Court of Cassation, No. 01-11.951 | Rory Wheeler, avocat (Paris) & solicitor (England)

Court of Cassation, First Civil Chamber, 30 March 2004, No. 01-11.951

FABRALTEX COMPANY

Vs.

ALBERT COMPANY

Gives notice to Mrs. X…, in her capacity, of its resumption of proceedings;

Whereas, in order to establish jurisdiction and rule on the dispute between Frabaltex and Albert, which had filed a request for arbitration on 7 July 1998, the Chairman of the arbitral tribunal, appointed by the first two arbitrators, declared that he accepted his mission on 10 November 1998; whereas Albert, having been placed in receivership by judgment of 10 January 1999, and having opposed the exclusive jurisdiction of the commercial court, the Arbitral Tribunal retained, by order of 22 February 1999, that it had been constituted since 10 November 1998, and stated that the proceedings, suspended by the effect of the declaratory judgment, could be resumed according to the forms and conditions of article 48 of the law of 25 January 1985, which became article L. 621-41 of the French Commercial Code; whereas on 25 January 2000, the arbitral tribunal issued an award on the merits, fixing the debt of the Frabaltex company to the liabilities of the Albert company; whereas the judgment under appeal (Paris, 15 March 2001) dismissed the actions for annulment brought by M. Y… and SCP Courret-Guguen, in their capacity as plan enforcement commissioner and representatives of creditors, and by the company Albert;

On the first ground taken in its two parts:

Whereas the judgment is criticized for refusing to annul the order of 22 February 1999, on the grounds of violation of international public order, then, according to the ground:

that by deciding that an arbitral proceeding is ongoing within the meaning of article L. 621-41 of the French Commercial Code (article 48 of the law of 25 January 1985) imperatively on the date of constitution of the Arbitral Tribunal and by disregarding any right of the parties or the arbitrators to set another date for the commencement of the proceedings, the Court of Appeal has violated articles 1460, 1495, 1502-5 of the new Code of Civil Procedure and misapplied article 1452 of the said Code;
that by deciding that the Arbitral Tribunal was constituted on 10 November 1998, even though the President of the Arbitral Tribunal had provided in the Terms of Reference that the Arbitral Tribunal would be deemed constituted on the date of signature of the Terms of Reference, which had not yet occurred on 20 January 1999, so that the proceedings were not in progress, the Court of Appeals violated Article L. 621-41 of the aforementioned text and thus Article 1502- 5 of the new Code of Civil Procedure;

Whereas, however, the arbitral proceedings are in progress from the day on which the Arbitral Tribunal is definitively constituted and can therefore be seized of the dispute, that is to say from the acceptance by all the arbitrators of their mission; whereas in this case, having exactly retained that as of 10 November 1998, this constitution of the Arbitral Tribunal was perfect, the draft deed of assignment having as its sole purpose to postpone by agreement the starting point of the arbitration period and since it was not likely to defer the effects of the acceptance by all the arbitrators of their mission, the Court of Appeal rightly deduced that the arbitration proceedings were in progress within the meaning of article L. 621-41 of the French Commercial Code, thus legally justifying its decision;

On the second ground, as set out in the statement of claim and reproduced in the annex to this judgment:

Whereas it is through a very precise analysis of the documents produced and the circumstances of the case and in the exercise of its sovereign power, that the Court of Appeal considered that it resulted from all the elements that the common intention of the parties had been to submit the representation of all the disputed trademarks to the arbitration agreement, so that the arbitrators had ruled within the limits of their mission; that the claim based on a violation of article 1502-1 of the new Code of Civil Procedure is unfounded ;

FOR THESE REASONS:

DISMISSES the appeal;

Orders the plaintiffs to pay the costs;

Thus, made and judged by the Court of Cassation, First Civil Chamber, and pronounced by the president in his public hearing of thirty March two thousand and four