Originially from: World Arbitration and Mediation Review (WAMR)

‘EQUALITY’ IS REQUIRED WHEN NAMING
ARBITRATORS, COUR DE CASSATION RULES
By Stephen R. Bond, White & Case, Paris; formerly Secretary General, ICC
International Court of Arbitration
Declaring that “the principle of equality of the parties in the naming of
arbitrators” is a matter of public policy (ordre public), the Cour de Cassation,
France’s highest court, has ruled that this principle was violated by the imposition
of a single arbitrator on two defendants in a multi-party arbitration. The
implications of the decision are already the subject of considerable debate in
arbitration circles. (Siemens AG and BKMI Industrienlagen GmbH v. Dutco
Construction Co., Cour de Cassation, January 7,1992)
The Problem of Multi-Party Arbitration
Multi-party arbitration is arbitration’s equivalent of squaring the circle. The
conundrum arises because steps that may be perceived as necessary for the
“efficient administration of justice”—consolidating related cases, joining all
interested parties in a single arbitration, avoiding an ungainly number of
arbitrators sitting on a tribunal— can run directly counter to the consensual nature
of arbitration, which is generally considered its inviolable foundation.
However, the growing complexity of international commercial relations means
that a significant percentage of contracts and business relationships are multipartite
in nature and, necessarily, so are the disputes that grow out of them. Thus,
over the past seven years, some 20 percent of the approximately 2,000 cases
submitted to the ICC’s International Court of Arbitration were multi-party in the
sense of involving three or more parties. Indeed, a few cases involved 50 or even
100 parties. The issues related to multi-party arbitration are, therefore, neither
theoretical nor hypothetical, and neither are the ensuing difficulties.
Selecting the Tribunal
Among these difficulties is the selection of the arbitral tribunal in a multi-party
arbitration. The judgment of the Cour de Cassation in the Dutco case deals with
this issue head-on.