Cass. Civ. 1 19 December 2018, n°16-18.349

On 19 December 2018, the French Cour de cassation (Arrêt n° 1220) ruled that parties are not entitled to invoke before a judge deciding on the annulment of an arbitral award facts that cast doubts on the arbitrator’s independence and impartiality if they did not raise them within the time limits established in the applicable arbitration rules.

The facts such judgement refers to stem from a dispute concerning the performance of a subcontractor in the context of a civil construction project abroad. The contract pointed to arbitration proceedings under the Rules of the International Chamber of Commerce (ICC). The ICC Rules of Arbitration provide that a party may only challenge an arbitrator within 30 days of the date on which the party was informed of the facts and circumstances on which it relies on to submit the challenge.

One of the parties had thus decided to challenge an arbitrator, and had its application dismissed for being time-barred, i.e., after the 30 days provided in the ICC Arbitration Rules. In due course, the arbitral tribunal rendered a partial arbitral award, ruling on part of the dispute. That same party, following the partial award, commenced proceedings in order to set it aside in French courts. The action for annulment was grounded on Article 1502, 2 of the French Code of Civil Procedure in force at the time, which provided that, in international arbitration, an appeal against a decision granting recognition or enforcement of an arbitral award shall be possible only if the arbitral tribunal was irregularly composed or the sole arbitrator was irregularly appointed. The party brought such appeal on the ground that the president of the arbitral tribunal had failed his duty to disclose information regarding his independence and impartiality.

The Paris Court of Appeal, on 12 April 2016, dismissed the appeal after a lengthy procedure. Dissatisfied with such a result, plaintiff filed a petition to the Cour de cassation requesting it to overrule the Court of Appeal’s decision.

The Cour de cassation upheld the Court of Appeal’s dismissal, considering in particular that plaintiff was no longer entitled to invoke facts already raised in the making of the challenge to the arbitrator at the ICC and subsequently refused for being untimely, unless any further and new relevant information was discovered in the meantime. The Court pointed out that the information plaintiff wished to rely on for its challenge was available and verifiable on the same day it received an e-mail from the president of the arbitral tribunal revealing facts that would have had an effect on the trust of the party. Furthermore, it stated that if new information had been thereafter sent, it would only complement the information previously revealed before challenging the arbitrator, without aggravating doubts about the arbitrator’s independence and impartiality.

The 2018 decision seems to be in line with the 25 June 2014 (Arrêt n° 758) decision in which the Cour de cassation held that “The party who knowingly fails to exercise, within the period prescribed by the applicable arbitration rules, the right to challenge [an arbitrator] on the basis of any circumstances likely to jeopardize the independence or impartiality of an arbitrator is deemed to have waived the right to rely on them before the judge [responsible for setting aside an award]. »

Timing in arbitration is of paramount importance. Although dealing with another matter than the challenge of an arbitrator, in a decision dated 16 March 2018 (Daewoo Shipbuilding & Marine Engineering Company Limited V. Songa Offshore Equinox Limited And Songa Offshore Endurance Limited), the English Commercial Court dismissed an application of appeal under the English Arbitration Act as it was not made within the statutory time period provided by s70(3) of the Act and that, furthermore, there was no reason to grant an extension to the period.

The matter involved a discussion on whether the 28-day statutory period for appeal started to run on the date of the original award or on the date of the correction of the award due to a clarification request. The English Court ruled that such period commences on the date of the original award unless the correction made to it was material to the challenge of the award. In such case, it also decided that this exception did not apply and, therefore, plaintiff’s application was time-barred.

Considering past Court decisions, it is undeniably important to parties in an arbitration to be aware of timeframes in international arbitration and the local legislation of the seat of the arbitration. In addition, it is necessary to check the conditions for challenging an arbitrator set out either by the arbitration agreement or by the institutional arbitration rules. Failing this, it will not be possible to invoke facts that were raised and verifiable at the time of the challenge in support of annulment proceedings, unless new facts are then revealed.