The International Bar Association’s Arbitration Committee is one of the world’s largest professional groups for counsel and arbitrators handling transnational disputes. The Committee currently includes over 2600 members from 115 countries. According to the IBA, membership is steadily increasing.
The Arbitration Committee has published several sets of Rules and Guidelines that are widely accepted by the global arbitration community as an expression of arbitration’s best practices worldwide. These include the IBA Rules on the Taking of Evidence in International Arbitration, (2010), the IBA Guidelines on Conflicts of Interest in International Arbitration (2004), which are currently under revision, and the IBA Guidelines on Drafting Arbitration Agreements (2010).
In 2013, the Arbitration Committee issued its latest compilation, the IBA Guidelines on Party Representation in International Arbitration (referred to below as “the Guidelines”). Like previous Arbitration Committee efforts they are not mandatory. The Guidelines state that they "shall apply where and to the extent that the Parties have so agreed, or the Arbitral Tribunal, after consultation with the Parties, wishes to rely upon them …” They also make clear, in Guideline 3, that they are not intended to displace otherwise applicable mandatory laws, professional or disciplinary rules, or agreed arbitration rules.
The Guidelines have already generated significant controversy, and it is likely that at least some of the suggested practices will not be widely adopted.
There was significant international participation on the Party Representation Task Force, including participants from both common and civil law jurisdictions, and from numerous countries in North America, Central America, South America, Europe, Asia and Africa. However, in some respects these Guidelines appear to have a slant toward U.S. procedures, rather than practices more broadly accepted worldwide.
Certainly, this is not true of every subject. Some Guidelines embody broadly utilized international principles and are not likely to be controversial.
Generally Accepted Practices
Ex parte communications with an arbitrator.
For example, Guidelines 7-8 cover the topic of ex parte communications with an arbitrator. In summary, they provide that:
- Except as otherwise specified, a party or party representative should not engage in ex-parte communications with arbitrators concerning the arbitration.
- A party or party representative may communicate with a prospective or appointed party-nominated arbitrator to determine his or her availability and suitability for the arbitration.
- A party or party representative may communicate with a prospective or appointed party-nominated arbitrator for the purpose of selecting the presiding arbitrator on a three member panel;
- However, it is not appropriate to seek the views of a prospective party-nominated arbitrator or presiding arbitrator on the substance of a dispute.
There is much literature on this subject, and experienced arbitration practitioners and arbitrators are well aware of what is and is not appropriate.
The Guidelines also address a number of other subjects, such as remedies for misconduct, which also reflect broadly accepted practices.
Remedies for misconduct of the parties or their counsel before an Arbitration Tribunal.
Guidelines 26–27 outline the remedies available to an arbitration tribunal for misconduct by the parties or their counsel.
A Tribunal has a number of remedies at its disposal, including:
- Admonishing the party representative
- Drawing appropriate inferences in assessing the evidence presented or the arguments made,
- Apportioning costs of the arbitration, or
- Taking any other appropriate measure in order to preserve the fairness and integrity of the proceedings.
Since these remedies are generally consistent with international practice and the rules of many international arbitral institutions, they are not likely to be very contentious.
Sources of Controversy
However, other Guidelines may prove much more controversial:
Information Exchange and Disclosure
Perhaps most significantly, in discussing Information Exchange and Disclosure, the Guidelines seem to lean toward practices in common law countries, particularly the United States, rather than broadly followed international practices.
It should first be noted that few, if any, countries have "discovery" practices such as those used in U.S.-based arbitration and litigation. In local practice in many civil law countries there is no "discovery." Parties must rely solely on documents in their own possession. However in international arbitrations, as reflected in the IBA Rules on the Taking of Evidence in International Arbitration, there may be limited exchanges of documents. Under those Rules, requests for documents must be "narrow and specific" and must demonstrate how the documents requested are "relevant to the case and material to its outcome." In international arbitration, prehearing depositions and interrogatories, as we know them in the United States, are virtually unknown.
The Guidelines provide,
"When the arbitral proceedings involve or are likely to involve Document production, a Party Representative should inform the client of the need to preserve… Documents, including electronic Documents that would otherwise be deleted in accordance with a Document retention policy in the ordinary course of business which are potentially relevant to the Arbitration.
"The Party Representative should explain to the Party whom he or she represents the necessity of producing, and potential consequences of failing to produce, any Document the Party or Parties have undertaken or been ordered to produce.
"A Party Representative should advise the Party whom he or she represents, and assist such Party in taking reasonable steps to ensure that: (i) a reasonable search is made for Documents a Party has undertaken or been ordered to produce; and (ii) all non-privileged responsive documents are produced."
The Comments on the above sections state "the Guidelines are intended … to suggest standards of conduct in international arbitration." However, as noted above, in many countries, there are no practices akin to the suggestions of the Party Representation Guidelines. Thus, it seems unlikely that the Guidelines’ suggestions on Information Exchange and Disclosure are likely to be welcomed by either such parties or the counsel who represent them.
Witnesses and Experts
Some of the Guidelines regarding witnesses and experts are also likely to be contentious. Although the Comments on those sections state "the Guidelines are intended to reflect best international arbitration practice with respect to the preparation of Witness and Expert testimony," the Guidelines are more permissive than ethical practice permits in a number of countries.
For example, Guideline 20 states: "[a] Party Representative may assist Witnesses in the preparation of Witness Statements and Experts in the preparation of Expert Reports.” But such practices are not followed in many countries. This includes the United Kingdom, where witness preparation, as we know it in the United States, is considered unethical. In recognition of this fact, the comments to Guidelines 18–25 state: "if the Party Representative determines that he or she is subject to a higher standard than the standard prescribed in these Guidelines, he or she may address the situation with the other Party and/or the Arbitral Tribunal.”
Such a circumstance, which is not uncommon, is unlikely to encourage non-U.S. counsel to advise clients to adopt the Guidelines as guiding principles in many international arbitrations.
In summary, while many of the provisions of the Guidelines do reflect the best practices in international arbitration, several do not and for that reason, it is an open question whether the IBA's latest attempt to prescribe Guidelines for broad usage in the international arbitration community will gain the wide acceptance of prior IBA efforts.
Steve Smith is a member of the Panel of Neutrals of the Agency for Dispute Resolution. He is former VP & General Counsel of Lockheed Martin Space Systems Company. He is currently a US Delegate to the ICC Commission on Arbitration and ADR, a member of various domestic and international arbitration panels, and a member of the Board of Directors of the American Arbitration Association. He now acts as arbitrator, mediator and counsel at the Denver law firm of Sherman & Howard.
By Steve Smith