New International Bar Association (IBA) Guidelines on Conflicts of Interest in International Arbitration

Executive Summary:

• The IBA published updated Guidelines on Conflicts of Interest in International Arbitration in February 2024. These address new areas such as social media and third-party funding, ensuring that they adapt to the changing landscape of international arbitration.
• The IBA Guidelines are a non-binding but widely accepted framework used in Mexico and globally to identify and manage potential conflicts of interest in international arbitration. The 2024 update strengthens this framework and improves the overall practice of arbitration.

The IBA (International Bar Association) is a global organisation that brings together legal professionals and bar associations. Its mission is to strengthen international legal cooperation.

The Guidelines. To achieve this goal, the IBA periodically develops and publishes guidelines in various fields, including arbitration. These guidelines reflect internationally accepted practices and serve as authoritative standards and best practices.

IBA Guidelines on International Arbitration. Independence and impartiality are fundamental pillars of international arbitration. Failure to disclose a conflict of interest (absence of independence and/or impartiality), which compromises these principles, may lead to the annulment of an award or to its refusal to be enforced.

Despite their non-binding (soft law) nature, the IBA Guidelines on Conflicts of Interest in International Arbitration (hereinafter “the 2024 Guidelines”) have been, for many years, the globally recognised framework for identifying and managing potential conflicts of interest on the part of arbitrators, experts and lawyers, with the aim of ensuring the neutrality of arbitration proceedings.

New Guidelines. February 2024 marked the tenth anniversary of the first review of the IBA Guidelines on Conflicts of Interest in International Arbitration. Following the usual practice of the IBA Arbitration Committee, an evaluation and update of the Guidelines was carried out. A dedicated working group was formed to identify issues that might require revision and a survey was launched to gather the views of practitioners around the world.

As a result, the following areas of opportunity were identified:

(i) Disclosure of information by referees
(ii) Third-party funding
(iii) Issue conflicts
(iv) Models of organisation of legal professionals in different jurisdictions (for example, bar associations, etc.)
(v) Experts
(vi) Sovereigns or their agencies and instrumentalities
(vii) Non-lawyer arbitrators
(viii) Social media

The 2024 Guidelines maintain the structure of their predecessor, organizing the content into two main parts: Part I sets out the key pillars governing the management of conflicts of interest, the obligation of disclosure by the arbitrator, the power of the parties to object to or withdraw from an arbitrator, the scope of the Guidelines, the relationships that may give rise to conflicts of interest, the duty of the parties and the arbitrator to act in good faith and transparency, and the responsibility of the parties in identifying and managing conflicts of interest. An explanation of each of these general rules is included.

Part II contains the so-called “traffic light”, a practical tool that facilitates the identification and management of conflicts of interest in international arbitration. The traffic light consists of a series of hypothetical scenarios organized into four categories: non-waivable red list, waivable red list, orange list and a green list.

For example, an event that clearly creates a conflict of interest would be eligible for updating the scenarios described in the red list (either non-waivable or waiverable), while the orange list describes scenarios where the conflict of interest might not be apparent but still requires attention and possible management (i.e., possible disclosure), while the green list indicates situations where no significant conflicts of interest are identified.

As an example, the 2024 Guidelines include modifications to the scenarios described in the orange list. Specifically, sections 3.1.6 to 3.1.8 were added within section 3.1 (“Professional services provided to a party prior to arbitration or other involvement in the case”).

• Section 3.1.6 addresses the arbitrator's role as an expert for one of the parties in an unrelated matter within the previous three years.
• Section 3.1.7 deals with services provided by the arbitrator's law firm or company to one of the parties without the involvement of the arbitrator and without these services being related to the ongoing dispute.
• Section 3.1.8 refers to a law firm or organization that shares significant revenues with the arbitrator's firm and provides services to one of the parties before the Arbitral Tribunal.

With the 2024 Guidelines, the IBA demonstrates its commitment to relevant and adaptable international arbitration. The additions and adjustments made ensure that the IBA Guidelines reflect a current factual and legal landscape. This proactive approach is crucial to maintaining the Guidelines as one of the most relevant frameworks for managing conflicts of interest in arbitration.

What impact does the above have on practice in Mexico? The IBA Guidelines are widely used in arbitrations seated in Mexico, as well as in arbitrations where the parties are Mexican. In this context, the 2024 Guidelines constitute a significant advance for both global and national arbitration, which translates into important progress for arbitration practice.

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