Under Article 18(4) of the Japan Arbitration Act (“JAA“), arbitrators have an ongoing obligation to disclose circumstances which may give rise to justifiable doubts as to their impartiality or independence. In the latest judgement in a series of appeals relating to an application to set aside an arbitral award, the Japanese Supreme Court confirmed that this disclosure obligation will only be breached where an arbitrator is aware of such circumstances but fails to disclose them, or could have learned of such circumstances through a reasonable investigation but did not. Continue reading
Tag: arbitrator independence
In a recent challenge to an award made under s68 of the English Arbitration Act 1996, in Symbion Power LLC v Venco Imtiaz Construction Company the English Court considered the issue of unilateral communications between a party-appointed arbitrator and its appointing party. Further, and of particular interest to parties who choose arbitration to keep the resolution of their disputes confidential, the Court also addressed the circumstances in which a judgment resulting from an application to challenge an award may be published without anonymization of the parties' names. On this point, a party seeking to maintain confidentiality will need to be able to provide evidence of the positive detriment which it will suffer if the judgment is not anonymized.
In a remarkable judgment of 17 February 2015, rendered further to a rarely-seen application for revision of an arbitral award (which in this case lead to the retraction of the award), the Paris Court of Appeal overturned an arbitral award issued by a three-member tribunal in Paris in 2008 in favour of Bernard Tapie (Tapie), a French businessman and ex-politician, against the Consortium de Realisation (CDR), a French stated-owned company. The Court found that the award was tainted by fraud on the ground that there had been collusion between one of the arbitrators, Mr Pierre Estoup (Estoup) (a former president of the Versailles Court of Appeal), and Tapie and his counsel, Me Lantourne (Lantourne), with Estoup deliberately and systematically influencing the arbitral tribunal’s decision-making process in favour of the interests of the party that he intended to promote. Tapie and his group of companies had received € 403 million in damages under the award in question.
The dispute at the origin of the now-retracted award was highly publicised, because it involved one of France’s most famous businessmen of the 80’s, a French state-owned company, the French Government at the time of the arbitration (including the then Ministry of Finance, Ms Christine Lagarde, now Chairman of the IMF), and an arbitral tribunal composed of three renowned French legal personalities (alongside Estoup, sat Mr Jean-Denis Bredin, a well-known lawyer, and Mr Pierre Mazeaud, a law Professor and former President of the French Constitutional Council who acted as Chairman of the arbitral tribunal).
The judgment is a rare example of a successful motion for the revision of an award under French law. The French Court first classified the arbitration as domestic and then concluded that the facts disclosed in a related criminal investigation evidenced links between Estoup, Tapie and Lantourne which had been fraudulently concealed by Estoup – demonstrating a lack of independence, which had been confirmed by the arbitrator’s attitude during the arbitration proceedings. A handful of court judgments have been overturned in similar circumstances, which gives some indication as to what the legal consequences and next steps following the retraction of the arbitral award may be. However the precise legal consequences are still to be determined.