commentary on their application, at least under English law.
ICC Update: Disclosures and Third Party Funding
In February this year, the ICC issued new guidance on conflict disclosures by arbitrators, which has been incorporated into its broader note to arbitrators and parties. The ICC guidelines now place a considerable burden on any arbitrator being appointed in a case under the ICC arbitration rules to disclose: “Any circumstance that might be of such a nature as to call into question his or her independence in the eyes of any of the parties or give rise to reasonable doubts as to his or her impartiality.”
The ICC guidelines also require all arbitrators to complete and sign a statement of acceptance, availability, impartiality and independence in a bid to ensure those qualities of arbitrators in ICC cases. The ICC guidelines list a host of circumstances that must be considered (but not necessarily disclosed), including whether the arbitrator or their law firm represents or advises one of the parties or one of its affiliates. This is similar to the requirement in the IBA guidelines at the heart of W Limited v M SDN BHD.
However, in the ICC guidelines, this is a circumstance for an arbitrator to consider upon deciding whether to make a disclosure; it is not a non-waiverable disclosure as it is in the IBA guidelines. Interestingly, the ICC guidelines state that such a disclosure does not imply, in and of itself, the existence of a conflict, which is similar to the view expressed by Knowles J in W Limited v M SDN BHD. Conversely, the ICC guidelines also state that whilst a failure to disclose is not automatically a ground for disqualification, that failure will be considered when assessing whether there are grounds to refuse an appointment. In the spirit of increasing transparency in the arbitration process even further, the ICC guidelines also attempt to introduce wider business/funding relationships into conflicts considerations. The ICC guidelines state that an arbitrator should consider whether they or their firm has any business relationship with one of the parties or an affiliate, or has a personal interest in the outcome of the dispute. Further, the ICC guidelines state that an arbitrator should consider whether they or their firm have a “relationship with any entity having a direct economic interest in the dispute or an obligation to indemnify a party for the award.” Whilst this approach is already adopted by the IBA guidelines, its incorporation – word-for-word – in the ICC guidelines is a helpful addition, given the growth of third party funding arrangements.
The ICC guidelines are helpful, clarifying and progressive. The transparent approach to conflict disclosures they foster will hopefully create a more open culture in conflict disclosure conversations. Further, the update in respect of third party funding and other business relationships reflects changes to the industry and as such is welcome. However, the impact these changes will have is obviously limited to the ICC universe and it remains to be seen whether other arbitral institutions will follow suit.
Impact on the Legal Landscape?
Whilst you could be forgiven for thinking that the cumulative impact of the two recent High Court decisions, including judicial criticism of the IBA guidelines, and the new ICC guidelines could be a development of the law surrounding arbitration bias, the bottom line is that it has not changed the status quo; this is a case of plus ca change, plus c’est la meme chose.
The two High Court cases affirm the primacy, as far as English law is concerned, of the common law and the fair observer test when deciding upon apparent bias applications. The court’s refusal to follow the IBA guidelines, whilst worthy of note, should not be overstated. Whilst heavily influential, the IBA guidelines are only non-binding guidelines and, as such, the court was not bound by them. Further, the