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Ethics in International Arbitration by Rogers, Catherine A. (1st September 2014)

Part I Mapping the Terrain, 1 From an Invisible College to an Ethical No-Man’s Land

From: Ethics in International Arbitration

Catherine A. Rogers

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2015. All Rights Reserved. Subscriber: null; date: 26 May 2019

(p. 16) (p. 17) From an Invisible College to an Ethical No-Man’s Land

[T]he professional community of international lawyers …

though dispersed throughout the world

and engaged in diverse occupations,

constitutes a kind of invisible college

dedicated to a common intellectual enterprise.

Oscar Schachter

No Man’s Land is an eerie sight

At early dawn in the pale gray light.

Never a house and never a hedge

In No Man’s Land from edge to edge.

James H. Knight-Adkin*

1.01  International arbitration was founded by members of what Oscar Schachter called the ‘Invisible College of International Lawyers’.1 Schachter argued that, even though international lawyers were ostensibly performing ordinary legal services on behalf of individual clients, they were effectively engaged in a legislative function, contributing to creation of a global legal order.2 Although Schachter did not single out the founders of modern international arbitration specifically, he was undoubtedly describing them.

1.02  Like other members of Schachter’s Invisible College, those who made international arbitration what it is today shared a common intellectual enterprise. They also shared a professional ethos that was preoccupied with transcendent principles of justice.3 As Schachter theorized, they aimed at constructing a global legal order. Through their advocacy and service as arbitrators, their scholarship, their drafting of essential treaties,4 and their lobbying of national governments, they established international arbitration as a feasible and reliable dispute (p. 18) resolution mechanism. They shaped its legal framework and the contours of its procedures that remain today.

1.03  In those early stages, international arbitration practitioners and arbitrators had shared understandings about various issues, including tacit understandings about what constituted proper ethical conduct in arbitral proceedings. Several recent trends, both within international arbitration and more generally as part of globalization of the legal profession, have broken down these shared understandings. The result is that today, instead of being constituents of an Invisible College, those participating in international arbitration dwell in an ethical no-man’s land.

1.04  A ‘no-man’s land’ is a space between the formally occupied territories of two warring sovereigns.5 In the absence of a governing sovereign, booby traps, land mines, snipers, and tangled barbed wire determine how and when soldiers manoeuvre in that space. Attacks from both sides are constant. Most importantly, the uncertain political status of a no-man’s land means that it is unclear what rules or laws apply because the warring sovereigns each claim legal dominion. Perhaps this last feature best captures why makes professional conduct in international arbitration an ethical no-man’s land.

1.05  The ethical abyss is most evident with respect to counsel. Even if their conduct is central to arbitral proceedings, no one seems to know what, if any, ethical rules apply to attorneys in international arbitral proceedings. Consider, for example, the range of possibly applicable ethical rules that might apply to a German attorney, who has an LL.M. from a US law school and is a member of the New York Bar, and is representing a Japanese client in an arbitration seated in Switzerland that is governed by French substantive law against an Austrian counterparty. If the reader is uncertain about which ethical rules apply, arbitration experts do not fare much better.

1.06  A recent survey by the International Bar Association (IBA) Task Force on Counsel Conduct in Arbitration confirmed the general confusion about what rules would apply. Of those surveyed, 63% reported that they believed that they were subject to their home jurisdiction’s rules; 27% were uncertain, but followed their home rules in an abundance of caution. Meanwhile, 10% either had no opinion or did not believe they were subject to their home jurisdiction’s rules.6 Approximately 56% of respondents believed that their conduct in international arbitration may also be subject to ethical rules other than those of their home jurisdiction. Finally, a total of 87% of respondents indicated that they are either never or only sometimes sure what ethical norms govern the conduct of their opposing counsel.7(p. 19)

1.07  As with a real no-man’s land, instead of liberating participants from ethical regulation, these ambiguities foster conflict and confusion, create traps for the unwary, and provide opportunities for mischief by the unscrupulous. It is perhaps no surprise, therefore, that there are numerous reports of increased incidents of so-called ‘guerrilla tactics’ in international arbitral proceedings. Although there is no universal definition, ‘guerrilla tactics’ generally refer to intentional ethical abuses that are intended to delay or sabotage arbitral proceedings in order to gain an unfair advantage.8 In a recent survey, 68% of respondents reported having themselves experienced guerrilla tactics.9 Notably, the authors of the survey did not define ‘guerrilla tactics’ because—with no consensus about what constitutes proper ethical conduct—one attorney or party’s guerrilla tactic is another party or attorney’s legitimate strategy or even procedural right.

1.08  With international arbitrators, the problem is not so much about what rules or standards apply, or about rampant misbehaviour. The international arbitration community has done a commendable job of developing increasingly clear and transparent standards, and increasingly effective procedures for enforcing them. Nevertheless, important questions remain in certain areas, such as with respect to the nature of impartiality obligations of party-appointed arbitrators, the nature of arbitrators’ vocation as service providers (or something more), the role of arbitral institutions in monitoring arbitrators, the effect of so-called ‘issue conflicts’, and perceived inequities and lack of transparency in the selection process.

1.09  With other participants, such as experts and third-party funders, issues about their professional conduct are largely uncharted territory. The questions are new and, until now, largely unexplored.10 Anecdotal reports, however, suggest that ambiguities about what standards or rules apply, and hence what constitutes appropriate conduct, are an increasingly important concern.

1.10  The overall thesis of the book is that professional regulation of these various participants must be endogenous, not exogenous, to international arbitration. This is an express call to self-regulation. While the term ‘self-regulation’ is new, the dynamic of self-regulation is well worn into the very fabric of international arbitration. As explored more specifically in Chapter 6, international arbitration operates largely on assumptions of its ability and need to self-regulate. Its processes exist largely independent of national legal systems, unregimented by national procedural rules, and free from the confines of national legal cultures. In this respect, international arbitration has always been, and continues to be, largely self-regulating, including with respect to the conduct of participants. To date, only arbitrators have been effectively subject to self-regulation. This book proposes that international arbitration extend the tradition of self-regulation expressly and intentionally to the ethical conduct of all its participants. Self-regulation will render their professional obligations more clear, (p. 20) discernible, and predictable. The result will be increased efficiency and increased confidence in the legitimacy of arbitral processes.

1.11  As background to this larger project, this first chapter contextualizes the current ethical quandaries within the larger history of international arbitration and regulation of the globalized legal profession more generally. Section A provides a brief overview of the early modern history of international arbitration. With that background, Section B examines the trends that have led to a breakdown in the informal social controls that had, until recently, adequately substituted for more formal ethical regulation. Section C contextualizes these international arbitration developments in the larger framework of professional regulation of lawyers, analysing how ethical regulation has generally failed to keep pace with the realities of a modern, globalized law practice. Section D weaves these strands back together to assess regulation of attorneys in international arbitration, and concludes with a more detailed preview of the book’s proposal for self-regulation.

A. The early modern international arbitration system

1.12  Although the origins of international arbitration date back to antiquity, the origins of modern international arbitration can be traced to the 1920s.11 This was the heyday of Schachter’s Invisible College of international lawyers.12 At that time, the very notion of internationalism was still teetering over its first steps. The weak, and eventually doomed, League of Nations limped along without US participation. The more robust United Nations would only come to be after the gestation of another World War. In this context of nascent internationalism, the notion of effective international adjudication still seemed to be mostly an abstract aspiration.13

1.13  During this earlier era, international commercial arbitration was not the mature, intricate mechanism we find today. The foundations for the modern system were, however, being laid. The Geneva Protocol on Arbitration Clauses of 1923 and the Geneva Convention on the Execution of Foreign Arbitral Awards of 1927 were more effective for international arbitration than the League of Nations was for global governance, and established the framework for modern international arbitration. Despite their achievements, under the Geneva Protocol and the Geneva Convention, arbitration agreements were still routinely voided14 (p. 21) and arbitral awards were subject to intense judicial scrutiny, sometimes even rewriting.15 Only by virtue of domestic courts’ respect for principles of international comity were arbitral awards enforced at all.16

1.14  Expectations about what international arbitration could accomplish were much lower than they are today. There were relatively few cases, and their resolution was inherently less predictable in both processes and outcomes. Early international arbitration procedures were primarily compromise-oriented, and characterized by informality and flexibility. Arbitral decisions were revered not so much for their legal accuracy or precision as for their sense of fairness and practical wisdom.17 Since, as noted, judicial enforcement was questionable, awards were generally only as good as they were likely to be complied with voluntarily.18

1.15  In keeping with this approach, the arbitrator of yesteryear was often already personally known to the parties or counsel, and typically an expert from the same industry as the parties.19 He exercised a paternalistic authority20 and was expected to render a just and equitable result. This objective sometimes meant disregarding the express terms of the contract or the clear provisions of applicable substantive law ‘for the sake of achieving unanimity among the arbitrators and giving something to both parties’.21

1.16  Several doctrines developed to facilitate these informal decisional processes. The doctrines of amiable compositeur and ex aequo et bono both expressly authorize arbitrators to disregard the strictures of so-called auxiliary rules, such as statutes of limitation, in order to reach more just and equitable outcomes.22 Under ex aequo et bono, arbitrators are also authorized to disregard (p. 22) mandatory rules of law.23 In lieu of national substantive law, in this earlier era, parties often selected a more pliable body of law developed out of customary trade practices and focused on equitable results. This unwritten law of merchants24 or lex mercatoria was developed by academics, who were also actively involved in arbitrations.25 One purpose of lex mercatoria was to permit arbitrators to tailor their decisions to customary trade usages and a gentile interpretation of the principles guiding international commercial transactions.26

1.17  The hallmark of lex mercatoria is its insistence on the notion that a duty of good faith informs contract interpretation and performance.27 In applying this requirement of good faith, arbitrators could imply terms to achieve a more equitable result. One example would be implying a requirement that a party provide ‘ample notice’ of termination, even if the contract included no such term.28

1.18  These soft-edged standards and procedures suited the international marketplace at the time. In that era, there were relatively few companies, primarily concentrated in specific industries, such as maritime, construction, and engineering, and certain commodities, such as oil, cotton, and steel.29 Parties that were disputing one day would have to do business with each other another day. The need to continue a business relationship made sharp business tactics and scorched earth litigation strategies counterproductive. International businesses needed to resolve disputes through a kinder, gentler process that would not impair their ability to do business together in the future.30

1.19  In this earlier era, the small cluster of professionals who acted as arbitrators and counsel generally had shared understandings about what it meant to act honourably and behave ethically.31 (p. 23) Just like other members of Schachter’s Invisible College, they were a self-regulating club of gentlemen that needed no external guidance or regulatory oversight. This group’s sense of nobility and belief in good faith extended to their expectations about how businessmen would behave in their commercial activities. For example, the Geneva Protocol of 1923 did not impose any obligations for coercive enforcement through national courts, but effectively presumed voluntary compliance.32 This assumption was also reflected in the 1923 version of the International Chamber of Commerce (ICC) Rules, which expressly relied on businessmen’s sense of honour to ensure voluntary compliance with arbitral awards.33

1.20  By the 1950s, the founders of modern international arbitration realized that the benevolence among disputing parties presumed by the Geneva Protocol and the Geneva Convention was insufficient. Real mechanisms for enforcement were needed to corral recalcitrant parties and to press reluctant national courts into enforcing agreements and awards. There were daunting cultural, political, historic, practical, economic, and legal obstacles to creating an effective, reliable, and enduring system of international adjudication.34 But the architects of modern international arbitration were determined in their ‘idealistic experiment in trans-border understanding and cooperation’.35 With these goals in mind, the United Nations Convention on the Recognition and Enforcement of Arbitral Awards (New York Convention) was drafted to replace the Geneva Protocol and Geneva Convention. The New York Convention adopted a more realistic view of the strategic behaviour of participants, and mechanisms for controlling that behaviour.36

1.21  Despite its more realistic approach to ensure enforceability of arbitration agreements and awards, the Convention reflects an implicit assumption that counsel or arbitrators could be counted on to self-regulate. How else to explain the New York Convention’s conspicuous silence about misconduct by either group?37 Just as arbitrators imposed on parties an implicit and vague obligation to act in good faith, they must have expected the same of their arbitrator colleagues and counsel appearing before them. Specific provisions were apparently regarded as unnecessary.

1.22  This omission is particularly stark in contrast to early domestic arbitration laws, which were promulgated before the New York Convention. In contrast to the New York Convention’s (p. 24) silence, early national arbitration laws were animated by vivid suspicions about the conduct and motives of counsel and arbitrators. For example, the English Arbitration Act of 1950 specifically identified the potential for arbitrator ‘misconduct’ or ‘improper’ procurement of an award as a ground for refusing enforcement of an arbitral award.38 Meanwhile, the drafters of the Federal Arbitration Act (FAA), enacted in the United States in roughly the same period as the Geneva Protocol, demonstrated remarkable creativity in specifying the types of potential misconduct that might give rise to a legitimate challenge to an award. They suspected that awards could be subject to ‘evident partiality’ by arbitrators, ‘corruption, fraud,… undue means’ by parties, counsel or arbitrators, and generally by ‘other misbehavior’.39

1.23  In the still relatively close-knit community of international arbitration,40 however, it was apparently unthinkable—or at least unspeakable—that its pioneers, those members of Schacter’s Invisible College of International Lawyers, could stray from their ‘noble duties.’41 Today, even the staunchest proponents of international arbitration acknowledge that these assumptions are no longer sustainable.42

B. Modern international arbitration

1.24  Contemporary international arbitration practice stands transformed from earlier eras. Arbitration is the unrivalled preference for resolving international commercial disputes.43 With the success and related growth of international arbitration, several other important trends have transformed its once cosy community into an ethical no-man’s land. Previously unthinkable challenges to arbitrators’ conduct are now relatively commonplace. Standards for arbitrator conduct, which used to rely on the arbitrators’ internal moral compass, have been replaced with a plethora of more detailed new standards and rules and intensified scrutiny by arbitral institutions. Some commentators worried or have argued, based on an increase in absolute number of challenges, that the expansion of disclosure obligations has led to an increase in challenges,44 a hypothesis that will be addressed later in Chapter 2.45(p. 25)

1.25  Meanwhile, in a parallel development, ethical clashes among, and alleged misconduct by, counsel have become more frequent and acute. These clashes are occurring more often, sometimes as a result of good faith disagreement and sometimes as a strategic tool to gain a tactical advantage. These developments have prompted numerous calls for the development of ethical standards to govern counsel,46 increased pressure on international arbitrators to make express rulings regarding attorneys’ ethical conduct, and calls for arbitral tribunals and international organizations to provide additional guidance and resources. The specifics of attorney ethics are addressed in Chapter 3. Attorney conduct is both key to arbitral proceedings, and emblematic of and inter-related to, the conduct of experts and third-party funders, topics that are taken up respectively in Chapters 4 and 5.

1.26  In addition, the arrival of third-party funders and the increased reliance on and expanded role of expert witnesses have introduced whole new categories of participants whose conduct can affect arbitral proceedings. The inherent sense of propriety of these new participants, however, is even less reliable than counsel and arbitrators. The stake that experts and third-party funders have in international arbitration is more attenuated than counsel and arbitrators, and their participation is less inherently constrained by traditions and existing procedures.

1.27  This Part surveys the three major trends in international arbitration that have produced the current backdrop against which all these participants’ ethical conduct is evaluated: Section 1 reviews the growth and diversification of the international arbitration field; Section 2 explores the increase in formalization and transparency of arbitration procedures; and Section 3 examines the increased competitiveness in the market for arbitration services.

1. Growth and diversification of international arbitration

1.28  The first and most obvious trend that has transformed international arbitration is its dramatic growth in size and cultural diversity. The current proportions of international arbitration practice undoubtedly surpass even the wildest expectations of its founders. Just in the last decade, the total number of arbitrations has nearly doubled,47 and another sharp increase has occurred since the crash of 2008. These figures do not reflect the number of ad hoc arbitrations or those administered by the growing number of smaller, regional arbitration centres.48

1.29  Although today a mainstay, the arrival of American companies and American law firms in international arbitration marked an important development in both the growth and diversification of international arbitration.49 Until approximately 30 years ago, international (p. 26) arbitration had been a predominantly European affair. Although a few Americans were active in the international arbitration system since its early beginnings, they arrived in large numbers only in the 1980s. American attorneys brought with them not only a uniquely adversarial American style of advocacy,50 but also a range of ethical standards that were at odds with those of their European counterparts.

1.30  American attorneys can ethically engage in pre-testimonial communications with witnesses and use aggressive strategic tactics, but are subject to stringent rules against conflicts of interest, duties of candour to the tribunal, and obligations to comply with document requests.51 By contrast, European attorneys have a more relaxed and flexible approach to conflicts of interest, but are usually subject to absolute prohibitions against pre-testimonial communications with witnesses in national court proceedings. European attorneys and arbitrators meanwhile find American litigation strategies ‘barbaric.’52 Even as some leading US firms have become important providers of international arbitration services,53 these problems have not gone away entirely, and are analysed in greater detail in Chapter 2.

1.31  Perhaps the most disruptive importation by American attorneys was their uniquely partisan approach to the role of the party-appointed arbitrator. Domestic US arbitration procedure historically allowed parties and their counsel to communicate throughout arbitral proceedings with their party-appointed arbitrators, even about crucial issues involving strategy.54 Such communication is considered unacceptable in most other systems,55 and an anathema in (p. 27) international arbitration. This fundamental clash over the role of party-appointed arbitrators became a cornerstone in early debates about arbitrator conduct. Even after the US practice of partisan party-appointed arbitrators has mostly died out in domestic US arbitration, party-appointed arbitrators remain at the centre of modern controversies about arbitrators. The newest, and often most acerbic, attacks on party-appointed arbitrators challenge the propriety of dissenting opinions by co-arbitrators in favour of appointing parties,56 and propose eliminating the process of unilateral party-appointment altogether.57 These issues will be taken up in Chapter 9.

1.32  International arbitration has diversified well beyond the arrival of American participants. This diversification is illustrated, among other things, by the proliferation of arbitral institutions. At the birth of modern international arbitration, there were few institutions, and their activities centred almost exclusively in Europe.58 Beginning in the late 1970s and early 1980s, however, centres began sprouting up around the globe—from Hong Kong, to Cairo, to Vienna, to Kuala Lumpur, to British Columbia. Later, in the early 1990s, new centres arrived in Singapore, the Philippines, Ha Noi, Beirut, Jakarta, Milan, and, for intellectual property disputes, the World Intellectual Property Organization or WIPO in Geneva.59 Even more recently, centres have proliferated throughout Latin America, Africa, and the Middle East.60 In the 1990s, the American Arbitration Association (AAA) also founded the International Centre for Dispute Resolution, or ICDR, to administer international cases. More recently, major European centres like the London Court of International Arbitration (LCIA) and the ICC are sponsoring, supporting, or jointly operating new centres in India,61 (p. 28) Dubai,62 Singapore,63 and East Jerusalem (for disputes involving parties from Israel and Palestine).64

1.33  While the premier centres still attract most of the mega-cases, the greatest growth in annual caseloads is occurring at regional centres.65 Just as small community banks and credit unions can carve out a niche by providing service that is better tailored to the local community than large nationwide banks,66 regional arbitration institutions are regarded as providing service and know-how that is more tailored to local markets.

1.34  Predictably, in response to local needs and concomitant with the rise of regional centres, parties are appointing arbitrators and counsel who are from outside the traditionally European pool of participants.67 These trends mean not only participants who are new to international arbitration, but also an increase in participation by lawyers who are not part of the global network of mega-firms. Ultimately, diversification of participants has contributed to a breakdown in the insular, once-shared professional norms. Those shared norms had operated as a basis for informal self-regulation, but as they have broken down, nothing has come in to take their place.(p. 29)

2. Formalization and increased transparency

1.35  Related to international arbitration’s growing in size and diversity, in recent years it has also become procedurally more formal and transparent.68 Under current practices, parties rarely empower arbitrators to decide the matter as amiable compositeur or ex aequo et bono.69 Instead of these open-textured but opaque procedures, arbitral procedure has become more definite and precise. The result is greater transparency about how and why arbitral decisions are made. While arbitrators once had vast, unchecked discretion in ordering procedures, modern arbitral rules have shifted to give parties more control over the presentation of evidence, in part by imposing formal rules that standardize arbitrators’ evaluation of evidence.70 One clear illustration of this shift is the ICC Rules. The ICC Rules implement the consensus that awards should be rendered with reasons71 and expressly prohibit arbitrators from acting as amiable compositeurs unless the parties expressly authorize them to do so.72 Another example is the International Bar Association’s Rules for the Taking of Evidence in International Arbitration and other practice guidelines and protocols that arbitrators routinely adopt in some form to order proceedings.73

1.36  At a substantive level, lex mercatoria is now rarely selected by the parties.74 Instead, choice-of-law clauses usually require application of national law, which increases predictability and avoids application of law that is not well developed.75 The total effect of these developments (p. 30) is that international arbitration has become a more complex, sophisticated, and formal method for resolving international disputes.76

1.37  Critics complain that in its modern incarnation, international arbitration is less recognizable as a form of ‘alternative dispute resolution’77 than as a type of ‘offshore litigation’.78 This transformation has been both celebrated and decried as the ‘judicialization’ of arbitration and, in some instances, the ‘Americanization’ of international arbitration.79 While there is considerable debate regarding the efficacy of some of these developments,80 they have undoubtedly increased transparency and raised new challenges regarding the ethical conduct of participants in the system.

1.38  As the procedures that govern arbitral proceedings have become more refined, formal, and transparent, they increasingly contrast with integrally related ethical issues, which remain vague, indeterminate, and hopelessly ad hoc. The result is an increased pressure for advances in the rules that govern the professional conduct of various actors in the system. One response to these increased pressures was the promulgation of the IBA Guidelines on Conflicts of Interest in International Arbitration regarding arbitrators, along with various efforts by arbitral institutions to make their disclosure and challenge standards more transparent and predictable. These developments are explored in Chapters 2 and 6. With regard to counsel ethics, advances have been much slower, but momentum has been growing and important new developments (taken up in Chapters 3 and 6) are in the works.81 Even more recently, and less developed, are responses to growing concerns about the conduct of experts and third-party funders (taken up respectively in Chapters 4 and 5).(p. 31)

3. Economic competition in international arbitration

1.39  Another important trend, related to its expansion and diversification, is that international arbitration has become more expressly entrepreneurial. Arbitration awards mean not only large awards for prevailing parties, but also large fees for those rendering arbitral services. In law firms, international arbitration practice groups compete to get the biggest and most high-profile cases.82 Arbitral institutions compete to attract cases. States, and even cities, compete to attract arbitration business.83 Arbitrators compete to preside over the largest and most high-profile cases.84 Today, scorekeepers keep careful track of all this data.

1.40  An ‘Annual Scorecard’ published by the American Lawyer magazine provides what it calls ‘[a]n inside look at more than 100 major disputes from the secret world of arbitration.’85 Ratings agencies provide industry evaluations,86 academics conduct empirical research to measure which institutions and States attract the most cases,87 and various industry (p. 32) publications have started awarding prizes that distinguish top performers.88 These sources not only measure competition within the industry, but also increase the stakes of that competition.

1.41  Not surprisingly, all this competition has produced a new breed of arbitrator, who regards participation in arbitration as an entrepreneurial venture.89 Meanwhile, since service as an arbitrator is one of the best credentials for attracting business as counsel, arbitrator status is no longer pursued solely as an end in itself. It is also a means of increasing a lawyer’s rainmaking potential.90 As Jan Paulsson has explained, ‘the age of innocence has come to an end … [and] the delightful discipline of a handful of academic aficionados … has become a matter of serious concern for great numbers of professionals determined to master a process because it is essential to their business’.91

1.42  These various trends—the expansion, diversification, increased transparency, and increased competitiveness—have important implications for the ethical conduct of participants in international arbitration. In many respects, these trends track the expansion and globalization of the legal profession more generally and therefore are best understood in light of those developments.

C. Globalization of the legal profession

1.43  The ethical challenges facing international arbitration practice echo the challenges facing national legal professions more generally. As Detlev Vagts observed years ago in his call for international governance of the legal profession, in close-knit professional communities, everyone ‘know[s] what they are supposed to do. In the rare case that somebody is tempted to lapse from grace, the prospect of disapproval by one’s peers is deterrence enough’.92 As national and global legal practice expanded in size and diversified geographically, informal mechanisms became clearly inadequate, just as in international arbitration.(p. 33)

1. The rise of the mega law firm

1.44  Until the last 40 years, most lawyers were sole practitioners or members of relatively intimate firms of partners all of whom knew each other and primarily serviced local clients on local matters in local courts.93 In the United States, the few firms that ventured overseas did so only haltingly and usually in response to a specific client need rather than as part of a larger mission to establish a global practice.94 There was no such thing as a global law firm, and even the largest firms would be considered miniscule in comparison with today’s behemoths.

1.45  When law practice was primarily local, professional regulation was informal and more about social cohesion. As Charles Wolfram explains, bar associations in the United States grew out of ‘eating clubs’.95 This tradition, in turn, developed out of the English socializing function of the Inns of Court in London. The Inns of Court were instrumental in acculturating new members and still have eating rooms as a central feature of their architecture.96 Formal regulation was similarly underdeveloped at the national level, and written codes were scarce and largely regarded as unnecessary.97

1.46  Back when the New York Convention was being drafted in the 1950s, the American Bar Association’s ambitious new Canon of Attorney Ethics was only a few decades old. Soon enough, it would prove to be highly unsatisfactory. The Code of Professional Responsibility would not replace it until 1970, and the ink was still drying on the American Canons of Judicial Ethics, which were regarded as largely advisory.98 On the other side of the Atlantic, the British Solicitors’ Practice Rules had only been penned in 1936, but in most other parts of Europe and the rest of the world, written codes and organized bar associations were still largely unknown.99 It was not until 1977 that the Council of Bars and Law Societies of Europe (the (p. 34) CCBE) drew up a very general statement of the principles of professional conduct that apply to European lawyers, known as the Declaration of Perugia.100

1.47  Today, the small legal communities of the 1950s have mostly given way to larger, increasingly dispersed law firms.101 This is particularly true with respect to US- and UK-based firms. As David Wilkins describes:

In the 1960s, there were only twenty law firms in New York City with more than fifty lawyers, with the largest, Shearman & Sterling, consisting of 125 lawyers. By the turn of the twentieth century, there were more than 250 U.S. firms larger than Shearman’s old size, with more than ten firms of over 1000 lawyers. The growth since 2000 has been even more torrid—until, of course, the fourth quarter of 2008. In 2006, the median size of the nation’s 250 largest firms had ballooned to over 500, with more than twenty firms topping the scales at over 1000—and four breaking the 2000-lawyer barrier.102

Comparatively, of the top 100 European and top 200 UK law firms in 2011 and 2010, respectively, four firms had over 2000 lawyers, eleven boasted more than 1000 lawyers and 31 firms had over 500 lawyers.103 European law firm growth has been most pronounced in the UK. Until 1967, a statute capped London firms at 20 persons,104 but UK firms rapidly expanded during the mid-1980s. By 2010, six of the top 20 worldwide firms were headquartered in the UK.105 Similarly, whereas not a single German corporate firm had more than 50 lawyers in 1989,106 by 2010 16 of the top 100 European firms were German.107

1.48  As a result of this growth in the size of law firms and national legal practices more generally, most countries now have written codes of ethics, even if there remains significant variation in their level of detail and available sources of interpretation.108 Perhaps even more striking than the relative growth in size of law firms is the geographic diversification of the legal profession.(p. 35)

2. The mega-firm goes global

1.49  In the same period that small firms gave way to larger firms and informal social controls gave way to formal regulation, localism gave way to globalism. Foreign offices are no longer eccentric analogues to a firm’s ‘main practice’. At least in US and UK law firms, an overseas presence is today an essential credential for competing effectively in the global marketplace. The figures measuring this transition are staggering.

1.50  Prior to World War II, only four US law firms had an overseas office.109 By 2004, 64 of the top US-based firms had offices abroad supporting 386 foreign law offices in 55 cities staffed by over 8,700 attorneys.110 US-based firms had several inherent advantages in globalizing, beginning with their early size advantage, which in turn has led to greater opportunities for profits and expansion.111 Globalization has become a key factor for law firm profitability and success.112 As of 2009, five out of 10 of ‘the world’s highest-grossing firms had more than 60% of their lawyers working in countries outside of the firm’s home country.’113

1.51  These developments are similarly reflected in World Trade Organization (WTO) statistics about global trade in legal services, which show the United States having 54% of international trade in legal services, Europe with 36.5%, and Asia with 9.4%.114

1.52  Despite these developments, there is an inherent tension underlying the globalization of legal practice. Globalization is about opening markets for suppliers, increasing competition among them, and increasing choice for consumers of their products. From the perspective of economists and trade representatives, these goals would seem to apply to legal services as much as any other service industry.115 These goals are not, however, always an easy fit with (p. 36) the conventional view of lawyers as creatures of national law, national training, and national licensing and regulation.

1.53  Lawyer self-regulation has historically been premised on a ‘state-sanctioned [monopoly on] the delivery of legal services in return for assurances of ethical behavior’ by the legal profession.116 While a professional monopoly has traditionally been a defining feature of the legal profession, its pre-eminence is being challenged by the march toward increasingly global free markets and by development of overlapping national regulatory authority over professional activities. This tension raises many questions for the regulation of transnational legal services, with special implications for international arbitration.

D. Regulation of transnational law practice

1.54  Contemporary law practice, including international arbitration practice, is indisputably global, with even small and medium-sized firms participating in the global market for legal services.117 Ethical regulation by bar authorities, however, remains largely local and territorial.118 The distinction between these two phenomena can be likened to two contrasting maps.119 Ethical regulation is like a map delineating the physical territories of political entities. Law practice, however, is like a map of weather patterns. Political units regulate within their borders and carefully guard against various types of intrusion. No sovereign, however, expects or attempts to prevent clouds or the wind from passing into or out of their territory. Until recently, domestic professional regulatory authorities seemed to treat the globalization of law practice as a force of nature, as difficult to control as the weather.

1.55  One particularly poignant example of this sense of regulatory impotence is in the aftermath of the disastrous gas leak at the facility of a Union Carbide subsidiary in Bhopal, India in 1984. Within hours after gruesome details became public, dozens of American attorneys descended en masse on distressed, unsophisticated, and often illiterate Indian victims. In apparent violation of several US ethical rules, and in clear violation of Indian ethical rules,120 these US attorneys directly solicited victims and convinced them to sign contingent fee retainer agreements for tort actions to be brought in the United States. Apparently, the fact that many victims did not speak English or understand the agreements did not influence (p. 37) the attorneys’ efforts. One attorney boasted that he had obtained more than 7,000 signed contingency fee agreements within five working days of the gas leak, meaning approximately one agreement every 60 seconds.121

1.56  Despite the apparent ethical violations,122 neither US nor Indian bar authorities ever sought to discipline these attorneys.123 Whatever other reasons may have contributed, one explanation for the inaction was likely that the relevant regulatory authorities regarded the attorney conduct at issue as outside the purview of their disciplinary power. For the American authorities, their rules and disciplinary jurisdiction did not apply overseas in 1984.124 For the Indian authorities, their ethical rules did not apply to foreign attorneys acting in court cases pending in the United States.125

1.57  Today, similar conduct is less likely to escape some form of regulatory oversight or discipline from either the host or the home jurisdiction. Two more recent cases alleging mass toxic tort claims in Nicaragua and Ecuador illustrate the point. In both cases, US attorneys have faced serious potential discipline in the United States for alleged misconduct that occurred in the foreign country and related to foreign proceedings.126 It is not only the passage of time that produced different responses.127 These later cases registered on the radar of disciplinary authorities not because of new activism, but because complaints were brought by opposing (p. 38) parties as part of their case strategy. According to anecdotal reports, this technique appears to be on the rise also in international arbitration, as parties and counsel are reportedly responding to ethical conflicts within arbitral proceedings by petitioning national bar authorities for disciplinary action against allegedly offending attorneys.

1.58  These developments suggest that ethical conflicts in international arbitration may be more likely to be raised in national contexts. Relatedly, there is an increased potential for national legal systems being pressed to become more active regulators of attorney conduct in international arbitration. One problem with these developments, however, is that recourse for ethical misconduct is only available through some national bar authorities. Even today, as in the era of Bhopal, apart from a few active jurisdictions, national bar rules and disciplinary authority often do not apply to conduct that occurs abroad or in international arbitral proceedings. This book argues that national authorities are not efficient or effective regulators for conduct in international arbitration. Nevertheless, national regulation of transnational legal practice is an important backdrop for understanding ethical regulation in international arbitration, and support from national bar authorities will be essential for self-regulation in international arbitration.

1. National regulation of transnational legal practice

1.59  Perhaps the most significant marker of the globalization of the legal profession is that today many local bar authorities expressly allow foreign attorneys to conduct legal activities in their jurisdiction. This authorization is almost always conditioned on the requirement that they ‘register’ as foreign attorneys or ‘foreign legal consultants’.128 Many jurisdictions also require that they affiliate with locally licensed attorneys. In this status, foreign legal consultants are subject to regulation as local attorneys. They are usually precluded, however, from advising on local law—often very broadly defined129—or appearing in local courts.130 One exception is the European Union, which has developed very broad opportunities for cross-border practice among lawyers from other European Member States.131

1.60  At the other end of the spectrum, there are some holdouts that have resisted opening their legal markets. To varying degrees, Korea, Japan, China, and India have offered considerable resistance to penetration by US and UK firms,132 with India being the most (p. 39) extreme example. These holdouts have only been partially successful since foreign investment almost necessarily presumes legal services by foreign and international law firms.133 They are also coming under increasing pressure from international trade organizations and agreements to open up to foreign lawyers.134 The pressure, however, also comes with some reciprocal concessions.135 The United States is yielding, albeit slowly and partially, to this pressure by allowing foreign lawyers greater access to US legal markets.136

1.61  Whatever advances have been made in allowing and regulating in-bound foreign attorneys, no national legal system has regulated their own ‘out-bound’ lawyers with the same vigour. A cynic might hypothesize that this regulatory reluctance is simply a form of protectionism for local attorneys, or at least a disregard for misconduct that imposes costs in foreign legal systems but does not affect local legal markets.

1.62  Without completely ruling out the more cynical view, the limited institutional capabilities of national bar authorities are also inevitably part of the explanation for limited concern over the foreign conduct of locally licensed attorneys. As noted, even in domestic contexts, there are serious questions about the effectiveness of discipline and sanctions by bar authorities.137 The institutional limitations that give rise to this critique are amplified in transnational and international contexts.

1.63  Territoriality is the primary basis for political entities to exercise prescriptive jurisdiction. In the context of lawyer regulation, the concept of territoriality has traditionally been used (p. 40) to determine who ‘can regulate the conduct of persons who appear in … courts, maintain [professional] offices, or conduct other transactions within [a given] territory’.138 While strict conceptions of territoriality are no longer regarded as a limitation on the exercise of regulatory jurisdiction by political branches,139 attorneys are not generally regulated by political entities.

1.64  Local bar associations and law societies, most often in conjunction with local courts, are the primary promulgators and enforcers of professional ethics in most national legal systems.140 These bar authorities often compete for jurisdiction with the bar authorities of other political sub-divisions within the same polity.141 In Continental Europe, local bar associations were historically limited to particular cities or minor political subdivisions. In the United States, bar authorities continue to operate at the state level. Competition among state bars has blocked pragmatic efforts to develop national licensing and regulation.142 This competition among other local bar authorities within a national polity creates what might be called ‘horizontal’ pressure on their exercise of regulatory power.

1.65  In addition to ‘horizontal’ pressure from competing national bar authorities, other political entities are also encroaching ‘vertically’ on the power of bar authorities.143 In the United States and Europe, and to a somewhat lesser degree in other jurisdictions, there has been a virtual explosion of auxiliary regulation aimed at attorneys. These regulations are enacted through national legislation, administrative regulations, judicially created rules (including liability rules), and international agreements. They aim at controlling various (p. 41) activities including money laundering, corruption, terrorism, tax evasion, and trade in legal services.144 Their effect, however, is to erode the foundations of attorneys’ professional self-regulation.145 As a result, bar authorities—particularly in the United States—are in an increasingly limited and more defensive posture.146 In light of these horizontal and vertical constraints on bar authorities, their reluctance to assert a new measure of regulatory power extraterritorially may be understood as a pragmatic retrenchment in the face of eroding authority.147

1.66  Recent reforms in a few jurisdictions have expressly extended extraterritorially the powers of some local bar authorities, and have introduced related choice-of-law guidance for ethical rules. Instead of opening a new globalized role for bar authorities to accord with globalization of the legal profession, however, in practice these developments emphasize the institutional limitations of bar authorities in a globalized legal world.

1.67  Even in their purely domestic activities, bar authorities are often underfunded and understaffed.148 They are also generally staffed with individuals who have little or no knowledge or expertise of international or foreign law practice, let alone foreign language competences. Investigating conduct that occurred in a foreign jurisdiction, in violation of foreign ethical rules, and in all probability occurred in a foreign language would stretch the competence of most national bar authorities.149

1.68  The limited institutional competences of national bar authorities suggest that they are not the optimal choice as the sole, or even primary, source of ethical regulation for attorneys or (p. 42) arbitrators150 in international arbitration. Many ethical issues ‘generated by the global context’ are ‘not easily amenable to resolution by reference to any single code within the “home” or “host” jurisdiction’.151 For this reason, commentators have argued that the ‘common expectation of regulatory control exercised by a professional bar may [need to] be replaced’ by a mechanism or combination of mechanisms more adapted to modern global realities.152 While there have been some preliminary efforts to date, they have been limited in both aim and effect.

2. Efforts at international regulation of transnational legal practice

1.69  In response to the limitations of national bar authorities, one obvious effort has been to provide guidance for international and transnational practice through international codes of ethics. There have been literally dozens of attempts, but most fall short of providing clear guidance and none even attempt to create transnational mechanisms for enforcement.153 The earliest effort was the 1956 IBA International Code of Legal Ethics. In 1977, the CCBE promulgated the Declaration of Perugia on the Principles of Professional Conduct.154 While both these efforts were remarkable for their prescience (they were adopted when national written codes of ethics were still a new and rare phenomenon), they are most accurately described as expressing notions of professionalism rather than meaningful ethical guidance.155

1.70  More recent efforts include the IBA ‘Core Values’ Resolution, which began in 1998, and the IBA General Principles of the Legal Profession of 2011, which includes recently updated and more detailed commentary.156 The Bar Association Presidents’ Meeting developed in 2005 a Statement of Core Principles, which was adopted by 100 bar associations from around the world, and the Union Internationale des Avocats (UIA) developed the Turin Principles in 2002.157 (p. 43) While all laudable efforts,158 most operate at a level of abstraction that again provides little meaningful guidance to the most salient issues that arise in actual international arbitral practice.159

1.71  Most recently, other international efforts have developed a more tailored focus. The CCBE developed the Code of Conduct in 1988 (later revised in 2006), which governs European lawyers.160 The CCBE Code was specifically drafted to provide guidance to attorneys engaged in cross-border activities in Europe and is arguably the most advanced and successful international code of ethics to date.161 Even if much more overtly aimed at addressing regulatory issues than stating general aspirational principles (like those efforts described previously), the CCBE still does not address a number of the most difficult questions that arise in the regulation of cross-border practice. Most importantly, the CCBE Code does not resolve conflicts between different national ethical regimes that might both apply to particular attorney conduct; it only suggests that attorneys inform themselves about the rules of other Member State jurisdictions.162

1.72  One feature all these efforts have in common is that they fail to address specific ethical issues that are most critical in practice before international tribunals. This omission is interesting because most early regulation of legal professions had a reverse focus—most early codes focused primarily, if not exclusively, on an attorney’s role as advocate and conduct before tribunals. As explained in more detail in later chapters, the absence of rules regarding practice before international tribunals is most likely an implicit nod to the generally recognized notion that tribunals must develop their own rules specially tailored to their proceedings.163

E. Regulation of attorneys in international arbitration

1.73  Advocacy before tribunals is universally assumed to require specialized rules that are particular to the relevant tribunal and cannot be developed independently of that tribunal. This assumption is expressed in various efforts that provide guidance for transnational legal practice, but leave room for the ethical rules of an international tribunal to govern conduct before it. For example, Article 2.5 of the IBA General Principles of the Legal Profession of (p. 44) 2011 states, ‘A lawyer who appears before or becomes otherwise engaged with a court or tribunal must comply with the rules applied by such court or tribunal.’ In the same vein, Article 4.1 of the CCBE Code provides ‘A lawyer who appears, or takes part in a case, before a court or tribunal must comply with the rules of conduct applied before that court or tribunal.’ Similarly, Model Rule 8.5 in the United States instructs that an attorney is bound by the rules of a tribunal or, in the absence of such rules, the ethical rules of the ‘jurisdiction in which the tribunal sits’.164 The underlying assumption of each of these approaches is that tribunals generally have their own rules. The problem with international arbitral tribunals is that they do not.165

1.74  Recognizing this gap, two more recent efforts have attempted to fill it. On the one hand, the International Law Association Study Group on the Practice and Procedure of International Courts and Tribunals drafted the Hague Principles on Ethical Standards for Counsel Appearing before International Courts and Tribunals (Hague Principles).166 The Hague Principles are an ‘attempt to articulate common ethical standards for counsel for all international courts’.167 Notably, however, the Hague Principles expressly disavow application in commercial arbitration.168 In addition, while attempting to provide general guidance, the Hague Principles appear to contemplate that they will be supplemented by rules specifically promulgated by individual tribunals.169

1.75  In another important effort, an International Bar Association Task Force has recently drafted proposed Guidelines on Party Representation in International Arbitration. These Guidelines (p. 45) are an important milestone in the development of ethical regulation for international arbitration. As important as they are, the Guidelines for Party Representation are not formally binding, seek to leave so-called manadatory national rules in place, and leave open essential questions about how they can be meaningfully enforced. As such, by their own terms, the Guidelines on Party Representation do not seek to displace otherwise applicable national rules.170

1.76  Despite these recent advances, counsel ethics in international arbitration continues to be more or less a no-man’s land. This status is not entirely accidental. The ethical void is at least in part by design. There are two main, inter-related factors that inspire this design. First, even if not required by the New York Convention, there is a generally acknowledged right to be represented by counsel chosen by a party. Initially this right was recognized at the international level only for criminal defendants.171 That basic procedural right eventually translated into non-criminal contexts,172 and from there into international arbitration contexts.173 For example, the English Arbitration Act of 1996 provides that ‘[u]nless otherwise agreed by the parties, a party to arbitral proceedings may be represented in the proceedings by a lawyer or other person chosen by him’.174

1.77  This first premise about the right to counsel of a party’s own choosing creates a second dynamic. To allow parties maximum flexibility in choosing counsel, most jurisdictions effectively exempt foreign attorneys appearing in locally seated international arbitrations from regulations that otherwise apply to foreign attorneys. This exemption effectively leaves attorneys in international arbitration unregulated since, as noted previously, most bar associations do not expressly or practically extend their regulatory efforts extraterritorially.175 This Section explores these two aspects of regulation of attorneys in international arbitration.

1. Jurisdictions that seek to attract international arbitration

1.78  States compete, often vigorously, to attract international arbitration business.176 Limiting or precluding foreign attorneys from appearing as counsel in international arbitrations can (p. 46) force parties to retain different (i.e., local counsel) that would not otherwise be necessary. As a result, such requirements on foreign counsel are regarded as an act of hostility against international arbitration and can make a jurisdiction less competitive in attracting arbitration business. Singapore provides a vivid example.

1.79  In the highly publicized case of Turner (East Asia) Pte. Ltd v Builders Federal (Hong Kong) Ltd,177 the Supreme Court of Singapore affirmed an injunction prohibiting the US-based law firm of Debevoise & Plimpton from appearing in international arbitration proceedings seated in Singapore. The court, applying a broad statutory definition of ‘practice of law,’ reasoned that representation in an international arbitration is ‘an act of an advocate or solicitor when it is customarily (whether by history or tradition) within his exclusive function to provide’.178 In response to this decision, ‘most lawyers and businesspeople began avoiding Singapore as an arbitration venue’ and ‘writing Singapore out of arbitration clauses’.179 As a result, ‘Singapore’s arbitration business dropped precipitously, going to Kuala Lumpur and Hong Kong instead’.180

1.80  In the years since Turner, the Singaporean legislature has attempted to ameliorate the situation through two amendments to the Singapore Legal Profession Act. A July 1992 amendment clarified that Sections 32 and 33 of the Act ‘shall not extend to…arbitration proceedings seated in Singapore in which foreign law governs’.181 A 2004 amendment repealed Section 35 of the Act to allow foreign lawyers to give advice, prepare documents, and provide assistance in all Singapore arbitration proceedings.182 Effectively, arbitration counsel and arbitrators are now permitted a ‘fly-in–fly-out’ option to participate in locally seated international arbitrations. The happy ending to this cautionary tale is that, after ensuring that arbitration was open to foreign counsel, ‘Singapore [has] clearly emerge[d] as the most popular Asian seat’.183

1.81  Japan provides another interesting example of changes in professional regulation to accommodate international arbitration. Historically, Japan has imposed both widely applicable and extremely restrictive policies on foreign lawyers.184 In 1996, however, it passed a law (p. 47) permitting foreign attorneys to act as representatives in international arbitrations.185 As a consequence, international arbitration is the only legal activity in which foreign lawyers are permitted to engage in Japan.186 To illustrate just how welcoming Japan is for international arbitration, it has also created special immigration status for foreign attorneys entering for the purpose of engaging in activities related to international arbitration. Previously, this type of visa was reserved to domestic workers serving foreign diplomats or consular representatives, amateur athletes, and volunteer workers.187

1.82  Not to be outdone, several individual states within the United States are vying to make themselves a more attractive venue for international arbitration by permitting foreign counsel. The practice of law in the United States is governed almost entirely by the individual states, and few states have reciprocity regarding professional licensing. As a result, attorneys must generally qualify and be licensed by each individual state in which they engage in legal activities.

1.83  Against this background, the California Supreme Court in a now infamous 1998 case concluded that New York counsel appearing in a domestic arbitration in California were engaged in the unauthorized practice of law. The court found them guilty of a criminal misdemeanour, and concluded that they were not entitled to any fees from the relevant representation.188 Although the court also concluded that the prohibition did not apply in international arbitration,189 the decision prompted legislative amendments that do affect international arbitration. The amendments clarified that, while counsel licensed in other US jurisdictions could appear in arbitrations in California, foreign-licensed attorneys could not.190 Because foreign counsel cannot appear to represent their clients, California is often considered an undesirable seat for international arbitration.191The international arbitration community in California is lobbying to reform this legislative misstep, but to date it has not prevailed.

1.84  Other US jurisdictions, such as New York and Florida, have been more effective at making themselves more hospitable to international arbitration.192 New York has determined that (p. 48) representation in arbitration is not the ‘unauthorized practice of law’, such that both out-of-state and foreign attorneys can readily participate in arbitrations seated in New York without being locally licensed.193

1.85  Florida ethical rules also allow attorneys licensed in other US jurisdictions or foreign jurisdictions to appear in locally seated arbitrations, but affirm that in doing so, they are bound by Florida ethical rules.194 These were hard-fought changes:

The International Law Section of the Florida Bar worked together with many international arbitration practitioners in Florida in 2003 in order to promote the promulgation of rules by the Supreme Court of Florida that clearly allow parties to select counsel of their choice to represent them in international arbitration proceedings conducted in Florida, regardless of whether their counsel of choice is admitted to practice in Florida.195

Florida has since used those legislative developments as a basis for affirmatively advertising itself as an arbitration-friendly jurisdiction.

1.86  This reform is part of a larger effort to ‘establish a strong infrastructure to support and promote international arbitration in Miami’. According to the website of the Miami International Arbitration Society:

[T]he State of Florida has enacted targeted legislation and regulations over the course of the last three decades designed to provide a sound and sophisticated legal framework to promote international arbitration in Florida. This legal framework includes … progressive rules that permit parties to use their legal counsel of choice to represent them in international arbitration proceedings conducted in Florida, including counsel from a foreign jurisdiction who is not admitted to practice law in Florida.196

(p. 49) Florida’s approach contrasts with that of New York in that attorneys in Florida-seated arbitrations are bound by local ethical rules, whereas they do not appear to be in New York.

1.87  A similar approach has been adopted by Korea, which has only recently liberalized its legal practice to allow Foreign Legal Consultants. Korea requires that those participating in an international arbitration in Korea be registered as a Foreign Legal Consultant and, as a consequence, makes them subject to both their home ethical rules and those of the Korean Bar Association. This approach by Korea, which is similar to Florida’s in that they both make attorneys in international arbitration subject to local bar rules, is somewhat unique. Most other States do not expressly impose local ethical rules on lawyers who are appearing in locally seated international arbitrations. Instead, by indicating that local licensing is not required, other jurisdictions implicitly exempt foreign attorneys from local ethical rules when appearing in locally seated arbitrations.

2. Jurisdictions historically hostile to foreign lawyers in international arbitration

1.88  While most jurisdictions are arbitration-friendly, a few jurisdictions continue to impose significant restrictions on foreign lawyers in international arbitration. For example, in Thailand the Working of Aliens Act apparently prohibits foreign attorneys from appearing in arbitration and, at least according to one scholar, ‘if strictly construed’ it would also prohibit the attorney from assisting or advising regarding Thai arbitral proceedings.197 More recent sources suggest that foreign lawyers can appear in international arbitrations as long as Thai law does not govern and Thai courts ‘are not involved in enforcement’.198 Meanwhile, both counsel and arbitrators are advised to obtain work visas in order to enter Thailand199—there is no ‘fly-in–fly-out’ exemption as in Singapore.

1.89  In Chile, meanwhile, restrictions are even more extreme than the now-defunct Singapore limitations. Local law requires Chilean nationality to be licensed as a Chilean lawyer. This provision, combined with a requirement of representation by counsel even in arbitration proceedings has been interpreted by some commentators as precluding foreign lawyers from appearing in locally seated arbitration, even if some ambiguities remain.200

1.90  The Thai and Chilean limitations can be significant impediments to international arbitrations seated in those countries. Somewhat surprisingly, however, these limitations are not very well known, perhaps as a result of the fact that they are under-enforced. As Gary Born observes, they ‘are notable precisely because they are anomalies that deviate from the international norm’.201 Two other jurisdictions, however, are notable also because of their size and (p. 50) importance to global markets and related international disputes. China and India remain the two most important jurisdictions that restrict lawyers’ practice with respect to international arbitrations in their territories.

1.91  China is the most important jurisdiction that restricts representation in international arbitration. China is home to the China International Economic and Trade Arbitration Commission (CIETAC), the arbitral institution with the largest caseload, at least in terms of number of cases.202 China prohibits foreign attorneys from issuing any opinions or evaluations of Chinese law in international arbitrations.203 According to some commentators, it may also prohibit foreign attorneys from representing parties in CIETAC arbitrations, or at least not without co-representation with a Chinese attorney.204 To the extent a Chinese attorney is required to participate, that attorney could not be a member of the same foreign firm because Chinese attorneys are only permitted to practice in Chinese firms, and those who affiliate with a foreign firm must forsake their Chinese licence.205 This rule effectively requires parties to an arbitration that is seated in China or in which Chinese law may apply to retain a Chinese law firm to appear as co-counsel, or risk imposition of sanctions.206

1.92  If the application of Chinese law to foreign firms has some ambiguities, Indian law has until very recently been quite clear—they are not welcome! Indian bar associations and courts have expended tremendous efforts to effectively preclude formal establishment of foreign law firm offices in India through extensive litigation that has endured for decades. As recently as July 2010, the head of the Society of Indian Law Firms has underscored this opposition, stating that ‘The Indian profession will rise up in arms if [foreigners] want to open offices here’.207 The basis for this opposition, he explained, is a concern that liberalization of the Indian legal market is regarded as an effort ‘to emasculate the Indian legal community’.208 (p. 51) Indian lawyers characterize efforts by foreign firms to open offices as an effort to colonize the Indian legal market, which they claim is evidenced by ‘repeated patronizing, condescending language from foreign law firms regarding the inadequacies of Indian lawyers’.209

1.93  As a delayed response to the Bhopal plaintiffs’counsel solicitations, Indian lawyers complain that foreign attorneys apparently continue to come in on tourist visas and evade the restrictions of the Advocates Act of 1961.210 These complaints recently manifested themselves in an aggressive lawsuit, alleging that ‘32 law firms … are clandestinely operating in India’.211 The Madras High Court finally issued a pragmatic opinion in February 2012, which has particularly salutary effects for international arbitration. Citing ‘national interest’ and reasoning that an across-the-board prohibition on foreign lawyers ‘would be a far-fetched and dangerous proposition’ and ‘a step backward’,212 the Madras High Court concluded that foreign attorneys could fly in and fly out, for example, to represent parties in international arbitration. The Madras High Court is one of several state high courts, but it has concurrent writ jurisdiction with the Indian Supreme Court under Articles 32 and 226 of the Constitution of India. As a result, the Madras High Court decision applies throughout India, subject only to possible appeal to the Indian Supreme Court.

1.94  Despite the favourable ruling from the Madras High Court, not all is well for international arbitration in India. A separate legal action instituted by the same group as the Madras action has successfully petitioned the High Court of Delhi, which is in a different Indian State, to issue notice to the New Delhi branch of the LCIA to remove the word ‘London Court’ from its name.213 The status of this lawsuit remained uncertain as this book was going to print,214 and there are efforts underway to make India more international arbitration-friendly. One sign of progress is that, in August 2013, the LCIA India administered its first arbitration and its future now seems assured as a fixture in the Indian legal market.215(p. 52)

1.95  The obstacles for international arbitration that exist in India, as well as those in Thailand, Chile, and China, are generated by fears that globalization of the legal profession will harm local law firms. These protectionist measures, therefore, bring the discussion back to the demographics of globalization of law firms more generally.

3. Demographics in global and international arbitration practice

1.96  It is not surprising that international arbitration practice is dominated by Anglo-American mega-firms and established Continental practitioners since those were the first movers in globalization of the legal profession more generally. Because of their size, Anglo-American firms were uniquely well-positioned to expand internationally.

1.97  The arrival of US- and UK-based law firms has had significant effects on local markets. For example, France opened its legal market to foreign firms in the 1970s, and Germany in 1998. By 2005, there were only four French-owned law firms among the top 25 firms in France, and ‘eight of the top 10 law firms in Germany were operated by US and UK law firms’.216

1.98  In other local legal markets, particularly emerging economies, foreign firms often dominate international work.217 While these developments have fuelled concerns like those expressed by Indian lawyers, it would be too simple to dismiss them as a neocolonialist effort to entrench American and British law firm hegemony.218 The scene is much more complex. As a starting point, particularly in international arbitration, as analysed in Section 2 (‘Jurisdictions Historically Hostile to Foreign Lawyers in International Arbitration’), excluding foreign lawyers from participating in locally seated international arbitrations does not protect local law firms. Instead, foreign parties and counsel avoid that jurisdiction as a seat for arbitration and the ultimate result is a reduction in arbitration business for local legal service providers. Even if local firms are not the primary counsel in international arbitrations, locally seated arbitration can be good for the local economy, including for local lawyers, who may consult on issues of local law or become involved if there is a need to petition local courts.

1.99  The arrival of foreign mega-firms may also be good news for local attorneys for other reasons. Recent empirical research suggests that the arrival of mega-firms has not necessarily, or at least not only, displaced local attorneys. With the exception of a few unique jurisdictions like (p. 53) Brussels and Hong Kong, the majority (around two-thirds)219 of attorneys who staff overseas offices of US-based law firms apparently have their primary legal education and licensing outside the United States.220 Somewhat more surprisingly, only 9% of these local attorneys staffing foreign offices are admitted both in and outside the United States, and only a third of these attorneys have any US legal education, either a J.D. or LL.M.221 In other words, the primary growth of multinational law firms in foreign markets has been through hiring local attorneys, usually without requiring that they have substantive expertise or other professional ties to the United States. This staffing appears to be equally if not more true of international arbitration practice groups.

1.100  These statistics suggest that globalization of law firms may not so much be a neo-colonialist invasion into local legal markets,222 as feared by the Chinese and Indian opposition to foreign firms. Instead, it may indicate a process of ‘glocalization’.223 Under this view, mega-firms adapt to foreign local marketplaces through attorneys who have local legal culture and training, with relatively few foreign attorneys functioning as liaisons with the ‘home’ firm.224 In Brazil, even if some concerns remain about foreign firms ‘com[ing] in and steal[ing] all the sweets’, they are also described as ‘fueling a red-hot jobs market for locals’, at least for ‘ambitious young attorneys’ who can earn ‘higher pay and faster promotion’ than at local firms but ‘at the expense of the old guard’.225

1.101  These demographics are both the background against which global arbitration practice developed, and a catalyst for developments within international arbitration. For example, the so-called ‘Americanization’ of international arbitral procedure226 is undoubtedly a reflection of the dominance of US (and to some extent UK) firms in the largest international arbitrations. Similarly, the oft-noted under-representation of minority and female arbitrators, particularly in investment arbitration and in the largest commercial arbitration disputes, may be viewed as at least partially attributable to the severe shortage of diverse and female partners with significant seniority in global law firms.227(p. 54)

1.102  On the other hand, the ‘regionalization’ and diversification of international arbitration, noted previously,228 signals that international arbitration cannot expand into new markets without bringing into its fold lawyers and arbitration professionals from those markets. For example, the management of the new LCIA India is made up of Indians, and the arbitrators in the first arbitration under the auspices of the LCIA involved the Chief Justice of the Indian Supreme Court, in addition to two prominent women arbitrators from the UK and US.229 The arrival of new players brings diverse legal cultures and professional skills that contrast with those of major, established, multi-national law firms. While contributing to diversity, these new players have also brought to the fore new ethical issues and highlighted the absence of meaningful regulation in international arbitration.

1.103  Looking to the future, the most significant culture gap in international arbitration may turn out to be between practitioners at multi-national firms, of whatever nationality, and practitioners at smaller regional or national firms. Large, multi-national law firms provide internal training, as well as internal management protocols and procedures, that establish standards for practice that are often tied to those of the firm’s home office. They are more likely to have specialized practice groups that focus exclusively on international arbitration.

1.104  As the number of regional arbitration outposts and the number of smaller and medium-sized arbitral disputes grow, the size and hemogeny of international arbitral practice will also continue to expand. International arbitration has, in its past, managed to absorb new players and adapt to market transitions. It is facing similar challenges again today with respect to professional regulation of its various participants.

F. Conclusion

1.105  Professional regulation of attorneys was traditionally based on a model of a local licensure and local discipline of locally produced rules for attorneys engaged in local law practice. The globalization of law practice has forced national bar authorities to reconsider this old model in light of an influx of foreign lawyers operating within their jurisdictions and, more recently, the activities of locally licensed attorneys abroad, including before international tribunals. As with various other industries, however, local and national regulatory bodies and the rules they promulgate are tailored to local and national legal contexts. They are ill-equipped to regulate attorneys who operate on a wholly transnational plane, such as multi-national, multi-jurisdictional international arbitration practitioners. In their professional activities, an Indian attorney practising in the international arbitration group of a Singaporean law firm, a Brazilian attorney practising in an international arbitration group in the Geneva branch of an English law firm, and a Lebanese attorney practising in the Paris office of a US law firm’s international arbitration practice all have much more in common with each other than they do with lawyers licensed in their home jurisdictions who practise primarily domestic law. The nature of their professional activities in international arbitration transcend national (p. 55) borders. They have little relationship to the ethical rules that were designed to regulate legal activities within those borders. They are, it may be said, a new ‘International Arbitration Bar’. It is time they be regulated as such.

1.106  Regulating attorneys within international arbitral procedures and institutions may seem like a daunting challenge. Compared to improbable creation and tremendous evolution of the international arbitral regime, however, it may seem like a more modest goal. Whatever the measure, regulation of attorneys is an essential predicate to regulation of third-party funders and expert witnesses.

1.107  When the international criminal law community confronted the obvious need for international ethical regulation, the International Criminal Tribunal for the Former Yugoslavia (and other international courts) delegated the issue to special administrative bodies. These entities drafted and implemented codes of conduct, established procedures, and designated personnel to administer it.230 The ‘International Criminal Bar’ took these steps because they realized international criminal justice could not function effectively and legitimately without professional regulation of those managing and participating in its proceedings.

1.108  The development of a fully functioning ethical regime for international arbitration, however, presents distinct challenges from those faced by the international criminal law regime. In contrast to international criminal tribunals, international arbitration is a decentralized and highly diversified network of ad hoc tribunals. Its most visible and long-standing entities, arbitral institutions, have no formal or legal relationship to each other. States are intentionally cordoned off from arbitral proceedings and inter-connected only through treaty obligations to enforce agreements and awards. For the reasons described earlier, national bar authorities and legislatures are ill-equipped to step in, but unlike international criminal law, there are no public international bodies to which the power to promulgate binding ethical rules can readily be delegated. International arbitration, in other words, presents unique challenges for ethical regulation.

1.109  The project of the remaining chapters of this book is not to suggest definitive answers about how to meet all of these challenges. It is instead to document the existing challenges in the next four chapters, and propose conceptual and theoretical frameworks for answering those challenges in an overall regime of self-regulation in the remaining chapters. Despite disclaiming aspiration to a definitive master plan, and conceding that it leaves many questions unanswered, this book makes a number of specific proposals. Many elements of the proposals build on features that already exist in international arbitration practice. Others will not be immediately feasible, but are instead long-term goals that will hopefully materialize for arbitration in the next 20 years. And still other proposals may be contested, or ultimately even prove unworkable. Debating, contesting, negotiating, and experimenting with various approaches is a healthy, and even essential, part of the process of developing and implementing ethical regulation.(p. 56)

1.110  Ultimately, the challenge of ethical self-regulation is a challenge for the international arbitration community to think beyond its present situation, to future generations and future developments in an ever-more globalized legal world. It is a challenge for international arbitration to bring to bear all the pragmatism, creativity, and sense of the noble duty to transnational justice that it has demonstrated in the very best moments of its history. In sum, it is a challenge for international arbitration to reconstitute Schachter’s Invisible College to redress the modern problems of international arbitration’s ethical no-man’s land.

Footnotes:

No Man’s Land, in George Herbert Clarke (ed.), A Treasury of War Poetry (1917).

1  Oscar Schachter, ‘The Invisible College of International Lawyers’, 72 Nw. U. L. Rev. 217 (1977).

2  See Schachter, ‘The Invisible College of International Lawyers’, 223–6.

3  See Schachter, ‘The Invisible College of International Lawyers’, 225–6. Yves Dezalay and Bryant Garth similarly identified how attorneys and arbitrators in international arbitration operate as ‘moral entrepreneurs.’ Yves Dezalay and Bryant G. Garth, ‘Merchants of Law as Moral Entrepreneurs: Constructing International Justice from the Competition for Transnational Business Disputes,’ 29 Law & Soc’y Rev. 27, 35 (1995).

4  Pieter Sanders may be considered the dean of the Invisible College’s school of international arbitration. Famously, on one weekend in May 1958, Sanders typed on a small portable typewriter at his father-in-law’s house what would later be ratified as the United Nations Conference on International Commercial Arbitration. See Pieter Sanders, ‘The History of the New York Convention’, in Albert Jan van den Berg (ed.), Improving the Efficiency of Arbitration Agreements and Awards: 40 Years of Application of the New York Convention (ICCA Congress Series No. 9, 1999) 11–14.

5  The earlier etymology of the term ‘no-man’s land’ is a little more gruesome. It was first used for a wasteland outside London where the rotting bodies of hanged, impaled, and beheaded criminals were left as a warning to potential lawbreakers. G.J. Aungier (ed.), Chroniques de London: depuis l’an 44 Hen. III. jusqu’à l’an 17 Edw. III. (Camden Soc, 1844) 56. This area came to be known as no-man’s land since no one would seek to claim this land for ownership. Later it obtained its modern connotation.

6  IBA Task Force on Counsel Conduct in Arbitration Survey (Sept. 2010). See also Günther J. Horvath, ‘Guerrilla Tactics in Arbitration, an Ethical Battle: Is There Need for a Universal Code of Ethics?’ in C. Klausegger et al. (eds.), Austrian Yearbook on International Arbitration (Manz’sche Verlags- und Universitätsbuchhandlung, 2011) 297 (‘Attorneys are bound, if at all, by the code of ethics of the home State where they are licensed.’). Similarly, when it was suggested to a conference of international arbitration practitioners ‘that an advocate in a private commercial arbitration was not bound by the same duties owed by counsel to a court, the immediate (near unanimous) response was shock and indignation’. Peter C. Thomas, ‘Disqualifying Lawyers in Arbitrations: Do the Arbitrators Play Any Proper Role?’ 1 Am. Rev. Int’l Arb. 562, 563 (1990).

7  Results of study on file with author.

8  For various definitions of ‘guerrilla tactics’, see Stephan Wilske, ‘Arbitration Guerrillas at the Gate: Preserving the Civility of Arbitral Proceedings when the Going Gets (Extremely) Tough’, in Klausegger et al. (eds.), Austrian Yearbook on International Arbitration, 315–19; Horvath, ‘Guerrilla Tactics in Arbitration, an Ethical Battle: Is There Need for a Universal Code of Ethics?’ in Klausegger et al. (eds.), Austrian Yearbook on International Arbitration, 297; Abba Kolo, ‘Witness Intimidation, Tampering and Other Related Abuses of Process in Investment Arbitration: Possible Remedies Available to the Arbitral Tribunal’, 26 Arb. Int’l 43, 46–7 (2010).

9  See Edna Sussman and Solomon Ebere, ‘All’s Fair in Love and War—Or Is It? Reflections on Ethical Standards for Counsel in International Arbitration’, 22 Am. Rev. Int’l Arb. 611, 612 (2011).

10  See Chapters 4 and 5.

11  Johnny Veeder, a leading voice in the call for ethical innovation in international arbitration, argues persuasively that an important ‘stepping stone’ for modern arbitration is the much earlier Code by Lord Bramwell, which forms ‘the basis of English statutory law on arbitration’. V.V. Veeder, ‘Two Arbitral Butterflies: Bramwell and David’, in Martin Hunter, Arthur Marriott, and V.V. Veeder (eds.), The Internationalisation of International Arbitration: The LCIA Centenary Conference (Graham & Trotman/Martinus Nijhoff, 1995) 13–15. Closer to the 1920s, in 1917 the Swedish Chamber of Commerce founded the Committee for the Settelement of Disputes in Commerce, Industry and Shipping. Perhaps more importantly, the Court of Arbitration of the International Chamber of Commerce was founded in 1923 and ‘played a major role in the promulgation of the Geneva treaties and of the New York Convention’. Alan Redfern and Martin Hunter, Law and Practice of International Commercial Arbitration (4th edn., 2004) 5 (with Nigel Blackaby and Constantine Partasides).

12  The primary architects of the system were and are often referred to as ‘Grand Old Men’, and shared the features and attitudes identified by Schachter. See Yves Dezalay and Bryant Garth, Dealing in Virtue: International Arbitration and the Construction of a Transnational Legal Order (1996) 35.

13  For a detailed overview of the development of various forms of international adjudication, see Gary B. Born, ‘A New Generation of International Tribunals’, 61 Duke L. Rev. 775 (2011).

14  Throughout the nineteenth century, courts in the United States and England frequently invoked the doctrine of ‘ouster’ to void contractual arbitration clauses which they viewed ‘as unlawful circumventions of judicial jurisdiction and as denials of judicial justice’. Philip J. McConnaughay, ‘The Risks and Virtues of Lawlessness: A “Second Look” at International Commercial Arbitration’, 93 Nw. U. L. Rev. 453, 462 (1999) (citing Thomas E. Carbonneau, ‘Arbitral Adjudication: A Comparative Assessment of Its Remedial and Substantive Status in Transnational Commerce’, 19 Tex. Int’l L.J. 33, 39 n. 12 (1984)); see also Edward Chukwuemeke Okeke, ‘Judicial Review of Foreign Arbitral Awards: Bane, Boon or Boondoggle?’ 10 N.Y. Int’l L. Rev. 29, 32 n. 13 (1997).

15  As Tom Carbonneau explains, as a result of the ‘stigma of illegitimacy’ attached to arbitration, English law ‘allowed courts to reform or to revise completely an arbitrator’s ruling on the legal questions that arose during the arbitration’. Thomas E. Carbonneau, ‘Arbitral Justice: The Demise of Due Process in American Law’, 70 Tul. L. Rev. 1945, 1948 (1996) (citing Michael J. Mustilland and Stewart C. Boyd, The Law and Practice of Commercial Arbitration in England (2nd edn., 1989)).

16  See Leonard V. Quigley, ‘Accession by the United States to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards’, 70 Yale L.J. 1049, 1049–55 (1961).

17  Yves Dezalay and Bryant Garth, ‘Fussing About the Forum: Categories and Definitions as Stakes in Professional Competition’, 21 Law & Soc. Inquiry 285, 295 (1996).

18  One of the important assets of international arbitration is the high rate of voluntary compliance with arbitral awards, which continues today. See Paul Friedland and Stavros Brekoulakis, ‘2012 International Arbitration Survey: Currrent and Preferred Practices in the Arbitral Process’ (2 November 2013) <http://annualreview2012.​whitecase.com/International_Arbitration_Survey_2012.pdf>.

19  See W. Lawrence Craig, ‘Some Trends and Developments in the Laws and Practice of International Commercial Arbitration’, 30 Tex. Int’l L.J. 1, 6 (1995). In this chapter, I use the masculine pronoun because it discusses a period in which there were no female arbitrators. Today there are still few women, particularly at the top ranks of the arbitrator profession, which has raised concerns in many corners.

20  Dezalay and Garth, ‘Merchants of Law as Moral Entrepreneurs’, 35.

21  F.A. Mann, ‘The Aminoil Arbitration’, 54 Brit. Y.B. Int’l L. 213, 214 (1983). See also John Beechey, ‘International Commercial Arbitration: A Process Under Review and Change’, 55 Disp. Resol. J. 32 (2000).

22  See Christine Lecuyer-Thieffry and Patrick Thieffry, ‘Negotiating Settlement of Dispute Provisions in International Business Contracts: Recent Developments in Arbitration and Other Processes’, 45 Bus. Law. 577 (1990).

23  It is only relatively recently that States have begun to regard their mandatory laws as reaching extraterritorially. The ability of international arbitration to apply and enforce mandatory national laws, including when their application is to events or disputes located outside the relevant nation, is a modern concern within the international arbitration system. See Mitsubishi Motors Corp. v Soler Chrysler-Plymouth, Inc., 473 US 614, 638–40 (1985).

24  See generally,Thomas E. Carbonneau (ed.), Lex Mercatoria and Arbitration: A Discussion of the New Law Merchant (rev. edn.,1998); Michael Joachim Bonell, ‘The CISG, European Contract Law and the Development of a World Contract Law’, 56 Am.J.Comp.L. 1 (2008).

25  Dezalay and Garth, ‘Merchants of Law as Moral Entrepreneurs’, 34.

26  These principles are sometimes referred to as the ‘new lex mercatoria’, because they are a modern reincarnation of the substantive law of merchants that was developed by medieval English mercantile courts. See Berthold Goldman, ‘Lex Mercatoria’, 3 Forum Internationale 3 (November 1983) (‘Lex mercatoria is a venerable old lady who has twice disappeared from the face of the earth and twice been resuscitated.’).

27  See Nikitas E. Hatzimihail, ‘The Many Lives—and Faces—of Lex Mercatoria: History as Genealogy in International Business Law’, 71 Law & Contemp. Probs. 169, 174 (2008) (describing Clive Schmitthoff and Berthold Goldman as the ‘founding fathers of the modern lex mercatoria’ and its impact on international arbitration).

28  See Christopher R. Drahozal and Richard W. Naimark (eds.), Towards a Science of International Arbitration: Collected Empirical Research (Kluwer Law International, 2005) 248 n. 66.

29  Paul Bairoch and Richard Kozul-Wright, Globalization Myths: Some Historical Reflections on Integration, Industrialization and Growth in the World Economy, WIDER Conference on Transnational Corporations and the Global Economy, September 1995, 5–18 (arguing that globalized trade primarily consisted of trade in raw goods before the end of World War II; it was not until manufacturing predominated that globalized trade diversified and included manufactured goods).

30  See generally, Dezalay and Garth, ‘Fussing About the Forum’, 295.

31  This is not to suggest that they were infallible or always abided by the highest ethical standards. In a widely-criticized award, in the Petroleum Development Ltd v Sheikh of Abu Dhabi case, Lord Asquith selected English law because Abu Dhabi is ruled by an ‘absolute, feudal monarch’, who ‘administers a purely discretionary justice with the assistance of the Koran; and it would be fanciful to suggest that in this very primitive region there is any settled body of legal principles applicable to the construction of modern commercial instruments’. See Petroleum Development (Trucial Coast) Ltd. v Sheikh of Abu Dhabi (1951) Award, 18 I.L.R. 144.

32  See John Collier and Vaughan Lowe, The Settlement of Disputes in International Law: Institutions and Procedures (2000) 264.

33  ‘It was expected that moral norms and “the force that businessmen of a country can bring to bear upon a recalcitrant neighbor” would be sufficient to ensure respect for arbitral awards.’ W. Lawrence Craig, ‘Some Trends and Developments in the Laws and Practice of International Commercial Arbitration’ 30 Tex. Int’l L.J. 1, 7 (1995).

34  See Thomas E. Carbonneau, ‘The Ballad of Transborder Arbitration’, 56 U. Miami L. Rev. 773, 774 (2002).

35  See Carbonneau, ‘The Ballad of Transborder Arbitration’.

36  One of the most important developments introduced by the New York Convention was to place the burden of proof in challenging recognition or enforcement of an arbitral award on the award creditor. See Albert Jan van den Berg, The New York Arbitration Convention of 1958 (1981) 9.

37  Today, the grounds for refusing recognition or enforcement under Article V of the Convention are interpreted as encompassing arbitrator bias and certain types of egregious misconduct by counsel. In fact, despite the starkly different language in the Federal Arbitration Act (FAA), the grounds for challenging awards under the Convention are interpreted as being largely coterminous. Alan Scott Rau, ‘The New York Convention in American Courts’, 7 Am.Rev. Int’l Arb.213, 234–5, 257 and n. 20 (1997) (‘[A]s a general matter I think it is reasonably safe to assume that in operation the standards of the Convention and the FAA will be identical.’).

38  Arbitration Act 1950 § 23 (Eng.).

39  9 USC. § 10(a), (b), (c) (2010) (emphasis added).

40  As Dezalay and Garth have explained, ‘competition for arbitration business favored a few institutions and settings. The International Chamber of Commerce was clearly the leading, even dominant, institution … [T]he same, relatively few, names of arbitrators were repeated over and over on both sides of the Atlantic’. Dezalay and Garth, Dealing in Virtue, 9.

41  Dezalay and Garth, Dealing in Virtue, 34.

42  Martin Hunter, ‘Ethics of the International Arbitrator,’ 53 Arb. 219, 220 (1987) (concluding that the world of commercial arbitration is no longer a club of gentlemen, but one that needs explicit guidelines for conduct).

43  Sch. of Int’l Arb., Queen Mary University of London, International Arbitration: Corporate Attitudes and Practices 2006 (2006), 5 (‘When…respondents were asked which mechanism they preferred to use, 73% stated international arbitration; transnational litigation was preferred by only 11%.’). While some critics, particularly those who focus on the high costs of international arbitration, suggest its popularity may be diminishing, there is no ready alternative unless the case is amenable to resolution through mediation.

44  See Leon Trakman, The Impartiality and Independence of Arbitrators Reconsidered, University of New South Wales Faculty of Law Research Series (Paper 25, 2007), 9–10 (arguing that by enacting comprehensive standards for arbitral conduct, the IBA may have unintentionally encouraged challenges to arbitral awards); David Hacking, ‘Challenges: Theirs is to Reason Why’, 1(6) Global Arb. Rev. (2006) (citing ICC statistics for annual number of arbitrator challenges to argue an increase); Charles N. Brower, ‘Keynote Address: The Ethics of Arbitration: Perspectives from a Practicing International Arbitrator’, 5 Berkley J. Int’l L. Publicist 1 (2010) (reasoning that enactment of comprehensive guidelines and publication of ethical decisions will encourage challenges).

45  See Chapter 2, paras 2.86–2.87.

46  See Introduction, page 4, note 13.

47  Christopher R. Drahozal and Richard W. Naimark (eds.), Towards a Science of International Arbitration: Collected Empirical Research (2005) 341 app. 1. Tracking the increase within a single institution, a full ‘two-thirds of all cases brought to ICC arbitration arose in the last 20 years of its 75-year existence’. W. Lawrence Craig et al., International Chamber of Commerce Arbitration (3rd edn., 2000) 2.

48  Dezalay and Garth, Dealing in Virtue, 6–7, n. 4; Stephan Wilske, ‘Global Competition for the Best Place of Arbitration for International Arbitrations – A More or Less Biased Review of the Usual Suspects and Recent Newcomers’, 1 Contemp. Asia Arb. J.1, 53 (2008).

49  Carbonneau, ‘The Ballad of Transborder Arbitration’, 778 (‘[L]eading international lawyers on Wall Street [eventually realized] that transborder arbitration was a force to be reckoned with in international commerce.’); Elena V. Helmer, ‘International Commercial Arbitration: Americanized, “Civilized,” or Harmonized?’, 19 Ohio St. J. Disp. Resol. 35, 40 (2003) (reporting that since the 1970s and early 1980s, ‘[t]he number of American law firms and lawyers offering arbitration services (either as counsel or, in the case of individuals, also as arbitrators) is on the rise’).

50  See generally, Lucy Reed and Jonathan Sutcliffe, ‘The “Americanization” of International Arbitration?’ 16-4 Mealey’s Int’l Arb. Rep. 11 (2001).

51  John Toulmin, ‘A Worldwide Common Code of Professional Ethics?’ 15 Fordham Int’l L. J. 673, 681 (1991/1992). (‘[T]he rules of professional conduct in the United States relating to conflicts of interest and imputed disqualification are among the strictest in the world…’.)

52  John Toulmin, ‘A Worldwide Common Code of Professional Ethics?’, 681–85. As will be discussed later, these standards affect attorneys’ and parties’ perceptions of the propriety of conduct of both arbitrators and counsel from other systems. National differences in attorney conflict-of-interest standards as well as arbitrator conflicts and disclosure standards are taken up in Chapter 2.

53  For rankings of law firms and lawyers in international arbitration practice, see paras 1.39–1.42.

54  See, e.g., Sunkist Soft Drinks, Inc. v Sunkist Growers, Inc., 10 F.3d 753, 759 (11th Cir. 1993) (finding no prejudicial misconduct despite finding that party-arbitrator met with representatives and witnesses of appointing party before arbitration to plan strategy). Conflicting cultural perspectives on ex parte communication were not an issue in cases like Sunkist because they involved solely domestic US arbitrations. Even in the United States, however, practices such as arbitrator ex parte communications with the appointing party have met with significant criticism. See, e.g., Carrie Menkel-Meadow, ‘Ethics Issues in Arbitration and Related Dispute Resolution Processes: What’s Happening and What’s Not’, 56 U. Miami L. Rev. 949, 957 (2002). This topic is taken up in greater detail in Chapter 8.

55  Amb. Malcolm Wilkey, ‘The Practicalities of Cross-Cultural Arbitration,’ in Stefan N. Frommel and Barry A.K. Rider (eds.), Conflicting Legal Cultures in Commercial Arbitration: Old Issues and New Trends (1999) 86 (describing differing approaches to ex parte communication as a problem in international arbitration that must be overcome); Detlev Vagts, ‘International Legal Ethics and Professional Responsibility’, 92 Am. Soc’y Int’l L. Proc. 378, 379 (1998) (discussing a hypothetical case involving contrasting approaches to ex parte communication with arbitrators as basis for panel discussion). See also Hans Smit, ‘Managing an International Arbitration: An Arbitrator’s View’, 5 Am. Rev. Int’l Arb. 129, 131 (1994) (taking the view that communications between party and party-appointed arbitrator concerning the appointment of the presiding arbitrator are generally accepted where the party-appointed arbitrator takes part in the selection process, even if the rules are silent); Hans Smit, ‘The Future of International Commercial Arbitration: A Single Transnational Institution?’ 25 Colum. J. Transnat’l L. 9, 16 n. 40 (1986) (noting that an award rendered by an arbitrator who communicates ex parte with an appointing party ‘may not be recognized in foreign countries’).

56  See, e.g., Albert Jan van den Berg, ‘Dissenting Opinions by Party-Appointed Arbitrators in Investment Arbitration’, in M. Arsanjani et al. (eds.), Looking to the Future: Essays on International Law in Honor of W. Michael Reisman (2011) 821–43; Jan Paulsson, ‘Moral Hazard in International Dispute Resolution,’ Inaugural Lecture at University of Miami School of Law (29 April 2010), 1 Transnat’l Disp. Mgmt. 10 (2010); Laurent Levy, ‘Dissenting Opinions in International Arbitration in Switzerland,’ 5 Arb. Int’l 34, 41 (1989) (arguing for a code of conduct to govern issuance of dissenting opinions).

57  See Jan Paulsson, ‘Are Unilateral Appointments Defensible?’ Kluwer Arb. Blog, 2 April 2009, <http://kluwerarbitrationblog.com/blog/2009/04/02/are-unilateral-appointments-defensible/> (arguing for elimination of party-appointed arbitrators).

58  The American Arbitration Association and the then-fledgling China International Economic and Trade Arbitration Commission (CIETAC) may be considered exceptions to this general rule since they also administered arbitration in their respective geographic homes.

59  In many of these newer institutions, the caseload growth is even more dramatic than that of the original European centres. The Hong Kong International Arbitration Centre went from 54 cases in 1990 to 281 in 2005; the Singapore International Arbitration Centre had only two international cases in 1991, but 29 in 2005. The Hong Kong International Arbitration Centre and the Singapore International Arbitration Centre are arguably among the most prominent regional institutions, which have in turn prompted the development of a new generation of international arbitrators.

60  Doug Sperry, ‘The Impact of International Commercial Arbitration on Developing Nations: Has the Emergence of the International Private Justice Market Narrowed the Gap Between Developed and Developing Parties?’ 40 Hong Kong L.J. 361, 374 (2010).

61  The ICC established its first international court of arbitration in India (New Delhi) in 1923. The LCIA launched its first independent overseas subsidiary in India on 18 April 2009, in New Delhi: see ICC India, <http://www.iccindiaonline.org/index.htm>; LCIA India, <http://www.lcia-india.org/>. However, the Association of Indian Lawyers (AIL) recently successfully petitioned the High Court of Delhi to issue notice to the New Delhi branch of the London Court of International Arbitration (LCIA) to remove the word ‘London Court’ from its name. As of 31 May 2011, no decision has been made. See Soibam Rocky Singh, Delhi HC Issues Notice on Working of London Court of International Arbitration in Delhi, Law et al. News, 31 May 2011, <http://www.lawetalnews.com/NewsDetail.asp?newsid=4087>.

62  The ICC founded a chapter in Dubai in 2004, and the DIFC-LCIA Arbitration Centre was founded in February 2008 as a partnership between the Dubai International Financial Centre (established in 2004) and the LCIA. See ICC-UAE, <http://www.iccuae.com/>; DIC-LCIA Arbitration Centre, <http://www.difcarbitration.com/index.html>. From 2009–10, the DIFC-LCIA registered a dozen cases, involving parties from the UAE, Malaysia, Oman, Norway, the Cayman Islands, Kuwait, Hong Kong, and the British Virgin Islands. The sums in dispute in these cases range from US$50,000–US$100 million. News from the LCIA, 15 NO.2 IBA Arb.News 112.

63  Singapore has become the Asian hub for international arbitration. The Singapore International Arbitration Centre (SIAC) handled 198 new cases in 2010—up from 160 in 2009 and 99 in 2008. As such, the ICC opened a regional office in Singapore in January 2010, and the LCIA opened their New Delhi office in 2009, largely to resolve the large number of Indian arbitrations surging to the SIAC. See SIAC, 2010 CEO’s Annual Report, <http://www.siac.org.sg/index.php?option=com_content8view=article8id=2888Itemid=148>; ICC: News, ‘ICC Inaugurates Asia Regional Office’, <http://www.iccwbo.org/index.html?id=34530>; Greg Bousfield, ‘Stepping up to Singapore: LCIA’s Indian Arbitration Mission’, Commercial Dispute Resolution, 29 April 2010, <http://www.cdr-news.com/arbitration-and-adr/112-articles/706-stealing-from-singapore-lcias-indian-arbitration-mission>.

64  Catherine A. Rogers, ‘Peace, One Dispute at a Time: The Jerusalem Arbitration Center’, New York Dispute Resolution Lawyer (Spring 2012).

65  Doug Sperry, ‘The Impact of International Commercial Arbitration on Developing Nations’, 361, 378 (describing ‘an opportunity for smaller, regional institutions to gain a foothold in the market and for new arbitrators from those regions to gain entry into what has traditionally been an exclusive club’).

66  Customer Satisfaction with Banks and Credit Unions Increases in 2011: Prime Performance 2011 Bank and Credit Union Satisfaction Survey, <http://www.prweb.com/releases/Prime-Performance/Bank-and-CU-Satisfaction/prweb9019992.htm>, 11 Dec. 2010 (finding significantly higher customer satisfaction with credit unions and small banks).

67  For parties from developing countries, local arbitrators were regarded as necessary to counterbalance what was regarded as biased Western-centric visions that European tribunals imposed in earlier arbitrations. See,e.g., Ahmed Sadek El-Kosheri, ‘Is There a Growing International Arbitration Culture in the Arab-Islamic Juridical Culture?’ in Albert Jan van den Berg (ed.), ICCA, International Dispute Resolution: Towards an International Arbitration Culture (1998) 47, 47–48 (noting that, despite the long history and current popularity of arbitration in Arab nations, the Arab legal community remains hostile toward transnational arbitration because of biased treatment by Western arbitrators); John Beechey, ‘International Commercial Arbitration’, 32, 33 (explaining that there ‘remains a huge task’ to convince developing nations that they can expect a fair hearing before international arbitration tribunals); Dezalay and Garth, Dealing in Virtue, 43–45.

68  The term ‘transparency’ is subject to various interpretations. In this book, I use the term to mean the ready availability, primarily to parties, of the rules that regulate and govern international arbitration processes and decision-making. For further analysis of how transparency is often confused with, but is distinguishable from, ‘public access’ and ‘disclosure’, see Catherine A. Rogers, ‘Transparency in International Commercial Arbitration’, 54 U. Kan. L. Rev. 1301, 1319 (2006).

69  One earlier study of 500 arbitration clauses revealed that only 3% of clauses empowered the arbitrators to decide under these doctrines. See Christopher R. Drazohal, ‘Commercial Norms, Commercial Codes, and International Commercial Arbitration’, 33 Vand. J. Transnat’l L. 79, 129 n. 233 (2000) (citing study of clauses from 1987–89).

70  See Detlev Vagts and W. Michael Reisman, ‘International Chamber of Commerce Arbitration’, 80 Am. J. Int’l L. 268 (1986) (reviewing W. Laurence Craig et al., International Chamber of Commerce Arbitration (1984)).

71  William W. Park, ‘Income Tax Treaty Arbitration’, 10 Geo. Mason L. Rev. 803, 823 (2002) (‘The marketplace has pushed international arbitration toward reasoned awards.’); Rt. Hon. Lord Justice Bingham, ‘Reasons and Reasons for Reasons: Differences Between a Court Judgment and an Arbitral Award’, 4 Arb. Int’l 141, 145 (1988) (noting the ‘strong balance of international opinion in favour of the giving of reasons by arbitrators’); Donald P. Arnavas and Rt. Hon. Lord David Hacking, Using ADR to Resolve International Contract Disputes, Briefing Papers no. 04-11 (Oct. 2004) (explaining that reasoned awards have always been the norm in international arbitration, but with the shift to more formalized and rule-based decision-making, awards have necessarily become longer and more detailed).

72  See ICC R. Arb.art. 17(3) (1 Jan. 1998), <http://www.iccwbo.org/uploadedFiles/Court/Arbitration/other/rules_arb_english.pdf> (regarding amiable compositeurs); ICC R. Arb. art. 25(2) (requiring reasoned awards). Similarly, the AAA website admonishes, ‘You should not compromise unless the dispute clearly calls for this result. Parties generally expect a decision on the issues.’ American Arbitration Association, A Guide for Commercial Arbitrators, <http://www.adr.org/si.asp?id=4211>.

73  See Born, International Commercial Arbitration (2014) 2269.

74  See Drazohal, ‘Commercial Norms, Commercial Codes, and International Commercial Arbitration’, 129.

75  See Christopher R. Drahozal, ‘Contracting Out of National Law: An Empirical Look at the New Law Merchant’, 80 Notre Dame L. Rev. 523, 537–46 (2005) (reporting results of empirical research that demonstrate parties overwhelmingly choose national law and hypothesizing that national law is preferred because it is more predictable than alternative transnational legal rules); 2010 International Arbitration Survey: Choices in International Arbitration, Queen Mary University of London, 11–16 (highlighting the fact that many corporations now rely on choice of law provisions to determine which substantive law will govern a dispute, discussing the procedures that institutions use to make this choice, and arguing certain factors lead entities to use these mechanisms); see also Ryan E. Bull, Note, ‘Operation of the New Article 9 Choice of Law Regime in an International Context’, 78 Tex. L. Rev. 679, 706 (2000).

76  While the trend is important to recognize, the goal of formality should not be overstated. For many, flexibility remains an important feature of international arbitration.

77  See Christian Bühring-Uhle, Arbitration and Mediation in International Business: Designing Procedures for Effective Conflict Management (Kluwer Law International, 1996) 17–36.

78  Dezalay and Garth, ‘Fussing About the Forum’, 311.

79  See generally, R. Lillich and C. Brower (eds.), International Arbitration in the 21st Century: Towards ‘Judicialization’ and Uniformity [Twelfth Sokol Colloquium] (1993) (critiquing the need for balance between flexibility and certainty); Klaus Peter Berger, Private Dispute Resolution in International Business (2006) 303 (‘It is particularly in major, multi-million dollar arbitrations that the informal atmosphere … has given way to confrontation and litigation tactics, hitherto known only from proceedings before national courts. Over the past decades, the arbitral process has undergone a fundamental transformation which is often characterized as the “judicialization” of arbitration …’).

80  Critics of the ‘Americanization’ of international arbitration use the term to describe a growing ‘unbridled and ungentlemanly aggressivity and excess’ in arbitration, a ‘total warfare’ characterized by excesses of US-style discovery and distended briefs and document submission. Yet most scholars view the trend not so much as one of ‘judicialization’ or ‘Americanization’, but rather as one of ‘harmonization’ or ‘homogenization’—a merging of common and civil law traditions. See Kevin T. Jacobs and Matthew G. Paulson, ‘The Convergence of Renewed Nationalization, Rising Commodities, and “Americanization” in International Arbitration and the Need for More Rigorous Legal and Procedural Defenses’, 43 Tex. Int’l L.J. 359, 364 (2008); Elena V. Helmer, ‘International Commercial Arbitration: Americanized, “Civilized”, or Harmonized?’ 19 Ohio St. J. on Disp. Resol. 35, 37 (2003); Nicolas C. Ulmer, ‘A Comment On “The ‘Americanization’ of International Arbitration?”’ 16-6 Mealey’s Int’l Arb. Rep. 1 (2001); Lucy Reed and Jonathan Sutcliffe, ‘The “Americanization” of International Arbitration?’ 16-4 Mealey’s Int’l Arb. Rep. 11 (2001).

81  See Chapter 3, paras 3.85–3.103.

82  Actual data on attorney fees in international arbitration is often prone to exaggeration and extrapolation, with little empirical evidence. However, the generous size of such fees can be inferred from data on international arbitral awards. See, e.g., David Smith, Note, ‘Shifting Sands: Cost and Fee Allocation in International Investment Arbitration’, 51 Va. J. Int’l L. 749 (2011) (citing numerous examples of legal costs in international investment arbitration); Susan D. Franck, ‘Empirically Evaluating Claims About Investment Treaty Arbitration’, 86 N.C. L. Rev. 1, 66–68 (2008) (while the empirical validity of claims of costs of arbitration is uncertain, costs often run in the US$ millions, with legal fees a significant part); David A. Gantz, Investor-State Arbitration Under ICSID, The ICSID Additional Facility and the UNCTAD Arbitral Rules, (US Vietnam Trade Council Seminar Series, 2004) 23, <http://www.usvtc.org/trade/other/Gantz/Gantz_ICSID.pdf> (legal fees for major law firms who represent investors and host governments range from US$200 to US$500 per hour, but may be negotiable (downward)).

83  William W. Park, ‘National Law and Commercial Justice: Safeguarding Procedural Integrity in International Arbitration’, 63 Tul. L. Rev. 647, 680 (1989) (documenting a ‘scramble among Western European nations’ to compete for international arbitration business); Sir Michael J. Mustill, ‘Arbitration: History and Background’, 6-2 J. Int’l Arb. 43, 53 (1989) (‘[O]ne must take note of the efforts made by individual nations to make their arbitration laws … more attractive.’). Efforts by specific jurisdictions such as Japan, Singapore, New York, and Florida to attract international arbitration business are discussed in Chapter 1, paras 1.78–1.84.

84  John Yukio Gotanda, ‘Awarding Costs and Attorneys’ Fees in International Commercial Arbitrations’, 21 Mich. J. Int’l L. 1, 1–3 (1999) (noting that an overwhelming number of countries permit arbitrators to award costs and fees, which often run into the millions of dollars). One detractor goes so far as to argue that since arbitrators’ fees under the ICC Rules are set based on ‘the complexity of the case, as reflected in the award’, arbitrators have ‘an incentive to write unnecessarily elaborate opinions’. Julia A. Martin, ‘Arbitrating in the Alps Rather Than Litigating in Los Angeles: The Advantages of International Intellectual Property-Specific Alternative Dispute Resolution’, 49 Stan. L. Rev. 917, 967 (1997).

85  To create the Scorecard, reporter Michael Goldhaber gathers and publishes information about the largest arbitrations relying ‘primarily on information supplied by lawyers involved in the cases, supplemented in some cases by arbitration or court papers, securities disclosures, and media reports. In many cases we have had to rely on information from only one side in the dispute, and we were not able to obtain a response from the other side in all cases’. Michael D. Goldhaber, ‘Arbitration Scorecard: Methodology’, The American Lawyer (Online) 1 July 2011, <http://www.lexisnexis.com/lawschool/research/default.aspx?ORIGINATION_CODE=000928signoff=>.

86  2011–2012 ‘Best Law Firms’, US News and World Report, <http://bestlawfirms.usnews.com/search.aspx?practice-area-id=488practice-area=International+Arbitration+-+Commercial> (rankings are based on a rigorous evaluation process that includes the collection of client and lawyer evaluations, peer review from leading attorneys in their field, and review of additional information provided by law firms as part of the formal submission process); Chamber and Partners (5 Feb. 2012), <http://www.chambersandpartners.com/Search/?International-Arbitration> (allowing parties to search for highly ranked firms and attorneys based on specified practice area and expertise within given arbitral institution).

87  2010 International Arbitration Survey: Choices in International Arbitration, Queen Mary University of London, 18–19 (finding that London, England was the most popular choice of seat for international arbitrations; followed by Geneva, Switzerland; Paris, France; Tokyo, Japan, and others. Factors that helped determine the seat include: convenience, infrastructure, application of substantive law, corporate policy, location of parties, and less influential concerns).

88  Among the most well-known prizes are those administered by the Transnational Dispute Management Journal and OGEMID. See <http://www.transnational-dispute-management.com/ogemidawards/>.

89  As the Special Committee on Professionalism of National Academy of Arbitrators summarized: ‘There are those among us who view arbitration primarily as a business. They are likely to concentrate more on self-interest than the interest of the profession … We recognize that arbitrators are no less ambitious than other professionals; we recognize that many of us are dependent on arbitration fees for a livelihood.’ Report of Special Committee on Professionalism of National Academy of Arbitrators, Daily Lab. Rep. (BNA) No. 106, E-1, E-4 (4 June 1987), cited in Alan Scott Rau, ‘Integrity in Private Judging’, 38 S. Tex. L. Rev. 485, 485 (1997). See also Dezalay and Garth, Dealing in Virtue, 34–36.

90  Although arbitrators’ fees are often pointed to as extravagant, in fact empirical research indicates that they represent only a small fraction of the overall costs of an arbitral dispute. Attorney feesare by far the highest percentage of costs. ICC Commission Report on Techniques for Controlling Time and Costs in Arbitration, <http://www.iccwbo.org/Advocacy-Codes-and-Rules/Document-centre/2012/ICC-Arbitration-Commission-Report-on-Techniques-for-Controlling-Time-and-Costs-in-Arbitration/> (finding that only 18% of costs are attributable to arbitrator and administrative fees). The implication, verified by anecdotal research, is that partners at leading law firms, whose fees on a particular case involve an entire team of attorneys, earn more as counsel than when serving in the same case as an arbitrator.

91  Dezalay and Garth, Dealing in Virtue, 37. In a similar vein, David Hacking reflects, ‘The small community of international arbitrators, who know and trust one another, is gone. Peer-group control will no longer be here to preserve the “ethics” of international arbitration’. David Hacking, ‘Ethics, Elitism, Eligibility: A Response: What Happens if the Icelandic Arbitrator Falls Through the Ice?’ 15 J. Int’l Arb.73, 77 (1998).

92  Detlev F. Vagts, ‘The International Legal Profession: A Need for More Governance?’ 90 Am. J. Int’l L. 250, 250 (1996).

93  As Mary Daly explains: ‘Until recently, lawyers infrequently practiced in more than one state. Law firms rarely established branch offices, with the possible exception of an office in Washington, D.C. or in a distant city to meet the particular needs of a single client. Consequently, in searching for ethical guidance, lawyers, courts, and disciplinary authorities looked only to the professional standards adopted by a single jurisdiction, the lawyer’s state of general admission or the court to which the lawyer had been admitted pro hac vice.’ Mary C. Daly, ‘Resolving Ethical Conflicts in Multijurisdictional Practice—Is Model Rule 8.5 the Answer, an Answer, or No Answer at All?’ 36 S. Tex. L. Rev. 715, 719 (1995). For an insightful analysis of how the term ‘partner’ has become something of a misnomer as US law firms have erupted into large corporate-like structures that sprawl across multiple jurisdictions, see David B. Wilkins, ‘Partner, Shmartner! EEOC v Sidley Austin Brown & Wood’, 120 Harv. L. Rev. 1264 (2007).

94  One of the earliest examples is when John Foster Dulles of New York firm Sullivan & Cromwell played a key role in the negotiations of the Versailles Treaty at the end of the First World War and his firm went on to promote capital flow from North America to Europe. John Flood and Fabian Sosa, ‘Lawyers, Law Firms, and the Stabilization of Transnational Business’, 28 Nw. J. Int’l L. & Bus. 489, 502 (2008).

95  See, e.g., Charles W. Wolfram, Modern Legal Ethics (1986) 53.

96  As Lord Woolf has explained, ‘All barristers will have to be members of one of the four Inns of Court and before they are called to the bar by their Inn. The dining process is an important part of developing the collegiate culture which contributes to professional standards.’ Right Hon. Lord Woolf, ‘The Atlantic Divide’, 34 Tulsa L.J. 657 (1999); see also Peter A. Joy, ‘Making Ethics Opinions Meaningful: Toward More Effective Regulation of Lawyers’ Conduct’, 15 Geo. J. Legal Ethics 313, 321 and n. 23 (2002) (noting that at the Inns of Court in London ‘initiates to the legal profession joined a close-knit group with common eating rooms and common goals’).

97  See Detlev F. Vagts, ‘Professional Responsibility in Transborder Practice: Conflict and Resolution’, 13 Geo. J. Legal Ethics 677, 688–9 (2000); Vagts, ‘The International Legal Profession’, 250.

98  See Ronald D. Rotunda, ‘Judicial Ethics, the Appearance of Impropriety, and the Proposed New ABA Judicial Code’, 34 Hofstra L. Rev. 1337, 1353 (2006).

99  See Vagts, ‘The International Legal Profession’, 250.

100  CCBE, The Declaration of Perugia on the Principles of Professional Conduct of the Bars and Law Societies of the European Community (1977). See also Louise L. Hill, ‘Lawyer Publicity in the European Union: Bans Are Removed but Barriers Remain’, 29 Geo. Wash. J. Int’l L. & Econ. 381, 390 (1995) (explaining that the Declaration of Perugia attempted to harmonize and define common principles for the various rules of professional conduct for EU lawyers).

101  See Marc Galanter and William Henderson, ‘The Elastic Tournament: A Second Transformation of the Big Law Firm’, 60 Stan. L. Rev. 1867, 1882 (2008).

102  David B. Wilkins, ‘Team of Rivals? Toward a New Model of the Corporate Attorney-Client Relationship’, 78 Fordham L. Rev. 2067, 2089 (2010) (internal citations omitted); see also James W. Jones, ‘The Challenge of Change: The Practice of Law in the Year 2000’, 41 V and. L. Rev. 683 (1988).

103  In 2009, of the top 100 European firms, one firm (Garrigues) had over 2000 lawyers, two had over 1000, and six had over 500. See ‘European 100: The Continental Elite 2011’, The Lawyer, <http://www.centaur2.co.uk/emags/thelawyer/tl_Euro100_2011/>; ‘UK Annual Report 2010: The Cost of Cutting’, The Lawyer, <http://www.centaur2.co.uk/emags/thelawyer/uk200_2010/>; ‘European 100: The Continental Elite 2009’, The Lawyer, <http://www.centaur2.co.uk/emags/thelawyer/TL_Euro_100/>.

104  John Flood, ‘Megalaw in the U.K.: Professionalism or Corporatism? A Preliminary Report’, 64 Ind. L.J. 569 (1989).

105  ‘The Am Law 100 2010: Gross Revenue: Baker & McKenzie Tops Skadden’, American Lawyer, <http://www.law.com/jsp/tal/PubArticleTAL.jsp?id=1202448484841>.

106  Glenn Morgan, ‘Institutional Legacies and Firm Dynamics: The Growth and Internationalization of UK and German Law Firms’, 26(12) Org. Stud. 1765, 1773 (2005).

107  ‘European 100: The Continental Elite 2011’, The Lawyer, <http://www.centaur2.co.uk/emags/thelawyer/tl_Euro100_2011/>.

108  Geoffrey C. Hazard Jr and Angelo Dondi, Legal Ethics: A Comparative Study (2004) 152–3. For example, in Korea, the documents that delineate attorneys’ ethical obligations ‘are collectively six pages long’. Robert W. Wachter, ‘Ethical Standards in International Arbitration: Considering Solutions to Level the Playing Field’, 24 Geo. J. Legal Ethics 1143, 1149–50 (2011). In their brevity, these sources ‘leave out details about what specific tactics are permitted or forbidden in adversarial proceedings’ and ‘there is very little written commentary on this subject from academics and practitioners’. See Wachter, ‘Ethical Standards in International Arbitration’, 1049. The explanation for this ‘dearth’ of formal regulation is that ‘The Korean bar is relatively small and culturally homogeneous, so the unwritten and unspoken code fills in all of the gaps from the six pages of the Ethics Charter and the Ethics Regulation’. Wachter, ‘Ethical Standards in International Arbitration’, 1049.

109  See Carole Silver, ‘Winners and Losers in the Globalization of Legal Services: Situating the Market for Foreign Lawyers’, 45 Va. J. Int’l. L. 897, 916–17 (2005) (noting the growth of foreign offices backed by US law firms). Notably, these statistics come from a study of only 60 firms; the overall number is probably higher.

110  Silver, ‘Winners and Losers in the Globalization of Legal Services’, 916.

111  The historical dominance of US firms may soon be challenged. US law firms are generally prohibited from engaging in multi-disciplinary practice structures, but must compete with such structures that are increasingly permitted by competing jurisdictions, such as the UK and Australia. See Ted Schneyer, ‘“Professionalism” as Pathology: The ABA’s Latest Policy Debate on Non-lawyers’ ownership of Law Practice Entities’, 40 Fordham Urb. L.J. 75 (2012).

112  See Steven Mark, ‘Harmonization or Homogenization? The Globalization of Law and Legal Ethics—An Australian Viewpoint’, 34 Vand. J. Transnat’l L. 1173 (2001).

113  Compare ‘The Global 100’, 10/2009 Am. Law. 191 (2009); with ‘The Great Game’, 10/2009 Am. Law. 134 (2009).

114  WTO, Council for Trade in Services, LegalServices—Background Note by the Secretariat, WTO Doc S/C/W/43, <http://docs.wto.org>, select ‘Search’, select ‘All documents’, search Document number: ‘98-2691’ [1998 WTO Report]; WTO, Council for Trade in Services, LegalServices—Background Note by the Secretariat, WTO Doc S/C/W/318, <http://docs.wto.org>.

115  For an insightful analysis of the trade implications on legal services, see Laurel S. Terry, ‘The Future Regulation of the Legal Profession: The Impact of Treating the Legal Profession as “Service Providers”’, J. Prof. Law. 189 (2008); Laurel S. Terry, ‘From GATS to APEC: The Impact of Trade Agreements on Legal Services’, 43 Akron L. Rev. 875 (2010).

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

117  See Carole Silver, ‘Regulatory Mismatch in the Market for Legal Services’, 23 Nw. J. Int’l L. & Bus. 487, 495 (2003) (‘The international label is not claimed only by large law firms; even small firms participate in this specialty.’). This phenomenon is a logical counterpart of the increased participation of smaller and medium-sized companies in the global economy.

118  Laurel S. Terry, ‘A Case Study of the Hybrid Model for Facilitating Cross-Border Legal Practice: The Agreement Between the American Bar Association and the Brussels Bars’, 21 Fordham Int’l L.J. 1382, 1384 (1998) (‘[D]espite the increase in scholarly writing on this topic, the development of cross-border practice throughout the world has vastly outpaced the theory of whether and how such practice should be regulated’); Justin Castillo (Reporter), ‘International Law Practice in the 1990s: Issues of Law, Policy and Professional Ethics’, 86 Am. Soc’y Int’l L. Proc. 272, 282 (1992) (‘International … ethics is an area where there is little solid information available’).

119  This image is borrowed from Bernard L. Greer, Jr, ‘Professional Regulation and Globalisation: Toward a Better Balance’, in J. Ross Harper (ed.), Global Law in Practice (1997) 169, 169–70.

120  In India there is ‘an absolute bar’ on attorney advertising and solicitation, which would even preclude Indian attorneys from being listed on a referral website. Michael A. Gollin, ‘Answering the Call: Public Interest Intellectual Advisors’, 17 Wash. U. J. L. & Pol’y 187, 209 (2005).

121  David T. Austern, ‘Is Lawyer Solicitation of Bhopal Clients Ethical?’ Legal Times, 21 Jan. 1985, 16.

122  See Austern, ‘Is Lawyer Solicitation of Bhopal Clients Ethical?’; ‘Bhopal Is for Lawyers’, 37 (1) Nat’l. Rev., 11 Jan. 1985, 20.

123  Perceptions of opportunism by US attorneys may have contributed to India’s decision to become the sole representative of the Bhopal victims and its opposition to any compensation being paid to attorneys who initiated the cases in the United States.

124  In fact, it was not until 2006 that the American Bar Association explicitly provided through Model Rule 8.5, one of the Model Rules that can be adopted by individual states, that jurisdiction of state regulatory authorities would extend to attorney conduct outside the United States. For an extended discussion of the jurisdiction and choice-of-law issues related to regulation of US attorneys engaged in law practice outside the United States, see Catherine A. Rogers, ‘Lawyers Without Borders’, 30 U. Penn. Int’l L. Rev. 1035 (2009).

125  Contingency fees are generally prohibited in most other countries, although recently there has been some softening as many European jurisdictions are exploring. Mark A. Behrens et al., ‘Global Litigation Trends’, 17 Mich. St. J. Int’l L. 165, 183–84 (2009).

126  See In re Girardi, 611 F.3d 1027 (9th Cir. 2010), amended, 08-80090, 2010 WL 3517899 (9th Cir. Sept. 10, 2010) (holding that a formal reprimand of one attorney was appropriate discipline for recklessness in determining false statements or documents, and six-month suspension was appropriate discipline for attorneys’ knowing submission of false documents); In re Chevron Corp., 749 F. Supp. 2d 141, 146 (S.D.N.Y. 2010), aff’d sub nom. Lago Agrio Plaintiffs v Chevron Corp., 409 F. App’x. 393 (2d Cir. 2010) (denying motion to quash subpoena seeking testimony and documents from a New York attorney regarding alleged misconduct, including intimidating Ecuadorian judges, obtaining political support for the Ecuadorian lawsuit, procuring and packaging expert testimony for use in Ecuador, pressuring Chevron to pay a large settlement, and obtaining a book deal); Michael Goldhaber, ‘Chevron Plaintiffs Double Feature: Emery Celli Moves to Withdraw in New York Discovery Case’; ‘Patton Boggs Accuses Gibson Dunn of Tortious Interference’; ‘Very Different Responses: Firms Repping Chevron Plaintiffs Offer Up Double Feature Corporate Counsel’, The American Lawyer (Online) 9 February 2011, <http://www.lexisnexis.com/lawschool/research/default.aspx?ORIGINATION_CODE=000928signoff=off>.

127  Apart from violation of local ethical rules, States have also shown some willingness to impose criminal sanctions on foreign attorneys who violate local criminal laws. For example, taking of a deposition is a common practice in the United States, but is considered unethical and illegal in many other countries, such as Brazil. According to the US Department of State: ‘The Government of Brazil asserts that, under Brazilian Constitutional Law, only Brazilian judicial authorities are competent to perform acts of a judicial nature in Brazil. Brazil has advised it would deem taking depositions in Brazil by foreign persons to be a violation of Brazil’s judicial sovereignty. Such action potentially could result in the arrest, detention, expulsion, or deportation of the American attorney or other American participants.’ US Dep’t of State, Brazil Judicial Assistance, <http://travel.state.gov/law/judicial/judicial_672.html>.

128  Laurel S. Terry et al., ‘Transnational Legal Practice 2009’, 44 Int’l Law. 563, 569 (2009).

129  For example, in Hong Kong, ‘practice of law’ is defined broadly enough to include ‘provid[ing] general guidance as to what foreign lawyers and firms may not do’ and any activity that ‘can properly be regarded as a service customarily provided by a solicitor in his capacity as such’. Darryl D. Chiang, ‘Foreign Lawyer Provisions in Hong Kong and the Republic of China on Taiwan’, 13 UCLA Pac. Basin L.J. 306, 328–9 (1995) (citing Foreign Lawyers Registration Rules, (1994) Cap. 159 vol. 2, ch. 8, § 12 (H.K.)).

130  These limitations most likely provide the regulatory counterpart to the empirical phenomenon observed by Professor Silver and her colleagues. An office in another country would not be of much benefit to a US or UK firm if it were staffed with foreign attorneys who were legally precluded from engaging in any work that implicated local law or legal institutions. Glocalization, in other words, is intricately intertwined with the restrictions imposed on cross-border legal practice.

131  Laurel S. Terry, ‘An Introduction to the European Community’s Legal Ethics Code Part II: Applying the CCBE Code of Conduct’, 7 Geo. J. Legal Ethics 345 (1993); Laurel S. Terry, ‘An Introduction to the European Community’s Legal Ethics Code Part I: An Analysis of the CCBE Code of Conduct’, 7 Geo. J. Legal Ethics 1 (1993).

132  For an in-depth analysis of the development of the legal profession in China, see Ethan Michaelson, Unhooking from the State: Chinese Lawyers in Transition (2003). With regard to other dimensions of the globalization of law practice, see Jayanth K. Krishnan, ‘Globetrotting Law Firms’, 23 Geo. J. Legal Ethics 57, 87 (2010) (‘India has no choice but to resist infiltration by UK law firms because they believe the UK has ulterior motives similar to the British East India Company from the seventeenth century.’); Bruce E. Aronson, ‘The Brave New World of Lawyers in Japan: Proceedings of a Panel Discussion on the Growth of Corporate Law Firms and the Role of Lawyers in Japan’, 21 Colum. J. Asian L. 45, 52–53 (2007) (the Japanese bar association has historically resisted integration of foreign attorneys, but pressure from trade negotiations with the United States resulted in licensing of foreign attorneys).

133  Even in China, where a strong Central Government has asserted itself in most industries, regulation of transnational legal practice remains ambiguous, and limitations on foreign firms are apparently under-enforced. See Sida Liu, ‘Globalization as Boundary-Blurring: International and Local Law Firms in China’s Corporate Law Market’, 42 Law & Soc’y Rev. 771 (2007). This lax regulatory enforcement has allegedly led to ‘backdoor’ legal activities by foreign attorneys, raising the hackles of local Chinese attorneys who complain that foreign firms were improperly impinging on business that would otherwise go to local lawyers. See Anthony Lin, ‘Shanghai Bar Association Goes after Foreign Firms’, N.Y. L. J., 16 May 2006, <http://www.law.com/jsp/llf/PubArticleLLF.jsp?id=1147856732635>. See A. Shankar, ‘Madras HC issues notice in PIL seeking action against foreign law firms’, Law et al. News, 20 Mar. 2010. Similarly, long after the Bhopal case, foreign attorneys apparently continue to come into India on tourist visas, which many Indian attorneys claim violate the restrictions of the Advocates Act of 1961. According to Indian lawyers, who filed a public interest lawsuit in protest, ‘32 law firms … are clandestinely operating in India’. See A. Shankar, ‘Madras HC issues notice in PIL seeking action against foreign law firms’, Law et al. News, 20 Mar. 2010.

134  Misasha Suzuki, ‘The Protectionist Bar Against Foreign Lawyers in Japan, China, and Korea: Domestic Control in the Face of Internationalization’, 16 Colum. J. Asian L. 385 (2003).

135  Markets for legal services are a significant trade issue, and remain one of the few areas in which the United States enjoys a significant trade surplus. ‘The US Department of Commerce Bureau of Economic Analysis estimates that the export of legal services from the United States generated $4.3 billion in receipts in 2005, while imports of legal services were valued at $914 million, yielding a 4:1 surplus for balance-of-payment accounts. According to the UK Department of Constitutional Affairs, British law firms generated £1.9 billion in exports in 2003, compared to £1.5 billion in imports.’ Laurel S. Terry et al., ‘Transnational Legal Practice: 2006–07 Year-in-Review’, 42 Int’l L. 833, 834 (2008).

136  See Laurel S. Terry, ‘The Legal World Is Flat: Globalization and Its Effect on Lawyers Practicing in Non-Global Law Firms’, 28 Nw. J. Int’l L. & Bus. 527, 529 (2008) (‘[B]etween 1993 and 2003, US exports of legal services grew 134%, but imports grew 174%.’).

138  Vagts, ‘Professional Responsibility in Transborder Practice’, 689. The second most prevalent basis for jurisdiction is nationality of the attorneys, or in the case of bar organizations, membership. See Vagts, ‘Professional Responsibility in Transborder Practice’, 689–90 (citing Restatement (Third) Foreign Relations Law § 402(2) (1987)).

139  See Hannah L. Buxbaum, ‘Transnational Regulatory Litigation’, 46 Va. J. Int’l L. 251, 273–80 (2006); Kal Raustiala, ‘The Geography of Justice’, 73 Fordham L. Rev. 2501, 2514–17 (2005).

140  For instance, in France, each of the 180 local bars except for the very smallest has one or more Deontology Committees, which are composed of elected members of the local bar and have power to promulgate the bar’s ethical regulations (Réglement Intérieur) and recommend avocats to the local Council (Conseil de l’Ordre) for disciplinary proceedings. The Council is the only organ that has the power to sanction members for violations of rules of conduct. See Loi n° 2004-130 du 11 février 2004 réformant le statut de certaines professions judiciaires ou juridiques, des experts judiciaires, des conseils en propriété industrielle et des experts en ventes aux enchères publiques [Act No. 2004-130 of 11 Feb. 2004 reforming the status of certain judicial and legal professions, legal experts, the patent attorneys and experts in public auctions]; Loi n° 71-1130 du 31 décembre 1971 portant réforme de certaines professions judiciaires et juridiques [Law No. 71-1130 of 31 Dec. 1971 on reforming certain judicial and legal professions] arts. 17 and 22; John Leubsdorf, Man in His Original Dignity: Legal Ethics in France (2001) 2; Christina Dadomo and Susan Farran (eds.), The French Legal System 2nd edn. (Sweet & Maxwell,1996) 119–120.

141  Regulation of the legal profession ‘remains local in both scope and administration, often providing little guidance’. Ronald A. Brand, ‘Professional Responsibility in a Transnational Transactions Practice’, 17 J.L. & Comm. 301, 302–03 (1998).

142  See Eli Wald, ‘Federalizing Legal Ethics, Nationalizing Law Practice, and the Future of the American Legal Profession in a Global Age’, 48 San Diego L. Rev. 489 (2011); see William T. Barker, ‘Extra-jurisdictional Practice by Lawyers’, 56 Bus. Law. 1501 (2001).

143  Historically, most States permitted some form of professional independence. For example, eighteenth-century Prussia did not, despite significant efforts, absorb advocates completely into the civil service machinery. See Dietrich Rueschemeyer, ‘Comparing Legal Professions Cross-Nationally: From a Professions-Centered to a State-Centered Approach’, 11 Am. B. Found. Res. J. 415, 445 (1986). Similarly, the former Soviet Union made unique allowances for attorneys to work as self-employed professionals in cooperative colleges, a privilege denied to virtually all other commercial sectors, even if allowances for attorneys were more rhetorical than actual. See Lawrence M. Friedman and Zigurds L. Zile, ‘Soviet Legal Profession: Recent Developments in Law and Practice’, 1964 Wis. L. Rev. 32 (1964). More recently, the proliferation of laws that indirectly regulate attorneys have raised questions about what self-regulation really means. See, e.g., Fred C. Zacharias, ‘The Myth of Self-Regulation’, 93 Minn. L. Rev. 1147 (2009).

144  For an overview of these developments at the international level, see Terry et al., ‘Transnational Legal Practice’.

145  In many jurisdictions, self-regulation is not part of the local tradition. Instead, 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, but which have no formal regulatory power since membership is not required for law practice.

146  Ted Schneyer, ‘An Interpretation of Recent Developments in the Regulation of Law Practice’, 30 Okla. City U. L. Rev. 559, 559–610, 569–70 (2005) (arguing that bar associations ‘continue, often with ABA support, to resist federal “intrusions”’ but conceding that ‘they must increasingly content themselves with trying to influence, rather than staving off, federal initiatives’); Fred C. Zacharias, ‘The Myth of Self-Regulation’, 93 Minn. L. Rev. 1147 (2009) (arguing that there are costs to falsely regarding ‘disciplinary codes as mere professional self-regulation rather than as one element of an expansive regulatory regime governing the bar’); John Leubsdorf, ‘Legal Ethics Falls Apart’, 57 Buff. L. Rev. 959, 961 (2009) (arguing that the ideal of attorney self-regulation has been almost entirely eroded in England). This phenomenon is also occurring in Canada, England, Australia, and with European regulation.

147  Informal research and anecdotal accounts suggest that most bar authorities do not regard themselves as having extraterritorial power. See, e.g., ‘20th Annual Workshop of the Institute for Transnational Arbitration: Confronting Ethical Issues in International Arbitration’, 3:3 World Arb. & Mediation Rev. 363–64 (2009) (‘[T]here is a parochial view … that [Argentinean lawyers] are not prepared at this time to extend to lawyers practicing abroad our rules because [Argentinean lawyers] do not feel we have jurisdiction.’).

148  See Ronald J. Daniels and Michael Trebilcock, ‘The Political Economy of Rule of Law Reform in Developing Countries’, 26 Mich. J. Int’l L. 99, 125 (2004) (discussing the lack of resources of Latin American bar associations); Susan P. Koniak, ‘Corporate Fraud: See, Lawyers’, 26 Harv. J.L. & Pub. Pol’y 195, 215 (2003) (discussing the inability of underfunded and understaffed bar authorities to regulate lawyers assisting securities and other types of fraud); Quintin Johnstone, ‘Bar Associations: Policies and Performance’, 15 Yale L. & Pol’y Rev. 193, 199 (1996) (‘In comparison to large business corporations and many government agencies, the major comprehensive bar associations’ financial resources are limited.’).

149  In fact, the few examples of investigation of attorney misconduct in the United States have been through the courts, in connection with parallel cases that are pending.

150  Although it may seem strange to talk about bar associations regulating arbitrators, there are some bar authorities that already do or are contemplating direct regulation of arbitrators who are licensed as attorneys. For example, Article 55 of the Italian Codice Deontologico Forense specifically requires, among other things, that Italian lawyers who serve as arbitrators remain independent, disclose certain information about relevant contacts, and preserve the trust parties have placed in them. Similarly, in the United States, there is a new proposed Model Rule for Lawyers Acting as Third Party Neutrals, which if enacted would become part of the Model Rules. See CPR-Georgetown Commission on Ethics and Standards of Practice in ADR, Model Rules 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>.

151  See Etherington and Lee, ‘Ethical Codes and Cultural Context’, 97.

152  See Etherington and Lee, ‘Ethical Codes and Cultural Context’. Problems with national regulatory authorities enforcing international or foreign ethical rules are explored in greater detail in Chapter 3.

153  Catherine A. Rogers, ‘Fit and Function in Legal Ethics: Developing a Code of Conduct for International Arbitration’, 23 Mich. J. Int’l L. 341, 396 (2002); M. McCary, ‘Bridging Ethical Borders: International Legal Ethics with an Islamic Perspective’, 35 Tex.Int’l L.J. 289, 294 (2000).

154  See The Declaration on the Principles of Professional Conduct of the Bars and Law Societies of the European Community (1977) [hereinafter Declaration of Perugia]. The Perugia Principles contained only ‘eight brief ethical pronouncements’, which have been described as an obscure ‘discourse on the function of a lawyer in society’ and ‘the nature of the rules of professional conduct’. See Mary C. Daly, ‘The Dichotomy Between Standards and Rules: A New Way of Understanding the Differences in Perceptions of Lawyer Codes of Conduct by US and Foreign Lawyers’, 32 Vand. J. Transnat’l L. 1117, 1159 (1999).

155  See Etherington and Lee, ‘Ethical Codes and Cultural Context’, 97.

156  The IBA International Principles on Conduct for the Legal Profession was adopted by the IBA on 28 May 2011. International Bar Association, <http://www.ibanet.org/Publications/publications_IBA_guides_and_free_materials.aspx>.

157  For a detailed survey of reform efforts to date, see Laurel S. Terry, ‘A “How To” Guide for Incorporating Global and Comparative Perspectives into the Required Professional Responsibility Course’, 51 St. Louis U. L.J. 1135, 1153 (2007).

158  For example, the Statement of Core Principles provides such broad admonitions as: ‘An independent legal profession, without which there is no rule of law or freedom for the people.’ While obviously an important principle, absent a meaningful definition of what constitutes ‘independent’ or ‘rule of law’, the general principle provides little meaningful guidance.

159  Andrew Boon and John Flood, ‘Globalization of Professional Ethics? The Significance of Lawyers’ International Codes of Conduct’, 2 Legal Ethics 29, 55–56 (1999) (arguing that the absence of discourse about the international codes is a barrier to the globalization of professional ethics); H.W. Arthurs, ‘A Global Code of Ethics for the Transnational Legal Field’, 2 Legal Ethics 59 (1999) (discussing the difficulties of creating a universal or global code of ethics and criticizing such codes as ineffective).

160  Charter of Core Principles of the European Legal Profession and Code of Conduct for European Lawyers (2006), [CCBE Code of Conduct], <http://www.ccbe.org/fileadmin/user_upload/NTCdocument/EN_Code_of_conductp1_1249308118.pdf>.

161  Laurel S. Terry, ‘An Introduction to the European Community’s Legal Ethics Code Part I: An Analysis of the CCBE Code of Conduct’, 36–37.

162  Article 2.4 of the CCBE Code of Conduct provides: ‘When practising cross-border, a lawyer from another Member State may be bound to comply with the professional rules of the Host Member State. Lawyers have a duty to inform themselves as to the rules which will affect them in the performance of any particular activity.’

163  See paras 3.23–3.29. The omission, particularly from earlier codes, may also reflect the fact that the proliferation of international tribunals is a relatively new development.

164  The full text of Rule 8.5 is as follows: ‘(a) Disciplinary Authority. A lawyer admitted to practice in this jurisdiction is subject to the disciplinary authority of this jurisdiction, regardless of where the lawyer’s conduct occurs. A lawyer not admitted in this jurisdiction is also subject to the disciplinary authority of this jurisdiction if the lawyer provides or offers to provide any legal services in this jurisdiction. A lawyer may be subject to the disciplinary authority of both this jurisdiction and another jurisdiction for the same conduct. (b) Choice of Law. In any exercise of the disciplinary authority of this jurisdiction, the rules of professional conduct to be applied shall be as follows: (1) for conduct in connection with a matter pending before a tribunal, the rules of the jurisdiction in which the tribunal sits, unless the rules of the tribunal provide otherwise; and (2) for any other conduct, the rules of the jurisdiction in which the lawyer’s conduct occurred, or, if the predominant effect of the conduct is in a different jurisdiction, the rules of that jurisdiction shall be applied to the conduct. A lawyer shall not be subject to discipline if the lawyer’s conduct conforms to the rules of a jurisdiction in which the lawyer reasonably believes the predominant effect of the lawyer’s conduct will occur.’ As analysed in greater detail in Chapter 9, this rule is problematic as applied to international arbitration because the jurisdiction in which a tribunal sits is often unrelated to the underlying dispute. Moreover, as described in the pages that follow, the ethical rules of most jurisdictions do not regard their rules as applying to foreign counsel in locally seated international arbitrations. See also Chapter 9.

165  See Ucheora Onwuamaegbu, Panel on International Arbitration of Investment/Contract Dispute, ‘Is There a Need for Guidelines for Counsel Participation in International Arbitration?’, State Bar of Texas International Law Section’s 21st Annual International Law Institute, 6 Mar. 2009, p. 2 (‘Neither the ICSID Rules nor those of UNCITRAL … provide any guidelines for the participation of representatives of parties in proceedings, including provisions on disclosures or possible disqualification.’).

167  Arman Sarvarian, ‘Common Ethical Standards for Counsel Before the European Court of Justice and European Court of Human Rights’, 23 Eur. J. Int’l L. 991, 992 (2012).

168  According to Principle 1.2, the Hague Principles only apply to ‘an international arbitral tribunal in a proceeding in which one or more of the parties is a state’. This definition would include investor-State arbitration, but not international commercial arbitration, unless it included a State party.

169  The ILA Principles recognize in precatory language ‘that each international court and tribunal has its own characteristics and functions and that each international court may need to adapt principles to fit its particular circumstances and practices’. For example, Principle 6.2 states that counsel may engage in pre-testimonial communication with a witness, but ‘subject to such rules as the international court or tribunal may have adopted’.

170  The IBA Guidelines for Party Representation are analysed in greater detail in Chapters 3 and 6.

171  The international concept of ‘counsel of choice’ began as a political right that should be guaranteed to criminal defendants. See International Covenant on Civil and Political Rights, G.A. Res. 2200A (XXI), U.N. GAOR, Supp. Np. 16 (Vol. 21), U.N. Doc. A/RES/2200A(XXI), at 14(3)(d) (16 Dec. 1966). It has subsequently been recognized more generally as a feature of procedural fairness in any adjudicatory proceeding.

172  For example, the International Court of Justice website explains that ‘there is no special International Court of Justice Bar, there are no conditions that have to be fulfilled for counsel or advocates to enjoy the right of arguing before it except only that they must have been appointed by a government to do so’. See International Court of Justice, How the Court Works, <http://www.icj-cij.org/court/index.php?p1=18p2=6>.

173  In re Certain Solder Joint Pressure Pipe Fittings, CDA-USA-98-1904-03, 2000 WL 1125288 (NAFTA Binat Panel 3 Apr. 2000) (dismissing a motion to disqualify a non-lawyer from acting as counsel of record for one of the parties to the review, noting that ‘… parties are entitled to be represented by counsel, … and to be represented by counsel of choice. The Tribunal regularly permits parties to be represented by persons other than lawyers, such as trade consultants, economists and accountants’); Charles N. Brower and Stephan W. Schill, ‘Regulating Counsel Conduct Before International Arbitral Tribunals’, in Bekker et al. (eds.), Making Transnational Law Work in a Global Economy: Essays in Honour of Detlev Vagts (2010) 488, 505–06.

174  Arbitration Act, (1996) § 36 (UK).

175  See paras 1.65–1.68, and accompanying text.

176  William W. Park, ‘National Law and Commercial Justice: Safeguarding Procedural Integrity in International Arbitration’, 63 Tul. L. Rev. 647, 680 (1989) (documenting a ‘scramble among Western European nations’ to compete for international arbitration business); Sir Michael J. Mustill, ‘Arbitration: History and Background’, 53 (‘[O]ne must take note of the efforts made by individual nations to make their arbitration laws … more attractive.’).

177  See Turner (East Asia) Pte. Ltd v Builders Fed. (H.K.) Ltd, (1988) 2 MLJ 280 (Sing.).

178  Turner (East Asia) Pte. Ltd v Builders Fed. (H.K.) Ltd, 280.

179  Chiang, ‘Foreign Lawyer Provisions in Hong Kong and the Republic of China on Taiwan’, 329 n. 114; David W. Rivkin, ‘Restrictions on Foreign Counsel in International Arbitrations’, XVI Y.B. Comm. Arb. 402, 403–07 (1991).

180  Chiang, ‘Foreign Lawyer Provisions in Hong Kong and the Republic of China on Taiwan’, 329 n. 114.

181  Statutes of the Republic of Singapore, Legal Profession Act (Cap. 161) § 34A(1)(a) (1994). Michael A. Polkinghorne, ‘More Changes in Singapore: Appearance Rights of Foreign Counsel’, 22 J. Int’l Arb. 75, 75 (2005); Chiang, ‘Foreign Lawyer Provisions in Hong Kong and the Republic of China on Taiwan’, 329 n. 114; Michael A. Polkinghorne, Note, ‘The Right of Representation in a Foreign Venue’, 4 Arb. Int’l 333, 334–37 (1988).

182  Polkinghorne, ‘More Changes in Singapore: Appearance Rights of Foreign Counsel’, 76.

183  2010 International Arbitration Survey: Choices in International Arbitration, Sch. of Int’l Arb., Queen Mary University of London (2010), 20, <http://www.arbitrationonline.org/research/2010/index.html>. The Survey also attributes the rising success of Singapore to promotional activities and active involvement of more arbitral institutions. Presumably, these latter developments would not have had much traction were it not for the opening up of international arbitration matters in Singapore to foreign lawyers.

184  Tadao Fukuhara, ‘The Status of Foreign Lawyers in Japan’, 17 Jap. Ann. Int’l L. 21 (1973), in Hideo Tanaka (ed.), The Japanese Legal System: Introductory Cases and Materials (1976) 591, 591–607; Chan, Kay-Wah, Lawyers in Japan: A Profession Caught in the Current of Reforms (2–5 June 2005) (paper presented at the annual meeting of The Law and Society, J.W. Marriott Resort, Las Vegas, NV).

185  Luke Nottage, ‘Japan’s New Arbitration Law: Domestication Reinforcing Internationalisation’, 7 Int’l A.L.R. 54, 55 (2004) (citing The Special Measure Law concerning the Handling of Legal Practice by Foreign Lawyers, promulgated as Law No. 65 of 1996 on 12 June 1996, taking effect on 1 September 1996).

186  See Nottage, ‘Japan’s New Arbitration Law’, 59. Notably, there are efforts to open the Japanese legal market to more foreign attorneys. See Japan Federation of Bar Associations, (2012), 57–64, <http://www.nichibenren.or.jp/library/en/about/data/WhitePaper2012.pdf>.

187  Global Business Immigration Handbook § 12:17.

188  Birbrower, Montalbano, Condon & Frank, P.C. v Superior Court, 949 P.2d 1 (Cal. 1998).

189  See Birbrower, Montalbano, Condon & Frank, P.C. v Superior Court, 7.

190  See Cal. Code Civ. Pro.§ 1282.4 (1 Jan. 2011); Cal. R. Ct. (2009), R. 9.43(a) (amended and renumbered effective 1 Jan. 2007, adopted as Rule 983.4 by the Cal. Sup. Ct., effective 1 July 1999). Notably, California imposes relatively strict obligations on attorneys licensed in other states, including an obligation to file a detailed certificate with the State Bar of California and obtain written approval by the arbitral tribunal. See Cal. Code Civ. Pro.§ 1282.4 (a) and (c). Notably, repeat appearances ‘shall be grounds for disapproval and disqualification from serving as an attorney in the arbitration in which the certificate was filed’. See Cal. Code Civ. Pro.§ 1282.4 (d).

191  See David D. Caron and Leah D. Harhay, ‘A Call to Action: Turning the Golden State into a Golden Opportunity for International Arbitration’, 28 Berkeley J. Int’l L. 497 (2010).

192  For instance, in order to improve New York as an attractive forum for international arbitration, the New York State Bar Association (NYSBA) recently created a task force to review New York law as an international standard and the use of New York as a neutral forum for resolving international disputes in arbitration. The task force’s number one recommendation was in support of establishing a permanent Center for International Arbitration in New York. See NYSBA, ‘State Bar Association Calls for Creation of a Permanent Center for International Arbitration in New York’ (28 June 2011), <http://www.nysba.org/CustomTemplates/Content.aspx?id=6590>; NYSBA, Final Report of the New York State Bar Association’s Task Force on New York Law in International Matters (18 April 2011), <http://www.nysba.org/InternationalReport/>. Florida recently won a bid to host the International Council for Commercial Arbitration (ICCA) biennial international conference, and the Florida legislature recently passed a bill standardizing international arbitration rules based on the UNCITRAL Model Law. See Fla. Stat. Ann. § 684 (West 2010); MIAS Blog, Miami Wins Bid for ICCA 2014 (31 May 2011), <http://miamiinternationalarbitration.com/blog/?p=11>; Santiago A. Cueto, ‘International Arbitration: Florida Adopts UNCITRAL Model Law, Miami to Benefit the Most’ (20 May 2010),<http://www.internationalbusinesslawadvisor.com/2010/05/articles/international-arbitration/international-arbitration-florida-adopts-uncitral-model-law-miami-to-benefit-the-most/>.

193  Committee on Professional Ethics of the Association of the Bar of the City of New York, ‘Recommendation and Report on the Right of Non-New York Lawyers to Represent Parties in International and Interstate Arbitrations Conducted in New York’, 49 Record of the Association of the Bar of the City of New York 47 (1991).

194  See Rules Regulating the Florida Bar, Rule 1-3.11 (c). (Appearances by Non-Florida Lawyer in an Arbitration Proceeding in Florida) (lawyers permitted to appear by this rule shall be subject to these rules regulating the Florida bar while engaged in the permitted representation, including, without limitation, Rule 4-5.5).

195  See Miami International Arbitration Society, ‘Freedom of Choice of Counsel’, <https://miamiinternationalarbitration.com/us/arbitration/arbitration-in-miami/freedom-of-choice-of-counsel>.

196  MiamiInternationalArbitration Society, <https://miamiinternationalarbitration.com/us/arbitration/arbitration-in-miami/overview>. See also Fl. St. Bar R. 1-3.11 (West 2009): (a) Non-Florida Lawyer Appearing in an Arbitration Proceeding in Florida. A lawyer currently eligible to practice law in another United States jurisdiction or a non-United States jurisdiction may appear in an arbitration proceeding in this jurisdiction if the appearance is: (1) for a client who resides in or has an office in the lawyer’s home state; or (2) where the appearance arises out of or is reasonably related to the lawyer’s practice in a jurisdiction in which the lawyer is admitted to practice; and (3) the appearance is not one that requires pro hac vice admission.

197  Christopher Lau and Christin Horlach, ‘Commentary: Arbitration in Asia? Yes—But Where?’ 23-SPG Int’l L. Practicum 43, 44 (2010); Jahan P. Raissi, Note, ‘Arbitrating in Thailand’, 16 Hastings Int’l & Comp. L. Rev. 99, 119 (1992). (‘The Working of Aliens Act … prohibits the business person’s counsel from presenting a case before an arbitral tribunal, and if strictly construed, the business person’s or a company’s own counsel cannot even assist or advise the client regarding Thai arbitral proceedings in general.’)

198  This is an opinion in a still-evolving survey apparently being conducted by the International Bar Association. Thailand International Trade in Legal Services, <http://www.ibanet.org/PPID/Constituent/Bar_Issues_Commission/ITILS_Thailand.aspx>. It is ambiguous what enforcement in Thai courts necessarily means, particularly since in many cases the place of enforcement may not be well-settled when arbitral proceedings are commenced.

199  See Lau and Horlach, ‘Commentary: Arbitration in Asia? Yes—But Where?’, 44.

200  Dyalá Jimenez-Figueres and Angie Armer Ros, ‘Notes on the New Chilean Law on International Arbitration’, 20-7 Mealey’s Int’l Arb. Rep. News Brief 13, 25–26 (2005) (suggesting that ‘parties to an arbitration in Chile should include Chilean counsel in their representation as a matter of caution’).

201  See Born, International Commercial Arbitration (2014) 2914.

202  See Dr Nils Eliasson, ‘A Brief Introduction to Arbitration in Hong Kong’, 23-SPG Int’l L. Practicum 46, 49 (2010). (Chinese law may still prohibit foreign registered lawyers from representing parties in CIETAC arbitration in mainland China without being accompanied by a Chinese attorney, as part of a general prohibition against foreign attorneys interfering with ‘Chinese legal affairs’.)

203  Waiguo Lushi Shiwusuo Zhuhua Daibiao Jigou GuanliTiaoli (外 国 律 师 事 务 所 驻 华 代 表 机 构 管 理 条 例) [RulesonImplementation of the Regulations on the Administration of Foreign Law Firm Representative Offices in China] (promulgated by the State Council, 19 Dec. 2001, effective 1 Jan. 2001), art. 32(4) defined ‘China Legal Business’ to include addressing the application of Chinese law and the issuance of opinions or evaluations of Chinese law as agent in international arbitrations. Article 32(4) was narrowed by a decision of the Ministry of Justice, which prohibited representatives of foreign law firms from commenting in the capacity of agent on the application of Chinese law. In the Reply to the Letter Submitted by CIETEC on Recommendations Related to ‘the Rules on Implementation of the Regulations on the Administration of Foreign Law Firm’s Representative Offices in China by the Ministry of Justice’, the Ministry of Justice provided an explanation on the revisions as follows: ‘Basically, local co-counsel is needed for questions of Chinese law but foreign law firm representatives may nevertheless serve as agent in international arbitrations in China. These regulations have no force outside China because foreign lawyers are not acting as representatives of foreign law firm representative offices in China.’ Lester Ross of Wilmer Hale, email of 5 Aug. 2010.

204  Nils Eliasson, ‘A Brief Introduction to Arbitration in Hong Kong’, 49.

205  For an in-depth analysis of the development of the legal profession in China, see Ethan Michaelson, Unhooking from the State: Chinese Lawyers in Transition (2003).

206  Sida Liu, ‘Globalization as Boundary-Blurring: International and Local Law Firms in China’s Corporate Law Market’, 42 Law & Soc’y Rev. 771, 783–84 (2008) (discussing sanctions imposed by the Chinese Ministry of Justice on Beijing-based foreign lawyers representing clients in an international arbitration case in China in 2005).

207  ‘Law and globalization: Not entirely free, your honour’, Economist, 29 July 2010.

208  See ‘Law and globalization: Not entirely free, your honour’, Economist, 29 July 2010. In an ironic twist, as the Indian legal market remains formally closed to foreign law firms, it is itself infiltrating foreign legal markets by soaking up outsourced legal services. Mary C. Daly and Carole Silver, ‘Flattening the World of Legal Services? The Ethical and Liability Minefields of Offshoring Legal and Law-Related Services’, 38 Geo.J. Int’l L. 401, 404–05 (2007).

209  See Krishnan, ‘Globetrotting Law Firms’, 60.

210  See ‘Madras HC issues notice in PIL seeking action against foreign law firms’, Law et al. News, 20/3/2010, <http://lawetalnews.com/NewsDetail.asp?newsid=774>.

211  See ‘Madras HC issues notice in PIL seeking action against foreign law firms’.

212  The Madras Court was correct that the Indian legal profession’s protectionism backfired. Instead of preserving the representation of parties in Indian arbitrations for Indian lawyers, it has resulted in an off-shoring of arbitration—parties that might otherwise arbitrate in India instead seat their arbitrations in Singapore, or elsewhere.

213  See Soibam Rocky Singh, ‘Delhi HC Issues Notice on Working of London Court of International Arbitration in Delhi’, Law et al. News, 31 May 2011, <http://www.lawetalnews.com/NewsDetail.asp?newsid=4087>. For an interesting analysis of the history of legal services and current regulatory climate in India, see Krishnan, ‘Globetrotting Law Firms’.

214  A month after the alleged notice, the LCIA had yet to receive a summons and no papers had been filed at the LCIA India registrar by the court or plaintiffs. See Ben Lewis, ‘Indian Arbitration: The Road Less Traveled’, Law.com (20 June 2011), <http://www.law.com/jsp/law/LawArticleFriendly.jsp?id=12024978742798slreturn=1>; Sebastian Perry, ‘LCIA faces lawsuit in India’, Global Arb. Rev. (3 June 2011), <http://www.globalarbitrationreview.com.ezaccess.libraries.psu.edu/news/article/29518/lcia-faces-lawsuit-india/>. Moreover, many Indian arbitration specialists question the seriousness of the lawsuit. See Edward Machin, ‘LCIA India told to change name by Delhi lawyers’, <http://www.cdr-news.com/arbitration-and-adr/112-articles/1120-lcia-india-told-to-change-name-by-delhi-lawyers>.

215  See Prachi Shrivastava, ‘LCIA yet to bag 10th case as high-powered Hiranandani arbitration resolved with Cherie Blair’; AP Shah, ‘Karanjawala’, Legally India (8 Aug. 2013), <http://www.legallyindia.com/201308083898/Litigation/3-year-old-lcia-still-to-get-its-10th-dispute-resolves-hiranandani-feud-with-karanjawala-pepper-hamilton>.

216  Kyungho Choi, ‘Korean Foreign Legal Consultants Act: Legal Profession of American Lawyers in South Korea’, 11 Asian-Pac. L. & Pol’y J. 100, 104 (2010) (internal citations omitted); see also John E. Morris, ‘Germany Invaded!’ Am. Law., Sept. 2000, 32.

217  Until relatively recently, the explanation was that local law firms could not provide the services desired by foreign investors in certain sectors. See Geoffrey C. Hazard Jr and Angelo Dondi, Legal Ethics: A Comparative Study, 56 (noting that China ‘wanted to expand its legal profession at a rapid rate, but [lacking] the university apparatus and cadres of graduates to do so[,] … has admitted people with basic literacy and substantial experience in practical office affairs to the profession of lawyer’); Eliasson, ‘A Brief Introduction to Arbitration in Hong Kong’, 49; Andrew Godwin, ‘The Professional “Tug of War”: The Regulation of Foreign Lawyers in China, Business Scope Issues and Some Suggestions for Reform’, 33 Melb. U. L. Rev. 132, 143 (2009) (‘[I]n the early 1990s … there were no local law firms with a national presence within China, let alone firms with an overseas presence, that could compete successfully with international law firms in the lucrative foreign direct investment (FDI) market.’).

218  See Yves Dezalay and Bryant G. Garth (eds.), Global Prescriptions: The Production, Exportation and Importation of a New Legal Orthodoxy (2002); Krishnan, ‘Globetrotting Law Firms’, 60 (2010).

219  Robert L. Nelson, ‘Are We There Yet? Empirical Research and the Predicted Demise of Large Law Firms: An Introductory Essay’, 22 Geo. J. Legal Ethics 1249, 1254–55 (2009).

220  Carole Silver et al., ‘Between Diffusion and Distinctiveness in Globalization: US Law Firms Go Glocal’, 22 Geo. J. Legal Ethics 1431, 1448–51 (2009).

221  Silver et al., ‘Between Diffusion and Distinctiveness in Globalization’, 1450.

222  Several scholars argued that: Steven Mark, ‘Harmonization or Homogenization? The Globalization of Law and Legal Ethics—An Australian Viewpoint’, 34 Vand. J. Transnat’l L. 1173, 1179–80 (2001); Susan Marks, ‘Empire’s Law’, 10 Ind. J. Global Legal Stud. 449, 451–52 (2003).

223  See Silver et al., ‘Between Diffusion and Distinctiveness in Globalization’, 1433. This conclusion does not take into account the allocation of administrative power or profits as among so-called ‘local’ partners and partners in the home country. While employment in branches of multi-national firms may pay at the high end or above the compensation level of top local firms, foreign attorneys employed in foreign offices are often paid less than those in UK or US offices where the firm originates. One reason for this pay differential can be the lower cost of living in most jurisdictions outside London, New York, and other hubs of multi-national firms.

224  Silver et al., ‘Between Diffusion and Distinctiveness in Globalization’, 1433.

225  ‘Keep Out: Brazilian lawyers don’t want pesky foreigners poaching their clients’, The Economist, <http://www.economist.com/node/18867851> (23 June 2011).

227  Lucy Greenwood and C. Marc Baker, ‘Getting a Better Balance on International Arbitration Tribunals’, 28(4) Arb. Int’l 653 (2012) (‘A major cause of the under-representation of women on international arbitration tribunals is the lack of women making it thorough to the upper eschelons of the legal profession.’). This observation suggests that, as women get further in the law firm pipeline, the number of arbitral appointment for women may increase. Nevertheless, other more subtle obstacles undoubtedly also exist, such as unconscious gender bias. See Greenwood and Baker, ‘Getting a Better Balance on International Arbitration Tribunals’, 662.

229  See Prachi Shrivastava, ‘LCIA yet to bag 10th case as high-powered Hiranandani arbitration resolved with Cherie Blair’; AP Shah, ‘Karanjawala’.

230  See Rogers, ‘Lawyers Without Borders’, 1078–79; Judith A. McMorrow, ‘Creating Norms of Attorney Conduct in International Tribunals: A Case Study of the ICTY’, 30 B.C. Int’l & Comp. L. Rev. 139 (2007).