Introduction

Arbitration is a form of adjudication that not only resolves the dispute between the parties who have selected this method of private adjudication but also serves the justice system by virtue of the arbitral award that is rendered at the end of the arbitration process. As those in the position of conducting the proceedings and rendering the awards, arbitrators are indisputably the most important element of arbitration. Arbitration proceedings may only be fair and equitable if carried out by impartial and independent arbitrators. Arbitrators are subject to various obligations and responsibilities prior to, during and even after arbitration proceedings are concluded. Such obligations and responsibilities may arise from the national laws governing arbitration, any agreements between the parties or in the case of institutional arbitration, the applicable institutional rules. However, the obligations of the arbitrators are not limited to those set forth by the aforementioned rules. Arbitrators are also subject to certain ethical obligations. Due to the judicial nature of the service they provide by resolving disputes and the legally binding nature of the award they render, much like judges, arbitrators are required to possess a highly-developed sense of ethics. This Code has been prepared by the Istanbul Arbitration Association and sets forth the ethical rules the arbitrators must comply with. The decision-making process carried out by arbitrators will only be perceived as fair and just by all the persons and institutions involved if the arbitrators possess the qualities specified in the Code of Ethics and act in compliance which such Code through the arbitration proceedings.

Application of the Code

The Istanbul Arbitration Association’s Code of Ethics for Arbitrators will apply under those circumstances where it has been expressly stated that such Code will be applicable. Some of the matters covered by this Code may also be regulated under laws governing arbitration, any agreements between the parties or in the case of institutional arbitration, the applicable institutional rules. In such cases, this Code shall not supersede laws governing the arbitration, any agreements between the parties and in the case of institutional arbitration, the applicable institutional rules and this Code will only be in force and applicable to the extent that it is not contrary to such. An arbitrator’s ethical obligations start at the moment he or she receives a request to serve as an arbitrator and continue until the end of the proceedings and in some instances, may continue even after an arbitral award has been rendered.

The main purpose of this Code is to ensure the fair and proper conduct of the arbitration proceedings and establish a means to serve as a guide on how to embody the intangible attributes required of arbitrators such as impartiality, independence, fairness, honesty, competence, conscientiousness, discreetness and prudence in practice. The principle of proportionality shall be taken into account when applying and interpreting the ethical obligations set out in this Code.

1. FAIR, JUST AND SWIFT PROCEEDINGS

1.1. The arbitrator shall conduct every stage of the arbitration proceedings independently impartially and in a fair and just manner and shall recuse him or herself on his or her own initiative where such conduct is not possible.

1.2. The arbitrator shall treat the parties equally, fairly and equitably and shall not represent any of the parties. To this end, the arbitrator shall not, either on behalf of or against, any party engage in any behavior that could constitute a violation of the right to a fair trial or infringement of the right of defense of any one of the parties and shall avoid any expressions or actions that could create such an impression.

1.3. During the course of the proceedings, the arbitrator shall give each party sufficient and reasonable opportunity to present its claims and defenses, ensure that the parties have an opportunity to submit evidence, protect each party’s legal right to be heard at each stage of the proceedings and observe the principle of equal treatment of all parties.

1.4. In order to ascertain the issues pertaining to the actual dispute before him or her, the arbitrator shall meticulously examine all petitions, documents, evidence, opinions, reports and statements submitted by the parties and resolve the dispute after careful consideration.

1.5. The arbitrator shall not be biased during oral proceedings, shall take note of/observe the methods used in asking questions and giving opinions and shall avoid any attitude, behavior or expression that would reveal his or her opinions on important issues in advance of the rendering of the award and shall avoid any disputes or confrontations with the parties. 1.6. The arbitrator shall closely monitor the progress of the proceedings and shall take necessary care and steps to ensure that the arbitration proceedings are carried out swiftly and concluded within the set timeframe.

2. ARBITRATOR’S ACCEPTANCE OF HIS/HER APPOINTMENT AND EXECUTION OF

HIS/HER DUTIES

2.1. The prospective arbitrator may accept an appointment provided that he or she is confident that he or she is able to carry out his or her duties in an impartial and independent manner. In case the prospective arbitrator has any doubts, he or she must decline appointment.

2.2. The prospective arbitrator should only accept appointment if he or she has sufficient knowledge of the language of the arbitration and is competent to resolve the dispute, otherwise the prospective arbitrator should decline the appointment. 2.3. By accepting appointment, the arbitrator undertakes to devote sufficient time to the execution of his or her duties.

2.4. The arbitrator shall perform his or her duties as arbitrator personally.

2.5. The arbitrator should not resign or withdraw except where required by this Code or where unexpected circumstances have occurred that have made it impossible or extremely difficult for the arbitrator to continue to perform his or her duties.

2.6. The arbitrator shall not assume the role of a conciliator or mediator during the arbitration proceedings.

3. IMPARTIALITY AND INDEPENDENCE OF ARBITRATORS

3.1. From the moment the arbitrator accepts appointment, he or she must be impartial and independent and must remain impartial and independent throughout the arbitration proceedings.

3.2. Impartiality means that the arbitrator should be equidistant to the parties, should not show any preferential treatment to one party over the other and should not be prejudiced or be biased regarding the merits of the dispute. Partiality on part of the arbitrator consists of any attitude or action that could create the impression that he or she does not intend to conduct fair and just proceedings and has no concern for rendering a fair award and could be interpreted as any behavior contrary to the principle of equality of the parties.

Independence means that the arbitrator, in his or her position as the decision-maker, is able to act wholly in line with his or her free will and judgment throughout the proceedings and when ruling on the dispute. Within this context, an arbitrator is independent if he or she has no past or present direct or indirect personal or professional ties with the parties in particular and any person or organization that is or may have an interest in the dispute in general, if he or she does not in any way benefit from the award rendered and is free of any and all connections and relationships that could be used to pressure or affect his or her thoughts and free will as set forth in this clause.

3.3. If the arbitrator is or subsequently becomes aware that he or she cannot act impartially and independently as expected, he or she shall promptly take all steps as may be required under the circumstances including recusing him or herself or withdrawing. If all parties ask the arbitrator to withdraw then the arbitrator must withdraw.

3.4. The arbitrator shall not permit her/his material, business, professional, family or social relationships or responsibilities to affect his or her actions or decision.

3.5. The arbitrator may not use his or her appointment to prioritize his or her personal or private interests and must not act in any manner that would create the impression that he or she is in a special position that could be affected by other persons

4. DUTY OF DISCLOSURE

4.1. Prior to accepting appointment the prospective arbitrator must notify the parties as to whether

1. a) he or she has any direct or indirect economic or personal interest in the outcome of the arbitration,
2. b) he or she, his or her family, employees or business partners have any known current or past economic, professional or personal relationships that could affect the arbitrator’s independence or impartiality in the mind of any party
3. c) he or she possesses any previous knowledge regarding the dispute as well as the scope and extent of such knowledge,
4. d) there are any other matters, relationships and interests as may be required to be disclosed under the agreement between the parties, applicable institutional rules or the law governing the arbitration.

4.2. The duty of disclosure arises when the prospective arbitrator is approached regarding being the prospective appointment and shall continue throughout the arbitration proceedings.

4.3. Prior to accepting the appointment and during his or her service as arbitrator, the arbitrator shall exert the necessary care and effort and make sufficient inquiries in order to determine the existence of any connections and circumstances which may fall within the scope of the duty of disclosure as provided for under article 4.1.

4.4. Where there is any doubt as to the necessity of disclosure, the circumstances should be construed in favor of making a disclosure.

4.5. The arbitrator shall promptly give written notice to the parties identified below of any circumstances that arise subsequently and could justifiably cast doubt as to his or her impartiality or independence., Unless otherwise specified in the agreement between the parties, the applicable institutional rules or the law governing the arbitration, the notice shall be given to each of the parties and all other arbitrators adjudicating the dispute.

5. COMMUNICATION WITH THE PARTIES

5.1. Any communication between a prospective arbitrator prior to the formation of the arbitral tribunal or an appointed arbitrator with a concerned party in the absence of the other party will only be permitted under the circumstances stated below and subject to the specified restrictions:

1. a) While the appointment of a prospective arbitrator is being considered, the prospective arbitrator:

• may ask questions regarding the identities of the parties, their representatives or the witnesses as well as the general nature of the dispute and
• may answer questions directed to him or her by one of the parties or their representatives with the purpose of ascertaining whether he or she is suitable and qualified for the appointment. During such dialogue the prospective arbitrator may obtain information from one of the parties or their representatives regarding the general nature of the dispute but must not permit any discussion on the merits thereof. Any such communication must remain limited to the purpose of assessing whether any circumstances exist that could affect the arbitrator’s impartiality and independence and ascertaining the arbitrator’s competence with respect to the dispute in question as well as how much time the arbitrator should devote to the arbitration proceedings. An arbitrator should ensure that any party requesting contact with him or her limits the dialogue to this scope as well. b) In the cases where two party-appointed arbitrators are expected to select the third arbitrator, each may consult and exchange views with the party which appointed him or her with regard to the selection of the third arbitrator. 5.2. The arbitrator shall not make any unilateral contact with the parties or their representatives at any time during the arbitration proceedings. In the event of such contact, this contact as well as its content shall promptly be notified to the other party or parties and the other arbitrators. Procedural matters pertaining to the arbitration , or confirming the date or location of a hearing and the like are not included in this prohibition. 5.3. Apart from oral proceedings, any communication with the parties shall be in writing. 5.4. When an arbitrator contacts one of the parties in writing, he or she shall send a copy of the content of such communication to the other parties and shall send or ensure that others send a copy of any written communication concerning the dispute that has been sent only to the arbitrator and has not yet been sent to the other parties. 5.5. If an arbitrator discovers that another arbitrator is engaged in inappropriate communications with one of the parties that could adversely affect the arbitration proceedings, he or she shall notify the other arbitrators and the parties of such.

5.6. As of the moment he or she receives the request to serve as arbitrator, the arbitrator shall neither directly or indirectly accept any material item or gift from any of the parties for any reason whatsoever at any stage of the arbitration.

6. TRUST AND CONFIDENTIALITY

6.1. The arbitration proceedings, the hearings held during the proceedings, deliberations between the arbitrators and information obtained as a result thereof as well as the arbitral award are all confidential and the arbitrators undertake to safeguard the trust placed upon them and to observe the principle of confidentiality.

6.2. The arbitrator or any person who has served as an arbitrator in the past shall not disclose any confidential information he or she may have obtained during the arbitration proceedings in which he or she has served as arbitrator to third parties and shall not use such confidential information to benefit his or her own interests or to affect or damage the interests of others.

6.3. The arbitrator shall take all necessary precautions to protect trade secrets and confidential information and to ensure that all persons – regardless of the capacity in which they are involved – participating in the arbitration respect the confidentiality of the proceedings.

6.4. The arbitrator shall keep any matters and written correspondence pertaining to the arbitration proceedings and award confidential and not disclose to third parties.

6.5. The arbitral tribunal’s deliberations or the views of any one of the arbitrators on these deliberations shall never be disclosed.

6.6. During the arbitration proceedings or any subsequent period, the arbitrator shall not disclose the arbitral award nor disclose or make use of any confidential information he or she has obtained as a result of the arbitration, except for information of which disclosure is permitted in writing by virtue of agreement of the parties or the arbitration rules. Any information already in the public domain by no fault of the arbitrator or any information that the arbitrator is legally required to disclose in response to an official request from courts or other government institutions and agencies are not included in this provision.

7. FAIRNESS IN DETERMINING ARBITRATION COSTS AND FEES

7.1. The arbitrator shall take all necessary steps and precautions and act as may be expected from a prudent arbitrator in order to ensure that the costs of arbitration do not rise excessively during the course of the proceedings and to avoid unnecessary costs and delays

7.2. The arbitrator shall determine reasonable fees and costs and take into account the relevant circumstances of the case including the nature of the dispute and the conduct of the proceedings when doing so.

7.3. The arbitrator shall not unilaterally contact any party or its representative with regard to supplementary payments or expenses.

7.4. The arbitrator shall not request an increase in his or her fee during the arbitration except when it is justified.