Gaillard’s Tribute Before the Paris Court of Appeal: Was Justice Seen to be Done?

THE AUTHOR:
Anastasia Medvedskaya, Associate at McNair International

An arbitrator must be independent and impartial in exercising their jurisdictional functions. This rule is largely embodied in national laws and arbitration rules, and simply cannot be impugned. The rationale for this rule is straightforward: the parties’ fundamental procedural rights should be respected and “the trust between the arbitrator and the parties must be continuously maintained”.[1] In a recent decision, the Paris Court of Appeal scrutinised the arbitrator’s obligation to disclose his close personal relationship with the counsel of one of the parties which was revealed as a result of the arbitrator’s publication of a post-mortem eulogy.

Background of the Dispute

On 10 January 2023, the Paris Court of Appeal set aside a partial award in the contract-based ICC arbitration between Douala International Terminal (“DIT”) and Douala Port Authority (“DPA”). The Paris Court of Appeal found that the tribute published by arbitrator Prof. Thomas Clay (tribunal chair) about the late Prof. Emmanuel Gaillard (counsel for the DPA) revealed a close personal relationship between them which the arbitrator had failed to disclose at the point of his nomination. The DPA first challenged the constitution of the Tribunal before the ICC and then before the Paris Court of Appeal. Whereas the ICC rejected this challenge, the French judge ruled that such lack of disclosure and the subsequently revealed closeness between a party’s counsel and the tribunal chair gave the respondent reasonable doubts regarding the arbitrator’s impartiality.

The underlying dispute arose out of a concession agreement concluded between a French logistics group, Bolloré, and a Cameroonian state-owned entity for the operation of a container port terminal in Douala. In 2018, the DPA lodged a new public tender for the concession and allegedly created conditions such as to exclude its previous concessionaire DIT from participation in the tender. The ICC Tribunal, chaired by Prof. Clay, rendered a partial award finding that the DPA’s decision to exclude DIT from the tender constituted a breach of contract.

No Waiver under Article 1466 of the French Code of Civil Procedure

DIT argued that the arbitrator’s challenge was not raised in a timely fashion and the DPA had therefore waived its right under Article 1466 of the French Code of Civil Procedure (“CCP”). To recall, pursuant to Article 1466 of the CCP, “a party who, knowingly and without legitimate reason, fails to invoke an irregularity before the arbitral tribunal in a timely manner shall be deemed to have waived the right to invoke it”. A year earlier, on 22 February 2022, the Paris Court of Appeal held that an application to set aside under Article 1466 of the CCP was inadmissible if a party failed to rely on ‘notorious’ (i.e., publicly available or well known) publications edited by an arbitrator (See, Thomas Granier, “A Party’s Failure to Timely Rely on Notorious Publications Edited by an Arbitrator Precludes the Setting Aside of an Award for Lack of Impartiality: Note on Paris Court of Appeal Decision of 22 February 2022”, ASA Bulletin, Volume 40, Issue 4, p. 822 et seq.). In French law, the right to challenge the validity of the award is waived unless the challenging party demonstrates that the underlying information was not notorious.

Moreover, pursuant to Article 14.2 of the ICC Rules “for a challenge to be admissible, it must be submitted by a party either within 30 days from receipt by that party of the notification of the appointment or confirmation of the arbitrator, or within 30 days from the date when the party making the challenge was informed of the facts and circumstances on which the challenge is based if such date is subsequent to the receipt of such notification”.

In this case, the Paris Court of Appeal found that the friendship between Prof. Gaillard and Prof. Clay was only revealed on 8 April 2021 (i.e., at the moment the eulogy was published) and therefore the challenge was filed on time (See, IN MEMORIAM – Emmanuel Gaillard (1952-2021), par Thomas Clay). Put differently, the friendship between the two Parisian arbitration practitioners was not well known until that time, which, crucially, fell after the arbitrator had been nominated. Accordingly, the DPA did not waive its right to raise arguments based upon Prof. Clay’s friendship with the claimant’s counsel at the set-aside stage.

Eulogy Revealed Close Personal Relationship which Should have been Disclosed

The French judge emphasised that, under Article 1456-2 of the CCP, the arbitrator has an ongoing duty to disclose “any circumstances that may affect his or her independence or impartiality”. The wording of this article is vague and the Paris Court of Appeal referred to the guidance set out in Article 11 of the ICC Rules which mandates disclosure of “any circumstances that could give rise to reasonable doubts as to the arbitrator’s impartiality”. In addition, the ICC’s Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration provides that, among other things, a “close personal relationship” between an arbitrator and the counsel of one of the parties or the counsel’s law firm should be disclosed (See, paragraph 27).

The Paris Court of Appeal very carefully rejected the argument that Prof. Clay had to disclose the fact that two of the tribunal members sat on PhD juries together (See, para. 56). Likewise, there was no duty to disclose academic ties between Prof. Clay and Prof. Gaillard (See, para. 60). The Paris Court of Appeal also agreed that post-mortem tributes would generally contain a certain level of “exaggeration inherent to funeral tributes”. Against this background, Prof. Clay’s words “I admired him and I loved him” were not by themselves sufficient to warrant disclosure (See, para. 62).

It is worth noting that Prof. Clay wrote a letter to the ICC on 28 April 2021 explaining that he had not seen the late Prof. Gaillard privately since 2019 and had never consulted him on arbitration matters. The Paris Court of Appeal rejected this explanation insofar as the arbitration started in 2019 and this “close personal relationship” should have been disclosed.

In the eulogy, Prof. Clay wrote: “I was looking forward to hearing again his impressive knife-edge pleadings, where his precision and overreaching vision seduced me much more than any histrionic outbursts. This meeting will not take place, nor will our regular meetings (…)” (See, paras. 62, 70).

The Paris Court found that while the eulogy did not “call into question the intellectual and professional integrity” of Prof. Clay, his statement, coupled with the admission of having consulted Prof. Gaillard “before making any important decision” (See, para. 70), was of such a nature as to raise justifiable doubts in the mind of the respondent (DPA) that the arbitral chair could decide the case with full independence and impartiality.

The main criteria assessed by the Paris Court of Appeal was the existence of reasonable doubts in the mind of the aggrieved party pursuant to Article 11 of the ICC Rules, as well as the ICC’s Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration (which served the French judge in interpreting the vague terms of Article 1456-2 of the CCP) (See, para. 42 – 44). Such doubts were found to be justified since Prof. Clay’s eulogy directly referred to the case in which he sat as chair arbitrator.

The French judge’s ruling is curious in two respects. First, the ruling contradicts an early finding of the ICC Court, which itself had rejected the chair arbitrator’s challenge. The French court therefore had its own interpretation of the ICC Rules and ICC practice recommendations and came to a different conclusion than the ICC Court. While the details of the ICC Court’s rejections are not publicly available it would be interesting to compare the two reasonings. It is therefore not clear whether the outcome of this case would have been any different if the arbitration was not governed by the ICC Rule. Second, DIT’s argument that the eulogy should be “interpreted in its context” having regard to “the emblematic figure of Prof. Gaillard in international arbitration” was not completely rejected by the Court, which acknowledged that the praise of an academic by another academic using superlatives, particularly as regards their practice as a lawyer and personal qualities, should not raise reasonable doubts on the arbitrator’s independence and impartiality (See, para. 39). But the fact that the particular case was mentioned in the eulogy seemed to be the turning point. It is not clear whether the Court would have come to a different conclusion had Prof. Clay not mentioned the particular case in which he sat as a chair arbitrator.

In conclusion, this case highlights that the impartiality of the arbitrator is assessed objectively to the extent that justice “should manifestly and undoubtedly be seen to be done”.[2] Even in extreme circumstances, such as an emphatic statement published in the moment of grief, the Paris Court of Appeal focused on the apparent bias of the arbitrator as reasonably perceived by the party, while acknowledging that a eulogy does not, in and of itself, manifest the arbitrator’s bias. This case is now pending before the French Cassation Court, and we will not know the full details of this challenge until the French Cassation Court hands down its judgment. In the meantime, it remains to be seen whether justice was seen to be done.

ABOUT THE AUTHOR:

Anastasia Medvedskaya is an Associate at McNair International. She specialises in international commercial and investment arbitration and public international law. She has acted as counsel for investors and States in several investment treaty disputes and in commercial arbitration cases under the ICSID, ICC, LCIA, and UNCITRAL rules. Prior to joining private practice Anastasia worked with EY Paris working alongside damages experts. You may contact Anastasia at: amedvedskaya@mcnairinternational.com.