Velimir Zivkovic moderated a discussion with independent arbitrator Knud Jacob Knudsen of Knudsen Arbitration, alongside contributions from Matej Pustay, Niamh Leinwather, and audience members, on a question that arbitration practitioners keep circling back to – the issue of conflicts of interest. The immediate catalyst was a Norwegian Supreme Court decision—discussed as having been handed down in May of the previous year—that drew heavily on the IBA Guidelines on Conflicts of Interest in International Arbitration, prompting Knudsen’s pointed challenge: if courts and institutions are using the Guidelines as the practical yardstick, are they still “just” soft law—or are they hardening into something that functions like binding rules?

The orthodox position: “soft law” by design

Knudsen began by anchoring the formal baseline: the IBA Guidelines expressly state they do not override applicable national law, arbitral rules, or other binding instruments. They are drafted as an assistive tool—not a rulebook with legal force. National courts have often reiterated this non-binding character.

The case that prompted the debate

The Norwegian Supreme Court case arose from a shareholder dispute in an industrial property company. After an award was issued, the losing side challenged it on the basis that an arbitrator lacked independence because the arbitrator’s law firm was acting for one of the parties in an unrelated matter.

Key factual points emphasised in the court’s reasoning (as presented in the session):

• The other engagement was financially insignificant relative to the firm’s annual revenue.
• The arbitrator had no personal involvement; the work sat in a different department.
• Although the arbitrator was described as a key person in the firm, that alone did not outweigh the other factors.

The court also found a breach of the duty of disclosure (the arbitrator did not disclose the firm’s client relationship), but treated that breach as not decisive on impartiality/independence—more a factor that “bites” in borderline situations.

Where it gets interesting: how the court used the IBA Guidelines

The most consequential part of the decision wasn’t the outcome; it was the method.

Norway’s Arbitration Act (2004), based on the UNCITRAL Model Law, requires arbitrators to be impartial and independent, and permits challenges where circumstances create justifiable doubts. Knudsen’s point was that these statutory phrases are high-level and offer limited traction for messy, real-life scenarios—especially those unique to arbitration, such as lawyers acting as arbitrators.

So the Supreme Court turned to “international sources” and treated the IBA Guidelines as a serious interpretive aid, including:

• General Standard 2 (the “reasonable third person” test).
• General Standard 6 (the idea that an arbitrator may be identified with their firm/employer, but that a fact-specific assessment is still required).
• The Red/Orange List distinction for law-firm relationships—specifically, the dividing line between a significant commercial relationship (waivable red list) and firm services that do not create such significance (orange list).

A practical consequence of the court adopting that taxonomy: the “red vs orange” classification starts to look less like optional guidance and more like the backbone of the legal analysis. Knudsen described this as the court effectively letting the Guidelines’ structure do a great deal of the work in determining when firm-level conflicts should disqualify an arbitrator.

The takeaway Knudsen pressed: “normative value” without formal binding force

Knudsen was careful not to claim the Guidelines override statute. His sharper argument was functional: it matters less that they are formally non-binding if they are being used to interpret binding national law. In practice, an arbitrator in Norway cannot safely dismiss the IBA Guidelines as “nice to have”; the risk calculus changes once a supreme court treats them as the main interpretive lens for independence, identification with a firm, and disclosure.

He also highlighted a broader reach: this was not an international case in the usual sense—it involved Norwegian parties—yet the IBA Guidelines still played a central role. That, in his view, strengthens the argument that their gravitational pull now extends well beyond purely international disputes.

Discussion: comparative perspectives and practice realities

Zivkovic asked whether, in Norway, the Supreme Court decision is likely to become entrenched as a reference point. Knutsen’s view was that Supreme Court rulings sit at the top of Norway’s hierarchy of sources, so lower courts will follow—and the decision’s reliance on the IBA Guidelines elevates the Guidelines themselves, not merely the paragraphs cited.

Pustay noted that many jurisdictions have statutory tests that are similarly general (“impartial and independent”), so it is unsurprising—perhaps even desirable—that courts reach for a widely accepted, detailed instrument. He framed this as a step towards consistency rather than fragmentation.

Leinwather raised a key “what else could they use?” challenge. Knudsen pointed to Norwegian preparatory works and some analogy to cases involving expert judges, but maintained that these sources often provide limited practical guidance for arbitration-specific problems—hence the attractiveness of the IBA’s detailed lists.

On comparisons, the group touched on the reality that some apex courts explicitly label the Guidelines as soft law while still citing them repeatedly (Halliburton in England was mentioned as an example of this pattern). The implication: courts may deny binding force in theory while conferring substantial authority in application.

Institutions and the “silent hardening” effect

A particularly practical moment came when Knudsen described how the Guidelines operate in the real ecosystem of challenges: counsel frequently cite them; arbitrators consult them as a “traffic-light” risk check; and institutional bodies (he referenced his experience with the SCC Board) routinely consider them in challenge assessments. This is one route by which “soft law” hardens—through repeated, predictable use by the actors who shape outcomes.

A side debate that mattered: disclosure mechanics

Laura Noerrung Poulsen raised a disclosure nuance from the Norwegian decision: where an arbitrator is appointed via a court or appointing authority, is disclosure to that body enough, or must the arbitrator ensure disclosure reaches the parties directly? Knudsen explained the case’s unusual appointment pathway and noted a split view (including a dissent) on whether a separate, direct-to-parties duty should apply regardless of the appointment mechanism.

Practical takeaways

• Treat the IBA Guidelines as the operational baseline, even if they are “non-binding” on paper—especially where national courts are using them to interpret statutory independence tests.
• Firm relationships are not one-size-fits-all: significance (commercial weight, proximity, involvement) matters, and the red/orange distinction is increasingly influential in how that significance is framed.
• Disclosure failures can be outcome-shaping in close cases; even where not decisive, they undermine confidence and complicate defensibility.
• Appointment route affects disclosure expectations: if an appointing authority sits between the arbitrator and parties, don’t assume “someone else will pass it on” unless the rules and process clearly support that assumption.