Arbitrators' obligation to disclose / Arbitrators' declaration of independence / Paris Court of Appeal's Rulings of 2 July 2013 and 29 October 2013 / Obligations of arbitration centres / AAA ICDR
Following our previous newsletters of 14, 17 and 24 August 2013; of 03 and 15 September 2013; of 24 October 2013 and of 15 and 17 November 2013, we are pleased to inform you of the two rulings recently passed by the Paris Court of Appeal which highlighted the precautions arbitrators must take and what should be done during their declaration of independence so as to ensure that their conduct is beyond reproach and that their judgement have legal value.
The 2 July 2013 ruling (LA VALAISANNE HOLDING LVH Company versus/ Mr. Guy B. C/o Matco Limited) which was featured in the last issue of Revue de l'arbitrage 2013.som.819, and on the quite recent decision of the Paris Court of Appeal of 29 October 2013 (Sarl Dukan de Nitya c/ VR Services) the Court avoided the judgment entered by an arbitrator who did not correctly disclose the ties he had with one of the parties (extract of motives below).
“Nullification on grounds of irregular composition of the arbitral tribunal is admissible considering the deliberately reductive and truncated nature of the declaration of independence made by one of the arbitrators although the appellant did not have any particular reason to doubt the latter's good faith and irrespective of the fact that information was perfectly accessible, right from the start of the arbitration process concerning the links between the arbitrator and one of the partners of the law firm acting as legal counsel to the other party.”
We do not know yet when the French Supreme Court (Cour de Cassation) will render its ruling on the Tecnimont affair; it is our wish that when the Court rules the ruling will definitively establish case law affirming a very strict obligation imposed on arbitrators and their law firms to disclose any conflicts of interests.
These obligations are usually very clearly set forth in the statutory rules of arbitration centres. Unfortunately, as some recent events have shown, especially the ICDR / Henri ALVAREZ / FASKEN MARTINEAU / Michaël LEE / 20 ESSEX Street affair, arbitration centres and the arbitrators they nominate in an administrative manner at times tend to have “an extremely loose” interpretation, to say the least, of these rules. We can only commend the judicial judge for this reminder that the place given to private conventional justice by States can only be justified if the fundamental pillars of arbitration (independence, impartiality and obligation of disclosure) are honestly and rigorously respected.