The Party Representation Guidelines’ tenth anniversary

Alexis Mourre
Former Co-Chair, IBA Arbitration Committee; Guidelines Task Force; MGC Arbitration, Paris
amourre@mgc-arbitration.com

Ten years ago, the IBA Council unanimously adopted the IBA Guidelines on Party Representation in International Arbitration (the ‘Guidelines’).^[1] The IBA Council includes delegates from more than 100 bar organisations from all continents and is widely representative of the global legal profession. The Guidelines were prepared, as is usual for the IBA work products, by a task force composed by eminent arbitration practitioners representing different legal cultures, and was submitted to a wide public consultation, both within the 22 members of the IBA Arbitration Committee and the arbitration community at large.

Yet, the Guidelines were at the time of their adoption harshly criticised within parts of the arbitration community. The Swiss Arbitration Association (ASA) took the unprecedented initiative of launching a campaign to encourage practitioners not to use them, and the suggestion was made that the Guidelines adoption process had not been sufficiently open.^[2] The ASA subsequently changed course and proposed, as an alternative to the Guidelines, the creation of an international arbitration ethics council, whose role would have been to decide on matters of counsel conduct.^[3] That was at least an acknowledgement of the existence of the problem. But the initiative did not work, simply because disciplining counsel in arbitration proceedings is and should remain a prerogative of arbitral tribunals, exactly in the same way as counsel should be accountable for its behaviour before any judge. The ethics council project quietly died. So did the ASA campaign against the Guidelines. Now, ten years after their adoption, the time has perhaps come for a less passionate and more rational reflection on professional ethics in international arbitration.

In addressing whether regulation of counsel conduct in arbitration is desirable, three considerations deserve to be made.

The first is one of legitimacy. In court, acting lawyers are normally registered before the same local bar and will abide by the same ethical professional rules; as such, they will acknowledge the judge’s intrinsic authority to discipline ethical breaches; judges act as part of the state judiciary and, therefore, have greater power to discipline counsel without having to worry – as arbitrators do – about possible challenges against their decisions based on alleged breaches of due process. The authority of international arbitrators, to the contrary, only rests on the parties’ consent. Arbitrators have no forum, the rules of which they could enforce on counsel, and they constantly find themselves under the threat of challenges for alleged breaches of the parties’ right to be heard. Yet, there is no question that international arbitration today functions as a true international system of justice,^[4] and it fulfils an important regulatory role in international commerce as much as in relationships between investors and states.^[5] Can such an international system of justice function properly without rules of ethics of its own? International arbitration, it is submitted, cannot be a legitimate international system of justice without global rules enforcing meaningful principles of good faith and candour in the representation of parties before tribunals.

The second important consideration is the necessity to establish a level playing field between parties represented by counsel from different jurisdictions and, therefore, subject to different professional ethical rules. Questions such as the extent to which counsel can interview witnesses in advance of the hearing may be regulated in divergent ways in different jurisdictions. It is important, therefore, that clarity be established as to what can and cannot be done by counsel, so that both parties can abide by common rules. After all, the entire history of international arbitration is that of a progressive convergence of procedural rules, which has allowed the progressive establishment of a truly transnational body of procedural rules. That history would be incomplete without a set of rules dealing with the representation of parties before arbitral tribunals.

The third and final consideration is that the absence of common rules increases the complexity of arbitral proceedings in at least two important respects. First, counsel representing different parties may not abide by the same principles and may, therefore, make arguments on questions of ethics based on different national rules. Second, allegations of breach of ethical rules may be brought before professional bars, or even courts, thereby creating conflicts of jurisdiction which may disrupt the arbitral procedure. It is important, therefore, not only that common rules be established, but also that the arbitral tribunal’s power to sanction breaches of these rules so as to protect the integrity of the arbitration be clearly affirmed.

Ten years after the adoption of the Guidelines, it is still difficult to understand the reasons why they provoked so much opposition in the first place. Three main arguments have been put forward, but none of them stands scrutiny.

The first is that by addressing issues of counsel conduct, arbitral tribunals would be overstepping their role and impinging on the prerogatives of professional bars. However, none of the bar organisations within the IBA Council that adopted the Guidelines raised any such concern. In addition, the argument ignores that the Guidelines are strictly limited to matters pertaining to the conduct of the arbitration. Many ethical matters that are entirely unrelated to the conduct of the arbitration, such as questions relating to counsel’s remuneration, are not addressed in the Guidelines and left, therefore, to the competent bar organisations.

The second argument that has often been raised against the idea promoted by the Guidelines that counsel should be guided by a duty to arbitrate in good faith is that counsel’s overriding duty is towards its client rather than the arbitral tribunal. Counsel’s duty would be to assist its client by putting forward all possible arguments in its favour, not to assist the arbitral tribunal.^[6] However, the fact that counsel has the duty to represent its client to the best of its ability cannot mean that anything should go. No professional bar admits that a lawyer can misrepresent a judge, knowingly rely on false evidence, or induce its client to conceal evidence that is ordered produced by the judge. In establishing rules such as Guidelines 9, 10 and 11, Guideline 12 on the need to advise the client of its duty to preserve potentially relevant evidence, or Guideline 23 on the need to encourage witnesses not to give false evidence, the Guidelines do not subvert any sacrosanct right of defence. They instead provide for healthy rules aimed at organising the way in which legal assistance should be provided before arbitral tribunals. Beyond that, the Guidelines contribute to advancing an idea which is in the author’s view fundamental to establish the legitimacy of international arbitration: because arbitration is a creature of consent and is aimed at avoiding the confrontational approach prevailing in court litigation, there should be a duty to arbitrate in good faith and hence for each party to assist the arbitral tribunal in the resolution of the dispute.^[7] That approach, if admitted, calls for a balancing exercise: counsel’s duties towards its clients are not limitless and find their boundaries in its duties towards the arbitral tribunal and the parties’ common interest if favouring a fair and efficient system of dispute resolution.

Finally, the suggestion has been made^[8] that the rules on information exchange and disclosure would import into arbitration a principle of ‘judicial hold’ by providing in Guideline 12 that when the arbitral proceedings involve or are likely to involve document production, a party representative should inform the client of the need to preserve, so far as reasonably possible, documents that would otherwise be deleted and which are potentially relevant to the arbitration. However, it is difficult to understand what interest would be served by the contrary rule, according to which a party would be at liberty to destroy, as soon as an arbitration starts, whatever document may be contrary to its interests. The shredding machine cannot serve the broader interest of the arbitration’s legitimacy.

We now see more and more references to the Guidelines in terms of reference or in terms of appointment, inviting or mandating the parties to draw inspiration from the same. It is also more customary to see procedural orders based on the Guidelines, or simply referring to the Guidelines in support of the Tribunal’s decision. Institutions have also adopted them, such as the ICC,^[9] the Australian Centre for International Commercial Arbitration (ACICA)^[10] or the Lagos Chamber of Commerce International Arbitration Centre (LACIAC),^[11] while others, such as the London Court of International Arbitration (LCIA), have adopted rules of their own regulating counsel conduct and establishing their duty to represent their clients in good faith.^[12]

Although the Guidelines have not yet gained the general acceptance of the Rules of evidence or the Guidelines on conflicts of interests, I have no doubt that they will continue gaining acceptance because they are a fundamental part of the global legal framework of arbitration and because there is no viable alternative to a soft law instrument^[13] to establish transnational rules for the representation of parties in international arbitration.