In the beginning was chaos (or: The creation of the IBA Guidelines on Conflicts of Interest in International Arbitration)

Otto L O de Witt Wijnen 
Chair, Working Group on the IBA Guidelines on Conflicts of Interest in International Arbitration, 2002-2004; Bergambacht, Netherlands

'You better forget the whole thing', said my dear wife, on a beautiful December evening in Paris in December 2002. We had just finished a fine dinner with Robert Briner and Anne Marie Whitesell, then President and Secretary-General of the ICC International Court of Arbitration.

The Working Group for the IBA Guidelines on Conflicts of Interest in International Arbitration had started its initial discussions and I had started to sound out the general attitude to this initiative in the international arbitration world. We would continue to do that throughout the whole process. Obviously, the arbitration institutions were very important in this respect. Generally, their attitude was sympathetic, but always with the caveat that they had their own rules, traditions and caselaw, and would not intend to be bound by the IBA Guidelines, if they were ever promulgated. Robert expressed this during our dinner and, precise and clear as he was, this drove my wife to the conclusion above.

I knew better. In the international arbitration community, the conviction that something had to be done about the world wide different and often confusing, if not: very confusing approach to the highly important issue of the independence / impartiality of the arbitrator had been growing over the years. The number of frivolous challenges was increasing alarmingly. So was the number of cases in which arbitrators did not know what to disclose or not disclose, just to mention two of the problems. At some point Arthur Marriott QC, always looking for means to improve dispute resolution (he was one of the first to promote mediation) had proposed that a committee be formed to study this issue and to find a solution. Similar thoughts cropped up elsewhere, also in what then was known as Committee D of the IBA, which would later be renamed the Arbitration Committee. Robert Briner was not only, since decennia, one of the leading arbitrators in the world, but an active member of Committee D, and a past Chair of the IBA Section on Business Law. He was fully aware of the problem and the need to find a solution. We had been friends for many years ; I knew where he stood. 

In 2002, these thoughts resulted in the formation, by Committee D, of a working group of 18 outstanding international arbitrators from 16 jurisdictions worldwide: from New Zealand and Australia to a number of important European jurisdictions, the US and Canada, Mexico, Singapore and South Africa, They were to be supported by two extremely able rapporteurs, Nathalie Voser and Naomi Rao. I was then asked to chair this group, and had no difficulty in accepting this honourable invitation. I knew most of the members of the group, knew not only their quality and experience but, equally if not even more importantly, that they all had constructive minds and were pleasant to work with.

In the light of my earlier experience in the Working Group on the Rules of Evidence, I was convinced that it would be possible to find common ground for a solution to the problems with which we were going to be confronted, and that the international arbitration community would accept and follow this. I was extremely pleased when the present leadership of the IBA Arbitration Committee, in preparation for this article, sent me a report on the reception of the IBA arbitration soft law products (September 2016, 'the Report'), including of course the Guidelines . The core conclusion was (ia in para 99) that the Guidelines were the most commonly referenced to, that they had gained broad acceptance and were often used by the international arbitration community. They equally got support from legal commentators (para 176). Pleased, but not really surprised. Not only in the light of my expectations sketched above, but also because, within months after the promulgation of the Guidelines, I already received reports that panels and institutions in various jurisdictions had embraced them; and also certain state courts – inter alia in Germany and the USA. Working Group member Michael Hwang, who also sat on the ICC Court, reported pretty soon that also this body had – in fact – decided to use the Guidelines (cf also the Report at para 124). 

To say that the questions we had to tackle were many and complex is an understatement. From all points of view: legal, practical and cultural, there were totally different and, as said, often confusing approaches all over the world. It was said that, in some US states, you could not act as arbitrator if you had the same hairdresser as the lawyer for one of the parties. More serious were such questions as to whether barristers from the same chambers could work in an arbitration as arbitrator and counsel respectively; a question that was at the time the subject of state court proceedings in common law and civil law jurisdictions – with opposite decisions. Similar questions occurred, more and more, with regard to partners in the then steadily increasing number of big international law firms. There was the question of repeat appointments. Of what to disclose or not, again a question that was approached differently in many jurisdictions – as was the question of what justifiable doubts about the arbitrators' independence/impartiality are. 

Nevertheless, agreement on how to tackle the problems in their many aspects was soon reached within the Working Group. It was decided to formulate certain principles, and then to list situations that occur in actual practice and answer the question of how to deal with them. It was realised of course that we would never be able to list everything. But we hoped that the lists-to-be would give some guidance, also in the light of the general principles to be formulated. 

Various task forces were formed: such as a drafting committee and some for the preparation of the lists. All that resulted, ultimately, in two draft proposals (of October 2002 and August 2003 respectively). Both were widely distributed and became the subject of frequent discussions within the international arbitration community, notably at two IBA sessions in Durban and San Francisco respectively, but also at such gatherings as the famous LCIA Tylney Hall meetings and the like; inter alia at the Union Internationale des Avocats. At one of those Tylney Hall meetings, there was a fire alarm in the middle of the night. Everybody had to scramble out of bed and go to the lawn. When I came out I saw one of our then eminences grises, Prof Pierre Lalive, in an immaculate white bathrobe, continuing a discussion he had had that afternoon on some aspect of the Guidelines. Someone suggested that the discussion should not become too heated; the fire alarm appeared to be false. Also, many arbitration institutions discussed the matter (I remember Belgium, New Zealand and South Africa doing so). 

Contributions, proposals and suggestions on the drafts were received from such sources but also, frequently and spontaneously, from individuals and bodies all over the world. They did not only concern the drafts as such. There were some other, sometimes very principle questions. There was inter alia a serious doubt with some (leading) lawyers in the UK as to whether the Guidelines as such, or in the way in which they were worked out, would hold under common law. Interestingly, common lawyers in the Working Group did not share those doubts. And it is interesting now to read in the Report that the Guidelines were even more widely accepted in developed common law arbitral seats than in the civil law ones (para 147). But generally, with all the 
questions, suggestions and sometimes critical remarks, there was overall a very positive attitude towards the project. We only had a very small number of reactions that the project was doomed to fail; in my research for this article, I found only one. Better still, our original approach was intended for commercial international arbitration, but the constructive responses that we received from other domains, such as the maritime community and investment arbitration, quickly triggered the conclusion that the Guidelines might as well be applied to all sorts of arbitration (it later turned out that they were used also at the national level). 

Were there never discussions, was there never disagreement within the Working Group? Of course there were and was. On matters of practice and principle, notably: what to place on which list - but also on others, such as the question of whether it should be 'Conflict' of Interest or 'Conflicts' of Interest. But always at a high level, with a constructive approach, a clear will to find a solution and, also, with an agreement in the end; and that, in most cases, never took long. I believe that the longest discussion that we had, right from the beginning to the very end, was as to whether the test for the independence of the arbitrator should be objective or subjective. This was one of the more serious points of discussion also with the ICC. We even changed our mind there at some point in time (I believe after San Francisco; see also the Explanation to General Standard 3). 

There was one other point where we changed our mind at a certain point in time: the naming of the lists. Originally, they were named Black, Grey and White. We then got reactions that this naming was, in certain parts of the world, no longer fashionable. We then changed to Red, Orange and Green ('Amber' was not recognised in certain countries). We also had long debates on the question how to deal with party autonomy: should it not be up to to the parties, ultimately, to decide whether they would/could accept a certain conflict at the arbitrators side? The unanimous answer, in the end, was negative; hence the Non-Waivable Red List. Equally unanimous was the decision that 'disclosure' should not by definition be 'disqualification'. (Having said all this, I can frankly not remember any decision which was not unanimous). 

One of the other discussions that we had was on the question of how binding the Guidelines should be. Many comments received said that, of course, they could never be binding on panels, institutions, let alone be considered as 'rules of law'. I always found these discussions somewhat abstract. As was ultimately said in the Introduction to the Guidelines (para 6), in a paraphrase: as long as the Guidelines are generally accepted and helpful in the decision making process, we (at least I) could not care much as to whether this was due to any (formally) binding character attributed to them or not. I find no indication in the Report that, at any occasion, the Guidelines were found to be contrarious to a national law. References such as to the situation in Switzerland (para 122) rather give the impression that they are considered to be in line with the applicable national law(s). 

In San Francisco, it was decided to ask five of our friends, who had actively participated in the discussions there with some very fundamental questions, to carry out a kind of risk analysis on the basis of the second draft as it then stood (Gerry Aksen, Wolfgang Kuehn, Toby Landau, Fali S Nariman and Michael Schneider). This turned out to be a very useful exercise; and it did not entail any major changes. 

In January 2004, we had scheduled a final meeting, in Zurich. Many members of the Working Group were physically present there, for which I am still very grateful; those who could not be there participated by telephone, including myself - a few days before, I had a conflict with a ski-slope not far from Zurich - the slope won, so I was unable to travel to Zurich and I sat in on the telcon which lasted many hours; six if not seven, in my recollection. It led to the final text to be proposed to the IBA authorities. And that resulted in its adoption, by the IBA Council , on 22 May 2004. 

The excellent working atmosphere and companionship within the Working Group continued after the promulgation of the Guidelines. Somewhere in 2005, Arthur Marriott called me. He had a dispute with Emmanuel Gaillard: he was appointed as arbitrator in one of Arthur's cases, and Arthur believed that there was a conflict with Emmanuel's role as counsel in a similar other case: it was not an explicit situation of one of the Lists, but still. As Emmanuel disagreed, Arthur had decided to take the case to the competent court – which was the District Court at the Hague. Arthur asked me for technical assistance. Slightly taken aback, I suggested that I could call Emmanuel to hear his view. No problem. I then had a long talk with Emmanuel, and had to conclude, in the light of the principles of the Guidelines, that he was wrong, also in my view. He was not convinced. I then mentioned that Arthur was going to the Court, and that he had asked me to assist him. 'No problem', was the answer. The Court upheld the challenge and Emmanuel consequently renounced one of his said positions. It has never impeded our relationship. 

It is somewhat presumptuous, if not worse, to say that we had reached a 'promised land'. But, reading the Report, I believe that, in any event, the chaos with which we were confronted became controlled, if not subdued. 

I look back on the whole exercise with great pleasure and satisfaction and, above all, with extreme gratitude to the great number of dear and able friends on the Working Group and elsewhere who were instrumental in achieving this result.