As part of Day 3 of the London International Dispute Week (“LIDW”) 2024, Freeths LLP, Gatehouse Chambers and the Chartered Institute of Arbitrators (CIArb, London branch) organized a panel on “Lawyer (Mis)Behaviour International Arbitration”.
The panel featured Mr Justice Robin Knowles CBE (High Court Judge of England and Wales), Dr Crina Baltag (University of Stockholm), Mr Frederico Singarajah (Gatehouse Chambers) and Mr Paul Kinninmont (Freeths) and sought to continue the debate and reflection among the international arbitration community on behavioural standards for lawyers provoked by recent developments and cases, such as the recent ground-braking P&ID v Nigeria case (see previous coverage here), as reported below.
Diversity of Relevant Standards on Misconduct in International Arbitration
The panellists first addressed the framework applicable to the behaviour of actors involved in international arbitration proceedings, and in particular the IBA Guidelines on Party Representation in International Arbitration (the “IBA Guidelines”) adopted in 2013.
Dr Baltag first observed that one of the challenges arbitration practitioners are currently facing with regards to ethics and regulation of misbehaviour in international arbitration is the diversity of relevant and applicable standards. Different standards can indeed be found in e.g., the ethical rules of a bar association, the specific parties’ agreement, or mandatory provisions of the lex arbitri. One could thus ask whether international arbitration practitioners do need more.
Dr Baltag emphasised the need to look at these norms holistically and noted that, while the IBA Guidelines were controversial at the time they were adopted, they are now widely-accepted and even seem to need a further improvement, as reflected in the IBA Arbitration Committee’s recent announcement that it is considering the possibility to review them following recent decisions. Dr Baltag also recalled that these are “guidelines”, as opposed to “rules”, as are, e.g., the IBA Rules on the Taking of Evidence in International Arbitration, or the IBA Rules of Ethics for International Arbitrators, meaning that they only are recommendations of a contractual nature that the parties can chose to adopt or that arbitral tribunals can chose to rely on.
Dr Baltag observed that a general standard of conduct is being replicated, citing as example the ICCA Guidelines on Standards of Practice in International Arbitration, which do not apply only to party representatives. However, in comparison, she noted that the IBA Guidelines empower arbitral tribunals with wide discretion to determine the extent of the misbehaviour, as reflected in the definition of the notion of ‘misconduct’ (“a breach of the present Guidelines or any other conduct that the Arbitral Tribunal determines to be contrary to the duties of a Party Representative”).
Dr Baltag explained that these standards are necessary, especially given that international arbitration involves different (legal) cultures. For instance, ex parte communications with an adjudicator are accepted in litigation in parts of the world (see e.g., before Brazilian courts), while it remains an unacceptable practice in arbitration and in many other legal systems.
Overall, she reminded the audience that in upholding misbehaviour under the IBA Guidelines on Party Representation, arbitrators should take into account the need to preserve the integrity and fairness of the process and the enforceability of the award, the good faith of the party’s representative; and any (e) relevant and applicable privilege and confidentiality, among others. In doing so, Dr Baltag emphasised, the arbitral tribunal must ensure due process even when drawing inferences or when exercising discretion at the time of cost allocation, in consideration of any misbehaviour.
Dr Baltag concluded that the IBA guidelines are just one suggestion in the myriad of texts available on the topic. There is room and necessity to take a de novo look at this discussion, especially considering that there are many new participants in arbitration proceedings comparing to a decade ago.
Flexibility of Current Standards
Building on this presentation, Justice Knowles discussed how the UK courts view these texts, and observed that so far, they have wisely considered that there may be more than needed. As it will not be possible to specifically tackle all types of misconducts, he suggested to first determine what would be a good behaviour in a specific situation, before then looking at the parties’ aspiration—an adjudicatory process leading to a fair decision—and finally at what is actually the rule of law.
In turn, Mr Singarajah highlighted that, although there are obvious things of misbehaviour that are universally accepted (e.g., not submitting forged documents), there remains a grey area, in which there can be difficulties even with good behaviours. He considered that the IBA Guidelines as they stand give a welcome flexibility to tackle this type of behaviours. Mr Singarajah highlighted the need to find a good balance between this flexibility, which allows arbitral tribunals and lawyers to have enough room to address misconducts, and having enough norms so as to apply a minimum standard.
Dr Baltag agreed that the general standards of the IBA Guidelines are broad enough to capture potential future situations—which is in general a common feature of soft law. She however recalled that this can lead to heated discussions, as it was the case for instance with the broad notion of “civility” when the UNCITRAL Commission was preparing its Code of Conduct for Arbitrators in International Investment Dispute Resolution.
Justice Knowles suggested that there might be an area where transparency can play a role. Lack of “civility” or ongoing “guerrilla tactics” can happen behind the scene, and that is where he saw that the standard could be raised. The overall goal being to offer a collective effort worldwide to have a process that is fairer and actually better.
Inequality of Arms
Turning to the issue of inequality of arms, Justice Knowles advised that both courts and arbitral tribunals must be ready to use more means of ensuring inequality of arms—and recognised that tribunals are becoming more hands-on. When there is a disparity in terms of expert contribution, an arbitrator needs to be ready to bring up another expert. What needs to be delivered is a decision that stands up to the rule of law, thus ensuring trust in arbitrators and judges.
Elaborating on Justice Knowles’ views, Dr Baltag wondered where the line should be drawn. Reflecting on the P&ID v Nigeria case, she highlighted that “the greatest experience and standing” (para 9) is not enough. Some issues may not be readily visible and come to light before the tribunal only when it becomes critical for the arbitral process. In this situation, arbitral tribunals will have the duty to ensure due process and, at the same time, to render a reasoned decision.
Overall, Dr Baltag considered that in most cases, lawyers are just using the procedural tools available to them (provisional measures, security for costs), which are perfectly valid tools. And some procedural rules, such as e.g., the Rules of the London Court of International Arbitration (“LCIA”), allow arbitrators to be more proactive to avoid their abusive use. She highlighted the need to ensure that everyone understands the arbitral process as of the first case management conference.
In turn, Mr Singarajah shared his experience of an arbitration with an obvious discrepancy in the skills of the legal teams at every stage of the process. In order to counter-balance this, the tribunal decided to cross-examine one of the parties, in lieu of the opposing party.
As Justice Knowles emphasised when concluding the discussion, “when parties choose arbitration, they are really choosing a process for a fair decision. It’s not about arbitration going wrong, it’s about –collectivelly—making it a success. The world absolutely needs arbitration. What’s at stake is the rule of law—it’s that serious”.
The panel discussion was followed by a Q&A session during which questions primarily focused on issues of corruption. On this, the panellists agreed that there are most often signs of corruption, “something at the top of the iceberg”, while observing that tribunals are now moving away from the Lagergren approach and learning how to deal with these situations.
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