🚧Arbitration, a highly appropriate technique for deploying Compliance Law, in particular to satisfy the Vigilance Obligation

Compliance and Arbitration are two techniques, two words even, that are not often brought together.

It's as if the two were mutually exclusive.

Why is this?

Because there is little understanding of what Compliance Law is.

Let us first understand this misunderstanding, and then we will understand why Arbitration seems to have little or no place in Compliance Law, as soon as it is reduced to the sole concern of "conformity".

I. SO LITTLE ROOM FOR ARBITRATION IN THE SOLE "CONFORMITY" REQUIREMENT

Currently, Arbitration is not developing very much because it is still believed that "Compliance" only consists of obeying mandatory regulations, particularly those that are punishable by Criminal Law.

Therefore, because Arbitration is equated with the resolution of disputes between individuals with regard to their particular interests, concerning their available rights, whereas Compliance is equated with concern for the general interest and public order, Compliance and Arbitration would be opposed to each other.

Moreover, if they cross paths, it would only be so that, faced with an arbitration relationship that is contrary to Public Order, for example a corruption pact for which the arbitration proceedings are merely a request for this corruption enforcement, the arbitrators put an end to it, or even the  judge if they have not done so.

That, but nothing more...

But this is an inaccurate view of Compliance on the one hand, and an overly narrow conception of Arbitration on the other.

II. TO SATISFY THE COMPLIANCE MONUMENTAL GOALS, THE SUITABILITY OF ARBITRATION TECHNIQUES

Indeed, Compliance Law cannot be reduced to its tool, which is the active conformity with regulations. Compliance Law is this new branch of law whose normativity lies in its Goal, which is not conformity with regulations, even if these regulations are of Public Order. The goal is substantial: Compliance Law aims to preserve systems so that they do not collapse, whether in the banking, financial, health, transport, telecoms, digital, energy or climate systems, and so on.

Because the State cannot do this, Compliance Law requires entities that are in a position to contribute to achieving this monumental goal of system sustainability to make an effective contribution. These entities are large companies. They do so because they are obliged to by law or because they want to (CSR).

The Goal is set by the political and public authorities. This Monumental Goal of preserving systems varies from one part of the world to another, as current events are sadly showing. It is not the same thing in Asia, the United States or Europe. The Monumental Goal of Compliance Law that Europe has chosen, and which identifies it, is not only the preservation of systems in the future but also (and ultimately) the preservation of the human beings who are involved in them, whether willingly or not.

To meet this Compliance Obligation to contribute effectively and efficiently to the achievement of these Monumental Goals, companies are free to choose the methods they use. As long as these methods are credible.

One of the most effective methods is the Contract. In particular, a Compliance Contract (to manage data, for example).

One of the most effective clauses in contracts is the Compliance Clause, which will enable the company to make the required contribution to the Compliance Monumental Goals . This can be an arbitration clause.

One of the most effective clauses in contracts is the compliance clause, which will enable the company to make the required contribution to the Monumental Goals of Compliance. This can be an arbitration clause.

Let's take an example from the "Advanced Head of Compliance Law": a company's fulfillment of its Duty of Vigilance.

III. THE CLEAREST ILLUSTRATION: THE FUTURE OF ARBITRATION IN VIGILANCE MECHANISMS

The Vigilance Obligation results from various texts, but the most significant is undoubtedly the one set out in the French 2017 law, known as the "Vigilance Law" and European CS3D, which oblige parent companies and ordering companies that govern a value chain to detect and prevent serious environmental and human rights breaches within that chain. If a risk or violation is detected, remedial action must be taken.

To achieve this, the company needs to provide solutions to the partners along the value chain, which is generally built on a combination of corporate ties and long-term contracts that are mutually linked.

Any disputes that may arise must be resolved, and the issue of Vigilance may be only incidental to questions of contractual execution, interpretation, termination, liability, etc.

Arbitration, decided after the dispute has arisen, can be a solution, especially if it has to be harmonised across the entire value chain.

L'arbitrage, décidé après la naissance de la dispute, peut constituer une solution, surtout s'il faut l'harmoniser pour l'ensemble de la chaine de valeur.

Opening up the process to external stakeholders can make it more secure, especially if, as required by the CS3D directive, the company has to provide a solution to complaints about its own behaviour, in which case Arbitration is a way of ensuring that company is not both judge and judged.

Arbitration is thus a means of giving concrete expression, perhaps better than any other, to the need for value chains to be sustainable, an ambition that legal solutions must uphold in today's unstable world.

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