Court of Cassation, No. 96-21.430

Court of Cassation, First Civil Chamber, 5 January 1999, No. 96-21.430

Tripcovitch

Vs.

Mr. X

Whereas by agreement of 19 May 1993, containing an arbitration clause providing for arbitration organized by the International Chamber of Commerce, the Italian company Tripcovitch undertook to sell to Mr. de X., a Cognac trader, the majority of the shares representing the share capital of Assurances Rhône-Méditerranée, and Mr. de X. undertook to purchase it. Tripcovitch gave the purchaser an option to buy the Italian insurance company Nordest, in return for prices stipulated in Italian lire; whereas Tripcovitch, reproaching Mr. de X. for non-performance of his obligations, initiated arbitration proceedings on 20 June 1994; that on 15 May 1995, Mr. de X., together with Mr. Z and Mr. Y, the creditors' representatives and administrators of the receivership, summoned Mr. A., in his capacity as the liquidator, before the Commercial Court of Cognac, to see the arbitration clause nullified; that the judgment under appeal declared the clause null and void, on the basis of Article 1458, paragraph 2 of the new Code of Civil Procedure, on the grounds that the agreement was civil in nature;

On the admissibility of the appeal, contested by the defense:

Whereas Messrs. de X. and Z. maintain that the appeal, lodged against a decision which ruled on a question of international jurisdiction and did not put an end to the proceedings, is inadmissible;

But whereas the decision declaring the arbitration clause null and void put an end to the proceedings, which were concerned only with this subject matter;

That the appeal is therefore admissible;

On the third ground, taken in its first two branches, as well as on the ground, raised ex officio in accordance with the conditions of Article 1015 of the new Code of Civil Procedure, regarding the validity of the arbitration clause in the international order:

Having regard to the principle of validity of the international arbitration clause, without condition of commerciality, and the principle according to which it is for the arbitrator to rule on his own jurisdiction;

Whereas it follows that the State courts do not have jurisdiction to rule on the validity of the arbitration clause, and that Article 2061 of the Civil Code does not apply in the international order;

Whereas the Court of Appeal, seized by Mr. X. of a main action seeking the nullity of the arbitration clause stipulated in the contract concluded with the company Tripcovitch, declared this clause null and void on the basis of Article 2061 of the Civil Code, because of the civil nature of the contract, by deciding that the conditions laid down by Article 1458, paragraph 2, of the new Code of Civil Procedure, according to which the domestic court seized of a dispute submitted to an arbitration tribunal may retain jurisdiction when the arbitration agreement is manifestly null and void, were met;

Whereas in so determining, the Court of Appeal, which was not seized of the dispute submitted to the arbitral tribunal and which should have let the arbitrator rule on his own jurisdiction by virtue of the second of the above-mentioned principles, has disregarded the first;

FOR THESE REASONS, and without needing to rule on the first and second grounds:

REVERTS AND ANNULS, in all its provisions, the judgment rendered on 23 October 1996, between the parties, by the Court of Appeal of Bordeaux;

DECLARES that there is no need to refer the case back;

Having regard to Article 627, paragraph 2, of the new Code of Civil Procedure, declares that the State court does not have jurisdiction to rule on the validity of the arbitration agreement in a main action;

REFERS the parties to seize another jurisdiction.