Originally from: Soft Law in International Arbitration

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Introduction

1. Problems of conflicts of interest increasingly challenge international
arbitration. Arbitrators are often unsure about what facts need to be
disclosed, and they may make different choices about disclosures than
other arbitrators in the same situation. The growth of international
business and the manner in which it is conducted, including interlocking
corporate relationships and larger international law firms, have caused
more disclosures and have created more difficult conflict of interest
issues to determine. Reluctant parties have more opportunities to use
challenges of arbitrators to delay arbitrations or to deny the opposing
party the arbitrator of its choice. Disclosure of any relationship, no
matter how minor or serious, has too often led to objections, challenge
and withdrawal or removal of the arbitrator.

2. Thus, parties, arbitrators, institutions and courts face complex
decisions about what to disclose and what standards to apply. In
addition, institutions and courts face difficult decisions if an objection or
a challenge is made after a disclosure. There is a tension between, on the
one hand, the parties’ right to disclosure of situations that may
reasonably call into question an arbitrator’s impartiality or independence
and their right to a fair hearing and, on the other hand, the parties’ right
to select arbitrators of their choosing. Even though laws and arbitration
rules provide some standards, there is a lack of detail in their guidance
and of uniformity in their application. As a result, quite often members
of the international arbitration community apply different standards in
making decisions concerning disclosure, objections and challenges.