Please find below a translation of the article first published by La Semaine Juridique Entreprise et Affaires No. 26 on 1st July 2021 

The authors, Georges Arama and Martin Riedel  are in charge of our National and International Arbitration Department.

One of the topics discussed in this article is the corruption control as one of the challenges of the arbitration proceedings. In this respect, Georges Arama has successfully assisted the Gabonese Republic in a litigation regarding a construction project. On May 5th, 2021 the ICCP-CA annulled an arbitral award rendered by the ICC on 21 June 2018 which had ordered the Gabonese Republic and the City of Libreville to pay to the companies Webcor ITP and Grand Marché de Libreville the amount of 92 million euros in a litigation regarding a construction project. For more information about this topic, click here and read the full article “Wedding gift to Gabonese mayor leads to set-aside” published on 26th May 2021 by the @Global Arbitration Review ( (GAR).]

 

Arbitration: New issues in the development of economic relations between states and companies

Thanks to the flexibility and the leading role of the parties in the conduct of the proceedings, arbitration contributes to the economic development of companies and states.

The number of states or state entities involved in ICC arbitration proceedings has thus increased by 50% between 2013 and 2017[1].

However, since a state is not a party like any other, professionals, such as arbitrators and lawyers, had to adapt their practice to the issues arising from this particularity.

  • How can states and private actors strengthen their economic development through arbitration?

MR: Arbitral tribunals are a “neutral forum”. Choosing arbitration allows private actors to safely access new markets, without fearing to face a foreign language and legal system that they (rightly or wrongly) distrust.

GA: Our experience with public-private partnerships in Africa shows that companies want to submit their disputes to an independent, not national jurisdiction. The possibility to have ” outsourced” proceedings, conducted before experienced arbitrators, guarantees the protection of their local businesses. However, with the 2014 oil crisis, the economies of some oil-producing states have collapsed, affecting their ability to maintain a balanced relationship with their trading partners . Given the increasing number of cases and their economic importance, arbitral tribunals have taken care to examine the failures of these states with greater flexibility and, sometimes, the concept of equity has allowed to obtain awards that take into account the parties’ respective situations. The recourse to arbitration is therefore a reassuring factor for a company but also for states which, by this way, strengthen their development.

  • Based on your experience, which particularities do legal professionals have to face during an arbitration between a state and a private company?

GA: One of the peculiarities of defending  African states during arbitration lies in the field of evidence. The means or working methods of states diverge radically from those of companies. Unlike a company whose departments are in permanent contact, the administrations sometimes coordinate their respective actions poorly. It is not uncommon to discover documents that are contrary to the interests of the state or, on the contrary, that no document allows the state to justify its actions. It is our job as lawyers to report these difficulties to the arbitrators who handle such situations with more cautiousness and then “balance” the interests of the parties. Search for documentation by experts and lawyers is also essential and requires support and proximity to civil servants, who are not very familiar with these procedures, in order to reconstruct the case, from the negotiations to the litigation phase. Then, during the arbitration proceedings, the lawyer’s role will be to propose a concerted strategy to the different administrations and to make his interlocutors aware of the usefulness of the evidence to protect their interests.

MR: Securing evidence is also an important issue for companies and we often advise them to be assisted by a contract manager. We also explain to them the type of market and, above all, the characteristics of the state they are dealing with facing. For this purpose, klein • wenner has a team of multicultural and multilingual lawyers who have developed a strong expertise in international litigation and can assist them in French as well as in English, German or Italian.

  • Which procedural safeguards are in place to support states and private companies?

MR: International arbitration offers parties a promptness that is difficult to find in proceedings before most national courts. The confidentiality of the awards is another real advantage, especially in consideration of the financial importance and the reputation of the parties in international business.

GA: The rising number of states participating in arbitration proceedings has also highlighted the challenge of safeguarding public interests. An interesting example is corruption control. As this is occult by nature, arbitral tribunals and support judges had to develop the technique known as “red flags” to sanction it. Our law firm has often been faced with this kind of problem, notably during annulment actions before the Paris Court of Appeal, which strongly contributes to the fight against corruption and which recently used this technique to pronounce the annulment of an award on the ground of corruption, even though this argument had not been raised during the arbitration. The message that “the control of the judge who is in charge of the annulment has a specific and distinct purpose from that of the arbitral tribunal[2] must therefore be taken into account by law firms which, faced with the complexity of the networks and proceedings, have to develop a real know-how in the handling of these cases.

[1] ICC Report 2018

[2] Paris Court of Appeal, 17/11/2020, No. 18/02568

 

 

 

Georges Arama Partner

Martin Riedel Partner

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