International Arbitration / Conflict of Interest / Declaration of Independence of Arbitrators / Liability of firms
2011-11-13 18:54
Because arbitration is an essential part of the OHADAC project, we consider useful to bring to your consideration the recent ruling by the French Reims Court of Appeal chaired by Counselor Dominique Hascher, dated November 2nd, 2011.
This "Technimont" ruling cancels an arbitration award made by a “conflicted” arbitration Court because one of the arbitrator, in this case the President of the arbitral Court, worked in a law firm committed as legal counsel with one of the parties to the arbitration and because the arbitrator did not reveal this situation, contrary to its obligations.
This decision extends the scope of official disclosure of the arbitrators to their relations, as counselors, with the parties.
That case, -very carefully redacted-, will be a milestone for arbitration. It concerns a particularly serious and current problem which will be widely discussed in the next issue of the Journal of Arbitration No. 3-2011 in which you will find an important article by Professor Daniel Cohen on this topic: "Arbitration and Conflict of interest", with many recent judgments in the matter.
The parties to an arbitral dispute must, to preserve their interests and respect for the rule of law, require a comprehensive declaration of independence from the arbitrators, especially from the President of the arbitral Court or the sole arbitrator. Declarations of independence should be the widest possible.
In the Caribbean, the news of international arbitration is now marked by a very similar case involving one of the largest business law firm in Canada, a case probably more severe because of the involved amounts and because of the nature of the conflict of interest.
This case is generating a great emotion in the world of law and international arbitration, in the United States, Canada, Europe, Africa, Latin America and of course in the Caribbean. But it will probably contribute positively to change the tide and bring the arbitrators to a very strict compliance with their reporting obligations and independence; law firms in which some partners are arbitrators have also strict ethical obligations to respect, if they don't want to see their responsibility and their lawyers directly involved in similar cases.
