Court of Cassation, No. 87-19.319

Court of Cassation, First Civil Chamber, 7 January 1992, No. 87-19.319

PAKISTAN ATOMIC ENERGY COMMISSION (PAEC)

vs.

SOCIÉTÉ GÉNÉRALE POUR LES TECHNIQUES NOUVELLES (SGN)

On the appeal brought by the Pakistan Atomic Energy Commission, known as PAEC, PO, Box 1114 Islamabab (Pakistan), represented by its Chairman General Manager, Mr Munir Ahmad Z…, in cassation of a judgment delivered on 13 July 1987 by the Paris Court of Appeal (First Chamber, Additional Division), in favour of the Société Générale pour les Techniques Nouvelles, known as SGN, whose registered office is at Montigny-Le-Bretonneux, Saint-Quentin-en-Yvelines (Yvelines),defendant to the cassation.

The claimant mentions, in support of its action, two grounds of cassation annexed to the present judgment.

According to the terms of the judgment under appeal (Paris, 13 July 1987), the Pakistan Atomic Energy Commission (PAEC) concluded, in 1973 and 1974, with the French company Saint-Gobain Techniques Nouvelles, which became in 1977 the Société Générale pour les Techniques Nouvelles (SGN), a contract for the performance of studies and technical assistance for the installation of a plant for the reprocessing of irradiated fuel in Pakistan. Following intergovernmental agreements, the parties concluded another contract on 10 August 1977 for the supply by SGN of a component of the reprocessing plant. This contract, which came into effect on 27 September 1977 after SGN had become a lower-tier subsidiary of the French Alternative Energies and Atomic Energy Commission, contained a definition of force majeure which included acts of State and an arbitration clause providing for amiable composition. By a letter dated 10 May 1979, SGN informed PAEC that, on 10 April, it received instructions from the French Government to suspend the contracts. Subsequently, by a letter of the following 31 July, SGN notified its counter-party that it could no longer provide the expected services because of an event of force majeure. PAEC, in accordance with the arbitration clause, filed a claim before the Court of Arbitration of the International Chamber of Commerce. By an award dated 25 July 1985, the arbitral tribunal ruled that the decision of the French Government, which was notified to SGN on 10 April 1979, was a case of force majeure preventing any claim for non-performance of the contract, and sentenced SGN to the payment of damages, because of the latter’s delay in providing proof of the existence of such force majeure.

The Court of Appeal dismissed PAEC’s action for annulment against this award, which action was based on Article 1502-3, 1502-4 and 1502-5, of the new Code of Civil Procedure.

On the first ground of appeal, taken in its five branches, as set out in the statement of claim of PAEC and reproduced as an annex to this judgment:

First, the statements of the challenged judgment entail that several months before the arbitral hearing of February 1985, SGN invoked legal and factual grounds which it drew from a decision of the government prohibiting it from performing the contracts. Shortly before this hearing, and at the time of the events, only the announcement of the witness statement of Mr. Y… and the transmission of an affidavit of the Minister of Industry took place. The PAEC deferred to the decision of the court, merely reserving its rights, and did not oppose to the hearing of the witness, who simply read the decision taken on 15 June 1978 by the External Nuclear Policy Council without producing it. Prior to the closure of the proceedings on 22 April 1985, the PAEC was able to assert its rights in its summary brief dated 8 April 1985, in which it sought the possibility of producing further evidence and legal opinions only in the event that the court considers that the testimony and affidavit are “relevant and persuasive”. This was not the opinion of the arbitrators as expressed in their award and for whom this information served only to “clarify their approach” with respect to the existence of the French governmental decision which was sufficiently established by all of the components of the file. In light of these claims, the Court of Appeal legally justified its decision, without distorting the award, by considering that PAEC had been able to organise its defence in due course and that neither the principle of due process (adversarial proceedings) nor that of the equality of the parties had been violated. Therefore, the ground of appeal cannot be admitted in any of its parts.

On the second ground of appeal, taken in its three branches as set out in the statement of claim and reproduced as an annex:

The Court of Cassation cannot control the application of international trade practices, nor that of equity or “own good judgment” of the arbitrators ruling as amiable compositeurs. In addition, under the guise of unfounded grievances regarding the lack of legal basis, the ground of appeal extends only to the review of the merits of the award, which does not fall within the jurisdiction of the Court of Appeal ruling on an action for annulment. The ground of appeal, taken in its various parts, is therefore not admissible.

FOR THESE REASONS:

DISMISSES the appeal.