The new LCIA Rules (2014) contain two provisions related to the obligation to act in good faith applicable to all participants in arbitration (Art. 14.5 and Art. 32.1) that might be considered both unexpected (in light of the common law tradition to disregard the concept of good faith) and forgotten (in recent commentaries and highlights related to the enactment of those new Rules). This obligation applies to all participants in arbitration, including the arbitrators and the arbitral institution, and not merely to the parties or their representatives. This is not an unprecedented move. Indeed, Art. 15 of the “Swiss Rules of International Arbitration”, Art. 23 of the “Cepani Rules” and Art. 26 of the rules of the “Corte de Arbitraje de la Cámara de Comercio de Madrid” (Art. 26), contemplate a provision setting forth a general principle of good faith in arbitration. However, in relation to other rules of arbitral institutions, these are the only examples.
This prompted the interest to analyse the existence and efficacy of the principle of good faith (and more particularly their corollaries such as the prohibition of “venire contra factum proprium” or “estoppel by representation”) in international arbitration. More specifically, it is interesting to ascertain whether or not good faith applies “universally” at the numerous levels and to the numerous players in international arbitration. More importantly, can we find a universal notion of good faith and its corollaries?
This article endeavours to address these issues and answer the fundamental and final question: are arbitrators and arbitral institutions obliged to act in good faith? The answer seems to be positive.ASA Bulletin