[co-author: Ledea Sawadogo‑Lewis]
The ability of parties to be involved in the selection of the arbitral tribunal from the outset is a distinguishing feature of contemporary international arbitration, and probably what parties consider to be one of the key benefits of arbitration as opposed to state courts(1). The consequences of an arbitrator’s failing to disclose, or wrongfully disclosing, matters which are likely to cast doubt on an arbitrator’s independence or impartiality, can be significant, leading to potentially lengthy (and, therefore, costly) annulment proceedings before state courts. It is therefore key for parties to gain an adequate understanding of what is expected to be disclosed, and at what opportune moment(2), by the arbitral tribunal.
In a 2015 case, the Common Court of Justice and Arbitration (CCJA), the judicial arm of the Organisation for the Harmonisation of Business Law in Africa (Ohada), declined to disqualify an arbitrator who had been a public service servant of the state in a matter involving an entity of this same state (OHADA, CCJA, 15 October 2015, 102/2015), and French Courts have recently decided to uphold the award resulting from this decision, dismissing challenges on grounds that the arbitrator lacked impartiality and independence (CA Paris, 25 February 2020, N°16/22740). These decisions shed light on the CCJA’s stance towards disclosure, and on how to best preserve potential annulment claims for similarly situated parties in the future.
1. Disclosure obligations under the CCJA’s arbitration rules
Arbitrators’ disclosure obligations are governed by Article 4 of the CCJA’s Arbitration Rules. It states that “Any arbitrator nominated or confirmed by the Court shall be and shall remain independent from the parties involved.” In section 4.2, it also sets out the mechanism through which a party may oppose, or ask for the removal, of an arbitrator which it deems to lack independence, either by sending a notification to the Secretary General within 30 days of receipt of the notification or confirmation of the arbitrator by the Court, or within thirty days of the date wherein the party introducing the challenge was informed of facts and circumstance of the facts and circumstances in support of this request for disqualification(3).
This section of the rules closely resembles those of other widely utilised arbitration rules, for example the ICC rules which state that “every arbitrator must be and remain impartial and independent of the parties involved in the arbitration”, that arbitrators should “provide in writing facts which are of such a nature as to call into question the arbitrator’s independence in the eyes of the parties” and that “the Secretariat shall provide such information to the parties in writing and fix a time limit for any comments from them”(4).
2. The International business corporation case
The International Business Corporation (IBC) was set up in 1993 by Len Holding for steel construction and distributing industrial steel in Cameroon. In 2007, the IBC sought business partners with a view to creating a new factory, and on 18 September 2007 a shareholders' agreement was concluded with the Société Nationale des Hydrocarbures (SNH), a public industrial and commercial establishment dependent on the Republic of Cameroon. It provided that SNH and its staff would receive 61% of the capital of IBC, the rest being held by Len Holding and its shareholders.
After disputes arose between the parties, the IBC and its founding shareholders (Len Holding and certain individuals) initiated arbitration proceedings against SNH under the aegis of the CCJA, and SNH appointed a "Cameroonian civil servant in the service of the State of Cameroon" as arbitrator. As SNH is "an extremely powerful entity" of the State of Cameroon and the arbitrator had clear links with the state, IBC wrote to the General Secretariat of the CCJA (the Secretariat) objecting to the appointment of the arbitrator. Subsequently, the Secretariat informed the arbitrator of his appointment by SNH as well as IBC’s opposition to his appointment. The Secretariat invited the arbitrator, in accordance with Article 4.1 of the CCJA’s Arbitration Rules, to notify the Court of his acceptance and to inform it of any facts or circumstances that might call into question his independence. The arbitrator submitted his declaration of acceptance and independence, and disclosed the fact that he had been a public civil servant for several years to the CCJA – he was then confirmed as arbitrator. The IBC failed thereafter to raise further challenges.
The award was granted against the IBC, who then brought annulment proceeding on the grounds that the arbitrator lacked impartiality and independence. Both the CCJA(5) and French courts(6) refused to grant the IBC’s request for the annulment, holding that its failure to reinitiate a challenge following the arbitrator’s confirmation amounted to a waiver of the claim.
Conclusion – timing is of the essence
The IBC decision and its upholding by French courts appear to result from a straightforward application of the waiver principle, codified in French law under Article 1466 of the French Code of Civil Procedure. The fact that the CCJA in this case confirmed the arbitrator despite being aware of its strong ties with the Cameroonian state suggests that the timing of IBC’s objection to his appointment would have made the difference here – it should have raised its objection after the CCJA had confirmed the arbitrator, rather than before – this would have probably reserved their claim for annulment-stage proceedings. As explained in the French Courts’ decision to uphold the arbitral award, it is the lack of reaction by the IBC further to the confirmation of the arbitrator which resulted in the claim being waived.
In order to preserve any claims they may have at the enforcement stage, parties submitting their dispute to the CCJA should therefore not only assert their opposition to an arbitrator being appointed by an opposing party, but also reassert this opposition within 30 days once the CCJA proceeds with his appointment.
The decisions and upholding the enforcement of the award also seem to further the CCJA’s stated objective to strengthen the independence and competitiveness of the CCJA arbitration centre through a better alignment of the Rules with the Uniform Act on Arbitration Law and with international best practices, including, for example, Article V of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, while respecting the specific context of the OHADA member states(7).
1. Gary Born, International Commercial arbitration, Kluwer Law International, 2021, p. 1761 et seq.
3. CCJA Arbitration Rules, Article 4.
4. Rule 11, 2021 ICC Arbitration Rules.
5. OHADA, CCJA, 15 October 2015, 102/2015.
6. CA Paris, 25 February 2020, N°16/22740.