Paris Court of Appeal, No. 08/03824 | Rory Wheeler, avocat (Paris) & solicitor (England)

Paris Court of Appeal, 19 February 2009, No. 08/03824

MONTREAL MONTAJES Y REALIZACIONES S.A.

Vs.

SIEMENS A.G.

By contract dated 11 June 2001, SIEMENS A.G. (hereinafter SIEMENS) and MONTREAL MONTAJES y REALIZACIONES S.A. (hereinafter MMR) concluded a consortium contract for the purpose of the rehabilitation of Eritrea’s power grid, known as the “Eritrea project”, with MMR acting as leader of the consortium.

In December 2001, a second contract of the same type was concluded between the same parties for the purpose of the renovation of the power grid of the Bahamas, known as the “Bahamas project”, in which SIEMENS was involved as a leader.

A dispute arose between these two companies in respect of the payment by MMR of sums that were supposed to return to SIEMENS in the context of the Eritrea project. In accordance with the terms of the arbitration clause provided in the contract, SIEMENS implemented the arbitration proceeding by filing a claim to this end on 27 October 2005 before the court of arbitration of the international chamber of commerce.

The arbitral tribunal, composed of Mr. Y, Chairman, and Mr. E and Mr. Z, co-arbitrators, rendered on 2 August 2007 a partial award in which it stated that it was not competent to rule on claims for payments regarding supplementary engineering and equipment rental services as well as “to rule on the defendant’s defence which invokes the compensation". It dismissed the claims for the postponement and suspension of the proceedings formed by the defendant and reserved its decision for the remaining matters.

By a final award, rendered on 28 July 2008, the arbitral tribunal, similarly composed, sentenced MMR to pay SIEMENS a sum of 1,125,261.26 euros in damages as well as contractual interest and various sums.

MMR filed an action for annulment firstly against the partial award and, in the course of procedure, against the final award on the basis of Articles ‘1502 4°’ of the Code of Civil Procedure for the violation of international public policy and 1502 3° of the same code for violation of the mission entrusted to the arbitrators.

It further requests the court to condemn the SIEMENS to pay the costs of the proceedings and to pay MMR a sum of 10,000 euros on the basis of Article 700 of the Code of Civil Procedure.

For its part, SIEMENS requests the court to dismiss MMR of its claims and to condemn the latter to the costs and the payment of a compensation of 20,000 euros for non-recoverable costs that are not included in the costs.

UPON WHICH

Considering that, by submissions dated 4 November 2008, MMR requested the annulment of the final arbitration award rendered on 28 July 2008.

That therefore, the parties should be invited to explain themselves on whether incidental submissions may validly bring an action for annulment of an arbitral award before the court. Consequently, an order should be made to reopen the debates as stated in the operative part.

FOR THESE REASONS,

orders the reopening of the debates;
invites the parties to explain themselves on the admissibility of the claim made by the submissions dated 4 November 2008 for the purpose of declaring the arbitral award dated 28 July 2008 null and void;
refers the case back to the hearing of 12 March 2009 for pleading.