ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Tuesday, December 20, 2022

Cour de Cassation Vacates $15 Billion Arbitral Award Based on International Public Policy

This decision in Belokon v. Kyrgyzstan is from March 2022, but we just got wind of it care of Roslyn Lai and Charles Ho Wang Mak's publication in on the American Society of International Law Website last week.  The ruling is significant because it demonstrates the willingness of even pro-arbitration jurisdictions like France to consider materials not available to the arbitral tribunal.  In this case, the court determined that upholding the award would have enabled the investor to profit from money laundering.

Cour de Cassation
Image by Arushi0880, CC BY-SA 4.0 via Wikimedia Commons

The case arises out of Kyrgyzstan's actions agains the Manas Bank, in which Mr. Belokon, a Latvian national, had invested, in 2010.  Mr. Belokon brought a UNCITRAL action in 2010.   When the arbitral award was rendered in 2015, Manas Bank was insolvent.  

In the arbitration proceedings, Kyrgyzstan presented evidence that the bank was engaged in money laundering, but the arbitral body did not find the evidence sufficient.  It noted that, had Kyrgyzstan presented substantial and probative evidence of money laundering, it might not have ruled in Mr. Belokon's favor.  

Kyrgyzstan challenged the award before the Paris Court of Appeal, which found substantial evidence that the award would enable Mr. Belokon to profit from money-laundering activities.  Mr. Belokon appealed to the Cour de Cassation, arguing that the Paris Court of Appeal exceeded its authority in considering facts not presented to the arbitral tribunal.  The Court de Cassation found that the public policy anti-corruption interest in this case outweighed the public policy interest in the finality of arbitral decisions.

Cour_de_Cassation _Paris_140320_1
Cour de Cassation Building
Image by Daniel Vorndran / DXR, CC BY-SA 3.0, via Wikimedia Commons

The scope of the decision is unclear.  Based on the authors' summary of the case, it is hard to tell whether the relevant evidence was unavailable to Kyrgyzstan at the time of the arbitration or if it simply neglected to present it.  One would think that difference ought to matter.  In addition, it is not clear how a reviewing court should weigh the public policy interest in ferreting out corruption against the public policy interest in the finality of arbitral decisions.  In this case, the Cour de Cassation was persuaded that enforcing the decision would enable Mr. Belokon to benefit from money-laundering and apparently it was convinced the the arbitral tribunal, if presented with the evidence it had before it, would have refused Mr. Belokon's demand for compensation.

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