Author:
Bhumi Agrawal
Content writer, Law Colloquy
Introduction:
Alternative dispute resolution has become the new normal for people when it comes to resolving their dispute. Arbitration especially has received more acceptance in the past years than what was expected, due to its nature and process that it offers. Recently, due to Covid-19 people have adapted themselves for resolving disputes virtually and came up with the new normal of online arbitration. With the more and more recognition of arbitration, parties have started using unethical ways to win the arbitration, with increasing cost and time of the arbitration proceedings which are the true advantages for which parties opt for arbitration in the first place. Therefore, it became necessary to address these issues so that the parties can utilize the advantages which arbitration offers. Furthermore, there arises the need to curb these issues as they use the advantages of arbitration for their benefit.
In this article, the author will throw light upon one such issue, i.e., Guerrilla Tactics that are used by the parties to deceit the tribunal or the other party. The author would further discuss the reasons for the rise in such tactics and the possible solutions to combat the same. Furthermore, the author tries to make aware its reader of the possible threats in the arbitration proceedings.
What are the Guerrilla Tactics:
Guerilla Tactics primarily refers to the irregular warfare strategy whereby the opponent tries to win the fight and gain public support, at the cost of the enemy's loss. In simpler words, the opponent takes advantage of the enemy's weaknesses and practices unethical ways to win the war.
"The enemy advances, we retreat; the enemy camps, we harass; the enemy tires, we attack; the enemy retreats, we pursue.[1]" This is an example of guerrilla tactic as summarized by Mao Zedong during the beginning of the Chinese civil war.
Relationship of Guerrilla Tactics And Arbitration:
Parties enter into an arbitration agreement as it saves time and cost. Most importantly, outside court settlement does not ruin the relationship of the parties instead try to establish it. Over time, as arbitration became more and more popular people started using the proceeding as per their benefit and raise speculation of using unethical means during the proceedings. This unethical practice could include merely wasting time, asking extra cost, asking unnecessary document, defaming the party, assaulting or threatening the other party etc. These unethical practices could collectively be referred to as guerrilla tactics. The primary advantage of time and cost efficiency of arbitration is lost when either of the party professes these kinds of unethical practices. Due to these kinds of practices, the confidence of parties in arbitration as a justice delivery mechanism is shaken.
Factors Responsible For Rising In Guerrilla Tactics:
1. There is a lack of a framework that regulates the proceedings
Since the tribunal in international arbitration cannot punish the offending counsel as in the judicial proceedings, the counsel gets a chance to deviate the course of proceedings. Due to the absence of a framework that could provide for code of conduct of the counsel, the counsel exercises dominant position and try to influence the proceedings. Earlier, no law or regulation would provide for a framework for the process, but in 2013, the International Bar Association provided for guidelines for the representation of parties in International Arbitration. The IBA guidelines will be discussed further in detail. However, these guidelines will apply only if the parties have agreed for the same.
2. Limited power of the arbitral tribunal
The international tribunal lacks power in punishing the wrongdoer party or providing remedies to the aggrieved party. Due to which the party gets a chance to practice unethical means or guerrilla tactics. No law has given the power to the arbitral tribunal to go beyond its way and pass any order that will result in smoother proceedings.
3. Issue of impartiality and neutrality of arbitrators
In any arbitration proceedings, the counsel is appointed by the party and then the counsel together appoints the arbitrator. There might occur an instance wherein the arbitrator may gain likelihood for either party. This raises the chance of the counsel to indulge in more unethical practices and the concept of fairness and impartiality is lost in the process.
Measures for Combating This Issue:
1. Autonomy to the tribunal:
The most important way to curb the guerrilla tactic is by providing ample power to the tribunal so that the tribunal can punish the party in case of any wrong done. This would deter the parties from opting for any guerrilla tactics. The tribunal must be empowered to issue interim measures; this means the power of the court to pass orders that will provide temporary relief to either party before passing a final award. The court could grant interim relief only if it is satisfied that the parties could suffer irreparable loss if such relief is not granted and for the protection of subject matter of the dispute.
2. The agreement must include ethical conduct:
The parties could either provide for an ethical conduct clause in the arbitration agreement and breaching the same clause would render the offending party to provide remedies to the aggrieved party. The parties could even agree after the dispute has arisen so that both the parties can frame the agreement accordingly keeping the dispute in mind because the agreement that is drawn before the dispute usually misses out on many points that could create inconsistency during the proceedings.
3. Fast track settlement
Article 38(1) of the ICC rules provides the parties with an opportunity to draft a fast track settlement clause to shorten the time limit within which the proceedings must be concluded. This could be opted by the parties so that both parties cannot cause any delay in the proceedings and the award is rendered quickly. However, framing such a clause could be troublesome as the time within which the proceedings must be concluded could not be ascertained. Failing to provide the award within the time limit could create further difficulties for the parties.
4. Appointment of arbitrator
To make sure the independence and impartiality of the arbitrator, he must be appointed by the arbitration institution, this will reduce the chances of assumptions concerning conflict of interest in the proceedings as no person should be a judge in his own case. The arbitrator so appointed must be asked to disclose any conflict of interest fully and must not involve with either of the party in the absence of the other party. The arbitrator must try to have a hold of the proceedings and make sure that neither party exercises a dominant position over the tribunal or the other party.
5. Request of documents:
Many times it happens that merely to waste time, the counsels asks for unnecessary documents, the other party must inform the tribunal of the intention of the other party and the tribunal must take decision accordingly.
IBA guidelines
The IBA issued these guidelines in 2013, and the main motive of this guideline is to provide for the counsel conduct and party representation and maintaining fairness in the process. The guidelines explicitly provide for the applicability of the guideline, which will be applicable only if parties agree to the same wither wholly or in part. The guideline seeks to protect any possible guerrilla tactic by empowering the tribunal to take actions to maintain the integrity of the proceedings. The guideline restricts explicitly ex-parte communication between the arbitrator and the party representative, except in certain circumstances. Submissions to the tribunal, admissibility of witnesses and experts are well provided within the guideline. The guideline further provides for remedies to the aggrieved party in case of misconduct by the other party.
Although the guidelines try to cover everything the applicability still leaves scope for the parties for not opting for these guidelines and makes the room open for the counsel to practice the unethical tactics. Mandatory measures are required for the counsel conduct that would apply in every international arbitration.
Conclusion:
Arbitration being a very flexible process, some counsel tries to abuse this process by practising unethical tactics. If any party cannot frame a strong case from their side, they try to obstruct the proceedings. Instead of framing new laws and guidelines, emphasis must be made on making the arbitrators aware of such tactics, so that they can recognize and can take actions accordingly. In the case of institutional arbitration, the institutions must provide for the counsel conduct which the parties must adhere to whilst the proceedings. As of now, there is no solution to curb these unethical practices completely and the IBA guidelines fail to curb these practices. The counsels are filled with the zeal to win and with lesser laws to stop these practices, raise speculations whether arbitration proceedings deliver justice? Due to globalization, there is no way that the cross-border disputes are going to reduce. There is an urgent need to come up with some binding laws or practices that could help not only in eradicating this issue but will also reduce the cost and time of the process.
Disclaimer: Kindly note that the views and opinions expressed are of the author, and not Law Colloquy.
Reference:
[1] Mao Tse-tung, "A Single Spark Can Start a Prairie Fire", Selected Works, Eng. ed., FLP, Peking, 1965, Vol. I. p.124
