In Groupe Antoine Tabet c/ la République du Congo, Cass. Civ. 1re, n° 11-16444 of 25 June 2014, the French Supreme Court (Cour de cassation) considered an application to have an award set aside on the grounds that the President of the tribunal had failed to disclose a relationship that was capable of raising doubts as to his independence.
The French Supreme Court upheld the award rendered at the International Court of Arbitration of the International Chamber of Commerce (ICC) in favour of the Republic of the Congo. The court refused to set aside the award, finding that there was no conflict of interest giving rise to a risk that the President of the tribunal might not have been independent and impartial. The court rejected the argument that the assessment of the arbitrator’s independence and impartiality should have involved an investigation into the substantive reasons behind the conclusion of certain contracts.
The judgment provides a welcome reminder of the limits to the court’s supervisory function, offering a clear indication that the role of the courts does not extend to independent investigation of the facts at issue. The decision also contributes to the ongoing development of French law in respect of arbitrators’ obligations of disclosure.
In April 1992 and March 1993, Group Antoine Tabet (GAT) concluded two contracts for the financing of public works with the Republic of the Congo (the Congo). By three contracts concluded in 1996, 2001 and 2003 (the Contracts), TEP Congo guaranteed the payment of certain sums owed by the Congo to GAT. Under these agreements, TEP Congo undertook to pay petrol royalties which it owed to the Congolese authorities directly to GAT. TEP Congo is a member of the Total Group.
Following various disagreements, GAT brought ICC arbitration proceedings against the Congo. During the course of the arbitration, GAT sought the disqualification of the President of the Tribunal, on the basis that he was a director of a corporate shareholder in the Total group, before the ICC Court. The ICC Court rejected the application.
The proceedings resulted in a number of partial awards, and the Tribunal issued a final award, ultimately requiring GAT to pay “a certain sum” to the Congo, on 26 October 2009. The Paris Court of Appeal rejected GAT’s application to have the award set aside. GAT appealed to the French Supreme Court.
GAT based its appeal to the Supreme Court on three grounds.
First, GAT argued that, in his roles as a company director and a partner in a law firm, the arbitrator had a business relationship with a group of companies that was guaranteeing any award made against one of the parties to the dispute. This was capable of raising doubts as to the arbitrator’s independence, and he was therefore required to make a full disclosure to the other party to the dispute.
GAT also attacked the Court of Appeal’s finding that the Contracts were irrelevant to the arbitrator’s impartiality (since, irrespective of whether the sum was paid to the Congo or GAT, TEP Congo would in any event be obliged to settle its debt). In reality, GAT argued, the fact of having a business relationship with the guarantor company was sufficient to create reasonable doubts as to the arbitrator’s independence and impartiality, and the Court of Appeal had failed to understand the legal consequences of its own conclusions. As a result, it had breached Articles 1502-2° (setting aside on the grounds of an irregularity in the constitution of the tribunal) and 1452, paragraph 2 (the duty of disclosure) of the French Code of Civil Procedure (CPC), as well as Article 7(2) of the applicable ICC Rules and Article 6, para. 1 of the European Convention on Human Rights.
The second ground of appeal concerned the court’s supervisory role. GAT argued that this requires the court to identify anything which might affect the arbitrator’s judgement or raise reasonable doubts as to his independence and impartiality. As such, the Court of Appeal should not have limited itself to a finding that the Contracts were “financially neutral” and should instead have investigated why it had agreed to pay up to USD 70 million of any award made against the Congo. By not doing so, the Court of Appeal had again breached Articles 1502-2° and 1452, paragraph 2 of the CPC.
Finally, GAT argued that, by failing to consider the submission that the arbitrator ought to have revealed that he was a partner in a firm that highlighted its activities in the Congo and emphasised the excellent relations that it enjoyed with local institutions, including Government ministries, the Court of Appeal had breached Article 455 of the CPC (which sets out the requirements for a valid judgment).
The Supreme Court rejected the appeal. The Court of Appeal had found that the Contracts were “neutral” for TEP Congo, which would pay USD 70 million irrespective of whether the Congo was successful in the proceedings. It was therefore entitled to conclude that the outcome of the arbitration would have no impact on the finances of TEP Congo – which was not itself a party to the procedure – with the result that there was no conflict of interests giving rise to a risk that the arbitrator might not be independent and impartial.
Equally, once it had found that, when considered with the other elements of the case, the arbitrator’s undisclosed relationship with the Total Group could neither affect his judgement nor provoke “reasonable doubt” about his independence and impartiality, the Court of Appeal had been correct to reject the submissions based on the irregular constitution of the Tribunal. The Court of Appeal was not required to investigate the reasons behind the Contracts; nor was it obliged to respond to the argument invoked in GAT’s third ground of appeal.
This decision represents a helpful clarification of the Court of Appeal’s supervisory role over the arbitral process. The Supreme Court’s rejection of the argument that the assessment of the arbitrator’s independence and impartiality should have involved an investigation of the substantive reasons behind TEP Congo’s conclusion of the Contracts is a welcome reminder of the limits to the court’s supervisory function, offering a clear indication that the role of the courts does not extend to independent investigation of the facts at issue.
The decision also contributes to the ongoing development of French law in respect of arbitrators’ obligations of disclosure. The importance which both the Supreme Court and the Court of Appeal attached to the fact that the award would have no impact on TEP Congo’s finances suggests that, in certain circumstances, it may be the actual effect of an award, rather than the nature of the arbitrator’s interests, which determines both the scope of an arbitrator’s disclosure obligations and the extent to which doubts may be raised as to their independence and impartiality. The refusal of the French courts to set the award aside may be indicative of a desire to avoid an excessively strict approach to the issue and it will be interesting to see how the Paris Court of Appeal addresses the question in the next stage of the long-running Tecnimont sage.