New Highlights in International Arbitration

News

Two recent court judgments on arbitration decisions in France and the UK have shed light on some issues of regular interest to both practitioners and parties to arbitration. 

In France, the outcome of an arbitration was challenged in the French Court of Cassation on the basis of bias, while in the UK the High Court ruled on various elements of confidentiality in arbitration proceedings.

International Arbitration – France

A leading recent arbitration-related case Douala International Terminal (DIT) v Port Autonome de Douala (PAD) concerned bias within arbitration tribunals.  

At an ICC arbitration tribunal the parties disputed an agreement concerning the operation of a port in Cameroon. Upon its conclusion, PAD were dissatisfied with the tribunal’s partial award and sought its annulment before the Paris Court of Appeal (PCA), on the basis that the president of the tribunal had since publicly eulogised in writing the Claimant’s counsel, who had passed away. PAD alleged that in retrospect certain statements made questionable the independence and impartiality of the arbitrator. 

The PCA agreed and annulled the award. The Claimants referred the issue to the French Court of Cassation (FCC) which upheld the judgment of the PCA. 

The FCC emphasised that:

• An arbitrator must disclose any close personal or professional ties throughout the arbitration proceedings (which was not done in this case); 
• “Close” does not include academic or professional ties, except when they suggest personal closeness beyond the academic/professional interactions; 
• The phrases in the eulogy which showed exaggeration were to be regarded as a tribute to a respected figure, and not as a sign of improper influence; 
• The eulogy had contained an admission by the tribunal president that he had consulted DIT’s representative on “important choices” which led to doubts about his impartiality. The court stated that the president should have disclosed this information in the arbitration proceedings to allow parties to exercise their right to challenge. 

France (and Paris in particular) are an important seat for international arbitrations and this decision reaffirms the standard of disclosure required. Failure of an arbitrator to disclose information about their relationship with any party may result in the annulment of the award. While cursory professional and/or academic relationships do not cross the threshold for disclosure, any which do (such as a friendship in a professional context)  must be disclosed. It is at the arbitrator’s own discretion what information to disclose, while keeping in mind the potential negative consequences of non-disclosing important information. 

The threshold at which arbitrators have a duty of disclosure differs across arbitration institutions. Many institutions like those in Bulgaria choose to comply with UNCITRAL and thereby enforce a threshold of factors which may give rise to doubts about impartiality, independence or both of the arbitrators. Bulgarian practice indicates family and similar ties as well as business relationships with and repeated appointments of the same arbitrator as key bias factors. You can find out more about how arbitrator bias is dealt with in Bulgaria in our article Challenges of Arbitral Awards and Proceedings for Impartiality.

International Arbitration – United Kingdom

In Mordchai Ganz v. Petronz FZE and Abraham Goren [2024] EWHC 1011 (Comm) arbitration confidentiality went under the spotlight.  

The dispute concerned the authenticity of a share purchase agreement and therefore of the validity of the arbitration clause included in it and the competence of the arbitral tribunal. The London Court of International Arbitration (an arbitral institution in London) (LCIA), found the SPA inauthentic and denied the competence of the tribunal. The High Court agreed. 

The English Commercial Court overcame the objections of Mr Goren, the second defendant, so as to publish a non-anonymised judgment related to the arbitration proceedings, stating that there were a number of procedural points of interest for the public. The court emphasised that:

• Parties’ expectations of confidentiality must be weighed against the public interest in open justice (a fundamental principle of English jurisprudence);
• Publication of judgments and open justice bring transparency and confidence in the administration of justice;
• The LCIA rules were, in the view of the Court, not themselves capable of preventing publication. In particular, Article 30 of the LCIA Rules did contain an undertaking to keep awards and material in the arbitration confidential but given the finding that the arbitration agreement had been forged, Mr. Goren had not and could not rely on the fact that he had entered into an arbitration agreement with an expectation of confidence. Moreover, the Court commented (though this was strictly obiter) that the supervisory jurisdiction of the Court was an entirely separate process to the arbitration and the Rules could not per se bind the Court whether or not to maintain the confidentiality.
• If the concern had been that the judgment would damage the reputation of a party, the party had no remedy in the circumstances: the High Court found that any reputational damage would be caused by the conduct of the party itself and not by the decision of the court to publish the judgment.

The conflict between  right to privacy and protection of personal data and transparency of the justice system is addressed by the TJENI Project with the support of the Council of Europe. The project took place between 2022-2024 and proposed solutions for anonymisation of judgments for their publication. Although Bulgaria did not participate in the project, in Bulgaria the courts deal with the same conflict by keeping a publicly available database of anonymized versions of the judgments, containing court motives. Otherwise, the Bulgarian courts keep their own registers of non anonymized judgments, but without motives. 

The judgment of the English Commercial Court highlights that parties to arbitration proceedings should be wary that the confidentiality they may enjoy in those proceedings will be weighed against the public interest once the dispute reaches a supervisory court. The bare argument that there is no particular public interest in a given case will likely be given short shrift where the court can evidence even minor procedural points of interest. Moreover, any such argument would also need to overcome the broader public interest in scrutinising the activity of the courts and maintaining transparency in the administration of justice. 

Arbitration Highlights in Short

The recent case from France emphasised on the importance of impartiality in arbitration proceedings, while the one from the UK highlighted the comparison between parties’ interests and public interest and transparency in the administration of justice. While bias is considered a reason for an arbitration decision to be annulled, public interest is regarded as a key factor when weighing up parties’ confidentiality expectations against transparent administration of justice.