Altering the Courts’ Uniform Approach towards Conflict of Interest in Arbitration
With respect to the issue of impartiality and independence of arbitrators, Shehata & Partners was again successful in setting a precedent before the Egyptian Highest Courts. This case was the first time in the Egyptian Court of Cassation that any arbitral award was annulled on the ground of partiality of one of the arbitrators, and the second time that a CRCICA arbitral award got fully annulled. When Europe 2000 were unable to collect their dues from the Cairo Cleaning and Beautification Authority in their CRCICA arbitration, Shehata & Partners was hired to annul the award in order to have a second shot against the Cairo Cleaning and Beautification Authority.
A thorough analysis of all the documents and facts of the case enabled Shehata & Partners to discover new facts that would formulate the basis for a solid ground for an annulment. Essentially, we discovered that the arbitrator appointed by Cairo Cleaning and Beautification Authority was their former legal counsel. As with most arbitration rules and laws, there is always a time bar for any claim concerning the impartiality and independence of arbitrators. Therefore, it was crucial for Shehata & Partners to prove that Europe 2000 had only become aware of this new information after the issuance of the award. The lack of disclosure by the arbitrator in question might have made this case easier in other jurisdictions, however in Egypt the case was different because prior cassation precedents have always taken the approach that the failure of disclosure by the arbitrator does not always mean that the concerned party was not actually aware of the arbitrators’ alleged conflict of interest.
Shehata & Partners understood that the Cassation Circuit reviewing the case had been relying upon international legal authorities in its prior precedents, so we relied extensively on the IBA Guidelines on Conflict of Interest as well as international legal authorities to back up our chosen approach. In doing so we managed to convince the Cassation Court that the failure of the arbitrators’ disclosure should shift the burden of proof to the other party, breaking new grounds in the field of Egyptian Arbitration. Shehata & Partners’ integral knowledge of arbitration, and in particular soft law instruments, was the cutting edge in the winning of this case.