AT & T Corporation and Another v. Saudi Cable Co.

The Saudi Arabian Ministry of Post Telephone and Telegraph invited telecommunications companies, including AT & T Corporation (AT & T) (plaintiff) and Northern Telecom Ltd. (Nortel), to bid on a large telecommunications project (TEP-6). The bids required an agreement to purchase cable from Saudi Cable Co. (SCC) (defendant). In 1993 SCC and AT & T entered a pre-bid agreement (PBA). The PBA was governed by New York law and contained an arbitration clause stating that disputes would be referred to the International Chamber of Commerce (ICC) for arbitration, with London as the seat of arbitration and English law governing. After AT & T’s bid was accepted for the TEP-6 project, it began negotiations with SCC pursuant to the PBA. Negotiations were unsuccessful, and AT & T filed a request for arbitration with the ICC. An experienced Canadian attorney and arbitrator, L. Yves Fortier, was selected as the tribunal’s presiding arbitrator. Fortier was a nonexecutive director of Nortel. Because of a secretarial error in submitting Fortier’s résumé to the parties, Fortier’s involvement with Nortel was not disclosed to the parties. As a nonexecutive director, Fortier’s involvement with Nortel was limited, and any outcome of arbitration would not have a material effect on him. The arbitral tribunal issued two awards in SCC’s favor, and during hearings concerning damages, Fortier’s connection with Nortel was discovered. AT & T challenged Fortier’s appointment as an arbitrator with the ICC. After the ICC rejected its challenge, AT & T filed in commercial court seeking Fortier’s removal as arbitrator for bias. The commercial court rejected AT & T’s application, and AT & T appealed.