Court of Cassation, No. 93-20.863

Court of Cassation first Civil Chamber 19 December 1995, 93-20.863

WESTMAN INTERNATIONAL LIMITED

vs.

ALSTHOM

On the single ground, taken in all its three parts:

Whereas on 11 December 1985 Alsthom concluded with the English company Westman International Limited, a contract by which the latter undertook to promote the company Alsthom in view of its “pre-qualification” in a call for tender for the supply in Iran of gas turbines; that after the signature of the contract with the client, Westman implemented the arbitration clause for payment of the agreed commission; that by the award of 21 March 1992, the arbitrators recognised the validity of the 1985 contract qualified as a brokerage and business agreement and, in view in particular of the statement fees and expenses produced by the claimant, ordered Alsthom (whose rights were succeeded by European Turbines), to pay a specific commission of 4% of the amount of the contract.

Whereas the Westman company alleges that the judgment under appeal (Paris, 30 September 1993) wrongly set aside the award relating to the conviction, on the ground of a breach of international public policy which alleged a fraud committed by it in the establishment of its fees and expenses. Thus according to the ground, on the one hand, that the violation of international public policy is listed among the grounds for annulment provided for in Article 1502 of the new Code of Civil Procedure only in so far as it affects the enforcement of the award, not the procedure, and the fraud, when admitted, allows for review before the arbitrators and not an additional ground for annulment. On the other hand, the Court of Appeal refrained from investigating if Westman, even erroneously, could not, in good faith, have considered as irrelevant the precision regarding the fact that the fees and expenses had been incurred by its partners as it had to reimburse them. Finally, where it is agreed that the remuneration of a service provider will only be due in the event of success, the contract acquires an aleatory nature with the consequence that this remuneration has a fixed-price nature separate from the fees and expenses actually incurred. So by denying any right to the commission after having nevertheless found that Westman was not entitled to anything in the event of failure and that Alstom’s pre-qualification had been obtained, the Court of Appeal violated article 1134 of the Civil Code.

However, while procedural fraud may exceptionally allow an arbitral award affected by it to be withdrawn, it may also be sanctioned in terms of international public policy, so that the action for annulment provided for in Article 1502-5 of the new Code of Civil Procedure remains open;

Whereas, secondly, the Court of Appeal noted that, contrary to its consistent assertions, Westman did not incur, for itself or its shareholders, any of the considerable expenses that it certified having personally incurred, and that it did not justify either a commitment on its part to assume responsibility for expenses that would have been incurred personally by its shareholders, or a payment by them of such expenses; thus the Court of Appeal considered with discretion that the statement of fees and expenses produced by Westman had been falsely drawn up and submitted to the arbitrators with fraudulent intent;

And whereas, finally, the Court of Appeal held that the fraud committed removed the presumption of performance of the contract by Westman resulting, according to the arbitrators, from the pre-qualification obtained by Alsthom;

It follows that the ground cannot be upheld;

FOR THESE REASONS:

Dismisses the appeal.