Court of Cassation, No. 89-18.708

Court of Cassation, First Civil Chamber, 7 January 1992, n° 89-18.708

Siemens company and other

BKMI and other

vs.

Dutco construction company

Joined appeals no. 89-18.708 and 89-18.726, which have similar pleas;

On the first two ground of the single plea of each of the appeals, joined together:

According to articles 1502-2, 1504 of the new Civil Procedure Code and article 6 of the Civil Code;

The principle of equality of the parties in the designation of arbitrators is a matter of public policy. It can only be waived after the dispute has arisen.

A consortium agreement was concluded on 26 March 1981, between Dutco Construction of Dubai and the two German companies BKMI and Siemens for the construction of a cement industry in Oman. It was stipulated that all disputes will be settled under the rules of arbitration of the International Chamber of Commerce, by three arbitrators appointed in accordance with those rules; that, on the request for a single arbitration presented by Dutco, separately, against its two contracting parties for separate claims against them, an arbitral tribunal was constituted of three arbitrators, one of whom was jointly appointed by the two defendants with protests and reservations. The Tribunal held that it had been duly constituted and that the arbitral proceedings should continue in multiparty form against the two defendants.

In dismissing the actions for annulment brought by BKMI and Siemens against the award, the judgment under appeal holds that the arbitration clause included in the agreement binding the three companies unambiguously expresses the common intention of the parties to submit to three arbitrators all disputes resulting from their agreement, from which it necessarily follows from the multiparty nature of the contract itself, with the foreseeable possibility of disputes between the three partners, that the parties have accepted the possibility of a single tribunal composed of three arbitrators to rule on a dispute between the three parties, with the adjustments resulting from such a situation;

Whereas in so ruling, the Court of Appeal violated the above-mentioned texts;

FOR THESE REASONS, and without the necessity to rule on the other grievances of the appeals:

QUASHES AND ANULLS, in all its entirety, the judgment of 5 May 1989, between the parties, by the Paris Court of Appeals; consequently, returns the case and the parties to the state they were in before the said judgment and, in order to be upheld, refers them back to the Versailles Court of Appeals.