Paris Court of Appeal, No. 05/13780

Paris Court of Appeal, 11 May 2016, No. 05/13780

GROUP A B vs. REPUBLIC OF CONGO

On 9 January 2004, Group A B, a company incorporated under Lebanese law, filed an action for annulment against a partial award rendered in Paris on 8 December 2003 in case ICC n°10394/DB/EC, by Mr. M. F…, President, L… and S…, arbitrators. They declared they had jurisdiction to hear claims for interim and conservatory measures filed by the Republic of Congo and Group A B, (‘Z’). The arbitrators:

• dismissed the main claim for interim and conservatory measures made by the Republic of Congo on the basis that the latter seeks an injunction against Z to abandon (i) the enforcement of the judgment of the Court of Justice of Geneva of 13 September 2002 and (ii) the implementation of the guarantee of TotalFinaElf E&P Congo for the maturities that will occur until 2004, pending the forthcoming arbitral award.

• implemented the subsidiary claim for interim and conservatory measures filed by the Republic of Congo; consequently, ordered Z to give, in the fifteen calendar days from the notification of this partial award, to TotalFinalElf E&P Congo (with a copy to the Republic of Congo) written irrevocable instructions to pay into the escrow account to be opened by the parties with the President of the Bar Association at the Paris Court of Appeal, in accordance with the provisions of the procedural order that will shortly be issued by the arbitral tribunal, any sum exceeding the amount of EUR 16,007,146.81 that TotalFinaElf E&P Congo could be required to pay to Z in the enforcement of a court decision issued by a Swiss national court. The interest that would be run on the sum in escrow will be combined with the principal and the sequestration will end upon instruction and in accordance with the terms and conditions issued by the arbitral tribunal no later than within fifteen days from the notification of the final award.

• dismissed the claim for interim and conservatory measures formed by Z.

• reserved the right to rule on the claims of the Republic of Congo and Z concerning costs and fees relating to the proceeding on interim and conservatory measures.

Group A B raises, as a preliminary manner, the inadmissibility of its own appeal as well as three grounds for annulment against the award, based on the absence of an arbitration agreement (art. 1502-1 of the new Code of Civil Procedure), the non-compliance of the arbitrators with their mission (art. 1502-3 of the new Code of Civil Procedure) and the violation of the international public order (art. 1502-5 of the new Code of Civil Procedure). Group A B requests the payment by the Republic of Congo of a sum of EUR 5.000 pursuant to Article 700 of the new Code of Civil Procedure and submits that the latter should be ordered to pay the costs.

The Republic of Congo submits that the appeal should be dismissed and that Group A B should be ordered to pay EUR 15.000, in addition to the costs, on the basis of Article 700 of the new Code of Civil Procedure. It also requested the dismissal of the final submissions of Group A B which were filed on 21 March 2006, two days before the closure.

After being crossed off the register on 23 March 2005, the case was reinstated the following 24th of June.

UPON WHICH :

On the admissibility of the pleadings of Group A B and of the action for annulment:

The Republic of Congo did not prove that the deposit by Group A B of its submissions two days before the closure would have impeded its right to defence. The latest pleadings of the claimant should be accepted.

Group A B, which filed an action for annulment against the arbitral award of 8 December 2003, states that this action is in reality not available, because the award that it challenges is not ultimately an award.

Group A B, which decided to file an action for annulment against the award of 8 December 2003 which has lead the Republic of Congo to defend its rights, cannot thereafter, in defiance of the requirements of good faith and procedural fairness, and to the detriment of its opponent, contradict itself by pleading the inadmissibility of its own appeal. This ground of appeal cannot be admitted.

On the first and second grounds for annulment based on the absence of an arbitration agreement and on the non-compliance of the arbitrators with their mission, (article 1502-1 and 1502-3 of the new Code of Civil Procedure):

Group A B states that the interim and conservatory measures requested by the Republic of Congo and granted by the arbitral tribunal do not fall within the scope of application of the arbitration clauses of the financing agreements 560 and 569 signed between the parties in 1992 and 1993. Group A B adds that, by ordering the latter to give to TEP Congo a written irrevocable instruction to pay into an escrow account any sum exceeding an amount of EUR 16,007,146.81 that the latter could owe to Group A B as execution of a Swiss judicial decision, the arbitrators involved TEP Congo, which was not party to the arbitration, in legal relationships that do not concern it, and ruled as such without any arbitration agreement.

The mission of the arbitrator, as defined by the arbitration agreement, is limited mainly by the subject matter of the dispute, as determined by the claims of the parties.

The arbitration clauses in the financing agreements 560 and 569 provide, in identical terms, that any dispute between Group A B and the Republic of Congo will be subject to arbitration proceedings in Paris under the Arbitration Rules of the International Chamber of Commerce, of which article 23 incidentally allows arbitrators to deliver interim and conservatory measures.

In the course of 2002, the Republic of Congo and Group A B submitted to the arbitral tribunal several claims for interim and conservatory measures, which were answered in the partial award of 8 December 2003. The arbitral tribunal thus scrupulously fulfilled its mission, which was entrusted to it by the parties, including the claimant.

Furthermore, Group A B, through its terse statements, does not demonstrate how TEP Congo would have become a party to the arbitral proceedings in the absence of an arbitration agreement concluded with the latter, for the sole reason that the discussion before the arbitrators for the granting of interim measures concerned the conviction by the Geneva courts of TEP Congo on the basis of its payment commitments to Group A B.

The first and second ground for annulment are unfounded.

On the third ground of annulment based on the violation of the international public order by the recognition or enforcement of the award (Article 1502-5 of the new Code of Civil Procedure) :

Group A B considers that the award of 8 November 2003 violates the rules of international lis pendens and res judicata effect of the decisions rendered by the courts of the canton of Geneva in Switzerland which ordered TEP Congo to pay of a sum of CHF 72,261,019.88 to Group A B.

The latter adds that the award also violates the res judicata effect of a prior partial award rendered during the same proceeding on 4 June 2002 in which the arbitral tribunal had stated that, in the current state of affairs, and in view of the contractually agreed guarantees irrevocably established by the intervention of TEP Congo, there is no reason to grant Group A B’s claim to order the Republic of Congo to pay a penalty.

Group A B then mentions the violation of the rules generally admitted in the field of international arbitration and interim measures, by the reason that the arbitrators could not have upheld the claims of the Republic of Congo without examining the merits of the dispute. Their decision on the interim and conservatory measures could not have been so rendered since it covers the merits of the case. Moreover, the condition of emergency is not met and the Republic of Congo did not explained how it would be seriously and irreparably harmed by the dismissal of the requested measures.

The enforcement of an award is incompatible with procedural international public order when the fundamental principles of the proceedings have been violated, which would be the case, inter alia, if the arbitrators ruled in a contradictory manner within the same or in multiple awards. However, such a contradiction in ruling between the partial award of 4 June 2002 and the challenged award is not established. Group A B, with its still terse denunciations of a transgression on the fundamental values of due process, does not provide any evidence that would lead to a result that is incompatible with the sense of justice.

The enforcement of an award is also incompatible with substantive international public order when fundamental legal principles have been violated to the extent that the result obtained by the arbitrators is incompatible with the value system of our legal order. The claimant is only trying to force the court to examine the merits of the considerations stated by the arbitrators to order interim or conservatory measures, no demonstration of the violation of these fundamental principles being made.

That the third ground for annulment is dismissed, in the same manner as the claim.

On the costs and Article 700 of the new Code of Civil Procedure :

Considering that Group A B incurs the costs without being able to claim an indemnity for the irrecoverable fees in respect of Article 700 of the Code of Civil Procedure. On the basis of this article, equity requires that Group A B be ordered to pay to the Republic of Congo a sum of EUR 15.000.

FOR THESE REASONS :

Holds admissible the final submissions of Group A B dated 21 March 2006 are admissible,

Holds that the objection of inadmissibility raised by Group A B against its action for annulment is inadmissible,

Dismisses the action for annulment against ICC award n°10394/DB/EC of 8 December 2003;

Orders Group A B to pay to the Republic of Congo a sum of 15,000 ' pursuant to Article 700 of the new Code of Civil Procedure,

Dismisses any other claim of the parties;

Orders Group A B to pay the costs, and grants the SCP Bernabé Chardin Cheviller, solicitors, the benefit of Article 699 of the new Code of Civil Procedure.

THE CLERK, THE PRESIDENT