On demand 1h 04s Basic

Ethics and Best Practices in International Arbitration

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Ethics and Best Practices in International Arbitration

In international arbitration practice, it is common to see parties from various cultural backgrounds and a globalized pool of legal talent acting as counsel and arbitrators. The interaction between different cultural and legal approaches does not come without challenges. It may become difficult for practitioners to understand which ethical rules and guidelines are relevant and how they may apply. Indeed, over the past decade, the role of ethical rules, professional best practices, and other guiding principles has become a hotly debated topic for international arbitration practitioners.

This program provides U.S. licensed practicing lawyers with foundational guidance in these areas. It introduces international arbitration and the unique ethical challenges that a globalized practice may present. Then, it covers the mandatory ethical rules and recommended best practices that may guide practitioners through various pitfalls and challenges. Finally, it engages with how these guidelines might improve and support a forum for dispute resolution built on the concepts of neutrality, party autonomy, and procedural flexibility.

Transcript

Hello and welcome to this ethics CLE program on ethics and international arbitration. My name is Kiran Gore. I'm an international arbitrator, disputes management consultant and counsel and lecturer at the George Washington University Law School. I have over 15 years of experience in international dispute resolution, and I've previously worked at Three Crowns and DLA Piper before I launched my own law firm in Washington, DC. My present and past clients include governments, corporations, private individuals, and I often also advise states and international development organizations on how to develop sustainable systems. I'm really delighted to be here with you today to talk about ethics in international commercial arbitration. We have a jam packed agenda. We're going to start with talking about international arbitration generally, including some of its perceived benefits, and why parties and users, including their counsel, like to use international arbitration for their international disputes. And as well as some of the unique ethical challenges that this globalized system may raise. But then I'm going to talk about ethical rules for us practitioners, ones that may mandatorily apply, ones that may be recommended to apply. And we have a few examples that will examine that come from the ABA model rules. We're then going to talk about recommended best practices, including some soft law guidance that's available from various working groups and other interested bodies. And then we'll talk about how all of this, all these ethical guidelines and and suggestions interplay with core arbitration concepts, because there is a bit of a tension there before finally concluding by turning to recent trends and emerging issues. Let's get started. So let's start with a primer on international arbitration and some of its unique ethical challenges. So as many of you will know, international arbitration is one of the oldest forms of international dispute resolution. It's a setting where two parties can voluntarily consent to resolving their dispute between one or more arbitrators, whom they agree on the method for selection, and that those arbitrators will be empowered to review the dispute, hear relevant evidence, interpret applicable law, and then issue a final and binding decision. For those very reasons. Arbitration. International arbitration is a creature of party consent, and its legitimacy is only as good as the parties confidence in that decision making process. You can imagine that, in contrast from traditional litigation, parties who choose to voluntarily submit their disputes to arbitration do need a lot of confidence, not only in the arbitrators whom they select to render those decisions, as opposed to national court judges, but also in the sanctity of the process. So you can imagine ethics and ethical guidelines play a great role in this. Parties often come to international arbitration for greater neutrality. They they'd rather not subject themselves to traditional court litigation, and maybe a jurisdiction that they feel could be biased against them or unfamiliar to them. Or maybe they don't speak the language or don't have a familiarity with the legal system at play there, or vice versa. They may feel that the other side has a greater advantage than they have if they are playing in their home court territory, so international arbitration therefore aims to provide greater neutrality. As wonderful as that balance may be, it also presents an opportunity for clash of cultures and legal approaches, and this is one of the places where the ethical challenges can arise. So let me go through some of those clash areas. Among the compelling features that parties look for are neutrality, as I mentioned. So the parties do have the opportunity not only to choose where the arbitration will take place, but also what laws will apply and how arbitrators are selected, including whom they may be and what their national backgrounds may be, as well as their legal training. That way, parties know what to expect. They will be given the same set of circumstances to arbitrate under as their opposing sides. So there is no such thing as a home court advantage. And then parties can really, really feel confident in the fact that their dispute is being resolved on its merits and without the influence of possibly biased judiciaries, procedural technicalities that muddy the waters in traditional litigation, and therefore this is a more predictable form of international dispute resolution. Parties know how things will be resolved. They know that their panel of arbitrators will be fair minded and neutral, and they also would have a little bit more control over the length of the process, maintaining control over their own dispute resolution. So you can imagine, for an increasingly globalized environment where parties are transacting business with with counterparties all around the world, perhaps in very great number of volume, such as in the supply chain setting or the construction setting, the various interplay really does give rise to an opportunity to want to control dispute resolution without getting sucked into not only litigation in foreign courts, but also the appellate process that may exist there. In contrast with arbitration, the awards rendered by arbitral tribunals tend to be binding and final, with no right of appeal, aside from those that might be provided for in the New York Convention, which is a topic for a different program. So those unique ethical challenges, because these parties come from different cultural backgrounds, they may have different expectations. Not only that, but counsel and arbitrators may also come from different legal backgrounds and have different understandings of what may be acceptable or proper conduct in those proceedings. So with respect to collection and presentation of evidence, privilege, confidentiality, neutrality, signs of what may be bias or not bias, those are all factors that are subjective and may be construed differently in different legal settings. Not only that, counsel and arbitrators who appear in international arbitrations may be admitted to practice in different jurisdictions. Different from each other. So they're not a uniform bunch of people. And also their clients may be from other jurisdictions. So you all of a sudden have multiple layers of expectations, cultural and legal understandings, and then possibly ethical and other guidelines that may mandatorily apply to an individual actor, such as counsel or arbitrator, as well as multiple layers of ethical and other guidance that may mandatorily apply to the team. The counsel team as a whole on each side, as well as the entire panel of arbitrators. Typically you'll see three. Maybe you have more than that, but three really is the number. And you can imagine there's a mixed match of different legal backgrounds and ethical expectations that apply or may apply to those various people. Aside from the multiple layers of ethical and other guidance that may apply to an internet independent actor, there's also the concern about sanctions. Different jurisdictions may handle sanctions in different ways, but at least in the US, we know that various bar committees and bodies are able to sanction lawyers for poor conduct. They can either be disbarred, or they can be disqualified from practice for a given period of time through suspension. There are various sanctions available. They can pay monetary fees, etcetera. And similarly, judges and courts have the ability to sanction lawyers and parties that appear before them that are not necessarily engaging in good behavior, whether it's respect to. Fair and civility, fairness and civility in conduct, or whether it's with respect to how they are handling evidence and otherwise engaging in guerrilla tactics in the international arbitration setting. In contrast, there is no overall supervisory ability available, either through the arbitral institutions or through the panel of arbitrators. So the challenge really becomes, how do we ensure a standardized approach to conduct? How do we roll out different guidelines that ensure that the different actors are overseen in a similar and consistent way, despite the lack of an overall sanctioning body? And the reason this is really important is because of the rise of what is the so-called guerrilla tactics. Guerrilla tactics are where a party may, you know, take advantage of a certain situation, or council may take advantage of a certain situation to manipulate the proceedings or to manipulate a loophole to gain greater access or tactical advantage in an arbitration proceeding in favor of their party, while the other side may not be able to take advantage of that same situation, an example may may arise quite simply from different approaches to how do you engage with witnesses? How do you handle evidence? How do you collect evidence? Data privacy laws, for example, may come into play where different evidence is to be handled differently in different jurisdictions. And that can give rise to guerrilla tactics, where there are different types of compliance required from one side versus the other. And similarly, what what can you tell your client or what information is your client required to disclose can become another avenue of differences. And so we do have really unique ethical challenges when parties come from different cultural backgrounds and have different expectations. And also when counsel and arbitrators come from different backgrounds and have different understandings of what may be acceptable or proper conduct for the proceedings. And this is where the room comes in for different kinds of soft law and other guidance, which I'll discuss in more detail throughout this presentation. Let's turn now to zoom in on the practitioners. And of course, for us practitioners, we often go to the ABA model Rules of Professional Conduct. I have two examples for you that we're going to examine on this topic. The first is Model rule 1.6, which refers to confidentiality of information. And I've only excerpted a small portion of this rule. The relevant portion of this rule in the slide. I'll read it out loud to you. It refers to the client lawyer relationship. And subpart A provides that a lawyer shall not reveal information relating to the presentation representation of a client unless the client gives informed consent. The disclosure is impliedly authorized in order to carry out the representation or the disclosure as permitted by paragraph B, we're going to skip paragraph B and then sub paragraph C provides. A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to information relating to the representation of a client. So not only are we, as US lawyers, required to maintain confidentiality, but there are also other layers to these obligations, such as those that might arise in the course of attorney client privilege, the work product doctrine, etcetera. But this is the standard or the type of standard that most US lawyers will aim to comply with. It's an exception to the general rule that all relevant evidence may be submitted to and its production compelled by a court or tribunal, and also that the other side should be allowed access to that information. This is where the clash of ethical guidelines may come up. Nearly all legal systems agree on the need for privilege, but the scope and specific factors for asserting that privilege may vary. So, for example, in common law jurisdictions like the United States, document production is an integral feature of litigation, so a party may produce documents even if detrimental to its own position, thereby rendering the ability to object to certain production based on privilege an important limit on the scope of production. So confidentiality and attorney client privilege and the work product doctrine really interplay there, at least in the US context, to provide a limitation on document production and the production of evidence. Meanwhile, in civil law jurisdictions where parties are not as frequently obligated to produce documents that are detrimental to their position, they are only those documents on which they base their claims and defenses. That really creates an opportunity for a difference in approach. And so we do have a more robust, fully developed ethical framework for confidentiality and related doctrines in the United States as compared to some civil law jurisdictions. So let's talk about this from a more practical point of view. Document production. As many of you who practice international arbitration will realize. Is pretty commonly a feature in proceedings that take place. An assertions of attorney client privilege and confidentiality have also similarly increased. So when one party seeks production of evidence and the party in possession of that, possession of that evidence objects by asserting a attorney client privilege, it will be up to the panel of arbitrators to decide whether privilege applies to shield that document, whether confidential information is present in that document, and the assumptions of arbitrators and counsel and their reasonable expectations of that party are important considerations. So even the scope of privilege may vary depending on assumptions of the arbitrators and counsel the applicable law. Those reasonable expectations of the party who seeks confidentiality or privilege, and the circumstances that lead to the invocation of that privilege, for example, whether it's based on the substance of that document or whether the context of that document gives rise to those assertions of privilege or confidentiality. But what law applies? This is exactly the issue that, on a procedural level, is often debated in international arbitration proceedings and quite frankly, not given enough attention because. Where there may be a breach. It could be construed as an ethical breach by an attorney who, if you look at the ABA model rule that we referred to earlier, 1.6, so there are at least six different laws that may apply to such a claim. It could be the law of the arbitration agreement, the law of the seat, meaning the procedural law that applies to the arbitration proceedings, the law applicable to the main contract between the parties, the law applicable to the attorney client relationship, which if you're a US based party, or a US trained lawyer or a US barred lawyer, it might be American law, and that might vary across the 50 states to some degree. The law of the place where the lawyer gave the advice or practised, or the law of the place where the advice was received. So already we have six different choices of what law may apply. And you can see it's a bit of a matrix that different laws may be triggered, or multiple laws may be triggered, depending on where the party is based, where the lawyer is based, where the lawyer may be admitted to practice, and where the destination of that advice may be meaning who, who or where that advice was received and the expectations that may apply there. So this matrix of pretty complicated considerations gives rise to some serious ethical concerns. And you can imagine that not only do parties need to remain mindful of this when they're soliciting advice or engaging a lawyer, but as counsel acting in international proceedings, you need to be mindful not only of what your client, who may be an international, a foreign client may expect, but also what the other side may expect. And if you have an international team that you're working on, international team of lawyers, or maybe you have people who come from different legal backgrounds with different admissions to practice in different jurisdictions, it becomes an increasingly complicated setup. I'm going to now provide example number two for us to discuss, which are come from the rules of professional conduct as rule 1.12, which refers to former judges, arbitrators, mediators or third party neutrals. And again it refers to the attorney client, the excuse me, the client lawyer relationship which provides at subpart A, except as stated in paragraph D, a lawyer shall not represent anyone in connection with a matter in which the lawyer participated personally. Party. So this this example provides a flip side of what we've just been discussing. Part one. Example one. We were looking at what the attorney and client relationship may look like in the confidentiality that that triggers. And now this rule, rule 1.12 turns to the client and lawyer relationship, looking at the roles of arbitrators, mediators and other service providers. And the goal here is quite supportive of the goals of international arbitration and why parties often choose international arbitration, which is that they want to have a neutral forum free from bias. And so what does this really mean? It means that because we don't want judges who may be inherently biased against us, we also don't want arbitrators who could possibly show partisanship towards or against a certain party. Nearly all legal systems. Again, they agree on the need for balancing these interests, but just different jurisdictions may strike that balance differently. And there may be an intent to not only prevent bias, but also an intent to prevent the appearance of bias in arbitral decision making. I mentioned earlier in this program that the goal of international arbitration is to provide a neutral. Decision making forum where the parties can have confidence in the outcome, and the arbitral award that is provided by the arbitrators. Part of that ability to be confident in the decision that's rendered is simply to make sure that it's rendered in a fair and neutral way. So. So this is the questions that's worth considering when you're thinking about selecting an arbitrator, which is is it what's more important, the party autonomy to choose decision makers or choosing decision makers who will provide that impartial and unbiased decision? And similarly, but what's more important, preventing bias or preventing the appearance of bias? And in both of these instances, the goal is going to be how do you ensure that you reach a decision that the parties can have confidence in? And this is important not just on an individual case basis, but also on a systemic level. If if we are continuing to see a great greater increase of use of international arbitration to resolve disputes as opposed to court proceedings, this becomes the key inquiry. So let's also look for that reason. I mean, these rules that provided the model rules, they're great starting points, but they leave a lot of gaps because they only provide guidance for US based practitioners. And as we've discussed, the likelihood of you having an international proceeding where you have all participants from the exact same jurisdiction is quite slim, you will always have a mixed match of different parties coming from different places. Those parties will have expectations. You will also have a mixed match of counsel, and even within specific counsel teams, you'll have diversity among counsel on where they may be admitted to practice. So there are various providers that provide guidance. Some of them might be nonprofits, international nonprofits, some of may be arbitral institutions, some of them may be think tanks and working groups. But there's very many sources for guidance on how to better understand the ethical and other rules that may trigger greater confidence in the arbitration system. So I'm going to start with a few primers. Many of these are offered by the ABA. The ABA is the international bar Association and they're considered one of the largest. Bar associations in the world and are most reflective of international practice. They take up a lot of issues in their working groups and in their guidance that they issue that that aim to capture the differences in the challenges of international legal practice. So one of the rules guide sets of rules that they've offered are the rules on of ethics for international arbitrators. So this aims to apply to international arbitrators. This process started in the 1980s, when the IBA set forth rules on ethics to govern the conduct of arbitrators. And there the goal was to emphasize that rules cannot be binding upon the arbitrators, but by creating a set of guidance that could voluntarily be applied by the parties or by the arbitrators, we could create a consensus of action where where there's a certain standard being maintained. So, for example, under the rules of ethics, communications with the parties are permitted between the arbitrators and parties are permitted up until the appointment, and after that ex parte communications are no longer allowed, because that would possibly give rise to conflict, bias, or appearance of bias. Um. In general, ex parte communications from arbitrators to parties are discouraged unless the parties have consented to having arbitrators assist them in the settling of a case. And in that sense, the tribunal as a whole may make proposals for settlement to the parties. So there are various mechanisms set up again to respond to the possibility of bias or appearance of bias or conflict, in a similar way that the ABA model rule provides. Another set of guidance is offered by the IBA guidelines on Conflicts of interest here. This. This process began in 2004, where the IBA promulgated these guidance, and then they were updated to keep them fresh and current in 2014. Again, not mandatory legal provisions, and they do not override applicable laws or the ethical guidelines that must be applied by parties based on where they are barred or admitted. But the parties can choose to have these as additional soft law guidance. And they they generally are accepted by the international community. But but not without pushback. The guidelines have been criticized by various sources, including by arbitral institutions who have generally not sought to apply them directly in their cases. Generally, the guidelines provide a list of red. Green and orange signifiers that tell the parties whether something is a waivable conflict or a non-waivable conflict, or one that may be justified. Um, and offering doubt as to the party the tribunal's impartiality or independence. So essentially the guidelines try to put meat on the bones. They provide examples of what kinds of contact, past experience, relationships, etcetera. Given that it is a really small community, are waivable or not, and whether they truly give rise to a conflict of interest and whether an arbitrator should recuse himself, or whether an arbitrator challenge to an arbitrator's impartiality or independence should be upheld, so many parties will turn to the guidelines on Conflict of interest to help guide their decision making as to what they should do with an arbitrator. And that. Coded list of signifiers is pretty commonly used by parties when they're making those assessments. Aside from these very generalized guidance offered by the IBA, there are also other guidelines that are out there. The Chartered Institute of Arbitrators, which is a voluntary, membership based organisation that very many arbitrators around the world are members of, also offers a code of professional and ethical conduct that applies to their membership base, again, voluntarily. This is all soft law guidance. We're putting this as an overlay to the bar and procedural requirements that might apply based on where a part a arbitrator is based or where they may be admitted to practice. But the Chartered Institute of Arbitrators also provides a code of professional and ethical conduct to help guide us through the various appearances of bias and impartiality that may arise. Similarly, arbitral institutions have gotten into the game, so, for example, the Hong Kong International Arbitration Centre, the Singapore International Arbitration Centre both have a code of ethical conduct for their arbitrators that they expect their arbitrators to adhere to. Those codes provide great guidance to parties and counsel if they're looking to better understand whether the conduct of an arbitrator or his or her relationships are acceptable, or are they merely signifiers that could be disregarded. And that process continues to evolve. The latest set of developments in codes of conduct for arbitrators is an outcome of Uncitral working Group three and its relationship with Icsid, which is the International centre for the Settlement of Investment Disputes. This primarily relates to investment arbitrations and not commercial arbitrations, which is what we've been discussing so far. But the Uncitral Icsid Code of Conduct for Arbitrators in International Investment Disputes aims to provide an even clearer overlay for what kind of conduct is acceptable or unacceptable for arbitrators. You might recall we were talking earlier about the ABA model rules and how it may be appropriate for an arbitrator who has been appointed to then later also act as counsel for that same party. In contrast, the Uncitral Icsid Code of Conduct, which has recently been entered into force, takes a different approach, which is that it is impermissible for an arbitrator to also concurrently act as counsel for that same party. And then there are lists, numbers of years that must be adhered to to ensure that there is no conflict going forward. So this is a great space to watch for the latest thinking on what is acceptable in terms of impartiality, independence, bias and appearance of bias. As far as how do we ensure that the system remains fit for purpose? Let's also look for a few moments at soft guidance for counsel. So so of course, when we're thinking about arbitrators in particular, we're thinking of ways to ensure that the arbitrators are qualified to sit in the seats that they are in, whether they're capable of rendering the decisions that we have asked them to render. And if there is bias, appearance of bias, lack of independence, lack of impartiality, those all give rise to challenges, not only to the arbitrators while they're sitting as arbitrators in those proceedings, but also possibly challenge to the awards that they render. Um, although we have no formalized appeal mechanism in international arbitration, the awards that are rendered are considered final and binding on the parties. Under the New York Convention, there are mechanisms to either set aside or to oppose the enforcement of an international arbitration award. Those grounds are pretty limited, and they differ from jurisdiction to jurisdiction, but they certainly do exist. Um, and it's not a a full review on the merits, but the procedure in particular with respect to the arbitrators can be examined. But for counsel, the guidance is a little bit different. And I really do want to focus this presentation on what guidance is out there for counsel, because most of us are appearing in these kinds of proceedings as counsel. As I said, you might have council teams where you have different members who admitted to practice in different places. You might have council teams where an individual member of the team is admitted in multiple jurisdictions in international arbitration proceedings. That's quite common to have someone admitted to two or more jurisdictions, and therefore bound by the ethical rules of all of those jurisdictions. And the challenge, the personal level challenge for that person may be that they have conflicting guidance. It's great when those guidance are the same. It's understandable when one has a lower threshold and the other has a higher threshold, which means the council should act to the highest threshold to which he is bound, but where they differ entirely and conflict. And there's no way to easily comply with the ethical requirements imposed by various systems. The the council really does have a challenge that they need to engage with. Soft law can provide good guidance there. And there's various codes, just like for arbitrators, there's various codes that could be applied to counsel teams to help them guide, guide their way through these processes. So the first is the again the ABA is a great source for international guidance. It's the International Code of Ethics for lawyers. It's not designed to replace any of the guidance that is available on a national basis, but it really aims to address this ethical no man's land. The problem is really the following. Council in international arbitrations aren't regulated by an international bar. They have their individual national bars. For American lawyers, it may be the ABA. You have similar guidance coming from each of the states, different bar requirements, and a lawyer from a civil law country might have significantly different obligations. And even among those common law jurisdictions, the differences for preparing witnesses for cross-examination, they may not necessarily be similar. And the differences, quite frankly, may be very significant. The counsel may be thus subject to diverse and potentially conflicting bodies of domestic rules and norms. And there's three distinct problems here. The first is known as when a lawyer is subject to the regulatory power of more than one jurisdiction, both of which are imposed upon him or her simultaneously. The result is that the attorney has to choose whether they will face professional discipline, regardless of what action they take. The second problem is having inequality of arms, right? So this is the challenge of where one side of attorneys is bound by certain ethical standards in an international proceeding, while the other side has different standards that results in structural unfairness. The third problem is sort of a choice of law or conflicts of law problem. And this iteration, the challenge becomes whether particular rules apply and how they apply. So so we talked about confidentiality. We talked about the the ABA model rule 1.6. Well, the ethical rules that govern a New York lawyer, for example, is confidentiality obligations to his French client. Or a Singapore based client may be very different from a company that is represented by a German office of an English law firm. Right. So we have the rules guiding us, while another lawyer might have different rules guiding them or no rules whatsoever guiding them. So the International Code of Ethics for lawyers. It's been around a long time. First adopted in 1956, it was amended and revised in 1988, continued to be kept up to date, and in general, it provides that a lawyer who undertakes work in a jurisdiction where he's not a full member of the local profession, should adhere to the standards of professional ethics in that jurisdiction where he's been admitted, and he'll observe all ethical rules that apply to lawyers in the country where he's working. So this is sort of the be the best person you can be kind of rule where you adhere to the requirements that apply to you. And also on top of that, additional rules that would apply to the local bar. This code, though it's pretty general. It includes various things about independence that are unclear. It. Results and conflicting interests from time to time in litigation, and it doesn't really make any reference to international arbitration. So it's sort of a generalized code of conduct that doesn't take into account the peculiarities of international arbitration in the way that I set them out for you in one of our earlier slides. Let's turn to the second set of guidelines that I've mentioned. It's the international principles on conduct for the Legal Profession. This. Code comes from 2011, and was aimed to represent the 21st century version of the International Code of Ethics. And so the International Code of Ethics was sort of its precursor. This builds upon it and it aims to reflect core values. What are those core values? Well, there's ten of them. They are independence, honesty, integrity and fairness. Conflict of interest. Confidentiality and professional secrecy. Client interest. A lawyer's undertaking. Client's freedom. Addresses the property of clients and third parties. Competence and finally how to handle fees. And the international principles are accompanied by a set of commentary which express the common ground which underlies all of these national and international rules in the Code of Lawyers. Ensuring that lawyers act in a way that. Befits the profession and its sort of lawyers, lawyers providing guidance for a more internationalized bar. In general, it does refer to courts and tribunals, so it is designed to refer and be applied in international arbitrations. But again it's very general, not very specific. And it doesn't provide enough guidance on the clash of differing principles that I described earlier. Another set of guidance. This is even more modernized. Come again from the come is the guidelines on party representation and international arbitration. It was adopted in 2013 and then updated, and they were designed on the principle that party representatives should always act with integrity and honesty. They should not engage in activities that result in unnecessary delay or expense. They should not try to obstruct arbitral proceedings, and they apply wherever and whenever the parties agree, or where the arbitral tribunal, after determining it, has the right to overlay these kinds of rules, decide that it wishes to use them. In my personal experience, the guidelines on party representation international arbitration are almost always applied in arbitral proceedings. Oftentimes, the tribunal and its first procedural meeting will ask the parties, if they wish to make any comments on this, if they have any reflections on this, and then if there's no objection or even if there is an objection. After deliberation and hearing the parties sides, the tribunal will often include a reference to these guidelines in their first procedural order after the first meeting, with the parties having taken into account all their various comments. According to a recent report, these professional party representation guidelines were referenced in about 20 to 30% of arbitrations involving issues of counsel conduct, so there is survey data to reflect that these guidance are not often used, although my personal experience is a little different. And even when parties and tribunals consult them, they do not necessarily feel bound by them. So it is, again, still voluntary, not necessarily binding, but it does provide a baseline that is peculiar to international arbitration, which can be quite helpful. Um. Many international arbitrators have commented that these party representation guidelines are a great way for a tribunal to initiate discussion with the parties as to what would be proper conduct, what kind of conduct is allowed, what would not be allowed, what are the ethical norms, and then what is the role for guerrilla tactics? We haven't talked about guerrilla tactics yet, but guerrilla tactics are pretty much the opposite of ethical action. It's using various tactics, whether procedural or otherwise, or loopholes, what have you, to obstruct the process, to obtain an unfair advantage and to manipulate the proceedings, perhaps in your client's favor. Guerrilla tactics are generally quite frowned upon, um, and are the source of extreme scholarly debate these days in the international arbitration community. However, the the fact that guerrilla tactics exist and the acknowledgement that they exist is fairly new and was only recently, after so much aggregate experience with international arbitration and the growth of that community, that parties and counsel have started to recognize that guerrilla tactics are being used and how they are being used. So the guideline guidelines do aim to curtail guerrilla tactics. I'm going to point out a couple more specific examples of different codes that may apply to different kinds of lawyers. One that's quite well known is the Code of Conduct for European lawyers. Of course, it wouldn't necessarily apply to those who are barred in the US, but this code has been around for a number of years, since the late 1990s, and has been amended and revised several times since then, and it was developed as part of the continued integration of the European Union. So it makes it pretty interesting because it does aim to harmonize divergent legal systems, divergent ethical guidelines into a singular system. Especially in light of increased frequency of cross border activities in light of the EU's formation. Among other things, it specifically refers to arbitrations and arbitral tribunals, and says that an attorney who appears before an arbitral tribunal is required to apply the same ethical guidelines that would expect to apply when appearing before a court. So that's a helpful marker for how it relates to international arbitrations. However, it has been criticized for not being very clear on how those rules of conduct really translate over to an international setting. Saying that you should act the same as you do in a domestic proceeding, and then you should act the same as you should in an international proceeding, is not a very clear set of guidance. And the drafters have continued to revise and offer commentaries on how these code this code should be applied. Another example I'll point out this one comes from an American context is the triple A. So that's the American Arbitration Association's. Standards of conduct for parties and representatives, and this obviously very commonly used arbitral institution in the United States and by American parties and also in international proceedings there, a standard of conduct of practice guidance, among other things, requires party representatives to advise their clients and witnesses as to appropriate conduct that's expected of them. So it extends even beyond the conduct of lawyers and touches upon the conduct of their clients, who would be parties and their representatives. And it includes rules on how to appear in proceedings, how to refrain, how to act, perhaps basic common sense, but refrain from using vulgar, profane or other improper language how to interact at a civil level with one another in a dispute resolution setting. And that's not the this. This is not the only forum where this kind of guidance has been offered. There's similar guidance offered by the London Court of International Arbitration, the LCA and its 2014 arbitration rules, which was then echoed in their 2020 amendment of those rules, where they similarly give guidance on what it is that party representatives should do. So it's not so. So here we have an opportunity for counsel to guide their own clients and how they should act, which which takes me to the latest iteration of various rules and guidance, which is that Ice guidelines on standards of practice. This is brand new. It came out in 2020 2021 for public comment before a final report was issued. They had a task force on standards of practice in international arbitration, and the idea that the task force was engaging with is what is the minimum standard of conduct that's acceptable in international arbitration? And what was implied in their inquiry was, how do we ensure minimal levels of civility in international arbitration? For those of you who may be come from a litigation, more adversarial backgrounds, maybe this is something that makes you scratch your head. But international arbitration, for those of you who have experienced the community and participated in hearings and seeing that it is despite being a very globalized practice, it is actually a very small world where the same repeat players, the same repeat counsel, often appear again and again and again. And when you see the same counsel appearing again, and you see the same arbitrators that you appear before over and over again, in cases for overseen by the same arbitral tribunal organizations and institutions, there becomes a need to have that community which is a little insular and small, regulate itself. So what the guidelines on standard of practice aim to do was develop a minimum code of civility for how tribunals and and practitioners and their clients could interact with one another. This process took several years to put together. As I said, there was a public comment period before they released those guidelines. And and they refer to everything from, you know, how to be polite and not use vulgar or profane language, how to how to interact with each other. What is that minimum standard of decorum that we want to see in the arbitral proceedings room? And now the uphill question is, will the guidelines on standards of practice be accepted into mainstream practice? Will arbitral tribunals make them mandatorily applicable in their arbitrations? Will arbitral institutions refer to them in their rules so that they are incorporated by reference for future proceedings? This remains to be seen. As I said, they're super new. They've only been around for less than a couple of years, but there is a lot of interest in this kind of thinking, and I have personally seen a lot of op ed style articles and and scholarly writing about the need for standardizing how we interact with one another as a community in the international arbitration community. I personally can't say I've had any, any really terrible experiences where I feel a discussion on minimal civility is necessary, but I certainly have also been a litigator in my career. And there's a different level of adversariality that that comes up in litigation. And I wonder if that's starting to creep up in the arbitration proceedings rooms. And this is what's giving rise to these kinds of concerns for different practitioners. So I want to turn briefly now to the interplay. We've talked about ethics. We've talked about mandatorily applicable rules. We've talked about soft law guidance that that where there have been gaps, various stakeholders have come in to fill those gaps and offer suggestions for how they should be addressed. Um, but but how does all of that interplay with core arbitration concepts? As I said before, parties come to international arbitration by choice. They want a forum that is neutral, that reflects party autonomy, where they can choose their own procedure, their own applicable rules, their own decision makers in terms of having a say in how the arbitral tribunal is composed. And they also want some procedural flexibility so that they are not necessarily tied to the rules of civil procedure of a particular jurisdiction. They are not tied to the appellate processes of different courts. And because there is so much party autonomy built into international arbitration as a fundamental matter. How does a regulation, from an ethical point of view fit into that party autonomy? You know, is, is it fair to limit which arbitrator a party can appoint because of ethical rules or because of other guidelines that that perhaps lead to a, a, a signifier that that there is no necessary way that that arbitrator could be unbiased. Um, it comes back to the main advantage of arbitration. In order for users to have confidence in the system, certain standards of conduct have to be maintained to keep an equalized playing field and to keep the appearance of an equalized playing field. It's not just the precise users of a particular dispute, the parties to a particular dispute who are at issue here, but it's also the system as a whole. So so give you that as food for thought, thinking about the various core arbitration concepts, how they align with with different ethical guidelines, whether they are related to party autonomy and selection of arbitrators or confidentiality, or different standards of attorney client privilege versus attorney client secrecy, as it may come up in civil law countries and their legal systems. These are things to think about when you do have this clash of different jurisdictions and different approaches to the law. So last couple of minutes. We're almost done here. I want to talk a little bit about emerging trends, emerging issues in recent trends. Um. And I've touched upon each of these already a little bit, but I want to go into some greater depth. The first emerging trend is that parties are starting to agree early in arbitration proceedings to standards of practice in the application of certain soft law instruments. So it's not only that parties look to various guidelines to help them assess whether an arbitrator is a good pick for their particular dispute. That includes not only whether the arbitrator has the right qualifications to make a informed and thoughtful decision, and to contribute meaningfully to the arbitral decision making process. But it's also whether that arbitrator gives off any signs of bias, whether they can confirm, both objectively and subjectively, that they will be independent and impartial in their decision making. Here we have those various guidelines that I mentioned. We have in particular the red green, orange list method, where there are different signifiers that can be checked to understand if an arbitrator is going to be the right choice for a particular dispute. So that has become really normal, really common place to be applied in international arbitrations. Parties routinely make reference directly to those guidelines when assessing the decision to challenge or accept an arbitrator. But in addition to that, you also have other standards starting to creep into the practice. And it's not only guidance on how an arbitrator is to act or how they are to maintain their independence, but it's also the guidance on how counsel. Parties and party representatives are to behave and engage in the arbitral process. So, for example, the OECD Guidelines on Standards of Practice is a great iteration of that. It's the latest, most modern iteration of how that looks. All of these various guidelines which have evolved, as I said, starting from the 1950s onwards, to react to different globalized events, everything from the advent to the EU to the rise of international arbitration, engage with the same core question, which is how do we find commonality and equalize playing field for for different actors to engage with international arbitration and to engage with the dispute resolution process? Along those same lines, and I mentioned this briefly as well. Arbitrators are also starting to make reference in their procedural documents to the guidance of certain soft law instruments. And I think this is a reflection of the maturity of the field. Different arbitrators. Yeah, we're reaching a moment in international arbitration where the field has reached maturity. The field really was nascent in the 1980s and 1990s, and now we have several decades of experience and arbitrators who have sat on dozens and dozens of arbitral panels. And I think they're starting to see trends on how parties interact with each other, the ethical challenges that they face given the globalized teams that they have. And. And having certain soft law guidance memorialized in their early procedural documents. So a express reference in a procedural order, in early procedural order to the application of certain soft law guidance, is incredibly valuable because it helps ensure that there is a benchmark for how to engage with allegations should they arise of misconduct, or how to engage with guerrilla tactics should they arise. How to engage with. Objections that relate to bias or other harms. So all of this comes together to give us a sense of what is the guidance we need, because there should be a universal standard that applies to all parties and all counsel appearing in in an arbitration, regardless of what national background and what legal background they may come from. So this is precisely what those early references can start to do for parties. On top of that, what we're continuing to see, and this is really exciting is the development of new guidance and updates. So I've given you a snapshot historically of how some of the documents that already exist have come to be. And how they've built upon pre-existing pre-existing guidance, but they're continuing to grow. These developments are not stagnating there. There are still working groups and other bodies, stakeholders that are looking at this, examining it and coming up with new approaches. The Uncitral Icsid Code of Conduct for Arbitrators and Investment Arbitrations is an excellent example. It has long been one of the greatest criticisms of investment arbitration that the decision makers in one case are the council in a different case. And how is that switching of hats? Call it double Hatting but how is that back and forth switching of hats acceptable if we want to have a fit for purpose, sustainable, credible decision making system where we result in arbitral awards that not only parties are confident in, that they they reflect the correct application of the law. But once they're happy to comply with then the future, they will do the same. So. So it's a great reflection of the maturity of this field and also the aggregate of experience that we're continuing to see new guidance and updates to pre-existing guidance to keep all the guide, the ethical rules and guidelines up to date for present trends. From my point of view, we have a increasing new trend of multi-jurisdiction qualified practitioners. This means that the ethical challenges will only increase. We are seeing more and more international lawyers who are interested in this area of practice, who are pursuing degrees and other further education beyond their first bar admission, to continue to develop their skills and become attractive and be valuable in this particular area of practice. And the result there is that they may have a single person, may have multiple, multiple different levels of ethical requirements to apply to. We talked about the three buckets that those can fall into, the worst of which is no matter what choice you make, you are preaching the ethical guidelines that apply to you in a particular jurisdiction, because you're admitted to a different jurisdiction that provides the opposite guidance to you. That is the worst case scenario. And in that case, that particular individual would probably be guided by soft law guidance to help them harmonize those differences. The best case scenario is where those different guidelines do not really present a challenge, but that the ethical requirements that must be adhered to are the same across the different jurisdictions. And so it's very easy to comply. And of course the middle is a muddy middle. So, so. The challenge really is, is that this applies differently to every single lawyer and every single lawyer team. But for those of you who are grappling with ethical challenges, I encourage you not only to think about yourself, but also who else is on your legal team where they may be admitted to practice, how many places they may be admitted to practice on an individualized basis, but also, where are your clients based? Personally, I've had different phases in my career times where I've advised us clients in international proceedings and then other times where I've mostly been advising foreign clients who are engaging with US parties. The point being is that international arbitration is a globalized practice. And if you look at the latest studies and surveys, the users of international arbitration are becoming more diverse, more increased, more globalized, that we have even more jurisdictions engaging. And so this area of practice, which began historically as an old boys club, where it was the same repeat players, is starting to change where there's more diversity. This is great. It's a reflection of globalization and and the diversity of globalization that we're continuing to see. But it also means that there's more considerations from a standardization of what is acceptable ethical practices. What are guerrilla tactics, how do we sanction them? Can they be sanctioned? Is there a way to sanction them? These are great questions because one one of the trends have not included on this slide is simply what are the ramifications? So of course, in the ABA setting, in a US setting, we we know that there are various bar and other committees that are charged with ensuring adherence to those guidelines, and they are able to sanction lawyers in various ways who fail to adhere similarly, judges are empowered to sanction lawyers and parties for bad conduct. Arbitrators do not necessarily have that same mandate. If you think about how the arbitral process is set up, it may be that they're able to take adverse inferences or or other types of inferences to give rise to a certain outcome in the proceedings, but they cannot sanction bad conduct. They have no authority to do so. And their mandate ends with the conclusion of a particular arbitration. So there's no necessarily a body or other setting that they could refer issues to. So it's a really challenging place to be when you think about regulating the bar, the international arbitration bar. I'm going to stop there. I'm going to thank you all for your attention and your time. I hope you have found this to be a useful discussion, and I look forward to joining you again in the future. Thank you.

Presenter(s)

KG
Kiran Gore
International Arbitrator | Disputes Management Consultant & Counsel
Law Offices of Kiran N Gore PLLC

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