Author: Megan K. Niedermeyer*
Published: April 2015
Description: The international arbitration community has often been (irreverently) lauded as an “old boys’ network,” intrinsically interconnected in its approach and susceptible to the pitfalls of self-dealing. The unique nature of international arbitration as a practice makes any attempt to address potential ethical quandaries a difficult task; by its nature, international arbitration brings together lawyers from diverse jurisdictions, to resolve disputes according to privately devised rules, in a seat or locale that can be devoid of any obvious connection to the parties at play. In 2004, in response to this lack of clarity the International Bar Association put forth the IBA Guidelines to provide further direction for how to best address the ethical issues typically arising in the course of international arbitration. Though these Guidelines were recently updated in 2014, the updates consist of finite revisions and clarifications rather than a move towards a cohesive set of rules that can be applied, with salience, across jurisdictions. The challenge for arbitral ethics remains: these guidelines, developed by an organization without the power to discipline, lack teeth and have failed to coalesce a tipping point of international arbitration players to converge towards the IBA’s uniform set of ethical standards. This begs the question: in the cross-jurisdictional practice of international arbitration, whose ethical standards apply, and how should the rules of the game be written?
There is no doubt that the practice of law is increasingly global; especially in the context of large law firms, lawyers across offices, jurisdictions, and continents routinely work together on the same matters to solve their clients’ problems by applying a combination of local, national, and international laws, regulations, and best practices. Accompanying the wider trend of globalization has been the growth of the field of international arbitration. As capital spreads deeper and wider across markets, complex cross-border transactions are the new normal and have become routine. In an effort to reduce the risks associated with parties, investments, and contracts residing in various countries, companies increasingly turn to international arbitration as the preferred method to settle eventual disputes. American Lawyer magazine estimated that as of August 2013, about 120 international arbitration actions, totaling over $1 billion each, were pending at arbitration tribunals around the world. The growing popularity, and even…
*The author is an Associate in the Silicon Valley office of White & Case, LLP. She holds a JD from the University of California, Berkeley School of Law and a MSc from the London School of Economics. This article reflects solely the personal views of the author.