This update follows an extensive survey conducted among arbitration practitioners and stakeholders in 2022. While affirming the importance of the IBA Guidelines and advising against a complete overhaul of the 2014 edition, the survey also pinpointed areas requiring modernisation and refinement.
The 2024 update maintains the original structure of the Guidelines, with the first part dedicated to fundamental principles and the second part focusing on common features of international arbitrations. The revised guidelines, known as the IBA Guidelines 2024, modernise and clarify the existing framework. These changes should promote transparency, fairness, and integrity in international arbitration, thereby enhancing the effectiveness and credibility of the arbitration process.
The main revisions introduced in the IBA Guidelines 2024:
1. AMENDMENTS TO PART I: THE GENERAL PRINCIPLES
A. General Standard 2 ( Conflicts of Interest ):
General Standard 2 addresses when an arbitrator should decline an appointment due to concerns about impartiality or independence. This reaffirms an objective test rather than a subjective test. The "reasonable third party" test focuses on whether a reasonable third party, informed of the relevant facts, would perceive a conflict which would raise doubts about the arbitrator's impartiality or independence.
The amendments aim to provide a clearer understanding of "justifiable doubt" in situations listed in the Non-Waivable Red List. It specifies that if justifiable doubt arises regarding a fact or circumstance listed in the Non-Waivable Red List, the arbitrator " should decline the appointment or refuse to continue to act ".
B. General Standard 3 ( Disclosure by the Arbitrator ):
Disclosure by arbitrators has been a subject of debate in the arbitration community, especially regarding the application of objective versus subjective tests. The 2024 IBA Guidelines confirm a subjective approach applies which focuses on whether the disclosed facts or circumstances would raise doubts about the arbitrator's impartiality or independence from the parties' perspective.
While acknowledging the arbitrator's duty to investigate under General Standard 7(d), the guidelines stress that arbitrators should take into account all facts and circumstances known to them when considering whether to make a disclosure. Situations, such as those set out in the Green List, "that could not give rise to doubts in the eyes of the parties because no appearance of or actual conflict of interests exists from an objective point of view under General Standard 2”, do not need to be disclosed.
C. General Standard 4 ( Waiver by the Parties ):
General Standard 4, concerning waiver by the parties, introduces a presumption that parties are aware of facts or circumstances they could have discovered through reasonable inquiry. This underscores each party's own responsibility to investigate potential conflicts of interest involving arbitrators.
D. General Standard 6 ( Relationships ):
General Standard 6 examines potential conflicts of interest or disclosure requirements arising from relationships. It stresses the need for a case-by-case evaluation of each relationship's specific circumstances and its relevance to the dispute. Updated guidelines clarify that arbitrators represent not only their law firms but also their employers, considering organisational structure and practice modes. A new provision confirms that entities or individuals under a party's control represent that party. The guidance acknowledges third-party funders, insurers, parent companies, states, and state entities as potential identity bearers, noting complexities in assessing state-related relationships.
E. General Standard 7 ( Duty of the Parties and the Arbitrator ):
Amendments expand parties' obligations to disclose relationships between arbitrators and other parties involved in the dispute, including any direct or indirect relationship between the arbitrator and the parties, their affiliates, or entities under their control.
Additionally, the guidelines introduce an obligation to disclose the identity of counsel advising on or appearing in the arbitration.
2. AMENDMENTS TO PART II: PRACTICAL APPLICATION OF THE GENERAL STANDARDS
Part II of the 2024 IBA Guidelines features a Practical Guide with a "Traffic Light" system, categorising potential conflict situations into Red, Orange, and Green Lists. While the Red and Green Lists saw minimal changes, the Orange List underwent significant modification, with the addition of new scenarios and clarifications. These include:
- The addition of the appointment of an arbitrator that "currently serves, or has acted within the past three years, as an expert for one of the parties or an affiliate of one of the parties in an unrelated matter" ( Section 3.1.6 ).
- The inclusion of the appointment of an arbitrator which "has, within the past three years, been appointed as an expert on more than three occasions by the same counsel, or the same law firm" ( Section 3.2.9 ).
- The incorporation of the arbitrator’s assistance in mock-trial or hearing preparations on more than three occasions by the same counsel or the same law firm within the past three years ( Section 3.2.10 ).
- The addition of situations where the arbitrator and counsel, and arbitrator and fellow arbitrators, serve together in a different proceeding ( Sections 3.2.12 and 3.2.13 ).
- The introduction of experts appearing in the arbitration proceedings for another matter where the arbitrator acts as counsel ( Section 3.3.6 ).
- The reduction of circumstances leading to a potential conflict when the arbitrator is affiliated with the administering institution or appointing authority. Specifically, it is now specified that, for the situation to be categorised under the Orange List, the arbitrator must hold an executive or another decision-making position and must have actively participated in decisions related to the arbitration ( Section 3.4.3 ).
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In conclusion, the 2024 updates to the IBA Guidelines reinforce the importance of transparency, fairness, and integrity in international arbitration. These revisions were necessary following the Halliburton v Chubb [1] Supreme Court decision and follow on from similar amendments to institutional rules. They provide clarity and modernisation while upholding the fundamental principles of impartiality and independence.
[1] Halliburton Company v Chubb Bermuda Insurance Ltd [2020] UKSC 48 .
