Principle Of Equality And Arbitrators' Duty To Disclose: New Developments By The International Commercial Chamber Of The Paris Court Of Appeals

• Published date: 02 June 2021
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution, Trials & Appeals & Compensation
• Law Firm: Soulier Avocats
• Author: Ms Ana'lle Idjeri

2021 is already shaping up to be a year of new developments on such exciting topics as the principle of equality of the parties in the constitution of the arbitral tribunal and the arbitrators' duty to disclose.

Indeed, in five rulings handed down between the end of December 2020 and mid-February 2021, the Paris Court of Appeals has ruled on the arbitrator's duty to disclosure, either by reiterating conventional solutions or by adopting, in the case of the International Commercial Chamber of the Paris Court of Appeals (Chambre commerciale internationale de la Cour d'appel de Paris, also known by its acronym "CCIP-CA"), a more innovative approach.

The principle of equality of the parties in the constitution of the arbitral tribunal

In the Vidatel case¹, the eponym company, seeking to set aside the arbitral award, claimed that the ICC International Court of Arbitration had violated the arbitration clause agreed upon with its co-shareholders in appointing on its own initiative the five arbitrators. It also alleged a violation of the competence-competence principle.

On the other hand, one of the defendants, PT Ventures, considered that compliance with the terms of the arbitration clause would have led to a breach of equality insofar as the plaintiff - who was in conflict with its three co-shareholders - would have found itself in a situation of inequality, compared to such co-shareholders.

The International Commercial Chamber of the Paris Court of Appeals pragmatically held that the application of the principle of equality of the parties in the constitution of the arbitral tribunal must necessarily be analyzed in a different way when the arbitration clause is concluded and when it is implemented.

In particular, it considered that the appointment procedures provided by the clause were not compatible with the principle of equality, which can be waived after the dispute has arisen. In doing so, it followed the findings of Dutco² decision which enshrined this principle under French law.

As such, when at the date of the dispute the plaintiff is acting against defendants with converging interests, it appears necessary to set aside the arbitration clause pursuant to the principle of equality.

Moreover, the International Commercial Chamber of the Paris Court of Appeals observed that in the case at hand, the ICC had proposed - in vain - to the parties to find an agreement as to the constitution of the arbitral tribunal.

In these circumstances, it considered that the ICC was legitimately entitled to play a part in the constitution of the arbitral tribunal.

Incidentally, this interpretation seems to be in line with the spirit of the new Article 12(9) of the ICC revised Rules of Arbitration, according to which:

"Notwithstanding any agreement by the parties on the method of constitution of the arbitral tribunal, in exceptional circumstances the Court may appoint each member of the arbitral tribunal to avoid a significant risk of unequal treatment and unfairness that may affect the validity of the award."

In addition, the plaintiff argued that the ICC had violated the competence-competence principle in interpreting the arbitration clause. The International Commercial Chamber of the Paris Court of Appeals dismissed this argument and held...