We refer to the newsletters dated: Oct. 14, 2014; Oct. 16, 2014; Jan. 16, 2015; Mar. 9, 2015; Mar. 25, 2015; Jun. 5, 2015.

As part of its actions to promote international arbitration and ethics of arbitrators, provided through their independence and impartiality, the site www.ohadac.com informs you that on December 16, 2015, the First Civil Chamber of the French Court of Cassation issued a remarkable judgement, confirming a decision of the Court of Appeals of Paris of October 14, 2014 canceling the enforcement of an arbitration award rendered by Mr. Henri Alvarez, partner in the law firm FASKEN MARTINEAU DUMOULIN LLP.

While the sole arbitrator Henri ALVAREZ ruled within the framework of an arbitration, his law firm, FASKEN MARTINEAU DUMOULIN LLP, published a press release on its web site welcoming its participation in a transaction of an amount of 660 million dollars on behalf of one of the applicants of the arbitration. The sole arbitrator Henri ALVAREZ had not revealed this important operation conducted by his law firm to the parties, and had rendered a sentence in favor of the clients of his law firm in March 2011. He was however solely in charge of judging this very serious dispute where the American clients of his law firm claimed several hundred million euros from a group from Guadeloupe.

On December 16, 2015, the French Court of Cassation decided to sanction this conflict of interests, legitimately casting suspicion on the decision and serious doubt on the independence and impartiality of the arbitrator Henri ALVAREZ in this case.

The Court of Cassation notes “that in September 2009, the sole arbitrator had signed a statement of independence asserting that the law firm Fasken Martineau, where he practiced as a lawyer, did not presently advise the company Leucadia National Corporation”. It then notes that “on December 15, 2010, the website of this firm had published information, resumed in January 2011 by a business magazine for lawyers, that the company Leucadia National Corporation had sold its interest in a Canadian copper mine, that it was assisted, in this operation undertaken since 2005 by a team of three lawyers of the firm Fasken Martineau, “specifying that” the debates, before Mr. Alvarez, were closed since August 2010 and the case adjourned for deliberation on the date when the existence of this advisory role was made public”.

The Supreme Court approves the position of the Court of Appeals, which “has thus revealed that the arbitrator had not mentioned his statement of independence, that the fact was not known to the AGI company prior to commencement of the arbitration, that in the course of arbitration proceedings, the obligation to engage in investigations regarding the independence of Mr. Alvarez were not incumbent upon it, given the guarantees he had provided during his statement, and that he had not revealed an obviously important operation for the law firm, in view of the considerable publicity made by the latter”.

The Court of Cassation concluded that “the Court of Appeals has hence correctly deduced that these circumstances, unknown to the AGI company, raise reasonable doubt about the independence and impartiality of the arbitrator, the arbitral tribunal having thus been irregularly constituted”. The amount of 5,000 euros is allocated to the group from Guadeloupe under Article 700 of the French Code of Civil Procedure.

This judgment therefore rejects the execution in France of a sentence non-compliant with public order as it was rendered by an arbitrator not offering sufficient guarantees in terms of impartiality. It appropriately refers to French jurisprudence on conflict of interests in arbitration, based on the notion of “common knowledge” in particular.