A changing arbitration world and the IBA role

Claus von Wobeser¹
Von Wobeser y Sierra, S C
cvonwobeser@vwys.com.mx

In the next two years it will be 20 years since I was Co-Chair of the Arbitration Committee of the International Bar Association (IBA) (2005-2006). During those couple of years, I had the privilege of organizing two editions of the IBA International Arbitration Day with esteemed colleagues. In this article, I reflect on the evolution of international arbitration and the role of the IBA in supporting its development.

Reviewing the evolution of arbitration over the course of this time, there has been an extraordinary development of international arbitration with increased complexity, which has followed a growth of the challenges we identified 20 years ago. Luckily, there has been a significant proliferation of soft law to attend and mitigate these challenges, including the conduct of those involved in arbitration proceedings: parties, counsels, arbitrators and institutions. All of these factors have endorsed the important role that arbitration users play in its continued evolution making sure that it remains the natural and preferred method of resolving international disputes.

Among the users of arbitration, institutions have undoubtedly played a very important role in the last 20 years. In particular, the role of the IBA has been fundamental for the consolidation of international arbitration thanks to the variety of soft law instruments that it has issued over the years and its use by the arbitration community.

The IBA was established in 1947, shortly after the creation of the United Nations, with the aim of protecting and advancing the rule of law globally.² Subsequently, and as part of those efforts, the IBA created Committee D (Procedures for Settling Disputes) in 1983 to develop instruments that would contribute to more effective dispute resolution. Part of the instruments Committee D developed was the first edition of the IBA Rules on the Taking of Evidence (‘Rules on Evidence’), whose original name was the Supplementary Rules Governing the Presentation and Reception of Evidence in International Commercial Arbitration in 1983.³ It was not until 1999, when the first amendment of the ‘Rules on Evidence’ took place, that a proper working group was established to assess the impact and reception of those rules to propose updates and modifications.⁴ Since then, the IBA and its Arbitration Committee have been at the forefront in consolidating true international arbitration. 

Prior to the IBA's catalogue of guidelines and rules, arbitration was basically divided into arbitrations with common law characteristics and arbitrations with civil law characteristics. In other words, arbitrations were tailored to the legal tradition of the companies involved in the proceedings and their lawyers. For example, arbitrations with common law characteristics used a discovery-type procedure for the taking of evidence and arbitrations with civil law characteristics were based on civil litigation proceedings. Thus, each arbitration proceeding was inspired by the domestic procedures of the different applicable jurisdictions.

Gradually, international arbitrations with disputes between users from different jurisdictions started to increase and a problem was uncovered, mainly that each user wanted to shape the proceeding as it was used to in its jurisdiction. Therefore, the need to homogenize and streamline arbitration became more and more imperative.
From my perspective, the IBA’s catalogue of rules and guidelines came to change international arbitration. In fact, most international commercial and even investment arbitrations today adopt one or more of the IBA's rules or guidelines on different issues. In 2016, the IBA published a Report on the Reception of the IBA Arbitration Soft Law Products (‘Report’) that confirms the extensive use the IBA’s soft law instruments, in particular the Rules on Evidence and the ‘IBA Guidelines on Conflicts of Interest in International Arbitration (‘Guidelines on Conflicts of Interest’).

For example, with respect to the Rules on Evidence, according to the Report,⁵  nearly half (48 per cent) of the arbitrations known to respondents worldwide referenced the Rules on Evidence and reference to them was above 50 per cent in all regions but Latin America (30 per cent) and Africa (25 per cent).
In approximately 80 per cent of those arbitrations in which reference was made to the Rules on Evidence, the arbitral tribunal consulted them on the basis that they represented non-binding guidelines. In the remaining 20 per cent, the Rules on Evidence were considered binding. Yet, even in those arbitrations in which the tribunal consulted the Rules on Evidence as guidelines only, it overwhelmingly followed them (in more than 90 per cent of the cases).

The Report also showed that the Rules on Evidence are most frequently referenced in commercial, rather than in investment treaty arbitrations, and there does not appear to be a difference in their use between common and civil law jurisdictions.

The Report confirms that the IBA Rules on Evidence play out an important role in the promotion and harmonization of efficient procedural frameworks for arbitrations worldwide. The findings of the 2016 report heavily informed the amendment of the Rules on Evidence in 2020. As a direct consequence of the COVID-19 pandemic and considering the reality of many arbitrations pending in 2020, the modifications of 2020 were oriented to incorporate technological advancements, such as the addition of the term ‘remote hearing’ and high-level commentary surrounding the fairness and efficiency of remote hearings, including in the context of witness examination.⁶ This should arguably be interpreted as proof of the continuous dynamism of the Rules on Evidence as one of the most accepted and used soft law instruments.

For its part, the Guidelines on Conflicts of Interest are the IBA’s most commonly referred-to instrument in arbitration proceedings.⁷ The Report discloses that these guidelines are used in 67 per cent of decisions resolving issues of conflicts of interest. Perhaps more importantly, in 69 per cent of the decisions that referenced the Guidelines in solving a conflict-of-interest issue, the decision-maker chose to follow the Guidelines.⁸ 

Over time, the Guidelines on Conflicts of Interest have become a go-to guide for arbitrators, counsel, and arbitral institutions in identifying conflicts of interest and assessing the need for disclosure. These Guidelines were first published in 2004 and have been revised twice, in 2014 and this year. This latest revision incorporates suggestions by arbitration practitioners reported in a survey carried out by the Arbitration Guidelines and Rules Subcommittee in 2022. This survey confirmed that the Guidelines remained a useful and effective tool, and suggested areas where the Guidelines might need to be modernized or finetuned, for example, arbitrator disclosures; third-party funding; and issue conflicts, among others. The result are revised guidelines that place a particular emphasis on the need for a concerted effort, including arbitrators, counsel and parties, to ensure that the arbitration proceedings are conducted transparently, impartially and independently.⁹

In hindsight, I reckon that what was discussed almost 20 years ago is as relevant as ever. As I mentioned in my welcome remarks at the 9th IBA International Arbitration Day, arbitration, even with its challenges, is still the best method to resolve international disputes, providing a binding decision for the parties, and until we find a better method we are responsible for making it work in the best way possible. There is certainly no doubt that the work of institutions such as the IBA fulfils this goal, and one proof of this is the IBA Arbitration Committee’s practice of assessing every ten years whether its rules and guidelines should be adapted.¹⁰

Nonetheless, it is the task of all the arbitration community to maintain arbitration as the preferred method of dispute resolution and to continue to enhance it and find creative solutions to adapt to the new challenges of an evolving society.

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1  Founding Partner at Von Wobeser y Sierra, S.C. in Mexico City.
2  International Bar Association, About the IBA, available at https://www.ibanet.org/About-the-IBA.
3  Roman Khodykin, Carol Mulcahy, Nicholas Fletcher, ‘A Guide to the IBA Rules on the Taking of Evidence in International Arbitration’, (2019), p. 1.
4  Roman Khodykin, Carol Mulcahy, Nicholas Fletcher, ‘A Guide to the IBA Rules on the Taking of Evidence in International Arbitration’, (2019), p. 6.
5  Roman Khodykin, Carol Mulcahy, Nicholas Fletcher, ‘A Guide to the IBA Rules on the Taking of Evidence in International Arbitration’, (2019), pp. 1–9. For the original survey, see IBA, 'Report on the Reception of the IBA Arbitration Soft Law Products', available at https://jusmundi.com/en/document/pdf/publication/en-report-on-the-reception-of-the-iba-arbitration-soft-law-products.
6  Harry Nettlau, Zachary O'Dell and Till Hackstein, ‘An Examination of the 2020 Revision of the IBA Rules of Evidence’, 19:6 German Arbitration Journal (2021), pp. 315-322. 
7  IBA, ‘Report on the Reception of the IBA Arbitration Soft Law Products’ (2016), p. 30.
8  IBA, ‘Report on the Reception of the IBA Arbitration Soft Law Products’ (2016), p. 29.
9  Chiara Capalti and Giorgia Bizzarri, ‘The Revised IBA Guidelines on Conflicts of Interest: A Call to Action for Parties and Counsel?’ (2024), available at https://arbitrationblog.kluwerarbitration.com/2024/05/07/the-revised-iba-guidelines-on-conflicts-of-interest-a-call-to-action-for-parties-and-counsel/. 
10  IBA, ‘IBA Guidelines on Conflicts of Interest in International Arbitration Approved by the IBA Council’, (2024), Foreword.