Don't Trust the Arbitrators? Pt. 2

By Keith Edmund White, Editor-in-Chief

So, international trade arbitrators are getting a bad wrap from the Belgium-based, anti-corporate lobbying organization Corporation Europe Observatory (the appropriately acronym-ized "CEO").

My twitter friend, Marek Krasula, who first alerted me to the report, shot me over a very helpful blog posting last night.  In short:

• There are 20-year old IBA Rules for International Arbitrators exist [More IBA guidelines, including conflict of interest guidelines, are available here.];
• a very helpful, if a bit short on readability, 2010 Wolters Kluwer blog posting exists on the subject;
• and, the post can be summed up best as:  While the IBA gives ethical guidelines, there is no uniform, international "mechanism to control an arbitrator's behavior," but some arbitral bodies that have done this themselves.

From the 2010 Philipp Peters et al blog post:

Initiatives like the ABA-AAA Code of Ethics for Arbitrators in Commercial Disputes should therefore be welcome. On a broader international level, the IBA Rules of Ethics for International Arbitrators are now more than twenty years old, and even though the discussion about ethics is far from being dead, it seems to have shifted more towards questions of counsel ethics while codes of conduct for arbitrators focus mostly on the questions of impartiality and independence. While it is perfectly understandable that these issues are of utmost concern, keeping alive the discussions on the broader subject of “arbitrators’ ethics” seems to be desirable.

More recently, some arbitral institutions have taken up the challenge of creating codes of conduct for arbitrators acting under their auspices, most of them in Eastern Europe. Examples include the Court of Arbitration at the Polish Chamber of Commerce, the Permanent Court of Arbitration attached to the Chamber of Commerce and Industry of Slovenia or the Latvian Chamber of Commerce and Industry. While some of these codes are no more than general, moral guidelines, others go further and regulate specific situations which typically arise during an arbitration. Sometimes, these rules of ethics are enforced. For example, under the rules of the Permanent Court of Arbitration attached to the Chamber of Commerce and Industry of Slovenia, an arbitrator violating the code of ethics is explicitly considered to have failed to fulfill his or her duties. On the basis of this, the institution “may” terminate the arbitrator’s mandate either upon request of a party or, in exceptional circumstances, on its own accord. This regime makes the code of ethics more than just a guideline, creating a mechanism to control an arbitrator’s behaviour beyond just the adherence to fundamental principles.

It remains to be seen whether arbitral institutions will follow this path of regulating arbitrators’ conduct in the future. For the moment, the major institutions seem to be satisfied to leave this issue to the international arbitral community. On an international level, there should be no reason not to aim for an updated broad consensus, except, maybe, for the difficulties typically associated with achieving such consensus. After all, the consolidation of an international ethical standard for arbitrators might be a part of the recipe that could help to reduce the number of instances in which parties find themselves having an “arbitration hangover”.  [Source:  Philipp Peters et al, Can I Do This? Arbitrators Ethics, Kluwer Arbitration Blog, Nov. 9, 2010]