Ethics and Professional Standards

6.16 IBA Guidelines on Conflicts of Interest

The IBA Guidelines on Conflicts of Interest in International Arbitration are the most widely referenced ethical standards for arbitrators globally. Understanding these guidelines is essential for any serious ADR practitioner.

Structure of the Guidelines

The IBA Guidelines use a "traffic light" system to classify situations:

Non-Waivable Red List

Situations where the arbitrator must decline or withdraw regardless of party consent:

• Identity of Interest: Arbitrator is a party or has significant financial interest in outcome
• Same Matter: Arbitrator or firm currently represents one party in the same dispute
• Employment: Arbitrator is employee, director, or board member of a party
• Financial Interest: Arbitrator holds significant shares in a party

Waivable Red List

Serious situations that require disclosure and can only continue if all parties expressly waive after full disclosure:

• Previous Involvement: Prior legal advice to a party on the dispute
• Current Representation: Firm represents party in unrelated matter
• Close Family Relationship: Spouse/partner works for a party
• Prior Role: Previously served as counsel for a party in the same dispute

Orange List

Situations that may give rise to justifiable doubts and should be disclosed:

• Prior Appointments: Appointed by same party or counsel multiple times in past 3 years
• Same Law Firm: Arbitrator's firm has relationship with party or counsel
• Professional Relationship: Close professional relationship with counsel
• Prior Expression: Publicly expressed opinion on legal issues in dispute
• Same Arbitration: Currently serving on another tribunal involving same party

Green List

Situations that do not require disclosure as they would not normally give rise to doubts:

• General Legal Education: Published articles on general legal topics
• Professional Association: Membership in same professional organization
• Same Chambers: Different barristers in same chambers (not firm relationship)
• Academic Connection: Teaching at same institution as counsel

6.17 Duty of Disclosure

The duty to disclose potential conflicts is fundamental to arbitrator ethics. This duty is continuing throughout the proceedings and requires proactive investigation by the arbitrator.

Scope of Disclosure Duty

1. Before Acceptance: Investigate and disclose before accepting appointment
2. At Commencement: Formal disclosure statement at first procedural conference
3. Continuing Duty: Disclose new circumstances arising during proceedings
4. Reasonable Inquiry: Duty includes checking firm conflicts and databases

What to Disclose

The test is whether a reasonable third party would consider the circumstance likely to give rise to justifiable doubts about impartiality:

• Relationships: Personal, professional, or business relationships with parties or counsel
• Financial Interests: Direct or indirect financial interest in outcome or parties
• Prior Involvement: Any prior involvement with dispute, parties, or subject matter
• Repeat Business: Pattern of appointments by same party or firm
• Expressed Views: Public statements on issues in the case

Disclosure Statement Template

A proper disclosure statement should include:

• Header: Case reference, date, "Declaration of Independence and Impartiality"
• Investigation: Statement that reasonable inquiry has been made
• Disclosure: Specific matters that may be relevant (or "None" if no issues)
• Confirmation: Statement of ability to serve impartially despite disclosures
• Commitment: Undertaking to disclose any new circumstances
• Signature: Dated signature of arbitrator

6.18 Confidentiality Obligations

Confidentiality is a cornerstone of ADR. Both arbitrators and mediators have strict obligations to protect the confidentiality of proceedings, though the scope differs between arbitration and mediation.

Arbitration Confidentiality

Scope

• Deliberations: Tribunal deliberations are always confidential
• Submissions: Parties' submissions and evidence
• Hearings: Hearing proceedings and transcripts
• Award: Award content (unless parties agree to publication)
• Existence: Even the existence of arbitration may be confidential

Exceptions

• Legal Requirement: Disclosure required by law or court order
• Enforcement: Award disclosure necessary for enforcement proceedings
• Party Consent: All parties agree to disclosure
• Protection of Rights: Disclosure necessary to protect legal rights

Mediation Confidentiality

Mediation confidentiality is typically broader than arbitration:

• All Communications: Everything said in mediation is confidential
• Without Prejudice: Offers and admissions cannot be used in subsequent proceedings
• Mediator Non-Compellable: Mediator cannot be called as witness
• Caucus Confidentiality: Private session information confidential even from other party

Mediation Act 2023 Provisions (India)

Section 22 provides statutory confidentiality protection:

• Mediation communications are confidential
• Not admissible as evidence in any proceeding
• Mediator cannot disclose to third parties
• Mediator not compellable to give evidence

6.19 Ethical Challenges in Practice

Real-world practice presents ethical dilemmas that require careful navigation. Understanding common scenarios helps prepare for these challenges.

Scenario 1: Ex-Parte Communication

Situation: A party's counsel calls you to discuss scheduling without the other party present.

Correct Approach:

• Decline to discuss any substantive matter
• For purely administrative matters, immediately inform other party
• Better practice: Require all communication through tribunal secretary or both parties copied

Scenario 2: Discovering Mid-Proceedings Conflict

Situation: After hearings conclude, you discover your law firm partner just filed a case against one of the parties.

Correct Approach:

1. Immediately disclose to all parties
2. Allow parties to comment on whether to continue
3. If no objection with informed consent, proceed to award
4. If objection, consider resignation and consequences for proceedings

Scenario 3: Mediator Learning of Fraud

Situation: During mediation, one party admits in caucus that their claim is based on falsified documents.

Correct Approach:

• Cannot disclose caucus information without consent
• Cannot facilitate settlement based on fraud
• May need to terminate mediation without disclosing reason
• Cannot be compelled to testify about mediation communications

Scenario 4: Pressure from Appointing Party

Situation: The party who appointed you hints that they expect a favorable view on liability.

Correct Approach:

• Firmly but professionally clarify your independence
• Document the communication
• Consider disclosing to other party and/or co-arbitrators
• If pressure continues, may need to resign

6.20 Professional Standards and Codes

Multiple professional bodies have developed codes of conduct for arbitrators and mediators. Familiarity with these standards demonstrates professionalism and helps navigate ethical questions.

Key Standards for Arbitrators

IBA Rules of Ethics for International Arbitrators

• Diligence and efficiency in conducting proceedings
• Equal treatment of parties
• Independence and impartiality
• Competence in accepting appointments

CIArb Code of Professional Conduct

• Integrity in all professional dealings
• Confidentiality obligations
• Avoidance of conflicts of interest
• Competence and continuing education

Key Standards for Mediators

IMI Code of Professional Conduct

• Self-determination of parties
• Impartiality and neutrality
• Confidentiality
• Competence
• Quality of process

Mediation Act 2023 (India) - Section 10

• Conduct mediation impartially
• Disclose circumstances giving rise to justifiable doubts
• Not meet or communicate with parties separately without consent
• Assist parties in examining their interests