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Part II Staking Out Theoretical Boundaries and Building the Regime, 6 Chanticleer, the Fox, and Self-Regulation

From: Ethics in International Arbitration

Catherine A. Rogers

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved. Subscriber: null; date: 06 June 2023

(p. 220) (p. 221) Chanticleer, the Fox, and Self-Regulation

Thou shalt namoore, thurgh thy flaterye,

Do me to synge and wynke with myn ye;

For he that wynketh, whan he sholde see,

Al wilfully, God lat him nevere thee!

Chanticleer the Rooster in Chaucer’s Nun’s Priest’s Tale*

Les hommes ont oublié cette vérité, dit le renard.

Mais tu ne dois pas l’oublier.

Tu deviens responsable pour toujours de ce que tu as apprivoisé.

Antoine de Saint-Exupéry, Le Petit Prince**

6.01  ‘Regulation’ and ‘self-regulation’ are ‘normatively loaded term[s]’.1 The word ‘regulation’ is more likely to send shivers down the spine than to inspire confidence. The main reason is that regulation is usually conceived of as a top-down, command-and-control operation; it is the imposition of coercive state power through rules generated by pointy-headed state bureaucrats. The word ‘regulation’ brings to mind enormous tomes of convoluted fine print and picayune restrictions.2 It is a synonym for unnecessary red tape.3

(p. 222) 6.02  ‘Self-regulation’, meanwhile, is often derided as ‘self-serving, self-interested, lacking in sanctions, beset with free rider problems, and simply a sham’.4 It is an indicator ‘that the government is not serious about an issue’.5 It prompts the age-old question: Should foxes ever be left to guard the henhouse?6

6.03  As debates about ethical regulation have bubbled up in international arbitration, some commentators have issued a health warning of sorts against what has been called ‘Legislatis’, meaning the urge to legislate and use more rules to solve problems.7 Other commentators have questioned more specifically whether it would be appropriate for international arbitration to ‘usurp’ from national authorities the inherently public function of regulating professionals.8 These critics argue that professional regulation is bound up with national public policy and inextricably intertwined with national cultural preferences.9 Still others protest that ethical regulation in international arbitration would be unnecessary meddling in a system that is doing just fine without it, thank you very much.10

6.04  This chapter seeks not only to answer these critiques, but to reframe the regulatory debate in international arbitration, including how foxes and henhouses feature in that debate.The primary thesis of this book is that international arbitration must undertake express self-regulation of those who participate in its processes. The need for ethical regulation, particularly with regard to attorneys, has been the subject of heated debate, played out most recently in a series of publications and events.11 To move this debate forward, it is necessary to debunk (p. 223) some of the underlying myths that animate it, to replace these mistaken assumptions with more robust and meaningful definitions of the term ‘regulation’, and to examine existing forms of self-regulation in international arbitration.

6.05  Building on the admonition of de Saint-Exupéry’s wise fox, this chapter urges international arbitration to be responsible for those professionals it has ‘tamed’ in its processes. Drawing contrast with Chanticleer’s narrow escape,12 it argues that responsible regulation in international arbitration can no longer be resisted by self-satisfied, closed-eyed crowing that regulation is not needed. The first Part of this book established that all professionals are in need of greater guidance and accountability in international arbitration. This chapter demonstrates that professional self-regulation would not be a radical innovation. It is, instead, an inevitable evolutionary development. It is similar to prevailing trends toward global self-governance in other transnational activities and emerges out of existing predicates in international arbitration practice itself.

6.06  This chapter begins in Section A by defining the terms ‘regulation’ and ‘self-regulation’, both as general concepts and as they apply to professional conduct. The remainder of the chapter builds on these definitions. It argues that internal mechanisms and procedures maximize the competence of a regulatory regime like international arbitration. Meanwhile, competing interests within international arbitration, as well as national bulwarks, prevent self-regulation from devolving into a race to the bottom.

6.07  After establishing the definition and parameters of self-regulation in Section A, Section B argues that international arbitration is already engaged in the self-regulation of international arbitrators. Specifically, the ethical standards for arbitrators developed by members of the international arbitral community are more precise, effective, and professionally relevant than those developed by national legislatures and courts.13 Arbitral institutions directly oversee the selection, appointment, and challenge processes under their rules. In performing these functions, arbitral institutions act as primary regulators, both in developing applicable standards and enforcing them. National courts remain available as a final bulwark. In some systems where permitted under national law, they rule directly on arbitrator challenges; in other systems, they review awards allegedly affected by arbitrator misconduct in annulment or enforcement proceedings. National courts, however, conduct this review in only a small fraction of international arbitrations. Their conclusions differ from arbitral institutions’ decisions on arbitrator challenges in a smaller fraction of that already small fraction. In other words, both by design and in practice, national courts provide a minimalistic backstop to self-regulation rather than serving a primary regulatory function.

6.08  There is clearly room for improvement in regulation of international arbitrators, including increased transparency and accountability in the selection process. These topics are taken up (p. 224) later in Chapters 8 and 9. The basic framework for arbitrator regulation, however, has proven to be more effective and reliable than might otherwise be imagined or implemented through any external or national regulatory processes.

6.09  Based on the general outlines of international arbitrator regulation, Section C proposes a model for attorney regulation that implements the essential structural features that have made arbitrator regulation successful. Specifically, these proposals are for the promulgation and enforcement of ethical obligations at an international level and by private entities within international arbital processes. These proposals mean that national bar authorities and courts would not funcition as primary regulators, but instead as essential, albeit limited secondary regulators.

A. Defining self-regulation

6.10  A growing number of commentators have been calling for development of express regulation of counsel in international arbitration.14 These proposals, however, have also been met with knitted-brow disdain. Noted arbitration professionals publicly lament that ‘more’ professional regulation in international arbitration might ‘cure the disease but kill the patient’.15 The admonition to all is that, if international arbitration were to attempt self-regulation, it would run the risk of ‘regulating [itself] out of existence’.16

6.11  These articulated concerns, it will be shown, are predicated on outdated and ultimately misleading assumptions about what is meant by ‘regulation’, ‘regulators’, and ‘self-regulation’. This Part unpacks the meaning of these terms and locates them in modern debates among political scientists and policy analysts about the nature of transnational and global governance.(p. 225)

1. The meaning of ‘regulation’

6.12  Resistance in the international arbitration community to proposals for express ethical regulation or even self-regulation was predictable, if not inevitable. When ‘regulation’ is translated to mean traditional, heavy-handed bureaucratic controls, the term itself is a welcome mat for opposition. By now, however, this view of regulation, and the notion that States have a monopoly on the production of regulation, are understood in academic literature as over-simplified relics.

6.13  At a descriptive level, scholars from fields as disparate as political science, economics, legal pluralism, sociology, psychology, and others, have demonstrated the ‘obvious’ fact that ‘the state does not…exercise a monopoly in regulating the lives of citizens’.17 Even within the confines of a single State, a host of forces impose order on society and ‘regulate’ its members.18

6.14  These insights have created pressure for a new, more modern definition of ‘regulation’, even if efforts have not yet distilled into consensus. As Christine Parker explains:

Definitions of regulation range from ‘a type of legal instrument’, to any area of law that aims at social control, to any intentional ‘process of controlling behavior with reference to some standard or purpose’, to ‘an outcome of an interaction of forces and actors’, to and even ‘a property of self-correction’. ‘Regulators’ can be state institutions, non-state actors, social and economic forces (e.g., markets, norms, or even language), or physical or virtual technologies.19

Without parsing the nuanced reasons for variances among competing definitions, it is useful to adopt a general definition for the purposes of this chapter. Julia Black defines regulation as:

[T]he sustained and focused attempt to alter the behaviour of others according to defined standards or purposes with the intention of producing a broadly identified outcome or outcomes, which may involve mechanisms of standard-setting, information-gathering and behaviour modification.20

This definition refocuses the definition of regulation on the objectives (controlling behaviour) and the functions required to accomplish that (setting substantive standards and enforcement).

(p. 226) 6.15  The redefinition of regulation has, in turn, ushered in a range of theories and proposals about how and when regulation is most effective, and which mechanisms are optimal to accomplish desired ends.21 The result is a vigorous debate about which strategy, or combination of strategies, is optimal for ensuring compliance with regulatory objectives.22

6.16  With respect to international and cross-border activities, the obsolescence of traditional notions of regulation is even more apparent. As corporate enterprises have become multinational and supply chains have gone global, individual States have become largely incapable of imposing conventional domestic ‘regulation’ on transnational activities.23 This regulatory impotence has been demonstrated in areas as diverse as the environment, health and safety, workers’ rights, human rights, financial reporting standards, and the like.24

6.17  At the transnational level, regulation through conventional forms—treaties and intergovernmental organizations—has also proven to be ineffectual.25 As Stacie Strong explains, ‘Formal regulatory bodies…find it difficult to respond rapidly to threats of international legal harm, even though the pace and integrated nature of modern globalized society means that developments in one jurisdiction can have a nearly instantaneous effect elsewhere in the world’.26 Just as State-centric views of domestic regulation have broken down, scholarship regarding global regulation reveals ‘what is really going on’ at the transnational level in the absence of effective traditional State regulation.27 These assessments are called variously, and with significant overlap, ‘New Governance’,28 ‘transnational norm theory’,29 ‘global (p. 227) governance’,30 ‘global legal pluralism’,31 ‘new regulatory initiatives’,32 ‘“hard” and “soft” law in international governance’,33 and ‘global law without a state’.34

6.18  What these various theories and models all have in common is that they identify a declining role of formal, centralized state action in conjunction with a rise, and even primary role, for private actors and networks in implementing what are largely voluntary new regulatory regimes.35 The reasons for this ‘privatization and internationalization of governance’ is that ‘governments lack [the] requisite technical expertise, financial resources, or flexibility to deal expeditiously with ever more complex and urgent regulatory tasks’.36 The observed, measurable result is that, in global contexts, regulatory solutions to global governance problems tend to involve more market-oriented, participatory, decentralized, and self-regulatory strategies.

6.19  These strategies complement, and sometimes even displace, traditional State-based regulation. By internalizing monitoring and enforcement, and delegating it to insiders within the institutions being regulated, self-regulation can rely on specialized knowledge, technical capacity, proximity, and social capacity that government regulators lack.37 These strategies can increase coverage and effectiveness. For example, in one study of the pharmaceutical industry, internal corporate inspectors were better able to detect problems, audit compliance, and trap suspected wrongdoers than government officials.38 Another example of largely successful self-regulation is the City Code on Takeovers and Mergers, a body of rules written and administered by the Panel on Takeovers and Mergers that is staffed by personnel on secondment (professional exchange) from the professional community it regulates.39

6.20  While the shift toward private, self-regulatory regimes in global contexts is essential, and perhaps even inevitable, it also raises important questions and concerns.40 How and under what conditions can self-regulation be effective, reliable, and legitimate? When and how, in other words, can foxes be responsible guards of the henhouse? The importance of these questions is perhaps most acutely demonstrated by the failures of self-regulation in the global financial (p. 228) industry, illustrated most vividly by the LIBOR scandal described in the introduction to this volume. These questions must be answered by any regime that seeks to self-regulate.

6.21  Here again, governance scholars have developed a range of proposed theories and strategies for how to fill this governance gap to make self-regulation effective and legitimate. Two important contributions provide a basis for the model of professional self-regulation, developed later in this chapter. The first is John Braithwaite’s concept of ‘enforced self-regulation’.41 The second is Julia Black’s prescriptions for ensuring the legitimacy of private regulators.42

6.22  Braithwaite identifies the fundamental weaknesses of self-regulation—that when enforcement would impose costs on those deputized to act as regulators, their incentives to regulate break down and the potential effectiveness of self-regulation also breaks down.43 To address this problem, Braithwaite proposes a model for optimizing compliance with regulatory objectives that does not simply abandon any role for traditional State power. Instead, it emphasizes a combination of self-regulation backed up by public enforcement that is sufficiently punitive to ensure both the efficacy of the self-regulatory model and internal compliance with it.44

6.23  In this model, private embedded actors are primary regulators, but government entities monitor various stages of self-regulation, ensure compliance with minimum governmentally enacted standards, and provide back-up legal enforcement when primary enforcement breaks down.45 Braithwaite provides examples of where his enforced self-regulation model is already in place, including areas as diverse as aviation, food safety, mining, and environmental protection.46

6.24  Even if his model is designed to avoid self-regulation’s most significant weakness, Braithwaite nevertheless also acknowledges potential problems with his model. He identifies the potential for bottlenecking in approving privately-written regulations, increased corporate costs, moral ambiguity in private drafting of regulations, judicial inflexibility in accommodating private rules, and the inability for corporate internal compliance monitoring groups to remain completely independent.47

6.25  Another essential weakness with self-regulation, explored by Black, is that private entities can control the conduct only if their exercise of power is regarded as legitimate, meaning that (p. 229) they are perceived as acceptable and credible by those they seek to govern.48 State regulatory machinery is imbued with an inherent legitimacy that derives from its sovereign, governmental status. For a fragmented, decentralized, and largely private regulatory regime that operates in the shadow of State power, those who promulgate and enforce regulations must find other means to affirm their legitimacy.

6.26  An organization or institution is considered legitimate if it establishes a ‘generalized perception or assumption that [its actions and objectives] are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions’.49 In regulatory contexts, Black explains, legitimacy essentially means being ‘perceived as having a right to govern both by those [the organization or entity] seeks to govern and those on whose behalf it purports to govern’.50 In this respect, the question of when a regulator is legitimate is not only a normative enquiry, but also an empirical enquiry.51 With ethical regulation in international arbitration, Jan Paulsson has made a similar observation about the limits of ‘self-policing’. He notes that ‘its success waxes and wanes in light of the perceptions of its bona fides’.52

6.27  As Black explains, legitimacy can be established through a range of techniques. An institution can claim legitimacy based on invocation of larger regulatory goals and values, or based on its conformity with written norms and concepts of procedural justice, fairness, transparency, consistency, and the like, which Black refers to as ‘justice-based claims’ and ‘constitutionalist-based claims’.53 Claims of legitimacy can also be based on what Black refers to as ‘functional claims’ about an organization or institution’s effectiveness in performing assigned regulatory tasks, as well as ‘democratic claims’ through reliance on processes that are representative, participatory, and deliberative.54

6.28  As discussed in greater detail later,55 international arbitration’s existing legal framework already largely tracks the essential features of Braithwaite’s and Black’s prescriptions. International arbitration is, as Braithwaite proposes, a largely private regime backed up by government enforcement that is highly punitive, but triggered only when self-regulation breaks down. Moreover, both as a community and among its constituent parts, international arbitration self-consciously builds and guards its legitimacy through many of the means and techniques that Black analyses.

6.29  The principal thesis of this book—that international arbitration should engage in express self-regulation of its participants’ professional conduct—would map ethical regulation onto these existing features of international arbitration. The call to self-regulation, in other words, is for international arbitration to acknowledge and leverage existing self-regulatory (p. 230) structures, extending these structures and institutions to professional regulation of various participants.

6.30  As explained in greater detail later,56 this process of express self-regulation is already well developed with respect to arbitrators. An analogous regime is developing with respect to counsel, but it must be more expressly undertaken, also with respect to experts and third-party funders. Before turning to international arbitration and application of this reconceptualization of self-regulation to its participants, it is important to examine first the distinct, but related conceptualization of self-regulation traditionally applied to the professions.

2. Self-regulation and professionalism

6.31  When it comes to the professions, the terms ‘regulation’ and ‘self-regulation’ have their own separate baggage that is related to, but distinct from, regulation in other contexts. The term ‘self-regulation’ as applied to attorneys has traditionally been the essence of what it means to claim status as a professional.57 It is conventionally conceived of as the means of guaranteeing professional independence from political and State control. Today, this definition and the ideals it embodies are deeply contested.

6.32  Just as with self-regulation of other economic actors, sceptics of attorney self-regulation worry about the incentives of those entrusted with their own regulation. Critics contend that professional self-regulation is a sham through which lawyers maintain an unhealthy monopoly on the provision of legal services.58 Under this view, self-regulation is what allows the legal profession to ‘stave off state regulation’ and to ‘support the status hierarchy in the profession’ by defining as unethical conduct that in which mostly non-elite lawyers engage.59

6.33  In a distinct but related vein, attorney self-regulation is also challenged as a myth because, as a practical matter, attorneys do not actually control attorney regulation. In many countries, attorneys are expressly and heavily regulated by the political branches of government.60 In the United States, England, and many European countries, the ideal of self-regulation is often insisted on rhetorically, and sometimes trotted out to resist external regulation. For example, the International Monetary Fund had pressured Greece, Ireland, (p. 231) and Portugal to subject their lawyers to regulation established by a regulatory body comprised mostly of non-lawyers, which would have handled discipline and complaints. In opposition, US and European bar authorities relied on notions of professional independence and self-regulation.61 Specifically they argued that an external regulator would be:

…in clear breach of one of the core principles of the legal profession: regulation independent from the executive branch of the state—a principle recognized in Europe, the United States, and internationally. It is the cornerstone of any democratic society based on the rule of law and also necessary for the sound administration of justice.62

Despite persistent rhetoric of professional independence, and the related notion of self-regulation, as a practical matter attorneys in Europe and the United States do not solely control the mechanisms for their own regulation.

6.34  In the United States and much of Europe, courts are actively engaged in the regulation of attorneys. Some scholars contend that judicial involvement signals that self-regulation is illusory.63 Others argue that judicial supervision is consistent with a version of self-regulation,64 or a means of ensuring the most important aspect of self-regulation, namely independence from the political branches.65

6.35  Despite these objections about the role of courts, the greater challenge to the ideal of self-regulation, even in the United States and Europe, is the virtual explosion of auxiliary regulation aimed directly at attorneys engaged in specific industries and practices.66 These regulations include national legislation, administrative regulations, judicially created rules (including liability rules), and international trade agreements.

6.36  These various ancillary regulations aim at controlling activities such as money laundering, corruption, terrorism, tax evasion, and international trade in legal services, but they de facto affect traditional notions of self-regulation by licensing and disciplinary authorities.67 For (p. 232) international arbitration, as examined in Chapter 1, two countervailing transnational regulatory interests affect national bar authorities’ power. First, international trade pressures have forced national bar authorities to open local markets to foreign attorneys, usually on the condition that they register with local bar authorities.68 Despite this development, in response to pressure to attract international arbitration business, most local bar authorities expressly exempt foreign lawyers appearing in international arbitration from such registration requirements or any other obligation to abide by local ethics rules.69

6.37  This account of attorney regulation focuses on historic, formalistic definitions of ‘regulation’ as the conventional imposition of power by entities officially authorized to regulate attorneys. But what about the new theories of regulation in other spheres examined in the first part of this chapter? Is there a corollary to attorney regulation?

6.38  Just as the term ‘regulation’ in commercial and social contexts is now understood to refer more generally to intentional mechanisms for controlling behaviour,70 a more accurate account of attorney regulation is now expanded to include the various forces that actually control attorney behaviour. At the same time notions of command-and-control regulation were being debunked in other fields, the prevailing model of traditional attorney regulation is also on the wane. Scholars of the professions long ago noted ‘a steadily shrinking percentage of the rules and regulations governing the various aspects of legal practice’,71 hence a declining role of formal disciplinary mechanisms. To the extent that traditional attorney regulation was a form of ‘self-regulation’, this trend is not moving toward privitization. It is parallel, however, in its transition to a more flexible and utilitarian approach to how regulation acutally works.

6.39  In his seminal article about ethical regulation in the United States, David Wilkins synthesized these trends, distilling them down to four categories of sources that regulate attorney conduct:

  • • Disciplinary Controls, meaning traditional mechanisms imposed by local bar authorities working in conjunction with the judiciary;

  • • Liability Controls, meaning malpractice claims;

  • • Institutional Controls, meaning mechanisms that exist within the institutions attorneys operate (i.e., judicial or administrative sanctions); and

  • • Legislative Controls, meaning statutory obligations imposed on lawyers by political branches that supplement, but are separate from, their bar-imposed ethical obligations.72

Wilkins’ reconceptualization of attorney regulation parallels new governance theories that challenge traditional streamlined command-and-control models for regulation of other economic activities. Like other theories of regulation of commercial activities, Wilkins’ work demonstrates that attorney regulation is more complex, fragmented, diffuse, and multi-faceted than the simple story about traditional forms of attorney regulation at the national level.

(p. 233) 6.40  Just as new definitions of regulation have led to debates about which regulatory regimes work best in other fields, new understandings about attorney regulation similarly permit and require normative reconsideration of how attorneys should be regulated. What had previously been conceived of as ‘formally universal professional norms’ are given new meaning ‘as new and differently situated decision makers apply these rules to concrete cases in differing contexts’.73 Based on this fragmented reality, Wilkins argues that professional norms developed for specialized practice settings will be most effective if enforcement is contextualized, meaning if they are interpreted and applied by the institutions that are most competent and have the greatest incentives to perform the necessary regulatory functions.74

6.41  For domestic attorneys operating as advocates in national courts, this prescription suggests that national court judges should act as primary regulators.75 As Wilkins explains, ‘[b]y making the enforcement process a part of an ongoing system of interactions between these knowledgeable actors and the offending lawyer, institutional controls increase the incentive for these parties to participate in the regulatory process’.76 Institutional controls also ensure informational advantages through situational monitoring and specialized institutional competence that external controls lack.77 The efficiencies of situational monitoring allow tribunals to shape enforcement within the context of adversarial incentives.78

6.42  While emphasizing what Black would call functional claims, Wilkins is also arguing that attorney regulation should do more than efficiently enforce a static set of professional norms. Attorney regulation should also help inform an ongoing discussion about competing conceptions of the lawyer’s role.79 Such assessments should be ‘open and accessible to ensure that information about the conduct in question and the standards being applied can be reviewed, critiqued, refined, and internalized’.80 Wilkins effectively argues that attorney regulators focus on functional claims, but also employ what Black characterizes as ‘value-based’, ‘constitutionalist-based’, and ‘democratically-based’ claims of legitimacy.81

6.43  The lesson of this analysis for international arbitration, explored in greater detail in the remainder of this chapter, is that professional regulation of attorneys is most effective if located within international arbitral proceedings, institutions, and related international organizations. National institutions lack the functionality advantages that Wilkins identifies. Conflicts among national attorney ethics have already proven problematic, and internationally promulgated rules that are enforced through national institutions risk re-fragmentation. There are, however, both normative and practical challenges in relocating regulation of attorney conduct in international arbitration to the international level and within private (p. 234) institutions and processes. The final section of this chapter takes up these challenges, after analysing self-regulation in international arbitration generally and with respect to international arbitrators.

B. Self-regulation in international arbitration

6.44  The main purpose of this book, and specifically this chapter, is to encourage a more systematic approach to professional self-regulation within international arbitration as a means to increase its legitimacy, reduce disruptions, and stave off potential external regulation. Although often framed as a new innovation, in reality, professional self-regulation in international arbitration is already a reality in various forms. At the most fundamental level, international arbitration is itself an example of a self-regulating dispute resolution regime, as examined in Section 1. With regard to international arbitrators, a robust form of self-regulation, analysed in Section 2, has developed organically and in response to perceived needs. A similar process, already underway with attorneys, is examined in Section 3. The chapter concludes with some thoughts about developments toward a self-regulatory regime for arbitrators and counsel being extended to experts and eventually third-party funders.

1. International arbitration as a self-regulatory regime

6.45  International arbitration is often characterized as a ‘ticket’ to admission to international trade. According to some commentators, sacrifice of national regulatory objectives is the price of that ticket.82 Under this view, international arbitration is one of the essential reasons why States have lost regulatory control over international economic activities.83 Without dismissing the underlying concerns, that analysis arguably inverts, at least partially, the cause-and-effect relationship between the State loss of regulatory control and the rise of international arbitration.84

6.46  Analysis of the effect of international arbitration on State regulation of global activities must begin with a clear understanding of what international arbitration displaces. In domestic contexts, national courts are a primary mechanism for enforcing State regulatory power.85 While this function is most prevalent in the United States, with its tradition of private enforcement through litigation, other jurisdictions are increasingly relying on judicial mechanisms for regulatory enforcement.86 With transnational activities, however, the viability of this (p. 235) function breaks down considerably.87 This breakdown is in part what inspired global governance scholars, described earlier, to analyse how regulation of global commercial activities systematically exceeds the grasp of States.

6.47  Like other forms of national regulation dispute resolution similarly loses its potency when the target is cross-border conduct. National court control over transnational disputes, including disputes aimed at enforcing important national regulations, is fraught with ambiguities and limitations. Basic matters of jurisdiction, choice-of-law, cross-border evidence gathering, and—most crucially—enforcement of resulting judgments present unique challenges when disputes involve transnational elements.88 Gary Born has dubbed these the ‘peculiar uncertainties’ of national litigation of international disputes.89

6.48  The cumulative effect of these ‘peculiar uncertainties’ is that, although one State might assert that a particular national law is mandatory, that law is only actually binding if the State that imposes it can also effectively enforce it. As a practical matter, an ostensibly mandatory national law can be avoided, can lose its mandatory quality, in a particular case if another State’s court adjudicates the case and applies its own law, or refuses to enforce the enacting State’s judgment.90 International arbitration must be evaluated against the background of this regulatory uncertainty, not against the false assumption of a fully effective regulatory framework that simply does not exist at the transnational level. The effectiveness of international arbitration in contrast to national courts explains why, for many categories of claims, it has emerged as the primary mechanism for resolving transnational disputes.91

6.49  International arbitration has become the primary mechanism for resolving transnational disputes precisely because it ensures an enforceability for awards that might otherwise be elusive with national court judgments.92 International arbitration avoids the ‘peculiar uncertainties’ (p. 236) of transnational adjudication in national courts by replacing State-produced rules and procedures with alternatives that are primarily developed and implemented privately and at the international level.93 In international arbitration, the agreement between the parties generally determines the venue, the applicable arbitral and procedural rules, the applicable substantive law, and the identity of the arbitrators themselves. A range of private and non-governmental organizations promulgate rules and guidelines that facilitate these party agreements and provide gap fillers. Most prominent among these private entities94 are arbitral institutions, which promulgate arbitral rules and administer arbitration cases. Through their rules and under their auspices, arbitral tribunals, appointed through agreement among the parties, generate binding awards.

6.50  Arbitral awards are not endowed with any formal precedential effect on subsequent cases or other arbitral tribunals. They have nevertheless incrementally built up into a body of informal international arbitration precedent, in both investment arbitration95 and, to a lesser (p. 237) extent, in international commercial arbitration.96 Cumulatively, these awards have become an important source of guidance for subsequent parties and tribunals.97 Because they are the products of private sources, however, they are not pronounced or promulgated like public laws. They are, instead, disseminated through private channels.

6.51  Although global and diffuse, in the past several years international arbitration has become remarkably effective at exchanging information and vetting new developments among various participants.98 An extraordinary number of conferences, professional publications, professional trade organizations, listserves, blog posts, LLM programmes, moot court competitions, lunch clubs, special interest groups, young practitioner groups, and networking events facilitate these exchanges. In addition to facilitating dissemination and discussion of developments in the field, these processes also contribute to a socialization process within the international arbitration community.99

6.52  Similar information-sharing and socialization in other substantive areas, such as antitrust, securities, and corruption, have been characterized as creating international networks that promote transnational regulatory governance.100 Even more deliberatively, international arbitration has claimed for itself various regulatory powers that were historically regarded as the exclusive province of States, including enforcement at the transnational level of securities, antitrust, and anti-corruption laws. Perhaps the best illustration of how international arbitration evolved into a mechanism for global governance is with respect to corruption. Although contracts procured through corruption were historically regarded as beyond the jurisdiction of arbitral tribunals,101 such disputes are now generally regarded as subject to arbitral jurisdiction.102

6.53  Today, the exact nature and perimeters of arbitral tribunals’ regulatory function regarding allegations of corruption is being vigorously debated.103 Questions range from fundamental (p. 238) issues about the extent and limits of arbitral tribunals’ obligations to more technical issues about the burden of proof applicable to establishing corruption as a legal defence.104 The very existence of that debate, however, demonstrates recognition of the potentially important regulatory function for international arbitrators with respect to commercial and investment activities involving corruption.105

6.54  Beyond issues of corruption, international arbitral tribunals also routinely adjudicate claims involving transnational applications of mandatory law, perhaps even more often and more effectively than domestic national courts for certain types of disputes.106 In contrast to the ‘peculiar uncertainties’ of transnational litigation, anecdotal evidence suggests that international arbitration is doing a reasonably robust job of enforcing mandatory law in individual cases.107 Far from completely undermining the public concerns embodied in mandatory rules, international arbitration is capable of ensuring, often does ensure, and perhaps even strengthens, their vitality in cross-border contexts.

6.55  Just as Braithwaite proposes in his model of enforced self-regulation, described earlier, international arbitration’s success is at least partially attributable to the fact that States provide an essential, though limited, control function. Virtually every State active in international commerce is a signatory to the New York Convention, the Panama Convention, or both.108 Consistent with the Conventions, national judicial involvement in international arbitration cases is minimized, but it comes into play at key junctures, most notably annulment and enforcement of agreements and awards. States adopt national arbitration laws, which can undergird arbitral procedures, fill gaps in the absence of party agreement, and provide grounds for annulling locally made awards. National legislative and judicial functions are in the background of the primary and private ordering of the regime, but provide a last resort when things go wrong in the private ordering.109

(p. 239) 6.56  The fact that most awards are voluntarily complied with110 means that even if national courts are authorized to review awards in annulment or recognition and enforcement proceedings, they rarely actually undertake that review. When they do, it is even more rare that they would actually annul or refuse to enforce an arbitral award. Despite the low probabilities in absolute terms, the risk that national courts will annul or refuse enforcement of an award is like the north point on a compass that keeps arbitral proceedings on course. Arbitrators have an affirmative duty to render an award that is likely to be enforced,111 and parties often reference the risk of annulment or non-enforcement when arguing in favour of procedural opportunities or applicability of mandatory law. Arbitration’s self-regulatory function, in other words, operates in the shadow of national courts’ control function.

6.57  The result of these arrangements is a ‘transnational, hybrid institutional constellation in which states cooperate to put the authority of their domestic courts behind private dispute resolution bodies’.112 International arbitration is a complex, fragmented, diffuse, and multi-faceted regime. States are willing to defer to it because they cannot replicate the expertise of international arbitration specialists, who are best-situated and suited to develop and operationalize applicable procedural rules and standards that can produce enforceable outcomes. Although not often regarded as such by arbitration practitioners themselves, the international arbitration regime is an example of the model of global governance described earlier in Section A.1. The remainder of this chapter argues that the professional regulation of participants in international arbitration has been, and should be, intentionally modelled to fit the self-regulatory structure of this regime.

2. Arbitrator regulation as a model of professional self-regulation

6.58  As examined in Chapter 2, international arbitrators are largely exempt from traditional forms of national regulation that bind various other professions, such as barbers, taxidermists and even lawyers. Until recently they were also largely exempt from any regulation at the international level. Instead, international arbitrators’ conduct was subject only to unchecked self-monitoring, and a hodge-podge of anaemic and disjunctive controls.113 Chapter 2 examined how this vacuum has been filled with a range of new sources, but also how expectations on and challenges for arbitrators have expanded in recent years. Drawing on those descriptions in Chapter 2, this Part analyses how the sources and procedures that control arbitrator (p. 240) conduct have evolved into an effective and legitimate—if still-evolving—self-regulatory regime. Arbitral institutions and organizations operate as primary regulators. These entities have establishd their regulatory role through demonstrated expertise and proximity, as well as constructive self-interest in safeguarding the effectiveness of arbitral processes.

6.59  Focusing on arbitrators’ obligations of independence and impartiality, Section a of this Part examines how the various constituent substantive parts of those obligations—a duty to investigate, a duty to disclose, and standards for disqualification—were primarily developed and refined by private international institutions and organizations, not national or governmental regulators. Section b examines enforcement of these obligations primarily within international arbitration processes and institutions.

a. The content of arbitrators’ impartiality obligations

6.60  Arbitrators’ skill and expertise may entice parties to entrust their disputes to international arbitration, but it is their neutrality that largely accounts for confidence in their final decisions. International arbitrators personify the promise of neutral decision-making in international arbitration.114 Their ethical obligations are the expression of that promise. As examined in Chapter 1, international arbitrators were historically a small, intimate group that did not seem to need any formal professional regulation. With increased complexity, size, and diversity of cases, as well as ever greater demands for transparency and predictability, arbitrators’ personal sense of rectitude and related informal social controls are now insufficient.115 That determination, and regulatory responses to it, were made primarily by private arbitral institutions and organizations.

i. The duty to disclose

6.61  As a practical matter, the selection and appointment process is the primary means through which arbitrators are regulated. This process begins with a duty by prospective arbitrators to disclose information about potential conflicts of interest. The development and refinement of this duty over time is one of the best examples of how regulatory competence is allocated in international arbitration.

6.62  National law has been notably vague, and occasionally even silent, about the existence and perimeters of a duty of disclosure for arbitrators. Perhaps most strikingly, the English Arbitration Act of 1996 deliberately omits any express affirmative duty of disclosure116 and English courts have not imposed such an obligation.117 English legislation and case law may be an outlier since national legislation and case law from jurisdictions acknowledge the (p. 241) existence of such a duty. Even those States that impose such a duty, however, do not effectively clarify the perimeters of the duty.

6.63  While some national laws still lack disclosure obligations, all international arbitration rules impose such a duty.118 These obligations evolved within arbitral institutions, even among those institutions that are not private.119 This analysis illustrates two important features of the duty to disclose. First, arbitral institutions preceded States in imposing such a duty. Second, when national authorities adopt a duty to disclose, they draw inspiration from the privately implemented obligation. For example, when the US Supreme Court first pronounced the existence of such a duty under US law in Commonwealth Coatings Corp. v Continential Cas. Co.,120 it relied on the existence of a duty to disclose under American Arbitration Association (AAA) arbitral rules as ‘highly significant’, even if ‘not controlling’.121

6.64  In addition to creating arbitrator disclosure obligations, arbitral institutions have also significantly and voluntarily refined the content of those obligations over the years. For example, the earliest version of disclosure obligations in the International Chamber of Commerce (ICC) Rules required only that a prospective arbitrator disclose information that the arbitrator believed from the arbitrator’s own subjective perspective called the arbitrator’s independence into question.122 Later versions of the ICC Rules reduced this almost absolute personal discretion by requiring that arbitrators disclose ‘any facts or circumstances which might be of such a nature as to call into question the arbitrator’s independence in the eyes of the parties’.123 Even more recently, the ICC disclosure standard has been revised again to require disclosure of ‘any facts or circumstances which might be of such a nature as to call into question the arbitrator’s independence in the eyes of the parties, as well as any circumstances that could give rise to reasonable doubts as to the arbitrator’s impartiality’.124

(p. 242) 6.65  These newer standards, which are often referred to as incorporating a ‘subjective’ standard but this time from the parties’ (not arbitrators’) perspective,125 are intended to require broader disclosure.126

6.66  Some institutional rules also supplement disclosure obligations with a statement of independence that includes additional specificity about the nature of disclosures. For example, in response to continued complaints about delays in arbitral proceedings and the timeliness of awards, in August 2009 the ICC expanded its more general Statement of Independence to a ‘Statement of Acceptance, Availability and Independence’. This new Statement compels disclosure of specifics about prospective arbitrators’ caseloads, not ‘[g]eneral descriptions, such as “many” or “several” [matters]’. To that end, prospective arbitrators must list their ‘currently pending’ cases, including cases as counsel, co-arbitrator, and sole or presiding arbitrator. They must also confirm their ability to devote necessary time to the arbitration and to conduct the process ‘diligently, efficiently and in accordance with the time limits in the Rules’.127 In addition to disclosure obligations during the appointment process, new revisions to the ICC Rules also require arbitrators to provide the parties and the ICC Secretariat with an expected date when the award will be rendered after the close of proceedings.128

6.67  This newly expanded disclosure obligation was prompted by the ICC’s need to safeguard its own legitimacy among parties and to compete effectively with other institutions. The response, however, also demonstrates the power politics that can affect private implementation of new regulatory policies.129 The new ICC disclosure requirement drew swift and vigorous backlash from some arbitrators. Among other things, on the substance, they argued that counting cases was not an accurate means of evaluating how busy an arbitrator is or how efficiently the arbitrator can resolve a case. Some arbitrators apparently even threatened a lawsuit, alleging that the proposed rule violated EU Competition Law and data protection rules. In halls of arbitration conferences, occasional mumblings can still be heard to the effect that the ICC has become outright hostile to arbitrators. These objections may have developed more traction were it not for support for the ICC reforms reportedly offered by law firms and corporate parties. The ICC may have been risking perception of legitimacy among arbitrators, but that seems to have gained legitimacy among other critical groups, users, and counsel.130

(p. 243) 6.68  Outside of mainstream European arbitral institutions, arbitral institutions have a slightly different approach to arbitrator regulation. Several newer regional institutions have introduced specific codes of ethics for international arbitrators.131 For these newer institutions, which do not enjoy the established legitimacy of older and better known competitors, codes of conduct for arbitrators can be seen as a signal that the institution was ready to assume an active regulatory role in assuring proper arbitrator conduct.132

6.69  While arbitral instititions have been at the forefront of arbitrator disclosure obligations, they contain mostly vague standards, such as ‘independence’, ‘impartiality’, ‘in the eyes of the parties’, and ‘justifiable doubts’. The problem with these standards is that, they are qualitative standards. As such, they effectively leave arbitrators with tremendous discretion about what to disclose and provide little guidance for how to interpret and apply the standard in specific situations.

6.70  When arbitrators are asked to decide how to apply qualitative standards to these specific factual settings, even acting in the utmost good faith, there can be disagreement about whether disclosure was warranted. In the words of one commentator, even under the supposedly more exacting ICC standard, ‘[a]rbitrators are… required “to stretch their mind” as to how certain circumstances might be perceived by the parties’.133

6.71  The problem with this mind-stretching exercise is that it occurs precisely at the moment when a prospective arbitrator must also stretch their minds to put aside their own potential financial interests since the decision to make a disclosure can lead to challenge and disqualification. In other words, the decision to disclose a conflict-within-a-conflict. While intuition alone might suggest that this conflict-within-a-conflict is a problem, today we also have psychological research that verifies how a self-interested conflict can blur or ‘bias’ the decision to disclose.134

6.72  Consider, for example, the situation in which a prospective arbitrator is a member of a law firm that is providing legal advice to one of the parties on an unrelated matter with which the arbitrator has no personal involvement.135 Such contacts are today generally, but not universally, regarded as necessary to disclose. Fifteen or 20 years ago, most international arbitrators might have considered this situation unnecessary to disclose. Given historical changes and current room for disagreement, it is easy to imagine how a well-intentioned arbitrator reading the (p. 244) ICC’s standard could reasonably conclude that, since the arbitrator does not have any direct involvement in or knowledge about the representation, it could not affect his or her independent judgment and no party could believe it would.136 In other words, the vague qualitiative standard leaves arbitrators with significant discretion in interpreting how that standard applies.

6.73  This is where the International Bar Association (IBA) and its Guidelines on Conflicts of Interest in International Arbitration (IBA Guidelines on Conflicts) make an important difference. The drafters of the IBA Guidelines on Conflicts converted vague qualitative standards into more precise quantitative, objective, and fact-based categories of information. These categories are organized in the familiar ‘red’, ‘orange’, and ‘green’ lists, which allow for relatively easy reference and application. These categories were developed relying on the collective experience of the drafters, systematic study of national and international precedents, and an extensive public consultation process.137

6.74  By shifting from qualitative standards to quantitative, fact-based catetories, the IBA Guidelines on Conflicts help reduce ambiguities and much of the guesswork for arbitrators in deciding whether to make a disclosure.138 They also tend to reduce the risk for parties in making unsuccessful challenges and make it easier to identify challenges that are not made in good faith (i.e., when the basis for the challenge does not fit into a red or oranage list category).139 By creating clearer guidance to make the arbitrator selection process more transparent and predictable, the IBA Guidelines claim legitimacy through what Black would call ‘functional’ and ‘constitutional’claims.140

6.75  Despite apparent advantages in format, the Guidelines are criticized on several fronts, including that in some instances they are ‘not strict enough’.141 Moreover, when they were first introduced, the Guidelines encountered significant scepticism from individuals and institutions.142 As Born explains:

A number of arbitral institutions initially greeted the IBA Guidelines with some coolness…The ICC stated that it would not apply the IBA Guidelines (or other guidelines) in considering institutional challenge; the LCIA also indicated skepticism about the Guidelines’ usefulness in institutional challenges.143

(p. 245) Despite initial resistance, the IBA Guidelines on Conflicts quickly became an essential touchstone for parties, arbitrators, and institutions.144 In addition to confidence in their content, the perceived legitimacy of the Guidelines is also attributable to the profile of the IBA, the prominence of its drafters, and (at least partially) the timing of their project.

6.76  By contrast to the Guidelines on Conflicts, the IBA’s earlier Rules of Ethics for International Arbitrators (IBA Rules of Ethics), published in 1987, were rarely if ever cited, except occasionally in academic literature.145 Given the absence of perceived need for greater detail,146 the IBA Rules of Ethics in substance did little more than articulate general platitudes about what constitutes good behaviour.147 As analysed further later, they did not, for example, include a clear duty for arbitrators to investigate potential conflicts. The IBA Rules of Ethics were also drafted before the IBA even had an Arbitration Committee. No such committee existed because in the 1980s international arbitration was not necessarily recognized as a distinct practice area. Instead, the IBA’s Section on Business Law had a Committee on Procedures for Settling Disputes (Committee D), which appointed a drafting group led by three eminent lawyers who specialized in international arbitration.148

6.77  In the time since publication of the Rules of Ethics, international arbitration practice and its role in the IBA have grown immensely. Today, the IBA’s Arbitration Committee boasts 2500 members from over 90 countries.149 Instead of being a stepchild of the Section on Business Law, the Arbitration Committee is one of the crown jewels of the Dispute Resolution Section, at least as measured by membership and prominence of arbitration-related programming at IBA events.150 The Arbitration Committee has distinguished itself by developing the popular IBA Rules on the Taking of Evidence in International Commercial Arbitration (IBA Evidence Rules), which were first published in 1999151 (and later revised in 2010).152

(p. 246) 6.78  The process for drafting the Guidelines on Conflicts also contributed to their general acceptance. The working group itself included an exceptional array of talent and experience. Nevertheless, they engaged in extensive consultation with others, circulating an initial draft years before the final version and taking into account specific feedback produced by that initial draft. As Black explains, a consultation process like this is a means for a regulator (here, the IBA as a rule-maker) to increase its normative legitimacy.153

6.79  The IBA Guidelines on Conflicts were a response to dramatic changes in expectations about transparency in international arbitration practice that had occurred since the 1980s,154 when the Rules of Ethics were drafted. In the 1980s, leading specialists were advocating restraint in disclosure requirements and their monopoly on arbitrator services was largely uncontested and uncontestable.155 By 2004 when the IBA Guidelines on Conflicts were published, as described in Chapter 2, new entrants had brought new expectations and increased interest in transparency. These trends were enough both to compel drafting of the Guidelines and to overcome initial resistance to the IBA Guidelines on Conflicts.

6.80  All this is not to say that the IBA Guidelines, however technically written, are simply the product of an objective application of technical expertise to the problem of arbitrator conflicts. As scholars in other fields have observed, ‘global regulatory processes are not apolitical’.156 Such rule-making typically ‘has important distributional implications, generating winners and losers’.157 The political nature of global rule-making can also raise important implications both for the content of those standards and for their perceived legitimacy.

6.81  One example of the political dynamic with respect to the IBA Guidelines is with respect to barristers. Historically, barristers from the same chambers could appear as counsel on opposite sides of the same case or in the same arbitration as arbitrator and counsel.158

6.82  Despite the history and apparent functionality of this approach in England and other jurisdictions that have barristers practicing in chambers, the practice came under increasing pressure in international arbitrations.159 A primary reason is that practices in barristers’ (p. 247) chambers differ from file-sharing that is the norm in law firms.160

6.83  The drafters of the IBA Guidelines on Conflicts attempted to respond to this conflict among national traditions by requiring on the ‘orange list’ disclosure if ‘[t]he arbitrator and another arbitrator or the counsel for one of the parties are members of the same barristers’ chambers’.161 Inclusion on the orange list requires that the information be disclosed, but leaves open the possibility for the arbitrator to continue to serve, assuming he or she continues to believe that he or she can act independently,162 and generally in the absence of party objection.163 This battle over disclosure standards for barristers illustrates both the potential for political wrangling in the process of creating international rules, and the fact that solutions to those political quandaries involve winners and losers.164 This political dimension is the background against which the IBA Guidelines, like any other transnational private regulations, must establish their legitimacy.

ii. The duty to investigate

6.84  In contrast to the long history of arbitrators’ duty to disclose, the related duty to investigate is a relatively recent innovation. Most early judicial decisions refused to imply a duty to (p. 248) investigate potential conflicts of interest,165 and rules of leading arbitral institutions were similarly silent. When disclosure standards were vague, the absence of a duty to investigate arguably created an incentive to turn an intentionally ‘blind eye’ to any possible conflicts. Ignorance about an alleged conflict would allow arbitrators a complete defence against either non-disclosure or the underlying conflict itself.

6.85  Today, at the international level arbitrators are generally understood as having a duty to investigate. That duty was first codified by private international arbitral institutions and organizations. The 1987 IBA Rules of Ethics were apparently the first source to suggest that there might be such an obligation, but they framed the obligation as narrow and related only to what the IBA Rules referred to as ‘indirect relationships’.166 The duty to investigate was formalized and clarified in 2004, when the IBA published its Guidelines on Conflicts of Interest in International Arbitration167 and the American Arbitration Association/American Bar Association (AAA/ABA) Code of Ethics for Arbitrators in Commercial Disputes was published.168

6.86  More recently, in 2008, the ICC modified its standard statement of acceptance and independence to refer to a duty to make ‘due enquiry’,169 and the 2012 version of the ICC Statement of Acceptance requires arbitrators to confirm the absence of conflicts ‘to the best of [his/her] knowledge’, and that such assertion is after ‘having made due enquiry’.170 Virtually all arbitral rules and procedures now either include an express duty to investigate171 or have been interpreted to imply such a duty.172

(p. 249) 6.87  National law, by contrast, still lacks any coherent consensus about the existence of a duty to investigate.173 Some national court precedents have found or implied a duty to investigate,174 and held that failure to investigate could be the basis for annulling or refusing recognition or enforcement of an award.175 In finding such a duty, however, many judicial precedents have expressly relied on the existence of such a duty under arbitral rules.176

6.88  The evolution of the duty to investigate, and standards for disclosure in the previous section, are striking because the most significant developments were initiated at the international level, predominantly by private international arbitral institutions, and in contravention of individual arbitrators’ narrow self-interest. The prominence of private arbitral institutions and related international organizations in establishing the substantive standards for arbitrator conduct is no accident. It reflects their unique technical expertise, self-interest in effective regulation of arbitrator conduct, and related perceptions of legitimacy in promulgating these standards.

b. Enforcement

6.89  As analysed previously,177 ethical rules that are developed for specialized practice settings are most effective if they are enforced in that same context. This prescription means that they should be interpreted and applied by the institutions that are most competent and have the greatest incentives to perform the necessary regulatory functions. For arbitrators, arbitral institutions not only led in developing substantive standards for arbitrator disclosure and disqualification, but they also operate as the primary regulators in enforcing those standards. This regulatory power is primarily implemented through administration of arbitrator selection and challenge procedures, described later in sub-section i, but also in new ad hoc regulatory functions, described in sub-section ii, and possibly future certification, described in sub-section iii.

i. Selection and challenge procedures

6.90  Under most arbitral rules, selection and challenge procedures are administered by arbitral institutions and through procedures established by arbitral rules for constituting the tribunal. Once arbitrators make prescribed disclosures, arbitral procedures require parties to (p. 250) assert challenges based on alleged conflicts, and provide for how arbitral institutions and appointing authorities will rule on such challenges.178 While Chapter 2 reviewed the functional details of these procedures, the important point for this chapter is that in administering these procedures, arbitral institutions operate as primary regulators.

6.91  Pursuant to most arbitral rules, until recently, the basis for institutions’ rulings on challenges were not disclosed. Ambiguities about how arbitral institutions resolve challenges to arbitrators ultimately concern the lack of transparency and parties’ need for more information.179 In response, leading arbitral institutions have begun to publish information about how specific challenges have been handled. The Stockholm Chamber of Commerce gets credit for being the first mover, as for many years it published summary reports of its challenge decisions.180 Similarly, the ICC published three reports containing general summaries of the outcomes of its challenge decisions, although without providing any reasons for those decisions.181 The most ambitious effort was by the London Court of International Arbitration (LCIA), which with tremendous effort and fanfare published redacted versions of its actual challenge decisions.182

6.92  Publication of institutional challenge decisions demonstrate the need, identified by Wilkins, for assessments of professional conduct to be ‘open and accessible to ensure that information about the conduct in question and the standards being applied can be reviewed, critiqued, refined, and internalized’.183

6.93  Increased transparency regarding institutions’ challenge rulings is also important because, under most arbitral rules, the decisions made through these procedures are treated as ‘final’. As such, because arbitral rules contain ‘finality clauses’, institutions’ rulings on arbitrator challenges are not subject to being re-evaluated under the arbitral rules.184 National (p. 251) courts may still operate as a final check,185 but not based on the standards in arbitral rules. In the words of one English court, ‘[T]he finality provision [in Article 7(4) of the 1998 ICC Rules does not mean] that the English courts have no power to review the decision of the ICC Court’; meaning that subsequent review is under national English law, not the ICC Rules.186 In their independent review under national law, English courts have indicated arbitral institution’s challenge decisions are ordinarily accorded substantial deference, even if in applying a different standard, they are not technically deferring.187

6.94  Under this general framework, national courts have only rarely ever effectively ‘overruled’ an arbitral institution’s rejection of alleged conflict. Most often, challenges in national courts involve alleged conflicts that were never presented to an arbitral institution because the conflict arose or was discovered after the close of proceedings. A judicial decision that is inconsistent with an arbitral institution’s ruling is rare because national standards generally provide narrower grounds for challenge than those imposed by arbitral institutions or the IBA Guidelines on Conflicts.188

6.95  One contrary example, notable precisely because it is so exceptional, is the decision of the Court of Appeal of Paris in J&P Avax SA v Société Tecnimont SPA. In that case, a French Court of Appeal applied Article 1502(2) of the French Code of Civil Procedure to set aside an ICC award on the ground that the arbitrator had failed to disclose a conflict of interest.189 The court reached this decision despite the fact that the ICC Court had dismissed the challenge as inadmissible because it was asserted too late.190 The Tecnimont case reminds (p. 252) us that national courts still provide a final check on arbitrator bias. Although decisions like Tecnimont are rare, when an award is annulled or refused enforcement based on alleged arbitrator misconduct, its effect reverberates throughout the international arbitral regime. Decisions like Tecnimont are highly publicized, scrutinized, and debated in the international arbitration network described earlier.191 As a result, they become incorporated into community standards about arbitrator conduct and future regulatory assessments by institutions. By providing back-up legal enforcement, decisions like Tecnimont illustrate what Braithwaite calls ‘enforced self-regulation’, meaning severe State sanctions when self-regulation apparently breaks down.192

6.96  Like the evolution of disclosure obligations, increased transparency regarding institutional decision-making is typical of efforts by non-state actors to increase their legitimacy. Black observes that ‘[r]egulators can increase their legitimacy by providing information on aspects of their existing activities which they think will provide a basis for acceptance from different legitimacy communities’.193 Here, arbitral institutions were seeking to increase their legitimacy by making selection and challenge procedures more transparent, and also using disclosure as a means of increasing efficiency in issuing awards. These efforts are a natural response to increased competition among arbitral insitutions, and related pressure to respond to party concerns about unwarranted delays or other infrequent but disruptive forms of arbitrator misconduct.194

ii. Control over compensation and ad hoc regulatory functions

6.97  While not usually characterized as a form of regulation, arbitral institutions’ control over compensation for arbitrators’ fees and costs incurred fits within modern meanings of ‘regulation’.195 Institutions have various methodologies for how arbitrators are compensated. One feature they all have in common, however, is that they retain ultimate control over the amount of compensation finally paid to arbitrators.196

6.98  Under the ICC Rules, for example, the ICC Court has sole discretion to fix arbitrators’ fees in accordance with an established fee scale,197 based on the amount in dispute and within ‘its discretion’.198 In setting arbitrators’ fees, the ICC Court of Arbitration considers a list of factors, including the diligence of the arbitrators, the time spent, the rapidity of the proceedings, (p. 253) and the complexity of the dispute.199 More specifically, representatives of the ICC have stated publicly that they have ‘punished’ delayed awards or other arbitrator dereliction with reduced fees.200 Control over the purse strings by which arbitrators are compensated is an important tool for ensuring arbitrators comply with obligations that contribute to efficiency.

6.99  In addition to developing and enforcing clearer and more demanding standards, arbitral institutions have also asserted several independent, ad hoc regulatory powers. For example, the ICC Secretariat ‘spot-checks its electronic database to ascertain whether arbitrators have made proper disclosure about prior or pending ICC arbitrations’ and in ‘several cases’ has ‘discovered undisclosed information through this process’.201 Upon discovering such omitted information, the Secretariat may request that the arbitrator supplement disclosure or inform the ICC Court or the Secretary-General of an arbitrator’s failure to disclose information as part of the confirmation process.202

6.100  In a similar vein, most institutions reserve for themselves discretion to appoint or to remove an arbitrator on their own initiative and independent of party objection or consent.203 In addition, most institutions also have an informal, unwritten, internal ‘blacklist’ of arbitrators whom they will not select when acting as an appointing authority. In some extreme cases, arbitral institutions may even refuse to appoint an arbitrator to whom the parties agree. Overruling party preference with regard to arbitrator selection is a rather extreme measure, but arbitral institutions and appointing authorities have an interest in avoiding appointment or reappointment of arbitrators who are seriously unreliable or have committed significant transgressions.204

6.101  In addition to controlling individual arbitral proceedings, institutions also play a role in future appointments. One way institutions affect future appointments is through use of lists of potential arbitrators that parties are either encouraged to use or, in some rare instances, required to use.205 Some commentators have expressed scepticism about the value of such lists.206 Whatever practical function they may serve during the selection process, these lists function as a form of self-regulation. Formal or informal controls on entry are, according to most sociological profiles, a typical form of self-regulation among professions.207 For example, the AAA has a stated policy of only nominating ‘qualified’ arbitrators from its existing rosters, which it advertises as highly ‘select’ and open only to a limited number of arbitrators. (p. 254) To qualify, a candidate must attend training sessions administered by the AAA, as well as possess certain minimum professional qualifications.

6.102  Lists also create the possibility of removal from such lists as a potential sanction for professional misconduct. For example, the AAA has a well-known ‘one-strike-you’re-out’ policy. Under this policy, an arbitrator whose award is challenged for improper non-disclosure goes on inactive status and will not be nominated to future arbitrations while the judicial challenge is pending.208 Even after a final judicial decision, including a decision that upholds an award, the AAA makes a separate determination of whether the arbitrator should ever be restored to active status on the roster. The Milan Chamber for National and International Arbitration has published a similar policy incorporated in its Code of Ethics, which is appended to its arbitral rules.209

6.103  Institutions that do not establish formal lists or panels of arbitrators nevertheless also have informal means of cataloguing individuals from among whom they appoint arbitrators when charged with that task. For example, when appointing arbitrators, the ICC solicits names from its national committees and ‘selects a candidate from its extensive database of experienced practitioners’.210 While the ICC does not specify what criteria are required for admission to the database, in selecting arbitrators ICC personnel inevitably consider institutional knowledge about arbitrators, including internal records of sub-optimal conduct in past arbitrations. Similarly, other institutions also consider an arbitrator’s past conduct when making appointments. In this respect, formal or informal disqualification from appointments provides another regulatory check on arbitrator conduct.

6.104  In the absence of formal licensure, arbitral institutions and appointing authorities are today the most visible and effective regulator of arbitrators. They have a permanence and tangibility that makes them naturally well suited to serve as regulators. They also have unique expertise based on their intimate knowledge of and direct involvement in arbitration practices and procedures, and a unique ability to operate in a multi-national, multi-cultural environment.211

6.105  Despite performing this function, apart from a few arbitral institutions noted previously,212 most institutions do not have established formal policies for responding to arbitrator misconduct. Instead, they employ indirect mechanisms, most obviously through the selection, appointment, and challenge procedures, but also through some indirect means, described later.213

6.106  This informality is inevitable and in some respects necessary, but it also necessarily implies a lack of transparency. The primary function of arbitral institutions is to administer (p. 255) international arbitration cases. That function imposes on them confidentiality and fairness obligations that limit what they can do. Competition among institutions, however, pressures institutions to be more accountable.214

6.107  For example, as examined previously, arbitral institutions were rightly pressed to publish more detailed information about their challenge decisions.215 Arbitrators’ names, however, are necessarily redacted from these published sources. Moreover, the stores of information institutions accumulate internally is not generally provided directly to parties, even if that information would be extremely valuable to them in the arbitrator selection process. Instead, it remains confidential in the hands of arbitral institutions and outside of consideration when parties are selecting arbitrators. If more publicly available, such information could operate as a form of market-based regulation and accountability for arbitrators. One potential solution to this information conundrum, explored in Chapter 8, is the development of an independent resource that collects and makes publicly available information and feedback about arbitrators.216

iii. Arbitrator certification or licensure

6.108  The most classic form of self-reguation involves licensing or certification. Formal certification or licensure could be a means for providing training and quality control for new arbitrators, particularly from jurisdictions that do not have established traditions of arbitration from outside mega-multi-national law firm practice.

6.109  While certification of international arbitrators may seem like a remote possibility today, certification is a reality for international mediators. The International Mediation Institute (IMI) has a well-regarded and effective certification programme for mediators. The IMI’s model includes submission requirements that members have minimal training through qualified programmes, abide by its code of ethics, and provide feedback from parties.217

6.110  For arbitrators specifically, the Chartered Institute of Arbitrators, or ‘CIArb’, has a well-established certification programme. The CIArb refers to itself as a ‘Professional Organization for Arbitrators, Mediators and Adjudicators’218 and lists having a ‘prestigious secondary professional qualification’ as among the benefits of membership.219 The CIArb has stringent, published entry requirements, which may include extensive training, passing (p. 256) an examination, and completing an interview.220 It also has a relatively detailed code of ethics and related practice guidelines that pertain to arbitrator members. Most interesting of all, the CIArb has a grievance procedure for complaints against arbitrator members.221 This process was recently invoked to expel and publicly condemn an arbitrator for a more than four-year delay in rendering an award and for ‘repeatedly making promises which proved to be empty and meaningless’ about when the award would be forthcoming.222

6.111  While CIArb boasts robust membership, not all assessments of it are uniformly positive. It is also not certain that formal licensure would be a meaningful substitute for processes and credentials that currently prevail in the market for international arbitrators. As described in Chapter 2, experience and reputation established through previous service as an arbitrator is the primary credential.

c. National alternatives

6.112  Before concluding this Section, it is worth pausing to consider how arbitrator regulation would function if arbitrators were primarily regulated through domestic standards and national institutions. As already described, to date most national courts have exercised admirable restraint, providing an effective backstop, but not disrupting or interfering with arbitral processes. National courts are not, however, the only potential source for disruptive intervention.

6.113  As previewed in Chaper 2, national legislatures and bar authorities may seek to regulate arbitrators sitting locally or locally licensed attorneys who serve as international arbitrators.223 For example, the California legislature has adopted aggressive new rules regulating arbitrators, which do not purport to apply directly to international arbitration, but have caused consternation nonetheless.224 Similarly, a proposal by Professor Carrie Menkel-Meadow in (p. 257) cooperation with the International Institute for Conflict Prevention and Resolution (‘CPR’) and the Georgetown Law Center would implement a new Model Rule for Lawyers Acting as Third Party Neutrals, which would be incorporated into the United States Model Rules of Professional Conduct for lawyers.225 This new rule would impose on arbitrators its own version of impartiality (and other) obligations.226 As examined in Chapter 2, the Rule is interpreted as expanding significantly international disclosure obligations.227 While the proposed Model Rule has not been enacted by the ABA, some other national bar authorities have adopted similar rules that apply when their attorneys act as arbitrators.228

6.114  In the domestic context, national bar authorities arguably have an important and appropriate role in regulating domestic arbitrators. If domestic arbitrators are lawyers, they are most likely locally licensed. Moreover, standards that apply to domestic arbitrators’ conduct, as well as the law and procedures that apply in arbitrations over which they are presiding, are all most likely local law. National authorities quite naturally fit into that regulatory space. National authorities are less fitting as regulators of international arbitrators, who are subject to international standards promulgated and primarily enforced by international arbitral institutions and organizations. If national bar authorities were to supplement this regulatory framework with new national rules enforced by domestic entities, the meaning of obligations such as impartiality would be fragmented and disaggregated.

6.115  This section has examined how arbitrators, arbitral institutions, and related organizations can and have developed responsible, reliable, and highly sophisticated standards and procedures for ensuring ethical conduct. Effectiveness is ensured by a variety of factors, including arbitrators’ specialized knowledge and professional ethos, and institutions’ incentives to attract parties by ensuring proceedings are fair and awards enforceable. To the extent that these efforts fall short, national courts retain the power to annul or refuse enforcement of awards tainted by alleged misconduct.

6.116  In contrast to the well-functioning self-regulatory regime for international arbitrators, attorneys in international arbitration continue to be subject to uncertain, multiple, and fragmented ethical obligations that primarily derive from, and are presumed to be enforceable only by, national institutions. The final section of this chapter considers the extent to which incentives and interests similar to those for international arbitrator regulation can produce an effective self-regulatory regime for counsel in international arbitration.

3. Self-regulation of counsel in international arbitration

6.117  As clashes over ethical conflicts have become more frequent and more disruptive,229consensus has emerged about the need for regulation of counsel ethics in international arbitration. (p. 258) Opposition to such regulation, however, still remains and at times is quite emphatic.230 Opponents often cite the role of national ethical rules and professional discipline authorities. In many jurisdictions, these authorities are deemed to have exclusive jurisdiction to discipline attorneys. Moreover, in many jurisdictions, attorney ethical rules are generally regarded not only as mandatory, but also an essential corollary to attorney licensing at the national level. The conventional view is that only the entity that licenses an attorney, and ultimately holds the power to revoke that license, can regulate attorneys.

6.118  With a starting assumption that attorneys should be regulated exclusively in and by national legal systems, sceptics of self-regulation in international arbitration also characterize attorney regulation as beyond the reach of internal private regulation by international arbitral mechanisms.231 Some argue that the formal limitations of arbitral jurisdiction mean that arbitral tribunals and institutions cannot be ‘regulators’ or ‘regulate’ attorney conduct. These first two lines of objection fit into a third, larger category of general resistance to promulgation of any ‘new regulations’. As analysed previously, these various objections are based on largely outdated concepts of regulation,232 outdated understandings of how attorneys are actually regulated in national systems,233 and how profound the conflicts and regulatory gaps are for counsel in international arbitration.234

6.119  Assessments of global self-regulation of national regulatory interests must be assessed against national regulatory impotence.235To this end, assessments of international arbitration must be assessed against the limitations produced by the ‘peculiar uncertainties’ of national courts236 and international regulation of arbitrators must be assessed against national alternatives. Similarly, the need for and potential effectiveness of counsel regulation within international arbitration must be assessed against the backdrop of regulatory gaps created by national regulation and inherent limitations of traditional national regulatory models.

a. National versus international regulation of attorneys

6.120  As examined in Chapters 1 and 3, it is inherently uncertain which ethical rules, if any, apply to attorney conduct in international arbitration. As a formal matter, few national ethical codes indicate expressly whether they apply extraterritorially or in international arbitration.237 Empirical studies meanwhile verify that many attorneys themselves are often (p. 259) uncertain if their home rules apply at all, or are supplemented by other rules,238 such as the rules of a ‘host’ jurisdiction where the arbitration is seated or where proceedings physically take place.239 Attorneys nevertheless generally presume and act as if the rules of the attorney’s ‘home’ jurisdiction, meaning where the attorney is licensed, govern.

6.121  As surveyed in Chapter 3, meanwhile, applying the national ethical rules of attorneys’ home jurisdictions may mean that attorneys in the same arbitral proceedings are abiding by significantly different and even directly conflicting ethical rules.240 Then there are specialized ethical issues that may be unique to international proceedings and thus ‘not easily amenable to resolution by reference to any single [national] code within the “home” or “host” jurisdiction’.241

6.122  The paradigmatic example, examined in detail in Chapter 3, is contrasting national regulations regarding pre-testimonal communication with witnesses.242 Communication that is prohibited in many systems is ethically required by other systems. Other potential conflicts exist because of differing national obligations regarding the nature and extent of confidentiality obligations, conflicts of interest, obligations to produce documents, and obligations related to candor to the tribunal, among others.243 These conflicts can only be resolved by applying a single body of ethics.244

6.123  Even if substantive standards are harmonized or made uniform, enforcement would still be limited to traditional enforcement in the jurisdiction where attorneys are licensed; no single national bar authority would have the power or competence to rule on the conduct of all attorneys within the same proceedings. As a result, enforcement would be uneven and unpredictable.

6.124  This regulatory vacuum is probably still preferable to active efforts by national bar authorities to regulate the conduct of counsel in international arbitral proceedings. As previewed in Chapter 3, international ethical standards are developing. As a practical matter, however, national bar authorities would have significant difficulties understanding, interpreting, and applying these new and unfamiliar ethical obligations developed for international arbitration. These sources might be in a foreign language and would address conduct under (p. 260) unfamiliar procedures that likely involve opposing counsel and arbitrators from entirely different legal traditions.

6.125  The meaning of core ethical concepts like ‘truth’, ‘confidentiality’, ‘knowledge’, and ‘loyalty’ are hotly debated even within national legal systems. A simple linguistic translation of these terms across systems is difficult if not impossible. Relatedly, the culturally and contextually determined meaning of terms like ‘reasonable’ and ‘independence’ makes them equally difficult to translate linguistically. Adding to these conceptual problems, national bar authorities would also have difficulty assessing the factual underpinnings of alleged misconduct, which would most likely have occurred physically far away, and potentially in a foreign language. These types of institutional limitations are why Wilkins argues for contextualized enforcement as opposed to traditional disciplinary controls even in domestic contexts.245

6.126  In addition to purely practical challenges, there are also more constitutional challenges. Regulatory authorities are not all-purpose machines into which a set of ethical rules can be input at one end and a disinterested disciplinary decision applying those rules is produced at the other end. Like the lawyers they administer, the individuals who staff regulatory authorities are products of a local legal culture.246 Their legal history, background, and training necessarily colour their perceptions about the propriety of attorney conduct and their interpretation of rules applied to such conduct.247 When filtered through national regulatory authorities, international and foreign legal ethical rules will be refracted through these national perspectives. For example, it is difficult to image that US disciplinary authorities would punish a US attorney for ‘improperly’ preparing a witness in a manner that is ethically permissible or even required under US ethical rules. It is similarly difficult to imagine a French bar association disciplining a French attorney for ‘unethically’ withholding documents that should have been disclosed in an international arbitration but would be considered confidential under French law, in a country that is historically hostile to the very notion of US-style document exchange.248

6.127  In addition to discounting the difficulties with national regulation of counsel conduct in international arbitration, sceptics of regulation also fail to take into account existing trends in international arbitration. The next section examines several important precursors to the development of formal ethical regulation of attorneys within international arbitration before the subsequent section then examines trends toward more formalized substantive ethics and enforcement mechanism. Based on these trends, the final subsection concludes with proposals for future directions in attorney regulation.(p. 261)

b. Precursors to ethical regulation

6.128  Adopting a ‘can’t-wait’ mind set, even before any formal efforts to address this regulatory uncertainty, a number of ad hoc efforts sought to address counsel ethics informally and indirectly. These earlier efforts demonstrate an implied consensus about the need for international regulation of counsel ethics within international arbitral procedures and institutions, and provide important precursors to future developments. Most specifically, the IBA Evidence Rules took up several issues relating to counsel ethics under the guise of promulgating evidentiary rules. For example, the 1999 version of the IBA Evidence Rules harmonized distinctly different national procedures, but also clarified in Article 4(3) that ‘[i]t shall not be improper for a Party, its officers, employees, legal advisors or other representatives to interview its witnesses or potential witnesses and to discuss their prospective testimony with them’.249 When Article 4(3) was revised in 2010, the drafters implicitly acknowledged that the previous rule regarding pre-testimonial communication left open a number of questions250 and responded by adding that parties could also ‘discuss their prospective testimony with [witnesses]’.251

6.129  The 2010 IBA Evidence Rules, meanwhile, built on and expanded on these indirect efforts to regulate ethical conduct in arbitral proceedings. In Article 9(2)(b), the 2010 IBA Evidence Rules provide that arbitral tribunals have the power to determine which ethical rules are applicable and to enforce those rules by holding that evidence may be excluded as privileged under applicable rules.252 In recognition both of the need to resolve conflicts among national ethical rules and of the role of arbitral tribunals in providing that resolution, Article 9(3) outlines criteria that a tribunal should ‘take into account’ when it ‘consider[s] issues of…privilege under Article 9.2(b)’.253

6.130  In another acknowledgment of the necessity for arbtrators to rule on ethical issues, Article 9(6) provides that tribunals can take into account a party’s failure ‘to conduct itself in good faith in the taking of evidence’ in assessing ‘the costs of the arbitration, including costs arising out of or in connection with the taking of evidence’. Although they are designated as rules of evidence, the use of the terms ‘good faith’ and ‘improper’ reveals that these rules effectively address ethical issues. Notably, they were promulgated after the IBA Task Force on Counsel Ethics was established in 2008, but before it announced that it would be publishing its own Guidelines.254

6.131  Some of the truly unique and symbolic precursors to ethical regulation of counsel are ad hoc efforts by individual lawyers to ‘promulgate’ international standards. For example, in connection with his International Council for Commercial Arbitration (ICCA) keynote (p. 262) speech, Doak Bishop together with Margrete Stevens drafted in 2010 an ambitious proposed code of ethics for counsel in international arbitration.255 Similarly, Cyrus Benson drafted a ‘Checklist of Ethical Standards for Counsel in International Arbitration’, which is comprised of a series of proposed resolutions that parties and tribunals can agree to adopt, reject, or modify at the commencement of arbitral proceedings.256 These are not academic proposals. Both Bishop and Steven’s Code and Benson’s Checklist were created to provide usable resources that aimed to even the playing field by ensuring that counsel are abiding by the same ethical rules.257 In addition to these initiatives, some individual arbitrators now include in their initial procedural orders provisions that address specific ethical issues, such as procedures for retention of new counsel to avoid conflicts of interest with members of the tribunal. These improvisational, entrepreneurial efforts by individuals are illustrative of how international arbitration practitioners operate as what Dezalay and Garth referred to as ‘moral entrepreneurs’.258 Practitioners self-consciously seek to protect and strengthen the efficacy and legitimacy of interational arbitration, also in an effort to bolster indirectly their own credentials as knowledgeable participants and thought leaders.

6.132  In addition to direct, ad hoc efforts to harmonize conflicting national ethical rules, arbitral tribunals rountinely rule on ethical issues during the ordinary course of arbitral proceedings.259 Arbitral tribunals impose costs and fees,260 and occasionally even express ‘sanctions’,261 based on perceptions of alleged misconduct by attorneys. Tribunals have also imposed what might be called ‘reputational sanctions’,262 excluded evidence or drawn adverse inferences,263 issued interim orders, and on occasion even dismissed parties’ claims.264 It has also been reported (p. 263) that some individual arbitrators specify in initial procedural orders that the tribunal has the power to preclude conflicted or disruptive counsel from arbitral proceedings.

6.133  Informal sources and techniques have emerged in response to a perceived need for greater ethical guidance and regulation, and have been an important gap-filler. The problem with most informal methods for enforcing ethics, however, is that they are imprecise. In the absence of formally articulated ethics, arbitrators rely on their own perceptions and often undisclosed assessments of attorney conduct. The sanctions they impose, therefore, are often for unarticulated violations of unknown rules and without any opportunity for counsel or their clients to be heard.

6.134  In addition, these indirect techniques for responding to perceived ethical misconduct may sanction a party when the misconduct belongs to the attorney. Clients may be made to pay substantive awards produced by negative inferences, and sanctions, costs, and fees, even if the misconduct that produced them belongs wholly to the attorney.265 Some opponents of ethical reforms argue that, since attorneys are agents of parties, it is reasonable to impute to parties consequences for the misconduct of their counsel. While this assumption may be true in some cases, it is not in all cases.

6.135  In Pope & Talbot v Canada,266 counsel improperly facilitated the publication of confidential information.267 The tribunal deemed counsel’s conduct to involve either an ‘intentional violation’ or ‘reckless disregard’, that was ‘highly reprehensible’,268 and ‘not acceptable’.269 Apparently acting on a belief that it did not have the power to directly sanction counsel, however, the tribunal directed the offending counsel’s client to pay costs (US$10,000) for the motion on the issue.270 In so directing, the tribunal ‘expressed the wish’ that counsel would ‘voluntarily personally assume those costs’271 and ‘assumed’ that counsel would make its decision public.272

6.136  Pope & Talbot’s finding that counsel, not the party, were responsible for misconduct is not sui generis. Irresponsible counsel can take positions, even in advocacy settings, that betray clients’ best interests,273 though ostensibly asserted on a client’s behalf. In domestic contexts, client monitoring of attorney conduct can reduce such risks. In international arbitration, however, even from the client’s perspective, conflicting national ethical rules and resulting ambiguities make it exceedingly difficult to monitor and detect misconduct by counsel.

(p. 264) c. Developing substantive standards

6.137  Against the backdrop of existing precursors, development of substantive ethical standards for counsel is already well underway. Just as with development of substantive ethical obligations for arbitrators, these standards are being developed by private, international entities. As explored in Chapter 3, the most important and significant effort to date has been the IBA Task Force’s publication in 2013 of Guidelines for Party Representation in International Arbitration.274

6.138  To become binding on the parties, the Guidelines must be accepted in whole or in part by the parties or imposed by an arbitral tribunal.275 As analysed in Chapter 3, the IBA Guidelines for Party Representatives attempt to resolve many of the areas in which national ethical rules conflict, such as communication with witnesses276 and the extent of permissible communications with arbitrators.277 The Guidelines also address issues relating to attorney obligations in light of document exchange procedures278 and submissions to the tribunal.279

6.139  The Guidelines are not without their detractors, however. As indicated at the beginning of this chapter, some critics generally oppose development of new rules or guidelines.280 Others are critical of asserted inconsistencies between the Guidelines and the IBA Evidence Rules, particularly how the Guidelines appear (according to critics) to expand dramatically the scope of documents that can be sought in document exchanges.281 This latter concern is echoed by some civil-law-trained lawyers, who complain that some of the provisions in the IBA Guidelines are decidedly common-law oriented, as opposed to an established harmonized or neutral ethical standard. The nature of these latter concerns is addressed in Chapter 7.282

6.140  While debate continues about particular provisions, the ultimate success of the IBA Guidelines for Party Representatives will be determined not by an abstract assessment of their content, but by how widely they are accepted as legitimate, as well as used in arbitral proceedings. In this assessment, the Guidelines will not be the only product. Instead, it seems a vibrant marketplace for international standards may be developing, as previewed by Bishop and Steven’s code and Benson’s Checklist. As this book is going to press, the new LCIA Arbitration Rules are being revised to include what is being called a ‘regulatory scheme for counsel conduct’.283 In addition to rules imposed directly on counsel, the proposed revisions to the LCIA Rules would include two rules. The first would oblige parties to ensure that their (p. 265) legal representatives comply with ethical guidelines to be contained in a new Annex to the LCIA Rules. The second rule would empower the arbitral tribunal to exclude counsel from all or part of arbitral proceedings who are determined to have engaged in serious and persistant misconduct from the arbitration.284 Notably, the proposed LCIA Arbitration Rules would empower tribunals to exclude counsel by virtue of the parties’ assent to that power. As such, they do not attempt to extend tribunal powers over attorneys directly.

6.141  Calling the LCIA’s effort ‘an astounding innovation in the area’,285 some commentators are already speculating that the LCIA’s initiative may be ‘positive inspiration for other arbitral institutions to set up their own ethical rules or guidelines regarding the parties’ representatives’ conduct’ such that ‘the LCIA may not be the last institution’.286 Given the seemingly endless conferences, papers, blog posts, and debates on these topics, particularly in light of these new developments, the march toward international ethical regulation for counsel seems irreversible, even if questions still remain about the content and enforcement of those rules.

6.142  Several questions remain about content. First, culturally determined, value-ridden differences of opinion remain about what is proper and improper. Chapter 7 proposes the Functional Thesis, which will provide a more neutral approach than direct negotiations in determining the content of international ethics. Many other questions remain regarding the relationship between international ethical obligations and attorneys’ presumably continuing national ethical obligations. These latter issues are intertwined with issues of how international ethical rules are enforced in international arbitration.

d. Developing enforcement mechanisms

6.143  One principal reason why regulation of arbitrators is so effective is that the standards defining their impartiality obligations are enforced in context. Arbitral institutions are frontline regulators for arbitrator ethics because they have the greatest institutional competence and the greatest incentives to perform the necessary regulatory functions. For enforcement of counsel ethics, arbitral institutions do not enjoy a similar situational advantage. Instead, arbitral tribunals are the entities that have the greatest institutional competence and a direct, even if not perfectly aligned, incentive to regulate.287

6.144  Arbitral tribunals are uniquely positioned, particularly in contrast to national authorities, to interpret applicable ethical rules in cross-cultural contexts and against the backdrop of international arbitral procedures in which the relevant conduct occurs. During the ordinary course of proceedings, arbitrators have an opportunity to observe and evaluate an attorney’s conduct in context.

6.145  Arbitrators also have a stake in the integrity of the process. Arbitrators develop reputations in part based on their ability to control proceedings and render fair and expedient results.288 These reputations will affect whether arbitrators are selected to serve on future (p. 266) panels, which means arbitrators have an incentive to protect the integrity of proceedings against attorney misconduct.

6.146  One potential limitation on the proper function of tribunal incentives to regulate counsel is that, as described in Chapter 2, leading law firms play a decisive role in arbitrator selection.289 As a result, there is a risk that arbitrators may be unduly reluctant to sanction counsel from whom they might hope to secure future appointments. This risk is compounded by concerns that arbitral tribunals may be more likely to sanction arbitration ‘outsiders’ from smaller firms, rather than big players from leading firms. Even in the US court system, several studies have demonstrated that bar authorities and courts disproportionately sanction smaller law firms and solo practitioners.290 In international arbitration, the risk may be heightened since newcomers are less likely to be familiar with established practices and international rules.291 In addition to these questions about institutional competence of arbitral tribunals, questions also remain regarding whether and to what extent they may exercise this power.

i. Formal tribunal powers

6.147  Many objections to arbitral tribunals enforcing counsel ethics directly against counsel focus on the nature of arbitral jurisdiction and power. There are two distinct types of power that are contemplated—the power to disqualify or exclude counsel, and the power to sanction counsel. For both these categories, there are three distinct theories under which an arbitral tribunal might exercise such powers to rule on attorney conduct: inherent powers, implied powers, and contractual powers. The first two are occasionally, though not universally, endorsed by some public international and investment law tribunals,292 and undoubtedly remain important for public international tribunals.293 The third is the contractual approach, which was foreshadowed in the earlier-described precursors that are already being embraced by recent efforts to develop international ethics. The contractual approach is also the approach most consistent with modern governance theories and models of self-regulation.

6.148  Even in jurisdictions that are traditionally very deferential to arbitration, like the United States, judicial decisions about tribunal powers are all over the proverbial map, both in terms of outcomes and in terms of justifications for those outcomes. Disqualification presents an (p. 267) easier context because, even if a tribunal decision affects the conduct of counsel, it can be directed at a party, as contemplated by the new LCIA Arbitration Rules.

6.149  Even if disqualification is the easier context, there is still significant judicial disagreement. For example, in the United States, those courts that have permitted arbitrators to rule on motions to disqualify counsel have done so on the ground that such rulings necessarily implicate the merits and procedures of the underlying dispute, which the arbitrators were better situated to evaluate.294 One court even went so far as to suggest that court intervention ‘would show disrespect toward the Arbitration panel, which has the broad authority to address these issues in the first instance’ and would run contrary to state and national policies in favour of arbitration.295 Other courts reason that deference is essential to the proper functioning of arbitration and an avoidance of judicial intrusion on arbitral proceedings.296

6.150  On the other hand, several other US courts have rejected the idea that arbitrators have the power to decide the issue of counsel disqualification. The line of cases most often cited for this proposition come out of New York, and can be traced back to an oft-cited, one-paragraph opinion of the court of first instance (somewhat misleadingly called the ‘Supreme Court’) of New York in Bidermann Indus. Licensing, Inc. v Avmar N.V.297 Cases since Bidermann have often provided more thoughtful and thorough analyses, and hence constitute a significant body of authority weighing against the existence of such power.298

(p. 268) 6.151  At the international level, numerous cases have also addressed questions about tribunals’ inherent and implied powers to issue sanctions or disqualify counsel. Some older commercial arbitration cases reached inconsistent conclusions about their powers. One ICC tribunal concluded that it lacked jurisdiction to rule on a request to disqualify counsel. The tribunal characterized the claim as a dispute between claimant and counsel, which it concluded was not within the scope of the arbitration agreement. Even if had been within the scope, however, the tribunal found that the ‘dispute’ would not be arbitrable as a matter of law.299 Notably, the tribunal also expressed doubts about whether the ethical code of a domestic bar association applied ‘in the context of an international arbitral proceeding’.300 By contrast, another ICC tribunal assumed its jurisdiction to decide the issue of counsel disqualification, but in assessing the substance of the challenge, it ultimately denied the request on the merits.301

6.152  Arbitrators’ inherent authority is especially pertinent in treaty-based arbitrations, where arbitrators ‘hold a public office in view of the host State’s consent by sovereign act’.302 Not surprisingly, a number of investment tribunals have ruled on issues of counsel ethics. The most prominent, perhaps even watershed, case is Hrvatska Elektroprivreda d. d. [HEP] v The Republic of Slovenia.303 In that case, HEP requested the tribunal exclude one of Slovenia’s counsel from further proceedings when it was disclosed for the first time shortly before the hearings that Slovenia’s counsel was an English barrister who was a member of the same barristers’ chambers as the tribunal’s President.304 The tribunal ultimately ruled that the counsel in question could not participate further as counsel in the case.305

6.153  The tribunal grounded its decision on the immutability of properly constituted tribunals established under Article 56(1) of the ICSID Convention and procedural powers granted under Article 44 of the Convention (authorizing the tribunal to decide ‘any question of procedure’ not expressly dealt with in the Convention, or the ICSID Arbitration Rules, or ‘any rule agreed by the parties’).306 Additionally, the tribunal reasoned that international courts have an ‘inherent power’ existing independent of any statutory reference to deal with any issues necessary for the conduct of matters falling within its jurisdiction.307

(p. 269) 6.154  Another tribunal, in Rompetrol Group NV v Romania,308 similarly decided that it had an inherent power to disqualify counsel, but determined that such power would only be exercised ‘rarely, and then only in compelling circumstances’ based on an overriding and undeniable need to safeguard the essential integrity of the entire arbitral process.309 Also, in Fraport Ag Frankfurt Airport Services Worldwide v The Philippines,310 an ICSID Annulment Committee looked to Article 44 of the ICSID Convention and what it called a ‘functional justitfication’ to decide that it has the ‘power and obligation to make sure that generally recognized principles relating to conflict of interest and the protection of the confidentiality of information imparted by clients to their lawyers are complied with’.311 Even if it asserted that it had the power, the tribunal determined that there was no clear evidence that counsel received confidential information and hence there was no real risk of prejudice to the proceedings.312

6.155  These various precedents reveal not only conflicting outcomes, but a divided conceptualization about the regulatory role of arbitral tribunals independent of their outcomes. As analysed in greater detail in Chapter 9, conceptions of arbitrators’ role is often characterized in binary terms, as either ‘justice providers’ who substitute for judges or as mere ‘service providers’ who simply enforce parties’ contractual agreements.

6.156  The conception of tribunals as service providers is most vivid in ICC Case 8897. There, the tribunal held that the issue regarding counsel ethics, even if within the scope of the arbitration agreement, would be non-arbitral because it required adjudicating the ‘criminal consequences of alleged advocate misconduct’.313 The conception of tribunals as justice-providers is most clearly illustrated in the reasoning of HEP v Slovenia, which relied on its quasi-public status and finding of judicial-like inherent and implied power to conclude that regulating the professional conduct of counsel is part of that function.314

6.157  In Fraport, the tribunal attempted to stake out an uncomfortable middle ground. It concluded that it had the power to disqualify or exclude counsel, but that it lacked ‘deontological responsibilities’, and had ‘no power to rule on an allegation of misconduct under any such professional rules as may apply’ and instead limited its power to ‘the fair conduct of the (p. 270) proceedings before it’.315 On the one hand, this reasoning acknowledges a necessity and appropriateness for arbitral tribunals to enforce international ethics (even if the tribunal characterized them only as ‘generally recognized principles relating to conflict of interest’). On the other hand, it highlights several residual problems that will have to be addressed if international arbitration is to move toward an effective model of self-regulation for counsel conduct including the relationship between national ethical rules and international arbitration’s international ethical obligations.

6.158  Even if awards of costs and fees are a typical tribunal response to attorney misconduct, re-targetting monetary sanctions at the offending counsel presents unique jurisdictional problems. While an order to disqualify counsel can arguably be directed at the parties to the arbitration agreement, sanctions would be directed at attorneys who are not parties to the agreement. Here again the few available authories are split, with most cases finding that arbitrators lack jurisdiction over attorneys. A few cases have, however, been willing to find arbitral jurisdiction. Their reasoning is based on powers implied in arbitral rules or inherent in the nature of arbitral adjudication,316 similar to the reasoning discussed earlier regarding disqualification in investment arbitration cases.

ii. Fully operational self-regulation of counsel

6.159  One recurring theme with respect to international regulation of counsel in international arbitration is its relationship with national ethical rules and professional regulation. The IBA Guidelines on Party Representatives and most tribunal decisions regarding arbitrators’ powers to rule on counsel ethics presume that national ethical rules and enforcement mechanisms do and should still apply in full force in international arbitration. For a fully functioning model of ethical regulation in international arbitration, what is needed is instead something closer to Braithwaite’s model of ‘enforced self-regulation’ that has proven so successful for international arbitrators.317 It would be premature and presumptuous, particularly given the breakneck pace at which counsel ethics are evolving, to dictate here a specific blueprint for this goal. There are, however, a few prescriptions that seem necessary and inevitable.

6.160  First, there is a need to more clearly determine when and how international ethics displace, as opposed to merely supplement, national ethical rules. While many sceptics predict national bar authorities would not make necessary concessions, there seems to be much evidence to the contrary. For example, in the United States, Model Rule 8.5 allows international tribunals to have their own rules, such as the International Criminal Tribunal for the former Yugoslavia (ICTY) and the International Criminal Court, and US bar rules allow attorneys to abide by those rules instead of the rules of their home jurisdiction.318 In addition, with (p. 271) respect to international arbitration, as examined in Chapter 3, Swiss, Belgian, and French bar authorities have created special exceptions for international tribunals to allow locally licensed attorneys to engage in pre-testimonial communication with witnesses that would otherwise be prohibited in domestic litigation or arbitration.319 In a similar vein, bar authorities in the arbitral seat arguably could assert regulatory power over foreign attorneys appearing in locally seated arbitrations. As examined in Chapter 1, however, jurisdictions have almost uniformly created special exemptions in an effort to attract international arbitration business.320

6.161  The willingness of national bar authorities to grant exemptions from national rules demonstrates that international arbitration practitioners are effective at lobbying their local bar authorities to relinquish regulatory authority. The ultimate aim of such lobbying should not be a complete relinquishment of national ethical rules, but instead choice-of-law rules that allow application of international arbitration ethics to counsel appearing in international arbitral proceedings.

6.162  To be effective at creating an even playing field in international arbitration, a choice-of-law rule must be adopted by all relevant national bar authorities. The best way to approach this effort is through an international ‘model’ choice-of-law rule that can be adopted by national bar authorities.321 The drafting of such a rule will require serious analysis and delineation of which rules or categories of duties get displaced, as well as when, and how.322 The process of drafting and implementing such rules, however, will help affirm national support for primary regulation to be located with international arbitral tribunals.

6.163  Another innovation needed to ensure fully functioning attorney self-regulation, particularly if national bar authorities cede application of their national ethical rules, is to affirm arbitral tribunal powers to function as primary regulators. To this end, attorneys should be personally and expressly subject to tribunal power. Momentum is already gaining regarding tribunal powers to exclude or disqualify counsel. That momentum is manifest in assertions by tribunals of their inherent or implied power.323 Even more recently that momentum is manifested by proposed revisions by the LCIA that would embed such power in the arbitral rules, and consequently the parties’ agreement,324 and by ad hoc efforts by individual tribunals to create such powers by including them in terms of reference and initial procedural orders.325 The advantage of these latter mechanisms is that they establish contractual forms of arbitral jurisdiction that are less likely to encounter opposition by national courts or authorities. A similar mechanism could be used to make attorneys directly and personally subject to arbitral jurisdiction.

(p. 272) 6.164  In the ordinary course of events, attorneys generally sign terms of reference or initial procedural orders. These signatures are a form of assent, but expressed by attorneys in their representative, not individual, capacity. There is some debate about whether the terms of reference constitute an amendment to the arbitration agreement or a new superseding agreement.326 Whatever the status, however, signature by attorneys in their personal capacity could join them, for limited purposes, to the arbitration agreement.

6.165  Ultimately, having attorneys sign on to the arbitration agreement would allow tribunals to issue ‘sanction awards’ when severe misconduct was found. Such sanction awards would be enforceable like other Convention awards, and would provide a formal means for international arbitrators to issue definitive assessments of attorney conduct with real remedies attached. Sanction awards would internalize enforcement power within international arbitration’s procedures, but would subject that power to ordinary award-review or bar-review mechanisms. It would, in other words, achieve enforced self-regulation of attorneys in international arbitration.

C. Conclusion

6.166  While ‘regulation’ is a term that is generally resisted, self-regulation in international arbitration is a healthy way to preserve existing structures and strengthen the regime. The legitimacy of international arbitration is predicated in substantial part on the integrity and professional conduct of its founders and of its modern custodians—the arbitrators, counsel, experts, and administrators of arbitral institutions who manage and decide the disputes. These participants build and sustain the legal frameworks and procedures on which the legitimacy of international arbitration is founded. Clearer ethical norms and a reliable enforcement regime are essential to that function and have evolved organically in international arbitration.

6.167  Apart from avoiding potential risks of external regulation, the regulation of counsel in international arbitration presents an important opportunity. Just as with arbitrator ethics, effective counsel regulation will help to facilitate the influx of an increasingly large diversity spectrum of participants.

6.168  The evolution of internal regulation of international arbitrators, and subsequently attorneys, in international arbitration also holds some clues about the future of regulation of experts and third-party funders. For example, as with the evolution of ethics for counsel, procedural innovations regarding experts have already been introduced, most specifically through recent revisions to the IBA Evidence Rules. These efforts are already attempting to frame their ethical obligations. As examined in Chapter 4, some of these rules miss their mark and may need further revision, but they signal an intuition that some clearer regulation is needed.

6.169  Efforts to regulate third-party funders, meanwhile, may follow a similar approach. Just arbitrators were a first priority for ethical self-regulation more generally, but third-party funders may piggyback on arbitrator impartiality reforms. There are already efforts underway to incorporate disclosure obligations relating to third-party funders in revisions to the IBA Guidelines on Conflicts.

(p. 273) 6.170  Assuming third-party funders are addressed in arbitrator disclosure obligations, a related obligation for parties to disclose the presence of funders in the dispute would become inevitable. Moreover, as future refinements to counsel ethics are introduced, third-party funding regulation will likely creep in there too. Most obviously, the existence of, and law applicable to, attorney-client privilege can be determined by arbitral tribunals, as illustrated in IBA Evidence Rules, Article 9, discussed earlier.327


Geoffrey Chaucer, Canterbury Tales, lns 3429–32 (‘You shall no more, with any flattery, / Cause me to sing and close up either eye. / For he who shuts his eyes when he should see, / And wilfully, God let him ne’er be free!’).

**  Antoine de Saint-Exupéry, The Little Prince, ch 21 (1943) (‘“People have forgotten this truth”, the fox said. “But you mustn’t forget it. You become responsible forever for what you’ve tamed”.’).

1  Julia Black, ‘Decentring Regulation: Understanding the Role of Regulation and Self-Regulation in a “Post-Regulatory” World’, 54 Current Legal Probs. 103, 115 (2001).

2  According to the Organisation for Economic Co-operation and Development (OECD) definition of ‘regulation’, it includes a dizzying and tangled array of sources: ‘Constitutions, parliamentary laws, subordinate legislation, decrees, orders, norms, licenses, plans, codes and even some forms of administrative guidance can all be considered as “regulation.”’ OECD, Recommendation of the Council of the OECD on Improving Quality of Government Regulation, C(95)21/FINAL, n. 2, <http://acts.oecd.org/Instruments/​ShowInstrumentView.aspx?InstrumentID=1288InstrumentPID=1248Lang=en8Book=False>.

3  This perception is captured in the image of the Global Arbitration Review—a man in a suit tied up in red tape and unable to move—used to illustrate the debate between Chief Justice Sundaresh Menon and Toby Landau, QC about the need for professional regulation in international arbitration. See Allison Ross, ‘Regulation Debate Continues in Singapore’, Global Arb. Rev., 13 June 2012, <http://globalarbitrationreview.com/news/article/30608/> (quoting Toby Landau as saying international arbitration risks ‘regulating ourselves out of existence’).

4  See Black, ‘Decentring Regulation’ 115.

5  See Black, ‘Decentring Regulation’ 115.

6  Critiques about self-regulation in international arbitration have been most vehement among critics of investment arbitration. See, e.g., ‘Who guards the guardians? The conflicting interests of investment arbitrators’, Corp. Eur. Observatory, 27 Nov. 2012, <http://corporateeurope.org/trade/2012/11/chapter-4-who-guards-guardians-conflicting-interests-investment-arbitrators> (discussing the legitimacy of arbitration in its current form).

7  Michael Schneider, ‘The Essential Guidelines for the preparation of Guidelines, Directives, Notes, Protocols and Other Methods Intended to Help International Arbitration Practitioners to Avoid the Need for Independent Thinking and to Promote the Transformation of Errors into “Best Practices”’, in Laurent Lévy and Yves Derains (eds.), Liber amicorum en l’honneur de Serge Lazareff (2011) 563 (draft on file with author).

8  Michael Schneider, ‘President’s Message: Yet another opportunity to waste time and money on procedural skirmishes: The IBA Guidelines on Party Representation’, 31:3 ASA Bull. 497, 499 (2013) (‘While the [arbitral procedures] may be regulated by the parties to an arbitration and by the arbitral tribunal appointed by them, [ethical rules] fall within the responsibility of those professional bodies that regulate the exercise of the legal profession.’).

9  For instance, Professor Jan Paulsson has cautioned that ‘good rules that are prospective’ or ‘robust’ rules for regulating international arbitration ‘might be too robust to be tolerated by [national] legal systems’ which might overrule those regulations. Therein ‘lies a danger of overreaching self-regulation and turning it into something which is a peril for the process’. Jan Paulsson, London School of Economics, Is Self-Regulation of International Arbitration an Illusion?, 4th LSE Arbitration Debate, 9 May 2013, 34:34, <http://www.arbitration-icca.org/AV_Library/4th_LSE_Arbitration_Debate.html>. Paulsson also argues that in arbitration involving States as parties, States are unlikely to accept international regulation of its counsel. LSE Debate, 43:40 (hereafter ‘LSE Debate’) (‘The politics of adjudication under public international law may make it unlikely that disputing states will accept a lot of regulation.’).

10  There are several versions of this line of argument. There is the classic if-it-ain’t-broke-don’t-fix-it argument. See Comments of Sundaresh Menon, in LSE Debate. Others argue arbitration is becoming ossified with too many rules and regulations, and ‘more regulation’ will only aggravate that problem. See Ross, ‘Regulation Debate Continues in Singapore’. Still others argue that the elite core of international arbitration know how to conduct themselves and are unlikely to benefit from either formal expression of those obligations or imposition of penalties for lapses. See LSE Debate (comments of Toby Landau).

11  See Sebastian Perry, ‘Policing Ethical Conduct: Menon and Paulsson Debate Regulation’, Global Arb. Rev., 6 June 2013, <http://www.globalarbitrationreview.com/journal/article/31702/policing-ethical-conduct- menon-paulsson-debate-regulation/> (‘[A] controversy has raged ever since as to whether there really is a “systemic failure” on the part of institutions, arbitrators, and counsel to maintain minimum standards of ethical conduct and, if so, what form of intervention could remedy it.’); Sebastian Perry, ‘Minds Meet over Regulation’, Global Arb. Rev., 5 June 2013 (‘A much-anticipated debate between Sundaresh Menon and Jan Paulsson on the desirability of a regulatory framework for international arbitration ended with a surprising consensus on the need for arbitral institutions to take the lead in policing ethical conduct.’).

12  In The Nun’s Priest’s Tale, Chanticleer lets down his guard of a henhouse when a clever fox flatters him into demonstrating his lovely singing voice, with neck outstretched and eyes closed. As Chanticleer does so, the fox takes advantage of Chanticleer’s distraction and self-absorption to attack both him and the henhouse. Ultimately, Chanticleer prevails and vows never again to let pride and self-indulgence interfere with his duties.

14  Doak Bishop and Margrete Stevens, ‘The Compelling Need for a Code of Ethics in International Arbitration: Transparency, Integrity and Legitimacy’, in Albert van den Berg (ed.), Arbitration Advocacy in Changing Times (15 ICCA Congress Series, 2010) 391; Charles N. Brower and Stephan W. Schill, ‘Regulating Counsel Conduct Before International Arbitral Tribunals’, in Pieter Bekker et al. (eds.), Making Transnational Law Work in the Global Economy: Essays in Honor of Detlev Vagts (2010) 488 (‘At issue may ultimately be the legitimacy of the international arbitral system as a whole, in particular inasmuch as…[uniform legal ethics for counsel] operate not only retrospectively…but also prospectively as a mechanism of global governance.’); David J.A. Cairns, ‘Advocacy and the Functions of Lawyers in International Arbitration’, in M.Á. Fernández-Ballesteros and D. Arias (eds.), Liber Amicorum Bernardo Cremades (2010) 291; Margaret L. Moses, ‘Ethics in International Arbitration: Traps for the Unwary’, 10 Loy. U. Chi. Int’l L. Rev. 73, 80 (2012) (‘An international code could help provide transparency and certainty for proper attorney conduct, help level the playing field, contribute to the fairness of the procedure, and improve the confidence of the participants and the public in the arbitration process.’); Doak Bishop, Keynote Address at the ICCA Congress on 26 May 2010, ‘Ethics in International Arbitration’, in van den Berg, Arbitration Advocacy in Changing Times 383, 388 (‘Although there have been no catastrophes to this point, the International Arbitration system is at least subject to reasonable criticism without its own transparent Code of Ethics, and we need to ensure the future integrity and legitimacy of the system.’). See also Carolyn B. Lamm et al., ‘Has the Time Come for an ICSID Code of Ethics for Counsel?’ in Karl Sauvant (ed.), 2009–2010 Y.B. Int’l Inv. L. & Pol’y (2010) (answering the titular question in the positive); Cyrus Benson, ‘Can Professional Ethics Wait? The Need for Transparency in International Arbitration’, 3 Disp. Resol. Int’l 78, 83 (2009) (answering the titular question in the negative); Doak Bishop and Margrete Stevens, ‘Advocacy and Ethics in International Arbitration: International Code of Ethics for Lawyers Practicing Before International Arbitral Tribunals’, in van den Berg, Arbitration Advocacy in Changing Times; Günther Horvath, ‘Guerrilla Tactics in Arbitration, An Ethical Battle: Is There Need for a Universal Code of Ethics?’, in Christian Klausegger, Peter Klein et al. (eds.), Austrian Yearbook on International Arbitration (Manz’sche Verlags- und Universitätsbuchhandlung, 2011) 297 (answering titular question in the positive).

15  Ross, ‘Regulation Debate Continues in Singapore’ (quoting Toby Landau).

16  Ross, ‘Regulation Debate Continues in Singapore’ (quoting Toby Landau).

17  Christine Parker, ‘The Pluralization of Regulation’, 8 Theoretical Inq. L. 349, 349 (2008). See also Peer Zumbansen, ‘Sustaining Paradox Boundaries: Perspectives on Internal Affairs in Domestic and International Law’, 15 Eur. J. Int’l L. 197, 201 (2004) (‘Comparative studies of developments in regulatory law and policy in Western states over the past three decades have shown a widespread movement away from a top-down approach in public governance to an increasingly hybrid interaction of public and private actors.’) (reviewing A. Claire Cutler, Private Power and Global Authority (Cambridge University Press, 2003)).

18  See Larry Catá Backer, ‘Inter-Systemic Harmonization and its Challenges for the Legal-State’, in Sam Muller et al. (eds.), The Law of the Future and the Future of the Law (2011) 427, 431–2, <http://www.fichl.org/fileadmin/fichl/documents/FICHL_11_Web.pdf> (‘[T]he greatest challenge for law in the twenty-first century is to avoid becoming irrelevant in an emerging global governance order in which corporations use contracts to regulate their supply chains, states reconstitute themselves as private market actors and private enterprises assert regulatory control of markets through authoritative systems of assessment and rating.’); Paul Schiff Berman, ‘Global Legal Pluralism’, 80 S. Cal. L. Rev. 1155, 1170 (2007) (‘[M]any community affiliations, such as those held by transnational or subnational ethnic groups, religious institutions, trade organizations, unions, Internet chat groups, and a myriad of other “norm-generating communities” may at various times exert tremendous power over our actions even though they are not part of an “official” state-based system.’).

19  Parker, ‘The Pluralization of Regulation’ 350–1 (citations omitted). For a thoughtful analysis on the multiplicity of meanings attributed to the term ‘regulation’, see Black, ‘Decentring Regulation’ 128–36.

20  Julia Black, ‘Critical Reflections on Regulation’, 27 Austl. J. on Legal Phil. 1, 26 (2002). Mapping the essential features of this definition onto the topics of this chapter, regulation can be said to be a sustained and focused attempt to ensure that the conduct of arbitrators, attorneys, experts, and third-party funders comports with ethical standards in order to ensure the fairness of arbitral outcomes.

21  Jodi L. Short, ‘The Paranoid Style in Regulatory Reform’, 63 Hastings L.J. 633, 634 (2012).

22  For an overview of these regulatory shifts, see Orly Lobel, ‘The Renew Deal: The Fall of Regulation and the Rise of Governance in Contemporary Legal Thought’, 89 Minn. L. Rev. 342, 423–32 (2004).

23  See Catá Backer, ‘Inter-Systemic Harmonization’ 429 (‘Much that passes for law-making remains at this level of nineteenth century conceptions, even as the foundations for those conceptions—the superiority of the state and of the positive law produced by a sovereign demos—has been severely challenged.’); Michael Torrance, ‘Persuasive Authority Beyond the State: A Theoretical Analysis of Transnational Corporate Social Responsibility Norms as Legal Reasons Within Positive Legal Systems’, 12 German L.J. 1573, 1579 (2011) (‘The development of…transnational normative systems amongst private actors…is associated with the limitations of a State-centric definition of domestic and international law that is perceived to be “incapable” of delineating fully the parameters of social conduct (including the social conduct of corporations) in relation to other social actors.’); Marc Galanter, ‘Planet of the APs: Reflections on the Scale of Law and Its Users’, 53 Buff. L. Rev. 1369, 1399–1401 (2006) (‘In the past 30 years the business corporation has achieved an ascendancy over government entities’).

24  Olaf Dilling, ‘From Compliance to Rulemaking: How Global Corporate Norms Emerge from Interplay with States and Stakeholders’, 13 German L.J. 381 (2012).

25  Kenneth W. Abbott and Duncan Snidal, ‘Strengthening International Regulation Through Transnational New Governance: Overcoming the Orchestration Deficit’, 42 Vand. J. Transnat’l L. 501, 577–8 (2009) (discussing the deficiencies of contemporary transnational governance); Catá Backer, ‘Inter-Systemic Harmonization’ 428 (‘At the start of the twenty-first century, governance harmonization has become a more complicated, more desired, and yet more elusive enterprise.’).

26  S.I. Strong, ‘Regulatory Litigation in the European Union: Does the US Class Action Have a New Analogue?’ 88 Notre Dame L. Rev. 899, 914 (2012).

27  See Robert Wai, ‘Transnational Liftoff and Juridical Touchdown: The Regulatory Function of Private International Law in an Era of Globalization’, 40 Colum. J. Transnat’l L. 209 (2002); Dan Danielson, ‘How Corporations Govern: Taking Corporate Power Seriously in Transnational Regulation and Governance’, 46 Harv. Int’l L.J. 411 (2005).

28  See Saule T. Omarova, ‘Wall Street as Community of Fate: Toward Financial Industry Self-Regulation’, 159 U. Pa. L. Rev. 411, 428 (2011) (‘The world as seen through the theoretical lens of New Governance is a complex, dynamic, and intricately interconnected universe in which various governmental and non-governmental forces constantly negotiate the boundaries between public and private spheres of economic and social life.’).

29  See Torrance, ‘Persuasive Authority Beyond the State’ 1582.

30  See Dilling, ‘From Compliance to Rulemaking’ 381 (‘In many cases, such regulatory issues therefore cannot be resolved within a single territory. Instead, they require the involvement of global players, such as civil society, business actors, or international organizations, who can often find pragmatic solutions to global problems, even if they lack the formal authority to do so.’).

31  Berman, ‘Global Legal Pluralism’ 1170 Parker, ‘The Pluralization of Regulation’ 349.

32  See Abbott and Snidal, ‘Strengthening International Regulation Through Transnational New Governance’ 505.

33  See Gregory C. Shaffer and Mark A. Pollack, ‘Hard vs. Soft Law: Alternatives, Complements, and Antagonists in International Governance’, 94 Minn. L. Rev. 706, 707 (2010).

34  See Gunther Teubner, ‘Global Bukowina: Legal Pluralism in the World Society’, in Gunther Teubner (ed.), Global Law Without A State (1997) 3. These developments are also sometimes referred to as ‘lex mercatoria’, though that term is not used here given its potential to cause confusion with other doctrines more specific to the international arbitration regime.

35  See Abbott and Snidal, ‘Strengthening International Regulation Through Transnational New Governance’.

36  Tim Büthe and Walter Mattli, The New Global Rulers: The Privatization of Regulation in the World Economy (Princeton, 2011) 5.

37  See John Braithwaite, ‘Enforced Self-Regulation: A New Strategy for Corporate Crime Control’, 80 Mich. L. Rev. 1466, 1468 (1981–82).

38  Braithwaite, ‘Enforced Self-Regulation’ 1469.

39  John Armour and David A. Skeel, Jr., ‘Who Writes the Rules for Hostile Takeovers, and Why? The Peculiar Divergence of US and UK Takeover Regulation’, 95 Geo. L.J. 1727, 1729 (2007).

40  See Black, ‘Decentring Regulation’ 115.

41  See Braithwaite, ‘Enforced Self-Regulation’. See also Abbott and Snidal, ‘Strengthening International Regulation Through Transnational New Governance’.

42  See Black, ‘Decentring Regulation’. An additional requisite for effective self-regulation, suggested by another commentary, is the existence of social cohesion and common normative objectives among those self-regulating. Neil Gunningham and Joseph Rees, ‘Industry Self-Regulation: An Institutional Perspective’, 19 Law & Pol’y 363, 371–2 (1997) (identifying one reason for why some industries are more successful than others is ‘the development of an effective industrial morality that brings the behavior of industry members within a normative ordering’); Klaus J. Hopt, ‘Comparative Corporate Governance: The State of the Art and International Regulation’, 59 Am. J. Comp. L. 1, 64 (2011) (suggesting that the success of the Takeovers Panel in London is related to the ‘British self-regulatory tradition’, which does not necessarily translate to other countries that do not share the tradition).

43  Braithwaite, ‘Enforced Self-Regulation’ 1469.

44  See Christine Parker, ‘Compliance Professionalism and Regulatory Community: the Australian Trade Practices Regime’, 26 J.L. & Soc’y 215, 216 (1999) (commenting on Braithwaite).

45  Braithwaite, ‘Enforced Self-Regulation’ 1471.

46  Braithwaite, ‘Enforced Self-Regulation’, 1483–90; see also Tetty Havinga, ‘Private Regulation of Food Safety by Supermarkets’, 28 Law & Pol’y 515 (2006).

47  Braithwaite, ‘Enforced Self-Regulation’, 1490–1500.

48  Julia Black, ‘Legitimacy and the Competition for Regulatory Share’ (23 June 2009), LSE Legal Studies Working Paper No. 14/2009, <http://ssrn.com/abstract=1424654>, 16.

49  Mark C. Suchman, ‘Managing Legitimacy: Strategic and Institutional Approaches’, 20 Acad. Mgmt. Rev. 571, 574 (1995).

50  Black, ‘Legitimacy and the Competition for Regulatory Share’ 9.

51  Black, ‘Legitimacy and the Competition for Regulatory Share’ 10.

52  Jan Paulsson, Foreword, in Karel Daele, Challenge and Disqualification of Arbitrators in International Arbitration (Kluwer, 2012) xx.

53  Black, ‘Legitimacy and the Competition for Regulatory Share’ 12.

54  Black, ‘Decentring Regulation’ 143–4 (explaining that multiple permutations of ‘accountability’ (i.e., within cultural norms or democratization schemes) entail normative assumptions of a narrow conceptualization of self-regulation, necessarily requiring a specific object of regulation and a regulator).

57  Richard L. Abel, American Lawyers (1989) 37 (‘If structural functionalism had to distinguish professions by means of a single characteristic, self-regulation would be a prime candidate.’); William T. Gallagher, ‘Ideologies of Professionalism and the Politics of Self-Regulation in the California State Bar’, 22 Pepp. L. Rev. 485, 493 (1995) (‘[S]elf-regulation has traditionally been considered theoretically central to the professional enterprise.’); Michael J. Powell, ‘Professional Divestiture: The Cession of Responsibility for Lawyer Discipline’, 1986 Am. B. Found. Res. J. 31, 31–2 (1986) (reporting that sociologists regard self-regulation as the defining characteristic of a profession).

58  Abel, American Lawyers 23.

59  Abel, American Lawyers 157.

60  In many jurisdictions, ethical rules are promulgated through legislative enactment, even if supplemented by ancillary enforcement mechanisms. For example, in Thailand, China, Egypt, and Turkey the content attorney ethical rules are delineated by statute. In other jurisdictions, such as Chile, ethical rules are written by professional guilds, but those guilds are voluntary organizations that can exclude members, yet which have no formal regulatory power since membership is not required for law practice. See Evan A. Davis, ‘The Meaning of Professional Independence’, 103 Colum. L. Rev. 1281, 1290 (2003); Judith A. McMorrow, ‘Professional Responsibility in an Uncertain Profession: Legal Ethics in China’, 43 Akron L. Rev. 1081, 1101 (2010) (describing legislatively enacted rules governing lawyers in China, and how they override rules enacted by local professional organizations).

61  Bruce A. Green, ‘Lawyers’ Professional Independence: Overrated or Undervalued?’ 46 Akron L. Rev. 599, 604 (2013).

62  Letter from Georges-Albert Dal, President, Council of Bars and Law Soc’ys of Eur., and William T. Robinson, III, President, Am. Bar Ass’n, to Christine Lagarde, Managing Director, Int’l Monetary Fund (21 Dec. 2011), <http://www.ccbe.eu/fileadmin/user_upload/NTCdocument/CCBE_and_ABA_letter_1_1325686329.pdf> (cited in Green, ‘Lawyers’ Professional Independence’ 604 ).

63  See Fred C. Zacharias, ‘The Myth of Self-Regulation’, 93 Minn. L. Rev. 1147, 1152–3 (2009).

64  See Thomas E. Carbonneau, ‘Freedom and Governance in US Arbitration Law’, 2 Global Bus. L. Rev. 59, 85 (2011) (extolling the virtues of judicially-supervised self-regulating arbitration bodies); Benjamin H. Barton, ‘The ABA, the Rules, and Professionalism: The Mechanics of Self-Defeat and a Call for a Return to the Ethical, Moral, and Practical Approach of the Canons’, 83 N.C. L. Rev. 411, 439 (2005) (arguing the in- effectiveness of judicial oversight in curbing misconduct of the current self-regulating US legal profession); David Barnhizer, ‘Profession Deleted: Using Market and Liability Forces to Regulate the Very Ordinary Business of Law Practice for Profit’, 17 Geo. J. Legal Ethics 203, 225–6 (2004) (same).

65  See Ira Horowitz, ‘The Economic Foundations of Self-Regulation in the Professions’, in Roger D. Blair and Stephen Rubin (eds.), Regulating the Professions: A Public-Policy Symposium (1980); Paul Milgrom et al., ‘The Role of Institutions in the Revival of Trade: the Law Merchant, Private Judges, and the Champagne Fairs’, 2 Econ. & Pol. 1–23 (1990).

66  Geoffrey C. Hazard, Jr. and Susan P. Koniak, The Law and Ethics of Lawyering (1990) (cataloguing the range of statutory and common law rules that govern attorney conduct in the United States). For an overview of these developments at the international level, see Laurel S. Terry et al., ‘Transnational Legal Practice’, 42 Int’l Law. 833 (2008).

67  See David B. Wilkins, ‘Making Context Count: Regulating Lawyers After Kaye, Scholer’, 66 S. Cal. L. Rev. 1145, 1154 (1993); David B. Wilkins, ‘How Should We Determine Who Should Regulate Lawyers?’ 105 Harv. L. Rev. 799, 803 (1992).

70  Parker, ‘The Pluralization of Regulation’ 350–1 (citations omitted).

71  Wilkins, ‘Making Context Count’ 1153.

72  See Wilkins, ‘Who Should Regulate’, 806–9.

73  Wilkins, ‘Making Context Count’ 1154.

74  See Wilkins, ‘Who Should Regulate’ 473 (arguing that understanding institutional incentives of those in charge of the institution is a ‘primary goal’ of determining how or who should regulate attorneys); Wilkins, ‘Who Should Regulate’ 843–4 (‘[D]espite their limitations, institutional controls have a number of enforcement advantages over disciplinary regulation.’).

75  While this function holds many potential benefits, in some legal systems it may not be possible as a matter of constitutional law or jurisdictional limitations for courts. While systematic comparative analysis of this issue would undoubtedly be interesting, it is beyond the scope of this volume.

76  Wilkins, ‘Who Should Regulate’ 838.

77  Wilkins, ‘Who Should Regulate’ 835.

78  Wilkins, ‘Who Should Regulate’ 835.

79  Wilkins, ‘Who Should Regulate’, 836–8.

80  Wilkins, ‘Who Should Regulate’ 884.

81  Black, ‘Legitimacy and the Competition for Regulatory Share’ 12.

82  For a classic analysis of the dilution of national mandatory law in international arbitration, see Philip J. McConnaughay, ‘The Risks and Virtues of Lawlessness: A “Second Look” at International Commercial Arbitration’, 93 Nw. U. L. Rev. 453, 461 (1999).

83  See Gunther Teubner, ‘Breaking Frames: The Global Interplay of Legal and Social Systems’, 45 Am. J. Comp. L. 149 (1997) (arguing that transnational commercial actors and multinational corporations challenge the supremacy of state-based legal systems for pre-eminence in the production of norms). See also Alec Stone Sweet, ‘The New Lex Mercatoria and Transnational Governance’, 13:5 J. Eur. Pub. Pol’y 627 (2006). For an analysis of these developments and their relation to international private law, see Wai, ‘Transnational Liftoff and Juridical Touchdown’.

84  Antipoetic systems such as international arbitration can allow ‘those actors with the resources, scale, and expertise to monitor a complex regulatory terrain…will be the most able to advance their interests’. See Wai, ‘Transnational Liftoff and Juridical Touchdown’ 264.

85  Martin Shapiro, Courts: A Comparative and Political Analysis (1986) 25 (analysing adjudication as a form of regulation or ‘social control’).

86  Strong, ‘Regulatory Litigation in the European Union’ 901.

87  Christopher A. Whytock, ‘Domestic Courts and Global Governance’, 84 Tul. L. Rev. 67, 71 (2009) (arguing that domestic courts are ‘pervasively involved in regulating transnational activities’ but analysing how that role is limited to allocating governance authority); Christopher A. Whytock, ‘Transnational Judicial Governance’, 2 St. John’s J. Int’l & Comp. L. 55 (2012).

88  Gary Born, International Commercial Arbitration (Kluwer, 2014) 66 (hereafter ’Born’).

89  Born 66. National courts continue to perform important global governance functions for those categories of cases in which parties are unable or unlikely to agree to arbitration, such as tort cases and public international law cases. See Whytock, ‘Domestic Courts’, 94–6.

90  See John R. Allison, ‘Arbitration Agreements and Antitrust Claims: The Need for Enhanced Accommodations of Conflicting Public Policies’, 64 N.C. L. Rev. 219, 224–5 (1986) (illustrating national challenges to other national awards in a historical sense). This argument has also been advanced by some commentators, who point out that expert arbitrators may be substantively superior to lay juries. See Dora Marta Gruner, Note, ‘Accounting for the Public Interest in International Arbitration: The Need for Procedural and Structural Reform’, 41 Colum. J. Transnat’l L. 923, 944 (2003). Still, there remain detractors who contend that arbitration downplays public interests because ‘[t]he goal of arbitrators is to resolve the dispute presented in a manner responsive to the interests of the parties. Unlike judges, arbitrators need not, and generally should not, consider broader public interests as well’. Hannah L. Buxbaum, ‘The Private Attorney General in a Global Age: Public Interests in Private International Antitrust Litigation’, 26 Yale J. Int’l L. 219, 245 (2001). But see Philip J. McConnaughay, ‘The Risks and Virtues of Lawlessness: A “Second Look” at International Commercial Arbitration’, 93 Nw. U. L. Rev. 453, 456 (1999) (arguing that international arbitral awards ‘are far less likely than public judicial decisions to effectuate the purposes of the mandatory laws’).

91  Born 66. National courts continue to perform important global governance functions for those categories of cases in which parties are unable or unlikely to agree to arbitration, such as tort cases and public international law cases. See Whytock, ‘Domestic Courts’, 94–6.

92  Some scholars have attempted, based on empirical analysis, to challenge claims concerning the primacy of international arbitration in international commercial disputes. See Theodore Eisenberg and Geoffrey P. Miller, ‘The Flight from Arbitration: An Empirical Study of Ex Ante Arbitration Clauses in the Contracts of Publicly Held Companies’, 56 Depaul L. Rev. 335, 367 (2007) (arguing that there is a ‘paucity of arbitration clauses, even in international contracts’). Subsequent analysis has largely discredited the validity of these studies. See Christopher R. Drahozal and Stephen J. Ware, ‘Why Do Businesses Use (or Not Use) Arbitration Clauses?’ 25 Ohio St. J. on Disp. Resol. 433, 463 (2010) (explaining that Eisenberg and Miller erroneously ‘focus on types of contracts that are unlikely to include arbitration clauses’ and ‘they either do not consider, or pay little heed to, the types of contracts that the arbitration literature commonly identifies as likely to include arbitration clauses. As a result, their study likely significantly understates the use of arbitration clauses in [international] contracts between sophisticated parties.’).

93  For example, when service of process and gathering evidence implicate exchanges among the nationals and courts of different States, national differences, and sovereign sensitivities, such service can only be accomplished through treaties that most lawyers consider overly ‘time-consuming and unnecessarily complex…to accomplish what is routine in domestic litigation’. Prego Signor Postino, et al., ‘Using The Mail to Avoid the Hague Service Convention’s Central Authorities’, 12 Or. Rev. Int’l L. 283, 286 (2010). Some US attorneys, unaware of these sensitivities, have even been arrested or provoked diplomatic protests in foreign jurisdictions. See, e.g., US Dept. of State, Service of Legal Documents Abroad, <http://travel.state.gov/law/judicial/judicial_680.html> (‘It may be prudent to consult local foreign counsel early in the process on this point. American process servers and other agents may not be authorized by the laws of the foreign country to effect service abroad, and such action could result in their arrest and/or deportation.’). This unnecessary complexity becomes decidedly more streamlined and simple when predicated on privately agreed-upon arbitral procedures and a private process that does not implicate sovereign sensitivities.

94  There are a few arbitral institutions that are not private, such as the Permanent Court of Arbitration (PCA), which is an inter-governmental agency, and International Centre for Settlement of Investment Disputes (ICSID), which is an autonomous international institution established under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States. See Steven L. Smith and Ivana J. Cingel, § 19:10, ‘Permanent Court of Arbitration’, in Bette J. Roth, Randall W. Wulff, and Charles A. Cooper, 1 Alternative Dispute Resolution Practice Guide (2012); ICSID: ‘About ICSID’ <https://icsid.worldbank.org/ICSID/ICSID/AboutICSID_Home.jsp>.

95  See Justin D’Agostino et al., ‘A Discussion on the Use of Precedents in International Investment Arbitration and its Consequences. Does the Evolving Practice of Relying on Previous Investment Arbitration Awards Represent the Birth of a Customary International Law on Investment?’, Herbert Smith (2011) <http://www.sccinstitute.com/filearchive/4/40956/Justin%20D%27Agostino_Report.pdf> (draft) (arguing the extent of precedent in investment arbitration); Matthew Weiniger, Editorial, ‘Special Issue on Precedent in Investment Arbitration’, 3 Transnat’l Disp. Mgmt. (2008) (same); Tai-Heng Cheng, ‘Precedent and Control in Investment Treaty Arbitration’, 30 Fordham Int’l L.J. 1014, 1016 (2007) (‘[A]lthough arbitrators in investment treaty arbitration are not formally bound by precedent in the same manner as common-law judges, there is an informal, but powerful, system of precedent that constrains arbitrators to account for prior published awards and to stabilize international investment law.’). But see Irene M. Ten Cate, ‘The Costs of Consistency: Precedent in Investment Treaty Arbitration’, 51 Colum. J. Transnat’l L. 418 (2013) (arguing that investment treaty arbitration lacks precedent).

96  See Catherine A. Rogers, ‘The Vocation of the International Arbitrator’, 20 Am. U. Int’l L. Rev. 957, 999–1000 (2005); Cindy G. Buys, ‘The Tensions Between Confidentiality and Transparency in International Arbitration’, 14 Am. Rev. Int’l Arb. 121, 123 n. 7 (2003) (‘Although arbitral awards have no precedential value, the reasoning of the arbitrators may be persuasive to other arbitrators confronting the same or a similar issue.’); Gabrielle Kaufmann-Kohler, ‘Globalization of Arbitral Procedure’, 36 Vand. J. Transnat’l L. 1313, 1323 (2003) (discussing how the IBA Rules primarily ‘restate and generalize’ established international arbitration practices).

97  See generally, Gilbert Guillaume, ‘The Use of Precedent by International Judges and Arbitrators’, 2 J. Int’l Disp. Settlement 5 (2011); Kenneth Michael Curtin, ‘Redefining Public Policy in International Arbitration of Mandatory National Laws’, 64 Def. Couns. J. 271, 279 (1997) (‘Publication of arbitral awards…is becoming more common, thus alleviating the difficulties associated with a lack of precedent.’); Klaus Peter Berger, ‘International Arbitration Practice and the Unidroit Principles of International Commercial Contracts’, 46 Am. J. Comp. L. 129, 149 (1998) (stating that ‘arbitral awards more and more assume a genuine precedential value within the international arbitration process’).

98  For a detailed analysis of the development of this information, see Catherine A. Rogers, ‘Transparency in International Commercial Arbitration’, 54 Kansas L. Rev. 1301 (2006).

99  See Yves Dezalay and Bryant Garth, Dealing in Virtue: International Arbitration and the Construction of a Transnational Legal Order (University of Chicago Press, 1996) 18–29, 278 (noting socialization of lawyers into the elite arbitration network and adoption of eastern arbitration norms).

100  See Anne Marie Slaughter, A New World Order (Princeton University Press, 2004) 20–21.

101  In the first case that portended this rule, Mr X, Buenos Aires v Company A, Award, ICC Award No. 1110, at para. 24 (1963), 10 Arb. Int’l 282, 293 (1994), the tribunal refused to adjudicate the case in which a British company agreed to pay bribes to an Argentinean intermediary. The tribunal concluded that it had no arbitral jurisdiction. See also Mr X, Buenos Aires, at para. 16 (noting that ‘contracts which seriously violate bonosmores… cannot be sanctioned by courts or arbitrators’).

102  Later arbitral tribunals have affirmed that they had jurisdiction over disputes involving contracts procured through corruption. See Born’ 1013–15.

103  Kenneth D. Beale and Paolo Esposito, ‘Emergent International Attitudes Towards Bribery, Corruption and Money Laundering’, 75 Arb. 360 (2009); Aloysius Llamzon, ‘The Control of Corruption through International Investment Arbitration: Potential and Limitations’, 102 Am. Soc’y Int’l L. Proc. 208, 208 (2008); Hilmar Raeschke-Kessler and Dorothee Gottwald, ‘Corruption in Foreign Investment—Contracts and Dispute Settlement between Investors, States, and Agents’, 9 J. World Inv. & Trade 1, 5 (2008); Matthias Scherer, ‘Circumstantial Evidence in Corruption Cases before International Arbitration Tribunals’, 5 Int’l Arb. L. Rev. 29, 29 (2002).

104  Abdulhay Sayed, Corruption in International Trade and Commercial Arbitration (Kluwer Law, 2004); Stephan Wilske and Todd J. Fox, ‘Corruption in International Arbitration and Problems with Standard of Proof: Baseless Allegations or Prima Facie Evidence?’ in Stefan Michael Kröll and others (eds.), International Arbitration and International Commercial Law: Synergy, Convergence and Evolution (Kluwer, 2011) 489.

105  The remaining questions about the role of international arbitrators with respect to corruption focus on their function should interact with existing standards and with other potential centers for regulation. These issues are explored in greater detail in Chapter 9.

106  See Buxbaum, ‘The Private Attorney General in a Global Age’ 262 (noting that nearly all of antitrust enforcement is through private litigation and arbitration).

107  For example, in its amicus brief urging the Supreme Court to permit the arbitration of antitrust claims in Mitsubishi v Soler, the ICC provided numerous examples of cases administered under the auspices of the ICC in which various national competition laws were ‘adeptly handled’ and the public policy interests of the relevant countries were taken into account. Amicus Curie Brief of International Chamber of Commerce, 4–5, Mitsubishi Motors Corp. v Soler Chrysler-Plymouth, Inc., 473 US 614 (1985) (Nos. 83–1569, 83–1733).

108  Currently, 149 countries are signatories to the New York Convention, and 19 countries are signatories to the Panama Convention. See New York Arbitration Convention, <http://www.newyorkconvention.org>; Organization of American States, <http://www.oas.org>.

109  See W. Michael Reisman, Systems of Control in International Adjudication and Arbitration: Breakdown and Repair (1992) 113 (analysing how international arbitration intentionally minimizes the role of national courts to avoid ‘transfer [of] the real decision power from the arbitration tribunal…to a national court’).

110  See Paul Friedland and Stavros Brekoulakis, 2012 International Arbitration Survey: Currrent and Preferred Practices in the Arbitral Process (2 Nov. 2013), <http://annualreview2012.whitecase.com/International_Arbitration_Survey_2012.pdf>.

111  Born 2044 (‘One of the arbitrator’s most significant obligations is to render an award that is enforceable. This duty is frequently expressed, as an objective, in institutional rules.’); Julian D. M. Lew, ‘The Law Applicable to the Form and Substance of the Arbitration Clause’, in Albert Jan van den Berg (ed.), Improving the Efficiency of Arbitration Agreements and Awards: 40 Years of Application of the New York Convention (9 ICCA Cong. Ser, 1998, Kluwer, 1999) 114, 118 (‘The ultimate purpose of an arbitration tribunal is to render an enforceable award.’). But see Christopher Boog and Schellenberg Wittmer, ‘The Lazy Myth of the Arbitral Tribunal’s Duty to Render an Enforceable Award’, Kluwer Arb. Blog, 28 Jan. 2013, <http://kluwerarbitrationblog.com/blog/2013/01/28/the-lazy-myth-of-the-arbitral-tribunals-duty-to-render-an-enforceable-award/> (arguing that arbitrators do not have an affirmative duty to render enforceable awards).

112  Thomas Hale, ‘The Rule of Law in the Global Economy: Explaining Intergovernmental Backing for Private Commercial Tribunals’, APSA Annual Meeting Paper (2013), <http://ssrn.com/abstract=2299637>.

113  Huang Yanming, ‘The Ethics of Arbitrators in CIETAC Arbitration’, 12(2) J. Int’l Arb. 5, 6 (1995) (advancing a view common at the time that ‘an arbitrator’s [personal] “self-discipline” and reputation are sufficient to safeguard the integrity of the process’).

114  See Catherine A. Rogers, ‘Regulating International Arbitrators: A Functional Approach to Developing Standards of Conduct’, 41 Stan. J. Int’l L. 53, 86–7 (2005).

116  Robert Merkin, Arbitration Law, at para. 10.23 (1991, updated June 2013).

117  A v B and X [2011] EWHC 2345, at para. 88 (QB (Comm)) (‘Whilst arbitrators may indeed make wider disclosure [than required by the rules of the LCIA] out of caution, they are under no obligation to do so, let alone under an obligation breach of which could entitle the aggrieved party to say there was a serious irregularity, for the purposes of section 68 of the Arbitration Act, notwithstanding that there was not in fact any arguable case of apparent bias.’); AT&T Corp. v Saudi Cable Co. [1999] All ER(D) 1100 (Comm), appeal dismissed in [2000] EWCA (Civ) 154 (Eng.) (no duty of disclosure under Arbitration Act or common law). See also David Sutton, et al., Russell on Arbitration, 23rd edn., (2007) at para. 4-128 (early disclosure of prior interests that may give rise to impartiality is advisable but not expressly required by statute); Gillian Eastwood, ‘A Real Danger of Confusion? The English Law Relating to Bias in Arbitrators’, 17 Arb. Int’l 287, 297 (2001).

118  See Born 1951. For example, the LCIA Rules require disclosure of any ‘circumstances known to him likely to give rise to any justified doubts as to his impartiality or independence’. LCIA Arbitration Rules, art. 5(3) (1998); ICDR International Arbitration Rules, art. 7(1) (2010). See also WIPO Arbitration Rules, art. 22(b) (2002); DIS Arbitration Rules, §16(1) (1998).

119  For example, in 1976, the UNCITRAL Arbitration Rules imposed a duty to disclose. See art. 9 (1976). Moreover, although neither the ICSID Convention nor the original ICSID Arbitral Rules of 1968 contained a duty to disclose, the 1984 version of the ICSID Rules introduced such a duty and the 2006 Arbitral Rules clarified and expanded the duty. See Daele, Challenge and Disqualification of Arbitrators in International Arbitration 3. Specifically, the new rule requires disclosure of ‘past and present professional, business and other relationships (if any) with the parties’ and ‘any other circumstance that might cause [the arbitrators’] reliability for independent judgment to be questioned by a party’. See ICSID Arbitration Rules, R. 6(2) (2006). As revisions to the rules, these changes were introduced by ICSID through its delegated rule-making powers, as opposed to a multinational treaty or other formal governmental decision.

120  393 U.S. 145, 149 (1968).

121  Commonwealth Coatings, 393 U.S., 149.

122  W. Lawrence Craig et al., International Chamber of Commerce Arbitration, 3rd edn.,(2000) § 13.03, 214 and n. 26.

123  See Rules of Arbitration of the International Chamber of Commerce, art. 7, § 2 (1998), <http://www.jus.uio.no/lm/icc.arbitration.rules.1998/> [1998 ICC Rules]; see also 1998 ICC Rules, art. 7, § 3 (requiring disclosure of same information discovered later in proceedings).

124  ICC Arbitration Rules, art. 11(2) (2012) [ICC Rules].

125  Reference to the ‘eyes of the parties’ is routinely interpreted as imposing a subjective standard for arbitrator disclosure under the ICC Rules. See Yves Derains and Eric A. Schwartz, Guide to the ICC Rules of Arbitration 2nd edn. (Kluwer, 2005) 134–5; Gary Born, ‘The Danish Institute of Arbitration Updates Its Arbitral Rules’, Kluwer Arb. Blog, 28 May 2013, <http://kluwerarbitrationblog.com/blog/2013/05/28/the-danish-institute-of-arbitration-updates-its-arbitral-rules/> (discussing subjective and objective standards of disclosure); Claudia T. Salomon et al., ‘Arbitrator’s Disclosure Standards: The Uncertainty Continues’, 63-OCT Disp. Resol. J. 76, 79 (2008); John M. Townsend, ‘Clash and Convergence on Ethical Issues in International Arbitration’, 36 U. Miami Inter-Am. L. Rev. 1, 18 (2004). The terminology of ‘subjective intent’ is misleading, a topic taken up in greater detail in Chapter 8.

126  A better interpretation of what is meant by the ‘eyes of the parties’ reference in the ICC Rules is that the assessment of a duty to disclose is not limited to what would be ‘reasonable’ for a generic objective observer, but rather what would be reasonable from an observer with the same characteristics, background, and experience of the parties. In other areas of law, such as tort and criminal law, this adaptation of the objective standard is referred to as a ‘modified objective standard’. See e.g., Joseph M. Perillo, ‘The Origins of the Objective Theory of Contract Formation and Interpretation’, 69 Fordham L. Rev. 427, 451 (2000); Vaughan v Menlove (1837), 3 Bing. N.C. 467, 132 E.R. 490 (Can.) (applying modified objective test in negligence setting).

127  See Erika Myrill, ‘Datebook Handy? New ICC Form Forces Arbitrators to Certify their Availability Before Proceedings Begin (Web)’ <http://cpradr.org/Resources/ALLCPRArticles/tabid/265/ID/521/Datebook- Handy-New-ICC-Form-Forces-Arbitrators-to-Certify-their-Availability-Before-Proceedings-Begin-Web.aspx>.

128  ICC Rules, arts. 27 and 33.

129  See generally, Büthe and Mattli, The New Global Rulers.

130  The backlash from arbitrators in response to ICC reforms suggests that it might be difficult for institutions with less institutional fortitude, history, and influence than the ICC to adopt such measures, at least unless and until such disclosures become a more universally accepted norm for disclosure.

131  See,e.g., Milan Chamber of Commerce, International Arbitration Rules: Code of Ethics of Arbitrators (2010), <http://www.camera-arbitrale.it/en/Arbitration/Arbitration+Rules.php?id=64>; Singapore International Arbitration Centre, Code of Practice: Code of Ethics for an Arbitrator (2009), <http://www.siac.org.sg/our-rules/practice-notes/code-of-ethics-for-an-arbitrator>.

132  Black, ‘Legitimacy and the Competition for Regulatory Share’ 15–6.

133  Daele, Challenge and Disqualification of Arbitrators in International Arbitration 910.

134  Social scientists have identified a ‘self-serving bias’ that causes a decision-maker to ‘arrive at judgments of what is fair or right that are biased in the direction of their own self-interests’. Linda Babcock and George Loewenstein, ‘Explaining Bargaining Impasse: The Role of Self-Serving Biases’, 11 J Econ. Perspectives 109, 111 (1997). In addition, as some commentators describe: ‘[D]ecision makers are psychologically motivated to maintain a stable view of a self that is moral, competent, and deserving, and thus, immune from ethical challenges…[T]his view is a barrier to recognizing and addressing conflicts of interest. So, ironically, decision makers’ persistent view of their own ethicality leads to subethical decisions.’ Dolly Chugh et al., ‘Bounded Ethicality as a Psychological Barrier to Recognizing Conflicts of Interest’, in Don A. Moore et al. (eds.), Conflicts of Interest: Challenges and Solutions in Business, Law, Medicine, and Public Policy (Cambridge, 2005) 104, 109.

135  IBA Guidelines on Conflicts, 2.3.3.

136  See ICC Rules.

137  Büthe and Mattli, The New Global Rulers 4 (‘Regulatory institutions that supply participatory mechanics that are fair, transparent, accessible, and open…are more likely to produce common interest regulation.’).

138  The shift from qualitative standards to quantitative categories has important effects, discussed in Chapter 8, regarding arbitrators’ duties.

139  There remains some debate about whether challenges to international arbitrators are on the rise, and whether any such possible increase is attributable to promulgation of the guidelines and the expanded disclosures they require. See Born 1895–8.

140  See Black, ‘Legitimacy and the Competition for Regulatory Share’ 18.

141  Robert B. Davidson, ‘Conflicts of Interest and Disclosure under US Law’, 17 No. 2 IBA Arb. News 97,98 (2012).

142  See, e.g., Markham Ball, ‘Probity Deconstructed: How Helpful, Really, Are the New International Bar Association Guidelines on Conflicts of Interest in International Arbitration’, 21(3) Arb. Int’l 323, 323–41 (2005); V.V. Veeder, ‘The English Arbitration Act 1996: Its 10th and Future Birthdays’ (2006), <http://www.expertguides.com/default.asp?Page=108GuideID=1508CountryID=117> (‘[T]he IBA Guidelines on Conflict of Interest have provided a well-sprung platform for new tactical challenges to arbitrators, a malign practice that appears to be increasing everywhere.’).

143  Born 1891–2.

144  William W. Park, ‘Arbitrator Integrity: The Transient and the Permanent’, 46 San Diego L. Rev. 629, 676 (2009) (‘Perhaps the most oft-cited of these standards can be found in the IBA Guidelines. Rightly or wrongly, this list has entered the canon of sacred documents cited when an arbitrator’s independence is contested.’).

145  Notably, in a similar vein but on a more limited scale, Laurent Levy proposed a freelance ‘code of ethics’ for dissenting arbitrators. See Laurent Levy, ‘Dissenting Opinions in International Arbitration in Switzerland’, 5 Arb.Int’l 34, 41 (1989).

146  In the 1980s, when the Rules of Ethics were published, international arbitration had yet to transform itself from a largely informal compromise-oriented regime into a mechanism for managing complex disputes and producing technical law-based decisions in an increasingly transparent manner. For a description of this transformation, see paras 1.28–1.42.

147  Born 1881.

148  Those three individuals are today all leading arbitrators and scholars: Martin Hunter (England), Jan Paulsson (then of France), and Albert van den Berg (The Netherlands).

150  For instance, at the 2013 IBA Annual Conference, out of 80 committees, the IBA’s Arbitration Committee is sponsoring the third largest number of sessions (nine sessions), equalled only by the Taxes (nine sessions), Law Firm Management (12 sessions), and Corporate and M&A Law (13 sessions) Committees. See Annual Conference of the IBA: Final Programme, <http://www.int-bar.org/conferences/Boston2013/binary/Boston%202013%20final%20programme%20FULL.pdf>.

151  IBA Rules on the Taking of Evidence in Int’l Commercial Arbitration (International Bar Association 1999), <http://www.asser.nl/upload/ica-webroot/documents/cms_ica_4_1_IBA_ROE2.pdf>.

152  See White and Case, 2012 International Arbitration Survey: Current and Preferred Practices in the Arbitral Process (Queen Mary Univ., 2012) (‘The IBA Rules on the Taking of Evidence in International Arbitration are used in 60% of arbitrations: in 53% as guidelines and in 7% as binding rules. In addition, a significant majority of respondents (85%) confirm that they find the IBA Rules useful.’).

153  Black, ‘Legitimacy and the Competition for Regulatory Share’ 16.

154  See Rogers, ‘Regulating International Arbitrators’ 55.

155  See para. 6.76.

156  Büthe and Mattli, The New Global Rulers 11.

157  Büthe and Mattli, The New Global Rulers 12.

158  See Born 1940. Barristers ethical rules permit such appearances, but impose strict duties of independence. Barristers’ chambers also have internal protocols that preclude one barrister from accessing, even accidentally, another barrister’s confidential client information under circumstances where confidentiality may be called into question. See Bar Council, Practice Management Guidelines, s. 6, art. 13 and app. 3 (2006) (UK), <http://www.barcouncil.org.uk/media/42934/pmg_section_6.pdf> (indicating that guidelines are applicable when members of the same chambers are instructed on behalf of different parties or as arbitrator in cases involving other members of chambers).

159  See John Kendall, ‘Barristers, Independence and Disclosure’, 8 Arb. Int’l 287 (1992) (discussing several objections to arbitrators on grounds that they come from the same barristers’ chambers as the barrister-advocates in the same cases); Michael Polkinghorne and Emilie Gonin, ‘Barristers from the Same Chambers Appearing as Counsel and Arbitrator: Independence Revisited?’ 5 Disp. Res. Int’l 163 (2011); R. Doak Bishop and Lucy Reed, ‘Practical Guidelines for Interviewing, Selecting and Challenging Party-Appointed Arbitrators in International Commercial Arbitration’, 14 Arb Int’l 395, 419–20 (1998) (‘Just as English barristers from the same chambers may represent opposing page interests in the English courts, it is not per se objectionable for them to represent opposing interests or serve as counsel and arbitrators in arbitrations.’); David Edwards and David Foster, ‘Challenges to Arbitrators’, in Global Arbitration Review: The European & Middle Eastern Arbitration Review (2008) (discussing Laker Airways v FLS Aerospace [1999] 2 Lloyds Rep 45, confirmed in Smith v Kvaerner Cementation Foundations Ltd [2006] 3 All ER 593 (UK)); John W. Hinchey and Troy L. Harris, International Construction Arbitration Handbook § 6:27 (‘Questions, with no clear answers, have arisen with respect to English lawyers as to whether an arbitrator/barrister would be disqualified because one of the parties is represented by a counsel from the same chambers.’); Roy S. Mitchell, ‘Cultural Sensitivities in International Construction Arbitration’, 2 Faulkner L. Rev. 325 (2011).

160  Apart from systems predicated on the English model, law firms, not barristers’ chambers, are the prevailing model for legal professionals. File-sharing and fee-sharing are the norm in law firms and, consequently, ethical rules create both conflicts and privileges among members of the same law firm. In contrast to these rules, the rule permitting barristers from the same chambers to serve as both arbitrator and counsel is an anathema in many other systems. According to a survey by Berwin Leighton Paisner in 2010 of non-English lawyers and non-English parties regarding perceptions about barristers’ conflicts of interest, nearly two-thirds (for lawyers) and three-quarters (of parties as estimated by their attorneys) were either ‘very negative’ or ‘fairly negative’ when asked about barristers from the same chambers appearing as arbitrator and counsel in the same dispute). Jonathan Sacher, ‘International Arbitration: Research based report on perceived conflicts of interest’, Berwin Leighton Paisner LLP, <https://apps.americanbar.org/litigation/committees/insurance/docs/2011-cle-materials/03-WhatWrongArbitration/03bInternationalArbitration.pdf> [Berwin Leighton Paisner survey]. Notably, the existence of so-called ‘Chinese walls’ and other safeguards, which as noted are standard practice in barristers’ chambers, made the situation ‘much more acceptable’ to 50% of the respondents, the absence of shared financial interests made the situation ‘much more acceptable’ to 40% of the respondents, and the fact that the arbitrator and the opposing counsel would not know each other well made the situation ‘much more acceptable’ to nearly 45% of respondents. Berwin Leighton Paisner survey. See also Daele, Challenge and Disqualification of Arbitrators in International Arbitration 326. This study seems to confirm two important things. First, a significant amount of resistance to barristers is based on lack of understanding of how barristers’ chambers operate. Second, that even with clearer information about how barristers’ chambers actually operate (no general access to information, no shared financial arrangements, and potential absence of personal relationships), perceptions about barristers’ potential conflicts remain constant for some non-English attorneys and clients.

161  IBA Guidelines on Conflicts of Interest in International Arbitration, art. 3.3.2 (2004) [IBA Conflicts Guidelines].

162  See IBA Conflicts Guidelines, General Standard 3(b).

163  The potential for appointment over party objection is addressed in Chapter 8.

164  See Sida Liu, ‘The Local Profession as a Social Process: A Theory on Lawyers and Globalization’, 38 Law & Soc. Inquiry 670 (2013).

165  Al-Harbi v Citibank, NA, 85 F.3d 680, 682 (D.C. Cir. 1996). See also Gianelli Money Purchase Plan & Trust v ADM Inv. Serv. Inc., 146 F.3d 1309, 1312 (11th Cir. 1998); Lifecare Int’l Inc. v CD Medical, Inc., 68 F.3d 429 (11th Cir. 1995) (no duty to investigate past conflicts); Betz v. Pankow, 31 Cal.App.4th 1503 (Cal. Ct. App. 1995) (no adverse inferences from arbitrator’s failure to identify conflict). But see Schmitz v Zilveti, 20 F. 3d 1043 (9th Cir. 1994) (finding ‘evident partiality’ even when an arbitrator was unaware of relevant facts because arbitrator has a duty to investigate that is independent of duty to disclose).

166  IBA Rules of Ethics for International Arbitrators, R. 4.2(a) (1987) [IBA Rules] provides that ‘[n]on-disclosure of an indirect relationship unknown to a prospective arbitrator will not be a ground for disqualification unless it could have been ascertained by making reasonable enquiries’. The IBA Rules define ‘indirect relationships’ as those involving ‘a member of the prospective arbitrator’s family, his firm, or any business partner who has a business relationship with one of the parties’. IBA Rule 3.3. Given that the obligation to enquire applies only to indirect relationships, it was apparently assumed by drafters of the IBA Rules that an arbitrator could not be unaware of conflicts involving direct relationships. That assumption is no longer viable under modern complexities of arbitrators’ so-called direct relationships.

167  The IBA Conflicts Guidelines, discussed in greater detail in para 6.83, provide that ‘an arbitrator is under a duty to make reasonable enquiries to investigate any potential conflict of interest, as well as any facts or circumstances that may cause [his/her] impartiality or independence to be questioned’. General Guideline 7(c).

168  Canon II(B) of the AAA/ABA Code of Ethics for Arbitrators in International Disputes (2004) [AAA/ABA Code] provides that ‘persons who are requested to accept appointment as arbitrators should make a reasonable effort to inform themselves of any interests or relationships’ that may give rise to a conflict.

169  See Daele, Challenge and Disqualification of Arbitrators in International Arbitration 55.

170  2012 Rules: ICC Arbitrator Statement of Acceptance, Availability, Impartiality and Independence (on file with author).

171  AAA/ABA Code of Ethics for Arbitrators in Commercial Disputes, Canon II.B (2004).

172  For example, although the ICSID Rules are silent about any duty to disclose, a few high-profile annulment cases have read into the arbitrator qualifications and appointment process a continuous duty on arbitrators to investigate potential conflicts. See, e.g., Compañía de Aguas del Aconquija S.A. v Argentina, ICSID Case No. ARB/97/3, Decision on the Argentine Republic’s Request for Annulment of the Award rendered on 20 August 2007, 10 Aug. 2010, n. 63.

173  See Born 1959–60.

174  Locabail (UK) Ltd. v Bayfield Properties Ltd., [1999] EWCA (Civ) 3004, [2000] QB 451, 478 (Lord Bingham); Applied Indus. Materials Corp. v Ovalar Makine Ticaret Ve Sanayi, A.S., 492 F.3d 132, 138 (2d Cir. 2007) (reasoning that an arbitrator must investigate potential conflicts or disclose an intent not to investigate; emphatically rejecting the notion that it was creating a free-standing per se affirmative duty to investigate); New Regency Prods., Inc. v Nippon Herald Films, Inc., 501 F.3d 1101, 1107–8 (9th Cir. 2007) (arbitrator’s absence of knowledge of conflict is relevant, where arbitrator has taken reasonable steps to investigate conflicts, but not dispositive); SA J&P Avax SA v Tecnimont SPA, Cour d’appel [CA] [regional court of appeal] Paris, 1 e ch., 12 Feb. 2009, 1 Rev. Arb. 186 (2009) (with commentary by Tomas Clay) (finding existence of a duty to investigate) reversed on other grounds, J&P Avax SA v Tecnimont SPA, Cour d’appel Reims, 2 Nov. 2011, case no 10/02888 (Fr.).

175  Applied Indus. Materials, 492 F.3d, 138 (‘The mere failure to investigate is not, by itself, sufficient to vacate an arbitration award. But, when an arbitrator knows of a potential conflict, a failure to either investigate or disclose an intention not to investigate is indicative of evident partiality.’).

176  See, e.g., New Regency Prods., 501 F.3d, 1110 (noting that ‘Canon II(B) of the code [the American Arbitration Association and American Bar Association Code of Ethics for Arbitrators in Commercial Disputes]…provides that arbitrators have an ongoing duty to “make a reasonable effort to inform themselves of any interests or relationships” subject to disclosure’ and that ‘General Standard 7(c) of the International Bar Association Guidelines on Conflicts of Interest in International Arbitration (2004) states that “[a]n arbitrator is under a duty to make reasonable enquiries to investigate any potential conflicts of interest, as well as any facts or circumstances that may cause his or her impartiality or independence to be questioned”.’).

178  For a summary of these procedures, see Born 1912–55.

179  See James H. Carter, ‘Reaching Consensus on Arbitrator Conflicts: The Way Forward’, 6 Disp. Res. Int’l 17, 17 (2012) (‘The absence of consensus about arbitrator conflicts is largely the result of a lack of publicly available information. Most disputes about arbitrator conflicts of interest are resolved by arbitral institutions without any reasoned decision or public record.’).

180  Marie Johansson, Decisions by the Arbitration Institute of the Stockholm Chamber of Commerce Regarding Challenge of Arbitrators, 2 Stockholm Arb. Rep. 175, 180–2 (1999); Marie Öhrström, ‘Decisions by the SCC Institute Regarding Challenge of Arbitrators’, 1 Stockholm Arb. Rep. 35, 46–8 (2002); Annette Magnusson and Hanna Larsson, ‘Recent Practice of the Arbitration Institute of the Stockholm Chamber of Commerce—Prima Facie Decisions on Jurisdiction and Challenges of Arbitrators’, 2 Stockholm Arb. Rep. 47, 70–3 (2004); Helena Jung, ‘SCC Practice: Challenges to Arbitrators SCC Board Decisions 2005–2007’, 1 Stockholm Int’l Arb. Rev.1, 5–6 (2008); Niklas Lindström, ‘Challenges to Arbitrators—Decisions by the SCC Board during 2008–2010’, 5 SCC Newsletter 1 (2011); Felipe Mutis Tellez, ‘Arbitrators’ Independence and Impartiality: A Review of SCC Board Decisions on Challenges to Arbitrators (2010-2012)’, Electronic Library of the Arbitration Institute of the Stockholm Chamber of Commerce (2013), <http://www.sccinstitute.com/filearchive/4/44889/Felipe%20Mutis%20Tellez_Article%20on%20SCC%20Challenges%20on%20Arbitrators.pdf>.

181  See, e.g., Anne Marie Whitesell, ‘Independence in ICC Arbitration: ICC Court Practice concerning the Appointment, Confirmation, Challenge and Replacement of Arbitrators’, ICC Arb. Bull. (Independence of Arbitrators—Special Supplement, 2007), 11.

182  See 27(3) Arb. Int’l, at 283 et seq. (2011) (providing redacted LCIA challenge decisions from 1996 to 2010); Geoff Nicholas and Constantine Partasides, ‘LCIA Court Decisions on Challenges to Arbitrators: A Proposal to Publish’, 23 Arb. Int’l. 1 (2007) (outlining reasons for LCIA to publish redacted challenge decisions).

183  Wilkins, ‘Who Should Regulate’ 884.

184  See, e.g., ICC Arbitration Rules, art. 15(2), (3) (2012) (permitting removal by the ICC Court and allowing parties an opportunity to comment on process); LCIA Arbitration Rules, art. 10(1), (2) (1998) (upon party challenge, the LCIA Court ultimately decides whether to revoke arbitrator appointment); ICDR International Arbitration Rules (2010), art. 9 (‘If the other party or parties do not agree to the challenge or the challenged arbitrator does not withdraw, the administrator in its sole discretion shall make the decision on the challenge.’); ICSID Arbitration Rules, R. 9 (2006) (granting ICSID Chairman discretion to disqualify arbitrator); SCC Arbitration Rules, arts. 15, 16 (2010) (granting SCC Board power to remove arbitrator); SIAC Rules, art. 13 (2013) (granting SIAC power to dismiss and appoint arbitrators); HKIAC Administered Arbitration Rules, art. 11 (2013) (granting HKIAC power to decide on arbitrator challenges).

185  Certainty about the effective finality arbitral institution decisions on challenges has itself evolved over time. Compare Jean-Yves Art, ‘Challenge of Arbitrators: Is An Institutional Decision Final?’ 2 Arb. Int’l 261 (1986) (outlining differences in French and Swiss law that ensure finality of ICC decisions in France but not in Switzerland), with Pierre Lalive, ‘Absolute Finality of Arbitral Awards?’ (2008), <http://www.arbitration-icca.org/media/0/12641359550680/lalive_absolute_finality.pdf>, 18 (commenting that ‘national legislations and courts have adopted a restrictive attitude regarding the grounds permitting the setting aside of Awards’ but questioning the correctness of questioning the finality of some Awards).

186  AT & T Corp.

187  See, e.g, AT & T Corp. (‘[T]he court, if required to interpret the ICC Rules, would naturally pay the closest attention to any interpretation of the ICC Rules adopted by the ICC Court, but the English courts retain their jurisdiction to determine whether the ICC Rules have been breached when entertaining an application to remove for alleged misconduct.’). Chapter 2 analysed how, when courts apply a national or convention standard to assess arbitrator conduct, they are not technically ‘deferring’ to an institution’s decision, but instead ruling consistent with it. See paras 2.72–2.78.

188  Born 1951 (‘In general, [arbitral] rules require somewhat broader disclosure than national law standards, although this varies somewhat from jurisdiction to jurisdiction and institution to institution.’).

189  J & P Avax SA, Reims.

190  The Reims Court of Appeal reasoned that ‘a challenge before the ICC and an application to a judge to set aside the award are separate proceedings, which do not serve the same purpose and are not controlled by the same authority’. See J & P Avax SA, Reims (‘Considérant que la récusation devant l’institution d’arbitrage et le contrôle de la sentence devant le juge de 1’ annulation sont des procédures distinctes qui n’ont pas le même objet et ne sont pas soumises à la même autorité.’) (English translation by Georgios Soumalevris, <https://docs.google.com/viewer?a=v8pid=sites8srcid=aW50ZXJuYXRpb25hbGFyYml0cmF0aW9uY2FzZWxhdy5jb218d3d3fGd4OjE4MzE3OTAwZDQ5ZGVmYTE>).

191  See para. 6.51.

192  See Braithwaite, ‘Enforced Self-Regulation’ 1471.

193  Black, ‘Legitimacy and the Competition for Regulatory Share’ 17.

194  Michael P. Malloy, ‘Current Issues in International Arbitration’, 15 Transnat’l Law. 43, 45 (2002) (noting that ‘competition among arbitration institutions for the growing number of international commercial arbitrations has moved their respective technical details closer to conformity’).

195  See Black, ‘Decentring Regulation’ 129 (defining regulation as any mechanism for controlling behaviour in accordance with identified regulatory goals).

196  Compare ICDR Arbitration Rules, art. 32 (2010) (compensation based on amount of service, taking into account their stated compensation rate and case size and complexity, set by negotiation with administrator), with ICC Arbitration Rules, art. 37(1) (2012) (providing for institutionally created fee scale), and LCIA Arbitration Rules, art. 5.3 (1998) (allowing each arbitrator to ‘agree in writing upon fee rates conforming to the Schedule of Costs’ but capped at £450).

197  Article 37(1) provides that the applicable fee scale is ‘the scale in force at the time of the commencement of the arbitration’. The Scales of Administrative Expenses and Arbitrator’s Fees set forth in the 2012 ICC Rules are effective as of 1 Jan. 2012 in respect of all arbitrations commenced on or after such date, irrespective of the version of the Rules applying to such arbitrations.

198  ICC Arbitration Rules, art. 37(1), (2), app. III (arts. 2(1), 2(2), 4(1)) (2012). See also Derains and Schwartz, Guide to the ICC Rules of Arbitration 357–62.

199  ICC Arbitration Rules, app. III (art. 2) (2012) (‘[I]n exceptional circumstances’ the Court may arrive at a figure higher or lower than the limits set in Article 37(2)).

200  Jason Fry, et al., The Secretariat’s Guide to ICC Arbitration (ICC, 2012).

201  Daele, Challenge and Disqualification of Arbitrators in International Arbitration 55–6.

202  Daele, Challenge and Disqualification of Arbitrators in International Arbitration 55–6.

203  See Born 1383 (under ‘virtually all institutional rules, the parties’ individual nominations or joint proposals are subject to review by the arbitral institution for suitability (e.g., impartiality, experience)’).

204  See Born 2102 (‘Just as an arbitration is no better than the arbitrators, so an appointing authority is no better than its staff and decision-makers.’).

205  China International Economic and Trade Arbitration Commission [CIETAC] Arbitration Rules, art. 24 (2012). The CIETAC Rules originally required selection of arbitrators from a CIETAC list, but more recently have been amended to permit parties to agree on other arbitrators. See also China Maritime Arbitration Commission Arbitration Rules, art. 25 (2004) (requiring parties to choose arbitrators from a list).

206  For a critical view of institutional lists, see Born 1673 (‘A number of leading arbitral institutions have either refused to adopt even non-binding lists of names from which arbitrators may be selected or have found these lists of little positive value (and some negative effect).’).

207  See Abel, American Lawyers 27.

208  See American Arbitration Association, ‘Failure to Disclose May Lead to Removal from the National Roster of Neutrals’, <https://apps.adr.org/ecenter/neutralQualifications/Failure%20to%20Disclose%20May%20Lead%20to%20Removal%20From%20the%20National%20Roster%20of%20Neutrals.pdf>.

209  Camera Arbitrale Nazionale e Internationale Milano, Code of Ethics of Arbitrators, art. 13 (2010) (noting that an arbitrator who does not comply with the Code of Ethics will be replaced and may also be refused participation in future proceedings because of the violation), <http://www.camera-arbitrale.it/show.jsp?page=169945en/Arbitration/Arbitration+Rules/Code+of+ethics.php?id=104>.

210  United States Council for International Business, ‘FAQs on ICC Arbitration’, <http://www.uscib.org/index.asp?documentID=2726>.

211  cf. Wilkins, ‘Who Should Regulate’, 884–85 (proposing that with attorneys, regulators with the greatest institutional competence be assigned primary regulatory authority).

212  See para. 2.82.

214  While this book does not address directly the ethics and professional obligations of arbitral institutions, they are increasingly a focus of attention and deserving of study. Menkel-Meadow, working with the CPR, has been at the forefront of these issues in the United States. See CPR-Georgetown Commission on Ethics and Standards of Practice in ADR, Principles for ADR Provider Organizations (2002) [‘Principles’], <http://www.cpradr.org/Portals/0/Resources/ADR%20Tools/Tools/Principles%20for%20ADR%20Provider%20Organizations.pdf>. For an excellent work by a promising young scholar that provides an important starting point for these issues in international arbitration, see Barbara Alicja Warwas, The Three Pillars of Institutional Arbitral Liability: The Weaknesses of Current Regulations and Proposals for Further Reform, Ph.D. thesis, (Florence: European University Institute, 2013), <http://biblio.eui.eu/search~S5/X?SEARCH=%28warwas%298SORT=D> (on file with author).

215  See para. 2.68.

217  See ‘How to become IMI Certified’, <http://www.imimediation.org/how-to-become-imi- certified>.

218  Chartered Institute of Arbitrators, ‘Home’, <http://www.arbitrators.org/>.

219  The CIA website describes that one of the benefits of membership is the ‘opportunity to network with professionals engaged in a wide range of disciplines’. Chartered Institute of Arbitrators, ‘Membership Benefits’, <http://www.arbitrators.org/Joining/benefits.asp>.

220  Chartered Institute of Arbitrators, ‘Special Member Assessment’, <http://www.arbitrators.org/Courses/SMA.asp>.

221  It appears that the CIA grievance procedure was originally tailored to consumers involved in the CIA’s domestic consumer arbitration. See Chartered Institute of Arbitrators, ‘DRS-CIArb’, <http://www.drs-ciarb.com/aboutus.asp>. Since its initiation, complaints appear to have overwhelmed the grievance procedure (evidently in the domestic context). See Tony Bingham, ‘Guilty As Charged’ (commenting that the grievance procedure has also drawn some stiff rebuke from arbitrators who are, predictably, resistant to being subjected to formal investigation of their conduct), <http://www.tonybingham.co.uk/column/2002/20020517.htm>. Critics characterize the CIAarb process as a ‘court-marshal’ approach to arbitrator regulation.

222  Disciplinary Tribunal of The Chartered Institute of Arbitrators, <http://www.ciarb.org/about/C%20I%20Arb%20DISCIPLINARY%20DECISION%20J%20Campbell.pdf> (decision expelling arbitrator ‘from the Chartered Institute of Arbitrators with immediate effect’ and ordering payment to the Institute ‘of £3,000 plus VAT towards the costs incurred by the Institute’).

224  The legislation was adopted after a local paper ran ‘a series of articles featuring horror stories about the inequities of arbitration’. See Ruth V. Glick, ‘California Arbitration Reform: The Aftermath’, 38 USF. L. Rev. 119, 120 (2003). The rules substantially expand arbitrator disclosure requirements, provide mechanisms for regulating arbitrator action, increases the bases for disqualifying arbitrators, and (some speculate) may increase the bases for vacating awards. Id. 121–2. Notably, the new ethical rules do not apply to international arbitrators. Glick, ‘California Arbitration Reform’ 123 n. 26; see also Ruth V. Glick, ‘Should California’s Ethics Rules Be Adopted Nationwide?: No! They Are Overbroad and Likely to Discourage Use of Arbitration’, Disp. Resol. Mag., Fall 2002, 13, 13–4; ‘Judicial Council of California Adopts Ethics Standards for Private Arbitrators’, 13 World Arb. & Mediation Rep. 176 (2002) (noting that notwithstanding adoption of new standards, several members suspect that the volume of information that must be disclosed under California’s new standards ‘may be too burdensome’ and could ‘be used too readily’ to disqualify arbitrators).

225  See CPR-Georgetown Commission on Ethics and Standards of Practice in ADR, ‘Model Rule for the Lawyer as Third-Party Neutral’ (2002), <http://www.cpradr.org/Resources/ALLCPRArticles/tabid/265/ID/622/Model-Rule-for-The-Lawyer-as-Third-Party-Neutral.aspx>.

226  Proposed Model Rule, Rule 4.3.5.

227  See para. 2.93 (discussing Proposed Model Rule 4.5.3(b) 8 (c)).

228  See, e.g., Codice Deontologico Forense (Ital.), <http://www.ordineavvocatimilano.it/upload/file/allegati_articoli/Testo_Cod_Deonto_16_12_2011.pdf> (‘An attorney who serves as arbitrator shall behave in an ethical and proper manner and oversee that the proceedings are impartial and independent.’) (‘L’avvocato chiamato a svolgere la funzione di arbitro è tenuto ad improntare il proprio comportamento a probità e correttezza e a vigilare che il procedimento si svolga con imparzialità e indipendenza.’) (translation by author).

230  See Schneider, ‘President’s Message’ 549 see also Daele, Challenge and Disqualification of Arbitrators in International Arbitration 269 (‘[A]s not everybody agrees on the need of a universal ethical code for arbitration counsel, it is far from sure that such a code will ever see light.’); Loretta Malintoppi, ‘How May Investment Tribunals Cope With and Sanction Guerrilla Tactics of the Parties/Their Counsel?’ 7 Transnat’l Disp. Mgmt., <http://www.transnational-dispute-management.com/article.asp?key=1611>. (‘On balance, I personally am not convinced that there is a compelling need for a code of ethics for the “international bar”, or at least not for the time being. This brief overview has shown that investment tribunals can effectively counter improper tactics by counsel, through the imposition of awards for costs, drawing adverse inferences or simply admonishing counsel at the hearing or—even more publicly—in an award.’).

231  Brower and Schill ‘Regulating Counsel Conduct Before International Arbitral Tribunals’ (noting that authority to regulate attorneys ‘usually is viewed as inherently governmental and restricted to state institutions, such as national bar associations or state courts in whose jurisdiction counsel is qualified to practice’).

234  See Chapters 1 and 3.

237  V.V. Veeder, ‘The 2001 Goff Lecture—The Lawyer’s Duty to Arbitrate in Good Faith’, 18:4 Arb. Int. 431 (2002).

238  IBA Task Force on Counsel Conduct in Arbitration Survey (Sept. 2010) (on file with author) (finding that only 63% of respondents believed that their home ethical rules apply in foreign-seated arbitrations).

239  See Robert W. Wachter, ‘Ethical Standards in International Arbitration: Considering Solutions to Level the Playing Field’, 24 Geo. J. Legal Ethics 1143, 1143 (2011) (‘There is no obvious answer to the question [of which ethical rules apply], and one or more sets of rules might apply, including the rules where the attorney is licensed, the foreign jurisdiction where the attorney works, the rules of the seat or arbitration, the rules adopted by the arbitral tribunal, or the rules where the conduct occurs.’).

241  See Laurence Etherington and Rogert Lee, ‘Ethical Codes and Cultural Context: Ensuring Legal Ethics in the Global Law Firm’, 14 Ind. J. Global Legal Stud. 95, 97 (2007).

244  Some commentators have argued that this problem can be resolved by having the ethical rules of the arbitral seat apply and the courts or disciplinary authorities of the seat enforce those rules for attorneys in locally seated arbitration. Kristen Weisenberger, ‘Peace is Not the Absence of Conflict: A Response to Professor Rogers’s Article “Fit and Function in Legal Ethics”’, 25 Wisc. Int’l L.J, (2007) 89–128 (arguing that extant rules of conduct are adequate for the purpose of regulating international arbitrations, and a conflict-of-laws approach is the best option). As analysed in Chapter 1, instead of asserting regulatory authority, host jurisdictions around the world have almost uniformly exempted attorneys involved in international arbitrations from local ethical regulation. See Chapter 1, paras 1.77–1.87.

246  There are international sections to State regulatory authorities, but they play no role in discipline. Their functions are generally limited to organizing research, networking opportunities, and symposia on issues of international law and practice.

247  cf.Wilkins, ‘Who Should Regulate’, 810–11 (noting that, since enforcement officials invariably exercise a certain amount of discretionary authority over the content of professional norms when they apply ethical rules in particular cases, ‘conferring enforcement authority is tantamount to empowering a particular set of actors to place their own interpretation on these ambiguous professional norms’).

248  France, Germany, The Netherlands, Norway, Belgium, Switzerland, Sweden, and Canada have all enacted blocking statutes that forbid its citizens from complying with certain US discovery requests. See William S. Dodge, ‘Extraterritoriality and Conflicts-of-Laws Theory: An Argument for Judicial Unilateralism’, 39 Harv. Int’l L.J. 101, 169 n. 357 (1998).

249  IBA Evidence Rules, art. 4(3) (1999).

250  For a discussion of these ambiguities, see para. 3.36.

251  IBA Evidence Rules, art. 4(3) (2010).

252  IBA Evidence Rules, art. 9(2) (2010).

253  IBA Evidence Rules, art. 9(3) (2010).

254  The initial mandate of the Task Force was to determine ‘whether the lack of international guidelines and conflicting norms in counsel ethics undermines the fundamental protections of fairness and equality of treatment and the integrity of international arbitration proceedings’ and, if so, ‘what, if anything, the Counsel Ethics Task Force should propose to mitigate any such adverse impact’ <http://www.ibanet.org/Article/Detail.aspx?ArticleUid=610bbf6e-cf02-45ae-8c3a-70dfdb2274a5>. As of 2010, the task force had not made any public announcements regarding this mandate. The author was a member of the Task Force in its later years, but not prior to 2010.

255  Doak Bishop and Margrete Stevens, ‘Advocacy and Ethics in International Arbitration: International Code of Ethics for Lawyers Practicing Before International Arbitral Tribunals’, in Arbitration Advocacy in Changing Times (ICCA Congress Series No. 15, Rio, 2010), 408.

256  Benson, ‘Can Professional Ethics Wait?’, 88–94.

257  Benson, ‘Can Professional Ethics Wait?’ 89.

258  Dezalay and Garth, Dealing in Virtue.

259  For a thoughtful overview of the tools available to arbitrators, see Günther J. Horvath, ‘Guerrilla Tactics in Arbitration, an Ethical Battle: Is There Need for a Universal Code of Ethics?’ in Christian Klausegger et al. (eds.), 2011 Austrian Yearbook on International Arbitration (Manz’sche Verlags- und Universitätsbuchhandlung, 2011) 297, 302–310.

260  Günther J. Horvath, ‘Guerrilla Tactics in Arbitration, an Ethical Battle: Is There Need for a Universal Code of Ethics?’ in Christian Klausegger et al. (eds.), 2011 Austrian Yearbook on International Arbitration (Manz’sche Verlags- und Universitätsbuchhandlung, 2011) 297, 308–309.

261  See Gray v Smith Barney, Inc., NASD 95-01185 (17 March 1997) (respondents were sanctioned for failure to produce a witness) (cited in Michele R. Fron and Kelly M. McIntyre, ‘Sanctions in Arbitration’, 1264 PLI/Corp 1143, 1157 (2001)).

262  See EDF (Servs.) Ltd v Romania, ICSID Case No ARB/05/13, Procedural Order No. 2, 30 May 2008, para. 50 (tribunal admonishing parties (and implicitly counsel) for conduct).

263  See EDF (Services) Limited v Romania, ICSID Case No ARB/05/13, Procedural Order No. 3, 29 Aug. 2008, paras 37–8, 38 (finding evidence inadmissible); Libananco Holdings Co. v Turkey, ICSID Case No. ARB/06/8, Decision on Preliminary Issues, 23 June 2008 (excluding evidence); Teixeira v Hunter Int’l Secs., NASD 96–02581 (1 May 1997) (drawing an adverse inference regarding documents respondent was ordered to and refused to produce).

264  See In re LOP Capital Markets Inc. v Sun Coast Capital Grp., NASD 97–04049 (11 Aug. 1998) (sanctioning claimant’s numerous discovery violations by dismissing their claim with prejudice and barring the claimant from presenting any matter, argument, or defence to the counterclaim at the hearing. In addition, third-party respondents were barred from asserting any defence in the matter, although the award does not indicate the basis for this sanction); Parsons v Kensington Wells, NASD 96–05310 (25 June 1998) (defences stricken due to failure to comply with discovery orders); Prime Capital Services, Inc. v Bram & Procopio, NASD 97-01910 (Mar. 1998) (claim dismissed for failure to produce documents, obey discovery orders, and appear at a scheduled hearing); Everen Securities v Collop, NASD 96-01295 (21 March 1997) (barring respondent from presenting any defence or other matter at the hearing on the basis that he failed to file an answer). These are domestic US cases.

265  One of the clear examples of tribunal convinced that misconduct belonged to an attorney is the NAFTA decision in Pope & Talbot, Inc. v Canada, UNCITRAL/NAFTA, Decision, 27 Sept. 2000.

266  See Pope & Talbot, Inc. v Canada, UNCITRAL/NAFTA, Decision, 27 Sept. 2000.

267  See Pope & Talbot, Inc. v Canada, UNCITRAL/NAFTA, Decision, 27 Sept. 2000, 1–4.

268  See Pope & Talbot, Inc. v Canada, UNCITRAL/NAFTA, Decision, 27 Sept. 2000, 6 and 8.

269  See Pope & Talbot, Inc. v Canada, UNCITRAL/NAFTA, Decision, 27 Sept. 2000, 7.

270  See Pope & Talbot, Inc. v Canada, UNCITRAL/NAFTA, Decision, 27 Sept. 2000, 11.

271  See Pope & Talbot, Inc. v Canada, UNCITRAL/NAFTA, Decision, 27 Sept. 2000, 12.

272  See Pope & Talbot, Inc. v Canada, UNCITRAL/NAFTA, Decision, 27 Sept. 2000, 13.

273  This potential may increase with the increasing participation of third-party funders. As described in Chapter 5, funders often collaborate directly with law firms and their participation can raise a host of ethical issues for attorneys.

274  The author served as a member of the Task Force, though joined a few years after it had initially been constituted. In light of obligations as a member of the Task Force, commentary on the substantive content of the Task Force’s Guidelines is necessarily limited.

275  Even when agreed to, however, the Preamble of the Guidelines indicates that they are not intended to displace mandatory national ethical rules or the role of national regulatory authorities.

276  See IBA Guidelines for Party Representatives 18–25.

277  See IBA Guidelines for Party Representatives 7.

278  See IBA Guidelines for Party Representatives 12–17.

279  See IBA Guidelines for Party Representatives 9–10.

280  Michael Schneider, ‘President’s Message’, 497.

281  Schneider, ‘President’s Message’ 389, (‘[U]nder the guise of regulating party representation, this “guideline” expands the scope of the obligations of the parties themselves and introduces an obligation of document preservation (or “litigation hold”)!’).

283  Doug Jones, ‘How to maintain a fair and just process when counsel, clients and co-arbitrators appear to be conspiring against you’, 13, <http://arbitrationlaw.com/files/573a_how_to_maintain_a_fair_and_just_process.pdf>.

284  Jones, ‘How to maintain a fair and just process’ 17 (quoting draft texts of proposed LCIA Rules 18.5 and 18.6).

285  Jones, ‘How to maintain a fair and just process’ 13.

286  Jones, ‘How to maintain a fair and just process’ 18.

288  Dezalay and Garth, Dealing in Virtue 159 (noting the importance of an elite reputation to international commercial arbitrators); cf. Eric A. Posner, ‘Arbitration and the Harmonization of International Commercial Law: A Defense of Mitsubishi’, 39 Va. J. Int’l L. 647, 668 (1999) (reviewing research that demonstrates that arbitrators are deeply concerned about their professional reputations).

290  Mark Hansen, ‘Picking on the Little Guy: Perception Lingers that Discipline Falls Hardest on Solos and Small Firms’, A.B.A. J., March 2003, 30, 30–32 (explaining studies from California, New Mexico, Virginia, and Oregon show higher rates of sanctions imposed against solo and small firm practitioners); Hal R. Lieberman, ‘How to Avoid Common Ethics Problems: Small Firms and Solos Are Often Subject to Disciplinary Complaints and Malpractice Claims’, N.Y.L.J., 28 Oct.2002, S4.

291  See Catherine A. Rogers, ‘When the Bad Guys Are Wearing White Hats’, 1 Stanford J. Complex Lit. 487 (2013) (analysing why international practice holds potential ethical traps for smaller law firms new to international practice).

292  See, e.g., Rompetrol Group NV v Romania, ICSID Case No. ARB/06/3, Decision of the Tribunal on the Participation of a Counsel, 14 Jan. 2010; Fraport Ag Frankfurt Airport Services Worldwide v Republic of The Philippines, ICSID Case No. ARB/03/25, Annulment Proceeding, Decision on Application for Disqualification of Counsel, 18 Sept. 2008; Hrvatska Elektroprivreda d. d. [HEP] v The Republic of Slovenia, ICSID Case No. ARB/05/24, Tribunal’s Ruling Regarding the Participation of David Mildon QC in Further Stages of the Proceedings, 6 May 2008.

293  For a thoughtful analysis of these theories, and how they are often conflated and confused with each other, see Arman Sarvarian, Professional Ethics at the International Bar (Oxford University Press, 2013).

294  See SOC-SMG, Inc. v Day & Zimmermann, Inc., 5375-VCS, 2010 WL 3634204 (Del. Ch. 15 Sept. 2010), *2; Concat LP v Unilever, PLC, 350 F. Supp. 2d 796, 816 (N.D. Cal. 2004); Croushore v Buchanan Ingersoll P.C., 32 Pa. D. & C.4th 142, 149 (Pa. Com. Pl. 1996); Cook Chocolate Co. v Salomon Inc., 87 CIV. 5705 (RWS), 1988 WL 120464 (S.D.N.Y. 28 Oct. 1988); Wurttembergisch Fire Ins. Co. v Republic Ins. Co., 86 CIV. 2696 CSH, 1986 WL 7773 (S.D.N.Y. 9 July 1986).

295  SOC-SMG, *3.

296  See Canaan Venture Partners, L.P. v Salzman, CV 950144056S, 1996 WL 62658 (Conn. Super. Ct. 28 Jan. 1996) (unpublished opinion) (sending issue to arbitration since there was no ‘positive assurance’ that the issue was outside the scope of the arbitration agreement and that ‘[d]oubts should be resolved in favor of arbitration’); Concat LP v Unilever, PLC, 350 F. Supp. 2d 796, 816 (N.D. Cal. 2004) (ruling on a disqualification motion regarding parallel litigation, but concluding that its ruling was not binding in the arbitration proceedings); Concat LP v Unilever, PLC, 350 F. Supp. 2d 796, 816 (N.D. Cal. 2004); Wurttembergisch Fire Ins. Co. v Republic Ins. Co., 86 CIV. 2696 CSH, 1986 WL 7773 (S.D.N.Y. July 9, 1986) (‘While I have the authority to disqualify the present defendants’ counsel in this [court] litigation…any order doing so would have only advisory effect upon the arbitrators. Courts do not give advisory opinions. It is for the arbitrators to control their internal procedures, subject only to the very limited post-award remedies conferred by § 10 of the [Federal Arbitration] Act.’).

297  173 A.D.2d 401, 402 (N.Y.App.Div.1991) (‘Issues of attorney disqualification…involve interpretation and application of the Code of Professional Responsibility and Disciplinary Rules…and cannot be left to the determination of arbitrators…’); see also Matter of Erdheim v Selkowe, 51 A.D.2d 705, 705 (holding that the power to censure attorneys ‘as members of the Bar is reserved to the Appellate Division of the Supreme Court in each department’). Matter of Abrams, 62 N.Y.2d 183, 196, 476 N.Y.S.2d 494, 465 N.E.2d 1; S & S Hotel Ventures v 777 S.H. Corp., 69 N.Y.2d 437, 443, 515 N.Y.S.2d 735, 508 N.E.2d 647).

298  Munich Re America Inc. v Ace Property & Casualty Co., 500 F.Supp.2d 272, 275 (S.D.N.Y.2007) (determining that ‘possible attorney disqualification—is not capable of settlement by arbitration’); In Matter of Arbitration Between R3 Aerospace Inc., Marshall of Cambridge Aerospace Ltd, 927 F.Supp. 121, 123 (S.D.N.Y.1996) (citing Bidermann Indus. Licensing Inc. v Avmar N.V., 173 A.D.2d 401 (1991)) (‘The subject matter of the dispute in this case—i.e., possible attorney disqualification—is not capable of settlement by arbitration.’); Croushore v Buchanan Ingersoll P.C., 1996 WL 932086, 1996 Pa. Dist. & Cnty. Dec. LEXIS 212 (Pa.Com.Pl.1996) (‘[B]y agreeing to submit a dispute to arbitration, a party has not given up its right to seek judicial review of its claims that a former attorney or former law firm is breaching fiduciary duties owed to the party, as a former client.’); Erdheim v Selkowe, 51 A.D.2d 705, 705 (N.Y.App.Div.1976) (finding that arbitrators lacked the ability to censure attorneys and that this power ‘is reserved to the Appellate Division of the Supreme Court in each department’).

299  See Partial Award of 1997 in ICC Case 8897 (unpublished), in G. Naón, Choice-of-Law Problems in International Commercial Arbitration (Collected Courses of the Hague Academy of International Law, Martinus Nijhoff Publishers, 2001) 157–9.

300  See Partial Award of 1997 in ICC Case 8897 (unpublished), in G. Naón, Choice-of-Law Problems in International Commercial Arbitration (Collected Courses of the Hague Academy of International Law, Martinus Nijhoff Publishers, 2001) 157–59.

301  Partial Award of 2000 in ICC Case 10776 (unpublished), in G. Naón, Choice-of-Law Problems in International Commercial Arbitration (Collected Courses of the Hague Academy of International Law, Martinus Nijhoff Publishers, 2001) 159–60. The alleged conflict was based on the fact that counsel had participated in negotiation and drafting of the agreement giving rise to the dispute and could be called as a witness, and because counsel sat on claimant’s board of directors, he would have a pecuniary interest in the case and would be unable to deal with confidential information.

302  See Brower and Schill, ‘Regulating Counsel Conduct Before International Arbitral Tribunals’ 496.

303  See Hrvatska Elektroprivreda d. d. [HEP] v The Republic of Slovenia, ICSID Case No. ARB/05/24, Tribunal’s Ruling Regarding the Participation of David Mildon QC in Further Stages of the Proceedings, 6 May 2008.

304  See Hrvatska Elektroprivreda d. d. [HEP] v The Republic of Slovenia, para. 12.

305  See Hrvatska Elektroprivreda d. d. [HEP] v The Republic of Slovenia, para. 34.

306  See Hrvatska Elektroprivreda d. d. [HEP] v The Republic of Slovenia.

307  See Hrvatska Elektroprivreda d. d. [HEP] v The Republic of Slovenia, para. 33. Notably, the tribunal included pre-eminent arbitrators, including Charles Brower, David Williams QC, and Jan Paulsson, who has been on the forefront of arbitrator and counsel ethics.

308  See Rompetrol Group NV v Romania, ICSID Case No. ARB/06/3, Decision of the Tribunal on the Participation of a Counsel, 14 Jan. 2010.

309  See Hrvatska Elektroprivreda d. d. [HEP] v The Republic of Slovenia.

310  See Fraport Ag Frankfurt Airport Services Worldwide v Republic of The Philippines, ICSID Case No. ARB/03/25, Annulment Proceeding, Decision on Application for Disqualification of Counsel, 18 Sept. 2008, para. 41.

311  See Hrvatska Elektroprivreda d. d. [HEP] v The Republic of Slovenia, para. 37.

312  See Hrvatska Elektroprivreda d. d. [HEP] v The Republic of Slovenia, paras 54–5. Another recent application to disqualify counsel that arose in Highbury International AVV & Ramstein Trading Inc. v Bolivarian Republic of Venezuela was dismissed, but grounds for the challenge and dismissal are unavailable. See Highbury International AVV v Bolivarian Republic of Venezuela, ICSID Case No. ARB/11/1, Decision on Disqualification of Counsel, 10 Aug. 2011, para. 189, in Daele (ed.), Challenge and Disqualification of Arbitrators in International Arbitration 60–87; S. Perry, ‘ICSID Panel Declines to Disqualify Counsel’, Global Arb Rev., <http://globalarbitrationreview.com> (15 Aug. 2011).

313  See Partial Award of 1997 in ICC Case 8897 (unpublished), in G. Naón, Choice-of-Law Problems in International Commercial Arbitration (Collected Courses of the Hague Academy of International Law, Martinus Nijhoff Publishers, 2001) 157–9.

314  See Hrvatska Elektroprivreda d. d. [HEP] v The Republic of Slovenia, ICSID Case No. ARB/05/24, Tribunal’s Ruling Regarding the Participation of David Mildon QC in Further Stages of the Proceedings, 23 May 2008.

315  See Hrvatska Elektroprivreda d. d. [HEP] v The Republic of Slovenia, ICSID Case No. ARB/05/24, Tribunal’s Ruling Regarding the Participation of David Mildon QC in Further Stages of the Proceedings, 6 May 2008, paras 38–39.

316  See Polin v. Kellwood Co., 103 F. Supp. 2d 238 (S.D.N.Y. 2000), aff’d, 34 F. App’x 406 (2d Cir. 2002) (reasoning that the applicable arbitral rules gave the panel broad power to grant any remedy that would have been available under a court’s inherent power); Bak v MCL Fin. Group, Inc., 88 Cal. Rptr. 3d 800, 806 (Cal. Ct. App. 2009) (finding that, although counsel was not party to the arbitration agreement, by voluntarily appearing for defendants in the arbitration proceedings and in responding to plaintiffs’ claim, counsel subjected himself to the jurisdiction of the arbitration panel and was subject to its rulings, including monetary sanctions).

318  Specifically Rule 8.5 provides that ‘for conduct in connection with a matter pending before a tribunal, the rules of the jurisdiction in which the tribunal sits [shall apply], unless the rules of the tribunal provide otherwise’, Model Rules of Prof’l Conduct R. 8.5 (2002).

321  Catherine A. Rogers, ‘Cross-Border Bankruptcy as a Model for Regulation of International Attorneys’, in Making Transnational Law Work in a Global Economy: Essays in Honour of Detlev Vagts (Cambridge University Press, 2010).

322  For an extended analysis of the challenges and perils of ethical choice-of-law rules, and how the UK Solicitor’s Regulatory Authority’s rule-by-rule approach is superior to the approach in the US Model Rules, see Catherine A. Rogers, ‘Lawyers Without Borders’, 30 U. Penn. Int’l L. Rev. 1035 (2009).

325  See para. 6.158.

326  See Born 808–9. For an earlier proposal for analysis of ‘sanction-awards’, see Catherine A. Rogers, ‘Context and Institutional Structure in Attorney Discipline: Developing an Enforcement Regime for Ethics in International Arbitration’, 39 Stan. Int’l L. Rev. 1 (2002).