A busy year for Arbitration in Paris: Key developments in the first half of 2024
2024 has been an important year for arbitration in Paris, marked by a landmark court decision concerned with bias, an award from the Court of Arbitration for Sports emanating from the Olympics, and the creation of new arbitration venues. In this article we discuss all of these key developments.
French Court Sets Aside ICC Award Over Arbitrator Bias
The increasing interactions between arbitrators, counsel, and parties have led to a rise in post-award challenges based on claims of bias due to undisclosed relationships. This issue came to a head in a landmark decision by the Paris Court of Appeal, upheld by the French Court of Cassation on June 19, 2024.
The case involved an ICC arbitration between Douala International Terminal (DIT) and Douala Port Authority (DPA). Following a eulogy, published by the president of the arbitral tribunal, Prof. Thomas Clay, to the late Prof. Emmanuel Gaillard, who was counsel for DIT, DPA raised a challenge based on passages in the eulogy revealing a close personal relationship, which Clay had failed to disclose.
DPA first challenged the tribunal’s constitution before the ICC. The ICC dismissed DPA’s challenge, prompting an appeal to the Paris Court of Appeal. In its defence, DIT argued that the tribute paid by Clay to Gaillard, which was publicly available, must be seen in its proper context, taking into account Professor Gaillard’s role as a leading figure in the world of international arbitration, and its eulogistic and exaggerated nature. DIT accepted that there was a financial or business relationship between Clay and Gaillard or Gaillard’s firm, Shearman & Sterling.
The Court of Appeal set aside the award, ruling that the friendship between Clay and Gaillard, evidenced by remarks in the eulogy, including the comment that Clay consulted Gaillard “before making any important choices”, indicated a relationship beyond mere academic or professional interaction. The Court of Appeal also found that the eulogy established a connection between their personal relationship and the arbitration proceedings, as evidenced by Clay’s anticipation of Gaillard’s “formidable, razor-sharp pleadings again, where precision and insight were far more seductive than any rhetorical flourish”. The Court of Appeal emphasized that under Article 1456-2 of the French Code of Civil Procedure (CPP) and Article 11 of the ICC Rules, arbitrators are required to disclose any circumstances that may affect their independence or impartiality. The ICC’s Note to Parties and Arbitral Tribunals further mandates the disclosure of close personal relationships between arbitrators and counsel.
The French Court of Cassation upheld the Court of Appeal’s findings, agreeing that while certain passages of the eulogy should be interpreted solely as a tribute to a respected figure in the arbitration world, others clearly revealed a personal relationship between Clay and Gaillard. These revelations, the court concluded, were sufficient to raise reasonable doubts about Clay’s independence and impartiality in the proceedings, and consequently agreed that the ICC award should be set-aside.
Court of Arbitration for Sports’ Award denies gymnast her bronze
An article on developments on Paris arbitration would not be complete without including an arbitration from the 2024 Paris Olympics. Here the Court of Arbitration for Sports’ Ad Hoc Division published a controversial award on 14 August 2024, rendered by a tribunal chaired by Hamid Gharavi, including Philippe Sands KC and Lu Song. This award led to US gymnast Jordan Chiles being stripped of her Olympic bronze medal, as the on-floor inquiry from the US team had been filed too late.
The decision sparked a media backlash against both CAS and the tribunal, with several media outlets focusing on Gharavi’s work as counsel in arbitrations for Romania, whose gymnastics federation brought the case. However, the tribunal specified in its award that Gharavi disclosed his ongoing representation of Romania in two pending ICSID claims, this disclosure was brought to the parties’ attention on 7 August 2024, and no objections were made at that time to Gharavi’s appointment.
Expansion of Paris’ Arbitration Venue Capacity
In response to a previous shortage of available hearing venues since the closure of the ICC venue in 2020, two new hearing centres are planned opened in Paris in 2024, which will support Paris-seated arbitrations being heard in Paris, and restore its status as a premier arbitration seat. Delos New Hearing Centre1 : Earlier this year, Delos Dispute Resolution opened the Paris Arbitration Centre. This new facility, located in the heart of the city, includes four hearing rooms and twelve breakout rooms. The centre is equipped to handle a variety of dispute resolution needs, providing state-of-the-art facilities for both arbitrators and parties involved.
New ICC Hearing Centre2: After closing its first hearing centre during the pandemic in 2020, the ICC International Court of Arbitration announced it will open a new hearing centre in autumn 2024. The new premises will offer two sets of hearing and breakout rooms, designed to accommodate in-person, hybrid, and virtual hearings, and will be situated in the heart of Paris.
Conclusion
The significant developments in arbitration in Paris throughout the first half of 2024 highlight the city’s central role in the global arbitration landscape. The landmark court decision of the French Court of Cassation highlights the enhanced importance of transparency and impartiality in arbitration proceedings. The opening of new arbitration venues demonstrates Paris’ dynamism and commitment to provide top-tier arbitration services.
Footnotes