators "should in particular, but not limited to, pay attention to" the above categories of potential conflict, which may encourage a cautious approach to disclosures. This in turn may lead to increased challenges, although the note makes clear that should the arbitrator's impartiality be disputed, it is still for the Court to determine whether there are sufficient grounds for disqualification.
For further information, please contact Chris Parker, Partner or your usual Herbert Smith Freehills contact.