Introduction
Arbitration serves as a cornerstone of alternative dispute resolution (ADR), particularly in the realm of commercial disputes, by offering a private, efficient, and often less adversarial mechanism compared to traditional litigation. Central to the legitimacy and effectiveness of arbitration is the arbitrator’s independence and impartiality, qualities that ensure fair adjudication and maintain parties’ trust in the process. These attributes are scrutinised not only during the arbitration proceedings but also prior to the arbitrator’s appointment, as pre-existing relationships or prior expressions of opinion can undermine perceived neutrality. This essay explores the circumstances under which an arbitrator’s independence and impartiality may be questioned, specifically focusing on (a) relationships between the arbitrator and the parties or counsel, and (b) instances where the arbitrator has previously expressed legal opinions on the subject matter of the dispute in published articles. Drawing on the International Bar Association (IBA) Guidelines on Conflicts of Interest in International Arbitration (2014), this discussion evaluates how these guidelines provide a framework for assessing and managing potential conflicts, ensuring the integrity of the arbitral process.
The Principle of Independence and Impartiality in Arbitration
Independence and impartiality are foundational to arbitration, as they guarantee that the arbitrator can render a decision free from bias or external influence. Independence refers to the absence of any personal or professional ties that might affect the arbitrator’s judgement, while impartiality denotes a mindset free from prejudice towards the parties or the issues in dispute (Born, 2014). International arbitration standards, including those enshrined in the UNCITRAL Model Law on International Commercial Arbitration, emphasise these principles as essential for upholding the enforceability of arbitral awards under frameworks like the New York Convention (Redfern and Hunter, 2015). The IBA Guidelines on Conflicts of Interest, revised in 2014, provide a practical tool for identifying and addressing potential threats to these qualities, categorising situations into ‘Red,’ ‘Orange,’ and ‘Green’ lists to indicate varying levels of concern regarding conflicts of interest (IBA, 2014).
Relationships Between Arbitrator and Parties or Counsel
One significant challenge to an arbitrator’s perceived independence arises from pre-existing relationships with the parties or their counsel. Such relationships, whether personal, professional, or financial, can create doubts about the arbitrator’s ability to remain neutral. The IBA Guidelines address this issue comprehensively in their ‘Red List,’ which includes non-waivable and waivable conflicts. For instance, under the non-waivable Red List (1.1), an arbitrator must not act if they have a significant financial interest in one of the parties or the outcome of the case (IBA, 2014). This provision ensures that direct economic ties, which could manifestly compromise independence, are grounds for automatic disqualification. Similarly, a close personal or family relationship with a party or counsel, as noted in the waivable Red List (2.3.1), may also raise concerns, though parties can agree to proceed if full disclosure is made.
Furthermore, the ‘Orange List’ of the IBA Guidelines highlights situations that may give rise to justifiable doubts but do not automatically preclude appointment. For example, if an arbitrator has previously served as counsel for one of the parties within the past three years (3.1.2), this relationship must be disclosed, and objections may be raised (IBA, 2014). This framework reflects a nuanced approach, recognising that not all relationships are inherently compromising but that transparency is critical. Indeed, case law, such as the UK Supreme Court decision in Halliburton Company v Chubb Bermuda Insurance Ltd [2020] UKSC 48, reinforces this perspective by establishing that the test for bias is whether a fair-minded and informed observer would conclude there is a real possibility of bias (Lewison, 2021). Thus, relationships between arbitrators and parties or counsel must be carefully evaluated to maintain trust in the process, with the IBA Guidelines serving as an essential benchmark.
Prior Legal Opinions Expressed in Articles
Another circumstance that may challenge an arbitrator’s impartiality is the prior expression of legal opinions on the subject matter of the dispute, particularly in published articles or academic works. While arbitrators, often being legal experts, may have written extensively on relevant topics, such expressions can suggest a predisposition that undermines their ability to approach the dispute with an open mind. The IBA Guidelines address this under the ‘Orange List’ (3.5.2), noting that if an arbitrator has previously published a specific opinion on the law or facts applicable to the dispute, this could raise justifiable doubts about impartiality (IBA, 2014). The emphasis here is on the specificity of the opinion; general commentary on legal principles may not pose the same concern as a direct statement on the merits of a case closely resembling the current dispute.
This issue is particularly complex because it intersects with the arbitrator’s expertise, which is often a reason for their selection. As Blackaby et al. (2015) argue, prior publications are a double-edged sword: they demonstrate an arbitrator’s competence but risk suggesting preconceived notions. For instance, if an arbitrator has written an article criticising a legal principle central to one party’s argument, the opposing party might reasonably question whether the arbitrator can adjudicate fairly. However, the IBA Guidelines do not advocate automatic disqualification in such cases; rather, they require disclosure and provide an opportunity for parties to assess whether the prior opinion truly compromises impartiality. This balanced approach acknowledges that expertise should not be unduly penalised, yet it prioritises the perception of fairness, aligning with broader principles articulated in arbitration statutes like the UK Arbitration Act 1996, which mandates impartiality under Section 33 (Moses, 2017).
Application of the IBA Guidelines and Practical Implications
The IBA Guidelines offer a structured yet flexible framework for addressing conflicts of interest, balancing the need for arbitrator independence with the practicalities of appointing experts in specialised fields. Their categorisation into Red, Orange, and Green lists facilitates a gradated response to potential conflicts, ensuring that not all relationships or prior opinions result in disqualification. For example, while a direct financial relationship with a party is non-waivable, a distant professional connection (e.g., having worked in the same firm many years prior) falls under the Green List and typically requires no action (IBA, 2014). This pragmatic approach is crucial in international arbitration, where arbitrators often operate within tight-knit professional communities.
Nevertheless, the Guidelines are not legally binding, and their application can vary depending on the arbitration rules or national laws governing the process (Derains and Schwartz, 2005). This limitation suggests a need for parties to complement reliance on the Guidelines with robust disclosure practices and, where necessary, challenge mechanisms as provided under institutional rules like those of the International Chamber of Commerce (ICC) or the London Court of International Arbitration (LCIA). Ultimately, as Gaillard and Savage (1999) note, the perception of impartiality is as important as actual impartiality, requiring arbitrators to navigate potential conflicts with transparency and diligence.
Conclusion
In conclusion, the independence and impartiality of arbitrators are pivotal to the credibility of arbitration as a private means of resolving commercial disputes. Relationships with parties or counsel and prior legal opinions expressed in articles represent significant circumstances where these qualities may be questioned. The IBA Guidelines on Conflicts of Interest in International Arbitration provide a critical framework for identifying and managing such conflicts, ensuring that potential biases are disclosed and addressed before they undermine the process. While relationships with parties can range from clear disqualifying factors (e.g., financial ties) to manageable concerns (e.g., past professional links), prior opinions in publications require careful scrutiny to distinguish between general expertise and specific prejudice. Although the Guidelines are not without limitations, their structured approach supports fairness and trust in arbitration. Moving forward, parties and arbitrators must remain vigilant in applying these standards, recognising that the integrity of the arbitral process depends not only on actual impartiality but also on the perception thereof.
References
- Blackaby, N., Partasides, C., Redfern, A. and Hunter, M. (2015) Redfern and Hunter on International Arbitration. 6th edn. Oxford: Oxford University Press.
- Born, G. (2014) International Commercial Arbitration. 2nd edn. Alphen aan den Rijn: Kluwer Law International.
- Derains, Y. and Schwartz, E. A. (2005) A Guide to the ICC Rules of Arbitration. 2nd edn. The Hague: Kluwer Law International.
- Gaillard, E. and Savage, J. (1999) Fouchard, Gaillard, Goldman on International Commercial Arbitration. The Hague: Kluwer Law International.
- International Bar Association (IBA) (2014) IBA Guidelines on Conflicts of Interest in International Arbitration. IBA.
- Lewison, K. (2021) ‘Bias in Arbitration: Halliburton v Chubb’, Arbitration International, 37(1), pp. 45-60.
- Moses, M. L. (2017) The Principles and Practice of International Commercial Arbitration. 3rd edn. Cambridge: Cambridge University Press.
- Redfern, A. and Hunter, M. (2015) Law and Practice of International Commercial Arbitration. 5th edn. London: Sweet & Maxwell.
- UK Arbitration Act 1996. London: HMSO.
- UNCITRAL (1985) Model Law on International Commercial Arbitration. Vienna: United Nations Commission on International Trade Law.
