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Conflict of interest in arbitration: the example of the OHADA and ruling of the French Supreme Court by Dr. Joseph Kanga

14 Feb 2012

droit-ohadaThe arbitration vetting (obligation of independence and impartiality) enshrined in Articles 6 and 7 of the OHADA Uniform Act on Arbitration Law is one of the attractive aspects of legal and judicial systems of the OHADA in Africa.

Indeed, the penalty for breach of duties of arbitrators' independence and impartiality and other ethical rules in business litigation settled under the influence of the OHADA law is strictly a fact guaranteed by the Common Court of Justice and Arbitration of the OHADA.

In comparative law of arbitration, this requirement enshrined by the European Community legislature in 1999 is experiencing a renewed vitality and interest (in French law, see Civ. 1st, October 20, 2010, 2 rullings, D. 2010 . Pan. 2933, pers. Clay, ibid. News. in 2589, pers. X. Delpech, JCP 2010. 1286, pers. Seraglini, ibid. 1306, pers. Le Bars and Juvenal; LPA Feb 21., 2011, p. 17 , notes Henry, and Dr. proc. 2011. 17, note Asfar Cazenave, RJ com. 2011. 80, note Moreau V. equal., in the case Tecnimont, Civ. 1st, November 4, 2010, D. 2010 . Pan. 2933, pers. T. Clay, LPA 2011, No. 36, p. note 17 and Henry, on remand, V. Reims, November 2, 2011, RG 10/02888, Cah. Arbitration 2011. in 1109, notes from T. Clay. See also the IBA Guidelines on Conflicts of Interest in International Arbitration, May 22, 2004 approved by the Council of the International Bar Association). The OHADA legislator's intention to clean the function of arbitrator was reinforced by Article 12, paragraph 1, of the UNCITRAL Rules as revised in 2010.

Pedagogically well chiseled, the French Supreme Court ruling confirms in its judgment of February 1st, 2012 that the arbitrator (this is an obligation and not an option), “before accepting the mission, disclose any circumstance likely to be regarded as affecting impartiality in order to allow the party to quickly exercise, if applicable, his right of challenge”. In line with the jurisprudence Tecnimont du 2 novembre 2011jurisprudence of Tecnimont, November 2nd, 2011 (see newsletters of Dic.15th, 2011, Nov 29th, 2011, Nov.19th 2011, Nov.13th, 2011 and Nov 8th, 2011), the civil French high court aims to point the finger at a practice which seriously undermines the credibility of international arbitration: the practice of “arbitrators home”. Indeed, the fact that an arbitrator be appointed by a party regularly creates between the party and this “private judge” a sort of “current business” inconsistent with the appearance of impartiality and independence expected of the arbitrator. In such circumstances, personal interests and those of the arbitrator's law firm, if any, are in clear breach of the duties of independence and impartiality which they are responsible.

Judicial review is an essential tool for ensuring compliance with the arbitrator's duties. It is for this reason that the arbitration system of the Common Court of Justice and Arbitration of the OHADA is now a model. At a time when the credibility of other systems of international arbitration, particularly in North America, is seriously undermined by massive conflicts of interest, -generally not revealed and not sanctioned by an effectively challenge of the concerned arbitrators-, this OHADA model is particularly the spearhead of moralization of the arbitration function. Indeed, everyone has in mind a clear case of conflict of interest involving an arbitrator & partner in a major Canadian law firm, which currently defrays the chronic and arouses great emotion in the world, -usually discreet-, of international arbitration. In this case, and despite the seriousness of the conflict of interest, the concerned arbitral institution had refused to challenge the involved single arbitrator, then the latter having resigned without officially recognizing his error, and allowing his award to continue to have an appearance of international legitimacy, creating further prejudice to the aggrieved party.

It is more than clear that, in fact, the independence and impartiality of arbitrators are a determinant key of the credibility of the arbitration and that any breach of revelation from the arbitrators shall be punished with the utmost severity by the concerned Centre for International Dispute, first and foremost. The OHADA Arbitration brings this judicial guarantee that is sorely lacking in many private arbitration mechanisms, particularly in North America.

We are glad in this regard to bring to your attention the judgment of February 1st, 2012 by the French Supreme Court on a question of apparent arbitrator's impartiality and its importance for his appointment. We also enclose a brief comment thereon.

It is very clear from this judgment that it is the arbitrator's responsibility to disclose any circumstance likely to be regarded as affecting impartiality in order to allow the party to exercise, without delay, if any, his right for disqualification.

Let us hope that the practice of international arbitration, including the United States and Canada, follow the example of the OHADA arbitration system and finally also draw these common sense principles affirmed by the Tecnimont ruling, then the ruling of February 1st, 2012 by the French Court of Cassation.

Joseph KAMGA, J.D.
President of the Association for the Efficiency of Law
and Justice in the OHADA space (AEDJ), Cameroon
Email: joseph.kamga@aedj.fr

Published on 2012-02-14, 2:39 pm