Advance Waivers of Arbitrator Conflicts of Interest in International Commercial Arbitrations Seated in New York – Vol. 27 No. 1

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Author: Report of the International Commercial Disputes Committee of the New York City Bar Association

Published: October 2016

Description: During the arbitrator appointment process, arbitrators are required to disclose potential conflicts of interest and any facts that may give rise to an appearance of partiality. During that process, some arbitrators seek to obtain from the parties an “advance waiver” by which the parties agree that if certain conflicts of interest arise in the future, the arbitrator may continue to serve. To illustrate, in one case reported by a major arbitral institution, an arbitrator asked the parties to agree to the following conditions: in a global law firm of about 2000 lawyers … I cannot exclude that lawyers in this firm will act in the future for or against one of the parties or their affiliates. I will not act myself for or against any of the parties or their affiliates during the arbitration proceeding. At the same time, I will disclose any future act or circumstance that might, from the perspective of any of the parties, put my independence as an arbitrator into question.

Some waiver requests go further and ask the parties to agree expressly that the arbitrator need not make additional related disclosures. For example, in another case reported by an arbitral institution, a prospective arbitrator requested the parties to “accept that current or future member firms of [his group of firms] are free . . . to accept instructions from or against any of the parties to this arbitration . . . without any duty on [his] part to make any disclosure in connection with any such instructions.”

Though it is not uncommon for international arbitrators, particularly those in global law firms, to seek advance waivers of potential conflicts of interest, there is only limited available guidance concerning the use, validity, and enforceability of such waivers. With the exception of the ICC, the major international arbitration institutions have not issued rules or formal policy guidance on the subject. Further, while the October 2014 revision of the International Bar Association Guidelines on Conflicts of Interest (the “IBA Guidelines”) recognizes the “increasing use” of advance waivers, the Guidelines take no “position as to the validity and effect of advance declarations or waivers,” beyond opining that such waivers “do not discharge the arbitrator’s ongoing duty of disclosure.” Instead, the Guidelines advise, “[T]he validity and effect of any advance declaration or

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