Court of Cassation, No. 04-13.999

Court of Cassation, First Civil Chamber, 28 May 2008, No. 04-13.999

SA EUTON

Vs.

URAL HUDSON

THE COURT OF CASSATION, FIRST CIVIL CHAMBER, rendered the following judgment:

Whereas the Belgian company Euton concluded a contract on 4 June 1992 with the Irish company Ural Hudson relating to the renovation of a building in St. Petersburg, which included an arbitration clause. Difficulties having arisen, a first arbitration award of 7 April 1997 declared Ural Hudson a creditor of the Euton company and a second award of 21 January 1999 classified the contract of 4 June 1992 as a carrying agreement. The Euton company carried on behalf of Ural Hudson 99% of the shares in the capital of the Len Euton joint venture. On 25 June 1999, Ural Hudson filed a new request for arbitration, claiming restitution of the joint venture’s shares and payment of damages. Euton filed an action for annulment against the award rendered on 7 November 2002;

On the first ground, taken in its two branches, hereafter annexed:

Whereas Euton complains that the judgment under appeal (Paris, 19 February 2004) dismissed the action for annulment brought against the award;

Whereas the judgment indicates that, since arbitration is international, the parties, when establishing the Terms of Reference, asked the arbitrators to take into account their agreement on a dual level of jurisdiction; it finds, on the one hand, that Euton cannot, after claiming it, contradicts itself and thus considers that the arbitration agreement is null and void and, on the other hand, that the legal remedies under French law cannot be adjusted according to the will of the parties; that, since the provisions derogating from Articles 1502 and 1504 of the Code of Civil Procedure are deemed unwritten, the Court of Appeal has ruled the ground of appeal is inadmissible;

The second and the third ground of appeal in all their branches are annexed hereafter:

Whereas the same complaint is still made in the judgment under appeal;

Whereas the judgment states firstly that Euton refused on 23 July 2002 to pay its share of the provision for arbitration costs and secondly that Ural Hudson, which was the claimant in the arbitration and had to pay the costs in their entirety, indicated that it would pay the costs in instalments until 28 February 2003; that the judgment rightly holds that Euton, which did not invoke the termination of the proceedings before the award was made, is not entitled to object to the extensions of the time limit until 18 October and then until 29 November 2002;

And whereas the judgment reminds that, according to Euton’s own records, Euton learned by chance of the telephone communications exchanged with the chairman of the arbitration tribunal at the end of the proceedings; that the Court of Appeal was able to deduce that this information came Euton’s attention before the hearing of the pleadings and the closure of the proceedings and concluded that, having refrained from protesting at that time against the alleged irregularity, it was deemed to have renounced it; that on this ground alone, it justified its decision;

FOR THESE REASONS:

Dismisses the appeal;

Orders Euton to pay the costs;

Thus, done and judged by the Court of Cassation, First Civil Chamber, and pronounced by the President in its public hearing of twenty-eight May two thousand and eight.