An increasing number of international disputes are being decided through international arbitration with large amounts of money at stake. A prevailing party may well decide to enforce the award in a jurisdiction that is not the seat of the arbitration, which follows a stricter standard of arbitrator disclosure. What standards of disclosure should an arbitrator follow when being considered for the panel? The ramifications of ignoring this issue or choosing the wrong standard could be devastating.
This chapter discusses this issue in the context of the Revised American Arbitration Association/American Bar Association Code of Ethics for Arbitrators in Commercial Disputes (Code of Ethics) and the International Bar Association (IBA) Guidelines on Conflicts of Interest in Commercial Arbitration (IBA Guidelines), viewed through the recent en banc decision by the 5th Circuit in Positive Software v. New Century Mortgage Corp.
II. The Code of Ethics
The AAA/ABA Code of Ethics imposes very stringent disclosure requirements on arbitrators—the most stringent of all such rules this author has seen—and thus could be viewed as the “gold standard” against which all other disclosure standards are measured. Canon I, paragraph A, sets forth the basic obligation of an arbitrator: “An arbitrator has a responsibility not only to the parties but also to the process of arbitration itself and must observe high standards of conduct so that the integrity and fairness of the process will be preserved.”