Elie Kleiman Yann Dehaudt-Delville November 3 2016 Principle of procedural estoppel under French arbitration law Freshfields Bruckhaus Deringer | Arbitration & ADR - France Elie Kleiman, Yann Dehaudt-Delville Arbitration & ADR IntroductionSupreme Court strict application of principle of procedural estoppelStrict enforcement of parties' agreement setting forth time limit to challenge arbitratorCommentIntroductionIn two recent decisions the French Supreme Court and the Paris Court of Appeal supported the rigorous application of the principle of procedural estoppel and reiterated their commitment to the enforcement of the parties' agreement governing the arbitral proceedings.In France, it is a well-established principle that a party which knowingly refrains from making a claim before an arbitral tribunal of an irregularity in arbitral proceedings is deemed to have waived its right to raise such irregularity in a later challenge against the award brought before local courts.This rule embodies the notion of procedural estoppel(1) and was first coined by case law.(2) It has since been codified through Decree 48/2011 of January 13 2011 in Article 1466 of the Code of Civil Procedure.(3)This principle prevents parties from relying on alleged irregularities that affect arbitration proceedings before the French courts if the requesting party has not initially raised them before the arbitral tribunal.(4)With respect to irregularities affecting the constitution of the arbitral tribunal, a specific procedure to challenge an arbitrator's appointment is generally provided by the applicable rules where parties have opted for the rules of an arbitral institution (eg, the International Chamber of Commerce (ICC), London Court of International Arbitration (LCIA), Stockholm Chamber of Commerce (SCC), International Centre for Dispute Resolution (ICDR) or Singapore International Arbitration Centre (SIAC)), or where they have chosen ad hoc arbitration rules to apply (eg, the United Nations Commission on International Trade Law or Paris Arbitration Rules). A timeframe to bring this challenge ‒ between 14 and 30 days from the arbitrator's appointment or from the date on which the requesting party learns of the relevant facts ‒ is usually set by those rules.(5)Where such rules are applicable, the issue is whether the short timeframes that they prescribe should be regarded as binding upon the parties when French courts apply Article 1466 of the Code of Civil Procedure. In other words, can a party which knowingly neglects to challenge an arbitrator within the timeframe provided by the chosen institutional rules subsequently be permitted to challenge the award before the French courts based on the arbitrator's alleged lack of independence and impartiality?In 2016, the French courts rendered two noteworthy decisions on the matter.The first decision was rendered by the French Supreme Court in Fibre Excellence v Tembec on January 27 2016,(6) and upheld a Paris Court of Appeal decision that had dismissed a party's application to set aside an award rendered by a 'truncated tribunal'.(7) The Supreme Court held that a party's failure to submit, within the eight-day timeframe imposed by the ICC court, its comments regarding the continuation of the proceedings without one of the arbitrators on the panel (due to the resignation of an arbitrator on that same party's request) constituted a waiver of that party's right to challenge the award based on the irregularity of the constitution of the arbitral tribunal.The second decision was rendered by the Paris Court of Appeal on April 12 2016 in Tecnimont v Avax.(8) This appellate ruling followed a Supreme Court decision which established that the timeframes imposed by the arbitral rules chosen by the parties are binding upon them.(9) The Supreme Court held that a party which knowingly neglected to challenge an arbitrator within the timeframe prescribed by the chosen arbitration rules is barred from challenging the arbitrator's independence and impartiality before the courts at a later stage. However, the Supreme Court is vested with the power to rule on legal issues only and cannot review the facts of the cases that it hears. Therefore, after delivering this important precedent, it remanded the case to the Paris Court of Appeal, which was tasked with verifying whether the timeframe to challenge the arbitrator set out by the arbitration rules had been respected for each circumstance cited by Avax in support of its claim that the arbitrator lacked independence.The Paris Court of Appeal adhered to the Supreme Court's precedent and, after careful scrutiny of the facts, dismissed Avax's challenge of the award. The Paris Court of Appeal held that a challenge which is not brought in time will be inadmissible unless the applicant can demonstrate that its challenge is based on newly discovered, non-publicly available information that substantially increased its doubts as to the arbitrator's independence and impartiality.Supreme Court's strict application of principle of procedural estoppelIn March 2010 French companies Fibre Excellence SAS and Tembec SAS entered into a contract pertaining to Fibre Excellence's acquisition of the shares of three companies that were owned by Tembec. The transaction implied that a part of the purchase price would be paid in relation to the net working capital of the targets. The contract contained an arbitration clause which referred to the ICC Rules of Arbitration and designated Paris as the seat of arbitration.A dispute arose between Fibre Excellence and Tembec regarding the assessment of the net working capital at stake. On December 1 2010 Tembec appointed an expert to make a determination as to the amount. However, Fibre Excellence initiated concomitant arbitration proceedings on December 8 2010 and the expert had to suspend his work.In March 2011 a three-arbitrator tribunal was constituted pursuant to the 1998 ICC rules. In May 2012 hearings on the merits were held.On February 28 2013 the arbitrator appointed by Tembec released an updated statement of independence to notify the parties and the ICC that he had spent several months negotiating his transfer from his current law firm to the law firm representing Tembec in the arbitration proceedings.In a March 27 2013 letter Fibre Excellence stated that "such situation obviously impact[ed] [the arbitrator]'s independence" and "necessarily created a conflict of interests that [it] could not accept"; consequently, Fibre Excellence asked the arbitrator to resign, which he did on April 2 2013 (he then joined the firm representing Tembec on April 30 2013).On April 2 2013 the chairman of the tribunal notified Fibre Excellence and Tembec that the draft award was finalised and undergoing the scrutiny of the ICC.In an April 4 2013 email the ICC court invited Fibre Excellence and Tembec to submit their comments before April 12 2013 on both the resignation of the arbitrator and the application of Article 12(5) of the 1998 ICC rules.The relevant text of Article 12 of the 1998 ICC rules reads as follows:"1. An arbitrator shall be replaced upon his death, upon the acceptance by the Court of the arbitrator's resignation, upon acceptance by the Court of a challenge or, upon the request of all the parties...5. Subsequent to the closing of the proceedings, instead of replacing an arbitrator who has died or been removed by the Court pursuant to Articles 12(1) and 12(2), the Court may decide, when it considers it appropriate, that the remaining arbitrators shall continue the arbitration. In making such determination, the Court shall take into account the views of the remaining arbitrators and of the parties and such other matters that it considers appropriate in the circumstances."(10)However, Fibre Excellence remained silent and did not comment on this issue within the eight-day timeframe specified by the ICC.On May 2 2013 the ICC court accepted the arbitrator's resignation and decided that the proceedings should continue with the two remaining arbitrators.The award was rendered by a truncated tribunal composed of the two remaining arbitrators on May 16 2013 – a mere two weeks after the ICC court had accepted the resignation of the arbitrator. The arbitral tribunal found that it did not have jurisdiction to rule on the disputed amount of net working capital, since the contract provided for expert determination to assess this amount. The tribunal thus ordered the parties to resume the expert proceedings that they had started in December 2010 and rejected all other claims, notably those regarding Tembec's alleged misrepresentations and civil fraud.On August 12 2013 the Paris Court of First Instance granted leave to enforce the award in France. Shortly thereafter, on September 2 2013 Fibre Excellence applied to the Paris Court of Appeal to set aside the award, invoking the irregularity of the composition of the arbitral tribunal as its grounds to do so.(11)Fibre Excellence put forward three arguments in support of its application to set aside the award:The award resulted from a deliberation in which the arbitrator appointed by Tembec had participated while he was considering leaving his law firm to join the firm representing Tembec in the arbitration proceedings.The ICC court's acceptance of the arbitrator's resignation did not remedy the irregularity affecting the constitution of the tribunal since, at the date of his resignation, the draft award had already been adopted by the arbitral tribunal comprising all three arbitrators.The ICC court did not correctly apply the 1998 ICC rules, since its email inviting the parties to comment on the application of Article 12(5) (ie, on the continuation of the arbitration proceedings with the remaining two arbitrators only) was sent to the parties before the ICC court had accepted the arbitrator's resignation.On December 2 2014 the Paris Court of Appeal dismissed Fibre Excellence's application.(12) The court first quoted Article 1466 of the Code of Civil Procedure, which provides that a party which knowingly refrains from invoking an irregularity before an arbitral tribunal is deemed to have waived its right later to rely on such irregularity. Observing that, pursuant to the contract at issue, the 1998 ICC rules were applicable in this case, the court consequently ruled that the method by which irregularities could be raised during the arbitration proceedings should be governed by these rules.The Paris Court of Appeal added that, although assessing whether it was appropriate to apply Article 12(5) of the 1998 ICC rules in light of the requirement that the arbitral tribunal be independent and impartial fell within its jurisdiction, it could make such a determination only if the party challenging the application of this provision had formulated its views on this issue when it was given the opportunity to do so.Similarly, the Paris Court of Appeal observed that a party which has requested the resignation of an arbitrator is not later exempted from submitting its comments pursuant to Article 12(5) of the 1998 ICC rules. In doing so, it underscored that this provision is aimed precisely at addressing cases in which, subsequent to the closing of the proceedings, instead of replacing an arbitrator who has died or been removed by the court, the arbitration continues with the remaining arbitrators.The Paris Court of Appeal thus decided that Fibre Excellence had not submitted its comments on the application of Article 12(5) of the 1998 ICC rules within the "reasonable timeframe" it had been granted for this very purpose by the ICC; and while it was aware that the draft award was already undergoing the scrutiny of the ICC court, it had implicitly accepted that the award be issued as it stood at that time, without reopening the arbitral proceedings or appointing a new arbitrator.As such, the Paris Court of Appeal held that Fibre Excellence had waived its right to raise arguments on the arbitrator's lack of independence before the courts at this later stage, and therefore dismissed its application to set aside the award.In response, Fibre Excellence lodged an appeal before the Supreme Court. It relied on three different arguments:It was still entitled to challenge the award on the grounds of an irregularly constituted arbitral tribunal. To support this claim, it stressed that it had requested the resignation of the arbitrator appointed by Tembec as soon as it became aware of his potential lack of independence. Thus, it invoked the latter's lack of independence in a timely fashion in accordance with Article 1466 of the Code of Civil Procedure;Its waiver of reliance upon such grounds could not be presumed, and its silence following the ICC court's invitation to submit its comments on the application of Article 12(5) of the 1998 ICC rules could not cause it to be deprived of its right to seek annulment of the award on the basis of the arbitrator's lack of independence; andThe ICC court's decision to continue the proceedings with the two arbitrators who had already been empanelled without consulting the parties on this issue after it had accepted the arbitrator's resignation constituted a violation of the ICC rules. According to Fibre Excellence, this should be considered a legitimate reason to preclude the court from finding that it had waived its right to challenge the award based on the arbitrator's lack of independence.On January 27 2016 the Supreme Court upheld the Paris Court of Appeal's ruling.(13) It stated that the Paris Court of Appeal had correctly found that Fibre Excellence's silence on the continuation of the arbitral proceedings with the remaining two arbitrators constituted a renunciation of its right to challenge the award on the grounds that the arbitral tribunal had been irregularly constituted.The Supreme Court emphasised the fact that, following the arbitrator's resignation, the chair of the arbitral tribunal had immediately notified Fibre Excellence that the proceedings had been closed from September 27 2012, and that the arbitral award was being reviewed by the ICC court. The Supreme Court also pointed out that, although it had been invited by the ICC court to submit its comments on continuing the proceedings with the remaining two arbitrators, Fibre Excellence deliberately chose to remain silent. This, it held, amounted to a renunciation of its right to challenge the award based on the alleged irregularity affecting the constitution of the arbitral tribunal.At first glance, one might regard this Supreme Court decision as severe for the party seeking to challenge the award, especially as Fibre Excellence had arguably invoked the irregularity affecting the arbitral tribunal's constitution in a timely manner pursuant to the 1998 ICC rules.Article 11 of the 1998 ICC rules reads as follows:"For a challenge to be admissible, it must be sent 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."(14)Fibre Excellence challenged the arbitrator appointed by Tembec within 27 days of the release of his updated disclosure, thus abiding by the timeframe imposed by the applicable arbitration rules. On this basis, one may argue that it is questionable whether Fibre Excellence should be regarded as having waived its right to challenge the award at a later stage based on this circumstance.Interestingly, both the Paris Court of Appeal and the Supreme Court seem to have given little emphasis to this fact, preferring instead to focus on Fibre Excellence's failure to provide its comments on proceedings continuing with the remaining two arbitrators in accordance with Article 12(5) of the 1998 ICC rules. Both courts underlined that Fibre Excellence had deliberately remained silent on this issue, while being aware that the arbitrator who resigned had been involved in the drafting of the award, and relied on this fact to preclude Fibre Excellence from challenging the award.In so ruling, the Supreme Court not only acknowledged that the timeframes specified by the rules of arbitrations are binding upon the parties (see Tecnimont v Avax below), but also recognised the binding character of the timeframes specified by arbitral institutions in the course of procedural correspondence with the parties.Once again, one might consider that the court's decision seems heavy handed, since the ICC court had granted Fibre Excellence a short timeframe (eight days) to provide its comments on the application of Article 12(5). Moreover, Fibre Excellence was granted the opportunity to express its views only before the ICC court had made any decision on the application of Article 12(5) and before it had even accepted the arbitrator's resignation; Fibre Excellence was invited neither to comment on the decision of the ICC nor to challenge it. Further, the two-arbitrator truncated tribunal rendered its award only two weeks after the ICC had issued its decision on the continuation of the proceedings.Some commentators have suggested that, by ruling in this way, the courts expect parties to be not only proactive in their challenge to arbitrators, but genuinely overactive, which imposes onerous burdens on them.(15)However, in light of the specific facts of the case, although it may seem controversial at first glance, this Supreme Court decision appears to constitute a lucid application of the principle of procedural estoppel by the court.Fibre Excellence claimed that the arbitrator's independence was affected and that it could not accept such a conflict of interest. Accordingly, Fibre Excellence sought and obtained the resignation of the arbitrator appointed by Tembec. However, when invited by the ICC to present its views on the practical consequences to be drawn from the arbitrator's lack of independence, Fibre Excellence remained silent and did not request that the debate be reopened or a new arbitrator be appointed.As Fibre Excellence was aware that the arbitrator had taken part in the deliberations and that the award had already been drafted, and if it were genuinely concerned over the arbitrator's lack of independence and found the situation unacceptable, one would have expected Fibre Excellence to have swiftly requested that the draft award be set aside and the proceedings reopened; however, Fibre Excellence did no such thing.Fibre Excellence's position therefore appears paradoxical, as it seems to have tolerated a situation that it described as "unacceptable". It is possible that this position may have been inspired by dilatory tactics and aimed at obtaining a procedural option that could appear unfair in light of the circumstances. By failing to ask that the procedure be discontinued and a new arbitrator appointed, Fibre Excellence chose to wait for the award to be rendered. At the same time, it assumed that if the award were adverse to its interests, it could seek its annulment on the grounds that it reserved its right to do so based on its timely challenge of the arbitrator in the first place.Therefore, by holding that Fibre Excellence had waived its right to invoke the irregular composition of the tribunal when it failed to make any observation on the application of Article 12(5) of the 1998 ICC rules, the Supreme Court strictly, yet fairly, applied Article 1466 of the Code of Civil Procedure.This Supreme Court precedential decision compels the parties to remain consistent throughout the proceedings, which is the essence of the procedural estoppel principle. In case of a successful challenge of an arbitrator, it invites them to raise subsequent issues within the timeframe imposed by the arbitral institution or by the judge monitoring the arbitral proceedings. As the decision – severe at first glance – aspires to deter parties from pursuing dilatory tactics and thus promotes efficiency in arbitration proceedings, it should meet with approval.Strict enforcement of parties' agreement setting forth time limit to challenge arbitratorIn November 1998 Italian company Tecnimont SPA entered into a contract with Greek company J&P Avax relating to the construction of a factory in Thessaloniki, Greece. A dispute arose between the parties and Tecnimont commenced an arbitration based on the arbitration clause contained in the contract, which referred the parties to the ICC rules. A three-arbitrator tribunal was constituted in 2002.During the proceedings, Avax discovered that lawyers working in the same firm as the chairman of the tribunal ‒ who was 'of counsel' at a global law firm ‒ had participated in a conference on the petroleum industry in China in May 2007 with a representative of Tecnimont, and that this conference had been exclusively sponsored by the chairman's law firm.On July 16 2007 Avax requested that the chairman of the tribunal disclose any relevant information about the relationship between Tecnimont and his law firm. On July 17 2007 the chairman revealed that his law firm had been temporarily consulted by Tecnimont in 2005 with respect to a liquid natural gas project in China, but that it did not work with Tecnimont again. He also disclosed that his law firm had assisted Tecnimont's parent company, Edison SPA, in a matter that was closed in 2005 and on which his colleagues worked until 2002. He also indicated that his law firm was advising a company, Sofregaz, which was affiliated with Tecnimont. Upon Avax's further request for information, the chairman issued clarifications on his previous statement on July 26 2007.In his declaration of independence, released in October 2002 at the time of his appointment, the chairman had disclosed only that the Washington DC and Milan offices of his firm had previously worked with Tecnimont's parent company in a matter (that was closed at the time the arbitration proceedings started) in which he had never been personally involved.On September 14 2007 on the basis of the chairman's statements of July 17 and 26, Avax challenged his appointment before the ICC court, alleging that he lacked independence. However, under Article 11 of the 1998 ICC rules, the timeframe to challenge an arbitrator is 30 days from learning of the relevant circumstances,(16) and Avax's request was hence filed outside this timeframe.On October 26 2007 the ICC court dismissed the challenge brought against the chairman of the tribunal. Avax continued to participate in the arbitral proceedings, though it also reserved its right to make later claims.The arbitral tribunal continued and rendered a partial award on liability in favour of Tecnimont on December 10 2007.Further information regarding the links between the chairman's law firm and Tecnimont's affiliated companies were disclosed by the former, in particular on September 26 2007, December 21 2007 and January 20 and March 28 2008.Avax then applied to the Paris Court of Appeal to set aside the award on the grounds that the chairman had breached his duty of disclosure and was not independent.On February 12 2009 the Paris Court of Appeal set aside the award, finding that circumstances existed that could raise doubts in the parties' minds as to the chairman's independence and that the arbitral tribunal had consequently been irregularly constituted.(17) On November 4 2010 the Supreme Court quashed that decision on technical grounds and remanded the case to the Reims Court of Appeal.(18)On November 2 2012 the Reims Court of Appeal set aside the partial award on the basis of the arbitrator's perceived lack of independence.(19) It found that the annulment court could not have been bound by the timeframe for the submission of the challenge against an arbitrator under the rules of the arbitral institution. The Reims Court of Appeal's decision was partly based on the numerous steps taken by Avax to identify the nature of the relationship between the chairman and Tecnimont, as well as on the fact that disclosure about the arbitrator's situation had been drawn out. Under this circumstance, the court concluded that Avax had not waived its right to invoke the chairman's lack of independence on the sole grounds that it did not raise it within the timeframe provided by the ICC rules. This decision also attracted criticism among commentators.(20)Tecnimont lodged an appeal before the Supreme Court, contending that when Avax had filed its challenge on September 14 2007, the 30-day timeframe imposed by the 1998 ICC rules had lapsed, so it was barred from raising tet challenge before the local court's ruling on annulment.On June 25 2014 the Supreme Court set aside the Reims Court of Appeal's decision, holding that:"[A] party who knowingly refrains from challenging an arbitrator on the basis of circumstances related to his alleged lack of independence or impartiality within the time limit provided by the applicable arbitration rules is deemed to have waived the right to invoke such circumstances before the annulment judge".(21)With this decision, the Supreme Court established that institutional rules chosen by the parties ‒ in this instance the ICC rules ‒ are binding throughout the arbitration and should be fully observed. Relying on the principle of pacta sunt servanda ('agreements must be kept') and the notion of procedural estoppel, this ruling compels the parties to commit to the terms of the agreements that they conclude and forces them to bring their challenges within the stipulated timeframe.This decision was undoubtedly aimed at enhancing the efficiency of arbitration proceedings and should be lauded for this reason. However, the Supreme Court is vested with the power to rule only upon points of law, which explains why it did not rule on the merits of Avax's challenge against the award. The case was remanded to the Paris Court of Appeal, which was tasked with verifying whether the timeframe set forth by the arbitration rules to challenge the arbitrator had been respected for each circumstance cited by Avax in support of its claim that the chairman lacked independence.The Paris Court of Appeal's decision was therefore highly anticipated, as it would illustrate how this principle would be applied concretely to the facts of the case at hand.Before the Paris Court of Appeal, Avax contended that its challenge of the arbitrator on September 14 2007 was timely with respect to the ICC rules. Avax argued that it was actually from August 20 ‒ after it had conducted further inquiries in the wake of the arbitrator's statements of July 17 and 26 2007 ‒ that it could establish that the chairman's statements were incoherent, as Sofregaz was indeed a wholly owned subsidiary of Tecnimont. According to Avax, this constituted the foundation for challenging the chairman of the tribunal.Avax argued that further information regarding the ties between the chairman's law firm and Tecnimont's affiliated companies were disclosed by the chairman's firm after the statements were released in July. In particular:on September 26 2007 the chairman's firm disclosed that it had invoiced $18,000 to Tecnimont in relation to the liquid natural gas project in China;on December 21 2007 the chairman's law firm issued a report on the cases it followed for Sofregaz, and disclosed that one of its Madrid partners had sat as an arbitrator in a case where Sofregaz was a party; andon January 20 and March 20 2008 the chairman disclosed that his firm had advised EDF on two cases (EDF acquired Edison in September 2005; Edison sold Tecnimont to Maire-Tecnimont in October 2005).The Paris Court of Appeal considered that Avax had become aware of the circumstances that raised doubts as to the chairman's independence when the latter released his disclosure statements in July 2007.The court noted that, when Avax challenged the arbitrator before the ICC court in September 2007, it did not refer to its alleged finding in August 2007 that Sofregaz was a wholly owned subsidiary of Tecnimont. The court further established that such information was publicly and easily available and could have been verified by Avax on the very date on which the arbitrator released its additional disclosure statements in July. The court added that it was not credible that Avax had ignored the fact that Sofregaz was Tecnimont's subsidiary, and observed that Avax and Sofregaz had been involved concurrently or jointly in several of the same public procurement procedures from 2002.With respect to the information regarding the ties between the chairman's law firm and Tecnimont's affiliated companies that were disclosed by the chairman's firm after the statements were released, the court decided that they had not substantially increased Avax's doubts as to the arbitrator's independence and impartiality resulting from the elements already in Avax's possession.The court eventually found that the fact that the chairman's firm had advised EDF was not a circumstance that could raise reasonable doubts as to the arbitrator's independence.The Paris Court of Appeal thus dismissed Avax's application, holding that it had failed to timely challenge the arbitrator and was therefore barred from claiming that the arbitral tribunal was irregularly constituted.On April 12 2016 the Paris Court of Appeal made an objective assessment of the date on which Avax had become aware of the alleged irregularity.(22) The assessment relied on the arbitrator's disclosure statements, datable and tangible facts in order to identify the starting point of the contractual time limit for challenging the arbitrator. The court ruled that, unless Avax discovered circumstances which substantially increased its doubts as to the arbitrator's independence and impartiality and that were not public knowledge, it would have to submit its challenge within the agreed timeframe for it to be admissible.The rule that has emerged from this precedent is straightforward:The starting point of the timeframe to challenge an arbitrator is the objective date on which a party has knowledge or should have had knowledge of circumstances that give rise to doubts as to the arbitrator's independence; andA challenge which is brought outside this timeframe will be inadmissible, unless the applicant can demonstrate that its challenge is based on newly discovered non-publicly available information that substantially increased its doubts as to the arbitrator's independence and impartiality (and is timely with respect to the discovery of these new facts).This rule appears fair and balanced.On the one hand, the court has reaffirmed the binding character of contractual timeframes and made a coherent application of Article 1466 of the Code of Civil Procedure: its decision clearly indicates that parties should act in a timely fashion and cannot frivolously rely on any circumstance that they later discover in an effort to remedy their lack of reactivity.On the other hand, when a party fails to comply with the timeframe to challenge an arbitrator, the court will not close the door to a new challenge, provided that this is brought on the basis of new circumstances that substantially increase the party's doubts as to the arbitrator's independence and impartiality. This appears to be a necessary safety net to ensure fairness and is in line with the prohibition on advance waivers of conflicts of interest (whereby parties would presumptively agree not to invoke issues of independence and impartiality of arbitrators) under French law. In this respect, in a decision rendered on March 31 2016 in Chambre Arbitrale Maritime de Paris v Nykcool AB the Supreme Court upheld a Paris Court of Appeal decision that arbitration rules cannot deprive a party from the ability to challenge an arbitrator for circumstances become known after the expiration of the timeframe provided by the rules.(23)CommentThe Fibre Excellence and Tecnimont rulings illustrate the French courts' commitment to the strict enforcement of the parties' agreement, as well as their strong expectation that the parties remain consistent throughout the proceedings in accordance with the principle of procedural estoppel.These decisions impose a duty on the parties to swiftly challenge arbitrators after they become aware of circumstances that could give rise to reasonable doubts as to their independence and impartiality, and force them to adopt a behaviour that is in line with the position they expressed when challenging the arbitrator.If a party fails to challenge an arbitrator within a contractually agreed timeframe, or fails to act consistently with its challenge of an arbitrator based on its lack of independence, the party will be deemed to have waived its right to challenge the award before the French courts on the grounds that the arbitral tribunal was irregularly constituted.Without compromising the parties' fundamental right to due process and to a fair trial, both decisions aspire to deter parties from pursuing dilatory tactics and hence to enhance the efficiency of arbitral proceedings. Although they might appear strict at first glance, they are fair and balanced and should therefore be welcome.For further information on this topic please contact Elie Kleiman or Yann Dehaudt-Delville at Freshfields Bruckhaus Deringer by telephone (+33 1 44 56 44 56) or email ([email protected] or [email protected]). The Freshfields Bruckhaus Deringer LLP website can be accessed at www.freshfields.com.Endnotes(1) Cass civ 1, February 3 2010, Société Merial v Société Klocke Verpackungs, No 08-21.288: which defined it as a "procedural behaviour...constituting a change of position, on the merits, the nature of which misleads [the opposing party] about [the challenging party]'s intentions".(2) CA Paris, June 2 1989, Sociétés TAI, ESW et IEC v sociétés SIAPE, Engrais de Gabès et autres, No 88/8256, Rev Arb 87; CA Paris, May 16 2002, STPIF v SB Ballestrero, No 2000/20742, Rev Arb 1231; Cass civ 1, July 6 2005, Golshani v Gouvernement de la République Islamique d'Iran, No 01-15.912, Rev Arb 993; CA Paris, October 28 2010, Rev Arb 691; Cass civ 1, May 6 2009, Société International Company For Commercial Exchanges (Income), No 08-10.281; Cass civ 1, February 3 2010, Société Merial v Société Klocke Verpackungs, No 08-21.288.(3) Article 1466 of the Code of Civil Procedure provides that "a party that refrained from asserting irregularities in 'due time' is deemed to have waived its right to assert such irregularity later". Although it is codified in the section of the code governing domestic arbitration proceedings, Article 1466 is also applicable to international arbitrations proceedings pursuant to Article 1506 3° of the code.(4) Although it has been applied to allegations of irregular constitution of the arbitral tribunal in the two decisions reported in this update, this principle applies to all other grounds on which an award can be challenged. Article 1466 of the Code of Civil Procedure bars parties from relying on any and all irregularities before the local courts if they did not first raise them before the arbitral tribunal. For example, the Paris Court of Appeal recently relied on this principle to dismiss a claim by the Democratic Republic of the Congo (DRC) that an award rendered in Zurich, Switzerland, was not be recognised and enforced in France as it had been rendered in violation of the principle of due process (Article 1520 4° of the Code of Civil Procedure). The DRC argued that the arbitration's procedural calendar had been altered in a way that excluded the DRC from the discussions, since it had been established without considering the fact that the country was at war and therefore facing a material impossibility to properly defend itself in the proceedings. The Paris Court of Appeal observed that since the DRC had not raised this issue during the arbitral proceedings, though it could have done so, it was barred from raising it before the local courts (CA Paris, April 12 2016, République Démocratique du Congo v FG Hémisphère Associates LLC, No 11/20732).In seeking to set aside an award based on Article 1520 3° of the Code of Civil Procedure, a claimant in another case contended that a tribunal had ruled ultra petita (beyond what was sought) because it decided on the extent of a contractual debt arising out of sale agreements, whereas subsequent pledge agreements between the parties had conveyed acknowledgement of this debt, therefore ending the disputes related to the sale agreements. However, the Paris Court of Appeal observed that the claimant had failed to challenge the arbitral tribunal's jurisdiction with respect to the dispute arising out of the sale agreements and was therefore barred from arguing that subsequent pledge agreements would have ended the related disputes before local courts (CA Paris, May 10 2016, Monsieur Bocar Samba D v SA Ascot Commodities, No 14/20486).(5) ICC rules 2012, Article 14.2 (30-day time limit); LCIA rules 2014, Article 10.3 (14-day time limit); SCC rules 2010, Article 15.2 (15-day time limit); ICDR rules 2014, Article 14.1 (15-day time limit); SIAC rules 2013, Article 12.1 (14-day time limit).(6) Cass civ 1, January 26 2016, Fibre Excellence SAS v Tembec SAS, No 15-12.363.(7) CA Paris, December 2 2014, Fibre Excellence SAS v Tembec SAS, No 13/17555; See D Bensaude, Gaz Pal No 073, 14 March 2015, p 5; T Clay, Dalloz 2014, p 2541; J Mestre and A-S Mestre-Chami, "Prévention et règlement des différends économiques", Lamy Droit des Affaires, 2015, No 109, p 44.(8) CA Paris, April 12 2016, Société J&P Avax SA v Société Tecnimont SPA, No 14/14884; and D Thomson, "Jarvin award upheld in Paris", Global Arbitration Review, April 14 2016.(9) Cass civ 1, June 25 2014, Société Tecnimont SPA v J&P Avax SA, No 11-26.529; for further details see "Challenges of arbitrators: clarification on timeframe and standard of review".(10) Article 12 of the 1998 ICC rules has become Article 15 of the 2012 ICC rules.(11) Pursuant to Article 1520 (2) of the Code of Civil Procedure, an award may be set aside where "the arbitral tribunal was not properly constituted".(12) CA Paris, December 2 2014, Fibre Excellence SAS v Tembec SAS, No 13/17555.(13) Cass civ 1, January 27 2016, Fibre Excellence SAS v Tembec SAS, No 15-12.363.(14) Article 11 of the 1998 ICC rules has become Article 14 of the 2012 ICC rules.(15) T Clay, Dalloz 2014, p 2541; J Mestre and A-S Mestre-Chami, "Prévention et règlement des différends économiques", Lamy Droit des Affaires, 2015, No 109, p 44.(16) Article 11 of the 1998 ICC rules and 14.2 of the 2012 ICC rules.(17) CA Paris, February 12 2009, J&P Avax SA v Société Tecnimont SPA, No 07/22164, Rev Arb 186.(18) Cass civ 1, November 4 2010, Société Tecnimont SPA v J&P Avax SA, No 09-12.716.(19) CA Reims, November 2 2011, J&P Avax SA v Société Tecnimont SPA, No 10/02888, Rev Arb 112.(20) M Henry, Note – 2 novembre 2011, Cour d'appel de Reims (Aud. Solennelle)  Rev Arb 120, paras 23-24 ; T Clay, "L'application perlée du règlement d'arbitrage pour la contestation des liens non révélés entre arbitre et conseil"  4 Paris Journal of International Arbitration 1109, paras 28-41.(21) Cass civ 1, June 25 2014, Société Tecnimont SPA v J&P Avax SA, No 11-26.529.(22) CA Paris, April 12 2016, Société J&P Avax SA v Société Tecnimont SPA, No 14/14884, No 14/1488.(23) Cass civ 1, March 31 2016, No 14-20.396 (see L Weiller, "Tierce opposition, force obligatoire du règlement d'arbitrage et effectivité du droit de récusation", Revue Procédure No 6, Comm. 202, Lexis Nexis, June 1 2016), confirming CA Paris, October 30 2012, Chambre Arbitrale Maritime de Paris (CAMP) et Generali Iard v Nykcool AB , No 11/08277 8 Gaz Pal 15. In this case, the institutional rules provided that the time limit would begin to run from the "starting day of the arbitration proceedings", which, under French law, is the day on which the arbitral tribunal is finally constituted (ie, when all of the arbitrators have accepted their appointment: Cass civ 1, March 30 2004, Société Frabaltex, No 01-11.951 98, Bull civ 79), rather than from the day when knowledge of the irregularity is acquired.