Court of Cassation, No. 06-18.746

Court of Cassation, Civil Chamber 1, 11 February 2009, 06-18.746, Published in bulletin

THALES

THALES NAVAL SA (THALES)

VS

CHINA SHIPBUILDING CORPORATION

REPUBLIC OF CHINA NAVY (ROCN)

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

On the first ground, taken in its first parts:

In view of Article 455 of the Code of Civil Procedure;

Whereas under the terms of a contract, known as Bravo, of 31 August 1991, China Shipbuilding Corporation - to whose rights the Republic of China Navy (ROCN) is entitled after various deeds of assignment - undertook to acquire six frigates from Thomson CSF - to whose rights THALES and THALES Naval SA (Thales) are entitled; that the contract included an arbitration clause; that, complaining that THALES had paid commissions despite the prohibition figuring in article 18 of the contract, ROCN initiated arbitration proceedings, claiming damages; that THALES invoked that the dispute, covered by military secrecy, is not arbitrable;

Whereas, in dismissing the action for annulment, the Court of Appeal rightfully held that the arbitral tribunal was correct in finding that the claims are arbitrable and able to be settled in fair trial;

In ruling so, through boilerplate language (in French: clause de style), devoid of any precise reasoning or of any explicit reference to the reasons of the arbitrators whose reasoning it considered relevant, the Court of Appeal did not put the Court of Cassation in a position to exercise its control and, therefore, did not meet the requirements of the aforementioned text;

FOR THESE REASONS, and without it being necessary to rule on the other grievances:

REVERSED AND ANNULES, in all its provisions, the judgment delivered on 29 June 2006, between the parties, by the Paris Court of Appeal; returns consequently, the case and the parties back to their status quo ante and, for the proceedings to be determined in accordance with the law, transmits them back to the Paris Court of Appeal, otherwise composed;

Leave the costs to the Treasury;

Pursuant to Article 700 of the Code of Civil Procedure, dismisses all the claims;

Holds that at the request of the Public Prosecutor at the Court of Cassation, the present ruling will be transmitted to be transcribed in the margin or following the broken ruling;

Thus done and judged by the Court of Cassation, First Civil Chamber, and pronounced by the president in its public hearing of eleven February two thousand and nine.