Bouygues Bâtiment IDF (Bouygues) and the Lebanese company Elcir entered into a sub-contracting agreement relating to construction work in Paris. A dispute subsequently arose, leading Bouygues to initiate arbitral proceedings and to designate an arbitrator. The latter was disqualified by Elcir and replaced by another arbitrator, also listed in the list attached to the arbitral clause. An arbitral award was rendered.
The company Elcir filed an action for annulment of the award. It argued that the case in question was a domestic arbitration and that the arbitral tribunal was irregularly constituted because of the lack of independence of the arbitrator.
The Court of Appeal considered that the case was an international arbitration. The Court reiterated that that an arbitration case is international if it has economic implications in more than one State. The fact that the parties referred to provisions of the French Code of Civil Procedure relating to domestic arbitration in their arbitration clause is irrelevant. The mere fact that the construction had been paid for through a Lebanese bank account is sufficient to characterize an arbitration as international.
The award was annulled. The Court of Appeal recognized the lack of independence of the arbitral tribunal since the arbitrator had deliberately concealed his designation by the other party in other proceedings only a few months before this arbitration had commenced. This element created reasonable doubt as to the impartiality of the arbitral tribunal. The Court also took into account the fact that the Claimant only proposed this arbitrator, as it had to pick a name in the list attached to the arbitral clause and that the arbitrator himself was reluctant to answer some of the Court’s questions.