The Insider/Outsider Divide and the Ethics of Commercial Arbitrators
The Insider/Outsider Divide and the Ethics of Commercial Arbitrators
João Ilhão Moreira
ABSTRACT: Despite the general acknowledgment that arbitrators are bound by numerous professional and ethical obligations, little attention has been paid to the mechanisms that ensure that arbitrators fulfill these roles. When this topic is addressed within arbitral circles, there is a  general assumption that reputational mechanisms lead arbitrators to compliance. Some have challenged this notion, proposing that the arbitration market is too imperfect for these mechanisms to operate. This article adds to this debate by arguing that, while the arbitration market is indeed imperfect, some of its characteristics allow for the operation of a system of strong incentives for compliance. This article contends that the strategies of those selecting arbitrators lead them to heavily prefer candidates who show commitment to the norms of the field. It further argues that the arbitral community, arbitral institutions, and courts help enforce these norms by deterring infringements and facilitating the transmission of information regarding arbitrators. It notes, however, that this regulatory structure is most effective in influencing those operating in a long-term manner within the arbitral community, offering fewer incentives for those outside it to comply. Indeed, while arbitrators have been treated as a monolithic group, not all those who sit in arbitral panels are necessarily concerned with their long-term inner-community reputation and, therefore, may face different incentive structures in deciding whether to comply with the applicable ethical norms.

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