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Commercial arbitration developments

With every passing year, recourse to commercial arbitration continues to rise in the global marketplace, with an increasingly diverse and sophisticated community of participants in the process.

The growth and success of commercial arbitration as a popular means of resolving disputes relating, in particular, to cross-border transactions and projects, has required all those offering services in this field, including arbitral institutions and other rule-makers, arbitrators and counsel, to adapt to a constantly evolving landscape as well as the expectations of users that the process will truly deliver on its promises of fairness, neutrality and efficiency.

The year that has just passed has been particularly rich in developments reflecting both the increasing diversity and maturity of international commercial arbitration practice.

At an institutional level, established arbitral institutions have, thus, adopted further initiatives to ensure that users have easier access to their services. For example, in January 2014, to better serve its US and Canadian users, the Paris-based Secretariat of the ICC's International Court of Arbitration began to accept the filing of Requests for Arbitration through SICANA, its newly-established, affiliated office in New York, where ICC cases are also now being managed for the first time by a New York-based team of lawyers. For its first 80 years, all of the ICC's arbitrations were managed by staff in Paris. Today, the Secretariat's staff work out of Paris, New York and Hong Kong. Meanwhile, the Singapore International Arbitration Centre (SIAC), one of Asia's leading institutions, established its first overseas liaison office in Mumbai, India, and has also recently appointed an American for the first time as its President. These are only the latest examples of a trend begun years ago of "internationalizing" arbitration institutions, which increasingly seek to shed their local or regional identity.

As arbitral institutions themselves continue to become more international, so has the trend continued of practitioners attempting to harmonize practices and procedures, in the interest of providing for greater transparency and predictability in the conduct of international arbitrations and ensuring a level playing field. Of particular note, in October 2014, the International Bar Association revised their widely-used IBA Guidelines on Conflicts of Interest in International Arbitration. Those Guidelines are intended to provide guidance to arbitrators and others concerning the disclosure obligations of international arbitrators and to assist in assessing their independence and impartiality. One of the new issues that the drafters of the revised Guidelines were required to confront is the possible need for the disclosure of relationships with third-party funders, a reflection of the relatively recent increase in the number of third-party funders who are using their access to capital to fund claimants in international commercial arbitrations. The adoption by the IBA of the new Guidelines on Conflict of Interest followed the adoption, just a year before, of Guidelines on Party Representation in International Arbitration, which represent a novel and controversial effort of the IBA to address the absence, in international arbitration proceedings, of specifically applicable rules of conduct for the parties' representatives (usually, but not always lawyers). Cognizant that legal counsel that represent parties in international arbitration hail from all over the world, and that there is no centralized "bar" that governs professional conduct in international proceedings, many within the arbitration community have long called for the promulgation of an appropriate ethical code. The IBA Guidelines, thus, represent the first attempt by an international organization to formulate such rules. More recently, the London-based LCIA has become the first international arbitration institution to add to its arbitration rules "General Guidelines for the Parties' Legal Representatives," which are to apply to all counsel appearing on behalf of parties to LCIA arbitrations governed by the new Arbitration Rules adopted by the LCIA in 2014. It remains to be seen whether other arbitral institutions follow the LCIA's lead.

The concept of an ethical code being policed by arbitrators nevertheless remains a controversial idea. Some members of the international arbitration community take the view that an independent body, and not the arbitral tribunal, should police such misconduct. For example, the Swiss Arbitration Association has called for the creation of a transnational body to which instances of ethical misconduct could be referred.

Regardless of which perspective prevails, such developments show ongoing and active concern within the arbitration community concerning the standards that should apply to the behaviour of counsel in international commercial arbitrations, if for no other reason than to ensure the fairness and integrity of the proceedings.

Further, the arbitration community remains ever focused on improving efficiency in the arbitral process and on ensuring that rules are kept up to date in order to accommodate the increasingly complex needs of users. In the wake of changes to many arbitration rules in recent years to address issues arising in the context of multi-party arbitrations, the AAA's International Centre for Dispute Resolution, thus, adopted revisions to its arbitration rules in 2014 that provide a framework for assessing whether joinder of parties or consolidation of arbitrations is permissible, and, if so, under what circumstances. Given that users typically measure efficiency in terms of time and cost, the ICC also issued in 2014 its "Guide for In-House Counsel and Other Party Representatives on Effective Management of Arbitration" as part of an effort to identify the possible impact on time and cost of the many procedural decisions that parties may need to make during the principal phases of an arbitration.

In all of these domains – international outreach, harmonization of practice and increased efficiency – efforts at improvement will undoubtedly continue to be made in the year ahead.