30 May 2013

IBA Guidelines on Party Representation in International Arbitration

Companies can now have more comfort in their party representatives, and ultimately the enforceability of future arbitral awards. On 25 May 2013, the International Bar Association (“IBA”) released its first ever Guidelines on Party Representation in International Arbitration (“Guidelines”).

The Guidelines provide a single, unified, source of international best practice behaviour expected of all party representatives. Where adopted, by contracting parties or the arbitral tribunal, the Guidelines will provide greater comfort to companies engaging practitioners in international arbitrations, and assist in promoting the enforcement of arbitral awards.

Background

International arbitration is a field that draws professionals from different backgrounds, sometimes working in a foreign jurisdiction, on disputes with seats in other jurisdictions. Practitioners encumbered by unwieldy conflicts between rules of conduct in multiple jurisdictions have long called for guidance on general accepted practice. The Guidelines do not replace mandatory or professional domestic requirements. Instead, they offer a non-domestic alternative to a choice of ethical rules, and indicate accepted principles to counsel handling disputes when multiple jurisdictions are involved. For clients with cross-border contracts, particularly those involving different legal systems, the Guidelines offer a compromise.  Further, parties may point to conduct in line with the Guidelines should any challenges occur, thereby increasing the enforceability of an award.

Guidelines : a brief summary

The Guidelines provide a comprehensive set of conduct rules relating to:

  • Party Representation
  • Communications with Arbitrators
  • Submissions to the Arbitral Tribunal
  • Information Exchange and Disclosure
  • Witnesses and Experts
  • Remedies for Misconduct

If any guideline is not followed by a practitioner, the arbitral tribunal has broad remit to award Remedies for Misconduct, in order to preserve the “fairness and integrity” of the proceedings.  For example, the arbitral tribunal may admonish the practitioner, and, where appropriate, draw adverse inferences against the evidence or arguments presented or consider the misconduct in attributing costs.

Guidelines : the mechanics

Representation issues may seem obvious and universal at first glance, but in reality many jurisdictions dictate ethical rules based on different expectations and legal features.  Continuing discussions with party-appointed arbitrators regarding substantive points may seem reasonable to one party, while crossing the line on rules of conflicts in other jurisdictions.

Additionally, the Guidelines resolve certain situations which other rules had left open.  For example, now, if a tribunal has already been constituted, counsel with a conflict with a member of the tribunal, may not accept representation.  This provision prevents the potential abuse of the proceedings by one party who wishes to drag down costs and delay proceedings.

The Guidelines do not carry legal weight on their own, and must be adopted by the parties to an arbitration, or the tribunal itself, to have any immediate effect.  In other words, one party cannot unilaterally implement them. Where the Guidelines are adopted, practitioners – and their clients – potentially face sanction by the arbitral tribunal.

The Guidelines may also provide persuasive guidance by which to assess the conduct of practitioners. If, for example, an award is challenged on the basis of alleged deficiencies in a practitioner’s conduct, a supervisory or enforcing court may refer to the Guidelines.  In most circumstances, if the behaviour in question falls within the Guidelines, it will not support a challenge, hence promoting the enforcement of awards.

The Guidelines form part of IBA’s "best practice" guidelines set, which are used extensively in international arbitration. For example, the IBA Rules on the Taking of Evidence in International Arbitration, the IBA Principles on Conduct for the Legal Profession, and the IBA Rules of Ethics for International Arbitrators.

The IBA has indicated that it will introduce revised guidelines on counsel conduct and conflicts of interein arbitration sometime in 2013–14.

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