Rules of ethics in international commercial arbitration often require agreement among parties who may have a wide disparity in cultural and professional expectations for ethical practice. Even the best efforts to circumscribe the ethics of arbitration for parties in the international sphere have been challenging in light of these complexities. As argued below, it makes sense for arbitrators to approach ethical rules with a framework for decision-making—namely, John Rawls's "Justice as Fairness" theory of the social contract as applied to international commercial arbitration.
Ethical Principles Don't Come Easily
Some have recently questioned if "cultural differences make it impossible to develop a universal standard" of ethics in international arbitration. Brian Cooper, "Ethics for Party Representatives in International Commercial Arbitration: Developing a Standard for Witness Preparation," 22 Georgetown Journal of Legal Ethics 779, 781 (2009). This challenge is particularly difficult for the practice of the parties as opposed to the arbitrator. The International Bar Association (IBA) has recently acknowledged this difficulty in its IBA International Principles on Conduct for the Legal Profession when it noted that "no statement of principles or code of ethics can provide for every situation or circumstances that may arise," advising international practitioners instead to act "in accordance with the dictates of their conscience, in keeping with the general sense and ethical culture that inspires these International Principles." IBA International Principles on Conduct for the Legal Profession 11 (2011), available at http://www.ibanet.org/Publications/publications_IBA_guides_and_free_materials.aspx. The necessary generality of an approach to legal ethics in the international arena is evident as, for example, the IBA goes on to recognize that "[a] universally accepted framework for determining proper conduct in the event of conflicting or incompatible rules has yet to be developed." Id. at 20. While such guidelines are helpful, there is clearly more needed to provide a framework for ethical guidance in international commercial arbitration.
John Rawls's 'Justice as Fairness'
Since Rawls's publication of his ethical theory "Justice as Fairness" in 1971, U.S. judges have turned to it for guidance in domestic courts. See, e.g., Barnes v. Tools & Mach. Builders, Inc., 715 S.W.2d 518, 524 (1986) (Donnelly, J., dissenting); Davis v. Fulton County, Ark., 884 F. Supp. 1245, 1254 n.7 (E.D. Ark. 1995) (citing Rawls's A Theory of Justice and other social philosophers in arguing that states have obligations "to protect their citizens from private harms" because the contrary conclusion "would run counter to the most fundamental principles of political theory…."). Judge Donnelly of the Missouri Supreme Court, for instance, dissented from the majority in a 1986 strict liability case because, as he noted, the majority view "fails Rawls' test of fairness." Barnes v. Tools & Mach. Builders, Inc., 715 S.W.2d 518, 524 (1986) (Donnelly, J., dissenting). In supporting this argument, Judge Donnelly excerpted the following passage from Rawls's A Theory of Justice to explain the philosopher's "awesome contribution to the subject of distributive justice":
In justice as fairness the original position of equality corresponds to the state of nature in the traditional theory of the social contract. This original position is not, of course, thought of as an actual historical state of affairs, much less as a primitive condition of culture. It is understood as a purely hypothetical situation characterized so as to lead to a certain conception of justice. Among the essential features of this situation is that no one knows his place in society, his class position or social status, nor does any one know his fortune in the distribution of natural assets and abilities, his intelligence, strength, and the like. I shall even assume that the parties do not know their conceptions of the good or their special psychological propensities. The principles of justice are chosen behind a veil of ignorance. This ensures that no one is advantaged or disadvantaged in the choice of principles by the outcome of natural chance or the contingency of social circumstances. Since all are similarly situated and no one is able to design principles to favor his particular condition, the principles of justice are the result of a fair agreement or bargain. For given the circumstances of the original position, the symmetry of everyone's relations to each other, this initial situation is fair between individuals as moral persons, that is, as rational beings with their own ends and capable, I shall assume, of a sense of justice. The original position is, one might say, the appropriate initial status quo, and thus the fundamental agreements reached in it are fair. This explains the propriety of the name "justice as fairness": it conveys the idea that the principles of justice are agreed to in an initial situation that is fair.
Id. at 523–24 (internal citation omitted).
Clearly, Rawls is discussing distributive justice in society generally, but this approach has interesting implications in other contexts as well. To state the idea simply, decisions should be made in a given group according, as Rawls says, to "the principles that free and rational persons concerned to further their interests would accept in an initial position of equality as defining the fundamental terms of their association." John Rawls, A Theory of Justice 11 (1971). As a result, the "society satisfying the principles of justice as fairness comes as close as a society can to being a voluntary scheme, for it meets the principles which free and equal persons would assent to under circumstances that are fair." Id. at 13. In sum, Rawls defines his principles of justice as "those which rational persons concerned to advance their interests would consent to as equals when none are known to be advantaged or disadvantaged by social or natural contingencies." Id. at 19.
'Justice as Fairness' as an Ethical Guiding Principle
The method Rawls suggests would work well as a guiding principle for ethical decision-making in international arbitration. First, it is a better approach than rules-based guidelines because it allows certain flexibility to decision-making on ethical questions at the level of the individual arbitration (and presumably decided by the arbitrator at the request of the parties). The good faith use of Rawls's original position as a guideline for arbitrators to make ethical decisions in the course of arbitrations is likely to yield much more efficient and impartial decisions that are specific to the ethical question at hand. The application is simple as well. The arbitrator would merely consider any ethical issues on which the parties have not previously agreed, or on which accepted international convention is not clear by posing the question in the context of Rawls's original position. The guideline for resolution of such an ethical question in the arbitration would be the arbitrator's finding of what impartial parties in a position prior to the arbitration and without knowledge of their own interests in the proceedings would likely decide.
This approach makes sense in the context of international commercial arbitration because the situation has a similar contractual basis, only with parties holding competing interests "contracting" to resolve their differences by arbitration rather than all members of an association joining to form a Rawlsian social contract. The original position in the arbitral process for settling ethical questions should approach the decisions that a good faith arbitrator believes that the parties would have made if they were constrained to make choices that are mutually agreeable, and therefore fair, to all concerned. Although this approach relies more heavily on the individual judgment of the arbitrator, the necessarily general nature of the existing ethical rules in international arbitration requires a good deal of decision-making by the arbitrator anyway. The usefulness of recognizing a Rawlsian approach is to elevate a sense of fairness to preeminence in the application of existing ethical rules and the resolution of new ethical questions in the course of the arbitration.
The bottom line is that any guideline for ethical decision-making that specifies rules in any particular detail is unlikely to fully meet the needs of international commercial arbitration in light of cultural or national procedural differences. Rawls had the foresight to recognize a certain practicality in his approach when he posited that "[w]e should view a theory of justice as a guiding framework designed to focus our moral sensibilities and to put before our intuitive capacities more limited and manageable questions for judgment." Id. at 53. Such an approach makes sense and has the utility to be applied for any ethical question in international arbitrations, as the arbitrator must make instant decisions that tend toward a process the parties can accept as reasonably fair. As a result, this approach is effective to complement any attempt at enumerating codes of ethics for international arbitration.
Keywords: litigation, commercial, business, ethics, international commercial arbitration, John Rawls, A Theory of Justice, justice as fairness, social contract theory
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