In order to guarantee that arbitration is a fair process, arbitrators have the duty of conducting the proceedings and rendering a final decision in a neutral, independent and impartial way.
Arbitrators are obliged to disclose circumstances likely to give rise to justifiable doubts as to their neutrality, impartiality and/or independence. Although not binding, the IBA Guidelines on Conflicts of Interest in International Arbitration are recognized as the most comprehensive soft-law instrument setting objective standards for measuring possible arbitrator bias.
The IBA Guidelines address situations that are likely to occur in arbitral procedures, categorizing these situations in four non-exhaustive lists:
- Non-Waivable Red List;
- Waivable Red List;
- Orange List;
- Green List.
The Non-Waivable Red List includes situations arising out of the principle that no person can be a judge in his or her own cause. This would be the case, for instance, of the arbitrator being a legal representative or employee of one of the parties; or of the arbitrator having a personal interest in the outcome of the case.
The Waivable Red List covers situations that are serious, but not as severe as the ones in the Non-Waivable Red List. These situations can be disregarded where the parties are aware of the conflict of interest and still expressly state their willingness of having that person acting as an arbitrator. A Waivable Red List situation is the case of the arbitrator giving legal advice or providing an expert opinion to one of the parties in connection with the dispute prior to his appointment. Another case would be the arbitrator being a lawyer in the same law firm as the counsel to one of the parties.
The Orange List covers situations that, depending on the facts of the case, may give rise to doubts as to independence and impartiality of an arbitrator. This would be the case of the arbitrator having had served as counsel against one of the parties in an unrelated matter in the last three years. Another case would be the one of a close personal relationship between an arbitrator and the counsel of one party.
The Green List, contrary to the previous lists, covers situations in which no conflict of interest exists from an objective point of view. This includes the arbitrator having expressed a legal opinion (e.g. in an article or in a lecture) concerning an issue arising in the arbitration (as long as not focused on the particular dispute). It also includes the arbitrator being connected to another arbitrator or to counsel through memberships in professional associations, social or charitable organisations, or though social media.
Questions as to the neutrality, impartiality and independence of an arbitrator may be raised at any point during the arbitral proceedings. Notwithstanding, these are more common during the stage of constitution of the arbitral tribunal; or after the award has already been rendered, during enforcement or setting aside proceedings.
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