Who can become an arbitrator under French law?
Pursuant to Article 1508 of the French Code of Civil Procedure (the “CCP”), parties to an international arbitration agreement are free to appoint arbitrators, directly or by reference to a set of arbitration rules. The arbitral tribunal is either composed of a sole arbitrator or of an uneven number of arbitrators – generally three.1
French law does not impose for any specific requirements as to the diplomas, qualifications, and level of experience required to become an arbitrator. Therefore, virtually anyone can become one!
However, the exercise of certain professional activities may disqualify a person from acting as an arbitrator, such as being a state judge or a judicial officer (“huissiers de justice”),1 as well as being a member of Parliament.2 Civil servants are also prohibited from being appointed as arbitrators unless authorised, with the exception of law professors who are often appointed as arbitrators. Any arbitrator found to be in breach of these prohibitions faces disciplinary action, but this does not affect the validity of the award rendered.
In both domestic and international arbitrations seated in Paris, France (Article 1505 of the CCP), the “juge d’appui”3 has jurisdiction to resolve any dispute concerning the constitution of the arbitral tribunal,4 the challenge of arbitrators,5 as well as their abstention, resignation or impediment.6
Arbitrator's duty of independence and impartiality under French law
Once appointed, arbitrators must meet the requirements of independence and impartiality throughout the arbitral proceedings, whether domestic or international.7
As a result of such duty, arbitrators are required to disclose any fact or circumstance that may affect their judgment and/or create, in the mind of the parties, a reasonable doubt as to their independence or impartiality, even if such circumstance arises after the acceptance by the arbitrator of her/his appointment.8 A reasonable doubt may result from a potential conflict of interest which can be “direct” as it involves a link between the arbitrator and a party or its counsel, or “indirect” as it involves a link between the arbitrator or her/his firm and a third party with an interest in the arbitration9. In the latter case, the assessment of reasonable doubt depends, in particular, on “the intensity and the proximity” of such link.10
Arbitrators are, however, exempt from disclosing “notorious facts” of which the parties are deemed to have knowledge, i.e., “easily accessible public information, which the parties could not have failed to check before the start of the arbitration”.11 This requires judges to undertake a very detailed and factual analysis of the case to determine whether the fact in question was notorious or not.12
Failure to make a disclosure and/or a disclosure of facts which, in the opinion of a party, reveal a lack of independence and/or impartiality, entitles a party to challenge the arbitrator during the course of the arbitration. To this end, the parties must refer the matter to the arbitral institution in charge or, in the absence of such an institution, to the “juge d’appui” within one month following the disclosure or the discovery of the fact in question.13
The arbitrator’s lack of independence and impartiality may also be raised before French courts at the stage of setting aside the award or of the appeal proceedings against an exequatur order, on the grounds of the improper constitution of the arbitral tribunal,14 the violation of international public policy15 or on the ground that it constitutes a breach of the principle of equal treatment between the parties and the rights of defence.16
These notions and the scope of the duty of independence and impartiality have been actively debated before French courts over the years. The Paris Court of Appeal has held on several occasions that the independence of an arbitrator is “assessed objectively in the light of precise and verifiable factors external to the arbitrator”, while “impartiality presupposes the absence of prejudice or bias likely to affect the arbitrator’s judgment” and implies the absence of bias or predisposition towards a party that may affect the arbitrator’s judgment, due to multiple factors such as the arbitrator’s nationality, social, cultural or legal environment.17
On 10 January 2023, the Paris Court of Appeal caused a stir in the arbitration community when it rendered a landmark judgment setting aside an award on the grounds that the presiding arbitrator had failed to disclose his “close personal relationship” with counsel for the claimant in the arbitration.18 This was evidenced by a tribute written by the presiding arbitrator at the time of the counsel’s passing, stating that their friendship “became more personal because [claimant’s counsel] finally opened up, which he rarely did” and that the presiding arbitrator “consulted [claimant’s counsel] before any important decision”.
With regard to investment arbitration specifically, it is also worth noting that France participated in the drafting of the Code of Conduct for Arbitrators in international investment dispute resolution.19 This Code contains numerous provisions on what an arbitrator should or should not do to ensure their independence and impartiality. It regulates the practice of “double hatting” by preventing the arbitrator from acting as a legal representative or an expert witness in any other proceeding involving the same measure(s), the same or related party, or the same provision(s) of the same arbitration agreement.20
Arbitrator's duty to act expeditiously and loyally under French law
Besides independence and impartiality, arbitrators have a statutory duty to “act expeditiously and loyally in the conduct of the proceedings".21
The duty to act expeditiously includes the duty to comply with the time limit within which the award must be made, whether that time limitation is statutory, conventional, or set by the applicable arbitration rules.22
The principle of procedural loyalty is a close parent of the concept of procedural estoppel and is rooted in the principle of good faith. The arbitrators' duty of loyalty under Article 1464 requires them to act with diligence and transparency. They must not surprise the parties with procedural decisions that they could not legitimately expect and must remain fully available throughout the arbitration.
Focusing on diversity when appointing arbitrators
There is no specific provision under French law actively promoting diversity in the choice of arbitrators. However, the French arbitration community is increasingly dedicated to enhancing diversity in the appointment of arbitrators.
French arbitrators come from a wide range of backgrounds, including different professions, such as lawyers, law professors and industry specialists. They possess varied educational backgrounds, hold various degrees, and often speak several languages, reflecting a diversity of expertise that contributes to the dynamic nature of the French arbitration community.
The International Chamber of Commerce (“ICC”) has been leading the way by undertaking many initiatives on both gender equality and cultural diversity.
Since 2015, the ICC released diversity-related statistics showing a greater diversification of the profile of arbitrators in ICC cases. It also published a Note to ICC National Committees and Groups on the proposal of arbitrators, in which Committees and Groups, when appointing an arbitrator, are encouraged to consider diversity.
Moreover, at the beginning of 2023, in its Centenary Declaration, the ICC listed diversity, equity and inclusion for all stakeholders in dispute resolution as one of its ten main objectives for the next century.
Regarding gender equality, the ICC statistics show a steady increase in the appointment of female arbitrators from 10% in 2015 to 23.4% in 2020, a record for the ICC.23 Moreover, under the auspices of the ICC, the Equal Representation in Arbitration Pledge (“ERA Pledge”) was launched in 2016 and now has more than 4,000 signatories from law firms, institutions and organisations from over 113 countries, seeking to increase the number of women appointed as arbitrators with the ultimate goal of full parity.
French arbitration practitioners are also focusing on appointing younger arbitrators. In 2011, the French Arbitration Committee created the “under 40 group” (“CFA-40”), which today has more than 350 members and organizes numerous events. Similar groups and committees, such as the Paris Very Young Arbitration Practitioners (“PVYAP”), and the ICC Young Arbitration & ADR Forum (“ICC YAAF”), have emerged to put the spotlight on younger members of the arbitration community and to contribute to diversify the market.
Other task forces are working to make arbitration more accessible to everyone, such as the Task force on Disability Inclusion and International Arbitration, established by the ICC in 2021, and the ICC LGBTQIA+ network, established in 2023.
Moreover, recent keynote speeches given at Paris Arbitration Week intentionally focused on diversity so as to ensure continued awareness on this issue.
Dual liability of arbitrators under French law
Under French law, arbitrators’ duties are considered to be both jurisdictional and contractual, and it is therefore necessary to distinguish between these two possible sources of liability.
In the absence of specific legislation on the matter, the liability regime of arbitrators has gradually developed by way of case law.
As a preliminary remark, the court with jurisdiction to hear an arbitrator's liability claim is the court of the place of the seat of the arbitration.24 It should be noted that, on the one hand, an action for liability against an arbitrator may be combined with an application to set aside the award and on the other hand, each action may be brought independently of the other. Care must be taken not to confuse the two types of litigation: an award can be set aside without the arbitrator being held liable; or the arbitrator can be held liable for a breach without the award being set aside as a result.
If the liability claim relates to the conduct of the arbitration, it is qualified as a breach of the arbitrator's contractual obligations. The claiming party must therefore prove simple negligence (“faute simple”) on the part of the arbitrator. If, on the other hand, the claim relates to the content of the award, the arbitrator has full immunity from his/her judgment.25 The claiming party would therefore have to prove fraud, gross negligence or denial of justice in order to succeed.26
There is debate with regard to the amount of damages that may be awarded if an arbitrator is found to be liable. What is certain is that, in such circumstances, the arbitrator’s fees and arbitration expenses will have to be reimbursed.27 On the other hand, the possibility of obtaining damages for the loss of opportunity to obtain the profits at issue in the case, appears uncertain under current case law and seems to be subject to exceptional circumstances.28
This series will continue next week with the position from Germany.