Delays in Arbitration: When Client Interests and Ethics Come into Tension
Published in Idealex.press
Is there a tension between a lawyer’s duty to exhaust all lawful means to exercise the rights of the client and the duty of procedural good faith? Three lawyers share their views on the matter and its relationship with professional ethics.
By Felipe Riffo
The general expectation is that, both in arbitration and in proceedings before the ordinary courts, lawyers will act in a cooperative spirit toward the opposing party and before the arbitrator or judge, avoiding unjustified delays. However, that expectation coexists with the duty to protect the client’s interests by using all legitimate mechanisms and tools made available by the legal system.
In the field of arbitration, Mónica van der Schraft, international arbitrator and partner at MVJV Arbitration, notes that most proceedings are governed by standards of conduct widely observed by litigants: “However, at times a tension arises between the lawyer’s obligation to exhaust all lawful means to exercise the rights of the client and the duty to conduct litigation in good faith.”
The arbitrator explains that there are express provisions on the matter. The Chilean Code of Professional Ethics for Lawyers, for example, establishes in Article 96 the obligation to respect procedural rules and to refrain from abusing the right to file remedies, particularly where they are intended to cause undue harm to the opposing party. Similarly, the procedural rules of the International Chamber of Commerce provide that the conduct of the parties’ representatives may be taken into account when determining costs, which constitutes a concrete control mechanism within the proceedings.
Van der Schraft puts it this way: “This can be seen clearly in international arbitration when costs are determined. Tribunals often record that certain submissions or actions were purely dilatory and did not contribute to the progress of the proceedings. That element has an impact on the costs order and operates, in practice, as a sanction,” she explains, adding that in domestic arbitration this criterion is not always applied with the same intensity.
The challenge for those sitting on an arbitral tribunal lies in identifying when a legitimate procedural strategy crosses the line and becomes a tactic aimed solely at obstructing the progress of the case. According to the Chilean lawyer, this is a deeply case-specific question: “There is no specific rule that determines it, but the arbitrator is in the best position to distinguish which issues are genuinely disputed and relevant to deciding the merits of the case, and which actions are intended only to hinder the conduct of the proceedings.”
From a broader perspective, encompassing not only arbitration but also litigation before ordinary courts, Ramiro Mendoza, president of the Chilean Bar Association and also an arbitrator, argues that the key lies in the qualifying term itself: “The word is ‘unnecessarily’. If a matter is postponed out of neglect, personal convenience, or lack of interest, that is reprehensible. But sometimes postponement responds to the client’s interest, to a strategy concerning other matters, or even to the situation of the court that will hear the case.”
Along these lines, Mendoza stresses that an effective defence may involve choosing the most appropriate procedural moment: “Sometimes it will be necessary to wait. For example, if I notice that a particular court clerk has issued decisions that are harmful to the interests I represent, and I consider it preferable to wait for the regular judge to return, that strategic decision does not constitute undue delay or breach the ethical standard.”
Denying the Award
With regard to delays that occur after an award has been rendered, when the unsuccessful party turns to the ordinary courts in an attempt to annul or modify it, Mónica van der Schraft explains that the scope of that review depends on what was agreed in the arbitration clause. The parties may have waived all means of challenge, or only some, such as an appeal.
The parties may also agree to a second-instance arbitral tribunal responsible for reviewing first-instance decisions. “However, the waiver is not absolute, because there are remedies that cannot be waived by law, such as cassation on procedural grounds for lack of jurisdiction or ultra petita, and the disciplinary complaint remedy for misconduct or abuse by the arbitrator. The conflict arises in the interpretation of those avenues,” she explains.
As to the disciplinary complaint remedy, the arbitrator notes that much of the controversy is concentrated there and that everything will depend on the approach adopted by the courts in defining which conduct amounts to misconduct or abuse: “I am not sure there is an abusive use of this tool, since the law expressly recognizes the right to file it, and its exercise could not be characterized as bad faith when these are mechanisms that cannot be waived. What does happen is that, through extraordinary remedies with a specific purpose, parties sometimes attempt a disguised appeal, seeking a full re-examination of everything discussed in the case.”
Van der Schraft adds that the filing of disciplinary complaints and cassation remedies on procedural grounds against awards is a common practice, often aimed at obtaining a broad review of both the factual and legal background: “There is a tendency to use these instruments as an attempt to reopen the entire debate. Nevertheless, as long as the law establishes them as non-waivable, their mere filing does not, in itself, constitute an abuse.”
Despite these tensions, the specialist is optimistic about the development of arbitration in Chile and its place within the local legal culture. In her view, the courts have internalized the logic of this special jurisdiction: “Chile is a mature seat in arbitration, both because of the incorporation of arbitration clauses and because of the way proceedings are conducted and the respect that, in general, is afforded to decisions rendered by arbitral tribunals.”
The Structural Problem in Peru
From the perspective of the Peruvian legal system, Adrián Simons, partner at Simons & De Noriega and professor at Universidad del Pacífico, warns that many attempts to disregard an award involve abusive practices associated with bad faith and reckless conduct.
“The problem is that the system has deteriorated due to phenomena such as procedural harassment through the filing of multiple judicial actions. Parties no longer wait for the arbitration to conclude and resort, for example, to constitutional protection actions to challenge the constitution of the tribunal or decisions on challenges to arbitrators that were unfavourable to them. Unfortunately, some constitutional judges have improperly suspended ongoing arbitrations,” he says.
“There is no point in having an impeccable award if it cannot be enforced,” says Simons, who attributes the problem faced by Peru —concerning court decisions that set aside awards through improper constitutional protection actions— to the way the judiciary has been structured in recent years.
The academic served as faculty adviser for the study titled “The Precariousness of Our Judicial System Reflected in Judicial Provisionality”, prepared by the Procedural Law Study Circle of Universidad del Pacífico. The report states that, as of June 2025, the Judiciary had 1,560 tenured judges, equivalent to 42% of the total, compared with 2,154 provisional and supernumerary judges, representing 58% of a universe of 3,714 judicial positions nationwide. The figures show that tenured judges do not constitute a clear majority and that provisionality, understood as the sum of both temporary categories, remains structurally predominant.
In concrete terms, 58% of judicial posts in Peru are occupied by substitute judges rather than judges appointed to permanent positions. “That institutional fragility makes it easier for mostly provisional judges to grant constitutional protection measures or admit claims aimed at neutralizing the effectiveness of an award, disregarding the arbitration clause. That is the situation our country is facing today,” says Simons.
The Peruvian professor also identifies a significant deficit in deontological oversight regarding the use of dilatory tactics, particularly within professional associations. In his view, bar associations have not exercised effective supervision: “The Lima Bar Association, the largest in the country, does not carry out adequate disciplinary control. Its ethics tribunal does not meet the standards required for rigorous professional practice.”
Even so, Simons values the performance of the commercial chambers, especially the First Commercial Chamber of the Superior Court of Justice of Lima, which has maintained a consistent line of case law rejecting annulment applications that disguise challenges to the merits of the dispute: “The commercial chamber, particularly the first one, has helped strengthen legal certainty regarding arbitral awards.”
Telling the Client What They Do Not Want to Hear Is Also Part of the Job
When faced with an adverse award, the key lies in conducting a rigorous professional assessment of the real prospects of success of any potential remedy. Mónica van der Schraft maintains that this ability is acquired above all through experience.
“It is not a skill that is taught specifically. Undergraduate studies provide certain foundations in procedural law and ethical training regarding lawyers’ duties, the information that must be provided to the client, and the need to maintain critical judgment,” she notes. She explains that procedural law is a fundamental subject, as it makes it possible to understand the purpose of each remedy, its requirements, and the circumstances in which it is or is not available.
She also adds that every litigator must assume that conflict involves a real risk: there will always be one party that prevails and another whose claims are not satisfied. For that reason, she emphasizes the importance of recognizing when a matter is lost: “Regardless of the number of challenges filed, there will always come a final point. At that moment, one of the parties will obtain what it is seeking and the other will not, either fully or partially. At that stage, the outcome must be accepted.”
Along the same lines, Adrián Simons believes that lawyers must have sufficient clarity to explain that the client has the right to bring claims, but not to do so indiscriminately. “There is an ethical duty to explain where their powers begin and where they end. Exercising rights at all costs, without weighing the consequences of abusive use, is the real problem. And in many law schools that practical dimension is not taught with sufficient emphasis. Telling the client what they do not want to hear is also part of the job.”
From a different perspective, and speaking from the standpoint of the ordinary courts, Ramiro Mendoza observes that the legal system provides tools to address procedural bad faith, including corrective powers that allow a court, in response to reckless applications, to require the posting of a guarantee through the deposit of a specified sum before admitting further filings. As to a client’s insistence on continuing to litigate through successive remedies, Mendoza emphasizes that the substantive decision does not belong to the lawyer.
“If a remedy exists, the professional generally has a duty to file it. Otherwise, the lawyer may be exposed to a civil liability claim or disciplinary reproach before the relevant bar association, if the client believes they were poorly defended. As a lawyer, I represent the interests of others; I am not the judge. If I do not have the necessary conviction to maintain that defence, I must withdraw from representing my client. What I cannot do is substitute the will of the person who has placed their trust in me. That is why this is a profession based on trust,” Mendoza states.
The president of the Chilean Bar Association adds that, together with strengthening the teaching of the Code of Ethics in universities from the standpoint of professional practice, it is essential for litigators to demand procedural good faith and promote sanctions in response to conduct that causes unjustified delays: “The tools are available within the legal system. Sometimes it is easier to make a public criticism than to use the available procedural mechanisms, but the response must be given within the system.”
Other publications:
— Mónica van der Schraft Takes Part in International Arbitration Events in Madrid
— New ICC Rules: Transparency and Efficiency in International Arbitration
