Welcome to our latest update, focused on bringing you closer to the pulse of arbitration in Paris. In this edition we have curated key arbitration points that we believe are important for you, our clients:

• A dive into the latest French Conseil d’État’s decision on applying arbitration to public contracts disputes,
• A close look at the recently published ICSID Caseload Statistics report for FY2024,
• Essential tips and strategies to examine witnesses during an arbitration hearing,
• An exploration of arbitration’s role in resolving transportation disputes, and
• An invitation to meet in Mexico if you are also participating to the IBA!

Enjoy the read! Please do get in touch if you have any feedback or questions.

Ioana.

Latest French Arbitration Case Law

ARBITRATION & PUBLIC CONTRACTS: In its ruling dated 30 July 2024, the French Conseil d’État illustrated how French administrative court navigate the complex waters of setting aside arbitral awards related to public contracts.

It ruled against the annulment of an arbitral award which had directed the Martinique territorial authority to indemnify a Colas/Satrap consortium for a road construction dispute. The Conseil d’État reaffirmed its jurisdiction over such annulment requests, the general prohibition of arbitration in public contracts, and the limited scope of its review to procedural integrity and public policy compliance. Ultimately, it found no violation of impartiality or public policy, highlighting the strict exemptions under which arbitration is permitted in public contracts and the procedural rigour expected in such proceedings.

Takeaway? This decision clarifies the specific conditions under which arbitration may be utilized in public contracts and outlines the specific considerations for annulment procedures before the Conseil d’État, reinforcing the careful balance between contractual freedom and public interest safeguarding.

(Read my detailed analysis of the French Conseil d’État’s decision here)

Regional Highlights - ICSID Caseload Statistics

On 19 August 2024, the ICSID released its “ICSID Caseload – Statistics” report for the fiscal year 2024, showcasing a year of near-record activity:

• Record caseload: 57 new arbitration cases were registered, alongside 13 investor-State UNCITRAL arbitrations. In total, the ICSID Secretariat administered 358 cases, marking the second-highest caseload in ICSID’s history;
• Primary dispute instruments: BITs remain the most frequently invoked instruments, accounting for over 53% of cases (a slight decrease from the previous year’s 59%), while the Energy Charter Treaty (ECT) was invoked in 14% of cases;
• Geographic focus: a notable 24% of cases concerned Eastern Europe & Central Asia, the largest proportion among all regions, followed by South America (19%), North America (16%) and Central America & the Caribbean (12%);
• New cases across CEE & CIS: New cases were brought in the region against Armenia, Azerbaijan, Belarus, Bulgaria, Croatia, Georgia, Hungary, North Macedonia (2 cases), Poland, Romania, Serbia, Turkmenistan, and Ukraine;
• Sector-specific trends: The Oil, Gas & Mining sector dominated the caseload, representing 28% of disputes. There was a sharp increase in Transportation disputes, which doubled to 19% from its all-time average of 9%, followed by Electric Power & Other Energy disputes (17%) – illustrating the evolving landscape of international investment, with significant shifts towards infrastructure and energy sectors;
• Dispute outcomes: 53% of ICSID arbitral tribunals’ awards declined jurisdiction, while 36% dismissed all claims, and 11% upheld claims either in part or in full;
• Diversity in arbitration panels: Despite the overwhelming majority of arbitrators hailing from Western Europe (40%), the report notes a commendable increase in the appointment of women arbitrators to 29%, up from the 7% in 2023 (with ICSID itself being responsible for 25 out of the 58 appointments of women).

PRACTICAL TIPS – Examination of witnesses

The examination of witnesses during arbitration hearings is a pivotal moment in the presentation of your case. It is where “the rubber meets the road”, where your factual and expert witnesses’ testimonies come to life (direct examination), and where you have the opportunity to challenge the credibility and reliability of the opposing party’s witnesses (cross-examination). Excelling in those two exercises can greatly affect the tribunal’s view of the facts and the case’s outcome:

• Thorough preparation is non-negotiable: Understand your witness’s testimony inside out, including their written statements and any documents they will refer to. For cross-examination, prepare by identifying weaknesses or inconsistencies in the opposing witness’s statements and supporting documents,
• Craft a narrative through your questions: Use direct examination to build a coherent story that supports your case. Your questions should guide the witness to highlight the key facts and issues, reinforcing the overall narrative of your own arguments,
• Ask open-ended questions during direct examination: Encourage your witnesses to elaborate by asking questions that start with “how”, “what”, “why”, or “describe”, which will help the tribunal to understand the witness’s perspective and the context of their testimony,
• Use leading questions in cross-examination: Unlike direct examination, cross-examination allows for leading questions. Use them strategically to challenge the opposing witness’s credibility or to highlight inconsistencies in their testimony without giving them room to expand in a way that could be detrimental to your case,
• Control the pace and flow: Especially during cross-examination, maintain control over the witness by directing them to “yes” or “no” answers before providing an explanation. This technique helps keep the focus on the issues you are highlighting,
• Do not argue or pleading your case: Examination is not the venue for arguing your case or plead to the tribunal, who may see this negatively. Instead, focus on eliciting factual statements or admissions that support your case or weaken the opposing party’s position,
• Listen actively and be ready to adapt: While you should prepare your questions in advance, be prepared to modify your approach based on the witness’s answers. This is especially important when re-examining your witnesses to allow them to clarify or reinforce key points after their cross-examination,
• Practice makes perfect: Rehearse the examination with your team to refine your questions and ensure they are clear and concise. This will help you anticipate potential responses and refining your strategy to deal with them. There is no other secret to success!

SECTORIAL NEWS – Transportation

The transportation sector – a cornerstone of global commerce and mobility – is inherently complex due to its international scope and the involvement of diverse regulatory frameworks. This sector encompasses maritime, aviation, land, and rail transportation and, as such, is vital for the seamless flow of goods and passengers across borders. Disputes are thus not uncommon and arbitration has emerged as a preferred method for their resolution:

• Typology of disputes: The sector sees a variety of disputes, including (i) disputes relating to damage, loss, or delay in the delivery of goods, (ii) issues between shipowners and charterers over vessel charters, (iii) disputes over freight charges or demurrage fees, (iv) claims involving carriers’ insurance and liability for accidents or damage to goods, (v) regulatory compliance disputes related to international regulations and safety standards, and (vi) disputes arising from the use of multiple modes of transport and the liabilities of the different carriers involved;
• International regulatory framework: The inherent global nature of transportation disputes often involves complex questions of international law, including conventions specific to each mode of transport (such as UNCLOS for maritime, and ICAO regulations for aviation);
• Geopolitical and technological impacts: Disputes may also stem from geopolitical tensions affecting trade routes, from issues related to the adoption of new technologies in transportation (hydrogen vehicles, advanced transport management software and dynamic routing, digital freight procurement, etc.);
• Specialized arbitration institutions: The resolution of transportation disputes benefits greatly from the involvement of specialized arbitration institutions that offer expertise and tailored arbitration services for the sector. These include notably the London Maritime Arbitrators Association (LMAA), the Chambre Arbitrale Maritime in Paris (CAMP), the Hague Court of Arbitration for Aviation (the Hague CAA) or the Shanghai International Aviation Court of Arbitration;
• Sustainability challenges: The drive towards more sustainable practices in aviation, maritime and freight industries has introduced new types of disputes, particularly around environmental compliance and the adoption of green technologies.

By the way

As you read this, I’m amidst the buzz and excitement of the IBA2024 Annual Conference in Mexico – the City of Palaces! The days have been packed with enlightening sessions, lively discussions, and the chance to meet with peers from across the globe so it’s been an unforgettable experience.

I have to admit that the conference has offered a perfect blend of professional development and cultural exploration. From thought-provoking panels to networking events, every moment has been an opportunity to learn and connect. And, of course, experiencing the local culture, cuisine, and scenery has added a wonderful dimension to this trip.

There is still time left so if you’re also in Mexico and would like to grab a coffee and catch up, let me know!