In the context of international arbitration, Parties’ Representatives come from a variety of backgrounds; not all exercise the same standards of professional conduct. On 25 May this year, the IBA Council adopted IBA Guidelines on Party Representation in International Arbitration. The guidelines seek to set minimum and uniform standards of conduct for those who represent parties in international arbitration – regardless of a representative’s professional background.
Failure to comply with the Guidelines can have serious consequences. These include the drawing of adverse inferences about the weight of the evidence or legal arguments advanced by a party, and cost orders against the infringing party.
The Guidelines will apply when parties have so agreed or where the arbitral tribunal has determined that it has authority to apply them.
In international arbitration, party representatives are often subject to different and potentially conflicting rules, including those of the party representatives’ home jurisdictions, the arbitral seat and the place where hearings physically take place.
The Guidelines are intended to provide greater uniformity and a basic standard holding that party representatives should act with integrity and honesty and not cause unnecessary delay or expense to arbitration proceedings.
The Guidelines will apply in the following circumstances:
- where the parties have agreed to adopt the Guidelines in their arbitration agreement or at any time subsequently; or
- where the arbitral tribunal has determined that it has authority to rule on matters of Party representation in order to ensure the integrity and fairness of the arbitral proceedings.
The Guidelines are not intended to displace otherwise applicable mandatory laws, professional or disciplinary rules or agreed arbitration rules that may be relevant or applicable to matters of party representation.
The Guidelines apply to “Party Representatives” which are defined as “any person, including a Party’s employee, who appears in an arbitration on behalf of a Party and makes submissions, arguments or representations to the Arbitral Tribunal on behalf of such Party, other than in the capacity as a Witness or Expert, and whether or not legally qualified or admitted to a Domestic Bar”.
Importantly, the Guidelines will effectively extend beyond the Party Representative to the Party itself when the Party Representative is acting within the authority granted to it by the Party, as under the IBA Commentary on the Guidelines, “an obligation…on a Party Representative is an obligation…of the represented Party, who may ultimately bear the consequences of the misconduct of its Representative”.
The Guidelines set out the following principles:
- Ex Parte communications: a Party Representative must not, unless one of the exceptions applies1, engage in any communications with an arbitrator concerning the arbitration without the presence of or knowledge of the opposing party.
- Submissions to the tribunal: a Party Representative should not make any knowingly false submission of fact to the arbitral tribunal.
- Documents: a Party Representative:
- should inform the client of the need to preserve documents that are potentially relevant to the arbitration;
- should not make any request to produce, or any objection to a request to produce, for an improper purpose such as to harass or cause unnecessary delay;
- should advise their client to take and assist in taking reasonable steps to ensure that a reasonable search is made for documents that a party has undertaken, or been ordered, to produce and that all non-privileged, responsive documents are produced; and
- should not suppress or conceal or advise a party to suppress or conceal documents that have been requested by another party or that the party has undertaken or been ordered to produce.
- Witnesses and experts: a Party Representative:
- must identify himself or herself and the party he or she represents before seeking any information from a potential witness or expert;
- should seek to ensure that witness statements and expert reports reflect the witness’s / expert’s own opinion; and
- should not invite or encourage a witness to give false evidence.
Remedies for misconduct
Under the Guidelines, the arbitral tribunal may apply the following remedies for breach of the Guidelines:
- Admonish the Party Representative.
- Draw appropriate inferences in assessing evidence relied upon or legal arguments advanced.
- For example: if a party has disposed of documentary evidence that is potentially relevant to a live issue in the proceeding (or provides false documentary evidence in relation to that issue), the tribunal may infer that the proper documents would not have supported the party’s arguments. If so, it is likely that that party’s argument will be rejected.
- Consider the misconduct in apportioning the costs of the arbitration.
- Take any other appropriate measures to preserve the fairness and integrity of the proceedings.
The Guidelines address a limited number of issues and do not go into detail in setting out the required standard in respect of each issue. However, they will serve to provide a reference point for parties of the minimum standard required and the foundation for tribunals to give directions and orders providing a level playing field between the parties.
Click here to view the Guidelines.