In its previous newsletters, www.ohada.com dated Oct. 22, 2014 and Nov. 5, 2014 reported on the crucial ruling entered on October 14, 2014 by the Paris Court of Appeal (Cour d'Appel de Paris, Pôle 1, Chambre 1).

In this rescissory Judgment, involving a major conflict of interest in which a Vancouver lawyer, the sole arbitrator and a partner attorney of the large Canadian firm FASKEN MARTINEAU DUMOULIN LLP, failed to make full disclosure, the prestigious court considers that:

“It can neither be reasonably required that the parties thoroughly analyze all of the sources which could possibly mention the name of the arbitrator and the persons associated with him, nor that they continue this research after the arbitration proceedings have begun” (Paris, Oct. 14, 2014, No. 13/13459, AGI, JCP 2014. 1272, note H. Guyader; CMAP [Centre de Médiation et d'Arbitrage de Paris] Newsletter, Nov. 2014, p. 10, obs. L. Jandard).

In this case, the sole arbitrator's law firm had worked for one of the parties on a transaction involving 660 million U.S. dollars.

The decision of the arbitrator who had not fulfilled his duty of disclosure was submitted to the Paris Court of Appeal.

Therefore, based on the Tecnimont legal precedent, the judges overturned the enforcement order (which is a non-contradictory, virtually automatic procedure in France).

This Judgment has been much commented on and very well received by legal doctrine. The basic point of law on which the Court based its decision to overturn the effects of the decision and declared it contrary to public policy was unanimously approved.

It demonstrates that the Paris Court of Appeal reconfirms the concept of an arbitrator's strict neutrality and the information that must be included in statements of independence. This Judgment should be commended and the exemplary, thoroughly justified amount of the fine, € 200,000, based on article 700 of the French Code of Civil Procedure, is noteworthy.

Indeed, the undisclosed conflict of interest was so important that to request the enforcement of an arbitral decision that was biased due not only to the fault of the sole arbitrator but also of the plaintiffs in the proceedings (who had undisclosed business relations with the sole arbitrator's firm) could well be considered as an abuse of the judicial process.

The transaction carried out by the FASKEN MARTINEAU DUMOULIN LLP firm in the middle of the arbitration proceedings which involved 660 million U.S. dollars, included mostly a payment in securities of a large mining company listed on the TORONTO stock exchange. In 2012/2013, the same FASKEN MARTINEAU DUMOULIN LLP firm was counsel along with a business bank, subsidiary of the American company party to the arbitration, in a 5.1 billion USD successful takeover bid on this very mining company...