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The Inconsistencies in the 2014 IBA Guidelines on Conflicts of Interest in International Arbitration – a Matter of Correct Interpretation

Liikejuridiikka 2/2016 s. 45–59
10.6.2016
Asiantuntija-artikkeli

This article analyzes some of the internal tensions and inconsistencies created by the 2014 revision of the IBA Guidelines on Conflicts of Interest in International Arbitration and argues that with correct interpretation the shortcomings can be overcome. The article begins with a short overview of the 2014 IBA Guidelines. However, the focus of this article is primarily on the inconsistencies regarding approach to arbitrators working in law firms, but it also refers to the approach to parties belonging to group of companies and parties having third-party funders. On a more specific level, the article argues how to correctly interpret Paragraph 1.4 of the Non-Waivable Red List, which was in the view of the author of this article misinterpreted in a recent English case W Limited v M SDN BHD. Paragraph 1.4 pertains to a scenario where “the arbitrator or his or her law firm regularly advises a party, or an affiliate of the party, and the arbitrator or his or her law firm derives significant financial income therefrom.” The English court interpreted this provision very rigidly equating the arbitrator with his or her law firm and excluded the applicability of General Standard 6 (a) which gives the possibility for flexibility and looking at the circumstances of the case at hand. Such strict interpretation can have very restricting influence on the right of the parties to choose an arbitrator working in a big law firm. The incorrect interpretation could also be applied by analogy to some of the other paragraphs of the IBA Guidelines. Therefore, it is pertinent to point out the mistake that the English court made and argue how the revised IBA Guidelines ought to be interpreted. (Edilex-toimitus)

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