MARKET COMMENTARY 37
ARBITRATION IS BETTER SUITED TO EVOLUTION RATHER THAN TO REVOLUTION.
This brings us to the sanctions available to a tribunal to punish counsel’s misconduct, these are incorporated in the main body of the new Rules (at Article 18.6), and provide for the following sanctions: (1) a written reprimand; (2) a written caution as to future conduct; (3) a reference to the legal representative’s regulatory and/or professional body; and (4) any other measures deemed necessary by the tribunal to maintain its general duties as set out in Article 14 of the new Rules. These sanctions do not appear to be especially punitive. A written admonishment would remain confidential between those involved in the arbitration and may not act as a deterrent; and the power to refer counsel to the relevant professional or regulatory body for a clear breach of their professional code of conduct already exists. Indeed, the latter sanction is expressed in square brackets in the draft LCIA Rules, which may indicate a hesitation around its inclusion. In practical terms, the question is whether a party-appointed arbitrator would be prepared to impose sanctions on the counsel that appointed them if they want to be appointed by the same counsel in the future. Indeed, even arbitrators who are not party-appointed may hesitate to impose sanctions on counsel for risk of limiting future appointments. This is perhaps a controversial, but reasonable, question to pose when examining the development of a code of conduct for counsel in international arbitration. THE IBA GUIDELINES ON ‘PARTY REPRESENTATION’ Since their publication in May 2013, these Guidelines have been regarded as fairly controversial. Nevertheless, the IBA Rules on the ‘Taking of Evidence’ were perhaps regarded with as much scepticism upon their release, and are now almost universally adopted. Thus, the ‘Party Representation’ Guidelines may also reach the same level of ubiquity. The IBA Guidelines are fairly comprehensive; divided into seven parts consisting of 27 guidelines, with comments on how the Guidelines are to be applied. Some of the most salient principles set out are that a party representative: (1) should not engage in ex parte communication with the tribunal; (2) should not make any false statements of fact; (3) should inform the client to preserve documents relevant to the arbitration; (4) should not make a request to produce documents or object to a request for an improper purpose; (5) should not conceal documents; (6) should identify himself/herself and the party he/she represents before seeking any information from a potential witness or expert; (7) should ensure witness/expert reports reflect the witness/ expert’s own opinion; and (8) should not encourage or invite a witness to give false evidence. The sanctions available to a tribunal for counsel’s misconduct are: (1) admonishing the party representative; (2) drawing adverse inferences in assessing the evidence or arguments advanced by the party representative; (3) considering misconduct when apportioning the costs of the arbitration; or (4) any other measures deemed necessary by the tribunal “in order to preserve the fairness and integrity of the proceedings”.
HOW DO THEY COMPARE? The powers to draw adverse inferences and apportion costs for counsel’s misconduct under the IBA Guidelines on Party Representation are fairly arduous. In comparison, similar measures are not included in the LCIA Guidelines; however, the catch-all remedy available to an LCIA tribunal to impose “any other measures deemed necessary” to maintain its general duties, means that sanctions could be applied in appropriate circumstances. The other significant difference between the LCIA and IBA Guidelines is how they apply to counsel: in an LCIA arbitration proceeding under the new Rules, a legal representative must agree to comply with the Guidelines as a condition to appear by name before the tribunal; on the other hand, the IBA Guidelines can only govern counsel in an arbitration if the parties agree to opt in, as it is a voluntary code of conduct - a tribunal could also apply them after consulting with the parties, but most tribunals would seek agreement before doing so. Finally, the IBA Guidelines are not “intended to displace otherwise applicable mandatory laws, professional or disciplinary rules”; and this is similar to the manner in which the LCIA Guidelines apply to counsel. Practically, this means that where counsel is subject to a strict code of conduct, the IBA guidelines should (theoretically) have little effect, assuming such codes of conduct tend to be followed; however, they may help an inexperienced lawyer, or counsel from a developing jurisdiction, become familiar with the standards of conduct required in an international arbitration. CONCLUSION Some within the international arbitration community have long argued for a uniform code of conduct for counsel. For example, Doak Bishop called for the “development and adoption of a uniform Code of Ethics for International Arbitration” at the International Council for Commercial Arbitration (ICCA) Congress in 2010, in Rio de Janeiro. However, until such a code is enacted, parties involved in arbitration under the auspices of an arbitral institution (other than the LCIA) that does not opt in to the IBA Guidelines will not be subject to an arbitration-specific code of conduct. Perhaps the answer to the way forward can be found in the closing speech given by Chief Justice Sundaresh Menon at this year’s ICCA Congress in Miami, when he said that arbitration is “better suited to evolution rather than to revolution”. With the introduction of the IBA and LCIA guidelines, we are seeing evolutionary steps in the development of a uniform code of conduct for counsel in international arbitration; or, at least, a number of applicable codes. Other arbitral institutions may well follow the trend set by the LCIA and introduce their own codes of conduct, and many would argue that they would be wise to do so. As Chief Justice Menon remarked, international arbitration will respond to challenges, and evolve to what is best for its users and practitioners. A version of this article was first published in the Kluwer Arbitration Blog, May 2014
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