What Are Red, Orange, and Green Lists in IBA Guidelines?

The IBA Guidelines on Conflicts of Interest in international arbitration provide a comprehensive framework for managing potential conflicts of interest that may arise with arbitrators. To assist in determining the degree of a conflict, the IBA Guidelines categorize conflicts into three lists: the Red List, the Orange List, and the Green List. Each list represents different levels of conflict, ranging from situations that automatically disqualify an arbitrator (Red List) to those that do not pose a serious risk (Green List). These lists help ensure that arbitrators act impartially and independently, thereby maintaining the fairness of the arbitration process.

1. Red List

The Red List identifies situations that constitute clear conflicts of interest, which automatically disqualify an arbitrator from serving in a case. These conflicts are considered to be so severe that no waiver by the parties is possible. If any of the following situations apply, the arbitrator must not accept the appointment and is disqualified from serving in the arbitration:

• Financial Interest in the Dispute: The arbitrator has a direct financial stake in the outcome of the arbitration.
• Prior Representation: The arbitrator has previously acted as legal counsel or consultant for one of the parties in the case, especially on issues related to the dispute at hand.
• Personal Relationships: The arbitrator has a close personal relationship (e.g., family or intimate relations) with one of the parties or counsel, which could impair their impartiality.
• Financial Interest in a Related Party: The arbitrator has a financial interest in a related company or an affiliate of one of the parties.
• Prior Involvement in the Dispute: The arbitrator has previously been involved in the dispute in another capacity (e.g., as a witness, mediator, or expert).
• Prior Knowledge of the Case: The arbitrator has extensive prior knowledge of the subject matter of the dispute, such as previously serving as an expert on a similar issue.

Example:

If an arbitrator has been previously retained by one of the parties in a legal advisory capacity, this would fall under the Red List. The prior relationship presents a clear conflict of interest, and the arbitrator cannot proceed in the case.

2. Orange List

The Orange List contains situations that may give rise to a perception of bias or conflicts of interest, but are not automatically disqualifying. These situations require careful consideration and, in some cases, further disclosure or inquiry by the parties. In this category, the arbitrator’s independence or impartiality may be questioned, but it does not necessarily mean that the arbitrator must be disqualified:

• Prior Professional Relationships: The arbitrator has previously worked with or represented one of the parties or counsel in matters that are not directly related to the current dispute but may still raise concerns.
• Financial Interests: The arbitrator has a minor financial interest in one of the parties, such as a small shareholding, which could create a perception of bias.
• Close but not Immediate Relationships: The arbitrator has a personal relationship with a party, but it is not as close or significant as those listed under the Red List. For example, the arbitrator might have a professional acquaintance with one of the parties, but not a family member or close friend.
• Publicly Available Information: The arbitrator may have access to information that the parties are unaware of, which could raise concerns about impartiality, even though the arbitrator did not directly seek out this information.

Example:

If an arbitrator had previously represented one of the parties in a completely unrelated matter many years ago, this would fall under the Orange List. While this does not automatically disqualify the arbitrator, the party may request a disclosure, and the arbitrator may need to explain the extent of the prior relationship.

3. Green List

The Green List represents situations where there is no actual or perceived conflict of interest, and the arbitrator is free to proceed without disqualification. The Green List situations typically do not raise concerns about impartiality or independence. These include:

• Non-Disqualifying Past Relationships: The arbitrator may have had previous professional or social relationships with the parties or counsel, but these are not sufficiently close or recent enough to suggest any potential for bias.
• Routine Business Relationships: The arbitrator may have business relationships with one of the parties, such as being a customer or supplier, but the nature of the relationship does not pose any risk to impartiality.
• Publicly Available Information or General Knowledge: The arbitrator may have knowledge of general facts or issues relevant to the arbitration that is widely known or publicly available, but this does not affect their impartiality.

Example:

An arbitrator who has represented multiple clients in unrelated matters involving one of the parties in the past, without any ongoing or close relationship, would be considered to fall under the Green List. There is no current conflict of interest, and the arbitrator is free to act impartially.

Summary of Red, Orange, and Green Lists

Impact on the Arbitration Process

Clear Guidance for Arbitrators

The Red, Orange, and Green Lists provide clear guidelines for arbitrators to evaluate their own potential conflicts of interest. They help arbitrators understand the level of scrutiny that may be applied to their relationship with the parties and ensure that they remain independent and impartial.

Transparency for Parties

These lists provide transparency for the parties involved in the arbitration. They give the parties a structured way to assess potential conflicts of interest, making it easier to challenge an arbitrator if necessary.

Fairness of the Arbitration Process

By categorizing conflicts into three levels of severity, the IBA Guidelines help ensure the fairness and integrity of the arbitration process. Arbitrators are held to high ethical standards, and the parties can have confidence that the tribunal will act impartially.

Example

Scenario:

A company, Company A, initiates an arbitration with Company B. The appointed arbitrator has previously acted as legal counsel for Company B in an unrelated dispute, and Company A believes this could pose a risk to impartiality.

Red List:

If the prior representation was recent and related to the current dispute, the arbitrator would be automatically disqualified.

Orange List:

If the prior representation was unrelated and occurred several years ago, the arbitrator might still be subject to a challenge, but not automatically disqualified. The parties may request the arbitrator’s disclosure.

Green List:

If the arbitrator has only had casual, unrelated interactions with the parties, there would be no conflict, and they would be able to proceed without challenge.

Conclusion

The Red, Orange, and Green Lists in the IBA Guidelines on Conflicts of Interest offer a structured and transparent framework for evaluating potential conflicts in international arbitration. By clearly identifying the level of risk each situation represents, these lists guide both arbitrators and parties in maintaining the impartiality and independence necessary for a fair arbitration process.