Court of Cassation, No. 90-12.569

Court of Cassation, First Civil Chamber, 4 February 1992, No. 90-12.569

Saret

vs.

SBBM

On the sole ground, taken in its sixth and seventh branches:

According to articles 1504 and 1502-5 of the new Code of Civil Procedure, with articles 41, paragraph 2, and 74, paragraph 1, of the law of July 13, 1967;

The principle of equality of creditors in the mass (in French: créanciers dans la masse), which results from the last two articles, is of both internal and international public order;

The French company Saret concluded various licensing and supply contracts for the territorial areas of Casablanca and Marrakech, with the Moroccan company SBBM, on 13 September 1977. On 8 March 1985, Saret informed SBBM that it had concluded agreements with another Moroccan company granting the latter the manufacture and marketing of the same products for the Casablanca area. Saret’s went into receivership (in French: règlement judiciaire) on 21 June 1985, followed by a safeguard agreement (in French: concordat) approved on 27 March 1987. On 7 February 1986, SBBM, availing itself of the arbitration clauses, applied to the Court of Arbitration of the International Chamber of Commerce for a ruling that the contracts relating to the Casablanca zone were not null and void but had to be maintained. By pleadings of 16 October 1986, SBBM supplemented this request by another one in payment of the sum of 5 million francs in damages. By another pleading of 30 June 1987, this company also evaluated the harm suffered in case the contracts were ended by Saret’s fault at the sum of 30 million francs. The arbitral award, rendered on 9 September 1988, stated that the parties remained bound by the contracts until Saret wrongfully terminated them through the concession to another company and ordered Saret to pay SBBM damages to compensate with the unpaid royalties of the contracts relating to the Marrakech area.

In dismissing the action for annulment against the sentence that ordered Saret to pay the sum of 16 million francs, the Court of Appeal merely noted that this award was pronounced at a time when the company had recovered the free disposal of its assets in application of article 74, paragraph 3, of the law of 13 July 1967.

Whereas in so ruling, knowing that SBBM’s claim, according to the contested judgment, had its origin in the non-performance of contracts prior to the judicial settlement, and as such, if not extinguished, should have been subject to the insolvency law, the Court of Appeal violated the above-mentioned texts.

FOR THESE REASONS, and without the need to rule on the other branches of the plea:

QUASHES, in all its provisions, the judgment rendered on 26 January 1990, 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 Court of Appeals of Versailles