Ukraine-Russia annulment addresses impartiality in geopolitically sensitive disputes

The Paris Court of Appeal’s recent decision to annul an arbitral award in an investor-state dispute between a Ukrainian businessman and the Russian government raises multiple issues.

The dispute arose from measures affecting Crimean real estate assets owned by a Ukrainian businessman through several companies following Russia’s annexation of Crimea in 2014. The owners claimed that the assets had been expropriated unlawfully and initiated arbitration proceedings under the 1998 Bilateral Investment Treaty between the Russian Federation and Ukraine (BIT).

Immediately after the Ukrainian investor won the first jurisdictional phase of the arbitration, the Russian Federation filed an action for annulment before the Paris Court of Appeal, where the arbitration was seated, on the ground that the arbitral tribunal had not been properly constituted. Its arguments were twofold. Firstly, the Russian Federation challenged the tribunal’s constitution, alleging that the PCA had not followed the agreed procedure. Secondly, it argued that the social media activity of two members of the tribunal impacted their impartiality to its detriment.

On this second point, the Russian Federation alleged that the two members had ‘liked’ LinkedIn posts condemning the invasion of Ukraine in 2022 and commented on humanitarian law violations during the conflict. Russia also alleged that the president of the tribunal failed to make any statement after his law firm published a press release condemning Russian's invasion while the arbitration proceedings were already underway.

In March 2024, the PCA removed the two arbitrators following a successful challenge by Russia on the same grounds.

In a decision issued on 15 January, the Paris Court of Appeal annulled the partial award on grounds of irregularity in the appointment of the tribunal’s president, and a lack of independence and impartiality on the part of the presiding arbitrator, as provided for in article 1520, 2° of the French Civil Procedure Code (CPC).

The court upheld the Russian Federation’s objection regarding the irregular appointment of the presiding arbitrator, finding that the arbitral tribunal failed to follow the parties’ agreed‑upon procedure. Under article 1(1) of the applicable UNCITRAL rules and the subsequent parties’ written agreement, the co‑arbitrators were to prepare a list of candidates from which each party could strike one name, with replacements added if any candidate became unavailable, ensuring five viable options.

Although both parties confirmed this replacement mechanism in a letter dated 22 July 2019, the tribunal disregarded it by asking the parties to revert to the original procedure, a proposal to which only the claimants agreed. The court held that the claimants could not unilaterally revoke their prior consent, nor could the tribunal disregard the parties’ binding agreement. Consequently, the appointment of the presiding arbitrator was deemed invalid for failing to comply with the parties’ established procedure.

Turning to the Russian Federation’s challenges of one of the co-arbitrators and of the president of the tribunal on grounds lack of independence and impartiality, the court proceeded in two phases.

The court first held that the Russian Federation’s challenge was admissible, declining to apply article 1466 CPC, which deems a party to have waived its right to challenge an arbitrator if it knowingly fails to do so within the required time limit, instead finding that the waiver rule did not bar the Russian Federation’s objection. Although the information invoked to challenge the co-arbitrator was publicly available, the parties were not under a duty to conduct “exhaustive searches” of online materials about arbitrators or their affiliations. It then assessed the substance of the alleged lack of independence and impartiality, concluding that the allegations against the co‑arbitrator did not raise reasonable doubt.

The court found that a comment by the co-arbitrator made online was purely academic – the comment was a note by the co-arbitrator to thank an author of a publication about migrant children affected by the Russian invasion of Ukraine – and that positions taken by his university to suspend cooperation with Russian institutions whenever such cooperation conflicted with the university’s firm stance in favour of peace and the restoration of international law did not bind the co-arbitrator personally.

The court also analysed an email from the co‑arbitrator accusing the Russian Federation of making “erroneous, repetitive and ill‑conceived” allegations in raising a challenge again him, and although the court found these expressions capable of raising a reasonable doubt, it held that they were written after the award and merely in reaction to being challenged, so they did not show bias at the time the award was made.

While the challenge of the co-arbitrator was dismissed, the outcome was, however, different for the president of the arbitral tribunal.

The challenge arose since, during the arbitration, the president of the tribunal was linked to a public statement issued by his law firm in March 2022 condemning Russia’s invasion of Ukraine and announcing that the firm would cease all work for the Russian government and any state‑owned or sanctioned Russian entities. Although, as the court emphasised, there was “no evidence” that the president “was himself the author of [this] statement” or that he “contributed to its drafting in any way”, this did not eliminate the concern. The court recalled that, as a partner of the firm, he was nonetheless bound by the firm’s official position and by its internal policy severing ties with Russian‑related clients, thus directly affecting one of the parties before him. This institutional stance, taken while the arbitration was ongoing, made the link particularly sensitive.

The court then reinforced its analysis by turning to concrete facts: the president had also ‘liked’ social media posts in which his colleagues openly criticised the Russian Federation and its president in relation to the invasion of Ukraine. These acts of public approval, although minor in isolation, were seen cumulatively as capable of giving rise to a reasonable doubt in the parties’ minds regarding his independence and impartiality.

In consequence, the court held that these combined elements – the firm’s published anti‑Russia stance, the president’s position as partner, and his online approval of anti‑Russian statements – justified the annulment of the award on “grounds of the irregularity in the appointment of the presiding arbitrator and a breach of the arbitrator’s independence and impartiality”.

While carefully reasoned, the decision may raise broader questions about how far courts should go when assessing arbitrators’ or their law firms’ public statements on breach of international law.

Arbitrators must remain free of any involvement in political battles, but the international context today is particularly sensitive.

Since 2022, many practitioners, academics, and institutions have expressed positions grounded not in political preference, but in fundamental principles of international law: respect for sovereignty, condemnation of aggression, protection of civilians. These are not partisan stances; they are legal ones.  Yet one of the difficulties highlighted by this decision is the risk that such statements may be recast as indications of partiality and, when taken out of context, leveraged in a manner capable of disrupting the proceedings.

The decision could also have an undesired “chilling effect”: arbitrators may feel pressure to limit academic commentary, professional engagements in favour of international law or the rule of law, or even anodyne social media interactions. This would not make the system more impartial; it would simply make it more timid.

Indeed, as international law norms are being increasingly challenged around the world, the case highlights the growing challenges facing arbitration institutions in appointing arbitrators in high-profile, investor-state disputes with geopolitical undertones. If any expression of support for the international legal order risks being interpreted as an “antisState” position, one may legitimately ask who remains eligible to sit in such cases. The decision invites us, respectfully yet seriously, to reflect on how to safeguard impartiality without discouraging the resilience of the system and Paris’ attractiveness as a seat of arbitration.